A couple of weeks ago here at Civic Fields, when musing on whether liberalism could defend democracy apart from an economic justification, I wrote about the Right’s resurgence in Brazil. Early election results and several polls had strongly suggested that the Trump-aligned Flávio Bolsonaro (and, by extension, his father, Jair, currently in prison for violently attempting to overthrow the government) would win Brazil’s run-off presidential election held last weekend.
It was not to be. In what The Economist describes as “perhaps the most dramatic comeback in Brazil’s political history,” the 80-year-old incumbent, Luiz Inácio Lula da Silva, head of Brazil’s Workers Party, won his fourth term in office.
I am not expert on Brazilian politics, and even those who are will likely need some time to unpack exactly what happened in the final weeks of the campaign to turn the tide leftward, but according to The Economist’s early reporting, several factors played a role.
First, Lula actually started aggressively campaigning. This included recruiting online influencers to join the cause. One of them, André Janones, a 42-year old evangelical congressman, apparently played an outsized role in mobilizing the internet to Lula’s cause. (Watch out for those evangelical leftists!)
Second, Lula got Congress to do some last-minute legislation that directly addressed the grievances of workers—a reduction in work hours without a reduction in pay, and the bolstering of already existing social welfare programs.
But third, and most importantly, crucial Brazilian swing voters—particularly women—concluded Flávio Bolsonaro was just too dangerous and, despite their economic frustrations, could not bring themselves to vote for him. The Economist reports,
Two televised debates helped to rehash his dodgy past, especially his alleged links to Rio de Janeiro’s militias, groups of corrupt policemen who work as hitmen and extortionists. As a state deputy, he awarded a medal of honour to Adriano da Nóbrega, the leader of a notorious death squad who had been imprisoned for homicide. Mr Nóbrega’s wife and mother were later found to be on Mr Bolsonaro’s payroll (he says he was unaware of this). In 2023, Mr Bolsonaro, by then a senator, sent over $40,000 of taxpayer money to a member of a death squad who was later jailed for helping to assassinate a popular left-wing politician.
On top of all this, news broke just before the run-off election that Flávio and Jair partied with prostitutes on a yacht during Covid; and Flávio, in his last televised debate, stumbled badly as he tried to defend a policeman who shot a child.
The Trumps were not happy about Flávio’s defeat but happy to welcome him to the United States. You may have read that Flávio, who is under investigation in Brazil for money laundering, fled Brazil this week and landed in Miami, where he’s been promised asylum by Trump & Co. (one asylum case the Trump administration is sure to back!). On top of that, Flávio is now declaring himself Brazil’s “legitimate” leader, perhaps setting Trump up for another kidnapping of a South American leader.
But the Trumps are not the only ones bummed out about Flávio’s loss. The day after Lula’s historic win, Brazil’s stock market fell nearly 17%. A loss for a death-squad supporter meant big losses for the market.
Here in the United States, the Wall Street Journal joined Brazil’s stock market in sounding the alarm. They covered the events in Brazil as a minor catastrophe. The Journal’s editorial board took up Flávio’s cause and scolded the Brazilian people for keeping a “Leftist” in office. “That leaves,” the Journal fussed, “the job of enforcing institutional rules to the markets. On Monday they [that is, the markets] issued a decisive early verdict.”
What are we to make of these dashed hopes for a corrupt Right-winger with close ties to militias and death squads?
Is “the market”—i.e., Big Capital—fascist?
There was a time when I would have resisted this conclusion. The supposed virtues of Wall Street are that anyone with enough money can buy in and any legally bona fide company of sufficient size and value can be bought into. If capitalism is linked to liberalism and democracy, as has historically been claimed, Wall Street here was a mirror of the values of a free society.
But it is very hard to say that today.
To begin with, we have witnessed the extraordinary consolidation of the market in a handful of companies. Nasdaq’s recent factsheet tells us that Nvidia, Apple, and Microsoft alone comprise around 30% of the index, with Amazon, Alphabet, Broadcom, Meta, Tesla, and SpaceX rounding the tech holdings out at about 56% of the index. Over half of Nasdaq’s wealth is concentrated in less than ten companies. Ten years ago it would have taken three times the number of companies to comprise 50% of the index. The S&P 500 is dominated by the same small number of companies—the 15 largest stocks account for nearly 50% of the index. Capitalism today represents the concentration rather than diffusion of wealth.
Second, most of the men leading these super-companies have made it very clear that they are quite comfortable with racists, authoritarians, nincompoops, and thugs in the halls of political power, as long as it serves their interests. One even hoisted a Nazi salute.
Third, Wall Street is now almost entirely organized around the AI buildout, but this buildout fundamentally depends on a powerful alliance between tech companies and the State. The former need leverage (debt financing); leverage depends on lenders being confident that AI will pay off big; and that confidence depends on a relatively deregulated environment, consistent with Right-wing economic philosophy. The AI buildout also depends on the State’s willingness to use its power to help get data centers constructed, as Trump is doing. Finally, and perhaps most importantly, the AI stock-market “boom” depends on the assumption that if the boom ends up being a bust and the market crashes catastrophically, Washington will swoop in to save the most valuable companies involved, just as it did after 2008.
Therefore, the AI boom, far from being the expression of the “free market,” is the expression of a powerful State/Capital alliance.
And a State/Capital alliance, along with the mobs and thugs and racism, is the essence of fascism as a political philosophy.
The fascist alliance is exactly why Friedrich Hayek, the famous founder of neoliberal economics, was so worried about. Hayek was critical State intervention in the economy not because he was a market purist but rather because he was an anti-fascist. (See his The Road to Serfdom).
Today, by contrast, the markets seem quite comfortable with the State as long as it serves the concentration of wealth. The barons of Wall Street are okay with would-be fascists, as long as it serves their interests.
This too is to lament. I do not long for a pristine free-market past. I never believed markets could be truly free. I never was a Hayekian. But I do miss the Hayek-inspired marketeers who cared more for widespread distribution of political freedom than the concentration of wealth and money. As the Wall Street Journal attests, those peculiar freedom fighters have evacuated the premises.