Polanyi meets Bolsonaro: Reactionary politics and the double movement in twenty-first-century Brazil

A Polanyian frame

No one doubts the genius of Polanyi’s conceptualization of sociopolitical change as the interaction of two antithetical organizing principles: the ‘principle of economic liberalism’ and the ‘principle of social protection’ (Polanyi, 2001 [1994]: 138, 156). ¹ Likewise, Polanyi’s assertion that it was ‘the stubborn and impassioned insistence of economic liberals’ (p. 149) that ravaged social protection and unleashed reaction a century ago remains apt as a frame for looking at current shifts toward reactionary exclusionist regimes. Nonetheless, the double-movement frame is a complicated vision, melding contradictory vectors of transformation. Polanyi’s analysis builds in powerful barriers to either side of the double movement succeeding in fully dominating the other. There is no obvious resolution to the opposition of economic liberalism and social protection.

The expanding role of the ‘principle of economic liberalism’ in shaping European political economies is the dominant theme in Polanyi’s narrative of the Industrial Revolution and its aftermath in Europe. Yet full implementation the ‘principle of economic liberalism’ is not an empirical possibility. Efforts to implement the liberal utopian ideal of enabling the market to erase other forms of social regulation can never fully succeed without destroying the social matrix that makes the market itself possible. The closer the advocates of the utopian ideal come to succeeding, the more devastating the consequences. ² Were the ‘principle of economic liberalism’ ever to triumph fully, it would destroy its host society.

Polanyi doesn’t just excoriate ‘liberals’ for undermining efforts to construct social protections, he also condemns their willingness to abandon democracy in order to promote capitalism: ‘From Macaulay to Mises, from Spencer to Sumner, there was not a militant liberal who did not express his conviction that popular democracy was a danger to capitalism’ (Polanyi, 2001 [1944]: 234). Likewise, Polanyi finds the liberals’ aversion to proactive collective action fatally misguided. In a blast aimed at Hayek, he says, ‘Freedom’s utter frustration in fascism is, indeed, the inevitable result of the liberal philosophy which claims that power and compulsion are evil, that freedom demands their absence from a human community’ (pp. 265–266).

The ‘natural’ response to the destructive impact of economic liberalism is mobilization, extending across a range of social and class positions in defense of society as a whole, creating the opposing vector of the double movement – the movement for social protection. Yet, despite his condemnation of the destructive effects of economic liberalism, Polanyi was well aware that the possibility of the movement for social protection emerging triumphant was almost as vexed as the possibility of the triumph of economic liberalism.

The ideological, mobilizational, and organizational mechanisms that enable society to defend itself against economic liberalism are, to say the least, not well specified in Polanyi’s analysis. He is clear that the ability of any class or social group to play a role in the movement for social protection ‘is determined by the breadth and variety of the interests, other than its own, which it is able to serve’ (Polanyi, 2001 [1944]: 163), but the mechanisms through which this inclusiveness might become politically effective are not spelled out.

Polanyi’s historical examples of movements for social protection offer little basis for optimism. He was an admirer of Owenite socialism and the Chartists, saying, ‘Both movements comprised hundreds of thousands of craftsmen and artisans, laborers and working people, and with their vast following ranked among the biggest social movements in modern history.’ Yet he considered them ‘similar only in the measure of their failure’ (p. 175).

Polanyi also admired post-World War I ‘Red Vienna,’ considering it to have ‘initiated an equally unexampled moral and intellectual rise in the condition of a highly developed industrial working class which, protected by the Vienna system, withstood the degrading effects of grave economic dislocation and achieved a level never reached before by the masses of the people in any industrial society’ (p. 299). Yet he was equally clear (p. 298) that ‘such a system was certainly anomalous’ and ‘incompatible with the existing system of private enterprise.’ It made sense that Red Vienna would be crushed by the fascist/nationalist Heimwehr.

Given the impossibility of the triumph of the principle of economic liberalism and the inability of movements for social protection to transcend market society, the emergence of perverse reactionary regimes makes sense in a Polanyian frame. If economic liberalism imposes devastation and the movement for social protection is checkmated, then emergence of new political forms, however perverse, makes sense.

While well aware of the historical and cultural idiosyncrasies that characterized the fascist regimes of the interwar period, Polanyi insisted that fascism ‘should never have been ascribed to local causes, national mentalities, or historical backgrounds as was so consistently done by contemporaries’ (p. 245). For Polanyi:

If ever there was a political movement that responded to the needs of an objective situation and was not a result of fortuitous causes, it was fascism. . . . Fascism, like socialism, was rooted in a market society that refused to function. Hence, it was worldwide, catholic in scope, universal in application. (pp. 245, 247).

He did not shrink from admitting that his vision was one that ‘appears extreme if not shocking in its crass materialism’ (p. 31).

Given his somber reading of history, it is quite surprising that Polanyi could, in 1944, come up with an optimistic view of the post-World War II future, asserting that ‘nineteenth-century civilization has collapsed’ and that this collapse had ‘ushered in’ a great transformation (p. 3). For Polanyi the ‘disintegration of the world economy which started at the turn of the century’ had been followed by ‘the transformation of a whole civilization’ (p. 21). He concluded that ‘undoubtedly our age will be credited with having seen the end of the self-regulating market’ (p. 149).

Polanyi’s optimism depended on his what he saw as an underlining commonality among interwar regimes across the political spectrum: ‘the emerging regimes of fascism, socialism, and the New Deal were similar only in discarding laissez-faire principles’ (pp. 252–253). Not only had fascism been defeated militarily but the principle of economic liberalism had lost its dominance.

Among the surviving interwar regimes, some seemed to be making progress in expanding the principle of social protection without resorting to the repressive, reactionary exclusionist politics that had been coupled with social protection in interwar fascist regimes. Polanyi particularly noted the US New Deal, which had, in his view ‘started to build a moat around labor and land, wider than any ever known in Europe’ (p. 211). In addition, he had hopes that post-World War II international negotiations would solidify the positive possibilities that had originated during the chaos.

If Polanyi’s postwar optimism was partially vindicated by the ‘golden age of capitalism’ (roughly 1945–1973 – see Hobsbawm, 1994), the rise of neoliberalism that followed in the 1970s echoed his pessimistic analysis of earlier efforts to move social protection forward. ³ The principle of economic liberalism had made its resurgence once again. Nonetheless, as Polanyi would have predicted, the late twentieth century’s neoliberal efforts to erase the movement for social protection did not fully succeed (see Evans and Sewell, 2013). The other side of the double movement was still there. Society continued to resist the market’s domination.

Mid-twentieth-century advances in social protection in the rich countries of the North proved harder to dismantle than neoliberals had imagined. Even more interesting, the Global South made advances in the direction of social protection. Harris and Scully (2015: 440) make the case most strongly, asserting that: ‘For those skeptical of the possibility for a Karl Polanyi-styled counter-movement in the current neoliberal era, it is time to realize that one has been going on already, hidden in plain sight’ (p. 440).

While the Global South’s general progress with regard to social protection during the neoliberal era is open to debate, there was undeniable progress in at least some countries. Northeast Asia is the most obvious example. There increases in electoral competition were accompanied by policies that expanded access to health care, and health outcomes improved. As Evans and Heller (2019: 113) put it, ‘The last quarter-century has been a period of socio-political transformation in Northeast Asia that looks, more than anything else, like an effort to construct a twenty-first century East Asian version of post-Second World War Golden Age European social democracy.’

There were other important examples of the movement for social protection as well. ⁴ The legacy of India’s somewhat moribund Nehruvian socialism still showed life, generating significant new programs, such as NREGA, which is considered ‘perhaps the largest public-employment program ever’ (Veeraraghavan, 2017: 205). And, of course, Brazil under the Workers’ Party was a poster child for the ability of social democratic politics to mitigate the effects of neoliberalism. ⁵

The current rise of reactionary exclusionist regimes signals yet another shift in the momentum of the double movement and offers a fresh opportunity to reconsider the Polanyian frame. Recuperating the ‘crass materialist’ aspect of Polanyi’s analysis directs our attention, not just to the market and its ‘failure to function,’ but to the interests and agency that are responsible for generating the rise of reactionary politics.

I would propose that, at least in the contemporary Brazilian case, a ‘crass materialist’ analysis needs to go beyond understanding the dominion of markets as bolstered by the ideological convictions of economic liberals. The shift from a social democratic project to exclusionist reaction must be understood as the product of a structural context in which the terms of political contestation are heavily shaped by the economic power of capital, best thought of as ‘finance capital.’ ⁶ Once finance capital could no longer tolerate a social democratic, redistributional project, the trajectory that culminated in a reactionary exclusionist regime was set in motion.

Brazil is a particularly useful case because it offers a window on both moments of the double movement. The rise and partial success of the PT illustrates possibilities and limitations of millennial efforts to implement movements for social protection. The PT’s inability to push the project further and its abrupt replacement by a reactionary exclusionist regime showcases the ugly potential of the negative moment of the double movement.

The rise and fall of Brazil’s social protection project

Brazil was an unlikely candidate to become an exemplar of the twenty-first-century expansion of the movement for social protection. Four centuries of Brazilian history were marked by a racialized capitalism which imposed brutal, politically enforced inequalities. This legacy was still fully in evidence at the end of the twentieth century. Under the military regime in the 1970s, Brazil gained prominence as a world champion of inequality. Yet the social mobilization that would shift Brazil’s direction was already under way.

Already in the late 1960s, militant strikes, violently repressed, showed the potential for mobilizing industrial workers. Opposition to the military regime in the 1970s ranged from clandestine Marxist guerrilla movements, hoping to spark a revolution, to a broad cross-class alliance whose goal was to reinstate democratic politics. The organizational vehicles of mobilization were multifarious. There was sectorally specific organizing, like the ‘Sanitarista’ movement, working to expand the delivery of health services (Gibson, 2018). The Landless Workers’ Movement (MST) became an international icon for rural organizers (Tarlau, 2019). There were movements based in neighborhoods or cities aimed at democratizing the delivery of infrastructure (see Abers, 2000; Baiocchi, 2005; Baiocchi et al., 2011). Polanyi would have been impressed by the ‘breadth and variety of the interests.’

Building on the foundation of the union movement, the Workers’ Party emerged at the beginning of the 1980s, embodying this mobilization in the form of a political party (see Keck, 1992; Seidman, 1994). But it did not gain the presidency until two decades later. Despite his preternatural political talents, the PT’s leader, Luiz Inácio Lula da Silva, was defeated three times in his quest for the presidency. His successful effort in 2002 seemed at first destined to go down to defeat once again. International finance capital made clear its disapproval by driving down the value of the Brazilian Real and driving up the interest spreads on international markets every time Lula rose in the polls (see Martínez and Santiso, 2003). By this time, however, Lula had learned the rules of the game. He disavowed any intention to renege on Brazil’s obligations to the bankers and won the election. Recognizing the necessity of trying to make peace with capital remained one of the hallmarks of PT politics throughout his two terms in the presidency.

Once in power, the PT’s efforts to move the harshly inegalitarian Brazilian political economy in the direction of social protection were impressive. Lula’s administrations expanded social security programs like the BPC (Benefício de Prestação Continuada), rural and special pension regimes, and, most famously, the Bolsa Família program of conditional cash transfers. Even more important, in terms of the magnitude of resources shifted to the poor, was increasing the real minimum wage. Because the 1988 Constitution tied a variety of nonwage incomes to the minimum wage, including pensions, the minimum wage served as a sort of general ‘social wage.’

Even the usually critical Perry Anderson (2019: 22) was generous in his positive assessment of what the PT was able to accomplish, saying: ‘For a dozen years, Brazil was the only major country in the world to defy the epoch, to refuse the deepening of the neoliberal regime of capital and relax some of its rigours in favour of the least well-off.’ The World Bank (2018), rarely in agreement with Perry Anderson, concurred that the first three PT administrations constituted ‘golden years’ from the point of view of ordinary Brazilians, summarizing the gains as follows:

Brazil’s economic and social progress between 2003 and 2014 lifted 29 million people out of poverty and inequality dropped significantly (the Gini coefficient fell by 6.6 percentage points in the same period, from 58.1 down to 51.5). The income level of the poorest 40 percent of the population rose, on average, 7.1 percent (in real terms) between 2003 and 2014, compared to a 4.4 percent income growth for the population as a whole.

Unfortunately, the PT’s accomplishments proved no bulwark against the reversal of its political fortunes. When Dilma Rousseff, Lula’s chosen successor as president, was re-elected in 2014, the PT had won four presidential elections in a row. Two years later, in 2016, Brazil’s congress impeached Rousseff, removing her from the presidency on the basis of ‘evidence’ that hardly qualified as a fig leaf. The regime of Michel Temer commenced a harsh program dismantling Brazil’s social safety net (see Fleury and Pinho, 2018). In the 2018 election, Jair Bolsonaro, an open sexist, homophobe, and racist and an unabashed admirer of the torturers of Brazil’s military dictatorship, was elected president and Lula was imprisoned.

How should could such an abrupt and extraordinary reversal of the national social and political trajectory take place within the container of ‘normal’ democratic procedures? An answer must begin with re-examination of the PT’s political and social programs during the ‘golden decade.’ Given my interest here in trying to understanding the role of finance capital, the PT’s relation to capital is an important element in the story. Nonetheless, the story cannot be told without considering why popular support for the PT’s project turned out to be so fragile.

Most analysts would agree that the origins of the PT’s vulnerability were rooted in strategic choices made well before Lula’s presidency. Analysts of the labor movement, like Sluyter-Beltrão (2010) argue that, already in the early 1990s, the PT’s focus on electoral viability led the party and its cadres in the labor movement to neglect direct forms of ‘class conflict’ like strikes and shop-floor struggles. Others, like Ruy Braga (2012), have shown how the PT’s mobilizational weaknesses were exacerbated as informal work in the service sector supplanted formal jobs in manufacturing. ⁷

Rebuilding politically effective mobilization in the twenty-first century would have required the PT to revitalize its traditional workplace organizing and move beyond the workplace to other arenas and modes of organization. Yet having ‘taken state power’ opened up a multitude of attractive opportunities to use the state apparatus on behalf of social protection. ⁸ Returns from using the state were clear. Returns from exploring new forms of social mobilization were uncertain and organizationally challenging.

The PT’s engagement in the corrupt, anachronistically structured world of partisan politics created an additional set of traps. The archaic structure of allocating representation and the difficulty of dislodging clientelist fiefdoms ensured that members of the PT were never able to garner more than a fifth of the seats in the parliament, necessitating a series of byzantine, sometimes unsavory, forms of collaboration with traditional politicians. Playing this political game resulted in important victories like increases in the minimum wage, but it turned the PT into a ‘normal’ Brazilian party. ⁹ Eventually, it led to the involvement of some within the PT’s leadership in corrupt deals and undermined the party’s legitimacy. ¹⁰

All of this combined to create a ‘mobilizational deficit,’ lurking beneath the successes of the ‘golden decade,’ undercutting the regime’s ability to mobilize defenders when it needed them. ¹¹ But the mobilizational deficit is only part of the story. Whatever its strategic errors, a ‘voluntaristic’ reading attributing the PT’s vulnerability simply to ‘bad’ strategic choices would be misleading. The basic structure of the Brazilian political economy, which was beyond the capacity of the PT to reconfigure, placed limits to what even the most determined and adept political party could accomplish.

Progressive technocrats within the state could use state power to mitigate the harshly inegalitarian character of Brazilian society and the punishing effects of market dominance, but mitigation could only do so much. Most jobs still remained precarious. The state’s capacity to deliver essential public services was still a project under construction. Erasing the economic insecurity of precarious employment, making it easier for people to access education and health care, and transforming the physical insecurity of life in poor neighborhoods would have taken a reallocation of resources well beyond the discretionary resources available to the state. ¹² It would have required challenging the traditional prerogative of economic elites to claim an exorbitant share of the social surplus.

Finance capital has been extraordinarily successful in imposing a structure of returns that gives it an outsized share of Brazil’s social product. Bastos (2018: 10) provides a quick summary: interest rate spread and real lending rate are among the very highest in the world (each about 40%); elevated interest rates result in the yearly transfer of almost 6% of the GDP to bondholders. Thus ‘massive transfer of wealth through public debt and usurious credit spreads’ constitutes the ‘distinctive feature’ of ‘Brazilian style financialization.’ These returns are highly concentrated. Bastos notes that in 2017 the four biggest banks controlled 72.4% of all bank assets and 79% of all credit in Brazil (p. 10). ¹³ Recognizing the concentrated economic returns accruing to finance capital has two obvious implications. First, financial elites have a fundamental and ineradicable incentive to do whatever they can to maintain their current control over assets and returns. Second, their power enables elites to exercise powerful leverage over the structure of economic policy in order to realize these interests.

The political power of financial capital extends well beyond its obvious economic leverage. Concentration of control in the cultural arena parallels concentration in the financial arena. The media naturalize the ‘principles of economic liberalism.’ Support for the magic of the markets is paired with a drumbeat delegitimating the allocation of resources to public social protection efforts. Public sector investments are portrayed as counterproductive because the state is already ‘bloated’ (see McKenna, 2019: 118). This discursive warfare against the state is particularly ironic. The same elites that affirm that the public sector is ‘bloated’ benefit mightily from firmly entrenched connections within the state apparatus (particularly with those parts of the state that determine and execute financial policy), creating what McKenna calls a ‘perennial plutocracy.’ ¹⁴

Given finance capital’s combination of economic, cultural, and social power, some kind of ‘class collaboration’ was an unavoidable part of the PT’s political survival. During Lula’s two terms, it seemed that an effective détente had been established. A beneficent turn in the global economy facilitated keeping Brazilian growth rates comparable to those of the neoliberal 1990s, and the 2008 global economic crisis only briefly dented Brazilian growth. ¹⁵ The stock market soared between 2002 and 2008. In a relatively buoyant economy, the modest magnitude of the PT’s social investments did not require reducing the financial elites’ exorbitant returns. It seemed that social democracy could coexist with finance capital, improving working people’s lives without evoking reprisals from finance.

Given the non-antagonistic character of the PT’s policies, they would not seem to be in the same category as the policies of Red Vienna that Polanyi characterized as ‘incompatible with the existing system of private enterprise.’ Extending Lula’s success at surviving within the limits imposed by capital appeared to be a feasible aspiration. In fact, the PT’s efforts to live within the established economic rules of the game proved in vain. Constraints tightened and the PT’s mild twenty-first-century social democratic project was brought down.

In Dilma’s administrations, the terrain became more negative, in part because the global economy was not adding wind to Brazil’s sails and in part because she made more serious efforts to contain financial returns. In her first administration (2010–2014), she appointed a ‘heterodox’ economic team and managed to briefly bring down interest rate spreads.

Even in this more contentious mode, the PT was still hoping to be able to construct a modus vivendi that would allow them to live with capital’s power. The hoped-for basis of leverage was the idea of using a ‘neodevelopmentalist’ strategy of state-supported industrial expansion to separate ‘productive’ capital (primarily industry) from ‘rentier’ capital (primarily finance) (see Bresser-Pereira, 2013; Singer, 2020). It turned out that the hope of using fractional divisions in the capitalist class was illusory. ‘Industrial’ capital actually depended on financial returns for a large share of its profits. ¹⁶

Dilma was forced to return to the orthodox economics establishment – most obviously in the person of Joaquim Levy, the new Minister of Finance. A recession further undercut the ability of the PT to mount a defense by mobilizing its social base. The traditional agents of finance capital – center-right parties like the Brazilian Social Democracy Party (PSDB) and the PT’s supposed ‘ally,’ the Brazilian Democratic Movement (MDB) – could see that the time was ripe to put an end to the PT’s control over the state apparatus.

Dilma’s 2016 impeachment, followed by Sergio Moro’s ‘lawfare,’ which knocked Lula out of the electoral arena and into jail, left the PT in disarray. In the evocative words of Braga and Santos (2020: 169), the PT faced ‘the exhaustion of the mediation between the predatory aspirations of the Brazilian bourgeoisie and the rights and aspirations of workers’ that it had managed to sustain for a decade and a half.

The direct agents in removing Dilma were a mélange of standard parliamentarians. Documenting the concrete agency of finance capital is almost impossible. ‘Behind the scenes’ is the preferred arena of political action (see McKenna, 2019: 95–96). The political strength of finance capital’s allies in congress was more than sufficient, making direct public action unnecessary.

The election of Dilma’s successor seemed to contradict the attribution of political clout to capital. Jair Bolsonaro, hitherto a marginal right-wing politician without effective links to any major party and without a formally organized political base, was a statist admirer of military rule, hardly an obvious agent for the principle of economic liberalism. His election raised the obvious question, ‘If finance capital has so much power, why didn’t it use its political leverage to propel a traditional center-right politician into the presidency?’

The limitations of capital’s political power

Bolsonaro was almost certainly not the first choice of Brazil’s financial elite. McKenna (2019: 108) reports a conversation between Jorge Paulo Lemann (the richest man in Brazil) with a group of promising young political protégés in 2017 when presidential politics was still in flux. Lemann was clear about his preferences. ‘We need a democratic centrist, a Brazilian Macron,’ he said. Given that there was no one available as young and flashy as Macron, continuing in the tradition of then President Temer was the obvious second best – promoting a candidate who, regardless of lack of charisma, was a known quantity, a dependable part of the system.

There were, in fact, some promising center-right candidates. Henrique Meirelles, the MDB’s candidate for the residency in 2018, was one. After serving in the United States as the president of BankBoston for 12 years, he served as a PSDB congressman and then as minister of finance for the Temer administration. Geraldo Alckmin, the PSDB’s presidential candidate, also seemed thoroughly promising. While he lacked Meirelles’s credentials as a captain of finance, he had been governor of the State of São Paulo for most of the previous two decades and was thoroughly pro-business. Yet, despite their bona fides, both failed miserably. In the first round of the 2018 presidential election, Alckmin got less than 5% of the vote; Meirelles got just over 1%. ¹⁷ In short, success of dethroning the PT did not translate into a positive path to political power for the financial elite’s allies in the traditional center-right parties.

In the summer of 2018, while traditional center-right politicians were demonstrating their lack of charisma, Bolsonaro was proving himself adept at surfing the chaotic witches’ brew of political upheaval (see Evans, 2018; McKenna, 2018, 2019; McKenna, this issue). Evangelicals, especially the entrepreneurial leadership of the largest churches, found building alliances with Bolsonaro a comfortable process. The politically disaffected, whose aggregation took place above all via social media, found Bolsonaro’s lack of connection to the political establishment a positive credential. Controlling the fluid chaos of the presidential campaign that they had unleashed was beyond the bounds of the power of finance capital.

The political persona with which Bolsonaro started his rise to the presidency would at first seem to contradict Polanyi’s conviction that adherence to the ‘principles of economic liberalism’ is central to achieving the support of capital. As an admirer of the military, Bolsonaro was more a statist than a worshipper of ‘free markets.’ As his campaign progressed, however, Polanyi’s ‘crass materialism’ was confirmed. Bolsonaro managed to demonstrate his fealty to ‘liberal economic principles’.

A year before the election, in November 2017, Bolsonaro announced that Paulo Guedes, a genuine ‘Chicago Boy,’ would be his finance minister. Guedes’s economics doctorate from Chicago provided a formal credential, but the policies he espoused were more important. Guedes had looked to Pinochet’s economic policies as a model during the 1980s, taking a university post in Chile during the Pinochet dictatorship. His projected agenda of economic policies included completing the efforts to undermine the social safety net by attacking the social security system and engaging in ‘radical privatizations’ (see Kerstenetzky, 2019). By making Guedes his public face on the economic front, Bolsonaro ensured his acceptability.

In sum, financial elites succeeded in squaring the circle. They lacked the power to install their ideal ‘democratic centrist’ candidate, but they still ended up with a candidate who had demonstrated his willingness to protect their basic interests. Their power had boundaries, but their core interests lay inside those boundaries.

One might even argue that the new compromise was a ‘through the looking glass’ mirror image of process that resulted in Lula’s electoral victory two decades earlier. It 2002 and in 2018 popular discontent put capital’s first choice electoral outcomes beyond the limits of capital’s political power. The PT’s expanded state efforts to increase welfare could be still accepted as long as financial profits were protected. This time around, however, the compromise was an ugly one. Draconian rupture of the social safety net intensifying the economic hardships of the precarious majority replaced expanded state welfare efforts. Instead of expanded state capacity, the Brazilian poor would be faced with crumbling capacity to deliver basic services. Nonetheless, the continuity was as striking as the contrast. Financial elites would continue to receive their unfair share of economic returns. Once again, lack of power to fully mold the electoral process did not mean lack of power to protect core interests.

The Brazilian reversal and the rise of exclusionist reaction

The great Brazilian reversal echoes the pessimism that hovers over Polanyi’s recounting of nineteenth- and early twentieth-century historical efforts to bring movements for social protection to full fruition, from the Owenites to the Chartists to Red Vienna. Together with the rise of other reactionary exclusionist regimes, Brazil’s reversal undermines our hopes that Polanyi’s mid-twentieth-century projection of a ‘great transformation’ can come to fruition in our twenty-first-century conjuncture. At the same time, the Brazilian case is consistent with Polanyi’s ‘crass materialist’ perspective on the rise of reaction.

Having served as a model of the resurgence of movements for social protection in the Global South, Brazil now forces us to appreciate the fragility of contemporary efforts to expand social protection. The PT’s foundering shows that delivering benefits via control of the state but neglecting mobilization creates vulnerability. In addition, Brazil’s experience suggests that, as discouraging as it may be to focus on the power of finance capital to subvert projects of social protection, ‘pessimism of the intellect’ requires analyzing this power and trying to figure out ways to confront it politically.

Brazil’s twenty-first-century experience argues that the survival of the movement for social protection requires combining delivery of needed services with unrelenting intensification of mobilization. Resting content with the victories that can be won by wielding a share of state power can become a trap if it leads to complacency in the realm of mobilization. Mobilizational weakness, along with shifts in the terrain of civil society that undermined old bases of mobilization, was fundamental to producing Brazil’s great reversal.

Continued mobilizational effort is fundamental, but as long as the interests of finance capital continue to dominate the politics of economic policy, capital’s interests constitute a fundamental structural impediment to the expansion of social protection. The concrete details of financial capital’s agentic actions may remain shrouded, but the logic is straightforward. The interest of financial capital in preserving its exorbitant share of the social surplus is undeniable. Finance capital’s ability to bring to bear the economic, political, and cultural power to realize these interests is equally obvious.

Unfortunately, even with extraordinary mobilizational effort, countering the power of finance capital is a high hurdle for any party or social movement to clear. No obvious strategy for dislodging the power of finance capital emerges from the Brazilian case, any more than it emerges from Polanyi’s analysis of earlier cases. If ‘splits in the capitalist class’ were ever a significant source of leverage, that time is gone. Yet, the long-term success of the movement for social protection still requires discovering a way to disrupt the political power of finance capital.

Emphasizing the power of finance capital does not mean suggesting that it can shape political trajectories at will. Like the rest of us, finance capital makes history but not as it chooses. Efficacy in the negative project of impeding the expansion of social protection does not necessarily translate into capacity for building an effective project around the principle of economic liberalism . In Brazil, the social democratic project was successfully subverted, but the outcome was not finance capital’s ideal of a malleable ‘democratic centrist’ regime led by a dependable traditional party. It was, instead, the politically chaotic, reactionary exclusionist regime of Jair Bolsonaro, willing to protect the core interests of finance capital but socially destructive and undependable.

Generalizing from the story of the rise of exclusionist reaction in Brazil could prompt a bleak query: Has the reactionary path for escaping the ravages of market dominance, whose hegemony we somehow dodged in the mid-century chaos of two world wars, returned to haunt us in a more durable form? It would be easy to take an ‘uncompromising pessimism’ route and answer this question in the affirmative, but such a response goes beyond the evidence.

The durability of exclusionist reaction still remains to be tested in Brazil. As the Bolsonaro regime blunders its way through a disastrous response to the corona virus, its political future must be considered uncertain at best. The result could be a more systematically draconian repressive regime, but there is no theoretical basis for excluding an unexpected rise of new ‘green shoots’ of mobilization. ‘Pessimism of the intellect’ should not be an excuse for despair.

Nothing in the story of the Brazilian reversal can be taken to weaken the imperative of translating ‘optimism of the will’ into mobilization. Focusing on finance capital as a prime obstacle offers no ‘magic bullet’ for progressive political strategists, but it must be a component of any realistic assessment of the structural obstacles to be overcome if future movements for social protection are to bear fruit. Indeed, highlighting the power of finance capital as a structural obstacle should help sharpen the strategic focus of progressive mobilization.