Lula’s Brazil
By Perry Anderson
Contrary to a
well-known English dictum, stoical if self-exonerating, all political lives do
not end in failure. In postwar Europe, it is enough to think of Adenauer or De
Gasperi, or perhaps even more impressively, Franco. But it is true that, in
democratic conditions, to be more popular at the close than at the outset of a
prolonged period in office is rare. Rarer still – indeed, virtually unheard of
– is for such popularity to reflect, not appeasement or moderation, but a
radicalisation in government. Today, there is only one ruler in the world who
can claim this achievement, the former worker who in January stepped down as
president of Brazil, enjoying the approval of 80 per cent of its citizens. By
any criterion, Luiz Inácio da Silva is the most successful politician of his
time.
That success has
owed much to an exceptional set of personal gifts, a mixture of warm social
sensibility and cool political calculation, or – as his successor, Dilma
Rousseff, puts it – rational assessment and emotional intelligence, not to
speak of lively good humour and personal charm. But it was also, in its
origins, inseparable from a major social movement. Lula’s rise from worker on
the shop-floor to leader of his country was never just an individual triumph:
what made it possible was the most remarkable trade-union insurgency of the
last third of a century, creating Brazil’s first – and still only – modern
political party, which became the vehicle of his ascent. The combination of a
charismatic personality and a nationwide mass organisation were formidable
assets.
Nevertheless,
Lula’s success was far from a foregone conclusion. Elected in 2002, his regime
got off to a dour start, and soon came close to disaster. His first year in
office, dominated by the economic legacy of his predecessor, reversed virtually
every hope on which the Workers’ Party had been founded. Under Fernando
Henrique Cardoso, the public debt – nearly half of it denominated in dollars –
had doubled, the current account deficit was twice the Latin American average,
nominal interest rates were over 20 per cent, and the currency had lost half
its value in the run-up to the election. Argentina had just declared the
largest sovereign default in history, and Brazil looked – in the eyes of the
financial markets – to be on the brink of the same precipice. To restore
investor confidence, Lula installed an unblinkingly orthodox economic team at
the Central Bank and Ministry of Finance, which hiked interest rates yet
further and cut public investment, to achieve a primary fiscal surplus higher
even than the figure the IMF had demanded. For citizens, prices and
unemployment rose as growth fell by 50 per cent. But what was bitter medicine
for militants was nectar to bond-holders: the spectre of default was banished.
Growth resumed in 2004 as exports recovered. Even so the public debt continued
to rise, and interest rates were hoisted once more. Adherents of the previous
regime, who had smarted under Lula’s criticisms of Cardoso, pointed triumphantly
to the continuities between the two. For the Partido dos Trabalhadores there
was little to boast about.
This was
uninspiring enough, but worse was to come. In the spring of 2005, the leader of
one of the smaller parties in Congress (there were more than a dozen of these),
coming under pressure after one of his henchmen was videotaped pocketing a
bribe, hit back with the revelation that the government had been systematically
buying the votes of deputies, to the tune of $7000 a month each, to secure majorities
in the legislature. In charge of the operation was the head of Lula’s cabinet
in the presidential palace, José Dirceu, the money coming from illegal funds
controlled by the PT and distributed by its treasurer, Delúbio Soares. Within
weeks of this bombshell, an aide to the brother of the chairman of the PT, José
Genoino, was arrested boarding a flight with 200,000 reais in a suitcase and
$100,000 in his underpants. A month later, the manager of Lula’s bid for the
presidency, Duda Mendonça – a notoriety in the PR world – confessed that the
campaign had been financed by slush funds extracted from interested banks and
enterprises, in violation of electoral law, and that he himself had been
rewarded for his services with secret deposits in an account in the Bahamas.
Next it was one of Lula’s closest political confidants, the former trade-union
leader Luiz Gushiken, under fire for siphoning pension funds for political
ends, who was forced to step down as secretary of communications. In a yet
darker background lay the unsolved murder in early 2002 of Celso Daniel, mayor
of the PT stronghold of Santo André, widely suspected of being a contract
killing to do with bribes collected from local bus companies.
The exposure of a
broad hinterland of corruption behind Lula’s conquest of power, while it came
as a demoralising shock to much of the PT’s own base, could be put – as it
promptly was by loyalists – in historical perspective. Illegal bankrolling of
campaigns by hidden donors in exchange for favours was widespread in Brazilian
politics: the president of the main opposition party, Cardoso’s Social
Democrats (PSDB), was caught on the same charge and had to resign. Buying votes
in Congress was no novelty. It was well known that Cardoso had greased the
palms of deputies from Amazonas to secure the constitutional change that
allowed him to run for a second term. The Brazilian legislature had long been a
cesspit of venality and opportunism. By the end of Lula’s first term, between a
third and two-fifths of the deputies in Congress had switched parties; by the
end of the second, more than a quarter of both Congress and Senate were under
criminal indictment or facing charges. In December, legislators awarded
themselves a pay rise of 62 per cent. In 2002, Lula had been elected with 61
per cent of the popular vote, but the PT got less than a fifth of the seats in
Congress, where allies had to be found for the government to command a
legislative majority. Dirceu had wanted to make a deal with the largest party
of the centre, the PMDB, but this would have meant conceding important
ministries. Lula preferred to stitch together a patchwork of smaller parties,
whose bargaining power was weaker. But they naturally expected a share of the
spoils too, if a lower grade one, and so the mensalão – the monthly
backhander – was devised for them.
In cash terms, the
corruption from which the PT benefited, and over which it presided, was
probably more systematic than that of any predecessor. In absolute terms,
Brazilian elections are second only to America’s in their costs, and relative
to national income can exceed them by a wide margin. In 1996, Clinton spent $43
million to take the White House; in 1994 Cardoso laid out $41 million to secure
the Palácio do Planalto, in a country with a per capita GDP less than a sixth
that of the US. Unlike Cardoso, who twice sailed to victory on the first ballot
as the establishment candidate, and commanded abundant natural – in Brazilian
parlance, ‘physiological’ – allies and placemen in Congress, Lula was a
three-time loser when he ran again for the presidency in early 2002, and his
party traditionally an object of the deepest suspicion to all who counted
economically in the country. To mount that unfavourable gradient, special
resources were needed, for which special undertakings had to be given, public
and private. So too, with a smaller core of deputies and fewer spontaneous
friends in the legislature, to obtain makeshift majorities in Congress the PT
was driven to bribe on a bigger scale. Perhaps one could speak of a kind of
workers’ premium, in corruption as in disinflation: a need to over-satisfy the
IMF with an excessive primary surplus to keep the economy on keel, to
over-extract and distribute black money to win office and exercise power. That,
at least, would have been one line open to defenders of the party. In practice,
the more typical mitigation was to point to the personal probity, in some cases
the heroic record, of those in charge of disbursements made for organisational,
not individual ends. Dirceu, the architect of the modern PT and strategist of
Lula’s victory, had worked underground for years after returning clandestinely
from exile in Cuba. Genoino had been a guerrilla fighter in the jungle,
imprisoned and tortured by the generals. Gushiken still lived the modest life
of a former trade unionist. They had acted without personal advantage, pour
les besoins de la cause.
Such pleas did not
move the media. Uniformly hostile to the PT anyway, the Brazilian press went
into high gear as the scandal of the mensalão broke, sparing no deadly
conjecture or damaging detail. Its target now lay wide open. There was no
denying that the PT had always claimed to be above the swamp of traditional
mores, a fearless enemy of ingrained corruption rather than a hardened
practitioner of it. Soon even the distinction between institutional misconduct
and individual degeneration was swept away, in spectacular fashion. The single
most powerful figure in the government was the minister of finance, Antonio
Palocci, a mayor from the interior of São Paulo, who had been the inspiration
behind the ‘Letter to the Brazilians’, Lula’s electoral billet-doux to the
business community, and the key broker for the PT’s backdoor transactions with
banks and construction firms during the campaign. A mediocre former doctor with
no particular economic skills, his sub rosa ties to assorted cash-box circles
and his rigid orthodoxy in office made him the guarantee of business confidence
in the government and toast of the financial press, at home and abroad. Shady
deals in his municipal fief of Ribeirão Preto had long been rumoured, though
these too could be played down as replenishing only party coffers.
But in early 2006,
it emerged that a secluded lakeside mansion in Brasilia had been rented by one
of his aides from Ribeirão Preto. There, in scenes out of Buñuel, the sallow
features of the finance minister – he looks like a cutpurse in some low-life
seicento painting – were to be glimpsed slipping from limousine to portal, to
enter a villa where the rooms were equipped only with beds and a side table or
two for cash and alcohol. Here discreetly came and went lobbyists and
familiars, along with the minister, to enjoy prostitutes and parties, and
exchange tips and favours. When news of the brothel came out, cynics could be
heard to say that there was no reason for surprise, the capital itself being
little more than an enlarged version of the same. Palocci was not in a position
to take this line, and made desperate attempts to stifle the affair. Lula,
comparing him effusively to Ronaldinho as the star player the team cannot
afford to lose, sought by every means to save him, in vain. With his fall in
the spring of 2006, the slate of leading politicians around Lula was virtually
wiped clean.
The uproar in the
media was deafening. In Congress the opposition pressed for one commission of
investigation after another. Leading members of the PSDB started to talk of
impeaching Lula himself for complicity in the corruption of his entourage.
Feeling cornered by this wave of assaults, Lula began to speak in private of
appealing to the street if his enemies persisted in trying to depose him. In
reality, there was little danger of this, since both Cardoso and Serra, the
PSDB mayor of São Paulo, beaten by Lula in 2002 but hoping to become the
presidential candidate again for his party later that year, decided it would be
better to leave a badly wounded incumbent in office than to risk the emergence
of a strong, uncompromised opponent were he to be ousted.
Rarely has a
political calculation so misfired. Besieged in the media and mauled in the
legislature, Lula had two assets in reserve that not only saved his position,
but transformed it. The first was the return of sustained economic improvement.
After a period that had seen the worst stagnation of the century – an annual
average growth of 1.6 per cent in the 1990s, creeping up no higher than 2.3 per
cent in Cardoso’s eight years – GDP increased at a clip of 4.3 per cent from
2004 through 2006. The jump was essentially due to external good fortune. These
were the years in which Chinese demand for Brazil’s two most valuable exports,
soya and iron ore, took off, amid a steep general rise in commodity prices. In
America, where interest rates were being held artificially low by the Fed to
keep the financial bubble in the United States from bursting, the ‘Greenspan
Put’ made a flow of cheap capital imports available to Brazil. As business and
jobs picked up, the mood in the country changed. Few voters were disposed to quibble
with official claims taking credit for the improvement. With the upturn,
moreover, the state was now collecting larger revenues. These would be critical
for the government’s second ace.
From the start,
Lula had been committed to helping the poor. Accommodation of the rich and
powerful would be necessary, but misery had to be tackled more seriously than
in the past. His first attempt, a Zero Hunger scheme to assure minimum
sustenance to every Brazilian, was a mismanaged fiasco. In his second year,
however, consolidating various pre-existent partial schemes and expanding their
coverage, he launched the programme that is now indelibly associated with him,
the Bolsa Família, a monthly cash transfer to mothers in the lowest income
strata, against proof that they are sending their children to school and
getting their health checked. The payments are very small – currently $12 per
child, or an average $35 a month. But they are made directly by the federal
government, cutting out local malversation, and now reach more than 12 million
households, a quarter of the population. The effective cost of the programme is
a trifle. But its political impact has been huge. This is not only because it
has helped, however modestly, to reduce poverty and stimulate demand in the worst
afflicted regions of the country. No less important has been the symbolic
message it delivers: that the state cares for the lot of every Brazilian, no
matter how wretched or downtrodden, as citizens with social rights in their
country. Popular identification of Lula with this change became his most
unshakeable political asset.
Materially, a
succession of substantial increases in the minimum wage was to be of much
greater significance. These began just as the corruption scandals were
breaking. In 2005, the rise was double that of the previous year in real terms.
In the election year of 2006, the rise was still greater. By 2010, the
cumulative increase in the rate was 50 per cent. At about $300 a month, it
remains well below the earnings of virtually any worker in formal employment.
But since pensions are indexed to the minimum wage, its steady increase has
directly benefited at least 18 million people – the Statute of the Elderly,
passed under Lula, consolidating their gains. Indirectly, too, it has encouraged
workers in the informal sector not covered by the official rate, who make up
the majority of the Brazilian workforce, to use the minimum as a benchmark to
improve what they can get from their employers. Reinforcing these effects was
the introduction early on of crédito consignado: bank loans for
household purchases to those who had never before had bank accounts, with
repayment automatically deducted from monthly wages or pensions. Together,
conditional cash transfers, higher minimum wages and novel access to credit set
off a sustained rise in popular consumption, and an expansion of the domestic
market that finally, after a long drought, created more jobs.
In combination,
faster economic growth and broader social transfers have achieved the greatest reduction
in poverty in Brazilian history. By some estimates, the number of the poor
dropped from around 50 to 30 million in the space of six years, and the number
of the destitute by 50 per cent. Half of this dramatic transformation can be
attributed to growth, half to social programmes – financed by higher revenues
accruing from growth. Nor have such programmes been confined to income support.
Since 2005, government spending on education has trebled and the number of
university students doubled. During the 1990s, higher education in Brazil
largely ceased to be a public function, with three-quarters of all students
going to private universities that enjoyed tax exemption. Astutely, these have
been obliged, in exchange for their exemption, to offer scholarship places to
students from poor or non-white families who would otherwise never have a
chance of getting beyond middle school. However poor the quality of instruction
– it is often terrible – the hope of betterment has made the programme,
enrolling some 700,000 students to date, a great popular success, sometimes
compared for democratising effect to the GI Bill of Rights in postwar America.
In 2006, not all of
this had yet been achieved. But more than enough had been done to shield Lula
from the battering of his adversaries. Popular opinion was not entirely
indifferent to corruption – at the height of the mensalão, his ratings
had dropped quite sharply. But measured against such appreciable improvements
in people’s lives, backhanders did not count. By the spring, the political
tables had been turned so completely that Serra, looking at the opinion polls,
decided he had no chance against Lula, leaving a hapless rival in his party to
be thrashed in the presidential election that autumn, when Lula walked away with
the same majority as he won four years before, 61 per cent in the second round.
This time, however, its social composition differed. Alienated by the mensalão,
much of the middle-class electorate that had rallied to Lula in 2002 deserted
him, while the poor and the elderly voted for him in greater numbers than ever
before. His campaign, too, struck a different note. Four years earlier, when
its aim had been to reassure doubtful voters, his managers had marketed him as
the bearer of ‘peace and love’ to the country. In 2006 the tone was less
saccharine. Brushing aside lapses in the PT of which he had, of course, been
unaware, the president launched an aggressive counter-attack on the
privatisations of the previous regime, which had enriched a few at the expense
of the nation and could be expected to resume if his opponent were elected.
There was a gulf between his government and Cardoso’s: not a single enterprise
had been privatised under Lula. The disposal of public assets, often on the
murkiest terms, had never been popular in Brazil. The message struck home.
Buoyed by
socio-economic success, and a more hard-hitting political victory, Lula’s
second mandate was a much more confident affair. He was now not only the
undisputed master of popular affection, as the first president to bring a
modest well being to so many of his people, but also in complete control of his
own administration. His two leading ministers were gone. Palocci – to Lula
‘more than a brother’ – he might regret personally, but he was no longer
required to calm the nerves of overseas investors. Dirceu, a virtuoso of cold
political calculation and intrigue, he had never liked and somewhat feared.
Their joint elimination freed him for sole command in Brasilia. When, midway
through his second term its test came, he handled it with aplomb. The crash of
Wall Street in 2008 might be a tsunami in the US, he declared, but in Brazil it
would be no more than a ‘ripple’ – uma marolinha. The phrase was
seized on by the press as proof of reckless economic ignorance and
irresponsibility.
But he was as good
as his word. Counter-cyclical action was prompt and effective. Despite falling
tax revenues, social transfers were increased, reserve requirements were
reduced, public investment went up and private consumption was supported. In
overcoming the crisis, local banking practices helped. Tight controls, holding
multipliers of the monetary base well below US levels, and greater transparency
had left Brazilian banks in much better shape than those in the US, protecting
the country from the worst of the financial fall-out. But it was concerted,
vigorous state policy that pulled the economy round. Lula’s optimism was
functional: told not to be afraid, Brazilians went out and consumed, and demand
held up. By the second quarter of 2009, foreign capital was flowing back into
the country, and by the end of the year the crisis was over. As Lula’s second
mandate came to an end, the economy was posting more than 7 per cent growth,
and nature itself was smiling on his rule, with the discovery of huge deposits
of offshore oil.
To these domestic
successes could be added foreign laurels. The international standing of Brazil
has rarely, if ever, corresponded to its size or potential importance. Cardoso
had consorted with the Clintons and Blairs of the North, but such company had
only discredited him, as a lesser mouthpiece for the guff of the Third Way.
Diplomatically, the guideline of his regime was fidelity to the United States.
From the outset, Lula steered another course. Without confronting Washington,
he gave greater priority to regional solidarity, promoting Mercosur with
neighbours to the south, and refusing to cold-shoulder Cuba and Venezuela to
the north. The most impressive figure in Lula’s cabinet, the foreign minister, Celso
Amorim, was soon leading a front of poorer states to thwart Euro-American
attempts to ram more ‘free trade’ – free for the US and EU – arrangements
through the WTO at Cancún. As he politely expressed it, ‘Cancún will be
remembered as the conference that signalled the emergence of a less autocratic
multilateral trading system.’ If Washington and Brussels have still not
succeeded, eight years later, in imposing their will on the less developed
world through the abortive Doha Round, credit must first of all go to Brazil.
In his second
mandate, Lula would go much further in putting his country on the world stage.
By now he was a statesman courted in every region of the world, who no longer
had to defer, at least outwardly, to the conventions of the ‘international
community’. In part this change was due to the increasing weight of Brazil as
an economic power. But it also reflected his own aura as the most popular ruler
– in both senses of the term, political and social – of the age. Consecration
of the new position he had won for his nation came with the formation of the
BRIC quartet in 2009, bringing the heads of state of Brazil, Russia, India and
China together in one-time Sverdlovsk, with a communiqué calling for a global
reserve currency. The following year Lula hosted the BRIC summit in Brazil
itself. On paper, the four largest powers outside the Euro-American imperium
would appear to represent, if not an alternative, at least some check to its
dominion. Yet it is striking that, although Brazil alone of the four is not a
major military power, it is so far the only one to have defied the will of the
United States on an issue of strategic importance to it: Lula not only
recognised Palestine as a state, but declined to fall in with the blockade of
Iran, even inviting Ahmadinejad to Brasilia. For Brazil to do this was
virtually a declaration of diplomatic independence. Washington was furious, and
the local press beside itself at this breach of Atlantic solidarity. Few voters
cared. Under Lula, the nation had emerged as a global power. By the end, his
vast popularity was a reflection not only of material betterment, but also of
collective pride in the country.
If such is the bald
record of this presidency, how is it to be interpreted historically? Three
contrasting views hold the field in Brazil. For Cardoso and his followers,
still dominant among the intelligentsia and in the media, Lula embodies the
most regressive traditions of the continent, his rule just another variant of
the demagogic populism of a charismatic leader, contemptuous at once of
democracy and civility, purchasing the favour of the masses with charity and
flattery. In Brazil this was the disastrous legacy of Getúlio Vargas, a
dictator who had returned to power by the ballot-box as ‘father of the poor’,
and committed a melodramatic suicide when the criminality of his regime was
exposed. In Argentina, the reign of Perón had been still more ruinous and
corrupting. No less manipulative and authoritarian, if on a pettier scale,
Lulismo is – Cardoso’s verdict – ‘a kind of sub-Perónism’. The element of
partisan rancour in this description is no mystery: to be so outshone in
popular esteem by Lula has gone hard with his predecessor. But more moderately
expressed, the basic classification is not uncommon, and can be heard among
those who respect the memory of Vargas as well as those who detest it.
Viewed
historically, however, comparisons with Vargas, let alone Perón, miss the mark.
The differences between their forms of rule and Lula’s are fundamental. Not that
the great practitioners of populism in Brazil and Argentina were all that alike
themselves. Vargas’s rhetoric was paternalist and sentimental, Perón’s rousing
and aggressive, and their relationship to the masses was quite distinct. Vargas
built his power on an incorporation of newly urbanised workers into the
political system, as passive beneficiaries of his care, with a protective
labour law and a gelded unionisation from above. Perón galvanised them as
active combatants against oligarchic power, with a mobilisation of proletarian
energies in a trade-union militancy that outlived him. The one appealed to
lachrymose images of ‘the people’, while the other called up the anger of los
descamisados – the local sansculottes, but without shirts rather than breeches.
Lula’s exercise of
power has involved none of all this. His rise was based on a trade-union
movement and political party far more modern and democratic than anything
Vargas or Perón ever envisaged. But by the time he won the presidency at his
fourth attempt, the PT had been largely reduced to an electoral machine. In
power, Lula neither mobilised nor even incorporated the electorate that
acclaimed him. No new structural forms gave shape to popular life. The
signature of his rule was, if anything, demobilisation. The trade unions
organised more than 30 per cent of the formal labour force in the 1980s, when
he made his name as their most gifted leader. Today, the figure is 17 per cent.
The decline preceded his period in office, but was not altered by it. Even the imposto
sindical dating back to the Fascist-inspired legislation of the most
repressive period of Vargas’s rule (the Estado Novo), whose deduction and
distribution of dues by the state was long and rightly viewed by the PT as a
mechanism for sapping union activism, and whose abolition was a key demand of
the early 1980s, has been left untouched. Nor, on the other side of the ledger,
have the forms of clientelism characteristic of classic populism been
reproduced. The Bolsa Família is administered impersonally, clear of capillary
systems of patronage. The pattern of rule is quite distinct.
A second
interpretation looks to a different parallel. The political scientist André
Singer, press secretary to Lula in his first mandate, but an independent and original
mind, has pivoted a striking analysis of Lulismo on the psychology of the
Brazilian poor. This, he argues, is a sub-proletariat, comprising nearly half –
48 per cent – of the population, that is moved by two principal emotions: hope
that the state might moderate inequality, and fear that social movements might
create disorder. On Singer’s reading, instability is a spectre for the poor,
whatever form it takes – armed struggle, price inflation or industrial action.
So long as the left failed to understand this, the right captured their votes
for conservatism. In 1989, Lula won the prosperous south, but Fernando Collor,
brandishing the danger of anarchy, swept the poor to gain a comfortable
victory. In 1994 and 1998, Cardoso’s throttling of inflation ensured him a
still larger margin of the popular vote. In 2002, Lula finally grasped that it
was not just builders and bankers who needed reassurance that he would not do
anything unduly radical in power, but – even more crucially – street vendors
and slum-dwellers too. Only in 2006, however, was a complete reversal of
allegiances sealed, as the middle class abandoned him while the sub-proletariat
voted for him en masse. When he first ran for office in 1989, Lula took 51.7
per cent of the electorate in the south of the country, and 44.3 per cent in
the famished north-east; in 2006, he lost the south at 46.5 per cent, and swept
the north-east with 77.1 per cent.
The economic
orthodoxy of Lula’s first term, and the lesser but continuing caution of his
second, were thus more than simple concessions to capital. They answered to the
needs of the poor, who, unlike workers in formal employment, cannot defend
themselves against inflation and dislike strikes even more than the rich, as a
threat to their daily lives. So, coming after Cardoso, Lula cut inflation still
further, even as he attended to popular consumption, pioneering a ‘new
ideological road’ with a project combining price stability and expansion of the
internal market. In this, Singer suggests, he displayed his sensitivity both to
the temperament of the masses and to the political culture of the country at
large, each in their own way marked by a long Brazilian tradition of conflict
avoidance. Vargas too, until he was under siege at the end, had generally embodied
that trait. Lula can thus indeed be regarded in certain respects – in his
ability to square the concerns of capital and labour; to exploit favourable
external circumstances for internal development; to assert national interests;
and above all, to make a connection with the previously inarticulate masses –
as Vargas’s heir, offering a potent blend of authority and protection as the
‘father of the poor’ had once done. But in other ways, his popular roots as a
penniless immigrant from the north-east and his unimpeachably democratic
commitments gave him far greater legitimacy and credibility as a defender of
the people than a wealthy rancher from the south, who left the rural masses
essentially untouched in their misery, could ever possess. Lula did not see
himself as a descendant of Vargas. The president with whom he identified was
Kubitschek, the builder of Brasilia, another optimist who never willingly made
an enemy.
For Singer,
however, comparison with a much more famous ruler is in order. Might not Lula
have become the Brazilian Roosevelt? The genius of FDR was to transform the
political landscape with a package of reforms that would eventually lift
millions of hard-pressed workers and pinched employees, not to speak of those
made jobless by the Slump, into the ranks of the postwar American middle class.
Any party that sets in motion upward social mobility on such a scale will
dominate the scene for a long time to come, as the Democrats did once the New
Deal was underway, though eventually the opposition will adjust to the change
and compete on the same ground, as Eisenhower would do in 1952. Presiding over
comparable changes, Lula’s victories in 2002 and 2006 can be mapped with
uncanny closeness onto Roosevelt’s of 1932 and 1936: first a large majority, then
an avalanche, the popular classes pouring out for the president as the
respectable classes turned against him. In prospect could be a Brazilian
political cycle just as long, driven by the same dynamics of social ascent.
Glances in the
mirror at resemblances with FDR are not new in Brazil. Cardoso also liked to
compare his project with that of the great Democratic coalition mustered to the
north. Lula may come closer, but the contrasts between the New Deal and his
intendancy are still plain. Roosevelt’s social reforms were introduced under
pressure from below, in a wave of explosive strikes and rolling unionisation.
Organised labour became a formidable force from 1934 onwards, which he had to
court as much as he could control. No comparable industrial militancy either
sustained or challenged Lula (the rural landless attempting such a role were
much too weak, their movement easily marginalised). Where Roosevelt confronted
a deep slump, which the New Deal never really overcame, and was rescued from
its failure only by the onset of the Second World War, Lula rode the crest of a
commodities boom in a time of increasing prosperity. Differing in their luck,
they differed completely in style too: the aristocrat who rejoiced in the
hatred of his enemies, and the labourer who wanted none, could hardly form a
greater contrast. Were the ultimate upshot of their rule to be the same, there
would seem little immediate connection between causes and effects.
Still, in one point
there could be thought a certain likeness. The intensity of the animus against
Roosevelt in conservative circles up to the outbreak of the war was out of all
proportion to the actual policies of his administration. To all appearances,
the same anomaly was to recur in Brazil, where Lula’s aversion to conflict was
not reciprocated. Anyone whose impressions of his government came from the
business press abroad would get a shock from exposure to the local media.
Virtually from the start the Economist and Financial Times
purred with admiration for the market-friendly policies and constructive
outlook of Lula’s presidency, regularly contrasted with the demagogy and
irresponsibility of Chávez’s regime in Venezuela: no praise was too high for
the statesman who put Brazil on a steady path to capitalist stability and
prosperity. The reader of the Folha or Estadão, not to speak
of Veja, was living in a different world. Typically, in their columns,
Brazil was being misgoverned by a crude would-be caudillo without the faintest
understanding of economic principles or respect for civil liberties, a standing
threat to democracy and property alike.
The degree of venom
directed at Lula bore little or no relation to anything he was actually doing.
Behind it lay other and deeper grievances. For the media, Lula’s popularity meant
a loss of power. From 1985 and the end of military rule, it was the owners of
the press and television who in practice selected candidates and determined the
outcome of elections. The most notorious case was the backing of Collor by the
Globo empire, but the coronation of Cardoso by the press, before he had even
thrown his hat into the ring, was scarcely less impressive. Lula’s direct
rapport with the masses broke this circuit, cutting out the media’s role in
shaping the political scene. For the first time, a ruler did not depend on
their proprietors, and they hated him for this. The ferocity of the ensuing
campaigns against Lula could not have been sustained, however, without a
sympathetic audience. That lay in the country’s traditional middle classes,
principally but not exclusively based in the big cities, above all São Paulo.
The reason for the hostility within this stratum was not loss of power, which
it had never possessed, but of status. Not only was the president now an
uneducated ex-worker whose poor grammar was legend, but under his rule maids
and guards and handymen, riff-raff of any kind, were acquiring consumer goods
hitherto the preserve of the educated, and getting above themselves in daily
life. To a good many in the middle class, all this grated acutely: the rise of
trade unionists and servants meant they were coming down in the world. The
result has been an acute outbreak of ‘demophobia’, as the columnist Elio
Gaspari, a spirited critic, has dubbed it. Together, the blending of political
chagrin among owners and editors with social resentment among readers made for
an often bizarrely vitriolic brew of anti-Lulismo, at odds with any objective
sense of class interest.
For, far from doing
any harm to the propertied (or credentialed), this was a government that
greatly benefited them. Never has capital so prospered as under Lula. It is
enough to point to the stock market. Between 2002 and 2010, Bovespa
outperformed every other bourse in the world, rocketing by 523 per cent; it now
represents the third largest securities-futures-commodities complex on earth.
Huge speculative gains accrued to a modern bourgeoisie accustomed to gambling
on share prices. For more numerous and risk-averse sectors of the middle class,
sky-high interest rates yielded more than satisfactory returns on simple bank
deposits. Social transfers have doubled since the 1980s, but payments on the
public debt trebled. Outlays on the Bolsa Família totalled a mere 0.5 per cent
of GDP. Rentier incomes from the public debt took a massive 6-7 per cent.
Fiscal receipts in Brazil are higher than in most other developing countries,
at 34 per cent of GDP, largely because of social commitments inscribed in the
constitution of 1988 at the high point of the country’s democratisation, when the
PT was still a rising radical force. But taxes have remained staggeringly
regressive. Those living on less than twice the minimum wage lose half their
income to the Treasury, those on 30 times the minimum wage a quarter of theirs.
In the countryside, the clearing of vast interior areas of scrub for modern
agribusiness, proceeding apace under Lula, has left landownership more
concentrated today than it was half a century ago. Urban real estate has moved
in the same direction.
Official reports,
backed by much statistical analysis and endorsed by sympathetic agencies and
journalists abroad, claim not only a major reduction of poverty in Brazil in
these years, of which there is absolutely no doubt, but a substantial
diminution of inequality, with the Gini index falling from an astronomic
0.58-plus at the start of Lula’s term to a merely towering 0.538 at the end of
it. In such estimates, from the turning point of 2005 onwards, the incomes of
the poorest decile of the population purport to have grown at nearly double the
rate of those in the top decile. Best of all, some 25 million people have moved
into the ranks of the middle class, henceforward a majority of the nation. For
many commentators, domestic and foreign, this is the most hopeful single
development of Lula’s presidency. It is the ideological pièce de résistance in
the glowing accounts of boosters like the Latin American editor of the Economist,
Michael Reid, eager to hold up the new middle class in Brazil as the beacon of
a stable capitalist democracy in the ‘battle for the soul’ of a ‘forgotten
continent’ against dangerous rabble-rousers and extremists. Much of this
acclaim rests on an artifice of categorisation, in which someone with an income
as low as $7000 a year (pauperism elsewhere) is classified as ‘middle class’,
while according to the same schema the uppermost class – the super-elite of
Brazilian society, comprising just 2 per cent of the population – starts at
scarcely twice the average per capita income of the world’s population. Marcio
Pochmann, the head of the country’s leading institute of applied economic
research, has trenchantly remarked that a more accurate description of the much
touted new middle strata would be simply ‘the working poor’.
More generally, the
belief that inequality in Brazil has significantly declined must be met with
scepticism, since not only is it based on data for nominal income that exclude
– according to standard statistical rules – ‘outliers’ at the top of the tail,
i.e. the super-rich, but much more fundamentally ignores capital appreciation
and concealment of financial gains at the summit of society. As the leading
study, Declining Inequality in Latin America, notes of standard
household surveys, ‘incomes from property are grossly underestimated’: ‘If the
top incomes ignored by surveys experience a large enough relative increase,
then the true dynamics of overall inequality may display a rising trend even
when survey-based estimates show the opposite result.’ So in Brazil it is
estimated that between 10,000 and 15,000 families receive the lion’s share of
the $120 billion annual payments of the public debt (the cost of the Bolsa
Família is $6-9 billion), while in the last decade millionaires have multiplied
as never before. The explosion of the stock market alone should be warning
enough against any naivety on this score. The rich are well aware on which side
their bread has been buttered. Unlike the ‘economic royalists’ attacked by
Roosevelt, who detested the New Deal, most Brazilian financiers and
industrialists have been warm supporters of Lula’s government. Capital has been
not only more lucid about it than the – true – middle class, but also more
comfortable with it than with any previous regime: logically enough, since
profits have never been higher.
For a third
interpretation of Lulismo, these profits must lie at the centre of any
realistic analysis of its system of rule. In a series of iconoclastic essays,
the sociologist Chico de Oliveira has developed a vision of it in nearly every
way antithetical to that of Singer, with whom he remains on good terms despite
their political differences (one of the historic founders of the PT, de
Oliveira left the party in disgust soon after Singer joined Lula’s government).[*] De Oliveira
doesn’t contest his friend’s characterisation of the psychology of the poor, or
the improvements in their lot wrought by Lula. The sub-proletariat is as Singer
describes it: without resentment of the rich, satisfied with modest and gradual
alleviations of its conditions of existence. But his account focuses too
narrowly on the relationship between Lula and the mass of his electorate.
Missing are two fundamental parameters for an understanding of Lulismo. The
first is the moment in the world history of capital at which it came to power.
Globalisation has cut off the possibility of an inclusive project of national
development of the kind long sought in Brazil, not least by those like Lula
himself. The third industrial revolution, based on biological and digital
advances that erase the boundary between science and technology, requires
investment in research and imposes patents that permit no ready transfer of
their results to the periphery of the system – least of all in a country like
Brazil, where investment has never, even at the height of developmentalism
under Kubitschek in the 1950s, exceeded a low 22 per cent of GDP. Outlays on
R&D remain beggarly.
Thus instead of
further industrial advance, the consequence for Brazil of the latest wave of
technological revolution has been to shift accumulation away from manufacturing
to financial transactions and natural-resource extraction, with a very rapid
growth in the banking sector, where profits are highest, and in mining and
agribusiness for export. The former is an involution, diverting investment from
production; the latter a regression, taking Brazil back to earlier cycles of
reliance on primary commodities for growth. It was to the dynamic of these sectors
that Lulismo had to adjust in coming to terms with capital. Here lay the second
parameter. For the result was to transform the structures out of which it had
emerged – the party and the trade unions which, after 2002, became the
apparatus of power on which it rested. The leadership of the CUT, the principal
confederation of labour, was put in charge of the country’s largest pension
fund. The cadres of the PT colonised the federal administration, where a
Brazilian president has the right of nomination to over 20,000 well-paid jobs,
far more than the spoils system has ever allowed the executive in America. Now
all but completely detached from the working class, this stratum was inexorably
sucked into the vortex of financialisation engulfing markets and bureaucracies
alike. Trade unionists became managers of some of the biggest concentrations of
capital in the country, the scene of ferocious struggles for control or
expansion between competing predators. Militants became functionaries enjoying,
or abusing, every perquisite of office.
As a new logic of
accumulation interlocked with a new incrustation of power, a hybrid social
layer was formed – de Oliveira would compare it to the duck-billed platypus, as
a sport of the animal kingdom – whose natural habitat was corruption. The
unorganised poor of the informal economy had now become Lula’s electoral base,
and he could not be reproached for that, or for the neo-populism of his
relationship to them, unavoidable for Chávez or Kirchner too. But between the
leader and the masses lay an apparatus that had become deformed. Missing in
Singer’s account was a sense of this dark side of Lulismo. What it had achieved
was a kind of inverted hegemony. Where, for Gramsci, hegemony in a capitalist
social order had been the moral ascendancy of the possessing over the labouring
classes, securing the consent of the dominated to their own domination, in
Lulismo it was as if the dominated had reversed the formula, achieving the
consent of the dominant to their leadership of society, only to ratify the
structures of their own exploitation. A more appropriate analogy was not the
United States of the New Deal, but the South Africa of Mandela and Mbeki, where
the iniquities of apartheid had been overthrown and the masters of society were
black, but the rule of capital and its miseries was as implacable as ever. The
fate of the poor in Brazil had been a kind of apartheid, and Lula had ended
that. But equitable or inclusive progress remained out of reach.
To many, even of
those close in political outlook to de Oliveira, this picture is overdrawn, as
if the dark side of Lulismo, hard to deny in itself, has in his representation
of it become a total eclipse. How has it been received in the PT itself? With
scarcely a word. In part, it is often said, he is so personally liked and
respected that no one – save Delúbio and Dirceu, who sued him for libel before
they were indicted – wants to quarrel with him. A very Brazilian cordiality.
But then what of the far more favourable analysis of Singer? There too,
virtually no reaction. Converted into a vote-getting machine, the PT has kept
most of its militants and mass membership – some 300,000 members took part in
its last internal election – but has lost its intellectual wing, and is
generally empty of ideas. When the party emerged at the turn of the 1980s, the
Brazilian intelligentsia was a vital ferment in the mass movements against the
military regime of the time, and played a major role in the politics that
followed its withdrawal from the scene. A decade later, when Cardoso took the
presidency, it split into two camps bitterly ranged against each other: those
who supported his regime, and those who opposed it. The PT was the party of
opponents, enjoying the talents of a wide array of the country’s most gifted
intellectuals. Another ten years on, with Lula in power, disillusionment had
set in. Faute de mieux, most of its former lights still vote for it, to keep
out the right, but engagement has gone. To all appearances the party could not
care less.
Does this matter?
In the 1960s, Brazilian culture was a brilliant affair, not only before but
even under the military: football not yet expatriate, bossa nova, experimental
theatre, cinema novo, an indigenous Marxism to rival any in Europe –
philosophy, sociology, literature, Kulturkritik. By the time the
country emerged from the dictatorship in 1985, however, the two forces that had
transformed the cultural landscape in the North were already reshaping it in
Brazil too: on the one hand, the modern academy, with its bureaucratisation of
careers and specialisation of fields; on the other, the modern fashion and
entertainment industry, marketing anything it can touch. Professionalisation,
commercialisation: no culture has escaped their yoke. With them, inevitably, comes
depoliticisation. But the extent of that varies widely from one society to
another. Compared with the Brazil of 50 or 30 years ago, the decline of
political energy in cultural life is palpable. Compared with Europe, the
grammar of the imaginary can remain vividly political.
In part, this is
due to simple continuity of persons and ideas from an earlier epoch, even
against a university backdrop duller, if more proficient, than in the past. The
doyen of Brazilian literary history, Antonio Candido, a moral-intellectual
touchstone for the left, is still a presence at the age of 93. In the next
generation, Roberto Schwarz is the finest dialectical critic anywhere in the
world since Adorno; Chico Buarque, a perhaps uniquely versatile author at once
of songs, plays and novels; de Oliveira, the most original sociological mind in
Latin America; Emir Sader, its one radical political thinker of continental
vision. Younger figures like Singer or Pochmann are still products of the final
stages of the struggle against the dictatorship. In the arts, explosive forms
continue to be produced, though they are now far more liable to neutralisation
or degradation into entertainment: Paulo Lins’s novel Cidade de Deus
reduced to cinematic pulp by an expert in television ads; José Padilha
descending from the bitter documentary truths of Bus 174 to
Gaumont-grade action films. But the maw of the market is not irresistible. The
latest literary grenade, Reinaldo Moraes’s scabrous novel Pornopopéia,
which takes it directly as a target, could prove more difficult to digest.
The change in
period has found its barometer in what is now the country’s best periodical.
The monthly Piauí was launched in the autumn of 2006, as Lula coasted
to his second term. Its editor, Mario Sergio Conti, who comes originally from a
Trotskyist left, ran the mass-circulation weekly Veja – Brazil’s
equivalent of L’Express or Der Spiegel – in the 1990s.
Quitting towards the end of the decade, he used a pre-negotiated sabbatical to
write a full inside account of the way the Brazilian media first propelled
Collor into the presidency in 1989 and then deposed him in 1992 (Conti himself
published in Veja the key scoop that brought him down). In its sheer
narrative drive, span of characters high and low, density of detail, and not
least its dramatic dénouement, Notícias do Planalto reads like a
documentary by Balzac. Sparing no one – proprietors, commentators or reporters
– it broke the fundamental taboo of the press: dog does not eat dog.
Retrospective complaints about owners by journalists, on occasion yes.
Galleries of the journalists themselves? Belloc’s quip remains off-limits.
Before Notícias came out, the magnate Roberto Civita, head of the
media empire which owns Veja, who wanted Conti back in his stable,
agreed somewhat reluctantly to let him try out a periodical of more
intellectual ambition for a smaller readership, without believing it would make
him any money. Preparations for the project went ahead, but when Civita saw Notícias
he cancelled it on the spot.
Five years later
Conti, then working as a broadcaster in Paris, met through mutual friends an
heir to one of the greatest banking fortunes in Brazil, João Moreira Salles. A
director of more discriminating temperament than his better-known elder
brother, Walter, author of such middle-market fare as Central Station
and The Motorcycle Diaries, João’s portrait of Lula backstage during
the campaign of 2002, Entreatos, is a masterpiece of ambiguity,
readable equally as an admiring tribute to the candidate’s vitality and
affability, and as a disquieting trailer for the corrosions of power to come.
Moreira Salles, who was also thinking of launching a magazine, had heard of
Conti’s idea, and on talking it over, not only agreed to finance it, but – an
unusual arrangement for the millionaire proprietor of a journal – to work for
it under Conti. He insisted only that it be edited in Rio, as a counter-weight
to the excessive concentration of intellectual life in São Paulo once the
capital had moved inland. The magazine that issued from this arrangement is a
stylish affair, sometimes seen as a kind of tropical New Yorker. But
though certainly smart enough, it differs not only in design, printed on matt
paper in larger format, but spirit, as its title indicates. Piauí, one of the
poorest states of the north-east and a byword for backward provincialism, was
chosen as ironic antithesis to Manhattan. Living up unawares to its reputation,
the governor of the state in due course descended on the magazine with a
substantial escort, and in a very Brazilian scene thanked its editors
effusively for conferring such well-merited distinction on it.
Beneath the veneer
of worldliness it still affects, what the New Yorker delivers today is
mostly a sententious conformism. Piauí is more mordant, less easily
placed. It is enough to compare the gushing portrait of America’s ruler offered
by the editor of the first (Introit: ‘This is how it began, the
telling of a story that changed America …’; Exit: ‘Obama, who had
bowed his head in prayer, broke into a broad smile … Three times we all said
amen’) with the lethal coverage of Brazil’s elite by the second. Piauí
has developed the matter-of-fact, deadpan profile into an art more ruinous of
its subjects than detraction could ever be. Cardoso, Dirceu and Serra have been
among the victims, along with Márcio Thomaz Bastos – Lula’s reptilian minister
of justice until 2007 – and Rousseff’s vice-president, Michel Temer. In the
same impassive tone, the magazine has excavated some of the ugliest episodes
and niches of public life: financial brawls, congressional shenanigans, legal
enormities.
Two exposés stand
out as calm engravings of Brazilian equity and justice. In a miniature
masterpiece, Moreira Salles detailed the fate of the housekeeper who saw
Palocci entering his lacustrine brothel in Brasilia. A 24-year-old from Piauí,
earning $50 a week, he found his bank account had been broken into by the
president of the Federal Savings Bank, one Jorge Mattoso – fresh from a meeting
in the presidential palace – looking for evidence that the boy had been paid
for his testimony by the opposition. Violation of banking secrecy is a crime in
Brazil. An hour later, Mattoso delivered print-outs to Palocci in person at his
residence, showing that $10,000 had been deposited in the boy’s account.
Palocci ordered the federal police, who had the boy under lock and key, to
investigate him on suspicion of bribery and false witness. When it emerged that
the money had been paid by the boy’s father, the owner of a bus company who had
until then refused to acknowledge him, in order to fend off any chance of a
paternity suit, he had to be released, and the police brought criminal charges
against Palocci and Mattoso. Palocci had to step down as minister, but the
attorney-general reduced the charges against him and four years later the
Supreme Court acquitted him by five votes to four. Today, this toad squats in
power once more, now chief of staff to the new president. The young man he
sought to frame never got a job in the city again.
What of the Supreme
Federal Tribunal that absolved him? Daumier would have been hard-pressed to
depict it. Supposedly concerned with constitutional issues alone, it handles –
if that is the right word – some 120,000 cases a year, or 30 a day per member
of the court. Lawyers transact with judges in private, and on receiving
favourable verdicts, have been known – in full view – to hug, indeed wine and
dine, the justices responsible for them. Of the 11 current members of the
tribunal, six of them appointed by Lula, two have been convicted of crimes in
lower courts. One, appointed by Collor, his cousin, made legal history by
guaranteeing immunity to a defendant in advance of his trial, but was saved
from removal by his peers to ‘preserve the honour of the court’. Another, a
friend of Cardoso, supported the military coup of 1964, and could not even
boast a law degree. A third, on casting a crucial vote to acquit Palocci, was
thanked by the president in person for assuring ‘governability’. Just retired
is Eros Grau, once convicted of trafficking in influence, a particular
favourite of Lula; dubbed ‘Cupid’ by colleagues, and author of a fifth-rate
pornographic novel, he sought to get an associate onto the court in exchange
for a vote to bury the mensalão.
Scenes like these,
not vestiges of an older oligarchic regime, but part and parcel of the new
popular-democratic order, preclude complacency about the prospects ahead,
without abrogating them. Political and judicial criminality in Brazil, however
repellent, is still – its apologists can point out – considerably less than in
India, China or Russia, the other BRIC powers with which it is now conventional
to compare it. Nor, as last year’s presidential election showed again, is
corruption a major concern of the masses, although it doesn’t go unnoticed at
the polls – it was partly responsible for the contest going to a second round.
The victory of Dilma Rousseff was certainly, by proxy, Lula’s greatest
electoral triumph. A figure scarcely known to the population a few months earlier,
who had never before confronted a voter, and did not possess a trace of
charisma, polled – once chosen by him – not far from Lula’s own scores, with a
thumping second-round majority of 56 per cent: three million fewer votes than
he won in 2006, three million more than in 2002. In Congress, where the PT for
the first time became the largest party, and in the Senate, where it also made
big gains, she commands the support of more than two-thirds of the legislature
in each house – majorities Lula himself never enjoyed.
Rousseff owes her
ascent to the vacuum around the presidency left by the scandals that eliminated
Palocci and Dirceu as successors. After their fall, she had three advantages
over any other possible contender. She was not a product of the PT, which she
joined only in 2000, so, lacking any base in the party, from which Lula –
publicly at least – had kept his distance once in the Planalto, posed no threat
to him. She was good at something he was not: administration. As minister of
energy she had ensured the country did not suffer the blackouts that had so
damaged Cardoso’s standing in his second term. Finally, she was a woman, around
whom it was much easier to wrap the warmth of his own charisma than it would
have been with a man. A colleague described the relationship between them, when
she became his chief of staff, as not unlike that of father and daughter. In
fact they are contemporaries – she is only two years younger than Lula – but
the joint campaign they ran in 2010 would have been much more awkward with a
male candidate.
In trajectory, not
to speak of temperament, the contrasts between them are marked. Rousseff comes
from an upper-middle-class family. Her father was a Bulgarian Communist who
emigrated to Latin America in the 1930s, and did well in real estate in Belo
Horizonte. Sent to good local schools, with private French and piano lessons at
home, she was 17 when the military seized power in Brazil. At 19 she was part
of a revolutionary underground carrying out armed actions in and around the
city. Moving to Rio in 1968, she was involved in one of the most famous raids
of the time: the expropriation of a chest containing two and half million
dollars from the mistress of the most corrupt of all governors of São Paulo. In
1970 she was caught in São Paulo, tortured, and jailed for three years. On her
release, she moved south to Porto Alegre, where her former companion in the
underground, now her husband, was imprisoned. When the dictatorship loosened in
the late 1970s, she got a job in the statistical bureau of Rio Grande do Sul,
re-entering political life affiliated to the party led by Lula’s chief rival on
the left in the 1980s, Leonel Brizola, and gradually moving up to become
secretary for energy under a PT governor. In 2002 Lula noticed her technical
capability, and brought her to Brasilia. In political background a guerrilla
rather than a trade-union leader, Rousseff, though highly controlled, is more
explosive in character than Lula. Observing the way each handled disputes in
the energy sector, a leading participant commented: ‘He enjoys them like a
spectator at a ping-pong game; her style is to hurl the racket.’ No one doubts
her toughness.
Of her convictions
today, there can be less certainty. She came to prominence under Lula during
the more radical phase of his government, so in neoliberal perception is
associated with the dangers of an insidious statism and nationalism. There is
no question that she has robustly defended the regalian rights of the Brazilian
state to the reportedly huge deep-sea oil deposits off the country’s coast,
which multinational companies and domestic capital have been eyeing hungrily.
She has promised not only an expansion of the housing and infrastructural
programmes begun under Lula, but – a major new commitment – universal health
coverage. At her inauguration, she went out of her way to pay tribute to the
comrades who had fought the dictatorship as she had done, and fallen in the
battle against it. But in restoring Palocci to power as chief of staff, and replacing
Amorim as foreign minister by a complaisant envoy to Washington, she has
designed her cabinet to reassure business and the United States that they have
little to fear from the new administration. Holding down the minimum wage,
hiking interest rates and promising tighter controls on public spending, her
first measures look not unlike the orthodox policies of Lula’s first years in
power.
Might the same
parabola, curving towards radicalisation in a subsequent phase, be repeated? Or
is the stock of readily available reforms exhausted? By common consent, steady
GDP growth of at least 4.5 per cent a year is required to extend the social
achievements of Lula’s presidency. Though by Chinese or Indian standards this
is a modest target, it exceeds the average Brazilian performance so far this
century. Buoyant as it is at the moment, the economy is dogged by three deep
underlying problems. Its savings rate remains extremely low, at a mere 17 per
cent of national income, less than half that of India and a third that of
China; so investment has stagnated at under 20 per cent of GDP, with spending
on R&D at 1 per cent. Brazilian interest rates, on the other hand
(currently over 11 per cent), have long been the highest of any major economy.
Designed to curb inflation and attract the foreign capital needed to eke out
domestic savings, these rates, combined with export gains and quantitative
easing in the US, drove up the real to perilous heights – doubling in value
against the dollar under Lula.
Finally, Brazilian
trade has become steadily more dependent on agribusiness and mining, where the
largest concentrations of domestic capital are to be found, while industry –
where multinationals control the most important (automobile) sector – has
receded. Between 2002 and 2009, the share of manufactures in Brazilian exports
dropped from 55 to 44 per cent, while the share of raw materials soared from 28
to 41 per cent. China, responsible for so much of the prosperity of the Lula
years, when it became the country’s largest trade partner (by 2009, it was
buying 18 times the value of the commodities it purchased from Brazil at the
start of the century), is now threatening to swamp it with low-cost
manufactures, whose import from the PRC rocketed 60 per cent last year.
Historically, countries have achieved high living standards without
wide-ranging industrialisation, but these have been sparsely populated settler
or sylvan societies with high educational levels – Australia, New Zealand,
Finland – exhibiting nothing like Brazil’s measures of poverty or demographic
profile. Against these can be set Brazil’s vast natural resources – as much
spare farmland as the US and Russia put together, as much renewable water as
the whole of Asia, oil reserves floating the largest IPO in history – and its
impressive, if sometimes inhibited, record of state-led enterprise, to which
are owed the country’s steel and aircraft industries, its breakthroughs in
tropical agriculture, and its thriving petroleum giant. The opportunities for
faster growth are certainly no less than the obstacles to it.
What balance sheet
of the Brazilian experience set in motion under Lula, and still unfolding, is
at this point possible? Viewed as a period in the political economy of Brazil,
it can be regarded as contiguous with that of Cardoso, a development within the
same matrix. Viewed as a social process, on the other hand, it has marked a
distinct break. The external conditions for that change were unusually
propitious. This was a time in which South America as a whole has been the
scene of a shift to the left setting it apart from any other zone of the world.
Chávez came to power in Venezuela well before, Kirchner in Argentina just
after, Lula in Brazil. The following year, Tabaré Vázquez took Uruguay for the
Frente Amplio. Thereafter, in succession, Bolivia, Ecuador and Paraguay elected
the most radical presidents in their history. What lay behind this global
exception were two distinguishing features of the region. It was here, under
supervision from Chicago and Harvard, that neoliberalism was first introduced
and shock therapy applied by Pinochet in Chile and Sánchez de Losada in
Bolivia, and that privatisations by Menem in Argentina outdid those in Russia.
But it was here too
that the first popular uprising against a neoliberal package erupted, in the caracazo
that led to the end of the old order in Venezuela. Economically, the parameters
of the neoliberal period were rarely rolled back (Venezuela is the exception,
since they were never successfully imposed there in the first place). But they
were never popular, and their architects fell into a political discredit that
their northern counterparts, even today mostly unscathed by 2008, have escaped.
Here the other particularity of the region kicked in. Latin America is the only
part of the world to have produced a century of radical revolts against the
established order, stretching back in more or less unbroken sequence to the
Mexican Revolution of 1910. In different periods these have taken different
forms, but their underlying impetus has been much the same, and despite every
kind of repression or deflection, has yet to be checked: armed insurrections in
El Salvador and Brazil in the 1920s; popular front in Chile, peasant risings in
Peru in the 1930s; military jacobinism in Argentina in the 1940s; worker
militias in Bolivia, expropriations in Guatemala, revolution in Cuba in the
1950s; guerrillas from Colombia to Uruguay in the 1960s; victory at the polls
in Chile, on the streets in Nicaragua in the 1970s; civil wars in Central
America in the 1980s; overthrow of the oligarchy in Venezuela in the 1990s. The
electoral harvest of the new century is a mutation out of the same soil.
The generation that
came to power in this period had lived through two kinds of defeat: by the
military dictatorships that crushed the left in the aftermath of the Cuban
Revolution, and by the free market systems that were in part the price, in part
the upshot, of democratisation. These formed a single legacy. Earlier forms of
radicalism, political or economic, were ruled out of court by their succession.
But there was little real social adhesion to the neoliberal regimes for which
the generals had paved the way. When their time ran out, the leaders who came
after them respected, pragmatically, the rules the generals had imposed, but
could not altogether put aside memories of a more insurgent past, and the
loyalties that went with them, still less overlook the constituencies excluded
from the new order. Venezuela, which never knew a military dictatorship during
the high tide of continental counter-revolution, nor – the two absences were
closely connected – a neoliberal stabilisation in its wake, was the exception,
Chávez operating in other, more underdetermined conditions.
Brazil, on the
other hand, can be taken as the epitome of the general pattern. For most of its
history, by reason of language, size and geography, the country was rather
isolated from the rest of Latin America. As late as the mid-1960s, Brazilian
intellectuals were more likely to have spent time in France than to have
visited any neighbouring society. Once the military tyrannies took over, the
common experiences of underground work, imprisonment or exile – Cuba and Mexico
the chief refuges – changed this. For the first time, politically active
Brazilians were connected in a continental network with their opposite numbers
in the Spanish-speaking Americas. The solidarities of that period continue to
inhabit the political landscape today among governments of the left, cradling
Brazil within a hospitable environment. In a regional dialectic, the
differences between them have often worked to mutual advantage, Lula extending
a mantle of protective friendship to regimes – Bolivia, Venezuela, Ecuador –
more radical than his own, while benefiting in international opinion from
favourable comparison of his moderation to their extremism.
In the same period,
the international context has been as benign for Brazil as the regional
setting. On the one hand, the United States lost concentration as continental
overlord once it declared the War on Terror in the Middle East and beyond. With
Iraq, Afghanistan, Yemen, Pakistan, Egypt as the frontlines of American
strategy, there was little attention to spare for the hemisphere. Bush paid one
distracted visit to Brasilia, and Obama is making another this month. There
will be effusive greetings for the first mulatto president of the United
States, as Brazilians see him, who had their own long ago. But no one thinks
the call will be much more than ceremonial. The traditional mechanisms of
supervision, still in working order in Cardoso’s time, have rusted. Not just
the military expeditions to the Orient of the last decade, but the financial
bubble preceding and accompanying them, have tilted the relationship between
the two states in Brazil’s favour. Once the American economy became dependent
on ever greater injections of cheap money – first under Clinton and Bush
through very low interest rates, now under Obama thanks also to the printing
press – the external capital needed to keep the Brazilian economy growing
became more and more available, at less and less cost. If the flow now even
risks overwhelming the real, that is only another, perverse sign of the
alteration in their respective positions. For Brazil, still more decisive has
been the ascent of China as a countervailing economic power, the principal
market for its two leading exports and the mainstay of its trade balance. The
long Chinese boom has affected virtually every part of the world. But Brazil is
arguably the country where it has made the greatest difference. As the US
dipped and the PRC swelled, the winds allowed passage to a new social
direction.
Its upshot remains,
for the moment, undecidable. There is no doubt that an emancipation has
occurred. But might Brazilian history supply an unsettling analogy? In the late
19th century, slavery was abolished in Brazil virtually without bloodshed, in
contrast to the slaughter with which its end, not even originally intended, was
accompanied in the United States. But it was not only the cost in life that was
low. The cost in property was also low, for emancipation came late, when the
slave population was dwindling, and the slave economy in advanced stages of
decline. It wasn’t a purely elite affair; popular abolitionism took many
imaginative initiatives in its quietus. But when it came, slave-owners were not
all ruined, and slaves gained legal freedom alone. Socially, the after-effects
were modest: principally, increased white immigration from Europe.
Could there be,
mutatis mutandis, some resemblance with the Bolsa Família, crédito
consignado, minimum wage? Lula liked to say: ‘It’s cheap and easy to look
after the poor.’[†] Uplifting, or
disturbing? In its moral ambiguity might lie one kind of epitaph on his rule.
Compared with his predecessors, he had the imagination, born of social
identification, to see that the Brazilian state could afford to be more
generous to the least well-off, in ways that have made a substantial difference
to their lives. But these concessions have come at no cost to the rich or
comfortably-off, who in any absolute reckoning have done even better – far
better – during these years. Does that really matter, it can be asked: isn’t
this just the definition of the most desirable of all economic outcomes, a
Pareto optimum? Were the pace of growth to falter, however, the descendants of
slaves might live out an aftermath not so different from that of emancipation. From
the time of its adoption, just after slavery was gone, the Comtean motto
inscribed on the banner of the nation – Ordem e Progresso – has long
been a hope fluttering in the wind. Progress without conflict; distribution
without redistribution. How common are they, historically?
Yet perhaps this
time it will not be the same. The last decade has not seen any mobilisation of
the popular classes in Brazil. The fear of disorder and acceptance of
hierarchy, which still set them apart within Latin America, are legacies of
slavery. But though material betterment is not social empowerment, one can lead
to the other. The sheer electoral weight of the poor, juxtaposed against the
sheer scale of economic inequality, not to speak of political injustice, makes
Brazil a democracy unlike any society in the North, even those where class
tensions were once highest, or the labour movement strongest. The contradiction
between the two magnitudes has only just begun to work itself out. Should
passive improvement ever become active intervention, the story would have
another ending.
[*] For English versions of de
Oliveira’s essays see New Left Review 24 (November-December 2003) and 42 (November-December 2006).
[†]
‘A coisa mais fácil para … um presidente da República é cuidar dos pobres. Não
tem nada mais barato do que cuidar dos pobres.’ This was said in a speech to
new ministers on 31 March 2010. By then it had become a sort of motto, repeated
on many occasions.
LONDON REVIEW OF
BOOKS
http://www.lrb.co.uk/v33/n07/perry-anderson/lulas-brazil/print
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