An interpretation of the Brazilian economy from the profit rate: 1950-2020

Abstract

The paper investigates the path of the profit rate and its components in Brazil between 1950 and 2020. The high growth in developmentalism, 1950-1980, in contrast to the great stagnation in neoliberalism, 1980-2020, is interpreted based on the rate of profit and its components: the profit share, the productivity of capital and the level of capacity utilization. The fall in the rate of profit due to the decline in capital productivity resulted in a slowdown in the rate of capital accumulation and economic growth. In the 1980-2020 period there was a structural break in the relationship between productive investment and profits with the adoption of neoliberalism, the same profit rate resulted in lower capital accumulation. The great stagnation is explained by the fall in the profit rate and the adoption of neoliberalism.