934264

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ISS0010.1177/0268580920934264International SociologyEvans

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International Sociology
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Polanyi meets Bolsonaro: © The Author(s) 2020
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DOI: 10.1177/0268580920934264
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twenty-first-century Brazil

Peter Evans
University of California Berkeley, USA; Watson Institute, Brown University, USA

Abstract
Twenty-first-century Brazil’s political evolution is a window on the dynamics of contemporary
political transitions. The inability of Brazil’s Workers’ Party to sustain its social democratic project
and the subsequent rise of the reactionary regime of Jair Bolsonaro are, in turn, part of a global
pattern of political change. Karl Polanyi’s vision of the ‘double movement,’ in which the dominance
of the market vies with the countervailing movement for social protection, offers an analytical
springboard for reflecting on these political transitions. Trying to understand the movement for
social protection leads to examining ebbs and flows in the momentum of mobilization. Trying
to understand how market dominance leads to reaction brings us back to Polanyi’s advocacy of
‘crass materialism’ as a lens for looking at reaction, and from there to consideration of how the
structural power of capital undercuts efforts at social protection and opens the door to reaction.

Keywords
Brazil, finance, Polanyi, reaction, social protection

The twenty-first-century rise of reactionary regimes in both North and South refocuses
our attention on Karl Polanyi’s mid-twentieth-century insistence on the economic origins
of reaction. Like the fascist regimes of the first third of the twentieth century, current
reactionary regimes blossomed after a period in which economic liberalism – ‘neoliberal
global capitalism’ in contemporary parlance – reigned. Once again, the quest to escape
the socially destructive consequences of the dominion of economic liberalism has turned
into ugly exclusionist reaction in major countries.
Twenty-first-century Brazil illustrates both the dynamics of reaction and the obsta-
cles to implanting inclusionary social democracy in the Global South. The collapse of

Corresponding author:
Peter Evans, University of California Berkeley, Barrows Hall, Berkeley, CA 94720, USA.
Email: pevans@berkeley.edu
2 International Sociology 00(0)

efforts by Brazil’s Workers’ Party (Partido dos Trabalhadores, hereafter PT) to con-
struct a ‘tropical social democracy,’ and the subsequent rise of the chaotically reac-
tionary regime of Jair Bolsonaro, constitute an emblematic transition. Efforts to
ameliorate the harsh realities of neoliberal capitalism via social democratic policies
were stymied. The result was not a return to mainstream neoliberal policies but regres-
sion to reaction.
Current reactionary regimes like Bolsonaro’s are sometimes labeled ‘nationalist’ and,
to be sure, their rhetoric does not foreground the traditional neoliberal globalist nostrum
that freeing markets across borders naturally maximizes welfare. Nonetheless, their
‘nationalism’ is perverse. Their economic playbook features adherence to the agendas
and interests of global capital. At the same time, their definitions of the ‘nation’ are
exclusionary rather than inclusive. Excluding non-majority religious and ethnic com-
munities from the ‘nation’ is a key part of their political and cultural playbook.
Marginalized social and economic groups are also arbitrarily subjected to exclusion.
Traditional progressive visions of ‘nationalism’ as a quest to increase the flourishing of
all those who live in the nation don’t apply. All of this makes ‘nationalist’ a misleading
label. ‘Reactionary exclusionist’ fits better.
The obvious temptation when considering contemporary Brazil is to become fixated
on the mesmerizing combination of Bolsonaro’s horrifying misgovernance and his bril-
liant political theater. I would like to follow a different analytical path. My goal is to
direct attention to the underlying structure of economic power that opened the political
space in which a figure like Bolsonaro could ride a novel combination of organizational
and cultural vectors to power.
Brazil’s great reversal took place in a context structured by the power of capital, in
particular finance capital, whose primary interest lay in preserving its own returns at the
expense of allocating society’s surplus to the provision of social goods. From a Polanyian
perspective, the Brazilian transition exemplifies a shift to the negative moment of the
Polanyian double movement. Brazilian capital acted as the agent of ‘the principle of
economic liberalism,’ checkmating, in alliance with its traditional political allies, the
project of expanding social protection.
The role of capital in the Brazilian transition must, of course, be set in the overall
dynamics of the double movement. The positive moment of social protection depends on
the momentum of mobilization. In the Brazilian case, both the expansion of this moment
and its vulnerability intersect with the rise and fall of the Workers’ Party. Furthermore, in
line with the pattern of the interwar transitions that were so important to Polanyi’s frame-
work, the resurgence of economic liberalism did not follow the preferred script of eco-
nomic elites. Unable to install one of their traditionally preferred political agents, they
had to settle instead for a more uncertain alternative. They protected their core interests,
but at the expense of unleashing the potential inherent in the negative moment of the
double movement: destructive, reactionary exclusionist politics.
Juxtaposing Brazil’s recent reactionary trajectory with Polanyi’s analytical perspec-
tive is a doubly productive endeavor. The Polanyian frame helps shift attention from the
idiosyncratic, historically specific features of Brazil’s trajectory to the way in which
Brazil’s fate resonates with a broader set of comparative and theoretical arguments.
Considering twenty-first-century Brazil takes the Polanyian frame beyond the historical
Evans 3

examples on which Polanyi builds his analysis and offers an opportunity to use Polanyi’s
double movement frame to shed light on twenty-first-century conundrums.

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 liberal-
ism’ 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 con-
tradictory 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 eco-
nomic 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 pro-
mote 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 phi-
losophy 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 mobili-
zation, 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
4 International Sociology 00(0)

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 move-
ments 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 liberal-
ism 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 ‘nine-
teenth-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 civiliza-
tion’ (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.
Evans 5

Among the surviving interwar regimes, some seemed to be making progress in

expanding the principle of social protection without resorting to the repressive, reaction-
ary 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 capital-
ism’ (roughly 1945–1973 – see Hobsbawm, 1994), the rise of neoliberalism that fol-
lowed 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 neolib-
eral 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 con-
tinued 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 pos-
sibility 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, gener-
ating significant new programs, such as NREGA, which is considered ‘perhaps the larg-
est 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
6 International Sociology 00(0)

capital, best thought of as ‘finance capital.’6 Once finance capital could no longer toler-
ate a social democratic, redistributional project, the trajectory that culminated in a reac-
tionary 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 limi-
tations 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 exclu-
sionist 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 inter-
est 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 disa-
vowed any intention to renege on Brazil’s obligations to the bankers and won the elec-
tion. 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),
Evans 7

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 mini-
mum 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 ordi-
nary 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 com-
menced 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 dur-
ing 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 elec-
toral 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’
8 International Sociology 00(0)

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 representa-
tion 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 politi-
cians. 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 stra-
tegic 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 domi-
nance, 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 discre-
tionary resources available to the state.12 It would have required challenging the tradi-
tional 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 financiali-
zation.’ 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 obvi-
ous 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
Evans 9

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 compa-
rable 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 rela-
tively 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 ‘incom-
patible with the existing system of private enterprise.’ Extending Lula’s success at sur-
viving 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’ capi-
tal actually depended on financial returns for a large share of its profits.16
Dilma was forced to return to the orthodox economics establishment – most obvi-
ously 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
10 International Sociology 00(0)

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 politi-
cal 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 effec-
tive 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 liberal-
ism. 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 presi-
dential candidate, also seemed thoroughly promising. While he lacked Meirelles’s cre-
dentials 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 disaf-
fected, 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.
Evans 11

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 eco-
nomic liberalism’ is central to achieving the support of capital. As an admirer of the mili-
tary, 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 pro-
jected agenda of economic policies included completing the efforts to undermine the
social safety net by attacking the social security system and engaging in ‘radical privati-
zations’ (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 recount-
ing 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’ perspec-
tive 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
12 International Sociology 00(0)

of the state but neglecting mobilization creates vulnerability. In addition, Brazil’s experi-
ence 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 intensi-
fication 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 mobiliza-
tion. Mobilizational weakness, along with shifts in the terrain of civil society that under-
mined 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, polit-
ical, 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 protec-
tion does not necessarily translate into capacity for building an effective project around
the principle of economic liberalism . In Brazil, the social democratic project was suc-
cessfully subverted, but the outcome was not finance capital’s ideal of a malleable ‘dem-
ocratic 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 ‘uncompromis-
ing 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 system-
atically 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.
Evans 13

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 pro-
gressive mobilization.

Acknowledgements
I would like to thank the editors for their efficient and conscientious work under difficult circum-
stances in guiding this article to completion. I would also like to thank an anonymous reviewer for
their stimulating critical reading of an earlier draft. Special thanks are due to Celia Kerstenetzky,
who brought her expertise to bear in a perspicacious and insightful reading that resulted in funda-
mental improvements in my analysis. Finally, I would like to thank Elisabeth Magnus, whose
copy-editing skills were essential to the final version. The flaws and errors that remain uncorrected
are, of course, solely my responsibility.

Declaration of conflicting interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/
or publication of this article.

Funding
The author received no financial support for the research, authorship, and/or publication of this
article.

ORCID iD
Peter Evans https://orcid.org/0000-0001-5601-5656

Notes
1. To cite just one example, Robert Kuttner (2014) proclaimed Polanyi’s The Great
Transformation ‘the 20th century’s most prophetic work of political economy.’ See also
Block and Somers (2014) and Evans (2015). Most recently, Piketty (2020) highlights the
importance of Polanyi’s analysis.
2. Polanyi sums up the devastation as follows: ‘the destruction of family life, the devastation of
neighborhoods, the denudation of forests, the pollution of rivers . . . and the general degrada-
tion of . . . the innumerable forms of private and public life that do not affect profits.’ See
Polanyi (2001 [1944]: 139).
3. Indeed, Polanyi’s unease with the faltering post-World War II project was already evident in
his 1947 article ‘Our obsolete market mentality.’
4. See, for example, McGuire (2010) and J Harris (2017) on expanding access to health care.
5. Calling the PT’s project ‘social democratic’ may be considered a conservative take. The PT’s
self-identification is ‘democratic socialist.’ On the other hand, some critics of the PT now
suggest that its project might have actually been a ‘variety of neoliberalism’ (see Saad-Filho
et al., 2020). ‘Social democratic’ is a broad frame, encouraging comparisons with a variety of
regimes trying to increase social protection.
14 International Sociology 00(0)

6. By using the term ‘finance capital’ rather than simply ‘capital’ I am hoping to make two
points. First, Brazil’s big banks are the heart of the economic power of the capitalist class.
Second, and equally important, the overall profits of even capitalists whose ostensibly princi-
pal activity is not ‘finance’ are likely to be highly dependent on financial returns. See discus-
sion below.
7. See also Braga (2016) and Braga and Purdy (2019).
8. See Kerstenetsky (2012, 2014) for a comprehensive analysis of Brazil’s social development
state, setting the Brazilian case in comparative perspective.
9. André Singer (2012) is perhaps the best known analyst of the PT’s dilemmas. See also Saad-
Filho et al. (2020).
10. It is ironic but symptomatic that Sergio Moro’s weaponization of ‘anticorruption,’ which ena-
bled him to put Lula in jail and for which Moro was rewarded by being made minister of
justice by Bolsonaro, focused on what seems to have been a largely fictionalized case against
Lula, while others like Temer, against whom the evidence was far stronger, remained free (see
Proner et al., 2018).
11. The PT’s problems were compounded by the transformation of the social terrain on which
mobilizational battles were fought. The rise of evangelical congregations as major foci of
community solidarity and political organization is the most obvious example. McKenna
(2018, 2019 and in this issue) provides an empirically thorough and analytically sophisticated
account of this transformation.
12. Among the political contradictions confronting the PT’s efforts was the fact that given very
limited resources it made sense to concentrate efforts on the poorest deciles of society. This
resulted in what might be called the ‘elephant curve effect’ in which those below the top 1%
but above the median income benefited relatively less, reinforcing the resentments of whiter,
more established segments of the ‘middle class’ over the improved status of those they con-
sidered ‘underserving marginals.’ See Gethin and Morgan (2018).
13. See also Bastos (2017).
14. See McKenna (2019: 85–135).
15. In fact, after going negative in 2009, growth popped back up to a two-decade high of 7.5% in
2010.
16. Hope of creating a ‘developmentalist’ alliance with industrial capital was an old dream in
Brazilian developmentalist thinking, going back at least to dependency theory. See Evans
(1979).
17. In comparison, the fact that the PT’s candidate (Fernando Haddad), who could boast a PhD in
philosophy but not a long-standing national political reputation, was able to win 45% of the
popular vote and take the entire Northeast region is a reminder that, for all its mobilizational
failings, the PT still remained in 2018 the most formidable political party in Brazil.

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Author biography
Peter Evans is Professor Emeritus in the Department of Sociology, University of California,
Berkeley, and Senior Fellow in International Studies, at the Watson Institute for International
Studies, Brown University. He began doing research on Brazil in 1967 and is best known for his
1995 book Embedded Autonomy: States and Industrial Transformation. His recent articles have
examined changing state–society relations and transnational social movements, especially the
global labor movement.
Evans 17

Résumé
L’évolution politique du Brésil au XXIe siècle constitue un observatoire privilégié pour examiner
la dynamique des transitions politiques contemporaines. L’incapacité du Parti des travailleurs
brésilien à poursuivre son projet social-démocrate et la montée du régime réactionnaire de Jair
Bolsonaro qui a suivi s’inscrivent l’un comme l’autre dans un scénario global de transformation
politique. L’idée de Karl Polanyi du « double mouvement », selon laquelle la domination du marché
est en concurrence avec le mouvement compensatoire en faveur de la protection sociale, offre
un point de départ analytique pour examiner ces transitions politiques. Tenter de comprendre
le mouvement en faveur de la protection sociale conduit à examiner les flux et reflux de la
dynamique de mobilisation. Essayer de comprendre comment la domination du marché entraîne
un mouvement de réaction nous ramène à la position de Polanyi, qui préconisait d’examiner la
réaction au prisme du « matérialisme grossier », et de là, nous amène à prendre en considération
la façon dont le pouvoir structurel du capital sape les efforts de protection sociale et ouvre la
voie à la réaction.

Mots-clés
Brésil, finance, Polanyi, protection sociale, réaction

Resumen
La evolución política de Brasil en el siglo XXI proporciona una excelente visión de la dinámica
de las transiciones políticas contemporáneas. La incapacidad del Partido de los Trabajadores de
Brasil para sostener su proyecto socialdemócrata y el posterior ascenso del régimen reaccionario
de Jair Bolsonaro son, tanto uno como otro, parte de un patrón global de cambio político. La
visión de Karl Polanyi del “doble movimiento”, en el que el dominio del mercado compite con el
movimiento compensatorio en favor de la protección social, ofrece un trampolín analítico para
reflexionar sobre estas transiciones políticas. Intentar comprender el movimiento de protección
social lleva a examinar los flujos y reflujos en el momento de la movilización. Intentar entender
cómo el dominio del mercado conduce a la reacción nos conduce a la defensa que hace Polanyi
del “materialismo grosero” como una lente para examinar la reacción, y de ahí a considerar cómo
el poder estructural del capital socava los esfuerzos de la protección social y abre la puerta a la
reacción.

Palabras clave
Brasil, finanzas, Polanyi, protección social, reacción.