The mask behind the Pension Reform: economic liberalism

There are many arguments against the Pension Reform proposed by President Jair Bolsonaro and spearheaded by Minister Paulo Guedes: the delay in access to retirement, the reduction in the value of benefits, the harm to precarious workers in the market, the negative impact on women, rural workers, teachers, and so on; these are just some of the arguments.  

Beyond these points, which have been widely and expertly debated by specialists and political leaders from the progressive field, I would like to discuss the ideological aspect of the Reform concerning the model of society we aspire to build. The first model refers to an exclusionary, oppressive, unequal, and inhumane society; the second model is inclusive, concerned with the oppressed, fostering equality and striving to be fully human.

If your vision of society is based on individualism and greed, summarized in the popular saying: "every man for himself and God for all," then you are very likely to support the Pension Reform, as well as liberalism and right-wing agendas. Now, if you believe in the phrase of the former president of Uruguay about what it means to be left-wing, that is: "it is a philosophical position towards life, where solidarity prevails over selfishness," it means that you are much closer to the progressive camp, therefore, against the current government's agenda.

Perhaps you didn't stop to think about the evils contained in the discourse of economic liberalism during the 2018 election campaign. Yes, it's over, but now we are strongly feeling the result. At that time, unfortunately, people were more concerned with the penis-shaped baby bottle than with economic problems and, thus, easily forgot to research in depth this conservative theoretical current whose main figure was the American economist Milton Friedman (1912-2006), Paulo Guedes' professor.

According to Paul Singer: “Economic liberalism is part of a larger doctrine, with ramifications at the political level. It advocates for the freedom of the individual as a citizen, producer, and consumer.” Furthermore, it opposes state intervention in the economy, instead advocating for free markets, free competition, and privatizations.

Following this logic, citizens act in an extremely individualistic way, paying for their own retirements by freely choosing a private pension model, known as a capitalization system. Currently, the system is a pay-as-you-go system, with resources coming from employees, employers, and the State, as stipulated in the Constitution.  

The capitalization system is geared towards a selfish and greedy conception of society. This is what the American philosopher Noam Chomsky will denounce in the documentary. Requiem for the American DreamIn other words, an attack on the "principle of solidarity." In Chomsky's words: "Social security means: 'I pay taxes on wages so that the widow on the other side of town can receive help to live.' That's how a large part of the population survives. There's no use for it for the super-rich, so there's a concerted attempt to destroy it."

Liberalism is precisely this: the destruction of the principle of solidarity, spearheaded by liberal financial elites. Instead of having a society based on cooperation, committed to social justice, we have capitalism that encourages unbridled competition, increases inequalities, and consequently, citizens become profoundly consumerist, thinking only of themselves, in a true "everyone against everyone else" scenario.

According to Professor Theotonio dos Santos: “The implementation of neoliberalism began with the handover of economic policy from the fascist government of General Augusto Pinochet to the so-called 'Chicago Boys' in 1973.” The Chicago Boys is the name given to the group influenced by the Chicago School, led by Friedman, which advocated precisely for the free market. Paulo Guedes, in addition to being a former student of Friedman, also participated in the Chilean economic team that implemented the capitalization system. Currently, more than 90% of retirees in Chile receive less than a minimum wage, which has contributed to a very serious wave of suicides in this population.

“Liberalism is the banner under which the bourgeoisie fights for and conquers economic and political hegemony,” states Singer. There is no doubt that this doctrine has a side: that of the rich, the bankers, the bourgeoisie extremely interested in Bolsonaro's Pension Reform. The same economic elite that owes R$ 426 billion to Social Security, according to figures compiled by the Attorney General's Office of the National Treasury (PGFN). On the other hand, the Social Security deficit, according to the National Treasury, is R$ 290 billion.

The list of companies indebted to Social Security includes banks. One of them even had a net profit of R$ 21 billion in 2018, the same financial institution that is pressuring the government to approve the Social Security Reform. If the economic elite of this country paid what they owe, the working class would not have to bear the expenses of social security. In other words, the economic liberalism of Paulo Guedes in the Bolsonaro government has made it very clear who will pay the bill: you.

The Pension Reform is immoral and inhumane because it harms the most defenseless people in our society and benefits only billionaires, the same ones who do not honor their commitments to the pension system. Therefore, opposing the Reform is not merely an economic issue, but an ethical principle.