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Homage

Faded fantasy

Death of Celso Furtado, at the age of 84, brings back the question of the problems of national underdevelopment

Death has the power of eradicating all the defects of the deceased, and it was no different with Celso Furtado (1920-2004). Personalities lavished eulogies, recalling the economist from the state of Paraíba. But in the midst of the sameness of the declarations, it is possible to perceive that Furtado’s real strength appears between the lines. “He enriched Brazil and not himself”, the former Health Minister and São Paulo mayor José Serra  said. “He was a noteworthy example of how to dedicate oneself to the study of the economy in order to present social transformations”, São Paulo Senator Eduardo Suplicy observed. “He was a great thinker on the country’s development and, without him, Brazil loses a bit of its will to grow”, former Finance Minister Delfim Netto declared. “More than an economist, Furtado was a Brazilian who filled us with pride for his commitment to Brazil, to Latin America, and to all the developing countries”, noted President Luiz Inácio Lula da Silva.

Oddly enough, these phrases bring out the real Celso Furtado, an intellectual who, along the lines of Gilberto Freyre or Sérgio Buarque de Holanda, saw himself with a mission of understanding Brazil to make a nation of it. Even in constant mutation: from the pre-coup optimist of 64, who believed in the effectiveness of political participation and held hope for national development, to the pessimist of the 1990’s, in ostracism and witnessing the victory of what he feared most: neoliberalism and globalization.

Between the two, he was an embittered man with dreams of change, who, in the 1970’s and 1980’s, suffered when he saw the military gilding the pill of underdevelopment, by implementing, by brute force, the modernization that benefited only the elite. It is symptomatic that he baptized one of his many books as A fantasia desfeita [The Faded Fantasy]. Economists do not work with fantasies, nor do they dream of nations.

Furtado’s economics is not the same as the technocrats’; it is, rather, anchored on the belief of the power of politics to control the forces of the economy and preached the need for distributing income to humanize society. The economist, in actual fact, hid the political and social thinker. The time in which he produced his most important works, the 1950’s and the 1960’s, was one of great intellectual effervescence in Latin America.  The post-1930 ideal of the inevitability of a new Industrial Revolution was being revisited, this time led by the States, to meet the increase in demand (demographic growth) and of the strangulation of supply, since the majority of the countries were out of step with the modernity of the business circles of the First World.

Why did some countries grow and prosper, and others, like Brazil, live aside from the advantages of capitalism? From the start, this question accompanied Furtado’s thinking; he made the question of the national development, or underdevelopment, and the country’s peripheral inclusion in the international capitalist system, part of his mission. Thinkers like Freyre and Buarque de Holanda pored over this dilemma, but Furtado was the pioneer in using political economics, instead of biological, climatic or racial interpretations.

For him, there was a lack of rationality in the economic system, as well as a group of intellectuals and politicians who would place themselves above class interests, and put themselves, in his words, “at the service of the interests of the nation”. For Furtado, an underdeveloped country, a mere source of raw material for others, always at the mercy of external decisions, could not be regarded as a nation. Fundamental in this was his passage, between 1949 and 1953, through the Economic Commission for Latin America and the Caribbean (Cepal), in Chile, and the contact with its executive secretary, Raúl Prebisch. The Cepal theses rethought the role of the intellectual, now converted into an active force, and criticized the liberal ideals, which freed the market from the intervention of the State.

Before Cepal, there was a belief in an international division of labor, with countries naturally destined for agricultural production, and others, for industrial production, all working to perfection, since when all was said and done, there would be a global equilibrium and everyone would come out winning.  Therefore, the countries exporting raw materials would not need to transform their productive structures.

The Cepalites stuck their finger in to the wound: the progress and development of the so-called “center” (the industrialized countries) occurred to the detriment of the exporters of primary goods, the “periphery”. Furtado used this kit of tools to dissect Brazil and to reveal that dualism was also flourishing internally: living together in the same country were backward sectors, aimed at primary goods, where the popular classes were, and others, modern, whose standard of living and consumption were similar to those of the countries of the center. The economist saw in this the tip of the iceberg of underdevelopment and gave his recipe for the about-turn: industrialization and agrarian reform.

Furthermore, he questioned how it was possible to make the country grow using external models: Brazil had an abundance of labor and land, but little technical progress. The result was obvious: unemployment, low productivity and, therefore, underdevelopment, for him, the great obstacle to building a national integration, a nation. He began his mission by history. In Formação econômica do Brasil [The Economic Formation of Brazil], of 1959, he assessed the singular nature of the capitalist development of the country that, born as an integral part of the world-wide capitalist system, soon deviated to underdevelopment. “This is an autonomous historical process, and not a stage through which, o f necessity, economies that have now attained a higher degree of development have passed”, he wrote. It was the first clash with the liberals, who would group together in a universal manner the development of economies. There were exceptions.

And they were prompted by political choices, since, for Furtado, everything was reduced to the manner in which the dissemination of technical progress took place in society. In the countries of the center, the choice of a given technology would obey rational criteria, one would use one or other technique pari passu with the optimization of the use of land and labor. Rich and poor would benefit from technical progress. In Brazil, it was the other way round. The political elites would choose the path most beneficial for them: progress was at the service of sophisticated standards of consumption that would mimic the center of the economic system. At the majority of times, the option was for technologies that saved labor and land, which the country had in abundance.

“In the developed economies, there is a parallelism between the accumulation of the productive forces and, directly, the objects of consumption. The growth of one requires the advance of the other. The roots of underdevelopment reside in the linkage between these two processes caused by modernization”, he warned. “What characterizes development is the underlying social project. Growth is founded on the on the preservation of the privileges of the elites, who satisfy their zeal for modernization. When the social project gives priority to the effective improvement of the living conditions of the majority of the population, growth is metamorphosed into development. But this metamorphosis is not spontaneous. It is the fruit of the expression of a political will”.  Brazil’s problem was not the lack of technical progress, but the non-dissemination of it through the whole of society.

Industrialization was not synonymous with development pure and simple. Without control and planning, the risks were great, as those of the archaic model. In 1955, Furtado drew up his Draft of a development program for the Brazilian economy, which acted as a basis for Juscelino Kubitschek Plan of Targets. The dream seemed to the economist to be possible. But, if at that moment the national productive structures were altering, the agrarian structure and the mentality of the dominant elites were still the same as before the Revolution of 30. He did not realize this and, based on the Keynesian belief in the benefic role of state intervention, still believed that there were still possible rational political choices for the courses of the economy: the State could make the economic excess and the technical advances be employed according to Brazil’s social and economic conditions, breaking the cycle of underdevelopment. The fantasies had not yet faded. All that was needed was for society to opt for a rational and modernizing industrialization, which would reach everybody.

In this way, he would say, internal political decisions would be reflected in external changes in the way how the country was integrated with the international economic system. There had to be rethinking internally (including therein agrarian reform, which would stanch the bleeding of the rural exodus, which lowered urban salaries and concentrated income), to break for good the center-periphery system, which, he believed, had nothing of natural about it. Furtado put these ideas into practice by providing subsidies for the creation, after lengthy studies of the Northeastern Region, of the Superintendency for the Development of the Northeast (Sudene), in 1959.

Three years afterwards he was to return to the government, appointed by Goulart to occupy the new ministry, of Planning, where he published a Triennial Plan for Economic and Social Development. He found time, also in 1962, to launch two books: Subdesenvolvimento e Estado democrático [Underdevelopment and the Democratic State] and A pré-revolução [Prerevolution], in which he reaffirmed the chance the country had to reformulate its economic policy along lines that were suitable for the Brazilian model, and, accordingly, to grow and to distribute wealth through society. His ideas put his name at the top of the list of those quashed by the AI-1 (The first act of the military dictatorship) and led him to exile, to start with in Chile and, later on, in Paris, where he stayed for 20 years.

The “economic miracle” transformed his beliefs in to lost illusions. The strong regime of the military introduced the modernization of underdevelopment, when some of the practices of contemporary capitalism were introduced (urbanization, new standards of consumption, birth of new productive segments etc.), but left unaltered the fundamental aspects that effectively generated underdevelopment. The façade of development was to aggravate the underdeveloped reality, and even perpetuate Brazilian backwardness. Furtado became a pessimist and revised his beliefs in the real possibilities of turning around picture of economic retardation.

Disillusionment
O mito do desenvolvimento econômico [The Myth of Economic Development], of 1974, expresses this disillusionment. The country’s problem, he wrote, was “to generate sources of employment for its numerous and growing population, a major part of which still vegetates in marginalized urban sectors or in subsistence farming”. If anything had modernized itself in Brazil, he explained, it was demand, not supply or the productive structure. Contrary to what he had thought, what was to be seen in the period between 1930 and 1970 was merely a change in the standards of consumption, without any rise or gain in productivity. The military regime worsened the situation by doing reforms that merely concentrated income even more and favored mimetic consumerism. The economist left aside, for once and for all, his technical attire and came out as a social thinker. In the new book, à la Freyre, Furtado confesses the mistake of the earlier enthusiasm and questions the national elite culturally. “The reproduction of the social forms, which we identified as underdevelopment, is bound up with the forms of behavior conditioned by dependence.”

More than an economic issue, this was a question of an ancestral colonial heritage that the country would not give up. “For the elite to keep itself modern, it merely imitates the behavior of the centrist elites, which obliges changes in the productive structure that necessarily have to adapt themselves to this new style. Accordingly, industrial growth does not overcome underdevelopment and dependence. And every underdeveloped economy is dependent, because underdevelopment is a creation of the situation of dependence.” There was no point in idealizing: in this context, development was a myth.

Likewise, one could not think of building a nation in a country whose development was taking place in fits and starts, with the process of industrialization hitched to the logic of modernization of the standards of consumption of the elite. In spite of his despondency, in 1979, with the amnesty, Furtado returned to Brazil. The pessimism is now confessed in O Brasil pós-milagre [Post-miracle Brazil], of 1981, in which he foresees the terrible consequences of inflation, of the energy crisis, of the antisocial nature of the economic model and the role of the transnational companies. In 1985, he rehearsed a return to the State, invited by Tancredo Neves to draw up the Government Action Plan. He will play another role: Sarney’s Minister of Culture, in 1986, taking part, in a sad way, in the sad episode of the censorship of the film Je vous salue, Marie, by Godard.

Under criticism, he left the ministry in 1988.  But disillusionment with the new economic model was to be the hardest blow for Furtado, as is shown in book Brasil: a construção interrompida [Brazil: building interrupted], of 1992, a criticism of the neoliberal project of the 1990’s, which, according to him, aborted the possible building of national integration, by subtracting from the State its regulatory function and by putting in place the logic of the economy focused on the foreign market, without any concern for the domestic inequalities. “The transnationals, the great financial capital and the group of the richest countries act as deregulatory forces of the national system. And these forces give Brazil two options: either to adapt to the new international order or to become a historical anachronism.”

Furtado did not wish to celebrate, as so many, the emergent globalization, and it was he who came to be seen as an anachronism. In 1997, he had a small joy: his election to the Brazilian Academy of Literature. Afterwards, he remained silent for years, and only went back to speak, and plenty, about politics and economics, with the election of Lula. Before dying, he attacked the current economic model. Oddly enough, he died close to the fall of one of his great disciples: Carlos Lessa, former president of the BNDES.

Furtado exaggerated his belief in the autonomy of the bourgeois State and in its interest in the distribution of wealth throughout society. He took a long time to notice the cultural dependence of the elites, and was optimistic in excess when believing that the reversal of the technological structures and the incorporation of productivity gains into salaries would take the country out of underdevelopment. Be that as it may, his disenchantment with globalization is no longer a privilege of the left. But, for sure, what would have left him really happy was to be remembered for being the Brazilian who filled us with pride for his commitment to Brazil.

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