The post-Republic

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By LINCOLN SECCO*

Commentary on the End of the New Republic

For some years now, the end of the so-called New Republic has been discussed. The test of extreme neoliberalism that we had from 2016 expressed something that no longer has any objectivity as a political and social regime. He cannot deny and replace the previous system as his constitutive moment. The social-liberal binomial that marked the labor era of capitalism has collapsed. Potentially, society no longer exists, it is only the liberal side that appears as the apparent totality. It feeds on a social terrain deformed by privatized services, false social organizations and outsourcing. “Politics” does not incorporate the working class into the sphere of citizenship, only individuals endowed with rights that do not restrict the rate of profit.

In the Sixth Republic, a regime of tension was experienced between a social and a liberal perspective.. Social in the popular conquests of the Constituent Assembly, liberal in the execution of rulers. The 2016 coup brought two illegitimate governments to power. PT's victory in 2022 momentarily interrupted the fascistization of the State.

The current phase differs from the New Republic because its form is that of progressivism in terms of new rights, however disconnected from any change in the productive sphere. There were irrevocable advances in political culture and intersubjective relations, but in most cases without economic cost for the dominant classes.

The changes of the 1980s, on the other hand, only touched on those individual rights, which was unjustifiable. On the other hand, it reached the level of production relations and, specifically, the wage form. It is true that the wage expresses and at the same time obscures the exploitation of the workforce, but it is around it that the main distributive conflict in capitalist societies takes place. The defense of labor and union rights and direct and indirect wages set the tone for that historical period.

With the 1988 Constitution, labor, social security and social rights became a common ground of dispute. Even neoliberal governments were restrained in the face of those social obstacles. However, from the XNUMXst century onwards, the left itself stopped treating them as untouchables. And these days, even progressive governments are afraid of “mercantile vandalism”[I] which prevents them from even considering a mere change in the Copom inflation target. The new framework, that is, the structure within which the class struggle must move, is now fiscal and not social. The names are not random.

Republic

Historian Murilo Leal Neto recorded the presence of a collective subject formed by the “working class + popular classes + sectors of the middle class” in the period 1951-1964 in a context of accelerated industrialization, urbanization and tendency towards full employment in the capital of São Paulo.[ii]

Although the social and material changes that occurred afterwards were decisive, that popular field was still present in the 1980s when we witnessed general strikes and union struggles, later emptied by automation and the political orientation of union leaders. We could add new religious values, neoliberalism, the informal sector, attacks on the CLT, etc. But the deindustrialization process was decisive in differentiating the so-called New Republic from previous political phases, particularly the Republic of 1946.

The Sixth Republic was marked by a State that redistributed social surplus value beyond the country's productive capacities. There was a disconnect between low economic growth, the ability to tax the rich, and the promise of expanding working-class participation in the social product. In other words, the legal form of production relations expressed a political correlation of forces that no longer corresponded to the material basis of the economy.

The legal expression of that conflict was summarized by Hideyo Saito when he stated that the 1988 Constitution “created the progressive framework of social protection, but a conservative tax system, incapable of sustaining it. The ruling class and its media, however, preach the idea that the Constitution made the country ungovernable due to the 'excess' of social and union rights: the deviation would be in these rights and not in the regressiveness of taxes, which spares the wealthier classes” .[iii]

Obviously there could be past income distribution, but in a democratic capitalist system the tension of a distributive conflict without additional income would lead to the dictatorship of one of the fundamental social classes: the proletariat or the bourgeoisie. No wonder democracy is in most countries an unstable regime. The course taken was the conciliation of classes that the tree of agribusiness and the reformist orientation of the government allowed.

The 1984-1989 democratic revolution essay (Diretas Já!, constituent, general strikes, Frente Brasil Popular) coincided with the end of the long cycle of Brazilian economic growth. If the CLT marked the takeoff of heavy industry in Brazil, the 1988 Constitution marked the end of industrialization.

The National Constituent Assembly increased spending, however it was regressive in terms of revenue. One example, among many, was the income tax table. At the end of the Dictatorship, Decree-Law 2.065/83 set the maximum rate at 60%. The 1988 Constitution reduced it to 25%. In 1999, 27,5% was established.[iv] Shortly before there was the exemption of profits and dividends (1995).

The dispute over the public budget in the Sixth Republic had two opposing goals: (i) establishment of a minimum percentage of spending on health and education, maintenance of social security, etc.; (ii) the public debt that sequesters a significant part of the collection to remunerate rentiers.

It was a framework marked by conflict: on the one hand, a minimum floor of social resources was protected and the allocation of some taxes to guarantee social rights. On the other hand, the primary surplus was defended (a positive result of government revenue minus expenditure, except for interest expenditure). Politically, the contention translated into siege presidentialism. Congress harassed the executive when he had “populist” pretensions.

Faced with the popular consensus in favor of free education and public health, Congress has always had difficulty decoupling revenue and the path adopted by the right was to establish a linear cut in public spending. The milestones of this process were: 1997 with the withdrawal of the right of states to issue public bonds[v] (securities debt); 2000 with the Fiscal Responsibility Law; 2016 with the constitutional ceiling for primary expenditures (that is, disregarding interest payments); 2023 with the new fiscal framework.

The PT cycle

Between 1981 and 2022, population grew by 1,4% per year and GDP grew by 2,2% per year. Thus, per capita income increased by only 0,8% per year.[vi] After the constituent, the GDP grew only 1,8% per year between 1989 and 2003. In Lula's second term, the Brazilian GDP grew 4,6% per year. In that short period, the PT valued the minimum wage and social spending, but growth was not based on an industrial base or advanced technological services and reproduced the country's structural dependence. He thus subjected himself to the regression that quickly followed.

Although the Sixth Republic can be divided between the PSDB and PT periods, its unity resided in that productive disconnect mentioned above. It is as if political and economic history walked separately when we analyze each phase analytically and at the same time articulated when we consider the period as a whole. The extension of rights without a solid material basis can only happen in a precarious way.

The so-called New Republic rested on the promise of meeting social demands with no counterpart in material production. The meager distribution of income had become autonomous in the face of its narrow economic base at the PT moment. It was the dialectic of the second phase of that historical period.

It does not mean that the rights gained were financed by confiscating the past income of the rich. On the contrary. Income inequality decreased in the Sixth Republic, but this was timid and the concentration of patrimonial wealth was maintained. There is an extensive methodological debate about the measurement of Brazilian inequality. The fact is that the universalization of rights was translated in two ways: precariousness and expansion of access.

It is not a watertight binomial. Access to health, education, housing, cisterns, electricity is not precarious for those who had none of these. The term precariousness is ambiguous when imported into Brazil. Most of the workforce has always been informal. Entering a public school that has lowered the quality is not perceived as disqualification by those who could not go to school.

The State chose disqualification because it preferred to remunerate “social” organizations. The problem is that when access becomes generalized, the next step for governments should be to improve the service and for that it would be necessary to change the neocolonial economic model, create an industrialized economy and a progressive tax system. This did not fit into the narrow bed in which the conflicts of the Sixth Republic fell asleep. The mismatch between “economics” and “politics” needed to be resolved.

Lava Jato and the 2016 coup sought a neoliberal legal-political form. Fascism, on the other hand, broke with any form and laid bare what we have today. The mere electoral defeat of fascism opened the interregnum of a country in a waiting period. It is necessary to define whether we will have a social republic or the deepening of the purest liberalism because the combination of the two things did not work.

* Lincoln Secco He is a professor in the Department of History at USP. Author, among other books, of History of the PT (Studio).

Notes


[I]The expression is by Gilberto Maringoni. Thank you for reading him and Giancarlo Summa.

[ii]Grandson, Murilo Leal Pereira. “The factory, the union, the neighborhood and politics: the “reinvention” of the working class in São Paulo (1951-1964)”. Worlds of Work Magazine, vol.1, n. 1, January-June 2009.

[iii]Saito, H. “”Rich should pay more tax”, Moorish no. 15, January 2021, p. 308.

[iv]Nobrega, Christopher B. History of Income Tax in Brazil, an Individual Approach (1922-2013). Brasilia: Federal Revenue, 2014.

[v]Trindade, JR “Tax dependency”, https://aterraeredonda.com.br/dependencia-fiscal/. On the privatization of state banks see: Paes, Julieda PP State banks, money 'creation' and the political cycle. São Paulo: FGV, 1996.

[vi] Alves, José ED “Brazilian GDP growth by presidential periods between 1956 and 2022”, EcoDebate, 28-09-2022.


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