International economic crises and States



International economic crises allow us to understand the shift of regimes along the autocratization-democratization axis


This work investigates, using the historical-comparative method (Lijphart, 1971), the impacts of the four major international crises of capitalism that occurred until 2019 – Long Depression, Great Depressiono, Stagflation Crisis e Great Recession – in the states of three countries, the United States (USA), Germany and Brazil.[I] Given the post-2008 autocratization, it focuses more on the size of political regime of the State and in Great Recession, which promoted dedemocratization. But I articulate the regime with two other dimensions of the State: political association leveraged in coalitions and decision-makers (Weber, 2004). Autocratization refers to the authoritarian tendency, over a period of time, which, influencing several nations, reduces the number of countries undergoing democratization (Lührmann, Lindberg, 2019).

I analyze the State three-dimensionally. Regime it is the regulatory institutionality of the government process (formation, change, right to opposition, etc.) and relations between the State and society. Furthermore, the State is a organization of political domination that takes decisions, highlighting those related to its institutional form and the economy – the key object of the political struggle.[ii] Its decision-making function is set within a complex structural framework, highlighting civil society, social classes, internal and external markets, and the international system. In this scenario, actors associate and demand, according to their preferences, decisions on public policies and institutional rules. As in capitalism the production of goods and services is private, State decisions, in any regime, have accumulation as a reference structure (Offe, 1984; Przeworski, 1995) and depend on and express support alliances, of a political-institutional and sociopolitical nature. The dynamics of alliances generate relationships of cooperation, competition and conflict.

The article is inspired by Gourevitch (1986), who, to understand the political causes of economic policy choices, compared the impacts of the first three crises of the international economy in five developed countries (Germany, USA, France, United Kingdom [UK] and Sweden). He observed how crises induced changes in two variables of the State: economic policies and the coalitions that leveraged them. The comparison here is even greater, as I add a third variable, the political regime, and the fourth crisis, the Great Recession. Thus, this work faces the dilemma of comparison in the social sciences: many variables, few cases (Lijphart, 1971). Each of the four international crises are the independent variables; the three dependent variables make up the concept of State: coalitions, decisions on public policies and institutional rules and the autocratization-democratization axis of regimes. It is argued that the distinct national responses to international crises result from interactions between these common external stimuli and specific internal factors, which tend to redefine the State three-dimensionally, as a regime, decision-makers and association of coalitional political domination. The process of responding to crises tends to reconfigure the alliances and preferences of key actors related to State decisions, especially in economic policy, a tendency that often also affects the regime, changing it or strengthening or weakening courses of democratization or autocratization . How do the three dependent variables converge in the State, he synthesizes them. International crises are critical junctures, which, in relation to the actors, define their preferences, as well as political coalitions and oppositions and the correlation of forces. Singularly contextualizing political action (institutional and social), crises are privileged empirical sources for analyzing changes in the three-dimensional arrangement of the State. In international crises, the different movements of countries in the spectrum of political regimes illuminate encounters and disagreements between capitalism, authoritarianism and democracy.

I selected Germany, Brazil and the USA, for historical-comparative purposes, for the following reason: in the four international crises examined here, they presented such an insertion in the world economy that these critical junctures necessarily reached them, impacting the conceptual three-dimensionality of their States, despite their differences in productive structure, external transactions and income (high or medium); are important actors in the global or regional economy; experienced some (remote or current) domestically produced autocratization. They have similarities and differences in shifts on the autocratization-democratization axis. Brazil and Germany experienced authoritarian regimes, but the first never experienced fascism, characterized, above all, by presenting a dictatorial leadership that mobilized the masses, aiming at popular legitimization to completely control people's lives and annihilate any political opposition (Stanley, 2018). However, there are neofascist tendencies in Bolsonarism (Boito, 2020). Since 1945, Germany has been on a democratic path, although, post-2008, the far right has resurfaced. The USA, usually considered a full democracy, lost democratic quality in the post-2008 period, going through the Trump administration, a leader described by some as neo-fascist (DiMaggio, 2021). The analysis mobilizes synchrony and diachrony, similarity and difference, intranational and international comparisons. How do international economic crises impact the three variables of the State, giving rise, in some national contexts, to shifts in political regimes?

Formula three hypotheses correlating international economic crises and political regimes. A first refers to the chance of them changing regimes or inducing an increase or reduction in their levels of democracy or autocracy. Such effects correspond to structural and agency pressures favorable or detrimental to the expansion or restriction of socioeconomic and political equality, depending on the preferences of the relevant actors and the relationship of forces between the alliances in action. The pressures intensify the distributive conflict, which can give rise to both more universal and egalitarian responses – which develop citizenship and the social groups that the State aims to benefit with its actions –, as well as more restrictive ones, combining exclusion by the market (unemployment, underemployment, etc.) with the reduction of rights (civil, political, social). A second hypothesis is that, in international crises, autocratization (to varying degrees) presupposes the generation of a relationship of pro-business forces and worker subordination. In this sense, I highlight three situations: a) predominance of an authoritarian-mobilizing leadership allied with conservatives and businesspeople, in a context of ungovernability (Hitler); b) an authoritarian-mobilizing alliance between all or part of big business and conservative segments of the electorate, in the context of a crisis of democratic legitimacy (Bolsonaro and Trump); c) when, in contexts of crisis of hegemony or class balance, a militarily supported leadership emerges, which anti-democratically boosts the relative autonomy of the State (Otto von Bismarck's Germany and the new state, in Brazil). A third hypothesis is that the democratic commitment of actors is a barrier against autocratization.

Unmoored from institutionalist exclusivism, hegemonic in political science (eg Levitsky, Ziblatt, 2018; Lührmann, Lindberg, 2019), I examine political regimes and the current authoritarian wave domestically produced. I rely on (neo)Marxist views of the State (Przeworski, 1995) and political economy, in this case, the regulation theory (Boyer, Saillard [ed.], 2002), useful for illuminating the distinct phases of capitalism in force in the four crises examined. I aim to contribute empirically to understanding, interdisciplinary, nationally generated autocratization and democratization (except the German post-1945), induced by international crises, as processes based on the economic, social, political and ideological spheres, which evoke the aforementioned three-dimensional conception of the State.

Crises of capitalism and transformations in the State

 The debate on the crisis of capitalism re-emerged with the Great Recession (2007-2008). Since then, there has been talk of secular stagnation, reinvention of capitalism, questions about its end, etc. (Streeck, 2016).[iii] I adopt as a definition of economic crisis “a sharp deterioration in aggregate economic performance, indicated by slow growth and accelerating inflation”, or deflation, which is not self-correcting (Haggard, Kaufman, 1995, p. 8). In the post-2008 period, debates about the crisis of democracy and the wave authoritative. The current coexistence of the crises of neoliberal capitalism and democracy allows us to examine, from a broader historical and comparative perspective, how the three past international economic crises, in addition to the current one, have impacted the States of some countries.

In economic crises, structural (production, jobs, markets, currencies) and agency (decisions, coalitions) processes combine. The public agenda and alliances between actors tend to change. Sometimes, changes come through elections, when governments change. In other cases, rulers reformulate their policies, resign from office, there are coups d'état and revolutions. Changes in public policies, alliances and the relationship of forces tend to be linked either with quantitative changes in political regimes – which increase or decrease their degrees of authoritarianism and democracy – or qualitative ones, generating their replacement. I will address the effects of the four international crises mentioned in the three selected States.

The long depression (1873-1896)

 A Long Depression, the first international economic crisis, occurred at the end of the 1991th century, in a context of economic liberalism, the Second Industrial Revolution, the replacement of bimetallism by the gold standard and the first democratic wave (Huntington, 2001). As for the gold standard, Polanyi (1986) drew attention to the risks of standardizing economic policies with the aim of configuring self-regulated world markets. One of the main symptoms of this crisis was the broad and lasting deflation. The political debate focused on the positioning of countries on international trade (Gourevitch, XNUMX). Free trade or protectionism?

In the USA, the end of the Civil War brought prosperity in urban business, industry and finance. Opened after a decade of prosperity, the crisis had two waves, the panics of 1873 and 1893. In 1896, in the second wave, there was a realignment election, “an election type in which the depth and intensity of electoral involvement are high, in which more or less profound readjustments occur in the relations of power within the community, and in which new and durable electoral groupings are formed” (VO Key Jr. , 1955, p. 4). This presidential election delimited the main conflicts of interest and alliances, opposing two coalitions between political parties and social actors. The winner, who emphasized production and jobs in heavy industry, brought together large urban businesses and more qualified workers in support of the Republican William McKinley, defending industrial protectionism and agricultural free trade; the defeated, qualified as populist and progressive, resulting from the merger between the People's Party and os Democrats, conceived of citizens as consumers and demanded the generalization of free trade. This electoral result had an impact on the political system: it ended the balanced bipartisanship of the Third Party System and inaugurated the Fourth Party System (Hershey, 2014), characterized by four decades of dominance of Republican Party (hereinafter PR ou Republicans).

In Bismarck's Germany, free trade, anchored in junkers, gave way to protectionism, supported by the iron and rye coalition, a support bloc between heavy industry and agriculture, mediated by the alliance between the parties National Liberal e Conservative. The political and ideological result reinforced, until 1918, nationalism, imperialist militarism, antisocialism, social security and an authoritarian-competitive political system (Gerschenkron, 1943).

There is little specific information about the impacts of Long Depression in Brazil. after the Panic of 1873, the crisis arrived in the country due to deflation, which lasted ten years. In the USA and Europe, it caused prices to fall in agriculture, but in Brazil, also in industry (Roberts, 2009 and 2016). Analyzing the financial crisis of abolition at the end of the 1996th century, Schulz (1875) assessed that XNUMX was a key year to study it, with its external cause being Long Depression and internally, the Banco Mauá moratorium. When investigating the roots of industrialization in Brazil, Luz (1961) observed that the continuous fall in coffee prices, in the period 1880-1886, favored the implementation of an industrial policy. However, given the strength of the free-trade interests of agro-exporters and the weakness of industrialists, an effective protectionist tariff was not introduced, only the first industrializing, interventionist and nationalist arguments emerged.

What is important here is the political repositioning of coffee growers in relation to the Second Reign, both due to the impact of a decade of depression on international coffee prices, and because they were not compensated for abolition. These factors contributed to the coup Proclamation of the Republic, on 1889, regime change leveraged by the alliance between non-radical farmer republicans, because his abolitionism was weak or moderate), and farmers who were until then monarchists were unhappy with the economic situation and the monarchy. They came together to defend federalism and immigration – which is related to the impacts of Long Depression in Europe and Brazil. I advise Oligarchic Republic, which maintained competitive authoritarianism, land concentration and the power of coffee growers. After some difficulties, since 1898 Campos Sales stabilized the 1891 Constitution regime politically and financially (Franco, no date; Bello, 1983; Carvalho, 2011).

Great Depression (1929-1939)

At the outbreak of great depression, in 1929, the international political economy was similar to that of 1873: free trade and gold standard. In that decade, the US credit and stock markets were so deregulated and attractive for speculative investment that the euphoria led to panic and the explosion of the financial bubble.

Until then, not even socialist or social-democratic parties incorporated into their economic ideas an alternative approach to neoclassical orthodoxy, other than socialism. As for the political regime, the context was first reverse wave of democracy, opened by the rise of fascism in Italy in 1922. National responses to the crisis, begun pre-war and continued after its end, innovated in terms of class coalitions, economic policy, ideology and political regimes.

Three processes of change in the three-dimensionality of the concept of State emerge simultaneously and by synthesizing international and national variables. Firstly, new arrangements emerge interventionist economic policies, broader than mere protectionism, configuring what in the post-war period was called mixed economy, or, also, keynesianism, highlighting the policies of demand stimulus (Shonfield, 1965). State and market begin to establish a relationship distinct from the hitherto predominant economic liberalism. Faced with the crisis, governments in the Americas, Europe and Asia intuitively implemented countercyclical and interventionist measures, then theorized by alternative economic approaches to neoclassical orthodoxy, which, in any context, advocates the primacy of markets.

Secondly, interventionist policies were associated, between 1930 and 1970, with five new paths of political regime: in developed countries, the social-democracy and the fascism; in Latin America, on the one hand, the two types of populism (authoritarian and democratic), anchored in mass politics; on the other hand, the non-populist military dictatorships. The international depression and the post-war period led to the emergence of democratic and authoritarian regimes that incorporated the masses, but, obviously, with different objectives and means. Mass societies transformed regimes, which, distinctly, promoted nationalism in the economy or foreign policy, industrializing interventionism and social policies. The third process concerns coalitions, which I will address below in the three countries investigated.

In the US, an electoral realignment of Democrats with blocks of salaried voters structured the New Deal Coalition, which opened the Fifth Party System, greatly distancing the Republicans of the presidency, and strengthened democracy. From 1933 to 1968, this coalition structure was second only to the PR the elections of 1952 and 1956 (Hershey, 2014). A New Deal Coalition was the North American version of historic commitment between capital and labor, more clearly configured in post-war Europe, combining, especially in social democratic governments, democracy with stabilization policies, market regulation and social welfare (Przeworski, 1989).

Already in unstable Weimar Republic, depression contributed to leveraging, in the 1930 and 1932 elections, the Nazi Party, led by Hitler. His rise to chancellor in 1933, following an alliance with the German National People's Party, caused an ideological shift to the extreme right in the fragmented party system of the Reichstag, which leveraged radical institutional changes in the balance of forces, in coalitions, in the political regime, in economic policy, in short, in the State.

The defeat of german empire na First War, whose pacification was completed in Treaty of Versailles, unfolded into a multidimensional crisis, including socialist-revolutionary content. Faced with popular pressure led by the Social Democratic Party (SPD), the Kaiser resigned. The republic was proclaimed, the Weimar Republic, which soon had to bear immense liabilities from imperial militarism. Germany was punished with a very harsh payment plan to repair the war damage caused to the countries of Triple Entente. The pacification was humiliating and reinforced the nationalism of conservatives. A pact between the moderates of social democracy and the chief general of the Armed Forces resulted in the Weimar Coalition (1918-1929), between the SPD (center-left) and the Democratic and Catholic Center parties, both center-right (Gerschenkron, 1943). Sociopolitically, workers and entrepreneurs in the high-technology industry became closer. Strengthening the export position of German corporations in international competition required skilled labor.

Na November Revolution, opened in 1918, the Zentralarbeitsgemeinschaft, an agreement by which workers and employers formalized salary bargains. Workers' unions won the eight-hour working day (Feuchtwanger, 1993). Former partners in iron and rye coalition They lost importance in this new arrangement of the political economy, which was neither protectionist nor nationalist or hostile to the moderate left. But the parliamentary majority of Weimar Coalition It lasted a short time, constrained by the financial and hyperinflationary crisis of the 1920s and by the ungovernability of the republic. Then the far right rose. One of its main support bases was the junkers, whose economic and political power, apparently weakened at the beginning of the new regime, remained, in fact, almost intact, due to the failure to carry out agrarian reform.

In 1931, a serious banking crisis caused the country to regress from recession to great depression, which lasted until 1933 (Doerr et. al., 2019). In the November 1932 elections, the Nazis became the largest party in the Reichstag, but with only 33% of the votes. Socialists and communists combined for 37%. However, despite having a virtual majority in parliament, the left was divided. A Communist International, already Stalinized, prioritized opposition to the SPD, not anti-Nazism. After the elections, 19 leaders from industry, finance and agriculture petitioned President Paul Von Hinderburg, of junker, demanding Hitler's appointment as chancellor, which occurred two months later.

Mobilizing the direct support of the masses, the Führer deconstructed, during the depression, the Weimar Coalition. He created a fascist coalition of class fractions of the bourgeoisie, willing to destroy the left-wing organizations: the SPD, the communist party and the unions. The depression strengthened the relative weight of heavy industry in business associations. With the loss of external market by the finished goods export industry, preferences changed, industrialists from the main sectors unified and realigned themselves with farmers. A formed united front of urban and rural business, contrary to social commitment and workers' organizations, which supported the policy of intense demand stimulation, to which, until then, the SPD was staunchly refractory, as it saw no alternative to neoclassical orthodoxy. Initially, the Nazi government implemented intuitive Keynesianism, with deficit government spending allocated to public works. Then, economic stimuli leveraged militarism, due to expansionist purposes. As a whole, Hitler's program was fascist, interventionist, nationalist and imperialist, unfolding in World War II. The Third Reich offered businesspeople massive public, military and construction spending, wage control and repression of organized workers. But, comparatively, it achieved the largest international reduction in unemployment, and did not significantly alter the social security inherited from Bismarck (Gourevitch, 1986).

Obviously, the wave of great depression it also flooded Brazil, causing profound economic and political impact. It influenced the situation in the Revolution of 1930, coup d'état against Oligarchic Republic, led by dissident oligarchies and supported by urban social actors – workers and middle classes (Bello, 1940) –, which ended the hegemony of the coffee bourgeoisie. Skidmore (1975, pp. 27-31) identifies two groups in the coalition revolutionary: the revolutionaries – liberal constitutionalists, supported by the middle class and the Democratic Party of São Paulo, and the semi-authoritarian nationalists (lieutenants); and the non-revolutionaries – senior military personnel, coffee growers dissatisfied with the crisis response policies implemented by Washington Luís and the dissident political elite.

As coffee exports and prices fell, foreign exchange declined, highlighting the structural external restriction, whose overcoming depended on economic modernization. The modernizing agent was a State that transformed itself, acquired a national and developmental character, imposed corporatism and, dictatorially, between 1937 and 1945, abolished federalism. The urban actors and interests of workers and middle classes were strengthened. Nationalist values ​​emerged. Industrialization changed the production matrix, the internal market developed, liberal, rural and agro-export exclusivism was overcome. But land concentration persisted. In short, archaic and modern were rearticulated. In the new pattern of accumulation, either the internal sector, which was underdeveloped in the agro-export model, conservatively modernized the archaic or maintained it by instrumentalizing it (Oliveira, 1972).

In general terms, the post-war period opened the second democratic wave (Huntington, 1991). Especially in Europe – but also in the USA, which emerged strengthened from the war –, Keynesianism and democracy combined, under different national modalities, configuring the most successful phase of developed capitalism, which equated growth, full employment, inflation control , social welfare policies, falling inequality and political regimes that expanded freedoms and citizenship (Boyer, Saillard [ed.], 2002). The economic and public policy ideas of this marriage were called Keynesian consensus and its development in the relations between capital and labor, historical or class commitment (Gourevitch, 1986; Skidelsky, 2009).

In the USA, post-war reformism was weaker, held back by conservative opposition. However, a political arrangement between Democrats e Republicans moderates prevented the setbacks desired by the right, such as workers' union rights, from advancing beyond a certain limit. In the structural context of joint reconfiguration of the State and the economy, created during the great depression and politically leveraged by New Deal Coalition, Lindon Johnson carried out, in 1964-1965, the program Great Society, with social and anti-racial policies, although the strong presence of the middle class in the coalition implied a liberal welfare state (Esping-Andersen, 1990).

Among the three countries analyzed, the historic commitment post-war period was expressed, above all, in the social market economy (hereinafter SME:) German, combining, through the leadership of Christian Democracy (CDU/CSU), liberalism, generous social policies, labor regulation and worker participation in company management. Mainly since 1966, when Willy Brandt (SPD) became vice-chancellor, Keynesianism entered the scene (Streeck, 1996; Van Hook, 2004; Dauderstädt, 2013). A reformist coalition, to the Weimar, between the industry exporting cutting-edge products and its workers, leveraged this German model of capitalism. The disappearance of junkers During the war, the resumption of trade union organization and the priority given to the international market, in the context of German and European reconstruction, encouraged the abandonment of the protectionist alliance (Gourevitch, 1986). Since the division of the country into two distinct states in 1949, a stable democracy has emerged in West Germany, driven by the Allied occupation forces, the new Constitution, the reconfiguration of the balance of forces and party reform. A Christian Democracy, center-right, and the SPD, center-left, became the two main parties, ideologically positioned around the center. In 1952, the Federal Constitutional Court banned the Communist Party of Germany, founded in 1918. It was alleged that it would pursue undemocratic ends. But, with the reunification of Germany, in 1990, an eponymous party emerged in Berlin, claiming its legacy. There is also the THE LEFT, rooted in the ancient East German Communist Party.

In Brazil, after the war ended, there was a change of regime. The Army deposed the dictatorship of Getúlio Vargas, supported by liberals and democrats. New elections and the 1946 Constitution inaugurated populist democracy, which, anchored in developmental alliance (Cardoso, 1993, pp. 51-78) – with a moderate nationalist content, coexisting with foreign capital in several internal markets –, it incorporated the urban masses into development. In the political-institutional sphere, this alliance was expressed by the coalition between the PSD and the PTB.[iv]

Stagflation Crisis (1973-1982)

A stagflation crisis led to the closure of post-war capitalism and occurred simultaneously with the beginning of third democratic wave, in 1974. It manifested itself in two international recessions, in 1973-1975 and 1980-1983, both linked to oil shocks. The first of them, which quadrupled barrel prices, was the main cause of the surprising coexistence of unemployment, high inflation and a growth crisis, that is, stagflation, a recession that, in the USA, lasted 16 months.[v]

Two years earlier, in 1971, the Nixon shock, a response to speculation against the dollar, unemployment and inflation. President Nixon unilaterally broke with the international convertibility established in Bretton Woods, which marked a structural change, which led to the floating exchange rate regime, standardized in neoliberal capitalism.[vi] The end of the dollar-gold standard was a victory for private banks over governments in terms of control of the international financial system, which became market-oriented. The disarray in the world economy was worsened by the oil embargo by OPEC during the Yom Kippur war. The index Dow Jones of the New York Stock Exchange fell 50%, between the peak, at the end of 1972, to the trough, in 1974, being, then, the biggest crash since great depression. Furthermore, in 1979, the Iranian Revolution caused another oil shock, which resulted in the price of a barrel doubling. Combined with the monetarist shock of the Federal Reserve (FED, US Central Bank), aiming to combat inflation, the impact of this second black gold crisis was worse than the previous one, triggering, between 1980 and 1983, the biggest post-war international recession (Moffitt, 1984; Davis , 2003; Kindleberger, Aliber, 2005).[vii]

Thus, in developed countries, the economic and political conditions to support the Golden Age, whose political economy expressed two balances, one between capital and labor, the other between the powers of the international system, the USA and the USSR, which determined the bipolarity of the Cold War.

The stagflation crisis increased the divergences of economists and political actors on how to overcome a recession. It gave rise, through economic-structural and electoral processes, to neoliberalism, an international conservative wave, an ideology whose Policies, by abandoning the fixed exchange rate system, the prospect of full employment and capital control, deconstructed the foundations of the world economy in force for three decades (Skidelsky, 2009). Due to structural changes – internationalization of manufacturing, increased competition from corporations in the world market and the intense growth of finance – oligopolies in various sectors of activity adhered to this new ideology, which aimed against work, unions and the State ( wages, taxes, social policies and market regulation), aiming to reduce costs, privatize companies and public services, restore profit rates and gains for shareholders and managers. This political economy operates a tendency towards the coalition of capital, generally opposed to work and the social, regulatory and business roles of the State (Gourevitch, 1986). It leveraged a structural change in the accumulation regime, towards a capitalism driven by finance, designed in the policies of the Washington Consensus, based on the theory of deregulated markets (Skidelsky, 2009; Guttman, 2016), which have become hegemonic since the fall of the Berlin Wall in 1989 (Duménil, Lévy, 2011).

In the economy, neoliberalism has generated greater instability, lower growth rates and an increase in both the participation of the financial sector in GDP and inequality. In politics, government decisions tend to reproduce Policies standardized, rooted in orthodox economics, even when the mandatory party is left-wing; conservative politicians, financial investors and business corporations demand the moderation of democratic rights, aiming not to harm the market discipline, depending on its costs (Godechot, 2016).[viii]

In the USA, the overwhelming electoral victory of Republican Ronald Reagan on the Democrata Jimmy Carter opened the doors of the State to this so-called conservative economic and social ideology, of new right, neoliberalism, which, in 1979, had firmly entered the United Kingdom at the hands of The Iron Lady, Margaret Thatcher.[ix] Policies rooted in neoclassical orthodoxy resurfaced with the reactonomics: tax cuts for the rich, cuts in social spending, deregulation of markets and intolerance towards strikes and unions (Farber, Western, 2002).[X] This comprehensive ideological change shaped the Sixth Party System, what happened to New Deal Coalition, marked by the rise of conservatives in PR and moderate liberals in PD, displacing the more progressive ones (Brewer, Maise, 2021). Reagan also won his reelection bid and governed until 1989.

Thatcher, in the UK, and Reagan, in the USA, induced a change in the correlation of forces between capital and labor in their countries, in favor of employers. Given its importance in the international economy, the impact went beyond Anglo-Saxon borders. Both restricted the right to strike and the prerogative of unions to ensure that companies hired only unionized workers. Monetarism, market deregulation and privatization were also pro-capital measures. Although neoliberal policies do not overcome inter-business conflicts of interest, they consolidate a structural environment that reinforces, on the one hand, decision-making commitment market-oriented of the State, in the sense of eliminating costs and regulations, and, on the other, the conformation of the ideological unity of capital against work, in all economic sectors, making it difficult to form political coalitions with national developmental and/or social democratic projects. Key Asian countries are exceptions.

The political impacts of the end of the Bretton Woods and the stagflation crisis were stronger in the USA than in Germany, where SME:, with its structural compromise between capital and labor, moderated neoliberalism. Furthermore, ideologically, the two main German parties orbit in the political center (Gourecitvh, 1986). In party politics, the main outcome of the crisis was the rupture of the social-liberal coalition between the SPD and the Free Democratic Party (FDP), established in 1969, in the cabinet of Willy Brandt, and maintained, since 1974, in the three governments of his co-religionist Helmut Schmidt. In the 1982 elections, the FPD allied itself with the CDU/CSU, led by Helmut Khol, who, closer to neoclassical orthodoxy, governed for 16 years, until 1998, half under reunified Germany. The social-liberal coalition broke up due to the FDP's disagreements with the increase in the public deficit and because it shared the industry's opposition to labor costs, which, with the increase in external competition, would be harming exports. Thus, at first, Germany adjusted to neoliberalism measuredly. Among other variables, the national purpose of exporting cutting-edge products, hiring qualified labor, and the correlation of forces between capital and labor, institutionally based on codetermination, promoted a path dependence. To theupload-side economics and the reforms market-oriented did not dismantle the social market economy, unions and welfare state, even after reunification. But the effect of redistributive policies on the unemployed, especially less qualified immigrants, was reduced. This goes back to the growth in the participation of the richest 10% in national income and the corresponding drop in this indicator among the 50% that make up the bottom half (Dauderstädt, 2013; Chancel, 2021). Furthermore, this adjustment occurred without democratic discontinuity.

But it is worth mentioning that, at the beginning of this century, facing economic stagnation, unemployment and fiscal weakening, the then chancellor Gerhard Schröder, supported by the SPD/Green coalition, implemented the reforms of 2010 Agenda, which advanced in the liberalization of SME:, making labor and capital markets more flexible and restricting social security. The bank-company relationship has undergone changes: more space has opened up for global investments. This liberalization generated conflicts in the SPD. There is controversy over how much of the SME:. As for indicators, the measures improved exports, growth and employment, but investments, productivity and the share of wages in income fell and inequality increased.

In Brazil, the stagflation crisis led to economic and political changes in the strategy of the military government and the destiny of the regime. In a short time, the interventionism of the then existing developmental state and the authoritarianism on which it had been based since 1964 were called into question. The first oil shock ended the economic miracle, whose financing depended heavily on external debt, facilitated by the abundance of credit in the international market. Until then, the positive trade balance controlled the external deficit. The country imported oil and production goods and directed them, above all, to the durable consumer goods industry, led by the automotive sector. The oil crisis replaced the structural problem of external bottlenecks, that is, import capacity. Taking office in 1974, Geisel ruled out a recessive adjustment. He reformulated developmentalism, through the II National Development Plan (PND), aiming to overcome bottlenecks in the supply of basic inputs and production goods. But financing continued to depend on external debt. According to some economists, the plan contributed to boosting, at the turn of the decade, a jump in exports (Castro, Souza, 1987; Mantega, 1997). Controversies aside about the II PND, from 1977 onwards, the business community reacted against nationalization and authoritarianism, which strained the support of industrialization by triple alliance between state, foreign and national capital (Evans, 1979).

At the turn of the decade, the second oil crisis and the Volcker shock worsened the situation, creating a double shock in international prices (energy and credit), which disrupted the State's external accounts. Fearing that foreign banks would stop rolling over foreign debt, the government carried out a external adjustment orthodox, which caused recession. The peak of the crisis occurred in 1982, with the Mexican default, when the IMF increased demands to help Latin American countries in external debt. The orthodox response to the debt crisis ended the growth cycle of the 1970s and disrupted the triple alliance. This economic process was linked to the democratic transition negotiated between the military and the opposition, which ended authoritarianism and left open the challenge of resuming development, but, this time, with democracy and social justice (Bresser-Pereira, Ianoni, 2017).

Great recession and developments (2007-2013)

The 2007-2008 international financial crisis broke out in the USA. Immediately, it collapsed the Icelandic banking system. Since 2009, its epicenter has moved to the Eurozone, causing economic and political effects until 2013. Then, a third problem was triggered: structural slowdown in emerging economies, driven by countries that had been more resilient in the early years (Wolf, 2014). This succession of crises impacted democracy, institutionally and ideologically, especially, for this work, in the USA and Brazil and, to a lesser extent, in Germany.

Soon after it broke out in the USA, this crisis was called Great Recession and seen as the most serious since the great depression. Many perceive it as crisis of neoliberal capitalism (Roberts, 2016; Keeley; Love, 2010). In the USA, the recession lasted until June 2009. The peak occurred when the speculative bubble burst, in September 2008, in the poorly regulated real estate mortgage market. subprime, for high-risk clients, which led to bankruptcy Lehman Brothers, then the fourth largest investment bank in the country and intensely involved in that market. The North American financial system collapsed (Council of Economic Advisers, 2010; Wolf, 2014). Given the international and concentrated nature of finance, the crisis quickly spread to other regions and countries, causing a sharp drop in the growth of the world economy. Between mid-2008 and February 2009, ten European countries rescued more than twenty banks.

The bubble burst during the George Bush administration, during the presidential election campaign, won by Democrata Barack Obama. Bush carried out the first measures to face the financial crisis, acquiring the Fannie mae and Freddie mac, declaring the bankruptcy of the Lehman Brothers and nationalizing the American International Group (AIG), the largest insurance company in the world, whose control was taken over by FED.

In October, Congress approved, supported by the two presidential candidacies and the majority of parliamentarians from their respective parties, the Emergency Economic Stabilization Act of 2008, which established the Troubled Assets Relief Program (TARP), a set of programs worth US$700 billion. Among other measures, TARP authorized the purchase of toxic assets, especially from the secondary mortgage market, partially absorbing losses, and injected capital into financial institutions, purchasing shares in eight large banks and insurance companies, including AIG, to avoid the domino effect that its bankruptcy would cause (Council of Economic Advisers, 2010).[xi]

Between September 2007 and December 2008, aiming to stimulate economic activity by offering credit, the FED reduced the interest rate on federal bonds to almost zero. But, as the economy did not react, an unconventional policy was resorted to, which quantitative easing: instead of focusing only on the sale of bonds at very low interest rates, the Central Bank stimulated aggregate demand, purchasing, on a large scale, long-term assets held by financial institutions. This policy lasted until October 2014 and the injection of liquidity reached US$4,48 trillion (Bernanke, 2012).[xii]

Obama took office in January 2009, having a majority in both parliamentary houses, which he managed to maintain only until the beginning of 2011. Immediately, he approved in the lower house, without any support from the PR, and with just three votes from the opposition in the Senate, the American Recovery and Reinvestment Act (ARRA), a broad and unprecedented economic recovery plan, via fiscal stimulus, budgeted at US$787 billion.[xiii] The main objective was to combat unemployment, whose rate, in December 2007, was 4.9%, but, with the crisis, rose to 7.2% a year later, on the eve of his inauguration. In December 2016, at the end of his second term, it had fallen to 4.7%, a lower level than in 2007.[xiv] However, the 12 million jobs created and low unemployment did not cause an increase in salary income, as part-time and/or low-paying jobs grew.

ARRA intensified the opposition Republican, defending the reduction of the tax burden, public spending and public debt. There is a synergy between the intensification of divergence over fiscal policy, tensions in democracy and coalitions between parties, pressure groups and segments of the electorate. The rejection of Keynesianism is inherent to neoliberalism, but the radicalization of this ideology has fueled extreme opposition, which rules out even a limited countercyclical fiscal policy. In this context, between 2009 and 2010, the austerity paradigm, vehemently contrary to the Keynesian moment of Obama, a president who ended up giving in, since mid-2010, to the policy of budget cuts to reduce the public deficit.[xv]Thus, in 2011, the Budget Control Act, which ended the disputed debate over the public debt ceiling, whose expansion was supposedly blocking growth. Negotiated between the opposition and government, the law intensified differences between the parties Democrata e Republican and within them.[xvi]

Acquiring your own home was central to your American Dream, built on the belief that freedom guarantees the opportunity to prosper and succeed. Taking advantage of this dream, the real estate lobby, since the post-war period, has managed to prevent the State from giving priority to popular housing – restricting it only to the very poor –, leaving it to the private sector, through the long-term mortgage market. Lenders received government guarantees against losses, and borrowers received subsidies. This supposed free market evolved towards the private sector advancing what was left of the popular housing policy. With the emergence and development of neoliberalism, financial deregulation, supported by Republicans and Democrats, removed borrowers' protection against bank exploitation. In the end, the government subsidy basically benefited the costly dream of middle-class and wealthy borrowers. triggered by Great Recession due to the bursting of the financial bubble in the mortgage market subprime, mortgages on more than 10 million homes were foreclosed. However, even Obama's timid measures to defend borrowers, at least Home Affordable Modification Program, which did not prevent millions from losing their homes, received harsh criticism from Republicans, given the immense resistance of neoliberal radicalism against any outcome other than the execution of defaulters. Aid to some caused resentment in others. There is evidence that the unrelieved and resentful supported Trump in 2016 (Dayen, 2015; Fernholz, 2016; Chappell, 2017).

In 2010, Obama implemented two health programs: the Affordable care (ACA) popularized as ObamacareAnd Health Care and Education Reconciliation Act. The second was an amendment to the first, to overcome opposition Republican unanimous to the changes, but also from a minority Democrata. Healthcare reform was one of Obama's main electoral commitments. It aimed to make health insurance cheaper and more accessible by expanding its coverage. In 2009, 49 million residents did not have health insurance. With the new legislation, another 20 million had access. The deficit fell to 29 million in 2015 (Obama, 2016). However, states with governors Republicans resisted expanding their health programs and joining the Obamacare, limiting achievement of the ACA goal of reducing inequality in health care (McCarty, Poole, Rosenthal, 2016).[xvii]

 Still in 2010, the Executive approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, aiming to rebuild financial supervision and regulation of firms and markets, protect consumers and investors against abuse, provide tools for the government to manage financial crises and, at the international level, raise regulatory standards and improve cooperation. Critics assess that, although well-intentioned, the measures provided timid progress, as they did not address the problem of moral hazard of too big to fail banks, that is, the rescue of banks that take too much risk; Furthermore, in 2014, government sources claimed that decisions were being frustrated by reactions from Republicans,making its implementation difficult (Miller, 2019).[xviii]

In the 2010 congressional elections, the Democrats They lost their majority in the House of Representatives and reduced it in the Senate, a result repeated in 2012, with Obama's re-election. In the 2014 elections, the Republicans they maintained their majority in the lower house and strengthened themselves in the Senate. These electoral defeats Democrats weakened Obama's legislative agenda.

By exhibiting clear trends of change, the 2016 presidential election demarcated US politics. In addition to the choice of Donald Trump, until then a outsider No. PR, as the party's candidate, there was a significant presence in the primaries Democrats, with another surprising name, Bernie Sanders, politician of the socialist left. He lost the nomination to Hillary Clinton, supported by establishment partisan, but in a close and relatively balanced dispute. These two facts expressed processes of change in the two main parties and in the electorate. Trump won the Electoral College by 304 votes to Clinton's 227. You Republicans They emerged as big winners at the polls, especially the Trumpists, who became their dominant faction.

At the beginning of the Trump administration, the PR approved in Congress the Tax Cuts and Jobs Act, a huge and important overhaul of the federal tax code, which cut $1,5 trillion from expected tax revenue, mostly favoring corporations and the wealthy. For the majority of citizens, the reductions were moderate. As it is a fiscal stimulus through tax waivers, Republicans supported her.[xx] In 2017, Trump tried to pass the American health care act, which aimed to empty the Obamacare, but the measure only passed in the Chamber, not in the Senate. Furthermore, in 2018, contrary to the Dodd–Frank, the Republicans approved the Economic Growth, Regulatory Relief and Consumer Protection Act, softening the demands of Obama's financial reform.

The neoliberal coalition's opposition to interventionist policies, even the most timid ones, in the fiscal, financial, redistributive and social areas, evolved towards radicalization of traditional political polarization in the USA, especially due to the strengthening of the extreme right in PR. Until 1977, political polarization in Republicans it was low, but since then, it has followed an upward trend, which has harmed democracy and the fight against inequality, a problem with which it is correlated (McCarty et. al., 2016).

Writing shortly after Trump's election, Nancy Fraser (2017a; 2017b) identified, based on the distribution and recognition variables, three types of neoliberalism in the USA: progressive, the reactionary and the hyper-reactionary. Progressive neoliberalism emerged and evolved in the Bill Clinton era and was hegemonic until Trump dethroned it. In fact, qualifying neoliberalism as Democrats progressive is almost an oxymoron, as its political economy is socially regressive; its pro-market policies pressure against the democratic principle of equality, as they oppose the State's counterbalance to market injustices and restrict fiscal resources for public policies to promote equal opportunities. Ultimately, Clinton formulated and defended the ideology of New Democrats, cousin of New Laborby Tony Blair. the coalition new-democratic it brought together service sectors with high symbolic and cognitive power – Wall Street, Silicon Valley and Hollywood –, businesspeople, suburban middle class, new social movements (feminism, anti-racism, multiculturalism, identity and sexual rights, youth). It was distinct from New Deal Coalition, which brought together union members, African-Americans, urban middle classes and some segments of large industrial capital. The ideology of progressive neoliberalism wanted to equate financialization and emancipation, the agendas of Wall Street and diversity, multiculturalism and feminism. It embedded a meritocratic conception of combating inequality. Given the political heritage of rights, originating from New Deal, this alliance guaranteed neoliberal hegemony.

O reactionary neoliberalism, represented by Reagan and the two Bushes (father and son), was anchored in finance and the military and extractive energy industries and targeted the richest 1%. It brought together large corporations (banks, financial speculators, firms in the real estate and energy sectors) and conservative groups (evangelicals, whites [southern and workers] and rural inhabitants). The divergence with the progressives was not in distribution, but in the demand for recognition, in relation to which they adopted a standard of traditionalist conservatism, so to speak, that Trump's hyper-reactionary neoliberalism will replace with a expanded, antagonistic and explicitly authoritarian conservatism. In addition to affirming national ethnicity, economic nationalism, unilateralism America First, anti-immigration and the Christian religion, Trump raised flags opposite to those of neoliberal progressivism: racism, misogyny, homophobia, xenophobia and Islamophobia.[xx] In the economy, it innovated by adopting protectionism, especially in the tariff war with China.[xxx] Among the political-ideological novelties of Trumpist neoliberalism, nationalism and the neo-fascist tendency stand out, absent in the reactionary versions of the Republicans, and progressiveTwo Democrats.

Neoliberal-nationalistism displayed strong anti-globalization rhetoric, asserted white supremacy and defended a xenophobic conception of national sovereignty: the country's territory is only for North Americans. In economic policy, despite some protectionism, nationalism was moderated by the neoliberal ideology of market deregulation. There was also a reduction in spending on social programs for the poorest, while the rich received tax cuts.[xxiii] By reducing the decision-making margin of democratic rights policy and leveraging its leadership with an autocratic and mobilizing discourse, opposing friends to enemies (immigrants and the left), this new neoliberalism is not only anti-democratic, but also has neo-fascist tendencies.

Fraser and others assess that deindustrialization and the deterioration of the living conditions of workers and the middle class are closely related to Trump's victory, which would mean not only a revolt against global finance, but also against progressive neoliberalism, whose economic policy It was plutocratic, weakened the unions, made work precarious, while its distributive policy proved to be derisory. The income of the poorest half fell from 19% in 1980, during the neoliberal turn, to 13% in 2021, but that of the richest 10% rose from 34% to 45% (Chancel et. al., 2021). Adherence to Trump's hyper-reactionary neoliberalism was the escape valve for the almost 63 million voters who voted for his program, dissatisfied with the lack of an alternative. With the progressive populist path of Bernie Sanders defeated, the Democrats they offered the electorate more of the same, namely Hillary Clinton.

For Fraser, the victory of the hitherto outsider No. PR, Trump, evokes, at first, a political crisis in the USA. But as its symptoms also appear in several other European and Latin American countries, it would be a global political crisis. However, it understands the political crisis as an expression, in the political sphere, of a broader, multidimensional crisis – also economic, social, environmental –, a general, global crisis, a hegemony crisis. Trump's rise would represent a political offensive to fill this hegemonic gap, a structural fracture.

In Germany, the main industrial and exporting power in Europe, the crisis arrived during the government of Grand Coalition between the CDU/CSU and SPD parties, headed by Chancellor Angela Merkel.[xxiii] In 2007, the country's GDP was 3%; in 2008, it slowed to 1%. In 2009, it fell a lot, negative by 5.7%, a result worse than the -4.3% in Europe. This poor performance was mainly due to the collapse of international trade. But the country recovered well in 2010 (4.2%) and 2011 (3.9%). Then, its growth slowed down again, having been just 0.4% in the 2012-2013 biennium, amid the debt crisis in Europe.[xxv]

Despite the sharp drop in GDP at the dawn of the recession, there was little unemployment, and it fell continuously between 2009 and 2014. This fact was one of the main achievements of Merkel's first two cabinets.[xxiv] This positive performance is explained by insufficient hiring in the expansion prior to the crisis, by wage moderation and by the widespread adoption, during the recession, of the policy of flexible working hours, which allows them to be reduced, with proportional reductions in wages and contributions to social security (Burda, Hunt, 2011). Ultimately, this performance is related to the policies of the SME: and with the reforms of the 2010 Agenda (Dauderstädt, 2013).

The first signs of transmission of the crisis appeared in July 2007, when the IKB Deutsche Industriebank, exposed to subprime mortgages, announced a massive drop in profits, indicating the need for rescue, with an injection of capital, to avoid going bankrupt. The rescue came soon, through a fund of €3.5 billion, put together by the public bank KfW and private banks (Schneider, 2014).[xxv] In February 2008, IKB obtained another large rescue package, worth €1,5 billion, two-thirds with resources from the federal government, which also granted, in August, a final bailout of €1.05 billion. Finally, the American investor Lone Star bought the IKB.[xxviii] In October 2008, the Bundestag approved, in an unusually quick vote and with the support of 82.6% of voters, an impactful €500 billion rescue package for the financial system to restore confidence and stabilize it.[xxviii] But it should be noted that, just like in the USA and other countries, Merkel, in 2010, implemented an austerity plan to control the public deficit.[xxix]

As for political competition and alliances, in Great Recession, there were two relevant strengthening, that of the center block and that of far right. In the 2009 elections, Merkel secured a parliamentary majority without the SPD, with the center-right coalition between the CDU and its old ally, the FDP. This cabinet faced the European debt crisis, an offshoot of the Great Recession. Merkel led the agreement that established the European Stability Mechanism, a fund that, through fiscal austerity targets, granted loans to Eurozone member states in difficulty. This external action by the chancellor encouraged the organization of the German eurosceptic opposition. A second Grand Coalition was formed based on the results of the 2013 elections, but this time between CDU/CSU and SPD, as the FDP did not overcome the 5% vote barrier to have a seat in the Bundestag. In 2015, this new centrist cabinet was faced with the humanitarian crisis of European migration. Merkel surprised: she liberalized legal restrictions to open borders to immigrants and refugees. The third and fourth Grand Coalition of the Merkel era resulted, respectively, from the 2017 and 2021 elections, which consolidated CDU/SPD centrism as a guarantor of democratic governance, thus keeping another change, the strengthening of the extreme right, under relative control. In 2013, the neo-Nazi party was created Alternative to Germany (AfD). In the elections at the time, it almost overcame the vote barrier, with 4.7% of votes, a feat it managed to achieve in 2017, when it was voted for by 12.6% of voters, becoming the third largest party in the Bundestag (Klikauer, 2019).[xxx] In 2014, it received 7.1% of the national vote in the elections for the European Parliament, electing seven members, including with the support of the extremist movement Patriotic Europeans against the Islamization of the West (PEGIDA), then appeared. Their ideology is eurosceptic, nationalist, anti-immigration and anti-Islam (Mushaben, 2017).

Even in the largest European economy, income inequality grew during the two related crises. In 2005, 2010, 2015 and 2018, post-tax national income in the hands of the richest 10% was, respectively, 25.1%, 28.5%, 30.3% and 29.6%, while in the 50% that make up the bottom half these results were 26.9%, 26.6%, 25.3% and 25.8%.[xxxii] According to the OECD, between 1995 and 2018, the percentage of Germans in the middle class fell from 70% to 64%. The satisfaction of this social segment is important for both the strengthening and weakening of democracy (Germani, 1978).[xxxi] However, despite greater inequality and the resurgence of the far right, international agencies that measure the quality of democracy include Germany, from 2006 to date, in 13th or 14th position in the select group of around 20-25 countries qualified as full democracies. I do not aim here to question the assumptions and methodology of this assessment.[xxxii]

Finally, the Great Recession and European debt crisis impacted Brazilian politics, which was also influenced by another process in the international market, the end of the tree its commodities. Such external events are not exclusive causes of the country's direction since then, as their impacts interacted with internal economic and political variables. Furthermore, the external influence was not only economic, but also political, highlighting the extreme autocratization, observed in Trumpism and its European and Latin American expressions. The interaction of international and national variables resulted in the end of the cycle of four consecutive federal governments of the Workers' Party (PT), through a controversial presidential deposition, supported by a broad ultraliberal coalition, led, initially, by the right and, soon after, by the extreme -right. It was a conflictive process, which implied increasing autocratization, due to the emergence of a political leadership with a neo-fascist profile, therefore, with mass support, inspired by and articulated by Trumpism.[xxxv]

Upon assuming the Presidency of the Republic in 2003, Luiz Inácio Lula da Silva proposed to implement a program and a social-developmental coalition (CSD) between capital and labor. The governing party coalition was heterogeneous, ranging from the moderate left to the traditional right. From 2006 onwards, with Guido Mantega taking office at the Ministry of Finance, economic policy began to change (Barbosa, Souza, 2010). Over time, tensions between social-developmentalist and neoliberal trends inside and outside the government increased and dismantled the peaceful coexistence initially observed. Political competition followed and soon after, conflict, especially since 2013, under Dilma Rousseff's government.

Before the Great Recession, Lula adopted general and specific measures to stimulate the economy and maintain investments.[xxxiv] The general measures were, above all, in the fiscal, monetary, credit and exchange rate areas and represented a flexibilization of the macroeconomic tripod, aiming to make stability and growth compatible, by stimulating demand (Oreiro, 2016). The specific ones focused on the most affected sectors, such as civil construction, the automotive industry, agriculture and retail sales, which were included, for example, with a reduction in import tariffs and taxes (TCU, 2009). In the fiscal area, after a record primary result in 2008 of 4.07% of GDP, the National Congress reduced the target from 3.8% in 2009 to 2.5%. Petrobras was authorized to increase its investments.[xxxiv] In the monetary area, the government stimulated credit policy, including expanding the power of the Central Bank to purchase credit portfolios from banks in difficulty, due to the crisis, as the other countries investigated here did.[xxxviii] In the exchange rate area, volatility in the price of the dollar was combated. Although growth in 2009 was negative, there was an excellent recovery in 2010. GDP variation in the period was as follows: 5.2% in 2008, -0.2% in 2009 and 7.5% in 2010. Considering six goals – full employment, distribution of income, growth, price stability and fiscal and current transaction balances, Lula's performance in the international crisis was good in the first three and in the fifth, fair in the fourth and bad in the sixth. He left his second term with a record approval rating of 87% and elected his successor, Dilma Rousseff.[xxxviii]

During Rousseff's governments, political tensions increased due to several factors, from two negative impacts of the international economy - the debt crisis in Europe and the end of the tree its commodities – even internal causes: market opposition to economic policy, party competition in the 2014 elections and the corruption scandal arising from Operation Lava Jet. Over time, in the Rousseff governments, the conciliation tendencies, observed in Lula's administrations, between social-developmentalist and neoliberal forces were broken, when different macroeconomic policy preferences were accommodated and made more flexible, within market discipline. , leading to the implementation of several social policies and new citizenship rights.

At the beginning of Rousseff's first term, in 2011, the government continued with the fiscal and monetary restrictions that began at the end of 2010. It chose to reduce inflation and the pace of growth. In the previous two years, stimulus to the economy caused an increase in inflation and the nominal deficit, an indicator that, in 2008, was just 1.53% of GDP, rising to 3.34% in 2009 and falling to 2.56% in 2010. The market criticized this performance, due to the increase in public sector net debt, which rose, in the period, from 38.5% of GDP to 42.1%.[xxxix] From January to July 2011, the basic interest rate, which had been rising since mid-2010, went from 10.75% to 12.5%. Furthermore, the new government announced a fiscal contingency of 1.2% of GDP. However, this brake coincided with the European crisis, which then weakened the world market. European governments faced it with austerity and monetary stimulus, which devalued the euro and increased the value of currencies from emerging countries with attractive interest rates, as was the case in Brazil. Therefore, although the restrictive measures generated the desired slowdown, it exceeded what the government expected. GDP in 2011 grew just 2.7%, below the 5% forecast.

Since August 2011, in response to the worsening global economy, the government has implemented measures to expand economic activity and promote growth. The strategy adopted was to change macroeconomic prices and other relative prices to stimulate private investment, especially in industry. In monetary policy, a cycle of reduction in the basic interest rate began, which, in October 2012, fell to the lowest level, until then, of the inflation targeting regime: 7.25% per year. In 2013, real interest rates fell to 2%. Taxes on personal credit were reduced and banks' compulsory deposit requirements were relaxed. This set of measures was called New Economic Matrix (NME). They generated conflicts with financial institutions, which, in a short time, went beyond the scope of disagreements on economic policy and evolved into a political veto of finances for the president, whose candidacy for re-election in 2014, the market rejected.

Furthermore, the tree its commodities. Although this economic fact is not directly related to the 2008 crises and in Europe, the appreciation of commodities had been important in sustaining the pink wave in Latin America, a region specialized in the export of primary products and the extractive industry. O All Commodity Price Index, from the IMF, grew uninterruptedly from 2003 to 2008, going from 65.70 to 163.13; fell until 2009, in Great Recession; it recovered until 2011, surpassing the 2008 level, but fell until 2014 (159.12) and plummeted to 108.28 in 2015, having continued to fall until 100 in 2016 (base year for the calculation).[xl]

In the 2014 presidential election, Rousseff, the PT and other allies faced opposition to the NME and the fall in prices of commodities (which led to recession). Furthermore, the aforementioned corruption scandal emerged, whose media impact fueled dissatisfaction with the parties and democracy, discontent evident since the June days, in 2013, a kind of Arab Spring Brazilian. Initially, the scandal involved Petrobras, a mixed company and the main Latin American company. Despite everything, Rousseff was re-elected, but in a tight dispute against the main opposition party until then, the PSDB. Once the elections were over, those who lost asked for a recount of the votes. At that point, even with Rousseff's victory, the social-developmental coalition was volatile, while the neoliberal coalition was strengthening, unwilling to tolerate any flexibility in economic policy.

In 2015, as the revelations of the lava Jato reached the public, oppositional social pressures increased, having repercussions on the newly sworn-in Congress. Although the president of the Chamber of Deputies was part of the governing coalition, he was elected to this role competing against the PT candidate. In the following months, he broke with the government, which, with a fragile party base and moving towards the opposition, faced a crisis of ungovernability. The change in the new government's economic policy was important. Under great pressure, Rousseff joined the fiscal adjustment, while the conservative majority in Congress, along with the left, opposed the approval of the presidential measures. Weakened, the government lost support from voters and, simultaneously, was cornered by the opposition, which ended up finding fiscal reasons in the government accounts to propose presidential impeachment. Although the reasons raised for Rousseff's deposition were quite dubious, as they had been practiced by previous presidents, without their legality being questioned, they led to, in April 2016, the Chamber of Deputies authorizing the initiation of the impeachment process. . After his deposition, with broad support from the business community, vice-president Michel Temer took office, having completely broken with social-developmentalism. He carried out ultraliberal policies. These facts changed the relationship of forces, which became unfavorable for the developmental heterodoxy and, above all, for the left, even the moderate left. The Rule of Law and democracy were also weakened, including due to the unprecedented emergence of new right-wing forces, inclined towards extremism, which began to mobilize in the streets, a political space hitherto associated with democrats and the left. The rivalry against the PT became the center of gravity of the political struggle. The anti-PT flag ended up being led by the extreme right, precisely by federal deputy Jair Bolsonaro, who ended up running for president of the Republic and winning the 2018 elections, in a context of change in the national party system.

Finally, it is worth highlighting that, although, initially, the Lula government avoided the 2008 crisis, its developments in Europe challenged the first two years of Rousseff's first term, which, after unsuccessful heterodox attempts, hampered by the end of the tree its commodities and pressured by business, gave in to austerity at the beginning of his second term, amid the crisis of the main parties, the rearrangement of coalitions and the dispute for command of the government. In Brazil, the resumption of neoliberalism was politically radical, as it was based on a content ultraliberal and because it occurred in a context of a strong dedemocratizing shift, first to the right, then to the extreme right, a political force that won the 2018 elections and strengthened the autocratization, although under the formal validity of democracy.


Taking four international economic crises as independent variables, I analyzed, at least historical-comparative method, its impacts on the states of three countries, USA, Germany and Brazil. I conceived the concept of State as a synthesis of three dependent variables: decisions (of economic policy and institutional rules), support coalitions and political regime. This conception of the State guided the comparison.

Na Long Depression, Germany and Brazil implemented authoritarian-competitive regimes, resulting, among others, from the responses (decisions) of political-institutional and social actors (coalitions) to the internal effects of this international crisis. In the USA, it impacted the political system – but not exactly on the autocratization-democratization axis of the regime –, opening the Fourth Party System, characterized by the supremacy of Republicans about the Democrats and from industry (which gained tariff protection) over agriculture (exposed to free trade).

Na great depression, the mixed economy emerged as a paradigm, displacing orthodoxy. There was also innovation in coalitions and regimes. This crisis, which emerged in first reverse wave of democracy, started in 1922 by Italian fascism, contextualized three decades of authoritarianism. In 1933, Nazism fascistized the German political regime (a trend also observed in Portugal, Spain, Japan, etc.). A broad coalition of big business against proletarian organizations supported the military keynesianism of the Führer. In Brazil's Revolution of 1930, a coalition of dissident oligarchs, opposition politicians, urban middle classes and military officers overthrew the Oligarchic Republic. The new regime modernized the State and the economy, but through conflicts, such as the Constitutionalist Revolution of 1932, the insurrection of 1935 and Integralism, resulting in, in 1937, a developmental dictatorship, which lasted until the end of the Second World War. In the USA, the change was democratizing, supported by the New Deal Coalition, a version Yankee do historic commitment, which promoted urban and rural business interests and incorporated labor, union and social rights.

After the war – an outcome of the Great Depression and economic-military imperialism – the second democratic wave, which covered the three countries investigated. In Germany (through external intervention) and in Brazil (through a military coup), dictatorships fell. The German nation moved towards democratic development, supported by social market economy. Brazil joined the populist democracy, supported by the PSD-PTB developmental alliance, bringing together progressive and conservative politicians, industrial groups and workers. In the USA, despite the Cold War and conservatism, democratic capitalism continued, institutionally supported, above all, by Democrats.

A Stagflation Crisis uncovered the turnaround neoliberal, which, since 1979-1980, has become hegemonized. In the United Kingdom, Thatcher broke the Keynesian consensus, leading the radical adhesion of Conservatives to the restoration of market authority.[xi] Then, in Reagan's USA, conservatism and right-wing polarization became more pronounced. Republicans. O sixth party system displaced the New Deal Coalition and, since then, party cleavages have deepened.

In Germany, the center-right CDU/CSU coalition electorally defeated the SPD for 16 years. It remained social market economy, but income and wealth inequality between the top 10% and the bottom 50% has been increasing, a trend also observed in the USA. Pressure against the welfare state and against state intervention in the economy.

This strong trend market oriented developed concomitantly with third democratic wave, configuring a contradiction between economic and political processes. Today, after forty years, instead of free market develop democracy, there is evidence of a reverse third wave (Lührmann, Lindberg, 2019).

In Brazil, the context of Stagflation Crisis it led to the liberalization of the military dictatorship and industrializing state actions, in response to the oil shock, which were criticized by industrialists. Furthermore, the external debt crisis – an offshoot of the US' orthodox response to stagflation – and the Figueiredo government's recessive adjustment disrupted the developmental-authoritarian alliance between private capital (foreign and national) and state capital. The conflicts and agreements that occurred in this political process placed the country in the democratic transition, which ended the dictatorship, but preserving authoritarian institutional variables.[xliii]

Finally, the Great Recession delimits the history of neoliberal capitalism, being the structural basis of today's debate on the crisis of democracy and autocratization. In the three countries studied, the response to it led to innovation, through the resumption of moderate Keynesianism, with fiscal stimulus and monetary expansion. Despite the moderation, its adoption generated reaction. Since 2010, orthodox economists, supported by the finance community, have emphatically defended the expansionary fiscal contraction, austerity, a perspective to which several governments adhered, convinced or under pressure, such as Obama, Merkel and Rousseff, in this case, in 2015.[xiii]

As for the political regime, the Great Recession and its related crisis in Europe impacted all three countries. In Brazil, the end of commodity boom it was another element of cyclical pressure. With varying intensities, there was either autocratization (USA and Brazil) or far-right political-ideological forces strengthened (Germany). A key year was 2016: in May, oppositionists removed Rousseff from office, targeting her impeachment; in June, the Brexit won the referendum in the UK and, in November, Trump won the presidential elections in the USA, a country that, since then, to mention one fact, the Economist Intelligence Unit characterizes as democracy fails, and no longer as full democracy.[xiv] Although this agency qualifies Germany as a full democracy, the far right has grown there. In all three countries, inequality has increased. In Brazil, measured by the Gini Index, it had been falling until 2015, when it began to grow uninterruptedly (Neri, 2019).

The hypotheses remain. The first assumes that Capitalist crises reinforce the chance of regimes changing or increasing or decreasing their levels of democracy or autocracy. There are fifteen possible outcomes, as there are five crisis situations in three countries – I examined the great depression before and after the war, a conflict that it helped to cause, in addition to revealing the structure of mixed economy.

There was a change of regime in six cases, three authoritarian and three democratic: Brazil (Long Depression); Germany and Brazil (great depression and post-war); and the developments of the Stagflation Crisis in Brazil. As for the processes of increase or decrease in the amount of authoritarianism or democracy in regimes, without there being qualitative change, there was autocratization in three cases: in Germany (Long Depression) and in the developments of Great Recession in the USA and Brazil, since 2016, respectively, with Trump, Temer and, above all, Bolsonaro. There was also a controversial case of autocratization, the USA in Stagflation Crisis, as some saw Reagan as an exponent of reactionary neoliberalism; like Thatcher in the UK, he took a strong stance against the unions; at least, I suppose that there was no democratization of democracy in their governments, a phenomenon that, however, occurred in two cases, both in this same country, in great depression and post-war.

 Finally, there are three situations in which there were changes in the political system, but not exactly in the political regime. At Long Depression, the party system in the USA came to dominate Republicans. In Stagflation Crisis, the German center-right displaced the government's center-left for 16 years. In Germany, the context of Great Recession gave rise to four situations of Grand Coalition, in addition to the one that already existed in Merkel's first cabinet (2005-2009); This data is relevant because, despite the strengthening of the extreme right (AfD), the consolidation of centrism CDU-SPD has guaranteed democratic governance.

In the above cases, the changes processed in the crises of capitalism, impacted one of the three variables of the concept of State, the regime, the other two being coalitions and decisions on public policies, rights and institutional rules. These three variables combine, resulting in different syntheses or state equations, all of them associated with the changing relationships of social and political actors with Leviathan in the different critical junctures of different phases of capitalism. Such data corroborate the first hypothesis. A austerity, for example, was shown to be a response to Great Recession tending to be autocratic, as it is anti-egalitarian, as it restricts the supply of material resources necessary for the minimum effectiveness of the democratic principle of political equality.

Second hypothesis: the autocratization, induced in international crises, it requires a pro-business relationship of forces, that guarantees the subordination of workers. These general conditions occurred in the autocratizations examined here (ignoring the Reagan administration). I identified three situations of this type:

  1. in Hitler's fascism (great depression), leader who forged – mobilizing the masses, in the chaos of depression, hyperinflation and ungovernability of Weimar Republic, and benefited from the division of the left – a business unification in support of totalitarianism;
  2. in the Trump and Bolsonaro governments (Great Recession), leaders who, faced with the crisis of democratic legitimacy and corruption (Brazil), mobilizing the masses and politically restricting actors identified as enemies, unified the business community (or part of it) and conservatives in an ultra-liberal agenda of democratic erosion;
  3. in Germany from Long Depression, faced with class balance, Bismarck arbitrated an agreement and articulated a protectionist coalition between industry and agriculture, with a nationalist-military and imperialist inclination and restriction on the action of social democracy; in Brazil from great depression, Vargas, given the disintegration of the alliance supporting the Revolution of 1930, gained military support for the dictatorial coup of new state, which resulted in an increase in the autonomy of the State.

The third hypothesis argues that the democratic commitment of actors is a barrier against autocratization. I confirm this in the following cases where extreme right-wingers were contained: in the USA, in great depression and in the post-war period; in Brazil, in Stagflation Crisis; and in Germany, in Great Recession.

Examined interdisciplinary and historically-comparatively, international economic crises make it possible to understand the shift of regimes along the autocratization-democratization axis as national responses processed within them, circumscribed in the political economy of the changing relations between State and society in each country, and not as exclusively political-political processes. institutional. Such displacements mobilize structures and actions. Without ignoring their specificities, the autocratic tendencies of Trump and Bolsonaro are rooted in the increase in inequality, the intensification of the distributive conflict and the emergence of far-right leaders, who, in coalition with conservative politicians, businesspeople and voters, define their enemies and they are aimed at the masses, to build a proto-fascist standard of legitimation, an alternative to the legitimacy crisis of democracy, a representative regime weakened by citizens' dissatisfaction with its current balance between benefits and costs. Current autocratization emanates from contradictions between neoliberal capitalism, in crisis, and the democratic State, which have internationally challenged political parties across the political-ideological spectrum.

*Marcus Ianoni He is a professor at the Department of Political Science at the Universidade Federal Fluminense (UFF). Author, among other books, of State and coalitions In Brazil (2003-2016): social-developmentalism and neoliberalism (Counterpoint).[]


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[I] The identification of the four crises is in Gourevitch (1986), Stiglitz (2009) and Roberts (2009). The last two call the 2007-2008 crisis Great Recession.

[ii] The State also makes judicial and administrative decisions and exercises ideological functions.

[iii] Reports about the recession can be found at these links: Folha de São Paulo, Folha de São Paulo e Financial Times. Accessed: 10/09/2019.

[iv] In 1934, there was a constitutionally supported regime change that lasted just three years.

[v] According to the World Bank [IBRD], world GDP varied as follows: 1973 (6.5%), 1974 (1.9%) and 1975 (0.6%). Inflation was, respectively, 11.7%, 16.3% and 11.7%; to see on this link . Accessed: 15/08/2020.

[vi] Until 2009, 79 countries adopted floating exchange rates. In 2013, there were 65, cf. on this link. Access: 10/08/2020.

[vii] See FED report on this link. Access: 28/08/2020.

[viii] Report on the increase in the share of finance in GDP, between 1950 and 2010, on this link. Accessed: 10/08/2020.

[ix] Reporting on Reagan voters is on this link. Access: 20/08/2020.

[X] Report on Reagan's action against the air traffic controllers strike is on this link. Official information about Reaganomics are on this link. Accessed: 10/08/2020.

[xi] Information from the US Treasury Department about TARP is available on this link. Access: 12/06/2021.

[xii] Quantitative easing (quantitative easing) is a monetary policy of purchasing, by the central bank, certain amounts of public bonds or other financial assets with the aim of stimulating the economy. See reports about the quantitative easing on this link. Accessed: 12/06/2021.

[xiii] Report on the approval of Obama's plan is on this link. Access: 13/06/2021.

[xiv] Official data from the US Bureau of Labor Statistics are available on this link. Reporting on employment in the Obama administrations is on this link. Access: 26/12/2021.

[xv] Reports about austerity in the Obama administrations are on this link e in this other link. Accessed: 27/12/2021.

[xvi] Report on the budget cut in 2011 is on this link . Access: 31/12/2021.

[xvii] As of November 2021, 12 states have not expanded Medicaid, to join Obamacare. Reports about Obama's health policy are on this link e in this other link. Accessed: 01/01/2022.

[xviii] Information from the US House Committee on Financial Services on financial regulatory reform are on this link. Access: 30/12/2021.

[xx] Reporting on Trump's fiscal stimulus is on this link. Access: 30/12/2021.

[xx] I adjectived the conservatism taking inspiration from Fraser.

[xxx] A description of facts from the Trump administration is next linc. Access: 24/04/2022.

[xxiii] Report of Center on Budget and Policy Priorities about Trump's budget policy is this link. Access: 24/04/2022.

[xxiii] CDU is the Christian Democratic Union and CSU, the Christian Social Union. BBC News report on Merkel's first Grand Coalition is on this link. Access: 12/06/2022.

[xxv] Consult IBRD on this link. Access: 31/05/2022.

[xxiv] On total unemployment in Germany, see this link. Access: 31/05/2022.

[xxv] Reports about the mortgage crisis in European banks are on this link e in this other link. Accessed: 11/06/2022.

[xxviii] Report on the sale of IKB is on this link. Access: 11/06/2022.

[xxviii] Reporting on the German rescue package is on this link. Access: 12/06/2022.

[xxix] Reporting on austerity in Germany is on this link . Access: 19/06/2022.

[xxx] Reporting on the elections in Germany in 2013 is on this link. Access: 19/06/2022.

[xxxii] These data are on this link. Access: 19/06/2022.

[xxxi] Reporting on the German middle class is on this link. Access: 19/06/2022.

[xxxii] Consult

[xxxv] Report on Bolsonaro's ties with Bannon, Trump's advisor, is on this link. Access: 26/06/2022.

[xxxiv] Report on Lula's position in the face of Great Recession is on this link. Access: 26/06/2022.

[xxxiv] Reports on the fiscal policy and investments of the Lula governments are on this link, in this other link and still on this link. Accessed: 26/06/2022.

[xxxviii] Report on Lula's measures to combat the crisis is on this link. An opinion piece is in this other link. Accessed: 02/07/2022.

[xxxviii] Report on Lula's popularity upon leaving the government is on this link. Access: 02/07/2022.

[xxxix] Report on the 2010 nominal deficit is on this link. Accessed: 02/07/2022.

[xl] IMF data on commodities are on this link. Access: 03/07/2022.

[xi] About Thatcher's revolution, see this link. Accessed on: 20/07/2022.

[xliii] O Document of the Eight, which marked the business campaign for redemocratization, is on this link. Access: 20/07/22.

[xiii] About austerity, see this link. Access: 20/07/2022.

[xiv] Consult on this link. Access: 20/07/2022.

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