Pacification and Brazil’s War on Drugs

For decades, Brazilian favelas (slums) have been under the control of highly organized, well armed gangs. Financed by the drug trade and armed with weapons often bought from the police the gangs rule their territory, rivaled only by other gangs trying to win turf. Up until a few years ago even law enforcement officers dared not enter. But spurred by the pleas of a large voting bloc and especially this year’s World Cup and the 2016 Olympic Games a change in policy was deemed necessary. In an effort to polish up Brazil’s image abroad a new policy of pacification of the favelas was adopted in 2008. Aimed at eliminating the gangs’ control the policy can be divided into three phases: (1) reclaim territory formerly lost to drug gangs, (2) expel them from those areas and (3) integrate resident communities with the rest of the city. This last phase theoretically includes long-term government initiatives to improve quality of life in pacified favelas, although this has been called into question by residents. Besides, when being a bureaucrat becomes as lucrative as it is in Brazil, one should not be surprised to hear would-be politicians make any and all campaign promises necessary to win political office. As mentioned in a previous article Brazilian police is notoriously corrupt and consequently distrusted by many people, particularly in the states and cities of São Paulo and Rio de Janeiro. Perhaps that is why two special police departments were set up to establish closer ties between them and local residents: the Batalhão de Operações Policiais Especiais (BOPE) and Unidades de Polícia Pacificadora (UPP). Although often referred to as “community police” these forces can call for military support – as they did most recently in 2010 and 2011. In select slums gang members were successfully chased out and …

Brazil’s Most Controversial Government Program

A common characteristic of developing nations is the high rate of urbanization and subsequent disparate development between regions. Brazil being no exception to this rule, the effect is quite far-reaching in the healthcare industry. More than 90 percent of medical professionals are concentrated in areas that cover less than 10 percent of the country. A program launched by the federal government in 2011 to address this problem failed to attract but one third of the required number of doctors to address this problem. Consequently, it was replaced with a new program: Mais Médicos (more doctors). Overseen by the World Health Organization, this three-year program aims to alleviate the unequal geographical distribution of healthcare professionals by bringing them in from abroad. Fifteen thousand doctors from Cuba, Portugal, Argentina, and Spain were to work in these remote areas. Yet while government initiatives with such laudable goals generally tend to garner plenty of popular support among Brazilians, Mais Médicos has been shrouded in controversy from its inception. Industry representatives, students and the Ministry of Labor have taken aim at the program, A conservative magazine even went so far as to accuse Cuban doctors of being “communist spies” infiltrating the country. In a mere 12 months (Mais Médicos went into effect in July 2013) the program has become arguably the most controversial one implemented by the Dilma administration. While the Cuban healthcare system has a relatively good reputation the fact that a significant chunk of Brazilian tax money directly funds the communist Cuban state makes some feel quite uncomfortable. The Brazilian Medical Association and the Federal Council of Medicine have been encouraging healthcare professionals to voice their opposition in the form of protests and strikes. They even went to the Supreme Court last August in an attempt to roll back the program, stating foreign …

A Critical Look At a World Famous Welfare Program

Hailed by The Economist as a “much admired and emulated anti-poverty program”, the signature legislation of Brazil’s last president Lula da Silva was the Bolsa Família (Family Allowance) program. Aimed at alleviating the misery of the poorest segments of the population, the program provides financial aid to families and free education for children whose parents cannot afford to send them to school. The largest conditional cash transfer in the developing world comes with strings attached, though. The eleven million families receiving the financial aid – on average $35 per month – commit to keeping their children in school, adhering to the government’s vaccination schedule, and taking them for regular health checkups. In a country plagued by persistent inequality and poverty widely blamed on an unjust system, the popularity of a program of direct wealth transfers to the least privileged should be no surprise. Still, might the superlatives expressed by the likes of The Economist have been a little overdone? At first glance the numbers seem impressive; extreme poverty has been halved from nearly 10 percent to just over 4 percent, income inequality has fallen, and about one fourth of the population has benefited from the program. In addition, the initiative has been touted for its decentralized nature and target accuracy in reaching those in the most dire of circumstances. As Henry Hazlitt might have pointed out, however, there is more than meets the eye. It does not take a genius to understand that since the government has no money to spend it has to fund its operations through taxation, the printing press, or by going into debt. In the long term, therefore, the Bolsa Família program cannot be said to contribute to real wealth creation. Worse yet, regardless of the preferred means of funding itself these government programs necessarily extract …

The Self-Regulating Power of the Market

A common objection to a libertarian society is the “without the government corporations would rule the planet” argument. The theory goes something like this: having few or no laws would give business free reign to run roughshod over our rights since the people have no recourse if they are violated. By extension the idea of limited (let alone no) government is quickly dismissed as a utopian illusion thought up by naïve dreamers who think corporations are run solely by selfless do-gooders. Fortunately those that have taken a more than slight interest in the message of liberty know better. The majority of libertarians are not corporate apologists but rather critical thinkers who understand that while no system is perfect, centralizing power into the hands of a relative few is least likely to genuinely protect people’s rights. Besides, while government can – and routinely does – secure your compliance with the threat of “legitimate” violence, a business that fails to live up to its promises can either step up its game or watch while its customers take their business to a competitor. Libertarian theory basically holds that built-in market mechanisms reward good business practices and penalize bad ones, thereby removing any need for government intervention. After all, a free market knows no barriers to entry that would stop an entrepreneur from filling the void left by competitors. In many cases however, one does not need to go that far at all. Since reputation is key to the survival of any business the free flow of information protects customers from mistreatment. In this information age that has become truer than ever. Here in Brazil a good example is a website and mobile application called ReclameAqui (“complain here”). Dissatisfied customers use such websites to post their grievances about a product, service or poor customer …

Constitutionally Protected Corporatism

The seventh and current Brazilian Constitution dates back to 1988, when it was written from scratch by a Constitutional Congress elected two years earlier. It contains a whopping 250 articles making it about as thick as the Bible. As its length might indicate it was not exactly written in the traditional sense, for the purpose of outlining what government can and cannot do to ensure the rights of the people. Drafted after a period of military dictatorship with a constitution that severely restricted the rights of the people while expanding government power, the current one is also known as the Citizen Constitution. Did the Constitutional Congress in the late eighties feel the need to allay people’s fear of having their rights stripped away anew? Perhaps, but entrusting the very same institution that trampled all over the rights of the people with a litany of new powers does not seem to make logical sense. Couple this flawed logic with collectivist egalitarian rhetoric and what results is not exactly a recipe for freedom. Many classical liberals and libertarians understand the inherent contradiction in constitutionally protecting positive rights; that protecting someone’s “right” to force a doctor to provide healthcare services inevitably ends up violating the doctor’s rights. Yet much less thought seems to be given to the practical implications, not to mention how it warps the general perceptions of capitalism. Whether one calls it corporatism, crony capitalism, or state capitalism, it certainly is anything but capitalism. Yet it is written right into the “law of the land” and few seem to take notice. The constitutionally guaranteed “right to healthcare” apparently includes – among other things – free drugs for those suffering from hypertension, diabetes and asthma, as can be seen advertised in and around pharmacies here. While perhaps seemingly laudable at first glance, …

The Private Security Industry In Brazil

Walking down the street here in Brazil one can spot many signs on homes and businesses warning criminals that the property is protected by company X. For a free market proponent like myself this was a particularly interesting observation which prompted me to do some research. One problem many Brazilians complain about is corruption. Transparency International’s Corruption Perceptions Index has Brazil consistently hovering around 70th place in the world in recent years. Considering that any score below 50 indicates a serious corruption problem, Brazil’s public sector corruption level is given the thumbs down with a score of 42. It should be no surprise, therefore, that over 60 percent of Brazilians distrust the police. The problem is particularly serious in the state of Rio de Janeiro, where extortion by police is the most common. While a 2012 crackdown resulted in the arrests of 63 Rio police officers, the Mensalão (Big Monthly Payment) scandal exemplifies the pervasiveness of corruption in many if not all layers of government. In 2010 an industry trade association in the state of São Paolo estimated the average annual cost of corruption as roughly between $32 billion and $53 billion. While the Mensalão scandal had a big impact on then-president Lula’s administration, for most Brazilians corrupt police comes at a much greater cost. According to Human Rights Watch “police officers in Rio de Janeiro and São Paolo routinely resort to lethal force”, killing more than a thousand people every year in those two cities alone. Since 2003 more than 11,000 residents of Brazil’s two major cities have lost their lives at the hands of police. Though police reports often claim the victim(s) resisted arrest, Human Rights Watch reports that forensic evidence contradicted the official version of events in many cases. Such abuse of power is pervasive and in …

How Technology is Freeing the Market in Brazil

In times of seemingly unending government intervention in every aspect of our lives, some find it hard to be optimistic about our chances of achieving liberty. At the same time, however, we are fortunate enough to live in an era in which innovative new technologies are chipping away at said intervention. And these technologies run on devices so small they fit in our pockets! I am sure we can all attest to this development, and one example recently caught my attention. City governments here in Brazil still have a heavy hand in the taxicab industry, restricting competition by only allowing a pre-determined number of drivers to operate with a license and designated vehicle in a given area. Whether one qualifies for a license depends largely on experience, tilting the playing field in favor of older drivers. Though this is partly mitigated by the sublicensing of younger drivers, the average age in the profession is relatively high. In order to pool the risk of accidents and other calamities – among other reasons – virtually all drives are united in a co-operative to which they pay a R$700 (350 USD) monthly membership fee. Besides auto insurance the co-ops operate call centers which people can call when in need of a cab. In short, the only major change the industry has seen in many years has been of a temporary nature: the issuance of thousands of extra licenses by local governments for the 2014 World Cup. Yet clients and drivers alike are finding that overregulation does not represent immunization from changing times. While Uber has not yet made inroads into Brazil beyond Rio de Janeiro, other free applications for mobile devices have caused a mini-revolution in the previously bogged down industry. Known by such names at 99Taxi and Taxijá (já meaning something like …

Is Brazil Sitting On a World Cup Bubble?

Just hours before the opening ceremony of the World Cup last Thursday, protesters clashed with police in the streets of Sao Paulo and Rio de Janeiro. Striking airport workers and teachers also made the headlines, seeming to confirm the concerns many Brazilians have about civil unrest during the tournament. Now that the spotlight is on Brazil for an entire month, different groups of disgruntled citizens are expected to attempt to garner international attention for their cause. The first protests were largely sparked by the billions in taxpayer money that have been spent on stadiums and infrastructure in a country whose GDP per capita is below that of Venezula and Iran.  In order to be able to claim that the stadiums were financed by private construction firms, Brasilia lent money to them at astonishingly low interest rates, less than half the going rates. Coupled with the fact that politicians are notorious for their cozy relationships with the construction sector, it is no surprise that no self-respecting Brazilian believed these claims. An Audit Court report released last May found $275 million in alleged price-gouging for the Brasilia stadium alone. Just like four years ago in South Africa the stadiums have become known as “white elephants” for their huge cost before, and uselessness after the tournament. The city of Brasilia has no major professional team to use the stadium after the World Cup, while the $270 million Arena da Amazônia in Manaus is so remote that construction materials had to be shipped up the Amazon River because no trucks could reach the place. So, despite the fact that no team would even consider playing their home games there, that’s just where the Brazilian politicians decided to have their cronies build a stadium. Needless to say, the surge in government spending in the last months and …

Language of Liberty’s Brazil Tour Continues

For the first weekend seminar the Brazil Liberty Team returned to Porto Alegre for the third consecutive time, where we were joined by Roberto Rachewsky of the Millennium Institute, Diogo Costa of Ibmec and University of Iceland professor Hannes Gissurarson. The event was hosted by Instituto de Estudos em Gestão Empresarial (IEGE) and organized by Clube Miss Rand, a student group started as late as last January that already attracts more than 40 liberty enthusiasts to their weekly meetings. With topics ranging from the importance of language to education and economic freedom, and from the drug war to entrepreneurship and how modern technology can advance the cause of liberty, the presentations were very well received. They also stimulated lively discussions with all attendees after the speeches and during the breaks. The seminar brought together a truly international team of speakers from different backgrounds, so that everyone in the audience likely could identify with at least one of them and their passions. We hope to be back again! The last weekend of May brought the expanded Brazil Liberty Team to Curitiba, capital and largest city of the state of Paraná. The seventh largest city of Brazil, Curitiba is home to 1.8 million people and over 3 million in the wider metropolitan area. In 2009 Reader’s Digest named Curitiba the best city to live in Brazil. The city’s modern transportation system, buildings and shopping streets give it quite a European feel. The seminar was organized by the local student group Grupo de Estudos Liberalismo e Democracia (GELD), which started last September with Saturday morning meetings and just four people in attendance, yet now has some forty members and continues to grow. Diogo Costa was not with us for this event but the audience was treated to his Ibmec colleague Adriano Gianturco’s insights …

Language of Liberty tours Southern Brazil

On Tuesday morning our Liberty Team left the city of Porto Alegre, capital of Rio Grande do Sul, the southernmost state in Brazil. After a 5-hour bus ride we arrived in the city of Rio Grande, one of the country’s busiest maritime ports. For our wonderful hosts’ group Clube Atlântico, founded about 6 months ago, it was the first time they received international guests. Nonetheless, thanks especially to the efforts of Camilla, Eduardo, Heber and Everson we felt so welcome and comfortable it was like meeting old friends! In a city known for its strong unions related to the port and city, the group has encountered aggressive opposition from left-leaning (student) groups. Though such groups apparently don’t shy away from vandalizing property in order to make a point, the Liberty Seminar was not interrupted by a confrontation. After a word of welcome from Clube Atlântico’s president Henrique, Glenn introduced the Language of Liberty Institute to the audience followed by Patrick’s empowering speech about educational alternatives and homeschooling, and a talk on marketing liberty by Mart. After the break the attendees were treated to an eloquent presentation by CATO’s Latin America expert Juan Carlos Hidalgo on how economic freedom leads to economic growth and betters people’s lives. The 35 students that attended the seminar, hailing from all over Brazil, left feeling encouraged and inspired to redouble their efforts for the cause of liberty. During the post-event dinner with our new friends we were told that the event had also attracted new members to the group. Encountering the sort of opposition we saw in Rio Grande was a new experience even after organizing over 40 programs all over the world, including many former Soviet countries. Still, it is easy to see the amazing opportunity in the city considering the port and the …