In democratic managerialism



The class of managers or technobureaucrats was once again strengthened and constituted the core of the new coalition of dominant classes

60 years ago, in May 1961, the first issue of the Business Administration Magazine (RAE). Two years before, I had been admitted through a contest at EAESP/FGV and I wrote my first paper. It was a task that members of the mission of the Michigan State University they gave to new professors before they went to the United States to do their MBA. My paper, written in English, “The rise of the middle-class and middle management in Brazil”, was my first foray into the question of the emergence of the new managerial or technobureaucratic class, at the same time as it was an analysis of the distortion of socialist revolutions towards statism.

My essay should have been published in the first issue of RAE, but its first editor, my dear friend and now deceased colleague, Raimar Richers, bet too much on the scientific method and understood that my work “did not have sufficient empirical basis”. It was March 1960, I was leaving for the United States; getting there, submit it to the Journal of Inter-American Studies, who published it without requesting any changes. The theme of the emergence of a third class in capitalism was much discussed at that time, and had its great moment with the publication of the great book by James K. Galbraith, The New Industrial State (1969), in which he argued for the emergence of the “technostructure”.

The eighteen months I spent in the United States were one of intense study. I was then impressed with the development of the United States – not just economic development, but also political development. At that time, the United States was the richest and most powerful country in the world, and the standard of living for all classes continued to rise; they were a cohesive white society that was coming to grips with racism and the apartheid system; they were not only the example of economy, but also of democracy for the world. My wife, Vera Bresser-Pereira, and I had the opportunity to watch on TV the famous first presidential debates in which Jack Kennedy and Richard Nixon faced each other; they were two brilliant politicians who in their debate agreed on everything, showing how integrated American society was at that time.

The picture today is very different. The United States is still the most powerful country economically and militarily, but it is losing its hegemony to China. It is a country stuck in an inefficient economic liberalism that, since 1980, has been the main cause of very low growth rates, a huge increase in inequality, and the stagnation of the standard of living of the poorest half. It is a society that has lost cohesion, that has ceased to share beliefs and goals. It has a political system in which democracy has deteriorated and is no longer an example for anyone; in a plutocracy that elects politicians without real popular support, and opened up opportunities for right-wing populist politicians to be elected president – ​​something unimaginable 60 years ago.

What happened in this time that led the United States to this decline? The new historical fact that led the great country and, with it, a good part of rich capitalism to the crisis of the last twelve years was the Neoliberal Turn that occurred in the United Kingdom and the United States around 1980, with the election of Margareth Thatcher and Ronald Reagan to command these two countries. It was a wrong choice from an economic point of view; the United States, which had always been a developmentalist country (although its politicians spoke liberally), which maintained high customs tariffs until 1939 (the defining industrial policy of a developmentalist economic policy regime), suddenly changed course radically and began to adopt an economic liberalism incompatible with its own economic development. It was a wrong choice on the social level, because it implied an increase in inequality, and on the political level, because it meant the exchange of republicanism for an individualist political liberalism.

While political liberalism sees freedom only as the individual's right to do whatever he wants as long as it is not against the law, republicanism sees it as the goal to be achieved by society and as an obligation of its political leaders to defend the public interest even if it runs counter to their own interests. This was the vision of the public thing that guided the founding fathers at the time of its independence. They dialectically combined two opposing ideologies, republicanism and liberalism. JGA Pocock demonstrated this fact in the definitive 1975 book, The Machiavellian Moment.

This republicanism was still strong in the United States of 1960 and tempered liberalism. I will give just two examples related to President Jack Kennedy: his famous phrase, “Ask not what your country can do for you – ask what you can do for your country— and the book he published five years before he was elected president, when he was a senator, Profiles on Courage, in which he chose eight senators to tell his story, adopting as the only selection criterion that each one of them, at a certain moment in their political life, had the greatness to adopt the policy that they understood to consult the interests of the American nation, despite the political forces that elected him were against it. With the neoliberal turn, republicanism was forgotten, and American society was at the mercy of an inefficient economic liberalism and a reactionary political individualism.

stages of capitalism

To understand capitalism, I divide it into four phases according to its ruling class: Capitalism of Merchants, Capitalism of Entrepreneurs, Capitalism of Managers, and Capitalism of Renters and Financiers. To make this periodization, I consider Great Britain and France, the two countries that went through all these phases.

The first phase, Merchant Capitalism, covers the 1929th to mid-XNUMXth centuries and marks the transition from feudalism to capitalism. It was in this phase that the Capitalist Revolution took place – the formation of the nation-state and the industrial revolution in those two countries. The second phase, Entrepreneurial Capitalism, occurred between the beginning of the XNUMXth century, when the industrial revolution ended in England and France, and the XNUMX crisis demoralized economic liberalism; it was capitalism that Adam Smith and Marx analysed, the first welcoming its emergence and emphasizing the role of the market in its coordination, the second defining it as a mode of production based on capital accumulation with the incorporation of technical progress, and making his critique.

Still in this phase, at the end of the XNUMXth century, the Second Industrial Revolution takes place in the United States, which I also call the Organizational Revolution and the third phase begins – that of Managerial Capitalism. Private managers emerge in large private companies and, together with a growing public bureaucracy, form a new class of managers or technobureaucratic class. Managers then begin to replace entrepreneurs in business administration. It is the phase in which the United States is the hegemonic power and capitalism ceases to be liberal to be developmentalist or Keynesian – it starts to imply a moderate intervention of the State in the economy. And it also becomes social-democratic, because in this phase we have the construction of the welfare state, mainly in Europe. It was, finally, the phase in which capitalism lived its great moment – ​​the Golden Years of Capitalism – a period of strong growth, financial stability and reduction of inequalities.

Notwithstanding these good results and the important fact that the managerial class was far from having exhausted the contributions it could make to economic growth, a moderate economic crisis in the 1970s, involving a fall in the rate of profit and the emergence in the United States of stagflation, made possible the neoliberal turn. We then have the Capitalism of Renters and Financiers or Neoliberal Capitalism, in which businessmen are replaced by rentiers, now in the property of the big companies. Capitalism returns to economic liberalism, while the “financists” rise to power, who, speaking on behalf of the rentiers, mount a war not only against the public bureaucracy, but also against the private managerial class.

The top private executives could not be expelled from the class coalition because they ran the big companies, but they became the favorite opponents of the stockholders. And the financiers are also managers, usually with master's degrees in business administration (MBAs) if not with doctorates in economics, who have taken over the management of the rentiers' wealth and started to play the role of organic intellectuals of neoliberal financial-rentier capitalism.

To legitimize economic liberalism, these financiers resort to neoclassical economic theory – an economic theory that has returned, since the neoliberal turn, has returned to be dominant in universities and intends to give a “scientific” foundation to neoliberal ideology. This phase, by excluding the State and trying to make the market the sole institution of economic coordination of capitalism, will be characterized by low growth, high financial instability, and a brutal increase in inequality. So, not surprisingly, it ends early, with the great financial crisis of 2008.

Since then, economic liberalism is once again demoralized; rich economies grow very slowly, central banks issue money to reduce the interest rate, which becomes negative, characterizing a “secular stagnation”, and also to finance public spending during the Covid-19 pandemic, without demand heats up and there is inflation. Since the election of Donald Trump in the United States and the Brexit referendum in the United Kingdom, both events taking place in 2016, a right-wing populism has emerged as an irrational reaction to the failure of neoliberalism, in particular its inability to face the problem of unemployment. caused by the failed competition with China.

As the three previous phases were always “progressive” in the sense that they led capitalism to advance in terms of economic, social, and political development, and as the neoliberal capitalism of the rentiers and financiers was a period of serious regression, perhaps it is better not to consider this is a true phase of capitalist development, but a mere reactionary deviation.

a human construction

In the book I'm writing, Rentiers-Financiers' Capitalism and After, I criticized leftist analysts who do not distinguish neoliberalism from capitalism and reject any idea of ​​progress in capitalism, criticize it, and predict its imminent collapse.[1] A similar mistake is to say that neoliberalism is “the true face” of capitalism and that the Golden Years would have been an exception. This is, for example, the argument adopted by Wolfgang Streeck when he states that “they are not les trente glorieuses, but the series of crises that followed that represent normal democratic capitalism”.[2] This view would make sense if we understood capitalism as a “natural” phenomenon, and not as the result of a construction Social; if we believed that humans were nothing more than pawns in a historical process in which human will and action are absent.

This is a mistaken naturalization of history. It ignores that capitalism is a form of society regulated by two major institutions – the State and the market – which, like all institutions, were constructed by humans. It can be said that this construction is partly “unconscious”. Indeed, Marx and Engels, with historical materialism and the concept of ideology, made an important contribution to the understanding of human societies and their development. But even in his day, and certainly even more so today, humans had political goals that they embodied in institutions – particularly the largest of them, the state.

The modern State is the constitutional-legal system and the organization endowed with coercive power that guarantees it; it is the nation's main instrument of collective action. At least since the three founding revolutions of the modern state – the Glorious Revolution, the American Revolution and the French Revolution – the modern state is the institution that emerged with capitalism to define and enforce ultimate political goals (security, individual liberty, betterment of standards of living, social justice and environmental protection) as well as the instrumental goals (an autonomous and democratic nation-state) that modern societies have set for themselves since the XNUMXth century.

Capitalism was the first mode of production to experience economic development and “human progress”, which I define as the historical process through which each nation advances towards the realization of these goals. Thus, capitalism today is not a natural form of society, but a social organization formally aimed at the realization of these political goals, it is the first mode of production in which there was economic development and some human progress. Limited and unsatisfactory progress, but one that cannot be ignored.

The nation-states that exist today are therefore the result of the nation's collective action to create a better political society. In this process, individuals and organizations defend their own interests as if they were the interests of all, and, as a result, nations often experience historical regressions. After all, however, the dialectical vector not only of class interests and political agreements, but also of republican and solidary principles, which equally guide human action, result in human progress.

The previous section of this article is a summary of the first chapter of the book I am writing, Financiers-Rentiers' Capitalism and After, in which I discuss the economic and political setback that neoliberal financial-rentier capitalism represented from 1980 onwards, and show that since 2008 it has faced a terminal crisis. I ask myself, then, what to expect next, and my answer, in the last chapter, is an optimistic one. I propose that a new form of social organization is emerging which I call “democratic managerialism”.

Before starting to write this book, I was critical of those who claimed that capitalism was dying; what is dying, I said, is neoliberal capitalism. However, I revised this position when I became convinced that the capitalist class and capitalism had exhausted their ability to promote economic development and, more broadly, human progress and, after all, I saw clues emerging indicating the emergence of a new form of social organization after the capitalism that I call “democratic managerialism”.

This social formation is not a phase of capitalism, but a new mode of production that takes shape when the bourgeoisie is replaced by the professional class in the process of capital accumulation. The ruling class will now be the public and private managerial class. In the new coalition of classes, the capitalist class will play a secondary role as each day accelerates the transfer of control of capital accumulation from capitalists to the managers of large private companies and the economic policy decisions that encourage or discourage this accumulation, for professional politicians and civil servants.

From here I summarize the last chapter of that book. I argue that the emerging democratic managerialism will be managerial because leadership in the investment process has shifted from the capitalist to the managerial class; it will be democratic because democracy was a historic achievement of the working class and the middle class in the most advanced capitalist countries at the turn of the 40th to the XNUMXth century and became a consolidated political regime in these countries. When threatened as it has been for XNUMX years by neoliberalism, which is authoritarian, and more recently by right-wing populism, it shows strength and resistance and thus grows stronger.[3]

Democracy is not only not dying, but it is thriving and will define the new social organization. Democratic managerialism will hardly be as progressive in its first phase as it was in the Golden Years of Capitalism, because the problem of competition in developing countries has not been resolved and continues to put pressure on wages in rich countries. But, as I predict it will be developmental, it could lead the most advanced countries to return to growth and raise living standards.

Republican, social and developmental democracy

When Marx analyzed capitalism, the new capitalist class shared power and privilege with the decaying aristocracy. For him, this would be the first and last phase of capitalist development, because soon the fall in the rate of profit would determine the economic collapse while a socialist revolution would mark the end of capitalism. What happened instead at the turn of the XNUMXth century was the Organizational Revolution, which gave rise to the new managerial class, and, with universal suffrage, the Democratic Revolution, which gave some power to the people to defend their interests. Nor did he foresee that once the industrial and capitalist revolution was realized by each country, it would trigger sustained economic development, rising living standards and shifting the strategic factor of production from capital to technical and organizational knowledge.

The logic of the emergence of a new social organization is today linked, on the one hand, to the demand of modern societies for human progress, and, on the other hand, to the fact that the advance of democracy is making the people more heard. Capitalism became the dominant form of organization in all modern societies when it proved more capable of generating wealth and raising living standards than feudalism and slavery, and later able to adapt to the rise of democracy. . But it has always been a mode of production marked by inequality.

Now, after the neoliberal turn of 1980 and the 2008 crisis, when economic inequality is reaching new highs, capitalism is not proving to be capable of generating a satisfactory growth rate, much less of reversing the neoliberal process of income concentration, and shows little ability to control climate change. It is thus becoming evident that capitalism has exhausted its capacity to promote human progress. On the other hand, capitalist elites lost control of capital accumulation. Third, the indignation not only of the working class, but also of the middle class with the bad economic results increases every day the conflicts and the political polarization. Fourth, it is not clear to political actors what the way out will be, but clues are beginning to emerge as to how the new social organization that will be born from this generalized crisis will be.

Capitalism is a dynamic mode of production in which a class coalition dominated by the capitalist class commands the process of economic development. Today, however, the capitalist entrepreneurs that still exist have lost economic and political strength. The solution to this difficulty, which I have been discussing with myself for some time now, is a post-capitalist solution. I have argued in this book that we could only predict the end of capitalism if an alternative emerged. Post-capitalist democratic managerialism should be that alternative. It will have to be a managerial social formation because the managerial class will be the ruling class; democratic because a certain type of administrator, the democratically elected professional politician will have his legitimacy and political power increased.

The democracy that initially resulted from the Democratic Revolution was a minimal democracy (the guarantee of the rule of law, civil rights, and universal suffrage), but since then democracy has spread to middle-income countries as well, and the quality of democracy has tended to improve. In this economic and political development, democracy has become a universal value, not just a form of government, but also a progressive ideology.

Today democracy is the only political regime endowed with social legitimacy. It is instrumental in realizing the political goals that modern societies have set for themselves. In the early XNUMXth century, the first form of democracy was elite democracy or liberal democracy; after the Second World War, mainly in Europe, democracy became republican, social and developmental; it became republican because a reasonable number of citizens and politicians began to act in a civic rather than a liberal way, because they gave priority to the public interest rather than their private interests as liberal individualism supposes; it became social, because in addition to civil rights and political rights, social rights began to be considered and the welfare state emerged; it became developmental rather than liberal because it saw moderate state intervention in the economy as an instrument for economic development and human progress rather than seeing the state as a mere guarantor of property and contracts.

While the transition to participatory democracy is proceeding slowly in more advanced democratic countries such as Denmark and Switzerland, my prediction is that democracy will continue to progress as pressure from the working class and middle classes for more political participation will continue to deepen.

In recent years, as neoliberal capitalism was coming to an end, it produced the right-wing populism expressed in the 2016 election of Donald Trump in the United States and the Brexit referendum in Britain. The reaction of society and democratic institutions to this threat showed that democracy is a definitive achievement of humanity.

Republican, social and developmental democracy

What are the new historical facts behind the emergence of democratic managerialism? I propose four, of which the failure of neoliberal capitalism is the first and most obvious. The other three are the rentier class's inability to control the process of capital accumulation and, more generally, its inability to govern; the rise of the professional class whose potential had not yet been exhausted when, in 1980, the neoliberal turn dislodged it from the ruling coalition; and the strengthening of democracy which, under threat from neoliberalism and more recently from right-wing populist populism, proves to be the great political achievement of the working class and the middle classes.

Poverty or the lack of governance capacity of the rentier-financier class coalition is our second new historical fact. In the previous three phases of capitalist development (the mercantilist, industrial and managerial phases), Marx's prediction that the holders of capital would retain control of society once the country became fully capitalist was confirmed.

In all three phases, capitalists (merchants, entrepreneurs and administrators) were not just privileged profiteers; they played a leading role in the production process. They weren't just rich people getting richer. They were also a kind of delegates of society in charge of conducting the process of capital accumulation and innovation, on which economic growth depends. It was his key role in capitalist development that justified and supported his power and wealth. This is not the case with rentiers, who are either idle recipients of rents passively associated with financiers, or are also financial speculators. They have no justification for their power and income, but since they are the holders of capital, they remain the ruling class.

This, however, is not a sustainable condition and is one of the explanations why the capitalism of the neoliberal rentier-financiers was short-lived – it only prospered for 28 years. It is an essential argument behind my assertion that, in the new form of social organization that is growing, the holders of capital will not be the ruling class. While capitalism was the capitalism of entrepreneurs, capitalists were central to the development process; it lost part of its functionality when, in managers' capitalism, managers replaced entrepreneurs in the management of private companies; and lost all support when idle rentier capitalists replaced entrepreneurs in the ownership of big business.

The rentiers and financiers are not committed to economic development. They are an idle capitalist class interested in short-term dividends, interest and property rents, not the long-term expansion of big business. The exception is the third party members of the neoliberal class coalition – the top executives who run private companies. But in the new social organization, from its first phase, they will play a central role in the process of capital accumulation: in neoliberal capitalism, their actions are permanently blocked by rentiers and financiers.

This poverty of the rentier-financier coalition is crucial because governing modern societies is an extremely difficult task. If economic liberalism produced growth, governing nation-states would be a relatively simple task. Governments would only be obliged to guarantee the social order and keep the fiscal account balanced; the market would take care of the rest. But we know that this “invisible hand” does not exist. Adam Smith's metaphor of the “invisible hand” only makes sense when we are not referring to the entire economic system, but only to the competitive sectors of the economy.

Markets fail to coordinate the non-competitive sectors of the economy, the five macroeconomic prices, the external current account, income distribution, as well as basic education and health; these sectors must be coordinated by the state, despite the shortcomings involved. The neoliberal claim that state failures are worse than market failures does not apply, not because these sectors involve market failures, but because the market is relatively absent and it makes more sense to subject them to public management.

Neoliberals reject this argument because they expect much more from the market than it can deliver. They expect the market to coordinate sectors in which there is no competition, or the existing competition is essentially biased, as is the case with the five macroeconomic prices. Governing nation-states, contributing to human progress and world peace are the noblest actions humans are called to perform. Governing is a very difficult task that requires experienced and competent politicians, ideally endowed with republican virtues; politicians who continually reaffirm the nation's core values ​​and beliefs and are capable of reinterpreting them whenever new historical facts require it. Few politicians have these qualities. They can be progressive or conservative, liberal or developmental, but they must be republican and politically competent.

Our third new historical fact behind the rise of democratic managerialism is the fact that the managerial class did not exhaust its full potential when the neoliberal turn reduced its political power. The rise of a tight liberal financial-rentier class coalition interrupted the secular emergence of the managerial class, but this interruption was not and could not be definitive. While, in the neoliberal phase, capitalist entrepreneurs lost their centrality, two managerial groups remained associated with rentiers – financiers and top executives of large companies. Now, in the emerging democratic managerialism, the professional class will have the opportunity to lead the entire system. Not just the private managerial class, but also the public one and, within it, professional politicians.

Finally, the fourth new historical fact that explains democratic managerialism is the resilience of democracy as it has survived and thrived over the last forty years under attack by neoliberalism, which is intrinsically meritocratic and authoritarian, and more recently, right-wing authoritarian populism. While liberalism is a capitalist ideology that was born with the rise of nation-states and national markets, democracy is an ideology and form of government based on the working class and the middle class that the bourgeoisie and liberalism have long rejected with the argument that democracy would be the “tyranny of the majority”.

The bourgeoisie and liberalism were in favor of the rule of law and civil rights, which are a condition for democracy, but a minimally defined democracy is only achieved when these rights are added to the basic political right – universal suffrage. Democracy was a popular achievement which, only after a long political struggle by socialist parties and middle-class intellectuals in favor of universal suffrage, did the bourgeoisie accept. It took almost the entire nineteenth century for the capitalist class to feel relatively sure that the victory of socialist parties in general elections would not lead to their expropriation and the establishment of socialism.

It accepted democracy but set up an extensive system of “safeguards” – laws that set strict constitutional limits on democracy: a clear division of powers and the requirement of qualified majorities to amend the constitution. And practical limits to people's power: the ability to finance politicians in elections, or simply bribe them, control of the media, and the subordination of trade unions to strict laws.

Later, even the dominant classes in modern capitalism – the capitalist class and the managerial class – also came to see democracy as their preferred regime, firstly because these two social classes are large and diverse classes whose members need rules to regulate their ambitions. to achieve political power. Second, because authoritarian governments are usually subordinated to the capitalist class, but they can simply be arbitrary governments that ignore not only the rights of the people, but also the rights of the elites.

Market society without capitalist ruling class

Democratic managerialism assumes a market society without a capitalist ruling class; it assumes a social formation in which we continue to have private ownership of the means of production, profits and wages are the two main revenues, and the state and the market coordinate the economic system. We cannot, however, call this type of social formation capitalist because the capitalist class has lost control of the process of capital accumulation and innovation. Some will say that it is impossible to think of a society where capital and the market are present, but the capitalist class is no longer the dominant class; or where the former ruling class has lost power, but the new social formation continues to be misnamed after it.

There is, however, historical precedent for this type of situation. The aristocracy gradually lost its military role during the long period in which the bourgeoisie emerged. In this historical process, we arrived at mercantilism, which was already a first phase of capitalism, but continued to be seen as a phase of ancien régime – the aristocratic regime of absolute monarchies. Now, after about 100 years of the rise of the managerial class, in which the bourgeoisie gradually lost control of the process of capital accumulation, we find it difficult to see the emergence of a new social organization. In more developed societies, which are the main object of this study, the rise of the managerial class is gaining momentum again, the bourgeoisie remains rich, but has lost its main role for senior executives and elected and non-elected public servants.

At the same time, we are seeing democracy grow stronger as it withstood the onslaught of authoritarian neoliberals and is now repelling the onslaught of right-wing populism. In this context, the people and the most educated sectors of the middle class and politicians are gaining political influence and can seize this opportunity to advance democracy, on the one hand making it more representative of popular demands, and on the other hand, making parliament less dependent on the interests of rentiers and financiers, and its members, more committed to an economic policy of responsible development.


Democratic managerialism will retain many features of capitalism – profits and capital accumulation, wage labor, market coordination of competitive sectors. The fundamental difference is that the economic coordination of the economy will be carried out according not to the logic of economic liberalism that has failed, but of the developmentalism that is the obvious alternative to this liberalism. Thus, it is assumed that the managerial class of private managers and civil servants will have the strategic role of commanding the process of accumulation and innovation of capital and, therefore, the task of governing.

Professional politicians will define the economic reforms and public policies required as representatives of the people, endowed with greater responsibility and autonomy vis-à-vis the rich. They will represent the various sectors of society including the capitalist sectors, but they will not primarily represent the capitalist class. These politicians will work on a series of institutional reforms that will make their candidacies more independent of funding by wealthy capitalists and managers.

Paul Mason says the seeds of post-capitalism are beginning to bear fruit. “Capitalism will not be abolished by techniques of forced march. It will be abolished with the creation of something more dynamic, almost invisible in the old system, but which erupts, reshaping the economy around new values, behaviors and norms”. We can see in modern societies signs that point in the direction of the new. Mason believes they point to “a more collaborative production; goods, services and organizations are emerging that no longer respond to the dictates of the market and the managerial hierarchy”. Yes, the new is emerging from the tracks left by the present and the recent past.

But one must not be so optimistic and believe that the Information Revolution is producing a “new man”. Human behavior will continue to be simply the dialectical vector of survival instincts and human coexistence. Societies are not only the result of self-interest or the survival instinct, but also of the need that each of us has to share life in society with the other. After 40 years of neoliberalism and individualism, changes in individual and group behavior towards a more collaborative and simple lifestyle are needed; are a response to the threat of climate change and rising inequality.

The information revolution has created a networked society, but not a better society – a society in which the volume of information has increased chaotically; in which elites lost the monopoly on organized information that control of the mainstream media used to ensure. It opened space for new and progressive ideas, but also for conspiracy theories and fake news produced on the far right.

My bet is that, in the new context produced by the information revolution, the new that is embodied in democratic managerialism will supplant the old present in neoliberalism, right-wing populism and conspiracy theories. The shift is taking place not towards an ideal society, but towards a society within reach, where power passes from rentier capitalists to managers, political power mainly to professional politicians. As democratization proceeds, the common people gain not much, but a little more voice.

My main argument pointing in this direction was the erosion of capitalists because they lost their strategic role in controlling the process of capital accumulation and innovation. Today, the manager conducts most of the capital accumulation and innovation within large companies. Within the capitalist class, only young entrepreneurs retain an important role: commanding startups that today are the main source of radical innovation. But this is the only thing that guarantees capitalism any legitimacy and keeps it alive; other things are just leftovers, starting with wealth without a social function.

The failure of neoliberal financier-rentier capitalism was further evidence of how wrong neoliberalism was in assuming that markets are capable of uniquely coordinating the economic system. And it paved the way for a return to a developmental policy regime. That change is already starting to happen. After the 2008 financial crisis, the threat posed by right-wing populism, and the Covid-19 pandemic, we are seeing major countries moving towards developmentalism.

Angela Merkel's Germany, the European Union and, finally, President Joe Biden's United States are not only adopting large countercyclical fiscal packages, but also starting to define and implement policies that promote reindustrialization. The expectation of a book published in 1985 by Evans, Rueschemeyer and Skocpol is coming true, the State is once again called upon to promote economic development. At the time the book was published, they were not heard, but history has made reality and necessity prevail over a reactionary ideology.

The new social organization will not produce miracles, what lies ahead is by no means a utopia. I make an optimistic forecast, but one that I assume is realistic. I am just predicting that we are taking a step towards a more reasonable and balanced way of coordinating the economy and governing nation-states.

* Luiz Carlos Bresser-Pereira He is Professor Emeritus at the Getulio Vargas Foundation (FGV-SP). Author, among other books, of In search of lost development: a new-developmentalist project for Brazil (FGV).

Originally published on Business Administration Magazine (RAE). vol. 61, noo. 3, May-June 2021.


Bresser-Pereira, Luiz Carlos (2021) “Democracy is not dying. It was neoliberalism that failed” (2020) New Moon, January 2021.

Bresser-Pereira, Luiz Carlos (1962) “The rise of middle class and middle management in Brazil” Journal of Inter-American Studies, 4(3):313-326.

Evans, Peter B., Dietrich Rueschemeyer and Theda Skocpcol, eds. (1985) Bringing the State Back In. Cambridge: Cambridge University Press.

Dardot, Pierre and Christian Laval (2009) La Nouvelle Raison Du Monde: Essai sur La Société Néolibérale, Paris: La Découverte/Poche.

Galbraith, John Kenneth (1967[1968]) The New Industrial State, Rio de Janeiro: Brazilian Civilization, 1968. Original in English, 1967.

Pocock, JGA (1975) The Machiavellian Moment, Princeton: Princeton University Press.

Streeck, Wolfgang (2011) “The crisis of democratic capitalism”, New Left Review 71, September-October: 5-30.


[1] See, for example, Dardot and Laval (2009).

[2] Streeck (2011, p. 5-6).

[3] I defended this thesis in the essay published by New Moon in 2021, “It is not democracy that is dying. It is neoliberalism that has failed”.


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