884361

research-article2019
LAPXXX10.1177/0094582X19884361Latin American PerspectivesFriedmann and Puty / Rise And Crisis of a Low-Conflict Progressivism

Sailing against the Wind

The Rise and Crisis of a Low-Conflict Progressivism
by
Gustavo Codas Friedmann and Claudio A. Castelo Branco Puty
Translated by
Luis Fierro

The governments of the Partido dos Trabalhadores (Workers’ Party—PT) in Brazil

(2003– 2016) were part of a cycle of progressive governments in Latin America whose
differences are more specific to the conditions of political struggle in each country—the
conditions of arrival in government, the structure of the political system—than funda-
mentally programmatic. They can be characterized as a low-conflict progressivism in that,
although there was no promotion of a neoliberal agenda on the model of European social
liberalism, there was accommodation within the framework of the established order that
was ultimately fundamental to the success of the 2016 parliamentary-judicial coup.

Os governos do Partido dos Trabalhadores (PT) no Brasil (2003 a 2016) fizeram parte
de um ciclo de governos progressistas na América Latina cujas diferenças dizem mais
respeito às condições específicas de luta política em cada país—nas condições de chegada
ao governo, na estrutura do sistema político—do que uma diferença programática funda-
mental. Podem-se caracterizar os governos do PT de um progressismo de baixo conflito à
medida em que, não obstante não ter havido a promoção de uma agenda neoliberal nos
padrões do social-liberalismo europeu, houve uma acomodação aos marcos da ordem esta-
belecida que, em última medida, foram fundamentais para o sucesso do golpe judiciário-
parlamentar de 2016.

Keywords: PT, Lula, Dilma, Progressivism, Neoliberalism

We write this article while Brazil is boiling politically, in September 2017. The
context is that of a country that has endured three years of deep economic
recession and high unemployment. The federal government, in the hands of
Michel Temer, the center-right former vice president who actively conspired to
overthrow President Dilma Rousseff in May 2016, is driving an unprecedented
agenda of neoliberal reforms with the support of the Partido da Social
Democracia Brasileira (Brazilian Social Democracy Party—PSDB), a party that

The late economist Gustavo Codas Friedmann (d. August 12, 2019) was a professor at the Perseu
Abramo Foundation. Born in Paraguay and exiled to Brazil for his political views, He was instru-
mental in the agreement between President Lula and President Lugo that readjusted the amounts
paid by Brazil for the energy produced in Paraguay by Itaipú Binacional and served as its general
director in 2010–2011. Claudio A. Castelo Branco Puty is a professor of economics at the Federal
University of Pará and at the University of International Business and Economics (Beijing). He was
a PT deputy in the Congress from 2011 to 2015. Luis Fierro is a translator living in the Miami area.

LATIN AMERICAN PERSPECTIVES, Issue 230, Vol. 47 No. 1, January 2020, 83–99
DOI: 10.1177/0094582X19884361
https://doi.org/10.1177/0094582X19884361
© 2019 Latin American Perspectives

83
84   LATIN AMERICAN PERSPECTIVES

was defeated by the Partido dos Trabalhadores (Workers’ Party—PT) in the last
four elections. Lula’s possible candidacy is leading the opinion polls and draw-
ing crowds to the streets of Brazilian cities in caravans organized by the PT.
Meanwhile, right-wing forces are preparing, in broad daylight, to ban his pres-
idential candidacy and waging a fierce contest within the conservative bloc
over their alternative candidates. Amid the multiple layers of the crisis, an
assessment of the PT governments is fundamental for the reconstruction of
emancipatory paths for the Brazilian people.
Whom did the governments led by the PT represent? Would they have pro-
moted the same neoliberalism of the 1990s, mitigated this time by compensa-
tory social policies—a kind of “social neoliberalism”? Did they function as a
sort of indirect agent of neoliberalism by demobilizing the working class? Or
were they a true “post-neoliberal” experiment? And, after all, what comes after
neoliberalism on the periphery of world capitalism? We have reviewed the PT’s
political trajectory in Brazil’s recent history in an attempt to understand how
the party has approached the task of governing Brazil since 2003. We will criti-
cally address these governments, especially in their economic and social dimen-
sions, in the Latin American context and conclude with an effort to characterize
the PT experiment. The PT governments braved the turbulent seas of the polit-
ical struggle in Brazil and had good results while the economic conditions
allowed sufficient nautical speed. However, the incipient democratization that
they promoted triggered reactions in which constraints that had been latent for
many years became open opposition. The ship slowed down and, engulfed in
the vortex, capsized, astonishingly, in the coup of 2016.

Progressivism in the Era of Programmatic

Disorganization

The progressive cycle of governments in Brazil began in 2003 not as a result

of a linear programmatic and organizational accumulation of forces of the
Brazilian left in the previous period but because of the combination of the neo-
liberal crisis and popular resistance that opened the way for the conquest of the
presidency. The trajectory of the PT embodies these contradictions. Founded in
1980, in the following decade the PT passed through two very distinct phases.
After its origin, growth, and implantation across much of the national territory
there was a period of resistance to the neoliberal reforms of the 1990s, with a
reduction of its strategic perspective to purely electoral dynamics. Until the
election of 1989, electoral dispute was for the PT part of a strategy of democratic
“rupture.” In that year Lula came close to winning the presidential election
defending a popular-democratic, antilandowner, and anti-imperialist platform
in the wake of social struggles, including a two-day general strike in March
1989. A few months before, the PT deputies had voted against the approval of
the final text of the 1988 Constitution in protest of what was considered a
restricted and conservative redemocratization.
Beginning in the 1990s, with increasing institutional victories, elections
became more and more the PT’s path to power. This was at a moment of
immense defeat of the left at the world level with an accelerated reversion of
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   85

the experiments in “real socialism” to savage capitalism that strengthened neo-

liberal hegemony. We do not underestimate the importance of this ideological
and theoretical retreat. In the “programmatic disorganization” of the left 1
socialism disappeared from the strategic political perspective of the main leftist
parties that survived, and Cuba, which dared to maintain its socialist experi-
ment, was thrown into the difficult conditions of the “special period.”
Two countertendencies illustrate efforts at resistance. In 1990, on the initia-
tive of Lula and Fidel Castro, an open meeting of leftist and progressive parties
was convened in São Paulo and developed into the Forum of São Paulo, a broad
area of convergence that remained alive throughout these decades. In the fol-
lowing year, 1991, the PT held its first congress, in which it debated and
approved what would become “PT socialism” and asserted that it could not be
similar to the experiences of European social democracy or the “real socialism”
of the Soviet Union but instead was a general framework for the development
of a project of a democratic socialism. In this context, the idea became consoli-
dated that governing meant reversing the priorities for the management of the
public machine in favor of the majority. It was about having a strategy for
improving the living conditions and income levels of the socially marginalized
popular sectors and depressed regions. In the 2002 campaign, two main ideas
were reinforced. The first was that Lula would feel fulfilled if, at the end of his
term, all Brazilians ate three meals a day. The second was that improvement in
the conditions of life of the majority would be achieved without causing losses
to the capitalists, the upper middle classes, and the more developed regions.
These goals not only were part of his campaign rhetoric but are still part of
Lula’s defense of the legacy of his two governments.

A Brief History of the PT Governments

Lula’s electoral victory in 2002 came after three failed attempts (1989, 1994,
and 1998) and after the PT and its network of social movements had been the
main opponents of the implementation of the Washington Consensus agenda
in Brazil throughout the 1990s.
The liberalizing economic policy of the governments of Fernando Henrique
Cardoso had a repressive bias and concentrated income. It involved a period of
overvaluation of the real in the form of an exchange-rate anchor, mechanisms
for attracting flows of foreign capital through the opening of the capital account,
restrictive monetary policy and high interest rates, broad commercial liberal-
ization, the privatization of state enterprises, an end to restrictions on foreign
direct investment, severe fiscal tightening, reduction of the state’s role in the
economy and the provision of public services, and, last but not least, regressive
tax reform with exemptions for capital gains and reduction of income tax rates
for the richest.2
The rise of governments led by the PT to the central executive branch
occurred in the context of the exhaustion of the model of macroeconomic
adjustment that had limited growth in the years of President Fernando
Henrique Cardoso. Added to this, the blackout of electricity service throughout
the country caused in 2001–2002 by the lack of investment in this sector, leading
86   LATIN AMERICAN PERSPECTIVES

to its privatization, further eroded neoliberal hegemony. This phenomenon had

been appearing in most of the region, with Lula’s victory being preceded by the
election of Hugo Chávez in Venezuela in 1998, the intense crisis and dollariza-
tion in Ecuador, and the Argentine default of 2001.
The election of Lula did not, however, come without important political con-
cessions. After pressing the party, Lula nominated as his vice president a busi-
nessman from the garment industry, José Alencar of the center-right Liberal
Party. He then launched the “Letter to the Brazilian People”3 of June 22, 2002,
in which he guaranteed that the new economic model implemented by the PT
would be based, “of course, on respect for the contracts and debts of the coun-
try.”
In the assembling of his first cabinet he gave another clear signal of adher-
ence to the agreement with financial capital by naming to the presidency of the
Central Bank Henrique Meirelles. a federal deputy newly elected by the PSDB
(and, not coincidentally, currently the finance minister and the main guarantor
together with the market of the government of Michel Temer). Clearly, this
affirmed a political option for nonconfrontational coexistence with financial
capital and the main characteristic of the PT cycle in government: a progressiv-
ism that sought to promote social inclusion and substantive improvements in
the living and working conditions of the majorities through the solutions that
caused the least friction with the ruling class.4
Given the characteristics of the Brazilian political system, the PT assumed
the government with a minority in the National Congress and faced with vari-
ous political crises that threatened to lead to impeachment and took refuge in
the relative stability of the “coalition presidency.” In this pattern of governabil-
ity, inherited from the Cardoso years, the political center (at that moment the
Partido Movimento Brasileiro [Brazilian Democratic Movement Party—
PMDB]) played a central role in sustaining the government and, most impor-
tant, the Senate. This parliamentary dynamic and its counterpart, the occupation
of government posts and the subsequent determination of electoral alliances in
the subnational elections, deeply marked the tactics of the PT in those years.
Especially after the mensalão scandal, which almost destroyed Lula in 2005–
2006, the PMDB became the anchor of governability and preferred ally of the
majority of the PT as opposed to its leftmost sectors, even in internal party
disputes. By adopting this pattern of governability, the PT and its allies on the
left fit within the framework of the narrow Brazilian democratic-liberal institu-
tionality, opening a fatal flank by not daring—by convening a constituent
assembly—to make political reforms that altered the democratic bases of
power.
Two other characteristics of the battlefield on which Lula’s government was
moving were the oligopolistic character of the media in Brazil and the siege on
the government by the state.
The media in Brazil are controlled by a few family or religious groups, and
their integration with the financial sector both as owners and as large advertis-
ers is apparent. The dispute between these groups for the resources of official
publicity generates the illusion that the government can guide them when, in
fact, in the long run it is exactly the opposite that occurs. This illusion of control
of the oligopolistic media through funding of advertising generated yet another
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   87

political deficit of the PT governments, which did not even attempt to democ-
ratize the mass media. As if responding to a single editor, radio and television
networks and print newspapers with a national circulation developed, from
the mensalão case in 2005 until 2016, an efficient campaign for the political ero-
sion of the PT, identifying it as the sole representative and beneficiary of cor-
ruption in the country.
What we call the siege on the government by the state refers both to the rules
of its functioning and to its personnel composition, which were ill-suited to the
purposes of a government committed to the democratization of power: laws
and regulations that ultimately played a regressive role in the allocation of the
public budget and Supreme Court justices, judges, prosecutors, public employ-
ees, and even holders of commissioned positions many of whom were resolute
opponents by origin or class position of any left-wing project but holders of
specialized knowledge, power, and ties to the high bureaucracy, not to mention
the military and the state military police.
Therefore, Lula’s victory had some important constraints: a center-left/left
congressional minority, broadly hegemonic financial capital, a media oligopoly
by private groups, and a state commitment to antiredistributive logic. The
experience of the PT governments was therefore highly conciliatory toward big
business—the media, agribusiness, financial capital, and some industrial
groups. Justified in terms of the need to achieve a parliamentary majority and
minimum conditions of governability, this ended up extending to the cam-
paign finance dynamics of the PT and its allies, leading to scandals such as that
of Petrobras. The enormous influence of the banks over the policies of the
Treasury and the Central Bank and the formal presence of representatives of the
private banking federations in the management of state and parafiscal funds
are just a few examples of the direct power of finance over the Brazilian state.
Public policies also followed the path of least conflict/veiled compromise,
increasing vacancies in higher education by purchasing vacancies in private
schools with public money and thus allowing rapid expansion (since the pri-
vate schools were idle) but placing a mass of young people under the ideo-
logical control of private education in addition to transferring large financial
resources to private educational groups.
Under great pressure from capitalist agribusiness, the deconcentration of
landownership through agrarian reform eventually disappeared, with the Dilma
government’s defense of a “rural middle class” and the “quality” of the settle-
ments being a sign that new expropriations were no longer a priority. The gov-
ernment adopted in its official discourse the liberal vulgate that Brazil had created
a “new middle class”—a mystifying thesis for at least two reasons: because the
income of the alleged middle class was too low to constitute a stable middle
stratum and because it overlooked their being part of the working class.
With regard to macroeconomic management, the PT governments were ini-
tially characterized by preservation of the tripartite framework, but after 2005
there was a clear change. The increase in central government revenues (Figure 1)
had already guaranteed fiscal space for programs of social inclusion and recon-
struction of state capacities.
After the global financial crisis this option became clearer when there was an
undeclared abandonment of the bases of the tripod, deepening the conflicts
88   LATIN AMERICAN PERSPECTIVES

Figure 1. Annual variation of net current central government revenues (%) in 2017 prices
(data from Secretaria do Tesouro Nacional, 2017).

between so-called developmentalist and neoliberal sectors within the govern-

ment. The first Dilma government followed the path of Lula’s second and
began with the clearest attempt to break with the inherited principles of mac-
roeconomic management, peaceful coexistence with financial capital, and con-
gressional governance through bargaining. In a May 1, 2012, statement, the
president argued that the banks had a “perverse logic” and mandated that state
banks lower their interest rates to record levels. From then on and throughout
2012, the period was one of marked conflict. The distributive dispute between
capital and labor in the context of a heated labor market began a moderate
increase in inflation, which was at the “ceiling” of the annual inflation target.
This triggered significant pressure from the press for the government to take
tougher measures against inflation—to raise basic interest rates. Faced with the
strong pressure of “published” opinion, the government backtracked and
resumed a process of raising the Central Bank’s basic rate, which had conse-
quences for the exchange rate and for industrial competitiveness.5 We consider
this as having determined the future of Dilma Rousseff’s government.6
Then we had the mobilizations of June 2013, an expression of the malaise felt
by a significant part of the traditional middle class. Symbolically threatened by
the social rise of the poorest and facing inflation in services, particularly domes-
tic services, this middle class exploded into activism that was capitalized on by
far-right groups funded by American think tanks and nongovernmental orga-
nizations such as those linked to the Koch brothers. The pattern of the demon-
strations was diffuse, starting with municipal issues and, as became clear,
ending up being part of the international promotion of “color revolutions” by
organizations linked to the United States, where legitimate discontent over par-
ticular issues became a political whirlwind of regressive bias. The corporate
media clearly saw the opportunity to manipulate the sense of the mobilizations
to combine this social discontent with its agenda against the macroeconomic
management of the PT government and the struggle against PT corruption con-
nected with what was called Operation Car Wash.
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   89

The government’s response to the demonstrations was advanced by propos-

ing to the Congress elements of a democratization of the Brazilian political
system, but it had not created the conditions for confronting the new political
moment. From that point on it was clear that with the end of the commodity
cycle and the ensuing win-win period in the Brazilian economy, a change in the
pattern of class struggle in Brazil was under way. In fact, several studies have
shown that, beginning in 2011, there was both a contraction of the profit mar-
gins of Brazilian companies (Rocca and Santos Jr., 2015) and a decline in the
aggregate profit rate (Marquetti, Hoff, and Miebach, in this issue). The conse-
quence was a decline in aggregate saving, private investment, and economic
growth. The Dilma government’s attempts to stimulate investment with ever-
increasing tax exemptions for industry and a shift from regulatory frameworks
in the logistics area to facilitating private investment were insufficient and inef-
fective. The general phenomenon undermined the conditions of governability
by eroding the PT executive’s power of arbitration between classes.
Still, in 2014, after an ideologically polarized campaign, Dilma defeated by a
narrow margin Aécio Neves, the neoliberal right-wing candidate, and was
reelected. By the end of that year the country had the lowest unemployment
rate in its historical series (4.8 percent), and opinion polls showed that one of
the decisive factors in Dilma’s candidacy was job and income outcomes.
However, by the end of 2014 federal revenue was dropping. Associated with
this, problems accumulated in the external accounts and paralysis in private
investment. Added to this scenario were two other crises: Operation Car Wash,
which revealed the extent of corruption at Petrobras and the involvement of
almost all the heads of the Congress in kickback schemes, and the rise of Deputy
Eduardo Cunha, who symbolized the toxic combination of business interests
and politics, to the presidency of the Chamber. Faced with the free fall of rev-
enues, the paralysis of Petrobras and the entire civil construction sector, and an
uncontrolled Congress, the government opted for more concessions to financial
capital, repeating the formula used by Lula in 2003: calling in a neoliberal eco-
nomic team to manage a fiscal adjustment plan for a supposedly rapid recovery
of the economy and thus have peace on one of the fronts of battle. Nothing
could have been more misleading.
The idea of   the adjustment plan was (1) to liberalize administered prices in
an attempt to modify profit margins for the electric, oil, and gas sectors; (2) to
substitute state investment for private investment from a concessions program
in the infrastructure sector with readjusted rates of return and Banco Nacional
de Desenvolvimento Econômico e Social (National Bank of Economic and
Social Development—BNDES) support, this time for financing via debt instru-
ments in the capital market such as infrastructure bonds; (3) to cut primary
expenditures; and (4) to intensify the fight against inflation through successive
increases in basic interest rates. The plan was a failure. The economy slowed
still further, deepening the recession, generating a price shock, blowing up
unemployment, and increasing the fiscal problem. The effect of the option for
austerity was social demobilization and the further weakening of government
ties with the working class. This was accentuated when, on the eve of her
impeachment, Dilma announced a pension reform and measures that pro-
moted the privatization of state-owned enterprises.
90   LATIN AMERICAN PERSPECTIVES

Meanwhile, the other two crises were getting worse. Operation Car Wash
advanced on the PT and Lula, and the Congress elected Eduardo Cunha, who
immediately carried out a series of measures that sabotaged any initiative of
the government toward economic recovery and used the receipt of a demand
for the impeachment of Dilma as an instrument of blackmail. The government,
under pressure from Lula, opened up more space for the PMDB, including giv-
ing the task of congressional articulation to Michel Temer himself.
In retrospect, the ill-fated adjustment of 2015 stemmed from the—largely
political— standoff in economic management, with the decline in the policy of
lowering interest rates and the intensification of disputes between the Treasury
and the Central Bank. For a number of years there had been a dysfunctional rela-
tionship between moderate expansionism and relative price management and
measures to ensure the latter’s inflation target. At the heart of the problem was
once again the macroeconomic tripod, since monetary policy kept the real over-
valued—deepening current-account problems—as the government’s reluctance
to admit a primary deficit (until 2015 Brazil was the only country in Latin America
to maintain a primary surplus) restricted fiscal policy, preventing the soft landing
that occurred in other Latin American countries in the same period. While the
anachronistic macroeconomic framework undermined the prospects for con-
fronting economic stagnation, political circumstances led to the fatal error of a
severe fiscal adjustment in the midst of a slowdown even though Brazil had
absolutely reasonable debt indicators compared with the world standard. The
combination of higher rate for electricity and fuel, interest rate increases, and
reduction of the Growth Acceleration Program, as well as Operation Car Wash’s
blocking of the huge investments projected by Petrobras, generated a perfect
storm that sank the country in the worst recession ever registered.
The story of the government’s terminal crisis would not be complete without
mentioning the role of state institutions such as the Federal Police, the Federal
Court of Accounts, and almost all of the judiciary in making the Dilma govern-
ment inviable. These institutions, increasingly articulated with the press, barred
public policies (for example, the court’s embargo on changing the regulatory
framework of ports and the opposition of sectors of the judiciary to the More
Doctors program), prevented the presence of Lula in the Dilma cabinet and
called into question her accounts and her ministers in a process of constant
obstruction that gradually paralyzed the government and led to its fall.

Neoliberal governments?

The history of the PT governments suggests that many of the choices they
made were not for the necessary ideological conversion or abandonment of a
reformist program. In most cases they were the result of an evaluation—per-
haps conservative—of the correlation of forces combined with an institutional
illusion that led to the government’s not creating the conditions for a change
from social mobilization and effective democratization of the state and other
“ideological apparatuses” as in the case of the oligopolized media. Even so,
important innovations in public policy and politically significant outcomes
occurred during this period.7
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   91

Figure 2. Evolution of BNDES disbursements, 1995–2016.

In foreign policy, Brazil had a global role unprecedented in its history

through what was known as the “active and dignified” policy. Independence
vis-à-vis the United States was central to the consolidation of the G20 in the
struggle for reform of the International Monetary Fund and the World Bank
and the establishment of the BRICS, signaling the need for a new post–Bretton
Woods global governance arrangement. Lula’s presence in the Brazilian gov-
ernment was fundamental for burying the proposal of the Free Trade Area
of   the Americas, the main U.S. strategy for the region since 1994. The PT gov-
ernments were decisive for the creation of regional institutions promoting
political integration such as UNASUR and CELAC and the strengthening of
Mercosur. Finally, the presence of a progressive government in Brazil provided
a level of political and economic protection to the other progressive experi-
ments in the region.8
The recovery of the capacity for state intervention was remarkable. The
BNDES exhibited an unprecedented increase in its support for industry and
the strengthening of national business groups, with disbursements exceed-
ing R$150 billion beginning in 2009. The repositioning of the state took
various forms—public tenders, career structure, the creation of specific
ministries—that allowed a strengthening of the action of the public sector.
Robust investment programs in infrastructure and housing construction
were also established (Figure 2).
There was a strengthening of universal public policies in terms of both
increased budgets and coverage. The approval of a national education plan that
included spending 10 percent of the GDP on education and the allocation of 50
percent of the resources from the Pre-Salt oilfields toward a social fund for
education and 25 percent to health was a legacy of the political environment of
that period. The opening of a record number of new public universities and
increased funding for existing ones and the establishment of racial quotas for
admissions changed the face of public higher education in Brazil. The More
Doctors program, which enabled thousands of health professionals, including
foreigners (a good number of Cubans) to be hired and mobilized to serve
92   LATIN AMERICAN PERSPECTIVES

populations for which assistance was lacking, was also a milestone. The cre-
ation of ministries aimed at family agriculture and social development, respec-
tively, allowed for a series of innovations in public policies for small farmers,
agrarian reform settlers, and families in vulnerable situations that, together
with real adjustments of the minimum wage in all the years of the government,
allowed about 30 million people to escape poverty.
The strong infrastructure investment policy had multiplier effects, generat-
ing around 20 million jobs in the period before the crisis that led to the coup. A
constitutional amendment guaranteed unprecedented labor and pension rights
to domestic workers (Brazil has the world’s largest contingent of women,
mostly black, in domestic work). Public social security coverage increased and
pension accounts, as a result of the boom in the labor market, became sustain-
able.
The discovery of oil in the Pre-Salt layer on the Brazilian coast led to an
increase in investment in the oil and gas chain, with multiplier effects on ship-
building thanks to the Lula government’s policy of requiring national content
in the company’s large procurement contracts. Petrobras’s share of the holding
has grown, and so has the company, threatened with privatization in the 1990s.
The Pre-Salt regulatory framework, to the dismay of private companies after a
hard battle in the Congress, made the state the owner of the oil and placed a
state-owned oil company, Petrosal, in control of production. A sovereign fund
was set up to receive resources from the exploitation of the Pre-Salt layer. All
these measures were the fruit of intense battles in the Congress, since the right
was radically opposed to them.
The PT governments had a clearly redistributive character, as is apparent in
the behavior of the Gini index, which declined steadily from .54 in 2004 to .49
in 2014 (Ministério do Desenvolvimento Social, 2015). Despite persistent
inequality in Brazil and increasing income concentration in the world, the pov-
erty rate in 2014 had fallen by 70 percent in relation to 2004, and about 36 mil-
lion people had risen above the extreme poverty line, generating a new working
class. The significant decline in the proportion of the GDP represented by
wages up till 2004 was reversed in 2005. The criticism of liberal sectors and
some of the left that revenues in this period were due exclusively to the favor-
able conditions of international liquidity overlooks the unconventional and
successful management of the crisis of 2007, when world orthodoxy advocated
austerity and the government was decisively expansionist.

Brazil in the Latin American Progressive Cycle

The Brazilian experiment is better understood by looking at the rest of Latin

America. With the electoral victory of Hugo Chávez in Venezuela in 1998, the
region experienced the beginning of an unprecedented cycle of popular gov-
ernments—electoral victories of progressive forces (Uruguay, Bolivia, Ecuador,
Nicaragua, El Salvador), alliances led by progressives (Argentina, Brazil,
Paraguay), and progressive reconversions of conservative governments
(Honduras). Cuba went from the final phase of the “special period” begun in
1992 to the updating of its model with the assumption of the government’s
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   93

leadership by Raúl Castro in 2006 (on a provisional basis) and 2008. Within this
synchrony there was significant heterogeneity in the characteristics and dynam-
ics of the national processes. In three cases (Venezuela, Bolivia, and Ecuador)
the new governments responded by convening constituent assemblies to rees-
tablish the republics. In the others electoral victories occurred within constitu-
tional continuities. In some countries (Venezuela, Bolivia, Ecuador, Paraguay)
the victorious forces were relatively recent or unstructured, while in others
(Brazil, Uruguay, Nicaragua, and El Salvador) they were the result of decades
of construction. In three cases the governments were interrupted by coups
(Honduras in 2009, Paraguay in 2012, Brazil in 2016).
Both the right and the left tried to classify these governments as “carnivo-
rous” (revolutionary) or “vegetarian” (reformist), but these attempts greatly
impoverish the analysis. For example, in the two processes considered most
radical or revolutionary—those of Venezuela and Ecuador—the former
approved the autonomy of the Central Bank and the latter maintained the dol-
larization of the economy, both clearly neoliberal measures adopted within an
assessment of the correlation of forces in society and what the priorities of
governments should be. In virtually every case of a progressive government we
find (1) the urgency of removing the large human contingents that were below
the poverty line, (2) the effort to strengthen the state as an actor in the country’s
economy by capturing larger portions of the extraordinary incomes resulting
from the commodities boom and expanding its capacity to guide national
development vis-à-vis the market, and (3) varying degrees of national sover-
eignty with regard to U.S. imperialism, for which it was understood that our
countries needed to deepen regional integration.
In the beginning, the radical nature of some of these processes had a political
dimension— a fierce effort to defeat the old oligarchies that had so far domi-
nated these countries’ political life. The three programmatic lines mentioned
above served to forge alliances between the new governments and large major-
ities, beginning with the poorest. In no case did the government program
approach the radicalness with which Salvador Allende won elections in Chile
in 1970, which enunciated a peaceful transition to socialism through the elec-
toral process. There were no “socialist” programs in the recent progressive
cycle, although there were some unusual forms, such as “Amazonian capital-
ism” (Bolivia) and “serious capitalism” (Argentina). It was in an attempt to
realize those basic programmatic axes that political dispute developed, and
eventually there was programmatic deepening. The most emblematic case was
the Venezuelan, which only in the seventh year of Chávez’s government in
January 2005 opened the discussion of twenty-first-century socialism and later
proposed the reorganization of the state in terms of communes. Even there, the
government had already gone through a coup in 2002 and an oil strike.
Confronting political and economic difficulties of all kinds, however, it made
little progress on the programmatic path indicated.
The trajectories of progressive governments had sharp contradictions with
sectors of civil society in relation to environmental issues, since the financing
of some public policies required a degree of intensification of primary export
activities, which, in general, came into conflict with the traditional populations
affected and with environmental concerns. In many national experiments, the
94   LATIN AMERICAN PERSPECTIVES

basic program of the government was not free of contradictions within progres-
sivism itself. There were problems in macroeconomic management; inflation,
external constraints, and fiscal difficulties whose tax solution was blocked by
the resistance of the very rich were common bottlenecks of these experiments.
In short, the PT governments of Brazil were not fundamentally different from
other progressive governments in Latin America. What seems to distinguish
them is the dynamics of the political disputes that surrounded them.

The Nature of the PT’s Experiments

Neoliberalism as a global system of domination by financial capital has lived

several lives since the 1970s. It has gone from advocating a “minimal and strong
state” to the promotion of dismantling nation-states. These contradictions lead
Duménil and Levy (2017) and others to say that neoliberalism is already expe-
riencing a transition toward a new social order on the right.9 But what, after all,
would characterize a neoliberal government in Latin America?
In the 1990s there was little doubt that Latin American peripheral capitalism
was being reformatted by a neoliberal program. The menu included privatiza-
tion of companies and public services, indiscriminate opening to international
trade, deregulation of financial markets, and liberalization of the capital
account of the balance of payments for the free international flow of capital.
The consequences were a regime of low economic growth and social devasta-
tion: increase in structural unemployment with the growth of the informal mar-
ket and deregulation of formal work; the dismantling of peripheral Fordism
through the relocation and de-verticalization of companies and productive
chains within countries (“fiscal warfare” between states in Brazil) and interna-
tionally a “race to the bottom” on social and labor rights. Latin American neo-
liberalism, in addition to the defense of values and policies aimed at the
promotion of the free market and the implementation of mechanisms for the
valorization of fictitious capital, was characterized by subordination to an eco-
nomic and therefore political hierarchy that has in the United States undis-
puted leadership in the region. This hierarchy leads to resignation to
specialization in the production low-complexity and primary products—the
historical expression of interrupted development.
The pattern of state intervention, distributional outcomes, concern with the
national question, and a history of political conflicts of the distributive function
seem to clearly indicate that the PT governments were not a tropicalized neo-
liberal experiment. After all, why would financial capital, industrial confedera-
tions, and the wealthy in general overthrow a government that supposedly
promoted a regime of neoliberal accumulation and domination? Indeed, in the
Brazilian context, left-wing governments have promoted mostly progressive
agendas without having overcome important contradictions in the structure
and dynamics of their economies and a certain political ambiguity stemming
from the aforementioned institutional conditions. There is certainly a big dif-
ference between being an active part of implementing a neoliberal program
and political survival through the promotion of changes that respect the limits
of the established international order. In fact, given the inherited political and
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   95

institutional conditions, which remained unchanged, it is admirable that the

governments lasted so long and managed to move forward in an absolutely
inhospitable environment. But if the PT governments were not a type of neo-
liberalism, what were they?
The political debate on the left on Latin American progressivism seems to
have revolved around three positions. In addition to the already discussed idea
that they were a kind of social liberalism or a new type of neoliberalism, there
is the idea that they were post-neoliberal (Sader, 2007) and the idea that in the
cases of Venezuela, Bolivia, and Ecuador they were postcapitalist (Boron, 2017).
The conceptual problem with the idea of post-neoliberalism is its indetermi-
nacy: either it suggests a roadmap of rupture and solid transition that does not
appear to have occurred or it simply adds to the set of forms of twenty-first-
century progressivism. Most proponents of this idea see a return, under the
direction of popular and leftist forces, to the national-developmentalist, indus-
trialist, and statist program with a much stronger social and democratic dimen-
sion than in the period of import substitution. Hence the designation, which
seems appropriate in the Brazilian case, “social developmentalism.” However,
it should be kept in mind that import substitution began in the period of inter-
ruption of foreign trade by the crisis that began in 1929. The recent period
represents exactly the opposite, with high prices for exportable primary prod-
ucts that made possible a strategy for social development and the expansion of
state capacities in the midst of deindustrialization and reprivatization of the
economy, which makes social developmentalism an eminently political con-
cept.
Sectors of the left close to environmentalism have insisted that the character
of the experiment is a neoextractivist neoliberalism (Svampa, 2017)—the con-
tinuation of the historically developed model in the region, this time with the
use of extractive resources to finance social policies. The problem with this
characterization is that, while in some national cases (Venezuela, for example)
or sectors (agribusiness and minerals in Brazil), it does seem to correspond to
the facts, it does not account for the model. In a few cases there have been
efforts at economic diversification, industrialization, expansion of environmen-
tal stainability policies, and the recognition of the rights of indigenous and
traditional peoples in terms totally contrary to traditional extractivism. The fact
is that the experiments of the PT governments put great emphasis on the social
“emergency”—the priority of service to those who are starving or in absolute
poverty. This was expressed in stimulation of the expansion of the internal
mass market (part of the party program since the 1990s), which resulted in a
strategy of social inclusion by consumption.
Our notion of a low-conflict progressivism may correctly express the picture
but not the dynamics of the period, since these governments began with a less
progressive profile in 2003–2005 to reach a high point in 2011–2012 with the
social mobility and deepening democracy that were interrupted by the 2016
coup. This characterization follows Singer’s (2012) proposal of a “weak reform-
ism” to describe the two Lula governments (2003–2010) but emphasizes that
the program fell short of deep structural reforms. It distances itself, however,
from Modonesi’s (2017a) attempt, borrowing a concept from Gramsci, to frame
the experiment as a “passive revolution.” According to Modonesi himself
96   LATIN AMERICAN PERSPECTIVES

(2017b), “Gramsci maintained that [the class profile of passive revolution] orig-
inated at the initiative of the ruling classes and . . . this characteristic did not
correspond to the Latin American cases.” His attempt to dilute this concept,
whether because the bourgeois sectors termporarily associated themselves
with progressive governments or because they were favored by those govern-
ments’ policies, modifies the concept and sterilizes it. In the Brazilian case, the
right-wing counteroffensive launched since 2014 is proof of the progressive
content of the experience and the bourgeois character of the opposition it suf-
fered in its decisive moments.
As for postcapitalism, which is certainly not the case in Brazil or Argentina,
we can recall cases in which an attempt to overcome peripheral capitalism was
based on the notion of twenty-first-century socialism (in Venezuela) or some
modality of “living well” (in Bolivia and Ecuador). The evaluation of these
experiments in terms of that they actually did does not indicate effective efforts
to go beyond the social relations of capitalist production or liberal democracy.
Finally, it is important to mention the meaning of leadership, charismatic
and deeply popular as Lula’s was, in the scenario of progressive governments.
Descriptions of the relationship of these leaderships to the impoverished sec-
tors of society identify so-called populism as a democratic and authoritarian
anomaly, fundamentally a threat to the institutional order or, in its ambiguity,
a betrayal of the “program of the revolution.” From our perspective, the emer-
gence of leaders with this profile in the Latin American left represents precisely
the opposite—a progressive expression of unsatisfied demands found in the
figure of the charismatic leader, a catalyst for the construction of a popular
identity in the midst of preexisting social conflict. According to Laclau (2013),
populism is not an ideology but a political construction that may assume ideo-
logical forms from right to left, as is the case here. It is no wonder that, in con-
trast to leaders of this type, more and more assert the need for technocratic
governments in accordance with the dictates of an institutionality built for the
financial market.
Therefore, in the light of the history of the PT governments and the com-
parison with the experiments of neighboring countries, it seems to us more
prudent to view them as part of a long war of position on the political terrain
between democracy and capital in our continent, which has shown little prog-
ress since the reclaiming, now by progressive forces, of the banners abandoned
in the 1980s by the Latin American bourgeoisie.

Conclusion

The characterization of the PT experiment as low-conflict progressivism

aims to capture the dynamics of the Lula government in 2003 and record its
limitations. The PT’s victory in 2002 was a result of criticism of Cardoso’s neo-
liberal government (1995–2002) and the recognition of the PT as the main polit-
ical force that opposed him over the years.
Lula’s tactic, carried out on the periphery of capitalism, of implementing
policies for the benefit of popular sectors, national sovereignty, and regional
integration without prejudice to bourgeois economic interests was quickly
 Friedmann and Puty / RISE AND CRISIS OF A LOW-CONFLICT PROGRESSIVISM   97

confronted by U.S. imperialism. This became clear when Brazil, with the sup-
port of all of Mercosur and Venezuela, took up the rejection of the Free Trade
Area of   the Americas, negotiated since the mid-1990s as the U.S. priority hege-
monic project for the region, at the Summit of the Americas in Mar del Plata,
Argentina, in November 2005. The worldwide crisis of capitalism in 2008 and
its repercussions throughout the world system over the following years nar-
rowed the margins of operation of this tactic both within the country and in
Brazil’s relationship with the world market. The first term of President Dilma
(2011–2014) was the scene of an increasingly intense dispute between big capi-
tal and the progressive government led by the PT.
There were glimpses of answers from the Dilma government, as in the speech
that the president made on May 1, 2012, and the platform that responded to the
mass demonstrations of June 2013 (which, however, was quickly blocked by its
conservative allies), and the election campaign that gave her the fourth con-
secutive PT victory in October 2014 was in programmatic terms the party’s
most radical since 1989. Were these announcements of the passage from the
slow war of position to embryonic forms of a war of maneuver? In fact, this
seems to have been the reading given it by the right, given the intensity of the
counteroffensive unleashed to overthrow the government from the day after
the 2014 PT electoral victory. However, surprisingly, in programmatic terms the
second Dilma government looked like an attempt to return to the 2003 tactic,
now with the appointment as finance minister of an extreme neoliberal to
implement a recessionary fiscal adjustment program. This did not soothe the
forces of the right-wing coup but diffused the ability to resist of the popular
sectors, since it was read as if the government had taken over the program that
the Dilma candidacy had just defeated at the polls.
The path to the coup was open, with a powerful regrouping of conservative
forces that undercut the alliances the PT had made with center-right parties to
win the 2014 election and achieve governability in Congress. Attempts to cor-
rect course in 2016 were incomplete and late. The fall of the Dilma government
occurred without great resistance on the part of the popular sectors, although
there was at that time an unbroken confluence of left-wing forces around a
common assessment of the conjuncture—that it was a reactionary coup that
called for unified resistance that had not occurred since 2004, when the PT
experienced the crisis and division that gave rise to the Socialism and Freedom
Party.
In the midst of the backlash against the progressive governments, it is not yet
clear that their cycle has ended. While the right-wing forces do not have a project
with hegemonic capacity such as the neoliberalism they imposed in the 1990s,
conservatism has gained space because of the economic or political difficulties
the progressive governments encountered. It has expanded in a vacuum, not
because it has a better program to offer Brazil and Latin America. Faced with
this dilemma, the challenge for the left is not simple. In order for a new batch of
electoral victories to have strategic meaning, it is necessary to overcome the
impasse of the phase that has just ended. In this connection, an appreciation of
the difficulties, advances, and defeats of progressivism is crucial, but it seems to
us that the best method is not an abstract assessment, one that relegates history
to the background or imagines that the best way of evaluating the construction
98   LATIN AMERICAN PERSPECTIVES

of an emancipatory politics is in terms of variations on an ideal type, whether

developmentalism, socialism, or neoliberalism. We have preferred in this article
to try to construct a picture of the PT experience that arrives at different conclu-
sions from the normative traditions, which, with their grand narratives, find
comfort in denouncing the deviations and inadequacies of the experiments of
the left in the government but may shed little light on the unfolding of the con-
crete political struggle. We have situated the PT governments historically in a
broad spectrum of disputes between autonomous and democratic development
and a hierarchical economic order led by the United States.

Notes

1. “Programmatic disorganization” is a characterization of this period developed over the

years by Miguel “Moro” Romero (1946–2014), editor of the Spanish magazine Viento Sur. For the
record of the main party resolutions since its founding until 1998, see PT (1998). For an analysis of
the PT’s programmatic debates in the 1989, 1994, and 1998 elections, see Árabe (1998).
2. Before 1985, the income tax already had a maximum rate of 60 percent. In 1988 the personal
income tax table included a maximum rate of 45 percent and 11 levels. Since then it has had a
maximum rate of 25 percent and three levels. In addition, since 1996 the distribution of profits and
dividends has been exempt from taxation (Law 9249/1995).
3. http://www1.folha.uol.com.br/folha/brasil/ult96u33908.shtml.
4. For an analysis of the relationship of the PT governments with the popular sectors, see
Singer (2017: 15), in which the author defends the thesis that the electoral discourse of “Lulism”
coincided with a certain “popular conservatism” of the “subproletariat” excited by the idea of “a
state that is strong enough to reduce inequality without a threat to the established order.”
5. https://www.noticiasagricolas.com.br/noticias/agronegocio/120795-banco-central
-aumenta-a-selic-taxa-basica-de-juros-pela-1-vez-de-julho-de-2011.html.
6. Curiously, it was with the neoliberal turn in the conduct of the economic policy of the second
Dilma government, with a price shock managed within the strategy of “fiscal austerity,” that 2015
inflation reached 10.67 percent, the highest since 2002.
7. The three main parties of the Brazilian left have published assessments of the Lula and
Dilma governments: Guerra et al. (2017) for the PT, Rabelo and Monteiro (2017) for the Communist
Party of Brazil, and Maringoni and Medeiros (2017) for Socialism and Freedom.
8. For the international dimension of the experience of the PT governments, see Maringoni,
Schutte, and Berron (2014), Padula and Fiori (2016), and Pomar (2017).
9. A kind of managed neoliberalism or neomanagerism characterized by greater state interven-
tion, production reallocated in the national territory, less concern with so-called shareholder
value, and therefore greater power for management.

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