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The optimistic rebel

Questioning common sense, economist Antônio Barros de Castro foresaw the direction Brazil was moving in and its needs

wilton junior / agência estadoEconomist Antônio Barros de Castro giving an interview at BNDES headquarters in 2005wilton junior / agência estado

“Knowledge cannot be muzzled”: this phrase by Antônio Barros de Castro (1939-2011), defines the professional and personal career of the economist who died in August, the victim of an accident caused when the concrete slab that covered his office in Rio de Janeiro fell and fatally wounded him. On his computer where he wrote and which, by terrible irony, was not hit, were notes for the lecture he was to give at the Federal University of Rio de Janeiro (UFRJ) on the theme that since 2007 had fascinated him: China. In Brazil, in fact, he was one of the first to perceive the dimensions of the Asiatic phenomenon and to think how the country could take favorable advantage of the gaps in China . Being ahead of others and questioning common sense were his trademarks. As a historian he was the first to show that agriculture was not responsible for the Brazil’s late industrialization. He later advocated the growth strategies of a military government without worrying about criticism from his colleagues on the Left, who only foresaw catastrophe and stagnation. Before people were talking about the current rise of the lower middle class, the economist had already stated that it was the center of gravity for economic development, foreseeing its entry into the world of consumption in a positive way when others did not believe that it would be demand from these classes and not social reforms that would make the country function. He was also a great apologist of innovation and a critic of the “laziness” of companies when it came to investing in technology and creating new Brazilian products.

“He was an intellectual in the fullest sense of the word, who will be sorely missed for his brilliance, his originality, for his way of encouraging us to think creatively about the problems we have ahead of us,” says economist Carlos Américo Pacheco, a full professor at the Institute of Economics of the State University of Campinas (Unicamp). “What made Professor Castro stand out was his originality and the different way he thought, identifying areas to which others paid no attention.” “A professor emeritus, he was revered throughout his life as a teacher who respected the dignity and commitment that were essential to be a professor. He was Brazilian with a capital B. Castro always thought about the world, the economy and society in the service of a dream of Brazilian civilization devoid of xenophobia, arrogance and superiority as if  bestowing on us our potential qualities,” recalled his long-time friend, economist Carlos Lessa. They were classmates in the former National School of Economics of the University of Brazil, now UFRJ, where they studied together between 1956 and 1959. In the future, Barros de Castro was to be the master of other great economists.

“I was a student of his in the Economic Committee for Latin America and the Caribbean (Cepal) in 1964, where he distinguished himself by his notable teaching, his knowledge and his leftist political positions. We were teaching colleagues at Unicamp. Castro always stood out because he embraced positions that were not always common among his critical economist colleagues, because he espoused strongly optimistic thinking. He was undoubtedly one of the great Brazilian economists,” said economist Wilson Cano, from Unicamp, in his praise. Oddly enough, the restless “optimist” turned to economics when he was a teenager because of a financial crisis that affected his father, a coffee farmer in Paraiba do Sul, in the 1940s. “More than once there was no money to pay for my school. I have the impression that this was how I discovered this weighty conditioner of life that we call, in our jargon, ‘budgetary restriction’. From early on I began to read about agricultural economics. It was the birth of an appetite for economic problems,” he said in the book Conversas com economistas II [Conversations with economists II] (Editora 34).

The experience led him to avoid cold numbers and to reflect on economic problems over the long term with a humanist bias that he cultivated from the age of 16, when he began to voraciously read the philosophy books of Sartre and Camus. As a result, after graduating as an economist, he took a course at the School of Philosophy, where he won a scholarship from the Rockefeller Foundation and went to the London School of Economics. There he said he paid more attention to Karl Popper’s philosophy of science lessons: “I only studied economics marginally.” In one of Popper’s lectures, the timid Brazilian gave his opinions and delighted the master, who invited him to join a select group of 11 students. “I was the only barbarian, the only ignoramus in the midst of those people with PhDs.” The experience marked him. “Undoubtedly because of the influence of Popper, in my vision of the world , a ‘nose’ and sensitivity count a lot for advancing knowledge. Logic and facts serve to question. What produces is the imagination,” -something that is not always found in a Brazilian college. “My economics course was taken in a school that was totally insulated, with conservative professors, in a closed environment where we didn’t talk about Cepal or the Roberto Simonsen vs. Eugênio Gudin debate. It was a doubly anachronistic education: it had nothing to do with the feverish country of JK, nor with the conventional theory of the time. The political movement was minute within the school and I leaned toward the left, without managing to translate this into an alternative reflection about Brazil.” In London he had his first political experiences and when he returned to Brazil in 1962, he was truly shocked by the country, “which I found absolutely politicized.” He met Lessa and Maria da Conceição Tavares again and started teaching with them at the BNDE-Cepal course, where he was invited, along with Lessa, to write Introdução à economia: uma abordagem estruturalista [An introduction to economics: a structuralist approach] (1967).

At the time, Brazilian intellectuals were questioning traditional economic thinking, refusing to adopt foreign theories that did not take into account the national reality, as well as the model preached by the Brazilian Communist Party. “I identified with Caio Prado Jr. because of his rebelliousness, his critical thinking, which always questioned what they had taught him.” In “Agricultura e desenvolvimento no Brasil”[Agriculture and development in Brazil], published in Sete ensaios sobre a economia brasileira [Seven essays on the Brazilian economy] (1969), for example, going diametrically against the thinking of that time, he stated that agriculture was not a brake on national industrialization and that therefore there was no need for any major transformations in the Brazilian system of accumulation. In the book he stated that the Brazilian economic system was capable of expanding without social reforms. “It was the opposite of the ‘stagnationist’ theories, an obsession of the left. I saw no exhaustion of Brazilian industrialization and I believed that we were ready to return to growth. It was the last thing the left wanted to hear at the height of the dictatorship, convinced as they were that the country was heading toward a deep crisis” The discomfort of many of his colleagues grew when Barros de Castro analyzed the mistake of the left, for whom the consumption of low income sectors was not sufficient to make production growth viable. It was thought that durable goods only formed part of the consumer basket of the middle and upper classes, a mistake he initially shared. “We didn’t realize that durable goods were already being consumed by industrial workers. Many, obsessed with income distribution, ignored the dynamic of supply and didn’t believe in the functioning of capitalism among us.” In articles such as “O mito do desenvolvimento econômico segundo Furtado” [The myth of economic development, according to Furtado] (1979) or in the book O capitalismo ainda é aquele [Capitalism is still the same] (1979), Barros de Castro showed that growth was not limited by the difficulty of including new consumers in the market. “This occurs even though income distribution has not been corrected. We’re champions of inequality, but the relative differences are not a reason for freezing the consumption of the poor.”

Virtuous circle
The economist was a pioneer when he proposed a growth model via mass consumption. He believed in the possibility of a virtuous circle of growth with an increase in investments and productivity coupled with an increase in the salaries of the workers, thus breaking repressed demand. “There is a tendency to believe that the mission of the intellectual is to explain failure: to many, periods of growth were merely momentary suspensions of destiny.” He therefore gained the label of “optimist.” However, the publication of Economia brasileira em marcha forçada [The Brazilian economy on a forced march] (1985), in which he advocated, with reservations, the economic policy of the Geisel government in the 2nd PND (National Development Plan), led to many headaches. “The plan was bold and relevant, unlike the populism of the liberalizing Right in Chile and Argentina at the time. There it was a failure. Here the PND led to hydroelectric power stations and factories.”

“He saw what we didn’t. Not a prisoner of situations, deeply structuralist and an economist of the real world, he looked for another interpretation of the impact of the 2nd PND. Not that he didn’t agree with the consequences of indebtedness nor that he wasn’t a bitter critic of authoritarianism, but he wanted to understand which breaks had been put in motion with the plan and how they would allow Brazil to tread new paths after it had solved the debt crisis,” observes Carlos Pacheco. Colleagues such as Lessa and Conceição Tavares criticized him, as did his new colleagues at Unicamp, the university where he did his PhD in 1977 and where he had taught at during the 70s, exchanging it for UFRJ in 1980. In 1993, he took over as president of the Banco Nacional do Desenvolvimento Econômico e Social (BNDES) [National Development Bank], during the Itamar administration (he would return to the institution in 2004 as a director and advisor to the president). “There was a suspicion that I was blocking privatization. I learned from people I respect that privatization came to save worthless companies. I started supporting it, without making it an objective in itself, which for me would be to transform state-owned companies into the private-sector leaders of the economy.”

“His look at the strategies of companies distanced itself from the common grave. Some only saw passive modernization and a regressive specialization, while others glorified the opening up of the economy and the increase in productivity. Barros de Castro saw progress in what he called the second catch-up of Brazilian industry,”notes Pacheco. “But he was afraid of risks, especially in the not very innovative strategy of companies, which were prisoners only to changes in their production functions, prisoners to the past.” He criticized accommodation to mere manufacturing capacity, insisting that companies innovate by adapting products for low income consumers. This led him to observe the Chinese phenomenon. “From early on Chinese companies had turned to the masses in their country, instead of battling for the middle and upper classes with the multinationals. Using technology, they reviewed their processes and products, which resulted in a revolution in Chinese prices. Now it’s not only the poor Chinese who consume, but the poor Brazilians and Africans, etc. It’s a new paradigm,”he believed. For Barros de Castro the “China effect” needed to be understood in order to change the Brazilian model. “Brazil needs to be transformed both structurally and historically, because we’re entering a China-centered world from where radically different supply and demand take place, unlike anything the country has come up against until recently.” He warned: “We don’t have to improve, we have to change. The Chinese do improvement better.”

“He wanted to understand the Chinese experience, to map out the challenges that it posed for the development of capitalism, especially Brazilian capitalism. His premature death is the loss of a great a humanist at a time when the country needs help to consolidate a balanced economic and social development,” observes Claudio Salvadori Dedecca, a professor at the Institute of Economics at Unicamp. “He was an intellectual with great insight, in the sense that ‘what produces is the imagination’. He stimulated the desire to think,” is the assessment of Carlos Pacheco.