Following the eight year Presidency of Luis Ignacio Lula da Silva, Brazil has come to embody both the transformation of Latin America and the rising clout of developing world. Through a combination of heterodox public policies, ‘soft’ diplomacy and the internationalization of brand Brazil, the nation has finally shed its tragic nickname of the ‘country of the future’ and come to be known as the country of the moment.
As Brazil’s new President, Dilma Rousseff, prepares to shepherd South America’s largest economy into the next decade, questions loom as to the nation’s ability to sustain its current rate of development and continue to innovate in international and public policy spheres.
With these thoughts and others, I sat down to speak with Roberto Mangabeira Unger –Brazil’s former Minister of Strategic Affairs and member of Dilma Rousseff’s transition team– at his office in Cambridge, MA to discuss the country’s pending reforms and ambitions for the next decade.
Roberto Mangabeira Unger is Roscoe Pound Professor of Law at the Harvard Law School and the author of The Left Alternative, 2009, now in its second edition.
You’ve cautioned against comparing President Lula’s administration with that of Dilma Rousseff’s, citing the different demands of their respective eras. What era is Brazil entering now and what are its demands?
Roberto Mangabeira Unger: The great paradox of Brazil is that an immense vitality coexists with a denial to the majority of ordinary men and women of the economic and the educational instruments that would enable them to do something with their lives. The result is that much of this vast human dynamism goes wasted for lack of capabilities and lack of opportunities.
Brazil has had, under Lula, very substantial advances in the consolidation of macroeconomic stability; in the effort to lift millions of people out of poverty; in the expanded access to millions of young people to university and technical school; in large works of transport and energy and communication that are indispensible to our national development; and in a new position in the world.
Nevertheless despite all of these tangible and intangible advances the central problem of the country has not yet been solved. The central problem is this disparity between our vitality and the consequences of our inequality. The implication is that the next government and the next stage in Brazilian life have a different task. The task is to build a model of national development, a strategy of national development, that resolves this paradox and equips ordinary people with the capabilities and opportunities that they are denied. The problem is that the execution of this task requires something that we have rarely done in our national history, which is to innovate in our institutions. It is not a task that we can accomplish simply by building physical things or reallocating resources. It requires a reorganization of our institutions and a reorientation of the dominant ideas.
What do you see as Brazil’s role in the international arena?
Well we have a national interest in the creation of a world order more hospitable to a pluralism of interests and of vision than the world order that now exists. I’ll give you an example in the area of trade. The world trading system, under the WTO treaties, is now being organized as a system based on three commanding principles. The first principle is that the goal is the maximization of free trade. But free trade is not an end free trade is a means. The real end should be to create an open world economy on a basis that favors the coexistence of alternative strategies of national development and alternative experiences of civilization. In other words that allows for an extension, a radicalization, or experimentalism all over the world in different forms of life on the basis of respect for those rights and those capabilities that enable individuals, as well as collectivities, to experiment.
The second principle on which the present world system is being organized is a kind of institutional maximalism, by that I mean the impulse to impose on the trading countries, in the name of free trade, not just adherence to the market economy in general but conformity to a particular version of the market economy. Example, the tendency to outlaw, under the label subsidies, all the forms of strategic coordination between governments and firms that the countries now rich used to become rich. Another example, the impulse to incorporate into the rules of free trade the present regime of intellectual property, notably the patent system, which is in fact a relatively recent invention.
The third principle that the present world trade system that is shaping the development of the present world trade system is a striking contrast between the grant of freedom to things and to money and the denial of freedom to people to cross national frontiers. The single greatest lever of greater equality in the world would be greater freedom to move and to work elsewhere, although temporarily and conditionally and by steps, by successive steps, with safeguards with compensations.
It’s been twenty-five years since the end of Brazil’s Military dictatorship. What are your views on the current state of democracy in Brazil?
Brazil is the third largest democracy in the world. The largest is India and the second is the United States and our democracy is flawed, to be sure, but vibrant. Our party system is a mess, it never really recovered from the period of the military regime and I believe that greatest failure of our political parties, has been their failure to present the country with a clear alternative to the dominant political idea in Brazil, and in much of South American and much of the world, of what you might call ‘Tropical Sweden’.
So the idea is that all the great alternatives debated and fought over in the course of the last two centuries around the world have been discredited and defeated and there is only one path left. So what we have to do, according to this idea, is to adapt this path to our circumstances and above all to humanize it through social programs. It’s a fantasy about Scandinavian social democracy, that’s why I call it sardonically Tropical Sweden. As if we could achieve the subjective, in a country of this dimension, with these extreme inequalities and diversity in all forms; social, racial, religious, even physical and geographic, simply by incremental redistribution and regulation. Not enough. We wont get there. It’s not enough for Sweden and it’s certainly not enough for Brazil. There isn’t any force in Brazil that has clearly brought before the country an alternative to this phony idea of Tropical Sweden. In our country, in a way the opposite of the United States, no one professes to be a conservative. Everyone claims, or almost everyone claims, to be some kind of progressive and adopts a social democratic or social liberal discourse, but characteristically in the sugary form of this humanization of the inevitable. So that’s our conceptual failure, a failure of the imagination against the background of the abdication of originality in the sphere of institutions. Brazil is a society full of originality for example in popular culture, but this originality in the cultural life of the people has not been translated into the affirmation of originality in the domain of institutions of our national life, of our national project.
President Lula has spoken of using his time out of office to advocate for reforms to Brazil’s political system. What political reforms must Brazil still undertake?
Successive Brazilian presidents have affirmed the priority of political reform and then failed in power actually to bring it about. The point of departure, the first step towards this future is to sever the link between politics and money, to create a state that is not in the pocket of a plutocracy. And there are three sets of measures that we would have to undertake in Brazil to bring that about. First, radically to change the way in which political activity is financed, including the public finance of campaigns. Second, to replace the great majority of politically chosen offices in the state by governmental careers, by meritocratic civil service, and third, to reform the budgetary process which is a kind of swamp in which the powerful interests of the country struggle with each other and embrace one another.
My view is that all of these political changes that we are now talking about are the counterpart to this reorientation of the development strategy. It’s very common for the enlightened political elite to say that political reform is a preliminary, has to come first, and then we’ll talk about the change of the economic and social course of the country later. The reality is that that’s not how things happen in history. No country changes its political institutions in order later decide what to do with them. The way things happen is that the political institutions are changed only when they are felt to be a straight jacket that prevents the country from doing what it wants to do. This reshaping of the political institutions would have to happen in the midst of a struggle to change the direction, to change the economic direction.
How do you suggest that the Brazilian economy move in this new direction?
First, to do this that I’m advocating, we would have to bifurcate the economic pseudo-orthodoxy that we have largely accepted in the last decades. Part of it that we have to not only accept but reaffirm and deepen and that’s fiscal realism and fiscal responsibility even at the cost of postponing the use of instruments of counter-cyclical policy, or Keynesian policy. What happened in the left is that when the intellectual lost faith in Marxism many of them embraced vulgar Keynesianism as the substitute. Now we need fiscal realism and fiscal responsibility not as a genuflection to the financial markets but as a way of gaining independence so that we don’t depend on financial confidence, so that we can embrace a bold a rebellious national strategy. And therefore the bad part of the pseudo-orthodoxy, the part that we have to reject, is the part that tells us that we can rely on foreign capital to develop. No country becomes rich with another country’s money. It needs to innovate in its institutions in order to include, and to do that it has to disappoint the interests, and above all the prejudices, of the established forces in the country and in the world. And it needs a cushion of domestic saving, both private and public of national saving, to be able to do that, a force tightening of the level of national saving.
Second, in agriculture, which is now the main business in Brazil, we have unique advantages but we have accepted an ideological contrast between entrepreneurial agriculture, agribusiness, and family-scale agriculture that we have to overcome. We have to overcome it by a series of initiatives that would ensure entrepreneurial attributes to family-scale agriculture. One of our physical problems in Brazil is that for every acre under cultivation five acres are given over to low-intensity cattle grazing with the result that much of our national territory is now degraded pastureland that we must convert and can convert at relatively low-cost. So that we could easily in Brazil, in a very few years, double the area under cultivation and triple our agricultural output without touching a single tree.
Third, in industry, our traditional industrial policy in Brazil consists in taking money from the workers, giving it to the national development bank and the other public banks, that in turn give it to twenty big-businesses well connected to the state under the pretext of transforming them into global champions. The discourse is French and the practice is Korean. Meanwhile the most important sector of the Brazilian industrial economy, which is small and medium sized firms, are famished, starved of access to credit, technology, knowledge, and markets. They’re the ones we have to lift up. We have to bring them closer to the vanguard.
Fourth area is labor-capital relations and there’s three big problems. The first problem is that around 40% of the economically active adult population is in the so-called informal economy. We have to downsize radically pay-roll taxes and charges so that there isn’t a powerful disincentive to the employment and skilling of low-wage labor. The second problem, an increasing percentage of workers are in precarious situations of temporary sub-contracted labor or self-employment. We need a new set of rules to protect them, to represent them, and to organize them. The third problem is that over the last fifty years, the relative share of labor and national income has gone progressively down and consistently fallen beneath, below, advances in productivity and we would have to begin to reverse that. We can’t prosper in the world as a kind of China with fewer people. We should not bet on low-wage, low-skill labor, on cheap human labor. We should bet on going up the productivity scale.
What reforms are pending in the area of education?
One of Brazil’s great historical mistakes was to drastically under invest in education and I would say that today the two greatest priorities in national education are these.
First, to develop a series of procedures that would enable us to reconcile the local management of the schools by the states and municipalities with national standards of investment and quality. This is a problem that we share with the United States, and that we share with any country that like the United States and like Brazil, is very big, very unequal, and federal. It’s not enough to have a national system of evaluation of schools, it’s not enough to have a mechanism to redistribute resources from richer places to poorer places. You need something else, which is a procedure to intervene correctively when a local school system repeatedly falls below the minimum acceptable threshold of quality and to fix it the way that an independent administrator would fix a failing business under Chapter 11 bankruptcy.
The second priority in education is a dramatic change in the method of education. We need a form of education that rejects the emphasis on superficial encyclopedic coverage and memorization that has historically characterized public education in Brazil, in Latin America generally, and in much of the world. And the ideal in the future is a form of education oriented to analytic capability with a focus on the basics of numerical and verbal analysis. That prefers selective deepening to encyclopedic superficiality. Mastery of facts in the service of analytic capability that in it’s social setting is cooperative, rather than individualistic and authoritarian, and in its attitude to established knowledge is dialectical, that is to say that it presents every subject from at least two contrasting points of view. The place to begin in our situation is secondary schooling, which is the weak link in the chain. A new kind of high school a new kind of secondary school that combines general education with an analytical focus and technical education, that instead of prioritizing job-specific and machine-specific skills, gives priority to generic and flexible practical capabilities. An open frontier between this new kind of general education and this new kind of technical education.
I’ll make a general cultural comment. A characteristic of Brazil is it’s anarchic spirit. Our culture is characterized by an anarchic syncretism. It is entirely unnatural that we should have adopted as our educational model a kind of French dogmatic canonical model which is the very negation of our most prominent national characteristics. We should transform this untutored spontaneity of ours into a cultural flexibility. And I could generalize this comment about much that goes on in our national life. It’s as if for lack of wars we have decided to wage war on ourselves, and each characteristic of our national institutions, or our national culture, is as if it were a denial of who we are and we have to change that. We have to change that and a condition for changing that is this self-acceptance and this willingness vigorously to affirm an original collective identity. In Latin American that means accepting our nature as mestizos and not pretending to be something that we’re not and understanding that we best serve humanity by being originals. One of the requirements for being originals is to develop institutions that equip this power of rebellious self-affirmation.