The Long Depression by Michael Roberts

Author:Michael Roberts
Language: eng
Format: epub, pdf
Tags: Current Affairs, ebook
ISBN: 978-1-60846-507-1
Publisher: Haymarket Books
Published: 2016-08-18T16:00:00+00:00

Source: E Maito

Like some other emerging economies, Brazil benefited from some favorable external factors that supported the neoliberal policies at home. Food commodities prices rose. In a way, it was like the discovery of North Sea oil that helped Britain’s Thatcher government in the 1980s. The income windfall to Latin America from persistently high commodities prices over the past decade has been unprecedented. It averaged 15 percent of domestic income on an annual basis and close to 90 percent on a cumulative basis.7 A combination of rising commodities prices driven by Chinese demand, productivity gains as the rate of exploitation rose, and the expansion of employment from the rural areas boosted profitability and growth for a decade. After the 2002 crisis, GDP growth averaged above 4 percent a year until 2010. This led to significant improvements in living standards and life in general.

But the inequalities of capitalist development remained embedded in the system. Inequality of income and wealth in Brazil remains at extreme levels, exceeded only by post-apartheid South Africa—and, when measured by a Gini coefficient per capita, Mexico.

Despite the boom of the last decade, average household net-adjusted disposable income in Brazil is still way lower than the OECD average of $23,047 a year—and that’s the average. Over 16 million people are still living in what is deemed extreme poverty, with monthly incomes of below 70 reais (about US$33). Some 80 percent of men are in paid work, compared with 56 percent of women, and 12 percent of employees work very long hours, higher than the OECD average of 9 percent, with 15 percent of men working very long hours compared with 9 percent of women. Around 7.9 percent of people reported falling victim to assault over the previous twelve months, nearly twice the OECD average of 4.0 percent. Brazil’s homicide rate is 21.0 per 100,000 people, almost ten times the OECD average of 2.2, and one of the highest in the world. Violence is concentrated among young people and over the past fifteen years, violence—including armed violence—has become a major social problem in the country. Brazil’s regional disparities remain very high: average GDP varies from just 46 percent of the national average in the northeast region to 34 percent above the average in the southeast.

Under the government of former president Luiz Inácio Lula da Silva and during the commodities boom, there were some important gains for the working class: a social protection system, increasing credit at low interest rates for workers, and universal health care and education. The Bolsa Família, or family allowance program, is the most visible face of these policies. Between 2004 and 2011, the number of families benefiting from income transfers more than doubled, from 6.5 million to 13.3 million, representing nearly one-quarter of the population. In the more isolated regions, payments under this program have become the principal engine of the local economy. Another pillar of government policy, adopted through negotiations with the unions, was to raise the minimum wage and associated pension. Wages went

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