Class inequality and capital accumulation in Brazil, 1992–2013

Abstract

Abstract This article explores the patterns of class inequality and capital accumulation in Brazil, showing the drivers and limits of the decline in inequality that occurred during the Workers’ Party governments. It proposes that minimum wage hikes and greater social security changed the demand pattern and kick-started a cumulative causation process. Growth and redistribution thus reinforced each other for a period, and then spelled their own limits. As growth accelerated in the 2000s, a Gini decomposition indicates that class inequality decreased, but confined to changes between workers—capitalist income and social stratification were preserved. This also endogenously led to a regressive structural change, as low-productivity, labour-intensive services grew and international trade patterns worsened. This created a medium-term dependence on commodity prices for balance-of-trade solvency, and heightened cost-push inflation, which could not be overcome under the limited policy framework in place. The constrained basis for reducing inequality and the regressive structural change underscore that developmental strategies requires broad, multi-dimensional inequality-reducing measures and an encompassing catching-up project.