Written by the IWL-FI

The Bankruptcy of a Project: Ruling Brazil as a Capitalist Power with Minor Social Reforms

This is the first article of the series “PT’s crisis and degeneration”, whose aim is to provide our readers with a background of the history and origins of the bankruptcy of the PT’s project.
The Brazilian Workers’ Party (PT) held its 5th Congress in June 2015 amidst a deep crisis. On the 35th anniversary of its foundation, the PT saw Dilma Rousseff’s administration reach its lowest approval rating after applying a fiscal adjustment against the workers.
The government crisis and the involvement of party leaders in tremendous corruption cases at Petrobras have negatively affected the party. Millions of workers feel cheated by the PT, disappointed, betrayed and turn away from the organization. The right-wing grows confident and even sectors that advocate the return of the military went to the streets to take advantage of the people’s dissatisfaction.
The current PT is not even a parody of the party which generated a huge expectations among a whole generation of activists: that it was possible to build a genuine workers’ party, defender of the exploited and oppressed, which would combat corruption and would be capable of leading deep social changes in the country.
That hope is gone. It is not, therefore, a circumstantial, fleeting crisis. It is the crisis of a political project, of a strategy of government, of a program, of a popular front policy, of a broken model of a party. Faced with a shock of such proportions, we must seek to understand the deeper explanations for the degeneration of the PT.
The PT gradually adapted itself to bourgeois politics and ended up applying the same methods they said they would combat. That is a part of the truth. But why did they adapt? Why did they become corrupt? Why was there no resistance from its leading sectors? What were the political logic and the ideology which sustained this path?
The answer to these and other questions is crucial to the future of the working class in Brazil. The epoch that opened with the founding of the PT and the CUT (United Workers’ Central) in the early 1980s is over. We have to find a new strategy and a new path to resume the historical struggle of the workers and oppressed people in Brazil.
The strategic project of the PT
The strategy that has guided the policies of PT-led governments over the past 13 past years was not born today, nor was it the result of treachery. It was the result of a project that began to be drafted much earlier.
It is true that at its founding and during the early years of its existence, the PT declared itself to be a party which defended the rights of workers and other exploited sectors, fought against the military dictatorship and against imperialism (it advocated, for example, for a break with the International Monetary Fund and for a moratorium on the foreign debt), and called itself socialist in a broad sense. The contradiction is that its leadership, spearheaded by former president, Luis Inácio ‘Lula’ da Silva, sought from the outset to impose a notion of alliance with bourgeois parties to govern.
The fall of Stalinism
From 1989 on, after Lula’s defeat in the presidential election against Fernando Collor and with the new situation arising from the fall of the Stalinist regimes in Eastern Europe and the Soviet Union (USSR), this strategic notion prevailed completely.
For the PT leadership, the diagnosis of the global situation was clear. They claimed that the collapse of the USSR and of the other Stalinist regimes meant that socialism had failed. And that therefore capitalism had proven to be a strong, powerful, indisputable regime. In this framework, socialism was an unattainable utopia. Workers should relinquish the goal of taking power and forming their own government.
The only possible strategy would be to win elections allied with bourgeois “progressive” sectors to take office. This policy materialized in Lula’s alliance with José Alencar, the biggest textile businessman in the country, who was the vice-presidential candidate in the victorious election in 2002, and then in alliances with right-wing parties, such as PMDB, PTB and PP, to govern.
Such a strategy forced the party to defend the capitalist system and the anti-democratic political regime that exists in the country, that is, the current Constitution, the rule of law and its institutions like the judiciary, the legislature, and especially the armed forces, which clearly defend the exploiting classes.
These alliances were justified to allegedly allow the PT administration to carry out reforms that would improve the situation of workers and diminish the social inequality via a fairer income share, taking out a sector of the population from absolute poverty.
The myth of entrepreneurship
The PT and its administrations instilled among workers the notion that lasting social mobility would be possible by means of redistributive policies. Among them were compensatory social policies such as Bolsa Família [1]. On the other hand, there was access to credit in order to enhance consumption, subsidies to private higher education (Prouni, “University For All Program”), and encouragement of individual entrepreneurship of small businesses. Thus, it established the myth that a new emerging middle class was arising.
But one cannot rule within the capitalist system without favoring the owners of capital, i.e., multinationals, banks, big industries, agribusiness and developers. In office, the PT did this in different ways: by keeping the high interest rates which favored banks; by approving tax exemptions to business sectors such as the automakers; with privatizations disguised in the form of concessions. In addition, the BNDES (National Bank for Economic and Social Development) acted as a strengthening instrument of big national groups; construction companies were tremendously favored with infrastructure works and for Petrobras, and the private groups in the education sector benefited from the ProUni and other programs.
International Relations
Regarding the place of Brazil in the world, the PT leadership sowed illusions that the country could become a developed capitalist nation, a great power, a sovereign and independent country, without breaking with imperialism and its agencies and treaties. On the contrary, they governed on good terms with the U.S. government and with its consent.
The Letter to the Brazilian People, published by Lula just before the 2002 elections, in which he committed himself to respect the agreements signed by the country (that is, to pay the foreign and domestic debts to national and international bankers and respect capitalist property rights) was the clearest manifestation of the PT’s commitment to the domestic and international financial capital.
Cooptation of trade unions
To carry out this project it was essential for the PT not only to have the support of trade unions and social movements but also to control their activities to prevent potential protests. This was accomplished using a number of pre-emptive cooptation steps: winning activists over to prioritize the elections, to prioritize the election of members of parliament; appointing union members to key governmental posts; pension funds at state owned enterprises, such as the Previ (employees at Banco do Brasil) or FUNCEF (employees at Caixa Econômica Federal), controlled by the trade unions; allocating part of the “union tax” [2] for trade union centers etc. Thus, the leading unions and much of the social movements support the government and have become mere instruments to demobilize workers.
Managers of the capitalist crisis
The PT leadership’s rationale tries to make a blend of reformism (the possibility to reform the capitalist system) with the old bourgeois national development discourse. But why does this rationale have no effect any longer and is dismissed as hypocritical by millions of workers?
Because reality says more than a thousand words. The PT administration’s practice is the opposite of its speech. The government has been the main agent of imperialism and the bourgeoisie to perform economic adjustments, which is nothing more than forcing workers to pay for the crisis. In order to do this, the Rousseff administration led the assault on social rights such as unemployment insurance; increases in fuel and power supply rates; and put the Minister of Finance, the banker Joaquim Levy, to negotiate the outsourcing Bill with the Congress.
Leading the government of a capitalist state, the PT can’t escape the logic of managing the capitalist business. When an economic crisis arrives, a reduction of national income inevitably takes place. The bourgeoisie seeks to increase exploitation and destroy the previous income redistribution policies. On an international level, imperialism increases the exploitation of dependent countries to try to overcome the global economic crisis. The manager complies with the commands of the bosses. The PT fulfills the requirements of the real owners of state power, defends capitalism and attacks workers. This is the heart of the current administration’s crisis.
Corruption
The involvement of the PT in the major corruption schemes and in the formation of cartels that control major construction works and services, besides the obvious corruption of its leaders, follows the same logic. Corruption is an instrument at the service of bourgeois capitalist accumulation based on the plundering of the State. In every capitalist country, in Brazil perhaps in an exacerbated way, corruption and theft are part of the democratic game. By placing itself at the helm of the capitalist bourgeois state, the PT leadership began to reproduce the bourgeois methods of public management.
An alternative to PT
The conclusion is obvious: the PT’s project went bankrupt and fell into crisis along with the party. The emergence of a new political alternative is necessary; a party that represents the historical needs of the working class. The conditions under which this alternative can be developed are opened.
However, the emergence of new left wing parties which repeat and favor the same strategy as the PT is not a way out at all. What kind of party, program and class organization do we need? Just to start this debate, we should say that building a strong socialist workers’ party is a task for thousands of activists in the workers and popular movement. This series of articles is our modest contribution to this discussion.
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Notes:
[1] – Further explanation: http://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia
[2] – It’s a compulsory tax paid by workers and equivalent to the value of one working day. Currently, 10% of the tax income goes to Union Centers.
Translation: Gabriel Tolstoy
 
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PT’s Crisis and Degeneration (Part II): the Delusions of “Humane Capitalism”

 
This is the second article of the series “PT’s crisis and degeneration”, whose goal is to provide our readers with a background of the history and origins of the bankruptcy of the PT’s project.
Faced with the growing unpopularity of the Dilma government, with the corruption scandals and the crisis of the PT, the main defense of the leadership of this party is to claim that during their governments, workers’ living conditions have improved. However, although there were benefits to some sectors for a brief period, in the end it was all a mirage which is now being undone by this very government.
For years, the PT sold the delusion that it would be possible for workers to improve their lives permanently and steadily within the capitalist system, as long as it would be humanized by income redistribution policies promoted by the State. And, naturally, under the management of PT governments and their allies.
As such, the working class would not need to wage a tough fight to win over and defend their rights and to improve their living standards against the increasing exploitation of the bourgeoisie. It also would not need to organize collectively for that. The individual effort of each worker to ascend would suffice, with the support of the State and the generosity of the capitalists. Politically, it would just have to vote for the PT.
In office, the income distribution measures were directed to the poorest sections of the working class with the so-called compensatory social policies (Bolsa Família-“Family Allowance”, Luz para Todos-“Electricity For Everybody”, Mais Médicos-“More Doctors”, among others). The second aspect of this policy was a kind of quantitative easing, facilitating credit and encouraging consumption of working families. An important part of this incentive were the mortgage loans by the Minha Casa, Minha Vida – “My House, My Life” program.
Another policy was that of stimulating the natural desire of workers to escape from their condition of wage earners and to have their own business. For this, the government encouraged entrepreneurship, facilitating credit to micro and small entrepreneurs. Similarly, it sought to meet the aspiration for upward social mobility through access to university education, by facilitating student credit (government-provided loans) through Fies and ProUni.
The End of an Illusion…
Why do we say that all these measures were part of a grand illusion? On one hand, many of them, such as Bolsa Família, are palliative, i.e. do not solve the central problem of the working class: they do not attack capitalist exploitation and do not even guarantee employment, a decent income and labor and social rights in a lasting way. Furthermore, they can be revoked by the next government.
On the other hand, the credit measures, in addition to compromising the budget of working families for years, are permanently threatened by economic crises that could cause workers to lose their goods, their efforts and even their homes.
However, for a while, these measures seemed to work. The economic situation of the country was stable, mainly due to the high international price for commodities exports, which allowed the government to maintain these policies. The ideologues of the PT created the myth that a new middle class was born, due to the increasing consumption of working families. This is utterly false: those are only workers able to consume over a brief period the cost of going into debt. With the economic crisis, this illusion is definitely over.
Fiscal Adjustment: the PT against Workers
Upon fully reaching Brazil, the global economic crisis has shown the true face of the PT. In words, they talk of protection of workers, in favor of reforms to improve their standard of living. In deeds, however, they are in favor of the capitalists and against the workers. This can be seen now in the actual policies carried out by the government.
The capitalists have demanded from Dilma’s government a harsh fiscal adjustment, which means that workers must bear the cost of crisis with the loss of hard-won social rights, increased inflation and unemployment. That’s the global politics of imperialism. Let it be said, for example, by the workers of Greece, Spain, Portugal, and of all Europe.
The PT has not only totally agreed with such austerity policy, it has become the leading executive manager of its application, thus, the agent of the imperialist policy. Dilma appointed a banker, Joaquim Levy, from the Bradesco bank, as finance minister, to apply the adjustment with the full support of President Dilma.
The leadership of the PT, including Lula himself, claims that the setting is a necessary sacrifice. According to them, in a time of economic hardships, we must do as families that go through difficult situations: cut expenses to get their finances in order and to prosper again when the worst has passed.
The problem is that this comparison is a scam to give the impression that the whole country is making sacrifices to overcome the crisis – an utter lie. There is no adjustment for the rich. The banks and the agribusiness maintain massive profits. The automakers and other companies have benefited from tax exemptions have kept their profits. The only ones who are suffering from the adjustment of the PT and the capitalists are the workers and the poor.
Harsh Attacks…
The provisional acts 664 and 665 promoted by the government affect mainly the youth and working women. The reduction of funding by the Fies program harms students who believed in it and became indebted to try to get a university degree. Thousands can’t go on because of the cuts. The government increased the light fares by more than 40%. The increase in fuel prices extends to all the products and penalizes the population. The cuts in health, education and on the PAC construction sites cause thousands of layoffs.
To make matters worse, it is the working class who pay for corruption. The scandal in Petrobras, besides showing the outright theft of public money by governing coalition parties and the cartel of contractors, also led to the crisis of the company, to the suspension of construction works, and to the dismissal of thousands of workers, as in the case of the Comperj (Petrochemical Complex of Rio de Janeiro) in the state of Rio.
The National Congress, headed today by the PMDB of Eduardo Cunha, speaker of the House, and Renan Calheiros, president of the Senate, adds itself to this attack. The House passed the Outsourcing Bill that would cause the firing of millions of workers and the hiring of outsourced workers for much lower wages. The PT’s representatives voted against the Bill, but Dilma’s government, which has the decisive weight in the matter, has not taken a single action against the project, other than merely ensuring that there are no tax losses.
There is No Such Thing as Humane Capitalism
Workers need to draw some pressing conclusions from the current situation. The first is that the income distribution measures advocated by the PT as a major breakthrough, in addition to not solving the key problem of the working class, are small, fragile and temporary. And even then, they were only possible because there was a favorable economic environment.
The second conclusion is that when capitalist conditions change and economic crises ensue, these small improvements in income distribution are destroyed by the capitalists and the politicians at their service. As good defenders of capitalism, the PT governments are attacking the same measures they swore to defend.
But the most important conclusion is that, contrary to what is said by the PT leadership, the root of the problem of the working class can’t be found in the unequal distribution of wealth, though it is increasingly brutal and unjust. The explanation for the situation of the working class under capitalism, including the exploitation and inequality, lies in the fact that the means of production and distribution of the society (factories, infrastructure, and banks) and the land are private property of the big capitalists.
The logic of a production system based on this type of property relations is that there is an unavoidable tendency towards the accumulation and concentration of capital (that is, the elimination of the weakest) and towards the rise in inequality. There might be a temporary improvement, but when the crises comes, a reduction of national income inevitably takes place. The bourgeoisie increases exploitation to preserve their profits and destroy the previous distributive policies.
Therefore, contrary to what the PT always preached, inequality will not be solved with small improvements in income distribution. Inequality will only end with the expropriation of the means of production and the land that are now in the hands of big capitalists, turning them into collective property, run by a government of workers and poor people.
Finally, it must be said that the illusions spread by the PT have a nefarious effect on workers. They make their class consciousness – that is, awareness of their unavoidable wage-slave situation within the capitalist system and the need to organize a political struggle as a class to do away with this system – go several steps backwards.
The Independent Struggle of Workers is the Solution
The above findings do not mean that workers should not fight against inequality. Quite the opposite, indeed: this fight is a key issue to ensuring the survival of the working class. The defense of better wages and jobs is an example. The same goes for the defense of all the achievements of the class however small they might be.
The problem is that these improvements and achievements can only be defended with a lot of struggle and not with allegedly kind measures that capitalists give with one hand and take away with the other. And above all, this fight should have a goal: that the working class comes to power and creates a workers’ government that puts an end not only to inequality, but, once and for all, to this system of exploitation.
A struggle carried out in this way requires a strong organization of workers in combative labor unions and a genuine workers’ party: socialist, revolutionary, democratic, independent of the bosses. Precisely the opposite of what the PT represents.