The public administration of coupons

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By GILBERTO BERCOVICI*

The Bolsonaro/Guedes proposal proposes the realization of Milton Friedman's ideas: the management of social demands via the private sector through vouchers

At the beginning of the 1964 dictatorship, the carioca columnist Sérgio Porto, under the pseudonym Stanislaw Ponte Preta, published a series of satirical articles about the absurdities of the military government called Febeapá – Festival of Nonsense that Ravages the Country [1]. The current government of Captain Bolsonaro could not be left behind the regime that he does not tire of idolizing and is prodigal, in partnership with his Minister of Economy Paulo Guedes, in expanding the list of absurdities that deserve to be present in a new volume of Febeapá.

The proposed constitutional amendment on the so-called administrative reform, delivered to the National Congress on September 03, 2020, brings together a multitude of nonsense capable of shocking even the most loyal member of the basements of the 1964 dictatorship. , just one: the proposal to change the caput of article 37 of the 1988 Constitution. The current wording of this device is: “Art. 37. The direct and indirect public administration of any of the Powers of the Union, the States, the Federal District and the Municipalities shall obey the principles of legality, impersonality, morality, publicity and efficiency, and also the following: (...)”.

The will of the Bolsonaro/Guedes government is to change this text to: “Art. 37. The direct and indirect public administration of any of the Powers of the Union, the States, the Federal District and the Municipalities will obey the principles of legality, impersonality, impartiality, morality, publicity, transparency, innovation, responsibility, unity, coordination, good governance public, efficiency and subsidiarity and also to the following: (…)” (emphasis added).

The first consequence of this proposal is to confirm what I got tired of saying and writing: the so-called “subsidiarity principle” had not been incorporated into the 1988 constitutional system [2]. The proof is the simple observation of the proposal to include the “principle of subsidiarity” expressly in the text of the Constitution. If this principle were valid, as several of our market publicists defend, there would be no need for it.

It is worth remembering here that the so-called “subsidiarity principle” is nothing more than the preponderance of the private sector. The State would help and supply the private initiative in its shortcomings and shortcomings, only replacing it exceptionally. State action would be the exception, not the rule.

Defenders of the “principle of subsidiarity” usually claim that it would have been enunciated for the first time in the Encyclical fortieth year, of May 15, 1931, by Pope Pius XI. Some, still, in a gross historical mistake, justify the content of the Encyclical as an appeal to non-interference by the State in the face of the rise of fascism in Europe. Nothing more false.

The “principle of subsidiarity” was posited, for the first time, precisely by fascism, in the famous Labor Charter, edited by Benito Mussolini in 1927, in its item IX: “State intervention in economic production only takes place when private initiative is lacking or insufficient or when political interests of the State are at stake. Such intervention can take the form of control, encouragement and direct management” [3]. Of course, this is conveniently forgotten by the authors of our “new public law of economics”.

The question that must be asked is: what is a subsidiary Public Administration, introduced in the administrative reform proposal of the Bolsonaro/Guedes Government? A Public Administration that only acts when the private sector is missing or insufficient? What is behind such a proposal?

And here we see the mistake of our market administrators. His advocacy of the “principle of subsidiarity” essentially concerns the role of the State in the economic sphere or as the granting power of services and public works. It is simply an apologetic view of the market in defense of the private interests of some economic sectors (all large or potential customers).

The Bolsonaro/Guedes proposal goes, however, far beyond the mere guarantee of economic interests of concessionaires or contractors. Subsidiary Public Administration is nothing more than the realization of the ideas of the North American economist Milton Friedman: the management of social demands via the private sector through vouchers or coupons [4].

For Friedman, the State should not spend on expensive installations and pay salaries to permanent civil servants to provide essential public services, such as health and education, but create a voucher program (vouchers) that would allow interested parties to receive the desired service in a much more efficient competitive market mechanism.

In the words of Milton Friedman himself: “The object of the State is the education of its children, not the erection of buildings or the operation of schools. These are means and not ends. The state's objective would be better served by a competitive educational market than by a government monopoly. Providers of educational services would compete to attract students. Coupon-enabled parents would have a wide range to choose from. As in other industries, such a competitive free market would lead to improvements in quality and reductions in costs” [5].

This is the subsidiary Public Administration of Bolsonaro/Guedes: there would only be a need for a public hospital if there was not enough of a private hospital. The public school would only make sense in the absence of the private school. The citizen would have the right to education or health care through coupons, which would guarantee full or partial access to these services offered by the private sector, which is much more efficient, in the view of the current rulers, than the Public Power.

After all, why spend scarce public resources on schools, hospitals, sanitation, transport and energy infrastructure, and so many other sectors, if the Brazilian Public Administration can be reduced to managing vouchers for the needy? Brazil would still become more like the United States and its precarious welfare system of food stamps. Nothing more modern and advanced!

An image disseminated by an important professor of administrative law is that of Public Administration situated between clips and business [6], with the defense of the “modernization” of administrative law, obviously, in the sense of business. Nothing could be more wrong. The Brazilian Public Administration, if the proposal for a constitutional amendment of the Bolsonaro/Guedes administrative reform is approved, will neither be for clips nor for business. It will be the Public Administration of Coupons.

*Gilberto Bercovici is Professor of Economic Law and Political Economy at the Faculty of Law of USP. Author, among other books by Elements of infrastructure law(Countercurrent).

 

Notes


[1] There is a recent reprint of these very amusing chronicles: Stanislaw PONTE PRETA (Sérgio Porto), Febeapá – Festival of nonsense that plagues the country, São Paulo, Companhia das Letras, 2015.

[2] I wrote about this on several occasions, see the text published in Conjur on November 08, 2015: https://www.conjur.com.br/2015-nov-08/estado-economia-principio-subsidiariedade -authoritarianism.

[3] Carta del Lavoro, IX: “L'intervento dello Stato in economic production has luogo loosening when manchi or sia insufficiente l'iniziativa privata orwhen siano in giocointeressi politici dello Stato. Such an intervention can assume the form of control, encouragement and direct management”.In addition to Mussolini's fascism, the "principle of subsidiarity" was adopted by other authoritarian regimes, such as the dictatorship of Francisco Franco in Spain (1939-1975), in the Workforce, from 1938, and in the Law of Principles of the National Movement, from 1958. In the Brazilian case, this conception is inscribed in the Charter of 1937 (Article 135) and in the charters granted by the military dictatorship (Article 163 of the Charter of 1967 and Article 170 of Amendment No. 1 of 1969).

[4] This theme was that of one of the last articles by Milton Friedman, published in The Wall Street Journal, on December 05, 2005, entitled “The Promise of Vouchers” (https://www.wsj.com/articles/SB113374845791113764).

[5] In the original: “The state's objective is the education of its children, not the construction of buildings or the running of schools. Those are means not ends. The state's objective would be better served by a competitive educational market than by a government monopoly. Producers of educational services would compete to attract students. Parents, empowered by the voucher, would have a wide range to choose from. As in other industries, such a competitive free market would lead to improvements in quality and reductions in cost”.

[6] Cf. Carlos Ari SUNDFELD, “Administrative Law between Clips and Business” in Alexandre Santos de ARAGÃO & Floriano de Azevedo MARQUES Neto(coords.), Administrative Law and its New Paradigms, Belo Horizonte, Forum, 2008, pp. 87-93.

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