The Political Economy of Lulism and Its Aftermath

• Author: Ruy Braga,Fábio Luis Barbosa dos Santos
• Date: 01 January 2020
• Published date: 01 January 2020
• DOI: 10.1177/0094582X19887806
• Subject Matter: Articles

https://doi.org/10.1177/0094582X19887806

LATIN AMERICAN PERSPECTIVES, Issue 230, Vol. 47 No. 1, January 2020, 169–186

DOI: 10.1177/0094582X19887806

© 2019 Latin American Perspectives

169

The Political Economy of Lulism and Its Aftermath

by

Ruy Braga and Fábio Luis Barbosa dos Santos

Translated by

Patrícia Fierro

President Dilma Rousseff’s impeachment should be framed as part of the crisis of the

Lulist mode of regulation of social conflict. The Partido dos Trabalhadores (Workers’

Party—PT) presidencies lost their functionality from the standpoint of the interests of the

traditional ruling classes of the country, led by the financial sector. The breakdown of

Lulism was the exhaustion of the mediation between the predatory aspirations of the

Brazilian bourgeoisie and the rights and aspirations of workers. This exhaustion was first

evident in June 2013 and became acute in the subsequent years as the government was

confronted with economic crises and corruption scandals. The Temer administration’s

open confrontation of the working class pointed to a return of workers’ living conditions

to the nineteenth century, but these measures reflected not a turning point but simply an

acceleration of the pace of the prevailing politics. The collaboration of the ruling PT in

confusing, calming, and alienating the popular classes helps explain the negligible popu-

lar reaction to the impeachment, the antipopular assault led by Temer, and Lula’s arrest.

O impeachment da presidente Dilma Rousseff deve ser enquadrado como parte da crise

do modo lulista de regulamentação dos conflitos sociais. As presidências do Partido dos

Trabalhadores (PT) perderam sua funcionalidade do ponto de vista dos interesses das classes

dominantes tradicionais do país, lideradas pelo setor financeiro. O colapso do lulismo foi o

esgotamento da mediação entre as aspirações predatórias da burguesia brasileira e os direi-

tos e aspirações dos trabalhadores. Essa exaustão ficou evidente pela primeira vez em junho

de 2013 e se tornou aguda nos anos seguintes, quando o governo foi confrontado com crises

econômicas e escândalos de corrupção. O confronto aberto do governo Temer com a classe

trabalhadora apontou para o retorno das condições de vida dos trabalhadores ao século XIX,

mas essas medidas refletiram não um ponto de virada, mas simplesmente uma aceleração

do ritmo das políticas vigentes. A colaboração do PT no poder de confundir, acalmar e

alienar as classes populares ajuda a explicar a insignificante reação popular ao impeach-

ment, o ataque antipopular liderado por Temer e a prisão de Lula.

Keywords: PT, Lula, Brazil, Lulism, Neodevelopmentalism

As is widely argued in the literature that critically analyzes the develop-

ment model of the Lulist governments (see, among others, Saad Filho and

Morais, 2018), the Partido dos Trabalhadores (Workers’ Party—PT) presiden-

Ruy Braga is a professor of sociology at the University of São Paulo and the author of A rebeldia

do precariado: Trabalho e neoliberalismo no Sul global (2017). Fábio Luis Barbosa dos Santos is a

professor of international relations at the Federal University of São Paulo and the author of Além

do PT (2017). Patrícia Fierro is an American Translators Association–certified translator living in

Quito, Ecuador.

887806LAPXXX10.1177/0094582X19887806Latin American PerspectivesBraga and Barbosa dos Santos / The Political Economy of Lulism

research-article2019

170 LATIN AMERICAN PERSPECTIVES

cies (2003–2016) opted for class reconciliation as a method for reforming

Brazilian capitalism. This was based on the premise, which is in fact reason-

able, that much could be done to address the country’s acute inequality with-

out confronting the structures that reproduce it. The Zero Hunger program,

which was initially led by a Catholic friar, epitomized this approach. After all,

who would be opposed to ending hunger? But while bread would appease

the poor, reconciliation with the rich required a commitment to so-called eco-

nomic stability. Its founding milestone was the Real Plan, implemented by

Minister of the Economy Fernando Henrique Cardoso in 1994, which com-

pleted a process that turned Brazil into a “platform for valuing international

financial capital” (Paulani, 2008). At the same time that the country was

becoming consolidated as a destination for speculative capital, the flow of

these capitals became indispensable from the point of view of the so-called

macroeconomic tripod. This was a situation that emerged from policies

focused on fiscal targets, a floating exchange rate, and inflation targets. Fiscal

adjustment, high interest rates, contractionary monetary policy, and free cap-

ital movement were the pillars of this macroeconomic strategy. It was this

commitment that candidate Lula secured when he launched the “Letter to the

Brazilian People” during the campaign in 2002. It was, in fact, a letter to cap-

ital, aimed at warding off the specter of capital flight that was looming on the

verge of the election of the workers’ president.

Once sworn in, the PT government was true to its commitment, espousing

all aspects of neoliberal adjustment. The commitment to international credibil-

ity required deepening antisocial reforms such as the new Bankruptcy Law,

which placed workers on equal terms with other creditors, counteracting the

premise that business risks burden the employer. But the main knot untied in

Lula’s first term was the reform of social security. The move from the social

security model to the private pension system broke with the idea of genera-

tional solidarity, in which the contributions of young people ensure the pen-

sions of the elderly, in favor of a model in which each worker has an individual

account managed as a pension fund investment. Generational and class soli-

darity gave way to co-participation in the mechanisms and risks associated

with financial capital (Marques and Mendes, 2004).

This reform was emblematic for two reasons. First, it revealed the PT’s func-

tionality to the interests of the traditional ruling classes of the country, with the

financial sector in the forefront. The president’s prestige among workers was

fundamental in enabling, in the first year of his term, a reform that his prede-

cessor had not achieved because of the opposition he faced. Secondly, it trans-

formed a social right into a financial product. Beyond the macroeconomic

options that caused the first Lula government to be described as “the most

complete incarnation” of neoliberalism (Paulani, 2008: 10), it turned out that

the party’s civilizing perspective was in perfect harmony with the hegemonic

neoliberal rationality (Dardot and Laval, 2010).

However, it was never assumed that PT politics was neoliberal. On the con-

trary, in Lula’s second term, when there was a growth spurt driven by rising

commodity prices due to the Chinese expansion, the proposition that a “neode-

velopmentalist” project was under way was championed by government cro-

nies. After decades of stagnation, the slow recovery of wage-earning power,