December 24, 2017 – Fort Russ News – Paul Antonopoulos – Translated from Nova Resistencia.
RIO DE JANEIRO, Brazil – It has become a commonplace in the Brazilian media to describe the fact that consumer goods are comparatively more expensive here than in other countries under the concept of “Brazil Cost/Custo Brasil”. “Custo Brasil” is the scapegoat of the capitalist class and its useful right-wing idiots. It would be the sum of production costs, involving taxes, labor charges, salaries, etc.
“Custo Brasil” is the fetish used by the right to defend unrestricted and universal tax reductions, besides the Labor Reform and several other anti-national and anti-popular measures.
This scapegoat does not hold up. Firstly, the Labor Reform is leading to a precarious labor market, which will mean the average reduction in income, as has occurred in all other countries where similar reforms have been approved. The consequence will be the reduction of sales and, therefore, of profit. Economic Stagnation.
As for taxes, in fact, the reduction of ALL indirect taxes (such as IPI and ICMS) should be defended as a measure of social justice and economic responsibility, because these taxes, which are very high in Brazil, contribute to the maintenance of inequality economic development. These, in fact, have a negative impact on final prices and, on average, in Brazil, they are twice as large as in developed countries.
It happens, however, that a reduction of taxes does not imply reduction of prices. This only happens in liberal theories. For example, there is nothing to prevent the difference in tax cuts from being pocketed and the profit margin widened. And, empirically, this is what happens in most of the tax cuts that occur in Brazil. Take, for example, the multimillion-dollar tax derailments of the Dilma government, one of the biggest idiocies of its government (and not a few).
The reality is that one of the fundamental causes of the high prices of consumer goods in Brazil is the comparatively huge profit margins that companies extract in Brazil compared to the markets of other countries. The profit margins, for example, of the foreign automakers operating in Brazil are, on average, 3 times higher than in most other countries, being at 12%. And this according to figures presented by the automakers themselves. That is, the profit margins can be much higher, since if it is to profit only 10%, most entrepreneurs would prefer to live in the financial system.
As if it were not enough that these corporations send a good part of their profits abroad (annually, approximately 70 billion dollars escapes from Brazil), the foreign corporations that operate in Brazil, from assemblers to banks, know that they can rely on consumerism of the Brazilian mass and, therefore, throw prices up there, without fear of any fall in profits by reduction in consumption. Only the most serious economic crises may represent some obstacle to the consumerist spirit of Brazilians.
This is because, in an intensely unequal country, consumption is a mark of distinction, a way of proving superiority to the neighbor through a pattern of differentiated consumption. Naturally, consumer advertising, even appealing to the use of neurolinguistic programming and other subliminal techniques, imposed through the mass media, has a great responsibility in this education of the Brazilian people for consumption.
It is a structured model to guarantee underdevelopment and inequality. For example, part of the high production costs stem from the fact that we are a de-industrialized country. This could be solved by a national policy of state-led industrialization, but the big corporations themselves have done everything to avoid this, decades ago, fearing the emergence of national alternatives to industrial consumer goods.
Only one revolution can change that picture. Profit-Brazil needs to be fought, as well as the REAL barriers of Brazil-Cost, all of them linked to the capitalist mode of production.