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By Gilson Schwartz*

Our alert focuses on the main mistake of the Brazilian economic and political debate: centering the controversy, both on the left and on the right, on the counterpoint State x market in overcoming our growth crisis.

This opposition is increasingly highlighted in the press.

On the one hand, there are economists and politicians who insist on the thesis that, in order to resume economic growth, Brazil needs to improve its competitiveness and productivity, that is, it needs to improve the supply side, reduce bureaucracy, reduce the role of the State, leave free -initiative pull economic growth.

On the other hand, there are those who defend an ostensive and intensive resumption of economic growth by means of stimulating demand, mainly freeing the State to spend more, invest more, generate more jobs and transfer income, thus breaking the so-called “golden rule” of the public spending in Brazil.

For this, it is necessary to change the Constitution or obtain an authorization from the National Congress to release more credit for the government to pay expenses. Without this authorization, the government would again use creative devices to pay the expenses, a situation that served as a pretext for the impeachment of President Dilma Roussef.

In other words, the “golden rule” of the Budget is provided for in the Federal Constitution and is a mechanism that prohibits the government from incurring debts to pay current expenses, such as salaries, retirement benefits, electricity bills and other costs of the public machine.

When the rule is not complied with, managers and the President of the Republic can be framed in a crime of responsibility.

It is in order not to break the rule that the Bolsonaro government requested that Congress approve a supplementary credit of BRL 248 billion for the government to pay essential expenses – to be obtained by issuing Treasury bonds.

In practice, it is a temporary solution to not violate the law or having to freeze essential expenses and exacerbate the country's economic crisis.

As in politics, in economics (that is, in economic policy) this polarization clarifies little and polarizes a lot.

The central issue in today's capitalist world in crisis is no longer the moribund opposition between State and market, but mainly the reassessment of the relationship between economic growth and income distribution. The recovery of growth and the formulation of new models of human development depend on the in urgent need reversal of the long-term trend towards income concentration.

French economist Thomas Piketty, famous for his 2013 work, Capital in the XNUMXst century (Rio de Janeiro, Intrínseca) in which he denounces the concentration of capital throughout history, returns to the theme in a book published in France this September, with the very concise title Capital and ideology.

Its central thesis is that inequality is not economic or technological, but ideological and political. To the extent that the capitalist system produces inequality, its elites formulate doctrines to justify inequality.

For example, the idea that the accumulation of wealth is a matter of merit, not power, that is, the smartest create their opportunities and, therefore, charging taxes from the richest, taxing their assets, would be a disservice to economic growth. and the freedom of individuals.

In other words, it was no coincidence that neo and even ultraliberalism gained, from the 1980s onwards, so much strength in the media, in the press, in short in the ideology propagated by information and communication systems, including and especially on the internet. They are the richest, the most educated, the most privileged, the large corporations that control vast masses of technological, industrial and financial capital that defend an ideology that turns the State into a demon, corruption the origin of all evil, public policies and the public sphere itself in the domain of lazy, idle or communists.

Brazil: unequal and unfair

The growth of more conservative tendencies and populism with a fascist bias is part of this movement in which the middle classes are asphyxiated by the reduction of economic growth, the popular classes fall into misery or chronic unemployment while the elites use all their spheres of influence to prevent income distribution (which becomes even more concentrated when the economy grows little or goes into recession).

Research by Piketty's team clearly shows this, including for Brazil. They find in this perverse dynamic of crisis and income concentration one of the explanations for Jair Bolsonaro's electoral success.

Its social and electoral base is made up mainly of a resentful middle class and an elite that is articulate enough to defend its privileges as if they were something natural.

The work of Piketty and his team (dozens of economists collecting and analyzing data on the evolution of inequality in the world) marks an epoch. It is a rational, scientific, analytical response to the ideological game that makes the opposition between State and market an interpretation key that serves the very specific interests of a paranoid elite.

This is the world of “iconomies”. Economic phenomena, growth trends and economic policy options do not result from a supposed science of markets that work according to the “invisible hand”. They are the direct product of ideologies that were born to justify privileges and prevent the richest from losing income, assets and properties precisely during the crisis.

But capitalism, which produces inequality, encounters limits to its own development if the concentration and centralization of capital and power exceeds the limits of sustainability. This applies to our relationship with nature, with the poorest and most excluded, with immigrants and minorities. The greater the inequality, the less viable the market economy in a democratic society. Hence the popularity of populism whose greatest symbol is the “gun” in hand.

fire warning

The economic growth crisis in Brazil and in the world is the product of ideology and not of technological problems, corruption or the insufficiency and inefficiency of production and the market. Economists on the left and right, who in recent times continue to polarize the debate around the confrontation between supply and demand, the market and the State, remain trapped in an outdated agenda.

It's time to heed the warning of French economist Thomas Piketty. your new book Capital and ideology it shows how capitalism, which produces inequality, encounters limits to its own development if the concentration and centralization of capital and power exceeds the limits of sustainability. This applies to our relationship with nature, with the poorest and most excluded, with immigrants and minorities. The greater the inequality, the less viable the market economy in a democratic society. This contradiction explains the popularity and risks of populism whose greatest symbol is the “gun” in hand.

*Gilson Schwartz is a professor at the School of Communications and Arts at USP. He leads, at the same University, the research groups “City of Knowledge” and “Iconomy”

Learn more about Piketty's ideas on this link.

Extracts from the new book:

Graphics and basic ideas in “Powerpoint” (PPT) format. In this link.

World Inequality Database. In this link.

Inequality explains Bolsonaro’s “success”. In this link.

See this link for all articles

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