12 - State intervention and the prospects for capitalist accumulation

Summary

Three days of discussions and debate during a visit to Juazeiro in May 1983 convinced economist Ladislaw Dowbar that the area's economy was breaking with its traditional structure. Although traces of the old economy – for example, artisan work – were evident, capitalism had taken hold. Capitalist development in the region had been stimulated by government incentives and credits, especially to multinational firms. Thus it was erroneous, he said, to speak of precapitalism in a system that had been capitalist for some time. Capitalism had absorbed various economic formations, in part because the sertão was historically tied to the export economy and international markets. At the same time, he noted the absence of any democratic structures of participation. The people had little control over what was happening to the land. Water for irrigation was monopolized and unavailable to small farmers, and development projects were not being implemented for the people. The structure of local power consisted of traditional families who were now familiar with the financial apparatus – how to work with the government and obtain credits – but largely dependent on the state machinery.