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The social-liberal impasse of Lula’s government

Andreas Kloke

July 2004

This article was originally published in the July 2004 edition of Spartakos, journal of the Greek section of the Fourth International.

L.I. da Silva’s (“Lula’s”) government, which was elected in January 2003 by 60% of the voters and mainly by the poorest layers, has left little doubt about its basic decisions and political line. It has proved to be a government which, though based on the “Workers Party” (PT) and probably even now on the majority of the working class and the oppressed, has done everything possible to satisfy the demands of Brazilian big capital and the institutions of imperialist finance capital such as the IMF.

The government has already come into sharp conflict with its general or concrete promises given in the beginning. Unemployment is rising, social welfare benefits are being drastically reduced and last year the pensions of the civil servants were cut by a reactionary law which was approved with the support of the right wing bourgeois parties in both the parliament and senate. Only a few parliamentarians of the PT dared to vote against the bill, the approval of which marked the definite end of the PT as a real representative of the working class and the poorest popular layers.

Lula had promised to take care of all the hungry ensuring that they have enough to eat (plan “Fame Zero”). Actually the loans for the “program against hunger”, amounting to 575 million euros in 2003, were reduced to 134 million euros this year! The Brazilian economy continues to be in recession. One million jobs were lost in 2003. Research by the institute “Getulio Vargas” (Rio de Janeiro) estimates that the daily income of one out of three Brazilians is not more than one dollar per day. 

It would be decisive for the social reorganization of the country to actively promote and speed up the agrarian reform since only 26.000 big landowners, 1% of all landowners, possess 46% of the land and 20% of the 178 million inhabitants possess 90% of the land, whereas the poorest 40% possess only 1%. At the same time 4.6 million peasant families are landless. M. Rossetto, minister for agrarian development and member of the DS (Democracia Socialista) group within the PT, estimates that 55.000 country estates, covering 120 million hectares, have to be characterized as non-productive and thus, according to the law, have to be expropriated. This way, three million families could gain land. At the same time this would be a comparatively cheap and effective investment to create jobs. 

MST, the movement of the landless, after negotiations with the government accepted the modest objective to settle 400.000 families in the years 2004-6, thus creating 2 million jobs and indirectly even more. But despite the promises of the government, only 14.000 families got a piece of land in 2003 and only 7000 families have been settled between January and May 2004. 

For this reason, land occupations continues virtually to be the only way for the peasant families to demand their rights and this reached a first climax in April. In 2003 the number of peasants killed by the mercenary gangs of the big landowners rose from 43 (2002) to 72. (1) Nevertheless, minister Rossetto stated in July 2003: “We will not tolerate any violent manifestation where it may come from, from the landless or the armed gangs of the landowners.” In the last 20 years of Brazil’s “return to democracy” altogether 1671 peasants were murdered in conflicts, but only in less than 10 cases were the murderers sentenced to imprisonment. 

The governmental policy continues to be orientated towards the interests of the agrarian industry and the export of the agricultural products. Therefore, the government did not hesitate to allow the cultivation of genetically modified products. J.P. Stedile, a leading member of the MST, writes: “The farms with more than 1000 hectares employ only 600.000 wage earners and possess only 5% of the tractors. The small farms employ 13 million members of the families and also 1 million wage earners and possess 52% of the tractors. The agrarian industry ensures the profits of a minority, that of the big landowners who concentrate on monoculture for export as they did in the entire epoch of colonialism.” (2) The agricultural policy of the government has already to be characterized as failed.

Heloisa Helena stresses that “this openly neoliberal government uses 60% of the budget“ for paying off the foreign debts “raising this allocation by 40% in comparison to the payments of the former (right wing) government of F.H. Cardoso” (3), whereas government policy is non-existent in the sphere of necessary reforms in the big towns for health care and education. The government also decided to privatize four banks. The interest rates are among the highest in the world (10,5%) in order to attract speculative capital. Besides, the government has begun to get involved into corruption scandals (the “Waldomiro” case).

Despite its complete subordination to the dictates of the ruling class, despite the almost absolute non-existence of real reforms in favor of the workers and despite the stagnation of the economic and social conditions, the government continues to propagandize that its work supposedly is in a “transitional period” and the real reforms will be accomplished later. The government and the PT leadership use their influence in the party, in the trade unions (CUT), but also in other social movements, to impose as stabile as possible a “social peace”.

The gradual transformation of the PT

In 1979 the PT emerged through the struggles against the dictatorship. Since it was free from the traditions of social democratic or Stalinist reformism, it cherished the hopes of the anticapitalist forces throughout Latin America and the whole world. The “Declaration of principles of the PT” assured: “The PT refuses to accept any representative of the exploiting classes in its ranks. (…) The PT is a party without bosses.” In the course of time, however, the programmatic bases of the PT started becoming ambiguous and its first concessions to the imposing reality of the capitalist system became perceptible. The general worldwide crisis of the workers’ movement and of spreading socialist ideas, particularly after the collapse of the Stalinist regimes in 1989-91, certainly had some impact on the course of the PT.

At the party conference of 1991, “socialism” was defined as a combination of “state planning and a market with a social orientation” where the state controls and regulates “through its own enterprises, the control mechanisms over the finance system, through a policy of imposing the prices, the loans, through anti-monopolistic laws and the protection of the consumers, the wage earners and the lower middle-class.” The idea of self-organized socialism of the associated producers probably does not fit into this model of “state socialism”.

In the 90’s the bourgeoisie started integrating the rising PT into the administration of the municipalities and the states in order to tame it and to lead it towards class collaboration. Since 1988 the PT succeeded in winning 39 town halls of even big cities, among them Sao Paolo. Thus, many cadres of the PT and the CUT were gradually integrated into the structures of the bourgeois state. At the 11th party conference in 1997, already 60% of the delegates were “professional politicians”, that means holders of certain posts in the state apparatus, the party or other mass organizations, whereas this percentage was only 28,8% in 1991.

“With 185 mayors and 2485 town councilors elected in 2000 (…) more and more leaders and cadres of the party became directly dependent on the state institutions or on the party: parliamentarians, members and employees of the regional governments, councilors, (…) cadres responsible for the administration, employees of the PT and the CUT. Among the rank and file cadres registered in the municipalities in 1997, 25% were paid 10 or 15 times higher than the minimum wage (today amounting to 260 reals, less than 100 euros), but only 2% of the employees of the local self-administration received less than the minimum wage. Thus the PT transformed itself from a party that used to organize and lead struggles, into a party of administration and compromise aiming at improving state and capitalism instead of trying to overturn them.” (4)

The left, revolutionary wing of the party was more and more marginalized, perhaps without realizing this, and, even worse, many of its cadres could not resist to this development or participated in it. It is a process well known from the history of the European socialist parties before 1914. The everyday parliamentary and administrative routine gradually moderates the radical, Marxist and subversive aspirations of the party and the trade unions transforming them, despite their workers’ rank and file, into “reformist” organs of the capitalist system.

Since the leading group around Lula had made peace with the domestic and international finance capital leaving no doubt that a potential PT government would not come into conflict with it, the bourgeoisie itself supported Lula’s candidature in a period of a relative decline of the class struggles. The attitude of this leading group and its transition from somehow “left” reformism to governmental “social-liberalism” could certainly be characterized as “treason” but it is undeniable that Lula’s victory and his accession to power were based on his former capitulation to the bourgeoisie.
Under the present circumstances of the world wide advanced capitalist crisis, it is impossible for the governments led by reformist parties to carry through a policy of real reforms (and not the counter-reforms we saw from the beginning of the 80s). It is simply not a realistic option. It is not Lula’s “inability” or “bad will” that are to blame but the very reality of the ruling system. In this sense, Mantega, one of Lula’s chief advisers was not wrong when he stated in Nov. 2002: “The PT is a party of the contemporary left and is similar to the French PS, the English Labor Party or the Italian left. (…) Today, socialism is something absolutely indefinite, it does not exist anymore. We want a more effective and thus more humanized capitalism.”

If another confirmation was needed for the correctness of the revolutionary Marxist view, which emerged with the capitulation of the parties of the Second International before and after 1914 and was verified in all the critical moments of the 20th century - the view that no party and no government can serve the interests of both the bourgeoisie and the working people at the same time but that such an effort unavoidably leads to the subordination of the working class to the dictatorship of the big capital - then the recent Brazilian experience would be the most convincing example.

No management of the capitalist society or state can be favorable to the working people. Precisely due to the lack of an independent class policy, the PT has been mutated into a transmission belt of the bourgeoisie. 

The necessity of a revolutionary party and the foundation of P-SOL

There is no doubt that the economic and social situation itself has begun to reveal the hollowness of the promises given by the government and the PT leadership. Last year the civil servants went on strike against the reactionary pension bill, this year the landless peasants of the MST seem to be determined to start a new campaign. Some Indian peoples are struggling for the defense of their land. The pressure of the rank and file of the trade unions, the MST, of the movement of the homeless and others is getting stronger and stronger.

In Dec. 2003, Lula’s leading group expelled Heloisa Helena, one of the most popular militants and leader of the workers’ resistance, and other three parliamentarians from the PT because they refused to support the neoliberal policy of the government. The expelled comrades answered by launching an initiative for the creation of a new party. On June 5/6th 750 delegates representing 8000 members founded the P-SOL (Party of Socialism and Freedom) in Brasilia with many outstanding intellectuals who had left the PT being present. The new party, defending the founding principles of the PT and armed with the lessons of the social-liberal transformation of the PT will dedicate itself to the promotion of the social struggles and will provide an alternative to the militants disappointed by the PT. 

It is a huge challenge and the objectives of the new party will not to be realized easily. One part of the current which could be characterized as “anticapitalist left” remains in the PT, still hoping that the government changes its course. The DS, the Brazilian section of the 4th International and one of the most important left wing groups within the PT, cannot proceed anymore with a united political line since its majority continues to support the government, although with some critical estimations, and also participates in it with some cadres like minister Rossetto, whereas the open faction of DS, “Red Liberty”, was formed recently which counts among its members Heloisa Helena who is also in the leadership of the new party P-SOL. 

The present dilemma of the DS has its origins in the mistakes made over years before Lula’s electoral victory. The DS failed to correctly assess the gradual integration of PT cadres into the institutions of the regional administration and participated, to a certain degree, in that process. The deeply reformist orientation of Lula’s leading group was known years before 2002. In this situation the DS should have made a turn preparing itself for consistent opposition against the party leadership, particularly in the event of Lula’s foreseeable victory in the elections. But unfortunately, the DS let itself be swept away by the majority current of the voters fearing that the bulk of PT supporters “would not be able to understand” an attitude of real opposition to the party leadership.

Thus, the DS majority walked into the trap of participating in Lula’s government, which was from the very beginning essentially bourgeois, consequently coming tragically into conflict both with the founding principles of the PT and the Marxist view on the state. It should now be the urgent duty of the DS, even after such a delay, to draw the necessary conclusions from its wrong course and adopting a stance of clear opposition to the government and party leadership.

An important objective of “Red Liberty” and the P-SOL will be to build a bridge to all honest militants of the PT helping them to re-find the path of the struggles and of class independence. The general situation of the anticapitalist left remains complicated. The failure of the PT as an organization of social liberation undoubtedly caused a lot of damage to the hope of the people that a fundamental change of the situation is possible. Heloisa Helena notes that distrust can be sensed everywhere. Wherever representatives of the P-SOL go the poorest ask them: “What guarantee can you give us that this new party will not start betraying when it manages to take over the government?” (5)

The anticapitalist and revolutionary left is split. Apart from those who remained in the PT and the others who founded the P-SOL, there is also the extreme left, for years out of the PT, mainly the PSTU, an organization of “Morenoist” origin expelled from the PT in 1991. But the PSTU does not allow the existence of tendencies in its ranks. This shows that its leadership has not yet developed an adequate understanding of the democratic functioning of a revolutionary organization (or “the party”).

Whatever the present situation may be, in order to face the wave of new struggles which are most likely about to come all the forces of revolutionary Marxism will have to strive together as far as possible, for a new political, programmatic and organizational regrouping and to give clear political expression to the struggles and the self-organization particularly of the underprivileged and poorest layers of the working class as well as of the suppressed nationalities.

The developments in Brazil will continue to be of great importance for the whole of Latin America, the entire southern hemisphere, the antiglobalization movement and also for the imperialist centers of America and Europe. 


1) G. Foley, Growing challenges in Brazil to Lula’s pro-capitalist policies, in: Socialist Action (USA), May 2004
2) Joao Pedro Stedile, Les raisons d’ une mobilization des paysans sans terre, A l’ encontre, June 2004
3) Heloisa Helena, Face a l’ alignement de Lula, interview with Rouge, May 27th 2004 
4) Sophie Candela, Face aux nouveaux defis poses aux revolutionnaires, quels enseignements tirer de l’ experience bresilienne?, in: Debat militant, 19-05-04
5) See (3)


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