Facing Cyclical Crises: Political Responses of State Developmentalism in Brazil (2008-2014)

As contrasted to the USA and the European countries, which were hit hard by the systemic
financial 2008/2009 crisis of global capitalism, some emerging state capitalist countries were able
to surpass its immediate negative impacts. While the crisis in central countries implied the curtailment
of social benefits, widespread unemployment and an overall deconstruction of the welfare state,
in the Latin American region, for example, inequality was reducing, at the same time that unemployment
showed some of the smallest figures ever. This is certainly the case of Brazil which has adopted, since
the early 2000's, a series of developmental policies, in particular, programs of income redistribution assuring
social inclusion and, therefore, the possibility of expanding economically towards the internal market.
This paper discusses the virtues and limits of such political strategies. Despite the early adoption of
counter-cyclical measures and previously-established financial regulation and even the gradual
emergence of a social democratic trend more recently, such changes occurred in a scenario of
resilient neo-liberal macro-economic policies, combined with lower levels of growth in recent years.
We argue that in terms of facing longer term effects of the crisis, a shift from a model predominantly
based on social inclusion towards an investment scenario is also necessary so as to allow the
consolidation of this type of developmental state capitalism. We conclude with a brief reflection on the
need of categorizing in a more specific way the broader variety of state-led capitalism, taking into
account characteristics of some Latin American cases.