Fear, Hope, and Wishful Thinking in Brazil

In a certain developing country, a distinguished senator from the northeast wrote with visible anguish a letter to his friends regarding the recent election and the expected arrival to the capital of a popular leader. In his view the president-elect lacked culture and education, and his election represented the first real test of the democratic institutions in his country. He noted that “nobody knows what he will do when he does come . . . . My opinion is that when he comes he will bring a breeze with him. Which way it will blow, I cannot tell. . . . My fear is bigger than my hope.” The population, on the other hand, was all hope, no fear.

I am, it should be clear, referring to the United States. The senator was Daniel Webster, and the newly elected president was Andrew Jackson. Arthur Schlesinger, Jr., argued in his classic history of the period that Jackson contributed to the vitality of American democracy. However, it is also true that his macroeconomic policies-guided by his hatred of banks, public debt, paper money, and federal intervention-contributed to the most serious economic crisis since independence. It took a whole century before progressives were able to promote in the economic arena the values that Jackson represented in politics.

Luis Inácio Lula da Silva said that his election represented the victory in Brazil of hope over fear. He might have spoken too soon. He may turn out to be not all that different from Jackson if his macroeconomic policies are not reversed soon. It may seem premature to draw this parallel. Progressive men and women around the globe-like most Americans after Jackson’s election-are more hopeful than fearful. And there are good reasons for that, as Stanley Gacek reminded us in his recent article in this magazine (“New Hope for Brazil? Spring 2003). Lula himself during the campaign-and, as president, at the World Social Forum in Porto Alegre-promised to provide an alternative to the neoliberal policies that dominate the corporate-led globalization process.

His commitment to reducing inequalities, eliminating poverty, and promoting a more civilized society are unquestionable, as José Eisenberg also argued in this magazine (“Governing Brazil: New Challenges for the Left,” Summer 2003). But the problem is that the PT has more fear of financial markets than hope in its own ability to turn the economy around.

During the campaign, international financial markets put a lot of pressure on the Brazilian electorate. The world’s most celebrated currency speculator, George Soros, in an interview with the Folha de São Paulo, one of Brazil’s leading newspapers, argued bluntly that Brazil would not be allowed to elect Lula. Later he argued that as long as Lula led the polls, and even more should he win, the Brazilian real would be under speculative attack. In fact, the pressure began even before the election. The real deprec...