The abuses of the free market and food price controls.

The press reported that the Minister of the Civil House, Rui Costa, backtracked and denied "interventions in food prices in Brazil"; it was also said that "President Lula requested that the government's position be emphatically reinforced: no unorthodox measures will be adopted to contain food prices."

If the government doesn't intervene against the middlemen and speculators who drive up the exorbitant prices of food, who will?

One of the most cherished tenets of neoliberalism is the non-intervention of public power in the economy, allowing the market to act and regulate itself freely. 

However, excessive economic freedom has led to several problems for society, particularly for the working class, which is becoming increasingly impoverished and has borne the brunt of the losses and damages caused by the market operating without oversight from public authorities.

The biggest example of this was the 2008 financial crisis, caused mainly by the manipulation of mortgage loans in the United States, which led to the bankruptcy of large companies and caused recession in many countries, resulting in the disappearance of many jobs.

In the country that symbolizes capitalism, this episode led to farmers losing their land to banks, while families lost the roof over their heads. As a result of the lack of state oversight of economic activity, lives were destroyed and people were left to their own devices.

Currently, one issue that is making life difficult for a large part of the Brazilian population is the price of food in general, and especially of the basic food basket, which is constantly rising, hindering the government's efforts to combat food insecurity and to remove Brazil from the hunger map.

In the past, particularly regarding the protection of the population in case of shortages and abusive price increases in food, Brazil had Delegated Law No. 04 of 1962, sanctioned by President João Goulart. This law was extremely important in allowing the government to act in case of shortages and excessive increases in food prices, an essential item for all living beings.

However, even though the 1988 Constitution authorized the government to intervene in the economic order to guarantee national security and the collective interest, under the Bolsonaro administration this rule was revoked by the Economic Freedom Law, a legal framework of neoliberalism.

Through Provisional Measure 881/2019 (which "established the declaration of economic freedom"), converted into Law 13.874/2019, Bolsonaro revoked the very important Delegated Law No. 4 of 1962, which provided "for intervention in the economic domain to ensure the free distribution of products necessary for the consumption of the people".

According to the legislative measure presented by Bolsonaro and supported by the majority of Parliament, the Public Authorities should not intervene in the economic order. 

I believe that President Lula's first act as president, on January 1, 2023, should have been the repeal of the aforementioned Economic Freedom Law, an economic landmark of the previous fascist government. This could have been done through a provisional measure reinstating the norms of the old Delegated Law 4/62, adapted to the current constitutional order, mainly to prevent what is happening with the abuses in the prices of food and other essential products for the working class.

It is worth noting that the Constitution establishes that the State will act "as a normative and regulatory agent of economic activity." Therefore, the Constitution does not exclude the intervention of the Public Power in the economy. Indeed, the State is not even prevented from directly participating in economic ventures, and may do so as long as they are related to national security and the collective interest.

Now, if the State has the prerogative to act as an entrepreneur, it has even more of a constitutional mandate to intervene in the economy in cases of significant collective interest and for the preservation of national sovereignty, especially in matters related to "the free circulation of goods and services essential to the consumption and use of the people," as provided for in Delegated Law No. 4/62.

Indeed, the Constitution enshrines free enterprise, but this does not mean that the State cannot intervene in the economic order, as defended by the Bolsonaro government, since there are fundamental principles that should guide Brazilian society, such as the dignity of the human person, the social values ​​of work, solidarity, the eradication of poverty, and the reduction of social inequalities—fundamental principles to which any and all elected officials are bound from the moment they take office.

Therefore, the government cannot renounce its duty as a supervisory and regulatory agent, as determined by the Constitution, which imposes upon it the duty to act to guarantee and protect the population, which is the basis and legitimate support of the Brazilian State.

In this regard, the Supreme Federal Court has already ruled that:

"It is true that the economic order in the 1988 Constitution defines a system in which free enterprise plays a primary role. This circumstance does not, however, legitimize the assertion that the State will only intervene in the economy in exceptional situations. Quite the contrary. More than a simple instrument of government, our Constitution sets forth guidelines, programs, and goals to be achieved by the State and society. It postulates a comprehensive normative action plan for the State and society, informed by the precepts conveyed in its articles 1, 3, and 170. Free enterprise is an expression of freedom held not only by businesses but also by labor. Therefore, the Constitution, in contemplating it, also considers the "initiative of the State"; it does not, therefore, privilege it as something pertinent only to businesses.".” (ADI 3.512-ES)

Thus, free enterprise is not absolute, nor are companies above society; they cannot have complete economic freedom to do as they please and speculate on food prices. 

Therefore, the Public Authorities are constitutionally legitimized to intervene in the economy in special situations, to control the abusive pricing of food and other items necessary for the dignified existence of society, in order to avoid situations experienced in the past, in which price manipulation, the destruction and deliberate waste of food, the combined hoarding of goods and products, etc., were employed.

The Delegated Law, sanctioned by President João Goulart in 1962, was an extremely relevant and necessary instrument, from a human and solidarity perspective, particularly regarding the protection of labor, the foundation of everything. In truth, who benefited, then, from its repeal, as the Bolsonaro government did? To answer this question, I will use the words of President João Goulart in his last speech, delivered at Central do Brasil on March 13, 1964:

"The democracy they wish to impose on us is an anti-people, anti-union, anti-reform democracy—in other words, the one that best serves the group they serve and represent: the democracy of national and international private monopolies."

Therefore, I reaffirm that, in cases where the collective interest is at stake, the Public Authorities are authorized by the Constitution to intervene in the economic order to prevent abuses, such as the excessive increase in food prices, and the government of President Lula should have no qualms about doing so, if necessary.

It is worth clarifying that intervention can occur in various ways, whether through product imports, tax reductions, targeted inspections, price controls, subsidies, the creation of public companies, etc.

For this reason, one cannot be afraid of the market nor retreat from it, because, in the end, it is President Lula's government that will be held accountable if food prices continue to rise, and not the market agents who manipulate the prices of essential products. 

It is important to remember that President Lula's government has been under attack since day one and that the market's representatives will do everything to sabotage anything good the government accomplishes, just as they did at the end of President Dilma Rousseff's first term, when, starting in July 2014, they initiated a lockout to undermine her re-election.