The Cardoso Legacy

For two decades – more or less since the Falklands War, and the end of the military dictatorships that had become an international byword for counter-revolutionary ferocity – South America has been largely forgotten by world politics. Recycled democratisation, debt and dependency offered few conflicts and yielded no consequences to compare with dramas in Eastern Europe or Russia, the Middle or Far East, even domestic convulsions in North America. The days of the Cuban Missile Crisis might have belonged to another eon. Today, there are once again tremors in these backlands of the larger arena. At one end of the continent, Argentina has seen a social breakdown, amid the largest sovereign default in history, that is the equivalent for neo-liberalism of the collapse of Communism in the Soviet Union. At the other, Venezuela teeters day by day on the brink of civil war. Till very recently, these were the two richest societies of the region. In between, American gunships swarm over Colombia as guerrillas shell the Presidential Palace; desperate Indian populations loft a radical colonel to power in Ecuador, where the dollar – thousands of miles from Washington – is now the official currency, and in Bolivia have come close to electing one of their own as President, a militant farmer of coca, the other currency of the area. Under weak rulers, Peru and Paraguay are seething with discontent. Everywhere, economic crisis is biting hard.

In this landscape, the sweeping electoral victory in Brazil of a burly former metal-worker from a family of 22, ungrammatical in speech and untutored in government, is the loudest rumble of thunder to date. With a population now approaching 180 million, more than the rest of the continent combined, Brazil towers over its neighbours, but has never historically led them. Whether this might change under Lula is one of the many uncertainties posed by his capture of the Presidency at the head of the Partido dos Trabalhadores. Within the country itself, the nature of his triumph raises other questions. In the great Brazilian cities, his victory was celebrated with explosions of joy in the streets. For the disinherited throughout the country, one of their own was, incredibly, in power at last. In the United States, on the other hand, after initial misgivings on the Right, establishment organs are already falling over each other to reassure their readers that Lula is now a reformed character, who can be trusted to cherish ties with Washington and understand the concerns of Wall Street. Here in the UK, the Economist more warily – but more bluntly – asks: ‘Can Lula finish the job?’

The ‘job’ in question is what has been executed in Brazil in the past eight years, under Fernando Henrique Cardoso. Here, before any consideration of the rebus of Lula himself, is where all analysis of the current situation in Brazil must start. What kind of verdict does the impending change represent, in the first instance, on Cardoso’s Presidency? Lula campaigned strongly against his record, and even José Serra, the candidate of his own party, avoided compromising mention of him. Yet opinion polls suggest that Cardoso’s standing as an individual has held up well, and there is no doubt that many Brazilians – principally, but not exclusively, from the middle classes – believe that he has been their most enlightened ruler to date.

Cardoso’s defenders can point to a series of achievements, which – even if often exaggerated in official apologias – have been real enough. Hyperinflation was broken at the beginning of his rule, unambiguously benefiting the worst-off layers of the population. Illiteracy was reduced; infant mortality fell; there was some redistribution of land. If none of these advances was very spectacular – Brazil lags far behind even Mexico on the first and third, not to speak of Argentina or Chile on the second – the social ledger is not entirely bare. Nor, for that matter, is the administrative. The state apparatus has in certain respects undergone genuine modernisation, rendering it less opaque and more efficient. Levels of corruption, though still high, have fallen. Statistical information is somewhat more reliable, budgetary controls are tighter, regional pork-barrels are fewer. All this has eroded the archaic oligarchies of the North-East: forces that helped Cardoso to power, but have weakened under him – perhaps the most important long-term change of these years.

If it is a mistake to dismiss these gains, they remain modest compared with the damage inflicted by the Government’s macroeconomic policies. The defining character of the Cardoso Presidency has been neo-liberalism ‘lite’, as Brazilians – pioneers of nicotine images of politics – would say. In other words, the kind of neo-liberalism that predominated throughout the developed capitalist world in the 1990s. These were years when doctrines of the Third Way or the New Centre – Clinton, Blair, Schroeder – ostensibly distanced themselves from the harder versions of neo-liberalism pioneered by Reagan and Thatcher in the 1980s, while in practice continuing, indeed often accentuating, the original programme, if now tricked out with secondary social concessions and a more emollient rhetoric. Throughout this period the fundamental dynamic of neo-liberalism has persisted, unabated: its two core principles – deregulation of markets and privatisation of services (or industries, where still public) – setting the parameters of economic correctness. In the United States, it was the brackish aftertaste of Clinton’s regime in the White House that made sufficient voters too queasy to return Gore. But the real legacy of Clinton’s rule was the abolition of New Deal restraint on speculative banking, the deregulation of telecoms, and the bubble economy that burst in the wake of his exit: Enron, Tyco and WorldCom its parting signatures.

In underdeveloped conditions, the sequence was necessarily different. Convinced that Brazil could not finance growth from domestic savings, and that its public enterprises fostered inefficiency and corruption, Cardoso overvalued the currency, put the state sector on the auction block and threw the economy wide open – gambling on imports to hold down inflation, and foreign investment to modernise infrastructure and industry. Brazil is a huge country, with a large internal market and abundant resources. Overseas capital duly flowed in – $150 billion by the end of Cardoso’s mandate – but did little or nothing to dynamise the Brazilian economy, whose rates of investment remained feeble throughout his rule. Attracted mainly by cheap assets and sky-high interest rates, foreign operators snapped up public enterprises, acquired local firms and – above all – bought state bonds. Trade deficits soared, interest rates were raised even further to prop up the currency, and debt levels became hopelessly vulnerable to loss of confidence, triggering enormous outflows whenever there was turbulence in international financial markets – Mexico in 1995, East Asia in 1997, Russia in 1998, Argentina in 2001 – and an inevitable collapse of the exchange rate. Repeated IMF bail-outs merely deepened the pit of debt into which the country was being driven. When Cardoso came to power, the trade balance was in surplus, and public debt some 28 per cent of GDP: by the end of this year, it had doubled to 56 per cent, most of it held on short-term maturities. Under his Presidency, per capita growth rate has been a miserable 1 per cent a year. The results of the Brazilian variant of neo-liberalism are plain for all to see: worsening stagnation, falling real wages, unprecedented unemployment and a staggering debt burden.

The regime stands condemned on its own terms. The Government’s original achievement – monetary stabilisation – is in ruins: the currency is worth a quarter of its value at the outset of Cardoso’s Presidency, interest rates are the highest in the world (22 per cent), and the country is staring a moratorium in the face. Violent crime haunts the big cities as never before. Inequality remains very nearly the worst in the world. Dependency – in every deleterious sense – is incomparably greater than it was when Cardoso, in a now distant past as a sociologist, once proposed a critical theory of it.

The logic of a neo-liberal model on the periphery of world capitalism puts any country that adopts it at the mercy of unpredictable movements in the financial markets at the centre, so Cardoso’s misadventures were in large measure the chronicle of a fiasco foretold. But this was also a timorous and incompetent regime. The exchange rate was overvalued from the start, and no thought was given even to the modest degree of capital controls that a dependent neo-liberalism still allows, and which protected the Chilean economy from the worst ravages that Brazil was to suffer. More generally, the notion that the key to attracting foreign capital was deregulation and privatisation à l’outrance was extraordinarily naive. In the same years that Cardoso was leading Brazil into its present blind alley, China was attracting productive foreign investment on a scale that dwarfed the hot money in Brazil, while maintaining tight capital controls and a non-convertible currency, to achieve the highest rates of GNP growth in the world. There is no shortage of acute economic problems, not to speak of inequalities and injustices, in China today, but the contrast between vigorous development and crippled dependency could not be starker.

Why did Cardoso stick to a plainly calamitous path for so long, when its logic was already clear in the first exchange-rate crisis in the spring of 1995? One explanation would point to the political pact with the old order – the landowners of the North-East, the bankers and media magnates of São Paulo and Rio – that brought him to power. Pas d’ennemis à droite had been his maxim. Today, though he himself continues to speak otherwise, his admirers abroad – as any issue of the Economist reveals – praise Cardoso’s rule as a centre-right regime. In this interpretation, a distinguished statesman and intellectual of the Left became a captive of conservative alliances from which he could never free himself. Such a view, however, miscontrues the traditional oligarchies of the country, which have never been doctrinally inflexible – their instincts are utterly pragmatic, or ‘physiological’ as the Brazilians put it – and often stood to lose from strong doses of deregulation. A better answer probably lies in Cardoso’s relationship to his Finance Minister, Pedro Malan, and through him to the IMF and the US.

Psychological dependence of a ruler on a technician, in the decisive area of contemporary government, has become an increasingly common pattern. Next door, the relationship between Carlos Menem and Domingo Cavallo offered an even more striking example. The two couples, Brazilian and Argentinian, were very different. Cavallo had a demonic side – not least in his boldness and energy – that Malan, a quiet mediocrity, entirely lacks. Menem, who was completely ignorant of economics, allowed Cavallo to install the ultimate insanity of a currency board, guaranteeing parity of the peso to the dollar. But he had reason to fear him as a potential rival, and in due course they parted company. Cardoso, on the other hand, who would probably have liked Malan to succeed him, was infinitely better prepared than Menem, but still remained by formation a sociologist, whose sense of the separation of disciplines perhaps inclined him to favour a professional economist. The original stabilisation of 1994 was the work of Malan and his team, and Cardoso owed everything to it. That moral debt made it difficult for him to jettison Malan along with Gustavo Franco, the brash novice he had installed as head of the Central Bank, when, politically speaking, he should, in his own interest, have done so. When the artificial exchange rate finally buckled, Franco was dropped. But Malan stayed, and Brazil’s fuite en avant into the tunnel of debt rattled on.

In Cardoso’s inability to separate himself from his chamberlain, there was a further and ultimately more decisive factor. Malan, an intimate of the IMF, enjoyed American confidence. These were the years in which Stanley Fischer, acting as itinerant bagman for Robert Rubin and Lawrence Summers, would disburse stand-by credits and loans from the IMF, in sovereign disregard of its statutes, according to the political value to Washington of incumbent regimes around the world. The two chief beneficiaries of his largesse were Russia and Brazil, countries large and strategic enough for rulers congenial to US interests to warrant special favours, no matter how deficient their economic performance. Yeltsin and Cardoso were both rescued from electoral difficulties by timely injections of cash, because Washington wished to keep them in power. In Moscow, the guarantor of these transactions was Chubais. In Brasília it was Malan. So long as his Finance Minister remained in office, Cardoso could be sure of exceptional treatment by the Fund and the Treasury.

This was a tie that in any case came naturally. For Cardoso, the United States was now the central point of external reference, in every sense. Originally, his culture – he was after all a leading Marxist intellectual in the 1960s – had been much more European than American. But in the years of exile under the dictatorship, there was a significant change. US foundations made possible the research centre he set up on returning to Brazil in 1979, and when he entered the political arena, he made no secret of his belief that what Brazil needed was an equivalent of the Democratic Party. By the time he was President, a decade and a half later, the power of the United States in the world had increased enormously, victory in the Cold War creating global hegemony of a kind never seen before.

Ideologically, Cardoso had adapted to this ascendancy well before he entered the Palácio do Planalto. Sporadic friction over lesser tariffs or patents aside – matter for commercial attachés – the result was more or less complete alignment with Washington on all major international issues. In effect, Brazil had no foreign policy worth speaking of. Historically, this was scarcely a novelty. The military regime of the 1960s and 1970s, which possessed some sense of geopolitics, and pursued a line in Africa at sharp variance with the United States, was in this respect an exception. But Cardoso came to power promising that Brazil would play a role in the world commensurate with the size of its new-found democracy. In office, however, he might have been a ruler of Honduras for all his effect at large. His contemporary Guido Di Tella, Argentina’s Foreign Minister under Menem, a scholar of no less charm and distinction, once publicly described his country’s foreign policy with the terse words: ‘We have carnal relations with the United States. The rest of the world doesn’t count.’ Cardoso is incapable of such Hispanic tranchant – Portuguese is a more edulcorating idiom – but his diplomatic practice was the same. The principal difference was in rhetorical pretension. Abroad, he will be remembered mainly for those fatuous gatherings in New York, Florence and Berlin, solemnly discussing the Third Way, at which Clinton and Blair conferred with companions and underlings, to increasing ridicule even among media well-disposed to them. The comical windbaggery of these occasions did more to discredit Cardoso than he can have imagined: for someone of his past, they were the intellectual equivalent of Gorbachev’s sale of pizzas on TV.

Within Brazil, such matters have been of little moment. There, Cardoso continues to be widely respected for another side of his tenure. In the eyes of admirers, his greatest civilising achievement has been the consolidation of Brazilian democracy. Courteous to opponents, constitutional in conduct, Cardoso has presided – it is argued – over a nation that has become more mature in its politics, and stable in its attachment to values of liberty and civility. The peaceful transfer of power to Lula, due to take place in January, after an election cleansed of calumny or violence, will set the seal on his most enduring legacy to the country. A normal democratic life has finally taken root in soil long poisoned by Brazil’s inheritance of racial slavery, rural oligarchy, populist demagogy and – last but not least – military tyranny.

This now standard defence of the Cardoso years reveals more about Brazilian identity than it does about democracy. Empires tend to give peoples who have enjoyed them a markedly self-absorbed, provincial outlook: a fate Brazilians have no more been able to escape than Britons or Americans. For the fact – obvious enough in any comparative perspective – is that the local preservation of democracy is no particular merit of Cardoso’s, since it was never seriously threatened after the generals withdrew from power. All the other Latin American societies – Argentina, Chile, Uruguay – that underwent military dictatorships in the 1960s and 1970s have done just the same, under colourless, or conservative, or even corrupt and autocratic rulers. From Aylwin to Frei to Lagos; Sanguinetti to Lacalle to Batlle: no big deal. Even Menem, whose temperament could hardly have been less democratic, handed over power to De La Rua just as routinely as Cardoso will do.

Many Brazilians still find it difficult to realise they have neighbours. Reminded of such common experiences, however, loyalists will concede that, formally speaking, constitutional legality has been respected throughout the Southern Cone, and in that sense Cardoso’s rule may seem nothing special. But substantively, the quality of Brazilian democracy – so the reply goes – has vastly improved during his Presidency. Compared with the chaotic, turbulent years under Sarney, Collor and Itamar, his Government has been a model of rational conduct and orderly dialogue.

How is this claim to be judged? There is no doubt that Brazilian politics became calmer and more predictable under Cardoso, or that the conventions of the New Republic that emerged after the dictatorship, whose Constitution dates from 1988, became steadily more anchored in custom and habit. To that extent, it could even be said that not monetary but political stabilisation was the trademark of the Presidency, the one plainly outlasting the downfall of the other. On the other hand, a glance at the statistics or stories of steadily escalating crime in the press is enough to indicate the limits of the new civility. While urbanities are swapped in the cupolas of power, violence rages on the beaches and streets. A week before the second round of the Presidential polls this October, the Jornal do Brasil bannered its Monday edition: shoot-outs in restaurant, bus, school: 8 dead. a normal day in rio. In a single morning, sub-machine guns were blasting at the corner of the Avenida Atlantica in tourist Copacabana, in petty-bourgeois Niteroi across the bay, and in the slums of the Zona Norte. Anglo-American viewers will soon be able to get a sense of such nightmares, with the release of the movie City of God, based on Paulo Lins’s novel. They are unlikely to think the country is being civilised.

It is not just the contrast between elite arrangements and popular misery that makes talk of a transformation of Brazilian political mores seem one-sided. Something more ideologically pointed is also at stake. For when people speak of the civilising effect of Cardoso’s Government, what they are often actually referring to is the way it has tamped down the conflictual potential of Brazilian democracy, by setting the parameters of a consensus, the local version of la pensée unique, in which all serious dissent is disqualified in advance as outlandish and anachronistic. Naturally, within this conformist corral, in which neo-liberal platitudes are taken as read, exchanges are well-mannered. But if we look at the institutional structures of power, a different picture emerges. In Brazil, parties are often little more than labels of pecuniary convenience, alliances for dubious ends between the most incongruous partners, in which deputies can transfer allegiances with the abandon of football players. Before and even for a short while after he became President, Cardoso spoke of the urgent need for political reform to render the party system more principled and coherent.

At the end of eight years, what is the balance sheet? There has been no change of any kind. In power, Cardoso preferred to maintain the existing amorphous promiscuity, which afforded much scope for his own outstanding skills in corridor negotiation and manoeuvre. The ‘reform’ he forced through instead was the exact opposite: changing the Constitution to permit his own re-election as President. Politically speaking, this was certainly the worst single act of his rule, and the one which will have the longest effects. It places him alongside Fujimori and Menem, whose example he imitated, as another self-important egoist who degraded the legal traditions and democratic prospects of his country. Latin America has always suffered from the bane of over-powerful presidentialism – historically, the worst single import from the United States, aggravated by the lack of Northern checks and balances, and forming the seedbed of every kind of mystagogy and autocracy. But at least the liberal oligarchs of the 19th century, and their successors in the 20th, typically saw the sense of single-term limits. In Brazil, even the military dictatorship of the 1960s and 1970s did not tamper with this rule.

There was no compelling reason, other than vainglory, for Cardoso to insist on re-election. Malan or Serra could perfectly well have continued his regime in 1998, when they would have been elected without difficulty. In ramming through such a fundamental change, for such picayune motives, Cardoso dealt a triple blow to Brazilian democracy. First, by resorting to corruption to attain his ends: deputies from the depths of the Amazonian jungle were purchased to secure the necessary legislative majority, and later dismissed by their beneficiary with the immortal words, ‘someone may have sold their vote, the Government didn’t buy it.’ Second, by reinforcing an executive that already enjoys vast powers of patronage and manipulation, and intensifying the personalisation of politics, in the most deteriorated sense, around it. Finally, and perhaps most fatally, by the hypocrisy with which Cardoso orchestrated the campaign for his continuism: telling the nation, again and again, that he had nothing to do with the spontaneous desire that had arisen within Congress to permit a second term – a matter about which he was quite neutral. Lying as brazen as this is an act of contempt, showing all too clearly the cynical realities behind the façade of an ‘improved’ Brazilian democracy.

If there was a turning-point in Cardoso’s rule, it was here. To see the political decay to which it has contributed, one only had to glance at the commercials with which every Presidential candidate thought fit to deluge the nation this autumn. In the end, re-election rebounded even against Cardoso himself. If he had stepped down in 1998, his performance – though its underlying logic was already plain enough – would have looked far better than it does in 2002. By clinging to power, he has ensured that he will be remembered for his economic myopia. He will exit in Mexican style – like López Portillo or Carlos Salinas – able to defer the reckoning for his policies till he is out of office, but unlikely to be able to protect his reputation from what ensues. Unlike them, he never took financial advantage of his position. The treasury was not looted. On the other hand, unlike them, he didn’t give the nation any passing period of growth either.

This is not to say that history will judge him a failure. His very economic mismanagement could – paradoxically – engender a long-term political success. For the legacy of debt he has left will lay such excruciating constraints on his successor that he has good reason to hope, as he proclaims, that his policies will live on after him. Nor is this the only way he has locked in those who will follow him. The brand of conventional wisdom he came to represent remains, if not quite intact, still largely dominant in Brazil today, and the personalisation of power he intensified along with it. So, just as Thatcher can regard Blair as her most durable achievement, Cardoso may still be able to congratulate himself that he rendered a neo-liberal order in Brazil irreversible for some time to come.

On the face of it, Lula would seem an improbable candidate for the role that Cardoso has so clearly cast him in. Yet Latin America abounds with examples of politicians or parties winning elections on platforms fiercely opposed to neo-liberalism, but once in power implementing neo-liberal policies, often more drastically than those they denounced for doing so in the first place. In Venezuela, Carlos Andrés Pérez was the first to follow this parabola, campaigning passionately against foreign debt and austerity, and then imposing an IMF-dictated package so savage it detonated weeks of deadly rioting – the caracazo of 1989 – in a society then substantially richer per capita than Brazil is today. In the same year, Fujimori beat Mario Vargas Llosa in Peru by attacking his financial orthodoxy with a violence far exceeding any PT discourse today, and then became the architect of a particularly corrupt and cruel version of it. In Argentina, Menem’s trajectory was essentially the same.

None of these figures situated himself exactly on the Left, but in Europe we have seen the same cycle played out between Left and Right alike. France is the most eloquent case. Chirac came to power in 1995, denouncing la pensée unique – it was he who popularised the term – of the Mitterrand years. Once elected, his Government promptly tried to impose classic neo-liberal reforms, which set off the great strikes of 1996, and lost him the elections of 1998, won by Jospin promising to do the opposite. Four years later, Jospin had privatised more than all previous governments put together, and the Socialist Party was in turn rejected at the polls this spring. Time and again, promises were so much electoral confetti.

To note these precedents is not to say that Brazil is doomed to repeat the same cycle. Potentially, Lula’s capture of the Presidency marks a far deeper, and more hopeful, political change than any rotation of office in France. The symbolism of a former shoeshine boy and street vendor achieving supreme power in the most unequal major society on earth speaks for itself. Although other Brazilian Presidents have been of comparatively humble origin, they all made their way to the top through further – military or civilian – education. Lula, a trade-union leader in his twenties, remains culturally a worker from a poor rural family, raised in the industrial belt round São Paulo, whose Portuguese is imperfect, and formal learning minimal. In private, with a nice touch of irony, he has remarked: ‘Bush and I must be the two most ignorant Presidents in the world.’ Like his Northern counterpart, he has a streak of laziness, alongside a by now considerable acquired shrewdness. Across successive Presidential campaigns, he has honed a macho charm capable of seducing middle-class audiences and disarming opponents, as well as electrifying the masses. To see him at the microphone in the Canecão, a traditional music-hall in Botafogo, in the last days of the campaign, surrounded by composers, singers, actresses, writers – labour wooing culture – explaining to the crowd that he had been to Rio for political meetings many times, but had never been able to wander barefoot on the sand of its beaches like any other citizen, was to watch a theatrical performance as professional as any in that setting.

All this can encourage myth-making. Brazilian culture is sentimental as well as cynical – the two, as one would expect, going together – and the local media are currently in biographical overdrive, as if social origins were a safe guide to political conduct. The example of Walesa should be warning enough against excesses in this department. That said, it remains the case that Lula embodies a life-experience of popular hardship and social struggle that no other ruler in the world approaches. His bond with the poor sets him apart. This is his primary constituency, and he will care how they rate him in power. Behind him, moreover, is the only new mass party to have been created out of the labour movement since the Second World War: an organisation that in numbers, influence and relative cohesion has no equal in Latin America. The PT, which claims some 300,000 members, though criteria are not strict, is now, after administering a string of Brazil’s largest cities – São Paulo, Belém, Recife, Brasília, Pôrto Alegre – a much more moderate organisation than it was in the 1980s. But it is still relatively free-form, without a centralised bureaucratic apparatus, and contains many militants who have not forgotten their radical past. Last but not least, there is the mass sentiment expressed in the Presidential poll itself. The wretched of the Brazilian earth – those officially classified as ‘poor and indigent’ who make up nearly half the population – cast their votes for him in huge numbers. In the coastal cities of Rio and Salvador, with their black populations, he had landslide majorities: 79 and 89 per cent respectively. A climate of popular expectation surrounds Lula that no President of the New Republic has ever enjoyed at the outset of his mandate. Hope of relief from the misery of the last years will not vanish overnight.

On the other hand, against all such subjective build-up must be set the objective constraints of the situation in which President and Party will now find themselves. First and foremost, there is the landscape of economic wreckage left by Malan and Cardoso. Already before taking office, the PT leadership has strapped itself – in some cases, with well-nigh masochistic zest – into the Procrustean bed made by the IMF: a ‘primary surplus’ of 3.75 per cent of GDP, which will not only exclude any significant increase of social spending, but is likely to dictate a severe contraction, to win the confidence of foreign creditors and keep interest rates from climbing still higher. If it is all but taboo to say so in Brazil, abroad the financial press makes no secret of its conclusion that a moratorium on the debt mountain – currently running at R885 billion – is sooner or later inevitable. In short, the economic crisis is likely to deepen.

At the same time, social mobilisation remains depressed at levels far below those of the 1980s, one of the effects of the Cardoso years having been to weaken the collective energies needed to confront emergencies. Here the scale of Lula’s victory at the polls is a mixed blessing. In the second round, he piled up 52 million votes, crushing Serra by 61 to 39 per cent. In part, this plebiscite was a tribute to Lula’s tireless criss-crossing of the remotest corners of the country – something no other candidate attempted. But it was also the product of a saccharine public relations and propaganda campaign, orchestrated around the sickly watchword ‘Lula – Peace and Love’, and projected through television commercials of uninhibited effrontery, designed by a leading media pander of the Right. Brazilian political advertisements, because publicly funded, are longer than American ones, allowing for more serious argument – but also for more flamboyantly manipulative kitsch. Lula’s outclassed Serra’s in every respect, not least in the sums of money spent on them. Their signature gesture was the beckoning hand – of nubile nymphs, sports stars, average joes – inviting the viewer, to the rhythms of exuberant music, onto bandwagon or into bed, in the name of the motto. Once Lula had established a commanding lead in the opinion polls, the Globo empire – Brazil’s News International – started to smile on him, and money poured into his campaign coffers from banks and corporations, making him paradoxically far the best-financed of the candidates. Such support is not given free.

In addition, powerful though the Presidency is, legislation must pass Congress. There the PT has become for the first time the largest party, but in a fragmented spectrum in which it commands less than a fifth of the seats. Lula’s national vote was double that of his party, which failed to gain the governorship of any important state. The imbalance between executive and legislative scores will be accentuated by the enhanced Presidency, whose vast powers of patronage – some 15,000 posts are in its favour – anyway risk absorbing too many PT militants. For his electoral campaign, Lula adopted a paternalist textile millionaire from a small evangelical party as his Vice-Presidential candidate, and picked up the endorsement of not a few disgruntled or opportunist oligarchs from the North-East. For a workable majority in Congress, he has already had to extend such alliances, coming to an arrangement with the corrupt and inchoate PMDB, perpetual prostitute of the party system, till yesterday a prop of Cardoso’s regime. The PT’s political manager, José Dirceu – sprung from a military jail by a famous kidnapping of the US Ambassador in Rio; flown to exile in Cuba; underground operative for a decade on his return to Brazil, when not even the mother of his child knew his real identity; tactical architect of Lula’s victory – will no doubt control this front with an expert hand. But it would be naive to imagine much radical legislation speeding out of the new chamber.

Beyond these liabilities, there is also the weight of cultural tradition that will bear on the agents of any renovation. Far more even than Italy, which gave the concept to the world, Brazil is par excellence the land of trasformismo: the capacity of the established order to embrace and invert forces of change, until they become indistinguishable from what they set out to oppose – the dark side of the matchless Brazilian conviviality. The career of Cardoso, former Marxist become a pillar of the Centre-Right, has been a typical expression of this culture, of which he is both imprint and instrument. Lula’s plebeian background is no bar to embrace by the establishment. Social hierarchy has always formed an easy connubium with affable informality in Brazil, and there is no reason to think that – without precautions – the backing of banks today could not become the neutering of an upstart tomorrow. The rhetorical conditions for such an outcome have already been prepared. Peace and love are, in advance, a vocabulary of ingestion and defeat. A cause can survive a slogan, but without better ones than this, objective pressures will crush subjective desires soon enough.

Here programmes – as distinct from catchwords – become decisive. What does the incoming Government propose to the country? If one were to consider its prospects statically, it would be difficult to avoid pessimism. In opposition, the PT has not been uncreative. The participatory budgets of Pôrto Alegre, where voters determine the distribution of spending in their wards, are an invention widely admired abroad. PT economists were the first to point out the logic of Malan’s neo-liberalism, and predict its fatal consequences. But overall, it is obvious that neither Party nor President has any articulated alternative to the reigning orthodoxy, as their pre-electoral adherence to the directives of the IMF made clear. On the other hand, historically, actual policy innovations in Latin America have not followed preconceived schemes. Out of the great crisis that shook the continent in 1929 arose a set of pragmatic, intuitive responses: essentially, different forms of import-substituting populism – Getulismo in Brazil, Peronism in Argentina, the MNR in Bolivia – that were highly creative and effective in their own time. The doctrines later associated with them – derived from the ideas of the Argentinian economist Raúl Prebisch – crystallised after the event, more than guiding the actors in advance. South America today faces, once again, a crisis of continental proportions. Why should not Brazil, or its neighbours, find its way out of the impasse in similar fashion?

The difference, of course, lies in the immeasurably greater degree of integration of these economies, societies and cultures in the global order of capital, commanded from the North. The material and ideological intermeshing of national agents and processes with the international structures that penetrate and mould them has no comparison with the situation in the Depression, when Latin America was left largely to its own devices once Wall Street crashed. To that extent, the programmatic requirements for an escape from the present straitjacket appear much higher. But if the central economies themselves should go into a tail-spin – were the United States to describe the trajectory of Japan in the last decade – then, as the Empire attends to its homelands, the possibilities of improvised invention in the periphery might be released once more. For the moment, fingers crossed.