State, Market, Labour and Dependent Industrialization in Latin America: A Class Analysis of the Historical Development of Capitalism in Brasil

Introduction
Brasil is a country steeped in contradictions historically and contemporaneously. It is the only Portuguese-speaking country in Latin America, but with the largest population in the region. Undoubtedly the economic giant of Latin America due to the size of its market and level of industrialization, yet it has the fifth highest level of inequality in the region. Being one of the ten largest economies in the world and along with Russia, India and China considered the leading newly industrializing nations in the world, and a middle income country; it is still more often than not categorized as a developing country due to a high prevalence of poverty (Edwards, 2001: 79).
Having been the site of the first of military putsches that would lead to an era of Bureaucratic Authoritarian States in Latin America , Brasil today has a model constitution and is the only country in the region with a trade union’s Workers Party (Partido dos Trabalhadores) at the helm of the state. The workers party in power now for seven years though, seems interested in wielding anything but workers’ power and the Brasilian “puzzle” deepens .
How could this plethora of contradictions be interpreted, explained and integrated within a theoretical framework that could project its transcendence?
This paper is an attempt to problematize the evolution and consolidation of the present socio-economic and political state of Brasil with the view of grappling with possibilities of transformative change in the country. We will be concerned with understanding the dynamics of the state, markets and labour in the process of the evolution of the Brazilian economy and society and the unfolding through contention, of a future in the making, of Brasil.
In our view: the conquest of Latin America and particularly Brazil, marked the beginning of modern capitalism ; the history of Brasil thus is strictly one of evolution within and as a part of a world capitalist development and this has been a determining factor in its evolution as a nation; the relationship of Brasil within this world-wide system and its global market has not been either a linear one or marked solely by uneven development, it has involved contentions by social groups –particularly classes and fractions of classes- which have shaped the Brasilian state and the roles these have played and; the labour movement encompassing the working class, peasantry and other working people constitutes the crucial transformative category within Brasilian society, however despite a workers party being in power, this does not amount to the working class wielding power.
To sum up, we assert as our theses that: the Brasilian economy and polity have been historically established within a context of both uneven and combined development but not in a mechanical manner, nor strictly one of the development of underdevelopment as dependency theorists posit and; the industrialization of Brasil while being within the ambit of dependent capitalist development was a class project which built not just modern Brasil –industrialized and centralized - but indeed primarily, an industrial capitalist class, a national bourgeoisie . To understand as well as to transform Brasil, a class analysis of this historical evolution and the present conjunctural challenge emerging from it, is imperative.
In furthering our set tasks, this essay is divided into five broad sections. In the first we engage with theoretical considerations of possible interpretations and understanding of social-historical evolution in general and of capitalist development in Latin America in particular. The next section then takes a look at the early beginnings of Brasil as a nation. This takes us through the periods of colonization, empire and the first republic. Subsequently we look at industrial growth and the industrialization of Brasil. Here our main emphasis would be on the contradictions leading to and within the fifty-year, industrialization of the country. This would lead us to an analysis of Brasil during and after its democratization in the period of neoliberal globalization. Finally as our conclusion, we shall look at the prospects of transformation of Brasil considering labour and power.

Theoretical considerations on historical development
We briefly consider three possible theoretical points of departure for our analysis. These are: historical institutionalism (HI); underdevelopment and dependency theory (UDT); and historical materialism (HM).
We are of the opinion that each of these frameworks, while accommodating a broad array of traditions, does posit its defining perspective on the evolution of historical development in general and capitalist development in Latin America in particular. We would however for reasons we will state below consider an historical materialist world view rooted in the Marxist traditions, as providing for us the most incisive theoretical framework for interpreting Brasil’s development and the interplay of the social actors involved in this historic process.
Historical institutional theory interprets the development of historical and socio-geographical units of humankind stressing the interplay of institutions as social actors in its interpretation and path dependence as its system of analysis. It asserts that there are “critical junctures” in historical evolution, during which events of seemingly inconsequential circumstances which are not predictable and on the converse are random, set in motion an historical trajectory based on decisions made and options taken at such points in time (cp: Pierson, 2000; pp263, Mahoney, 2000; 510 -512).
This trajectory is assumed to continue in an evolutionary manner, because there are beneficial returns to the key institutional social actors in that society. The new situation is thus reinforced until other exogenous factors impinge on this set trajectory. It is this schema of HI that Collier and Collier utilize to explain away the incorporation of labour in Latin American states, substituting the institutionalized bureaucracy of the trade union movement for the entirety of labour, as it where.
While not totally devoid of analytical use beyond the obvious reality that history always matters anyway, HI in our view presents the image as the substance, making institutions (structures, ideologies, norms, etc) appear autonomous in their interests or at the very least making any underlying interest conjectural or coincidental and not essential or inherent . This identifies HI’s revival in the anti-essentialist waves of the late ‘70s and ‘80s which witnessed the onslaught of post-structuralism on any sense of a logic in history, and emancipatory struggles, which become to its various strands (including HI), mere ‘Grand Narratives’ We consider HI a grossly inadequate theoretical framework for anything beyond contemplative philosophy. Being more concerned with the point of changing the world as our point of departure on theory, we will at this juncture, go no further in engaging with it, in this essay, beyond pointing out that conjunctures are themselves embedded in certain logic of societal and historic development that the social players constrain or engender the choices that are made. This laws, we assert, can be deduced from the material life of humankind, in relation to nature and it’s self .
The roots of dependency theory go back to the earlier structuralist economics analysis of the ECLA which it took further leftwards with Marxist-tending analysis . A leading UDT proponent, Andre Gunder Frank identifies three basic contradictions as constituting UDT’s “thesis of capitalist underdevelopment”. These are; “the contradiction of expropriation/appropriation of economic surplus”, “the contradiction of metropolis-satellite polarization” and “the contradiction of continuity in change” (Frank, 1969: 27 – 38). We will argue that, while the primary contradiction identified by this thesis has its origins in class analysis, UDT proponents focus more on the second contradiction as the lodestone of their theory .
Faletto and the Cardoso in analysing “developing but dependent countries” do however, harp on the necessity for dependency theory to further analyse the role of agency, social actors for and against the status quo, and ideology along with structure, stressing the political character of the process of “social and economic transformation” (Faletto and Cardoso, 2008: 218 – 230).
While definitely advancing a convincing argument, UDT does not adequately resolve some critical theoretical questions in its analysis, as Leys points out (Leys, 1996: 76 – 85). He identifies three basic inadequacies bearing on the theory’s conceptualization of: exploitation; socio-economic units of analysis and; causative dynamic of perpetual uneven development. His position could be summed up with the following questions which we identify with: does the analysis of over-exploitation of Latin America and the periphery as a whole not make an understanding of ‘exploitation’ a mere whimsical thinking once it loses sight of the valorisation of capital which labour is enslaved to serve as its cross of exploitation? Might it also not be that ‘mode of exploitation’ is substituted for ‘mode of production’ thus making nonsense of the unit of analysis of UDT? And does not a mere application of uneven capitalist development without that theoretical framework’s adequate cognisance of combined development obscure the ‘whys?’ of inter-regional exploitation more than expose it especially in a globalised world?
A major cause for concern in evaluating UDT also, as Leys points out, is the practice of UDT theorists. It is not only state-centric, even where and when it has (as it often is) been laced with huge doses of Marxist-tending analysis, its praxis at best upholds populist agendas and are bereft of the rudder of class analysis and class struggle. It flounders thus, in our view, emerging on the field of real politick for change as a Third Worldist ideology for critical academics and radical state policy technocrats, its consistency as a revolutionary theory for revolutionary practice in itself, thus loses its potency.
In positing an historical materialist perspective with the instrumentality of class analysis, we must first proceed by realizing, as Resnick and Wolff put it, that there exist, a “diversity of class analyses” . Basically these entail singular construct based on property, power resources and income level and composite ones which seek to integrate these three. We might be constrained from going into the full gamut of the argument here, but we do locate class analysis within the Marxist traditions as being based on the relations of production. We however see as useful Erick Olin Wright’s schematic simplification of the levels of abstractions of and relations between “class structure” and “class formation”, at the levels of mode of production, social formation and conjuncture (Wright, 1985: 9).
A Marxist class analysis situates the source and locus of development and underdevelopment, exploitation and the need for domination to ensure its perpetuation, in the relations between labour, its social organisation and interaction with nature. Class, is above all considered a relation which enables the process of humankind’s production and reproduction of its social self, to be one of the exploitation of the many by the few, the propertyless by the propertied, the poor by the rich, capital by labour. Underdevelopment becomes not merely a distinguishing reality between nations, but one between the employer and the employed, between the city and the countryside, between dead labour of yesteryears and the subordinated labour of today. The structure of class thus takes live in formations of domination and resistance that in contestation manifest the class struggle.
What are the consequences of these for a Marxist class analysis? How do these relate to state and markets? The state’s emergence in human history is rooted in irreconcilable differences between classes in society. But to function as something seemingly neutral, it has to forge some semblance of reconciliation to legitimiza its rule. The state thus becomes a social relation reflecting the balance of forces in broader society. Like the permanent opposition role of labour in industrial democracy within the workplace, except in a revolutionary situation, such balance of forces which the state represents is always tilted towards the dominant social class in society. Similarly, the ideas of the dominant class are the dominant ideas of an age, resulting in the veil of ideology as “common sense” (See Gramsci) and false consciousness as awareness.
The myth of the free market, is one of the ideological construct of the capitalist class. The freeset of markets were constructed, safeguared and built on pillage, plundet and piracy aided and abetted, indeed in many cases initiated by the state of the capitalist.
A class analysis calls forth a class agenda of the working people, the labourers whose laboutr it is that creates wealth. It is in this light that the internationalism of the working class crises to its nadir of importance. A Marxist class analysis would urge stronger ties with the working class not only in the regions of the underdeveloped world, but of the whole world. Not surprisingly, this is no mean task. The trade union bureaucracies in advanced capitalist countries no less than in the worst underdeveloped country have come to see themselves more as mediatory conveyors between the workers and capital. A strong rank and file movement becomes both necessary and desirable for revolutionary conquest and consolidation. The state would have to be found anew through struggle, but none the less, which takes into cognisance both the joys of past passing victories and the lessons from failed struggles.

In the beginning
Brazil became a colonial possession of Portugal with the signing of the June 4, 1494 Treaty of Tordesillas, six years before Pedro Alvares Cabral set foot on it (Edwards, 2007: 11). This was during the era of Europe’s mercantilist transition from feudalism to the capitalist epoch. Land then still exerted its primacy as property, while trade was driving the turn to industry.
The territory of what would become Brazil lacked a large settled population with silver and gold as that which the Spanish had ‘discovered’ in other parts of what would later become Latin America. Pau-brasil , the wood from which the name of the country was to be derived was the main commodity which the Portuguese traded for with the natives on the shores of the territory’s North-Eastern region.
Sugar was to mark the first of what would be three commodity cycles that played critical roles in shaping the growth and uneven development of Brazil (Frank, 1969: 180 – 183, Baer, 2001:12 -14). This was between 1540 and 1640. During this period, “the Portuguese relied on the institution of slavery” (Edwards, 2007: 21). This inhumane institution subsisted during the second cycle (of gold) as well. It is important to stress from a perspective of class analysis that slavery in an era of mercantile capitalism could not but be a summoning of the spirits of a past form of labour, from the classical slave-owning epoch in the service of a nascent modern industrial society, which like the claimed juju in West Africa, could not be sustained for a long period .
For the UDT protagonists, this period was one of the first of entrenching structures of dependency between metropoles and the Brazilian satellite. While formally, the metropolis was Portugal which owned the colony, a seeming shifting of metropolis-satellite relations within concentric circles includes the Dutch and subsequently, the British . This analysis however undermines coming to grasp with the internal logic of an emergent capitalism which created ghosts of a class from the past (the slave) as much as it re-created a propertied form of the dominant class, the fazeindero, of the lands as components articulated into a world capitalist market. The collapse of the sugar market after the Dutch flooded the market with sugar from the Caribbean in the mid-seventeenth century reflects the contentions within as much as between countries that would be assumed to constitute the metropolis on one hand and the satellite states on the other. Three decades of stagnation set in after this decline during which the agricultural economy of cattle and the large faziendas set up as adjuncts to the sugar industry became the mainstay of a largely subsistence society, strengthening the political power of the large-scale farmers in the North East.
The gold cycle of the 1690s to the 17602, not only shifted the axis of production from the coast of the North East further interior to the central south of Minas Geiras, it was a furthering of the expansion of class stratification and the state power. With it came what Baer describes as “mercantilist control” (op cit: pp14). The miners had to resort more to “free” labour . Some of the miners it must be noted were small-scale miners who came to mine in their own interest, solely. Some would succeed and become part of the propertied classes, a great number would fail, swelling the ranks of men (and to a lesser extent, women) who would eventually be free of property, owning only their labour power as possible productive property. The early beginnings of the proletariat as a class in Brasil could be traced to this period.
This was when the (colonial) state took on a more interventionist role in the economy, with one fifth of all gold mined going to the Portuguese crown and all exported gold being part of convoys in voyages bearing the seal of the colonial overlords. It was also not until decades later in at the dawn of the nineteenth century, that Portugal allowed any manufacturing concern in Brasil
The period of the empire in Brazil has been well documented and its consequences (See for example: Bethell, 1989; Fausto and Brakel, 1999; Levine and Crocitti, 1999; Baer, 2001). We will not let this delay us here due to space and time. The dynamics of state as relations expressing the balance of power between and (as it more often than not is, except during or in the aftermath of a revolutionary situation where and when the ruling classes have to submit some extent of domination to be able to maintain hegemony) within classes and class alliances, we must however point out, is expressed in the political structure of the days of empire. Dom Pedro I ruled as a ‘moderator’ and Ceasarist symbol after independence and not as an absolute incarnation of the state. This was instituted with the 1824 constitution. The military’s perennial role in Brasil’s state and nation-building was signalled when on November 15, 1888 General Deodoro de Finseca led a military putsch that declared Brasil a republic .
Our concern here which is to lead us to the crux of industrialization in Brasil, is locating the dynamics between the state, market and labour.
The last two decades of the empire and the era of the first republic has been described by Leslie Bethell as “the apogee of export orientation in Brazilian economic history” (Bethell, 1989: 217). This rested on a coffee economy. The boom in world market prices of coffee in the 1830s and 1840s was to initiate a cycle of mono-cultural, commodity-driven economy with the greatest importance in Brasilian history
The accumulation of capital engendered some extent of industrial growth. The abolition of slavery in 1889, a year after Brasil was declared a republic by the military, freed labour to be able to put the fetters of wage slavery on it. There was however an upsurge of immigrant labour from Europe (mainly Italian) to take up the more productive space in wage slavery with the ex-slaves serving mainly in the most menial of jobs (See Baer op cit, Fausto and Brakel op cit). Wage slavery, of all races, is definitely much more instrumental to heightening effective demand than outright slavery ever could be. An internal market thus grew as well, even while the economy was geared towards agro-export (mainly of coffee, though tobacco and grains were as well inclusive, to a lesser extent) as its primary production model.
A nascent class of entrepreneurs that had accumulated wealth during the gold cycle in the south eastern and central southern region could more decisively engage the state , as both an economic and a political power within the society. While the Portuguese crown had slowed down the development of such physical infrastructure as roads to minimize smuggling, with the coffee-growth and its backers engagement with both the state and international finance capital, infrastructural development geared towards this agro-export model took on hold.
The October 29, 1929 Wall Street crash echoed across the capitalist world, not the least in Brazil.

Industrial growth and industrialization
Industrialization it could be argued had started in Brasil during the last years of the empire and the first republic. Considering industrialization from a broad perspective as a major plank of the modernization of a largely agrarian society through technological innovation and economic development this could be accepted. The pre-1930 Brasil resting on capital accumulated from the coffee trade and massive international financial outlays had set itself on the path of industrialization, producing a sizeable amount of its textiles and beverages, for example, in this period (Edward, op cit: 84 -87). During World War 1, the first efforts at Import Substitution had actually taken place (Baer, op cit: 31 -32).
It has however been further argued that what had existed then in Brazil was more of spontaneous industrial growth distinguishing it from the subsequent industrialization which was “accompanied by drastic structural changes in the economy” (Baer, op cit: 29). The 1930 “Revolution” it is thus argued initiated what would be the industrialization of Brasil, passing through several phases. We would, to a large extent, align with this perspective. It must be said though that irrespective of which of these two views is adhered to, as Bethell points out, points out theorization on industrialization in Latin America was subsequent to industrialization as policy and policy itself was in the wake of practice (Bethell, 1996: 207). This would lead us to consider the earlier structuralist economics, of which ECLAC was the centre as an affirmation of defence of this pathway. Dependency theory thus, in our view becomes its theoretical ‘other’ which engages the limitations of this in seeking a self-reliancist development. Indeed, UDT set itself the task of proving this phase to be merely a moment in the five hundred years of Latin America’s capitalist development of underdevelopment, while leading to the same state-centric solutions.
What were the historical dynamics that spurred the half a century of industrialization in Brasil? What were the defining characteristics of the industrialization? What was the alignment of class forces within this and how could the entire process be adequately explained with class analysis? It would not be possible to extensively address these salient issues here due to space and time. We shall however try to put these in perspective using broad brush strokes of class analysis.
Brasil was the first country in Latin America to commence an industrialization programme. It was also the only one to complete it. Closely aligned to this is the fact that it recorded the first of populist state leadership and was to be the site of the first of military-regimes constructed ‘bureaucratic authoritarian states’ in the region. The 1930 ‘revolution’ was indeed a passive revolution with which the nascent industrialist capitalist class aligning itself with the North Eastern fraction of the fazeinderos, sought to break the hold of the large coffee growers on power. This however was not what made it a ‘passive revolution’ as much as the fact that it was an offensive road block to the emergence of a more radical leadership of Brasil as a palpable possibility on one hand and the defensive sign post to a Brasilian ‘New Deal’ even before Roosevelt commenced his in the US, in response to the effects of the Great Depression. While the later, stemmed from external impact the former had fundamental internal dimensions without which the nuances behind Vargas “passive revolution” could hardly be adequately grasped.
First, industrial growth at the turn of the century threw up a nascent class of industrial producers, merchants and professionals, particularly in the southern and eastern states. With these of course arose a yet weak working class, with an increasing volume of immigrant workers, which was spurred by anarchist, socialist and democratic ideals. In the words of Keen, at this stage of the country’s development: the challenge of modernizing Brasil “fell to the rapidly growing urban bourgeois groups and especially to the middle class which had begun to voice even more strongly its discontent with the rule of the corrupt oligarchies” (Keen, 1996; 349). The ties between the large coffee producer and the major bourgeoisie whose accumulation of capital mainly from the coffee trade which often made the two, one and the same, slowed down such possibilities and as Bethel points out it was not until 1928 that in Sao Paulo “a representative organ of the industrial bourgeoisie” emerged (Bethell op cit: 274).
Second, the sharpening of contradictions of world capitalism had begun before the 1929 crash. Immiseration had spurred discontent in Brasil as well. In the twenties the trade unions had organised the first general strike in the country, but still remained weak, with little if any ties with the vast sea of peasant labour which was still held under the magic of the land owners ideology through ties of blood, religion, stasis and in general ‘consent’ in the Gramscian sense (Jackson and Parker, 2003: 2).
Within the military, groups which had come under Comtean positivist, socialist and anarcho-democratic influences, rose to military messiahnism (McCann, 2004: 261). Being middle-level officers, many of them lieutenants (“tenente” in colloquial Portuguese), the revolt they started on July 5, 1922 was known as the tenente revolt. The tenente represented two currents one with a nationalistic populist programme to eradicate the power of the oligarchies through central state control and the other which with this agenda also sought to curb the excesses of the masses (cp Bethell, op cit: 299 -300). The revolt they ignited while eventually repressed five years later, was to spur the 1930 October “revolution”. The right wing of the tenente were to be co-opted into the Vargas regime at its infancy and a number of them served later during his fascist Estado Novo regime as interventors, which were appointees of Vargas that served as sole administrators of states and cities where the constitutional authority had been deposed by the federal government.
In October, 1930, the military constituted the Junta Pacificadora, which deposed the regime of Washington Luis and his deputy Julio Prestes (which represented the interest of Sao Paulo coffee growers), who had been declared as winner in the presidential election earlier in the year, against Vargas. Vargas was declared interim president by the junta. This was the Brasilian bourgeois revolution. In 1933, Vargas ran for and became President. The following year, a new constitution marked the beginning of a new republic. The provisions of this constitution made it mandatory for Vargas to step aside after one term in office by 1937. He however, organised a coup and instituted the fascist Estado Novo, the following year. He was eventually forced to leave office in 1946 for Dutra one of his protégés. He staged a come back through free and secret elections in 1950. On August 24, 1954, in the midst of a demand by the Air Force that he resign in the wake of accusations on the attempted murder of an opposition figure, Vargas shot himself, leaving behind a moving Carta Testamento and the foundations of a new Brasilian economy and body polity moulded in the image of the industrialist-capitalist class, despite Brasil’s continued dependent status in the global world capitalist market.
At the heart of the economy was the first phase of the Brasilian industrialisation project, which continued through a succession of populist leaders until the April 1, 1964 military coup. The period from the coup till 1980 could be considered as the second phase of the industrialization project. This was when the military assumed the reins of state to defend the capitalist order in the name of growth, development and a bayonet-guaranteed peace.
The aim of this paper being to identify the dynamics of state, market and labour in the process of dependent industrialization in Brasil, and considering the limitations of space and time, a detailed analysis of the industrialization itself might be beyond the purview of our task. We shall however state the key elements of these two phases of the project.
Edwards argues that the 1930 revolution marked the “entrance of new important groups into national politics” (Edwards, op cit: 51). These new groups were the nascent bourgeois capitalist, its technocratic middle class and the Northern sugar plantations fazeinderos, which the emerging bourgeoisie forged an alliance with against the coffee and milk dominance of Minas Geiras and (especially) Sao Paulo coffee growers . These bourgeois historic bloc pursued a capitalist accumulation project by instituting state planning and implementing the import substituting industrialization strategy. The trade union movement was incorporated through the co-optation of some elements of the working class movement, and the hegemonic class alliance legitimized itself before working through the institution of social reforms which included establishing a national minimum wage and thus boosting effective demand within the country’s internal market.
Coffee continued to still play an important role although now with state intervention which entailed the purchase of excess coffee beans and thus served to protect the coffee growers from the utmost of vagaries of the market. The state petroleum company Petrobras was established and efforts at en Electrobras initiated though stalled initially by intrigues in parliament . The automotive sector was instituted in the 1950s during the prosperous administration of Kubitschek feeding into the iron and steel industry that had earlier been set up. The West might have enjoyed the Keynesian Welfare Nation State of assumed Fordist bliss and a capital-labour pact forged through liberal democratic means. Brasil could as well claim that its corporatist model, enthroned through pro-fascist means by Vargas and which had started to democratise (even though the military were never far from its window) had brought about growth, peace and a more prosperous nation. But just as was to be with the West and indeed the whole world, starting from the late 1960s, the devil of inflation crept in, galloping beyond the divinations of controlled inflation a la Keynes. And also quite importantly the ISI model failed to guarantee national independence; export of raw materials and import of capital still remained pervasive (Wynia, 1990: 214 -215, Bethell op cit: 208 -209).
This was the situation that set the stage for the March 31/April 1, 1964 coup and the next stage of capital accumulation as industrialization in Brasil. Not surprisingly, as Anglade put it: “the first concern of the government established by the 1964 coup was to reduce the high rates of inflation supposedly caused by excess demand” (Anglade, 1985: 63 -64). He further argues that the state embarked on an expansionist programme but kept inflation down through attacks on the working class, particularly by reversing the hitherto subsisting minimum wages. Capital goods were critical commodities in this expansionist programme and cheap credit (until the Volker shock) from the US (particularly through Citibank), was welcome and utilized in driving this second, harder phase of the ISI.
Fausto and Brakel document how in this period, with its Atois Institucionais (Institutional Acts), Inquesitos Police-Militares (Police and Military Investigation) IPM powers, and eventually ‘mandate’ or decrees, the military rolled back political liberties won in the eighteen years of the second republic’s democracy, destroyed job security, subordinating all of Brasilian social life to the accumulation of capital, to make the “Brasilian miracle” of 1968 -1973, possible (Fausto and Brakel, 1999: 280 -281). This ‘miracle’ was when GDP growth rates averaged 11.3 per cent and per capital growth rates 8.4 per cent (Anglade, op cit,). At the same time, the Gini index which measures inequality in income distribution increased to 0.64%; this was one of the worst in the world.
The continued expansion of debt-driven, and consequently dependent expansion of capital accumulation by the Brasilian state in the 1970s paved the way for the lost decade of the eighties after the oil shocks and global recession of the 1970s . The Brasilian military which had come in as the Caesar of the industrialising propertied class of a national bourgeoisie in 1964, to steady the boat being rocked by the economic crisis and rising social discontent being expressed in a furthering of the politicisation of the popular sector, had to negotiate its exit in the 1980s , amidst even worse socio-economic woes and political flux.
Democratisation came in the wake of the neoliberal counter-revolution which Thatcher’s Britain and Reagan’s America had started to construct on a global scale after the Chilean experiment of the Chicago boys, written in blood on Latin American soil. Post-military Brasil was thus a triple river-crossing. Globalisation and liberalization flooded into the sea of change via direct elections, which heralded Brasil’s march through the last decade of the twentieth century.

Democratisation, globalisation and liberalization
The defeat of the military candidate in 1985 marked the end of class rule through diarchy and the beginning of a “New Republic” (Edwards op cit: 110 -115). The process of democratisation was however to take another five years with the adoption of a new constitution on October 5, 1988 as its high point. Thus, Brasil’s democratisation and political liberalization was consummated in the second phase of neoliberal globalization’s world wide onslaught .
Inflation from the military era had galloped to hyper-inflation making economic issues to come to the fore in the determination of the choices of ruling class leadership by the masses as well as the challenge of ruling class politics with the growth of the PT which would come to power twelve years after the Fernando Collor de Mellor was sworn-in as the first post-military era president of the country. The Brasilian ruling class had to come to terms with the neoliberal state of the world and liberalise . It was believed that a PT government would roll back this state of liberalisation of the economic sphere, but that has not been the case, Lula’s PT seems quite friendly with international finance capital.
It is not our intention here to go in-depth into the dynamics of the democratisation process and the accompanying liberalization of the Brasilian economy and society in the age of globalizationas, since we are constrained here by scope. It shall suffice our argument to point out that the industrialization of Brasil as a class project could be considered a success despite the dust of crisis at its termination. It created one of the strongest capitalist classes in any of the peripheral countries within the world-wide system of capitalism. For example, “the effect of the crisis (i.e., the drop in production) of the early 1980s was less serious in Brazil than in Argentina in 1981 (-16 percent) or Chile in 1982 (-21 percent)”, Ominami, 1991: 81. We could only further add that its democratisation was at the point in world history when neoliberalism was being constructed as a global class project of the bourgeoisie (see Harvey, 2007). This was not coincidental; we are however constrained by the limits set this paper not to delve into this terrain here and now. Our summation would simply be that the industrial bourgeoisie that had emerged from the industrialization-as-class project of Brasil was aptly suited to further the integration of Brasil within this global construct of neoliberal globalization
Brasil it has been argued was the last of the Latin American countries to get into the neoliberal boat (Bianchi and Braga, 2005: 1747). The 1994 Plano Real was the country’s ruling class’ negotiation of its terms of opening up. This of course does not necessarily suggest independence from global capitalism which holds all (including the working people in advanced capitalist countries) in its thrall. What needs to be added here is that on one hand, the doctrine of rolling back the state is actually a myth, a necessary component of the ideology required for the material construction of neoliberalism . On the other, the Brasilian Plano Real reflects not just this general reality, but as well, the use of state powers by a bourgeois class that had emerged with strength from industrialization, to with one stroke address inflation –with the socio-political contestations to its authority that it ignites- and its continued relevance within the global capitalist market which includes the domestic market.
Political liberalization on the other hand was necessary for both internal and external reasons.
Internally, the military could no longer contain a rising working class within the system of diarchy it had hitherto perfected. The Brasilian trade union movement unlike that in most Latin American countries during the eras of both the populist and bureaucratic authoritarian state strategies bourgeois classes industrialising within late capitalism, was not incorporated into the state, and also quite importantly despite the socialist convictions of elements in its leadership was also not affiliated to communist parties (Levitsky and Mainwaring, 2006: 33). Its ‘new unionism’ was however a very critical component of the challenge to continued military dictatorship. There were thus, both pressures from it and confidence that letting the lid off political repression would not pave the way for communist subversion, a major justification for overthrowing Goulart and instituting the military as the capitalist class Caesar in the first place.
Externally, the world was changing. Neoliberal globalization was asserting itself both materially and ideologically as the only game in town. The bars of military dictatorships that Euro-America had helped construct and maintain as bastions for the furtherance of valorization of capital in the days of yore across the global south, were now becoming fetters, to the restructuring of global capitalism. Transnational capitalist forces needed less restriction to access and dominate society as much as its markets, with the myth of a self-regulating market. Parts of the ideological arsenal of the free market utopia as well were concepts such as ‘freedom’ and ‘choice’. With the collapse of the Soviet bloc, there was also no extraneous excuse for maintaining, promoting or encouraging blatant capitalist dictatorship in the form of military regimes.
Thus within these internal and external dynamics, a new Brazil evolved and when in 2002, a Workers Party President was set to emerge, there was enough cause for the global forces of capitalism to worry, especially as two years earlier Chavez had emerged as a scourge within the Latin America, for the free market economy that had freed itself from the society which it came to dominate. As they would come to realize sooner than later, there really was little or no cause for alarm. A workers party in government does not necessarily amount to building workers’ power or even a change in the direction, nature or project of a bourgeois state.

Conclusion: Labour, power and the future
What has been the role of the labour movement in Brasil during its history of dependent industrialization? How has it fared in the contestations for Brasil’s fate and what hopes does it hold for the future?
We align with Eskor Toyo that in capitalist society the labour movement is a broad category comprising the working class, peasantry and the socialist movement (Toyo, 2006: 3 -4). The more developed a capitalist society is though, the less influence the peasantry’s relevance as a component of the labour movement, because land recedes for industry as the primary means of social production.
One of the contradictions of Brasil, with its position as one of the ten leading economies in the world is that its peasant movement of the landless, the MST is not only very active and relevant but is indeed to the left of the trade union movement . Joao Pedro Stedile, leader of the Landless People’s Movement (MST) gives an insightful perspective on the history of Class struggles in Brasil, in an interview conducted by Atilio Boron for Socialist Register. Tracing the history of the labour movement’s rise and fall at different times in Brasil from the 1930 commencement of ‘dependent capitalism’ to more recent times, he considered the direita ja! struggle for direct elections in the late eighties as the highpoint of working people’s power. He also posited that the 1989 elections was not just an electoral contest but “it was a confrontation between two different class projects” (Boron, 2008: 195). The capitalist class project, which was a re-configuration of dependent capitalist development, defeated the popular class project of organised labour. What we could only add is that the Workers Party itself was to reconfigure its agenda to fit into the mosaic of capitalism’s interest, so as to win electoral power in 2002.
In essence, Brasil presently has a workers party in power that is not an agency of workers power. But is it an agency of popular power and what relations exist between popular power and class power?
The road of ‘dependency theory’ have led to only two possibilities in practice. These are the bureaucratic authoritarian or populist regime of governance which are state-centric but do not necessarily unravel the mysteries of dependency, not to talk of transcending dependent development which it aspires to. A working class project on the other hand would entail a class building a counter-hegemonic historic bloc, forging other elements of the popular sectors together, but not losing sight of its transformative goal. This obviously is not the path PT has chosen.
While there might be an extent of disillusionment with the PT, the Socialism and Freedom Party (PSol) which broke out of it and the Communist Party of Brasil (PCB), the oldest party in the country still do not have the needed mass support to adequately challenge both PT and the capitalist class which it seems to have forged an alliance with and build a counter-hegemonic bloc capable of mobilizing the working masses in a bid for power. The PT might also not have lost as much popular base as it would seem on first examination of its policies. It balances its pro-liberal direction with such populist programmes as the Bossa Familia, which millions of out-and-out Brasilians are benefiricaries of.
The future though is still in a flux. With the greatest depression of the world capitalist economy in eighty years, just still welling up the larva of its volcano, the coming year when Lula steps down and Brasilians go to poll will be very interesting. Would a PT government still emerge? If it does would the tide of mass anger that could swell up from its ranks and file push the party to constructing a popular-democratic agenda that would radicalize the Braislian state, subverting it from within for the working class-led historic bloc? Or would it hold on to the tails of the broader re-structuring of a liberalist, post-neoliberal world order that throws up some hocus pocus from Keynes while still pursuing the trajectory of submission of labour to capital, humankind to property?
These really are a lot of ‘ifs’, which lie in the womb of time, but which might start unfolding faster than we could think it would, right now. A labour movement in Brasil that breaks the status quo of dancing with such gusto to the music from capitalism’s cymbals would be a stronger threat to global capital and the transnational capitalist class, than Venezuela now is.
The contentions within and outside PT and CUT, within the working class, the landless peasants and the popular sectors in Brasil that will most likely be activated in the coming time by a collapsing world economy, would determine which ‘if’ Brasil becomes. Its large internal market, pride of place within the world market, created with its bourgeois-industrialist revolution will be the soul of the spectre of a genuinely workers government and state in Brasil, for capitalism. The possibility of this does seem bleak at the moment, due to a labour movement that has come to see electoralism as being equivalent to transformationalist power. The battles ahead for the soul of the Brasilian state may well be fought on the streets as at the ballot box.
A victorious emergence of workers power in Brasil would however have to see its challenge as being beyond while encompassing the tasks of re-building Latin America. Its cry must be: “workers of all lands unite!”





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