Brazil is in a funk. The gloss has come off the “miracle” that its leaders have long proclaimed. Investors started selling the country for such complacency long before the emerging markets slide accelerated this month. Now some 1m Brazilians have joined the protest too.
Their complaints range from corruption to poor public services and government overspending. What has caught everyone by surprise is their intensity, and popular support. Brazil’s protests also raise the question: how are they different from Egypt’s or Turkey’s? A further puzzle is how the government might resolve them.
Albert O Hirschman, the great US economist who died last year and did much of his work in South America, provides some clues. His best-known book, Exit, Voice and Loyalty, describes how individuals in struggling organisations, be they nations or businesses, have a choice between getting out (exit), or agitating for change (voice).
It is a wonderfully simple scheme. In East Germany, for example, the suppression of “exit” and dissident exile eventually led to “voice”, then mass protests and the fall of the Berlin Wall. Today, if far less dramatically, Brazil exhibits many of the characteristics Hirschman identified 40 years ago. They also provide a possibly optimistic perspective as to how the protests might be resolved.
First, the “why” of the Brazilian protests. These arose even though 40m people have risen out of poverty in the past decade. For some in the ruling Workers’ party (PT), this is sheer ingratitude. “These people view their ascension as the exclusive product of their own hard work, they are not conscious it is the fruit of government policies as well,” Rui Falcão, president of the PT, said last week.
It is debatable how much of that ascension is due to government policies rather than high commodity prices and a generalised credit boom. Either way, it is precisely because of their social ascension that so many Brazilians are protesting today.
Take healthcare. Brazil is one of the most unequal societies on the planet. Previously, the middle classes could afford to leave the public health system by going private. This “exit” reduced the role of protest, or “voice”, which might have improved matters. The same was true of public policing and education, which the well-to-do exited by paying for private security and schools.
But Brazil’s new middle class cannot afford the same escape valves. Their finances are too precarious. Instead they suffer shoddy public services and, as they find them lacking, their grievances eventually spilled over and gave “voice”.
For Hirschman this kind of conflict is fruitful and can lead to “a new, more cohesive democratic order being produced”. That is especially so because Brazil’s protests, although diffuse and without obvious leadership, are of the “more-or-less” variety, which can be solved through compromise.
After all, it is not as though Brazil, the world’s eighth biggest economy, lacks the resources to have good public services. The government takes in almost $400bn of tax revenues a year, about 35 per cent of gross domestic product, the same as the UK.
One reason why public services remain so poor is that funds are siphoned off to pay overly-generous public pensions. Teachers, for example, can retire in their early 50s on full salary, often after a final promotion in their last year. Other reasons are corruption, white elephant projects such as football stadiums, and sheer mismanagement. Last week, protesters in Rio taunted police troops with the telling word vergonha, or shame.
Of course, solving such social problems is easier said than done. It requires, in part, a cultural change that goes beyond the politics of the day into a more general need for good governance.
But at least Dilma Rousseff, the president, recognises there is a problem – unlike, say, Recep Tayyip Erdogan who has called Turkey’s protesters “bums”. The same may also be true of Brazilian attitudes to financial markets, where capital controls and other heterodox measures are slowly being rolled back (although the higher spending that might help solve social demands could clash with macroeconomic stability).
Crucially, Brazil’s “more-or-less” conflicts are also easier to solve than the more intractable “either-or” variety that exists over divisions of religion, gender, language or race. Those are more the kinds of problems that the Middle East grapples with. Brazil’s are of a lower order.
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