At the mercy of global capitalism (1996)

From the January 1996 issue of the Socialist Standard

Workers in developing countries, even those with vast natural resources such as Brazil, face a future of insecurity, destitution and repression. There is simply no way out within the capitalist order. For them, the establishment of Socialism really is a matter of life and death.

Brazil originated as a slave society. The Portuguese who ruled it from the sixteenth century saw its natural resources—brazil wood, sugar and gold— as the basis for massive fortunes. But the native inhabitants, who mostly lived as hunter-gatherers, were unwilling to work for pitiful wages in appalling conditions. The solution was to enslave the native peoples, and slave-hunting itself became a profitable business. When even this failed to produce a large and reliable enough workforce, slaves were imported from Africa—they had the advantage of immunity to European diseases in addition to their working abilities. As many as three-and-a-half-million slaves were shipped from Africa to Brazil, making this an important, if often neglected, aspect of the slave trade.

By the time Brazil achieved independence from Portugal in 1822, coffee was becoming the biggest export. Independence served the interests of the Brazilian ruling class, who were no longer tied to trading through Portugal, but made little if any difference to the lives of ordinary people. As elsewhere, slavery ceased to be the best method for extracting surplus labour, and by 1888, when slavery was abolished in Brazil, Brazilian peasants and new immigrants from southern Europe were working as wage labourers. Besides coffee, there was a boom in rubber production in the north-cast of the country in the second half of the nineteenth century, but this ended when rubber plants were smuggled out to south-east Asia and vast rubber plantations set up there.

For the first few decades of the present century, Brazil continued to be run as an export economy, dependent on the lion's share of the world coffee market. Imports were mainly of consumer goods for the rich, and machines. Brazilian industry was inefficient, protected from competition behind high tariff barriers. But the slump of the 1930s drastically reduced the world demand for coffee, and produced a crisis in Brazil's economy. A series of dictatorships and military governments failed to make a success of the policy of import-substituting industrialisation introduced into Brazil, as into much of Latin America, after 1945.

In the 1960s and 1970s, however, Brazil experienced annual growth rates of 10 percent, making it now the world's eighth largest economy (in terms of GDP). Coffee remains the main export, but fruit and some industrial products are also important. For a handful of rich capitalists and land-owners, things have worked out very well, but for the mass of ordinary Brazilians all this economic “progress" is a myth.

The expansion of manufacturing has led to an enormous increase in urban population, and vast shanty towns (favelas) have grown up around the main Brazilian cities. These offer few facilities of any kind, and are massively overcrowded, with over a million people living in favelas in Sao Paulo alone. In the whole country, one-third of houses have no piped water, and according to one report 80 percent of those going to casualty departments in public hospitals are suffering from illnesses caused by poor sanitary conditions. Under-five mortality rates are getting worse, certainly in some areas. Over 30 million people (one-fifth of the population) suffer from chronic malnutrition, while the richest one percent get 14 percent of the national income.

Child labour

While the rich enjoy their exclusive beaches and Swiss bank accounts, the overwhelming majority of the population live in fear and squalor. Violence and terrorism abound, directed especially against street children in the big cities and favelas. Child labour is rife, and perhaps half-a-million girls and women are forced to work as prostitutes. And despite its formal abolition over a century ago, slavery still exists, with thousands of workers in debt to their bosses and unable to leave their jobs on pain of death. This is particularly common in the Amazon, where workers are transported to clear the forest and make way for multinational-owned plantations.

For centuries, in fact, Amazonia has been seen as ripe for exploitation, whether by the Portuguese colonists, the Brazilian rulers or capitalists from abroad. Earlier this century, Henry Ford spent millions in an unsuccessful attempt to start a giant rubber plantation there. Besides logging—thus helping to destroy the rainforest—one of the current preoccupations of the government is of the Amazon as a source of hydroelectric power, with vast dams under construction or on the drawing- board. This devastates the lives of those who dwell in the forest, including the few remaining Indian bands. Resistance is met by violence and repression—the murder of rubber-tapper Chico Mendes in 1988 is only the best-known example.

Brazil has always been at the mercy of global capitalism and the interests of those who run it, and no Brazilian government has been able to administer the system in the way that it wants. The foreign debt is now a staggering $150 billion; interest payments were suspended [in] 1982 when it was little more than half this amount. Attempts to gain some control over the country’s helter-skelter economy, with inflation sometimes beating 2,000 percent a year, have included two introductions of new currencies, the latest in 1994. But nothing helps. Earlier this year, import tariffs were hiked on a range of "luxury" goods, including cars and televisions, to try and reduce the trade deficit—not that this tariff increase affects the vast majority of the population, who are in no position to afford such items.

Of course such a system has not run without resistance. Many slaves escaped over the decades and created slave sanctuaries, while the great Cabanagem rebellion in the 1830s showed that the rulers could not have everything their own way. Exploitation of the Amazon has led to much resistance to loggers and dam-builders, while workers have struck in a number of industries after the latest currency reform led to lower wages. In May this year troops seized control of government oil refineries in a conflict with striking oil-workers. Cardoso, the new president, recently vetoed an increase in the minimum wage: at £58 a month, this remains well below what is needed to support a family. Cardoso tried to set a good example by taking a 25 percent wage cut himself, but then his own salary, at £7,000 a month, is a little higher than the minimum.

Paul Bennett