Is Brazil Nuts -- Or Just the System?
Is Brazil Nuts -- Or Just the System?
By MARY ANASTASIA O'GRADY
September 29, 2006; Page A17
"Corruption is a regular effect of interventionism."
-- Ludwig von Mises
"Human Action," 1949
As Brazilians go to the polls on Sunday to elect a president for the next four years, most pundits are hedging their bets as to whether Luiz Inácio "Lula" da Silva of the Workers' Party (PT) can win re-election in the first round of voting.
A serious allegation of fraud inside the Lula campaign has become the main issue in the race over the past two weeks. Added to a host of other corruption charges implicating PT members close to the president in the past year, this latest scandal has the potential to force a run-off.
Lula may well be innocent, as he claims, of any involvement in the plethora of scandals now swirling around his party. But it is also true that if corruption has blind-sided him, he has only his own politics to blame. It has been the life work of Brazilian socialists -- of which the PT are among the most hardcore -- to empower the state, without limits, as an enforcer of "social justice" through the wholesome work of politicians and bureaucrats. Now they are reaping what they've sowed: a system that breeds corruption by its very nature, as von Mises warned more than a half-century ago.
A friend of mine who reads the Wall Street Journal sent me this editorial. It's an astonishingly ignorant piece of work - little miss Mary obviously knows Sweet F. All about Brazil, but what is fascinating is how someone with a few facts, no historical knowledge and axe to grind can come to sweeping conclusions that just happen to coincide with their own ideological preconceptions.
Yes, Lula has run a corruption heavy government. That has nothing to do with his brand of highly market friendly socialism, and everything to do with his being Brazilian. For 500 years, Brazil has been run by elites who looked on government solely as a way of capturing the resources of the state and re-directing this wealth to their friends and supporters. In order to keep the social peace, they would usually toss a few bones to the people in the form of some sort of public works – public squares, parks, roads. "Rouba mas faz" is the phrase Brazilians came up with to describe this phenomenon. "He steals but he does stuff".
In the case of the mayor of Sao Paulo ( a right-wing capitalist appointed by a military dictatorship that I’m sure during its vicious years in office met with the full approval of the Wall Street Journal), he stole US$400 million, but built a new road and tunnel under the city. In the case of the free market governor of the Amazon, he stole US$700 million, but pushed the development of farming through the Amazon (seen to be a good thing here).
In Lula's case, his government has mostly stolen for political purposes, to finance the party election coffers mostly, and to buy votes in congress ( At least for the first term. In his second term, I expect him and his buddies to start stealing on their own account -last kick at the can and all that) and as for the 'doing things' part, they have vastly expanded the welfare rolls. Given that most Brazilians are poor (a direct result of 500 years of government by non-socialist, non-honest, thieving but market-friendly elites), this is a good way to get elected.
It has pissed off the middle class, who voted for Lula because he promised to put an end to corruption, but the poor love him. Yes he steals, but at least we're getting some for a change (as opposed to the road builders or soy farmers or other already rich people who traditionally receive government largesse in Brazil). So the only thing that's really different about Lula is who benefits from the theft. If the people voted for the right-wing candidate, would the theft end? They don't think so. They'd just be cut out of the spoils.
And would it be better if nobody stole and the government -right wing, socialist, whatever - just tried to run honest programs and fix the stupid country. Yes, that would be better. But apparently in Brazil that's not an option.