Reform and Political Crisis in Brazil throws light on the contradictions in the PT governments and the dilemmas of Brazilian capitalism, finds Orlando Hill

Luis Inácio Lula da Silva is completing the first year of his third term as president of Brazil after having won a fierce battle against right-wing Jair Bolsonaro. So Armando Boito’s book is very timely and a contribution to the debate about the nature and class composition of the Workers’ Party’s (PT) three previous governments.

Boito bases his analysis of Brazil’s last three decades on Marx’s classic texts (mainly The Eighteenth Brumaire) and the theoretical works of the Greco-French Marxist Nicos Poulantzas. As most would agree, Boito argues that crises cannot be understood from a simple bipolar perspective where capital confronts labour. In the case of Brazil, Boito argues that the contradiction between labour and capital was not the main conflict which led to the impeachment of Dilma Rousseff.

What is referred to as the ruling class, the establishment, or the bourgeoisie cannot be regarded as a homogenous bloc. Due to the competitive nature of capitalism, that would be impossible. After all, capitalism can be described as a war of all against all. The capitalist class is divided into fractions each representing a certain industry and a base of capital accumulation with specific interests. Of course, the bourgeoisie have an overall interest which unites them, the exploitation of labour for the extraction of surplus value, i.e., profit. However, the fractions compete with each other over how surplus value is best produced and then distributed among them, and thus for hegemony in the capitalist state.

Brazil has a very sophisticated capitalist economy with a diverse capitalist class, and a working class and peasantry with a history of organisation and resistance. Boito argues, contrary to some authors, that the last wave of internationalisation of the capitalist economy has failed to fully absorb the bourgeoisie whose base of accumulation is situated in the domestic market. This fraction of the capitalist class is referred to as the internal bourgeoisie as opposed to the associated bourgeoisie, a subordinate ally of international financial capital.

Conflicts and struggles

The big internal bourgeoisie aggregates the following sectors: agribusiness, processing industry, transportation, and heavy construction. It also includes state-owned companies such as Petrobras. The associated bourgeoisie is represented by companies linked to foreign investment in Brazilian capitalism. These two fractions are what Poulantzas would refer to as the bloc in power. The political crisis in Brazil which led to the imprisonment of Lula and Rousseff’s impeachment was a consequence of the dispute between these two fractions for hegemony.

This in itself may, however, be too simple an analysis, excluding from the frame the degree to which Lula and the PT did represent the mobilisation of popular power, however fallibly, and therefore the sense in which these events were an attack on the working class, as well as a struggle between factions of the ruling class. An exclusive focus on intra-elite conflicts can have the effect of minimising the very real political role the working class plays, and the way that all factions of the ruling class will exploit an opportunity to attack any manifestation of working-class politics, precisely as in the case of the PT, when it’s compromises with the right have weakened its ability to mobilise popular support in its own defence.

Nevertheless, for Boito, the contradiction between the two fractions lies in their association with imperialism. ‘The big associated bourgeoisie aims at an almost limitless expansion of imperialism, while the big internal bourgeoisie, though linked to imperialism and relying on its actions to boost Brazilian capitalism, seeks to impose limits on that expansion’ (p.32).

It is the contradiction between those two fractions that leads Boito to see the crisis in Brazil as a result not of class struggle but of class conflict. In his view class struggle occurs only when there is a direct conflict between the working class and the bourgeoisie choosing between socialism and capitalism. What occurred in Brazil was class conflict ‘between different segments of the capitalist class and of the dominated classes that disputed the appropriation of wealth and income’ (p.164).

I am not sure how useful that distinction is. It seems that the difference between a ‘conflict’ and a ‘struggle’ is a matter of the correlation of forces and consciousness. What is defined as a ‘conflict’ could escalate to a ‘struggle’. In any capitalist economy, class conflict is always smouldering, it is a day-to-day fact. In certain historic moments, it can erupt into flames leading the working class to question the economic system as a whole. However, Boito sets too high and purist a bar in his definition of class struggle.

Even so, the concept of ‘conflict’ as opposed to ‘struggle’ helps the reader focus and have a clear analysis of the dynamics of the political process of the neoliberal restructuring of capitalism in Brazil. Boito establishes two main working hypotheses. The first is that in the neoliberal period initiated under Fernando Collor de Mello (1990-92), the first democratically elected president after the dictatorship, and extending to the present, the fraction that has held the prevalent hegemony has been ‘big international financial capital, for which the big Brazilian banks function as an associated bourgeoisie’ (p.7). A broad and powerful section of the Brazilian bourgeoisie benefited from the neoliberal policy of privatisation, high interest rates, trade liberalisation, free flow of capital, and attacks on workers’ rights.

Neoliberalism and development

However, another section of the bourgeoisie, which included agribusiness and industrialists, was reluctant to accept entirely the overall neoliberal policy. This eventually formed what Boito refers to as the internal bourgeoisie. It explains why, during the mass street campaign in 1992 to impeach President Collor, the internal bourgeoisie withdrew their support from him. Representatives of the Federation of Industries of the State of São Paulo (FIESP) spoke at the Fora Collor (Collor Out) mass rallies.

It is important to note that the internal bourgeoisie was and is not completely opposed to the neoliberal programme. After all they are part of the larger group big capital. There is no straight line separating the fractions. As a class, they along with the whole bourgeoisie support the ‘social policy of neoliberalism: wage deindexation, deregulation of labour relations, reduction, and cuts in social rights – in the areas of public health, public welfare, and education. However, they were [and are] reluctant to accept – or are even opposed – to important aspects of the neoliberal economic policy’ (p.33). For instance, they rejected the policy of trade liberalisation. The internal bourgeoisie seeks to protect the positions of strength it has conquered in Brazilian capitalism.

Although Collor was impeached, the big associated bourgeoisie maintained its hegemony under the governments that followed, Itamar Franco (1992-94) and Fernando Henrique Cardoso, aka FHC, (1995-2002). Politically, it was represented by the Brazilian Social Democratic Party (PSDB), which is a misnomer since it has no link to traditional social democracy.

The second working hypothesis is that the Workers’ Party (PT) government represented a novelty. It developed a policy known as neodevelopmentalism which managed to introduce elements of developmentalism without breaking with the neoliberal model. This promoted ‘the political rise of Brazil’s big internal bourgeoisie within the bloc of power’ (p.7). Boito argues that Lula’s government cannot be seen as ‘a mere continuity’ (p.7) of the previous governments despite not breaking with the neoliberal model.

‘Neodevelopmentalism is the developmentalism of the neoliberal period’ (p.60). It differs from the developmentalism model of 1930 to 1980. It promotes a much lower growth rate. It attaches less importance to the internal market. It accepts the restraints of the international division of labour which has led to deindustrialisation. It has a lower income distribution capacity. Maybe most important of all, it is ‘driven by a bourgeois fraction that has lost all velleity [inclination] to act a nationalist anti-imperialist social force’ (p.92).

Lula’s and Rousseff’s governments cannot be seen as PT governments, but as governments linked to the PT. PT was born as a mass left-wing social-democratic party from the trade union and social movements at the end of the military dictatorship. After a series of defeats in the presidential elections, it gradually moved closer to the internal bourgeoisie. In this process of programmatic and organisational reformulation, left-wing tendencies inside the party split to form new parties, the Socialism and Liberty Party (PSOL) and United Socialist Party (PSTU). Thus, the internal bourgeoisie, underrepresented in the party system, ended up having its interests represented by ‘a political party that was born out of the labor and popular movement’ (p.40).

‘Capitalism in Brazil, in order to develop, has depended greatly on some kind of political participation by the popular classes’ (p.56). The bourgeoisie is too small to be able to bring about social transformation on its own. Throughout history, it has relied on the participation of mass, popular classes. In the first half of the twentieth century, during the populist period, ‘it was the urban workers who became the key political resource to overcome or bypass the persistent … resistance of the old coffee bourgeoisie and US capital to the capitalist industrialization policy’ (p.57).

The PT and its social base

Although the big internal bourgeoisie is the most favoured force in the neodevelopmentalist policy, the urban workers remined loyal to the PT. They were the social base and had something to gain from the economic recovery and the minimum-wage readjustment policy which increased their purchasing power.

However, as Boito points out, PT’s social base shifted towards the more marginalised section of the working class, the unemployed, the underemployed and those living on odd jobs. Boito divides this sector into two subsectors. One sector is organised in popular-demand movements seeking urban land reform and housing. They benefitted in Lula’s second term with housing programme, ‘My House, My Life’ (Minha Casa, Minha Vida). Under Rousseff, the programme was extended. It represented a convergence of interests between the homeless and the civil-construction industry.

The other sector was unorganised and was included in the neodevelopmentalist front thanks to the cash-transfer programme known as Bolsa Familia (Family Grant). Boito makes an important criticism of the liberal analysts ‘for whom populism is mere “demagogy”’. In any populist political relationship, of which PT governments are an example, workers achieve real gains and vote according to their interest. ‘However, these gains are very limited, precisely because their beneficiaries remain politically and ideologically dependent on the government’s initiatives’ (pp.64-5).

During the PT governments, the two bourgeois fractions that polarised the conflict within the bloc in power sought alliances and support from outside the bloc. The big internal bourgeoisie saw its neodevelopmentist project strengthened by the support it received from the lower middle class, most of the trade unions, the peasant movement and most of the marginal unorganised mass of workers, mainly from the poorer northeast states. In the 2014 presidential election, it was the latter who ensured Dilma Rousseff’s victory.

It is important to remember that the organised movements of landless peasants (MST), the urban Homeless Workers’ Movement (MTST) and other social movements ‘maintained their distance from the neoliberal camp or even challenged it openly and militantly’ (p.165), despite backing the PT governments. Meanwhile, the associated bourgeoisie established an alliance with the urban middle class concentrated in the south and southeast states.

It was possible to hold together such a broad front with diverse class interests while the economy grew at 7.5%. However, as the economy plateaued at a much lower growth rate in 2011-2012, the neoliberal opposition noticed an opportunity to move from a defensive attitude and seized back the political initiative. ‘The economy sections of the great newspapers started stressing the need to reduce state costs, end fiscal exemptions and raise the interest rate’ (p.172).

Boito disagrees with the other two positions that try to explain the political crisis using the idea of class conflict. One assumes that the PT governments represented not the workers but the bourgeoisie as a whole. The political crisis is explained as ‘the moment when the bourgeoisie (as a whole), after having backed the PT administrations, joined the opposition when it came to the conclusion that the PT had lost the ability to manage the new situation created by the economic crisis’ (p.166). This is an analysis defended by the PSTU. The problem with this view is that the associated bourgeoisie was from the beginning in opposition to the PT governments. The internal bourgeoisie only abandoned the PT after sustained pressure from the opposition.

There is an opposing view defended by intellectuals and leaders from the PT which claims that the administrations represented the working class and were challenged by the bourgeoisie and the elites. The coup is seen as a rebellion of the bourgeoisie against a popular government. For Boito, the problem facing this analysis is that the PT governments, even though they did not represent the bourgeoisie as a whole, did represent, both objectively and subjectively, the internal fraction of Brazil’s bourgeoisie. ‘The economic policy measures of these administrations focused on the interests of the Brazilian big internal bourgeoisie… and only secondarily contemplated the interests of the popular classes’ (p.166).

Both alternative views have one thing in common. They treat the bourgeoisie as ‘a unified, fraction-free class,ignoring that the capitalist class can be, and usually is, divided into fractions withdifferent economic interests’ (p.167).

Boito is correct in seeing contradictions within the capitalist class, which do in general tend to produce different political factions, as with Brexit in Britain, but his analysis of the PT suffers from a similar problem as the analyses that he critiques. In order to gain office in a parliamentary system, reformist parties of the working class, particularly in the neoliberal era, adopt a programme which is acceptable to capitalist interests. A social-democratic party doesn’t thereby simply become the political representative of the ruling class, or a faction thereof; it is a contradictory formation, still with roots in and ties to the working class. The degree to which parts of the ruling class will be more or less accepting of, or oppositional to, such a party when in government does then depend on the balance of class forces.

The most important lesson is that there needs to be strong, independent revolutionary organisation rooted in the working class, capable of mobilising the power of the class at critical times when the ruling class, or factions of it, sense an opening for an assault on working-class gains.