Read Online Year 501 by Noam Chomsky - Free Book Online

for people with the right qualifications, like police torturers. True, real wages had collapsed, but the real value of imports was up 38 percent by 1980, thanks to the increase of 276 percent in luxury goods while capital imports fell sharply. Foreign debt skyrocketed (to be paid off later by the poor), and unions and peasant movements had been crushed in a wave of terror. But the rich were doing just fine; everything was on course in Chile, as in Brazil, thanks to proper application of economic theory.
    By the early ‘80s, the Brazilian economy was spinning towards disaster, and the tune changed. Brazil was dropped from the list of “neoliberal successes,” Felix observed in 1986, though some had not heard the message. In a 1989 discussion of the Brazilian military regime, Harvard Government professor Frances Hagopian, like Haines, still admired “the impressive extent to which the military succeeded in its economic objectives,” while expressing doubts as to whether this “extraordinary economic success” really required the repression and torture. 37
    While the “economic miracle” was churning merrily along, Brazil’s achievements were heralded as a demonstration of the marvels of free-market capitalism, the happy result of American guidance and kind assistance. After the collapse, Brazil demonstrates the failure to follow US advice and the sound principles of economic liberalism. Brazil’s plight is attributed to its state socialist deviation from economic orthodoxy. We thus derive yet another proof of the superiority of capitalism and the free market. To account for Brazil’s sorry state, we may now invoke the very measures that brought about the “free market triumph” while it was still possible to be dazzled by the “economic miracle”: the indefinite wage controls instituted by the much-praised neoliberal economist Delfim, the state corporations established to overcome the severe recession caused by monetarist strategies and to prevent a complete takeover of the economy by foreign corporations, and the import-substitution strategy that kept the economy afloat in the mid-1980s.
    It all goes to show, once again, how supple an instrument ideology can be, in well-trained hands.
    A great sigh of relief accompanied the victory in 1989 of the attractive representative of the Brazilian elite, Fernando Collor de Mello, in an election in which the two candidates could actually be distinguished without a microscope, the other being the labor leader Luís Inácio da Silva (“Lula”). With “the playing field levelled” by Collar’s huge financial resources and clear warnings by those who own the country that they would sink it down the tube if the elections came out the wrong way, Collor was able to eke out a victory. There was great enthusiasm in the doctrinal institutions as he set forth on the approved neoliberal path, with expectations for yet another “success story for American-style capitalism.” Briefly, however. The economy fell from 3.3 percent growth in 1989 to -4.6 percent in 1990. Per capita income fell by 6 percent from 1990 to 1992 as production continued to decline, health spending was cut by 33 percent, education spending sank further, and the tax burden on wage earners rose 60 percent. By mid-1992, James Brooke reports, “Mr. Collar’s failed economic policies” were “feeding national discontent.” And to top it off, Collor was facing impeachment after exposure of a corruption scandal that also set new records. 38
    As in the case of Brazil, “success stories of capitalism and democracy” achieve this status irrespective of the means employed. The import substitution strategy that saved Brazil from utter ruin was also an essential component of the “economic miracles” of the Pacific Rim. These miracles came into being under harsh authoritarian regimes that intervened massively in