Constitutionally Protected Corporatism

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The seventh and current Brazilian Constitution dates back to 1988, when it was written from scratch by a Constitutional Congress elected two years earlier. It contains a whopping 250 articles making it about as thick as the Bible. As its length might indicate it was not exactly written in the traditional sense, for the purpose of outlining what government can and cannot do to ensure the rights of the people.

Drafted after a period of military dictatorship with a constitution that severely restricted the rights of the people while expanding government power, the current one is also known as the Citizen Constitution. Did the Constitutional Congress in the late eighties feel the need to allay people’s fear of having their rights stripped away anew? Perhaps, but entrusting the very same institution that trampled all over the rights of the people with a litany of new powers does not seem to make logical sense. Couple this flawed logic with collectivist egalitarian rhetoric and what results is not exactly a recipe for freedom.

Many classical liberals and libertarians understand the inherent contradiction in constitutionally protecting positive rights; that protecting someone’s “right” to force a doctor to provide healthcare services inevitably ends up violating the doctor’s rights. Yet much less thought seems to be given to the practical implications, not to mention how it warps the general perceptions of capitalism. Whether one calls it corporatism, crony capitalism, or state capitalism, it certainly is anything but capitalism. Yet it is written right into the “law of the land” and few seem to take notice.

The constitutionally guaranteed “right to healthcare” apparently includes – among other things – free drugs for those suffering from hypertension, diabetes and asthma, as can be seen advertised in and around pharmacies here. While perhaps seemingly laudable at first glance, the true beneficiary of this constitutional provision is the pharmaceutical industry. After all, only their drugs are provided for free. This gives them not only a government-granted competitive advantage, but also an infinite revenue stream complete with heavily inflated prices. In that light it is no surprise that there are other reasons to believe the Brazilian government has a very cozy relationship with the pharmaceutical lobby.

Contrary to popular belief the average Brazilian, who might be thought of as the main beneficiary of a constitutionally guaranteed “right to healthcare”, is not at all helped by the situation. After all, since government has no money of its own to finance this system of cronyism, funding has to come from taxation, borrowing, or the printing press. While the former is not generally the preferred method for obvious reasons, the other two options are at least as detrimental to the people’s civil liberties and financial well-being. Brazilian inflation figures since the adoption of the current constitution serve as an indication of how the government likes to keep the scheme going.

In short, the constitutional provisions on healthcare and subsequent laws amount to nothing less than a giant handout to the pharmaceutical industry. Imagine running a business whose only customer consists of uninterested bureaucrats who don’t care how much you overcharge and whose end users have no clue how badly they are getting ripped off by the system. How easy it is to make a killing when the government is holding your hand!

It would serve Brazilian liberals well to emphasize this point when debating their detractors who claim to oppose corporate power.

Mart van der Leer is an International Business graduate (B.B.A.) from The Netherlands. He spent time abroad in Denmark, South Korea, Spain and the United States as a student and intern before moving to South America. He also co-founded a local branch of Students for Liberty in Utrecht, The Netherlands and writes about libertarian issues at therawreport.org. Follow Mart on Twitter via @the_raw_report.

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