The Wealth Dilemma

– ‘Money, man, it is a bitch

The poor, they spoil it for the rich’

– Nick Cave and the Bad Seeds, Easy Money

The upper classes in Brazil find themselves caught in this awkward double-bind. On the one hand, they complain constantly about the various problems which afflict the country. Things like political corruption, urban violence, government bureaucracy, rising prices, poor public services and so on. And of course, they have every right to do so. Brazil has a number of acute and deeply ingrained problems, about which people of all social classes feel justifiably aggrieved. But the rich tend to hold up other countries as the model, praising them as wealthy, civilized, enlightened; as opposed to Brazil, denigrated as poor, barbarous, backwards. The model countries are occasionally European, but for many Brazilians the ideal seems to be the United States, all too often venerated as a shining example of everything Brazil is not: safe, stable, transparent, modern, efficient etcetera

I will leave aside this problematic, idealized vision of the U.S, since I have never been there and I feel less qualified to comment. But I can make a brief comparison with Europe. Historically speaking Brazil has always been characterised by extreme social disparities and rigid hierarchy, with an immense concentration of wealth at the top of society. While the country has been undergoing a process of rapid social and economic evolution for at least two decades now, much of the old social structure remains in tact. What this means is that there is still a large and significant upper class in Brazil who enjoy a type of comfort and leisure which has virtually ceased to exist in Europe, apart from for a tiny minority. Brazilians repeatedly refer to their country as ‘poor’ or ‘Third World’, but this is not strictly true: in the eight months or so that I’ve been here I’ve seen many more obvious signs of wealth than I’ve ever seen in England, or anywhere else in Europe for that matter.

I would go further: not only is it untrue to label Brazil a ‘poor’ country, but in fact there are regions which are spectacularly rich and getting richer. São Paulo, for example, is currently the tenth richest city in the world, and is forecast to be the sixth richest by 2025. In 2012 there were 1880 individuals based here worth $30 million or more. Unsurprisingly, cost of living is amongst the highest in the world, higher even than cities such as Paris, London and New York. The market for technology and luxury goods is booming, despite the fact that due to high taxes on imports prices can be double or even triple what American or European consumers pay. These goods are sold in upmarket shopping centres or department stores such as Daslu, in which pedestrians cannot enter. Access is only possible in the right type of car – or by helicopter. In short, one really does not have to look too far to see that lack of money is not the issue here. The problem, of course, is one of distribution.

This then, is the other half of the bind: in Europe we do not tend to perceive the same social problems one sees in Brazil – at least to nothing like the same extent. The principal reason for this is that the national wealth has been more effectively distributed throughout all sectors of society, and invested in services which benefit everyone. As a result we have good schools, a good quality public healthcare system, safer streets, better public transport and so on. The dilemma of wealth in Brazil is therefore the following: the upper classes complain of the country being poor, violent, corrupt, backwards, but they are either unable or unwilling to contemplate the possibility that there might be a link between these perceived attributes and their own personal wealth. Those societies which provide greatest comfort, security and quality of life for their citizens are precisely those in which there are not such extreme disparities. The hard truth for the Brazilian elites is that if the country is to attain this kind of social cohesiveness, they will have to cede a greater share of the national pie to those below them.

In the past, when Latin American elites have been asked to do this, the reaction has been violence and dictatorship. This was what occurred in Brazil in 1964, as a response to what were relatively moderate reforms by the then president João Goulart. Arguably the greatest success of Lula, Dilma and the PT has been that thanks to favourable economic conditions, they have been able to drastically improve the incomes of the poor and the lower middle classes, while leaving the wealth accumulated at the top of society pretty much untouched. They have not taken from the rich and given to the poor, but merely managed a sustained period of growth in such a way that those towards the bottom of the pile have been the primary beneficiaries. The wealth of those at the top has still grown, just at a slower rate. Make no mistake: most of the upper classes still have little love for the government, but as long as the PT keeps its hands off their stash, they seem prepared to tolerate things as they are.