The myth of economic development in the Lula era

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By Vladimir Safatle*

At a time when Brazil is now ending a development cycle that would have lasted a decade and received the name of “Lulism”, it seems to me healthy to turn our eyes to Celso Furtado's theory

In 1974, Celso Furtado wrote a small book that still impresses today for its critical capacity in relation to one of the foundations of the economic notion of progress. In it, the very notion of economic development was described as a “myth”, not in the structuralist sense of the myth as a matrix for the intelligibility of social conflicts, but in the Enlightenment sense of the myth as an illusion capable of blocking what is decisive within social life. . This one myth of economic development, as Furtado said, was responsible for the paralysis of social creativity. Creativity that is necessarily expressed through a global process of “transformation of society at the level of means as well as ends”[I].

Furtado constantly fought against the way in which the vision of development was limited to the logic of the means, which can only mean, as such logic of the means made economic growth the simple expression of quantitative expansion of variables that, by themselves, never would lead us to a real transformation. In this context, “creativity” meant the ability to globally transform the horizon of progress in social life, opening space for the constitution of new forms of life. For someone like Celso Furtado, who never neglected the profound relationships between the critique of political economy and the critique of culture, this concept of creativity would necessarily have to be elevated to the central axis of social analysis.

At a time when Brazil is now ending a development cycle that would have lasted a decade and received the name of “Lulism”, it seems to me healthy to turn our eyes to Celso Furtado's theory in order to ask ourselves if, after all, such development was not the best expression of a “myth”. This is not about denying how, at the end of 2010, we witnessed phenomena such as the social ascension of 42.000.000 people with their expansion of consumption capacity, the raising of the minimum wage to 50% above inflation, the opening of fourteen universities federal funds and credit consolidation, from 25% to 45% of GDP. But it is a question of whether circumscribing the alleged success of the Lulista economic model to such a “logic of means” does not clearly express the inability of hegemonic sectors of the Brazilian left to assume as their major task the critique of the myth of economic development and the absorption of “creativity”. social” as a fundamental concept for the definition of what can be understood as “progress”.

The tripod of Lulism and its end

If we ask ourselves about the economic policy of Lulism, we will see that it was based on a tripod composed of the transformation of the State into an inducer of processes of ascension through the consolidation of social protection systems, the real increase in the minimum wage and the incentive to consumption. Such actions proved to be fundamental for heating up the internal market with the consequent consolidation of a level of almost full employment. At the other end of the process, the Lula government understood itself as a stimulator of the reconstruction of the national business community in its desire for globalization. To this end, the function of public investment banks, such as the National Bank for Economic and Social Development (BNDES), as a major financier of national capitalism was consolidated once and for all.

In this sense, Lulism represented the project of a true Brazilian state capitalism, resuming a proto-Keynesian model that existed in Brazil in the fifties and sixties under the name of “national-developmentalism”. In this model, the State appears as the main investor in the economy, becoming a partner of private groups and guiding economic development through large infrastructure projects. Brazil is a country where, for example, two of the main retail banks are public, where the two largest companies are state-owned (Petrobrás, BR distributora), while its third largest company is a privatized mining company (Vale), but with large state participation via public pension funds.

Thus, we can say that the system of expectations produced by this new version of Brazilian state capitalism was based, on the one hand, on strengthening the domestic market through the introduction of masses of poor citizens into the universe of consumption. That is, an integration of the population through the expansion of consumption capacity. On the other hand, through an association between the State and the national bourgeoisie, the government hoped to consolidate a generation of companies capable of becoming Brazilian multinationals with strong competitiveness in the international market.

It is difficult not to see this process in retrospect now without remembering Furtado's diagnosis of the myth of economic development. As he will say: “the hypothesis of generalization to the capitalist system as a whole of the forms of consumption that currently prevail in rich countries has no place within the apparent evolutionary possibilities of that system”. For: “the cost, in terms of depredation of the physical world, of this lifestyle is so high that any attempt to generalize it would lead inexorably to the collapse of an entire civilization”. Hence the need to state that economic development, that is, “the idea that poor peoples will one day be able to enjoy the ways of life of current rich peoples”[ii] it is simply unrealizable.

But such a development is unrealizable not only because of the destruction of the physical world and former life forms. It is a myth because it perpetuates an accumulation process that tends to eliminate, in a short period of time, achievements in the fight against inequality. Then we cannot say that Brazil has known policies to combat inequality. He met policies of capitalization of the poorest class, what is something different. The incomes of the upper classes continued untouched and on the rise. Thus, despite the advances linked to the social ascension of a new middle class, Brazil continued to be a country with brutal levels of inequality. For this reason, its growth could only bring problems like those we see in other fast-growing emerging countries (such as Russia, Angola, etc.). As a large portion of the new wealth circulates through the hands of a very restricted group with increasingly ostentatious consumer demands, as the government was unable to modify such a situation through a rigorous income tax policy (such as taxes on large fortunes, on conspicuous consumption, on inheritance, etc.), a situation has been created in which the richest portion of the population pressures the cost of living upwards, rapidly deteriorating the earnings of the lower classes. Not by chance, among the most expensive cities in the world we currently find: Luanda, Moscow and São Paulo.

Added to this is the fact that Brazilian wages remain low and no major changes are expected. 93% of the new jobs created in the last ten years are jobs that pay up to one and a half minimum wages. In other words, the fact that members of the “new middle class” have begun their access to consumption should not deceive us. They are still poor workers.

An alternative to improving wages would be to reduce the items that must be paid for by families thanks to the creation of free public social services. However, a family of the new Brazilian class must spend almost half of its income on education and private health, in addition to poor quality public transport. Families that entered the new middle class were forced to start paying for education and health, as they want to escape the appalling state services and guarantee the continuity of social ascension for their children. For no other reason, one of the main points of the June demonstrations was precisely the lack of good public services in education, health and transport.

However, this is a privileged point in which Brazilian development demonstrates its mythical character. By having practically half of their salary eroded by spending on education, health and transportation, the new middle class needs to limit its consumption, often resorting to debt. The current indebtedness of Brazilian families is 45%. In 2005, it was 18%. On the other hand, the money spent on education and health does not return to the economy, but only feeds the concentration of income in the hands of entrepreneurs in a sector that pays its employees poorly and has a low investment rate. Entrepreneurs who prefer to invest in the financial market, with its interest rates among the highest in the world.

But we can say that the constitution of a nucleus of public services is the limit of the Brazilian model because it could only be done through a tax revolution capable of capitalizing the State. Let's remember how Brazil is a country where the highest income tax rate is 27,5%, a lower number than countries with a liberal economy such as the USA and England. But to carry out a fiscal reform of this nature, the government would need to intensify class conflicts, which would imply breaking the political alliance that sustains it. In other words, progress in policies to combat inequality would make governability unfeasible.

As if that were not enough, Lula's policy of state financing of national capitalism took the monopolistic tendencies of the Brazilian economy to an extreme. Brazilian capitalism today is state monopoly capitalism, where the state is the financier of the processes of oligopolization and cartelization of the economy. A pedagogical example in this sense was the incredible recent history of the slaughterhouse sector. Brazil is currently the world's largest meat exporter, thanks to the recent creation of the JBS/Friboi conglomerate with money from the BNDES. However, the refrigerator market was, until recently, highly competitive with several players. Today, it is monopolized because one company bought all the others using BNDES money. Instead of impeding the process of concentration, expanding the number of economic agents, the state encouraged it. As a result, there is currently no sector of the economy (telephony, aviation, ethanol production, etc.) that is not controlled by cartels. This means poor quality services, as there is no competition and low rates of innovation.

From means to ends

Finally, let us remember how this myth of development has a clear function: “Thanks to it, it has been possible to divert attention from the basic task of identifying the fundamental needs of the community and the possibilities opened to man by the advancement of science and technology. , to concentrate them on abstract objectives such as the investments, as exports and the growth”. In other words, it is a question of preventing any attempt to escape from a fetishization of economic rationality linked to the maximization of investments and growth. Thus, societies fail to develop the experience of reviewing what appears as a “necessity” within certain forms of life. Creativity in establishing new priorities is put on hold indefinitely.

Perhaps it is for no other reason that, for the first time in Brazilian history, a cycle of economic growth was not accompanied by a creative cultural explosion. Contrary to what happened in the 30s, 50s and even in the 70s, Brazil did not experience a creative explosion in the last decade in which its society uses the arts and culture to experiment with new forms. Perhaps because he has not been able to escape his myth of economic development.

*Vladimir Safatle Professor at the Department of Philosophy at the University of São Paulo

 

Notes

[I] FURTADO, Celso; Small introduction to development, São Paulo: Paz e Terra, 1980, p. 11

[ii] FURTADO, Celso; The myth of economic development, São Paulo: Peace and Land, 1974

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