One decade after the 2003 election of Luiz Inácio ‘Lula’ da Silva, politically conscious opposition towards authoritarian discourse began to form in Brazil. The Free Brazil Movement, founded by Kim Kataguiri, received international recognition amidst protests to oust the fiscally corrupt Dilma Roussef.
Playing an essential part in organization and launching Kataguiri into stardom, this counter-cultural movement catalyzed the establishment of many classical liberal, libertarian, and even Objectivist political parties.
Diagnosing the Issue: A History of Authoritarian Corruption
The issues with Brazil’s government span beyond its corrupt and presently quasi-dictatorial nature. They also have to do with the inefficiency of the government bureaucracy and the regulatory system’s stunting of possible economic growth, both of which harm the people’s welfare. As outlined by the World Bank in 2016, the Brazilian economy suffers from three principal issues hampering its development. First, excessive regulation that restricts private and public investment, limiting job creation and infrastructure development. Second, an overly complex tax system, with high marginal rates and sales tax, which burdens citizens and limits consumption. Thirdly, an uncompetitive economy with a low degree of innovation and unrestrained rent-seeking. These policies, spanning back to the first reforms of the Partido Trabalhador (Workers’ Party, PT), led to tax revenue amounting to 32.2% of Brazil’s GDP in 2016. Until the end of the PT’s rule in 2017, workers’ wages fell by 20%, unemployment rose to a historical high of 16%, and annual inflation rates averaged 6.7%. Unsurprisingly, this resulted in the disenfranchisement of the nation’s poorest, despite the PT’s claims of advocating for the working class. These figures are significant because they demonstrate the inefficacy of the current “top-down approach” which sees the state as the agent of change, an ethos which has brought a decade of stagnation and missed opportunities for Brazil. Although the PT has won the hearts of the poor, fresh policies are necessary to address the working classes’ desire for a life of dignity and prosperity. The economic difficulties and struggles with corruption faced by the Brazilian people in recent years thus create the ideal moment for a strategic shift.
In the fray of Brazil’s rich history of freedom-seeking and cultural prosperity, there lies a dark tale of corruption from the ever-present (un)elected authority figure. Throughout the 20th century, power and wealth remained inaccessibly concentrated, markets were not free, property was only for the generationally wealthy, and genuine competition existed but in the elite political vacuums of Rio. This structure took its most complete form in two dictatorships: those of Getúlio Vargas from 1930 until 1945 and João Goulart from 1964 to 1976. This historical authoritarianism scarred perspectives on power through political memory; public opinion was stained by the experience of being forced to provide trust, arms, and taxes to a cruel military regime. One community leader recently asserted that ‘the state military police forces have many remnants of the dictatorship.’ The past century appears as a farce of democracy, but it was never truly dismantled. In the 21st century, three out of four presidents – all affiliated with the PT – were impeached, found guilty of corruption, or imprisoned. Jair Bolsonaro campaigned on departing from this vicious cycle of corruption, overspending, and the Left’s failed promises. Yet, he, too, has been embattled by corruption allegations, in both the 2020 scandal which found Rio’s governor suspended, and the Queroiz Case which led to his son’s investigation. Evidently, irrespective of how vehemently Brazilians have opposed corruption, the issue has hardly budged, despite new developments since the 2013 Anti-Corruption Act. Today, Brazil finds itself entrenched in a feverish cycle of self-interested racketeering, governed by tyrants concerned more with the reais in their pockets than with the people they have promised to serve.
This link between state concentration of power and corruption can be explained by the ignoble culture which has historically dominated Brazil’s political class. There appears to be no structural mechanism which can truly decipher the reason for such a persistent issue other than the failings of a bloated principal-agent model, which has lasted beyond governments and through regime changes. The nation has strong institutions, an activist judicial body, and continuously strives to improve its transparency to the public. Yet, the incessant need to delegate tasks to bought-out bureaucrats creates a systemic issue which can only be rectified by its elimination wherever feasible – namely through the abolition of state agencies and privatization of state owned enterprise. After all, the market cannot embezzle tax-payer funds lest the government uses it to do so. This socio-cultural context has made trusting the state nearly impossible, and so, as one does with an irresponsible child, the sole option has become to take its privileges away.
Defying Poor Governance with Religion— A Libertarian Pipeline
Holding the world’s largest Christian community of 167 million people, Christian beliefs form a crucial piece of social organization in Brazil. Through a culture of mutu-
al care, church communities have readily filled in gaps left by the government, particularly those evident throughout the COVID-19 pandemic. As the government faced criticism for its inadequate response, the Church of Latter-Day Saints became a key provider of resources to underserved communities, with Catholic churches likewise providing daily meals to unemployed parishioners. The Catholic Church has been a frequent first responder in the face of crisis, providing a basis of organization, funding, and resources to be distributed by local parishes. For example, the Church has lightened the burden on Brazil’s healthcare system through stepping in in underserved areas.
It has long collaborated with the Brazilian National AIDS Organization to promote research, prevention, and care. Beyond this, it has operated as a provider of welfare for the homeless, providing housing to victims of mudslides, and forming support networks. The bottom-up efforts of this deinstitutionalized safety net have consistently proven more capable of serving the people than the government. Compared to other Western nations, Brazilian culture places less emphasis on individual success, as shown by the O Brasil que eu quero (‘The Brazil I Want’) initiative of 2019. Accordingly, the principles of Catholic social teaching like community and solidarity could tread a path towards a dignified life in Brazil unobstructed by bureaucratic barriers. Thus, a libertarian leadership within this religious society would not result in collapse into the oftfeared ‘Wild West’ of anarchy, but instead allow the existing social principles governing Brazilian society to blossom.
Defining Terms: A Renewed Brazilian Libertarianism
These conditions require a new conception of libertarianism which merges the Christian culture of the Brazilian people with their attachment to social freedom. As such, this definition departs from the nonreligious one given by Hayek, allowing for a terminology more aptly suited to the Brazilian context. For this, we invoke St. Thomas Aquinas’ concept of dominum (self-mastery and autonomy). Thus, in advancing our conception of this form of libertarianism, we are proposing a modified paleo-libertarianism: looking to the political realm for the protection of individual rights, private property, laissez-faire capitalism, and ensuring the flexibility of the labour market, without advocating for the total abandonment of welfare models or other forms of mutual care which serve to preserve human capital or rectify its deficiencies, like healthcare and the Bolsa Familia.
Necessary Fiscal Reform: Opening the Doors to Growth
Firstly, simplifying and reducing all federal taxation to a flat income and sales tax, with the complete abolition of business tax, would spur improvements in all economic areas. This is because it would yield market innovation, consumption, and employment, just as occurred in Chile under the Chicago Boys’ reign. This proposal can be justified since Brazil’s current 17% sales tax not only heavily discourages consumption of non-essential products, but also makes consumption of necessary goods much more unaffordable for the poor. Slashing this tax therefore would significantly increase aggregate demand by lowering the prices of goods, leading to the creation of more job opportunities to keep up with this increased consumption. However, this would not functionally undermine critical state subsidies which develop human capital, such as the Bolsa Familia, for two reasons. Firstly, decreasing the sales tax could actually lead to an increase or maintenance of tax revenue, since it would encourage greater consumption of luxury and basic goods by lessening the tax incidence. Secondly, said programs would remain fundable as much of the revenue which is presently funneled to sustain the nation’s bureaucratic monolith would be repurposed to fund such politically critical programs. The living standard of the nation’s poorest, long caught in the favela’s poverty trap, would thus drastically rise. In Chile, this materialized in an 11-year streak of real growth in per capita income, averaging 5% and outpacing every Latin American economy at the time. Furthermore, the abolition of business tax would attract outside investment and grassroots entrepreneurship, increasing global business appeal and leading to the injection of capital into Brazil’s circular flow. In combination with a stabler political structure, attracting businesses would spur infrastructural development, creating labour demand for construction, management, and manufacturing within which Brazil’s least educated could thrive. Lastly, a flat income tax would allow for middle-class Brazilians to have higher levels of disposable income available for stock market investment, increasing the incentive to engage in productive economic activity for both themselves and the innovative entrepreneurs leading the charge. Again, the reduced taxation would not necessarily bring lessened tax revenue as – with a newly booming economy – it is very plausible that the ability for the government to invest in necessary welfare would remain relatively unaffected. In all respects, then, a simplified and less intrusive tax system would bring forth economic growth, greater productivity, make goods cheaper and more accessible, as well as aid the long-disenfranchised poor.
Labour Market Liberalisation: Undoing Restrictions
It could be argued that the Brazilian federal minimum wage should be abolished, to render the labour market more flexible. This would facilitate the employment of the least productive members of Brazilian society, putting them on track to gain skills in the workplace to bring about higher levels of productivity. In this way, counter to what many advocates for the minimum wage claim, those most impacted by structural disadvantages will finally have the opportunity to break free from historical cycles of race-based poverty, now transformed into indispensable agents of economic growth. This change would also lessen the poor’s widespread reliance on welfare, as they would be stably employed and able to afford cheaper market goods. Lastly, the increased productivity-based competition for all jobs would supplement the falling prices brought about by a decreased sales tax as the supply of goods would increase relative to the supply of labour. Therefore, we claim that the Brazilian federal minimum wage should be abolished.
Addressing Inequality and Crony Capitalism
Amidst tumultuous circumstances, local churches have consistently provided a steady presence for Brazilians, in many ways, taking on traditional government roles of pacifying, educating, and morally centring the populace, despite Brazil’s official secularism. To deal with continuous government failure, community-based efforts and Christian charity have stood in for the welfare system— a method of self-organization in which the nation’s poor finds support, yet upon which they are not dependent. In consistently stepping in to address pressing issues, the aid of the Church has proven more reliable than that of public services. This is especially the case given the continuous corruption scandals occurring in Brazil, wherein the state has created welfare programs as a justification to raise taxes and then proceeded to divert funds into private bank accounts.
The Catholic Church in Brazil has long been extremely vocal against corruption, and was a crucial thought leader in the passing of the Anti-Vote Buying Act of 1999. The Church has also held conferences in which bishops have directly condemned such forms of political abuse among officials, stating that they ‘jeopardize the credibility of government institutions and increase the mistrust of the people.’ Given their proximity to the populace in contrast to politicians, the words of such religious figures can be perceived as more trustworthy and less likely to be considered lip-service to a dissatisfied public.
The Takeaway
Given the amalgamation of Brazil’s historical troubles, cultural qualities, and unique contemporary challenges, libertarianism appears to be the best-suited model to address the nation’s ills, offering respite to a people who have, for decades, struggled under traditional-authoritarian rule. A model of freer markets and lessened interventionism will facilitate financial prosperity in the long-term — just as in the US under Coolidge and in the UK under Thatcher. Yet, Brazil’s libertarianism, adjusted to its cultural identity, will not be guided by the voracious spirit of Anglo-individualism, but the communitarianism inherent to its Christian identity. This notion is becoming mainstream in the rise of the Brazil Union party and the Partido Novo, which merge the liberal economic perspective with a traditionalism centred around the nation’s Christian culture. If our prescriptions become mainstream, we hold that the state’s coercive apparatus will be replaced by a blitzkrieg of social upheaval, now guided by a commonplace communitarianism and religiosity which prioritize the common good, replacing the selfish ethos of Brazil’s current political elite.
Felipe Chertouh is a Political Science & Government student at Sciences Po Paris. Elli Dassopoulos is a Political Humanities student at Sciences Po Paris/Columbia University.
This piece previously appeared in our 7th print issue, “Looking South.” You can read the full issue here: https://issuu.com/oxfordpoliticalreview/docs/opr_issue_7_final.