Financial Capital and the Parliamentary Coup in Brazil: Division, Reunification, and Crisis of Hegemony

• Author: André Flores Penha Valle
• DOI: http://doi.org/10.1177/0094582X221109566
• Published date: 01 September 2022
• Date: 01 September 2022
• Subject Matter: Articles

https://doi.org/10.1177/0094582X221109566

LATIN AMERICAN PERSPECTIVES, Issue 246, Vol. 49 No. 5, September 2022, 34–50

DOI: 10.1177/0094582X221109566

© 2022 Latin American Perspectives

34

Financial Capital and the Parliamentary Coup in Brazil

Division, Reunification, and Crisis of Hegemony

by

André Flores Penha Valle

The political action of financial capital and its class fractions in 2015–2016 resulted in

the overthrow of President Dilma Rousseff and her replacement by Michel Temer's interim

government. Financial capital at the time was made up of the internal banking bourgeoi-

sie, involving the large national commercial banks, and the associated financial bourgeoi-

sie, involving nonbank financial institutions operating in the capital market. Examination

of the relationship between financial capital and other bourgeois fractions in this context

disputes the hypotheses of a bourgeois united front and of a convergence around rentism

to demonstrate that the Brazilian bourgeoisie did not constitute a political front that over-

threw the government as a bloc.

A ação política do capital financeiro e suas frações de classe em 2015-2016 resultou na

derrubada da presidente Dilma Rousseff e sua substituição pelo governo interino de

Michel Temer. O capital financeiro da época era constituído pela burguesia bancária

interna, envolvendo os grandes bancos comerciais nacionais bem como a burguesia finan-

ceira associada, abrangendo as instituições financeiras não bancárias que atuavam no

mercado de capitais. Uma investigação sobre a relação entre capital financeiro e outras

frações burguesas nesse contexto contesta as hipóteses de uma frente única burguesa e de

uma convergência em torno do rentismo para demonstrar que a burguesia brasileira não

constituiu uma frente política que derrubou o governo como bloco.

Keywords: Financial capital, Power bloc, Dilma Rousseff ’s government, Political crisis,

Fiscal adjustment

This article analyzes the political action of financial capital and its class frac-

tions during the Brazilian political crisis of 2015–2016 that resulted in the par-

liamentary coup of Dilma Rousseff’s government. An analysis of the economic

agents’ positioning in the specialized press and the reports of their financial

assets shows that during most of the political crisis financial capital was divided

into distinct social forces, the large national commercial banks and the nonbank

financial institutions, mainly brokerages and investment funds. This discovery

disputes the hypotheses of a bourgeois united front and a convergence around

rentism that still influence interpretations of the coup.

André Flores Penha Valle is a Ph.D. student in the Graduate Program in Political Science at the

Universidade Estadual de Campinas. This article presents the results of a Master's research project

entitled “Division and Reunification of Financial Capital: From Impeachment to the Temer

Government” conducted through December 2019 and funded by the Coordination for the

Improvement of Higher Education Personnel.

1109566LAPXXX10.1177/0094582X221109566Latin American PerspectivesValle/Financial Capital and the Parliamentary Coup in Brazil

research-article2022

Valle/FINANCIAL CAPITAL AND THE PARLIAMENTARY COUP IN BRAZIL 35

A “parliamentary coup” may sound strange to those under parliamentary

political regimes, in which noncompliance with the political program for which

the prime minister was elected legally justifies his removal through a vote of no

confidence. However, in Brazilian presidentialism, the impediment depends on

an assault on the constitution perpetrated by the head of the executive branch

during his term. While the rules and procedures of the political regime matter

for the identification of a coup when establishing the legal limits for institutional

and governmental changes, they are not sufficient for an accurate description of

a phenomenon that is always the result of class struggle. The institutional rup-

ture caused by fractions of the state apparatus for the removal of the govern-

ment, through a case-by-case application of laws and unusual features of the

political game, serves a class politics aimed at gaining control of the state deci-

sion-making process (Perissinotto, 2016; Bianchi, 2016; Martuscelli, 2018).

The condemnation of President Dilma Rousseff for issuing supplementary

agricultural credit and delaying payment for social policies to state banks made

to ensure the surplus of public accounts (a practice frequently used by mayors,

governors, and even presidents who preceded her) was a casuistic use of the

impeachment law in an attempt by fractions of the state apparatus (parliamen-

tary and judiciary) to overthrow the Partido dos Trabalhadores (Workers’

Party—PT) government. It resulted from the neoliberal restorative assault on

international capital and the associated bourgeoisie1 supported by the mass

movement of the upper middle class. This assault succeeded in dividing the

political front that supported the PT governments and attracting portions of big

national capital that supported these governments to form a coup front bring-

ing together bourgeois fractions that had recently been on opposite sides of

national politics (Boito Jr., 2018).

Financial capital and its Fractions

The theory of bourgeois fractions and the power bloc developed by Nicos

Poulantzas (1977) is mobilized here to analyze the contradictory unity of the

bourgeois fractions in their relationship with the state. Divided according to the

function, origin, and size of its capital, the bourgeoisie exists politically in the

form of distinct social forces with specific, although not necessarily autonomous,

organizations, representations, and political discourses. Capitalist categories that

compete against each other for the distribution of total surplus value constitute

the substratum of these social forces, which represent different positions driven

by the economic, social, and foreign policy measures implemented by the state.2

Financial capital can be divided into particular forms of interest-bearing

capital: banking, loan, and fictitious (Marx, 1981). My object is defined not in

terms of the junction between industrial and financial monopolies but in terms

of the specific categories of capitalists and economic groups whose main

economic activity, the one from which most of their profit is derived and

therefore the one that determines their political behavior, is finance. Banking

capital primarily involves commercial banks, while loan capital involves

investment banks and credit unions. Fictitious capital specializes in the capital

market and includes investment funds, insurance companies, risk-rating