In a run-off election on 28 October 2018, the ex-military arch-conservative Jair Messias Bolsonaro handily beat challenger Fernando Haddad from the socialist Worker’s Party (known as PT in Brazil). He will take office on 1 January 2019. Haddad’s party had also produced previous presidents Dilma Rousseff and Luiz Inácio Lula da Silva.
Bolsonaro has promised to liberalise the economy, and to be a “defender of the Constitution, democracy and liberty”. However, he has also promised to uphold “family values”, and has repeatedly made grossly offensive racist, sexist and homophobic remarks, as well as downright terrifying statements in support of military dictatorship, torture and state-sponsored killings. He has widely been denounced as a far-right neo-fascist, and with good reason.
For supporters of free market economics, the trouble is supporting some of his policies, and rejecting others, while trying to see a bigger picture.
Brazil has suffered much in the last 15 years. The economy boomed along with other emerging markets under Lula da Silva, who was president from 2003 to 2011, despite his populist left-wing policies. GDP grew at an average rate of 7% per year. Per capita GDP rose by 5% a year during his two terms of office. Unemployment reduced from 13.7% to 7.8%, and he reduced the debt-to-GDP ratio from 73.9% in his first year to the low 60s for the remainder of his presidency.
Lula was popular both at home and abroad. He left office with an astonishing 87% approval rating. However, his presidency was marred by corruption scandals, ranging from vote-buying in support of legislation, to tender fraud and counterfeit dossiers on opposition politicians. In April 2018, he began serving a 12-year prison sentence for money laundering and receiving bribes.
His successor, Dilma Rousseff, also from the Worker’s Party, popped the Lula economic bubble during her term from 2011 to 2016. After the crash of 2009, Brazil’s GDP growth had recovered to a roaring 7.5% in 2010. Under Roussef, it collapsed to 3.5%.
Growth averaged only 1% during her term, and she left it in the deepest recession in Brazil’s history. Unemployment had returned to 11.3%, inflation had risen from around 6% to 9%, the debt-to-GDP ratio had ballooned to 78.4%, and GDP per capita had declined.
Rousseff was impeached in 2016 on charges of criminal administrative misconduct and disregard for the federal budget. Unlike Lula, she was hugely unpopular, with an approval rating of around 10% and more than 60% of Brazilians supporting her impeachment.
She was also accused of campaign funds violations, as well as responsibility for one of the largest corruption scandals in Brazilian history, in her position as chairman of the board of the state-owned energy company Petrobras between 2003 and 2010. The criminal investigation into this scandal, implicating many politicians and senior civil servants, is ongoing.
Rousseff’s successor, Michel Temer, was a co-accused in her campaign finance trial, although both were acquitted. The economy remained moribund on his watch, with slim GDP growth, rising unemployment, and the debt-GDP ratio rising sharply to 84%.
He was immensely unpopular, with an approval rating of just 7%. He survived two impeachment attempts, one of which was as acting president, but faces multiple investigations and criminal charges over corruption allegations.
While the government was mired in corruption and the economy was down in the dumps, crime rose sharply, fuelled by drug wars and slashed policing budgets. Brazil’s murder rate hit a record high of 30.8 per 100,000 people in 2017. It has the highest murder rate of any large country in the world (>100 million people), and the third-highest of any medium-sized country (>10 million people), after Venezuela and South Africa.
The people were quite right to be angry and demand a radical change. And a radical change they got.
With a middle name meaning “Messiah” and a nickname among supporters of “The Legend”, Bolsonaro promised to take a hard line against left-wing economic policies, against crime, and against corruption. This made him very popular. He became the first presidential candidate in Brazil to raise more than one million reais in public donations for his campaign.
In the lead-up to the election, he was stabbed in the stomach while campaigning. Seriously wounded, he was in hospital for more than three weeks, being released only a week before the general election on 7 October 2018.
His popularity, however, masks some very disturbing political views and statements.
“For the family and the innocence of children in class that the PT [the Worker’s Party] never had, against communism, for our freedom, against the , for the memory of Colonel Carlos Alberto Brilhante Ustra, the dread of Dilma Rousseff, the Army of Caxias, our Armed Forces, for a Brazil above all and for God above all, my vote is yes.”
Ustra is infamous as the head of the Brazilian intelligence, repression and torture unit from 1970 to 1974, under the military dictatorship that lasted from 1964 to 1985. Among his torture victims was Rousseff herself. More than 500 people allegedly died at the hands of this unit under his command, and a court officially named him as a torturer in 2008. He died in 2015.
On a more recent occasion, brandishing a massive machine gun, Bolsonaro proposed to fire upon the opposition to send them to Venezuela, “where they will eat grass”.
His misogyny, racism and homophobia have been on frequent display. He once said his son wouldn’t date a black woman, because he was raised better than that. He also said if his son were gay, he hoped he’d die in an accident. He has said women should be paid less than men because they get pregnant, that a secretary for women’s issues was unsuited for the job because “she was a dyke”, and that he wouldn’t rape a female member of congress because she was too ugly. Despite all this, his support among female voters appeared to be surprisingly high, apparently because security fears trump opposition to misogyny.
On a television show in 2016, Bolsonaro said he was in favour of torture, and that Brazil would only change with a civil war, killing thousands. He declared himself to be in favour of the former military regime, opposed to the country’s legislative body, the National Congress, and opposed to the right to vote.
Despite walking back these statements, and his claim to be a “defender of the Constitution, democracy and liberty”, he appears to have an awfully soft spot for military dictatorships. He quite possibly sees himself as a future dictator.
In 2016, a liberal movement known as Livres was established within Brazil’s Social Liberal Party (PSL) to promote both social and economic liberalism. When Bolsonaro joined the party in January 2018, Livres promptly split from the party in protest at his regressive social-conservative views.
Bolsonaro has been compared to many right-wing populists, including the US’s Donald Trump, Hungary’s Victor Orban, Peru’s Alberto Fujimori, and Rodrigo Duterte of the Phillippines. But perhaps Bolsonaro himself hinted at the best comparison when he told a television audience in 2015:
“Pinochet did what had to be done.”
He was referring to Augusto Pinochet, the Chilean general who led a US-supported coup d’etat against the Maxist-Leninist Salvador Allende in 1973, and ruled as a dictator until he stepped down in favour of democratic elections in 1990.
Pinochet’s political record is well known. He violently suppressed and persecuted socialists, left-wingers and political critics. His regime was responsible for 3,428 cases of disappearances, kidnapping, torture and murder, according to Chile’s Commission for Truth and Reconciliation, which ran for nine months from May 1990 to February 1991. These numbers were later revised significantly upwards, recognising over 40,000 victims of which more than 3,000 were killed or disappeared.
Pinochet defended his actions as necessary to save Chile from communism, and that was not an entirely implausible defence. After all, Allende hardly had a democratic mandate, having won only 36% of the vote in the 1970 election. Under his rule, Chile’s left wing had fomented widespread political violence, destroyed the economy, and brought the country to the brink of civil war. In his goal to right the ship, however, Pinochet undeniably was brutal.
On the other hand, he was responsible for what Chicago School economist Milton Friedman described as “The Miracle of Chile”. Friedman was a “monetarist”, advocating free markets but with central bank control over monetary policy.
In a partnership between institutions in the US and Chile, a project had begun in 1956 to train more than 100 Chileans under Friedman at the University of Chicago and establish them in positions where they could influence economic reform in that country. By 1970, these so-called “Chicago Boys” began to have an impact on political discourse in Chile.
Faced with a collapsing socialist economy when he took over in 1973, complete with breadlines and hyperinflation, Pinochet adopted the monetarist free market policies advocated by the Chicago Boys. The results were initially mixed at best, largely because of the monetary policy aspect of Chicago School economics. By the mid 1980s, however, the free market reforms were beginning to turn Chile into “Latin America’s most successful country”.
These policies largely remain in place today, and Chile was recently ranked as the 15th most free economy in the world, ahead of countries such as Germany, the Netherlands, Japan, Norway and Denmark. The country’s per-capita GDP has risen steeply, significantly outpacing the per-capita GDP growth of the region, and quadrupling from its low in 1975. Chile has moved on from developing-nation status, and is now widely recognised as a developed country.
The question then becomes, when given a choice between political freedom and economic freedom, which should you choose? I am of the view that economic freedom leads to prosperity, which generally leads to greater political freedom. State control of the economy leads to poverty, which leads to political violence and repression. Conversely, there is little evidence that political freedom necessarily leads to economic freedom and prosperity.
One wishes, of course, to have both. Supporting both social and economic liberalism, I would have split right along with Livres in disgust at the PSL letting Bolsonero join.
Yet perhaps economic freedom should take priority over political freedom. That is not to say one ought to condone the grossly offensive and repressive statements of someone like Bolsonaro, of course. He really is dangerous.
The choice between corrupt socialists and left-wing populism on the one hand, and a military strongman and right-wing populism on the other, is not easy. The track record of socialist governments has been dismal not only for economic freedom and prosperity, but also for personal and political freedom. They have led Brazil to the dire straits in which it finds itself today.
Would that a Livres candidate had won that election. But the Brazilian people decided that the right-wing strongman was the lesser of two evils. One hopes they will be proven correct, in the end. DM
Disclaimer: I don’t speak Portuguese. I relied on Google Translate to interpret several of the sources linked in this article.