Perry does have a point where federal income taxes are concerned. “After transfer payments, households in the bottom 60% are ‘net recipients’ with negative income tax rates, while only the top two ‘net payer’ income quintiles had positive tax rates after transfers in 2011.” The income tax burden falls heavily on the higher income quintiles.

But the tax code is far from the only factor that determines whether or not a particular quintile pays its “fair share.” To determine this, we need to move beyond vacuous political rhetoric like “fair share.” While greedy politicians endlessly and manipulatively repeat the phrase, it’s unclear what people — including Perry — even mean when they use it.

The economic relationship between the quintiles is the real issue. It’s clear where AEI’s thought leaders stand. They view the relationship between the upper and lower quintiles as one of exploitation, where certain quintiles extract value from the others. They just have the relationship reversed.

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Non ci crede neanche Dilma: Appena due mesi dopo, conquistato il secondo mandato, ha annunciato la nomina di Joaquim Levy a ministro delle finanze. Levy è direttore della Bradesco, una delle principali banche brasiliane, e negli anni novanta ha lavorato con il Fondo Monetario Internazionale. Quello stesso fondo monetario che, secondo la propaganda elettorale di Dilma, avrebbe preso il controllo dell’economia brasiliana se avesse vinto il candidato Aecio Neves.

Non contenta, Dilma nominerà Armando Monteiro a capo del ministero dello sviluppo. Monteiro è un nome importante tra le associazioni degli imprenditori e delle imprese. È stato presidente della Confederazione Manifatturiera Nazionale e della Federazione Manifatturiera dello Stato di Pernambuco. Durante la candidatura, poi fallita, al governo di Pernambuco nel 2014, Monteiro ha lamentato più volte l’assenza nello stato di una “politica industriale” coerente.

Oltre ai due citati, Katia Abreu, ex membro del direttivo del partito conservatore Dem, capo del cosiddetto direttivo rurale al senato, e presidente della Confederazione Nazionale dell’Agricoltura, dovrebbe essere il nuovo ministro per l’agricoltura. Abreu ha fatto parte dell’opposizione nominale durante l’amministrazione Lula. Durante gli anni di Dilma, si è gradualmente riallineata, inizialmente attirata dalla possibilità di interferire sulle nuove norme che riguardano i porti. Ovvero, dalla possibilità di controllare gli investimenti pubblici sui porti di mare, incentivando così l’esportazione di prodotti agricoli.

La nomina di questi tre nomi al governo di Dilma dimostra la mancanza di scrupoli del Partito dei Lavoratori (Pt); ciò che preoccupa non è che il governo sta spianando la strada ad una sorta di socialismo burocratico, come temono alcuni critici conservatori. A preoccupare è piuttosto la sua assenza di scrupoli, visto che il Pt è perfettamente a suo agio nelle strutture di potere dello stato e non ha alcuna intenzione di romperne l’equilibrio. Proprio come lo zar e l’aristocrazia russa non permettevano la costruzione di nuove ferrovie nell’impero, temendo che una ridistribuzione del potere economico potesse minare il loro potere politico, così chi è dentro i meccanismi dello stato, come il Pt, non vuole cambiare radicalmente una struttura politica che va a loro beneficio.

Joaquim Levy, Armando Monteiro e Katia Abreu cozzano con l’ideologia nominale del Partito dei Lavoratori di Dilma: non semplicemente dei sostenitori, ma dello stesso nucleo del partito. Questi nomi rappresentano le banche, le grandi imprese e l’agroindustria. I loro interessi privati, in simbiosi con lo stato corporativo, sono l’opposto degli interessi di “lavoratori” che il Pt dice di rappresentare. Sono persone che, comunque, non si oppongono al progetto più ampio del Pt di preservare il potere tramite il mantenimento dell’attuale struttura sociale, di perpetuare l’attuale distribuzione del potere economico, e dunque di quello politico, agendo sui suoi stessi meccanismi. Ecco quindi che la presenza nel governo di leader di settore come Armando Monteiro e Katia Abreu non sorprende: è scontato, dati gli incentivi strutturali.

Lo stato, dopotutto, è un gioco per ricchi. Il pugno alzato e le bandiere rosse possono far credere che abbia cambiato natura: in effetti, è sempre lo stesso. Che sia bolivariano, caudillista, varghista o peronista è solo una questione di marketing, dipende da ciò che va di moda in quel momento in America Latina. Come Hugo Chávez e Nicolás Maduro non sono altro che la continuazione dell’oligarchia venezuelana, così il Pt di Lula e di Dilma rappresentano la continuazione del sistema oligarchico brasiliano.

Karl Marx osservava che lo stato è un comitato che gestisce gli affari della borghesia; in questo senso, il Pt, è un’espressione pura del marxismo. I suoi dodici anni di dominio sulla politica nazionale sono caratterizzati da una relazione stretta con la politica corporativa “borghese”. Nonostante le percezioni e le polarizzazioni delle recenti elezioni, una rottura non esiste. Come dice Raymundo Faoro, il Brasile ha sempre avuto un “capitalismo orientato politicamente”, diretto e ridiretto secondo i desideri e le percezioni dello “strato burocratico” che controlla lo stato.

C’è l’impressione, però, che il Pt sia rimasto distintamente leninista: Il suo zoccolo duro si considera ancora un’avanguardia rivoluzionaria e confonde il proprio successo con quello della nazione. I militanti formano una barriera che difende il partito dalle critiche esterne. Le uniche critiche ammesse sono quelle che provengono dall’interno. Secondo la propria ideologia fondante, e come tanti altri partiti leninisti, se il partito va bene va bene anche il paese e la rivoluzione va nella direzione giusta. E forse è proprio così. Dopotutto, tra il capitalismo burocratico brasiliano e la centralizzazione burocratica sovietica non c’è molta differenza.

Traduzione di Enrico Sanna.

Not even Dilma believes this lie: A mere two months later, with her second term guaranteed, she announced Joaquim Levy as the new Minister of Finance. Levy is a director at Bradesco, one of the largest banks in Brazil, and worked at the IMF during the 1990s. The same IMF that, according to Dilma’s electoral ads, would resume its control of Brazil’s economy should also-candidate Aecio Neves be elected.

Not content, Dilma will put Armando Monteiro in charge of the Ministry of Development. Monteiro is a strong name among employers unions and business associations: He presided over the National Confederation of Manufacture (CNI) and the Federation of Manufacturers of the State of Pernambuco (FIEPE). During his failed bid for the state government of Pernambuco in 2014, Monteiro repeatedly lamented the alleged lack of a consistent “industrial policy” in the state.

Besides those two, Katia Abreu, former member of the conservative party DEM, leader of the so-called rural caucus in the Senate, president of the National Confederation of Agriculture, should be the new name at the helm of Ministry of Agriculture. Abreu was part of the nominal opposition during the Lula administration. During the Dilma years, she has gradually realigned herself, initially interested in dictating the terms of the new port policy — that is, she wanted to control government investments in seaports, thereby subsidizing agribusinesses’ exports.

The naming of these three as part of the Dilma government shows the lack of scruples of the Workers’ Party (PT); the government is not worrying because it will lead us down the path of some sort of bureaucratic socialism, as some conservative critics fear. Rather, their unscrupulousness is troubling because PT is perfectly comfortable inside the power structure of the state and does not intend to break this structure’s balance. Just like the tsar and the Russian aristocracy did not allow the construction of new railroads in the empire, fearing that a new distribution of economic power would undermine their political power, groups that are so incrusted in the state cogs such as PT do not intend to make radical changes to a political structure that benefits them.

Joaquim Levy, Armando Monteiro, and Katia Abreu collide head on with the nominal ideology of Dilma’s Workers’ Party — not only by their supporters, but by their nucleus. They represent banks, manufacture, and agribusiness. Their private interests, symbiotic to the corporate state, are in clear opposition to the “workers” to whom the PT pays lip service. They are individuals, however, that do not stand opposed to PT’s broader project of preservation of power through the maintenance of the present social structure, of the perpetuation of the existing distribution of economic power and hence the existing distribution of political power at the same nodes. Therefore, the presence of sectoral leaders in the government, such as Armando Monteiro and Kátia Abreu, are not surprising: they are expected, given structural incentives.

The state, after all, is a rich people’s game. Rising fist rhetoric and red-tinted TV ads may convey the impression that it has changed its nature: In fact, it is always the same. Being Bolivarian, Caudillista, Varguista, or Peronista is just the marketing fad of the moment in Latin America. In the same way that Hugo Chavez and Nicolas Maduro are but a continuation of the Venezuelan oligarchy, Lula’s and Dilma’s PT are no more than a continuation of the Brazilian oligarchic system.

Karl Marx observed that the state is a committee for managing the affairs of the bourgeoisie, and, in that sense, the PT is a full expression of Marxism: Its 12 years of dominance over national politics have been characterized by a close relationship with “bourgeois” corporate policy. Despite general perceptions and cultural polarizations in the recent elections, there has not been a rupture; as Raymundo Faoro stated, Brazil has always had a “politically oriented capitalism,” directed and redirected according to the wishes and perceptions of the “bureaucratic stratum” that controls the state.

There is a sense, nevertheless, according to which the PT remains distinctly Leninist: Their nucleus still judges itself as a revolutionary vanguard and conflates their success with national success. The militants form a force field that defends the party from outside criticism. Valid criticism are only internal. According to PT’s founding ideology, much like other Leninist parties, if they go well, the country goes well, and the revolution is on track. Maybe it is true. After all, between the Brazilian bureaucratic capitalism and Soviet-style bureaucratic centralization, the gulf is not that big.

Translations for this article:

• Italian, Leninismo Corporativo
• Spanish, Leninismo corporativo

Leggendo un rapporto sugli introiti provenienti dalle tasse federali sul reddito scritto dalla Commissione Bilancio del Congresso (Cbo), Perry deduce: “i ricchi pagano più della loro giusta quota del carico fiscale, e sarebbe ora che cominciassimo a chiederci se non è semmai il 60% più povero a non pagare la sua quota equa.” L’argomento ha a che fare più con l’analisi di classe che con le tasse. Nascosto nell’ombra, infatti, c’è l’intervento statale che infetta ogni transazione economica.

Perry ha ragione quando parla della tassa federale sul reddito. “Nel 2011, al termine del processo di trasferimento della ricchezza, il 60% più povero delle unità famigliari risultava ‘incassatore netto’ con un’aliquota negativa, mentre il restante 40% era formato da ‘pagatori netti’ con un’aliquota positiva. Il peso della tassa sul reddito dunque ricade pesantemente sui due quintili più ricchi.

Ma il fisco non è affatto l’unico fattore da prendere in considerazione se si vuole capire se un dato quintile paga o meno la sua “quota equa”. Dobbiamo andare oltre termini politici vuoti come “quota equa”. Se gli avidi politici non fanno altro che ripetere strumentalmente l’espressione, non è chiaro cosa intenda la gente, compreso Perry, quando la usa.

La vera questione è la relazione tra i vari quintili della popolazione. Da che parte stiano le menti dell’AEI non è chiaro. Pensano che la relazione tra i quintili più ricchi e quelli più poveri sia una relazione di sfruttamento, ovvero una parte estrae ricchezza dal resto. A parti invertite, però.

In un mercato libero, la relazione tra quintili (sempre che esistano) sarebbe simbiotica, caratterizzata dal mutuo interesse personale e dal mutuo profitto. Dopotutto, in un mercato libero affinché ci sia un interscambio occorre che entrambe le parti ne traggano beneficio. Chiunque sia libero di disporre di ciò che possiede e di scegliere autonomamente è anche libero di partecipare spontaneamente a qualunque interscambio mutuamente vantaggioso.

La cosa cambia quando ci sono coercizioni. Quando il potere diventa un fattore di una transazione precedentemente volontaria, la relazione tra le parti diventa una relazione di sfruttamento piuttosto che di mutuo beneficio. E il problema è che noi non viviamo in un mercato libero. Viviamo in un mercato dominato dal potere statale.

Se è vero che la politica fiscale va contro i ricchi, è anche vero che gran parte delle restanti politiche sortiscono l’effetto contrario. Gran parte delle leggi nascoste nell’ombra del mondo economico promuove la concentrazione del potere economico nelle mani di poche, ricche clientele politicamente protette.

La politica monetaria, ad esempio, premia chi per primo riceve la nuova moneta (le grandi banche) a spese di tutti gli altri, che poi devono fronteggiare l’aumento dei prezzi quando i nuovi dollari arrivano a loro. Poi c’è la proprietà intellettuale, che crea e protegge diritti artificiali e impedisce ai nuovi arrivati di competere. E ancora leggi urbanistiche, ordini professionali, regolamenti sulla sicurezza, requisiti di capitalizzazione e altre forme di burocratismo che frenano la competizione e beneficiano le grandi imprese già nel mercato a spese di quelle più piccole, dei potenziali concorrenti, di chi è agli inizi e di tutte quelle forme di impiego alternativo. E la lista non finisce qui.

Lo stato è responsabile della disuguaglianza strutturale, ma riesce a confondere i sostenitori del libero mercato inducendoli ad accusare il quintile sbagliato con politiche secondarie (come le tasse e i trasferimenti). Perry si limita agli effetti visibili dell’attuale politica fiscale, ignorando gli effetti invisibili di altri interventi statali nascosti nell’ombra, che frenano ogni possibile concorrenza e innovazione. In breve, il clientelismo e una politica che concentra la ricchezza non fanno altro che impedire un mercato altrimenti libero, e più che compensano gli effetti della tassazione.

Traduzione di Enrico Sanna.

Perry concludes from a CBO federal income tax report that, “’the rich’ are paying beyond their fair share of the total tax burden, and we might want to start asking if the bottom 60% of ‘net recipient’ households are really paying their fair share.” But there is more to class analysis than taxes. Other government interventions lurk in the background, infecting every economic transaction.

Perry does have a point where federal income taxes are concerned. “After transfer payments, households in the bottom 60% are ‘net recipients’ with negative income tax rates, while only the top two ‘net payer’ income quintiles had positive tax rates after transfers in 2011.” The income tax burden falls heavily on the higher income quintiles.

But the tax code is far from the only factor that determines whether or not a particular quintile pays its “fair share.” To determine this, we need to move beyond vacuous political rhetoric like “fair share.” While greedy politicians endlessly and manipulatively repeat the phrase, it’s unclear what people — including Perry — even mean when they use it.

The economic relationship between the quintiles is the real issue. It’s clear where AEI’s thought leaders stand. They view the relationship between the upper and lower quintiles as one of exploitation, where certain quintiles extract value from the others. They just have the relationship reversed.

In a freed market, the relationship between quintiles (to the extent that they would exist) would be symbiotic, characterized by mutual self-interest and mutual gains. After all, an exchange only happens in a freed market when both parties expect to benefit. People free to dispose of their own property and make their own choices naturally engage in cooperatively advantageous trade.

When coercion enters the picture, the story changes. When force is introduced into a previously voluntary transaction, the relationship becomes one of exploitation rather than mutual benefit. And the fact is that we don’t live in a freed market. We live in a market dominated by state violence.

While the federal tax code is skewed against the rich, the great majority of other government policy has the opposite effect. Most laws that lurk in the background of the economy promote the concentration of economic power in the hands of a few, politically entrenched rich cronies.

Monetary policy rewards the first receivers of new money (big banks) at the expense of everyone else who face higher prices once the new dollars trickle down to them. Intellectual property protects artificial rights and prevents newcomers from competing. Zoning laws, licensing restrictions, safety regulations, capitalization requirements, and other kinds of red tape impede competition and benefit already existing, larger firms at the expense of smaller firms, potential newcomers, start-ups, and alternative forms of employment. The list goes on.

That state is responsible for structural inequality, but tricks free market advocates into blaming the wrong income quintiles with secondary policies (like taxes and transfers). Perry focuses on the seen effects of current tax policy, ignoring the largely unseen effects of other, background government interventions that prevent would-be competition and would-be innovation. Statist cronyism and wealth-concentrating policies continually stifle the would-be free market and far outweigh the effects of after-the-fact taxation.

Translations for this article:

• Italian, Quando si Ignora Ciò che non si Vede.

It’s not about being governed or not, it’s about who is going to do the governing. Who would we want to sit on the Iron Throne if not a “specialist?” Someone who wouldn’t be driven by politico-ideological passions, but by the “industrial values” Veblen cherished. Someone to oil up the gears of this great machinery that is society.

That is all hogwash, of course, because when we talk about politics, we talk about ideology — about prioritizing, about choosing one collective goal as preferable to another. However, there are no macro social ends, at least not apart from a sum of individual goals or as a mere metaphor. Which is also the reason why it isn’t possible to put public management under the control of experts, because the very definition of what constitutes “public management” is an ideological question subject to political negotiation and resistance.

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È neanche una delle ideologie più recenti: Thorstein Veblen parlava di una tecnocrazia formata da ingegneri già negli anni venti. Veblen, nel suo famoso The Engineers and the Price System parla degli ingegneri (i “tecnici”) come di una classe di persone in grado di promuovere i principi della “gestione scientifica” rivolta alla produzione, opposti ad un sistema di mercato in cui i prezzi fungono da segnale. Veblen non vedeva niente di strano in un’organizzazione corporativa, che lui voleva far assurgere a modello universale e fondamento della società, eliminando le limitazioni tecniche di quelli che lui chiamava “valori industriali”. A loro volta, questi ultimi erano dipendevano dall’efficienza produttiva e non avevano niente a che vedere con gli incentivi del mercato; anzi, vi si opponevano.

Veblen promosse le sue idee riguardo l’industria e la tecnologia come punto di partenza di quella società basata su una produzione di massa da lui immaginata. Questa società, e i suoi valori, avrebbe dovuto far nascere, tramite i lavoratori dell’industria, una nuova forma di democrazia, gestita in maniera innovativa in modo da promuovere l’efficienza, la conoscenza tecnica e l’amministrazione della cosa pubblica. Ovvero una macchina perfettamente calibrata per il dominio e il controllo della società.

Questo ideale distopico riuscì a trovare adepti. Nel corso del ventesimo subì poche modifiche, perlopiù ad opera di progressisti come Joseph Schumpeter e John Kenneth Galbraith. Oggi ne sentiamo parlare soprattutto per bocca dei politici, che pensano di parlare con la voce dell’innovazione quando sostengono la necessità di mettere specialisti in posizioni di governo. È anche una comoda ideologia per un gran numero di burocrati perché non mette in dubbio l’esistenza di un dato incarico di governo, ma semplicemente si chiede chi dovrebbe ricoprirlo. La questione non è se un governo è necessario o meno, ma chi andrà a governare. Chi vorremmo sul Trono di Ferro se non uno “specialista”? Qualcuno che non si lasci trascinare da passioni politico-ideologiche, ma da quei “valori industriali” vagheggiati da Veblen. Qualcuno che olii gli ingranaggi di quel grande macchinario che è la società.

Certo sono tutte sciocchezze, perché quando parliamo di politica parliamo di ideologia, di priorità, della scelta di un obiettivo collettivo piuttosto che di un altro. Ma non ci sono fini sociali, a meno che non si consideri la somma dei singoli obiettivi individuali in senso puramente metaforico. Che poi è la ragione per cui non è possibile affidare la gestione della cosa pubblica al controllo degli esperti, perché la definizione stessa di “gestione della cosa pubblica” è una questione ideologica soggetta a negoziati politici e opposizioni.

Non è possibile rimuovere l’ideologia dal governo perché il governo stesso è un’ideologia: l’ideologia del potere, del controllo e della soppressione della dissidenza. L’ideologia della conformità, della dimensione macro-sociale, della società intesa come astrazione, mai riconducibile alle sue componenti individuali.

Governare, lungi dall’essere un’attività senza ideologie e programmi, consiste nel cucire assieme i programma della maggioranza all’interno di una gerarchia. Non c’è da meravigliarsi se il movimento anarchico tende storicamente verso rapporti orizzontali e la creazione del consenso come strategia che consenta di evitare la nascita di maggioranze e di strutture burocratiche di potere. Questa idea di un rapporto orizzontale ha l’obiettivo di mitigare gli effetti di particolari ideologie quando queste vengono applicate alla collettività. Al contrario una tecnocrazia, con il suo tentativo di razionalizzare i processi, ricorda un dispotismo illuminato. Certo è positivo che un processo socialmente desiderabile debba essere efficiente e consenta un risparmio di risorse, ma prima dobbiamo sapere quali sono i processi socialmente desiderabili. E non lo sappiamo.

È molto ironico il fatto che i politici di lungo corso siano i più grandi (e forse i più cinici) proponenti del credo tecnocratico. Lo stesso Aecio Neves, nonostante i suoi richiami all’amministrazione tecnocratica, è specializzato in una sola cosa: la poltrona. È stato direttore di una grossa banca pubblica, segretario alla presidenza, deputato, governatore e senatore.

Forse Aecio Neves oggi è un fantoccio della retorica che lui stesso ha messo su; un ostaggio. Perché Aecio Neves non è mai stato un tecnico; il tecnico è quello che realizza i suoi programmi politici.

Traduzione di Enrico Sanna.

Several pages quickly pointed out Rousseff’s “mistake,” because she had commemorated the performance of a privatized company — an anathema for the Worker’s Party (PT), to which Dilma is affiliated, always opposed to privatizations and particularly against the sale of Vale itself in 1997. Rodrigo Constantino, in his blog on Veja magazine’s website, did not skip a beat in pointing to Dilma’s inconsistency: “Could that be a late acknowledgment that the privatization of the former state-owned enterprise, so opposed by PT, was a good idea?”

However, there was no inconsistency on Dilma’s and the government’s part, because Vale is a state company. By that, I mean that Vale, fundamentally, has never been out of Brazilian state control.

It is worth repeating so that there is no doubt left: contrary to what Rodrigo Constantino (who, by the way, wrote a book called Privatize Now), Vale is literally controlled by the Brazil government. There was clear proof of that when the company’s president Roger Agnelli was fired due to pressures by PT’s government. The occurrence, widely commented at the time, was extremely educational. It showed not only the close connection between large businesses and the Brazilian state, but also demonstrated how we have a wholly inadequate conception about the privatization process that happened in Brazil.

“Privatizations” in Brazil did not involve any transference or pulverization of power and economic control; they were effectively corporate restructurings that changed very little the distribution of economic control and altered their legal regimes only as little as necessary to make them economically viable again.

There were, evidently, technical and productive improvements; it is also evident that those were the initial goals of the restructurings, which did not include any substantial change in stock control of the “sold” companies. Brazilian privatizations were not a way to cut the government off from the control of state companies, but a way the government found to keep their control.

The electoral campaigns in 2014 feature a few candidates who wish to reevaluate the merits of privatizations. Discussing privatizations is nothing new; every four years there is a new cycle of condemnations of them punctuated by a few unfounded praises. The reality is that both supporters and detractors of the privatizations talk about imaginary processes that bear no relation to reality. Few speak of the actual process Brazil underwent: it was not a “handover,” nor “privateering;” it also was not a new era of “efficiency” and “government downsizing.” It was a reorganization of the state apparatus and the inclusion of the corporate class in its ranks.

The Privatization of Vale

State-owned companies were a failed model by the 1990s and the Brazilian state was bankrupt after a decade of hyperinflation. The privatization of state enterprises was included as one of the factors for the success of the Real Plan, the implementation of a new currency that required the “zeroing of public deficit.” This cut on public deficit had to include revenues from state companies’s sales.

The sale of Vale was the largest privatization ever made in Brazil and was the most resisted one — and, yes, PT led the opposition to it, along with a large part of the left and social movements. To sidestep protestations, the government promoted a “coalition of support” that consisted in forming new investment groups spearheaded by state pension funds. The state development bank BNDES sponsored the formation of Valepar S.A., which controls the Vale’s Administrative Council, with 53.3% of the voting capital. Valepar is controlled by four state pension funds, led by Previ, which is the pension fund of state-owned bank Banco do Brasil’s employees and the largest pension fund in the country, with 58% of the stock. Besides pension funds, Valepar is also controlled by private bank Bradesco, multinational Mitsui and by BNDES itself, which owns 9.5% of the shares.

Through the actions of BNDES and the inclusion of state pension funds, government made privatizations “viable.” From then on, the new Vale, privatized with government money, would be owned by state pension funds and BNDES. Since the beginning of the 2000s, BNDES and pension funds compose the network of control that not only runs companies that have formally been cut off from the government, but also put nominally “private” businesses (even if they were not previously state-owned) in service of the government.

Pension Funds and the Control of the Unions by the State

Pension funds, created in the 1970s to boost savings, have become the largest investment tool in Brazil. Their investment potential was over $150 billion in 2010 (16% of the GDP), and was expected to grow. Pension funds’s investments, considered as a whole, are even more significant than BNDES — which is already the largest “development” bank in the world, far surpassing the World Bank (for instance, in 2009-10, the World Bank loaned about $40 billion, less than half of what BNDES invested).

From the late 1980s on, pension funds were increasingly managed by union leaders, especially because of some reforms that happened during Fernando Henrique Cardoso’s government, which opened up managing positions to workers. Union leaders became pension fund managers. Lula’s presidential campaign in 2002 specifically encouraged workers to form those funds, not only as a means to boost their consumption levels, but also to form controlling blocks in investment positions. Those pension funds could then be controlled by the government and used as an instrument of policy to “domesticate” capitalism.

The single union system and the union tax always helped the state in that regard, because they kept the unions under government tutelage — something that has never been challenged by the PT administration. It is no wonder that, from the 1980s on, the strongest Brazilian unions (connected to the car manufacturers in the interior of São Paulo) started to adopt a stance of “propositive unionism” or “citizen unionism,” which opposes conflicts between workers and managing classes, and urges the inclusion of workers themselves in managing positions. CUT and Força Sindical, the largest union federations in the country, represent that paradigm perfectly and act as managers’s mouthpieces (see, for instance, their urges to workers in the Amazon infrastructure projects to resume working after their strikes for better work conditions).

Thus, the Brazilian legislation works to transform monopoly unions into political and economic tools. The largest pension funds in Brazil (Previ, Petros, and Funcef) are still under direct control of the government, being the funds of employees of state-owned Banco do Brasil, state oil company Petrobras, and state bank Caixa. With the conversion of union leaders (mostly belonging to the Articulation, the dominant caucus in PT) in pension fund managers, becoming a new managing class, the government secured direct access to those funds.

In 2011, Exame magazine reported on how Roger Agnelli was fired from Vale’s presidency. “Roger, wait! This is a shareholders’s matter. And it’s being discussed by us, shareholders.” It was Ricardo Flores, then president of Previ, the main pension fund in Vale’s Administrative Council, who said that before discussing whether Agnelli would be let go, giving in to pressures by the Dilma administration. Ironically, later on he was removed from Previ’s presidency due to power disputes.

BNDES: State Privatizations, Private Nationalizations

BNDES is the largest development bank in the world. It was instrumental in the privatization process and transferred formal control of about 30% of the GDP. During this same process, BNDES positioned itself as a key partner of the new companies, like Vale and others, such as the twelve telecommunication companies that were created when Telebrás was privatized. Later, those companies were unified under the name Oi and BNDES had control over 25% of its capital. To facilitate the buying of Brasil Telecom — which was another company that was created from the “privatization” of Telebrás —, BNDES made new loans. After the acquisition of Brasil Telecom by Oi, the company was 50% owned by the government, through BNDES and the three largest pension funds (Previ, Petros, and Funcef). Over 20% of the company’s shares are owned by Andrade Gutierrez, a construction company that is extremely dependent on, and sympathetic to, the government.

It is actually difficult to find former state-owned companies that underwent different processes. In fact, the stock control by BNDES and unions does not tell the whole story. In the 1990s, Brazil went through a process of regulatory capture by design. Following privatizations, regulatory agencies were established for the new sectors the state had “left.” It was the first great moment of transit between the government and large corporations. With the subsidies to privatization processes, the new business and shareholders classes secured not only access to productive capital, but also to the state in its regulatory instances. It was an almost instantaneous process in the case of telecommunications.

Hence, “privatizations,” far from cutting the state off productive resources, were in fact only an organizational reconfiguration of capital. Capital formally left the scope of the state, but remained under its effective control, changing its legal regime without greater economic consequences. It is not a matter of ascertaining whether the capital that was “sold off” during the 1990s had taken a crony role; rather, the capital remains a part of the state, as it is controlled directly (through BNDES and pension funds) or indirectly (through the regulatory apparatus of joint control by the government and the corporations) by it.

The opposite process also took place very quickly during the PT administration (especially during the aftermath of the 2008 financial crisis) and is still underway. BNDES started to inject capital in private corporations and to elect its political-economic branches. This included the Sadia-Perdigão merger, the acquisition of Aracruz Celulose by VCP, the Friboi-Bertin merger, the Ambev buyouts, among many others. Construction companies are also policy branches of the Brazilian government. Odebrecht, in particularly, is a PT ally since 1992 and has repositioned itself in countless infrastructure and military endeavors. Other companies, such as Andrade Gutierrez and Camargo Corrêa, that have had their growth inextricably linked to national infrastructure projects, are nowadays nothing if not policy enacting arms of the state. The government has a toolbox with contracts as well as direct stock control to influence the “private” sector in Brazil.

In reality, it is a mistake to consider that large conglomerates in Brazil are “private” or “state-owned.” It is a meaningless distinction in this context; privatizations created mixed conglomerates controlled both by private and state interests, whereas companies that were already private have a level of government influence large enough that their interests and the government’s interests are interconnected. There is no opposition between “particular” and “public,” between “private” and “state,” because there is a convergence of the interests and desires of large corporations and the state that unite them.

The Vocabulary of Privatizations

Both supporters and detractors of the privatizations tend to defend their stances for the wrong reasons.

The technical and service improvements that took place after privatizations were not due to fundamental changes in capital control. They were reforms that modified organizational structure and the incentives of “public” companies, improving their capitalization and rationalizing their actions. The improvement in performance of the former state-owned companies did not take place due to denationalization, which did not occur, but due to restructuring. (In the same way, there was an improvement in performance and capitalization of Petrobras, which was not privatized. Privatizations, and the public offering of Petrobras’s stock, can be seen as new capitalization strategies rather than a dial back in state power.)

Our language reflects a duality between “private” and “state,” between “privatizing” and “nationalizing,” that is simply untrue. These dichotomies have no explanatory power because the state is not limited by its formal range of action, and because the state is not an insurmountable barrier where private businesses cannot venture. We can take as an example the trajectory of the former Minister of Development, Industry, and International Commerce Luiz Fernando Furlan, who pressed for the merger of food companies Sadia and Perdigão. Furlan left Sadia to join the government. After the merger, he left the government and resumed his presidency of the Administrative Council of Sadia.

“Privatizations” are a smokescreen, because they were only a revolution inside power, facilitating the maintenance of state control over vital sectors of the economy. It is impossible to complain about government interference in private companies; the large business owners in Brazil are part of the state. Vale is a political and economic branch of the state; its privatization and capitalization were structured with this goal in mind. When the head of Vale became an obstacle to the ends of the Brazilian government, he was fired.

Our language is unprepared to reflect this lack of differentiation between the public and the private. It is also difficult for most people to think about government and large conglomerates as part of the same system.

Moreover, we tend to treat what is “state-owned” as something public, and “private” resources as something out of the reach of the public. It is perfectly plausible, and indeed it is what happens in most cases, that a private resource can be “private;” that is, it is perfectly possible (and, I would argue, inevitable) that state resources serve the interests of only a small caste. The expressions we use are so completely inadequate that we speak of “nationalizations” when talking about state companies and “handovers” when speaking of privatizations. The political and economic experience of Brazil proves that these are all inadequate terms and that we should develop a vocabulary that represents reality such as it is: where state or “nationalized” companies serve the interest of a few state-connected groups and where private companies and the government possess converging, rather than antagonistic, interests — and both are contrary to general welfare.

Our political ideas are only prepared to deal with broad generalizations that stipulate that the government and the private sector are categorically distinct and that their influences over each other are a few small deviations — we tend to think that, in the majority of cases, government and businesses stick to their ideal roles. Privatizations, according to this mode of thinking, served to take companies out of the control of the government and put resources in a sphere over which government would have no influence. Even though people generally recognize forces that act in the relationship between government and businesses, most are likely to adopt this naive and a-historical view when analyzing processes and defending their political ideas.

The fact remains: privatizations were not a reduction, but a way of extending and rearranging state power. The pro-privatization discourse, thus, defends them in these terms, not under ideal conditions. The opposite is true as well: opponents and critics of the privatizations think of them as a decrease in state power. But if the privatized companies are still under government control, what could be the problem?

Quasi-Fascism

Any pro-privatization campaign in Brazil, such as some that have surfaced during the electoral period, must take into account the following fact: the Brazilian state and large corporations are one single entity.

This means that the privatizing effort has to take into account the presence and influence of the state as a fundamental fact. “Privatizing,” thus, does not mean a radical change in the state’s power structure, but slight adjustments in their legal regimes to provide for the capitalization of companies that, ultimately, remain under the state umbrella. Thus, both the idea of privatizing as well as the thought of nationalizing are founding ideologies of the state.

It should be obvious that privatizing, in itself, is not a passport for the dismantling of the state; in Russia, for instance, the same Soviet elite took control over the “privatized” resources during the transition to capitalism.

In Brazil, government control over large national corporate “privatized” conglomerates and even over companies that have always been nominally “private” did not happen by sheer chance nor did it suffer internal resistance; the business class was always a willing partner in this relationship. There has been, in the last decade and half, especially, an alignment of the views of the PT elite and national bourgeoisie. This alignment also included an incorporation of the old nationalism supported by the military elite, who is comfortably fortified and represented inside the government (despite the claims of several conservatives, who think the military is ignored and humiliated by the current regime).

Brazil has developed a quasi-fascistic system of systematic subsidies to capitalists, and direct and indirect control by the government of businesses and unions (which have given rise, through pension funds, to a new capitalist class themselves).

Conventional right and left-wing criticisms to this system are misguided because they end up defending a different aspect of the same system while they attack it. A defense of privatizations, for instance, can serve as a criticism of government power, but if executed as it was in Brazil, it extends the power over businesses and capital the government possesses.

Allies and Enemies

Privatizing is not enough. The corporate sector and the government are one single class. The deregulation that took place in the country were not able to break state influence over the economy, but have simply changed their character. Our political vocabulary does not reflect well real political issues, because it pits as polar opposites categories that are not fundamentally distinct: private and state-owned, corporations and government. Real opposition exists between those who have power and those who do not.

As I mentioned in two previous articles on the union actions in Brazil, there is an articulation taking place currently in Brazil between the business sector, the state elite and union leaders. They have formed a new managing class that represents the individual’s aspirations and decides on the sharing of the economic pie. The only way to resist this reality — that, yes, has been created by privatizations — is with the perception that the ruling class is not limited to a categorical sector of “businesspeople” or “bureaucrats.” It is a mixed class, with free transit inside government, unions and administrative councils.

After the newest billionaire corruption scandal in Petrobras, some have already spoken of the need of privatizing it and taking it away from the political sphere. But what we should remember is that Brazilian privatizations were never intended to strip the state of its power.

Public and private, capital and labor are now not opposites, but allies. Thus it is not surprising that Dilma should celebrate the 12.6% increase in iron ore production.

The one who paid for that record was you.

And it isn’t one of the youngest ideologies: Thorstein Veblen talked about his technocracy of engineers in the 1920s. Veblen, in his well-known The Engineers and the Price System described engineers (“technicians”) as the class capable of promoting the principles of “scientific management” for production — as opposed to a system of market production with effective price signaling. Veblen didn’t have any problems with the corporate organization and intended to universalize its model as the foundation of society, eliminating technical limitations to what he termed “industrial values,” which were connected to productive efficiency (and had nothing to do with, and indeed were opposed to, market incentives).

Veblen championed his ideas on industry and technique as the starting point of the mass production society he envisioned. That society and its values would give rise, through industrial workers, to a new democracy with a new management style that promoted efficiency, technical knowledge and administration. That is, a machine perfectly adjusted to the control and regulation of society.

This dystopian ideal was able to find adherents and modify itself slightly during the 20th century, especially in the works of managerial progressives such as Joseph Schumpeter and John Kenneth Galbraith. Nowadays, we hear it from politicians who may think they speak with the voice of innovation when they say that specialists should fill government positions. It’s also a convenient ideology for a number of bureaucrats because it doesn’t ask whether such government positions should exist at all, but only who should fill them. It’s not about being governed or not, it’s about who is going to do the governing. Who would we want to sit on the Iron Throne if not a “specialist?” Someone who wouldn’t be driven by politico-ideological passions, but by the “industrial values” Veblen cherished. Someone to oil up the gears of this great machinery that is society.

That is all hogwash, of course, because when we talk about politics, we talk about ideology — about prioritizing, about choosing one collective goal as preferable to another. However, there are no macro social ends, at least not apart from a sum of individual goals or as a mere metaphor. Which is also the reason why it isn’t possible to put public management under the control of experts, because the very definition of what constitutes “public management” is an ideological question subject to political negotiation and resistance.

It’s impossible to remove ideology from government because government is an ideology: The ideology of power, control and suppression of dissidence. The ideology of conformity, of the macro-social, of the idea of society as an abstraction, never reducible to its individual components.

Governing, far from an activity without ideology and plans, is the stitching of majority plans within hierarchy. It’s no wonder that anarchist movements have historically tended to horizontalism and consensus-building as strategies to avoid the formation of majorities and bureaucratic power structures. These ideas of horizontalism are intended to mitigate the effects of particular ideologies when applied to the collective. In contrast, technocracy looks like a form of enlightened despotism with its attempt to rationalize processes. Of course, it’s a positive thing that socially desirable processes should be efficient and demand less resources — but we must first know which ones are the socially desirable processes. They’re not a given.

It’s somewhat ironic that lifelong politicians are the biggest (and maybe the most cynical) proponents of the technocratic creed. Aecio Neves himself, despite his claims of technical prowess in administration, is a specialist in one thing only: Getting positions in the government. He’s been the director of a large state bank, secretary of the presidency, deputy, governor, senator.

It may be the case that Aecio Neves nowadays is a puppet of the narrative he’s built for himself, replicating it as a hostage of his own rhetoric. Because Aecio has never been a technician; the technicians are the arms that execute his political plans.

Translations for this article:

• Italian, Elezioni e Ideologia Tecnocratica.

Due to the crash’s violence, it took a week to transport Campos’s remains back to Recife, Pernambuco, the state he governed for eight years. His funeral was televised as an all-day Sunday spectacle. His pitiful performance in Tuesday’s interview was all but forgotten, his malformed thoughts elevated to slogans. “We can’t give Brazil up!” is shared and exploited as a catchphrase, while Recife’s people take the streets to sing “Eduardo/warrior/of the Brazilian people!” during the funeral.

Perhaps the exploitation of a famous politician’s death by the army of individuals who salivate for a piece of his memory is natural. Campos has been described as a “promising leadership,” a “negotiator,” a “statesman” who “transcended party lines.” All of these are lies. And that’s why it’s even more necessary to set the record straight on what Campos was and represented. He was an old school politician, inserted in the old system by the old elite, who protected our old crony capitalism; a personalistic politician firmly entrenched in the old habits of the Brazilian northeast’s elites.

Powerful institutions tend to perpetuate themselves and fluster attempts by outsiders to enact change. But Eduardo Campos wasn’t an outsider. He lived his life comfortably positioned inside in the power ranks, where he was placed by his grandfather, former Pernambuco governor Miguel Arraes. Campos wasn’t trying to subvert structures, but to put them to his service.

The state government employs “at least a dozen” of his or his wife’s relatives. Having supported the allied base of the federal government for many years, Campos successfully campaigned for the appointment of his mother to the Federal Court of Accounts and placed two of his relatives in the state Court of Accounts, a branch of government responsible for overseeing his own actions. Recife’s mayor is one of his trusted men, an unknown before the election, but leveraged by Campos’s name. Eduardo Campos justified the omnipresence of his relatives in the state as a result of their “abilities.” A prodigious family indeed.

Eduardo Campos has been described by the international press as “amicable” to markets and the Sao Paulo stock exchange reacted poorly to his death. That’s unsurprising: Tax exemptions and direct subsidies signs are displayed in front of virtually every industrial plant in Pernambuco. The Pernambuco Military Police, under the direct control of Eduardo Campos, repeatedly acted to protect the interests of the construction companies from the Novo Recife project — consisting of the privatization of very well located land in the Pernambuco capital to benefit contractors — beating up protesters and, later on, stating they wanted to talk. Marina Silva, his vice-presidential candidate, then hypocritically said she was against police violence and that several people in the movement against Novo Recife were members of her party.

On other occasions, Campos had no problem in giving building companies the land they demanded, such as when they wanted to build Riomar Mall over a swamp area, displacing hundreds of people from their stilt houses. These people had similar fates to the thousands of families who were expropriated and forcefully evicted for the construction of the Arena Pernambuco for the World Cup. It’s not by chance that construction companies, formerly lukewarm toward Campos’s party, made generous donations this year to the Socialist Party of Brazil. And it’s not by chance that large banks, industries and agribusiness companies lamented the loss of such a trustworthy ally.

His mellifluous narrative of favoring the poor hid a policy of control, suppression and infiltration of social movements. Campos’s political choices were always obfuscated by the convenient lie of “efficiency” in public management. In a recent interview, he said that abortion should not be legalized, reaffirmed his support for the war on drugs, recycled the tired idea that crack cocaine is a vicious drug that enslaves people, and stated he wanted to put “drug dealers” behind bars.

The more than 100,000 people who cry on streets because Eduardo Campos is dead remember only his most cynical side: The “modern” politician, who wanted to rid the country of “cronyism” and “favoring,” someone who was willing to “build alliances,” promote “sustainable growth,” “think about the poor,” and to defend “more humane politics.”

Someone like that really would have a lot of problems in the political system. Eduardo Campos didn’t have many.

He died, but his ideals live on — unfortunately.