Brazil’s recent turn towards austerity has been impressive in its swiftness and severity. Since January, the government has announced successive budget cuts, the postponement of a major housing program, and contractions in public investment. It proposed legislation to restrict access to unemployment benefits and pensions, and to eliminate the payroll tax reduction implemented in the last few years.

Additionally, the current finance minister insists that this is not enough and that next year social programs and public services will have to bear further cuts. The fact that these changes have occurred in a situation of political continuity — President Dilma Rousseff, from the Workers’ Party (PT), was reelected in last year’s election — makes this turn appear all the more puzzling.

However, despite the seemingly abrupt policy shift, the embrace of austerity is the result of longer-term, underlying conflicts that gained momentum during Rousseff’s first term from 2011 to 2014, when developmentalist ideas dominated economic policy debates. Perhaps even more importantly, the reversal shows the privileged position corporations hold in any capitalist democracy.