Welfare in the age of neoliberalism: The discourse of the PT’s state intervention

The pivotal shift in the conceptualization and discourse of welfare in Brazil came with the return of democracy. The massive social movements, which had created enough pressure to delegitimize and ultimately dismantle the military government, played a crucial role in the institutionalization of welfare programs in the policy agendas of subsequent administrations. The National Constitution of 1988, which reflected a hotly contested process of establishing new ground rules for a young democracy, embraced social inclusion as a citizenship right (Title VIII, Articles 203-204). With this shift, the welfare of all Brazilians became a public responsibility. Unrestricted from the domains of private philanthropy and the church, this public conception provided the legal and discursive framework for a universal expansion of benefits (Fenwick 2009, 110).

It is worth emphasizing the role of the underlying societal pressure vis-à-vis the state apparatus and the larger context of IMF imposed neoliberal structural adjustment programs. During the 1990s, while most of Latin America was going through a period of market reforms predicated on the non-intervention of the state, Brazil saw a series of contradictory state policies. On the one hand, the Brazilian state was dismantling protectionist policies, subsidies, and regulatory frameworks. In a dramatic turn after six decades of the developmental state, neoliberal reforms became the order of the day (Nylen 1993; Green 2000). Simultaneously, the state also established the National Secretary of Social Assistance (SNAS, Secretaria da Assistência Social) in 1995 and created Bolsa Escola in 1999, the first national noncontributory cash-transfer program in Brazil’s history (Fenwick 2009, 111). In other words, the demands from radical groups such as the MST—which politically advocated for the end of capitalism, and demanded land redistribution, played a key role in creating a political space for the state to legitimize the enactment of welfare policies in its tussles with domestic and international capital.

It is also interesting to note that these welfare policies and the general shift towards social inclusion in Brazil started decades before the PT came to power, and were always presided by an administration not known for its radical politics. While, for example, Cardoso never implemented a program as ambitious in scope as Bolsa Familia, he nevertheless took steps in that direction.¹⁹ Rather independently from the state’s political leanings, societal pressure was a key factor in shaping state policy regarding welfare.

The discourse of welfare as a citizenship right, however, could only go so far when confronted with the stony veins of domestic and international capital. When the PT set out to gain their support, it astutely framed Bolsa Familia under a purely neoclassical discourse. On an Inter-American Development Bank loan proposal for Bolsa Familia, it was stated that “cash transfers directed at poor families, conditional on school attendance, can play a critical role in poverty reduction, given . . . their contribution to the accumulation of human capital” (Inter-American Development Bank 2004a, 1). In a similar fashion, the World Bank stated that “the broad objectives of the Bolsa Familia Program are to reduce poverty and inequality and promote human capital investments among poor families through the provision of direct monetary transfers to poor families and incentives for investing in human capital [i.e. schooling for children]” (The World Bank 2004a, 4).

Beyond adjusting the discursive and theoretical framework, the PT also made sure the implementation of Bolsa Familia followed mechanisms deemed as efficient—i.e. market oriented. As a policy of targeted conditional cash transfers, Bolsa Familia was perceived as a social risk management program that took pains to weed out those who are not poor (as opposed to policies that reach all citizens, such as universal health systems, price controls on food and services, etc.). Furthermore, cash transfers signified an emphasis on individual choices in the market that favored privatization: Goods and services purchased with the money go to private businesses, constituting an indirect business subsidy (Ansell 2011, 24; Hall 2006, 695).

Theoretically speaking, the concept of conditional cash transfers is not dissimilar to a negative income tax, a policy supported by libertarians (in the American sense of the term) such as Milton Friedman (2002). In adopting a market oriented discourse and policy, the PT obtained all the political support it needed from powerful classes both within and without its borders. It avoided a conflict that could have potentially created capital flight, disinvestment issues and the consequent negative impact on the state’s fiscal revenues. Quite the contrary, the PT was generously rewarded in terms of resources to bankroll Bolsa Familia.

¹⁹ One could argue that Cardoso’s administration was forcefully induced to do so. On August 11, 1995, a conflict between police and land occupiers in the rural town of Corumbiara, Rondonia, left 13 dead, 11 of them occupiers. Then, on April 17, 1996, a larger massacre occurred in the desolate mining town of Eldorado do Carajás, in southeastern Para. Police opened fire on 1,200 MST protestors blocking a highway, leaving 19 dead. As with Corumbiara, there was evidence that some of the victims had been executed (Ondetti 2007, 13; Bergamo and Camarotti 1996). These popular uprisings and police massacres attracted international media attention, and forced Cardoso to respond immediately. First, he sought to decelerate the quickly escalating level of land occupations (Pereira 2003, 53) and issued a decree making occupied farms ineligible for expropriation for at least two years. As a result, by 2002 land occupations had declined to slightly above 1995 levels (Ondetti 2007, 14). Simultaneously, Cardoso jumpstarted a state led agrarian reform program. He quintupled the annual budget for INCRA (Institute for Colonization and Agrarian Reform) (Wolford 2005, 248), and settled 287,000 families on expropriated private land during his first term (Pereira 2003, 45-51).