Moral and Economic Development

Wednesday, June 1, 2016

The free market economy is an economic system that even though it does not stipulate specific moral for market participants, it does not work without moral. To be able to work, the free market economy needs honest business people, incorruptible officials and politicians and unbribable journalists and scientists.

 

Brazil is one success story of how reduction of immorality makes economic progress pos­sible. In the 1980s, the country still was ranked among the poor and under­de­veloped countries. In the 1990s, thanks to conservative economic policy, it mana­ged to keep hyperinflation in check; the country subsequently introduced active social policy. Yet at first, it didn’t amount too much. Crime gangs took money away from poor people, which was intended to pay for their children’s education, health expenses and to cre­ate an independent livelihood. The country then used its armed forces: Three dozens of the worst slums were being occupied and the Mafia driven away. Then the residents were not just able to breathe a sigh of relief, but also to invest in their future. From 2001-2011, Brazil’s middle class grew by 93 percent; it made up almost half of all Brazilians in 2012.

 

But the investments were mainly geared towards material improvement and primary education; the considerable moral deficits of the country were not reduced. A new crisis was triggered by the uncovering of a wide spread net of corruption, in its center the semipublic oil company Petrobras stood. Their money was used in 2014 to get public contracts, to finance the workers party (PT) and to support the election campaign of President Dilma Roussef. After her victory the Brazilian justice uncovered almost every week a new involvement in corruption and misuse of power of her party as well as of the whole political establishment. Without constitutional legality, responsible government leadership and justice the economy got into trouble. In 2015 the economy drops and fell into recession, the GNP shrank and inflation reached a mark of 10 percent. Parallel to the recession the drug cartel bosses got control again over the slums. Paralyzed from the scandals the government was not able to get the problems under control.  

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