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A city for the 99%: the democratization of power and the public budget

Programmatic Editorial

Due to its nature and the functions it carries out, municipal political power directly focuses on the daily life of the population. This power organizes some of the most basic conditions for social life, such as education, health, sanitation, transportation and housing. All too often, the concreteness of these issues means that they are dealt with in a way that conceals their political character. This leads to programs that limit themselves to the proposal of ways to merely manage and administer reality as it already exists, and uphold a technocratic ideal that erases social and political conflict. Even left-wing forces adopt perspectives, such as the building “cities for all”, that are in this vein.

From the perspective of a socialist project, if the contradictions that characterize capitalism appear in a particularly concrete way at the municipal level, our role should not be to hide them but, on the contrary, to make them more and more visible. Therefore, it is not a question of management or efficiency. Municipal power must be seen as an important arena of class struggle in its multiple manifestations: here too, affirming the interests of the working class and the oppressed necessarily means fighting the interests of the bourgeoisie. Guaranteeing universal access to housing implies undermining the foundations of real estate capital, offering free and quality health and education implies reducing the potential market for entrepreneurs in this sector, and so on. The city we want is the city for the working majority, not the ruling exploitative minority.

Implementing such measures within a capitalist society is however not a simple task. In addition to mobilizing its own bourgeois forces in favor of their interests, the State, at the municipal level as much as anywhere else, is equipped with various mechanisms that seek to limit the scope for possible transformation.

The pitfalls of state policy in liberal democracies

In liberal democratic regimes, the main way that politics is institutionalized is through electoral mandates. In this system, those who hold a mandate have no formal link to their own electorates once they are elected. Thus, in the absence of elements exerting pressure in the opposite direction, the tendency is for elected officials to increasingly respond to the internal dynamics of the spaces in which they exercise power, the city halls and council chambers.

These spaces, far from being constituted in a neutral manner or being equally accessible to all sectors of the population, are totally configured in favor of the action of the ruling classes. First, as a result of the concentration of financial, media and political resources in their hands, these classes generally manage to elect the majority of mayors and councilors. The correlation of forces in these spaces tends to be unfavorable as a consequence.

Second, the organizations created and maintained by the ruling classes within civil society (their private hegemonic apparatus) also enjoy the best conditions for being present and making themselves heard in these spaces of the state. Under the guise of consultancy, advisory roles, lobbying, advertising, etc., they coat the interests of the dominant classes with a varnish of technical-scientific legitimacy. In this way, projects that are directly articulated by factions of the bourgeoisie are presented as “technical opinions”, which then shape the action of the state apparatus.

Third, the state body of officials and functionaries in no way constitutes a neutral agent. Whether through the training and habits acquired in the exercise of its functions, or the weight that the dominant ideologies possess in society as a whole, the bureaucracy tends to act to preserve both current institutions and existing social relations.

The capture of the public budget by big capital

Beyond these immediate political obstacles, there is a second trench that defends bourgeois interests in the municipal public budget process. Its fundamental element is the so-called Fiscal Responsibility Law (Complementary Law No 101/2000). This law, a neoliberal pillar in the structure of the Brazilian State, deals above all with the responsibility for returns on investment capital and the payment of private companies that do business with public power at its various levels.

Through its provisions, strict limits are established on the resources that can be allocated to public policies relevant to the working majority, and free up those related to returns on capital. In short, the Fiscal Responsibility Law subordinates the public budget to the interests of the bourgeoisie.

It should also be noted that even the portion of public resources that escapes the boundaries of the Fiscal Responsibility Law and can be effectively allocated to public services is often captured by private capital. This occurs through mechanisms like the different types of public-private partnerships, such as those that operate under the name of Social Organizations. These emphasize the hiring of private companies that are disguised as “non-profits”, but all too often operate under the logic of widespread corruption. By inserting private logic directly into the operations of the state, public-private partnerships tend to degrade public services in order to generate maximum profits, either officially or through corruption.

The Democratization of Municipal Power

On its own, electoral victory is not sufficient for the overcoming of this set of barriers. Moving towards the democratization of municipal political power is fundamental. The creation and strengthening of mechanisms for the direct and effective participation of all the exploited and oppressed, which allows them to set the course taken by these municipalities, is an inescapable requirement for the implementation of profound transformations in the social order. A radical program and collective political action are two sides of the same coin, because form and content are inseparable in the socialist project.

In this sense, the existing Sectoral Councils (in health, education, etc.) should be strengthened. However, it is necessary to critically evaluate and overcome the limits encountered in the real experience of these councils over the last few decades. In particular, attention must be paid to the ways these councils have been hollowed out or manipulated in favor of the interests of the ruling classes. These councils must, on the contrary, be spaces for the expression of the needs and demands of the exploited and oppressed – primarily those of workers and the users of public services – and not those who seek to extract profits at the expense of the quality of public services.

An even bolder step than strengthening these councils would be the holding of a City Congress for the 99%. This congress would define and establish the strategic lines for all areas of the activities of city hall, starting with the budget and ending with the rendering of accounts and the inspection and monitoring of the measures implemented. Its composition and structure would be based on grassroots plenary meetings throughout the city which would ensure the representation of delegates from the neighborhoods and communities; from the housing, women’s, black, LGBTQI+, environmental and cultural movements; and from the unions that operate in the city.

This congressional structure must also be replicated on a smaller scale within the municipal offices and regional administrations. Service users, workers and local residents would elect delegates to thematic or local congresses, set priorities and monitor compliance. At the same time, regional secretaries and administrators would also be elected by the population, with mandates that are recallable at any time.

The transformation of budget logic

A municipal program formulated by the exploited and oppressed in a democratic congress would enter into a deadly collision with the budget structure of the municipalities, structured as they are to favor returns on capital over the provision of quality public services. Thus, the mobilization fostered by the process of the democratization of power must be permanent, going beyond the moments in which city’s congresses are held, and be maintained as a permanent struggle for the transformation of this budgetary structure.

One of the first fundamental measures would be a radical reversal of the logic of municipal tax collection. Property and services taxes, such as the Urban Building and Land Tax (IPTU), the Tax on Services of Any Nature (ISSQN), and the Property Transfer Tax (ITBI), need to be levied progressively by charging the richest 1% proportionally more and charging the 99% of the exploited and oppressed proportionally less. With the implementation of such a progressive approach at the municipal level, it would even be possible to influence the national debate around tax reform, highlight the need to reverse the twisted logic of the predominance of indirect taxes (such as those on consumption), and prioritize the need for highly progressive taxes on inheritances, large fortunes and the profits of private companies and banks.

However, a more equitable collection structure will only have a limited effect if the distribution of public resources remains subject to the logic of the Fiscal Responsibility Law and Constitutional Amendment 95, which establish the budgetary Teto de Gastos (spending ceiling). Mobilization at the municipal level must therefore also become a point of support for the fight against the Fiscal Responsibility Law and for the institution of a Social Responsibility Law. Such a Social Responsibility Law must organize public budgets (municipal, state and federal) in a way that guarantees that the needs of the 99% exploited and oppressed are met, and that the prioritization of returns on capital is abandoned.

The city for the 99% and class struggle today

The democratization of municipal power and the reversal of current budgetary logic constitute the two basic pillars for the construction of a city for the 99% of the exploited and oppressed. These two elements make the democratic formulation of government programs and the objective conditions for their implementation possible.

Of course, these processes will be met with great opposition from the ruling classes, who will not accept a loss of political control even at the municipal level. In a historic moment in which neo-fascist forces are advancing, this opposition tends to assume particularly brutal proportions. In this sense, it is worth recalling that the principal arms of the repressive state apparatus do not respond to municipal governments, and there is still a broad spread of an illegal apparatus of coercion in the form of militia.

This scenario further intensifies the need for the formation of a united front of the exploited and oppressed. Their political parties, social movements, and organizational entities must be brought together in defense of the construction of a city for the 99%, otherwise municipal power will increasingly become a space for the reproduction of class domination at the local level.

This article is an English translation of “Uma cidade para os 99%: democratização do poder e orçamento público”, [https://esquerdaonline.com.br/2020/10/09/uma-cidade-para-os-99-democratizacao-do-poder-e-orcamento-publico/], Esquerda Online (EOL), 09/10/2020.

Translation: Bobby Sparks