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Brazil’s Strategic Scenario in 2022: An Analysis

A document prepared by Left Voice’s sister organization in Brazil analyzes the country’s situation in the run-up to elections in October.

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Brazil's president Jair Bolsonaro and former president Luis Ignacio "Lula" Da Silva

This article spells out our analysis of the Brazilian political, economic, and social situation, with hypotheses for the next period. We invite organizations and activists on the Left to read and debate these ideas. We do so to help form a center of class independence, with the perspective of building a revolutionary party that will fight for a workers’ government that breaks with capitalism.

1.0 — Economic, Social, and Political Scenario

The Brazilian economy is entering a period of stagflation. The country’s GDP growth for 2022 is predicted to be 1.1 percent, according to the country’s public Institute for Applied Economic Research (IPEA). This is a very low rate, reflecting a recessionary trend in the international context of the pandemic. Some countries recovered quickly with the reopening of the service sectors, and even for Brazil, the 2021 trend suggested growth of 1.8 percent, but this has been undercut by low growth in agriculture and cattle-raising.

The low growth is not new, and everything indicates that it will continue. From 2019 to 2022, Brazil’s average GDP grew 0.5 percent per year (if this year’s projections hold). This is an improvement over the growth rates of the Temer government (2016–18), when the economy receded by an average of 0.13 percent each year. But it still remains low.

Against this backdrop, sudden changes could result from the war in Ukraine and the long-term effects of economic sanctions. But the macroeconomic situation seems to tilt toward inflation, particularly in the prices of food and oil products, but without — at least this year — any major economic crises or marked instability. What remains uncertain is the extent to which this may lead to social explosions among the poorer population. For now, the government has contained this; adding to this are high expectations that Luiz Inácio “Lula” da Silva of the Workers’ Party (PT), will return to the presidency and improve living conditions.

Lula, who served as president from 2003 to 2010, remains on top of electoral polls for the October election, winning every one of the second-round polls with an even wider margin of votes than in the first round. Bolsonaro has managed to narrow the gap with Lula through a series of economic measures — such as his Auxílio Brasil social welfare program, releasing funds from the FGTS1Translator’s note: The Fundo de Garantia sobre Tempo de Serviço (FGTS) is a fund paid through employer contributions. It is intended for workers who are fired or who resign. and providing a mandatory “13th month” salary to employees who have worked for 12 months (with those who have worked less receiving a proportional payment) — as well as by consolidating the anti-Lula vote, especially after the withdrawal of former Supreme Court justice Sergio Moro from the presidential race.

The neoliberal right-wing opposition, called the Third Way, has been in crisis, reeling from fratricidal disputes. It is not only that Moro has dropped out. The Brazilian Social Democratic Party (PSDB) is no longer even a shadow of the party that once ruled the country for eight years; its candidate, João Doria, dropped out in late May after winning the party’s presidential primary and contending with Eduardo Leite, former governor of the state of Rio Grande do Sul — another chapter in the party’s historical decline.

In light of this, the Lula ticket, with former São Paulo governor Geraldo Alckmin of the Socialist Party as his vice presidential running mate, seeks to challenge the orphans of the Third Way, not only for its voters but also for the bourgeois sectors that have supported it. This was made explicit when the presidential slate was launched. Alckmin is a major neoliberal figure in Brazil, and his presence on the ticket is aimed at winning the support of some parts of the ruling class and finance capital, and in particular that of U.S. imperialism and its current leader, Joe Biden.

Today’s strategic scenario in Brazil is not conducive for a military coup by Bolsonaro and the armed forces, or even for them to prevent the election results from being certified. Today is far different from the elections of 2018, marked by massive Bonapartist meddling that kept Lula off the ballot. After four years of the Bolsonaro government, divisions have emerged within the ruling classes that show that some bourgeois sectors prefer an alternative to Bolsonaro that doesn’t come with so much instability. There is no bourgeois unity around a single contending camp. Making the current scenario even more complex, there is some fragmentation between the national and international wings of the bourgeoisie.

At other moments, when Bolsonaro was stronger and on the offensive, large sectors of the bourgeoisie — the Brazilian Federation of Banks (Febraban) and the Federation of Industries of the State of São Paulo (FIESP) — took strong positions against Bolsonaro’s coup threats, as they did on September 7, 2021.2Translator’s note: For September 7, 2021 — Brazil’s Independence Day — President Jair Bolsonaro and his party organized a local version of the pro-Trump rally on January 6, 2021, that turned into the riot at the U.S. Capitol. Widely characterized as an attempt to begin the overthrow of Brazil’s democratic institutions, actions on that day — which Bolsonaro called an “ultimatum” from the people — included a rally of tens of thousands of people demanding the impeachment of Supreme Court justice Alexandre de Moraes, who had been jailing Bolsonarists for financing, organizing, and inciting violence and for spreading false information. Furthermore, through its security, espionage, and diplomatic agencies, U.S. imperialism signaled its opposition to such a measure. Weakened even further by the economic situation, and his strength having eroded from almost four years in office, Bolsonaro cannot undertake something of such magnitude.

It remains possible, however, that on the eve of the elections, or after the results are announced, Bolsonaro will put his base into motion, with outbreaks of unrest. Even the press has suggested that something could happen that resembles the January 6, 2021, siege at the U.S. Capitol.

Bolsonaro has sharpened his coup-based rhetoric, both to keep his social base aligned and to advance his plans, even if his political fortunes lie outside the government. That is why he has been spreading rumors about the vote count and has once again challenged the ministers of the Supreme Federal Court (STF) and the Superior Electoral Court (TSE). Since October the country has become deeply polarized. Bolsonaro’s rhetoric has encouraged much of his most hardened base to violence, which has taken place at various events. This could increase. Even though a Bolsonaro victory seems unlikely, his previous successes embolden his base to undertake all sorts of attacks while increasing fear in Brazilian society that he could be reelected.

One decisive question for any analysis of political-electoral trends is whether a broad section of the population feels that its living conditions have worsened during the Bolsonaro government — something to which all indicators point. For the first time since the Plano Real,3Translator’s note: In 1994, during the presidency of Itamar Franco, the Brazilian government undertook a set of measures known as the Plano Real [Real Plan], aimed at stabilizing the country’s economy in the face of hyperinflation. It introduced a nonmonetary currency, the Unidade Real de Valor [Actual Unit of Value], whose value was set to about US$1.00 and was adjusted daily. a president will end his term with the minimum wage worth less than when he entered. Furthermore, inflation is at a historic high not seen since 1996. Beyond the official inflation numbers, the real economy points to a much higher level of price increases for the items most consumed by the most impoverished sectors. Not everyone, though, blames Bolsonaro for the worsening situation; some believe his explanation that the situation worsened during the pandemic because of the state governors and people choosing to “stay at home.”

Worsening living conditions, fed by high unemployment and job insecurity, go beyond hunger alone to affect every aspect of working-class life. Take urban housing: in São Paulo there has been a striking increase of more than 230 percent in the number of people living on the streets.

The October elections are playing out on the terrain of this social situation; it is why, thus far, polls point to a Lula victory. Votes for Lula reflect the quest for a return to the living conditions and rights that have been lost under Bolsonaro. If there is no sudden shift in these polls, a new Lula government will likely take power.

2.0 — The Different Perspectives of Lula and Bolsonaro

Lula and Bolsonaro embody different bourgeois schemes for the administration of Brazilian capitalism. Knowing how to distinguish between the two is fundamental to denouncing and confronting the reactionary Bolsonaro and the serious consequences that his plans will have on the living conditions of the masses. Lula’s plan, meanwhile, is yet another attempt to develop a more humane and inclusive capitalism and to fight the Far Right with class conciliation — even though this is precisely what has allowed the Far Right to gain so much ground.

2.1 — Bolsonaro’s plans

Bolsonaro embodies ultra-neoliberalism. His model allows big capital to act without constraint; this means firings without limits, greater precariousness for the working class, eliminating union rights, and promoting an accumulation of capital that tramples indigenous rights, the Afro-Brazilian quilombolo settlements, and any environmental management — even in the framework of a “sustainable” capitalism. It is a model that can lead only to greater capitalist irrationality, more poverty, more unemployment, and greater environmental devastation. Minister of the Economy Paulo Guedes has always been the figurehead for the government’s advance of privatization and reform, and he is one of the few remaining cabinet members from the beginning of Bolsonaro’s government, even if his strength has lessened.

Bolsonaro’s social base comprises the most reactionary sectors of society, in particular the police, the military, the militia, conservative sectors of the churches, large sectors of agribusiness, and a sector of the bourgeoisie involved in logistics and retail trade (Havan, Riachuelo, Madero, etc.). His Far Right rhetoric praises the 1964–85 military dictatorship while attacking indigenous people, LGBTQ+ people, and fundamental democratic rights, such as abortion — all aimed at maintaining the cohesion of this base as an auxiliary force for his political onslaughts.

Ongoing government crises kept Bolsonaro from moving forward with privatizations and reforms as he had intended, such as his plan to privatize the state oil company, Petrobras. In relation to the spending cap, which changed to meet the budget, some analysts are now predicting it will be reformulated while maintaining the same budget control structure.4Translator’s note: In 2016, Brazil’s Congress amended the constitution to include a “spending cap” that would limit the growth of the federal budget to the pace of inflation. There are some state investments and efforts aimed at making the economy more dynamic, but they are very low. For instance, state-owned companies at the federal level have invested only 39.7 percent of what had been planned for 2021, the lowest amount in six years.

Meanwhile, there has been one scandalous episode of extreme violence after another linked to environmental policy and attacks on indigenous communities, as in the recent case involving the Yanomami in the state of Roraima.5Translator’s note: Over the past year and longer, indigenous Yanomami people in the Roraima region of Amazonia have been subjected to violent attacks, sexual abuse, and high rates of malaria and mercury poisoning, and their local environment has been devastated — all the result of illegal mining. These policies aim to allow greater flexibility for drilling and mining, even encouraging illegal activities — if not directly supporting them, as in the case of General Augusto Heleno, minister of the Institutional Security Office of the Presidency, authorizing some of these activities — as well as the unbridled clearing of forests so agribusiness can expand.

The image of Brazil as an “emerging power” that existed during Lulaism’s peak has been gradually falling apart. After all the economic and social setbacks, the huge assault against the environment, and the regime’s Bonapartist degradations, the Brazil of Bolsonaro has increasingly become an international pariah. Bolsonaro’s is part of a movement of extreme right-wing governments hit hard by Donald Trump’s defeat and that now seek to restore themselves with a victory in the U.S. midterm elections, which could put Trump back on the world political stage. He seeks alignment with these figures, along with reactionary states such as Israel, which Bolsonaro also uses to bolster his evangelical base in Brazil. He has had many public confrontations with European imperialism, Macron’s France in particular, and several conflicts with Joe Biden’s government in the United States — the most recent and most important being his visit to Putin on the eve of the war in Ukraine. After some earlier conflicts over China, Bolsonaro has avoided this kind of confrontation. This is because the two countries maintain a material relationship, in the form of Brazil’s grain exports, and because Bolsonaro wants to avoid provoking Democrats who do not want to see a Trump ally reelected in Latin America’s largest economy.

2.2 — Lula’s plan

Lula, meanwhile, has been outlining “neo-developmentalist” policies in his speeches aimed at boosting the capitalist economy through the state and increased consumption. A hallmark of this has been his defense of a “strong state” to leverage the economy, especially through infrastructure (something that could be accomplished through public-private partnerships), and to boost private investment. Lula points to increased consumption as an important mechanism, linking the “inclusion of the poor in the budget” to boosting economic growth. His rhetoric is full of the promise that economic growth and income distribution are not two separate processes — as opposed to the famous phrase of Delfim Netto, a former finance minister and economist, that “one must wait for the cake to grow, and then share it.” Thus, Lula and his Workers Party (PT)6Translator’s note: The Partido dos Trabalhadores (PT, Workers Party), of which Lula is a founder, is the largest left-wing party in Latin America and has what is in essence a social-democratic ideology. have proposed a model for regulating large companies aimed at appeasement and harmonious coexistence between the interests of employers and workers.

Lula has also highlighted his past government’s action on education, especially the creation of universities and more slots for students in higher education, linking this to his current plan for the country, with education and training a necessary component of economic development. The extension of higher education by previous PT governments was based on creating and expanding large private education monopolies, with places for matriculating students subsidized by huge tax exemptions. These places were lost as soon as the economic crisis more deeply affected the living conditions of these students, who were forced to suspend their studies.

As for Bolsonaro’s reforms, Lula criticizes what the bourgeoisie considers the “mother” of them all, the pension reform, and proposes changes to the Labor Code (addressed below). On the question of Bolsonaro’s spending cap, Lula has said it needs to be adjusted to expand state investments. But he always stresses his “fiscal commitment,” since an increase in the cap would increase tax collections, thus reducing the ratio of public debt to GDP. He repeatedly reminds voters that his earlier governments increased the country’s dollar reserves and fiscal surpluses — a signal to the financial markets that he will continue, religiously, to pay the national debt. In short, the PT has no plans to do away with the mechanisms aimed at controlling the public budget, but instead promotes making adjustments. Remodeling it is something even some on the neoliberal Right have proposed, especially in the wake of the pandemic.

On the subject of privatizations, Lula spells out some public companies, especially in strategic sectors, that he does not intend to privatize, including the electrical energy company Eletrobrás, the national postal service, and Banco do Brasil. He promises to resume state investments to address “production bottlenecks” — especially of fertilizers, which have been strongly affected by the war in Ukraine. But while Lula speaks out against privatizations, some of the leading figures elaborating his economic program, such as former finance minister Guido Mantega, are sending signals that such measures are possible. In a meeting with some big corporate leaders, he declared that he supports privatizations in the steel sector, probably referring to the privatization of the National Steel Company (CSN) in the 1990s. He also praised the neoliberal president of the Central Bank, Campos Netto. The PT is speaking out of both sides of its mouth.

Lula often speaks publicly about “defending Petrobras.” The return of the company as a symbol of the government and the country’s growth is an important part of the signals Lula is sending to the labor movement and even to the masses. But as the former president of the state-owned company has warned, it is impossible to reverse the privatizations and dismantling of the company, even if Lula and the PT seek to structure the company to use it in fertilizer projects, power generation, and perhaps even in more restrained confrontation with shareholders as a way to reduce fuel prices. Perhaps Petrobras is where Lula’s plans differ the most from those of Bolsonaro, but it also illustrates how his management — even in that company — would be based on what the institutional coup already accomplished, not its reversal.7Translator’s note: “The institutional coup” refers to the impeachment of former president Dilma Rousseff, for “corruption.” The charges were based on Operação Lava Jato (Operation Car Wash), so named because it was first “uncovered” at a car wash in Brasília. The criminal investigation into corruption by the Brazilian federal police began in 2014 during Rousseff’s first term and initially centered on the Brazilian state oil company, Petrobras. It was later used to jail Lula — part of an effort, aided by U.S. imperialism, to keep the PT from winning the 2018 elections. At the end of August 2016, the Brazilian Senate voted to remove Rousseff from office, finding her guilty of violating budget laws — and resulting in a bloodless coup employing the institutions of the state.

On the question of democracy, Lula always asserts himself as the defender of the most vulnerable sectors that have come under the sharpest attacks from the Bolsonaro government. He proposes, for instance, to create an Indigenous Ministry, with an indigenous leader, and to restore the Ministry of Racial Equality. Meanwhile, the PT seeks to erase the history of his earlier government’s enormous favoritism toward agribusiness, which is now a big part of the attacks on indigenous people; the “peacekeeping” mission to Haiti (led by generals who are now Bolsonaristas); and the policy of creating the Pacifying Police Programs (UPPs) that murdered and repressed thousands of Black people. He has declared his support for abortion rights as a “public health issue,” although he had to backtrack later, at least partially, given the reactions from conservative sectors. He offered no explanation of why abortion was not legalized during the 13 years of PT governments.

To justify his plans’ viability, Lula always reminds us of his earlier governments. He says nothing, though, about how those governments helped generate today’s structural problems. With the huge increase in outsourcing and labor turnover, Lula strengthened state institutions that subsidized Brazil’s large private monopolies by deepening covert mechanisms for the penetration of imperialist capital. One of the results was to create some Brazilian “global players.”

This economic policy was enacted through the National Bank for Economic and Social Development (BNDES) and the pension funds of the large state-owned companies (Petrobras, Banco do Brasil, and the Federal Savings Bank), which were the main instruments through which the state strengthened its aid to private monopoly capital in the domestic and foreign sectors. The policy promoted a modernization of sectors of the economy (industry, agribusiness, and services) while favoring imports over the production of goods for domestic consumption in most other branches of the economy. As a result, the country’s export agenda became the priority — a process that has been accentuated in recent years as agribusiness, mining, and oil extraction have become even bigger parts of the country’s GDP.

As Lula was providing huge resources to the private monopolies, he also maintained strong social support, with record-high approval levels — the development of what has been called Lulaism. This phenomenon required exceptional economic conditions to develop. Driven by China’s double-digit growth during the period, there was a high demand for Brazil’s commodities, and their value filled public accounts.

These conditions did not exist at the beginning of Lula’s first term but developed later. It was during his second term that Lulaism was consolidated, mainly through the social assistance program Bolsa Família (Family Allowance). Combined with credit expansion and increases in the minimum wage above inflation, social assistance programs were the material basis for a pact with the conservatives that increased the profits of the bourgeoisie while allowing for some concessions to ensure social stability. While maintaining social stability, Lula stuck to the essentials of neoliberal economic policy while creating a sense of climbing the social ladder — “Lulaista gradualism.”

Unlike the PT propaganda in the first year of Lula’s administration, when international economic conditions were not yet favorable, the scenario was different. The minimum wage was raised and Lula attacked it, instituting a pension reform for civil servants. Neoliberal prerogatives were maintained, and Lula preserved the legacy of privatizations undertaken during Fernando Henrique Cardoso presidency, from 1995 to 2003. As André Singer, a political scientist and former Lula press secretary, pointed out in a 2012 book, “The package of neoliberal ‘misdeeds’ aimed at ‘stabilizing’ the economy and proving to capital that the campaign pledges would be kept to the letter was applied on a larger scale than that practiced in Cardoso’s second term.”8André Singer, Os sentidos do lulismo: Reforma gradual e pacto conservador [The meanings of Lulaism: Gradual reform and conservative pact] (São Paulo: Companhia das Letras, 2012).

The PT governments were, in practice, neoliberal-neodevelopmentalist-social, a combination of the old neoliberal structure with more state intervention in the economy and some social concessions. None of the country’s structural problems, which are the pillars of capital accumulation, were touched. In fact, Lula deepened these contradictions, such as by exponentially increasing public funding to agribusiness through the Safra Plan (ostensibly aimed at promoting family agriculture) while guaranteeing a “social peace” that erupted into the June Days of 2013.9Translator’s note: In June 2013, millions of Brazilians took to the streets in demonstrations, first over fare increases for public transportation, and then widening to address government corruption and police brutality.

Finally, there are major differences between how Lula and Bolsonaro approach the political regime. Bolsonaro’s Bonapartist onslaughts have deepened the crisis of representation in the political regime, and he has even taken long-term steps to destabilize parts of the regime to favor his own position. A Lula government may bring an air of a return to normalcy, at least for a time. Although new experiments may develop within the PT, Lula’s victory would likely give a democratic veneer to a regime that has severely deteriorated in recent years. Yet the economic, political, and social conditions of 2023 will differ completely from those of Lula’s earlier terms in office, and he will have much narrower margins in which to operate and offer any concessions.

2.3 — Lula’s international policies

Lula repeatedly promotes “multilateralism” in his international policy. He lauds the partnerships he has made with different countries in Africa, and his policy toward the BRICS countries (the five emerging economies of Brazil, Russia, India, China, and South Africa) seeks to convey his aim to build harmonious economic, political, and diplomatic relationships in the margins of U.S. imperialism. In his speeches, the diplomatic axis of South-South integration is striking, an axis that includes China and Russia — along the lines of that advocated by Chancellor Celso Amorim, a leading figure of his earlier governments.

In an interview with Time, Lula spoke of rebranding his “game.” He opposed the war in Ukraine but — unlike U.S. and European leaders — blamed Zelenskyy without condemning Putin. In other words, his multilateralism challenges U.S. hegemony while spelling out that he has no problem with the United States, China, Russia, and so on.

Even though for the U.S. Democratic Party it is more than just unacceptable that a Trumpist like Bolsonaro should continue to lead Latin America’s largest country, there are frictions between what Lula represents and current U.S. international policy. Still, there is no “perfect alignment” between Lula and U.S. Republicans (thanks to Trumpism) or Democrats (especially since he was a victim of Lava Jato). This “non-alignment” is expressed in the “South-South” vision and the resumption of the BRICS alliance (another illusion, because there is no such thing beyond the huge advance of China as a global competitor, along with the Beijing-Moscow bloc that has materialized, after years of affinity, with the war in Ukraine). BRICS today brings together Washington’s main geopolitical adversaries (with India as an important, but fickle, ally).

Lula and the PT seek to build a privileged relationship with European imperialism, particularly France and Germany, which welcomed him when he was head of state. Although these countries are aligned with the United States on Ukraine, they have a strategic interest in increasing their presence in the Americas so that they can compete and thus weaken their subordination to the United States, and they seek greater access to several Brazilian raw materials as a way to minimize their dependence on Russia.

Lula aims to build diplomatic relations in a world quite different from that of the first decade of the 21st century. BRICS members are no longer the minor geopolitical players they were then (several are part of the world’s main geopolitical terrain today, Asia-Pacific).

Above all, Lula puts forth policies aimed at returning Brazil to the international stage, restoring the Brazilian economy to the ranks of the world’s leading economies and regaining some prestige among the capitalist powers. Lula and the PT want to renegotiate with the United States a “less subordinate” status among the world’s countries, straddling the line between the great Washington-Beijing dispute. Because of the business that Lula and the PT have with China, and the umbilical dependence of Brazil’s agribusiness on the Chinese economy, Lula nods to Xi Jinping and the Bonapartist government of the Chinese Communist Party — which also explains his criticism of Biden and the Democrats.

We see this as well in Lula’s critical stance toward the West (by disassociating himself from the Russian invasion), as spelled out in the Time interview. He takes advantage of the difficulties the United States is having as it tries to win the alignment of important countries that want nothing of the sort (India, Mexico, South Africa, etc.) — the result of a crisis of hegemony that remains unresolved by the United States’ partial successes against Russia thanks to the war. The “autonomy” that Lula and the PT seek in the face of U.S imperialism is relative; it does not confront the structural guidelines of imperialism’s economic interference in Latin America, but instead aims at mitigating U.S. domination through more partnerships with European imperialisms and China.

The PT project, which differs from Bolsonarism in how far it seeks to align with the United States, aims to base itself on cross-dependencies with different powers (it depends more on the United States for national security; more on China economically; and so on). Relative autonomy and genuine subordination are aspects of the PT program that will combine to varying degrees as the global economy and geopolitics become increasingly turbulent and unstable.

3.0 — Labor Reform and Differences Over Plans for Employees

The phenomena of greater precariousness with jobs on digital platforms — the “Uberization” of work — has been gaining strength rapidly, particularly in countries where the Far Right has also become stronger. Thus, the United Kingdom under Boris Johnson (post-Brexit) has been one of the major implementers of contract work with no guarantees. Trump’s United States also accelerated this, including growing precariousness within the giants of finance and commercial capital, such as Amazon and its replacement of workers with robots. This Uberization of Brazilian workers has reached 5 million — a very high number compared to that of other Latin American countries.

Remember that Bolsonaro has been all about destroying not only the working conditions of Brazilian workers, but also arbitration, attacking the unions and getting rid of as much of the Labor Code as possible — all in the context of subordinating Brazil to the international division of labor, with the country being the world’s farm and subjecting the Brazilian proletariat to conditions of exploitation that compete with those of workers in the worst exploited countries of the world, such as India.

For the Lula-Alckmin ticket, such subordination would come in the form of maintaining the mediation of the bureaucracy and finding a place for it in the regime. This is why Lula advocates the return of the union tax, which would give the union bureaucracies greater capacity to negotiate with the bosses and contain class struggle through co-optation and control. This, though, could have a perverse outcome for the labor movement and spawn new forms of precariousness — a reevaluation of the labor reforms to guarantee “minimum” conditions for app workers and subcontractors, through special regulation, but to generalize these modalities even more. In the earlier PT governments, the proposal was to generalize outsourcing and job insecurity with the aim of “generating 12 million jobs.” Wouldn’t it now be a proposal to reassess the labor code, not to guarantee full labor rights but to start with offering concessions and ending up consolidating the outsourcing of jobs at the end of production/distribution cycles and generalizing Uberization and piecework? Perhaps the rehearsal for this proposal was made by Márcio Pochmann, when he said that a Labor Code is needed “for the digital age,”10Pochmann is a member of the PT, former IPEA president, and the secretary of Development, Labor, and Solidarity for the Municipality of São Paulo. “CLT” refers to the country’s Labor Code. one that incorporates these new work configurations. He criticized the labor reform but proposed something “adapted to new needs,” which in practice would codify many of the most drastic changes in labor legislation since Tamer’s 2016 reforms.

Lula made a similar speech when he and Alckmin appeared with the central unions. He said he wants delivery drivers to have more rights but doesn’t want to change the labor reforms to return to 1943, when the CLT was enacted. What Lula wants to say is that the PT aims to regulate Uberization, as it did with outsourcing. Any talk of repealing the labor reform is demagogic. Lula has declared countless times that he intends to revise some points, using the Spanish example.11Translator’s note: In May 2021, the Spanish State adopted a law ostensibly to protect “gig” delivery workers by requiring that they be hired rather than working as freelancers, and opening the algorithms used to manage workforces to public scrutiny. The result, sometimes, was that companies left the country. He has repeated numerous times that he intends to sit at the “negotiating table” with the bosses and the unions, assigning Alckmin as the mediator. It is a categorical, symbolic representation of the Lula-Alckmin slate as one that unites the “unionist” and the “neoliberal.”

Bolsonaro, because he’s in a campaign for reelection, now promises to regulate app jobs through executive order. His proposal, presented by the Ministry of Labor and Social Security team, is centered on two points: formalize temporary contracts for rural workers; and regulate the relationship between app workers and companies. Bolsonaro’s proposed measures do not recognize an employment relationship between app companies and workers, and will not even guarantee Labor Code rights, but will promote “inclusion in social security.”

4.0 — A Fractured Ruling Class Faces the 2022 Elections

Thus, the 2022 elections present two approaches to imperial subordination. Roughly speaking, Bolsonaro’s side is that of the international Far Right current led by Donald Trump, supported by the Brazilian armed forces, which has its key economic base in agribusiness and some commercial sectors. Lula and Alckmin have support from sectors of industrial and financial capital and some support inherited from institutional Bonapartism (which today is centered in the Supreme Federal Court, STF). They are the ticket preferred by those both nationally and internationally who previously bet on the Third Way.

Agribusiness has been gaining importance ever since the PT governments. Roberto Rodrigues, linked to the Brazilian Agribusiness Association (ABAG), served as Lula’s minister of agriculture, and Kátia Abreu, the first woman president of the Confederation of Agriculture and Livestock of Brazil (CNA), took up this post in the Rousseff government. Today, agribusiness accounts for 24.7 percent of GDP. It has achieved great predominance in Congress, with a bench of 241 deputies and 29 senators. Considering that agribusiness is concentrated in states far less populous than the large urban centers, such disproportionate parliamentary representation is a structural characteristic of the political regime, in which the great masses are accounted for in numbers far short of their place in the overall population. The last great “achievement” of agribusiness was the election of Bolsonaro himself, who governed with great support from agribusiness and from wealthy social strata — particularly in the country’s interior — that benefit from Bolsonaro’s policies.

This does not mean that all of agribusiness acts as a bloc. Let’s look at how the business associations are responding to 2022. Generally, Aprosoja (the Brazilian Association of Soybean Growers), the CNA, and entities linked to meat, soy, and grains have supported the government. Tereza Cristina, a leader of the rural caucus, spearheaded the deregulation of pesticides as minister of agriculture; she was succeeded by Marcos Montes, her deputy, when she resigned to run for Senate. ABAG, however, which represents merchants, has taken a more critical stance toward the government and wants more limits on Bolsonaro’s anti-environmental policies.

During the events of September 7, 2021, some agribusiness associations with strong connections to European capital came out “in favor of democracy”; they did so because the Europeans push, at least rhetorically, on environmental policy and against agricultural expansion that leads to ecological devastation and attacks on indigenous populations and quilombolas. These groups prefer Bolsonaro to Lula but are concerned that Bolsonaro’s policies will create greater instability. So, while this sector may ultimately position itself against the government, and members of Congress from rural areas may push back, this is not the trend right now.

As for other industries, FIESP, which under Paulo Skaf had gotten behind the institutional coup and publicly supported Bolsonaro, has changed its tune under new president Josué Gomes. It is an important move, given that FIESP is the country’s main industrial employers’ association. While Gomes declares himself “nonpartisan,” he took office in February 2022 with public criticism of Bolsonaro in his inaugural speech. He is also the son of José Alencar, who was Lula’s vice president.

We see division among the large retailers and commercial capital, with some strongly supporting Bolsonaro (e.g., Riachuelo, Havan, and Carrefour) and other giants apparently positioning themselves to support the Lula-Alckmin ticket (including Magazine Luiza and Americanas). The latter may become more decidedly pro-Lula, given how firm the support from the Bolsonarist retailers has been — such as the Havan department store chain becoming a Bolsonarist “symbol.”

There is also no consensus within finance capital. Valor Econômico’s Maria Cristina Fernandes, in a recent article, notes that Bolsonaro has some important support in the sector, but also points to divisions, particularly in the Itaú Unibanco monopoly: “Top management at Itaú Unibanco is divided on the presidential race. The firm would prefer there not to be a clash between President Jair Bolsonaro and former president Luiz Inácio Lula da Silva. But the absence of a Third Way seems to leave them with no alternative. The half that comes from Brazilian’s largest bank leans toward the incumbent, while the other half prefers the former president.”

Campos Netto, current president of the Central Bank, has said that markets are calm because they have already “priced in” Lula. Even though a wing of finance capital leans toward Bolsonaro, there is no real fear of Lula’s election as there was in this sector in 2002.

While the key is that capital is divided on the elections, support for the Auxílio Brazil social welfare program that his administration created helps him in the polls, as does the more or less active support of his agriculture base. But the divisions (particularly within the industrial and finance capital sectors) reveal a shift since 2018, and capitalist support for the Lula-Alckmin ticket makes it much more bourgeois — part of what finance capital sees as a win-win game.

5.0 — Three Pillars of the Post-Coup Regime: The Military, the Judiciary, and the Center Parties

Even before Bolsonaro took office, we characterized the post-institutional coup regime as a formation “at the point of mutation.” While it was no longer the regime established in 1988, when a new constitution was enacted as part of Brazil’s negotiated transition from dictatorship, the new structure’s contours were not yet fully defined.

Now we are coming to the end of Bolsonaro’s term. Since its beginning, there has been a steady drumbeat of changes to the regime. The new regime is not solid, though, its form complete. It can still be shaken and transformed by new crises, especially if the class struggle erupts abruptly.

One striking feature is more accentuated Bonapartist traits that indicate a more aggressive stance toward the living conditions of the masses. This includes greater direct military interference in politics. Through four years of a Bolsonaro government, added to the two years of the Temer government, these important changes have catalyzed, leaving as a legacy what we call the work of the institutional coup. Regardless of who takes office in 2023, this will be a factor of constant discipline and control, regardless of who takes office in 2023.

5.1 — The military

Changes in how the military functions are one expression of Brazil’s organic crisis. Faced with the weakening of the political parties, factions of the bourgeoisie resorted to military action to act within the government. The expression of military force is not, therefore, simply a conjunctural phenomenon, but has emerged as part of the crisis of the Brazilian state as a whole (economic, social, political, and ideological), as part of the crisis of the traditional parties and coalitions that have seen a “breakdown” of their old hegemonies. The 2016 institutional coup fractured the backbone of the regime of 1988, which had the PT and the PSDB organized around two poles. After its six years in power, the PT has been preserved, and the traditional Right, with the Third Way in tatters, has had its space occupied by the military and the Far Right.

The military forces have always occupied a central role in shaping the Brazilian state. The military was central to the 1964 coup. Beginning when workers rose up at the end of the 1970s, and through the transition negotiated in the 1980s, the military’s role in the regime moved into the background — its interference and influence in the government was much more behind the scenes. That changed with the institutional coup and the run-up to it, with the military increasingly taking over the public arena and governmental leadership posts. Today the Bolsonaro government is full of reservist generals in top ministries and military personnel serving in more than 6,000 public offices. In 2017, there were 3,000.

At the beginning of Bolsonaro’s term, most thought these military leaders were there to restrain Bolsonaro. Today, they want Bolsonaro to do well in the elections because that will be important to the future government’s reallocation of forces. Today, the military sees itself as a fourth power within the regime, along with the executive, legislative, and judiciary branches of government. Article 142 of the Constitution is invoked whenever there seems to be institutional instability.12Article 142 states, “The Armed Forces, constituted by the Navy, the Army, and the Air Force, are permanent and regular national institutions, organized on the basis of hierarchy and discipline, under the supreme authority of the President of the Republic, and destined to the defense of the Homeland, to the guarantee of the constitutional powers and, at the initiative of any of these, of law and order.” In these moments, the military’s propaganda sends strong messages that present the Armed Forces as a moderating power, expressing the space the military wishes to occupy — that is, to wave the baton for all the other wings of the regime.

In decisive moments of dispute among the factions of the ruling class, the military has positioned itself as the safeguard of the government. Recently, in litigation with the Superior Electoral Court, the Armed Forces have been echoing the suspicions being cast on the fairness of the electoral process, which is a central part of Bolsonaro’s approach to the campaign.

None of this happens without reactions from the other wings of the ruling class (such as the judiciary) or the mainstream media. Three leading newspapers — Globo, Estadão, and Folha de São Paulo — are increasingly promoting the idea that the military should not be doing politics. These same media have also been pushing the news about Army torture during the dictatorship, after audio was leaked from the Military Superior Court.

People feared that associating the military with the government — especially letting it manage the pandemic — could erode the image of the Armed Forces. This has been limited, however, and polls show that popular support for the military in politics is divided: 44 percent think it’s bad, while 43 percent say it’s positive. The military relies on this latter group when it intervenes in disputes between the regime’s institutions.

The greater military interference in the regime, with explicit participation in the government, is not simply a function of its ideology. Thanks to Bolsonaro, the military now controls huge sums of public money. This year, the military will be authorized to spend about US$18 billion to purchase fighter jets and submarines — almost double the amount set aside in the public budget for health, and triple that for education.

5.2 — Judicial Bonapartism

Those who seek to contain and erode Bolsonaro and his allies within the regime today focus their efforts on the Supreme Federal Court, thus constituting a Bonapartist force within the regime. They have the support of a minority of the legislative branch and most of the mainstream media. They present themselves as a check on Bolsonaro’s authoritarian impulses, and have won the support of sectors of progressivism — aided by the mainstream media, but also fed by political parties that have put their trust in the STF trials, including the PT, the Brazilian Communist Party, and the Socialism and Liberty Party (PSOL-Rede). Reactions to September 7, 2021, showed that the judiciary enjoys strong support among powerful factions within the bourgeoisie. Major employers, such as FIESP, ABAG, and Febraban, issued statements opposing the “instability” caused by the government and in “defense of democracy” and the STF.

Historically, the STF has had good relations with the military, with generals serving on the ministers’ advisory boards. This relationship, though, has become increasingly strained during the Bolsonaro administration, and today they appear as two forces confronting each other. The recent dispute between the TSE and the military over the legitimacy of the elections is just another expression of this change. This does not mean that the judiciary and the military will not seek to negotiate and maintain a dialogue, especially behind the scenes. Different wings may seek more dialogue, alternating between public clashes of rhetoric and backstage negotiations and renegotiations.

Although the STF is today the wing of the regime most opposed to Bolsonaro, it was key in enabling him to come to power, when it was acting in concert with the military. Its massive Bonapartist interference was decisive: having Lula arrested, stripping him of his political rights, and even banning him from giving interviews during the 2018 elections. With Bolsonaro already in office, the same STF restored Lula’s political rights and annulled the Lava Jato convictions, clearing Lula to prevent any social instability. Now it is using the same methods against Bolsonarists, such as Daniel Silveira13Silveira, a pro-Bolsonaro federal congressman, was convicted by the Federal Supreme Court of attempting to impede the free exercise of powers and coercion in judicial proceedings. — taking a step that has weakened the STF for the time, since it created unity among a large part of the legislative branch that objected to the court’s setting a precedent. In a bloc that went beyond the hardest of the Bolsonarists, a majority of Congress tried to defend Silveira and guarantee the permanence of the presidential pardon. At the same time, the STF has endorsed the neoliberal reforms and continues to demonstrate its anti-worker orientation — as it did recently in acting against striking teachers in the state of Minas Gerais.

5.3 — The center parties

The so-called Centrão is a bloc of legislative power that, in recent years, has sought to play an important role in the country’s politics. This was the case with the Mensalão,14The Mensalão was a scandal involving legislators being “bought” during Lula’s government. the institutional coup, the guarantee of the Temer government, and now as a supporter of Bolsonaro alongside the military. The Centrão seeks greater prominence, and this will affect the future government.

This center constitutes a broad political category that is used by analysts and politicians to describe specific conjunctural arrangements among otherwise divided legislators. Originally, Centrão referred to the old Arena party, the party of the dictatorship that later became the Democratic Social Party (PDS). It maintained the agenda of finance capital, and in doing so promote a “depoliticization” of the elections to the House. Funding is a decisive factor for the election of most deputies and senators in their regional strongholds, whereas the federal budget has always been oriented to meeting the needs of big finance capital.

Over the years since 1988, this bloc has undergone divisions, fracturing, and reunification, but generally has maintained its characteristic as a political force encompassing important sectors of Congress that insist on the government negotiating its governance. The Fiscal Responsibility Law of 2000 represented a qualitative change. It gave state governors more room to maneuver economically, allowing them to incur debt and generate inflation. The very bourgeoisie that opposed the dictatorship strengthened it by paving the way for a “slow, gradual, and peaceful” transition. Hyperinflation became a source of permanent crises, because the federal government had no tools to control state spending. Law in the 1990s had centralized economic power, against the states.

The system we know today, which establishes a direct relationship between the federal government and localities through budget amendments negotiated with the deputies (bypassing the governors), is a by-product of this process. It weakens the parties because it ties elections to subordination to the executive branch, while establishing for the executive a dependency on deputies’ local electoral interests rather than on national policy. This is the architecture of the so-called coalition presidentialism that “depoliticizes” the elections to the federal legislature, making local and regional agendas determinant rather than a national agenda. At the beginning of his government, Bolsonaro sought to change this arrangement by incorporating Lava Jato judicial Bonapartist methods into the executive branch. Thus, at first he confronted the Centrão, but with government crises and the withdrawal of Moro, he eventually had to subordinate himself to the Centrão and seek their support.

Today, the leading Centrão bloc in parliament supports Bolsonaro, with deputies from the Progressistas (PP), Liberal Party (PL), and the Republicans, but also some supporters from other parties. This reflects the weakening of the bourgeois opposition that existed in the legislature at the beginning of the Bolsonaro government. It is striking to see the strengthening of a party like the PP in the wake of Lava Jato’s waning; the party had been hit heavily in the investigation, but it is now one of the largest in Congress and holds the presidency of the House with Arthur Lira. The PL of Valdemar da Costa Neto, also a target of Lava Jato, now stands with Bolsonaro; it benefited most from the party’s showcase. Those attacked by Lava Jato have grown stronger — a victory for the wing of the regime that had fought openly in the previous period. This wing feels so strong, in fact, that it is advocating a new regime in which the legislative branch and presidency would share executive responsibilities. For this it needs to curb the STF, as it already did in the Silveira case.

The so-called secret budget represents an attempt to bolster the legislative branch while weakening other branches of the government, which is why the STF has targeted it.15Translator’s note: In May 2021, a Brazilian journalist revealed that the Bolsonaro government had created a “secret budget” that included about US$565 million set aside to pay expenses for a select group of lawmakers — as a way of buying their votes. That November, a justice of the STF issued an injunction suspending the “rapporteur-designated budgetary grants” on which the budget was based, saying they were “detrimental to the general population” by reducing transparency and undermining the system of checks and balances.” Instead of depending on allocations by the executive branch, the legislative branch today has much greater autonomy to allocate resources than ever before. This has changed how the government negotiates party support and gives greater powers to the House president, since he controls the allocation of these resources. Regardless of who is elected, agreements and blocs with the legislature will be more difficult, and the executive branch must work through institutional arrangements that give greater power to the big bosses of these parties and to leading regional figures.

6.0 — The Labor Movement and Class Struggle

After years of slashed wages, inflation, and a surging cost of living, the working class struck back through the labor movement, as in the education strike in Minas Gerais, the garbage collectors’ strike in Rio de Janeiro, and the CSN strike in Volta Redonda. The teachers’ and garbage collectors’ actions were heavily controlled by the union leaderships, but Volta Redonda saw an interesting expression of rank-and-file organization against the leadership of the Força Sindical that we haven’t seen for a long time — while also exhibiting some limitations. These strikes and work stoppages point to an increasing trend of mobilizations that may expand in the next period, and may be used by the union bureaucracy to wear Bolsonaro down, even if they may also abate as the elections get closer.

The pandemic, the fear of unemployment, and the rising cost of living have hit the working class hard. According to the Intersyndical Department of Statistics and Socio-economic Studies (Dieese), there was a 42 percent decrease in the number of strikes and slowdowns in 2020 compared to the previous year, from 1,118 in 2019 to 649. The decrease was even greater in the public sector: 59 percent, compared to a 24 percent decrease in the private sector. The first half of 2021 is largely the same; no data are yet published for the second half of the year. The difference between the public and private sectors is striking, as it has been the more precarious workers who have mobilized most to recover wages and rights (whether it is public teachers in Minas Gerais or garbage collectors in Rio de Janeiro, or private-sector workers like those at CSN).

For comparison, there was a rise in strikes in the “wildcat” years from 2014 to 2016, reflecting 2013’s June Days. In 2014 alone, there were 2,085 strikes, and the total reached 2,094 in 2016 — the record year for strikes since the Dieese began tracking them in 1984.

The number of strikes fell after the institutional coup, and even more so once the pandemic hit — but also because several sectors of the public administration were doing “telework.” With the resumption of economic activity and the normalization of productive activities, the likely trend is that the working class will engage in a large number of strikes. This is an expectation shared by several international analysts, such as Stratfor, which has written: “In reaction to high food and energy prices, Brazil will see more frequent labor strikes and social unrest and increased government spending, raising investor concern about the country’s social and economic stability.”

It is possible that there will be more strikes, or that sectors that have not struck before will organize to win more than what is being promised them, and this leads to a recomposition of those who’ve come under such severe attack in the past few years. The illusions being sown by the possibility of Lula’s return to government are a factor that restrain the development of sharper processes, since the PT’s role is to keep the class struggle within the existing economic framework and channel it electorally to prevent actions from emerging that directly confront the government and the regime. Given the immense social misery, we cannot rule out the possibility of hunger strikes by some within the impoverished population that are not organized in more traditional groups and unions. Such a scenario is unlikely in the short term, although we are already seeing germs of it emerging, such as supermarket looting.

7.0 — The Battle for Class Independence

Looking beyond October, the Movimento Revolucionário de Trabalhadores (MRT) — which is part of the Trotskyist Fraction — Fourth International (FT-QI) — has been fighting to build a pole of class independence. Our objective is for this pole to play a role in the class struggle and present a political alternative, including to the elections, that confronts every coup threat from the Far Right, without succumbing to class conciliation — which will only weaken the working class in this battle.

Along these lines, the MRT has been participating, along with the United Socialist Workers Party (PSTU), the Socialist Workers’ Current (CST), and several other organizations and activists, in the Revolutionary Socialist Pole. We have also made our presence known in the struggles and strikes that have broken out in recent months, denouncing the treacherous policy of the central unions and demanding that they put an end to their truce with the government. We have put forward a workers’ program to confront the Far Right and the crisis that responds to the problems that afflict the working class and the poor population.

This program includes the fight for a 100 percent state-owned Petrobras, under the control of the workers and the people — not a Petrobras that serves the interests of a handful of capitalists. It demands an agrarian reform that transforms the big agribusiness companies into state companies, with no compensation for the big landowners, so that a country that produces enormous amounts of agricultural goods no longer has lines for bones and garbage. It demands the preservation of indigenous and quilombola lands — freeing them from the mercy of the agribusiness that destroys the environment.

All this requires confronting the big capitalists, not governing with them. They want to subject our class to increasingly unbearable levels of labor exploitation. That’s why it’s not enough to change some points of the labor reform, as Lula proposes. Instead, we must fight for the complete annulment of all the reforms, while also fighting for a reduction in the workday and the redistribution of work hours to confront unemployment and hunger. And we must fight to immediately implement a subsidy that provides the equivalent of at least one minimum wage, with a return to all pre-pandemic prices and tariffs.

Bonapartist interference in politics, both by the military and judiciary, is a huge factor in Brazil that will not disappear in 2023. We must confront every one of Bolsonaro’s coup threats and every Bonapartist action, challenging the political and economic steps that were taken first to structure the 2016 coup and then deepened by the Bolsonaro government. The idea that we can fight for “clean elections” in a regime deteriorated by so many years of attacks is to sow illusions in bourgeois democracy.

To sweep away the authoritarianism of the military, the caste of judges, and the Centrão, which are the pillars of the current political regime, we must fight to build a social force that can impose the will of the great majority of people through a new Free and Sovereign Constituent Assembly that will discuss the country’s structural problems and fight to impose a program that forces the capitalists pay for the crisis. This will be possible only with the self-organization of the masses to confront all the state repression and reactionary, dominant class that wants the majority of the population to be mere spectators who vote in elections every two years for their “representatives.”

In this democratic experience and clash between classes, the working class and poor must build rank-and-file organizations that can implement workers’ democracy, taking on the direct administration of the entire economy and plan how it will function to serve the real needs of society. We need a workers’ government that begins the transition to socialism, a society without exploitation or oppression. We need a socialist society, starting from the bottom, that takes technological developments out of the hands of a few parasites who seek to use them to exploit the great majority.

If the working class and poor people do not build a perspective along this very path, it will be a declining capitalism that continues to impose its will in the service of its interests. President Bolsonaro, Vice President Hamilton Mourão, the military, and the Far Right will continue their nostalgic evocation of the military dictatorship to guarantee the dictatorship of capital. Meanwhile, the demagoguery of Lula and Alckmin will continue to grow in strength in its efforts to present an inclusive capitalism that, as history has shown, favors only the big capitalists themselves. It is up to the working class to build the independent political path that can bring this system of exploitation and oppression to its knees. That is the task for which we are preparing.

First published in Portuguese on May 21 in Esquerda Diario.

Translation and annotation by Scott Cooper


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