February 1, 2007
In the 2006 presidential election campaign in Brazil, President Luiz Inácio Lula da Silva (known as Lula), leader of the Partido dos Trabalhadores (PT or Workers' Party), was interviewed at length on July 11, 2006, by the Financial Times (which also interviewed Lula's main rightist challenger Geraldo Alckmin). The interview touched on many topics but mainly concentrated on Lula's adherence in his first term of office to the global neoliberal policies of monopoly-finance capital, particularly repayment of debt and "fiscal responsibility." At two points in the interview the Financial Times bluntly asked whether Lula was looking toward a "radical change in the model," i.e., whether he and his Workers' Party intended to break with financial capital and neoliberalism in his second term of office. Lula gave them the answer they wanted: "There is no radical change in the model....What we need now, in economics and in politics, is to strengthen Brazil's internal and external security."
February 1, 2007
These articles were written five months before the first round of presidential elections in Brazil, on October 1, 2006. The second round, on October 29, saw Lula reelected with 58.3 million votes (60.78 percent of all valid votes), beating Geraldo Alckmin, the candidate for the Partido Social Democrata Brasileiro (PSDB), the party of Fernando Henrique Cardoso, Lula's predecessor in office. Lula won this second four-year mandate after a campaign revolving around ethical issues and allegations of corruption against government officials and high-ranking members of his Partido dos Trabalhadores (PT)—allegations from opposition parties, right and left. The campaign included the pathetic episode of PT officials trying to buy information on candidates from the PSDB in the State of São Paulo (economically and politically speaking, one of the most important states in the union, with a strong oppositional streak), and a concerted nationwide media campaign for Alckmin on a scale never before seen in Brazil
February 1, 2007
The Lula government's concept of social protection is not to be found in any official document or in any paper from his Workers' Party (PT) or his electoral platforms. This is why it is so difficult for the public at large, unfamiliar with the principles of social policy, to understand the meaning of his proposals and actual policies. In trying to explain this concept, we will discuss the government's reform of the social security system, underlining its impact on the state apparatus. We will analyze the core of its social policy as represented by the Programa Bolsa Família (Family Basket Program) and describe the way the economic cabinet designs social policy. From this start, we make the point that Lula's public policy puts on hold previous advances in the field of social rights, tries to create a private health care system, and erects welfare networks not founded upon rights. This last factor is crucial for the creation of a new base of support for the government, one not structured around social, union, and political workers' organizations
February 1, 2007
François Chesnais has defined three stages in the process of financial globalization. The first took place in the 1970s and he calls it "indirect financial internationalization of closed national systems." Latin American countries including Brazil took part in this process of attracting a substantial volume of loans. The second stage, 1980-85, started with Paul Volcker's "dictatorship of creditors" and the discovery by Margaret Thatcher of neoliberalism as the doctrine for the new age. The center countries, starting with the United States and Great Britain, unlocked their financial markets by liberalizing the international flow of capital. The interlinking of national systems became more direct and immediate through market finances. In Latin America, the debt crisis exploded with rising interest rates (following the negative Volcker shock) involving massive debt contracted in the prior period brokered by the banking system
February 1, 2007
n the 1980s the Brazilian economy suffered a long spell of stagnation and inflation caused by the foreign debt crisis affecting all indebted countries. That crisis triggered an acute inflationary process that reached 2,012.6 percent in 1989 and 2,851.3 percent in 1993, according to the general price index from the Getulio Vargas Foundation. The second half of the 1980s and the first of the 1990s saw the deployment of successive anti-inflationary plans, starting with the 1986 Plano Cruzado and ending with the 1994 Plano Real.* The period also marked the end of the industrialization strategy known as "import substitution" and the onset of neoliberal policies in Brazil
February 1, 2007
Since Fernando Collor's 1989 presidential victory, and most notably since Fernando Henrique Cardoso's two terms in office (1995-98 and 1999-2002, respectively), economic policies have been enacted in Brazil that represent a subordinate alliance of the country's dominant classes with international capital. Unfortunately, under President Lula these same sectors have remained in control, and economic policy caters to their interests
September 1, 2006
A trademark of our times is the dominance of neoliberalism in the major economic, political, and social forums of the developed capitalist countries and in the international agencies they influence-including the IMF, the World Bank, the WTO, and the technical agencies of the United Nations such as the World Health Organization, Food and Agricultural Organization, and UNICEF. Starting in the United States during the Carter administration, neoliberalism expanded its influence through the Reagan administration and, in the United Kingdom, the Thatcher administration, to become an international ideology. Neoliberalism holds to a theory (though not necessarily a practice) that posits the following
May 1, 2006
The questions regarding U.S. macroeconomic policy these days come down to whether the country can keep borrowing. Can consumers keep spending by increasing their debt level? Can the federal government keep running a large budget deficit without serious problems developing? Can the U.S. current account deficit keep growing? Will foreigners keep buying government bonds to cover this growing debt? If the answer is no to such questions, we can expect serious trouble and not just for the United States but for the rest of the world, which has grown used to the United States as the consumer of last resort. The United States buys 50 percent more than it sells overseas, enough to sink any other economy. In another economy, such a deficit would lead to a severe devaluation of the currency, sharply inflating the price of imports and forcing the monetary authorities to push interest rates up considerably
May 1, 2006
velopment economics, as a branch of economics that attempts to show how the world's poor economies can develop, had its origins in the 1940s and 1950s. One of its earliest ideas was that the economies of the less developed countries were mired in a cycle of poverty and needed a "big push" to develop. This push was seen as a large boost in investment, helped by the state's infrastructural and social spending, as well as by private foreign capital spending and aid from the governments of the developed nations
May 1, 2006
Immanuel Ness, Immigrants, Unions, and the New U. S. Labor Market (Temple University Press, 2005), 230 pages, cloth $59.50, paper $21.95.
Howard Karger, Shortchanged: Life and Debt in the Fringe Economy (Berrett~Koehler Publishing, 2005), 252 pages, cloth $24.95.
The widening and deepening of capitalism, which many economists misname globalization, has had traumatic impacts on workers. Sped up by what has been called neoliberalism (basically, the political program of modern global capital), the growing penetration of capitalist production and consumption relationships around the globe has literally pitched workers from pillar to post. For example, the North American Free Trade Agreement (NAFTA) has forced hundreds of thousands of Mexican peasants and wage workers to abandon their home country and migrate to the United States. Similarly, government austerity and "free market" programs—curbing food and health subsidies to the poor, closing and selling state enterprises, suppression of worker and peasant protests, and the like—in countries like India and China have deprived many workers of what security they had attained and pushed peasants from their land into cities
