How far can Latin American Leftists really go? Let’s take a look at Lula.
Official photo of the President of the Brazilian Republic, Luiz Inácio Lula da Silva. Image by Palácio do Planalto. CC BY 2.0 via Wikimedia Commons.
On the 18thof May - 2023, the Economist was feeling very concerned for the financial elite’s mental wellbeing regarding Latin America, writing: ‘The Region has some of the most left-leaning politicians on the planet. And they are scaring off investors.’
President Lula, now at the helm of the Brazilian economy, is certainly one of the figures targeted by this headline. You would think that the concern of a small group would merit minimal address amongst the voices of 656 million, however, Latin America’s political story has always been one driven by the disproportionately powerful influence of global capital.
With Lula’s 2023 return to power coinciding alongside wider Latin American left-wing victories, the media has equated this to a pendulum swing. However, this is simply a description of the symptom, and the cause is seldom mentioned. In reality, the push and pull between left and right runs along a defined axis; the pendulum’s movement is largely contingent on the friction between the interests of the financial elite in relation to the actions of the political class. In other words – the demands of neoliberalism.
Brasília City, Parliament Building. Photo by Leon Petrosyan. CC BY-SA 4.0 via Wikimedia Commons.
A defining moment in Lula’s first rise to power in 2002 was his ‘Carta ao Povo Brasileiro’ (letter to the Brazilian People). In this letter, he abandoned the original PT (Partido dos Trabalhadores/ Workers Party) commitment to the radical social transformation of Brazil, instead, signalling to the financial elite that he was committed to orthodox economic policies, to a market economy, and to neoliberalism. This decision was a key factor in his ascension to power, with right wing figures such as Delfim Netto (Minister of Finance during the military dictatorship) lauding PT as the ‘salvador do capitalismo brasileiro’ (The saviour of Brazilian capitalism).
And again in 2023, his second stint, his ‘Carta para o Brasil do Amanhã’ (Letter to the Brazil of Tomorrow) made similar assurances in this regard. This is not to say that his policies are wholly ineffective, or that they do not help bridge the divide in one of the most unequal societies on the planet; they do! Between 2003-10, poverty was reduced from 35% to 21%. However, the commitment to non-fundamental structural reform creates two key weaknesses within the Brazilian left-wing project.
Firstly, the balancing act of improving conditions for the poor while leaving past structures untouched is contingent on economic growth. From 2003-2007 this relationship worked, and the differing interests of the lowest and highest social strata were reconciled by good economic conditions; high profits coincided, despite the contradiction, with the increased wage share of the working classes. However, this contingency on economic growth was made apparent during the 2014-17 Brazilian recession. PT maintained policies that protected workers, consequently increasing their bargaining power at a time when private investment was struggling to recover. From the perspective of the financial elite, this demonstrated a failure to act in the neoliberal interest, and a further failure to ensure their control over the nation’s productive forces.
Secondly, the method by which conditions were improved did little to bridge the social divide between the traditional middle classes and those recently brought over the poverty line. The middle classes became uncomfortable as they found their traditionally segregated spaces (universities, holiday destinations, etc.) now shared by newcomers. Furthermore, government assistance only quelled short term poverty; the financial crisis left many as ‘precariats’, now angry at their unstable economic position in the gig economy.
Addressing the concerns of the financial elite, PT brought in Joaquim Levy as finance minister, an orthodox economist from the University of Chicago, to satiate their discontent. However, this proved to be insufficient - Lula was pinned under corruption charges during the ‘Petrobras’ political scandal. Recent investigations later discovered that Judge Sergio Moro gave advice to lead prosecutor Deltan Dallagnol to assist the securing of a conviction. Considering that Moro went on to become Bolsonaro’s Minister of justice, this gives weight to the idea that a concerted right-wing effort played a role in Lula’s political assassination.
Mainstream Brazilian media (note that media ownership in Brazil is concentrated in dynastic family conglomerates) capitalised off the scandal, redirecting public anger about falling living standards instead toward PT and ‘politics’ as a concept. As a result, PT became the defining symbol of crisis, corruption and pretty much all problems within the nation.
This period culminated in Lula’s arrest and imprisonment, the impeachment of his heir, Dilma Rousseff, and a subsequent positive response from investors – such was the glowing review amongst the financial elite regarding the situation’s outcome.
All of this set the stage for Bolsonaro’s rise to power.
Bolsonaro was able to spread his message via Facebook, WhatsApp and other more intimate means of outreach as compared to traditional media. Within these channels he depicted himself as being closer to the people, outside of the establishment and from ‘politics’ as concept; depicting the opposition as ‘politics’ incarnate. Furthermore, his socially conservative message was popular within an evangelist community that constitutes around a third of the Brazilian population. And do not be dissuaded from seeing similarities to a familiar Trumpian tone. Trump’s Ex-Chief of staff, Steve Bannon, maintains a personal relationship with Bolsonaro’s son, Eduardo, to the extent that Bannon has dubbed Eduardo as the south American leader of ‘The Movement’ – Bannon’s Brussels based thinktank created with the goal of supporting nationalist movements with connections to the alt-right on an ironically global basis.
With the United States on board, as a key articulator of neoliberal desire, Bolsonaro was free to engage in massive structural reform, as this was of course in the interest of the financial elite. He created a ‘super-ministry’ of the economy – merging the Ministries of Finance, Industry, Trade and Planning, placing it under the control of another University of Chicago educated economist - Paulo Guedes. This resulted in the opening of indigenous land for mining corporations as well as the privatisation of state industries and enterprises.
Lula’s presidency since 2023 signals the clawing back of some of these losses, but still within the same paradigm. And this sets the tone of the contemporary situation, where backed by the interests of capital, the right is free to make sweeping structural changes and the left remains stifled. This dynamic expands to a wider regional level; Brazil is just one example. Milei, Argentina’s recently elected right wing leader slashed the value of the peso by 50% to the US dollar, and further condensed the ministries of education, labour, employment, social security and social development into the new ministry of human capital. In contrast, Lopez Obrador in Mexico, a long-time left-wing figure head, continues to implement a policy of austerity.
So, it makes sense that the Brazilian left has a history of calling for ‘Hope’, with Lula’s electoral coalition being branded the ‘Federação Brasil da Esperança’ (Brazil of Hope Federation). They hope for economic growth, for the sacred salve necessary to paint the cracking façade of deeply embedded structural issues. They hope for a temporary break within the perpetual anxiety that is capitalism, as it tethers the economy to the interests of the financial elite, with these interests influencing government institutions, and ultimately shaking hands with whichever party keeps the clock ticking.