The corona virus crisis reflects the tragic end of an infamous decade that began badly in 2011, under the impact of the major financial crisis of 2008. During that time, world trade shrank and most countries did not grow, or did not, very slowly, the “new nature”.
In Brazil, if the 5% negative GDP forecast for this year is confirmed, the country’s economy will stagnate over these ten years and annual growth will peak at 0.2%. IPGE reports that this is not just another decade lost, but the worst performance since the beginning of the last century.
World capitalism has been losing momentum since the end of social welfare policies in the 1970s. Since then, every decade of investment in the world has been weak – in Brazil it has fallen from 20.5% of GDP in 2014 to 15%, and in 2019 to 4%.
After the 2008 crisis, the productivity of developed countries and Brazil grew by an average of 0.5% to 1% per year. This is the smallest increase in the last five decades. By regulating the markets, the empire of finance capital was established.
Profits allocated by the financial sector, which represented 10% of corporate profits in 1950, increased by more than 30% in the mid-2010s.
The flip side of this coin is the increased risk and inequality of employment and the concentration of income globally. Now, with Govt-19, unemployment will break a record in most countries. In Brazil it is already 14% and will increase next year.
According to the IPGE, the richest 10% of the Brazilian population accumulated 43% of income in 2018, while the poorest 10% have only 0.8%. Increasing inequality and rising incomes are a significant feature of the 2010 decade, with the loss of the rights of the poor and the consequent deterioration of democracy.
Martin Wolf wrote in the Financial Times that the rise of restructured capitalism would mark the death of liberal democracy.
Brazil began the lost decade with a reasonable expansion of 3% per annum and reached 2014 with a slower economy, but with lower net debt (36.7% of GDP) and larger financial reserves (US $ 376 billion). At the end of 2014, unemployment was 4.7%, the lowest level in history as poverty and misery were the lowest.
As soon as Dilma Rousseff was re-elected, the country plunged into a strong political crisis that toppled the government. Operation Lava Jato paralyzed Petrobras and the oil and gas production chain, and large construction companies, which are responsible for the bulk of the investment.
The crisis was exacerbated by the abandonment of the development strategy that had been in place until 2014. With the appointment of Joachim Levy to the Ministry of Finance in 2015, a whole new phase of liberalization was opened, which is still in effect today.
The growth of social inequality and the concentration of wealth provoked strong conflicts, which led to social mobilizations and the populist waves of the far right, which provoked hatred and radicalization. Donald Trump of the United States and Bolzano in Brazil looked like that. Other examples are Great Britain, Poland and Hungary.
America’s social courage and popular frustration a. Deaton et al. Case is best portrayed in the book “Deaths of Despair” (2019). This book records the proliferation of suicides and excessive deaths due to excessive consumption of alcohol and opioids. The situation in Brazil is no different. According to the World Health Organization, the country ranks fifth in the number of people suffering from depression – about 12 million.
The scene is not inspiring. But there is already a light at the end of the tunnel: the American voter’s refusal to renew Trump’s mandate, a symbol of the new dictatorship. This may be the first step in the downfall of other tough and incompetent leaders.