October 2, 2018

Lire en français | Leer en español | Ler em português

Prisons are reminiscent of Tolstoy’s famous observation about unhappy families: Each “is unhappy in its own way,” though there are some common features — for prisons, the grim and stifling recognition that someone else has total authority over your life.

My wife Valeria and I have just visited a prison to see arguably the most prominent political prisoner of today, a person of unusual significance in contemporary global politics.

By the standards of U.S. prisons I’ve seen, the Federal Prison in Curitiba, Brazil, is not formidable or oppressive — though that is a rather low bar. It is nothing like the few I’ve visited abroad — not remotely like Israel’s Khiyam torture chamber in southern Lebanon, later bombed to dust to efface the crime, and a very long way from the unspeakable horrors of Pinochet’s Villa Grimaldi, where the few who survived the exquisitely designed series of tortures were tossed into a tower to rot — one of the means to ensure that the first neoliberal experiment, under the supervision of leading Chicago economists, could proceed without disruptive voices.

Nonetheless, it is a prison.

The prisoner we visited, Luiz Inácio Lula da Silva – “Lula,” as he is universally known — has been sentenced to virtual life imprisonment, in solitary confinement, with no access to press or journals and with limited visits one day a week.

The day after our visit, one judge, citing press freedoms, granted the request of the nation’s largest newspaper, Folha of São Paulo, to interview Lula, but another judge quickly intervened and reversed that decision, notwithstanding the fact that the country’s most violent criminals — its militia leaders and drug traffickers — are routinely interviewed in prison.

To Brazil’s power structure, imprisoning Lula is not enough: They want to ensure that the population, as it prepares to vote, cannot hear from him at all, and are apparently willing to use any means to accomplish that goal.

The judge who reversed the permission wasn’t breaking any new ground. One predecessor was the prosecutor at the 1926 sentencing of Antonio Gramsci by Mussolini’s Fascist government, who declared, “We must stop his brain from working for 20 years.”

“History doesn’t repeat itself but it often rhymes,” as Mark Twain observed.

We were encouraged, but not surprised, to find that despite the onerous conditions and shocking miscarriage of justice, Lula remains his energetic self, optimistic about the future and full of ideas about how to turn Brazil from its current disastrous course.

There are always pretexts for imprisonment — maybe valid, maybe not — but often it makes sense to seek what may be the actual reasons. That is so in this case. The primary charge against Lula, based on plea bargains by businessmen sentenced for corruption, is that he was offered an apartment in which he never lived. Hardly overwhelming.

The alleged crime is almost undetectable by Brazilian standards — and there is more to say about that concept, to which I’ll return. That aside, the sentence is so totally disproportionate to the alleged crime that it is quite appropriate to seek reasons. Candidates are not hard to unearth. Brazil is facing an election that is of critical importance for its future. Lula is by far the most popular candidate and would easily win a fair election, not the outcome preferred by the plutocracy.

Although his policies while in office were designed to accommodate the concerns of domestic and international finance, he is despised by elites, in part no doubt because of his policies of social inclusion and benefits for the dispossessed, though other factors seem to intervene: primarily simple class hatred. How can a poor worker with no higher education who doesn’t even speak proper Portuguese be allowed to lead our country?

In office, Lula was tolerated by Western power, but with reservations. There was little enthusiasm for his success, with his Foreign Minister Celso Amorim, in propelling Brazil to the center of the world stage, beginning to fulfill the predictions of a century ago that Brazil would become “the colossus of the South.” Some of their initiatives were sharply condemned, notably their steps toward resolving the conflict over Iran’s nuclear programs in coordination with Turkey in 2010, undercutting U.S. insistence on running the show. More generally, Brazil’s leading role in promoting forces independent of Western power, in Latin America and beyond, was hardly welcome to those accustomed to dominating the world.

With Lula barred from running, there is a good chance that the right-wing favorite, Jair Bolsonaro, can gain the presidency and seriously escalate the harshly regressive policies of President Michel Temer, who replaced Dilma Rousseff after she was impeached in ludicrous proceedings in an earlier stage of the “soft coup” now underway in Latin America’s most important country.

Bolsonaro presents himself as a harsh and brutal authoritarian and an admirer of the military dictatorship, who will restore “order.” Part of his appeal is his pose as an outsider who will dismantle the corrupt political establishment, which many Brazilians despise for good reasons, the local analogue to the bitter reaction in much of the world to the effects of the neoliberal assault of the past generation. Bolsonaro affirms that he knows nothing about economics, leaving that domain to economist Paulo Guedes, an ultraliberal Chicago product.

Guedes is clear and explicit about his solution to Brazil’s problems: “privatize everything,” the whole national infrastructure (Veja, August 22), in order to pay off the debt to the predators who are robbing the country blind. Literally everything, ensuring that the country will decline to insignificance as a plaything of the very rich and the dominant financial institutions. Guedes worked for a time in Chile under the Pinochet dictatorship, so it may be useful to recall the results of the first experiment in Chicago neoliberalism.

The experiment, initiated after 1973 military coup had prepared the ground by terror and torture, was conducted under near optimal conditions. There could be no dissent — the array of Villa Grimaldis and the like took care of that. It was supervised by the superstars of Chicago economics. It had enormous support from the U.S., the corporate world, and the international financial institutions. The economic planners were also wise enough not to interfere with the highly efficient nationalized copper mining company Codelco, the world’s largest, which provided a solid base for the economy.

For a few years, the experiment was highly praised, and then silence reigned. Despite the almost-perfect conditions, by 1982, the “Chicago boys” had succeeded in crashing the economy. The state had to take over more of the economy than under the Allende years. Wags called it “the Chicago road to socialism.” The economy was largely handed back to the traditional managers and struggled back, though not without lingering residues of the disaster in educational and social welfare systems and elsewhere.

Returning to the Bolsonaro-Guedes prescriptions for undermining Brazil, it is important to bear in mind the overwhelming power of finance in the Brazilian political economy. Brazilian economist Ladislau Dowbor reports that as the Brazilian economy sank into recession in 2014, major banks increased profits by 25 to 30 percent, “a dynamic in which the more banks profit, the more the economy is stalled” since the “financial intermediaries do not finance production, but drain it” (“The Era of Unproductive Capital”).

Furthermore, Dowbor continues, “After 2014, GDP dropped sharply while interest and profits of financial intermediaries increased between 20% and 30% a year,” a systematic feature of a financial system that “does not serve the economy, but is served by it. It is negative net productivity. The financial machine is living at the expense of the real economy.”

The phenomenon is worldwide. Joseph Stiglitz summarizes the situation simply: “Where before finance was a mechanism for getting money into firms, now it functions to get money out of them.” That is one of the sharp reversals of socio-economic policy brought to the world by the neoliberal assault, along with the sharp concentration of wealth in few hands while the majority stagnates, social benefits decline, and functioning democracy is undermined by obvious means as economic power concentrates, increasingly in the hands of predatory financial institutions. The consequences are the prime source of the resentment, anger, and contempt for governing institutions that are sweeping over much of the world, commonly mislabeled “populism.”

This is the future planned by the plutocracy and its favored candidates. It would be undercut by renewal of Lula’s presidency, which did cater to the financial institutions and the business world generally, but not sufficiently so in the current era of savage capitalism.

We might tarry for a moment on what took place in Brazil during the Lula years — “the golden decade,” in the words of the World Bank from May 2016. During these years, the bank’s study reports:

Brazil’s socioeconomic progress has been remarkable and internationally noted. From 2003 [the onset of Lula’s terms in office], the country has become recognized for its success in reducing poverty and inequality and its ability to create jobs. Innovative and effective policies to reduce poverty and ensure the inclusion of previously excluded groups have lifted millions of people out of poverty.

 

Furthermore:

Brazil has also been assuming global responsibilities. It has been successful in pursuing economic prosperity while protecting its unique natural patrimony. Brazil has become one of the most important emerging new donors, with extensive engagements particularly in Sub-Saharan Africa, and a leading player in international climate negotiations. Brazil’s development path over the past decade has shown that growth with shared prosperity, but balanced with respect for the environment, is possible. Brazilians are rightly proud of these internationally recognized achievements.

 

Some Brazilians at least, but not those who hold economic power.

The World Bank report rejects the common view that the substantial progress was “an illusion, created by the commodity boom, but unsustainable in today’s less forgiving international environment.” It responds to this claim with “a qualified ‘no.’ There is no reason why the recent socioeconomic gains should be reversed; indeed, they might well be extended with the right policies.”

The right policies should include radical changes in the general structural framework that was left in place during the Lula-Dilma years, when the demands of the financial community were accommodated, maintaining policies of the preceding Cardoso years, including the low taxation of the rich (often avoided entirely by massive capital flight to tax havens) and absurdly high interest rates that led to huge fortunes for a few, while attracting capital to finance, instead of productive investment. The plutocracy and the media monopoly charge that social policies drained the economy, but in fact economic studies show that the multiplier effect of financial aid to the poor improved the economy, while it was the financial rent from usurious interest rates and other gifts to finance that were the real cause of the crisis of 2013 – a crisis that could have been overcome by “the right policies.”

The prominent Brazilian economist Luiz Carlos Bresser-Pereira, former finance minister, captures the crucial factor in the ongoing crisis succinctly: For blocking public expenses while keeping the interest rate high, “there is no economic explanation; the fundamental cause of high interest rates in Brazil is the power of money lenders and financiers” with its drastic consequences, aided by the legislature (elected with corporate funding) and the media monopoly that is largely the voice of private power.

Dowbor points out that throughout modern Brazilian history, challenges to the regressive structural framework have led to coups, “beginning with the dismissal and suicide of Vargas [in 1954], and the 1964 military coup” (strongly backed by Washington). There is a good case that much the same has been taking place during the “soft coup” that has been underway since 2013. This campaign of traditional elites, now concentrated in the financial sector and served by the highly concentrated media, went into high gear in 2013 when Rousseff sought to reduce the outlandish interest rates to some civilized level, threatening to diminish the flood of easy money to the small sector able to indulge in financial markets.

The current campaign to preserve the structural framework and reverse the achievements of “the glorious decade” is exploiting the corruption in which Lula’s governing Workers’ Party, known as PT, participated. The corruption is very real, and serious, though singling out the PT for demonization is pure cynicism, considering the escapades of the accusers. And as already mentioned, the charges against Lula, even if one were to credit them, cannot possibly be taken seriously as a basis for the punishment administered to remove him from the political system. All of which does qualify him as one of the most significant political prisoners of the current period.

The regular elite reaction to threats to the structural framework of the Brazilian sociopolitical economy is mirrored by the international response to challenges by the Global South to the neocolonial system left in place after centuries of Western imperial devastation. In the 1950s, in the early days of decolonization, the nonaligned movement sought to enter global affairs. It was quickly put in its place by Western power. One dramatic symbol was the assassination of the highly promising Congolese leader Patrice Lumumba by the traditional Belgian rulers (beating the CIA to the draw). The crime and its brutal aftermath ended the hopes of what should be one of the world’s richest country, but remains “the horror! The horror!” with ample participation by the traditional torturers of Africa.

Nonetheless, as decolonization proceeded on its agonizing course, the annoying voice of the traditional victims kept breaking through. In the ’60s and ’70s, with substantial input of Brazilian economists, the U.N. Conference on Trade and Development put forth plans for a New International Economic Order, in which concerns of the “developing societies,” the great majority of the world’s population, would be addressed. That initiative was quickly crushed by the neoliberal regression.

A few years later, within UNESCO, the Global South called for a New International Information Order that would open up the global media-communication system to participation outside of the Western virtual monopoly. That led to a hysterical assault, across the political spectrum, with astonishing lies and ludicrous charges, and U.S. President Ronald Reagan’s withdrawal from UNESCO on fabricated pretexts. All of this was exposed in a devastating (hence unread) study by media scholars William Preston, Edward S. Herman, and Herbert Schiller (“Hope and Folly”).

Also effectively silenced was the 1993 study of the South Centre showing that the capital hemorrhage from the poor to the rich countries had been joined by capital export to the IMF and World Bank, which are now “net recipients of resources from the developing countries.” The same was true of the declaration of the first meeting of the South Summit of 133 states in 2000, responding to the enthusiastic self-adulation of the West over its new doctrine of “humanitarian intervention.” In the eyes of the Global South, “the so-called ‘right’ of humanitarian intervention” is a new guise for imperialism, “which has no legal basis in the United Nations Charter or in the general principles of international law.”

Not surprisingly, power does not appreciate challenges and has many means to beat them back or simply to silence them.

More should be said about the endemic political corruption of Latin America, often piously condemned in the West. True, it is a plague, which should not be tolerated. But the plague is hardly confined to the “developing world.” It is not a mere aberration when the huge banks are fined tens of billions of dollars (JPMorgan Chase, Bank of America, Goldman Sachs, Deutsche Bank, Citigroup), typically in “settlements,” so no one is legally culpable for the criminal activities that destroy millions of lives. Noting that “corporate America is finding it increasingly difficult to stay on the right side of the law,” the London Economist on August 30, 2014, reported that 2,163 corporate convictions from 2000 to 2014 — and “corporate America” has plenty of company in the city of London and on the continent.

Corruption ranges from the massive scale just illustrated to the most petty cruelty. A particularly vulgar and instructive example is wage theft, an epidemic in the U.S. It is estimated that two-thirds of low-wage workers have their pay stolen from their wages every week, while three-fourths have part or all of their overtime pay stolen. The sums stolen from employees’ paychecks every year are greater than the combined total of bank, gas station, and convenience store robberies. There is virtually no enforcement. To maintain this impunity is critically important to the business world, so much so that it is a high priority for the leading business lobby, the American Legislative Exchange Council, which has broad corporate participation.

ALEC’s primary task is to develop legislation for states, an easy target because of the reliance of legislators on corporate funding and limited media attention. Systematic and intense ALEC programs are therefore able to change the contours of policy for the whole country with little notice, a stealth attack on democracy with quite substantial effect. One of their legislative initiatives is to ensure that wage theft will not be subject to inspection or enforcement of law.

But corruption that is technically criminal, massive or small, is just the tip of the iceberg. The major corruption is legal. For example, the resort to tax havens that drain an estimated one-fourth or more of the $80 trillion global economy, creating an independent economic system free from surveillance and regulation, a haven for all sorts of criminal activities, as well as taxes. Nor is it technically illegal for Amazon, which just became the second trillion-dollar corporation, to have benefitted enormously by exemption from sales taxes. Or for the corporation to use about 2 percent of U.S. electricity at sharply reduced rates, following “a long U.S. tradition of shifting costs from businesses to poor residents, who already pay about three times more of their income on utility bills than do wealthy households,” the business press reports.

There are countless other examples.

One important example is buying elections, a topic that has been studied in depth, particularly by political scientist Thomas Ferguson. His research, along with colleagues, has shown that electability for Congress and the executive is predictable with remarkable precision from the single variable of campaign spending, a very strong tendency that goes far back in American political history and extends to the 2016 election (Ferguson, Golden Rule; Ferguson et al., “Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election,” Working Paper No. 66, Jan. 2018, Institute for New Economic Thinking). Converting formal democracy into an instrument in the hands of private wealth is perfectly legal, not corruption, unlike the Latin American plague.

It is not, of course, that interference with elections is off the agenda. On the contrary, alleged Russian interference with the 2016 election is one of the leading issues of the day, a topic of intense inquiry and much frenzied commentary. In contrast, the overwhelming role of corporate power and private wealth in corrupting the 2016 election, following a tradition that goes back over a century, is scarcely noted. After all, it is perfectly legal, even endorsed and enhanced by decisions of the most reactionary Supreme Court in recent memory.

Buying elections is the least of the corporate interventions into the pristine American democracy that is being sullied by Russian hackers (with results that were undetectable). Campaign spending goes through the roof, but it is dwarfed by lobbying, estimated at about 10 times its scale – a plague that escalated rapidly from the early days of the neoliberal regression. The effects on legislation are enormous, extending even as far as literal writing of legislation by lobbyists, while the congressional representative who signs the bill is off somewhere seeking funds for the next election.

Corruption is indeed a plague in Brazil and Latin America generally, but these are small players in the competition.

All of this brings us back to the prison, in which one of the most significant political prisoners of the current period is kept in isolation so that the “soft coup” in Brazil can proceed on course, with likely consequences that will be severe for Brazilian society, and for much of the world, given Brazil’s potential role.

Can proceed on course, that is, if what is happening is tolerated.

 

The Intercept