Why Brazilians like to fight and how they build up their public debt deficit

I watched yet another humiliation of Brazil last week when they lost for the last time against Holland in the "losers match", fighting for the third place at the 2014 World Cup in football. Auch, I simply did not expect to see Brazil fall from grace like that. Add to that - they were humiliated on the world stage and this stage was set in Brazil. It does not get any worse than that.


Brazil was my favourite team to win at this World Cup. They had everything going for them - last year they won the Confederations Cup and if you take a look at the individuals that make up the team, you have some of the strongest players in the world.

About this blog entry

But you know what - it made me think about Brazil. So, this blog entry is all about wonderful Brazil. It will be a little casual thinking about the Brazilian mind and psyche, their fascination about fighting and only a little bit about their economy.

I want to make this clear from the beginning - I have only great things to say about Brazilians. They are some of the most kind and approachable people I have ever come across. They always greet you with a big smile and seem genuinely interested in you. You can easily become accepted and if that happens, you dont have to know them for long before you are invited to a party or their child´s communion ceremony.

High- and low-context cultures and corruption

According to the famous anthropologist Edward Hall, Brazil is a high context culture. What is that ? Well, it's when people in a society are generally loud, colorful, quick to make promises that cannot always be relied on, and casual about meeting times and deadlines. You get it ? These societies tend to be family oriented, with tight relationships even beyond the immediate family, based on close ties built over long periods of time.

You can read more about the amercian anthropologist Edward Hall, who invented the terms here.

"Low context" - on the other hand - describe societies like the US and Germany where people are much more individual oriented, care about privacy and are more likely to stick to timelines and deadlines and their word.

In a high context society a member of a group will always favour other members over an outsider. Even if this outsider brings new ideas and new business opportunities another member of the group will always be favoured. This will lead to corruption and nepotism.

A lot of Emerging Markets like Brazil are infested with corruption and nepotism. And, if you take a look at a list of high- and low-context cultures, you realize that a lot of Emerging Markets are indeed high context.

Another high context culture is Italy that puts a lot of faith in family oriented values - too much if you ask me. One of the reasons that economic growth in Italy has been very low historically is because so many companies are small family owned production companies. Italian businesses are too small to ever experience economies of scale and simply not innovative enough - all because of an over reliance of family values. Also, you find a lot of nepotism and corruption in Italy - by the way.  

The Brazilian warrior and the group mentality

To exemplify the in-group mentality in Brazil - lets take a look at the fighting scene in Brazil for a moment. Brazilians have a long tradition for fighting. Capioeira, Luta Livre, Brazilian Jiu Jitsu and Vale Tudo (no rules fighting) are all fighting styles made in Brazil. If you are interested in some background information regarding the development of some of the fighting styles in Brazil, I can recommend this excellent documentary available on YouTube, called The Gracies and the birth of Vale Tudo. You get the history of Vale Tudo in Brazil with a lot of stories and anecdotes from the 1950s, 60s and 70s. I have been doing Brazilian Jiu-Jitsu for 5 years now, so my perception of fighting is naturally biased.

There has always been competition, rivalry and in many cases hostility between members of the different fighting styles. That is why you should expect peace and harmony within the different fighting communities, but that has not been the case, at all. Within Brazilian Jiu Jitsu lots of sub-groups have formed in Brazil over the years born out of hostility or rivalry to other sub-groups.  

Robson Gracie, the father of another famous MMA and jiu-jitsu fighter, Renzo Gracie explains the in-group mentality in the above documentary: "We have manners, we are very polite. Just don´t bother us, just don´t pick on us and don´t threaten us. Inevitable, there will be confrontation."  If anyone talks trash about a member of a group - you are in bad standing. So, you look out for the "family" or in-group members and outsiders have to prove themselves worthy if they want to become a member. 

Fiscal spending and the group mentality in Brazil

Brazil can also be viewed as one group - one big familiy. So, every Brazilian is a member of the big Brazilian family. And members of this big family takes care of each other.This thinking has caused Brazil to develop a lot of social welfare programs. The Brazilian population is given high levels of income support from the government even though the economy does not generate enough tax revenues to support a welfare state. 

In the old days Brazil used the Central Bank to print money to fund the welfare programs - but that generated a lot of inflation, and is no longer a viable option. Today, they simply build up large fiscal deficits and hope for economic growth to take care of the spending problem. 

So, to wrap it all up - Brazil is a high context society which goes a long way in explaining the existence of high fiscal deficits and corruption. It also explains why so much animosity can develop between members of different groups.