Brazil: a modern megafactory

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By PLINIO DE ARRUDA SAMPAIO JR.*

In the absence of a nation project, Brazil proved to be particularly vulnerable to the destructive effects of globalization.

A long-term structural stagnation, brought about by the terminal crisis of import substitution industrialization, undermined the idea of ​​growth as a panacea for national problems. The liberalization cycle of the Brazilian economy, initiated by Collor de Mello in 1990, consolidated by Fernando Henrique Cardoso with the Real Plan in 1994, legitimized by Lula in the ephemeral “neo-developmentalist” cycle and brought to a paroxysm by Temer and Bolsonaro, resulted in the worst performance of the level of economic activity in Brazilian history.

The emphatic bonanza promises of the liberal reforms were not fulfilled. Between 1990 and 2020, the average growth of the Brazilian economy was only 2,1% per year – a mark equivalent to that of the lost decade of the eighties and well below the expansion of 6,7% per year between 1933 and 1980. in the neoliberal era, per capita income grew by less than 1% per year – almost five times less than in the cycle of industrialization. The propaganda that the end of inflation would create conditions for the beginning of a process of income distribution turned out to be nonsense. Put into perspective, both the functional concentration (between profit and salary) and the personal concentration of income (among the salary mass), which were already one of the worst in the world, registered a structural tendency of deterioration.[I]

The organic relationship between capital accumulation, the increase in social inequality and the deterioration of workers' living conditions is a characteristic of contemporary capitalism.[ii] The downward trend in the rate of profit requires a brutal increase in the exploitation of labor.[iii] Wage arbitrage on a global scale, fostered by the high spatial mobility of capital and labor, intensifies competition among workers, leaving them particularly vulnerable to capital's offensive against their rights.[iv] Under these circumstances, capitalist development and national development become incompatible. Political power is completely submitted to the interests of financial capital and the State is unable to make public policies with democratic and national content.

In the weak link of the world economy, such antagonism is potentiated by the expansion of asymmetries in the international division of labor. In the Latin American periphery, the structural crisis of capital manifests itself in the form of a process of neocolonial reversal, whose essence resides in the progressive inability of the State to establish minimum limits to the defects of capital. The regressive specialization of the productive forces necessarily corresponds to the lowering of the workers' traditional standard of living, the dismantling of public policies, the hollowing out of national sovereignty and the deepening of the depredation of the environment.

Brazil has proved to be particularly vulnerable to the destructive effects of globalization. The absence of a national project, which would identify the fundamental problems of the population as a whole and the actions to solve them, left society completely unarmed to face an extraordinarily adverse historical context.[v]

The bankruptcy of the Brazilian bourgeoisie as a demiurge of national development was sealed in the military dictatorship. By burying the basic reforms, the outcome of the bourgeois revolution as a permanent counterrevolution prevented the constitution of objective conditions (a national economic system) and subjective conditions (moral links of solidarity between social classes) necessary for the control of the ends and means of the national development.

By naturalizing social segregation and external dependence as constitutive elements of the pattern of bourgeois accumulation and domination, the dictatorship of big capital transformed the accumulation of profit into an end in itself. Powerless to face imperialism, the dependent bourgeoisie was condemned to adapt to the demands of international capital and reproduce the mechanisms of super-exploitation of labor and depredation of the environment.

While the subordination of economic policy to the imperatives of international capital coincided with the advance of import substitution industrialization, between 1968 and 1980, the high dynamism of the economy fed the myth of growth as a solution to national problems. By equating national development – ​​control over economic and social changes – with growth – the simple expansion of production –, the ideology of progress concealed the insurmountable divorce between capital accumulation, democracy and national sovereignty. The counterpart of the unbridled growth of the “economic miracle” was the intensification of the contradictions that would result in the neocolonial reversal: the systematic downgrading of the meager democratic and national achievements of the Brazilian people.

The vitality of the social classification mechanisms generated by the accelerated expansion of income and employment did not prevent the intensification of social inequalities or the reproduction of poverty on a large scale. The development of the productive forces implied a substantial increase in commercial, technological and financial dependence. The desperate copying of lifestyles and consumption patterns from central economies exacerbated the cultural mimicry of Brazilian society. Material progress has been accompanied by a deepening of the abyss between the world of the rich and that of the poor.

The foreign debt crisis in the 1980s made explicit the fragility of the Brazilian economic model and the absolute complicity of the autocratic bourgeois State, crystallized in the military dictatorship, with the interests of big capital. The yellow-green rhetoric of the generals and their delusional daydreams that the country was heading towards the “first world” culminated with the country on its knees, under the tutelage of the International Monetary Fund (IMF). The structural adjustment of the Brazilian economy to the new demands of international capital and imperialism was docilely accepted by the local bourgeoisie.

Exclusively concerned with preserving assets threatened with liquidation by the destructive effects of the changes the world capitalist system was undergoing, the bourgeoisie abdicated industrialization without batting an eyelid. It passed on the damages of the crisis to workers and quickly adjusted to the imperatives of the emerging global order. Under the cover of recurrent currency strangulation and hyperinflation crises, the Brazilian economy would undergo major structural changes.

The State was largely mobilized to consolidate agribusiness and mineral extraction as fronts for the expansion of Brazilian capitalism and to sustain rentism anchored in government bonds as a way of valuing fictitious capital – the two main vectors of the liberal-peripheral accumulation pattern. The collapse of the internal and external assumptions that supported dependent capitalism – the high generation of jobs caused by industrialization and the need for imperialism to have relatively strong partners on the periphery – would gain momentum in the XNUMXs, with the country’s subaltern insertion in the global order. The ability of the Brazilian bourgeoisie to negotiate terms of capitulation with imperialism would be drastically reduced.

Within the framework of the global order, the liberalization of peripheral economies is a path of no return. In the absence of a national response to the crises that recurrently shake the world economy, the bourgeoisies that live off the businesses that arise in the interstices of international capital investments are forced to double their bets on the commodification of life and on specialized insertion in the international division of labor. In this context, the offensive against work and nature is permanent. The radius of maneuver of economic policy is reduced to defining the pace and intensity of the withdrawal of workers' rights, the destruction of public policies and the degradation of the environment.

In addition to the differences in interests that condition the conflicts between the countless fractions of capital, an inevitable phenomenon in an economy marked by great structural heterogeneities, the project of the Brazilian bourgeoisie for the terminal crisis of industrialization by substitution of imports is the transformation of the Brazilian economy into a kind of of modern megafactory. With the arrival of the republic of delinquents, in 2016, this project was radicalized. Attacks on public policies with democratic, national and environmental content have become a reason for the State. In the Bolsonaro government, the disregard for public affairs, especially the situation of the working class, manifests itself in its maximum dose.

The abyss that separates Brazil from the developed economies is widening. Underdevelopment does not point to development, but to neocolonial reversal. The genocidal management of the health crisis leaves no room for any kind of doubt. The plutocracy was irretrievably divorced from the subordinate classes. The bourgeoisie's project is to accumulate wealth, without any concern for national problems. The first challenge to stop the Brazilian tragedy is to break the mental armor that naturalizes capitalism. Without the perspective of structural changes, which go beyond capital, it is impossible to mobilize society around a collective project that faces the secular problems of the Brazilian people.

* Plinio de Arruda Sampaio Jr. is a retired professor at the Institute of Economics at Unicamp and editor of Contrapoder website. Author, among other books, of Between nation and barbarism – dilemmas of dependent capitalism (Voices)

Originally published on Journal of Economists, April 2021.

Notes


[I] By the way see Pereira, DCN Functional income distribution in Brazil (1955-2014). Federal University of Rio Grande do Norte. Doctoral thesis. Christmas. 2017 in:https://repositorio.ufrn.br/jspui/bitstream/123456789/24276/1/DistribuiçãoFuncionalRenda_Pereira_2017.pdf. See also Medeiros, M., Souza, PHG and Castro, FA The top of the income distribution in Brazil: First estimates with tax data and comparison with household survey (2006-2012). Journal of Social Sciences, Rio de Janeiro, Vol. 48, no. 1. In: https://www.scielo.br/pdf/dados/v58n1/0011-5258-dados-58-1-0007.pdf

[ii] On the subject, the abundant information in Piketty's book, T. Le Capital in the XNUMXst and XNUMXst century. Paris, Edition du Seuil, 2013

[iii] The downward trend of the rate of profit is studied by Roberts, M. The long depression – How it happened, and what happens next. Chicago. Haymarket Books. In Brazil, the long-term trend of the rate of profit is examined in Marquetti, A. and Melody de Campos, SP Patterns of technical progress in the Brazilian economy, 1952-2008. ECLAC Magazine, At the. 113, August 2014. Santiago. Cepal; and also Marquetti, A.; Hoff, C.; Miebach, A. (2017). Profitability and Distribution: The Economic Origin of the Brazilian Political Crisis. Text for Debate. Department of Economics, PUCRS. Marchetti, A.

[iv] The logic of wage arbitrage on a global scale is studied by Smith, J. Imperialism & the Globalistion of Production. PHD Thesis. University of Sheffield. July, 2010.

[v] By the way, see Furtado, C. Brasil: A Construção Interrupda. Rio de Janeiro. Peace and Earth, 1992.

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