By JOÃO CARLOS BRUM TORRES*
The dollar's surge is a speculative attack by Brazil's most powerful political actor, the market party, whose objective is to prevent the current government from receiving any recognition for the excellent moment in the economy.
I had stated the following purpose: I will no longer bother readers and friends with comments about Brazil's economic impasses. I changed my mind, however, when I saw the newspaper's economics page. Zero hour of December 18, 2024, which contains not only the interview in which Professor Marcelo Portugal has prominently recorded the opinion that 2025 will repeat the disaster of 2014, a disastrous result that “results from the uncertainties heightened by the government’s insufficient fiscal package”, but also the timely and precise comments of Mr. Alex Agostini, “chief economist of the Austin Rating".
Alex Agostini was honest enough to say the following: “since the rise in the dollar is related to the ‘loss of credibility’ of fiscal policy, the market does not take into account macroeconomic fundamentals for the formation of the price of the dollar. Brazil has good solvency and good payment capacity in foreign currency. But what weighs more now are subjective factors of profound loss of credibility and trust.”
Well, very well, however, allow me to philosophize as a philosophy professor.
If I wake up in the morning and see a ray of sunshine, I form a belief: it is dawn and the weather is good. In the vocabulary of contemporary analytical philosophy, this is called a “propositional attitude” of an epistemic nature, that is, of a strictly cognitive nature, whose foundation is the simply perceptive record that it is dawn and the day is bright. Now, outside of scientific works of a strictly theoretical nature, epistemic propositional attitudes rarely appear alone, the most common being their connections with practical propositional attitudes, such as, to use my example, “today it will be possible to walk in the Park”.
The point that distinguishes Mr. Alex Agostini's comment is the honest frankness in clearly stating that we are faced with an economic phenomenon disconnected from macroeconomic fundamentals, that we are faced with a propositional attitude of a subjective nature, that is to say: something whose basis is not only not the simple record of the fact that the primary deficit will not be eliminated quickly, but which is the anticipation of a deterioration in the country's economic and financial situation to which this same subjective anticipation of the deterioration of public accounts will contribute, precisely and very powerfully. Which is to say that the market works, whether it likes it or not, to make the disaster happen.
But it is worth asking: does the practical propositional attitude of anticipating the fiscal result of 2025 as equivalent to that of 2014 simply result from the fear of a breakdown in the federal government's ability to pay its debt? Or is it a fear that in the near future positions in reais will only bring losses?
If the practical propositional attitudes of (i) forcing an increase in the interest rate through the self-induced unanchoring of economic agents' expectations and (ii) buying dollars on a large scale simply expressed the fear of financial loss of holders of large investments, we should recognize that it would be morally innocent, because after all, being afraid is not something that can be censured, even when this feeling is unfounded, in which case what we should do is consider that there is no reason for so much fear.
However, our practical conduct does not become subjectively biased only because of our emotions, as in the example, fear. It also becomes subjectively practical because of (i) our interests and (ii) intentions associated with both (II.i) the defense of such interests, and (II.ii) the promotion of our religious, moral or political ideals.
It is clear, however, that in the current political and economic situation in Brazil, the market's movements these days are partly aimed at obtaining gains or avoiding financial losses due to the instability of asset prices and, on the other hand, with the political purpose of destabilizing the government. This action is not a mere atomized aggregation of individual behaviors, but is structured with large investors setting the direction for the buying and selling of assets, either through the indirect mechanism and the demonstration effect of large-scale purchases of dollars, or explicitly through phone calls and conversations between brokers and advisors with their clients, who, by the way, according to a recent survey, are almost unanimously politically positioned against the Lula government.
To these mechanisms of serial ordering, typical of the action of dispersed agents and which are at the exact point of transition from serialized conduct to the concerted action typical of groups, to draw here on the precise and invaluable analyses of Jean-Paul Sartre, there are also interviews given to the many journalists who cover the actions and reactions of the financial world, whose prominence in the media is enormous, as can be seen in printed and television newspapers, as well as on social networks.
In short, we are facing a political crisis created by the antagonism between the government that has committed to a slower fiscal adjustment whose burdens are better distributed and hegemonic social forces that want a smaller government that has no commitment to reducing inequalities or concern for the country's economic development, and for whom 40 years of mediocrity in growth and social development are indifferent, or at least something that, if the market is left to function, will eventually happen, leaving it up to those who, in the meantime, and have always been doing badly, to have what? Patience, for heaven's sake, and to make an effort on their own to overcome their limitations and shortcomings, no matter how much personal and social capital they have or don't have.
The truth is that the dollar's surge is a speculative attack by the most powerful political actors in Brazil, the market party, whose objective is to prevent the current government from receiving any recognition for the excellent moment in the economy – GDP growth, after years, finally exceeding 3%, reduction in unemployment, reduction in poverty and even an increase in the rate of fixed capital formation – all data that reflect the desire of Brazilian society to once again have an economically dynamic country capable of making this the vector and engine of our passage to a phase of greater self-confidence, of commitment to removing Brazil from the championship of the greatest economic inequality in the world, and to restore our hope that our country will live up to its potential, to live up to itself.
*Joao Carlos Brum Torres is a retired professor of philosophy at UFRGS. Author, among other books, of Transcendentalism and Dialectics (L&PM). [https://amzn.to/47RXe61]
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