Fernando Alcoforado*
This article aims to present the factors that led to the failure of the national developmentalism adopted in Brazil and in the world and show how to rescue it in the contemporary era. National developmentalism is understood as the effort undertaken by various governments in the world after World War II to make their countries reach the same level of development as developed capitalist countries. The identification of the factors or causes that led to the failure of national developmentalism will make it possible to rescue it with the necessary adjustments, which, in the specific case of Brazil, is very important because it was, with national developmentalism from 1930 to 1980, that the country reached the highest level of economic and social development in its history (Figure 1). What is also intended in this article is, by identifying the real causes of the failure of national developmentalism, to contribute to showing the paths that lead to the economic and social emancipation of the vast majority of countries in the world.
Figure 1- Participation of Brazil’s GDP in the world GDP (1822-2022)
Source: ResearchGate
National developmental thinking was adopted in Brazil in 1930 by the Getúlio Vargas government and was later assumed in 1948 by ECLAC, Economic Commission for Latin America and the Caribbean, created by the UN (ECLAC. História da CEPAL. Available on the website <https://www.cepal.org/pt-br/historia-de-la-cepal>). ECLAC has made relevant contributions towards capitalist development in Latin America and the Caribbean and its theories and visions have been heard in many parts of the world. ECLAC’s economic thinking was formulated based on an analytical method, called “structural-historical”, which analyzes how the institutions and the existing productive structure inherited from the colonial period condition the economic dynamics of developing countries and generate late economic development with performances different from those obtained by the more developed nations. According to ECLAC, “late capitalist development”, like that of Brazil, has a different dynamic from nations that have experienced robust development, such as that of developed capitalist countries.
In the second half of the 20th century, ECLAC was the only intellectual center in all of Latin America and the Caribbean capable of generating its own analytical approach, which was consistently preserved and refined throughout its existence. ECLAC’s thinking consisted in defending a necessary deliberate policy of capitalist development to be adopted by the countries of Latin America and the Caribbean, ordered and rationalized using government planning/programming, with the State leading import-substituting industrialization. ECLAC advocated that Latin America and the Caribbean should raise labor productivity and retain the income generated by them. The development model advocated by ECLAC was defended in Brazil by great economists such as Celso Furtado and Rômulo Almeida, among others. In the 1960s, the “dependency theory” emerged to critically rethink the ECLAC model and offer an alternative interpretation of the economic and social dynamics of Latin America and the Caribbean.
Dependency theory is a theoretical formulation developed by intellectuals such as the German economist and sociologist André Gunder Frank and the Brazilian economist Theotônio dos Santos, among others, which consists of a non-dogmatic Marxist analysis of the processes of reproduction of underdevelopment on the periphery of world capitalism, in contrast to the conventional Marxist positions of the communist parties of the time and to the vision established by ECLAC (WIKIPEDIA. Teoria da dependência. Available on the website <https://pt.wikipedia.org/wiki/Teoria_da_depend%C3%AAncia>). The explanation of dependency theory and the intellectual production of authors influenced by this analytical perspective had broad repercussions in Latin America in the late 1960s and early 1970s when it became evident that the economic development of Latin American countries was not it proceeded in stages as recommended by ECLAC.
For dependency theory, the characterization of countries as “backward” derives from the relationship in world capitalism of the relationship of dependency of “peripheral” capitalist countries in relation to “central” capitalist countries. According to its formulators, André Gunder Frank and Theotônio dos Santos, among others, there would be no possibility of autonomous and full capitalist development in Brazil and Latin America and the Caribbean, but only an underdevelopment to which these countries would be condemned, despite the process of industrialization, unless there was a socialist revolution. In fact, industrialization in peripheral countries, such as Brazil, did not overcome their underdevelopment, but they were wrong to assert that the socialist revolution, like that in Cuba, would overcome underdevelopment.
According to the formulators of dependency theory, the “core” capitalist countries are the center of the world economy where the headquarters of the large international capitalist corporations are located, the technical, scientific and informational means are developed on a large scale and the commercial and financial flows flow with more intensity. Peripheral capitalist countries are those dependent on “central” capitalist countries and present themselves as spaces where commercial and financial flows and the development of science, technology and information occur on a smaller scale. Dependency means subordination, that is, the idea that the development of these countries is submitted (or limited) by the development of the central capitalist countries and was not the result of the agrarian-exporting condition or the pre-capitalist inheritance of underdeveloped countries, but by the pattern of the country’s capitalist development and for its subordinate insertion in world capitalism. In the view of dependency theory theorists, overcoming underdevelopment would involve a rupture with dependence and not the modernization and industrialization of the economy, which could even imply a rupture with capitalism itself.
One of the most important references in dependency theory is sociologist Fernando Henrique Cardoso (FHC), who later became president of Brazil (WIKIPEDIA. Teoria da dependência. Available on the website <https://pt.wikipedia.org/wiki/Teoria_da_depend%C3%AAncia>). In his work written with Enzo Faletto, in 1967, (entitled “Dependência e Desenvolvimento na América Latina”) and, in later texts (such as the book “As Ideias e seu Lugar”), FHC highlighted the role of internal factors in country in understanding the structural processes of dependency. In this direction, he sought to show the different forms of articulation between national economies and the international system and, at the same time, the different power arrangements, which indicated different modes of integration with the hegemonic poles of capitalism.
According to FHC, in Latin American countries in its beginnings (primary-exporting period), two distinct forms of economic organization could be identified: enclave economies and those in which there was national control of the production system. The evolution of these different forms of economic articulation with world capitalism also differed according to the composition and class struggles of different Latin American countries. In the 1960s and 1970s, Latin American societies had already consolidated their internal market and there was the internationalization of their economies subordinated to monopoly capitalism (with the expansion of multinational industries) indicating a new pattern of dependence.
The work of Fernando Henrique Cardoso was also notable for denying that dependency necessarily implied economic stagnation and underdevelopment and denying that the socialist revolution would be the only possible path for the industrialization of the continent. The facts of history demonstrate that FHC was wrong in denying that dependence would not lead to stagnation and underdevelopment as, in fact, occurred in the countries of Latin America and the Caribbean, but he was right to say that the socialist revolution would not be the only possible path for industrialization of the continent because socialist Cuba, for example, did not industrialize. During the 1980s, the developmental cycle in Latin America and the Caribbean came to an end based on the industrialization experiences planned by local governments. The economies of these countries were plunged into stagnation, hyperinflation and the external debt crisis, as was the case in Brazil. Faced with the failure of developmentalism in the 1980s, “neoliberal thinking” emerged, which attracted the interest of many intellectuals and public policy makers in Brazil in this economic thinking.
It can be said that, in all Brazilian governments from 1930 to 1980, there were numerous mistakes that contributed to the failure of national developmentalism in Brazil because they believed in the following: 1) Brazil could leave the condition of a peripheral country for a developed one within the framework of capitalism; 2) Industrialization would pave the way for development; 3) The national bourgeoisie would support the process of conquest of autonomous development; 4) The planned action of the Brazilian State would be sufficient to promote national development; 5) State-owned companies could compensate for the weaknesses of national private capital; 6) The development of Brazil would be achieved even with the strong presence of foreign capital in the country; 7) The development of Brazil would be achieved even with the country financially and technologically dependent on the outside world; 8) The development of all regions of Brazil could happen even with the concentration of investments in São Paulo.
None of these beliefs were realized in Brazil due to the following facts: 1) Despite all the efforts made, Brazil did not rise to the status of a developed capitalist country; 2) Industrialization did not open the way for development because the most dynamic sectors of Brazilian industry were occupied by foreign capital and the deindustrialization that is still ongoing in the country occurred; 3) The national bourgeoisie did not support the process of conquering the autonomous development of Brazil because it allied itself with foreign capital, serving its interests in a subordinate way; 4) The planned action of the Brazilian State was not enough to promote national development, despite the notable advances achieved by the national economy with the action of the Brazilian State that came to an end in the 1980s; 5) State companies did not compensate for all the weaknesses of national private capital, as happened in some economic sectors with the creation of companies such as Petrobras, Eletrobras, among others; 6) The development of Brazil was not achieved with the strong presence of foreign capital in the country, as demonstrated by the fact that it did not reach the condition of a developed country; 7) The development of Brazil was not achieved even with the country financially and technologically dependent on the outside world, as it was thought, because, on the contrary, it increased even more the financial and technological dependence in relation to the developed capitalist countries; 8) The development of all regions of Brazil did not happen as thought even with the concentration of investments in São Paulo because regional economic imbalances continue to exist in Brazil.
It cannot be denied that there were positive legacies of the Brazilian national developmentalism, for example, the implantation of the industrial park in São Paulo and in other regions of the country, the increase in the size of the GDP, the growing generation of employment and income, the increase in national income and the modernization of Brazil. As negative legacies, however, we had the domination of the most dynamic sectors of Brazilian industry by foreign capital, the increase in the country’s financial and technological dependence, Brazil’s excessive external indebtedness, economic imbalances between the country’s regions and the country’s deindustrialization. Regarding Brazilian industry, it is important to emphasize that its share of Brazil’s GDP reached its highest value (24.9%) in 1970. This share (which brings together the entire manufacturing sector) dropped to 11.79% of GDP in 2019 and 11 .30% in 2020, remaining at this level in the 1st quarter of 2021, equivalent to that recorded in 1947 (11.27%), the year in which the historical series of national accounts calculated by the Brazilian Institute of Geography and Statistics (IBGE) begins. These numbers demonstrate that there is a process of deindustrialization that began in 1985 and continues to this day.
Brazilian national developmentalism was inaugurated by the Getúlio Vargas government with the Revolution of 1930 and came to a melancholy end with the Ernesto Geisel government in 1979, with the bankruptcy of the Brazilian state and the stagnation of the Brazilian economy during the lost decade of the 1980s. it was replaced in Brazil, from the 1990s onwards, by the neoliberal policy of insertion of the country into the globalization process, which led to the weakening of the State’s role in the economy and greater opening of the national market to foreign capital. From 1990 to 2014, the Brazilian economy evolved with very low GDP growth and growing financial and technological dependence from abroad. From 2015 until the present moment, the Brazilian economy is facing stagnation that was aggravated by the pandemic of the new coronavirus. The perspective for the coming year of 2022 is of stagflation with the deepening stagnation and escalation of inflation under way in the country. The facts of history show that national developmentalism in Brazil failed to achieve its goals, but the neoliberalism that replaced it failed even more so by dismantling the Brazilian economy from 1990 to the present time (See Figure 1).
The question is: how to overcome the current crisis and rescue national developmentalism with the necessary adjustments in the contemporary era? To answer these questions, it is necessary to know, above all, the real causes of Brazil’s dependence on the central capitalist countries responsible for its economic and social backwardness. To understand the causes of Brazil’s dependence, it is necessary to know the theory of world systems developed by Immanuel Wallerstein and Fernand Braudel who consider that the world is economically organized in the form of “world-economies”, which would be, in Braudel’s language, “a fragment of the universe, a piece of the economically autonomous planet, capable of essentially being self-sufficient and to which its internal connections and exchanges confer a certain organic unity” (BRAUDEL, F. Civilização material, economia e capitalismo. São Paulo: Martins Fontes, 1996). According to Wallerstein, the formation of the world-system took place in the 16th century – the beginning of the capitalist system – and its transformations until today, considering the capitalist system as a world system. By the nineteenth century, virtually every region of the planet had been incorporated into the capitalist world-system (WALLERSTEIN, Immanuel. Unthinking Social Science. Cambridge: Polity Press, 1991). From 1990 onwards, with the economic and financial globalization, the capitalist world-system integrated all the imperialisms of the great powers that became the new imperialism of globalized capital.
According to Wallerstein, the capitalist world-system is composed of a division between center, periphery and semi-periphery, due to the division of labor between regions of the planet. The center is the area of great technological development that produces complex products; the periphery is the area that supplies raw materials, agricultural products and cheap labor to the center. The economic exchange between the periphery and the center is unequal: the periphery has to sell its products cheap while buying the center’s products expensive, and this situation tends to reproduce itself in an automatic, almost deterministic way, although it is also dynamic and changes historically. As for the semiperiphery, it is a region of intermediate development that functions as a center for the periphery and a periphery for the center, as is the case in Brazil. Some countries in the center assumed the condition of imperialists by exercising their domination over countries on the periphery and semi-periphery that have been the object of secular dispossession.
The semiperiphery is characterized by Wallerstein as a structural element necessary for performing a stabilizing role similar to that of the middle class within the configuration of classes in a country. It would also assume a function, in Arrighi’s words, of “systemic legitimation”, showing the periphery that there is the possibility of mobility within the international division of labor for those who are sufficiently “capable” and/or “well-behaved” (ARRIGHI, Giovanni. A ilusão do desenvolvimento. Petrópolis: Vozes, 1997). According to Arrighi, the semiperipheral condition is described as one in which a significant number of national states such as Brazil are permanently stationed between central and peripheral conditions, and which, despite having undergone far-reaching social and economic transformations, continues relatively late in important respects.
Arrighi states that the center of the world-system is composed of the most developed countries in the world that are those that are part of the organic nucleus of the world capitalist economy, that is, the countries of Western Europe (Belgium, Netherlands, Luxembourg, Sweden, Denmark, Norway, Finland, Iceland, West Germany, Austria, Switzerland, France and the United Kingdom), North America (United States and Canada), Australia and New Zealand. After World War II, Japan and Italy, which were semi-peripheral countries, joined this nucleus. The thesis that prevailed after World War II that it would be possible for all peripheral and semiperipheral nations to reach the stage of high level of development enjoyed by central capitalist countries similar to the United States did not come true. From the second half of the 20th century, there were several attempts to promote economic and social development in several countries in the world that failed, whether those within the framework of capitalism with national developmentalism initiated, for example, in Brazil, and those with the implementation of socialism such as the Soviet Union, Eastern European socialist countries and Cuba, among others. There have been several partial and temporary successes. But just when all indicators seemed to be heading in the upward direction, almost all peripheral and semi-peripheral capitalist countries collapsed during the 1980s.
According to Arrighi, the transformation from a peripheral or semiperipheral capitalist country to the condition of a developed one is quite difficult to achieve, as shown in his work The illusion of development. Arrighi states that, in the second half of the 20th century, Japan and Italy were the only countries that moved from the condition of semi-peripheral countries to that of members of the core of developed countries. Due to their geopolitical importance during the Cold War, Japan and South Korea were able to climb to a higher level of development due to the financial support they obtained from the United States after World War II and, above all, due to the role played by the national state in promoting development. South Korea was the only country on the periphery of the capitalist world-system that evolved into a semiperipheral condition and Japan and Italy were the only ones in the semiperiphery to reach the level of developed countries in the second half of the 20th century.
China, which was a semiperipheral country in the world economy, abandoned the construction of Maoist socialism after 1980 and joined the capitalist world-system after 1990, taking advantage of its comparative economic advantages (giant market size, very low labor cost , great existing infrastructure, etc.) without becoming subordinate to the great capitalist powers like the others thanks to its status as a great military and nuclear power and the independent developmental role played by the Chinese government, it can evolve to integrate the core of developed countries. With the end of the Soviet Union, Russia, which fits in as a semiperipheral country in the world economy, joined the capitalist world-system in 1991 without becoming subordinate to the great capitalist powers like the others thanks to its condition of great military and nuclear power and the independent developmental role played by the Russian government, it can reach the status of a developed country due to its comparative economic advantages (large market, large natural resources and large industrial structure). In turn, Brazil was a peripheral country until 1930, after which it reached the status of a semi-peripheral country that, despite having large natural resources and a reasonable consumer market, is threatened with retrogression from a semi-peripheral country in the world economy to the status of a country peripheral with the continuity of the neoliberal model.
It can be said that the failure to promote economic and social development in the peripheral and semi-peripheral countries of the world must be attributed to the fact that these countries have not managed to free themselves from their dependence on the capitalist world-system. In his work Unthinking Social Science, the North American sociologist Immanuel Wallerstein states that it is necessary to review the current paradigms of the social sciences and start thinking differently in the 21st century. Wallerstein defends the thesis that it is not enough to start the national liberation struggle in each country in isolation, as happened during the 20th century, without the rupture of the peripheral and semiperipheral countries of the world in relation to the capitalist world-system. This explains the failure of the vast majority of peripheral and semi-peripheral countries to break away from dependence.
The failure of almost all peripheral and semi-peripheral capitalist and socialist countries that tried to promote their autonomous development in relation to the capitalist world-system is due to the fact that they have promoted their actions without carrying out a globally coordinated world revolution, among other factors. This means to say that it is not enough to carry out isolated socialist or capitalist revolutions in each country. The peoples of all peripheral and semi-peripheral countries should carry out their national revolutions simultaneously with the realization of a world revolution aimed at the end of the capitalist world-system with the construction of a new world economic and political order that will contribute to ending the dispossession they suffer at the present time by globalized imperialism. Without this perspective, national capitalist developmentalism and socialism as projects of society will be doomed to failure as they did in the past.
It is concluded, from the above, that Brazil and all peripheral and semi-peripheral countries will only free themselves from their economic backwardness by simultaneously carrying out in each country a true revolution that promotes changes in the economic base and in the political and legal superstructure of the nation and the end of dependence on ancient and modern imperialism and the realization of a world revolution that promotes the construction of a new world economic and political order. Therefore, it is necessary to make the peoples of peripheral and semi-peripheral countries to act in a coordinated way in the fight against the common enemy, the capitalist world-system. To be successful, national revolutions in peripheral and semi-peripheral countries should take place simultaneously with the world revolution and not in isolation as in the past. Ideally, national revolutions should be carried out without the use of violence, seeking to build consensus between members of civil society, the government and holders of the national productive sector, as happened with the Scandinavian countries from 1930 onwards when they implemented the State of Social Welfare which, according to the UN, are the best-governed countries in the world and which present the highest political, economic and social progress among all countries in the world.
In order to carry out the world revolution, it is necessary to establish a World Forum for the Progress of Humanity by Civil Society organizations from all countries of the world, through which the objectives and strategies of a world movement for the construction of a new model of democratic society would be established in each country in the world in accordance with the will of its peoples and by the constitution of a democratic world government and a world parliament to coordinate the world economy, prevent environmental degradation and ensure world peace. This would be the path that would make it possible to carry out both national and world revolutions simultaneously without the use of violence. If this path is not possible, revolutionary violence will inevitably occur in every country.
* Fernando Alcoforado, 81, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019) and A humanidade ameaçada e as estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021) .
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