Brazilian Dependent Capitalism under the Hegemony of Financialized Capital

• Author: Lucas Crivelenti e Castro
• Published date: 01 March 2022
• Date: 01 March 2022
• DOI: http://doi.org/10.1177/0094582X211053011
• Subject Matter: Articles

https://doi.org/10.1177/0094582X211053011

LATIN AMERICAN PERSPECTIVES, Issue 243, Vol. 49 No. 2, March 2022, 39–55

DOI: 10.1177/0094582X211053011

© 2021 Latin American Perspectives

39

Brazilian Dependent Capitalism under the Hegemony of

Financialized Capital

by

Lucas Crivelenti e Castro

Translated by

Heather Hayes

An analysis of the Brazilian economic history of the past 50 years shows that the accu-

mulation of foreign debt and its subsequent crisis in the 1980s, the ensuing fiscal adjust-

ments with supervision by the International Monetary Fund, the execution of the Real

Plan in 1994, the resulting macroeconomic trifecta, and new laws and resolutions have

reinforced and expanded Brazil’s economic and financial dependency. Since the 1990s, its

political-economic relations have been shaped by the principles of a liberal-monetarist

economy that is the basis for the accumulation and revaluation of domestic and foreign

capital.

Uma análise da história econômica brasileira dos últimos 50 anos mostra que o acúmulo

da dívida externa e sua posterior crise nos anos 1980, os subsequentes ajustes fiscais com

supervisões do International Monetary Fund, a execução do Plano Real em 1994, a decor-

rente política do tripé macroeconômico e as leis e resoluções, reforçaram e ampliaram a

dependência econômico-financeira do Brasil em sua inserção mundial. Desde os anos

1990, o âmago das relações político-econômicas brasileiras está gestado por princípios

doutrinários de uma economia liberal-monetarista, a qual é a base para a acumulação e

revalorização de capital interno e externo.

Keywords: Dependency, Financialization, Economic subordination, Monetarism,

Macroeconomic trifecta

The main objective of this article is to examine Brazil’s dependency in the

current structure of globalized capitalism. With the financial deregulation

and further entry into trade that occurred in the 1980s in the central coun-

tries and in the 1990s in the periphery, there were important changes in rela-

tions involving Brazil’s economic submission to the organization of

globalized financial capitalism. In addition, the predominance of liberal-

monetarist macroeconomic policy in the various Brazilian administrations

since 1990 has generated the country’s subordination in the globalized sys-

tem of finance, the essence of the contemporary paradigm of dependent

capitalism, requiring an updating of it described by Fiori (1995) and Saes

Lucas Crivelenti e Castro is a doctoral candidate in political economy at the Universidade Federal

Fluminense. He has a Master’s degree in geography from the Julio de Mesquita Filho State

University of São Paulo, and his dissertation, “Novíssima dependência: A subordinação brasileira

ao imperialismo no contexto do capitalismo financeirizado,” was published in October 2021.

Heather Hayes is a translator in Quito, Ecuador.

1053011LAPXXX10.1177/0094582X211053011Latin American PerspectivesCrivelenti e Castro / DEPENDENT CAPITALISM AND FINANCIALIZED CAPITAL

research-article2021

40 LATIN AMERICAN PERSPECTIVES

(2007) as “a brand-new dependency.” This article will demonstrate that the

subordination of Brazilian economic policy to the dynamics of financializa-

tion is a continuous, unlimited, and general process independently of party-

political ideology, since both right- and left-leaning administrations have

furthered the country’s association with financial globalization.

We are dealing here with the period in the history of the global economy that

began with the abandonment of the regulations of postwar agreements such as

that of Bretton Woods, in which the predominance of the hegemony of financial

capital was sustained by commercial liberalization, financial deregulation, and

neoclassical monetary, exchange, and fiscal policies. As a common feature of

this period, the consolidation of private savings around banks, investment

funds, pension funds, and insurance companies—institutional investors—was

part of the pursuit of value in the accumulated capital that remains idle through

the acquisition of public and private securities and operations with financial

derivatives (hedges, options, futures, and swaps) (Chesnais, 2005; Lapavitsas,

2009). The idea is to show through a review of the literature on economic depen-

dency, financialization, and the implementation of liberal-biased policies that

the form taken by the current phase of dependent and peripheral Brazilian

capitalism is associated with monetarism.

A BrAnd-new dependency

Changes in the Brazilian economic regulatory framework (norms, laws,

and resolutions) with the objective of keeping the currency, public spending,

and the exchange rate stable through the liberalization of the national econ-

omy and inflation control have resulted in the contemporary paradigm of

Brazilian dependency, which is intrinsically linked to the expansion of global

financialization characterized here as the phase of capitalism beginning in

the 1970s. As a result, it is necessary to speak in terms of a brand-new depend-

ency. According to Fernandes (1975), Brazilian dependent capitalism is char-

acterized by the absence of a national project, especially when seen from the

perspective of the ruling classes, which allied themselves with foreign

hegemonic capital to perpetuate, on the one hand, the subordinate condition

of the country in its international relations and, on the other hand, the exploi-

tation of the labor of the remaining majority of the population that made

possible the division of surplus value between the national and the global

bourgeoisie.

The structure of Brazilian dependent capitalism followed the logic of a “dou-

ble articulation,” combining the accumulation of capital internally through the

reproduction of domestic underdevelopment with submission to foreign impe-

rialist demand (Fernandes, 1975). Thus, the local ruling class was allied with

foreign capitalists and defending interests foreign to Brazilian economic eman-

cipation (Fernandes, 2006). As a result, development policies between the 1930s

and 1980s, with the expansion of national industrialization supported by the

national state, the local bourgeoisie, and hegemonic international capital (Prado

Jr., 2008), did not break with the double-articulation socioeconomic model, but

they did achieve progress in the concentration of income, especially during the

Economic Miracle period (1969–1973).