Developing Brazil Today: An Interview with Celso Furtado

Brazilian economist Celso Furtado, now 82 years old, was one of Latin America’s most influential economic and social thinkers during the last half of the 20th century. As one of the leading “underdevelopment” theorists connected with the UN Economic Commission on Latin America, he helped develop and promote Import Substitution Industrialization. ISI was an economic program followed by many Latin American countries in the 1950s and 1960s aimed at stimulating economic growth by building up national industries. His books Economic Formation of Brazil (1959) and Development and Underdevelopment (1961) are considered classics of Latin American political economy. He held ministerial posts in two Brazilian governments. In December, a group of Brazilian journalists and social activists spoke with Furtado about Brazil’s prospects under President Lula’s government. These are excerpts, translated from Portuguese by NACLA, from the interview published in the Brazilian magazine Caros Amigos http://www.carosamigos.com.br/

João Pedro Stedile—In your opinion, what are the fundamental problems of Brazilian society today?

Celso Furtado—The first challenge is to prioritize the social problem instead of the economic problem. . . . I understand that this is part of Lula’s strategy. In doing this, he’s going to create public opinion that’s even more democratic, popularly rooted, and this is going to allow him to consolidate the next step, and finally you’ll transform Brazil by starting with the social side instead of the economic. . . . The truth is we’re seeing that Brazil is imperfectly put together and today it’s falling apart because the limited capacity we used to have to control the economy is now even less. You meet any foreign economist who studies Brazil, he wants to know about the balance of payments. What’s important in all this? The huge foreign debt, which has to be paid. Compared with other countries, this debt isn’t so big, it’s big in comparison to Brazil’s ability to service it, and that’s very limited. . .

This election was a sign that shows there are already a lot of people convinced that Brazil has to rebuild itself, it has to have a system that makes decisions, that carries out a political strategy that’s very different from that of the past. But for this Brazil needs a government that will establish a different kind of relationship with society.

I’ve been thinking about what it was that brought the country into this situation. And I was remembering that, in the era in which I had a role of some importance in the country, when what I was writing was being read a lot, particularly in the 1950s, when I published Economic Formation of Brazil—lots of people “discovered” Brazil by reading that—we had the idea that if the country was able to achieve a certain degree of industrial development, of economic development properly speaking, we’d gain our autonomy. It would be an enormous leap forward that would mean leaving behind a dependent economy for authentic independence. Nothing less than this was at stake. And I wrote about this, and I said that we were on the verge of taking this leap. . . .

For me, this was an extraordinarily significant period in Brazilian history, this period that goes from the first [Getúlio] Vargas government until the beginning of the military dictatorship [1964], about 20 years. . . . It was an exciting thing, the country was industrializing, transforming itself, incorporating the masses of the population into modern society. And all of this came crashing down. It didn’t come down because the Brazilian economy stopped growing, on the contrary, there were years in which Brazil grew even more, but it collapsed because the style of development changed, the social forces that had been present disappeared. Before 1964 there was a major confrontation of social forces, things were boiling hot, which made the big bourgeoisie and the Americans very fearful….The United States was afraid of the direction we had been taking; this phase ended and we entered—as someone put it—the peace of the cemeteries, it was the era of the dictatorship. Thirty years went by without real thinking, without being able to participate in movements, with the most provocative and courageous young people being hunted down.

The process of building Brazil fell apart. And the formidable gains of the previous period were lost, because Brazil started over again with a very primitive political life; the parliament that was elected during the dictatorship was extremely mediocre. And the worst thing was that it was impossible to open a debate about anything important, the press was completely controlled, young people were not mobilized, it became another country. Today I ask myself what we must do in order to pull Brazil out of that apathetic state. It’s started to come out of it now, with this promise of having a country that’s thinking about its real problems, its social problems.

Plínio Sampaio Jr.—How can we create jobs in the cities?

CF—. . .Brazilian society currently creates jobs that are of such low productivity that they don’t permit survival, subsistence. I’ve worked on this question and I think the following: Brazil will have to think about a different kind of society, about different kinds of employment. For example, why not keep more people in the rural areas, and create industrial employment in the countryside?

JPS—Create agroindustry. Industrialize the interior. . .

CF—It has to start with this. If you bring industry to the interior, this strengthens the country’s economic system, instead of weakening it. It’s not about creating jobs just to create them, without any economic meaning. You can’t lose sight of the fact that the economy makes its own demands, and you can’t create just any kind of jobs, like many people think. For example look at the interior of the Northeast, where there are so many unemployed people today, surviving on a small subsidy. A culture of misery, of begging, is entrenched. This is a crime in such a rich country, with so much potential, with so much uncultivated land. . . If we invest in the countryside using good criteria, we can create new areas, new kinds of development in the modern Brazilian economy. In many countries of northern Europe I see how the rural world survives. It’s not exactly a “primary” economy, because thousands of jobs are created in secondary and terciary sectors like agroindustry or rural tourism. In this kind of rural job creation, the state has to play a big role. There’s nothing bad about that . . . .The truth is that an important part of Brazil’s GDP is administered by the state. . . .but what we still have is a “welfare” economy, one based on subsidies. This works for a time, but then it breaks down.

José Arbex Jr.—But wouldn’t the Free Trade Area of the Americas stimulate the modernization of the Brazilian economy?

CF— The FTAA is the renunciation of national sovereignty. It’s necessary to understand this. If there’s something you can’t give up, it’s sovereignty, if you have a little sovereignty, as Brazil still has, you can have a political economy that responds to the necessities and aspirations of the people. But if we were to be forced into the FTAA’s framework, the big corporations would determine Brazil’s political economy. The big corporations that are already very powerful in Brazil are going to get even more powerful. And there’s this: Today we have a very important sector of international corporations, that generate a large part of Brazil’s GDP, like the automobile and machinery industries, etc., but these companies don’t pay attention to national priorities, they don’t act starting from a global vision of the Brazilian economy, they are controlled by the rationale typical of any corporation: profit. What’s rational for Ford is closing a factory here, if necessary, and moving to another country. You have to start with this question: Are we an economic system or not? If we are an economic system, we have our own logic and this logic doesn’t combine well with any internationalized logic. If you don’t have this autonomy and have to become subordinate—which is what will happen if we join FTAA—it won’t be possible to keep the transnationals from deciding according to their own interests what should be done, and what technology should be used. Automobile technology has advanced enormously, but it advanced in a form that’s completely negative for Brazil, because it generates unemployment: The Brazilian government, for example, helped Ford modernize, become more efficient, in order to export more. In this way it created unemployment. . . .

JPS—You were an active man, for more than 50 years you were continually active in public life. That is to say, you weren’t a typical academic, you were a cabinet minister twice, you created Sudene [the Northeast regional development agency], you passionately defended the necessity of agrarian reform. What would you tell Lula’s government? What errors should it not commit, or what dangers should it avoid?

CF—What errors is difficult to say, because people’s imagination is unlimited when it comes to committing errors, don’t you think? But I have the impression that the group that’s running the new government is likely to tough it out in a thankless situation. . . .

JPS—You’ve said throughout the interview that what’s fundamental is politics and not the economy. And that when it comes to politics what’s essential is popular participation. So what is your advice to social activists?

CF—In general terms, I’d say appreciate the value of popular institutions and organize groups that represent your point of view, so that we cease to be an amorphous mass exploited by adventurers. Brazilian society has to organize itself in a more consistent way in order to exercise its real power.