Socialism, and Capitalism, in the Americas: Lessons from Brazil

In the wake of the 2008-2009 Great Recession, growing economic disparity, and the all-around failure of capitalist policies to serve the interests of average people, socialism has grown in popularity.  Where Europe has long flirted with socialist parties, self-proclaimed “Democratic Socialist” Bernie Sanders and his enduring challenge to Democratic frontrunner Hillary Clinton is a clear affront to the capitalist philosophy that has long dominated US political and economic thinking.   

In countries like Brazil, however, the failure of socialism teaches us the need for balanced policies. 

Brazil has erupted into another round of democratic upheaval with an impressive 1.3 million protesters rallying for the ouster of Leftist President Dilma Rousseff amid ongoing economic turmoil and the prosecution of her Workers’ Party predecessor Luiz Inácio Lula da Silva over corruption charges.  Although facing impeachment and charges related to her campaign finances, Rousseff’s wrongs pale in comparison to the kleptocratic opposition figures who have built their careers on corruption and crony capitalism. 

Hoping to use the wave of civil discontent to reassert control over Brazil’s government and economy, Rousseff’s accusers are the same individuals who used the guise of capitalism to redirect national wealth to their cronies and deprive the impoverished of much needed opportunity.

Brazil’s faltering economy, like many of the Left-leaning Latin American economies, has never provided for the interests of its People.  Instead of overcoming corruption and policies that enriched the few without generating a sustainable consumer-driven market economy, the Peoples of countries like Brazil were pushed to embrace socialism.  Thanks to the policies of former President Luiz Inácio Lula da Silva, a.k.a Lula, millions of improvised Brazilians finally started to benefit from the fruits of Brazil’s natural wealth through massive social welfare spending.

Thanks to the collapse of commodity prices and weak demand due to China’s own economic woes, however, Brazil’s overreliance on government spending and too few revenue sources has created a disaster.

Brazil’s economic troubles will not, however, disappear with a shift to opposition leadership.  After all, Brazil’s troubles are as much the fault of capitalist-leaning politicians who seek the favor of Western investors above the approval of their own People.  So long as capitalism is simply used as a facade to exploit and sustain the impoverishment of the masses, Brazil and the rest of Latin America will never achieve sustained success or long-term economic stability.

For this reason, Brazil’s Right-wing political elites cannot hope to attract foreign investment by seizing upon current political and economic stability to force their way back into power just to push Brazil’s poor deeper into poverty.  This will only perpetuate Brazil’s political and economic instability.

On the other hand, socialist forces, if they manage to hold onto power, desperately need to foster business development in order to engineer a sustainable economy that serves the interests of the Brazilian People.  Although capitalism is considered profanity in many corners of Latin America, democratic capitalism is needed to help engineer the economic mechanisms that ensure an economy is viable.

Although property rights and other financial protections can be seen as a means for corrupt government officials to help the wealthy exploit a nation’s wealth while depriving the poor of their share, wealth building and family-owned small business development is essential to help average people lift generations of their families out of poverty.

Since the introduction of the “capitalist” and “socialist” terminology, political forces have pushed the countries and Peoples of the world to choose one or the other.  That said, both “capitalism” and “socialism,” represent two ends of the same economic spectrum.  Making the intellectual distinction between capitalist and socialist policies is, therefore, only useful when it is done to understand how public policies work.

Beyond ideologies that have tainted the capitalist-socialist debate, the fundamental difference between capitalism and socialism is that capitalists rely on automated mechanisms to regulate their economies; whereas, socialists rely on manual interventions to control their economies.

Looking at how the Chinese government has continued to react to the collapse of its stock market by seizing control of its economy, the Communist Party’s lack of confidence in the effectiveness of economic mechanisms it engineered is very apparent.

Much of Latin America shares this same lack of trust in capitalist policies thanks to a long history of self-serving power elitist who engineered their national economies to enrich themselves and impoverish everyone else.  Because socialist policies have delivered immediate and steady benefits to the impoverished, socialism has an obvious appeal.

Recognizing the interventions of the Right-wing George W. Bush Administration during the onset of the Great Recession, it is evident that all governments have a natural inclination to intervene when faced with economic threats, i.e. abandon capitalist ideals.  For the United States, a legacy of self-serving capitalist policies has also resulted in sharp income inequality and growing poverty, which does feed populous outrage.  At the same time, socialist policies have failed the People of the United States while the same is true for all Americans.

It is important to remember economies solely exist to distribute wealth in order to provide for the needs of people.  What feeds a lack of confidence among socialists is the sense that capitalism exists solely to redistribute a country’s wealth to the elites.  Socialism is supposed to force equal distribution.  Capitalist policies can, however, be more efficient, because their automated nature allows an economy to immediately adapt to changes and avoid the ill-effects of human error policymakers introduce when under political influence.

For the capitalist, the ability to earn a higher socioeconomic standing and profit from one’s labor, intellectual property, or financial investments is a sign of a healthy economy.  Capitalists see the value in rewarding those who make industries more efficient and grow the economy through innovation.  They have confidence that capitalist policies can be engineered to distribute wealth in the most efficient means possible, i.e. to provide for the needs of people and the need for sustainable economic growth.

On the other hand, wise capitalists understand economic policies can be engineered to harm an economy by enriching the few at the expense of the many, which is often seen in socialism.  Wise capitalists are not blind to the self-serving nature of mankind as well as the tendency of elites to legitimize, solidify, and consolidate their power through economic means.  A blind pursuit of capitalist ideals has encouraged the shunning of anything remotely socialist in the United States.  This includes necessities like unions and proper regulation, which are needed to achieve a healthy capitalist economy.

Unfortunately, Latin America’s failed experimentation with capitalism throughout the years has not been enough to overcome its socialist legacy.  Socialism has simply created a dependency on corrupt, self-serving governments that cannot provide for all the needs of their Peoples while capitalist reforms have been used to legitimize the impoverishment of the masses.  Because shifting favoritism toward capitalism and socialism always ends in disaster for the Americas, there needs to be an embrace of balanced, pragmatic policies that will help build economies that provide for the needs of the many Peoples in the Americas.

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