Brazilian social-economic formation:
regression to a new type of colonial conditionMarco Antonio Villela dos Santos
“...what is most important, that which constitutes the very gist, the living soul, of Marxism-a concrete analysis of a concrete situation” (Lenin) (1).
“… a dominated country, or a previously dominated one, that does not change its condition in the capitalist’s international division of labor does anything but to reproduce its unfavorable condition: the more the production of the products that its “place” assigns to it grows, the more it participates on the aggravation of its unfavorable condition (the price manipulations cannot change that whereas subsists the capitalist world economy).” Bettelheim, Charles, Relações Internacionais e Relações de Classe [International Relations and Class Relations]. In: Bettelheim, Emmanuel et alli. Um Proletariado Explorador? [An Exploiter Proletariat?]. Iniciativas Editoriais, Lisboa, 1971, pág. 27.
In the texts we have been publishing since CeCAC’s foundation more than ten years ago, we affirm that in the last two decades, since the middle 1980’s, the Brazilian social-economic formation has undergone transformations owing to the reconfiguration of the imperialist system in its aim to achieve higher levels of the rate of profit. To define this process, we have developed the concept of regression to a new type of colonial condition.
The imperialist system, the world economy, has been in an enduring crisis since the middle 1970’s, alternating periods of open economic recession and recovery.
The economic crisis of imperialism: over-accumulation of capital
The economic crisis of imperialism is the expression of a permanent over-accumulation of capital, which cannot be productively invested at the desired rate of profit, and of its correlate over-production of commodities. This creates a fertile ground for the purely financial accumulation of capital (M – M’), through the huge development of fictitious capital. This reinforcement of the rentier and parasitic constitutive aspects of imperialism precludes the emergence of a devastating crisis like the one of the 1930’s, on one hand and, on the other hand, does not allow the destruction of capital necessary to its own overcoming.
After the economic crisis that hit all the world economy in 1973/1974, the imperialism tries to escape the crisis through the mechanism that has generated the impossible to pay external debt of the dominated countries, mainly the Latin American ones. The defaults of Brazil and Mexico, in the beginning of the 1980’s, imposed to the imperialism the need to find new ways to continue the valorization process of the vast amounts of excessive capital of the world economy.
Reconfiguration of the imperialist system
From the middle 1980’s a reconfiguration in the imperialist system begins to take form, a process called by the bourgeois political economy as “globalization” and “neoliberal policy”. This process has its center on the attempt/necessity of raising the rates of profit of the imperialist capitals through lowering the value of the labor force both in the dominated countries and in the dominating ones.
Facing the resistance of the working class in the class struggle, that did not allow the depreciation of the value of its labor force to the limits needed to the recover of the rate of profit, neither in the imperialist countries nor in some dominated countries – amongst them some Latin American countries (including Mexico, to where the United States initiated a strong movement of transfer of sectors of its industry), the imperialist capital was obligated to find new ways to ensure the accumulation of capital.
Broadly speaking, we can say that this process occurred as a combination, in variable proportions, of two complementary movements. First, globalizing, internationalizing the production chain of imperialist trusts and cartels, where, in these chains, the assembling stages that are labor-intensive and /or intensive on natural resources and raw materials (and that require low level of specialization) are offshored to dominated countries, whereas the fabrication of parts and components that require technology and technical knowledge concentrate on the dominating countries, on the imperialist countries. Second, linked to this movement, there was a massive offshoring of industries to countries where the labor force, relatively disciplined, educated and ‘living in quarters’ is bought at a very low cost, to Asia in general and to China, specially.
Reconfiguration of the Brazilian social-economic formation
Both the internationalization of the production chains carried out by trusts and cartels, and the offshoring to Asia, specially to China and in some way to India, of a portion of the industrial production of the imperialist countries imposed deep transformations to the production and reproduction of the world economy and, therefore, through several mediations, to the Brazilian social-economic formation. As we have already stated, the transformations on the world economy drive the place occupied by the Brazilian social-economic formation in the new design of the imperialist system.
This process has the following consequences:
First, the internationalization of the productive chains of the imperialist corporations, which separate and situate themselves in different countries, reshapes the industrial sector of the Brazilian economy.
Second, the privatization and the denationalization processes had transferred to the foreign and domestic private capitals State-owned companies and State-acting sectors like health, insurance, education, infrastructure, etc.
Third, the offshoring of the imperialist industry to Southern and East Asia, to India, and mainly to China, generated a huge demand for basic products, specially food, oil and minerals/metals like iron, nickel, steel, aluminum, copper and zinc. Proof of this is the expansion of the consumption of minerals/metals in China that raised, proportionally, more than its GDP, as well as the consumption of natural rubber, cotton, wood, etc., which guided Brazil’s specialization in the production and exportation of basic commodities.
External determinations and class struggle
As we have been affirming, from the middle 1980’s a reconfiguration of the Brazilian social-economic formation is been imposing itself, as a result both of the external determinations, deriving from the changes in the world economy, and of its internal contradictions, of the class struggle, that set up, in each moment, the possibilities and limits to the external determinations.
This reconfiguration, seeking to make Brazil occupy, in the imperialist system, the place determined to it by the transformations in the world economy, brings about significant changes to the Brazilian social economic condition and, therefore, to the condition, the position of the classes for the class struggle.
The on-going rearrangement of the world economy overdetermines the rearrangement of the Brazilian social economic formation that is done in conformity to and in service of the process in course to counteract the tendency of the rate of profit to fall, of the process of accumulation of capital in the world economy.
Such a rearrangement in the world economy imposes a reorganization of the productive forces in the dominated countries, reorganization determined and in conformity, serving, adjusted to the process of recovery of the rate of profit, to the reproduction of capital in an increasing scale, to the development of the world economy. This rearrangement is determined by the contradictory development of the dominating pole in the imperialist system, that is, the dominating countries, the imperialist countries.
Thus, from the middle 1980’s begins in Brazil a process that we conceptualize as a regression to a new type of colonial condition. That process is being perceived by analysts, that utilize the conceptions of bourgeois political economy, only from its apparent elements, from isolated phenomena such as the deindustrialization, the reduction of the relative importance of the internal industrial accumulation to the reproduction of capital in an increasing scale in Brazil, the “reprimarization”*, the increasing share of agribusiness and of mineral extractive industry both in the internal production and in exports, etc.
Dislocation of the economic dynamism
In this process industry or more precisely, the state-owned, private, national and foreign industrial sector that was in charge, historically, of the economic dynamism from the beginning of the 20th century with the industrialization has been loosing the rank of dynamic sector of the economy. That sector was basically composed by the industry of durable consumption goods – and the sector linked to it – and of capital goods and infrastructure. In its place, with an increasing tendency, there are sectors like the agro-industry, the mining sector for export, and the fabrication and assembling platforms for export formed by foreign or associated national capital, etc.
That process also implies not only the raising of new fractions of the bourgeoisie, like the financial sector, the agribusiness, the mining, etc., as well as creates new differences in the composition of the dominated classes. Those changes must be accounted for by those who want to carry out the concrete analysis of the conjuncture of the class struggle.
The stagnation of Brazilian and Latin American economies in the 1980’s, as a function of the imperialism crisis and of its severe repercussions in the dominated countries of the continent, hit severely those sectors of the bourgeoisie. The rearrangement strategy, the reorganization, in order to counteract the crisis, through the opening of the Brazilian economy, privatizations, liberalization of the capital flows, the stimulus, the permission to the inflows of foreign direct investment, caused on one side the elimination of sectors of the internal bourgeoisie, of industrial chains that were the first to be denationalized (like the automotive parts, for instance) and were also substituted by imports – in a harsh revenge of History, carrying out a kind of reverse imports substitution. On the other side, a reorganization of the production that was formerly directed to the domestic market (perhaps the best example is the role of previously State-owned and now private corporations, like the Companhia Vale do Rio Doce and the Companhia Siderúrgica Nacional) and that is now directed to foreign markets in order to serve the interests of the reconfiguration of the world economy (minerals for China, for example). A reorganization to foreign markets as a function of its larger dimension and advantages, including that provoked by the opening of markets (that turns it possible to export to markets that had before very high tariffs and / or barriers, or simply did not allow imports), of the competitiveness of the Brazilian basic commodities, of the necessity of gain incomes in US dollar to remunerate the finance capital, and of the new configuration of the activities of transnational companies sharing out the world amongst their branches.
What we are saying is that, in the Brazilian case, the industry has suffered a reorganization process in which it has lost not only relevant sectors, but also links of productive chains of important industrial segments, increasingly giving up its role of dynamic sector that it had occupied in the economy to the agribusiness and mining for export sectors, to the making and assembling of consumption goods or parts of these goods for export in foreign capital corporations or associated to it.
And, differently from the industrialization process that had been occurring until the middle of the 1980’s, the new dynamic sectors of the economy finish their productive cycle abroad, that is, with the sale of products abroad. Not only this but also given the growing participation of foreign monopolist capital and the financial and exchange liberalization, the obtained profits are accumulated abroad.
The previous industrialization process
Since de beginning of the industrialization process in Brazil, at the end of the 19th and beginning of the 20th century, the industrialization had occurred as a continuous movement (not excluding phases of higher or lower economic growth nor crisis) under the determination of internal and external factors (internal contradictions and imperialism), in the sense of comprising a system (structure), into the imperialism world system, with medium technological level (or more precisely, from late to medium level), integrated either vertically – every stage of the productive chains, from the production of raw materials and intermediate goods to the final product – and horizontally – the constitution of the main production branches. That industrialization was centered on the production of commodities, whose technology had been established, stabilized and was widespread in the economies of the imperialist countries.
The industrialization process that developed trough almost all 20th century, into the conditions that were delimited by the imperialist world system, and not against it, and that had large participation of transnational corporations from the imperialist countries, aimed to, as a intrinsic necessity of its own reproduction, in a growing fashion, internalize all the cycle of reproduction of capital on an increasing scale, completing the production, fundamentally, in the internal market. The apex of that process occurred with the II Plano Nacional de Desenvolvimento (National Development Planning) in the Geisel government [1974-1978] that, even not totally accomplished, had its effects on the productive structure until the beginning of Sarney government [1985-1989].
A new period
In order to define a period, we can say that the process of regression to a new type of colonial condition, that begins at the end of the 1980’s, has its political and economic landmark with the Collor government [1990-1992] and that it is intensified in the two Cardoso’s presidential terms [1995-1998 and 1999-2002] and, nowadays, it is deepened and consolidated in the PT government, in the Lula’s government.
The regression to a new type of colonial condition means a changing in the economic, social and political structure of the Brazilian social economic formation under the pressure of a tough worldwide economic, political, ideological and military offensive of the imperialism.
The changes on the economic structure express themselves in transformations that aim to attend the necessities of the new configuration of the international division of labor that is modeling the world economy: 1 – basic commodities supplying; raw-materials (oil, iron, steel, aluminum, copper, etc., wood, leather, etc.) and food (grains, beef, chicken, fruit juice, sugar, etc.) for the new industrial Asian pole; 2 – the filling of the internal market by consume goods overproduced in the world market; 3 – gains of scale to the industrial sector in the hands of foreign capital, offering infrastructure and cheap labor force; 4 – development of a financial market able to valuing the overproduced capital in the world economy.
The new Brazilian economic structure
The change in the economic structure is expressed in:
1 – the shaping of a new industrial structure no longer integrated horizontally nor vertically by the closing of some of its links, parts of productive chains, of sectors of industrial activities, industrial segments from the extraction and manufacturing of raw-materials and auxiliary materials to the final product until the encompassing of some consumption goods industries, that begin to be imported or merely assembled in the country (in this case, by foreign monopolies). Thus, important industrial segments are lost or some links of the productive chains are broken. The deindustrialization is, therefore, a constitutive phenomenon of the regression to a new type of colonial condition.
2 – the organization of a new industrial sector directed to the constitution of “islands” of production and assembling of products, by foreign or associated corporations, of medium level technology, mainly for export. In the Brazilian exports, the presence of products of high aggregated value, dynamic supply and intensive in technology may induce to wrong conclusions. With a few exceptions, these products that come out as Brazilian exportation actually encompass only the assembling phase of parts and products fabricated in other countries, in the international productive chains, organized by the transnational imperialist corporations. Such assembling phase requires low specialization level and cheap labor force. The technology and the technical knowledge incorporated to those products are concentrated on imported parts and components, and most of the aggregated value benefits corporations of the imperialist countries where those parts and components are produced, and that organize these production networks.
3 –the constitution of an agro-industrial sector directed to exports. In the export of mineral basic commodities. Thus, the dynamic pole of the economy is transferred to export-led sectors. Therefore a group of sectors that complete themselves abroad, in general, sectors that elaborate primary products. That is, the new dynamic sectors have their productive cycle completed abroad. In this sense, Brazil deepens its characteristic of labor force and natural resources intensive products exporter. In order to compete in the world market, Brazil lays on its available, cheap and unskilled labor force. The specialization on the production and export of basic commodities is another characteristic of the colonial regression.
4 – the building up of a system with the objective of remunerate the finance capital, remunerating with high interest rates the fictitious capital that circulates and exists only in the gears of the financial speculation, through the articulation between a huge fiscal primary surplus and a high trade balance surplus, that makes it possible to remunerate the “casino” capital. This capital runs completely free to the country searching for the advantages that only Brazil and the PT government are able to give. To ensure that, a mechanism is configured with the aim of pumping out a large share of the surplus-value internally produced, even when completed abroad, to favor the finance capital. Extorts from the people an elevated primary surplus related to the GDP, which allows the government – keeping the highest interest rate in the world economy – to capture a share of the produced surplus-value and, buying the dollars from the trade balance, to transform them in remuneration to the finance capital benefited by these elevated domestic interest rates.
Brazil: more exploited, more dominated
In this way, we can say that the economic results celebrated by the Lula government, PT, PC do B and it’s allies, presented as a significant advance, greater independence, economic and social development of Brazil – as, for instance, the record trade balance surplus last year [2005] – only represent the trustworthiness to the determinations of the imperialism, the deepening of the Brazilian position in the new international division of labor imposed by the imperialism in order to counteract its crisis. It represents only the Brazilian regression to a new type of colonial condition.
Actually, the Lula government, - serving the Brazilian ruling classes with closest ties to the imperialism – with intention and conscience, deepened the “specialization” of Brazil (actually, an historical vocation of the its ruling classes) in corresponding to the place assigned by the imperialism in the new international division of labor. We are being more exploited and more dominated and our fake leftists celebrate.
This explains why the imperialism and sectors of the Brazilian ruling classes have interests on keeping Lula in the government, for despair of Cardoso and his band. With a left like that, who needs the right? As we wrote some time ago, Lula, the metalworker the gringo likes!
* This concept expresses the more dynamic growth of the agricultural and mineral/metals production (mainly destined to exportation), as related to other manufacturing industries. [back]
Note 1 - “Kommunismus” (June 12, 1920), Collected Works, 4th English Edition, Progress Publishers, Moscow, 1965, Volume 31, pages 165-167. Disponible at http://www.marxists.org/archive/lenin/works/1920/jun/12.htm.
First published in Portuguese in February 17, 2006.
The original version can be found in http://www.cecac.org.br/MATERIAS/formacao_social_bras_fev_06.htm.
The url address of this article is http://www.cecac.org.br/MATERIAS/Brazilian_social-economic_formation_jan08.htm
January/27/2008