Possible repercussions of economic crisis on the stability of democracies that already show significant signs of fragility
There is a reasonable likelihood that the next global economic crisis could threaten the future of our democratic political systems. The global economic system is a complex, adaptive system, like many others in nature and in society, and shares their basic characteristics. Underlying stresses can result in crises which, moreover, can feed through to destabilize other systems. There is a growing understanding of the damage that can be done to the economy by health pandemics and environmental degradation. In contrast, this new INET Working Paper focuses on interactions working in the opposite direction: more specifically the possible repercussions of economic crisis on the stability of democracies already showing significant signs of fragility.
The global economic system is already showing worrisome signs of stress. Ratios of debt to GDP have been rising for decades and in many jurisdictions are now at record levels. Debt exposes debtors to default in both good times (when interest rates rise) and in bad (when revenues shrink). Moreover, due to low investment and declining productivity growth in recent years, a huge, inverted pyramid of measured “assets” is now supported by a narrowing base of real production. While the “everything asset price bubble” has recently shrunk, the scope for further declines still seems significant. The migration of credit from regulated banks to less well-regulated financial institutions and markets also implies that the good health of less transparent entities cannot be assumed. Finally, in recent years, many financial markets have been showing signs of malfunctioning, including the market for US Treasuries.
The global economy has recently been subject to two negative supply shocks; the covid pandemic and the Russian invasion of Ukraine. The macroeconomic authorities in advanced economies initially underestimated the magnitude of the inflationary effects and then erred in assuming they would be only of short duration. In combination with massive demand-side support for the economy, this led to an unexpected upsurge in inflation. In turn, this led to a belated and unprecedentedly aggressive monetary response from an equally unprecedented number of countries. As of early 2023, credible arguments are being advanced for both further aggressive tightening and for some moderation of these policy actions.
Looking forward, a number of negative supply shocks can be identified that will intensify or prolong inflationary pressures. While the short-run effects of the two recent shocks have clearly abated, longer-run effects (for example, long covid and supply chain restructuring) will continue. For various reasons, there also seems likely to be secular upward pressure on commodity prices, especially metals, food, and energy. Demographic evolution will reduce the number of workers while increasing the number of pensioners with adequate means to maintain their consumption. Environmental change will constrain output in a variety of important ways, while time will increasingly reveal the effects of “malinvestments” encouraged by expansionary monetary policy over many years. Adding to all these negative supply effects, there are many reasons to anticipate the need for higher investment levels; to mitigate and adapt to climate change and replace scarce workers, and for other purposes. Combined, these forces imply a future of higher inflation and higher real interest rates. This could potentially lead to problems of private debt distress, leading towards debt/deflation, or public debt distress, leading towards much higher inflation.
This raises the issue of how economic distress might affect political developments in democratic countries. Democracies are also CAS and inherently fragile. Many requirements must be met for them to work properly. As well, there exists a natural tension in such systems between individual rights and concern for the common good. Historical experience indicates that such tensions can lead to excesses in both directions and an eventual rupture with the democratic order.
Today, ordinary citizens in many countries are legitimately concerned about the rise of inequality of income, wealth, and opportunity for their children. This disquiet is being fanned by vested interests, both internal and external, and is further amplified by the “echo chambers’ of social media. Many objective measures show that the underpinnings of democracy are breaking down with the nationalist right seemingly the biggest beneficiary. As happened in Germany in the 1920s and 1930s, and as seen on numerous other occasions, successive economic shocks can contribute to a change in the political order.
Before trying to identify policies that might contribute to economic and political stability, it will be necessary to adopt a new analytical framework based on the reality of interacting complex, adaptive systems. Within systems, this implies focussing on the longer-run effects of suggested policies. Between systems, it implies avoiding spillover effects that might support stability in one system while undermining it in another.
Restructuring debt levels in an orderly way would contribute to economic stability while reducing tensions between creditors and debtors. Recognizing the joint reality of lower economic potential and the need for greater investment underlines the need to moderate consumption over time. It would serve both economic and political ends if those more capable of exercising such moderation could be induced to do so. Direct measures to reduce inequality should also be contemplated. Private sector initiatives, like greater attention to stakeholder Interests, should be encouraged. Similarly, government measures to alter tax incentives (e.g., interest rate deductibility and other tax expenditures) and to improve educational and health outcomes would also be welcome.
None of the above recommendations will be easy to sell politically. Citizens and voters will instinctively react negatively to the suggestion that future consumption might have to be constrained, even in the interest of species survival. The intellectual and business elites will resist giving up power in the interests of greater equality. Political leaders will have to put the common good ahead of their immediate chances of re-election. Overcoming these incentive problems is a necessary first, if not sufficient, step toward resolving the prospective economic and political problems facing our democracies.
Indigenous women and femmes continue to lead in creatively reclaiming Native land, despite barriers put in place to subvert the work of rematriating these lands back to their original caretakers. A responsive movement has formed under the umbrella rallying cry of “Land Back.” The slogan is as clear as could possibly be. “Land Back” means exactly that: land back — acres upon acres of it.
A pair of reports published Thursday show that many workers employed in the U.S. military-industrial complex support shifting manufacturing resources from military to civilian use—a conversion seen as vital to the fight against the climate emergency.
Moving “from a war economy to a green economy” can help avert the worst consequences of the climate crisis, noted the Costs of War project at Brown University’s Watson Institute, publisher of the new research.
“Ever-higher military spending is contributing to climate catastrophe, and U.S. lawmakers need a better understanding of alternative economic choices,” Stephanie Savell, co-director of Costs of War, said in a statement. “Military industrial production can be redirected to civilian technologies that contribute to societal well-being and provide green jobs. This conversion can both decarbonize the economy and create prosperity in districts across the nation.”
In one of the papers released Thursday, Miriam Pemberton, an associate fellow at the Institute for Policy Studies, described “how the United States developed a war economy,” as reflected in its massive $858 billion military budget, which accounts for roughly half of all federal discretionary spending.
As Pemberton explained:
When the U.S. military budget decreased after the Cold War, military contractors initiated a strategy to
protect their profits by more widely connecting jobs to military spending. They did this by spreading their
subcontracting chains across the United States and creating an entrenched war economy. Perhaps the
most infamous example: Lockheed Martin’s F-35 fighter jet, which is built in 45 states.
The strategy proved successful. Today, many members of Congress have political incentives to continue to
raise the military budget, in order to protect jobs in their districts. Much of the U.S. industrial base is
invested in and focused on weapons production, and industry lobbyists won’t let Congress forget it.
Not only is the Pentagon a major contributor to planet-heating pollution—emitting more greenhouse gases than 140 countries—and other forms of environmental destruction, but a 2019 Costs of War study showed that “dollar for dollar, military spending creates far fewer jobs than spending on other sectors like education, healthcare, and mass transit,” Pemberton continued.
Moreover, “military spending creates jobs that bring wealth to some people and businesses, but do not alleviate poverty or result in widely-shared prosperity,” Pemberton wrote. “In fact, of the 20 states with economies most dependent on military manufacturing, 14 experience poverty at similar or higher rates than the national average.”
“A different way is possible,” she stressed, pointing to a pair of military conversion case studies.
“The only way to really lower emissions of the military is you’ve got to make the military smaller.”
As military budgets were shrinking in 1993, Lockheed was eager to expand its reach into non-military production.
“One of its teams working on fighter jets at a manufacturing facility in Binghamton, New York successfully shifted its specialized skills to produce a system for transit buses that cut fuel consumption, carbon emissions, maintenance costs, and noise, called ‘HybriDrive,'” Pemberton explained.
By 1999, Lockheed “sold the facility producing HybriDrive buses and largely abandoned its efforts to convert away from dependence on military spending,” she wrote. “But under the new management of BAE Systems, the hybrid buses and their new zero-emission models are now reducing emissions” in cities around the world.
According to Pemberton, “This conversion project succeeded where others have failed largely because its engineers took seriously the differences between military and civilian manufacturing and business practices, and adapted their production accordingly.”
In another paper released Thursday, Karen Bell, a senior lecturer in sustainable development at the University of Glasgow, sought to foreground “the views of defense sector workers themselves,” noting that they “have been largely absent, despite their importance for understanding the feasibility of conversion.”
Bell surveyed 58 people currently and formerly employed in military-related jobs in the U.S. and the United Kingdom and found that “while some workers said that the defense sector is ‘socially useful,’ many were frustrated with their field and would welcome working in the green economy.”
“This was a small group so we cannot generalize to defense workers overall,” writes Bell. “However, even among this small cohort, some were interested in converting their work to civil production and would be interested in taking up ‘green jobs.'”
One respondent told Bell: “Just greenwashing isn’t going to do it. Just putting solar panels up isn’t going to do it. So we’re trying to stress that the only way to really lower emissions of the military is you’ve got to make the military smaller.”
“By the way, do we really need to update all our ICBMs [Inter-Continental Ballistic Missiles]?” the survey participant asked. “Don’t we have enough to blow up the world three times over, or five times over? Why don’t we take those resources and use them someplace else where they really should be?”
Although President Joe Biden vowed on the campaign trail to phase out federal leasing for fossil fuel extraction, his administration approved more permits for oil and gas drilling on public lands in its first two years than the Trump administration did in 2017 and 2018.
According to the Center for Biological Diversity’s analysis of federal data released Wednesday, the Biden White House greenlit 6,430 permits for oil and gas drilling on public lands in 2021 and 2022—a 4.2% increase over former President Donald Trump’s administration, which rubber-stamped 6,172 drilling permits in its first two years.
“Two years of runaway drilling approvals are a spectacular failure of climate leadership by President Biden and Interior Secretary Deb Haaland,” said Taylor McKinnon of the Center for Biological Diversity. “Avoiding catastrophic climate change requires phasing out fossil fuel extraction, but instead we’re still racing in the opposite direction.”
Of the drilling authorized so far by the Biden administration, nearly 4,000 permits have been approved for public lands in New Mexico, followed by 1,223 in Wyoming and several hundred each in Utah, Colorado, California, Montana, and North Dakota.
According to the Center for Biological Diversity, these “Biden-approved drilling permits will result in more than 800 million tons of estimated equivalent greenhouse gas pollution, or the annual climate pollution from about 217 coal-fired power plants.”
Just last week, United Nations Secretary-General António Guterres told the elites gathered at the World Economic Forum in Davos that “fossil fuel producers and their enablers are still racing to expand production, knowing full well that their business model is inconsistent with human survival.”
Reams of scientific evidence show that pollution from the world’s existing fossil fuel developments is enough to push temperature rise well beyond 1.5°C above the preindustrial baseline. Averting calamitous levels of global heating necessitates ending investment in new oil and gas projects and phasing out extraction to keep 40% of the fossil fuel reserves at currently operational sites underground.
As a presidential candidate, Biden pledged to ban new oil and gas lease sales on public lands and waters and to require federal permitting decisions to weigh the social costs of additional planet-heating pollution. Although Biden issued an executive order suspending new fossil fuel leasing during his first week in office, his administration’s actions since then have run roughshod over earlier promises, worsening the deadly climate crisis that the White House claims to be serious about mitigating.
The U.S. Department of Interior (DOI) argued on August 24, 2021 that it was required to resume lease auctions because of a preliminary injunction issued by U.S. Judge Terry A. Doughty, a Trump appointee who ruled in favor of a group of Big Oil-funded Republican attorneys general that sued Biden over his moratorium. In a memorandum of opposition filed on the same day, however, the U.S. Department of Justice (DOJ) asserted that while Doughty’s decision prevented the Biden administration from implementing its pause, it did not compel the DOI to hold new lease sales, “let alone on the urgent timeline specified in plaintiffs’ contempt motion.”
Just days after Biden called global warming “an existential threat to human existence” and declared Washington’s ostensible commitment to decarbonization at the COP26 climate summit in Glasgow, the DOI ignored the DOJ’s legal advice and proceeded with Lease Sale 257. The nation’s largest-ever offshore auction, which saw more than 80 million acres of the Gulf of Mexico offered to the highest-bidding oil and gas giants, was blocked in January 2022 by a federal judge who wrote that the Biden administration violated environmental laws by not adequately accounting for the likely consequences of resulting emissions.
Despite Biden’s pledge to cut U.S. greenhouse gas pollution in half by the end of this decade, the DOI’s Bureau of Land Management held lease sales in several Western states in 2022, opening up tens of thousands of acres of public land to fossil fuel production. The DOI has so far announced plans for three new onshore oil and gas lease sales in 2023. The first will offer more than 261,200 acres of public land in Kansas, Nebraska, New Mexico, and Wyoming to the highest-bidding drillers. The second and third will put a total of 95,411 acres of public land in Nevada and Utah on the auction block.
In addition, the Biden administration published a draft proposal last summer that, if implemented, would permit up to 11 new oil and gas lease sales for drilling off the coast of Alaska and in the Gulf of Mexico over a five-year period.
The president’s 2021 freeze on new lease auctions was meant to give the DOI time to analyze the “potential climate and other impacts associated with oil and gas activities on public lands or in offshore waters.” Nevertheless, the agency’s long-awaited review of the federal leasing program effectively ignored the climate crisis, instead proposing adjustments to royalties, bids, and bonding in what environmental justice campaigners described as a “shocking capitulation to the needs of corporate polluters.”
The U.S. Geological Survey has estimated that roughly 25% of the country’s total carbon dioxide emissions and 7% of its overall methane emissions can be attributed to fossil fuel extraction on public lands and waters. According to peer-reviewed research, a nationwide prohibition on federal oil and gas leasing would slash carbon dioxide emissions by 280 million tons per year.
The Biden administration “has not enacted any policies to significantly limit drilling permits or manage a decline of production to avoid 1.5°C degrees of warming,” the Center for Biological Diversity lamented. The White House even supported the demands of right-wing Democratic Sen. Joe Manchin (W.Va.)—Congress’ leading recipient of fossil fuel industry cash and a long-time coal profiteer—to “add provisions to the Inflation Reduction Act that will lock in fossil fuel leasing for the next decade.”
On numerous occasions, including earlier this month, progressive lawmakers and advocacy groups have implored the Biden administration to use its executive authority to phase out oil and gas production on public lands and in offshore waters. A petition submitted last year came equipped with a regulatory framework to wind down oil and gas production by 98% by 2035. According to the coalition that drafted it, the White House can achieve this goal by using long-dormant provisions of the Mineral Leasing Act, Outer Continental Shelf Lands Act, and the National Emergencies Act.
“The president and interior secretary have the power to avoid a climate catastrophe, but they need to change course rapidly,” McKinnon said Wednesday. “Strong executive action can meet the climate emergency with the urgency it demands, starting with phasing out fossil fuel production on public lands and waters.”
A cadre of moderate Democrats and Republicans are joining together to revamp a political action committee to fight against progressive primary challengers to establishment Democrats.
With President Joe Biden’s former campaign manager as the PAC’s only consultant and a defense contractor executive as its treasurer, the Moderate PAC — not to be confused with the older Moderate Democrats PAC — stands to be an exemplar of the Democratic Party’s corporate-friendly, centrist wing. Its financial heft, though, comes from the other side of the aisle: So far, Republican megadonor Jeff Yass, the richest man in Pennsylvania, is virtually the only one putting money into the group.
“They would rather buy elections than let working-class progressives even run.”
“The corporate-backed establishment will stop at nothing to prevent more bartenders, nurses, principals, community organizers, and regular people from entering the Democratic Party in Congress,” Justice Democrats Executive Director Alexandra Rojas said in a statement to The Intercept. “They would rather buy elections than let working-class progressives even run. They will do everything in their power to make themselves richer at the expense of robbing poor and working-class Americans.”
Axios reported last week that the PAC planned to raise $20 million to fight off Democratic primary challengers in 2024 and “scare off” progressive groups like Justice Democrats that have backed several successful primary challengers and helped create a growing squad of progressive lawmakers in Congress. The article did not mention the group’s ties to the Biden campaign and the defense industry, nor the Republican funder.
As the number of progressives in Congress has continued to grow since 2018, the revamped PAC is one of several organizations launched in recent years to target progressive Democratic primary challengers and protect centrist incumbents. (The Moderate PAC did not respond to a request for comment.)
Ty Strong, the Moderate PAC president and founder, worked for a decade as a financial and business management analyst at Booz Allen Hamilton before joining a smaller financial firm in Pennsylvania in 2020 that closed abruptly the following year. He joined the Moderate PAC in October 2021. The committee’s treasurer, Marysue Strong, is chief financial officer at ProSync Technology Group, a defense contractor that provides IT services to the federal government. (Ty Strong did not respond to questions about his political experience or whether he and Marysue are related, though public records suggest that they are.)
In an op-ed for the Wall Street Journal last January, Ty Strong criticized what he called a “Democratic circular firing squad” and “progressive purity tests” that have threatened the political careers of centrist Democrats like Sens. Mark Kelly and Kyrsten Sinema in Arizona. If Democrats in purple states can’t find a way to “pivot back to the center and avoid death by circular progressive firing squad,” Strong wrote, “get ready for Republican control of both houses of Congress in 2023.” Less than a year later, Sinema announced that she was leaving the Democratic Party to become an independent.
The Moderate PAC has raised just over $1 million since last year, all from a single donor: Yass.
Yass, co-founder and managing director of a Philadelphia-based investment firm, gave the PAC $1 million in July. (The Democratic leadership’s house campaign arm, House Majority PAC, gave the Moderate PAC results from a poll in September 2022, which is recorded in disclosures, though no money changed hands.)
A vice chair at the Cato Institute, Yass has come under fire for using creative money-moving structures to avoid some $1 billion in taxes, according to ProPublica. Yass, most recently registered as a libertarian, occasionally gives to centrist local and national Democrats, but the overwhelming balance of his political contributions go to GOP candidates.
While Yass has recently expanded his focus to national politics and spent $47 million backing Republicans in federal elections last year, he has been most politically active in his home state of Pennsylvania. He backed Republican candidates up and down the ballot during last year’s midterm elections in the Keystone State.
Yass’s Commonwealth Foundation, a group based in Harrisburg, Pennsylvania, advocates to take the state’s public policy “back to its roots.” The group has drawn criticism for pushing policies that Yass’s critics say help him continue to accumulate wealth while avoiding taxes, like cutting funding for schools and public services. In addition to funding Republicans, Yass has funded state-level Democrats who align with his conservative objectives: He put money into the campaigns of Democratic officials in Pennsylvania who played a key role in the charge last year to try to impeach progressive Philadelphia District Attorney Larry Krasner.
As Yass has expanded his focus beyond Pennsylvania politics toward the national stage, his critics raised the alarm and warned both parties not to accept his money.
“Yass is a threat to democracy in Pennsylvania,” six organizers wrote in an op-ed last week titled “A deep-pocketed donor from Pa. is moving onto the national stage. That’s a problem.”
Yass has amassed his wealth in part by successfully avoiding paying taxes and used his financial influence to push candidates and policies for his own benefit, they wrote. “We need to call Yass’ donations what they are: money from a billionaire seeking to buy power,” the organizers wrote. “No one in public office should take money from billionaire Jeffrey Yass — Democrat or Republican.”
Correction: January 25, 2023, 8:00 p.m. ET
This story has been updated to reflect that, in 2023, Arizona Sen. Kyrsten Sinema left the Democratic Party to become an independent, not a Republican.
“Under Lula’s progressive government, the significance of Brazilian democracy to the rest of Latin America cannot be stressed enough. Nor can the threat represented by the Bolsonarista militarisation of Brazil’s state institutions.”
On 8th January 2023, a week after Lula’s presidential inauguration, the world was shocked by a Trump-style mob attack on key state institutions in Brasilia, the country’s capital city. The world saw media images of thousands of Bolsonaro supporters invading Planalto (presidential palace), and the premises of both the Supreme Court and Parliament, who, when inside proceeded to vandalise just about everything within their reach whilst taking selfies of themselves.
It was a Bolsonarista insurrection aimed at not recognising Lula’s victory and keeping Jair Bolsonaro in power. Flavio Dino, Lula’s minister of justice, reported that Bolsonaristas had perpetrated similar acts of vandalism in at least ten states.
Former president Jair Bolsonaro, who refused to recognise his electoral defeat against Workers’ Party (PT) candidate, Inazio Lula da Silva on 31st October 2022, had conveniently travelled to Florida (30th December 2022) ostensibly not to be present at Lula’s inauguration but most probably not to be directly associated with the 8th January coup attempt if it failed.
To hand over the presidential sash on Lula would have been tantamount to accepting the people’s electoral will. Bolsonaro’s vice-president, retired army general Hamilton Mourão, who had also questioned the transparency of the election, refused to hand over the presidential sash to Lula too and did not attend the official inauguration on 1st January 2023, even though he was invited.
The issue was resolved by inviting representatives of the people of Brazil (a Black child, a disabled person, a street recyclables collector, a metal worker, a teacher, a woman cook, and an artisan) who were entrusted with placing the sash across Lula’s chest. Prominent among them was 93-year old Roani Metuktire, indigenous leader who accused Bolsonaro of crimes against humanity for both destroying their Amazon habitat and trampling upon indigenous rights.
A few days earlier (24/12/22), Brasilia detectives had foiled a plot to detonate an explosive device inside a truck filled-up with jet-plane fuel in the capital city’s airport. Three Bolsonaristas were arrested and are being tried for the terrorist attempt. One of them (Washington de Oliveira Souza) told police that Bolsonaro’s call to arms inspired him to build the arsenal he kept in his flat (shotguns, a rifle, two revolvers, three pistols, huge amounts of ammunition, camouflage uniforms, and many explosive devices). These criminals declared to the police they intended to cause a huge commotion hoping to provoke the military to declare a state of emergency. From Florida, Bolsonaro labelled the action a “terrorist act” yet he still praised protesters camping outside army barracks across Brazil urging the military to stage a coup.
The coup atmosphere created by Bolsonaro intensified during the election itself. In an unprecedented deployment of personnel, the Federal Highway Police (PRF) set up roadblocks in the Brazil’s northeast seeking to prevent voters in the PT strongholds from voting. In the nine-states sub-region Lula scored an average of 70% of the votes cast.
Silvinei Vasques, director of the PRF had posted a call to vote for Bolsonaro on Instagram, which was later deleted. Before the second round in October 2022, The Economist (8/09/2022) described the nearly 400,000-strong Brazil’s police forces as “trigger-happy and fond of Mr Bolsonaro”. The prompt intervention of Supreme Court judge, Alexandre de Moraes, president of Brazil’s Supreme Electoral Tribunal (TSE), led the PRF blockade to be lifted and his order to extend the polls closure time in 560 places, prevented this Bolsonarista vote suppression effort from succeeding.
In a raid carried out by the Federal Police (12th January), a page with minutes for Jair Bolsonaro was found in the private residence of his (now ex) minister of justice, Anderson Torres, with a plan to issue a presidential decree declaring a state of emergency in the premises of the TSE aimed at changing (annulling) the 31st October election result and impose military rule.
Previously, Bolsonaro and some of the top brass, had proposed that the armed forces conducted their own, separate and parallel, vote audit to be contrasted with the TSE figures should Lula be declared the winner. On the 8th of January Torres was Brasilia’s security secretary appointed in that position by the capital city governor, Ibaneis Rocha, a Bolsonaro’s staunch ally.
With Torres in charge of Brasilia’s security the scene was ready for the putsch. Its Military Police (MP) simply opened the gates for the violent invaders. There are scores of posted videos showing sympathetic MP officers smiling, hugging and taking selfies of themselves with the insurrectionists. Brasilia’s Military Police Commander in chief, Fabio Augusto Vieira, is charged with openly conniving with them.
Another Bolsonarista top brass is ex minister of Institutional Security, general Augusto Heleno, who throughout 2021 and 2022 kept making threats of military intervention. In November 2022, after Lula’s victory in the second round, Heleno publicly tarnished the mental and physical health of the president and labelled him a drunkard.
There is also Walter Braga Netto, a retired army general, former minister of defence and vice-presidential candidate in Bolsonaro’s 2022 presidential ticket. In June 2022, Braga Netto stated that if Bolsonaro’s demand that the armed forces audited the election results was not accepted, the election could be cancelled. “Either we have clean elections, or we won’t have elections.” Reportedly, during the insurrection Braga Netto would have the task to deploy the armed forces in the streets.
Even though the idea of the army exerting tutelage over politics is appealing and popular among high officers, despite the persistent Bolsonaro and Bolsonarista calls the bulk of the armed forces were not persuaded to stage a coup. Bolsonaro had become so toxic that even substantial sections of the world far right seems to be ready to dissociate themselves from him, despite the BBC/PSB strenuous PR efforts made with “Rise of the Bolsonaros.”
On 9th January, Lula gave vent to his anger over the Bolsonarista violent insurrection against Brazil’s democracy announcing his government will not rest until finding and punishing all those responsible, including its financial backers. Brazil’s General Attorney Office has obtained that 6,5 million Reais (over 1 million Euros) belonging to 52 individuals and 7 companies be frozen to be investigated as suspects of having financed the coup attempt.
Followed by governors and Supreme Court judges, to symbolise institutional unity in defense of democracy, Lula headed a walk (09/01/23) from the presidential palace to the Federal Supreme Court premises to verify the damage done to the vandalised public buildings. Among those present were Brazil’s 27 state governors, the presidents of both Congress and Senate, and the General Attorney. Lula strongly criticised the lack of action and the silence of the armed forces for two months about the Bolsonarista camps outside military barracks demanding they stage a coup d’état. And for good measure, Lula has so far sacked over 50 military officers in charge of the presidency’s security.
After the institutional walkabout, law and order was swiftly restored by police forces: the Bolsonarista camp outside the army HQ in Brasilia was dismantled after an order from Alexandre de Moraes leading to the arrest of 1,500 protesters who were detained in over 300 detention centres. All such camps in other states of Brazil were also dismantled.
Torres Anderson is under arrest and the STF suspended Brasilia’s governor Ibaneis Rocha from his position for 90 days pending an investigation. During the coup attempt, as Rocha was sitting on his hands, Lula issued a decree turning control of Brasilia’s security over to the Federal Government until January 31. “Twenty minutes later, all government buildings had been completely cleared of rioters by the Brasilia Civil Police and the Federal Police.” Brasilia’s Military Police Commander in chief, Fabio Augusto Vieira, is also under arrest. Silvinei Vasques, director of the PRF, has ‘been retired’.
Brazil’s General Attorney Office has included Bolsonaro in its investigation because he may have “publicly incited the commissions of crimes”. And STF judge Ricardo Lewandowski rejected a preventive habeas corpus request for Torres and Jair Bolsonaro.
Due to the perplexity surrounding the Bolsonarista insurrection, little attention has been paid to the implementation of Lula’s policies. On 2nd January, one day after being inaugurated, he cancelled the privatization of eight state-owned companies. He also reversed several reactionary Bolsonaro decrees: re-established financial support to fight against deforestation and repealed a measure on illegal mining, suspended the issuance of new gun permits and authorisation for new shooting clubs, guaranteed income support for the poor, and a tax exemption on fuel, among a raft of progressive measures.
To top it all up, he appointed Sonia Guajajara, a representative of indigenous peoples, in charge of the newly created Ministry of Indigenous Peoples, which he pledged to create during the electoral campaign.
Under Lula’s progressive government, the significance of Brazilian democracy to rest of Latin America cannot be stressed enough. Nor can the threat represented by the Bolsonarista militarisation of Brazil’s state institutions. During the election campaign he promised the sack around 8,000 military officers appointed at all levels of the state throughout Brazil.
“Under Lula’s progressive government, the significance of Brazilian democracy to the rest of Latin America cannot be stressed enough. Nor can the threat represented by the Bolsonarista militarisation of Brazil’s state institutions.”
On 8th January 2023, a week after Lula’s presidential inauguration, the world was shocked by a Trump-style mob attack on key state institutions in Brasilia, the country’s capital city. The world saw media images of thousands of Bolsonaro supporters invading Planalto (presidential palace), and the premises of both the Supreme Court and Parliament, who, when inside proceeded to vandalise just about everything within their reach whilst taking selfies of themselves.
It was a Bolsonarista insurrection aimed at not recognising Lula’s victory and keeping Jair Bolsonaro in power. Flavio Dino, Lula’s minister of justice, reported that Bolsonaristas had perpetrated similar acts of vandalism in at least ten states.
Former president Jair Bolsonaro, who refused to recognise his electoral defeat against Workers’ Party (PT) candidate, Inazio Lula da Silva on 31st October 2022, had conveniently travelled to Florida (30th December 2022) ostensibly not to be present at Lula’s inauguration but most probably not to be directly associated with the 8th January coup attempt if it failed.
To hand over the presidential sash on Lula would have been tantamount to accepting the people’s electoral will. Bolsonaro’s vice-president, retired army general Hamilton Mourão, who had also questioned the transparency of the election, refused to hand over the presidential sash to Lula too and did not attend the official inauguration on 1st January 2023, even though he was invited.
The issue was resolved by inviting representatives of the people of Brazil (a Black child, a disabled person, a street recyclables collector, a metal worker, a teacher, a woman cook, and an artisan) who were entrusted with placing the sash across Lula’s chest. Prominent among them was 93-year old Roani Metuktire, indigenous leader who accused Bolsonaro of crimes against humanity for both destroying their Amazon habitat and trampling upon indigenous rights.
A few days earlier (24/12/22), Brasilia detectives had foiled a plot to detonate an explosive device inside a truck filled-up with jet-plane fuel in the capital city’s airport. Three Bolsonaristas were arrested and are being tried for the terrorist attempt. One of them (Washington de Oliveira Souza) told police that Bolsonaro’s call to arms inspired him to build the arsenal he kept in his flat (shotguns, a rifle, two revolvers, three pistols, huge amounts of ammunition, camouflage uniforms, and many explosive devices). These criminals declared to the police they intended to cause a huge commotion hoping to provoke the military to declare a state of emergency. From Florida, Bolsonaro labelled the action a “terrorist act” yet he still praised protesters camping outside army barracks across Brazil urging the military to stage a coup.
The coup atmosphere created by Bolsonaro intensified during the election itself. In an unprecedented deployment of personnel, the Federal Highway Police (PRF) set up roadblocks in the Brazil’s northeast seeking to prevent voters in the PT strongholds from voting. In the nine-states sub-region Lula scored an average of 70% of the votes cast.
Silvinei Vasques, director of the PRF had posted a call to vote for Bolsonaro on Instagram, which was later deleted. Before the second round in October 2022, The Economist (8/09/2022) described the nearly 400,000-strong Brazil’s police forces as “trigger-happy and fond of Mr Bolsonaro”. The prompt intervention of Supreme Court judge, Alexandre de Moraes, president of Brazil’s Supreme Electoral Tribunal (TSE), led the PRF blockade to be lifted and his order to extend the polls closure time in 560 places, prevented this Bolsonarista vote suppression effort from succeeding.
In a raid carried out by the Federal Police (12th January), a page with minutes for Jair Bolsonaro was found in the private residence of his (now ex) minister of justice, Anderson Torres, with a plan to issue a presidential decree declaring a state of emergency in the premises of the TSE aimed at changing (annulling) the 31st October election result and impose military rule.
Previously, Bolsonaro and some of the top brass, had proposed that the armed forces conducted their own, separate and parallel, vote audit to be contrasted with the TSE figures should Lula be declared the winner. On the 8th of January Torres was Brasilia’s security secretary appointed in that position by the capital city governor, Ibaneis Rocha, a Bolsonaro’s staunch ally.
With Torres in charge of Brasilia’s security the scene was ready for the putsch. Its Military Police (MP) simply opened the gates for the violent invaders. There are scores of posted videos showing sympathetic MP officers smiling, hugging and taking selfies of themselves with the insurrectionists. Brasilia’s Military Police Commander in chief, Fabio Augusto Vieira, is charged with openly conniving with them.
Another Bolsonarista top brass is ex minister of Institutional Security, general Augusto Heleno, who throughout 2021 and 2022 kept making threats of military intervention. In November 2022, after Lula’s victory in the second round, Heleno publicly tarnished the mental and physical health of the president and labelled him a drunkard.
There is also Walter Braga Netto, a retired army general, former minister of defence and vice-presidential candidate in Bolsonaro’s 2022 presidential ticket. In June 2022, Braga Netto stated that if Bolsonaro’s demand that the armed forces audited the election results was not accepted, the election could be cancelled. “Either we have clean elections, or we won’t have elections.” Reportedly, during the insurrection Braga Netto would have the task to deploy the armed forces in the streets.
Even though the idea of the army exerting tutelage over politics is appealing and popular among high officers, despite the persistent Bolsonaro and Bolsonarista calls the bulk of the armed forces were not persuaded to stage a coup. Bolsonaro had become so toxic that even substantial sections of the world far right seems to be ready to dissociate themselves from him, despite the BBC/PSB strenuous PR efforts made with “Rise of the Bolsonaros.”
On 9th January, Lula gave vent to his anger over the Bolsonarista violent insurrection against Brazil’s democracy announcing his government will not rest until finding and punishing all those responsible, including its financial backers. Brazil’s General Attorney Office has obtained that 6,5 million Reais (over 1 million Euros) belonging to 52 individuals and 7 companies be frozen to be investigated as suspects of having financed the coup attempt.
Followed by governors and Supreme Court judges, to symbolise institutional unity in defense of democracy, Lula headed a walk (09/01/23) from the presidential palace to the Federal Supreme Court premises to verify the damage done to the vandalised public buildings. Among those present were Brazil’s 27 state governors, the presidents of both Congress and Senate, and the General Attorney. Lula strongly criticised the lack of action and the silence of the armed forces for two months about the Bolsonarista camps outside military barracks demanding they stage a coup d’état. And for good measure, Lula has so far sacked over 50 military officers in charge of the presidency’s security.
After the institutional walkabout, law and order was swiftly restored by police forces: the Bolsonarista camp outside the army HQ in Brasilia was dismantled after an order from Alexandre de Moraes leading to the arrest of 1,500 protesters who were detained in over 300 detention centres. All such camps in other states of Brazil were also dismantled.
Torres Anderson is under arrest and the STF suspended Brasilia’s governor Ibaneis Rocha from his position for 90 days pending an investigation. During the coup attempt, as Rocha was sitting on his hands, Lula issued a decree turning control of Brasilia’s security over to the Federal Government until January 31. “Twenty minutes later, all government buildings had been completely cleared of rioters by the Brasilia Civil Police and the Federal Police.” Brasilia’s Military Police Commander in chief, Fabio Augusto Vieira, is also under arrest. Silvinei Vasques, director of the PRF, has ‘been retired’.
Brazil’s General Attorney Office has included Bolsonaro in its investigation because he may have “publicly incited the commissions of crimes”. And STF judge Ricardo Lewandowski rejected a preventive habeas corpus request for Torres and Jair Bolsonaro.
Due to the perplexity surrounding the Bolsonarista insurrection, little attention has been paid to the implementation of Lula’s policies. On 2nd January, one day after being inaugurated, he cancelled the privatization of eight state-owned companies. He also reversed several reactionary Bolsonaro decrees: re-established financial support to fight against deforestation and repealed a measure on illegal mining, suspended the issuance of new gun permits and authorisation for new shooting clubs, guaranteed income support for the poor, and a tax exemption on fuel, among a raft of progressive measures.
To top it all up, he appointed Sonia Guajajara, a representative of indigenous peoples, in charge of the newly created Ministry of Indigenous Peoples, which he pledged to create during the electoral campaign.
Under Lula’s progressive government, the significance of Brazilian democracy to rest of Latin America cannot be stressed enough. Nor can the threat represented by the Bolsonarista militarisation of Brazil’s state institutions. During the election campaign he promised the sack around 8,000 military officers appointed at all levels of the state throughout Brazil.
Left political strategies have traditionally divided between social democratic parliamentarism and the Leninist idea of “smashing the state.” Nicos Poulantzas argued that neither strategy was adequate and developed his own vision of “revolutionary reformism.”
Tactics comprise immediate actions, or methods of conduct, that are carefully planned for the purpose of reaching a clearly defined goal. However, most contemporary Marxists often fail to distinguish between strategy (long-term goals) and tactics (immediate actions). What should be the long-term goal of left political tactics, and does a theory of the capitalist state provide any answer to that question beyond abstract calls for a transition to socialism?
Road Signs
When Poulantzas published his last book, State, Power, Socialism, in 1978, he did so partly because he was intrigued by the question of democratic socialism in the context of the rise of Eurocommunism in Italy, Spain, and France. This development raised the question of the role of the state in the transition to socialism. The reemergence of democratic socialism thus required political theorists and political activists to rethink the question of socialist strategy.
The return of democratic socialism to national political agendas in Europe and North America has led to renewed debates about political tactics.
Poulantzas argued that a theory of the capitalist state could provide important insights into the role of the state during the transition to socialism. However, he observed that one could not deduce political strategy from such a theory, which could
never be anything other than applied theoretical-strategic notions, serving, to be sure, as guides to action, but at the very most in the manner of road signs. A “model” of the State of transition to socialism cannot be drawn up: not as a universal model capable of being concretized in given cases, nor even as an infallible, theoretically guaranteed recipe for one or several countries.
Poulantzas emphasized that there was “always a structural distance between theory and practice, between theory and the real.” This was a gap that could only be bridged by strategic decisions made by those engaged in the real class struggle.
With that said, what guides to action and road signs do Poulantzas’s theory of the capitalist state suggest for democratic socialism and socialist strategy today?
Winning the Battle
Karl Marx and Friedrich Engels defined the long-term strategic goal of socialist tactics in The Communist Manifesto (1848) as the “formation of the proletariat into a class, overthrow of the bourgeois supremacy, conquest of political power by the proletariat.” Marx and Engels argued that “the first step in the revolution by the working class” was “to raise the proletariat to the position of ruling class, to win the battle of democracy.”
Marx and Engels argued that ‘the first step in the revolution by the working class’ was ‘to raise the proletariat to the position of ruling class.’
Every important Marxist political theorist of the twentieth century embraced this strategic principle. Eduard Bernstein argued that “democracy is a condition of socialism” and his contemporary Karl Kautsky claimed that “socialism without democracy is unthinkable.” Similarly, in her critique of Vladimir Lenin and the Bolsheviks after the Russian Revolution, Rosa Luxemburg declared that “without general elections, without unrestricted freedom of the press and assembly, without a free struggle of opinion, life dies out in every public institution.”
Even Lenin himself had earlier endorsed a tactical resolution adopted by the Third Congress of the Russian Social-Democratic Labour Party, which proclaimed that
the direct interests of the proletariat and the interests of its struggle for the final aims of socialism require the fullest possible measure of political liberty and, consequently, the replacement of the autocratic form of government by a democratic republic.
Unfortunately, a century later, we are far from having won the battle for democracy. If anything, we are now faced with the prospect of its demise throughout the world, including the Western liberal democracies.
At a time when Nicos Poulantzas was also concerned about the rise of authoritarian statism, he pointed out that it was not enough to assert that we want democratic socialism. It was necessary, he insisted, to clearly formulate strategic demands about what a democratic socialist form of societal self-governance would entail as an institutional form, i.e., a transitional democratic socialist state.
Two Strategies
In some of his earliest writings as editor of the Rheinische Zeitung, Marx embraced “bourgeois democracy” as a political advance for the working class. He considered it an essential political shell for the further development of the proletariat as a class.
The most basic foundation for “democracy” was universal suffrage. However, in writings such as The Communist Manifesto, the Demands of the Communist Party in Germany (1849), and the Critique of the Gotha Program (1875), Marx advocated an expansive program of social and economic democracy that rested upon a heavily graduated income tax (fiscal policy), a strong central bank (monetary policy), and public investment in industry, transportation, communications, and agriculture (industrial and employment policy).
At the same time, he called for a variety of programs and policies. These included free public education for all, free legal services, the abolition of consumption taxes, a strong social safety net (unemployment insurance, old-age pensions, housing, health care, etc.), and the complete separation of church and state.
Marx concluded that the Paris Commune ‘was essentially a working-class government, the product of the struggle of the producing against the appropriating class.’
In 1872, Marx speculated that in mature liberal democracies, such as the United States, Britain, and Holland, it might be possible for workers to “achieve their aims by peaceful means.” For more than a century, this complex of policies and electoral tactics has largely defined the political program we call social democracy.
However, Marx and Engels changed their thinking about the conquest of political power as a result of the Paris Commune in 1871. Marx concluded that the Commune “was essentially a working-class government, the product of the struggle of the producing against the appropriating class, the political form at last discovered under which to work out the economical emancipation of labor.” What was different about the Parisian experiment, according to Engels, was that the working class had created a non-state political form of self-governance, while in 1848 it had been “a power in the [capitalist] state” as a result of newly granted universal male suffrage.
What Marx saw in the Commune, as compared to 1848, was a new political form that “breaks the modern state power.” He stressed the need for the proletariat to “transform the traditional working machinery” of the state and “destroy it as an instrument of class rule”:
The working class cannot simply lay hold of the ready-made state machinery and wield it for their own purpose. The political instrument of their enslavement cannot serve as the political instrument of their emancipation.
Thus, since the late nineteenth century, the Marxist debate on socialist strategy has largely been a contest between the proponents of parliamentary socialism, articulated in works like Bernstein’s Evolutionary Socialism (1899), and revolutionaries who insisted on the need to smash the state, as exemplified by Lenin’s pamphlet State and Revolution (1917).
Democratic Roads to Socialism
There is no question that in most of his writings, Poulantzas advocated a strategy in line with the second school of thought. In 1975, for instance, he made the following argument:
The transition to socialism cannot take place by a simple shift in state power (the working class and its allies replacing the bourgeoisie); this transition requires the state apparatuses to be smashed, i.e., it is not just a question of replacing the heads of these apparatuses, but of a radical transformation in their actual organizational structure.
However, in State, Power, Socialism (1978), Poulantzas explicitly abandoned his smash-the-state position:
There is no longer a place for what has traditionally been called smashing or destroying that [state] apparatus . . . the term smashing, which Marx too used for indicative purposes, came in the end to designate a very precise historical phenomenon: namely, the eradication of any kind of representative democracy or “formal” liberties in favour purely of direct, rank-and-file democracy and so-called real liberties . . . if we understand the democratic road to socialism and democratic socialism itself to involve, among other things, political (party) and ideological pluralism, and extension and deepening of all political freedoms including for opponents, then talk of smashing or destroying the state apparatus can be no more than a mere verbal trick.
At the same time, Poulantzas still included the following warning:
It would be an error fraught with serious political consequences to conclude from the presence of the popular classes in the State that they can ever lastingly hold power without a radical transformation of the State . . . the action of the popular masses within the State is a necessary condition of its transformation, but is not itself a sufficient condition.
In his final book, Poulantzas thus defined a strategy of democratic socialism that would incorporate the electoral politics of parliamentary socialism while simultaneously going beyond it to embrace forms of direct democracy. Instead of smashing the state, Poulantzas now envisioned what he called a “radical transformation of the State.”
In his final work, State, Power, Socialism (1978), Poulantzas explicitly abandoned his smash-the-state position.
That transformation would embrace innovations such as workers’ ownership and self-management, as well as limited forms of “council communism” based on organs of mass democracy (the original meaning of “soviet” in the Russian context). However, Poulantzas believed that these innovations would serve to strengthen, broaden, and deepen the democratic component of a modern democratic republic, instead of challenging and displacing it through a strategy of “dual power,” as occurred during the Russian Revolution.
Discussing the Russian case, Poulantzas argued that by abolishing the newly elected Constituent Assembly at the beginning of 1918, the Bolsheviks had left the state apparatus unsupervised and unregulated in the name of an “all power to the soviets” strategy. This set the stage for a socialist form of authoritarian statism, namely Stalinism, as the decentralized soviets lacked either the political capacity or the technical expertise to direct the day-to-day-activity of a complex modern society on a national scale. He concluded that during a transition to socialism, the institutions of representative democracy should be viewed “not as unfortunate relics to be tolerated for as long as necessary, but as an essential condition of democratic socialism.”
Democratic Socialism
Poulantzas concluded that democratic socialism was a two-pronged strategy consisting of policy and politics. On the one hand, it entailed a set of policies and programs designed to promote a more egalitarian society based on the principle “from each according to his ability, to each according to his needs.” This strategy might begin with basic social democratic policies, but it required a radical transformation of what Poulantzas calls the “economic apparatus” — central banks, tax systems, employment and wage policies, trade policies, social insurance — and ultimately would have to result in public and/or workers’ ownership of the means of production.
However, Poulantzas argued that the path toward reaching these goals also necessitated a political strategy — a radical transformation of the State — that would combine a transformed form of representative democracy with direct rank-and-file democracy:
The essential problem of the democratic road to socialism, of democratic socialism, must be posed in a different way: how is it possible radically to transform the State in such a manner that the extension and deepening of political freedoms and the institutions of representative democracy (which were also a conquest of the popular masses) are combined with the unfurling of forms of direct democracy and the mushrooming of self-management bodies?
For Poulantzas, this meant that the democratic road to socialism would be a long process that involved “the spreading, development, reinforcement, coordination and direction of those diffuse centers of resistance which the masses always possess within the state networks, in such a way that they become the real centres of power on the strategic terrain of the State.”
In place of the demand for “all power to the soviets,” Poulantzas argued that a left-wing government should immediately begin to integrate popular forms of direct democracy and workers’ self-management into the state. Rather than a situation of dual power with a contest between direct democracy and representative democracy, a single workers’ state should bring the two forms of democracy together.
Consequently, Poulantzas called for a struggle “to modify the relationship of forces with the State, as opposed to a frontal, dual power type of strategy,” which would mean “a sweeping transformation of the state apparatus.” He reiterated his earlier admonition against “building ‘models’ of any kind whatsoever,” emphasizing once again that a theory of the capitalist state could be at best “a set of signposts” for strategic decision-making, but not a road map.
Democratic socialism is not just an economic program or a set of social policies. It is a strategy of constitutional reform.
These observations from Poulantzas left several questions open. What exactly would it mean to combine a transformed democratic republic with workers’ ownership, self-management, and other forms of direct democracy? However, these observations nonetheless identified a political strategy of constitutional reform which could draw on the insights of state theory, while directing political tactics toward long-term goals beyond mere disruption and protest.
Democratic socialism is not just an economic program or a set of social policies. It is a strategy of constitutional reform aimed at realigning the structural relationship of the state to the working classes. There can be no socialism without a reinvigorated and more expansive democracy.
The Democratic Party’s conservative Blue Dog Coalition has been slashed in half due partially to a disagreement within its ranks over efforts to attract more members, Politico reported on Tuesday, with a number of corporate lawmakers insisting on preserving the Blue Dogs’ “longstanding legacy” and name despite its reputation as a “Southern ‘boys’ club’.” U.S. Reps. Abigail Spanberger (D-Va.)…
The Democratic Party’s conservative Blue Dog Coalition has been slashed in half due partially to a disagreement within its ranks over efforts to attract more members, Politico reported on Tuesday, with a number of corporate lawmakers insisting on preserving the Blue Dogs’ “longstanding legacy” and name despite its reputation as a “Southern ‘boys’ club’.” U.S. Reps. Abigail Spanberger (D-Va.)…
