Maria da Conceição Tavares (1930-2024)

Lecture in Amsterdam. 1980s. Personal archive. Photo: Jan Stegeman
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By FERNANDO NOGUEIRA DA COSTA*

Tribute to the recently deceased economist and teacher

A mentor is an experienced and wise person, capable of guiding, without the need to directly give advice to another person. He is a guide or master: he directs, develops, elaborates or writes ideas into works, and sets an example of political stance, even remotely – beyond his time and place.

I consider professor Maria da Conceição Tavares (1930-2024) my intellectual mentor. She was the person whose practice influenced the behavior of an entire social-developmental generation, that is, defender of active social policies in addition to economic policy for growth and income distribution.

The periodization of his work can be divided into three major phases. The ECLAC phase goes from 1963, the date of publication of his classic Rise and Decline of the Import Substitution Process in Brazil, until 1972, when his essay was published Beyond Stagnation, written with José Serra. The theoretical review phase began in 1973, when the author published the important essay Income Distribution, Accumulation and Industrialization Patterns (precursor to his thesis of professorship and, later, his title), until 1985. This year, when he published his essay The Resumption of North American Hegemony, began the phase of international political economy, the final stage of his thought written in works.

This periodization is also possible to be presented in a political and institutional way. In the Developmental Era (1950-1980), its main objective was to understand the logic of Brazilian growth that concentrated income and wealth. In the Neoliberal Era (1980-2002)), he researched the elements that caused the lack of growth with stagflation. In the Social-Developmental Era (2003-2014), he supported the Workers' Party government with his constructive criticism.

In institutional terms, there was the CEPAL phase, focusing on peripheral economic (under)development, in particular, of the Brazilian economy. After September 1973 (military coup in Chile), came the UNICAMP phase, where he formed many disciples through critical dialogue with thinkers from the Political Economy tradition, such as Marx, Keynes and Kalecki. During the UFRJ phase, he changed his focus to the analysis of global economic (dis)order, presenting a “geopolitical vision to better understand the formation of hegemonic centers”.

The contributions of the Professor’s work were numerous. In her work in the 1970s and 1980s, she broke with the ECLAC view of external determinants. It began to be based on sectoral analysis schemes, developed by Kalecki, to understand the dynamics of developing capitalist economies.

In his critical view of the stagnation thesis, he recognized conspicuous (luxury) consumption as having relevance as a stimulus to capital accumulation in the domestic market of countries with unequal income distribution – and not as an impediment. He shifted the analysis: the emphasis in his thinking was on the limits of investment decisions without financial and technological autonomy.

He developed the idea of ​​income distribution being exogenous to the accumulation process as it was determined by the political-union framework. The Brazilian economy grew, driven by the accelerating effect of investment and income multiplier, concentrated for political-institutional reasons on the expansion of consumption by higher income classes.

The distributive factors were not imposed, endogenously, by market forces, but by political forces. The increase in consumption of higher value-added goods did not reduce workers' consumption, on the contrary, it increased it through debt.

He highlighted: salary is not just a cost. The wage bill represents demand.

There are three central ideas in the Professor’s thinking. First, the false extrapolation from Microeconomics to Macroeconomics of the opposition of wages against profits, because these depend on the spending decisions of capitalists. Accumulation is not limited by wages, but by level of debt, sales rate, excess idle capacity and lack of innovation.

The second is that income distribution is determined by the movement of accumulation, the pattern of intercapitalist competition and the organizational power of workers. Class struggles affect income distribution, but are subordinated to capital accumulation or unemployment.

The third refers to the structural instability of capitalism, inspired by Kalecki, seen by the disproportion between the three sectors. The DI (capital goods producing sector) tends to expand its productive capacity above the demand of the other DII (capitalist consumer goods) and DIII (wage worker consumer goods) sectors.

Capitalists do many things as a class, but they do not collectively define their spending decisions. These are decentralized, uncoordinated and uninformed about each other. Uncertainty is also one of the determinants of investment.

The system does not tend to stagnate, but rather oscillates in cyclical movements of expansion and contraction. Conceição also makes a Schumpeterian reading of capitalism by highlighting the impulse of dynamics given by innovation. The emphasis on endogenous aspects is inspired by both Kalecki and Schumpeter.

Conceição Tavares' main research themes were regarding the center-periphery relationship, revealed in the balance of foreign trade, with a repudiation of the vision of market automatisms against underdevelopment. She highlighted the distinct style of development in peripheral economies and the role of transnational companies in the dynamics of the world economy.

In research into the cycle and crisis, movement was found to be limited by the degree of industrialization. In it, external bottlenecks become less relevant given the emphasis on the endogenous dynamics of capital accumulation, on the determinants related to competition (microdynamics) and on the categories of use of goods (macrodynamics) throughout the cycle.

Another original line of research was regarding the problem of financing non-financial companies. It showed the influence of changes in the productive structure on financing problems, especially consumption, as well as limits imposed by inflation on self-financing. The evolution of credit and financial assets would occur in cycles, depending on the mechanisms for creating real liquidity and financial liquidity.

Regarding international geoeconomics and geopolitics, he highlighted the fact that the United States, with the loss of its strength in technological leadership and trade deficit, has become a debtor country to the rest of the world. However, being the country that issues the world's currency and having military dominance, in addition to generating the largest GDP in the world, it managed to impose its interests on the rest of the world with not only military and economic hegemony, but also political and ideological.

In your classic book From Import Substitution to Financial Capitalism (1973), there are four essays. At the Rise and Decline of the Import Substitution Process, he emphasizes that it is not aimed at autarky, being merely a process of expanding and diversifying production capacity. At the Notes on the Problem of Financing in a Developing Economy, reveals with the wage-price spiral the system of relative prices prevented self-financing.

No Beyond Stagnation, criticizes the thesis of secular stagnation due to an internal market diminished by concentration, defended by Celso Furtado, and warns against the socially perverse dynamism imposed by political repression, including against unions. In rehearsal Nature and Contradictions of Recent Financial Development distinguishes the separation between industrial/productive capital and financial capital that undermines financial leverage to expand scale and profitability.

Em The Brazilian Financial System and the Recent Expansion Cycle (1983), differentiates between poor people’s money and rich people’s money; forced tender money and financial money; banking credit or debt market and capital market for enrichment; financial orbit (fictitious appreciation of money capital) and monetary orbit (realization of gains from the productive sphere). All these distinctions lead to the disjunction between abundance and scarcity.

Em A Reflection on the Nature of Contemporary Inflation (1984), shows the overcoming of the “normal prices” model by renegotiating contracts in a regime of high inflation. In this case, there are successive revaluations of the market values ​​of stocks, causing an inflationary acceleration instead of the inertia highlighted by other economists in the public debate at the time.

Contrasts the model of fix-prices (rigid prices) to the flex-prices (flexible or competitive prices). Price flexibility is based on the desired profit margin. Given the safety margin to prevent expected price markdowns by suppliers, pricing incorporates an uncertain or overestimated calculation margin.

There was also the “financialization” of forward prices when considering the opportunity cost of the interest rate. This, instead of slowing down, accelerated inflation!

Finally, the teachings of the Professor, my mentor, are unforgettable: (i) to be a good analyst of the systemic whole it is necessary to read all the specialists in component parts of the emerging complex system; (ii) to become a good economist you cannot just be an economist; (iii) the best intellectual and professional training is pluralistic and transdisciplinary; (iv) to be heterodox one cannot be dogmatic or sectarian – and one must know everything about orthodoxy to face public debate; (v) the world no longer needs an uneducated economist; (vi) “never say anything about the Brazilian economy without empirical evidence”!

His love of knowledge, that is, his philosophy, enlightened us. “Whoever does not know how to let themselves be surpassed by a disciple is not a teacher. The teacher is not a repeater of the truth, as what is relevant is, above all, the path to the truth. The master's greatest teaching is not what is said, but rather what is practiced. A teacher is not the one who always teaches, but rather the one who is capable of learning from the disciples.”

*Fernando Nogueira da Costa He is a full professor at the Institute of Economics at Unicamp. Author, among other books, of Brazil of banks (EDUSP). [https://amzn.to/3r9xVNh]


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