Brazil: The Assetization of Rights Corroding the 1988 Social Compact

This article analyzes the development of financial hegemony in Brazilian capitalism through successive expropriative dynamics. It first reconstructs the transition from ‘elite financialization’ (1981-94), characterized by high interest regimes and state privatization, to ‘mass financialization’ (1995-2016), driven by pension capitalization and the collateralization of social policy. These mechanisms expanded credit and indebtedness among working classes. The article then examines a new phase under Lula 3 centered on the assetization of social rights. In this configuration, the state actively creates and multiplies asset classes to finance welfare provision, most notably through sovereign securities earmarked for social policy. It argues that this model legitimizes a contractionary fiscal environment aligned with Brazil’s New Fiscal Framework and reshapes the relationship between social rights, public finance, and financial markets.