Transnational Corporations and Capitalists from the Global South: Natura & Co. and the IEDI

Abstract

The Brazil-based company Natura & Co. became a transnational corporation, the world’s fourth-largest cosmetics corporation, by restructuring its Brazilian operations, becoming a publicly traded corporation, and expanding its international presence with the acquisition of the Australian company Aesop, the British company The Body Shop, and the iconic Avon International. The political action of one of the company’s founders, Pedro Passos, as president of Brazil’s most important business think tank, the Instituto de Estudos para o Desenvolvimento Industrial (IEDI), helped shift the stance of that institute toward transnationalization strategies, structural adjustment and economic opening policies that benefited transnational corporations, revealing tensions within the Brazilian capitalist class.

A Natura & Co. tornou-se uma corporação transnacional sediada no Brasil, a quarta maior empresa de cosméticos do mundo, após reestruturar suas operações brasileiras, abrir seu capital e expandir sua presença internacional com a aquisição da companhia australiana Aesop, da britânica The Body Shop e da icônica Avon International. A ação política de Pedro Passos, um dos fundadores da empresa, como presidente do mais importante think tank empresarial brasileiro, o Instituto de Estudos para o Desenvolvimento Industrial (IEDI), contribuiu para alterar a orientação desse instituto em favor da promoção de estratégias de transnacionalização, de políticas de ajuste estrutural do Estado e de abertura econômica que beneficiaram corporações transnacionais, revelando tensões no interior da classe capitalista brasileira.

Keywords

Global capitalism Transnational corporations Corporate strategies Transnational capitalist class Brazilian capitalist class

Is there a Brazilian contingent of the transnational bourgeoisie? Research on global capitalism has highlighted the role of transnational corporations, generally based in the Global North, in the transformations of production, trade, and financial flows brought about by globalization. Shareholders (owners) and executives (managers), among others, are considered decisive agents in this process, influencing national states toward defending structural adjustment policies that favor their global businesses. It is important, however, to expand this investigation to take into account the role of transnational corporations from the Global South. This article analyzes the transnationalization strategy of Natura & Co. and the repositioning of the Instituto de Estudos para o Desenvolvimento Industrial (Institute of Studies for the Industrial Development—IEDI), a Brazilian business think tank, on Brazilian economic and industrial policies during Pedro Passos's presidency of the institute (2009–2015) and addresses the tensions with other leaders of this organization that result from this repositioning.

To this end, the critical approach inspired by the global capitalism school will be used to describe and frame the transformations in production, social classes, nation-states, and labor relations brought about by the emergence of transnational corporations and capitalist globalization, especially since the 1970s. William Carroll (2010), Peter Dicken (2015), William I. Robinson (2004; 2014), and Leslie Sklair (2002), among others, are renowned for their research on global capitalism as an epoch that differs qualitatively from those that preceded it.

As William I. Robinson (2004; 2014) has pointed out, the implementation of information and communications technologies, the liberalization of financial flows, and the global trade opening often imposed by neoliberal structural adjustment policies gave capital a mobility that allowed it to dissociate itself from the constraints of the Fordist compromise that prevailed in the Trente Glorieuses, a true shift of epoch in the history of capitalism. For Robinson, the basis of economic globalization was the emergence of transnational capital from the global fragmentation and functional integration of production in the last decades of the twentieth century and the beginning of the twenty-first, forming the globalized circuit of production and accumulation described by the literature on global value chains (Gereffi, Humphrey, and Sturgeon, 2005) and on global production networks (Henderson et al., 2002).

For transnational capital, accumulation became global—no longer bound to a specific region or nation. These are the main characteristics and tendencies of the ongoing transformation toward a global economy, differentiating it from the international capitalism that preceded it. Robinson argues that the formation of a transnational capitalist class was not linear or homogeneous, since there was a struggle between fractions of the bourgeoisie oriented toward transnational, national, and local accumulation. The last two did not cease to exist even though, little by little, they were forced by capitalist logic to become globalized.

The role of transnational corporations was crucial, since they were at the forefront of the fragmentation/integration of global production through mechanisms such as outsourcing and cross-border joint ventures. The increase in global mergers and acquisitions and the increase in foreign direct investment flows were two of the most important signs of the transnationalization of the global economy. Transnational corporations gradually lost the national identifications that once clearly associated certain companies with the countries in which they were originally based. The companies' shares included increasing numbers of investment funds and institutional investors that could not be easily connected to a specific national origin. This was mainly because their investors were scattered around the globe, including in countries of the former Third World, where members of the transnational capitalist class now held a significant percentage of the shares or the controlling stock of important transnational corporations. Transnational financial capital, the hegemonic fraction of the transnational capitalist class, controls the assets of the main transnational corporations. With the spread of stock markets facilitated by the communications revolution, shifts in the shareholder composition of transnational corporations can occur daily.

Some of the mechanisms of transnational capitalist class formation (Robinson, 2014: 21–22) are

the spread of transnational corporation affiliates; the phenomenal increase in cross-border mergers and acquisitions; the increasing transnational interlocking of boards of directors; increasingly cross- and mutual investment among companies from two or more countries and transnational ownership of capital shares; the spread of cross-border strategic alliances of all sorts; vast global outsourcing and subcontracting networks; and the increasing salience of transnational peak business associations. . . . There are other, less researched mechanisms that spur on transnational capitalist class formation, such as the existence of stock exchanges in most countries of the world linked to the global financial system.

Thus the transnationalization of the economy modifies capital-labor relations not just when it comes to the global fragmentation/integration of production. While the transnational capitalist class has gained global mobility, the working class, on the one hand, increasingly finds itself selling its labor power to transnational corporations and participating in geographically dispersed production processes while, on the other hand, it is seen by the transnational capitalist class as a national or even a local working class, with few instruments of extranational organization. According to Robinson (2004), these are the roots of the difficulties of the working class in the face of globalization. This does not mean that the transnational capitalist class does not have internal differences and disputes. While these tend to manifest themselves less and less as the national rivalry typical of the epoch of international capitalism, there is currently severe global competition between transnational corporations and transnational capitalist class fractions.

The point here is the transnational capitalist class's ability to recognize its common interests and organize supranationally, for example, in the World Economic Forum. At the same time, it is represented by an army of managers, economists, journalists, academics, high-level technicians, bureaucrats, and political operators who serve its interests and are materially rewarded and ideologically bound to its goals. Without necessarily being members of the class, they form a transnational elite (Robinson, 2004) that, besides holding management positions in companies and states, is also often educated at the same universities and top schools as members. This elite is fundamental to the emergence of what Robinson (2014) calls transnational state apparatuses. In short, the concept does not refer to the existence of a state that exerts global regulation. In fact, it describes the gradual capture and interrelationship between supranational and international institutions (such as the UN, the WTO, the IMF, the World Bank, the European Union, G7, G20, NATO, etc.), nation-states, and national institutions in a network that operates to ensure the conditions for global accumulation.

Because of their origin in the old international system hegemonized by the countries of the North, the transnational state apparatuses that are decisive in the global order largely come from the core countries. Thus, the incorporation of the bourgeoisie of the Global South into the transnational capitalist class contributes new features to those apparatuses. These new contingents of the transnational capitalist class are seeking greater stability and balance in global capitalism and acting to restructure the state institutions of their countries of origin, incorporating these institutions into transnational state apparatuses and using them to ensure their transnational bases of accumulation. In addition, there is a tendency, with globalization, toward transnationalization (of production, companies, and social classes). In dialogue with Dicken (2015), Sklair (2002), and others, Robinson (2004) argues that while internationalization is the extension of trade and financial flows across national borders, transnationalization is related to the global spread of the production process. Internationalization is associated with the multinational companies typical of the era of international capitalism, in which nationally based companies expanded their activities to other national economies. The internationalization of companies, which become multinationals, persists, since regionally and nationally oriented fractions of the capitalist class still pursue international expansion of their businesses. Thus transnationalization can be understood as the fusion and interpenetration of national capitals whose accumulation becomes globally based, and internationalization is one of its moments. National capitals expand internationally and merge into a transnational network that makes them less dependent on and less identifiable with their national origins.

For Santos and Ramalho (2015: 2), a corporate strategy is a “process of rational definition and continuous execution of specific objectives aimed at obtaining value.” Their analysis of corporate strategies takes into account their financial, investment, market, technological, labor, and union relations strategies. Adopting their approach, we seek to describe what can be considered an additional dimension: transnationalization strategy, the planning aimed at transforming the company into a transnational corporation through, initially, the organic growth and internationalization of its activities and, more recently, corporate mergers and acquisitions.

The following pages present the working hypothesis that Pedro Passos's stance as a business leader and as the president of the IEDI—supporting, for example, structural adjustment of the state and trade opening—relates to the ongoing transnationalization of Natura & Co. and reveals the existence of a Brazilian contingent of the transnational capitalist class. This contingent consciously seeks to establish better conditions for its global accumulation in Brazil, eventually confronting other capitalist fractions and even other members of the transnationally oriented fraction of the Brazilian bourgeoisie. This article will address how Natura & Co. became a transnational corporation and the changes in its corporate activities and in the political intervention of its founders, especially Passos's stance as the president of the IEDI. The research was developed at different times between 2012 and 2021 and was based on ethnographic research in a Natura production unit (Aguiar, 2017), interviews with shareholders (Luiz Seabra and Pedro Passos), executives, union leaders, workers, and IEDI leaders (such as Dan Ioschpe, Décio da Silva, Horácio Piva, and Pedro Wongtschowski), and analysis of the institute's publications and of the statements by those leaders in the press.

Natura: Three Waves of Transnationalization and a “Global Company”

Pedro Passos is an engineer who once worked as an administrator of a state railway company in São Paulo, where he met Guilherme Leal. At the beginning of the 1980s, both joined Luiz Seabra, the founder of Natura, as members of the company. Passos held executive positions and was Natura's CEO from 1995 to 2005. Seabra, Leal, and Passos—who all figure in lists of the wealthiest people in Brazil and in the world—have been, since then, copresidents of the company's board of directors. In an interview conducted in early 2020 at the office of his investment fund, Passos referred to Natura & Co., a holding created in 2018, as a “global company.”

Founded in 1969, Natura & Co. is a transnational corporation based in Cajamar (São Paulo). It currently operates in 100 countries and has an estimated 200 million consumers, annual revenue of US$10 billion, 40,000 workers, more than 3,000 company-owned stores, and 6.3 million sales representatives worldwide. It is also the leading Brazilian and fourth-largest cosmetics company in the world (Natura & Co., 2020). The enormous size of the company reached recently may make one lose sight of its long history and the development, especially in the twenty-first century, of a corporate strategy geared toward its transformation into a global company.

After its founding in the late 1960s as a store and a laboratory producing on a small scale, Natura set up a factory in São Paulo and later transferred its production activities to Itapecerica da Serra, a nearby city, where it operated for many years. Finally, in 2001, production activities moved to its modern factory in Cajamar, where the company also built a center for research and development. Between the end of the 1990s and the beginning of the 2000s foreign investors were keenly interested in acquiring the company, and management decided not to sell it but to reorganize it. In 2004 it became a publicly traded corporation at Bovespa (currently B3)¹ and adopted a new corporate strategy aimed at accelerating its internationalization, which began modestly in the 1980s with the start of small trade operations in Latin America. The company has sought to reinforce, in its public relations, the discourse of “social and environmental responsibility,” a crucial aspect of its market strategy also seen in the new plant in Cajamar. As Natura's founder, Luiz Seabra, stated (interview, São Paulo, January 17, 2013),

There is no doubt that our growth in Brazil, as well as our international expansion project, forced us to move to a new plant. However, the new site in Cajamar represented for us much more than approaching new markets, growing in material terms. This project represented to Natura the opportunity of embodying in that location, from scratch, . . . our beliefs, our environmental and social commitment. . . . We think that we are not yet in the global arena. We are far from that. Not too far, though. But we started some international experiments not really because of strategic planning but because some people were interested in launching our product line abroad. . . . We started to do it, in a planned way, about 16 years ago.

Interviews with Natura's members and with the company's mergers-and-acquisitions managers showed that the international expansion of Natura has occurred in three waves. The first of them, in the 1980s and 1990s, was allegedly less well thought out, carried out without planning, because of the interest of some of the distributors in taking Natura products to other countries. In this period, there was an attempt to start operations in Portugal (which was eventually abandoned) and to move into Chile and Peru. In Argentina, where new operations were also launched during this first wave, the company today competes for first position in market share. It has also signed a trade agreement with a local partner in Bolivia. According to Passos (interview, São Paulo, February 19, 2020),

Natura's experience with the internationalization process is relatively new. . . . It started many years ago through the growth of the international operation in Latin America, with the Natura brand reproducing the same business model that we have and growing organically. . . . In fact, it was a slow process because establishing a consumer brand in new markets from scratch takes a long time. . . . At some moments it was nearly an obsession of ours to maintain this vision that we should become internationalized, because at that moment . . . the growth in Brazil was greater and more profitable than the operations in Latin America. This was the first phase, which began around the early 1980s.

In 2005 it launched operations in France and Mexico, inaugurating the second wave of internationalization, which involved more strategic planning. During both the first and the second wave, the expansion was based on its own operations. During the second wave, the opening of a flagship store and a laboratory in France helped to promote the brand in premium markets. This wave also took Natura operations to Colombia and Venezuela in 2005, but in 2010 activities in the latter were terminated. Colombia, Mexico, and Argentina have been consolidated since then as very important external markets for the company (Pedro Passos, interview, São Paulo, February 19, 2020):

There is a second phase of Natura's internationalization (or a second strategy) . . . that we started implementing back in 2005 with the installation of an operation, of a store, actually, in Paris to test the model. . . . It was very difficult to advance internationalization based on organic growth. It was also a general decision in our strategic reflection . . . to expand in a range of multibrand and also of multichannel. . . . That's when the first operation that was important for our learning comes into play, which was the operation with Aesop.

There were plans to start operating in the United States and to move into Europe (through the United Kingdom) and Russia, but they had to be postponed because of the 2007–2008 economic crisis. Natura's corporate strategy was reassessed, and mergers and acquisitions were planned. With the second wave, Natura sought to transform itself into a multibrand and multimarket transnational corporation and depend less on its Brazilian operations and on direct selling through representatives. The acquisition of the Australian company Aesop in 2013 inaugurated the third wave. The acquisition of The Body Shop for about 1 billion euros in 2017 consolidated the third wave and reaffirmed Natura's transnationalization strategy (Pedro Passos, interview, São Paulo, February 19, 2020):

The Body Shop mainly sells through its own stores and franchised stores. . . . There are 3,000 stores in several countries. . . . First, there is the impact on the company's culture itself. I mean, you start to have demands overnight, simple things even, but suddenly you have to start speaking English in your daily decisions, right? [laughs]. . . . Every time you make a new acquisition, there is a group that leaves, . . . you have to develop new people, new leaderships in the organization. . . . L'Oréal was the owner of The Body Shop and placed it on the market. . . . We joined the competition on the acquisition, but there was already a strategic background that guided us in this direction.

The acquisition of Aesop and The Body Shop was made with the company's own cash and through bank financing without fundamentally changing its ownership structure. In contrast, the creation in 2018 of the global holding company Natura & Co., comprising the three brands, anticipated future movements, as is suggested by Passos's statements about the recruitment of new foreign executives and the current use of English in the company's routines.

Afterwards, major transformations in Natura & Co.’s corporate governance took place once it announced, at the end of May 2019, the acquisition of Avon International,² thus increasing the company’s coverage to 100 countries. The company created by this acquisition has a wide lead in the Brazilian cosmetics and personal hygiene market (16.6 percent) and is the fourth major global beauty company (2.6 percent of the market share). The former Avon management is to hold 24 percent of the shares while the former Natura's management holds 45.1 percent and the minority shareholders, Brazilians and foreigners, 30.9 percent (Melo and Filgueiras, 2019). There will therefore be greater diffusion of the company's ownership structure and a restructuring of the company's board of directors to include foreign members appointed by Avon shareholders. With the acquisition, 70 percent of Natura sales will be conducted abroad (Oliveira, 2019). All these are unmistakable characteristics of a transnational corporation. As Passos described the situation (interview, São Paulo, February 19, 2020),

Avon, which has always been desired, . . . was on the radar again. And it made a lot of sense because [in Latin America] we have the same business model, factories in the same places, distribution centers in the same places. . . . This will be beneficial in terms of operational synergies and some commercial synergies . . . . Meanwhile, Avon is in many countries in the rest of the world, right? This synergy level is lower, but we see that Avon’s presence—and Avon’s distribution channel in several places of the world—can be a platform for the expansion of the Natura brand and of the brand The Body Shop.

The acquisition of Avon International, also made possible through stock exchange and changes in the composition of its board of directors, has led to discussions about new aspects of the company’s transnationalization strategy. The interview with Passos provides hints of the consequences of Natura's consolidation as a transnational corporation. Certainly, its operations in Brazil and Latin America will be restructured to capture “synergies,” and a certain national “disembeddedness” of the company is observable in spite of the importance of its Brazilian operations. Even the location of Natura & Co. headquarters seems to be under discussion (interview, São Paulo, February 19, 2020):

Where will the corporate headquarters be? . . . Today Avon's corporate headquarters is in London, The Body Shop's is in London, Aesop's is partly in London. So, I would say that the two—so to speak, strongest—hubs are London, São Paulo, and Aesop's origin in Australia. But, in terms of density, London and São Paulo. . . . There is a good chance that we will have an important part of the corporate headquarters in London. . . . Probably an important headquarters in Latin America, covering this region. . . . Because the strategy here is a strategy of capturing synergies, a similarity with the model of Avon, markets that are already familiar, etc. . . . Thus, São Paulo, Cajamar, which is where we are based, and London, which I think will handle mainly The Body Shop’s operations, Avon in the rest of the world, Aesop, etc. . . . I am talking about headquarters. I am not talking about the legal aspect, where the legal headquarters of the company is, because this has not been defined yet. Nowadays, Brazil is the legal headquarters of the company, and it is listed on the São Paulo stock exchange with ADRs [American depositary receipts] in New York.

Passos speaks unmistakably as a transnational capitalist concerned with ensuring the best conditions for his business around the world and for the global accumulation of his company.

Passos and the IEDI: A Brazilian Business Think Tank in Dispute

During the six years in which Passos was head of the IEDI, he promoted a shift in some of its positions with regard to industrial and economic policies in Brazil. In line with the transnationalization that Natura was going through, he brought to the IEDI—an institution historically linked to a school of national developmentalism—a political agenda that aimed at reformulating aspects of interest to Brazilian industrial capitalists. It began to advocate changes in state institutions and their policies to the benefit of the transnationalized fraction of the Brazilian bourgeoisie. Throughout this shift, Passos faced resistance, but although his positions were not unanimously adopted the main aspects of his view of development were incorporated into the institute's stances by subsequent presidents Pedro Wongtschowski (2015–2017) and Dan Ioschpe (2017–).

The IEDI, based in São Paulo, was founded in 1989 by 30 major Brazilian capitalists. Given the crisis of the developmentalist cycle being experienced at the time (Saad Filho and Morais, 2018), its founders proposed a development strategy for Brazil that would be capable of repositioning national industry in the Brazilian and the international economy, overcoming some of the old developmentalist paradigms (such as the import-substitution industrialization model), and maintaining industry’s prominent role in the Brazilian economy. The institute's activities consisted in assessing the Brazilian economic situation and producing documents that suggest public policies to governments. As a capitalist think tank, it was seeking a new role to the national economy at a time when, as Valente (2002) indicates, national capital had no choice but to associate with foreign groups, participate in the privatization of public companies, or merge with other national groups to ensure its survival.

Studies of the IEDI's activities throughout the 1990s found that it served to unite the voices of resistance among national capitalists to some of the consequences of neoliberalism. Capitalists close to it opposed the way some of the neoliberal reforms that opened up the Brazilian economy were implemented and advocated a national industrial development strategy in which Brazilian companies would have a prominent role (Valente, 2002). Andrada (2005), for example, argued that the IEDI's industrial policy proposals could be considered aligned with the “new developmentalism”—depending on partnerships between the public and the private sector because market agents acting freely and without coordination could not produce a development project for the country. Nunes (2014) suggested that the key concept for understanding the IEDI’s agenda during the last decade of the twentieth century was “systemic competitiveness.” Although in the institute’s view some opening up of the Brazilian economy was necessary and even urgent, it had to be preceded by a strategy that would not undermine or extinguish parts of the national productive sector.

Economic openness is the key aspect of the institute's view on the Brazilian economy and was one of the sensitive subjects addressed by Passos during his presidency of IEDI. It is worth mentioning that during the 1990s the institute was already advocating for the need to open the national economy to some extent. Despite its unequivocal developmentalist inspirations, it would be inaccurate to attribute to it a strictly protectionist view of the Brazilian economy. Although it was not opposed to opening, there was dispute over how it would be carried out.³

While the need for some type of opening of the Brazilian economy has been a consensus in the institute since its creation, the disputes within IEDI over the following years were precisely around the modality of the opening. Thus, it is possible to suppose that the conflict, put forward by Passos from the moment he took over the presidency of IEDI, already haunted the institute and divided the industrial leaders who were assembled in it. Acknowledging that the institute did not deny the need for a certain degree of trade opening, the main shift in IEDI's stance under Passos's presidency was in relation to how to implement this opening. Passos, when asked about the main features that he sought to bring to the IEDI, replied (interview, São Paulo, February 19, 2020),

I think that what I provoked—and what caused a lot of internal and external discussion—was this agenda of economic openness. I fought hard—and have been fighting hard—for the economic opening agenda, which I think is a productivity driver that Brazil has been overlooking. I am talking about trade agreements, trade opening in the broad sense. . . . What I tried to do—and I think now the debate is more mature—was to change the stance of IEDI, which was very conservative in relation to economic opening. So, this is how I acted. I am not going to say that everyone agreed with me. But sometimes it is necessary to take a risk because it is important to change the way things go. And I think that the debate is more mature nowadays.

The dispute he mentioned was confirmed in an interview with Pedro Wongtschowski, the chairman of the Ultra group, who succeeded Passos in the command of the institute. According to him, his having been chosen for the presidency was part of an effort by IEDI members to balance the institute's stance on trade opening. This was because, while Passos's predecessors had oriented the IEDI toward a gradual and conditioned opening, he himself had worked to lead the think tank to a stance that supported greater openness, generating tension among the entity's members (Pedro Wongtschowski, interview, São Paulo, April 6, 2020):

Look, first I will tell you very honestly, the issue of the degree, the speed, the form of the trade opening has never been a consensus within the IEDI. Within the IEDI, there are all kinds of nuanced opinions—from the classic capital goods people, who think that the opening should take 10 years, that the process should not begin until the “Brazil cost” is reduced, etc., to those who think that it has to be quick, taking two or three years, with a process of . . . simplifying, of integrating the Brazilian industry into the world, and, if anyone suffers with it, that is too bad for them. Evidently, this depends on the economic sector you are in.

Here the dispute over the form of trade opening is clear. Indeed, none of the businessmen we interviewed was completely opposed to the trade opening, and all of them expressed support for some degree of openness.⁴

Effectively, Passos's term as president of the IEDI had consequences not only for the views of the institute but also on its conduct with regard to political power. In an interview for O Estado de S. Paulo in March 2013, he detailed the proposal of the IEDI for the exemption of basic inputs and reduction of import tariffs (Landim, 2013, emphasis added):

Pedro Passos . . . decided to pick a fight on a delicate subject. He became the spokesperson for a controversial proposal that will soon be presented to Dilma Rousseff's government: to exempt the production of basic inputs—such as steel, cement or chemicals—and, at the same time, lower import tariffs, opening the Brazilian market to competition against imports. After an intense internal debate within the IEDI, the measure was identified by the majority of the 44 heavyweights of the business sector who were members of the entity as fundamental to reducing industry costs and ending the stagnation that has already lasted four years. According to the entity, the end of protection for industries producing raw materials is necessary to ensure that the oligopolies will not seize the gains from a possible tax exemption, increasing their profit margins. “We don't want to carry out an inconsequential opening that destroys the chemical or steel industry, but we need a commitment that raw materials are going to have an international cost.”⁵

The exemption of inputs and, especially, the reduction of import tariffs are key issues in the debate about trade liberalization within the Brazilian capitalist class. In general terms, these issues create conflict among the different sectors of Brazilian industry, since they reflect conflicting interests of Brazilian companies in different parts of the value chain—companies that seek access to foreign factors of production at a lower cost tend to support the reduction of tariffs,⁶ while companies that produce these same inputs and supply them to the domestic market tend to oppose such opening.⁷ This is, after all, a dispute waged by companies seeking access to factors of production at lower cost, even to the detriment of other companies and domestic industries.

In fact, Passos’s presidency not only meant a change in the institute's view on trade opening but also represented a turning point in the institute's positions regarding the relation of the Brazilian economy to the outside world in a moment of increasing transnationalization of Brazilian companies. In line with the productive restructuring of global capitalism based on global value chains, Passos voiced a view on development that did not directly or necessarily associate industrial production with national borders. In an interview granted to Monteiro (2015: 15), he summarized his stance:

[It is necessary to shift] to an industry that understands that the opportunities are global. Nowadays, in most countries, verticalized industries no longer exist, especially as you add value. Nowadays they count on resources available in all locations. This is one of the characteristics that force a shift in the policies that have sought to encourage verticalization until now. . . . Brazil has to evolve based on the chains in which it demonstrates competitive advantages, as has happened with agribusiness, which shows that we can do it if we put in the work. . . . It is necessary to exempt the base of the chains to build this competitiveness. And when we signal this insertion, it mobilizes investments from companies toward seeking this international competitiveness.

As a matter of fact, during Passos's term the institute served as a kind of mobilizing network for the positions of transnationalized Brazilian companies. In addition to the exemption of inputs, a report in the Brazilian business newspaper Valor Econômico in April 2013 says that the institute actively worked for the elimination of double taxation on the profits of Brazilian companies with a presence abroad (Durão, Rosas, and Polito, 2013):

Several Brazilian companies with a presence abroad, such as Vale, CSN, Gerdau, Ambev, Natura, Votorantim, and Marcopolo, are interested in a solution to the double taxation issue. These companies . . . are meeting at the Institute of Studies for the Industrial Development (IEDI) and have been talking to the Finance Minister, Guido Mantega, with Secretary Nelson Barbosa, with the Federal Revenue Secretary, Carlos Alberto Barreto, to formulate a new alternative law to solve the problem.

Passos's presidency can be understood as an example of the political action of owners and managers of companies from the Global South that are undergoing transnationalization. The actions of the capitalists at the head of the IEDI and the tensions that resulted from them suggest that the focus of Brazilian transnational capitalists is reform of the Brazilian state to better promote their global accumulation. The content of this reform, however, is in dispute, involving, for example, the financing strategies of the companies (more oriented toward the capital market or more dependent on credit from state banks) and the modalities of trade policy, revealing the fierce competition within the Brazilian contingent of the transnational capitalist class and the markedly different positions of agents regarding the incorporation of the Brazilian economy into global capitalism.

Closing Remarks

The study of the transnationalization of companies based in the Global South shows that their outlines are different from those observed in the transnationalization of companies in the North. Robinson (2015) argues that capitalists in the Global South have joined the transnational capitalist class as former Second and Third World economies have been incorporated into capitalist globalization in recent decades. The contingent of the transnational capitalist class from the Global South, although diverse and facing internal struggles and competition, is mobilized to promote more balance and stability in global capitalism so that it can create its own transnational bases of accumulation.⁸

Throughout the twentieth century, elites in the periphery supported the implementation of national development strategies that potentially conflicted with the interests of the capitalists of the core countries (it was, after all, the time of anticolonial movements, nationally oriented import-substitution industrialization, etc.). In global capitalism, though, the Global South contingents of the transnational capitalist class may seek greater integration into the transnational circuits of accumulation through state institutions that guarantee the conditions for their global accumulation. Thus, “the TCC [transnational capitalist class] in the former Third World needs the state for its class development and in order to enter competitively into global circuits” (Robinson, 2015: 7). The transnationalization of the bourgeoisies of the South requires the national state institutions of these countries for its execution. This is, however, not a confrontation between national capitals from the North and the South but a struggle of the latter to restructure its national states, integrating them into the transnational state apparatuses—although with internal differences and struggles regarding the outlines of that restructuring.

The analysis of the transnationalization of Natura & Co. presented in this article relates the company's corporate strategy and the positions of its shareholders regarding the economic and industrial policies of Brazil and allows us to conclude that Pedro Passos, while president of the IEDI, supported trade opening policies and structural adjustment of the state to the benefit of transnational corporations, leading to tensions with other capitalists whose stances were aligned with the institute's historical defense of national industry. This phenomenon can be seen as a dispute among nationally and transnationally oriented fractions of the Brazilian bourgeoisie. It was possible to empirically verify, thus, through a successful case of integration into global value chains, the transformations of the Brazilian bourgeoisie that resulted from one of the aspects of globalization: economic transnationalization.

The new dimension in the study of corporate strategies identified here as the transnationalization strategy may contribute to a better description of the integration of the national economy into global capitalism and the ongoing transformations of the Brazilian state and Brazilian companies. It is also a theoretical tool capable of shedding light on the diversity of stances of company owners and managers and on the lines that separate them according to the economic sectors in which they operate.

Footnotes

Notes

Thiago Aguiar is a postdoctoral researcher at the Universidade Estadual de Campinas and a former visiting researcher (2016–2017) at the University of California, Berkeley. Pedro Micussi has an M.A. in sociology from the Universidade de São Paulo. Clara Baeder is a translator living in São Paulo. The authors thank the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior, the Conselho Nacional de Desenvolvimento Científico e Tecnológico, the Fulbright Commission, and the Fundação de Amparo à Pesquisa do Estado de São Paulo (grant #2019/26020-4) for grants that resulted in this work. Previous versions of the article were discussed in the Fourth ISA Sociology Forum in 2021 and in the forty-fourth annual meeting of ANPOCS in 2020. They also thank ISA Research Committee 2: Economy and Society and ANPOCS Working Group 40: Society and Economic Life for comments that enriched the manuscript and Clara Baeder for the translation.

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