By MARCOS PAULO PEREIRA SON*
The PT administration, with its weak reformism, also has difficulties in solving structural problems in commanding the economy governed by collapse
The return of Lulism
With the third victory of candidate Luis Inácio Lula da Silva in October 2022, with the support of part of the popular sectors, middle class radicals, sectors of the establishment political and in the last minutes of the 2nd round, representatives of the cosmopolitan bourgeoisie, Lulism returned to public administration seeking to reverse the crisis that characterized the country since 2015 with its re-edition of the lost decade.[I]
Promising to resume the expansion of consumption in Brazilian society through public investment, weak reformism[ii] supported the reelection of Arthur Lira to the leadership of the Chamber of Deputies in exchange for the approval of the Transition PEC, which allowed the increase and/or readjustment in the social programs that characterized the PT governments, in addition to the monetary amounts necessary so that there would not be a shutdown of the public machine.
Public investments, in the order of 150 billion reais, together with adjustments above inflation in the minimum wage and pensions, revived the moderate Keynesianism that gave the platypus country a new lease of life.[iii] hiding its logic of collapse that has been affecting Brazilian society since the 1980s.
Two years after the fiscal expansion promoted during the transition, social indicators have improved. Unemployment, which was 1% in the first quarter of 2023, is now 9,4% in the third quarter of 3.[iv], approaching full employment (taking into account the productive capacity of a country on the periphery of capitalism). The reduction of food insecurity,[v] which had exploded during the most acute period of the pandemic, also points to an improvement in the country's social situation.
Despite significant improvements in the Brazilian reality, old problems – which are taking on new forms – continue to haunt the country. The decrease in unemployment, which is close to the historic low of 2012, is due, qualitatively, to the creation of precarious jobs, concentrated in the service sector, which requires only a high school diploma and whose remuneration is around two minimum wages. The informality rate continues to be close to 40%, expressing the ocean of reserve army that continues to allow capitalist accumulation centered on lowering the costs of reproducing the labor force.
The resumption of public investment through social programs and a real increase in the minimum wage stimulated an aggregate demand that spread and created a consumption capacity that required the creation of new jobs in the sales and trade sector, but is not associated with an increase in labor productivity, that is, technological innovations that allow the extraction of relative surplus value. The diagnosis is of artificial growth, centered on family consumption, but disconnected from the development of productive forces and based on the deepening of extractivism.
Francisco de Oliveira in an essay published in the magazine Piaui in 2007,[vi] demonstrates how the PT governments, imitating Nelson Mandela's administration, inaugurated a reverse hegemony in the country: the dominated, by leading the moral direction of society, adopt the program of the dominators. Income transfer programs would act as a poverty administrator,[vii] removing class disputes from politics and elevating poverty to the spreadsheets of the Ministry of Social Development. The disputes surrounding a radical transformation of Brazilian society, centered on modernization with social inclusion, are replaced by a fragile alliance that patches up the Brazilian social fracture.
Written at the height of Lula's second term in office, the essay remains relevant for the new PT government: while the value of social program benefits is expanding, the country's productive structure continues to decline: deindustrialization is intensifying, investments in infrastructure remain below the need for modernization, companies continue to fail to absorb the research produced in Brazilian universities, the quality of jobs is precarious, family debt is the norm and the expansion of commodity production serves to fatten the country's reserves.
Crisis or collapse of the world economy? Brazil at a crossroads
To understand the changes in the Brazilian economy since the end of the development cycle, it is necessary to extend the analysis to the transformations in the global productive organization that altered the course of capitalist accumulation.
Robert Kurz (1991), in The collapse of modernization, demonstrates how these transformations operated within the global commodity-producing system. With the development of its productive forces since the post-war period, especially in the central countries, there was an increase in the organic composition of capital that began to dispense with living labor from the production process. This process led to the Third Industrial Revolution in the 1970s and 1980s, with microelectronics destroying the bases of capitalist reproduction.
If Marx had already demonstrated the critical process of capitalist reproduction, based on a constant devaluation of value, the substance that governs the capitalist mode of production, in which the increase in constant capital in relation to variable capital, by reducing the rates of surplus value extraction, leads to a tendency to fall in the rate of profit, what we began to understand from the end of the 20th century onwards is a capitalist accumulation that reproduces itself through the desubstantialization of value, undermining the bases of capitalist reproduction and transforming workers from a reserve army into a superfluous population.
If, from the 1970s onwards, the industrial sector stopped paying capitalists adequately, with the fall in its profit rate, the financial sector, with interest-bearing capital, suggested higher levels of individual remuneration. The migration of investments to the capital market, through credit, fueled the spiral of crisis, with fictitious capital leading the world economy. The problem lies, however, in understanding how fictitious capital intertwines with the production of goods that have less value in each unit produced, organizing the world economy based on the logic of collapse.
No artigo The production of space in the MATOPIBA region: violence, transnational agricultural real estate companies and fictitious capital (2017), the authors conceive how land has become a financial asset in search of capital appreciation through the production of commodities. The expansion of the agricultural frontier in Brazil since the 1970s is currently characterized by the financial market's search for remuneration for its capital through agricultural production, increasing production and productivity. The knot generated, a synthesis of capital accumulation in the current stage of capitalism, is that its expansion is based on the reduction of variable capital in the production process, simulating an accumulation process that does not have the bases to reproduce itself.
We can understand that the Brazilian economy, intertwined with the world economy, has difficulty undergoing changes that alter its productive structure when the current logic of production of goods fits into its valuation crisis.
And finally, extractivism
The foreign debt crisis of the 1980s altered the country's balance of payments, intensifying the inflationary process that was eroding the attempt at peripheral modernization that had been sustained since the 1930s. The solutions found for the new national problem started with the redefinition of capital accumulation in the country, with the adoption of orthodox economic policies that stimulated mineral and agricultural production to generate the international currency necessary to restructure its foreign debt.
Saskia Sassen (2016), in her book expulsions, presents the relationship between the payment of the external debt of the countries of the Global South and the deepening of extractivism. For her, there are two vectors that explain this functioning: the weakening of the National States, with the globalizing logic distributing the production chains worldwide, and the opening of national markets for the payment of these same debts as a requirement to access credit from multilateral organizations (IMF and World Bank). The author understands that “it is not simply about the debt, but about the use made of the debt problem to reorganize a political economy” (SASSEN, 2016, p. 108).
The deepening of extractivism comes in line with the beginning of the 2000s and the presidential election of the first worker to lead the country. The 13 years of PT administration benefited from tree commodities to implement their social policies. In addition to using revenues from the Pre-Salt, for example, to finance some of their policies, governments encouraged the extraction of natural resources and the expansion of the agricultural frontier throughout the country, intensifying the export-oriented nature of a peripheral economy.
The Lula III government, as a re-edition of Lulism adapted to the new conditions of correlation of national and international forces, continues to promote this economic reality. The Harvest Plan, with 400 billion reais, expresses this condition that structures the country's productive activity.
In addition to economic problems, social and environmental issues have been and continue to be penalized by extractivism. Indigenous, quilombola and squatter communities that occupy parts of the national territory have been suffering an intense process of expropriation caused by the expansion of the agricultural frontier, marked by land grabbing in new areas of agricultural production, such as the MATOPIBA region or parts of the Amazon territory. This same unbridled search for fertile land in the Amazon has been causing damage that some scientists say is a point of no return.[viii], with the collapse of the Amazon biome bringing apocalyptic consequences for the planet.
Temporary solutions
The attempts to modernize the country by the new Lula government, although timid, also come up against the problems of global capitalist accumulation. If new programs to stimulate industrial production are formulated or re-issued, such as the New PAC (Growth Acceleration Program) or the NIB (New Brazilian Industry), their results will be frustrated as they seek to solve problems in a reality that prevents reaching the average industrial production time, that is, the productivity of the central countries, in addition to the central problem of the crisis of capitalist reproduction that, contradictorily, is carried out by its own mechanisms of valorization, with the devaluation of value.
The PT administration, with its weak reformism, also has difficulty solving, within the logical limits imposed by the current stage of capitalism, structural problems of command of the economy governed by collapse, but which present gaps for reducing impacts, that is, for buying time, such as the creation of new sources of appreciation that would allow for changes and strengthen the Brazilian social fabric in the medium term, such as green technologies for the energy transition. What is diagnosed are temporary solutions that preserve the structural problems of the Brazilian social formation, or in other words, the future remains static.[ix]
*Marcos Paulo Pereira Jr. is a geography major at USP.
References
KURZ, Robert. The Collapse of Modernization: From the Collapse of Barracks Socialism to the Crisis of the World Economy. New York: Routledge, 1991.
PITTA, FT, MENDONÇA, ML, & BOECHAT, CA (2018). The production of space in the MATOPIBA region: violence, transnational agricultural real estate companies and fictitious capital. International Studies: Journal of International Relations of PUC Minas, 5(2), 155-179. https://doi.org/10.5752/P.2317-773X.2017v5n2p155.
Notes
[I] Cf. SINGER, André Vitor. Lula's Return. New Left Review, 139, 2023. Available at: https://newleftreview.org/issues/ii139/articles/andre-singer-lula-s-return.
[ii] Cf. SINGER, André Vitor. Social and ideological roots of Lulism. New Studies, n. 85, p. 83-103, 2009. Available at: https://doi.org/10.1590/s0101-33002009000300004.
[iii] Cf. OLIVEIRA, Francisco de. Critique of dualistic reason / The platypus. São Paulo: Boitempo Editorial, 2003.
[iv] https://www1.folha.uol.com.br/mercado/2024/10/desemprego-tem-menor-taxa-da-serie-historica-para-terceiro-trimestre.shtml.
[v] https://g1.globo.com/jornal-nacional/noticia/2024/07/24/cai-o-numero-de-pessoas-que-enfrentam-a-inseguranca-alimentar-grave-no-brasil.ghtml.
[vi] See https://piaui.folha.uol.com.br/materia/hegemonia-as-avessas/.
[vii] Ibid.
[viii] https://www1.folha.uol.com.br/ambiente/2024/09/megaincendios-na-amazonia-aceleram-chance-de-colapso-do-bioma.shtml
[ix] I am grateful for Julio Tude d'Avila's comments.
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