I'm John Bachelor with Professor Aven Ellis, the New World Report, State Capitalism.

The Financial Times covers this story with a cheerful headline,

Lula's Playbook.

Brazil bets on a return to state capitalism.

Subed, the president has big plans to kick-start the economy.

Professor, state capitalism, we need a definition because Lula is creative.

And why? Why go to state capitalism here in the 21st century when countries are enjoying trade with others?

Well, John, the idea, and it's certainly an ambiguous concept of state capitalism, but the general idea is that you have a predominantly private

sector economy, but you have a leadership role for the state. Oftentimes it's associated with state industries

in major sectors such as petroleum or mining

or construction.

The idea of state capitalism largely goes back to something called import substitution

industrialization and dependency theory in the 1960s and in 1970s.

Indeed, some of the big promoters of the idea back then were people like a well-known academic leader president Fernando and Enrique Cardoso of Brazil. But the idea back then was to say we need to basically while

we're going to stay free market we're not going to go in a communist

direction or populist socialist direction. You know we want to have the state be a

motor for development. We want to disconnect ourselves a little bit from the international dependency directly of just exporting primary products to largely to the United States and we want to build up our own industry for the

Brazilian people. The problem historically with state capitalism is that those

big industries tend to be political cashcals. They tend to be inefficient and so many

of the experiments that were tried in the 1960s and 1970s with state capitalism

Essentially crumbled in political and in economic problems and indebtedness.

Now in Latin America, in general, in the 20th century, there have been really kind of three paths

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