The American economy today is no longer driven by the automotive industry, but by the health sector, which represents 14% of the country’s GDP. While social services have become central to modern economies, their management paradigm has yet to be identified. Huge, centralized state bureaucracies are sorely lacking in responsiveness, while privatization has led to dramatic abuses. The lack of specific solutions to cope with the new demands of social services has become a major problem in both industrialized and emergent economies. (L. Dowbor)


Social management and transformation of society

Ladislau Dowbor

March 2000


Capitalism is a good system insofar as production is concerned, but it is deficient from the standpoint of adequate distribution. A highly productive system that fails to adequately distribute wealth is structurally flawed. We need alternatives. What we have experienced so far are not alternatives, but simplifications, with statism on the one hand and liberalism on the other. And redemption is expected to come from either the bourgeoisie or the proletariat, depending on one’s political views. This debate will continue, but reality has changed.

Economic growth is obviously insufficient, assuming it actually exists. Modern economic activity simply cannot be encouraged without the corresponding investment in people – their health, education, culture, leisure, etc. Social activities are no longer a complement to banking and industry; rather, they have become central to the economy itself. The American economy today is no longer driven by the automotive industry, but by the health sector, which represents 14% of the country’s GDP.

While social services have become central to modern economies, their management paradigm has yet to be identified. Huge, centralized state bureaucracies are sorely lacking in responsiveness, while privatization has led to dramatic abuses. The lack of specific solutions to cope with the new demands of social services has become a major problem in both industrialized and emergent economies.

A new context

Brazil has seen the creation of a strange division between formal economists who deal with “serious” issues such as interest rates, exchange rates, and investments, and social scientists who are concerned with the social tragedy and concentrate on denouncing the drama of the country’s children, the poor, and the excluded. Some are concerned with the GDP, while others offer bandages for the victims of the process. The time has come to revert this schizophrenia. It is time to bridge the divide between pragmatic cynicism and naïve idealism.

We could simply allow things to evolve and wait for macro-economic stability to bring us “naturally”, so to speak, more companies, more investments and, hence, jobs and salaries with which we could pay for the “rest”, the social costs. That is the position of many people who are simply unaware and ignorant of the dimensions of the unfolding drama, who turn their backs on the rising crime rate, increasing unemployment, the dramatic disorientation of the young, hunger, the unchecked corruption in politics and business, the general loss of values.

In this zone of indifference, however, one also finds people that are deeply imbued with ideological simplifications and who defend growing absurdities as being part of an inevitable logic – liberalists, rather than liberals, would more correctly describe such people – and who actually lead us to a frightening extremism. It is these people who argue that abject poverty is sad but inevitable and that to offer help to the two thirds of our society that are excluded is “paternalism”, and that the boom in violence which is making our lives each day more impossible is due to the “bad elements” of society. It would be necessary to build more prisons, lower the age of criminal responsibility, build more overpasses for cars, more holding pools for rainwater, more hospitals to treat disease, and so on. Pathetic builders of social crutches, who refuse to face the obvious: the system is structurally faulty.

The problem goes even further. In his excellent analysis, Anthony Giddens argues that the conservative vision of the world is collapsing, for the dimension of the values which, in some way, justified social injustice and unbridled profit – country, family, property, individual effort, and morality in the more traditional sense – is being undermined by mechanism itself – the market – which should make it feasible. Liberalism in its modern version, with powerful multinational pyramids of power, is diluting the nation, filling our streets and television sets with commercial vulgarity, replacing morals with a “do anything for money” mentality, breaking up the family, generalizing criminality and corruption, and creating a dispersive climate in which anything and everything is valid. The anchor of conservative values, the market, has turned against its creator and, in its global and totalitarian dimension, devours everything it encounters along the way. The statement of Raymond Barre, one of the expounders of European liberalism, who said: “We can no longer leave the economy in the hands of a bunch of irresponsible thirty-year-olds who think of nothing but money”, is pathetic. Wasn’t that what it was all about, that each individual’s egoism would lead to the happiness of all? What has been left over from the respectable, through often hypocritical, conservative ideology is what the Americans put so succinctly: “fast money, fast women, fast food…”

We are not dealing, here, with empty accusations. It is the philosophical construct, itself, which originated liberalism, with the utilitarianism of Jeremy Bentham, James Mill and others still so deeply rooted in the minds of Americans and their acolytes around the world, that is foundering.

The mega-companies that have emerged at the close of this century have exceeded, by far, the dimension of micro-economic production units, and have branched out into builders of the macro-social system, with calamitous results. The company constitutes an excellent organizer of production, and the market, as one of the regulators of the economy, must be incorporated into our universe of values. But the market society is disastrous. It is not a question of destroying the company, but of rethinking the universe in which it is inserted.

UNCTAD’s 1997 report offers an accurate analysis: in the last three decades, the concentration of income increased dramatically around the world, producing a profound imbalance in the relation between profits and salaries. However, these higher profits are not leading to greater investments; instead, they are being increasingly shifted to activities of speculative intermediation, particularly in the area of finance. In practice, the outcome is that we have greater economic injustice and steadily growing stagnation: the growth rate of world economy dropped from an overall average of 4% in the ‘70s, to 3% in the ‘80s and 2% in the ‘90s.

This perverse articulation is extremely important. Although we all criticize economic injustice, in our minds, forming a kind of semiconscious limbo, was the idea that the luxury of the wealthy somehow ended up being transformed into investments, hence into companies, jobs and salaries, which ultimately meant greater welfare. Inequality and social dramas were, in some way, the necessary evil of a process of the positive whole and ultimately (and in the long term), generators of prosperity. It is this type of “pact” that has been broken today. According to the analysis of UNCTAD, “it is this association of increased profits with stagnant investments, rising unemployment and reduced pay that is the real cause of concern.” (1)

It is not just the poor that are affected, but the entire productive system. An evaluation of Le Monde Diplomatique shows us how Peugeot, with its 140 thousand employees, was happy with the 330 million dollar profit it made in the first half of 1998. But how does this positive result compare with the profits of Citibank’s foreign exchange negotiation sector, in which 320 operators generated a profit of 500 million dollars in the first semester of 1997? Between the advantages of being a speculator or a producer, there is no longer any doubt. It is interesting to find this comment by Martin Wolf in the Financial Times: “what is in the balance is the legitimacy of the worldwide capitalist economy.”(2)

What is becoming evident, and is no longer a narrow view of systematic anticapitalist criticism, but of economic and social common sense, is that a system that knows how to produce but not how to distribute is simply not enough, above all if, even worse, it throws millions into unemployment, dilapidates the environment and rewards the speculator more than it does the producer.

This is not the place to delve into the burgeoning dramas: it is not for nothing that, for the first time in the history of humanity, and concentrated in a single decade, we have had gigantic world forums to evaluate the planet’s environmental depletion (Rio-92), the human rights scandal (Vienna-93), the demographic explosion (Cairo-94), the unsustainable social dramas (Copenhagen-95), the tragedy of women caught in the gears of economic transformation and of the crumbling family structure (Beijing-95), the worldwide rural exodus that is creating explosive cities everywhere (Istanbul-96). The United Nations’ Report on Human Development qualifies as obscene the fortunes of the four hundred or so individuals in the world whose personal wealth exceeds that of the poorer half of humanity. This concentration of income is considered as shameful as slavery and colonialism, and has no place in a civilized society.

The debate about who is to blame and who was right will no doubt continue to provide food for discussion, for our attraction to the past is powerful. But the truth is that reality itself has changed. The construction of alternatives involves a wide range of social alliances obviously broader than the concept of redemptory classes, bourgeoisie for some, proletariat for others, which dominated the 20th century. It is significant that the last world summit, more discreet than the aforementioned ones and organized by UNCTAD (Lyon-98), already worked on the issue of partnerships for development, with the formal meeting of governments, companies and organizations from civil society, in the search for new articulations.(3)

The Third Way? There are already candidates to appropriate the possible political benefits of the idea, attempting to capitalize on what hardly yet exists. But that should not prevent us from perceiving an ever more patent reality: the world we are building is not contained within the narrow theoretical limits defined by the 19th century, which we used in such a simplistic manner in the 20th century: communist statism and capitalist liberalism.

Articulation of the social and the productive

Simplifications are always attractive, above all during a phase of complex and rapid transformation of society. Is it enough to say that we are evolving toward the era of services? Today, owing to its very generality, the concept tends to confuse more than help. It is easy to state that agriculture in the United States employs 2.5% of the country’s labor. That kind of evaluation is possible because we reduce agricultural activity to working the soil. The American farmer today relies on the services of soil analyses, artificial insemination, liming, ensilage, meteorological services and others. Has agriculture become extinct, or does agriculture work in another form?

Similarly, one could say that secretaries or engineers that work in a factory are not in industry, but in the area of “services”. What sense would there be in that? In truth it is, to a large extent, part of a transformation of the content of productive activities, rather than the disappearance of these activities to the benefit of a nebulous area of “services”.

What is emerging is not a “third” sector but a “tertiary” one. In a way, it is the set of human activities that is being transformed through the incorporation of more technologies, more knowledge and more indirect work. Greater research, conception, planning and organizational content are involved both in productive activities and in activities connected the economic, commercial and financial intermediation, and social service infrastructures. It is the dimension of knowledge of the whole set of our activities of social reproduction that is expanding.(4)

The society that really exists continues to have prosaic needs, for housing, shoes, rice and beans, which must be ensured by the same activities as always, even though in a different form.

Productive activities undoubtedly continue to be essential, but they no longer contain in themselves the same conditions for their success. For millions of agricultural, industrial, and construction business units to be productive, we must ensure, besides the organization of the productive web and the progress of business management, solid infrastructures of transportation, energy, telecommunications, as well as water and sanitation, the so-called infrastructure “networks” without which companies face unsustainable outside costs and become noncompetitive.

Should we not keep in mind that we have managed to clog our cities with individual transportation, the most expensive kind, neglecting the collective transportation that predominates in any developed country? Was it naiveté, in terms of the rationality of society as a whole, that led us to opt for trucking instead of railway and fluvial transportation? What does the fact that a great majority of Brazilian homes are devoid of proper sanitation cost us, in terms of health and discomfort?

The productive sector, therefore, needs adequate infrastructures so that the economy s a whole can function. But it also needs a good financing and commercialization system to enable the exchange processes to flow freely: these intermediation services, in our case, have become an end unto themselves, draining the essential from wealth, constituted more strictly speaking of middlemen than of intermediaries, who sterilize the country’s savings.

Lastly, neither the productive area nor the infrastructure networks, or even the intermediation services, will function properly without investments in people, in their education, their health, their culture, their leisure, their information. In other words, the social dimension of development is no longer a “complement”, a humanitarian dimension that is somehow external to the central economic processes, but an essential component of social reproduction as a whole.

There is nothing new, of course, in the statement that ample infrastructures, efficient intermediation services, and a strong development of the social area are necessary for the proper functioning of the area of productive business. What is different is the new relative importance of the social dimension of our development. For health to be viable it must be preventive, permeating the entire social tissue and extending to the entire population. Education in Brazil today, counting students and teachers, involves over thirty million people. Culture has become one of the most important sectors in the body of economic and social activities.

The dimension and importance of the social area have changed qualitatively, demanding new balances in society’s priorities. And the rebalancing of the various areas of development now depends on more complex social articulations, forcing us to abandon statist or liberal simplifications.

The social: a means or an end?

The United States’ principal economic sector today is health, which accounts for 14% of the GDP. More or less on the same level is the entertainment industry, which is essentially part of the cultural area. If to these one adds formal education, in-house company training, the boom in technological update/refresher courses (from informatics to artificial insemination) and others, education has also taken on dimensions that have rendered it a giant in terms of both the resources involved and of employment. Adult education in the United States today has reached a mass that, a decade ago, would have been unimaginable: “The numbers are astounding. While only 23 million Americans participated in adult education programs in 1984, according to the National Center for Educational Statistics, this number reached 76 million in 1995 and, according to some predictions, may exceed 100 million in 2004”.(5)

Health is no longer a complement, where people with social concerns come to stick a band-aid on the wounds of the victims of progress, just as culture is no longer the sophisticated finish of a moneyed person. The social area, today, is the business.(6)

The transformation is deep. Along half a century, we have gone from a philanthropic vision of assistive generosity, of charity, of a sort of tranquilizing balm for capitalist consciences, to the understanding that the social area has become essential to economic activities. This profound change of focus has been positive. The business sectors, with the support of numerous World Bank studies, have come to realize that it is not a question of simple social cosmetics, but of conditions indispensable to business productivity itself. It is the vision that, in many countries, leads companies to offer strong political support to universal public education, to encompassing and efficient health systems, and so on.(7)

It is one thing to recognize that the social area is indispensable to the good functioning of productive activities. It is quite another to put this area at the service of companies. In this sense, we are watching a second important change, which we can see, for instance, in the United Nations’ Reports on Human Development: On thinking it over, good health, education, leisure and information are precisely the things we want from life. In other words, the correct focus is not that we should improve education because it will allow companies to work better: education, leisure, and health constitute the ultimate objectives of society and not a mere instrument for business development. Economic activity is a means, while social welfare is theend.

This change of focus contributes to give us a reality shock. While we placed productive activities in a central position, which, from the standpoint of the World Bank, centers on the gross domestic product, we could boast about ranking eighth or ninth in the world economy. However, when we view Brazil from the standpoint of quality of life, based on the criteria defined in the United Nations’ Human Development Indicators, our worldwide rank falls to 79th place.

In some way, two key ideas appear clearly: first, the social area has become central to development in every part of the globe. Second, the results in this area constitute the main criterion to evaluate the overall development policy. In terms of Brazil, we find that, from this point of view, we have reached a dramatic imbalance between the productive and social dimensions.

To break the tragic impasse the country is currently experiencing, therefore, it is not a question of attracting another Renault to produce more cars with more advanced technologies and a few hundred jobs. It is a question of thinking and organizing the social rebalancing. That is what will open up the real space for development. It is a question of inverting the equation.

The social: a sector or a dimension?

Social development and quality of life as an objective, a broader purpose of society, leads to profound repercussions inasmuch as the social ceases to be a mere sector of activities and becomes a dimension of all our activities.

When a major soybean producer tells us he is capable of supplying our agricultural needs in general, he visualizes hundreds of thousands of hectares of plantations at one end and happy consumers at the other. From another standpoint, this option represents rural exodus, unemployed families hanging on to urban outskirts, gigantic human costs, and enormous financial costs in terms of security, health and others, as well as an insufficient flow of income to consume the product.

There is another choice, which is, for instance, the creation of green belts around urban regions. Anyone that has traveled around Europe will remember the thousands of small agricultural units surrounding the cities, ensuring their supply of horticultural products, promoting pleasant and produce weekend leisure, contributing to absorb labor and opening up opportunities for the elderly, etc.

Hundreds of these kinds of choices can be cited, ranging from the productivity of large companies to social welfare. An accurate calculation would undoubtedly indicate that a thousand hectares of tomatoes allow for lower unit cost production. That is micro-economic logic. However, if one adds up the costs of rural exodus, unemployment, crime, chemical pollution, and the political imbalances generated by the presence of economic super-powers, there is no doubt that society, as a whole, will show a lower productivity. In other words, the best social productivity is not that which results from the simple maximization and sum of micro-economic productivities.

It is not a question of theoretical finesse. Millions of companies pollute rivers. Businessmen and their economists explain that is it cheaper to throw waste into rivers, that environmentalists love to exaggerate, that productivity and competitiveness are more important because they ensure more jobs and, ultimately, greater well-being through pay. Nonetheless, the money companies save by not acquiring the equipment needed to protect the environment results in polluted rivers. These, in turn, generate disease and huge curative health costs, besides the loss of leisure and the damage to other activities such as fishing or tourism. Paying with our taxes, city administrations have to recover the polluted water, at costs dozens of times higher than the costs of prevention would have been. The practical result is a society that squanders money, in addition to losing quality of life.

On a visit to a supermarket in Toronto, I found a room full of books and was told that it was a section of a municipal library operating inside the supermarket. The reasoning is simple: when a person goes shopping, he/she takes the opportunity to take out a book for the week, returning the one borrowed the previous week. In micro-economic terms, from the standpoint of billings, the supermarket would surely prefer to have a section with beauty creams. But in terms of quality of life and of citizenship, having such easy access to books, being able to browse through them with one’s children, sparking their interest in culture clearly increases social productivity.

The essence of this approach is that it isn’t a question of opting for the supermarket or the book, for the economic interest or for the social, but of articulating them. In a number of countries, the articulation of these interests has already been incorporated into the current practices of the management of society, into the so-called governance.

Upon presenting, in Brazil, the Scandinavian discussion about State reform, Ove Pedersen explained: “It is my assertion that the Scandinavian countries are increasingly taking on the character of a negotiated economy. An essential, and even increasing, part of the allocation of productive resources, as well as the (re)distribution of the product, is determined neither by the market nor through autonomous decisions by public authorities. Instead, the process of decision-making is conducted through institutionalized negotiations between the relevant interested agents, who make binding decisions typically based on discursive, political or moral imperatives more than on economic threats and incentives”. (8)

Rephrasing it, among the several interested economic and social agents, negotiated solutions are intelligently sought that allow the social, economic and environmental interests to be maximized. Anyone that takes a look at Sweden, a small country frozen seven months a year, with all the economic difficulties that entails, must ask himself what the reason is for its simultaneous economic prosperity and its quality of life. The reason lies, largely, in the fact that not only the company’s capital, but also increasingly the country’s social capital are looked after.

In Canada, people have become used to washing out their canned tomato tins, for example, and placing them in a proper bin. It’s the so-called clean garbage, a concept that is beginning to catch on in several Brazilian cities. As an example, if one multiplies five small pro-environmental actions of that kind a day by the 30 million inhabitants of Canada, one will have 150 million pro-environmental actions per day.

In São Paulo, mayor Paulo Maluf canceled the recycling program because it was not economically viable. This reasoning was correct from a micro-economic point of view and supported the opinion of his colleague Roberto Campos: recycling domestic garbage costs more than the sales value of the recycled product. In Canada, however, once the attitude, or culture, of not wasting became widespread, it was found that very little organic garbage is left over. Toronto’s city administration supplied standardized, hermetically closed garbage cans for organic garbage. Because there is not much of it and the cans can be hermetically closed, thus not causing unpleasant odors, the collection of this garbage went from a daily to a weekly basis. This evidently represented a drastic cut in the city’s cleaning costs. Thus, a cultural change and the corresponding alteration in the way activities are organized lead to a significant improvement of social productivity.(9)

It is easy to say that this has to do with rich societies that have the space and culture for that kind of activity. But one could invert this reasoning. The Canadian society is much less wealthy than the American; nevertheless, its quality of life is far superior. Seen from another angle, one could ponder whether Canada manages to promote this kind of initiative because it is rich, or if its wealth resulted from choosing a more socially productive path. It is incredible to what extent a culture of common economic and social sense, and what one could call social capital, generates a chain of economies and rationality: schools open their sports facilities to their neighborhoods at night and on weekends, thereby increasing the available infrastructure for leisure, with several well-known impacts in terms of health, drug abuse contention and so on. The availability of social leisure reduces, for instance, the absurdity of rich families building individual high cost swimming pools with almost zero productivity, which are unused 90% of the time.

It is not a case of giving multiple examples of a trend that has become evident on an international scale. What this implies, in terms of improved social management, is that social advance does not necessarily mean the allocation, by law, of a greater portion of resources to education. It means incorporating into business, ministerial, community or individual decisions the diverse dimensions and impacts that each action can have in terms of quality of life. In addition to an area – with its obvious sectors such as health, education, housing, leisure, culture, information, sports –, the social dimension, therefore, also constitutes a dimension of all the other activities, a way of building industry, a form of thinking urban development, a form of treating rivers, a way of organizing commerce.(10)

The micro-economic concept of productivity can only prove its superiority by isolating the profit impact of a productive unit, of the set of externalities, from the social impact that is generated. Each park that is razed to be replaced by a supermarket or a parking lot produces higher profits in terms of business, and greater losses in economic terms as a result of the additional costs generated for society, besides the loss of quality of life, which is, after all, the broadest objective.(11)

The liberal option of the business unit centered on immediate profits is not only socially unjust: it is economically stupid. It is natural that a society bewildered by the pace of changes, alarmed by unemployment, tormented with violence, should seek simple solutions. The great ideological simplification of liberalism represents, in this sense, the ideological extremism symmetrical to that of the great simplifications of the statist left. With all the weight of the extreme inheritances of the 20th century, we must learn to build more complex systems in which the key word is not option, but articulation.

In practical terms, we must learn to build an economically viable, socially just, and environmentally sustainable society. And we must do this by articulating State and company in the framework of an organized civil society. Again, the key word is not the choice between one or the other, but the articulation of the whole.

Individual solutions and social solutions

It’s interesting to pose the following question: After decades of anti-state discourse and with great liberal victories, why does the State continue to grow? And why did it go on growing during England’s Thatcher phase, during the American phase of Reagan and Bush, when the reduction of the State was at the core of political discourse?(12)

The truth is that the State has grown because of the increased demand for public goods. Although it is quite obvious, we would do well to remember that social problems changed radically with urbanization. A country family solves its problems individually, whether it a case of garbage disposal, water, firewood, transportation or anything else. Housing in the city is only viable if it is integrated to the public networks of electricity, telephone, water, sewage, sidewalks, streets, etc. It is for lack of an adequate solution for a collective consumer good such as transportation that people living in São Paulo have to drive at an average speed of 14 kilometers per hour, even though they have to pay for a powerful car. A city that manages to become paralyzed owing to an excess of transportation units, when cheap and functional alternatives are so well known, reveals the extent to which our capacity for planning and social management has lagged behind, while dramatic challenges appeared, demanding new solutions. And public assets require the strong presence of the State. Or will we go to the absurd extreme of placing tollbooths on our streets? And why not install tollbooths for pedestrians, too?

Urbanization has also changed the way social solidarity is organized. In the broad family of the rural world, the children and the elderly, or the occasional handicapped person, were supported by the active part of the family. Thus, the necessary redistribution between an individual’s active and non-active phases took place through the family’s solidarity. Urbanization rendered the family nuclear, breaking the system. With the new technologies, mini-apartments and social atomization, even the nuclear family is disintegrating. In the United States, only 26% of homes in the early ‘90s had a father, mother and child, i.e., a family.

In the case of Brazil, the process is dramatic because we have become urbanized in just three decades, creating cities and, above all, suburbs lacking infrastructures, schools, sanitation, and security. The little that existed of traditional networks has been lost, and the modern systems of public solidarity are still being hammered out.

Thus, we have reached the fatuity of the learned nonsense à la Roberto Campos, about whether the principle of public support of the vulnerable elements of society might, perchance, constitute a certain paternalism – a mortal sin in the eyes of the rich – while innocent children die of hunger and of ridiculous causes, and society explodes in unemployment, crime, and generalized corruption.

Another trend that changes the context are the new technologies, which constitute, together with urbanization, the two fundamental axes of transformation of social management. Strangely enough, we perceive technology as a threat. Instead of taking advantage of the opportunity it offers of doing things with less effort, we generate the panic of unemployment, and rather than organizing the redistribution of work, we enthusiastically adhere to the new industry of security goods and services, that of closed condominiums.

The tendency is for us to become divided between those in favor and those against technology. First, it would be useful to ask if anyone is asking out opinion about it. Second, it is essential to understand that technological change segments society into the included and the excluded. It is, therefore, not a question of denying the general usefulness of technology, but of understanding that, hand in hand with technological progress, we must build networks of support for those excluded from the transition phase. The fact that automakers use robots on their production lines does not mean we don’t still have 20 million rural workers, many millions of illegally employed workers, similar numbers of people working in precarious and informal activities, and a growing contingent engaged in illegal activities.

We can imagine a future in which society is linked by a network, children have pocket computers, and leisure booms. But what we build in the real, existing country are the isolated fortresses in condominiums, while society gradually degenerates into barbarism. It is what an American so appropriately called “slow motion catastrophe”.

Dreams apart, therefore, the challenge we have ahead of us, in terms of social management, is the construction of an ordered transition minimally viable in political, social and economic terms, for the brave new world that is shaping on the horizon. People often forget that the transition into the industrial era threw millions into unemployment and despair, provoking gigantic migrations to the United States and Brazil, among other countries. To repeat this drama on a worldwide scale, with billions of people excluded from the process of transformation, on this small and exhausted planet, would lead to unsustainable tragedies.

It is no doubt easy to say that, in the future, other jobs will replace those that have been lost, and that other forms of organization will solve the problems. What we would like, of course, is to survive until that happens. To articulate the social, with realism, flexibility and efficiency, and no longer with ideologies from the last century, has become a central imperative for our societies.

An area in search of its organizational paradigm

The social areas have only acquired this importance in the last few years and a sectorial culture has not yet really been formed. The reality is that we do not know how to manage these new areas, for the corresponding instruments of management are still under development. The management paradigms that we inherited – just riffle through any business administration magazine –all have solid industrial roots. All one hears about is Taylorism, Fordism, Toyotism, just-in-time, and so on. How do you deliver a just-in-time baby? Or provide assembly line education? A cultural Cad-Cam?

It would be relatively simple to consider the social as being naturally in the orbit of the State. There, we have other paradigms, which correspond to public administration: Weber, Prussia, the pyramids of state authority. However, there is less and less space for such simplifications. How does one reach 165 million inhabitants from a central chain of command? The social areas are necessarily capillary: health should reach every child, every family, under extremely differentiated conditions. Is the centralized management of such huge mega-systems feasible?

In practical terms, we know that when there are more than 5 or 6 hierarchical levels, the ones in command labor under the illusion than the ones at the bottom of the hierarchy effectively carry out their wishes, while those at the base imagine that someone is really in control. The agility and flexibility that highly diversified social situations demand can no longer rely on interminable state hierarchies that paralyze decisions and exhaust the resources.

In truth, the paradigms of social management have yet to be defined or built. It is a gigantic area in economic terms, and of utmost importance from the political and social standpoint, but its organizational reference points are still being outlined.

The world of profits has long ago discovered the new gold mine that the social represents. Who would refuse to spend every cent he owned if it were a matter of saving his child? And what alternative information does a patient have, if the doctor recommends a treatment? In the United States, today, a hospital is being sued because it paid 100 dollars to any doctor who referred a patient to its services. Are patients merchandise? Nature magazine shows how dozens of researchers published, in the form of personal letters, opinions in favor of smoking: it was later discovered that they received an average of ten thousand dollars from tobacco companies. One scientist defended himself by stating that that was his honest opinion, so why not make money out of it? Does the culture of money suffice to regulate culture?

Companies today supply schools with educational software that already incorporates publicity, brainwashing the minds of children in the classroom. Television subjects our children (and us) to the vilest variety of “Ratinho” programs (vulgar, low class TV programs), with the justification that it is simply following market trends and giving people what they enjoy. If that argument is valid, then why don’t teachers begin teaching their students what they like, without concern for truth and for the cultural level? In India, today, there are villages with innumerable young people displaying the scars of an extracted kidney: solid health companies in developed countries buy kidneys cheaply in the third world to be transplanted into citizens of the first. Here, the medical intermediaries generated by insurance companies are turning health into a nightmare. What is the limit to all this?

In Brazil, the excessive rigidity of the traditional State-centered structures and the tragic inadequacy of the private sector to manage the social have led to an increasingly chaotic situation. A recent evaluation leaves no doubt as to the essentially institutional origin of the chaotic state of Brazil’s social policies: “Along the last few decades, the institutional machine of social policies can be characterized, at all levels of power, as a disarticulate body of institutions responsible for highly segmented sectorial policies, which superpose clients and competencies, pulverizing and wasting resources that originate from a disordered diversity of sources. This results in a system of social protection that is highly centralized in the federal sphere, inefficient and unfair, governed by a confusing and ambiguous set of rules and regulations.”(13) We are talking about an area whose relative importance in social reproduction as a whole tends to become central.

In terms of resources, it should be kept in mind that the social, in Brazil, involves, in order of magnitude, 25% of the country’s GDP.(14) Brazil is not a country that spends little on the social. The support given to the victims of drought in the northeast turned into the drought industry, the complementary food served in schools has been transformed into the school snack industry, health into the industry of disease, and education is rapidly becoming a type of diploma industry. The social area undoubtedly needs more resources. But today, much more than that, it needs a political-administrative reformulation.

The social: a powerful social articulator

A new path is being paved through partnerships involving the state, nongovernmental organizations and private enterprise. Strongly emerging are concepts such as the social and environmental responsibility of the private sector. The so-called third sector appears as an organizational alternative that could come up with innovative answers by articulating with the State and ensuring citizen participation. Private companies are discarding their assistive viewpoint and assuming the responsibility conferred on them by the effective political power they hold. Thus, there is a shift from the simple social marketing, often with cosmetic objectives, toward a constructive attitude in which the private sector can help to build the public interest.

Wherever it is in operation, for instance in Canada or Scandinavia, the social area is managed as a public asset, in a decentralized and intensely participative manner. The reason is simple: citizens associated with the management of health in their neighborhoods are interested in not getting sick and are aware that they are treating their own lives. A parent associated with the management of the neighborhood school will not treat his/her children’s future lightly. In some way, the citizen’s direct interest can be capitalized on to design a debureaucratized and flexible form of social management, discovering new paradigms that go beyond both the state pyramid and the market’s “anything goes”.(15)

Another axis of renewal emerges with the municipal policies, the so-called local development. Urbanization allows for articulation of the social, the political and the economic in integrated and coherent policies, based on local scale actions, rendering feasible – but not guaranteeing, and this is important in order to understand the political impact – the direct participation of the citizen and the articulation of the partners. The emergence of innovative policies in this area is impressive. Peter Spink and a group of researchers of the Getúlio Vargas foundation in São Paulo have a compilation of 640 descriptions of successful experiences. The Labor party’s Bureau of Institutional Affairs has a database containing several hundred experiences. Pólis publishes excellent summaries in its Municipal Hints section. The Abrinq foundation is helping to dynamize a set of activities in the domain of the Mayor-Child movement. Since Istanbul, we have seen an acceleration of local initiatives that is transforming the political context of social management.(16)

The crossroads between social management and political decentralization thus offers particularly interesting perspectives.

One very significant advantage of local policies is the fact that they can integrate the different sectors and articulate the diverse actors. A practical point of reference for this vision can be found in the activities of the Regional Council of the Great ABC, where seven municipalities articulate to dynamize the local activities of the plastic industry: the education of workers is coordinated by the chemists’ trade union, in partnership with the companies, Senai, Sebrae, local colleges and high schools, with financial support from FAT and others that articulate in the process. Literacy programs such as Mova, and young people and adult education programs such as Seja have created a broader process of mobilization. The IPT adhered to the project, creating a mobile system of technological support for small and medium size companies (Prumo project). Unicamp participated with a diagnosis of the regional plastics sector, and small and medium size companies articulate through periodic regional meetings. The set of initiatives, these and others, finds its logic and coherence through the Regional Council, which brings together the region’s municipal administrations, in addition to representatives of other bodies of government and of civil society. The differences of the political spectrum of the region’s city administrations does not prevent the articulation of this network, in which the diverse initiatives – education, employment, income, production – become synergic instead of dispersive.

There is no universal formula in the social area. As demonstrated by the richness of the family doctor project, the differentiated dimension of human relations is fundamental in social policies. One of the most significant riches of local development derives precisely from the fact that the actions can be adapted to the extremely diverse conditions that populations face.

Naturally, this does not imply that social policies can be limited to local action, to partnerships with the private sector, and to the dynamics of the third sector. The reformulation directly affects the form in which the national policy is conceived in the diverse areas of social management, questioning the current hierarchy of government spheres, and forces us to rethink the process of domination of private macrostructures that dominate the industry of health, the means of information, the instruments of culture.

The recent trends of social management force us to rethink forms of social organization, to redefine the relation between the polity, the economic and the social, to develop research across the different disciplines, to listen systematically to the state, business and community actors. It is really, today, a universe under construction.

Again, it is not a question, here, of rediscovering obvious things. But we must ask ourselves a basic question: If the activities of the social area are becoming the most important sector, what type of social relations of production does its emergence embody? Surely, they will be different from those that were generated through industrial development. They point to a more horizontal, more participative, more network-organized society than the traditional pyramids of authority. Or, conversely, they may generate a kind of tollbooth capitalism centered on the industry of disease, on the industry of the diploma, on cultural manipulation through publicity and control of the media.

The university in the vanguard of the new continent: the first steps

It is evident that the discussion in Brazil is still very recent, above all if one considers that it involves a profound revision of our paradigms of how society runs itself. We are still imbued with the view that the company is interested only in profits and will, therefore, be impervious to a social or environmental vision, that organizing the participation of civil society is merely a way of taking the responsibility out of the hands of the State, and so on, and that the political domination of society occurs essentially through the control of companies.

It is highly significant to discover that a series of basic concepts of political and social reformulation that are occurring in many countries do not even have a translation into Portuguese: that is the case of empowerment, which the Spanish Americans have already translated as empoderamiento, in the sense of a recovery of political power by society; ofstakeholder, i.e., a social actor with an interest in a given decision; of advocacy, which represents the etymological original of ad-vocare, of creating the capacity to voice and defend a cause of a social group; of accountability, i.e., the responsibility of the representatives of society in terms of accounting for their actions; of devolution, recovery of the political capacity of decision on the part of communities, as a counterpoint to the concept of privatization. It is also the case of entitlement, of self-reliance and of so many others, in addition to the key concept of governance, which involves the governing capacity of the set of social, public and private actors, in which the traditional concept of governance, as defined by Aurélio (dictionary), must be reconstrued.

The articulation that awaits us involves an articulated drawing together of businessmen, public administrators, politicians, nongovernmental organizations, trade unions, academic researchers, and community representatives. The potential for a center of reference of social management that is being dynamized by PUC (Pontifical Catholic University)/IEE, but which involves the balanced participation of the different social segments, results precisely from the opening of a space for the structuring of social decisions, one among others, in this case probably with greater academic participation, and stronger concern with the dimension of research, but in which the key word is precisely the concept of articulation.

It is of equal import that PUC-SP, FGVSP (Getúlio Vargas Foundation-São Paulo) and USP (University of São Paulo) have created centers for the study of the Third Sector. It is significant that PUC’s Post-Graduate Economy Program has created a Laboratory of Social Economy. In a way, a traditional academic divide has been bridged in Brazil, in which Economy and Administration dealt with how to maximize profits, while Social Service dealt with finding crutches for the victims of the process. Anyone studying social management today is concerned with the new participative forms of drawing up the budget, with negative income tax (minimum income), with new forms of political representation and the new potential of communication. Social management is seeking new spaces in political, economic and administrative terms. It is no longer a sector, but a human dimension of development itself, involving both the businessman and the researcher, or the activist of the Landless Movement.

The advances should not be underestimated. A first lady vision of social policies, complete with charity tea parties, dates back to the past and still permeates a large part of our society. In the aforementioned summit of the United Nations, Partners for Development (Lyon-98), the representative of a large multinational enthusiastically described his achievements in terms of offering better products to his customers. He was interrupted by a lady who told him that he had failed to understand the spirit of the meeting, that he was talking to people interested in the social, environmental and economic impacts of the diverse processes, and not merely in finding pretty, scented gifts in shop windows, in a Santa Claus atmosphere. He was dealing with people like himself, citizens in search of new solutions, and not with customers. The response to this interruption was impressive. These are profound changes in the social climate or political culture, which are hard to quantify, but which are nonetheless very real.

We have come from a century of great simplifications. Tired of the liberal simplification, from which we have inherited 3,5 billion inhabitants of the planet living on an average of 350 dollars per year, who circulate neither on the Internet nor in any other economic space, or of the statist simplification that sought solutions through all-encompassing mega-bureaucratization and by social immobilization through laws and regulations, we are seeking a new course. The construction of the social, so critical in this country undergoing fragmentation, may represent a historical opportunity.


World BankBrazil: Expenses of the Public Sector with Social Assistance Programs – Washington, 1998

Emerson KapazA importância do Pacto Político, Folha de São Paulo, December 22, 1998

Frank McGillyCanada’s Public Social Services, Oxford University Press, Toronto 1998

Fundação Abrinq – Prefeito Criança bulletinSão Paulo, several editions.

Ladislau Dowbor – A Reprodução Social – Vozes, Petrópolis 1998

Le Monde Diplomatique, Paris, November 1998

Maria Marcela Petrantonio (org.) – Herramientas Locales para Generar Empleo y Ocupación, Mar del Plata, Mercociudades, 1998

Martin WolfPaíses ricos terão de jogar com as cartas na mesa, Gazeta Mercantil of September 21, 1998, p. A-16

Peter Spink and Roberta Clemente20 Experiências de Gestão Pública e Cidadania, FGV, São Paulo 1997

Pnud/Ipea – Relatório sobre o Desenvolvimento Humano no Brasil 1996 – Brasilia, Pnud/Ipea 1996,

Pólis – special edition, 50 experiências de gestão municipal

Unctad – Trade and Development Report 1997, Unctad, New York, Geneva 1997

Unesco – World Information Report 1997/98I, Paris, Unesco 1997

1- Rubens Ricúpero – Trade and Development Report 1997, Unctad, New York, Geneva 1997: “It is this association of increased profits with stagnant investment, rising unemployment and reduced pay that is the real cause of concern”. (Overview, p. 11).

2 – Further data for comparisons between productive profits and speculative profits are available in Le Monde Diplomatique, November 1998. Martin Wolf’s article, Rich countries will have to play with their cards on the table, was published by Gazeta Mercantil, September 21, 1998, p. A-16.

3 – On a national level, an example of the new orientations that are unfolding can be found in the text of Emerson Kapaz, A Importância do Pacto Político (The Importance of the Political Pact) (Folha de São Paulo, December 22, 1998), or in the statement of Horácio Lafer Piva, of FIESP, that “industry in general is quite bewildered with what is happening”, or yet in the emergence of progressive businessmen’s organizations such as Cives and Ethos, or of humanitarian concerns such as Gife, and so on.

4 – In methodological terms, the confusion can be traced back to Colin Clark, when the way certain activities were developed, incorporating a greater or lesser content of technology and knowledge, was confused with the economic sectors.

5 – Joseph Weber, Lifetime Learning: School is Never Out, Business Week, October 4, 1999, p. 99.

6 – The emergence of this giant has also been partially camouflaged by the aforementioned generous and vague concept of services. This concept, which ranges from prostitution to plumbing, from the governor to the financial consultant, deserves to be put behind us. Technically, it is an others: everything not directly connected to working the soil (primary) or with machinery (secondary) is residually labeled as services. We can no longer work with an others that represents two thirds or more of our economic activities.

7 – In the absence of broader solutions, isolated initiatives multiply: “While a mere 400 company-run universities operated in the United States in 1988, this number has currently risen to over 1,600, according to Corporate University Xchange Inc., a New York-based research and consulting company”. Joseph Weber, Lifetime Learning: School is Never Out, Business Week, October 4, 1999, p. 99

8 – The Negotiated Economy, Ove K. Pedersen, Department of Political Science, Copenhagen University, Copenhagen, e-mail  or 

9 – The process is quite simple: a private company can develop activities that generate a saleable product, such as shoes. However, when it comes to the widely diverse interests of society – clean rivers, attractive cities, green spaces essential for children to play in, the articulation between school and neighborhood – no company can “sell” those things except by fencing off an area and generating monstrous condominiums, ghettos of wealth fostering new dramas for tomorrow.

10 – In Brazil, the agreement signed between Carrefour and the government of the state of Rio Grande do Sul, in which Carrefour destines part of its space to small tradesmen to avoid the unemployment effect, and is sourcing part of its supply directly from small rural producers, is, in a way, the most visible first step. It is no longer a question of business charity, but of common sense in the articulation of economic, environmental and social objectives. The company gains popularity and a good name, the politician gains visibility, and society gains jobs and economic activities. The only possible losers are ideologists obfuscated by their vision of pure models.

11 – An in-depth vision of this issue can be found in A Reprodução Social (Social Reproduction), Editora Vozes, Petrópolis 1998. The concept of social reproduction was chosen precisely because the reproduction of capital appears to narrow for development itself.

12 – Anyone who still believes that the minimal State is here to stay would do well to keep in mind the data of the World Bank, unsuspected in this area: “The State’s expenses currently absorb approximately one half of the total revenue of industrialized countries and about one quarter in the developing countries”. The graphs reveal a continuous expansion of the State in rich countries, even in recent decades, and even up to 1995. The same trend prevails in developing countries, although there has been a slight decrease in the past few years. Do what I say … See World Bank, World Development Report 1997, p.2.

13 – Pnud/Ipea – Report on Human Development in Brazil 1996 – Brasilia, Pnud/Ipea 1996, p. 57

14 – World Bank, Brazil: Expenses of the Public Sector with Social Assistance Programs – Documents of the World Bank, May 27, 1988, vol. I – The 25% refer to the public and private sector. In an interview on October 22, 1999, minister Pedro Malan estimated Brazil’s social expenses to represent 21% of the GDP.

15 – A good summary of the organization of the social sector in Canada is given in Frank McGilly’s book, Canada’s Public Social Services, Oxford University Press, Toronto 1998

16 – As an example, see the small book organized by Peter Spink and Roberta Clemente, 20 Experiências de Gestão Pública e Cidadania (20 Experiences of Public Management and Citizenship), published by FVG (Getúlio Vargas Foundation) in 1997, or the experiences presented in the paper Herramientas Locales para Generar Empleo y Ocupación (Local Tools to Generate Employment and Occupation), coordinated by Maria Marcela Petrantonio, Mar del Plata, Mercociudades, 1998. In 1996, Pólis published an excellent edition containing 50 management experiences; the Fundação Abrinq publishes a bulletin entitled Prefeito Criança (Child Mayor), and Cenpec works with the systematization of educational experiences.

Ladislau Dowbor, 59, holds a Ph.D. in Economic Sciences from the Central School of Planning and Statistics of Warsaw, Poland. He is a full professor of PUC São Paulo and of the Methodist University of São Paulo, and a consultant for several agencies of the United Nations. Dr. Dowbor is the author of “A Reprodução Social”(Social Reproduction), published by Editora Vozes, 1998, and of several studies on economic and social planning. He was Secretary for Extraordinary Business in São Paulo’s city council. Phone: (55 11) 3872-9877; Fax: (55 11) 3871-2911; E-mail Writings and studies available at