Lula and Haddad

Image: Quang Nguyen Vinh


The social-democratic dryness and the crossing of the Rubicon of interest rates dictated by the Central Bank

The social-democratic tree, originating from the great labor and intellectual movements of the end of the 1990th century, which projected throughout the XNUMXth century, withered. On the one hand, because the experience destined to be its most complete historical model – the Russian Revolution – ran out of steam in the XNUMXs and turned into a capitalism “like the others”, a democracy dominated by mafias that acquired state assets at a low price. .

And also because the social-democratic countries, which tried to build peaceful and more equal societies – with rare exceptions – were subjected to neo or social-liberal recipes, under the political and financial hegemony of the new poles of world power. China, Cuba, Switzerland, Sweden, Denmark and Norway, however, are specific paths, whose analysis and evaluation do not fit in this short article. The social-democratic dryness and the crossing of the Rubicon of interest rates dictated by the Central Bank are what inspire this article.

The expression “social-democratic tree” I took from an old and beloved book of the same name, published in 1998 (University Presses of France) on the occasion of the critic “Congres Marx Internacional II”, whose lectures serve to guide the debates on the democratic question a little, at a time when the pillars of its Social State are trembling in France and here in Brazil we are fighting to reconfigure our Rule of Law, as well as the idea of ​​a sovereign nation and of social democracy, within the limits and spaces of the 1988 Constitution.

The residues of the social-democratic tree are present in the Brazilian crisis, first with the failed attempt of the Coup of January 8, now with this crossing of the Rubicon of the Central Bank’s arbitrary interest rates, which we inherited from Bolsonarist fascism, which the “big press” imitating Oscar Wilde's position on same-sex love relationships, he dare not call it by name.

The Rubicon was a watercourse in Northern Italy, which ran towards the Adriatic, where Julius Caesar was supposed to cross in 49 BC to face the Armies of Pompey, who rejected his armed presence in Rome. The name inspired the famous expression “to cross the Rubicon”, which registers the need to face an extraordinarily difficult challenge, to obtain a decisive victory over a situation or against a certain enemy.

Crossing the Rubicon here means showing society, the press that can be serious, and above all the parliamentary bases of the government that, either we separate the concept of independence and autonomy of the Central Bank, from the concept of sovereignty of the Democratic State, or the Central Bank becomes the sovereign and the Brazilian State will dry up in the financial circuits dominated by the banks and financial agencies of the rich countries. And it will do so even if any norm, whatever it may be, that superimposes “autonomy” or “independence” of an administrative entity of the State, on the sovereign State, is unconstitutional.

Financial globalization coined iron rules to reorganize the international market, the new geopolitical relations in a new world-system and to integrate the most recent technological conquests in a new pattern of accumulation. Relations between formally sovereign nations, including among the most developed ones, thus left the exclusive sphere of diplomacy shaped after the Renaissance – between wars of conquest and peace treaties – and were more strongly located in another form of regulation: the circulation of capitals that exist mainly as electronic signals, on the one hand, and, on the other, in the creation of instruments for a more immediate relationship between countries, through virtual money “looked after” by “independent” central banks. Having control over the currency is a founding economic-material assumption of a democracy with anti-fascist antidotes, as this control will allow social policies of minimal cohesion, to expand the appreciation of democracy to the poorest layers.

This ammunition – material and virtual – is what fuels “cautious” wars, exported to the periphery of the system, either in their traditional warlike forms, or through hybrid, supposedly democratic or “revolutionary” movements. In this complex of relationships, innovative techniques and finance and new regulated wars (such as the war between Russia and NATO), which are only of interest to the large financiers of the war industry and to the financiers of indebted States, is that the flows of capital and imagination, controlled by the dogma of the one way path, is where the struggle for interest rates takes place in our country. It takes place between the original government of the polls and the de facto government, established by the bureaucracy that manages the new “world system”. It is the struggle between the “Lula government” and the “independent Central Bank government”.

Hermann Heller, born in Poland in 1891 and died in Madrid in 1933, was a German jurist, from the non-Marxist wing of social democracy, whose reflections on the socialist idea, in the context of the rise of Nazism, are extremely useful to think about today – not the issue of socialism whose possibilities are beyond the field of vision of the near future – but to reflect on the possibilities of democracy, as a political regime, in a new era of the rise of a fierce, homicidal, racist, misogynistic and nationalist extreme right , in the belligerent sense of this expression. Hermann Heller stated that the exact limit that would indicate the end of capitalism and the beginning of socialism could not be considered a gift of nature, but a question of the political will of socialist subjects, based on real power relations.

The conception that the interest rate is an obligatory product of market spontaneity, defended by the Central Bank bureaucrats and the defense of government politicians, that – within certain levels – it can be trained, according to the specific social interest of each sovereign country, are the conceptions that are always fought in situations of the most acute crisis of the global system of capital, disputes that are always resolved, in relation to our country, by non-spontaneous decisions, but political ones, coming from the USA, as seen in recent weeks. We need to cross this Rubicon through a narrow bridge that will bring us closer, not to socialism as Hermann Heller thought, but to a sovereign and democratic State of Law.

Let us think of the structuring of a democratic Republic, as the destiny of our unitary “praxis” against fascism, removing the socialist utopia from the immediate possibilities and putting, in its place, the democracy of the constitutional social State. What is the use of Hermann Heller's thought, for us, in this moment of universal crisis of the democratic project and the rise of fascism, in all countries of the world?

I suppose it is to think of democracy, not only through its legal system, which opens permanent gaps for its destruction by fascism, but also to think of it through the opening of a cycle of reform of its formal and legal institutions, which can be equally targeted. to a “consciously oriented way of life”.

Joe Biden struggles, internally, between the possibilities of a social democracy that can undermine the foundations of fascism in his country (to remove Donald Trump from the scenario) and the mitigation of this project, for the fulfillment of his country's historical imperial functions, that are at the core of the American state.

The question of the “way of life”, then, as a programmatic claim, must be part of a democratic policy that does not eliminate the main role of the fight against poverty and social exclusion, but that opens new frontiers of communication between tactics and strategy, either advancing strategic questions for a new democratic type (environment and public health) already demanded in the present life by several urgencies: the urgency of environmental questions, the significant increase of slave and semi-slave work, the hyper-exploitation of women and children, the increase of fundamentalist violence by money religions and armed groups, inside and outside the State, carried out mainly against the poor, women, black and white youth, excluded from the concept of public security still in force in the country.

Human beings no longer form their conscience – at least mostly – from their work relationships within the productive system, but mainly from their relationships with the market and services, dominated by artificial intelligence. Customers work for banks, traditional formal jobs decrease and leisure time and enjoyment of life may increase, but as the conquests of technological facilities to improve “your day” were appropriated by big capital, life also dwindles from joy , of fraternity and solidarity: the norm is competitiveness, not cooperation between different people, this is what is ingrained in the daily life of the “broad masses of the people”. It is the crudity of the market in commanding life and the mathematics of algorithms in the selection of alienated capacities.

Bolsonarism, when it aimed its blows at electronic ballot boxes, aimed to destroy the maximum political “security”, given by formal democracy, which the great masses already saw as “lazy” to respond to their demands; when it encouraged fraudulent entrepreneurship – to put an end to employment – ​​it conquered thousands of consciences for the systemic adoration of the market and made, through the promises of false autonomy of work, thousands of followers; When Bolsonarism stimulated the execution of criminals and bandits (or anyone who looked like them) it awakened the spirit of the people, subjected to organized crime in the large peripheries of our vast country. It was the way of life of fascism being propagated and carried out in the teeth of the rule of law, powerless to block it.

The vast majority of banks are a technological and legal fiction and have deposits that cover “only a small proportion of the borrowed capital, between 3% and 5% at most”. If there is not enough liquidity, the values ​​are covered with government bonds, considered safe, with good liquidity; But behold, with the rise in interest rates, these bonds are devalued and the federal government “intervenes in the economy” to protect deposits, not shareholders. Here comes, therefore, the socialization of losses, the drastic reduction of the credibility of banks in the shared chain, the weakening of interbank responsibilities: the doubts of borrowers and of debtors and creditors themselves explode in the chains of the consumer and productive market. Says so, Manuel Castells in a recent article in the newspaper La Vanguardia, whose title “Silicon Valley in Crisis”, refers to the innovation processes – progressively exhausted there – that had a direct impact on the crisis of Banco SVB, an important financial fiction in that region.

Joseph Stiglitz, another world-class personality who analyzes globalization, in The great gap (Penguin) shows the “interconnection” of national economies – particularly that of the United States with the rest of the world – and recalls that in six years of the Bush administration, the US debt, related to public and private loans, reached 5 billion dollars, 1 billion just taken from People's China. It was a small boost to the country's total external debt, as it now exceeds 100% of US GDP. In just seven months of 2022, China – the country that is the largest holder of bonds issued by the United States Government – ​​“passed forward” 113 billion dollars of the bonds it holds, giving the message that it could put in check the financing of the public debt of the most important capitalist country in the world. All this is State policy, not mere market spontaneities.

Brazilian assets have become, with the rise in US interest rates, less attractive to foreign investors, as high interest rates encourage speculative investment in US Treasury papers, which offer very low risk of loss and are much safer, since their real ballast is its military-imperial power and its communion of convergence and regulated dispute, “in the last resort”, with the other economic and military giant of the planet, People's China.

In this new structural situation of the game between the powers, which no longer corresponds to the type of the last century, narrow but real possibilities open up for the exercise of our sovereignty. To hand over to a Central Bank, which is an entity of the State, the exercise of the most important aspect of sovereignty, which is effective control over the currency, is to give up the idea of ​​a nation.

Fernando Haddad has a proposal for a fiscal anchor, which is certainly not a spontaneous adventure on the other side of the rope, and President Lula's trip to China, which will be resumed, for strategic negotiations may allow us to cross this new Rubicon (the first was the attempt of the January 8 coup) remembering that its passage will also be a defeat for the fascists, encrusted in the State apparatus with the blessing of our old ruling classes, allies of the Bolsonarist adventure that almost demolished the country, without any true appreciation for the democratic regime .

*Tarsus in law he was governor of the state of Rio Grande do Sul, mayor of Porto Alegre, Minister of Justice, Minister of Education and Minister of Institutional Relations in Brazil. Author, among other books, of possible utopia (Arts & Crafts).

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