"It is not possible to simply wait for private initiatives and let them act in a disjointed manner, without any connection between them. Why wait only for private initiative? Why shouldn't the government provoke or take on tasks that do not interest it or are beyond its capabilities?" A strong statement and no less strong questions.
Allow me, the eventual reader, a question of impertinence: in which of the last eight or nine decades of our history would the text above have been written? The answer lies further on in this article. But I dare to hypothesize that there has long been a significant current of opinion in "deep Brazil" that subscribes – today – if not to the precise formulation above, then to the spirit that animates it and whose flame remains alive among us.
Two recent examples just to illustrate the point.
First, the systematic campaign against the privatizations of the 1990s (as being the squandering of "public assets") and their demonization as an electoral tactic in 2002, 2006, and 2010 – to which there was no adequate response.
Secondly, the long period – in addition to Lula's presidency, plus almost three more years already in Dilma's government – until the various internal factions of the party in government and its allies could accept, after some failed experiments, the idea of larger concessions to the private sector in the area of infrastructure – which, fortunately for the country, began to occur at the end of last year. But precious time was lost by Brazil – in terms of lower investment and lower growth – due to Hamlet-like doubts that have a long history among us.
To focus only on the "most recent" period: the two great wars of the last century, and in particular the Great Depression of the 30s, marked a trend towards state interventionism that was observed on an international scale and, obviously, found an echo and past experience in Brazil. What was new in the nature of the intervention that emerged from the 30s onwards was its partial and incipient use to attempt an acceleration in the pace of investment in infrastructure and basic industry, aiming at a transformation of the productive structure, different from that which the private sector would carry out – or not – in the absence of government intervention.
As a result, among the most relevant recurring issues of political economy in Brazil in recent decades – up to the present – are, to a greater or lesser degree, differences in perception (smaller today than in the past) regarding the form and extent of both external participation and public sector intervention in economic life.
No less important were – and continue to be – the differing perceptions (also fewer today than in the past) regarding the best institutional ways to reduce and/or arbitrate conflicts of interest arising from the dizzying expansion of the number of urban wage earners in the country over the last seven decades. Brazil is now the fourth largest country in the world in terms of urban population. The demands arising from this are extraordinary.
The associated demands for greater and better investments in infrastructure and human capital are considered "state-intensive." But in many countries around the world today, governments are finding it increasingly difficult to meet the expectations of their populations. Education, health, transportation, security, and other services that the public has expected their governments to provide for decades are falling beyond reasonable public budgets or, at least, beyond what significant portions of the population consider acceptable in terms of additional taxes, fees, and contributions to finance the provision of such services. Any resemblance to countries we know better is not mere coincidence.
Going back to the beginning, the statement and the two questions in the opening paragraph of this article are from an illustrious and influential figure in Brazilian public life (Edmundo Macedo Soares e Silva) and were published in December 1944 in the Bulletin of the Circle of Military Technicians under the title "Brazilian Engineering in the Volta Redonda Project: A Chapter of Economic Planning."
Almost 70 years have passed. We have a relatively long history of successes – and failures – in combining the public and private sectors (domestic and international) to promote the country's economic and social development.
I believe that the periods in which we made the most progress, or in which we had the most successes, were those in which the decisions involved had less ideological bias, more transparency, more confidence in public/private cooperation, and more pragmatism. And that we lost precious time, especially in infrastructure investments, when the weight of ideology, lack of transparency, and distrust between the two sectors was stronger.
In short, and to conclude, what is required is a combination of an efficient state, operating under the rule of law and governed by governments accountable to their citizens.
It is certainly not necessary to "just wait" for private initiative, but it is always necessary for governments to explain and account to Parliament and their citizens for the reasons, for example, that may lead them to grant privileged access to scarce resources to certain specific groups (through subsidies, credits, exemptions and trade protections). Or when they decide to "take on responsibilities" that they believe could not be left to others.
Furthermore, in this latter case, an open, transparent, and non-ideological discussion could reveal situations where there are existing or planned "responsibilities" that might exceed the technical, human, financial, and fiscal capabilities of the State itself—and its companies.
