Authoritarian Capitalism

Brazil's Contemporary Economic And Political Development

Thomas C. Bruneau

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429724589
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

During the past decade, the potential offered by Brazil's size, resources, and location has begun to be realized. There are, however, a number of international and domestic obstacles to the country's continued development, as indicated by its extreme inflation rate and its foreign indebtedness. There are also serious questions about the social and political results of the Brazilian approach to development: Brazil has become something of a test case for whether the Western, or capitalist, orientation can achieve development in more than strictly economic terms. Emphasizing key aspects of Brazil's economy, politics, and society, the authors present an overall analysis of the present system and provide a base from which to assess Brazil's future development.

1
Introduction

Thomas C. Bruneau Philippe Faucher

It has frequently been pointed out that Latin America is paradoxical. Economic growth, massive foreign investment, and grandiose projects in far-flung areas of the region flourish in the midst of misery, poverty, and great problems in the distribution of the benefits arising from economic growth. Despite a long tradition of frequently changing military regimes, some absolutely infamous, there has been a continuing interest in democratic values and processes.

In order to understand Latin America as the region enters the decade of the 1980s, it is useful to return briefly to the era of the 1960s and the first "development decade." During this period, several of the more important countries in the region, including Brazil, sought to stimulate economic growth and to establish democratic regimes. The example of the Cuban revolution of 1959 was the underlying reason for the support which the United States provided for these changes; it was thought that removal of oligarchies, promotion of economic growth, and encouragement of participation by the population would not only lead to development but would also avoid other Cubas. The development strategies actually implemented varied greatly from one country to another, but by 1970 it was clear that, while economic growth was possible, democracy was not. Thus the second "development decade" was dominated by military dictatorships. The objective of economic growth was retained, but as democracy was perceived to be unrealiable and inefficient it was replaced by a variety of regimes in which political participation was strictly limited. In contrast to earlier periods of "caudillo rule," however, it was not a single leader who assumed control but rather the military as an institution with a particular view of the relation between state and society justified by its own ideology of national security. Economic growth, usually to further national security, was encouraged and toward this aim the state apparatus was perfected and elaborated and its personnel trained to better administer a modern economy. In all instances economic growth was promoted through deepening cooperation with foreign investors and through reliance on foreign loans. During this period political opposition was controlled or even eliminated, the legislature was restricted, and the executive came to rule by decree - although at times its rulings were legitimated by the legislatures. This type of regime appeared first in Brazil in 1964 and later developed in all countries of the Southern Cone, as well as in a few other countries in the region.

The success of these regimes in promoting economic growth and development has been mixed, and in the 1980s we are likely to see significant changes in their approaches or models. The global context is now more constrained and economic growth more difficult. There is no question but that the countries of the region are fully integrated into the world economy and, at their particular stages of development, are very sensitive to negative trends in this economy. The decrease in economic growth raises problems for the legitimacy of these regimes as they have relied more on growth than on the support of the population. Even their justification in terms of the fight against Communism is more difficult now that the political systems have been purged and international alignments have become more complex. What is more, there is not only a substantial backlog of unmet grievances among the working class, but even the middle class, which has supported these regimes, is now smarting from increasing demands which are also unmet. In this context of decreasing legitimacy, the central core of the state has a tendency to fragment, leading to further fragmentation. Now, more than ever, there are many obvious reasons and increasing pressure for the military to return to their barracks.

The processes of industrialization and development under military auspices have substantially transformed the social structures in most of the countries in this region. Industrialization has created an urban working class of significant potential importance in countries such as Brazil. Development has also come to rural areas through the increasing penetration of modern technology, related to international demands, which has transformed rural structures as rural workers move to the cities and create a larger pool of urban workers. Clearly the urban working class must be taken into consideration, but it is precisely this group which these regimes have intentionaly and most completely excluded.

The general points made above have occurred in a number of ways which differ from one country to another. We are presently seeing tremendous changes in Central America, an area which until recently was thought to be all but stagnant. If in 1964 it was Brazil which led the way into authoritarian rule under military auspices, in 1980 it was Peru which moved from this pattern to one a great deal more democratic.

The richness and complexity of the processes of development under authoritarian rule, and the newly perceived limits to this strategy, have stimulated reflection about the theories and concepts to be employed in the analysis of all aspects of state and society. While earlier efforts sought to analyze economics and politics as distinct from one another, today the emphasis is on comprehending them only in relation to each other. The coups which led to authoritarian rule may be seen as responses to political agitation arising from economic crises. The perceived need for economic growth through stabilization has justified the use of repression in the closing of these systems. The main actor in this process, the military as institution, has allowed for a new type of management in these increasingly complex economies. This is a far cry from its traditional role in society. Alfred Stepan's study on Brazil is the first work to analyze how what he termed the "new professionalism" affected the manner in which the military perceived its role in society.(1) The doctrine of national security, with its emphasis on the war against the enemy within which is used as a justification for brutal repression, is probably the defining characteristic of these regimes and justifies their role in all areas of society.

Other analyses have sought to deal with the characteristics of military regimes as they seek institutionalization. Beginning with the writings of Juan J. Linz on authoritarianism, there is now a broad and rich literature on authoritarianism in Latin America. The same may be said for writings on corporatism.(2) Little by little a new approach has been adopted. The writings of Guillermo O'Donnell have helped crystalize an approach which suggests that these "bureaucratic-authoritarian" regimes are not simple military dictatorships. They cannot be considered either accidental or transitory but rather are a stage in the process of Latin American development.(3) These regimes arise out of particular class configurations, and the internal dynamics are linked to the international context. The absence of representation is manifest in these systems and exclusion is severely enforced. The dominant coalition is composed of civil and military technocrats. Industrialization, by means of close collaboration with foreign investment and technology, is the primary goal of these regimes. Order, and the general absence of politics, is considered a necessary condition for investment and thus for development. Despite variations among what might be termed the bureaucratic authoritarian regimes, and the criticisms directed at this concept, this term, and the approach it implies, are the defining themes in the study of Latin America from a political and economic perspective.(4)

Parallel with the study of the political regimes, and more closely related than many would like to admit, has been the analysis of the mechanisms of accumulation in peripheral societies. A great many aspects of these mechanisms have received attention. There has been a great deal of work on inflation and on the efforts of the governments to achieve monetary stability, efforts usually closely related to foreign governments and international institutions.(5) The effects of these measures on the systems of production, capital, and sectoral distribution have also been studied.(6) In all instances foreign investment has increased, with particular emphasis on programs of industrialization. In consequence, there is much discussion about whether these economies have become denationalized. The fight against inflation has, in most cases, led to control of salaries and their maintenance at levels less than inflation. One of the key issues, then, has been to provide evidence on the character of the maldistribution of income as a way to highlight the precise nature of these regimes.(7) Probably the broadest theoretical or conceptual approach which includes most of the above considerations is the dependency school which has received its most convincing formulation in the work of Fernando Henrique Cardoso and Enzo Faletto.(8) This form of analysis is situated within the Marxist approach to the analysis of imperialism and, following studies by the ECLA, has provided the basis for criticism of the theories of development previously prevalent. The concept of dependence, elevated to the status of theory by some, is felt by many to be an improved version of the relationships of domination identified by the Marxists. It rejects, however, the more radical theses of "neocolonialism" and "sub-imperialism."

Arguments over the concept of dependency, as well as confrontation with the complex and dynamic processes in the region, have led to an ongoing elaboration of concepts within this general approach. The mere fact that industrialization and growth does take place has forced a reexamination of Marxist literature on underdevelopment which criticized the earlier liberal literature on development. In 1973 Fernando Henrique Cardoso published his most important article dealing with the concept of associated or dependent development.(9) He was led to develop this concept because the traditional Marxist approaches, as well as those of the dependency school, did not accord well with the actual facts of industrialization and processes of accumulation in the peripheral countries. In his work he has demonstrated how the process of internationalization of the domestic market is linked to an increasing association of the domestic bourgeoisie with international capital, as well as to the increased importance of the middle class in the state with particular emphasis on the military and technocrats.

Peter Evans has further elaborated this form of analysis for Brazil.(10) He argues that the productive and financial structure has become substantial enough, and the state sufficiently developed, that it can now assume a predominant role in orienting the process of growth and accumulation. The state, then, possesses the means whereby it can negotiate with international capital in order to secure "national interests" as well as meet most of the demands of the middle classes. Investments must now be made in such a manner as to respond to local demands. The links of subordination are replaced by links of association. These take the particular form of an association between foreign capital, the state, and local capital.

Discussions in Latin America today usually concern politics, particularly democratization. Until now, however, there has been little theoretical orientation to this debate for concepts are only now being formulated and, of course, the outcome of this process is very much in question. For this last concern, that of democratization, Brazil provides an important case study. We are not speaking of a model, for the variety of states and societies in Latin America is such that a model is limited to one country - if that. Still, Brazil, with its huge size (fifth largest in the world), large but not unmanageable population (sixth largest in the world), and its economic strengh (tenth largest in the world), offers researchers and theoreticians a number of situations and processes which are of importance for the whole region. It was in Brazil in 1964 that the new type of bureaucratic authoritarian regime first appeared. The program of stabilization and the fight against inflation before the economic miracle of the late 1960s was also thought to be a model. These mechanisms, and their results in terms of the distribution of income, are also of relevance elsewhere in the region. Brazil's particular form of state organisation, and its major efforts at promoting development, have made it apparent that growth and development could be achieved. It was in Brazil that the tri-pé (a tripod of foreign capital, the state, and local capital) was recognized as a means to promote such development. It was in Brazil in 1974 that the rhetoric of the return to democracy began to appear serious. What is more, in Brazil movements among labor and students, as well as in the Catholic Church, have been extremely important in promoting socio-political change.

Much of what is both specific to Brazil and general for the whole region is included in the chapters that follow. The theme of this book is the development of Brazil under a particular form of authoritarian regime. It examines the most important aspects of the development process including the state, its reciprocal and changing relationship with society, and the complex interactions with several elements of the international or global system. The overall analysis is not static for the concepts and data indicate that there is indeed a changing situation at all levels. Within these chapters we find that there is indeed class and technological formation and even a developing political openness which may be linked to these larger or more secular processes. However, because of the bureaucratic authoritarian model and the type of economic system, there is serious doubt whether the skewed distribution of benefits will in fact allow a further opening of the system or whether it will be at most an "elitist" or "supervised" democracy. The character of the cultural system also raises questions as to the limits of the process.

Philippe Faucher, in his opening chapter, provides an interpretation of the crisis of the Brazilian regime. He argues that the process of liberalization is encouraged by the absence of agreement at the political level regarding the implementation of a stabilization program. The stalemate of the model of economic growth is manifested by the inability of the regime to realize the objectives stated in the second National Development Plan. The process of liberalization expresses the demands of domestic capital for a role in the system, as well as the pent up claims of workers, intellectuals, and certain other groups for real democratization.

Public enterprises play a large and important role in the development strategies of a number of Third World countries. Their role in Brazil has been the subject of some debate as to what they indicate about the state, the processes of development, and their impact on society. The chapters by Thomas Trebat and Werner Baer and Adolfo Figueroa are concerned with the behavior of these enterprises. Trebat provides a comparative analysis of the origins, control, and financial performance of enterprises in Brazil and Mexico. He finds that public enterprises are rather more independent in Brazil than in Mexico. Baer and Figueroa compare the experiences of Brazil and Peru with regard to the impact of public enterprises on the distribution of income and find that the impact has been negative. Here, as in the case examined by Trebat, Brazilian public enterprises appear to be most concerned with furthering their own interests, somewhat concerned with aiding the state, and very little if at all interested in aiding major sectors of the population.

The Brazilian state has systematically elaborated its apparatus and its negotiations with foreign capital in order to maximize the utility of this capital for local interests. The process of dependent development is characterized in precisely these terms of defining national interests in order to redefine the terms of dependence. Peter Evans is concerned with the role of the state in accumulation and, through his analysis of the petrochemical sector, suggests that efficient production of chemicals is but part of the purpose of the second petrochemical complex in Bahia; of even greater importance is the integration of a system bringing together foreign capital, the state, and local capital in order to elaborate institutions for further development. Francisco Sercovich is also concerned with petrochemicals (the third petrochemical pole in Rio Grande do Sul) in much of his work, but his chapter in this book focusses on the export sector in general. He finds that Brazil is reaching a point in the development of its technology at which it can compete effectively in the international market.

Whereas Evans and Sercovich are interested in petrochemicals as indicative of processes and structures in development, Kenneth Erickson is more concerned with the strategy of the Brazilian state in dealing with the serious situation that 80 percent of its petroleum must be imported. He provides a comprehensive analysis of this topic which, as one of the two or three foremost problems of the country, is of such importance that it alone might provide the basis for a foreign policy independent of the United States. Riordan Roett, however, in his chapter demonstrates that energy is part of an overall strategy of development and shows how pursuit of this strategy has led Brazil and the United States to diverge in their foreign policies. The ability, and even need, for...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Tables and Figures
• Foreword
• Contributors
• 1. Introduction
• 2. The Paradise That Never Was: The Breakdown of the Brazilian Authoritarian Order
• 3. Public Enterprises in Brazil and Mexico: A Comparison of Origins and Performance
• 4. State Enterprise and the Distribution of Income: Brazil and Peru Werner
• 5. Collectivized Capitalism: Integrated Petrochemical Complexes and Capital Accumulation in Brazil
• 6. The Exchange and Absorption of Technology in Brazilian Industry
• 7. State Entrepreneurship, Energy Policy, and the Political Order in Brazil
• 8. Brazilian Foreign Policy: Options in the 1980s
• 9. Brazil in 1980: The Emerging Political Model
• 10. The Labor Movement and the Crisis of the Dictatorship in Brazil
• 11. The Ethic of Umbanda and the Spirit of Messianism: Reflections on the Brazilian Model
• Selected Bibliography