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

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

www.heritage.org by Stephen Johnson Executive Memorandum #841

November 20, 2002 |  |

On December 10, President George W. Bush will meet with the president-elect of Brazil, Luis Inacio Lula da Silva, a populist who has professed admiration for Cuban dictator Fidel Castro and Venezuela's authoritarian president Hugo Chávez. During his campaign, Lula blamed free-market reforms for Brazil's economic slump, condemned the proposed Free Trade Area of the Americas (FTAA) as a plan to annex Latin America to the United States, and suggested that Brazil might abandon the Nuclear Non-Proliferation Treaty, which it signed in 1998. After his landslide win on October 26, however, Lula backed off on reviving Brazil's nuclear weapons program and said he would work with the United States on trade. These contradictions in Lula's post-electoral conciliatory stance and his anti-American and anti-free market campaign rhetoric suggest the need to engage him with caution.

President Bush's agenda for the upcoming meeting with Lula should focus on what would be considered an unwarranted return to nuclear weapons development, Brazil's potential support for non-democratic regimes in the region, the need to continue internal reforms, its needed participation in counterterrorism and counterdrug operations, and mutual efforts to lower barriers to bilateral and hemispheric trade.

A Nation at a Crossroads. Brazil, which rivals the United States in geographic size, has Latin America's largest economy, with a gross domestic product (GDP) of $800 billion. After ending military rule 17 years ago, Brazil began opening its markets and expanded its exports from primarily coffee to cars and aircraft. However, it also shielded businesses from competition and created a large public sector, which in 2001 consumed 20 percent of GDP.

Brazil aspires to be a regional power but is suffering from slow growth and mounting debt that now approximates one-third of GDP. It has received three loans from the International Monetary Fund (IMF) in the past four years, including a $30 billion bailout approved last September 9. By comparison, Mexico grew out of its last debt crisis in 1995 through trade, even paying off loans early. Its economy--half as big as Brazil's--now exports twice as much as Brazil's does. Lula must make similar pro-market choices to secure Brazil's footing as an economic leader in the 21st century.

Lula's Appeal. The former union organizer, who tried three times to win Brazil's presidency, finally did so this year by appealing to growing numbers of poor (46 million out of 170 million Brazilians) and blaming economic stagnation on outgoing President Fernando Henrique Cardoso's tentative steps to embrace capitalism. Lula promised to create 10 million new jobs through public-private partnerships and to double the minimum wage of $53 a month. To appeal to the armed forces and to restore Brazil's flagging self-esteem, he also suggested that abandoning Brazil's secret nuclear weapons development program in the mid-1990s was a mistake and promised to build up Brazil's military and technological prowess.

Lula favors strengthening the four-country Southern Cone Common Market known as MERCOSUR (MERCOSUL in Portuguese)--which Brazil dominates--through a subregional parliament and common monetary policies, rather than pursuing the U.S.-backed hemispheric FTAA. But if his approach is enacted, it would pile on more debt, divert attention from the real threats of crime and terrorism, and discourage trade with external markets, not just for Brazil but for MERCOSUR members Argentina, Paraguay, and Uruguay as well.

Rays of Hope. Current economic and political realities leave Lula little room to impose a radical agenda. Lula had to choose a moderate running mate and tone down his anti-free market campaign rhetoric after it caused Brazil's currency to devalue by some 30 percent. The other MERCOSUR partners, with their own economic troubles, are not likely to agree to a regional parliament run by Brazil. Nor would an alliance of all of Brazil's leftist parties provide enough votes to pass huge public spending programs in either house of congress.

Despite its roots on the left, the Workers' Party (Partido dos Trabalhadores, or PT) that Lula helped found 22 years ago has pursued a reform agenda of its own. In the states and municipalities where the PT has been in control, it has combined a concern for the poor with grassroots decision-making, leading to more open, accountable, and democratic governance.

Toward Commonsense Relations. Although Lula's campaign rhetoric may be part bluster, he should still be engaged with caution. He is untested in high office, and his lingering admiration for Castro and Chávez could portend aid to those regimes. To keep Brazil's ship of state afloat, he should be encouraged to continue his predecessor's market-oriented reforms. In his upcoming meeting with Lula, President Bush should promote U.S. interests and good relations with Brazil by making clear that the United States will:

• Condition continued U.S. support for emergency assistance to Brazil, such as IMF loans, on its adherence to the Nuclear Non-Proliferation Treaty; restraint from directly aiding non-democratic or authoritarian regimes, such as those in Cuba or Venezuela; and continued progress on efforts to establish the rule of law and open its markets;
• Support Brazil's leadership on regional security priorities if it forgoes nuclear pretensions to help the region's democracies counter the threats of international crime, drug trafficking, and terrorism; and
• Work with Brazil to lower global trade barriers as well as to develop a common position before the World Trade Organization (WTO) on steel and agricultural products, to establish a mutually beneficial bilateral trade accord, and to advance the FTAA.

Conclusion. "Order and Progress" has been Brazil's motto since 1889. Order is helpful only when it promotes free choice, and progress is possible only when opportunity is available to all. President Bush should encourage President-elect Lula to uplift Brazilians and make Brazil a hemispheric power through free markets and less burdensome government while working with other nations in the region to defeat their common threats.

--Stephen Johnson is Policy Analyst for Latin America in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.

www.fijilive.com Monday February 10, 2003

Fiji's Assistant Minister for Agriculture, Sugar and Land Resettlement, Isireli Tuvuki and Ambassador to the European Union, Isikeli Mataitoga are currently lobbying in Brazil for preferential access to EU markets. They are part of the African Caribbean Pacific (ACP) group of Sugar Ministers representing the three geographical regions of the ACP, which are suppliers of sugar under the Sugar Protocol. The purpose of the mission is to consult the new President of Brazil, Luiz Lula da Silva, of the socio-economic implications of the European Union Sugar Challenge brought by Brazil and Australia under the Dispute Mechanism of the World Trade Organisation. Mr Mataitoga said in the context of the consultation process in connection with the EU Sugar Challenge in the WTO brought by Brazil and Australia, both countries had made assurances that their challenge was not intended to undermine the preferential access of ACP sugar exports to the EU market. Mr Mataitoga said many ACP state countries, which were likely to be affected by the WTO challenge, were either small, least developed, developing islands or landlocked countries, and single commodity exporters. "Their inherent constraints and vulnerability inhibit them from reaching competitive levels and absorbing change in the same timescale as the more developed countries like Brazil." In addition, Mr Mataitoga said most of the development and diversification in most of these ACP countries was often severely restricted by geographical isolation, small domestic market, severe agro-climatic conditions and natural disasters, and the absence of economies of scale. Mr Mataitoga attended the meeting as an ex-officio Chairman of the ACP Sugar Consultative Group. The meeting will be over two days and the lobby mission will meet with Brazil's Minister for Foreign Affairs and the Minister of Agriculture and possibly with some members of the Senate.

www.forbes.com Reuters, 02.09.03, 3:04 PM ET By Nicholas Winning

SAO PAULO, Brazil, Feb 9 (Reuters) - Latin America's main stock markets are set for another choppy week as traders brace for a possible investor retreat if the United States goes to war with Iraq. "They just want confirmation about when it (war) is going to start and then after that we will probably see some more speculation about how long it is going to take and how it will affect capital flows to the region," said Aryam Vazquez, Latin American market analyst with IDEAglobal in New York. Stocks in Mexico and Brazil, the region's biggest economies, have been in the red for year and no recovery is seen until Iraq fears ease. Smaller markets in Chile and Argentina could creep higher, traders said. In BRAZIL, official inflation data on Thursday will be watched for clues about whether the Central Bank has space to ease its 25.5 percent interest rate. Independent data shows prices remain stubbornly high, and investors also fear high international oil prices could fuel price rises in Brazil. "Inflation will become a major issue because everyone was expecting it to come off in January and it hasn't happened," said Alvaro Teixeira, head of sales at Bradesco brokerage in Sao Paulo. Brazil's Bovespa <.BVSP> index fell 5 percent last week on Iraq war jitters. It stands almost 8 percent below where it began 2002 despite some market-friendly moves from the government of President Luiz Incaio Lula da Silva. The new government on Friday raised its budget surplus target to 4.25 percent of gross domestic product from 3.75 percent, a move some investors hailed as further proof of a commitment to fiscal restraint. In MEXICO, investors remain worried a war in Iraq would undermine the U.S. economy, the destination of 90 percent of Mexican exports and a major source of investment capital. The IPC benchmark stock index<.MXX> fell 1.5 percent last week, leaving it 4.3 percent weaker than where it began 2002. And Mexico's peso currency hit new closing lows despite a move by Mexico's central bank to tighten monetary policy to meet its ambitious 2003 inflation target of 3 percent. The bank on Friday posted January inflation of 0.40 percent, the smallest rise in prices for the month since record-keeping began in 1969. In CHILE, traders said the blue-chip IPSA index<.IPSA> could draw support from last week's positive U.S. labor data, although Iraq could ruin the mood. The IPSA firmed 1.3 percent last week, leaving it 1.5 percent ahead this year. "With U.S. stocks so weak for the last 10 days, we think the bourse could react positively to these data as long as there is no serious news about the conflict (in Iraq)," said Lorena Vasquez, an analyst with BCI brokerage in Santiago. In ARGENTINA, investors said stocks would creep higher, although the benchmark MerVal <.MERV> index has seen little action as players sought better short-term returns in treasury bills or fixed-term deposits. In late January the International Monetary Fund (IMF) approved a rollover of $6.78 billion in debt payments Argentina owes as the country fights a four-year recession that led to the world's biggest sovereign debt default and a fierce currency devaluation. The MerVal gained 2.7 percent last week, and now stands 7.6 percent higher than where it began 2002 as investors key into the presidential race ahead of the April 27 elections. "Little by little the market is consolidating higher ... while keeping a careful eye on local politics," said Mariano Arnau of Raymond James brokerage in Buenos Aires.