Lula’s Brazil – Part 1

Perry Anderson, London Review of Books, March 31, 2011

This article is posted online in two parts. The seconde part: Lula’s Brazil – Part 2

Contrary to a well-known English dictum, stoical if self-exonerating, all political lives do not end in failure. In postwar Europe, it is enough to think of Adenauer or De Gasperi, or perhaps even more impressively, Franco. But it is true that, in democratic conditions, to be more popular at the close than at the outset of a prolonged period in office is rare. Rarer still – indeed, virtually unheard of – is for such popularity to reflect, not appeasement or moderation, but a radicalisation in government. Today, there is only one ruler in the world who can claim this achievement, the former worker who in January stepped down as president of Brazil, enjoying the approval of 80 per cent of its citizens. By any criterion, Luiz Inácio da Silva is the most successful politician of his time.

That success has owed much to an exceptional set of personal gifts, a mixture of warm social sensibility and cool political calculation, or – as his successor, Dilma Rousseff, puts it – rational assessment and emotional intelligence, not to speak of lively good humour and personal charm. But it was also, in its origins, inseparable from a major social movement. Lula’s rise from worker on the shop-floor to leader of his country was never just an individual triumph: what made it possible was the most remarkable trade-union insurgency of the last third of a century, creating Brazil’s first – and still only – modern political party, which became the vehicle of his ascent. The combination of a charismatic personality and a nationwide mass organisation were formidable assets.

Nevertheless, Lula’s success was far from a foregone conclusion. Elected in 2002, his regime got off to a dour start, and soon came close to disaster. His first year in office, dominated by the economic legacy of his predecessor, reversed virtually every hope on which the Workers’ Party had been founded. Under Fernando Henrique Cardoso, the public debt – nearly half of it denominated in dollars – had doubled, the current account deficit was twice the Latin American average, nominal interest rates were over 20 per cent, and the currency had lost half its value in the run-up to the election. Argentina had just declared the largest sovereign default in history, and Brazil looked – in the eyes of the financial markets – to be on the brink of the same precipice. To restore investor confidence, Lula installed an unblinkingly orthodox economic team at the Central Bank and Ministry of Finance, which hiked interest rates yet further and cut public investment, to achieve a primary fiscal surplus higher even than the figure the IMF had demanded. For citizens, prices and unemployment rose as growth fell by 50 per cent. But what was bitter medicine for militants was nectar to bond-holders: the spectre of default was banished. Growth resumed in 2004 as exports recovered. Even so the public debt continued to rise, and interest rates were hoisted once more. Adherents of the previous regime, who had smarted under Lula’s criticisms of Cardoso, pointed triumphantly to the continuities between the two. For the Partido dos Trabalhadores there was little to boast about.

This was uninspiring enough, but worse was to come. In the spring of 2005, the leader of one of the smaller parties in Congress (there were more than a dozen of these), coming under pressure after one of his henchmen was videotaped pocketing a bribe, hit back with the revelation that the government had been systematically buying the votes of deputies, to the tune of $7000 a month each, to secure majorities in the legislature. In charge of the operation was the head of Lula’s cabinet in the presidential palace, José Dirceu, the money coming from illegal funds controlled by the PT and distributed by its treasurer, Delúbio Soares. Within weeks of this bombshell, an aide to the brother of the chairman of the PT, José Genoino, was arrested boarding a flight with 200,000 reais in a suitcase and $100,000 in his underpants. A month later, the manager of Lula’s bid for the presidency, Duda Mendonça – a notoriety in the PR world – confessed that the campaign had been financed by slush funds extracted from interested banks and enterprises, in violation of electoral law, and that he himself had been rewarded for his services with secret deposits in an account in the Bahamas. Next it was one of Lula’s closest political confidants, the former trade-union leader Luiz Gushiken, under fire for siphoning pension funds for political ends, who was forced to step down as secretary of communications. In a yet darker background lay the unsolved murder in early 2002 of Celso Daniel, mayor of the PT stronghold of Santo André, widely suspected of being a contract killing to do with bribes collected from local bus companies.

The exposure of a broad hinterland of corruption behind Lula’s conquest of power, while it came as a demoralising shock to much of the PT’s own base, could be put – as it promptly was by loyalists – in historical perspective. Illegal bankrolling of campaigns by hidden donors in exchange for favours was widespread in Brazilian politics: the president of the main opposition party, Cardoso’s Social Democrats (PSDB), was caught on the same charge and had to resign. Buying votes in Congress was no novelty. It was well known that Cardoso had greased the palms of deputies from Amazonas to secure the constitutional change that allowed him to run for a second term. The Brazilian legislature had long been a cesspit of venality and opportunism. By the end of Lula’s first term, between a third and two-fifths of the deputies in Congress had switched parties; by the end of the second, more than a quarter of both Congress and Senate were under criminal indictment or facing charges. In December, legislators awarded themselves a pay rise of 62 per cent. In 2002, Lula had been elected with 61 per cent of the popular vote, but the PT got less than a fifth of the seats in Congress, where allies had to be found for the government to command a legislative majority. Dirceu had wanted to make a deal with the largest party of the centre, the PMDB, but this would have meant conceding important ministries. Lula preferred to stitch together a patchwork of smaller parties, whose bargaining power was weaker. But they naturally expected a share of the spoils too, if a lower grade one, and so the mensalão – the monthly backhander – was devised for them.

In cash terms, the corruption from which the PT benefited, and over which it presided, was probably more systematic than that of any predecessor. In absolute terms, Brazilian elections are second only to America’s in their costs, and relative to national income can exceed them by a wide margin. In 1996, Clinton spent $43 million to take the White House; in 1994 Cardoso laid out $41 million to secure the Palácio do Planalto, in a country with a per capita GDP less than a sixth that of the US. Unlike Cardoso, who twice sailed to victory on the first ballot as the establishment candidate, and commanded abundant natural – in Brazilian parlance, ‘physiological’ – allies and placemen in Congress, Lula was a three-time loser when he ran again for the presidency in early 2002, and his party traditionally an object of the deepest suspicion to all who counted economically in the country. To mount that unfavourable gradient, special resources were needed, for which special undertakings had to be given, public and private. So too, with a smaller core of deputies and fewer spontaneous friends in the legislature, to obtain makeshift majorities in Congress the PT was driven to bribe on a bigger scale. Perhaps one could speak of a kind of workers’ premium, in corruption as in disinflation: a need to over-satisfy the IMF with an excessive primary surplus to keep the economy on keel, to over-extract and distribute black money to win office and exercise power. That, at least, would have been one line open to defenders of the party. In practice, the more typical mitigation was to point to the personal probity, in some cases the heroic record, of those in charge of disbursements made for organisational, not individual ends. Dirceu, the architect of the modern PT and strategist of Lula’s victory, had worked underground for years after returning clandestinely from exile in Cuba. Genoino had been a guerrilla fighter in the jungle, imprisoned and tortured by the generals. Gushiken still lived the modest life of a former trade unionist. They had acted without personal advantage, pour les besoins de la cause.

Such pleas did not move the media. Uniformly hostile to the PT anyway, the Brazilian press went into high gear as the scandal of the mensalão broke, sparing no deadly conjecture or damaging detail. Its target now lay wide open. There was no denying that the PT had always claimed to be above the swamp of traditional mores, a fearless enemy of ingrained corruption rather than a hardened practitioner of it. Soon even the distinction between institutional misconduct and individual degeneration was swept away, in spectacular fashion. The single most powerful figure in the government was the minister of finance, Antonio Palocci, a mayor from the interior of São Paulo, who had been the inspiration behind the ‘Letter to the Brazilians’, Lula’s electoral billet-doux to the business community, and the key broker for the PT’s backdoor transactions with banks and construction firms during the campaign. A mediocre former doctor with no particular economic skills, his sub rosa ties to assorted cash-box circles and his rigid orthodoxy in office made him the guarantee of business confidence in the government and toast of the financial press, at home and abroad. Shady deals in his municipal fief of Ribeirão Preto had long been rumoured, though these too could be played down as replenishing only party coffers.

But in early 2006, it emerged that a secluded lakeside mansion in Brasilia had been rented by one of his aides from Ribeirão Preto. There, in scenes out of Buñuel, the sallow features of the finance minister – he looks like a cutpurse in some low-life seicento painting – were to be glimpsed slipping from limousine to portal, to enter a villa where the rooms were equipped only with beds and a side table or two for cash and alcohol. Here discreetly came and went lobbyists and familiars, along with the minister, to enjoy prostitutes and parties, and exchange tips and favours. When news of the brothel came out, cynics could be heard to say that there was no reason for surprise, the capital itself being little more than an enlarged version of the same. Palocci was not in a position to take this line, and made desperate attempts to stifle the affair. Lula, comparing him effusively to Ronaldinho as the star player the team cannot afford to lose, sought by every means to save him, in vain. With his fall in the spring of 2006, the slate of leading politicians around Lula was virtually wiped clean.

The uproar in the media was deafening. In Congress the opposition pressed for one commission of investigation after another. Leading members of the PSDB started to talk of impeaching Lula himself for complicity in the corruption of his entourage. Feeling cornered by this wave of assaults, Lula began to speak in private of appealing to the street if his enemies persisted in trying to depose him. In reality, there was little danger of this, since both Cardoso and Serra, the PSDB mayor of São Paulo, beaten by Lula in 2002 but hoping to become the presidential candidate again for his party later that year, decided it would be better to leave a badly wounded incumbent in office than to risk the emergence of a strong, uncompromised opponent were he to be ousted.

Rarely has a political calculation so misfired. Besieged in the media and mauled in the legislature, Lula had two assets in reserve that not only saved his position, but transformed it. The first was the return of sustained economic improvement. After a period that had seen the worst stagnation of the century – an annual average growth of 1.6 per cent in the 1990s, creeping up no higher than 2.3 per cent in Cardoso’s eight years – GDP increased at a clip of 4.3 per cent from 2004 through 2006. The jump was essentially due to external good fortune. These were the years in which Chinese demand for Brazil’s two most valuable exports, soya and iron ore, took off, amid a steep general rise in commodity prices. In America, where interest rates were being held artificially low by the Fed to keep the financial bubble in the United States from bursting, the ‘Greenspan Put’ made a flow of cheap capital imports available to Brazil. As business and jobs picked up, the mood in the country changed. Few voters were disposed to quibble with official claims taking credit for the improvement. With the upturn, moreover, the state was now collecting larger revenues. These would be critical for the government’s second ace.

From the start, Lula had been committed to helping the poor. Accommodation of the rich and powerful would be necessary, but misery had to be tackled more seriously than in the past. His first attempt, a Zero Hunger scheme to assure minimum sustenance to every Brazilian, was a mismanaged fiasco. In his second year, however, consolidating various pre-existent partial schemes and expanding their coverage, he launched the programme that is now indelibly associated with him, the Bolsa Família, a monthly cash transfer to mothers in the lowest income strata, against proof that they are sending their children to school and getting their health checked. The payments are very small – currently $12 per child, or an average $35 a month. But they are made directly by the federal government, cutting out local malversation, and now reach more than 12 million households, a quarter of the population. The effective cost of the programme is a trifle. But its political impact has been huge. This is not only because it has helped, however modestly, to reduce poverty and stimulate demand in the worst afflicted regions of the country. No less important has been the symbolic message it delivers: that the state cares for the lot of every Brazilian, no matter how wretched or downtrodden, as citizens with social rights in their country. Popular identification of Lula with this change became his most unshakeable political asset.

Materially, a succession of substantial increases in the minimum wage was to be of much greater significance. These began just as the corruption scandals were breaking. In 2005, the rise was double that of the previous year in real terms. In the election year of 2006, the rise was still greater. By 2010, the cumulative increase in the rate was 50 per cent. At about $300 a month, it remains well below the earnings of virtually any worker in formal employment. But since pensions are indexed to the minimum wage, its steady increase has directly benefited at least 18 million people – the Statute of the Elderly, passed under Lula, consolidating their gains. Indirectly, too, it has encouraged workers in the informal sector not covered by the official rate, who make up the majority of the Brazilian workforce, to use the minimum as a benchmark to improve what they can get from their employers. Reinforcing these effects was the introduction early on of crédito consignado: bank loans for household purchases to those who had never before had bank accounts, with repayment automatically deducted from monthly wages or pensions. Together, conditional cash transfers, higher minimum wages and novel access to credit set off a sustained rise in popular consumption, and an expansion of the domestic market that finally, after a long drought, created more jobs.

In combination, faster economic growth and broader social transfers have achieved the greatest reduction in poverty in Brazilian history. By some estimates, the number of the poor dropped from around 50 to 30 million in the space of six years, and the number of the destitute by 50 per cent. Half of this dramatic transformation can be attributed to growth, half to social programmes – financed by higher revenues accruing from growth. Nor have such programmes been confined to income support. Since 2005, government spending on education has trebled and the number of university students doubled. During the 1990s, higher education in Brazil largely ceased to be a public function, with three-quarters of all students going to private universities that enjoyed tax exemption. Astutely, these have been obliged, in exchange for their exemption, to offer scholarship places to students from poor or non-white families who would otherwise never have a chance of getting beyond middle school. However poor the quality of instruction – it is often terrible – the hope of betterment has made the programme, enrolling some 700,000 students to date, a great popular success, sometimes compared for democratising effect to the GI Bill of Rights in postwar America.

In 2006, not all of this had yet been achieved. But more than enough had been done to shield Lula from the battering of his adversaries. Popular opinion was not entirely indifferent to corruption – at the height of the mensalão, his ratings had dropped quite sharply. But measured against such appreciable improvements in people’s lives, backhanders did not count. By the spring, the political tables had been turned so completely that Serra, looking at the opinion polls, decided he had no chance against Lula, leaving a hapless rival in his party to be thrashed in the presidential election that autumn, when Lula walked away with the same majority as he won four years before, 61 per cent in the second round. This time, however, its social composition differed. Alienated by the mensalão, much of the middle-class electorate that had rallied to Lula in 2002 deserted him, while the poor and the elderly voted for him in greater numbers than ever before. His campaign, too, struck a different note. Four years earlier, when its aim had been to reassure doubtful voters, his managers had marketed him as the bearer of ‘peace and love’ to the country. In 2006 the tone was less saccharine. Brushing aside lapses in the PT of which he had, of course, been unaware, the president launched an aggressive counter-attack on the privatisations of the previous regime, which had enriched a few at the expense of the nation and could be expected to resume if his opponent were elected. There was a gulf between his government and Cardoso’s: not a single enterprise had been privatised under Lula. The disposal of public assets, often on the murkiest terms, had never been popular in Brazil. The message struck home.

Buoyed by socio-economic success, and a more hard-hitting political victory, Lula’s second mandate was a much more confident affair. He was now not only the undisputed master of popular affection, as the first president to bring a modest well being to so many of his people, but also in complete control of his own administration. His two leading ministers were gone. Palocci – to Lula ‘more than a brother’ – he might regret personally, but he was no longer required to calm the nerves of overseas investors. Dirceu, a virtuoso of cold political calculation and intrigue, he had never liked and somewhat feared. Their joint elimination freed him for sole command in Brasilia. When, midway through his second term its test came, he handled it with aplomb. The crash of Wall Street in 2008 might be a tsunami in the US, he declared, but in Brazil it would be no more than a ‘ripple’ – uma marolinha. The phrase was seized on by the press as proof of reckless economic ignorance and irresponsibility.

But he was as good as his word. Counter-cyclical action was prompt and effective. Despite falling tax revenues, social transfers were increased, reserve requirements were reduced, public investment went up and private consumption was supported. In overcoming the crisis, local banking practices helped. Tight controls, holding multipliers of the monetary base well below US levels, and greater transparency had left Brazilian banks in much better shape than those in the US, protecting the country from the worst of the financial fall-out. But it was concerted, vigorous state policy that pulled the economy round. Lula’s optimism was functional: told not to be afraid, Brazilians went out and consumed, and demand held up. By the second quarter of 2009, foreign capital was flowing back into the country, and by the end of the year the crisis was over. As Lula’s second mandate came to an end, the economy was posting more than 7 per cent growth, and nature itself was smiling on his rule, with the discovery of huge deposits of offshore oil.

To these domestic successes could be added foreign laurels. The international standing of Brazil has rarely, if ever, corresponded to its size or potential importance. Cardoso had consorted with the Clintons and Blairs of the North, but such company had only discredited him, as a lesser mouthpiece for the guff of the Third Way. Diplomatically, the guideline of his regime was fidelity to the United States. From the outset, Lula steered another course. Without confronting Washington, he gave greater priority to regional solidarity, promoting Mercosur with neighbours to the south, and refusing to cold-shoulder Cuba and Venezuela to the north. The most impressive figure in Lula’s cabinet, the foreign minister, Celso Amorim, was soon leading a front of poorer states to thwart Euro-American attempts to ram more ‘free trade’ – free for the US and EU – arrangements through the WTO at Cancún. As he politely expressed it, ‘Cancún will be remembered as the conference that signalled the emergence of a less autocratic multilateral trading system.’ If Washington and Brussels have still not succeeded, eight years later, in imposing their will on the less developed world through the abortive Doha Round, credit must first of all go to Brazil.

In his second mandate, Lula would go much further in putting his country on the world stage. By now he was a statesman courted in every region of the world, who no longer had to defer, at least outwardly, to the conventions of the ‘international community’. In part this change was due to the increasing weight of Brazil as an economic power. But it also reflected his own aura as the most popular ruler – in both senses of the term, political and social – of the age. Consecration of the new position he had won for his nation came with the formation of the BRIC quartet in 2009, bringing the heads of state of Brazil, Russia, India and China together in one-time Sverdlovsk, with a communiqué calling for a global reserve currency. The following year Lula hosted the BRIC summit in Brazil itself. On paper, the four largest powers outside the Euro-American imperium would appear to represent, if not an alternative, at least some check to its dominion. Yet it is striking that, although Brazil alone of the four is not a major military power, it is so far the only one to have defied the will of the United States on an issue of strategic importance to it: Lula not only recognised Palestine as a state, but declined to fall in with the blockade of Iran, even inviting Ahmadinejad to Brasilia. For Brazil to do this was virtually a declaration of diplomatic independence. Washington was furious, and the local press beside itself at this breach of Atlantic solidarity. Few voters cared. Under Lula, the nation had emerged as a global power. By the end, his vast popularity was a reflection not only of material betterment, but also of collective pride in the country.

If such is the bald record of this presidency, how is it to be interpreted historically? Three contrasting views hold the field in Brazil. For Cardoso and his followers, still dominant among the intelligentsia and in the media, Lula embodies the most regressive traditions of the continent, his rule just another variant of the demagogic populism of a charismatic leader, contemptuous at once of democracy and civility, purchasing the favour of the masses with charity and flattery. In Brazil this was the disastrous legacy of Getúlio Vargas, a dictator who had returned to power by the ballot-box as ‘father of the poor’, and committed a melodramatic suicide when the criminality of his regime was exposed. In Argentina, the reign of Perón had been still more ruinous and corrupting. No less manipulative and authoritarian, if on a pettier scale, Lulismo is – Cardoso’s verdict – ‘a kind of sub-Perónism’. The element of partisan rancour in this description is no mystery: to be so outshone in popular esteem by Lula has gone hard with his predecessor. But more moderately expressed, the basic classification is not uncommon, and can be heard among those who respect the memory of Vargas as well as those who detest it.

Viewed historically, however, comparisons with Vargas, let alone Perón, miss the mark. The differences between their forms of rule and Lula’s are fundamental. Not that the great practitioners of populism in Brazil and Argentina were all that alike themselves. Vargas’s rhetoric was paternalist and sentimental, Perón’s rousing and aggressive, and their relationship to the masses was quite distinct. Vargas built his power on an incorporation of newly urbanised workers into the political system, as passive beneficiaries of his care, with a protective labour law and a gelded unionisation from above. Perón galvanised them as active combatants against oligarchic power, with a mobilisation of proletarian energies in a trade-union militancy that outlived him. The one appealed to lachrymose images of ‘the people’, while the other called up the anger of los descamisados – the local sansculottes, but without shirts rather than breeches.

Lula’s exercise of power has involved none of all this. His rise was based on a trade-union movement and political party far more modern and democratic than anything Vargas or Perón ever envisaged. But by the time he won the presidency at his fourth attempt, the PT had been largely reduced to an electoral machine. In power, Lula neither mobilised nor even incorporated the electorate that acclaimed him. No new structural forms gave shape to popular life. The signature of his rule was, if anything, demobilisation. The trade unions organised more than 30 per cent of the formal labour force in the 1980s, when he made his name as their most gifted leader. Today, the figure is 17 per cent. The decline preceded his period in office, but was not altered by it. Even the imposto sindical dating back to the Fascist-inspired legislation of the most repressive period of Vargas’s rule (the Estado Novo), whose deduction and distribution of dues by the state was long and rightly viewed by the PT as a mechanism for sapping union activism, and whose abolition was a key demand of the early 1980s, has been left untouched. Nor, on the other side of the ledger, have the forms of clientelism characteristic of classic populism been reproduced. The Bolsa Família is administered impersonally, clear of capillary systems of patronage. The pattern of rule is quite distinct.

A second interpretation looks to a different parallel. The political scientist André Singer, press secretary to Lula in his first mandate, but an independent and original mind, has pivoted a striking analysis of Lulismo on the psychology of the Brazilian poor. This, he argues, is a sub-proletariat, comprising nearly half – 48 per cent – of the population, that is moved by two principal emotions: hope that the state might moderate inequality, and fear that social movements might create disorder. On Singer’s reading, instability is a spectre for the poor, whatever form it takes – armed struggle, price inflation or industrial action. So long as the left failed to understand this, the right captured their votes for conservatism. In 1989, Lula won the prosperous south, but Fernando Collor, brandishing the danger of anarchy, swept the poor to gain a comfortable victory. In 1994 and 1998, Cardoso’s throttling of inflation ensured him a still larger margin of the popular vote. In 2002, Lula finally grasped that it was not just builders and bankers who needed reassurance that he would not do anything unduly radical in power, but – even more crucially – street vendors and slum-dwellers too. Only in 2006, however, was a complete reversal of allegiances sealed, as the middle class abandoned him while the sub-proletariat voted for him en masse. When he first ran for office in 1989, Lula took 51.7 per cent of the electorate in the south of the country, and 44.3 per cent in the famished north-east; in 2006, he lost the south at 46.5 per cent, and swept the north-east with 77.1 per cent.

The economic orthodoxy of Lula’s first term, and the lesser but continuing caution of his second, were thus more than simple concessions to capital. They answered to the needs of the poor, who, unlike workers in formal employment, cannot defend themselves against inflation and dislike strikes even more than the rich, as a threat to their daily lives. So, coming after Cardoso, Lula cut inflation still further, even as he attended to popular consumption, pioneering a ‘new ideological road’ with a project combining price stability and expansion of the internal market. In this, Singer suggests, he displayed his sensitivity both to the temperament of the masses and to the political culture of the country at large, each in their own way marked by a long Brazilian tradition of conflict avoidance. Vargas too, until he was under siege at the end, had generally embodied that trait. Lula can thus indeed be regarded in certain respects – in his ability to square the concerns of capital and labour; to exploit favourable external circumstances for internal development; to assert national interests; and above all, to make a connection with the previously inarticulate masses – as Vargas’s heir, offering a potent blend of authority and protection as the ‘father of the poor’ had once done. But in other ways, his popular roots as a penniless immigrant from the north-east and his unimpeachably democratic commitments gave him far greater legitimacy and credibility as a defender of the people than a wealthy rancher from the south, who left the rural masses essentially untouched in their misery, could ever possess. Lula did not see himself as a descendant of Vargas. The president with whom he identified was Kubitschek, the builder of Brasilia, another optimist who never willingly made an enemy.

For Singer, however, comparison with a much more famous ruler is in order. Might not Lula have become the Brazilian Roosevelt? The genius of FDR was to transform the political landscape with a package of reforms that would eventually lift millions of hard-pressed workers and pinched employees, not to speak of those made jobless by the Slump, into the ranks of the postwar American middle class. Any party that sets in motion upward social mobility on such a scale will dominate the scene for a long time to come, as the Democrats did once the New Deal was underway, though eventually the opposition will adjust to the change and compete on the same ground, as Eisenhower would do in 1952. Presiding over comparable changes, Lula’s victories in 2002 and 2006 can be mapped with uncanny closeness onto Roosevelt’s of 1932 and 1936: first a large majority, then an avalanche, the popular classes pouring out for the president as the respectable classes turned against him. In prospect could be a Brazilian political cycle just as long, driven by the same dynamics of social ascent.

Glances in the mirror at resemblances with FDR are not new in Brazil. Cardoso also liked to compare his project with that of the great Democratic coalition mustered to the north. Lula may come closer, but the contrasts between the New Deal and his intendancy are still plain. Roosevelt’s social reforms were introduced under pressure from below, in a wave of explosive strikes and rolling unionisation. Organised labour became a formidable force from 1934 onwards, which he had to court as much as he could control. No comparable industrial militancy either sustained or challenged Lula (the rural landless attempting such a role were much too weak, their movement easily marginalised). Where Roosevelt confronted a deep slump, which the New Deal never really overcame, and was rescued from its failure only by the onset of the Second World War, Lula rode the crest of a commodities boom in a time of increasing prosperity. Differing in their luck, they differed completely in style too: the aristocrat who rejoiced in the hatred of his enemies, and the labourer who wanted none, could hardly form a greater contrast. Were the ultimate upshot of their rule to be the same, there would seem little immediate connection between causes and effects.

Still, in one point there could be thought a certain likeness. The intensity of the animus against Roosevelt in conservative circles up to the outbreak of the war was out of all proportion to the actual policies of his administration. To all appearances, the same anomaly was to recur in Brazil, where Lula’s aversion to conflict was not reciprocated. Anyone whose impressions of his government came from the business press abroad would get a shock from exposure to the local media. Virtually from the start the Economist and Financial Times purred with admiration for the market-friendly policies and constructive outlook of Lula’s presidency, regularly contrasted with the demagogy and irresponsibility of Chávez’s regime in Venezuela: no praise was too high for the statesman who put Brazil on a steady path to capitalist stability and prosperity. The reader of the Folha or Estadão, not to speak of Veja, was living in a different world. Typically, in their columns, Brazil was being misgoverned by a crude would-be caudillo without the faintest understanding of economic principles or respect for civil liberties, a standing threat to democracy and property alike.

The degree of venom directed at Lula bore little or no relation to anything he was actually doing. Behind it lay other and deeper grievances. For the media, Lula’s popularity meant a loss of power. From 1985 and the end of military rule, it was the owners of the press and television who in practice selected candidates and determined the outcome of elections. The most notorious case was the backing of Collor by the Globo empire, but the coronation of Cardoso by the press, before he had even thrown his hat into the ring, was scarcely less impressive. Lula’s direct rapport with the masses broke this circuit, cutting out the media’s role in shaping the political scene. For the first time, a ruler did not depend on their proprietors, and they hated him for this. The ferocity of the ensuing campaigns against Lula could not have been sustained, however, without a sympathetic audience. That lay in the country’s traditional middle classes, principally but not exclusively based in the big cities, above all São Paulo. The reason for the hostility within this stratum was not loss of power, which it had never possessed, but of status. Not only was the president now an uneducated ex-worker whose poor grammar was legend, but under his rule maids and guards and handymen, riff-raff of any kind, were acquiring consumer goods hitherto the preserve of the educated, and getting above themselves in daily life. To a good many in the middle class, all this grated acutely: the rise of trade unionists and servants meant they were coming down in the world. The result has been an acute outbreak of ‘demophobia’, as the columnist Elio Gaspari, a spirited critic, has dubbed it. Together, the blending of political chagrin among owners and editors with social resentment among readers made for an often bizarrely vitriolic brew of anti-Lulismo, at odds with any objective sense of class interest.

For, far from doing any harm to the propertied (or credentialed), this was a government that greatly benefited them. Never has capital so prospered as under Lula. It is enough to point to the stock market. Between 2002 and 2010, Bovespa outperformed every other bourse in the world, rocketing by 523 per cent; it now represents the third largest securities-futures-commodities complex on earth. Huge speculative gains accrued to a modern bourgeoisie accustomed to gambling on share prices. For more numerous and risk-averse sectors of the middle class, sky-high interest rates yielded more than satisfactory returns on simple bank deposits. Social transfers have doubled since the 1980s, but payments on the public debt trebled. Outlays on the Bolsa Família totalled a mere 0.5 per cent of GDP. Rentier incomes from the public debt took a massive 6-7 per cent. Fiscal receipts in Brazil are higher than in most other developing countries, at 34 per cent of GDP, largely because of social commitments inscribed in the constitution of 1988 at the high point of the country’s democratisation, when the PT was still a rising radical force. But taxes have remained staggeringly regressive. Those living on less than twice the minimum wage lose half their income to the Treasury, those on 30 times the minimum wage a quarter of theirs. In the countryside, the clearing of vast interior areas of scrub for modern agribusiness, proceeding apace under Lula, has left landownership more concentrated today than it was half a century ago. Urban real estate has moved in the same direction.

Perry Anderson

See the second part of the article here: Lula’s Brazil – Part 2

* From the London Review of Books, Vol. 33 No. 7 · 31 March 2011, pages 3-12:…

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  1. […] This article is posted online in two parts. This is the second part. For the first part, look here : Lula’s Brazil – Part 1 […]

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