Wall Street Journal (4/6/06).
"A Leader Who Got Real" By Mary Anastasia O'Grady
One mid-November afternoon in 1889, three Brazilian military officers marched into the palace of Emperor Dom Pedro II in Rio de Janeiro and ordered him into exile, ending centuries of royal mismanagement and setting the country on a better path. Or so it was thought. Over the course of the next century, Brazil's economy would indeed grow into one of the world's largest. But too many of Brazil's citizens would remain impoverished, and its government would fall far short of a model democracy. The republic born in 1889 survived a mere 40 years. In 1930 Getúlio Vargas seized power on the grounds of election fraud and held it as an autocrat until 1945. Vargas returned to power, as an elected president, in 1951, only to kill himself in 1954 in the midst of a scandal. For the next 30 years, Brazil was ruled by a succession of ineffectual strongmen. In international circles it was reduced to a cliché: "Brazil is the country of the future and always will be."
Then, in the 1980s and early 1990s, borne along by liberalizing trends in South America, Brazil began a turn back to its republican dreams. The turn accelerated notably in 1994 with the election, as president, of Fernando Henrique Cardoso. He was re-elected in 1998 for a second four-year term. By telling his own story in The Accidental President of Brazil -- it includes his grandfather's role as one of the three young officers who sent Dom Pedro II packing -- Mr. Cardoso accidentally helps to explain part of Brazil's difficulty: its lack of a classical liberal tradition, including the idea of limited government.
Mr. Cardoso -- himself a believer in big government and statist programs -- has tried to make his country a just, tolerant and prosperous place. As president, he accomplished a great deal simply by setting into motion a process of modern institution-building -- e.g., reforming the fiscal and monetary bureaucracies. His achievements are all the more amazing when his academic upbringing is taken into account -- a steady diet of Latin-left pabulum. Mr. Cardoso was born in Rio in 1931 into "a perfect upper-middle-class existence" that included a French tutor and a father who "distrusted big business, financial markets or any kind of profiteering, as he believed that money corrupted people." Having been thus "educated" at home, the young Mr. Cardoso took up sociology at the University of São Paulo, doing field work in the city slums. As he trudged through "seas of mud" in a white lab coat, he and his classmates -- "perhaps more interested in being socialists than sociologists" -- were appalled at the legacy of Brazilian slavery.
But he made little progress in understanding the "mystery" of Brazilian poverty. In 1967 he published Dependency and Development in Latin America, a book that he calls his "finest academic work." Fans of political polemic may recall that it was named by the authors of The Perfect Latin American Idiot (1999) -- a critique of statist and socialist thinking -- as one of the region's top-10 idiot-producing works.
We should remember that neither Mr. Cardoso nor most of his countrymen, at the time -- and often since -- recognized the connection between economic freedom and prosperity. In January 1961, Jânio Quadros took the oath of president. Six months into his term, he pinned the Order of the Southern Cross on Che Guevara. A month later he quit the presidency. His vice president, João Goulart, took his place but did not last long. Most Brazilians were "terrified" of Goulart because of his unspecified plan for land reform. Mr. Cardoso plays down the role of the Cold War in all this but by March 1964, a military coup -- with public support -- removed Goulart from office.
The end of the military government in 1985 ushered in chaos. "Many Brazilians had believed that democracy alone was enough to solve our problems," writes Mr. Cardoso, " -- in fact it was creating new ones." The draft of the constitution in 1987 was packed with party favors. Special-interest demands were never refused, "no matter how ridiculous." In the end, nearly 2,000 amendments were whittled down to a mere 697. Still, the constitution "guaranteed outlandish 'rights' that Brazil could simply not afford," writes Mr. Cardoso, "creating laws and expectations that would haunt the country's politicians for years." These included life tenure for public-sector workers after two years of employment. By 1993 inflation had reached 2,500%, and President Itamar Franco asked Mr. Cardoso to become the country's finance minister, a seemingly thankless job.
But Mr. Cardoso, assembling a team of sound economists and introducing a new currency called the real in 1994, turned his tenure into a triumph. "Inflation slowed to only 2% in July, the month the real was launched," he writes. Mr. Cardoso became a hero, not the least to the underclass whose members suffered the most from hyper-inflation. Though never intending a political career, the professor soon launched his bid for the presidency.
It is true that the "real plan" collapsed five years later -- the country failed to convince markets that it could pay its debts -- but in the meantime Brazilians had tasted price stability. Mr. Cardoso's reforms had, in effect, poured cold water on the spending maniacs in Brazil's congress. By the time that the real went to a managed float in 1999, life in Brazil had changed: Market realities and the political cost of inflation were well understood. Transparency in public accounts had become the cornerstone of Brazilian democracy.
Given Mr. Cardoso's intellectual background, it's not surprising to find him hard-pressed, in these pages, to condemn the region's leftist repression. Of Fidel Castro he writes: "I was always surprised by how polite, curious, good-humored and soft-spoken he could be." Still, Mr. Cardoso mentions a telling moment at a 1999 summit meeting in Havana. When the heads of state were alone at a luncheon, one said to Castro: "Damn it Fidel! What are you going to do about this lousy, piece-of-**** island of yours? We're sick of apologizing for you all the time, Fidel. It's getting embarrassing."
The anecdote shows how disingenuous Latin governments can be when they remain silent about the Cuban dictatorship. But for Mr. Cardoso the outburst merely points up the errors of U.S. policy. Are 11 million Cubans living lives of repression, as the luncheon guest implied? Never mind. The U.S. "panders" to "influential" Cuban exiles, Mr. Cardoso laments, "rather than show true leadership in the region."
Even by his own account, Mr. Cardoso comes across, at times, as a sort of "Being There" president, reminiscent of the Peter Sellers character who accidentally came upon success. But he deserves enormous credit, not least for the intellectual honesty that allowed him to abandon collectivist ideals as the world changed.