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Abstracts of dissertations

Public Debt, Classes and Democracy in “Post-Real” Brazil
Bin, Daniel

Maria Francisca Pinheiro Coelho
University of Brasilia

Year of completion 2010

language of dissertation Portuguese

  • class exploitation
  • economic democracy
  • financial expansion
  • public debt
Areas of Research
  • Economy and Society
  • Social Classes and Social Movements
  • Work
This dissertation addresses class exploitation and economic democracy in “post-real” Brazil focusing on the country’s public debt as the analytical object. Against the background of the global switch from Keynesian liberal ideology to one of monetarist neoliberalism, the study attempts to explain the phenomena of capitalist crisis and readjustment that have led to the expansion of financial activities in Brazil. This financialization, reflecting simultaneously the state’s modified but undiminished economic role, has taken firm root in the state apparatus which, responding to the new liberalism, has adopted financial logic as its hegemonic springboard for action. Reduced welfare budgets, anti-inflationary fundamentalism and selective fiscal responsibility are, inter alia, concrete examples of the application of this logic. In addition to the class character of the state, these factors denote a class fraction, in this case the financial one, which is reinforced by labor exploitation through the distributive apparatus that comprises of the tax system and public debt. Since the state possesses the legitimacy to raise the aggregate rate of surplus value through taxation it can also legitimately increase the rate to the upper limit of equivalent interest payments to public debt creditors. This is a non-capitalist—primitive accumulation—device for accumulating capital. In the political dimension, which cannot be separated from the economic dimension, public debt demonstrates how capitalism is antithetical to democracy: by expanding material inequality, public debt leads to political inequality and imposes strict limits on real freedom. A further expression of such restricted democracy is the selective insulation of economic policies from the classes which are (not) allowed the power to influence such policies and those policies which eschew subjects (not) open for public discussion. The legislative branch avoids and is incapable of addressing the macroeconomic agenda whose control is assumed by the executive branch of the economic apparatus; this executive branch bows to the disproportionate political influence exercised by the financial sectors. In summary, given its approach to public debt management, the Brazilian state manifests its class and anti-democratic credentials by intensifying the exploitation of labor, both through its fiscal and monetary policies as well as by placing restrictions on popular participation in decision-making related to these policies. The apparently blocked decentralization of political power and wealth could signify movement towards some kind of democratic socialism. But the obstacles to decentralization could be overcome by enhanced effective popular participation in economic decision-making, which would begin with decisions that would emerge from class struggle about the state budget.