Lula wants a new pact between labor and capital: but is it possible?

Gabriel Casoni*, from São Paulo
Reinaldo Azevedo e Lula

Lula is back and in great form. In his interview with Reinaldo Azevedo, which had a huge audience and a big impact, Lula attacked the Bolsonaro government with amusing and popular metaphors and presented his main ideas with good humor and a refined political nose. Lula plays to win. His adversaries of lesser political stature are scared. Bolsonaro felt the blow in the presidential Planalto Palace, and his fear of facing the former president in the 2022 elections is palpable. And in a clear expression of desperation to Luis Inácio’s disconcerting entry into the political scene, various possible presidential candidates from the right – Luciano Huck (no party), João Dória and Eduardo Leite (Brazilian Social Democracy Party, PSDB), Luiz Henrique Mandetta (Democrats, DEM), and João Amoedo (New Party, NOVO) – with the unfortunate participation of Ciro Gomes (Democratic Labor Party, PDT), all signed a joint letter to the press in an attempt to appear as an alternative to the Lula-Bolsonaro polarization.

The central theme of this article, however, is not Lula’s political abilities or his competitors’ reactions. But rather the programmatic axes that the ‘petista’ (PT – Workers’ Party) put forward in the aforementioned interview. In it, the former president again took up his guiding idea of conciliation between “capital and labor”. With just cause, he emphasized that his governments were very beneficial to big business; said that the “market should go to Aparecida (1) to pay a promise for me to return”; and affirmed that 100% state-owned companies, such as the Caixa Economica Savings Bank, could be opened up to capital. Lula also defended the idea of the state being a driver of economic growth and maintained that the increase of public debt should not be demonized, as productive investment can be financed by issuing Treasury bonds.

In short, the ‘petista’ leader is betting on stitching together a new pact between capital and labour, with a focus on a project of economic and social development based on strong state participation. According to the ex-president, this would see the conformation of a government beneficial to all classes. But would Lula’s plan, which seems to be the easiest and most painless way out of the terrible decline that Brazil has plunged into, be viable?

I would suggest that the ‘Lulista’ strategy of seeking a new pact between antagonistic social classes – the bourgeoisie and the working class – would encounter serious obstacles to its practical realization. The year 2022 will not be a repeat of 2002. The political, social, and economic conditions are different. From a political point of view, one can highlight for example the existence of a far-right with mass presence in Brazil (which will continue to remain relevant even if Bolsonaro is defeated), something which did not exist at the turn of the century. But in this article, I want to highlight that which pertains to the strategic economic policy of the national bourgeoisie.

Since 2015, the national ruling class has been united in its defense of a program to destroy the rights of workers and their historic conquests, the objective being a substantial reduction of the so-called “custo Brasil” (Brazil cost), which would make the national market more attractive to foreign investment. The “custo Brasil” is nothing more than labor and social security rights, such as the constitutionally-required minimum level of investment in health and public education, spending on public services and public servants in general, the presence of state companies in strategic areas such as Petrobrás (oil) and Eletrobrás (electricity), the legal regulations that protect forest reserves and indigenous and quilombola lands, along with other social, labor and environmental guarantees. This program for the annihilation of labor and social rights is commonly referred to by the mainstream press as “modernizing reforms”. There is no indication that the bourgeoisie has either abandoned its obsession with such liberal reforms or is at all willing to preserve surviving social rights and conquests, and it is even less willing to accept the return of what has already been taken, such as the rights already extinguished by labor and social security reforms. On the contrary, an important part of the criticism that the right-wing levels at Bolsonaro and Economy Minister Paulo Guedes is their delay in the approval of liberal reforms and privatizations.

Faced with a likely third Lula government, the bourgeoisie would certainly demand that the PT president continues with this liberal program, just as it did with Dilma Rousseff in 2015. Former president Dilma gave in to big capital’s blackmail, applied fiscal austerity with former IMF economist Joaquim Levy as Finance Minister, and in the process dynamited her base of popular support, all of which were crucial to the advance of the parliamentary coup. Therefore, I believe that the ruling class would not agree to any pact to reverse or even freeze the liberal counter-reforms now underway. On the contrary, it would use all possible means to put pressure on a likely ‘governo de esquerda’ (government of the left), including, if required, the threat of a new coup. But the central issue is this. The idea that the ruling class can be civilized and controlled by stitching up a new contract of conciliation, and that this will stop the big business economic offensive against the conquests and rights of the working class and the poor, is an illusion.

The only path that can lead the left to real (and not just electoral) victory is to prepare for the inevitable confrontation with the privileged social layer that benefits from structural racism, high levels of savage exploitation, monstrous social inequality, the brutal destruction of nature for economic ends, the monumental concentration of land, the economic control by a handful of bankers, and all the other ills that tie Brazil to backwardness and social injustice.

In view of the arguments above, I think that the program of a united left candidacy – made up of the Workers’ Party (PT), Party of Socialism and Freedom (PSOL), Communist Party of Brazil (PCdoB), Brazilian Communist Party (PCB), Popular Unity (UP), United Socialist Workers’ Party (PSTU), the social movements, the unions, and the black, feminist, indigenous, LGBT and environmental movements – must be oriented to the defense of the most deeply-felt needs of working people and the oppressed. Because of his standing and support among the people, Lula is the name that must lead this candidacy of the ‘Frente de Esquerda’ (Left Front), without alliances with the bourgeoisie, and must point to the mobilization and organization of the exploited and oppressed as the only way of carrying out a program of structural changes that break with the legacy of inequality, racism, misery, submission, and destruction. To conclude, I want to suggest some initial programmatic points for debate within the left:

1. Reverse the legacy of the coup and value public services. The left candidate must commit to the repeal of the ‘Teto dos Gastos’ (Spending Ceiling), the labor reform, the pension reform, must stop further progress of the administrative reform, and reverse the other measures that the ‘golpistas’ (coup plotters) have introduced since 2015.

2. Jobs and income for all. Adoption of a public works program, with the construction of nurseries, hospitals, schools, basic sanitation structure etc., to generate millions of jobs; a minimum income program based on the minimum wage to end poverty; real appreciation of the minimum wage with the doubling of its purchase value in four years, with the strategic objective of it reaching the Inter-Union Department of Statistics and Socioeconomic Studies (DIEESE) reference point.

3. Guarantee quality public health and education for all, by ensuring the necessary financial investments for this, such as the transfer of 10% of GDP to education.

4. Combat structural racism, machismo, and LGBTphobia, by commencing with the demilitarization of the Military Police, the legalization of abortion, and the adoption of effective measures to combat racist, misogynist, and LGBTphobic violence.

5. Urban and agrarian reform with the protection of the environment. Guarantee the right to housing for all, with the implementation of social rent and expropriation of abandoned properties and those in debt to the State; guarantee agrarian reform with the expropriation of large estates, with the aim of strengthening agro-ecological production of healthy and cheap food for the population; for a policy of the strict protection of indigenous and quilombola lands and the protection of national biodiversity, harsh punishment for predatory agribusiness and illegal ‘garimpo’ (small scale) mining, industrial mining, and logging.

6. Economy for the benefit of the majority. Tax reform with the reduction of taxes for the working class and the poorest and increase the tax burden of the richest; reduction of consumption taxes and expansion of taxation on assets, with emphasis on the taxation of large fortunes and multinational profits; approval of the Law of Social Responsibility (LRS), which submits fiscal discipline to social development goals; public financing at reduced interest rates for small business in the cities and for small agricultural production in the countryside; for the audit and suspension of payment of public debt to major creditors, with the aim of reverting resources to finance public education and health; ‘estatização’ (nationalization) of the major private banks, with the aim of state control over the financial gears of the country, so that it is not held hostage to the blackmail of financial capital and so that banking resources can be placed at the service of the country’s social and economic development; Petrobrás, Correios (post), Eletrobrás and other public companies to be 100% state-owned.

7. More democracy and power for working people. For a ‘governo de esquerda’ (government of the left), without alliances with the bourgeoisie, that guarantees its strength through the mobilization and organization of the majority of the people. Plebiscites and referenda to be instituted for the making of principle national decisions. The organization of permanent spaces for public policy participation and deliberation by representatives of social movements, the black movement, the feminist movement, the union movement, the environmental movement, the indigenous movement, and others. Those in the military responsible for the crimes of the Dictatorship must be made to pay. For general Armed Forces reform, with a change to its command, structure, and doctrine. For an Armed Forces that defend national sovereignty and the interests of the majority of the people. Democratize the media, with the breaking of the monopoly of the big networks, such as Globo and Record.

*Gabriel Casoni is a Professor in Sociology with a Master’s degree in Economic History from the University of São Paulo (USP) and is part of the national coordination of Resistência (Resistance), an internal current within the Party of Socialism and Freedom (PSOL).


1 Aparecida: municipality in the state of São Paulo that is home to the Basilica dedicated to Our Lady of Aparecida, the patron saint of Brazil.

This article is an English translation of “Lula quer novo pacto entre o trabalho e o capital: isso é possível?”, Esquerda Online (EOL), 03/04/2021.

Translation: Bobby Sparks