Brazil's Ideological Crossroads:
Menos Marx; Mais Mises

Story by Eric D. Dixon
August 18, 2016
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Brazil stands at an ideological crossroads. Socialist ideas have had generations to grow in Brazil since they first took root there more than 100 years ago, interrupted by a long period of authoritarian military dictatorship in the late 20th century.

The country is now facing some of its most difficult times. The economy, the political landscape, and the overall semblance of rule of law are crumbling. This is causing many in the country, especially young people, to lose hope. There are some, though, who see an alternate path forward — a path that embraces the core ideas of the rule of law, a more limited government, and an end to the cronyism and corruption that has become so linked with the Brazil narrative.

Not long ago, Brazil appeared to be riding high. The global commodity boom of the first decade of the 21st century helped make the Brazilian economy the world’s seventh-largest in 2010. Since that time, though, the Brazilian economy has stagnated and is now actually shrinking — by 3.8 percent in 2015 and an expected 3.5 by the end of this year. The youth unemployment rate is higher than 15 percent — nearly 20 percent for young women. Brazil’s political landscape is also crumbling, with ongoing corruption scandals in the highest political offices that suggest rampant cronyism throughout government and industry.

"We see young people carrying signs in the streets that read: More Mises, Less Marx."
—Rodrigo Constantino, Chairman, Instituto Liberal
Rodrigo Constantino

The people of Brazil are angry at a system that has failed them, and ready for change. As Nobel laureate economist Milton Friedman observed, real change usually happens only after a crisis, and “the actions that are taken depend on the ideas that are lying around”. Atlas Network partners in Brazil have spent years laying groundwork for the ideas of liberty to be present at this moment, to provide a beacon of reason and hope amid a turbulent political and economic storm.

Protests

Corruption vs. Rule of Law

“Brazilian public opinion has changed significantly in the past few years,” said Diogo Costa, president of the Brazilian think tank Instituto Ordem Livre. “Through think tanks, social movements, social media, and new political leaderships, we see classical liberal ideas enter the public debate. High-profile politicians from traditional parties have responded to this change in the climate of opinions. They are now discussing how to reduce the size of the state as a way to fight corruption and restore economic growth. It is still early to see the practical fruits of the battle of ideas, but it is increasingly clear that the champions of freedom are gaining ground.”

"It's not enough to be fed up with the system. We need to present a clear vision for what would replace it."

The corruption charges against current Brazilian President Dilma Rousseff have inspired widespread protests, and a suspension of her office for at least 180 days after more than two thirds of the Senate voted to begin impeachment proceedings. This kind of independent proceeding is a crucial component of the rule of law, holding powerful leaders to the same standard of justice as any other citizen. If this trial finds Rousseff guilty of corruption, it would set a precedent for fairness and transparency in governance and create new opportunities for reform. Indeed, interim President Michel Temer is taking encouraging steps to move Brazil’s government in a more responsible direction, such as freezing expenditure levels and restraining runaway budget growth. Still, there remain supporters of the Rousseff regime who hope to preserve the system of favoritism that has brought them wealth and power at the expense of others, so it remains to be seen how successful the interim reforms may prove to be.

“We need a political reform, as well as to reduce the political ‘parties’ that exist only to get a share of public funding,” said Rodrigo Constantino, chairman of Atlas Network partner Instituto Liberal. “It’s also very important to apply the rule of law, so that people can realize it’s costly to break the laws. If we opened our commercial frontiers, privatized our state-owned companies, and used the state only to invest in justice and education — with vouchers — that would change our fate. But it’s easier said than done, and first we have to fight against our culture and all those people that take advantage of the status quo, especially the [labor] unions.”

Photo (abovetop): Will Rodrigues / Shutterstock.com

Roots of socialism in Brazil

Socialist ideas initially began to take root in Brazil when the First Socialist Congress was established in 1892, followed later the same year by another Socialist Congress and the Workers’ Socialist Party. Growth of that ideology in Brazil eventually led to the Brazilian Communist Party in 1922. A full-fledged military coup in 1964 essentially amounted to fighting fire with fire, pitting socialism against autocratic authoritarianism — and it lasted for more than 20 years. That dictatorship ended more than three decades ago, when new democratic elections were allowed again in 1985, but the intellectual climate since then has been rooted in the statist and populist ideas that now dominate and have led to Brazil’s current crisis.

“Brazilian people are used to a very socialist view when it comes to state’s role in society,” Constantino said. “They hate politicians, but they love the state as an abstraction. It’s a paradox, but it’s something that comes from a long time ago. That’s why they distrust the profit motive and entrepreneurs, while they look at the federal government as a kind of panacea to solve all our problems. We have to change the mentality there, and it’s not something easy that can be done in one generation only. It’s going to take a while, and it needs lots of effort. Our teachers are almost all leftists, and they indoctrinate young minds with socialism. Our journalists are leftists as well. Our media is biased and we don’t have the other side as in the United States with Fox News. Almost all political parties support state’s intervention and a ‘social’ agenda. So, as we can see, the challenges are great, but we can see some signs of improvement in all those areas.”

Bringing greater freedom and justice to Brazil will take more than disseminating the ideas of liberty. It will also require redirecting anger at corruption in the current regime into a movement that insists on a consistent rule of law for every leader and every political faction that hopes to attain power. It’s not enough to be fed up with the system — the new intellectual vanguard also needs to present a clear vision for what should replace it.

“There are three big challenges in this moment,” said Carlos Góes, chief research officer at Instituto Mercado Popular, a Brazilian think tank modeled after the rigorous policy research and data-driven journalism of organizations like the Cato Institute. “First, we must translate broad anti-government sentiment — currently felt by everyone from social conservatives to members of the far left — into broad pro-liberty sentiment that can achieve lasting reforms where they matter most. Second, we need to be pragmatic and influence policy at the margin, so we move toward a freer and fairer society. Finally, we need to ensure the Brazilian freedom movement can continue to grow, which means finding ways to diversify our funding base.”

Liberty for a new generation

To a population that has been raised for decades on a steady diet of socialist propaganda, a new freedom-oriented perspective can be a hard sell. Libertarian ideas have proven increasingly popular, however, with a new generation of youth, explained Rafael Dal Molin, president of the National Council for Atlas Network partner Estudantes Pela Liberdade (EPL). Young people are more likely to be open to a new way of understanding the world around them, and this intellectual curiosity has proven to be a source of explosive growth for the student group.

“EPL had been going through an amazing period of growth in the last two years,” Molin said. “We went from 100 local coordinators to more than 600. This growth, although being very good, has presented new challenges for the organization. We’re at a moment when we have to adapt and improve all of our processes and management methods for this new reality. One of our policies is constant and quick change. This is how we’re always able to improve our results and find new challenges. Attending the Think Tank Startup Training that Atlas Network held in Brazil was key for this new phase of EPL, helping us troubleshoot problems and continue our growth.”

Diogo Costa
"It is increasingly clear that the champions of freedom are gaining ground."
—Diogo Costa, President, Instituto Ordem Livre

A climate that celebrates the ideas of liberty is necessary, but not sufficient to overcome the challenges facing Brazil. The country will inevitably face a painful economic adjustment after such a long track record of reckless government policies, and people naturally clamor for quick fixes when they face financial hardship. A lasting solution therefore requires institutional reforms that decrease the discretionary power of government officials.

“​On a policy level, it is imperative to end government interventionism through public banks,” Costa said. “State financial institutions have surpassed private banks in total credit supply since 2013. A transitional government may give policymakers an opportunity to reduce the size of the state and take other important measures that Brazil has put on a hold for too long, such as tackling an unsustainable public pension system, simplifying the tax system, and opening up the Brazilian economy.”

"We need to ensure the Brazilian freedom movement can continue to grow."

Atlas Network partners reframing the debate

In addition to the organizations already mentioned, an array of independent Atlas Network partners in Brazil are doing the heavy lifting of reforming the intellectual climate and the policy debate. Together, they are spreading the ideas of liberty in new and innovative ways, proposing practical and politically possible solutions to current crises, and bringing people together to share ideas and resources in their shared ideological battle.

Carlos Góes
"We must translate broad anti-government sentiment... into broad pro-liberty sentiment."
—Carlos Góes, Chief Research Officer, Instituto Mercado Popular

For the past 29 years, Instituto de Estudos Empresariais has hosted Forum da Liberdade, with Atlas Network support during the past five years. This forum attracts more than 5,000 people annually to discuss Brazil’s most pressing issues, promoting free-market solutions. Instituto Ludwig von Mises Brasil went from publishing articles and book translations to organizing high-level conferences that attracted massive media attention, as well as starting the first post-graduate course on Austrian economics in Brazil. Spotniks, a successful pro-liberty online magazine, started from scratch about a year ago and built such a dynamic social media presence that it now claims more readers than some of the country’s more established magazines.

“There has been an explosion of liberty-oriented independent media channels, activist groups, and think tanks in Brazil,” Góes said. “Organizations such as Instituto Ordem Livre and Estudantes Pela Liberdade helped recruit and train a lot of talented individuals. After some years, these individuals started their own projects, unrelated to the original institutions. They are involved in social movements, political parties, academia, and research institutions. They have their own blogs, but also write for the mainstream media. This is great, because it truly gives a spontaneous and bottom-up structure to the movement, with a plethora of different strategies. We don’t know which one is the most efficient strategy or whether any particular organization will thrive, but this diversified portfolio of institutions is certainly more likely to deliver a good result than a centralized organization.”

The delicate work of advancing the ideas of liberty and sound economics is never done. There will always be people who want to exploit and subjugate others for their own gain, presenting new challenges and obstacles to a free society. The free-market think tanks of Brazil are poised to meet those challenges through work that is thoughtful and careful, bold and rigorous.

“I don’t believe in miracles or in magic solutions,” Constantino said. “So I think we are far away from a free country. It’s going to take a while, and it’s going to be a tough road ahead. But we don’t have reason to despair. We have youth learning more and more about liberalism. We see young people carrying signs in the streets that read: ‘More Mises, less Marx,’ and students fighting for the first time against communism in schools and universities. It’s outdated to support Che Guevara now, and it’s in fashion to talk about libertarianism. Winds are changing. There’s still a long way to go, but we have reason to be optimists.”

"It's outdated to support Che Guevara now, and it's in fashion to talk about libertarianism. Winds are changing. There's still a long way to go, but we have reason to be optimists."