- A conservatism that’s multiethnic, middle class, and populist Ross Douthat, NY Times
- Most legal commentary is dumbed down and misleading Ken White Popehat
- A social-democratic federation in a multiethnic state Branko Milanovic, globalinequality
- The radical leftist origins of the “self-help” movement Jennifer Wilson, the Nation
The convincing victory of Jacinda Ardern is important for more than just one reason. First, the 40 year-old Ardern’s centre-Left Labour party has won convincingly — securing 49% of the vote, and securing 64 seats in the 120 seat assembly. Ardern has delivered the biggest election victory for her party in half a century. The victory gives Ardern and her party the opportunity to form a single party government.
Second, while there is often talk of a right-wing political discourse being dominant globally, it is important that a center-left leader has won. Many commentators of course would argue that New Zealand is a small country, with a small population of less than 5 million – and that not much should be read into the electoral result.
Third, Ardern’s successful handling of the Covid19 pandemic, along with other women leaders – including German Chancellor Angela Merkel, Taiwanese President Tsai Ing Wen, Bangladeshi Prime Minister Sheikh Hasina, and Denmark’s Mette Frederiksen – has been acknowledged globally. A study published by the World Economic Forum and The Center for Economic and Policy Research makes this point and has cited some of the reasons for the success of the these leaders. The success has been attributed to the fact that all these leaders were quick to react to the crisis.
Fourth, at a time when the world is becoming insular, the New Zealand PM has been firmly pitching for open immigration policies, has taken a strong stance vis-à-vis Islamophobia (something which leaders of other liberal democracies have failed to do), and repeatedly argued in favor of a more inclusive society. In March 2019, shootings at a Mosque in Christchurch by white supremacists had resulted in the killing of 50 people. Ardern, while expressing solidarity with members of the community, donned a head scarve, or hijab, and this gesture was appreciated. In her victory speech the New Zealand PM stated that the world is becoming increasingly more polarized and that “New Zealanders have shown that this is not who we are.”
The New Zealand PM has her task cut out on issues related to the economy (the economy had shrunk by 12% in the second quarter thanks to the impact of the lockdown). Like other countries, there have been many job losses. Some of the sectors which have witnessed job losses, such as retail, hospitality, and tourism – employ women (according to some estimates a whopping 90% of people who have lost jobs are women). Some commentators also believe that the Labour government has not been able to deliver on key promises related to housing, child welfare, and the economy. There is also an argument that Ardern’s first tenure was not transformational, and after her win the expectations from her will be much higher.
Foreign Policy Challenges
New Zealand, in spite of being a small country, is important in the context of foreign policy issues. There are two important dimensions: New Zealand’s ties with China, and as a part of the 11-member Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).
As far as New Zealand’s ties with China are concerned, there are various layers to the bilateral relationship. Jacinda Ardern’s government has largely gone along with other 5 eye countries when it comes to the issue of allowing Huawei entry into New Zealand’s 5G network. On issues pertaining to Hong Kong, the Uygurs, and the South China Sea too, New Zealand has taken a firm stance vis-à-vis Beijing. After the imposition of the National Security Law in Hong Kong, New Zealand suspended its extradition treaty with Hong Kong, and it also made revisions with regard to its policy on military and dual-use goods and technology exports to Hong Kong, subjecting the city to the same as the People’s Republic of China (PRC).
During her speech at the China-New Zealand Summit, Ardern said:
As you know, this has come to the fore recently around developments like Hong Kong’s new security law, the situation of the Uyghur people in Xinjiang province, and Taiwan’s participation in the World Health Organisation.
Like its neighbour Australia, New Zealand has also been taking cognizance of increasing political interference in its domestic politics, via governments, political parties, and universities. There has been bipartisan support for taking measures to check the same. Some policies have been introduced with regard to political donations as well as Foreign Direct Investment.
At the same time, New Zealand has a close economic relationship with China and this is strong reiterated by figures. In 2019, China accounted for a staggering 33% of New Zealand’s dairy exports, over 40% of meat experts and contributed to 58.3% of international education earnings (it is estimated that in 2019, 87% of New Zealand’s service export earnings from China came from education-related travel and personal tourism).
While there has been a shift in New Zealand’s approach vis-à-vis China, officials have also repeatedly made the point, that it will not blindly toe any other country’s stance vis-à-vis China.
Another important foreign policy component of New Zealand is as member of the 11-member CPTPP. Along with other countries, New Zealand worked towards keeping supply chains going in the midst of the pandemic. For instance in April, New Zealand sent a first plane load of essential supplies to Singapore. (This included commodities like lamb and beef which were sent by a chartered plane.)
New Zealand and other CPTPP members have also been working to resume essential travel, while Singapore opened a travel bubble with New Zealand on September 1, 2020 (which means that quarantine-free travel will be allowed).
New Zealand and its neighbour Australia, another member of CPTPP, have opened an air bubble too (though this is one-way as yet only passengers from New Zealand can travel to Australia). The bubble currently is applicable only to two Australian states New South Wales and the Northern Territory.
In conclusion, the election result is important not just in the context of domestic politics, but in sending a message that there is space for centrist and inclusive politics and that it is not necessary to have a Strong Man image cultivated by many right-wing leaders. It is also important to bear in mind that liberal democracies, which respect diversity, are in a far better position to provide an alternative narrative to that of China. Apart from this, while the shortcomings of globalization do need to be acknowledged and addressed, inward looking economic and immigration policies need to be firmly rejected.
- On the “Muslim Game of Thrones” series Atif Baloch, DW
- Why secession, separatism, and disunion are the most American of values Rebecca Onion, Slate
- A history of America’s exceptional idea Jonathan Leaf, Modern Age
- Populism is a feature of globalization, not a bug Angelos Chryssogelos, Noema
- This is your US Constitution on drugs Ilya Shapiro, National Affairs
- The early years of Communist Party rule Ian Johnson, NY Times
- Why Leftists prefer and even encourage “cancel culture” Chris Bertram, Crooked Timber
- The rumour about the Jews Francesca Trivellato, Aeon
- New light on the dark interwar years Tony Barber, Financial Times
I wrote an article on the path to economic recovery in Brazil after the pandemic. The article was published by Instituto Monte Castelo, a Brasilia-based think tank, and it is in Portuguese. Here is a summary of the key points.
Brazil’s economy is overwhelmingly interventionist, as shown by its progress (or lack thereof) in data compiled by the World Bank in its Doing Business studies, or Heritage’s Foundation Index of Economic Freedom, or the World Economic Forum’s Global Competitiveness Report. As predicted by theories of economic interventionism (more recently, Robert Higgs and Sanford Ikeda; but, classically, Ludwig von Mises), a time of crisis invites more government intervention or, remarkably at certain historical junctures, disintervention.
From a free market perspective, what can be done?
Brazil’s situation is, to a certain extent, a reflection of the global scenario. A global crisis was bound to happen, given the unrealistic inflation of asset prices in global financial markets, reflecting the artificial propping up of the major economies around the world by injections of money and credit, as well as increased public spending after 2009. COVID-19 triggered it, but it was the tip of the iceberg. Brazil suffered from capital outflows and its currency devalued sharply against the US dollar.
In terms of how the external scenario reflects on Brazil, the only thing that can be done is decrease the level of risk in Brazil’s economy, or maintain interest rates on a level that reflects the amount of risk in the economy (given that Brazil’s Central Bank has been cutting rates throughout the year). The fact that the President is fighting with his cabinet and with the other branches of the government also reflects poorly in terms of political risk.
However, there is a lot that can be done in terms of the domestic scenario. The economic crisis resulting from the pandemic also reflects, in part, a change in consumer preferences and in how things will have to be done safely to avoid contamination. This means that some businesses will not thrive as much (restaurants, for example) and that other industries will incur in much higher costs to operate more safely. This disequilibrium would have happened regardless of government-mandated restrictions, and alert entrepreneurs will spot a chance to obtain gain by creating value for their consumers and clients.
However, it’s much harder to shut down inefficient companies, fire people, and open new ones, and hire people, in a heavily interventionist economy such as Brazil’s.
Shutdowns and other government imposed restrictions, especially on the local level, are making things worse. Brazil’s case is one of a milder shutdown. The government is offering a small compensation package for the trouble, but not much compared to the “stimulus” packages in Europe and the US. This probably reflects a more sober approach by Brazil’s Central Bank. However, on the one hand small businesses struggle to get access to credit due to the red tape, so this favors large companies and will concentrate the market in the long run. There’s also an idea of propping up airline companies and other inefficient businesses. This, in my view, would be a mistake. But lobbyists will line up to get their share of the cake.
The path to economic recovery in Brazil will necessarily have to involve local and federal deregulation, cutting lots of red tape, and major tax reforms. Labor laws have been made more flexible a few years ago, and the current administration managed to pass a massive pension reform that will reconfigure some of the public debt. However, this is not enough. Deeper reforms to cut public spending on a more permanent basis will have to be proposed, and the federal government will have to work harder to signal institutional and political stability and predictability.
The challenge is that the current administration can’t get reelected in 2022 with very little to show in terms of the economy, and the effects of the reforms proposed above will only become clearer in the long term. The temptation is to do just what the US seems to be doing – anti-trade nationalism to punish a foreign scapegoat, or the abstract scapegoat of ‘globalism’, appease some of the cronies with monetary and fiscal populism, red herrings making the population and the media focus on culture wars, etc. But this temptation is to be expected according to the economic theory of interventionism. Whether it will be overcome, only time can tell.
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”.
- Normal Joe (Biden) and the 2020 election Jacques Delacroix, NOL
- More campaign finance fiction Ethan Blevins, NOL
- The Good Life vs reality Mary Lucia Darst, NOL
- Prediction: Trump-Sanders 2016 Rick Weber, NOL
- “Medicare For All” will never work: a Brazilian view Bruno Gonçalves Rosi, NOL
- Bernie fans should want Bernie to lose the primary Bill Rein, NOL