Brazilian President Luiz Inácio Lula da Silva railed against free markets at the Group of 20 (G20) social summit on Saturday. Lula's remarks reflect credulity in the ability of technocrats to solve social ills and an ignorance of economic history.
The first G20 summit convened in September 2008 to respond to the financial crisis, promote global economic and stability. While the G20 has historically viewed these goals through the lens of its political and financial pillars, this year's summit marked the addition of a social pillar, which Lula described as "where the collective will and expression takes shape."
In his speech, Lula argued that more bureaucratic intervention in daily life is required because "neoliberalism has worsened the economic and political inequality." But the opposite is true. From 1975 to 2015—the neoliberal era—incomes converged internationally. The worldwide Gini coefficient, a measure of economic inequality, decreased from 68.7 to 64.9 between 2003 and 2013 and is projected to fall to 61.3 by 2035, according to economists Tomas Hellebrandt and Paolo Mauro.
Meanwhile, the number of free countries has nearly doubled from 44 in 1973 to 84 in 2023, according to Freedom House, a nonprofit that assesses the global state of political rights and civil liberties.
Lula also called for the permanent mobilization of member countries to "drive forward the work of the Global Alliance against Hunger and Poverty and advance on the taxation of the super-rich." Ending hunger and poverty are laudable goals, but they are achieved through production, not taxation.
Thanks to the industrial revolution, capitalism, and international trade, "the number of people in extreme poverty fell from over a billion to 700 million, while the number of people better off than that rose from a mere 60 million to 6.6 billion" from 1820 to 2015, per Human Progress. To further eliminate poverty and ameliorate human suffering, we must adopt pro-growth policies that allow some to become incredibly wealthy by providing still more value for their fellow man. For example, while Bill Gates' net worth is $104 billion, Microsoft's market capitalization, a measure of firm value, is $3.085 trillion—with a "t."
Lula painted capitalism as a system that discounts the will of the people, encouraging governments "to break off the growing dissonance between 'the voice of the markets' and the 'voice of the streets.'" In reality, the free market is a representative system in which "each man can vote, as it were, for the color of tie he wants and get it," as Milton Friedman explained in Capitalism and Freedom.
If Lula really wants to "reduce the cost of living and promote more balanced working hours," he should advocate for liberty, not bureaucracy.
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