Nightcap

  1. Pakistan, corruption, and the rule of law Irfan Khawaja, Policy of Truth
  2. Sovereignty, annexation, and anarchy Ankit Panda, Diplomat
  3. African-Americans and the War on Drugs Conor Friedersdorf, Atlantic
  4. Native treaties and Native sovereignty David Nichols, Origins

Nightcap

  1. Why are the police in charge of road safety? Alex Tabarrok, MR
  2. Is decentralization overrated? Jason Sorens, Pileus
  3. Can corruption be good for growth? Brank Milanovic, globalinequality
  4. What is the relationship between urban change and the ship of Theseus? Nick Nielsen, Grand Strategy Annex

PS: I’m back from vacation. Hope y’all enjoyed yourselves while I was gone.

Brazil will not become Venezuela

Judge Sérgio Moro has left the Bolsonaro government. Chosen to be Minister of Justice, Moro achieved prominence for leading the Carwash operation that took several corrupt politicians to jail, including former President Luiz Inácio Lula da Silva. Moro’s departure exposes a very serious weakness within the Bolsonaro government, and in the medium term, it will lead to the weakening of the government and the country. According to Moro, his departure is due to attempts by President Bolsonaro to unduly interfere with the Federal Police. Bolsonaro countered the accusations, but the scenario remains shaky for the president. If Moro is speaking the truth, and if he can substantiate what he said with material evidence, this can lead to impeachment and even arrest of the president.

It is important to remember how Bolsonaro came to power. Going back a few decades in the past, Brazil emerged from a military dictatorship in 1985. The years since then have been called the New Republic by Brazilian analysts. One of the most relevant leaders of this period was Fernando Henrique Cardoso. As finance minister (1993-1994) of the Itamar Franco government (1992-1994) and later as president (1995-2002), FHC led a series of reforms that made the country’s economy, previously marked by developmentalism, freer. FHC was succeeded by Luiz Inácio Lula da Silva (2003-2010). Historically a radical socialist affiliated with the Workers’ Party, Lula came to power in 2003 promising a moderate government. To a large extent, this promise was kept, but the Lula government was soon hit by serious allegations of corruption. These complaints continued under the government of his successor, Dilma Rousseff (2011-2016), who ended up being impeached in 2016. Because of his corrupt actions as president, Lula ended up arrested by Sérgio Moro in 2018. Despite the moderate tone of Lula and Dilma as presidents, throughout their time in power, both signaled measures that resembled their party’s most radical years. This nod often sounded like a threat that both could trigger the bases of their party to take radical measures as was seen in other South American countries that had elected left-wing governments, especially Hugo Chavez’s Venezuela. Lula went so far as to declare that in Venezuela under Chavez there was an “excess of democracy”.

It was in the face of multiple corruption scandals and the threat of a radical turn to the left that Jair Bolsonaro gained prominence. For many years an inconsequential politician from Rio de Janeiro, Bolsonaro gained fame with his stripped-down and even pimp language. As early as 2014, he began to be welcomed throughout Brazil under the shouts of “myth” for the open way in which it criticized the “left”. He soon became a popular phenomenon. Although many analysts doubted his viability as a candidate, he ended up winning the presidency.

Unfortunately, Bolsonaro is far from a classic liberal or a Burkean conservative. A retired army captain, he entered politics to defend the interests of his fellow soldiers. In addition, he has always defended Rio de Janeiro’s military police officers, who are constantly accused of human rights abuses. Finally, Bolsonaro has always declared himself an uncompromising admirer of the Military Dictatorship (1964-1985). Although he showed no signs that he would like to extinguish democracy in Brazil (as many analysts on the left feared), he was also unable to see the many damages that the military did to the country during their years in power.

In his practice as president, Bolsonaro shows himself to be an impatient man, unable to respect the bureaucratic procedures of a liberal democracy. Worse than that, if Sérgio Moro’s allegations are true (and there is good reason to believe that Moro is not a frivolous man), Bolsonaro is trying to control the Federal Police to avoid investigations against his eldest son, Senator Flávio Bolsonaro, accused of corruption and involvement with militias. There are good reasons to believe that, with the departure of Sérgio Moro, the Bolsonaro government has come to an end.

Fortunately, as Dilma Rousseff’s impeachment demonstrates, Brazil is not Venezuela. Despite its many setbacks and weak record as a liberal democracy, the country still stands out in South America for its record of solid institutions that survived even during anti-liberal governments. Although imperfectly, Brazil has the institutions expected from a classic liberal democracy: division of powers, a bicameral legislature, a supreme federal court, and (at least formal) independence between the powers. Unfortunately, there are high levels of corruption in all of these spheres, largely due to the great attributions of the state provided for in the 1988 Constitution. Much is expected of the state, and the state controls an immense amount of resources. It is said that a thief was once asked why he robbed banks. “Because that’s where the money is,” was his reply. Likewise, there is a good reason why many people enter politics in Brazil.

There are crucial reforms that need to be made in Brazil if the country is to become a viable democracy. Fortunately, many of these reforms have been made in the past. Since its independence from Portugal in 1822, the country has, at least superficially, classic liberal institutions. Never has a head of government in Brazil dared to govern without a constitution, as was the case in other South American countries. Bolsonaro’s impeachment, if confirmed, will be a major blow, but it will not destroy Brazil. But it also shows that, more than populist politicians, Brazil needs leaders who will lead it to a deeper liberalism. Popular support for this type of reform exists, but it is contrasted by the desire for a “myth”.

Nightcap

  1. We are in the midst of a technological panic.” Robert Lurie, Modern Age
  2. What is a concentration camp? Emma Kuby, History Today
  3. Kleptocracy Irfan Khawaja, Policy of Truth
  4. Greenland in Danish-American-Chinese relations Mercy Kuo, Diplomat

Some lessons from Brazil

Jair Bolsonaro has been in government for almost six months now. I believe I can proudly say that I saw this coming before many people: Bolsonaro would be the next president in Brazil. However, he might not be the best person for the job.

In my assessment, Bolsonaro is not the usual politician. As John Mearsheimer brilliantly observed, politicians lie. A lot. It should be a given: dogs bark, cats climb on trees, and politicians lie. Bolsonaro, as far as I can tell, doesn’t. And that might be part of the problem: he always speaks his mind. Nothing is concealed, even when strategy might call for that.

In the past week, Bolsonaro sent an open letter to some of his followers (not written by him) manifesting how hard it is to govern Brazil. The letter sounds like a vent for the president’s frustration: “You Either Die A Hero, Or You Live Long Enough To See Yourself Become The Villain”. But what Bolsonaro means by all that is not clear. For all sorts of reasons, corruption is a living part of Brazilian politics. Actually, of politics in general, just a little more down there. So why the president sounds surprised by that?

Some people in the press speculated that Bolsonaro plans a coup. Call that it is impossible to govern with the current congress and just close it. To be sure, that is not unthinkable, and Brazil has historical precedents for that. But that doesn’t sound like something that Bolsonaro would do. Sounds more like that he is trying to bypass Congress and govern with direct popular support.

Brazilian congress is fabulously corrupt, and Bolsonaro still enjoys great popularity. Maybe he wants to use that to press Congress for the changes Brazil needs. In any case, it is a good opportunity to remember some lessons: power corrupts and absolute power corrupts absolutely. Or, in other words, if men were angels, we wouldn’t need government. And if we were governed by angels, we wouldn’t need checks and balances. But we are not governed by angels. Therefore, checks and balances are necessary. The downside is that this makes the government slow when important changes are necessary. The temptation is to close democratic institutions and just do things the old fashion way: through a dictatorship. I don’t think that is where Brazil is going right now. But it’s important to remember that we need way more than a president. We need people who really understand and appreciate freedom. An uneducated people on these matters will always grow impatient and vote for an easy solution.

Nightcap

  1. The Other Zionism Joel Cabrita, History Today
  2. American Jewry’s Trump Virus Michael Koplow, Ottomans & Zionists
  3. A civil war centuries in the making Asher Orkaby, Origins
  4. Is Mexico a tragedy? Shepard Barbash, City Journal

Three Lessons on Institutions and Incentives (Part 4): Institutions and the Rule of Law

Daron Acemoglu & James Robinson call the set of regulations that obstruct innovation “extractive institutions.” Of course, here again, extractive institutions are less harmful than the total absence of institutions. Not every change in the status quo can be interpreted as “creative destruction” or “entrepreneurship.” As Friedrich Hayek pointed out in Law, Legislation and Freedom, so that the most mutually compatible plans can be carried out, it is necessary that a well-defined set of expectations be systematically frustrated: the usurpations, the frauds, collusions, the paramilitary bands, etc., etc. The main thing is to have institutions that guarantee a minimum of order. Now, many times the institutions manage to be put into effect as a result of having the consensus of a certain number of interests that see in the law an opportunity to extract benefits. It is the distinction between Acemoglu & Robinson between the already mentioned “extractive institutions” and “inclusive institutions.” The latter are constituted by that set of rules that formally are equal for all and that materially protect private property, the value of money, competition understood as freedom of entry to markets, among other values ​​of modern capitalism.

The distinction between extractive and inclusive institutions can find its parallelism in the expressions of “Rule by Law” and “Rule of Law.” The first consists on the accommodation of general and abstract normative statements with a second intention: to benefit a group at the expense of society as a whole. It is common to hear the criticism that the law has a false neutrality and that therefore any defense of the “Rule of Law” must be ideological (in the Marxist sense of the term). However, what distinguishes the concept of “Rule of Law” from “Rule by Law” is that, for the first of the terms, the consequences are unlikely to be predicted in terms of their particular and even more individual, while the second has an intentionality, declared or hidden.

To give an example, the procedural due process has such a degree of abstraction that it can hardly be predicted who will benefit from those proceedings. However, a law that prohibits the importation of a product of domestic manufacture clearly aims to redistribute resources from consumers to the local producers (although this type of regulation usually also generates consequences that are very difficult to foresee and often contrary to its original intentional).

Critics of the Rule of Law state that it is not neutral, because it protects exclusively the interests of the proprietors. However, such criticism loses sight of the fact that in the Modernity, any inhabitant, even those who are not citizens, can have access to the right to property, regardless of whether or not they belong to a certain caste, class, or social class. This, unlike the legal and political systems of the so-called Ancien Régime, which limited access to private property in perpetuity and irrevocably to a certain group of people, or even more, to a certain clan or group of families. It does not matter if, in Modernity, a person does not own any particular good, as long as he can count on the expectation of being able to become one at some time. In this sense, private property understood in the modern sense as that right that any inhabitant can enjoy from having stability in their possessions to the point of only being stripped of it by their own consent or by following the procedural due process.

This unlike laws protecting infant industries, professions or trades, or promotion of certain activities that are deemed as socially necessary or valuable, which establish a regime of transfers of resources from one sector of society to another. As the School of Public Choice indicates, such laws encourage “lobbying” and reduce the efficiency in the allocation of resources. In such institutional arrangements, individuals and businesses do not prosper through the discipline of serving the consumer, but through political agreements. Economic agents continue to maximize, but at the expense of regulations that deliberately establish certain winners (the owners of protected activities) and certain losers (consumers and potential producers who are denied access to protected activities). Under these circumstances, the citizenry begins to perceive an arbitrary sense in the norms and have no moral issues with challenging them (any contraband, without commercial purposes, is a clear example of this). Obviously, when non-compliance with standards becomes so extensive, regulations become ineffective. Moreover, as James M. Buchanan put it in his brief essay “A policy in the interests of producers,” the stagnation generated by protectionism means that the winners of such a system – the protected producers – turn out to be less rich than they would be in an open and competitive institutional framework.

Sometimes protectionism seeks its foundation in a mistaken theory of “original accumulation.” (Joseph Schumpeter ruled out the validity of such proposals by pointing out that, although those could have had some basis until the 19th century, the development of capital markets made this theory completely obsolete.)

However, neither Douglass North, nor William Easterly, nor Acemoglu & Robinson, deal with the problem of original accumulation. They prefer to encompass such phenomena within the set of erroneous theories that serve to justify policies arising from political agreements in polarized societies. This means that a certain institutional arrangement, an economic growth policy, a stabilization program, a constitutional reform, foreign policy and so on, in a polarized society is not inspired by abstract and formal principles but in concrete goals that benefit certain sectors of society above others.

The examples of polarized societies, to which Easterly and Acemoglu & Robinson turn, come mostly from African countries since these are mostly created in the process of decolonization and comprise different ethnic groups and languages ​​within themselves, so polarization is much more evident: certain policies benefit a certain ethnic group over another. Easterly specifically cites the case of an African nation in which an ethnic group that represents 10% of the population lives in the region where a certain commodity is produced and whose export generates large revenues and, in the meantime, the government is elected, with some exceptions, by 90% of the remaining population, which imposes export rights on the said commodity, whose collection is destined to industrialization plans that systematically fail.

It is often tempting to explain the failure of such industrialization plans for the corruption evidenced in their execution. In fact, corruption cases are verified, but public policy would also fail even if those involved were incorruptible. Many times bad policies destroy much more wealth than political corruption. Corruption implies a transfer of resources and, therefore, an inefficient allocation of resources, while bad public policies result in the destruction of wealth.

However, examples of polarized societies in African countries can generate confusion around the main message of The Elusive Quest for Growth and Why Nations Fail. The economic performance of nations has nothing to do with geography, culture, or lack of preparation of the ruling elites to draw the plans of government. Easterly holds the main responsibility for the rise and fall of nations in incentives, while Acemoglu & Robinson point to the institutions that establish such incentive schemes. Regarding the opinion of Douglass C. North, although his line of research can lend itself to a “culturalist” interpretation, he himself recognizes the disruptive change of formal institutions as a determining factor of economic performance.

In summary, the three works discussed here have as a common denominator the role of incentives as a determinant of the economic performance of countries, above culture (which North would call “informal institutions”), geography, or the level of education of its elites. However, the case of polarized societies is presented as a critical point of such approaches.

José Luis de Imaz in Los que mandan (The ones who command) had defined politics as the activity consisting of articulating diverse interests according to a coherent plan of government. The definition of Imaz deserves to be put back into use, since it addresses the problem of polarization and also because its double edge allows to tie the loose ends left by the visions that we can group, with greater or lesser precision, under the “neo- institutionalist” (clearly the case of North, although it would be pending to discuss the label for Easterly and Acemoglu & Robinson).

Notwithstanding, that polarization is manifest in tribal or caste societies does not mean that it is not present in other societal forms. In the United States, the north and south; in Europe, the separatist movements; in Argentina, the interior and Buenos Aires. With greater or lesser intensity, manifestly or latently, politics is always structured on a space of tension of interests in competition for resources. Those who frequent the work of Carl Schmitt often claim that trade and law are “civilized” means for the exchange and dispute of such resources, politics and war are on the other side of the same question in terms of intensity of the conflict.

However, the term institutions – which define incentives – does not refer only to deliberate political agreements in pursuit of a specific purpose, such as a given public policy. The concept of institution also concerns a series of abstract and general principles whose final result at a particular level no one can foresee, because their level of abstraction imposes an insurmountable limit for the knowledge of its concrete consequences.

[Editor’s note: Here is Part 3; Here is the entire, Longform Essay]

Michel Temer, Brazil’s former president, sent to jail

Maybe Brazil is trying to set a record. With Luis Inacio Lula da Silva already sentenced, Michel Temer was sent to jail this Thursday. Temer was Dilma Rousseff’s vice-president and came to power with her impeachment in 2016. Temer is now also one of the prisoners made by Operation Car-Wash, formerly lead by judge Sergio Moro, currently president Jair Bolsonaro’s minister of justice.

Temer’s party, the MDB (until recently PMDB), is known for being a centrist party with little to none ideological leanings. In many ways, it is similar to Mexico’s Institutional Revolutionary Party. In his time in power, however, Temer made a fairly good job. Although not an enthusiast of free markets, he made some reforms that Brazil desperately needs, showing that only really radical people on the left deny that free markets are the way to prosperity. The problem is that Temer’s party is too deeply entangled in private interests (as his prison shows) to go deeper into the reforms the country needs.

The left’s standard narrative is that Temer made a coup in Dilma’s impeachment. Of course, nothing could be further from the truth. Brazil leftists are more and more like members of  Flat Earth Society. Temer was Dilma’s vice-president, and this alone shows that he could not be too far from corruption.

Overall, Operation Car Wash is already one of the greatest blows against corruption in Brazilian history. To have two former presidents in jail might be bad for other countries. But in Brazil, it is a reason to celebrate. The law finally applies to everyone and anyone.

Nightcap

  1. The two afflictions that enhance the challenge for returning vets David French, National Review
  2. The varieties of Muslim faith become a vital form of diplomacy Bruce Clark, Erasmus
  3. How the Inkas governed, thrived and fell without alphabetic writing Christopher Given-Wilson, Aeon
  4. Qatar’s progress on its improbable World Cup David Conn, Guardian

How will Imran Khan’s electoral triumph affect Pakistan’s relationship with China?

All eyes are on how Imran Khan will fulfill the ambitious promises which he and his party (Pakistan-Tehreek-i-Insaaf, or PTI) have made for creating a ‘Naya Pakistan’ (New Pakistan). Khan, who will take his oath as Prime Minister on August 11, 2018, needs to hit the ground running given the myriad of economic (Pakistan’s external debt is well over $90 billion, and accounts for over 30 percent of the country’s GDP) and geopolitical challenges. As Pakistani senior officials were drawing up plans to approach the IMF for a loan (estimated at $12 billion), US Secretary of State Mike Pompeo warned the IMF that there is absolutely no justification for ‘IMF Dollars’ to bail out ‘Chinese bond holders’ or China.

Given the high expectations as well as the impatience amongst the youth, Khan is not likely to have a very long honeymoon period.

Pakistan-China relationship under PTI government

It will be interesting to see how the crucial Beijing-Islamabad relationship pans out under Imran Khan. During his first address (after his party’s victory) to the Pakistani nation, he dubbed the Pakistan-China relationship as the most important for Pakistan. Khan also emphasized the point that Pakistan had a lot to learn from China in the context of poverty alleviation, as well as the latter’s anti-corruption campaign.

China’s relationship with Imran Khan

In the past, Khan, while supporting the China-Pakistan Economic Corridor (CPEC) project in principle, had expressed certain apprehensions during his meetings with Chinese diplomats. Khan had also stated that the government of Pakistan needs to be more transparent with regard to the contours of the project, and that each province should get it’s rightful due.

The Chinese in turn were uncomfortable with Khan’s dharna (protests) of 2014 (it was as a consequence of these protests that the inauguration of the CPEC Project had to be delayed). Khan’s 2016 protests against the Nawaz Sharif government (after the names of three of Sharif’s family members, who held offshore accounts, appeared in the Panama leaks) were also watched with skepticism by the Chinese.

It would be pertinent to point out that the PTI manifesto, while praising the project, has pointed to some of CPEC’s short comings, including investments as a consequence of ‘insufficient transfer of knowledge and capabilities, fewer partnerships with local businesses and Pakistan’s high dependence on imports of goods and services from China’.

PTI’s chief rival, the PML-N, often spoke about the need for an independent foreign policy, but never ever alluded to this aspect.

Beijing’s preference for PML-N

It would also be pertinent to point out that while Beijing has had problems with Pakistan, it has had a close relationship with the Pakistan Muslim League (Nawaz), or PML-N. Beijing, which has maintained robust relations with the army, also shared cordial relations with Shehbaz Sharif, the President of PML-N and former Chief Minister of Punjab. China has praised Shehbaz Sharif for his efficiency more than one occasion, even referring to his style of working as ‘Shehbaz Speed’ and Punjab speed. When Shehbaz was appointed President of the PML-N, he received a congratulatory message from senior members of the Chinese Communist Party.

The PML-N also sought to take credit for the CPEC project on more than one occasion. In August 2016, while addressing a meeting of his party’s parliamentary committee, then-Prime Minister Nawaz Sharif stated:

He [Xi Jinping] said this is a gift to you from China. They were also waiting for the time when our government would be in power so that they could make this investment.

Chinese Media’s comments on Imran Khan and CPEC

Post the election results, Chinese media has sought to be positive, and has been confident that the CPEC project will go ahead as planned. One op-ed published in the Global Times (‘Will Imran Khan pivot Pakistan from US to China’) referred to how the West was creating unnecessary paranoia with regard to the economic ramifications of the CPEC project. The op-ed also said that Imran Khan may take Pakistan further into the ‘Chinese orbit’ and that he had no problem with the CPEC project. The article cites the PTI manifesto to bolster its argument (saying that PTI has dubbed the project as a ‘game changer’). Other sections of the Chinese media have also welcomed Imran Khan’s election. Only one analyst, Tom Hussain, has categorically made the point that PTI had strained ties with China in the past. Said Hussain:

the PTI has been working overtime to repair its relations with the Beijing, which had been damaged by its disparaging remarks and allegations of corruption about CPEC projects in the past.

Likely developments in the short run

Imran Khan doesn’t have too many options, but there could be some re-examination of some of the CPEC projects. While Pakistan is now dependent upon China given Islamabad’s rock bottom ties with the US, the question on many people’s minds is if Khan can do a Mahathir (Malaysia’s Prime Minister), where maintaining good ties with China does not mean shying away from questioning the financial feasibility of certain projects within CPEC.

In the short run, this is impossible, and many would argue that even in the long run this may seem like nothing but a pipe dream. Yet, if Imran Khan can harness relations more effectively with neighbors (as he emphasized in his speech) and build a robust economic relationship with India (something which the Chinese may not mind), we could witness a course correction. One of the reasons why Nawaz Sharif advocated good ties with India was so that Pakistan could develop an independent foreign policy and end its dependence upon the US. One of Sharif’s slogans in 2013 was ‘Trade not Aid’. While Imran himself has spoken about trade ties with India, will the establishment allow him to go ahead.

Changing geopolitical dynamics in South Asia

If one were to look beyond economics, even in the context of Afghanistan, one of the significant developments in South Asia has been a decision by India and China to work jointly in Afghanistan. It remains to be seen how Imran Khan’s government perceives this. India and Pakistan are also likely to participate jointly in anti-terror drills in Russia, in August 2018, under the umbrella of the Shanghai Cooperation Organisation (SCO).

Conclusion

It is very tough to predict how Imran Khan handles ties with China, but one thing is for sure: Beijing may publicly be welcoming Khan’s election but from the opinion pieces in the Global Times, there is a worry deep down concerning his maverick nature. Imran, unlike the Sharif’s (who were businessmen), may not be as transactional in the economic sphere. His economic ideology is left-of-center (with a strong thrust on welfare). While he needs foreign direct investment, he is not as obsessive about mega projects as the Sharif’s.

Imran on his part will have numerous challenges to contend with, and needs to strike a fine balance. A less hostile relationship with the neighbors will benefit him, and a slightly less hostile relationship with the US would give him space. Given the plethora of challenges he is likely to face, no real changes should be expected in the context of Pakistan-China ties, though over a period of time, recalibration of policies should not be ruled out.

Nightcap

  1. Afghanistan, corruption, and the CIA Edward Luttwak, Times Literary Supplement
  2. Ten years after the financial crisis John Lanchester, London Review of Books
  3. Aztec moral philosophy Sebastian Purcell, Aeon
  4. Balthus, eroticism, and censorship Lev Mendes, New York Review of Books

Nightcap

  1. The politics of “now” and the fall of the world’s governing soccer body David Runciman, London Review of Books
  2. Nineteenth-century rappers, Corn Laws, and the rise of free trade Greg Rosalsky, JSTOR Daily
  3. Avocados and tamales: language lessons Joyce Bartholomae, Coldnoon
  4. North Korea’s ice-cream-colored totalitarianism Lena Schipper, 1843

Eye Candy: 2026 World Cup votes, by country

NOL map World Cup 2026 vote
Click here to zoom

My only question is why did 3 countries that could easily (and have, in the past) host the World Cup on their own gang together? Mexico, Canada, and the United States are wealthy countries. Why gang up?

My guess is that wealthier countries are going to have to do a lot more cooperating if they want to host world-level events from now on, due to the fact that the selection process for these types of events has become democratized. Economist Branko Milanovic has a thoughtful piece on FIFA (the governing body for world-level soccer events) and corruption that ties in to all of this.

Explaining current Brazilian politics to known-Brazilians and why I believe this is time for optimism

It seems that many observers believe that Brazil’s current political situation is one of instability and uncertainty. Since the mid-1990s the national political scene has been dominated by two parties: the Worker’s Party (Partido dos Trabalhadores, PT, in Portuguese) and PSDB. Now, with the main leader of the PT imprisoned – former president Lula da Silva – the PSDB also seems to have lost its rationale. It is clear that this party never had faithful voters, only an anti-PT mass who saw in it the only viable alternative. Given these factors, it is true that a political cycle that began in the 1990s is coming to an end, but far from being a moment of uncertainty and pessimism, this may be the most fruitful moment in the country’s history, as it seems that finally classical liberalism is being vindicated in Brazil.

Brazil began its political history as a semi-parliamentary monarchy. As one observer of the time put it, the country had a “backward parliamentarism”: instead of parliament controlling the monarch, it was the emperor who controlled parliament. Moreover, the Brazilian economy was extremely based on slavery. In theory, Brazil was politically and economically a liberal country. In practice, it was politically and economically a country controlled by oligarchies.

With the proclamation of the republic in 1889, little changed. The country continued to be theoretically a liberal country, with a constitution strongly influenced by the North American one and a tendency to industrialization. In practice, however, Brazil continued to be politically and economically dominated by oligarchic interests.

The republic instituted in 1889 was overthrown in 1930 by Getúlio Vargas. Vargas was president from 1930 to 1945, and his political circle continued to dominate the country until 1964. Once again, political language was often liberal, but in practice the country was dominated by sectorial interests.

Vargas committed suicide in 1954, and his political successors failed to account for the instability the country went through after World War II. The Soviet Union had been trying to infiltrate Brazil since the 1920s, and this was intensified with the Cold War. The communist influence, coupled with the megalomaniacal administrative inability of Vargas and his successors, led the country to such an instability that the population in weight clamored for the military to seize power in 1964.

The military that governed Brazil between 1964 and 1985 were influenced mainly by positivism. In simple terms, they were convinced they could run the country like a barracks. For them, the motto “order and progress” written on the Brazilian flag was taken very literally. One great irony in this is that Auguste Comte’s positivism and Karl Marx’s communism are almost twin brothers, products of the same anti-liberal mentality of the mid-19th century. The result was that Brazilian economic policy for much of the military period was not so different from that of the Soviet Union at many points in its history: based on central planning, this policy produced spectacular immediate results (the period of the “Brazilian miracle” in the early 1970s), but also resulted in the economic catastrophe of the 1980s.

However, the worst consequence of the military governments was not in the economy but in the political culture. The military fought against communism in a superficial way, overpowering only the guerrillas and terrorist groups that engaged in armed struggle. But in the meantime, many communists turned to cultural warfare, joining schools, universities, newsrooms, and even churches. The result is that Brazilian intellectual life was taken over by communism.

Fernando Henrique Cardoso, elected president in 1994, is an important Brazilian intellectual. Although not an orthodox Marxist, his lineup is clearly left-wing. The difference between FHC (as he is called) and a good part of the Brazilian left (represented mainly by the PT) is that he, like Tony Blair in England and Bill Clinton in the US, opted for a third way between economic liberalism and more explicit socialism. In other words, FHC understood, along with leading PSDB leaders, that the Washington Consensus is called a consensus for good reason: there is a set of economic truths (pejoratively called neo-liberals) that are no longer the subject of debate. FHC followed these ideas, but he was heavily opposed by the PT for this.

Since the founding of the PT, in the late 1970s, Lula’s speech was quite radical, explicitly wishing to transform Brazil into a large Cuba. But Lula himself surrendered to the Washington Consensus in the early 2000s, and only then was he able to be elected president. Once in office, however, Lula commanded one of the greatest corruption scandals in world history. In addition, his historical links to the left were never erased. Although in his first term economic policy was largely liberal, this trend changed in his second term and in the presidency of his successor, Dilma Rousseff.

Today Brazil is still living in an economically difficult period, but an ironic result of more than a decade of left-wing government (especially the PT) is the strengthening of conservative and libertarian groups in Brazil. In the elections from 2002 to 2014 it was virtually impossible to identify candidates clearly along these lines. In this year’s election, we expected several candidates to explicitly identify themselves as right-wing. Jair Bolsonaro, the favorite in contention, is not historically a friend of the free market, but his more recent statements demonstrate that more and more he leans in this direction.

It is possible that in 2018 Brazil will not yet elect an explicitly libertarian president. But even so, the economic transformations initiated by FHC seem now to be vindicated. Only with the strengthening of the Internet did Brazilians have real access to conservative and libertarian ideas. With that, one of the most important political phenomena in Brazil in the last decade is the discovery of these ideas mainly by young people, and it is these young people who now cry for a candidate who defends their ideas. Bolsonaro seems to be the closest to this, although there are others willing to defend similar economic policy. After more than a decade of governments on the left, it seems that Brazil is finally going through a well-deserved right turn.

Brazilian Senator Aécio Neves close to jail

Brazilian Senator Aécio Neves is close to the jail. He is charged with corruption and obstruction of justice.

Aécio Neves is one of the main leaders of PSDB, the party that, especially since 1994, has been the main electoral opposition to the Worker’s Party (PT) of Luis Inacio Lula da Silva. Fernando Henrique Cardoso, president from 1995 to 2002, is also in the PSDB. Neves was presidential candidate in the last elections, in 2014, and was really close to defeating Dilma Rousseff, the candidate of PT that was later impeached.

The Aécio Neves trial is extremely symptomatic in Brazilian politics. There are no popular manifestations in his favor. No political analyst is claiming that he is innocent and being unjustly accused. In other words, the contrast between Aécio Neves and Lula, recently sent to jail under a lot of noise, couldn’t be greater.

A popular phrase in Brazil is very telling. The translation to English loses the rhyme, but here it goes: when Lula was facing trial, some militants of PT carried signs saying “Lula is my friend, you mess with him, you mess with me.” Former Aécio voters later carried signs saying “Aécio is not my friend, if you mess with him I couldn’t care less.” As usual, the right is right.