Celso Furtado: building the future

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By JOSÉ RAIMUNDO TRINDADE*

Commentary on the issue of development in two moments of the economist's work

In these hundred years that would complete Celso Furtado's life, he is being remembered as a “vanguard of development”, something that would be far from the author who saw development as a myth to be dispelled. The text that follows seeks to bring together two Furtados, one still partially convinced of the historical conditions for building a nation project and the other already quite disillusioned, but curiously maintaining optimism in the perspective of building a non-subordinated and autonomous future of Brazilian society. Below we make a brief appreciation of a young man and an old man Furtado, seeking to compare them and find the historical vein of building a Brazilian nation.

1- Thinking about Brazil

The book “The Brazilian Pre-Revolution” (1962), is one of the most provocative texts by the author of “The Economic Formation of Brazil”, being more of a discursive piece and, clearly, a text for political confrontation, without ceasing to be, like other works by Celso Furtado, an important source of analysis and critical construction of the Brazilian economy and society. The title, in itself already quite suggestive, reflected, beyond a certain critical optimism on the part of the author, the idea of ​​a latent and profound process of ongoing social and economic transformations, so to speak, a true revolutionary process, which would direct the structural transformations necessary for the constitution of the Brazilian nation[1].

The central thesis raised is that the Brazilian economy would have already reached, at that point, “a degree of economic differentiation” that would allow it to internalize the main decisions of its economic life. According to Furtado, “Brazil is repeating, to a certain extent, the experience of Japan in previous decades: the conquest of self-determination in the economic sphere, even if still in a phase characterized by a level of per capita income typical of an underdeveloped country”.

As a work of reflection and political confrontation, it is necessarily done with a call or proclamation for society's action to produce the "developmental utopia" that he espoused at that time, and our author generalized "the awareness that the country is moving for far-reaching transformations”, however, he noted that the forces contrary to a nation project were at work and that “under our feet like a deep storm, unfathomable forces work”.

Two central questions were placed at the center of the social tensions produced from the recent process of Brazilian national development at that time, and which would be permanently projected since then: i) the growing social and geographic concentration of income, a reflection of the low use resulting from the large pastas benefited from this development and, ii) the maintenance and aggravation of the anachronism of the agrarian structure. Furtado also considers that the absence of reforms in the state apparatus itself co-germinated a kind of privatization of the State that “becomes a current source of rapid accumulation of wealth inside and outside the government".

The author's reformism is expressed in the analysis of the international conditions in which we were inserted. The bipolar world (USA and USSR) allowed a certain margin of freedom in determining our goals as a nation, formulated in terms of a central point: freedom and economic development, understood freedom as a humanist perception[2] and not echo of mere individualistic interests.

An accelerated pace of economic growth could be in line with more social criteria, being essential “to prevent any form of setback in the political-social system and create conditions for a quick and effective change of the country’s anachronistic agrarian structure”. As we know, on these two aspects “we have historically failed”, the political setback imposed itself from 1964 onwards and, as Celso notes in 2001, “neutralized for two decades all forms of resistance by the excluded and exacerbated the anti-social tendencies of the our mimetic development”. The agrarian issue reaches the XNUMXst century as an unresolved issue, or rather, a central agenda issue for the always postponed national future, which in this second decade of the XNUMXst century is marked by the resurgence of the most decadent ruralism and a genocidal action against native peoples. and extermination of popular leaders in the countryside.

Furtado defended the need for constitutional reforms that would guarantee the realization of a agrarian reorganization and modify the state administrative machinery, the tax system and the banking structure from the ground up. It also advocated a legal statute that disciplined the action of foreign capital, subordinating it to the objectives of economic and social development in line with popular aspirations. According to the author, the most immediate tasks, at that moment, would be to organize Brazilian public opinion so that it manifested itself organically and proposed the goals of social development, like other national prophets, such as Florestan Fernandes, our author envisioned that without a deep organization “from below”, our slave culture would impose itself on any attempt at a minimally autonomous economic and social policy.

2- Economic policy and basic reforms

Furtado has always been a fierce critic of conventional theories of development, as well as of the scope of economic analysis instruments for the formulation of economic policy, considering his fundamental assumption that was the well-being of the majority of the population. The author is critically emphatic about the conditions of conventional economic theory in collaborating with the undertaking of development: “the way of thinking of economists was trapped by the concepts of general equilibrium, of self-correcting automatism (...) it was more or less evident its inability to grasp the problems of development”.

A similar view will be exposed regarding the interpretation and collaboration of economic thought in relation to the “proclaimed” basic reforms. The dominant economic thought shows itself incapable of stepping down from its equilibrist abstraction and false diagnoses of economic reality and standing up to the “unfathomable forces” of Brazilian society. The author still did not have, as will be done later, the due dimension of the ideological conservatism that feeds this science of power.

The basic logic of development in the core countries of capitalism can be described in terms of the technological stimulus made possible by the scarcity of labor. The central issue pointed out would be that the systems of these countries in the post-war period moved towards the adoption of full employment policies, to the extent that the entire stock of labor was employed - in Marxist parlance, the industrial reserve army was reduced – there was pressure to increase real wage rates which, in turn, fed the gears of technical innovation which, via technological unemployment, would tend to lower wage rates again and increase the rate of profit. This virtuous circle was only completed if solvent demand was guaranteed via high economic growth rates. According to the author "the policy of full employment implies a policy of development”, which did not materialize in Brazilian conditions.

The exposed debate was very important because a considerable portion of economists on duty in international bodies and in Brazil, defended a mere transplantation of the models used in those socioeconomic configurations to be used in countries with another level of capitalist development. Furtado considered that the use of only “quantitative” macroeconomic models is fully feasible in societies that present the exposed dynamics. But for differentiated economies of that highly developed type, “the quantitative policy technique has limited practical reach”. In these cases, economic policies have to have a qualitative character, “demands a knowledge of the dynamics of structures that escapes conventional analysis”. The basic reforms would have to be analyzed from this point of view, their scope would go beyond neoclassical methods, making it necessary to orient the economic analysis towards the internal (structural) and more complex components of the Brazilian development process.

Based on this method of analysis, it is worth noting the accelerated speed with which Brazilian industrial development took place in the period from 1945 to 1960. The short time for accommodating old and new interests, which emerged and were affected by the process, alongside the accelerated transformation imposed by industrialization created tensions that were difficult to reconcile. In this way, the “basic reforms” would fulfill the function of correcting and adapting interests that could ease the great social tensions fueled by the “disappointment between the expectations created by the development itself in the population as a whole and the limited access allowed to the fruits arising therefrom”.

Fiscal reform seems to be a permanent concern of everyone who tries to critically analyze the Brazilian economy. Enable the State to raise the necessary resources to financially cover its increased expenditures, enabling the government to carry out functions related to social and economic development. Celso Furtado identifies the financing of the public deficit via monetary issuance as a structural factor of Brazilian inflation, resulting in two harmful effects: i) it is levied as a tax that negatively distributes income, that is, it punishes a large part of the population with a kind of tribute that subtracts income of the poorest in favor of the richest – an inverted Robin Hoodian State -; and ii) depreciates the services offered by the State due to its necessary price rigidity as a factor to control inflation.

Agrarian reorganization, as he calls “agrarian reform”, is a second reform considered central, enabling the reorganization of the agrarian economy on rational bases, which would overcome, at the same time, land concentration, but which, above all, would make possible the increase in supply. of agricultural goods for an increasingly urban population. The structural tensions of the Brazilian economy would derive, in large part, from the limited responsiveness of the agrarian sector to (…) price mechanisms (p.44).

The regional issue is another serious problem already pointed out by our author and which would have to be tackled by the development policies to be undertaken. The secular northeastern problem should be seen from the following key aspects: i) the land and agrarian structure, based on the exploitation of sugar monoculture in the best arable lands; ii) the transfer of income from the northeast to the center-south, an internal mechanism for the deterioration of terms of trade; iii) urban unemployment; iv) underutilization of land in the more humid regions and lack of adaptation to the environment in the semi-arid zones [lack of search for technological and ecological alternatives]; v) the non-internalization of private capital and its recurrent migration to the center-south.

The defense of a development policy that acted on different fronts was what was required, something that is no different today. In this sense, via SUDENE [and SUDAM, in the case of the Amazon], it would be necessary to coordinate public and private investment actions, which, above all, would have to be continuous and technically autonomous, without being independent in terms of their social dimension.

3- Development without coordination and the democratic experiment

Until the 30s, Brazil would be dominated by what Furtado calls colonial ideological complex: the exchange rate, the external divide, the budget deficits, the prices of export products, and the only and miserable concern of the internal dynamics: inflation. According to Furtado, our development was more a historical imposition than planned and conscious acts of the national elite.

The author noted that coffee protection policies, via exchange rate devaluation, ended up collaborating with the incipient manufactures that had the domestic market as their objective. The immediate post-war period, in particular the Dutra government, was one of overwhelming anti-industrializing liberalism that ensured a cheap exchange for imports. This exchange rate policy was altered in the 50s, when the exchange rate became favorable to internal growth without, however, obey the guidelines of an authentic industrialization policy. The result of this last period (1948 to 1954) was the prioritization of non-essential sectors and the absence of macroeconomic coordination and in the productive network, added to the precariousness of the national productive infrastructure. The last period reflected by Furtado, from 1954, is the only phase that presents itself with coordinated characteristics, reminds the author that it will only be from then on that the BNDE (National Bank for Economic Development) will concentrate resources with a view to financing projects and a National Development Committee began to coordinate efforts.

The defense of the State's action as a promoter of development and the adoption of economic planning would be mandatory for countries like Brazil, where it would not be enough to preserve the stability of the system, requiring state action including the stimulation of private business activity, the reorientation of investments, the acceleration of capital accumulation and the reduction of risks. The author also notes that, in order to achieve democratic objectives, planning would be an indispensable factor, alongside the necessary coordination of the various economic policies undertaken and the actions of the various Ministries and government bodies.

4- The Brazilian economy in the second half of the XNUMXth century and the permanent postponement of the future

The challenge posed in the 60s was that of building the Brazilian nation, taking advantage of the innumerable and already so often sung natural advantages, the cultural fecundity and the magnitude of its population. The challenge posed by the author at that point in the Brazilian drama was: “will we open a new phase of qualitative transformations in our formation of a continental nation, or will we move towards a crystallization of the already established structure?”. Furtado recalls that it took “a century since political independence for Brazil to take, alone, the first steps on the path of economic development”. After the 1930s, the country had a national market that was relatively integrated in its various regions and, since the 1950s, subordinated no longer to external logic, but to the logic of the industry in the center-south of Brazil. However, this dynamic remained incomplete and with serious gaps that could make it impossible to “look to the future”.

Furtado, however, saw the future with optimism. On the one hand, he pondered that the industries linked to the three basic sectors – industrial metals, liquid fuels and equipment – ​​seemed to be definitely establishing themselves and, on the other hand, there was a gradual growth of the internal market and central decisions were the result of national command. This is how the author exults in the Brazilian transformation “at the beginning of the seventh decade of the [XX] century” and envisions the country “on the threshold of its transmutation into an industrial nation”.

The corollary of all this, and it is worth repeating the author, is that from a certain moment in Brazilian history, the conditions were given for taking a position to overcome the challenge posed. Yet history, seen through the eyes of the future, seems more dramatic and difficult than even the most critical of critics would suppose. After 40 years of the analyzes contained in “The Brazilian pre-revolution”, we find Furtado stating the following in an article already close to his enchantment: “our country is going through a historical phase of disillusionment and anxiety. Nobody escapes that our late industrialization was conducted within the framework of an imitative development, which reinforced our society's atavistic tendencies towards elitism and social exclusion”. The article from which the quote was taken has the generous title of “When the future arrives”, curiously a counterpoint to the final text of the 1962 book that was called “The future as an option”.

The historical conditions of our development were pregnant with difficult tests and internal and external impositions of a retarded and backward elite, moved by successive dictatorial and coup experiences. We emerged in the 20s as a non-nation and “we embarked on a path that leads us to a serious impasse”. Furtado returns to the challenge posed 40 years ago, the formerly optimistic ECLAC master maintains the need, today more than ever affirmed, for building the Brazilian nation, which, however, will have to happen with the strength and vigor of those who come from below and contrary to those in power and those who come from above!

*Jose Raimundo Trinidad He is a professor at the Graduate Program in Economics at UFPa.

References

Celso Furtado. The Brazilian pre-revolution. Rio de Janeiro: Cultural Fund, 1962.

Celso Furtado. “When the future arrives”. In: Ignacy Sachs (org.). Brazil: A century of transformations. São Paulo: Companhia das Letras, 2001.

 

[1] It is worth remembering that this moment is one of the periods of greatest popular effervescence in the country and from the cultural point of view there is a society in turmoil. At that time, the Popular Culture Centers run by the UNE appeared and, in the Northeast, the Peasant Leagues of Julião were in full operation.

[2] “What outrages the youth is the anti-human aspect of our development”.

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