by Zirin, Dave
The Chicago School trained economists from all over the world in shock doctrine tactics—and treated Latin America like its own dedicated laboratory. It engineered a coup in Chile (another 9/11 tragedy, this one on September 11, 1973), then fanned out across the continent establishing and training military dictatorships, including in Brazil. But in recent years, the military dictatorship model has become less necessary: political liberals, from Obama to Lula, have been more than willing to embrace the logic of neoliberalism.
Lula’s tenure in office coincided with the George W. Bush presidency’s careening from one crisis to the next, borrowing unprecedented sums from China, getting itself mired in the Middle East, and racking up more than a trillion dollars in debt. This gave Brazil a historically unprecedented opportunity to shake the yoke of perpetual peonage to a United States that had neither the economic nor the military capital necessary to keep South America in line. Chávez in Venezuela, Evo Morales in Bolivia, and other leaders were signaling a new leftward shift throughout the region. Lula’s former radicalism and continued ability to speak the language of the left allowed Brazil to maintain a good relationships with Morales, Chávez, and even Cuba’s Fidel Castro.
Lula cannily positioned himself as a buffer between the extremes of US imperialism, on the one hand, and a radical regional anti- imperialist bloc, on the other. The negotiations over the Free Trade Agreement of the Americas (FTAA) stand as the quintessential example of Brazil’s new power to mediate and even demobilize the radical wave on the continent while also presenting itself as a thorn in the side of the United States. The FTAA marked the hemispheric expansion of the controversial North American Free Trade Agreement (NAFTA), which in 1994, over the opposition of labor and environmental groups, created a “free-trade” bloc and eliminated tariffs between the United States, Canada, and Mexico. As the FTAA was hammered out over the course of the last decade, it sparked antiglobalization protests wherever negotiators met. Cuba, Venezuela, Bolivia, Ecuador, the Dominican Republic, Nicaragua, and Honduras all bitterly opposed it. But Brazil managed to lead a “moderate bloc” in conjunction with Argentina and Chile that for all intents and purposes scrapped the FTAA and, in its place, instituted a series of bilateral trade deals. This was not just an embarrassment for the United States; it established Lula’s Brazil as the key power broker in future trade negotiations within Latin America. While Lula pursued his brand of neoliberalism economically, he used his foreign policy as a way to assert his nation’s independence from the United States. Under Lula, Brazil recognized Palestine as an independent state. He also refused to take part in economic blockades of Iran. He promoted trade pacts that excluded the United States and strengthened relations with the its greatest headaches on this side of the Atlantic: Venezuela, Bolivia, and Cuba. Most symbolically, Brazil promoted and even held meetings of a new formation known as BRIC (Brazil, Russia, India, and China, a title invented by Goldman Sachs), which set about constituting a more-than-credible counterbalance to a global economy dominated by the United States and European Union.
Just as Lula was able to position himself at the crest of a surging wave of Latin American power, he also asserted Brazil as a twenty-first-century subimperial power in its own right by sending troops to occupy Haiti after President Jean-Bertrand Aristide was deposed in 2004. Lula even sent the Brazilian national soccer team over for a friendly match. Hundreds of thousands waited for hours to see Rivaldo, Ronaldinho, and other Brazilian stars defeat Haiti 6 to 0. Brazil’s team was escorted to the stadium by a convoy of white tanks. They called it the Match for Peace. Here is how the Washington Post described the scene:
On Wednesday, U.N. forces—most of them Brazilian—surrounded the stadium in full combat gear. Armored personnel carriers were stationed about 100 yards apart around the stadium, which was protected by fences and barbed wire. Haitian police patrolled with German shepherds and Rottweilers, and helicopters flew overhead. Blue-helmeted peacekeepers carrying shotguns ringed the field inside the stadium.25
If you’re hearing echoes of the old nineteenth-century tactic of US troops bringing baseball bats and balls to the Caribbean, you’re not far off. Many have also pointed out that Brazilian troops in Haiti are using and honing methods developed for controlling large, densely concentrated poor populations—which could be very useful back home, for example in the favelas.
For the next seven years, until 2011, several thousand Brazilian troops aimed to, as one UN official admiringly put it, “turn Port-au-Prince into Disneyland.”26 For all of the UN’s admiration, it must be noted that it bears responsibility for a cholera outbreak in Haiti and that its troops were also used to repress labor demonstrations and protests, among numerous other scandals.27 The cost of this occupation was roughly 450 million dollars per year, in the poorest country in the Western hemisphere—Haiti has 70 percent unemployment and an average income of three dollars per day.
Lula’s Domestic Policy: Image and Reality
At home, Brazil’s rapid economic growth allowed Lula to spend freely on social programs that challenged inequality and made his administration incredibly popular among his base of supporters, despite the stubborn facts that inequality and poverty still plagued the country. Once the economic upturn began to gain steam, Lula launched the social program called Bolsa Família. This is the policy most frequently used to explain Lula’s popularity among the poor. Much of what it encompasses also existed under his predecessor Cardoso, but it was not “branded” in the same fashion. Bolsa Família, which translates roughly to “family purse,” provides direct payments to 13.8 million impoverished families—fifty million people in total—but only if they are able to prove that their children attend school until age seventeen and go to health clinics for basic vaccinations and regular checkups. As the Christian Science Monitor reported, “the stipend is then deposited into the recipient’s bank account (preferably that of a woman),” which has “helped raise 36 million Brazilians out of extreme poverty.”28 Between 2001 and 2011, the infant mortality rate did fall by 40 percent. In the impoverished Northeast it fell by 50 percent, a historic accomplishment. Malnutrition has also dropped, although numerous factors led to this improvement in the quality of life for Brazil’s poor. The program only cost 2.5 percent of the nation’s GDP, but its image mattered even more to Lula’s presidency than its substance because, as Perry Anderson wrote, of “the symbolic message it delivers: that the state cares for the lot of every Brazilian, no matter how wretched or downtrodden, as citizens with social rights in their country. Popular identification of Lula with this change became his most unshakeable political asset.”29 The question that tortures analysts is whether Bolsa Família is a fig leaf on an otherwise neoliberal agenda or whether its existence marks a fundamental departure from neoliberalism itself.
Far more economically substantive, even if less symbolically powerful than Bolsa Família, was raising the minimum wage, which Lula increased by 50 percent between 2005 and 2010.30 Other programs also acted as an economic stimulus to the poor and the working class, such as the crédito consignado, which guaranteed bank loans for household purchases to those who had never before held bank accounts, with repayment automatically deducted from monthly wages or pensions. Lula also required colleges to offer scholarships to poor students, which opened higher education to more than seven hundred thousand poor and working-class students. This collectively brought millions of Brazilians into an income bracket above seven thousand dollars per year, which the government was quick to classify as “middle class.” It was estimated to cost 0.5 percent of GDP. As Lula liked to say, “It’s cheap and easy to look after the poor.”31
The sum total of these programs—the Bolsa Família, an increased minimum wage, and new access to credit—“set off a sustained rise in popular consumption, and an expansion of the domestic market that finally, after a long drought, created more jobs.”32 It also, even more importantly, created a popular impression that Lula genuinely cared about the poor—even as he was t
urning Brazil into a neoliberal paradise and the engine of an ailing global capitalism. Lula’s supporters are quick to point out that progress for the poor under his administration, while rife with contradictions, was truly substantive. They point to numbers that, on paper, appear staggering: government data show the number of people classified as “poor” dropping from fifty to thirty million in Lula’s first six years in office; the number of those described as “destitute” was cut in half.33
Yet when examining just how successful Lula was at “tackling inequality” while achieving growth, it is worth looking closer and remembering something Marcos Alvito told me: “Statistics are like a bikini. They show so much, but they hide the most important parts.” First, the inequality numbers pointedly do not include the new stratum of Brazil’s superrich, a rapidly growing class of billionaires, who have purchased the H. J. Heinz ketchup company, Anheuser-Busch, and other multinational companies. After buying Heinz and laying off hundreds of workers at its Pittsburgh headquarters, the wife of one employee rushed to early retirement referred to the situation as “the Brazilian plague.” Meanwhile, between 2006 and 2008, the number of Brazil’s millionaires increased by 70 percent—more than that of India. Taxes are also highly regressive for working people—another reason the excessive taxation to pay for new soccer stadiums spurred protests in 2013. If you live on less than twice the minimum wage, half of your income is taxed. In contrast, if you make thirty times the minimum wage, only a quarter of your income is taxed.34
One result of all this growth on capitalist, neoliberal terms has been that the oligarchy—the social class that has dominated Brazil since its founding five centuries ago—has actually become more powerful. This is particularly the case in Rio. The 2016 Olympic site is the only region of the country where inequality actually worsened under Lula’s rule. The oligarchs’ land ownership has not only increased but has become more concentrated than it was fifty years ago, a result of Brazil’s transforming into one of the leading agribusiness and beef-producing countries on earth. As a part of this land grab, Lula and his successor Dilma Rousseff have been far tougher on the landless peasant movement than his right-wing predecessors.
In addition to the oligarchy’s traditional power base, the countryside, over the last decade they have also ventured into the cities, where real-estate speculation reigns. Urban real-estate speculation, as anyone in Brazil’s megacities will be quick to tell you, has followed an even more aggressive pattern, with a rush to seize urban land. When I was in Brazil, I visited comfortable middle-class apartments with rents that would make a New Yorker blanch. At one, on the twenty-first story of a high-rise, the elevator had been “out” for months, forcing people to walk up and down the stairs. It is like a slow-motion version of the age-old practice of landlords burning tenants out of their apartments. “They think they can turn this place into a luxury hotel,” the residents told me. “So they are doing what they can to make us move. It is happening everywhere.”
Not to shock anyone, but real-estate developers and construction workers are the biggest contributors to Lula’s Workers’ Party. Chris Gaffney described the situation to me:
It’s important to remember that Brazil, twenty-five years ago, was still a dictatorship . . . so the consolidation of democratic institutions is recent and they’re still very weak. It’s very easy to criticize, especially from a North American perspective, what we perceive as the neoliberalization of the Brazilian economy. But before, there was really no stability, so inflation’s been under control for fifteen years, the economy has grown, it is more stable, but at the same time that there are people that have left poverty, the rich are more rich than they’ve ever been. Lula and the PT gave out scraps to the left that allowed them to really open up the country for massive profits on the right.
A Political Root Canal
During his second term in office, Lula expanded both his social welfare projects and Brazil’s importance on the global stage after the discovery of massive offshore oil deposits in 2007 and 2010. With eighty billion barrels of oil and gas deposits for export, Brazil joined rarefied company among energy-producing countries.35 The PT has pursued an aggressive program of offshore drilling (even though environmentalists were critical players in founding the Workers’ Party), with a terrible toll on Brazil’s environment.
Lula also dramatically slowed the gains of the Landless Workers’ Movement (Movimento dos Trabalhadores Rurais Sem Terra, or MST). The MST has, for twenty-five years, been one of the most important organizations for social change in Brazil. It has 1.5 million members and a presence in twenty-three of Brazil’s twenty-six states. Under Cardoso, a series of violent confrontations with the government turned the MST into an international cause. The attention did not stop Cardoso from criminalizing the movement, meeting its occupations with armed assaults. Believing Lula and the PT to be a friendly government, the MST shifted its strategy away from occupying public lands and began focusing on the areas gobbled up by agribusiness. Yet Lula resisted meeting with the MST until 2005. The meeting was hostile, with MST leaders pledging afterward to return to their confrontational ways. But they had been weakened by their earlier alliance with the PT.
Given that Lula was tough on labor unions, the environment, and the MST, one might think that grand social movements challenging these imperatives would mark his presidency. One would be wrong. Lula succeeded in dismantling any kind of popular response to his agenda. This point is critical, because it explains the spontaneous, disunified, and youthful nature of the 2013 protests.
Lula was able to demobilize the opposition to his neoliberal policies first and foremost by thoroughly transforming both the PT and the main trade-union federation that he helped found, the CUT. He “converted the party from a ‘movement-party’ to an electoral party.”36 These bureaucracies became a part of the ruling apparatus of the government and in return they were Lula’s great defenders. The PT was now a political machine, in charge of accruing votes and doling out twenty thousand highly paid federal jobs. The CUT was now officially in charge of the country’s largest pension fund. They were “inexorably sucked into the vortex of financialisation engulfing markets and bureaucracies alike. Trade unionists became managers of some of the biggest concentrations of capital in the country. . . . Militants became functionaries enjoying, or abusing, every perquisite of office.”37 The union paid a price for this. During the 1980s, under a period of dictatorship, the CUT represented more than 30 percent of Brazil’s workers. Today, after a decade of Lula and the PT in power, that number is now 17 percent.38 That is in many respects the most stunning statistic of Lula’s presidency. The bitter fruit of neoliberalism—and its siblings, austerity and inequality—is that when these economic policies flourish, even under a “workers’ party,” the workers suffer.
The majority of the Brazilian left supported the PT from its formation in the 1970s through the election of Lula. The general impact of Lula’s presidency was to throw this left into disarray and to confuse and demobilize social movements. Lula retained the loyalty of important sections of the left with large social bases, like the MST and the CUT, even as he carried out policies aimed at satisfying the international financial powers at the expense of Brazilian workers and failed to follow through on the agrarian reforms the MST had turned into an international issue. The PT was able to keep its core, but this new organization led to a massive disconnect with the working classes and shop floors from which the PT grew. I spoke with Marcelo Freixo, Rio’s mayoral candidate from the left-wing Socialism and Freedom Party (Partido Socialismo e Liberdade, or PSOL), which formed after splitting from the PT. Freixo is an elected lawmaker in Rio who has repeatedly risked his life to expose the city’s powerful militias; he even had to flee the country in 2011 because of his work.39 He told me,
The arrival of Lula in power actually weakened social movements initially because it co-opted them. These were people who had historically fought side by side with the PT and with Lula. So they naturally
wanted to go with Lula, but many of them were co-opted as Lula moved to the right during his time in office. One of the damaging aspects of this is that for young people, it looks like all parties are the same. That they all form coalitions and come to power and behave in a similarly corrupt way. Lula is now allied with Fernando Collor, who was impeached in the early 1990s, and with [José] Sarney, who was a corrupt politician, Brazil’s first democratically elected president [after the end of the military dictatorship]. They’re all now aligned in the government. This generated amongst the population a sense that “they’re all the same.” That’s very difficult to reverse. We are working on this, trying to reverse this perception: that’s why our campaign has involved social movements as well as many young people.
The PT also lost many of its theorists and academics, who abandoned the party in despair. Radical Brazilian sociologist Chico de Oliveira, one of the historic founders of the PT, left the party in protest. When Perry Anderson asked Oliveira whether Lula’s effect on the left could be compared to Franklin Roosevelt’s New Deal in the United States, Oliveira replied that
a more appropriate analogy . . . [is] the South Africa of Mandela and Mbeki, where the iniquities of apartheid had been overthrown and the masters of society were black, but the rule of capital and its miseries was as implacable as ever. The fate of the poor in Brazil had been a kind of apartheid, and Lula had ended that. But equitable or inclusive progress remained out of reach.40
In 2004, expelled PT members formed the aforementioned Socialism and Freedom Party, an electoral left party that has had some electoral successes and important, albeit not extensive, connections to the broader social movements in the country. Its divisions from the MST can be seen in the comments of João Pedro Stedile, an MST leader, who said, “The PSOL tried to reconstruct a PT of the left but did not manage to do so, because the tactic, the [electoral] path is defeated. We will not accumulate the forces to vie for power through institutional paths.”41