Brazil Can Be an Alternative Solution to Crisis in the E.U. and the U.S.

The threat of default for certain countries in the European Union and the political impasse over the United States’ debt have led some commentators to draw parallels between the two crises.

Gideon Rachman, chief editor of foreign affairs for the Financial Times, has exposed the problematic data. He says the U.S. and the E.U. have each developed following distinct historical patterns.

On the one hand, there is the European model based on government interventionism and social welfare, i.e., the guarantees of health and public education and legislative protection for workers. On the other hand, the American model is based on private initiative, free enterprise and flexibility of the labor market.

However, Rachman argues, the two models are currently facing the same obstacles: “The basic problem is the same. Both the United States and the European Union have public finances that are out of control and political systems that are too dysfunctional to fix the problem. America and Europe are in the same sinking boat.”

Extending the discussion, an editorial in the Paris newspaper Le Monde placed the discussion in a historical perspective: “The philosophers have this one day to study characteristics of the Western democracies of the early 21st century: They are all seriously in debt. Moreover, essentially, the public debt before the financial crisis of 2008-2009.”

One of the columnists for The Economist (who always signs with his initials, M.S.), took up the issue in a global context. Faced with the economic crisis of the Western democracies, M.S. notes, China’s growth weakens the argument that democracy is a necessary condition for economic progress.

Ultimately, the unfolding economic crisis and governance in the E.U. and the U.S. bring to attention questions concerning the effectiveness of Western political regimes and the intrinsic value of democracy.

Such doubts give new prominence to different political and economic paths being followed by developing countries. In this context, the consolidation of BRIC (Brazil, Russia, India and China), according to the formulation (which excludes South Africa, since the country has a population of only 50 million) developed by economist Jim O’Neill, shows Brazilian democracy to be unique.

In fact, Brazil is the only BRIC country that presents itself as a full democracy (unlike Russia and China) and has no serious ethnic cleavages or the threat of nuclear conflict with its neighbors (unlike India).