There is something uniquely tragic about watching an entire nation willingly step back into the embrace of its most expensive habit. In Brasília, the music has cued up, the red banners are unfurled, and Luiz Inácio Lula da Silva has pulled off yet another resurrection. To the international commentariat, swooning over promises of Amazonian stewardship and state-directed benevolence, this is a triumphant defense of democracy against the reactionary fringe. To anyone who has ever attempted to file taxes in São Paulo, or simply looked at the balance sheet of a state development bank, it feels suspiciously like watching your profligate uncle reclaim the family checkbook after promising that his previous bankruptcies were merely administrative misunderstandings.
Uncle Leviathan is back in the parlor, smell of stale coffee and administrative decree in tow, and he has brought along an entourage of planning czars ready to fix the carpet with borrowed cash. Friedrich Hayek observed in The Fatal Conceit that the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. In Latin America, however, that demonstration is treated not as a cautionary tale, but as a recurring national pastime. Every few cycles, the electorate grows tired of right-wing buffoonery, only to conclude that what the economy really lacks is a more earnest central planner with a warm smile and an industrial policy.
The narrative emerging from the international press treats Lula’s victory as a panacea for Brazil’s institutions, but it conveniently ignores the price tag attached to state salvation. The left’s vision of governance is invariably managerial and suffocatingly administrative. It presumes that wealth is not something generated through decentralized trade, property rights, and entrepreneurial grit, but a national allotment that sits trapped beneath ministerial red tape until a compassionate president liberates it. Brazil’s notorious business environment, universally lamented as the *custo Brasil*, was not created by the free market. It was sculpted by decades of corporatist bureaucracy, labyrinthine tax codes, and a judicial apparatus that treats private contracts as mere opening bids in a negotiation with the state.
Now comes the familiar parade of state-led grandiosity. We will hear endless tributes to the resurrection of state-owned enterprises, the deployment of subsidized credit via development banks, and sweeping regulatory decrees designed to micromanage everything from agricultural yields to green energy transitions. It is the perennial fantasy of social democracy: that the state can substitute its own heavy hand for the price mechanism without creating shortages, corruption, or sluggish productivity. When governments attempt to pick winners, they inevitably subsidize losers, usually because the losers have better lobbyists and closer ties to the ruling party.
The foreign policy establishment will applaud, of course, because credentials-holding technocrats in Brussels and Washington love nothing more than a foreign leader who speaks the language of state-directed climate compacts and regulatory harmonization. They will celebrate the environmental mandates without calculating the compliance costs imposed on smallholders, just as they celebrate the expansion of social programs without asking which productive class will be squeezed to service the sovereign debt. A regulatory regime constructed by decree is inherently fragile; it breeds cynicism, fosters compliance industries, and ensures that the average citizen spends more time navigating government agencies than building a livelihood.
None of this is to say that the alternative presented by his opponents was a model of classical liberal restraint. Populist nationalism of the right carries its own brand of state-worship, usually cloaked in military nostalgia and crony protectionism. But the tragic flaw of modern electoral politics is this endless binary between two different flavors of authoritarian paternalism. Citizens are offered a choice between a state that meddles in their private morals and a state that meddles in their private property, with neither faction entertaining the radical proposition that the state should simply leave both alone.
As Lula settles back into the Planalto, the cycle begins anew. More ministries will be minted, more regulatory agencies will hire compliance officers, and more economic activity will be nudged into the informal sector by entrepreneurs simply trying to survive the deluge of official paperwork. The state will present itself as the sole guardian of the public good, oblivious to the fact that it is the principal architect of the public’s exhaustion. One can only hope that, amidst the inevitable inflation and fiscal tightening to follow, Brazilians will eventually discover that real prosperity is not granted by benevolent patriarchs in the capital. It is earned whenever ordinary people manage to build, trade, and thrive in spite of them.