Can Democracy Challenge Empire in Lula's Brazil?

...In Brazil’s powerhouse central regions, which produce the world’s largest soy harvest on enormous tracts of land, Lula could ensure economic growth and foreign exchange by continuing his strong support of the agribusiness model...

...For others, Lula’s continuing economic orthodoxy is a betrayal of more than two decades of social movement mobilization and leftist party-building...

...So far, the alliances and the apparent governability established by Lula’s administration has come at a costly price: the loss of the excitement that social movements promote and a general disenchantment with politics...

...A wildly popular nighttime soap opera portraying landless squatters with openness, sympathy and steamy romance also contributed...

...SINCE TRADE UNIONIST LUIZ INÁCIO LULA DA Silva won Brazil’s 2002 presidential elections, he has surprised his own supporters as well as international bankers by rigorously complying with the economic prescriptions of the International Monetary Fund (IMF...

...An imaginative policy of this sort, which cuts through old orthodoxies of left and right, risks pleasing no one...

...Through participatory budgeting, ordinary people in the city’s neighborhoods come together in a yearly cycle of meetings to decide how the budget for new local infrastructure and services will be spent (on average about 10% of the total municipal budget...

...When Lula won the presidency, in contrast, there was a palpable consensus across the economic and political spectrum in Brazil that it was time to do something about misery, hunger, lack of education and violence...

...The President leads a programmatic, internally democratic political party with deep societal roots, ongoing connections to social movements and clear dedication to an alternative, egalitarian national project...

...The budget isn’t that big, and much of it is already allocated to basic salary expenses...

...Brazil today represents a forceful challenge to Empire because of the way in which strong social movements have crossed the divide between the streets and the institutions, converting both into creative arenas for progressive politics...

...Lula brought charisma and international prestige to this task...

...but pens and tablecloths for the municipal health fair...

...It does this by exceeding the 3.75% budget surplus required by the IMF and maintaining interest rates among the highest in the world...

...Leftist critics of the PT argue that the party has been on a path toward tempering its politics for a decade and that it made fundamental compromises to win the 2002 elections...

...There is a cultural battle to be fought in making these experiments “real” and “natural,” just as the transformed political landscape in Brazil is now taken for granted...

...As a result, even business groups that valued the privatization and balanced budgets instituted by Fernando Henrique Cardoso now argue that U.S.-promoted neoliberal policies hinder growth when carried to extremes...

...For some, including many commentators in the United States, Lula has appropriately adjusted to the politics of the possible, focusing on economic stability and carrying out small reforms in social security, support for family farmers and food for Brazil’s poorest...

...But if the democracy flourishing in Brazil fails to result in significant changes in poverty and inclusion, as seems increasingly likely, then those who have worked credibly for reform through democratic politics may well return to the polarized positions of the past...

...The strongest factor behind the potential of the PT as a source of dissent is the social movement activism that has flourished in Brazil since the late 1970s and spurred the growth and talent of the party...

...In Porto Alegre, a city of 1.3 million people in the southern state of Rio Grande do Sul, the PT won municipal elections from 1988 to 2000 and instituted a successful experiment in local government...

...This occurred when Lula surged in the polls before the 2002 elections...

...What is striking about many of these ideas is their practicality...

...The Lula government could shift the boundaries of the possible by addressing the issue of land reform regionally, rather than dealing with it as an all-or-nothing proposition...

...Brazil’s macroeconomic success lies in paying its enormous foreign debt, balancing its budgets and keeping inflation under control...

...Social movements, NGOs, scholars and local governments have long been putting forth new ideas, many of them publicized in arenas such as the World Social Forum...

...Together with many poor and middle class supporters of the PT, these business sector critics of neoliberalism are pressing Lula to defy international pressures and spend money to stimulate growth...

...Still, land reform is expensive, because it involves buying idle land from its owners and subsidizing the early stages of settlement and production for new occupants...

...In Brazil, reformist bargains within a market system could ensure food, jobs and education for ordinary people...

...The electoral system in Brazil is structured so as to favor weak parties and unaccountable representatives...

...But now we see that things work differently...

...These camps, while they agree on the basics of a market system, have been in tension over how to proceed, and the orthodox economists have so far won out...

...Paulo Vieira da Cunha, chief economist for Latin America for HSBC Securities, warned that “one of the questions behind the risk level of Brazil is political stability and the continuity of its economic policy...

...In three years, Bonês, who only has an eighth-grade education, assembled a team of 80 healthcare workers, including doctors and nurses, who provide public services that were not available before the PT took local office...

...For the first time, the leftist party faces serious corruption scandals, most notably involving alleged monthly payments from the top echelons of the PT to legislators from allied parties in return for their support...

...Thus there is an opening for reform, but a fragile one...

...In contrast, the successes of the PT in local governance and of the MST’s land occupations, both of which stimulated whole networks of activism, derived from their ability to animate and enchant...

...From this domestic perspective, institutional and party structures make successful reform unlikely...

...In the rural towns of Rio Grande do Sul, women from modest backgrounds withdrew from male-run organizations, such as the Landless Rural Workers’ Movement (MST), and formed their own Rural Women Workers’ Movement (MMTR) in order to address women’s economic and health issues, as well as gender relations within families...

...The movement’s goal is to pressure Lula to carry out a process of land reform that had been widely expected during Brazil’s transition to democracy in the 1980s, but was blocked by rural landowners, who have disproportionate power in the federal legislature and employ private militias to intimidate opponents...

...A creative policy, negotiated among competing groups, might focus redistributive efforts on Brazil’s relatively unproductive northeast, where land redistribution and support for small-scale agriculture could make a real dent in poverty...

...Economic pressures loom largest...

...Urban Brazilians see land reform as a way of keeping the rural poor in the countryside, rather than having them migrate to overcrowded urban slums...

...Before we entered government, we thought it was simple,” Bonês told me...

...Just as the PT so effectively linked social movements to formal politics—bringing together the streets and the institutions— they and others need to connect this existing, practical world of out-of-the-box thinking to international politics...

...The same economic orthodoxy that pleases Brazilian bankers and international financial institutions has dampened possibilities for growth...

...Bonês, a leader of the movement, spent 15 years supporting grassroots mobilizations and blocking highways to fight for social justice...

...This May, 13,000 landless workers marched to the nation’s capital, Brasília, bringing the issue once again to the political forefront...

...The PT has governed with skill and innovation in Brazil’s largest cities, often creating new solutions—such as participatory budgeting— that break out of old categories...

...Neighborhoods where sewage once ran down hillsides or across muddy streets now enjoy basic infrastructural services and have begun to construct healthcare posts and daycare centers...

...Indeed, there are two camps within Lula’s own administration, those who favor economic orthodoxy and those who favor social change...

...In this context, the notion that inclusion will occur gradually over decades through neoliberal growth and incremental social policy, presumably without upheaval or cataclysm, seems unlikely...

...Carrying land reform to the international level, Lula might then press the IMF to allow payments for land buyouts to come out of the budget surplus or debt repayment...

...YET BRAZIL currently exhibits a puzzling paradox...

...From this perspective, opposition on the part of international financial institutions precludes innovative policymaking in Brazil, even if such reforms are economically sound and promise political inclusion...

...LULA’S ADMINISTRATION COULD GET TO THE HEART OF exclusion and hunger in the countryside by addressing the contentious issue of land reform, around which the MST has mobilized with stunning success over two decades...

...World-renowned innovations such as participatory budgeting and land occupations have been sidelined by commitments to debt repayment and a 4.25% budget surplus, higher even than what the IMF requires...

...In this battle, cultural arguments, agents and imageries play a central role...

...Many of those who voted for Lula, however, assumed that the President’s orthodox economic stance was merely a first step, adopted to reassure financial markets and address inherited economic constraints...

...Were Lula to reinvigorate policymaking with the spirit and participation of social movements, he might rescue the innovative and experimental aspects of democracy, those most capable of bringing new cultural understandings and transforming the politics of the possible...

...And if innovation in Brazil, including new economic relations with Washington and the IMF, were to lessen inequality, then promises made in the name of democracy and civil society would gain credence internationally...

...Fifteen years ago, many of the country’s present achievements would have been unthinkable: Lula’s assuming office, the widespread legitimacy of the MST, participatory budgeting in scores of Brazilian cities, and Brazil’s leading role in global trade negotiations and UN reform...

...When I visited last year, she suggested I come with her to meet with local bankers to request donations of—“not money...

...The PT demonstrates no economic plan beyond carrying out Cardoso’s policies even better than he did himself...

...For advocates of neoliberalism, Lula’s adherence to mainstream economic doctrine is a triumph and a relief...

...Through such gradualism, Porto Alegre’ shantytowns have been transformed in the past 15 years...

...Twenty years of MST organizing have produced solid support for land reform among Brazilians of all classes and regions...

...This is a cultural component to hegemony, one that does not simply rule or impose and does not map directly onto economic interest, but rather influences thinking across the geographic and political spectrum...

...Dilecta Todoschini, a neighborhood activist and retired schoolteacher, compares the incremental approach of participatory budgeting to building a structure—and a life—from the ground up: “First, when you’re living in one dark room, you hope for a window...

...Even since the PT ceded control of the city to a center-right party in the 2004 municipal elections, the participatory budgeting process has remained significantly intact...

...Pressing the boundaries of the possible today in Brazil requires transforming the unprecedented dialogues between people like Gessí Bonês and the bankers, favela activists and the police, MST settlements and local governments, and Porto Alegre squatters and the courts into meaningful national policy...

...You come into office, with that big budget, and you change everything...

...As this slowness continues through Lula’s third year in office, and with corruption scandals seizing center stage, PT supporters differ in their responses...

...The moment Brazil is deemed risky, its currency loses value and foreign investment plummets...

...When the residents of an illegal squatter settlement faced eviction, they learned the skills of petitioning and concise argument in order to present their case...

...And despite the openness of Brazil’s military and civilian elites to limited reforms in areas such as social security, health care and cash transfers, reform processes clearly stall when they challenge elite privilege...

...Activists committed to change will fight for justice in the streets, instead of within political institutions, while Brazil’s elites will return to authoritarian visions of grandeur, defending themselves with political power and security forces...

...THESE ARE COMPELLING EXPLANATIONS...

...Alternative forms of decision-making, production and distribution function in many places in Brazil and Latin America...

...There is no better hope for a peaceful and stable hemisphere than to keep dedicated Brazilian activists, bankers, squatters, judges, businesspeople and government officials together in the same meeting rooms, combining imaginative reform with the mundane tasks of governing...

...Last year, when Lula spoke of changing economic policy in an effort to promote greater distribution of wealth, job creation and social inclusion, Paulo Leme, director of emerging markets at Goldman Sachs, responded immediately that the statement “weakens the government...

...within three months, the Brazilian real lost a third of its value against the dollar...

...The bankers learned about the realities of deprivation, which keeps the majority of local residents from making use of their banks, from the same woman who had blocked their cars in years past...

...And in the south, where fertile land is more balanced between family farmers and big growers, Lula could also compromise, supporting MST and smallholder efforts at sustainable development, while leaving many big farms intact...

...Last year, after shootouts between drug gangs shut down the roads linking Rio’s beachfront neighborhoods, Governor Rosinha Matheus requested that federal troops occupy eight of the city’s favelas, and President Lula authorized the deployment...

...HSBC was not worried about Brazil’s macroeconomic stability in and of itself, da Cunha explained...

...Instead, almost three years into his four-year term, Lula has done little to alter Brazil’s development path, and unease and disillusionment pervade the country...

...Brazil is the best-case scenario for democratically driven socioeconomic reform in the world today...

...Gessí Bonês, a women’s movement activist in the southern state of Rio Grande do Sul, explained the leeway that supporters granted Lula during his first year in office by reflecting on the PT’s experience in local government in her town of 7,000 people...

...But in the hands of a skilled politician like Lula, it might point the way to a future of democratic compromise, where each contending group achieves some of its goals and the lives of the poorest are demonstrably improved...

...Domestic factors limit reform as well...

...Bonês says she has “dois coraçoes”—two hearts—one in the institutions and the other in the streets...

...In this context, Lula has to govern without a congressional majority, forcing him to make all sorts of agreements with opposition parties that limit his ability to proceed with reform...

...The result has been a startling political story: a longstanding leader of the leftist Workers’ Party (PT) has kept the Brazilian economy stable and gained the support of domestic and global financial leaders...

...Amid the debate over Lula’s economic policy, few acknowledge what is at stake in Brazil in the age of U.S...

...Local residents, many of them with only grade-school educations, learn to argue, petition, make technical assessments, supervise project implementation and vote...

...Several factors account for the failure of the PT administration to enact meaningful socioeconomic reform, from the constraints of the global economy to the structure of Brazilian domestic politics...

...In the course of two decades of democracy and grassroots activism, the Brazilian left and Brazilian civil society have transformed the realm of the possible in Brazilian politics...

...And things change very slowly...

...LULA’S GOVERNMENT BRINGS TOGETHER MANY FACTORS that make significant reform possible...

...Empire...

...Progressive reform in Brazil under Lula, though deeply constrained by domestic politics and the international economy, faces a lack of political vision and imagination on all sides...

...Why, then, when a leftist committed to social change assumes the presidency, does it suddenly appear selfevident that reform can go no further...

...Today, when New York bankers respond to Lula’s proposals with stern warnings, their words threaten to cause real economic havoc...

...As this fiscal orthodoxy continues apace, violence, unemployment and drug trafficking increase in Brazil’s cities, while the rural divide between agribusiness and landless workers intensifies...

...They expected Lula to soon shift gears, prioritizing social inclusion and a more equal distribution of wealth by forging new bargains in such areas as land, labor, education, debt repayment and trade...

...Lula’s presidency represents the culmination of unprecedented leftist success in challenging and transforming the status quo in Brazil since the late 1970s...

...Rather, “the threat is, as always, politics”—where politics is understood as divergence from economic orthodoxy...

...Such revelations call into question the PT’s honesty and transparency, the traits that most consistently garnered it middle class votes...

...To speak of multiple democracies and markets is not to invoke utopias, but rather working experiments...

...Together, these policies severely limit Lula’s capacity to invest in economic infrastructure or social programs and make it near impossible for Brazilian entrepreneurs to afford the credit necessary for investment and expansion...

...And some see land reform as threatening, because it makes societal claims on private property and supports alternatives to conventional agribusiness...

...Lula’s predecessor, Fernando Henrique Cardoso, stabilized the national economy and brought transparency and balanced budgets to state governments, but he did not grapple seriously with inequality...

...Bonês monitored every at-risk child, set up a mobile dental clinic (constructed out of an old school bus) to provide free services to children in every rural neighborhood and coordinated the work of community health workers on a street-bystreet basis...

...Alongside these relatively modest domestic policy changes, Lula has taken the lead in challenging U.S.-dominance on the international stage...

...But from 2002 to 2005, she ran the department of health in her town while it was governed by a coalition that included the PT...

...Innovation, however, is suspect where economic orthodoxy holds sway...

...In March of 2004, after quietly supporting Lula for more than a year and seeing little policy response, the MST resumed its illegal land occupations, seizing nearly 150 properties in 20 of Brazil’s 27 states...

...Few people or institutions in positions of power—including those who by interest or inclination might sympathize with claims for social justice or political inclusion—can envision new relationships between economics and politics, new ideas about how economies might run or alternative formulations of global rules...

...and then you get the window and think about a floor, another room, indoor plumbing...