Capitalism in Brazil

I would like to share some excerpts of an interview I read the other day (for full interview in Portuguese visit

Updated 11 September 2009| Published 11 September, 2009.

Pochmann: Now capitalism wants our brains

The labor market reproduces inequality

“10% of the poorest Brazilians – 20 million – live on an average monthly income per capita of R$ 70 and transfer R$ 35 of those R$ 70 into tax for the Government meaning that this sector of the population carries the heaviest tax load”, says economist Márcio Pochmann, president of IPEA (Institute of Applied Economic Research).

Article by José Cristian Góes, of Caros Amigos magazine (reproduced under the suggestion of Alexandra Peixoto)


You once said this crisis is based on production and consumption. Could you explain, crisis of consumption?
Long-term sustainability of capitalism in the 20th century was possible thanks to the production of durable goods such as home and car, which, among other goods, represent consumption in 20th century capitalism. Manufacturing of these goods spread throughout the world, although only 1/4 of the world population has access to this consumption standard. Just 1/4. That´s practically what we have in Brazil. A “deepening” or intensification of underdevelopment as needed to match Brazilian consumption standards with global standards, especially in a world where income per capita is very low. In other words, in order to allow installation of the car industry in Brazil, a national production compatible with that of rich countries, and a consumption standard for the richer section of the population, income needed to be profoundly centralized.  Social sectors practising high consumption standards are visible in any Brazilian city. There are neighbourhoods with houses that have four, five cars in the garage: one car for each family member. Some homes are compatible with Hollywood housing standards.

Right, rich people have a good quality of life here..
Rich people here live better that middle class and rich people in the United States and Europe because here rich people don´t pay tax. And Brazil this army of service people. Rich people have manicures, maids, gardeners, cleaners, namely an army of service providers. Rich and middle class families in Brazil have an average of 13 servants at their disposal that take care of a variety of services. A minimum of 13, or more than 20 million people that comprise this army of very low paid individuals. How else could people pay so little to eat extravagantly, in pizza parlors and steak houses, in Brazil? Because the people that work there, the pizza guy, the cook, get extremely low wages. The most shocking fact is that feasibility and internalization of this consumption standard is only possible with a brutal income centralization, with a tax system that concentrates income, and takes from the poor to give to the rich, and with a State that structured itself  to mainly meet the needs of the rich, the top floor of society, as Milton Santos called it. This top floor has everything. They have public bank, technology system, public acquisition. In other words, they have built an entire structure to support the top floor. Although this is not exclusively a Brazilian issue, we have managed to reach the highest level of sophistication.

This article corroborates the discussion I once had with a student (see What is Middle Class in Brazil).




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