www.vcrisis.com by Manuel Acedo Sucre January 31, 2002.

One of the most troubling events of 2002 was the surprising upset of the traditional left by Jean Marie Le Pen's National Front in France's presidential elections. Even the French were stunned to see Le Pen carry 17% of the vote in the first round, eliminating the option of the socialist candidate, Lionel Jospin, for the runoff. Together with Bruno Megret's showing of 2.4%, the Le Pen vote meant that nearly a fifth of the French electorate had voted for the extreme right. But Le Pen is not your typical right-wing populist. He is part of a Europe-wide political movement that -at its redoubtable best- regards non-white immigration as the root of all economic, social and cultural evils in Europe, and -at its worst- is the expression of anti-Semitism, neo-Nazism and other forms of atavistic bigotry. This social phenomenon is no joke: racially motivated crimes against immigrant minorities have dramatically increased throughout Europe during the past decade, tragically becoming a routine news item.

Mainstream Europe has forcefully rejected what Le Pen represents. Perhaps what has most outraged a vast majority of Europeans is the apparition of hate language in the political scene. Language that originates in hatred and, in turn, translates into hatred; in this case, hatred directed against racial minorities. Language that not too long ago -when left unbound and allowed to explode and reach power- calcinated Europe.

Fortunately, present-day Europeans have managed to turn their outrage against this phenomenon into effective political action that has prevented its most extreme manifestations from reaching meaningful political force. French democracy managed this in the presidential runoff and, later, in legislative elections. But not all democracies are as resourceful. And the ones that are, sometimes tend to play down and disregard what they see elsewhere, but would never accept in their own turf.

Take the case of Venezuela. Venezuela is an almost 200-year old republic. During these 200 years it has only been ruled by civilians, under democratic rule, for 40 years (1958-98). This democracy gave voice and power to Hugo Chávez, a former lieutenant-colonel who had led a bloody army insurrection against one of the civilian Presidents in 1992. The same democracy, despite the many deaths caused by his coup attempt, later pardoned Chávez and allowed him to successfully run for President in 1998. Chávez introduced two new elements to the Venezuela of civilian rule: a return of the mechanisms that had allowed totalitarian rule for most of Venezuelan history, and an unprecedented use of hate language in his political discourse. The first element was achieved swiftly by discarding Venezuela's longest-lasting Constitution, including its provisions for constitutional change, and having a tailor-made Constitution approved with total disregard of the opposition, which at the time represented 40% of the population. The new Constitution restarted the presidential mandate (after 2 years had elapsed), extended it to 6 years and introduced reelection. A "transitory" regime allowed Chávez to obliterate the existing system of checks and balances between the different branches of power.

The unprecedented concentration of power in the President was very quickly matched and surpassed by his abusive use of that power. With the Supreme Tribunal and its Constitutional Chamber firmly under his control, and his minions strategically placed in each of the public institutions responsible for legally and constitutionally controlling presidential conduct, impunity has become the rule: legal transgressions have given way to constitutional violations and these, in turn, to outright criminal acts. And this is where hate language comes in -prominently- because unbound power, laced with hatred, is a deadly combination.

The language used by Chávez has always been violent. Very early in his campaign for the presidency he announced that he would "fry" the heads of the social democrats. References to rot, tumors, nausea and bodily excretions, used in connection with his political enemies, became common. A permanent feature of his discourse was and continues to be that his "revolution" will triumph at whatever cost, whether peacefully or through violence and blood. Anyone not with him was against him, and had to be crushed. At the beginning, the language employed by Chávez was politically received as just passionate rhetoric. It was the language of the fiery, inexperienced and rough presidential candidate, fighting the odds. But later the dark-horse candidate turned President. And the language continued. And the language zeroed in on anyone daring to express dissent. And the language moved mobs into violence. And the language and the mobs were protected, from above, by the most obscene impunity. So the language, now turned into a physical weapon, became an instrument of power. One that has allowed him to say, for example, that there are no journalists in jail.

But Chávez's treatment of journalists is particularly revealing. When Chávez became President, he enjoyed the typical honeymoon of the newly elected. This included all factors of power, and, among them, the media. Some important newspapers, television and radio stations had actually backed him as candidate, and continued to do so during the initial stages of his presidency. But as the honeymoon began to wear off and ordinary criticism of some government actions started to surface, Chávez began to systematically rail against the media. Media owners, as well as the journalists working for them, where singled out and called traitors and enemies of the people. Shortly afterward, organized mobs openly began to physically attack and injure reporters in the street. This happens now on a daily basis. Some reporters have been killed or maimed for life. No one has been arrested, let alone prosecuted, despite the fact that many of the attacks have been taped and shown on TV. Some of the televised gang leaders routinely appear with Chávez and his entourage during pro-government rallies.

The government's modus operandi was staged for all to see in early December 2002. On December 8, Chávez, during his weekly public address, stepped up his tirade against the media and called on his listeners not to accept the media "crimes" committed daily against the people and inciting them to act. On the early afternoon of December 9, the government withdrew the patrol cars that had been posted to protect private TV stations around the country. In the late afternoon government activists -some of them hooded- began surrounding the different private TV stations. As the crowds grew larger, some TV stations in Barquisimeto, Maracay, Maracaibo and San Cristóbal, as well as radio stations elsewhere, were invaded by gangs, and their equipment and installations destroyed. In Caracas, the government-sponsored mobs lay siege to the TV stations, not only threatening their employees but blocking access to and from the stations.

The government refused to intervene to restore order. The President, the Vice-president and the head of the National Guard had been called since early afternoon by media representatives, on and off the air, but they never responded the calls. Some of these calls had been franticly made, in the middle of the ransacking. The government's only reaction came at around 10:00pm of December 9: the Minister of the Interior went on national TV to say that the government was on the side of peace and that the people had a right to take street action to defend the Constitution. Needless to say, the rampaging continued unabated until the following day.

There have been more that 200 documented cases of attacks by government-sponsored mobs against journalists. Many of these have been duly noted by the Inter-American Commission on Human Rights, which has condemned them in no uncertain terms. The Inter-American Court of Human Rights has ordered the government to stop the aggressions and take action to protect journalists. The government has ignored the Commission and the Court, and, if anything, has stepped up the attacks. Just last week, the government initiated administrative procedures to close down three TV and several radio stations, based on some obsolete regulations that are clearly unconstitutional and violate basic treaties on human rights. So Chávez is right, he has not directly jailed journalists; he has just unleashed his violent mobs against them. His language has provided the bite for his mobs; he only has had to ensure impunity for them.

Chávez's hate language has not been restricted to the press. Rival politicians, labor leaders, the Catholic Church, journalists, media owners and businessmen, have all been branded as enemies of the people or of his "revolution". Verbal attacks have systematically been followed by physical attacks against individuals and institutions -physical attacks carried out by mobs and armed gangs, sometimes by groups using home-made bombs or assault weapons and hand grenades with complete impunity. On-call mobs routinely attack peaceful demonstrations by the opposition. It is common to see these demonstrations end in bloodshed and death, as the attackers are protected and sometimes coordinated by pro-government police, the National Guard and the Army. The pattern is clear: hate language identifies the targets; the mobs follow.

The story of Chávez is the story of hate language. Language deliberately toned down in certain political circles, but allowed to explode into violent tirades among the disenfranchised. Language that, depending on the context, may be just simplistic, populist or xenophobic, but -when used in the streets or from a position of leadership- becomes literally incendiary. Language that exploits the frustrations of those who feel excluded from mainstream society, blaming their lot on false causes, while giving them a sense of empowerment. The same language that -when timidly used in Europe- has been checked by democratic institutions; but, with Chávez's rise to power, has burned and destroyed democratic institutions in Venezuela. Language that has become violence.

An overwhelming majority of Venezuelans are calling for elections as a means to rescue their democracy and end the violence. At least 70% of the population -including a majority of the poor and the disenfranchised- want Chávez out. 70% that desperately demand to, at least, have the chance to deal with Chávez as the French were allowed to deal with Le Pen: with true democracy. What is different in the case of Venezuela is that Chávez has confiscated democracy. Hitler and Mussolini did the same in Europe, when, riding on their own popularity, their hate language helped them crush democratic institutions. Of all people, Europeans should be able to read the language of Chávez.

www.vcrisis.com

Venezuela in 2003 will suffer the worst economic contraction any Latin American country has experienced in more than a century, Venezuelan and international economists say in the Miami daily El Nuevo Herald. According to the economists, the contraction can be attributed to a crippling two-month strike against Venezuelan President Hugo Chavez. They warn that Venezuela's economic implosion in 2003 will be so severe that the country risks a “social explosion” that Chavez might be unable to control -- even with the armed forces. Most economists agree that Venezuela's economy will contract by at least 25 percent in 2003, with unemployment ballooning to about 30 percent and inflation rising 100 percent. Moreover, experts studying Venezuela's economic collapse also agree that the Chavez government's recently announced exchange and price controls would only aggravate the country's crisis.

Chavez and the poor

Dr. Juan C. Nagel of the University of Michigan argues in a paper titled "Chavez and the Poor": "Not only has poverty increased during Chávez’s tenure, it is worsening rapidly. Macroeconomic conditions hurt the poor disproportionately relative to the rich, and there is no social safety net to speak of. The poor in Chavez’s world are on their own." The problem is that many poor don't know that. Because of terrible economic policies in the past, many of the country's poor were denied access to an education. When someone who uses their colloquialisms tells them that their economic woes are caused by the rich, by the strike, by the oligarchy, etc, many believe him. Later, when they see him handing out free land titles and Chinese tractors to people on television, their hopes rise. However, I have to highlight a couple issues here. First, most poor people will never own land or a Chinese tractor under Chavez. The poor are slowly waking up to this manipulation, as their lives get worse. Thousands are joining the opposition, and marching along with the middle and upper classes. Furthermore, the international media and human rights groups have done next to nothing to reveal Chavez's manipulation of the poor. Instead, they portray him as a "defender" of the poor, a "Robin Hood", when a quick surface scratch reveals that beneath that act is a man desperate for power and revenues. Why haven't the poor benefited by the tremendous windfall of dollars to due oil prices in the last two years? Where's the money in the FIEM? Hugo Chavez Frias is no Robin Hood. In a visit to the US this week, Ecuador's president Lucio Gutierrez said that he wants to be "a close ally of the United States". Obviously, even leftist former coup leaders don't want to follow the example of Chavez's failed policies.

www.vcrisis.com

Venezuela in 2003 will suffer the worst economic contraction any Latin American country has experienced in more than a century, Venezuelan and international economists say in the Miami daily El Nuevo Herald. According to the economists, the contraction can be attributed to a crippling two-month strike against Venezuelan President Hugo Chavez. They warn that Venezuela's economic implosion in 2003 will be so severe that the country risks a “social explosion” that Chavez might be unable to control -- even with the armed forces. Most economists agree that Venezuela's economy will contract by at least 25 percent in 2003, with unemployment ballooning to about 30 percent and inflation rising 100 percent. Moreover, experts studying Venezuela's economic collapse also agree that the Chavez government's recently announced exchange and price controls would only aggravate the country's crisis.

Chavez and the poor

Dr. Juan C. Nagel of the University of Michigan argues in a paper titled "Chavez and the Poor": "Not only has poverty increased during Chávez’s tenure, it is worsening rapidly. Macroeconomic conditions hurt the poor disproportionately relative to the rich, and there is no social safety net to speak of. The poor in Chavez’s world are on their own." The problem is that many poor don't know that. Because of terrible economic policies in the past, many of the country's poor were denied access to an education. When someone who uses their colloquialisms tells them that their economic woes are caused by the rich, by the strike, by the oligarchy, etc, many believe him. Later, when they see him handing out free land titles and Chinese tractors to people on television, their hopes rise. However, I have to highlight a couple issues here. First, most poor people will never own land or a Chinese tractor under Chavez. The poor are slowly waking up to this manipulation, as their lives get worse. Thousands are joining the opposition, and marching along with the middle and upper classes. Furthermore, the international media and human rights groups have done next to nothing to reveal Chavez's manipulation of the poor. Instead, they portray him as a "defender" of the poor, a "Robin Hood", when a quick surface scratch reveals that beneath that act is a man desperate for power and revenues. Why haven't the poor benefited by the tremendous windfall of dollars to due oil prices in the last two years? Where's the money in the FIEM? Hugo Chavez Frias is no Robin Hood. In a visit to the US this week, Ecuador's president Lucio Gutierrez said that he wants to be "a close ally of the United States". Obviously, even leftist former coup leaders don't want to follow the example of Chavez's failed policies.

caracaschronicles.blogspot.com By Francisco Toro

I've been wanting to write a longer set of essays exploring some of the deeper reasons for the current crisis. So rather than focusing so narrowly on the here and now, this essay and the next one will try to take a longer-term view of the structural factors that underpin the crisis.

The Petrostate that was and the petrostate that is, part I

Seven years ago I was doing field work for my thesis on the Venezuelan labor movement in Cabimas, a crappy little town in on the eastern shore of Lake Maracaibo. (Apologies to any Cabimians who might be reading this.) One day, I met a bunch of guys playing basketball at a municipal court and thought I'd hang out with them for a while - not that I'm any good at basketball, but I thought they might offer a different perspective on things.

Later, when I told my labor movement buddies what I'd done, they were shocked. "What, you were hanging out with the adeco basketball players? Oh Jesus, did you give them any information?" I was shocked. Adeco basketball players? I'd always heard about how much political parties had penetrated Venezuelan society, but the notion that even the dudes playing basketball had a party affiliation struck me as deeply weird.

Undaunted, I went back to ask them about it. "So, you guys are from AD?" They kind of smiled awkwardly and one of them said, "well, we needed a court and..." He went on to tell me the story about how they'd always wanted a proper court to play in, and money for shoes and balls and uniforms and such. The mayor of the town when this was happening was an Acción Democrática politician, and one of their uncles was a party member, so they asked him for help. The uncle pointed them to their neighborhood party official, and they asked him if he'd press their case with the mayor. The organizer said he would, but told them the mayor would be far more likely to listen to them if they'd sign up to become party members. The bargain was pretty simple - a chunk of the municipal recreation budget in return for joining the party and helping out with election campaigns and get-out-the-vote drives. This didn't strike the guys as such a bad deal, so they signed up, pressed their case, and after a year or so they'd gotten their court built, and a few balls to play with...with the slight inconvenience that the whole town started to think of them as "those adeco basketball players."

I love the anecdote because it encapsulates neatly the entire structure of the Venezuelan petrostate, the old-regime Chávez has built a career out of railing against.

The petrostate trick is to turn oil money into power - control of the state’s oil money into control of the state - in a self-perpetuating cycle. The way you do that is by building a huge web of patron-client relationships.

The party organizer in my little tale was able to use his influence over a small share of the state’s oil money – just enough to build a basketball court - to fund a miniature local patronage network. His clients - the basketball players - would reciprocate on election day...not due to any sort of ideological affinity, but simply to keep their access to his influence over funds open. And he would use his influence over them, his ability to mobilize them for political purposes, to bolster his position in his role as client to the next patron up the line, the mayor.

This basic reciprocal pyramidal system was replicated all throughout the country, in every imaginable sphere of life, from multi-billion dollar infrastructure programs to things as petty as a municipal sports facility. The mayor - who played the role of patron in his relationship with the neighborhood organizer - was in turn client to the next patron up the line, probably the governor of Zulia state. And the governor played client to his higher up, probably a politician or faction within AD's National Executive Committee - the much-feared CEN, after its Spanish acronym. And that politician in turn played client to the party secretary general, or to the president of the republic...one neat string of patron-client relationships running from the dusty backstreets of Cabimas all the way up to the presidential palace in Caracas.

And, of course, a parallel (if somewhat smaller) pyramidal structure existed within Copei, the second largest party, and a much smaller one within MAS, the nominal left-wing party.

This, basically, was the system Chávez was elected to dismantle. By the time the 1998 election came around people resented it acutely and were desperate to see it replaced. But before launching into a (by now redundant) critique of the system, it bears stopping to notice a few of its features.

For one thing, it's important to realize that the system was not totally non-performing - the basketball court did get built. No doubt the funds that made it possible were mercilessly stripped at every step of the ladder from presidential palace to dusty street, but the court did eventually get built and used. So while it was inefficient, bloated, antidemocratic, and everything else, the system was not totally useless - and in its own amoral way, even the corruption served as a rough-and-ready way to spread the oil money around, to make sure its benefits reached many hands, not just a few. In a sense, even the recipients of the final product - the basketball players - were part of the sprawling corruption scheme: it's just that they got paid off for their services in courts and basketball gear rather than cash.

It’s also important to note that the Petrostate is not simply a system of social relations - a huge pyramid linking everone who's on the take - it's also a cultural system, an interlocking set of beliefs, a state of mind. The kids I met had no doubt that if they wanted a basketball court, it was the state's job to build them one - after all, wasn't the country awash in oil money? Insofar as the Petrostate has a culture, that is its founding myth - the notion that the government has so much oil money that it can, and should, bankroll the needs and desires of the entire society.

Within the petrostate mental model that, in fact, is the state's purpose, and governments are to be judged by how well they deliver on that promise. And that's not just me saying it - polls consistently find that over 90% of Venezuelans think this is a rich country, with over 80% calling it - incongruously - "the richest country on earth."

Those beliefs didn't just appear in the popular imagination by accident...the petrostate's founding myth was at the center of the AD political program from the 1950s onward. Rómulo Betancourt wrote at length on the subject. And for a while, the idea worked. So long as the population was relatively small, the state relatively efficient, and the oil money relatively plentiful, a simple redistributive strategy went a long ways.

Throughout the 50s, 60s and into the mid 70s, the petrostate led to a huge improvement in Venezuelans' standards of living. Infrastructure got built, people got jobs, and each generation could reasonably expect to live better than the one before. The country got universal schooling, free universities, hospitals, public housing, sewers, phones, roads, highways, ports, airports, all these signs of modernity decades before other Latin American countries had them. Less tangibly but just as importantly, the petrostate also bankrolled institutions such as paid maternity leave, unemployment benefits, old age pensions, statutory vacation pay, all the way back in the 1960s.

Another key part of the petrostate model that's often overlooked is that by creating this huge patron-client networks, the political parties became big and strong enough to make democracy viable. The web of social relationships created by clientelism - now such a reviled word - were actually healthy for society back then. Those relationships ensured that enough people were socially and emotionally attached to democratic institutions, that enough people felt they had a personal stake in the political system, to keep the whole society stable and democratic. And it worked, the system worked. There were elections every five years, parties routinely and peacefully alternated in power, Venezuela was an island of democracy and stability in a continent torn apart by Marxist insurgents and coup-plotting reactionary generals.

But there was also much to dislike about the model. For one thing, it was built entirely on vertical social linkages, on relationships of dominance and subservience, rather than on the kinds of egalitarian, horizontal links that serve as the backbone of truly vibrant democracies. As Robert Putnam has been arguing for three decades, social systems dominated by vertical, patron-client links are anathema terrible for “social capital,” a fancy term to describe societies marked by a high level of diffuse, generalized trust. Without social capital, it’s difficult to build democratic institutions that ultimately work the way they’re supposed to. In a social system built on dominance/submission relationships, it’s very hard for citizens to come together as citizens, as equals who can deliberate, argue towards a common position on the basis of their ideas rather than their position within a hierarchical structure. So a social system based on patron-client relationships could support democracy in the narrow, formal sense of having an independent media and elections and a diversity of free political parties. But everyday social relations were very far from being democratic and egalitarian – in fact, they were just the opposite.

Now, there are many reasons why the relatively benign clientelism of the 50s and 60s devolved into the kleptocratic lunacy of the 80s and 90s. Corruption is the typical reason cited, but the truth is both more complex and less morally satisfying than that. The real reasons, in my view, have everything to do with the increasing volatility of the world oil market, together with good old demographics. Until 1973, oil traded in a relatively narrow price range, making Venezuela's revenues more or less predictable from one year to the next. The petrostate model worked rather nicely under such conditions.

But starting with the oil embargo in 73 - the oil bust if you're in North America, the oil boom if you're here - the world oil market started to gyrate wildly, making it impossible to plan ahead. With each new boom, huge torrents of petrodollars would pour into the Venezuelan economy, only to be followed by busts that were just as marked and unexpected.

This boom and bust cycle was destructive on a number of counts. From a merely macroeconomic point of view, it's clear that economies don't do well under that sort of instability. More destructive than the market cycle itself, though, was the chronic government mismanagement of the cycle. The politicos seemed to believe that high prices would last forever, and so they would take out huge new debts even as money poured in at record rates. When prices fell, the boom-time excess would only fuel increasingly acute recessions, made all the worse by the new debt burden that had to be financed.

But the most pernicious effects were cultural rather than economic. The huge influx of oil dollars in the 70s shifted public morals in this country. Amidst the abundance of oil dollars, graft became accepted in a way it had never been before. The perception was that only a pendejo, a simpleton, would miss out on the opportunities for easy riches that proliferated in those days for the well-connected. This culture of easy-going racketeering, of matter-of-fact robbery, penetrated deep into the Venezuelan psyche.

At the same time, population growth was diluting the oil wealth among a bigger and bigger pool of recipients, making the notion of petrodollar-funded prosperity for all ever less feasible from a purely arithmetical point of view. Today, state oil revenue works out to about $1.35 per person per day. Even if the state redistributed all its oil rents in cash equally to everyone, most Venezuelans would not stop being poor.

By the late 1980s, the system had broken down irretrievably. Even if the politicians of the day had been a gaggle of angels gifted with Prussian administrative efficiency, there just wasn't enough oil money to go around. But the politicians were anything but angels - and the habits of graft had become so ingrained they wouldn't let them go, even when oil prices were low.

Beyond the purely financial incentives, though, patrons at every level became deeply enamored of power, of political power, social power, the power and prestige that came from having clients, from being a "big man" in town, a cacique, someone of prestige and authority and influence, someone who gets to boss underlings around.

This infatuation with interpersonal dominance made the entire system exceedingly difficult to reform, and particularly deaf to calls for reform from the outside. Never particularly suited to ideological debate, the system became ossified completely...power itself became its only ideology. The drive to amass more of it, to climb higher in the pyramid, to gain access to ever more lucrative hotbeds of corruption - these preoccupations came to dominate the political system entirely. And as they did, regular people's resentment at the petrostate model became ever stronger, though very few within the state seemed to recognize that.

So the late 1980s were a critical moment in the country's history. Venezuela needed massive reform, it needed to reinvent itself, it needed to leave behind a hopelessly outmoded model of governance, a model that was well beyond its sell-by date, and find a way to integrate itself into the world economy, shedding its reliance on oil, not just as a source of money, but as lynchpin of its socio-political and cultural systems. It needed to ditch clientelism, reinvent social relations at every level, pry apart the networks of client-patron relations that had defined its interpersonal relations for so long. Venezuelans needed to learn to come together as equal, in horizontal rather than vertical social structures, structures that allowed for the creation of social capital and an egalitarian model of interpersonal relationships. And they needed to ditch the notion that the state could bankroll everyone's way of life just by distributing the oil money. They needed to invent a whole new idea of the state from scratch, to create a new state that would help citizens create wealth instead of distributing it to them...a radical notion for the times. What the country needed was nothing short of a total rethink of society, the state, and the relationship between the two: a very tall order.

And we failed.

That failure, in essence, in the reason Hugo Chávez is in power today. His political success is the inevitable logical outcome of our inability to reform petrostate model. posted by Francisco Toro | 10:00 PM

www.brazzil.com Brazzil Ideology March 2003

Auguste Comte's positivist ideas have shown their greatest impact in economic policy. Economic policy in Brazil has been marked by an interventionist frenzy that affects all aspects of public life. The consequences of positivism in the country have been devastating.

Antony P. Mueller

"Ordem e Progresso"—Order and Progress—has been the motto on the Brazilian flag since the country became a republic in 1889. The words are taken directly from the writings of Auguste Comte. The ideas of Comte were adapted in the 19th century by the military and political elites in large parts of Latin America, and in Brazil in particular.1 Since then, the ghost of Auguste Comte has been haunting the subcontinent, and the practical consequences of this ideology have been disastrous.

Comte's positivism is best described as an ideology of social engineering. Auguste Comte (1798-1857) believed that after the theological and the metaphysical stage, mankind would enter the prime stage of "positivism," which to him meant that the society as a whole must be organized according to scientific knowledge.

Comte believed that all science must be modeled after the ideal of physics, and that a new science of social physics would emerge at the top of the intellectual hierarchy. This discipline would discover the social laws that then could be applied by an elite to reform society as a whole. Like medicine, which eradicates disease, social physics would have to be applied in order to remove the social evils.

Comte's ideal was a new "religion of humanity." In his view, people need to be tricked into feeling as authentic what will be instigated by the rulers and their helpers, who thereby serve the higher ideals of humanity. Reviewing Auguste Comte's ideas, John Stuart Mill wrote that this political philosophy aims at establishing "...a despotism of society over the individual, surpassing anything contemplated in the political ideal of the most rigid disciplinarian among the ancient philosophers," 2 while Ludwig von Mises remarked: "Comte can be exculpated, as he was insane in the full sense which pathology attaches to this term. But what about his followers?" 3

The rationalist mysticism which befell Comte as a mentally ill person later in his life called for the creation of a "positivist church," in which, imitating the rituals of the Catholic Church, the "cult of humanity" could be practiced. Toward the end of the 19th century, "positivist societies" began to spread in Brazil, and a real church building was erected in Rio de Janeiro as the place where the adoration of the ideal of humanity could be practiced like a religion. 4

Up to the present days, Brazil's system of higher education still bears the marks of Comte's positivism, and stronger still is the influence of the positivist political philosophy within the higher ranks of the military and among the technocrats. Positivism says that scientism is the trademark of modernity and that in order to accomplish progress, a special technocratic or military class of people is needed who are cognizant of the laws of society and who establish order and promote this progress.

The prevalent ideology of a large part of the ruling elite stands in sharp contrast to the traditions held by the common people. As in most parts of Latin America, Brazil's popular culture is deeply marked by the Catholic-scholastic tradition, with its skepticism toward modernity and progress and its more spiritual-religious orientation, which rejects the linear concept of time as a progressive movement in favor of a circular eternal vision of life. 5

Comte's ideas have shown their greatest impact in economic policy. Given the facts that members of the military have played a central role in Brazil's political life and that positivism had become the leading philosophical paradigm at the military schools, economic policy in Brazil has been marked by an interventionist frenzy that affects all aspects of public life.

The spirit of planning for modernity has turned Brazil into a hotbed of economic interventionism, with each new government promising the great leap forward. Instead of doing away with the obstacles that confront emerging private enterprises and guarantee reliable property rights, governments presume that it is their task to develop the country by conceding privileges to a small group of established firms.

Since becoming a republic, there has been not one government in Brazil that did not come up with a new comprehensive plan or a conglomerate of plans aimed at desenvolvimento (development). Following the positivist agenda, conceiving plans of a seemingly scientific nature and applying them by the force of the state has become the trademark of Brazilian economic policy. Frequently first elaborated in one of the few university centers, these plans form the agenda of the new government, which usually brings in a team of young technocrats for its implementation.

Particularly grandiose when military governments were in charge—such as in the 1930s and 1940s and from 1964 to 1984—the invention and implementation of great plans has continued up to the present day. Irrespective of which party coalition or power group is at the helm, the spirit of positivism has been shared by all of them up to the Fernando Henrique Cardoso government, which apparently is practicing a so-called "neo-liberal" economic policy.

Even by counting only the more important plans, the series that has been going on and on for almost a century is quite amazing: After following the model of industrialization through import substitution under the semi-fascist Estado Novo of the 1930s and 1940s, Brazil in the 1950s saw the Plano de Metas and, later on, the Plano Trienal of economic and social development. In the 1970s came the series of National Development Plans. The 1980s brought the Plano Cruzado, the Plano Bresser, and the Plano Verão. In the early 1990s, the Plano Collor 1 was initiated, to be followed by the Plano Collor 2 and, later on, by the Plano de Ação Imediata and, in 1994, the Plano Real.

Measured by their declared goals, all of these plans failed. During the past six decades, Brazil has had eight different currencies, each time with a new name and an inflation rate which implies that the current currency would have a rate of exchange of one trillion in terms of the Cruzeiro currency of 1942. 6

Under the cover of apparent modernity and science, the established clientelistic network of the "lords of power"7 continues to rule the country. In due course, this class has achieved a level of privileges similar to those that were enjoyed by the nomenclature in the Soviet Union compared to the rest of the population, who have resorted to their peculiar ways—called jeitinho, a kind of chutzpah—as their own method of survival.

Within the positivist system, scientism and interventionism go hand in hand. The presumed rationality of interventionism rests on the premise of knowing the specific outcome of an economic policy measure in advance. Consequently, when things turn out other than expected—and they always do—more intervention and control is warranted. The result is governments that are overwhelmed by their pretense and humiliated by their failures.

Brazil, which is so blessed by nature and by an entrepreneurial population with one of the highest rates of self-employment in the world, has been kept down by a misleading ideology. Up to the present days, Brazil's governments have been absorbing the resources of the country in order to pursue chimaeras of modernity and progress as they have defined them and blocking the spontaneous creativity inherent to free markets.

The space for Brazil could be wide open if the ghost that has plagued this country were cast away in favor of an order in the true meaning of the word, i.e., a system of reliable rules based on the principles of property rights, accountability, and free markets.

1 Leopoldo Zea, Pensamiento positivista latinoamericano, Caracas, Venezuela 1980 (Biblioteca Ayacucho).

2 John Stuart Mill, On Liberty, London 1869, p. 14 (Longman, Roberts & Green).

3 Ludwig von Mises, Human Action, Auburn, Ala. 1998, pp. 72 (The Ludwig von Mises Institute, Scholar's Edition).

4 Ivan Lins, História do positivismo no Brasil, São Paulo 1964, pp. 399 (Companhia Editora Nacional)

5 The classic expression of this kind of thinking in Latin America is José Enrique Rodó: Ariel, Montevideo 1910 (Libreria Cervantes). In literature, this kind of thinking is prominent up to the present days in the writings of Brazil's most popular writer, Paulo Coelho.

6 Ruediger Zoller, Prädidenten - Diktatoren - Erlöser, Table V, p. 307, in: Eine kleine Geschichte Brasiliens, Frankfurt 2000 (edition suhrkamp).

7 The classic description of the "lords of power" is Raymundo Faoro's Os Donos do Poder, 2 vols. (Editora Globo: Grandes Nomes do Pensamento Brasileiro) São Paulo 2000

Antony P. Mueller is a professor (extra-ordinarius) of economics at the University of Erlangen-Nuremberg, Germany. From September 1999 until December 2002 he was a visiting professor at the Universidade Federal de Santa Catarina in Brazil. He welcomes your comments at antonypmueller@aol.com