imperialism and dependency

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In neoliberal capitalism, the subordination of the economy of dependent countries enters a new phase. More denationalization of the economy, early deindustrialization. Reactivation, on new historical bases, of some dependency-type elements from the pre-1930 period

The economic policy of the Bolsonaro Government suggests that some established theses about capitalism and the Brazilian State in the recent period should be revised. Perhaps, it would be better to say, they should be rectified. I write this text with the intention of starting a debate about this rectification.

Two facts that occurred at the beginning of February serve as a starting point for reflection. The Central Bank again reduced the Selic rate and the Ministry of Finance suspended some legal obstacles that made it difficult for foreign construction companies to participate in infrastructure projects in Brazil. They are not isolated facts. Those who follow the news know that the Bolsonaro Government has taken several measures that are not exactly to the liking of important segments of financial capital and many others that broadly serve the interests of international capital.

In progressive academia and journalism, the view according to which “financial capital” generally presented dominates over “productive capital”, also presented in this general characterization. The general model is very well known and was applied as it is here in Brazil. I anticipate an observation: a thesis produced in central countries and bearing in mind, fundamentally, the reality of capitalism in these countries, was transplanted and applied as it is in a country of dependent capitalism like Brazil. We will come back to this point.

Now, let's see such a general model: (a) in the current phase of capitalism, we would have the accumulation of capital under the aegis of finance capital - the capital that would be valued without leaving the financial sphere, according to the definition of François Chesnais inspired by the concept of Marx's interest-bearing capital; (b) having Brazil entered, at least since the Fernando Henrique Cardoso administrations, in the neoliberal capitalist model, financial capital would predominate here and, third step of the reasoning, (c) we would be under the political hegemony of this fraction of the bourgeoisie.

The question then is the following: is the Bolsonaro Government challenging the current model of capitalism? Yes, because the Central Bank, under his government, has been systematically lowering the basic interest rate and the President of the Republic has used public banks to pressure private banks to reduce the interest rate on overdrafts. The president even publicly provoked bankers, saying something like: “Caixa Federal is going to take all their customers”. Paulo Guedes, in turn, spoke in Davos against the enslavement of the Brazilian economy by half a dozen banks. They are similar to the statements made by the former Minister of Economy Guido Mantega, statements to which what would have been the active participation of financial capital in the coup movement was attributed.

A first attempt at a solution would be to consider the hypothesis that financial capital does not dominate the Brazilian economy nor does it hold hegemony in the power bloc. But, the existing facts and analyzes are consistent to veto this path. A second approach would be to ask whether the notion of financial capital and the representation of its conflict with productive capital would not be used without due adaptations to the reality of Brazilian capitalism, which is a dependent capitalism. This is the path that seems most suitable to us. The solution would look more or less as follows.

Let us start with the most general explanatory model. In neoliberal capitalism, the subordination of the economy of dependent countries enters a new phase. More denationalization of the economy, precocious deindustrialization and concentrated in the segments of greater technological density, that is, reactivation, on new historical bases, of some elements of the type of dependency of the pre-1930 period. Financial capital, in this model, needs to be dismembered. We have a segment in Brazil, mainly the commercial bank market, which is dominated by large national public and private banks. Who is harmed by the economic policy measures of the Bolsonaro Government is the national segment of financial capital. It is against him that Guedes spoke out in Davos and it is against him that Bolsonaro delegated to the president of the Central Bank the authority to open the national banking market to foreign banks.

The objective seems to be the same one that Fernando Henrique and Pedro Malan successfully pursued in the 1990s. Yes, Fernando Henrique did not represent “financial capital” in general, but, particularly, international financial capital. This policy underwent a reversal during the Lula Governments. What are we talking about? Of imperialism and dependency. In Brazil, one cannot import, without specifications, the thesis of the predominance of financial capital. Here, the most important conflict within the capitalist class has been, over the last few years, the conflict between the internal big bourgeoisie, which includes banking capital, and the bourgeoisie associated with international capital, which includes segments of productive capital.

The two fractionation systems intersect. Just as in the segment of financial capital we have a sector that integrates the internal bourgeoisie and another that integrates the associated bourgeoisie, so in the segment of productive capital we have an internal bourgeoisie and associated bourgeoisie. This division is clear in the manufacturing industry and at the agribusiness peak, where JBS coexists with Bunge. The two fractioning systems intersect, but which would be the main one?

Since the 2015-2016 crisis, intra-bourgeois conflicts have entered a phase of moderation. The internal bourgeoisie without having dissolved itself as a class fraction, since it maintains a policy of pressure on the government as we are seeing in the resistance to the reduction of the common tariff of Mercosur, abandoned the position of autonomous fraction, that is, endowed with a political program itself with a view to political hegemony, by adhering, in its majority – attracted by policies such as labor reform and pension reform – to the Bolsonaro Government.

It is a conflict that, even moderate, remains and, in it, the Bolsonaro Government clearly takes sides with international capital: privatizations that are passing public companies into the hands of foreign capital, the sale of Embraer, the opening of the public works market after the destruction of national engineering companies, passive and explicit alignment with US foreign policy, and so on.

The Bolsonaro government does not primarily represent financial capital in general. It represents the associated and international segment of this capital – Brazilian investment banks focused on raising foreign funds, insurance companies and foreign investment banks. The position of the large national private banks, which, by the way, supported the Dilma Government until the eve of the impeachment, as shown by research by André Flores Penha Valle, is threatened. They continue to make huge profits, but have lost control of state policy. They may, in the coming years, also lose control of the domestic banking market. The same goes for the productive segment of the domestic bourgeoisie. Many industrial and agribusiness companies may suffer the same fate as the large contractors.

Within the internal bourgeoisie, we do have a conflict between internal financial capital and internal productive capital, but this is not the main existing conflict within the Brazilian bourgeoisie. The main one is the conflict between the domestic big bourgeoisie as a whole and the associated bourgeoisie and international capital. It is on the side of these last two segments that, without any doubt, the neo-fascist government of Jair Bolsonaro is found.

Analysts of recent and current Brazilian politics who believe it is possible to discuss the conflict between “rentiers” and “productive capital”, omitting dependency and imperialism, need to review their analyses.

*Armando Boito He is a professor of Political Science at Unicamp.

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