The Eternal Tupiniquim Regress

The philosopher Friedrich Nietzsche formulated the concept of the Eternal Return.

According to him, the Eternal Return has to do with the possibility of our existences repeating themselves infinitely, forcing us to live our lives exactly the way we are living them now, making the same mistakes and the same right calls, and adding nothing new to them: we would be, therefore, trapped in a prison of repetition. Far from wanting to discuss philosophy or metaphysics here, if we apply this idea to understanding our politics, we can coin a term for what is almost like a (tragicomic) disease afflicting Brazil's statesmen: the Eterno Retorno Tupiniquim — the Eternal Tupiniquim Return.

It's almost as if we were doomed to always repeat the same mistakes of the past: we, as a State, always fall into the same traps, always resort to the same populisms (dressed up in different colors), always reach for the same disastrous economic tricks, and fail, both as individuals and as a society, to stop them from happening.

So the crisis we're facing now, personified in the mistakes of the (also tragicomic) figure of Dilma Rousseff and her party, is the same crisis we faced in the 80s, the one we faced with Getúlio, the one we faced with Rui Barbosa: it's the crisis of reckless statism, the crisis of political megalomania, the crisis of the lack of freedom. How, then, do we break out of this vicious cycle and leave behind the Eternal Tupiniquim Return — which we can't quite tell is more of a sad samba or a disastrous tango?

The answer isn't that simple. A liberal, orthodox shock to the economy, which looks like the solution, has never been fully carried out in our country. It was always done halfway, never truly liberal. To fight the Encilhamento Crisis, generated essentially by the indiscriminate issuing of money and credit, Campos Sales fought inflation by pulling currency out of circulation and blocking its issuance, pursuing a strong, stable currency. He also managed to cut government spending and shrink the budget deficit. But he raised taxes significantly, generating popular discontent. In the end, he balanced the budget, and Brazil even got room to breathe. But not for long: it wouldn't take much time for the state to spin out of control again, going through insane interventionist ventures like the Taubaté Agreement and the Coffee Valorization plans, one of the causes of the deep recession we had in 1929. The problem has its roots in the freedom politicians had to concoct their far-fetched schemes and to be reckless in running the public administration.

The story of the crisis we're living through now isn't all that different. After seven disastrous economic plans to contain inflation and generate growth, all of them with effects opposite to what they intended, a left-wing government finally gave in and implemented the so-called “neoliberal” economic reforms outlined in the Plano Real. The problem with Brazilian “neoliberalism” is that it, too, was implemented halfway. We privatized state-owned companies (sloppily), but kept their sectors heavily regulated and shielded from competition. We stuck with a model of extortionate and inefficient taxes. We spearheaded a bureaucracy so maddening that, next to it, Kafka's bureaucratic nightmares look like bedtime stories. The great triumph of the Plano Real — a relatively stable currency and relatively prudent monetary policy (in the view of economist Leandro Roque) — was soon reversed by the use of public banks to expand credit and, later, made official under the Dilma administration through the Nova Matriz Econômica, basically a Keynesian paradise. And once again we found ourselves stuck in the mud. The problem, after all these years, is still how easy it was for politicians to be reckless in running the public administration, chasing their hallucinations of grandeur.

The question is: if we implement liberal measures at this point, we would probably still be subject to the Eternal Regress of Statism. The only way to keep that from happening is by institutionalizing these reforms, preventing them from being undone, enshrining them in the constitution; it's outlawing recklessness. We should look at how this was done in New Zealand and try to adapt some of those reforms to our country: New Zealand, in the 1980s, found itself with no great economic prospects, stagnant, with a very closed, heavily state-run economy. Nearly irreversible reforms were made, mirroring the thinking of the Chicago School and of Friedrich Hayek, who sees the market as a discovery process and stresses the importance of information flows for the economy to become more rational. Specifically, you can see this implemented in the public sector, which became far more transparent and predictable, not only in its actions but in its targets and results, making planning based on those variables much simpler for the productive sector. Laws were also created forcing politicians and bureaucrats to be more careful and transparent with public finances, like the Public Finance Act, the Fiscal Responsibility Act, and the Central Bank Act (this last one deserves a dedicated article to explain it, given how unique it is) — laws that can't be changed on a whim, the way we do here with, for example, our own Fiscal Responsibility Law. Today, the country is one of the most prosperous and free economies in the world.

It's obvious we have countless reforms to carry out, and that they still need plenty of discussion, but we should take advantage of a critical situation like the one we find ourselves in now to implement measures that would hardly be feasible (for political reasons) in calmer times. We also know that liberalism in Brazil is demonized by the left, but liberal thought has been growing consistently and encouragingly, and lately several politicians and a few parties have emerged supporting ideas of freedom: after all, we don't need to change Congress to get support for these reforms — we need to make our ideas politically profitable, as Milton Friedman put it. And in fact, we're pulling it off. And maybe we're getting close to the end of this prison of political megalomania and irresponsibility that is the Eternal Tupiniquim Regress.