Why isn't Brazil as productive as Switzerland?

 

The problem with this argument is it rests entirely on the widely misunderstood concept of labor productivity. Many people, especially non-economists, hear calls to "increase the average labor productivity of Brazilian workers" and think that means the reason Brazil is so much poorer than Switzerland is because Brazilian workers are supposedly lazy and don't work as hard as Swiss workers. But that is false and absurd. Labor productivity is simply defined as worker contribution to real GDP per hour of labor. The reason labor productivity is low in Brazil, and in the periphery in general, is because of the productive structure of the economy. Brazil, like most of Latin America (and the periphery as a whole), has an economy centered on exports of agricultural goods, minerals, energy, and other commodities. These are very low value-added, labor-intensive sectors with lots of international competition (and therefore low profit margins). The reason Switzerland's labor productivity is so high is because it has monopolistic "moats" in some very high value-added sectors like specialized financial services (ie, banking for global oligarchs) and advanced manufacturing. A Swiss banker working on a computer in an air-conditioned office will have an exponentially higher labor productivity than a Brazilian farmer or miner (or even a Brazilian banker), not because the Swiss banker works harder (they objectively don't), but because they work in specialized high value-added services and can simply charge exponentially more for their labor. These high value-added industries can't just be magically recreated in the periphery. Every country in Latin America and Africa would love to be the next Singapore (and many have tried), but you can't skip stages of development. Not everyone in the world can just work in the high value-added service sector -- especially when the high labor productivity in the advanced economies fundamentally depends on cheap energy, food, and minerals produced by workers in the periphery. When we talk about the global value chain, we're really talking about a highly stratified global division of labor. And it is very, very difficult to move up it. That takes years of careful planning, investment, education, training, infrastructure build-out, technology transfer, etc. -- which in turn requires political stability and the ability of the state to implement long-term planning without significant disruption. Neoliberalism was never as simple as "the government must spend less". It was about the state giving power to markets and the investor class to decide what the priorities of political-economy policymaking would be. This investor class (consisting of both foreign investors and the domestic compradores) prioritizes maximizing return on investment, not developing the productive capacity of the local economy. That's why it primarily invests in the extractive commodity export sector. This also explains why Brazil (and most of Latin America) significantly deindustrialized during the neoliberal period, and has become even more dependent on the low value-added export of commodities.

— Ben Norton (@BenjaminNorton) October 17, 2026