By LUIZ CARLOS BRESSER-PEREIRA*

Considerations on Celso Furtado's book.

In 1974, when Celso Furtado published The myth of economic development, he was concerned about the problem of non-renewable natural resources that set a limit to the growth of income and consumption in the world – a concern that was supported in the recently published book, The limits of growth, prepared by an interdisciplinary group at MIT for the Club of Rome.[I]

In the first essay, which is also the most important in the book, the author discusses the changes that have been occurring in capitalism and, in particular, the role of large companies, corporations, in this capitalism. But this discussion aims to show how the path of capitalist development was becoming a myth.

Right at the beginning of the book, Celso Furtado mentions myths such as the one about bon sauvage Rousseau's idea of ​​the disappearance of the State, Marx's idea of ​​the disappearance of the State, the Walrasian conception of general equilibrium, and states that “myths operate as beacons that illuminate the field of perception of the social scientist, allowing him to have a clear vision of certain problems and see nothing of others, at the same time that it provides him with comfort, since the value discriminations he makes appear to his mind as a reflection of objective reality” (p. 15).

The question Celso Furtado asks is what will happen to the world economy if economic development, which has become the goal of all peoples since World War II, is successful and manages to establish a standard of living similar to that existing in the rich world for everyone. And his answer is clear: “if this were to happen, the pressure on non-renewable resources and the pollution of the environment would be such that the world economic system would necessarily collapse” (p. 19). It would be enough to replace ‘pollution’ with ‘global warming’ and the problem would become much worse.

For him, it would be naive to believe that technological progress would solve the problem. Its acceleration is worsening it rather than solving it.

For Celso Furtado, the capitalism that emerged after the Second World War was characterized by the unification of the center, under the command of the United States. At that time, the persistent action of GATT was already taking shape, as was the process of trade liberalization that would gain full force with the neoliberal turn of 1980. He observes that “it cannot be said that the structural transformations that were taking place at that time were desired, much less planned, by the economic and political centers of the United States” (p. 36). They were first thought of, I would add, by neoclassical economists and those from the Austrian school who had remained outside the mainstream academic in 1930, longed for a return to power in the universities. They found a favorable space created by the crisis of the 1970s.

Celso Furtado attaches great importance to the emergence of large international companies and their new relations with the periphery. He states that “the evolution of the capitalist system, in the last quarter of a century, has been characterized by the homogenization and integration of the center, a growing distance between the center and the periphery and a considerable widening of the gap that, within the periphery, separates a privileged minority from the great masses of the population” (p. 46).

The post-war period was a period of growth in both the center and the periphery. “The intensity of growth in the center determines the direction of industrialization in the periphery, since the privileged minorities in the latter seek to reproduce the lifestyle of the center” (p. 46). This is a statement that Celso Furtado will repeat many times throughout his work. In order to gain and maintain this privilege, these minorities began to associate themselves with the privileged majority in the center rather than with their fellow citizens. Thus, having lost the support of the middle class and even of industrial entrepreneurs, economic nationalism or developmentalism, which had characterized Brazil since the 1930s, began to be threatened.

But Celso Furtado is more concerned with the pressure that development in the center and periphery was putting on non-renewable resources. This pressure is mainly due to the growing consumption of the entire population. He then makes a series of calculations about the amount of this consumption in the 1970s – when he was there.

He is concerned about the tendency of the privileged minority in the periphery that represented 5% of the population to change to 10%, and he is much more concerned about the hypothesis of the homogenization of consumption throughout the world. “The hypothesis of generalization, throughout the capitalist system, of the forms of consumption currently prevalent in central countries does not make sense within the apparent evolutionary possibilities of this system… The cost, in terms of depredation of the physical world, of this lifestyle is so high that any attempt to generalize it would inexorably lead to the collapse of an entire civilization” (p. 75).

It is from this that Celso Furtado concludes that economic development is a myth. “We now know irrefutably that the economies of the periphery will never be developed, in the sense of being similar to the economies of the current center of the capitalist regime. It is therefore worth stating that the idea of ​​economic development is a simple myth” (p. 75).

Note that the myth is not economic development itself, but the “idea” that inclusive development is possible for countries on the periphery of capitalism. This idea is an important part of the neoliberal ideology that the center transfers to the periphery. If the Global South embraces economic liberalism and rejects developmentalism, it would be on the path to Dr. Pangloss’s best of all possible worlds.

Isn't Celso Furtado being pessimistic on this matter? I think so. To reach his conclusion, he based himself on a hypothesis that is not being realized and will not be able to be realized. A large number of countries are not achieving the goal (the catch up) to the levels of development of the center. In this way, the idea that all countries would develop and reach the level of the most developed, which is the basis of his argument about the myth, will never come true.

It is not important to discuss the causes of this failure here; I will only state that they include the imperialism of the Global North and its determination to prevent peripheral countries from industrializing and achieving this goal. Furthermore, it is important to consider that, after 50 years, natural reproductive resources have not shown any signs of exhaustion, despite the abuses to which they have been subjected.

Economic development is therefore not a myth, but a powerful idea that guides people and governments. It continues to be possible – or it was at the time when Celso Furtado wrote. Since then, however, a new and very serious problem has emerged that perhaps confirms the limit to growth: global warming, which represents a threat to the survival of humanity. This problem arose from the increase in global production per inhabitant – from economic development, therefore.

And it led a number of intellectuals to advocate degrowth. But this thesis has not had any repercussions in the political world. Because even in rich countries there are still many poor people. And also for an objective reason: to fight global warming, individuals need to change their consumption habits (eat less meat, travel less, cultivate moderation in consumption), which do not require investment.

Countries need to make large investments in energy transition, changing machines, equipment and buildings so that they consume less energy. Economic development thus becomes the instrument for the problem – global warming – that it itself created.

Celso Furtado was the greatest Brazilian economist, although his ideas no longer coincided with the economic policy that began to be practiced in Brazil from 1990 onwards, under the Collor government, when he promoted economic and financial openness. His protest came early, with his 1992 book, Construction stopped.

Ten years later, to explain how economic development was then halted, a group of Brazilian economists and I began to define “new developmentalism,” a new economic theory and political economy based on Celso Furtado’s structuralist developmentalism and post-Keynesian economic theory. For us, economic development is not a myth; it is something that can be achieved. The idea of ​​development, on the other hand, is a myth because the achievement that the myth claims is happening is not actually happening, except in a few countries in East, Southeast, and South Asia.

* Luiz Carlos Bresser-Pereira Professor Emeritus at Fundação Getúlio Vargas (FGV-SP). Author, among other books, of In search of lost development: a new-developmentalist project for Brazil (Ed. FGV). [https://amzn.to/4c1Nadj]

Reference

Celso Furtado. The myth of economic development. Rio de Janeiro, Peace and Land, 1973.

Note

[I] The interdisciplinary group of 17 researchers was led by Donella Meadows, Dennis Meadows, Jorge Randers and William W. Behrens III.

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