TODAY NO ONE can dismiss the fantastic concentration of power that is embodied
in what are called financial markets, dominated by exchange speculation. With
the advance of globalization, those markets are now the most profitable.
Therefore, and increasingly, the distribution of world income responds to
virtual operations performed in the financial sector. This is the clearest
manifestation of an emerging reality well described as global capitalism,
the precursor of a future world system of power. The configuration of that
system of power and its institutionalization--including the role that having
the dollar will represent in it--shall become the main political task of the
coming decades. The European project to create a single currency and to
integrate their central banks, about to be realized in the near future, will be
the first great experiment with multinational monetary policies, and can be
seen as an attempt to affect the new configuration of world power.
The role that will correspond to the nation-states in this new political
design should be a cause of concern, since the distribution of income generated
in ever more interrelated productive systems will depend on it. There should
be no doubt whatsoever that space shall continue to exist for the exercise of
political will, as long as it is vigorously expressed.
The reflections contained in the pages below indicate some of the paths
that are necessary to explore if one wishes to influence the configuration of
the new power structure now dawning, from which it is impossible to escape.
CELSO FURTADO
Paris, April 1998
I. THE LONG ROAD TO UTOPIA (1)
INTELLECTUAL INFLUENCES
My intellectual development unfolded under a triple influence. At the
beginning, I was seduced by positivism, the idea that science generates
knowledge in its most noble form. It was not a primitive Compteanism, but
instead a confidence in experimental science as a tool to discover the secrets
of nature.
Subsequently the influence of Marx was felt, by means of Karl Mannheim,
the author of the sociology of knowledge, which referred scientific
understanding to its social context. That was the starting point for my
interest in history as an object of study.
The third current of thought that influenced me was U.S. sociology, by way
of Gilberto Freyre. The Masters and the Slaves (2) opened the cultural
dimension of historical processes to me. This contact with North American
sociology corrected the excesses of my historicism.
I consider it important that my approach to Marxism was accomplished
through the sociology of knowledge. When I read Capital in a Marxism
course that I took after the war at the Institute of Political Studies in
Paris, I already knew enough modern macroeconomics so as not to be seduced by
an economic determinism that provided an explanation for everything by means
of a simplification of the world.
THE RESEARCHER'S ROLE
The motivations of the investigator are numerous. The most fundamental,
however, is confidence in one's own imagination - and knowledge of how to use
it. That confidence translates into the conviction that it is possible to
intuit a reality of which only one aspect is known, similar to what is done in
paleontology. In this manner, the value of the researcher's work derives from
the mixture of two ingredients: imagination, and courage to take risks in an
uncertain search. The former leads me to the following assertion: science is
conducted by those who are capable of exceeding the fixed limits now imposed by
the university world. The tendency there for "canned products" to predominate
characterizes the basis of academic knowledge. Due to reasons not to be pursued
here, many persons of talent become frustrated in the university environment.
I very quickly noticed that, if I dared use imagination, I would enter
into conflict with the establishment of today's economic wise men. The
alternative consisted in resigning oneself to reproducing the conventional,
notably poor, wisdom, given our subordination in the area of scientific
knowledge. It is not easy to explain that we had rebelled and begun to create
out of our own imaginations. It was precisely that, which occurred in Latin
America: we decided to identify our problems and elaborate their theoretic
treatment. It was there, waiting to be captured, a Latin American and more
particularly a Brazilian historical reality. The emergence of CEPAL (3) during
the first postwar years, allowed our self-confidence to take a corresponding
leap.
Yet it is not enough to assemble efficacious tools. To act consistently in
the political terrain, that is, to assume responsibility for intervening in the
historical process, one must make ethical commitments. Science is a dazzling
human creation, but to a large extent it is conditioned by the society in which
it emerges. The fact that in the 19th century very elaborate theories surfaced
concerning racial differences is not totally divorced from the political
expansion of some European nations. The social sciences help mankind to resolve
practical problems of different types, but they also contribute to imposing the
image of the world that prevails in a given society. In this way, they serve to
ground the system of domination that they themselves legitimate. Therefore, it
is natural that the structures of power try to co-opt the men of science and
that the control of the direction of research should be the object of so many
controversies.
When I began my theoretical work, it was being thoroughly debated whether
the politics of industrialization should be favored. Expressed in today's
language: what are the best policies for development? Should an industrial
policy be adopted or everything be confided to the market? The answer to
these questions is not independent from identification of the social forces
that control strategic economic decisions. During the first postwar years, the
dominant social forces in Brazil were linked to the rural interests and to
those of external trade. Yet the germ of an industrial nucleus already existed,
circumscribed to certain areas only. I soon realized that the project of the
nation's modernization would have to find support among those forces.
My long life journey has thus been oriented by two principal reference
points: the ethical acceptance of universal values, which transcend every form
of parochialism, and confidence in the leadership of social forces whose
interests correspond to those of the national collectivity.
IMAGINATION "VERSUS" INSTITUTIONALIZED SCIENCE
It should also be remembered that the fight which we unleashed in CEPAL was
opposed to early "academization" of science, which ends by subordinating it
to limitations that inhibit creativity: that which does not utilize certain
language or adopt certain models remains disqualified, regardless of what it
might have to say. Institutionalized science is always conservative. See any
"first class" economics journal in English. Its selection criteria for the
articles that it publishes display a visible ideological content.
In Brazil, economics publications were, until the 1940's, in the hands of
specialists. The first rigorously academic publication appeared in 1947: the
Revista Brasileira de Economia, from the Getúlio Vargas Foundation
(Rio de Janeiro). The orientation of this magazine, which essentially relied on
translations of English and United States publications, was dictated by
professor Eugênio Gudin,(4) who pursued a strict liberal orthodoxy. To
challenge that current, in 1950 we founded Econômica Brasileira, a
publication of an Economists Club, recently established, which brought together
persons of "leftist" or simply "nationalist" leaning.
It should not be forgotten that, over and above the debates between
schools of thought or even ideologies, science always has to explicate
unexpected problems, which elude social control. No society manages to
completely escape the influence of its heretics, and nothing has had such
importance in history as heresy. The truth is that there always emerge
individuals disposed to fight for new ideas, risking positions of prestige and
economic interests. I have two sons dedicated to research (one a physicist and
the other an economist) and I know how difficult it is to obtain resources for
that task, if one wishes to preserve their autonomy in the selection of the
themes that will be investigated.
Vanguard work always encountered resistances, within and outside of the
universities. The emergence of the CEPAL was something so unexpected as to
inspire perplexity. What is certain is that even in the agencies of the United
Nations some forms of censorship were practiced. Discreetly, certain themes
were prohibited. Certain works were disqualified by allegations that one was
dealing with an "ideological" text. Thanks to the leadership of the Argentinian
economist Raúl Prebisch,(5) a unique ambiance was established at that
institution, which made possible the emergence of a new vision of the Latin
American reality and, in exemplary manner, the Brazilian. It was then that it
became clear that Brazil, which had become so very backward, had an available
access road to modernity, and that this road was industrialization. Within
Latin America, Brazil was the country that demonstrated the best conditions for
industrialization and, perhaps because of this, was also the one that most had
felt the absence of an explicit politics of industrialization. Thus, when that
option was chosen, in the second government of Vargas,(6) the process was
intensified, gained complexity and attained a vanguard position in the Latin
American scenario.
At the beginning of the Fifties I returned to Brazil, in the wake of an
accord between the CEPAL and the BNDE,(7) which had just been established, to
undertake a study of the prospects of the Brazilian economy and project its
growth, which resulted in serving as a basis for Juscelino (8) to propound his
Program of Objectives. At that moment, it comprised a vanguard investigation,
for there had been no familiarity with the techniques of macroeconomic
planning. I had researched that material in France and directed a CEPAL working
group which prepared a manual of planning techniques, which was used for the
first time. It dealt with a development strategy based upon the identification
of the principal macroeconomic indicators and the structural bottlenecks,
particularly those linked with relations with the exterior.
At this time today resources are much more abundant and there is a greater
number of educated persons, but, it appears, the possibility of innovating is
less, of using the imagination. The economy keeps progressing in the pursuit of
formalism, of the methods that brought glory to the natural sciences. Now then,
the object of study of the social sciences is not something perfectly defined,
like a natural phenomenon, but instead something evolved, which surges from the
life of people in society. The social sciences acknowledge the evidence that
human life is, in large measure, a process of conscious creation, which implies
postulating the principle of moral responsibility.
The heresies and heterodoxies play an important role in human history. A
universal consensus invariably reveals that a phase of creative scarcity is
being traversed. It is clear that in certain societies, the price that is paid
for dissenting is very high. Yet the fact that there have been persons willing
to offer up their lives in defense of ideas is an index of the important role
that these occupy in social formation.
I have the impression that in a society which has reached the Brazilian
level of development, resources are available to finance research in diverse
fields, if the researchers take care to preserve a certain degree of autonomy.
The risk of bonfire is no longer active, as in Galileo's time, but instead that
of allowing oneself to be co-opted or seduced by prebends. It surprises me that
the subject of most actual relevance--that of social exclusion--does not have
priority in the university programs. The truth is that a theory of structural
unemployment has not emerged comparable to that for cyclical unemployment,
which was studied in my era.
There seems to be a direct relationship between opulence and conservatism
in the society. I was exiled for a period in the United States, as a visiting
researcher at Yale University. There I wrote a theoretical work about
underdevelopment, that social phenomenon which is usually confused with
backwardness and poverty. I led a conference on the theme with professors and
researchers. I became satisfied that I had validated my argument. But the first
reviewer spoke with frankness: "what he proposes is very interesting, yet I
very much doubt whether he can obtain financing to accomplish an investigation
on this theme. No reputable journal is interested in such matters." There was
nothing more to say. I packed my guitar into the bag, as we say in my country.
DISCUSSION OF THE ECONOMIC GROWTH OF BRAZIL
People say that luck helps...the lucky. I have often been asked about the
circumstances in which I wrote my most-read book: Formação econômica
do Brasil.(9)
When I went to work at CEPAL in early 1949, I gathered the available
information concerning the Brazilian economy. I was quite surprised to verify
that Brazil had a backward economy in comparison with others in Latin America.
Argentina, whose population did not reach a third of Brazil's, had greater
industrial production. The per capita income of the Hispano-american group,
excluding Argentina, was much higher than that of Brazil's population.
All this worried me, and comprised for me an intellectual challenge. Could
it be that the Brazilian people were truly inferior, as many, inside and
outside the country, maintained? Was there another explanation? Since the
theories of ethnic inferiority and geographic determinism were already
discredited, I returned my gaze to history. Could it be that the Brazilian
ruling class had been incapable of putting the nation onto the path of
industrialization from which modern civilization had emerged, beginning in the
19th century? Those who had clear ideas in this regard, like Mauá,(10)
were overridden by the slaveholding landowners. When I began to consider these
subjects, I brought the insights of modern social science, including
macroeconomic analysis, and benefited from the discussions with Prebisch. What
is important is that we think with our own minds, he would say to me.
The work of Roberto Simonsen,(11) who organized a fine research team to
gather quantitative information referring to the colonial period, assisted me a
great deal in writing Economic growth of Brazil. I rediscovered Simonsen's
book by chance. In 1957-58 I was at the University of Cambridge, England for a
year, by invitation of professor Kaldor, to work on development theory. On the
trip, the airplane had a malfunction that caused me to stay in Recife for a day
or two. Wandering about the city, I entered the old Imperatriz bookstore and
found a recent edition of Simonsen's book, which I had had occasion to leaf
through ten years earlier, when preparing my thesis in Paris on the colonial
economy of Brazil. I obtained it, to read on the plane.
It was in this fashion, reviewing already published works, that I became
aware it was possible to derive a model of the Brazilian economy using a
perspective of centuries. The novelty consisted in incorporating historical
evolution into the picture of the structural relations, beginning with the
international. It was important to view Brazil, since its emergence, as an
important actor in the world economic scene. Access to the Cambridge libraries
helped me greatly in this attempt. To give an example: there I discovered a
book, written in English and published in Buenos Aires, that contained little-
known information regarding Brazil's international financial relations. I only
found out later that this precious book had never been cited by any Brazilian
author. I had to work tenaciously, but I could only dedicate mornings to the
writing of the book. At the end of three months, I already had 300 manuscript
pages that summarized ten years of efforts directed towards capturing that
which was truly significant in the economic growth of Brazil. Luck was, once
again, on my side, since when I went to send that mass of folios on their
peregrination to Brazil, I ran into an English colleague who accompanied me to
the post office. When I told him what I was doing, he made me aware of the risk
I was running. After his advice, I went to the university's reproduction
service. I left the originals and returned for them the next day. Without
waiting to investigate whether the microfilm was well-made, I put the text in
the mail. On the next day I left for a conference in Bursa, in Turkey. Upon my
return, I found that the book had not arrived in Brazil. Over some days, the
inquiry performed by the Royal Mail determined that the parcel had been lost in
the Brazilian mail...for which they indemnified me a few pounds. Desperate, I
went to the reproduction service to see if the microfilm was legible...It was!
THE RULING CLASSES
It was in the decade of the Thirties when the model of an "essentially
agricultural" economy, defended by the Brazilian ruling class, began to be
questioned. I was among the first who denounced ruralism as a cause of
backwardness in the country. With its territorial extension and its social
heterogeneity, Brazil's development could not depend upon extensive
agriculture. What today looks obvious, a half century ago was the theme for
heated polemics. The truth was that more than nine tenths of her exports were
comprised of unprocessed agricultural products, and that the interests tied to
exterior trade were those who ruled the country.
Brazil did not completely lack industries. What it did not have was an
industrial sector capable of generating its own dynamism. The rhythm of
economic activity was determined from outside, that is, through the production
of primary goods. The problem was not so much the dependence of growth on the
importation of technologies and equipment, but the absence of a directing class
capable of formulating a project to transform the nation. When I became
convinced that the nascent industrial class could assume that historic role, I
devoted myself to work on designing the instruments needed to implement this.
The project of national transformation existed, in nucleus, in the heads
of many people, especially in São Paolo. Yet the most developed thought,
the most illustrious professors, were on the other side of the fence. I soon
became aware that academic economic science created obstacles to the
formulation of a politics of industrialization for Brazil, and that that
doctrine did not lack external support. It displayed a veiled imperialism,
which had to be confronted with extreme care so as not to awaken the
"anticommunist" forces.
I recall that, already as a CEPAL technician, I participated in a meeting
of Latin American businesspersons that took place in Santos at the end of 1949.
The central theme of discussions was the cost of the industrialization that
took place in the countries of the region during the World War. The general
opinion was that it would be good to return to traditional forms of
development, supported by comparative advantage in international commerce. That
was the adequate, universally accepted doctrine. In my interventions I
referred, discreetly, to the benefits of taking advantage of industrialization
opportunities.
THE IMPORTANCE OF PREBISCH
When I arrived at Santiago, Chile to work at CEPAL, having already lived in
Europe, I had some notion of the importance of political aspects to economic
reality. Yet it was not until Prebisch assumed the leadership of the Commission
that I saw we had the possibility of doing truly important things. Prebisch had
directed the Central Bank of Argentina during the Thirties, applying an anti-
cyclical policy which gave him international prestige.
When I read the first work prepared by Prebisch--which came to be known as
the Manifesto--I said: "we have now the great lever that we needed to remove
the great resistances that we face in Brazil." I acted immediately, translating
the text into Portuguese, which appeared in Brazil before being published as an
official document of the United Nations. Even more, I had it appear in
Professor Gudin's prestigious personal effort, the Revista Brasileira de
Economia.
The reaction was not long awaited. The School of Economics of the
Getúlio Vargas Foundation, where the masters of native liberalism
pontificated under the tutelage of professor Gudin, invited a series of world
celebrities of conservative economic thought to Brazil, with the purpose of
restoring a "correct doctrine." Thus we had an opportunity to meet Lionel
Robbins, Samuel Viner and many other luminaries. They attempted to clear away
the intellectual effect of the CEPALine aberrations. This attempt caused the
subject to be more discussed. If hard conservatism was defended with such
diligence, it was because there were new ideas in the ring. The new ideas were
simple, intuitive: the great accumulated backwardness could be remediated with
the deliberate adoption of a politics of industrialization. This required the
renewal of the ruling class. Up to now, it has not been elucidated how that
transformation was accomplished in Brazil, but there is no doubt that the
prolonged depression of the Thirties and the disruptions that the World War
caused for foreign trade played their part.
The two following decades saw the suicide of a president of the Republic,
(12) and the attempt to impede his successor,(13) who insisted on the same
political line, from taking control. At first, industrialization emerged as a
subtopic of exchange rate policies, designed to defend coffee prices in the
international markets. The experience had taught the Brazilian government that
exchange rate stability was indispensable for the defense of the price of
coffee. Selective control of imports, imposed to eliminate or reduce the
deficit in the balance of trade, greatly favored the industrial activities to
reduce the relative prices of imported goods and equipment. In a word, the
opportunities to develop industrial activities in Brazil were so considerable
that even measures precarious in this sense produced appreciable results. The
first firm action in this direction was the establishment of the BNDES at the
beginning of the Fifties. Prebisch's Manifesto had been published two years
previously.
EMERGENCE OF UNDERDEVELOPMENT
In the era to which I refer, we took as given that economic development and its
essential manifestation, industrialization, were necessary conditions to
resolve the problems of Brazilian society: poverty, concentration of incomes
and regional inequalities. But we were far from thinking that that sufficed as
a sufficient condition. Therefore, frustration rapidly replaced the sensation
of success that the initial phase of industrialization had brought with it. It
would be a simplification to consider that the main cause of the change in the
sense of history of the nation was the military coup of 1964, which came to
substitute the objective of development (with priority on the social) with that
of economic growth (generating inequalities and privileges within itself).
And since the beginning of the Seventies, when I found that the social
forces who fought for industrialization did not sufficiently appreciate the
gravity of the country's social situation and tended to ally themselves with
the latifundists and with the right against the specter of the incipient
syndicalist organizations, I became aware that Brazil was a long way from
emerging as a modern society.
I defended, therefore, the idea that it had become necessary to deepen
our perception of underdevelopment as a specific historical process, which
required an autonomous effort at theoretization. I saw that the economic growth
of the country somehow prevented the population from perceiving the grave
social problems that were accumulating. The internal migrations created the
sensation that everyone, or at least the majority, had before themselves the
possibility of betterment, of social advancement. The same illusion appeared
with the widening of the agricultural area by the depredation of the forest. My
reflections upon this historical circumstance form the basis of what I called a
theory of underdevelopment.
Over various decades, I wrote a great deal on these themes. I am sure that
there still remains much to explore. I hope that the new generation resumes the
study of the particulars of the Brazilian historical experience.
ROLE OF THE SOCIAL ORGANIZATIONS
It seems to me that sufficiently clear ideas are still not held regarding the
process of growing interdependence of the national economies that is called
globalization. We live in an epoch when the insufficiency of the conceptual
realm to explain a rapidly transforming reality becomes evident.
Upon trying to distill the essence of the historical process that
engendered modern civilization, we realized that, actually, what was important
were not the ideologies nor, similarly, the technologies. If we use the
language of the heretics of the past century, we would say that those were the
tools used by the social forces who faced off in the class struggle. The social
groups who directed the fantastic process of wealth accumulation defined the
model of social organization within the limits established by the unsalaried
classes. These gained growing importance as markets destined to absorb the
flows of production.
What might have been the evolution of the modern societies in the absence
of syndical power, which attained its most advanced form in social democracy?
It is enough to suppose that democratic society, open to individual initiative,
would not have reached the preeminence that it has today without the sacrifices
performed throughout the length of more than a century of social conflict.
Today a new phase of that struggle exists. World political integration,
which was establishing itself, reduces the reach of regulatory action by the
nation-state upon which the syndicalist organizations were based. In
consequence, the organization of productive activity tends to be planned on a
multinational, and even world scale, to the detriment of the negotiating power
of the working classes. For that reason the double process of unemployment and
social exclusion has everywhere intensified on one hand, and concentration of
incomes on the other.
FUNCTION OF THE NATION-STATE
One matter that should be studied in more depth is that of the evolution of
that institution which occupied the center of the modern historical stage: the
Nation-state, to which there corresponded in progressive fashion the defense of
collective interests. From an agency defensive of patrimonial interests, the
Nation-state evolved to assume the role of interpreter of the collective
interest and guarantor of the materialization of the fruits of their victories.
This process resulted from the growing participation of the population
organized in the centers of power: that is, from the democratization of power.
So then, through that process the growing organizational capacity of the
working classes was discovered and, through that, the Nation-state, which
ensured the population's level of employment through protection of the internal
market.
These question are manifested everywhere, and now are linked with
technological advances and with the behavior of world political power. The
importance of the behavior of this political power was put in clear relief in
the recently concluded negotiations of the World Trade Organization over
international flows of technology and financial services.
The foregoing does not mean to say that the space for the exercise of
national politics has disappeared. The challenges that Brazil confronts are
those which correspond to a country-continent characterized by enormous social
heterogeneity, yet with an economic system that still is relatively centered in
an internal market of considerable dimensions and gigantic growth potential.
Experience shows that the internal market is the motor of growth in the
larger countries. Given that access to modern technology requires the opening
of the internal market, the problem centers on the control of efforts designed
in search of those two, to a certain point exclusive, objectives. By this
logic, the role of the State, in developing countries like Brazil and in a
world in transformation like that of today, tends to be ever more complex.
Thus, the leading problems are of a political nature. It is necessary to
abandon the idea that, with the end of ideological confrontation, problems will
be solved by themselves and the route to the future is already traversed. We
live in an age that favors the political function, the most noble of human
creative activities. It is important that the new generations recapture an
appreciation for the exercise of the imagination and convince themselves that
their responsibility is no other than that of giving continuity to the
construction of this great nation.
II. THE NEW CAPITALISM
ANY reflection concerning the legacy of CEPAL should begin with the recognition
that a unique effort was effected in it to create a body of theoretical thought
concerning the political economy that has emerged over a vast area of the
planet and which is called the Third World. This work of theoretic construction
is developed in two aspects. On one hand, the vision of the overall structure
of the world economy, beginning with the dichotomy between center and
periphery, which allowed the specificity of underdevelopment to be captured and
the Rostowian doctrine of the stages of economic development to be superseded,
which ignored the qualitative differences between the structures of development
and of underdevelopment. On the other, the perception of the system of power
underlying the world economy, which provided an explanation for the tendency
towards deterioration in the relation of exchange prices in the international
markets. In actuality, it involves a theory of the forms of domination that
are found in the origins of dependency to which the Latin American economists
will allude below.
Those two ideas shed light, from different angles, on the phenomenon of
power in the world economic structures, a fact almost completely ignored by the
conventional economic theories, which rely on the concept of equilibrium. Thus,
CEPAL represented an effort towards restoration of economics as a branch of
political science, which can be explained by the influence of Keynes over
Prebisch and of Marx over some of the most energetic youth who worked in CEPAL.
The analysis that follows of the transformations of the world economy are
based on the historical-structural vision which emerged from the initial labors
of CEPAL.
The historical process of economic formation of the modern world can be
examined from three viewpoints: a) the intensification of the effort of
accumulation, through the elevation of the levels of saving of certain
communities; 2) the widening of the horizon of technical possibilities; and 3)
the growth of sectors of the population with possibilities for access to new
customers for consumption.
We do not deal with three distinct processes, but instead with three
facets which interact in the same historical process. It is not difficult to
see that, without the technical innovations, the increase in savings would not
lead very far, while the amplification in the population's buying power is an
essential element for the dynamic reproduction of the system.
At this turn of the century, the ideas prevail that, independently of the
policies that one or another nation decides to follow, the process of
globalization of markets must impose itself upon the entire world. We confront
a technological imperative, similar to that which governed the process
of industrialization, which molded modern society during the last two
centuries.
Now then, the interconnection of the markets and the subsequent weakening
of the existing systems of state power that circumscribe economic activities,
allow for important structural changes, which translates into a growing
concentration of income and in forms of social exclusion that are manifested in
every nation. There are even those who consider that these adverse consequences
are the conditions for a new type of economic growth, whose characteristics are
not yet defined.
Thus it is, at this century's end, that economic growth acquires as its
counterpart the birth of a new form of social organization which redefines the
profile of income distribution. In this simple conclusion one can detect a
threat or a challenge. At the least, the advent of an epoch of uncertainties.
Reflecting upon the first Industrial Revolution, it can be seen that it also
opened the way to unemployment, principally in the agricultural sector, which
traditionally employed more than two thirds of the workers. Since development
only becomes effective if an economy has access to expanding markets, one must
explain how the markets were widened in the wake of a technological revolution
that generated a diminution in workforce demand and in incomes of the set of
workers. It is known that during a first period, enterprises in the nations
that headed the Industrial Revolution forced the opening of external markets,
which explains the imperialist offensive that occurred throughout the 19th
century. Nevertheless, the true motor of that economic growth was not so much
the dynamism of exports, but instead the amplification of internal markets,
derived from the increased buying power of the wage earning population. This
explanation in turn relies upon the framework of conventional economic
analysis, given that it is factors of an institutional and political nature
that determine the distribution of income.
In effect, it makes one think that if the logic of the markets had
prevailed without restrictions, the internationalization of economic activities
(the process of globalization) would have appeared much earlier, reproducing,
in an exaggerated form, the experience of England, where the share of external
commerce in the national income surpassed 50 percent during the Seventies of
the 19th century. That would have brought about a lesser geographic
concentration of industrial activities, which would have favored the peripheral
nations. Furthermore in this hypothesis, it would have caused a much greater
social concentration of incomes in the principal nations of the Industrial
Revolution.
But events did not follow this path. In fact, a greater geographical
concentration of industrial activities prevailed, which benefited the central
nations, along with a more equitable income distribution in those same
countries--which represent the technological vanguard--which brought with it
the adoption of the politics of social protection.
The explanation for this historical picture is found in the advance of new
social forces, which appear at the same time as the process of urbanization
generated by industrialization itself. The evolution of the system of power, a
consequence of the action of organized workers, carried with it the elevation
of real salaries and obliged governments to adopt protectionist policies to
defend their respective internal markets. In this fashion, and starting at that
moment, the motor for growth was the amplification of the internal market, with
a subsidiary contribution from exports.
In this fashion, the increase in buying power of the working class played
a central role in the process of development, only comparable to that of
technical innovation. Thus, the dynamism of the capitalist economy was the
result of the iteration of two processes: for one, technical innovation--which
translates into increased productivity and reduction in the demand for the
force of labor--and, for another, the expansion of the market - which grows
pari passu with total income. The importance of the first of these
factors--technical innovation--depends on the actions of businessmen and on
their efforts to maximize their gains, while the importance of the second--
market expansion--reflects the pressure from social forces that struggle to
elevate their incomes.
The actual process of globalization disarticulates the synchronous action
of these two forces, which in the past guaranteed the dynamism of the national
economic systems. In the degree to which enterprises globalize, to the degree
in which they escape the regulatory action of the State, they tend to support
themselves more in external markets to sustain their growth. Simultaneously,
the initiatives of the businessmen tend to escape control by the political
segment. They return in this way to the original model of capitalism, whose
dynamism was based on exports and in external investments.
In sum, the tripod that gave sustenance to the power system of the nation-
states is found clearly destabilized, to the detriment of organized workers and
in favor of the businesses that control the technological innovations. The
equilibrium that the regulatory action of the public authority guaranteed in
the past no longer exists. The foregoing explains the reduction in the wage
earners' share of the national income in every country, independently of their
rates of growth.
The ever greater interdependence between the economic systems rendered the
techniques they had used for development obsolete during the last decades, to
give a sense of the historical process in which the world is immersed. The
vertiginous advance of data processing technology permitted a diversity of
models. But the reliability of the forecasts practically disappeared. It is
enough to cite, as an example, the exercises performed regarding the
projections of international commerce in the following years in order to
ascertain the outcome of the accords debated in the original GATT. Thousands of
equations were processed without it being possible to elucidate any important
doubt. Subsequently today, the possibility of interfering in the macroeconomic
processes is most limited, as verified even by the best equipped governments,
impotent to confront a problem like unemployment.
The limited transparency of the actual outcomes reflects the action of new
elements and change in the relative importance of others, which involves an
acceleration of historical time. The national economic systems that subsisted
in grand autonomy and only occasionally were subject to external collisions are
a thing of the past. The principal markets--for technology, financial services,
communication media, quality products and even goods for general consumption,
not to mention those for traditional primary materials--operate today in a
unified manner or march rapidly towards globalization.
We examine some of the changes of greatest relevance in the configuration
of today's world panorama:
1. The decline in the governability of the economies of greatest relative
weight cannot be explained without keeping in mind the internationalization of
the financial markets. The enormous disequilibrium in the current account of
the United States balance of payments is a case of escape into the future, in
search of adjustment to that globalization, and it translates into the transfer
to that nation of a considerable part of the savings available for investment
in the rest of the world, including the poorest countries. This situation leads
to important modifications in that nation's international relations, as
demonstrated in the recent creation of a zone of free commerce that groups the
markets of the United States, Canada and Mexico. With that, North American
industries may be able to recover international competitiveness, given that the
monetary salaries in Mexico are equal to no more than a tenth part of those
that prevail in the United States. The experience of integration with Mexico,
excluding the mobility of the workforce, will serve as a model for a wider
project, capable of embracing the whole continent.
2. The European Union was born at France's initiative, with the principal
goal of promoting a durable political understanding with Germany. Four decades
later, it was the origin of a formidable project of political engineering. For
the first time, an important group of sovereign nations, with their own
cultural profiles, renounced national prerogatives so as to integrate
themselves politically and economically. In the past, multinational integration
was achieved by the domination of the strongest over the others. The European
process requires, now, an exercise in political imagination that reconciles the
resurgence of local values and cultural rivalries with the growing requirements
of a unified economic space of colossal dimensions. The European Union,
conceived in the past as a political project--to confront the perceived Soviet
threat and to overcome historic rivalries--acquired a powerful impulse on the
economic plane and is, easily, the most important experiment in transcending
the Nation-state as an instrument of regulation for human coexistence in a
democratic environment.
3. The process of transition to a market economy and of establishment of
democratic institutions in the nations of eastern Europe became much more
traumatic than what had been imagined. Everything leads one to suppose that in
Russia, which confronts the challenges of reconstructing a vast political space
with enormous ethnic and cultural diversity, that process will be very
prolonged. It is probable that, for one or two decades, Russia will remain at
the margin: a world apart, and must invent the political format that would
permit it to reconcile its authoritarian traditions with the claims of
democratic practice, predominant today in an ever more differentiated middle
class. Despite its immense resource potential, including qualified human
resources, everything seems to indicate that Russia will not greatly influence
the configuration of the world at the beginnings of the 21st century.
4. Without room for doubt, it is the nations of east Asia--China, in
particular--to whom it falls to delineate the shape of the new series of
transformations redefining the face of the planet. Headed by Japan, those
nations have obtained a high grade of autonomous technical dominance, which
they place in the service of major social discipline. Salaries are regulated
according to the requirements of international competition. The unparalleled
competitive strength of Asiatic capitalism emerges from this strict social
discipline and from investments in the development of human resources. It
should be expected that, given the enormous workforce reserves available to
them, their economies should gain weight, progressively, in world markets. The
barriers against this invasion occur through new forms of organization of the
markets, which introduces product differentiation. Areas will be ever more
limited where competition is effected through prices. The stock market crisis
at the end of 1997 made plain the weight that east Asia already has in the
world market and the importance that the investments in this region have for
the dynamism of the eastern economies, at the same time that it placed in
evidence the political immaturity of their ruling groups.
5. The Latin American economies will see themselves subjected to growing
pressures to deregulate their markets, with effects determined as a function of
their level of heterogeneity of their social structures. By not achieving
reversal of the process of concentration of income and the consequent
aggravation of social exclusion, nations such as Brazil and Mexico will be
exposed to social tensions that could well propel them into ungovernability.
The search for new development paradigms, oriented to preservation of non-
renewable resources and to the reduction of waste, is going to carry out a role
in Latin America equal to that performed, in the first half of the century now
ending, by the European social utopias.
In short, with tariffs substantially eliminated as an instrument of
commercial policy and with a progressively unified global financial market--in
which the cost of international transfers of capital tends toward zero--we
enter into a new phase of capitalist development, whose characteristics are
still to be defined.
Some of those to be profiled can already be indicated: the maladjustments
caused by the social exclusion of ever wider groups of the population tend to
become the most serious problem, as much in the rich nations as in the poor.
Those maladjustments not only emerge from the nature of technological progress,
but also reflect the indirect incorporation into the productive system of the
badly paid labor in late industrializing nations, primarily, the Asiatic.
Globalization, on a world scale, of productive activity necessarily leads to a
great concentration of income, which is the counterpart of the previously
mentioned social exclusion.
Therefore, the new challenges are of a fundamentally social, more than
economic, character, as opposed to what occurred in the previous phase of the
development of capitalism. And so, the first stage shall have to be handled
with political imagination. Whoever thinks that the space for utopia is
exhausted is mistaken. Contrary to that which Marx prophesied, the
administration of things will be substituted, increasingly, by the creative
governance of humans.
III. GLOBALIZATION AND NATIONAL IDENTITYTHE PROCESS OF GLOBALIZATION
The changes that occur in international relations, at this end of century,
cannot be understood except with a composite vision, a global vision, that
bases itself not only in economic analysis, but also in that prospective
imagination that allows considering the future as history. In the absence of
that enabling vision, it will be impossible to even understand the meaning of
the daily events that directly concern us and, lately, it will be impossible
too to act in an effective way as the subjects of history.
Keeping this concept in mind, I present some reflections below upon the
world reality that is emerging before us, with the goal of tackling, further
ahead, the problems which demand our attention in the most insistent manner.
1. The fact cannot be ignored that the world economy has entered into a
period of structural tensions which, by their global reach, have no precedent.
From the beginning of the Eighties, those tensions have been felt by the
nations of the Third World, beneath the rubric of a violent increase in
interest rates in international markets and in a powerful transfer of capital
towards the United States that, in and of itself, explains the bonanza
experienced by that nation beginning in the second half of that decade. The
apex of the tensions in the world economy is found in the virtual inflation of
the American economy, inflation caused by the long-term decline in the savings
rate, combined with a copious deficit in the current account of the balance of
payments. The reduction in the savings rate is a result of the convergence of
the negative disequilibria in the accounts of the federal government, added to
a sustained reduction in private saving. In effect, during the Eighties the
savings rate in the United States was reduced to half its observed magnitude in
the three preceding decades. Its actual level is equivalent to less than a
third of the average savings rate of the nations of the O.E.C.D. and less
than a fourth that of Japan. In consequence, the United States ceased to be the
principal creditor and provider of capital to the world, while becoming the
principal debtor. Its external debt in fact exceeds a billion dollars.
2. The existence of that structural imbalance in the United States economy
explains the absorption by that country of more than half of the savings
available for international investments.(14) It is very probable that that
disequilibrium shall still persist for some years, and the way in which this
problem is solved will considerably influence the future configuration of the
structure of world power. The tension present in the primary economic center
brings about realignments of forces in Latin America, a region that is
undergoing a crisis phase in its political structures, with consequences
difficult to foresee.
3. Another important source of tension is the widespread process of
destruction and reconstruction of the eastern European economies, who continue
to absorb part of the savings generated in other countries, without having the
ability to sufficiently remunerate that capital and contributing to keeping
interest rates at elevated levels. As opposed to that foreseen during a
beginning moment, that process will be extended in time and could last several
decades. The fall in production levels, which was 4.5 percent in 1990 and that
in the following year reached 15.4 percent, has persisted for some years. The
process of institutional change is very profound and opens enormous
possibilities for the participation of international capital. The nations of
eastern Europe control human resources that place them in an advantageous
situation in the competition with the countries of the Third World. It leads
one to think that, once the stage of institutional reconstruction is surpassed,
a new an dynamic area of capitalist development will be opened in that region.
This thorough process of economic reconstruction, which includes the eastern
portion of Germany, reinforces the tendency toward increases in the interest
rates, to the detriment of the economies of the Third World.
4. The integration of the nations of western Europe is an irreversible
process, although the ambitious objectives of the Maastrict treaties are not
reached. At the same time that this process strengthens the big economic
groups who act on a transnational scale, it opens space for the agents who
operate in social realms distinct from the specifically economic or financial.
The weakening of the instruments of political economy will stimulate
compensatory actions in other areas for the exercise of political imagination.
In western Europe is occurring the most important experiment to transcend the
Nation-state as the guiding instrument for economic activities in societies
which reconcile the ideals of liberty and of social well-being. The foregoing
requires the conquest of a growing social homogenization, difficult to achieve
due to the existing orientation of technical progress.
5. In a manner independent of the changes in the configuration of the
world structure of political power, the redeployment of productive activities
will continue its course, governed by the effects of the new techniques of
communication and of information processing, which tend to concentrate creative
and innovative activities including those that are instruments of power in
privileged areas of the developed world.
6. Everything indicates that the advance of transnational enterprises will
continue on, as a result of the growing concentration of financial power and of
the agreements over patents and control of intellectual property reached with
the aid of the World Trade Organization, with these factors contributing to the
increased breach between developed and underdeveloped countries.
7. The advance in the internationalization of the economic, financial and
technological pathways weakens the national economic systems. The activities of
the United States tend to be limited to the social and cultural sectors. The
nations characterized by acute cultural and economic inequalities will be
subjected to growing dislocating pressures. The counterpart of the dominance of
internationalization is the weakening of historic links of solidarity which, in
the case of certain nationalities, have kept countries marked by acute social
disparities of living standards united.
8. International political cooperation will facilitate attention to
problems in the preservation of environmental balance, the control of drug use,
the battle against contagious illnesses, the eradication of hunger, and the
maintenance of peace. As the economic domain tends to be increasingly occupied
by internationalized enterprises, they are ones that limit the space
corresponding to activities of local reach and of an informal nature. The
relative importance that these latter attain will determine the level of
development in each region: there will be a structural overlap of the developed
and underdeveloped areas, in a division of political space that perpetuates the
social inequalities.
9. The world power structure evolves towards the establishment of great
blocs of nations among those with headquarters of transnational enterprises,
with rich heritages of knowledge and skilled personnel. The growth of
international exchange of services, especially financial and technological,
occurs to the detriment of commerce in traditional goods. In the dynamic of
this system, forces prevail which tend to reproduce the actual development-
underdevelopment dichotomy. To escape from this set of forces, globally
articulated, it is necessary to unite political will, based upon a wide social
consensus, with objective conditions that, in fact, are present in only a few
countries of the Third World.
PRESERVATION OF NATIONAL IDENTITY
It is well to ponder those global structural readjustments that are now
occurring, with the goal of being able to identify the space Brazil will have
for deciding among its historical options, without abandoning the singularities
that characterize it. The challenge consists in finding an effective way of
preserving cultural identity and political unity in a world dominated by
transnational groupings whose power is derived from the control they exercise
upon technology, information and financial capital. To respond to it, it is
necessary to deeply understand the reasons for the loss of dynamism in the
Brazilian economy during the last two recent decades.
The Brazilian experience of economic development was the result of the
expansion of an internal market that proved to possess enormous potential. Far
from being a mere continuation of an economy exporting primary products
inherited from the colonial era--consistent with a constellation of autonomous
regional enclaves--industrialization assumed the form of a progressive
construction of an economic system that operated with considerable autonomy
with regard to the creation of savings and the generation of effective demand.
Thanks to the effects of that synergy, this system was greater than the sum of
the parts which comprised it.
From this situation, even without having benefited from a privileged
position like the United States one hundred years previously--with great
inflows of capital and with a technically qualified workforce deriving from the
most developed countries of Europe--Brazil, between the Fifties years and the
beginning of the Seventies, was the most rapidly expanding industrial zone in
the capitalist world.
During three centuries, the Brazilian economy based itself on the
extensive utilization of natural resources, many of them non-renewable: from
forestry exploitation during its historical beginnings, up to the great iron
mines, and passing through the destructive use of the soil over various
agricultural cycles. Brazil for a long time was, in fact, an excellent example
of what is now called "unsustainable development." With an exploitative
civilization, the nation was condemned to confront an immense crisis when the
exhaustion of the base of non-renewable (or renewable at increasing costs)
resources should arrive, or when international demand for those resources would
diminish as a function of the effect of new technical or economic factors.
It is only during the present century that the Brazilian economy stops
basing its dynamism on the depredation of its natural resources and begins to
base it, principally, upon adoption of technological advances and on the
accumulation of capital capable of reproduction. That was due to the process of
industrialization, which became the nation's motor of development beginning
with the Great Depression of the 1930's.
Brazil established the basis of its industrial system in an epoch of great
international disruptions, and the decisive role in the strategy that then was
adopted fell to the State. The sacrifice imposed on the population spanned all
social classes, even the groups who were accustomed to having access to
imported consumption goods. Throughout several decades, the nation
restructured itself, lowering the share of imports in the offerings of
consumption goods, at the same time that the population grew, especially in the
urban zones. It began to delineate a new social reality: the rich consuming
nationally manufactured products stopped being seen as beings from another
planet, and the developing middle class occupied greater space and assumed
leadership positions in the nation's cultural life.
At the outset of the Seventies, the external surroundings that had favored
industrialization changed radically: the crisis of the dollar, following the
first oil shock, gave birth to an enormous mass of international liquidity and
to reduced interest rates, which stimulated the process of excessive
indebtedness of a large number of nations in the Third World. What came after
was the sorrowful history of the successive adjustments imposed upon the debtor
nations: from recipients, these were turned into net providers of international
capital and found themselves forced to increase their effort to save and to
reduce their level of internal investment. This type of adjustment requires the
existence of a consensus and of a social discipline difficult to attain in any
society, but more in those, like the Brazilian, in which profound inequalities
and political backwardness coexist. Therefore, the real crisis, which already
extends over two decades, feels insuperable and places in relief the incapacity
of the State to confront it.
It would only be justified to increase the effort to deepen the external
insertion of the economy--that actually is considered a requisite for
modernization--if such an effort were made within the framework of a genuine
politics of economic and social development, which does not occur when the
increase in exports has as its counterpart the contraction of the internal
market.
It is never pointless to keep in mind that prices--in real terms--of
primary products exported by Third World nations follow a declining historical
trend. The average of those prices, during the period 1986-1990, was equal to
approximately half of that which prevailed forty years earlier, that is, in
1948-1955. A study by a group of analysts in the World Bank (published in
The World Bank Review of January 1988) arrived at the conclusion that
this deterioration has already lasted more than a century and continues to
intensify. Between 1989 and 1991, the average price of primary products
exported by the poor countries was reduced by 20 percent, a fall that is close
to what occurred in the recession of 1980-1982, which provoked the external
debt crises in those nations. Trapped in a harmful process, many poor nations
tried to compensate for the decrease in prices by increasing the volume of
exports and obtaining external financing, including from multilateral agencies,
to elevate production. The resulting violent competition provoked the downfall,
in recent years, of many producers of coffee and cocoa. The incomes earned by
the coffee producers were reduced by half, and the losses for cocoa and sugar
were even greater, as a result of the dismantling of the timid mechanisms to
defend existing prices from the period prior to the deregulation boom.
The double pressure of the increase in the supply of labor, stemming from
population growth, and the rigidity of demand for primary products in the
international markets led the peripheral countries, in the past, to try the
path towards industrialization. However, only a few of those countries united
the necessary minima of scale of population, endowment of natural resources and
business leadership to allow basing industrialization upon their internal
market. The great majority of the poor countries who tried to industrialize
continued to depend on marginal access to the international markets, as
subcontractors for the transnational enterprises. There were few who progressed
in the building of an economic system with a certain degree of autonomy in the
generation of effective demand and in the financing of reproductive investment.
The barriers to access to international markets that those nations
encountered are not limited to the deterioration of real prices for their
primary export products. That tendency, identified by Raúl Prebisch a half
century ago, can be explained by the very nature of those goods, whose relative
importance declines with increase of the population's income level. The
difficulties that the poor nations confront in their efforts to penetrate
international markets are more severe than the first students of underdevelopment,
who limited themselves to observing the nature of the products without
examining the structure of those markets, supposed. There is reason to believe
that in such markets the manifestations of that which is understood as
market power have considerable importance. It should not be forgotten
that, in what is referred to as manufactured products, international
transactions are constituted, in general, by operations performed within the
large corporations and under regimes of administered prices.
A study by the South Commission (15) demonstrates that, during the 1980's,
the prices of exports manufactured by the nations of the Third World grew by
12 percent, measured in nominal dollars. During that same decade, on the other
hand, the prices of manufactures exported by the developed nations increased 35
percent. If one calculates the buying power of manufactured goods exported by
Third World nations, taking account of the prices for machinery and equipment
that they imported, he notices that, over the same decade, that buying power
was reduced by 32 percent. In this way, the poor countries require greater
efforts to conquer the space for manufactures in the international markets. It
is indubitable that development is not possible without access to modern
technology, and that access is obtained, above all, through the route of
international commerce. Yet what happened in the past, in a nation with the
potentialities of Brazil, was that access to the international market had only
a supporting role in the unfolding of development, since the central impulse
was internally generated.
If it is admitted that the Brazilian economy will only recover its
dynamism with difficulty by supporting itself basically with external
relations, correspondingly one must determine if it has not committed an error
by abandoning the strategy of considering the internal market as the "engine of
growth." I do not claim that that abandonment may have been deliberate or even
conscious. We reflect, instead, upon changes as much transitional as structural
in the international economy that could not be confronted with decision and
imagination. A decade was lost, through whose length the capacity for self-
government available to the nation greatly deteriorated with the reduction in
efficacy of the instruments for macroeconomic policy. The space for maneuver
was found to be limited by the compromises struck with international creditors:
the club of creditor banks and the IMF.
The economic systems of great territorial scope and marked regional and
structural disparities--among what distinguishes Brazil, China and India--
survive with difficulty if they lose the cohesion that derives from expansion
of the internal market. In those instances, however effective they may be,
international projection is insufficient to ensure the dynamism of their
economies. In a world dominated by the transnational corporations, those
heterogeneous systems only survive and grow as a function of political will
based upon a project with deep historical roots.
A theory for economic development of the large heterogeneous--socially or
culturally--economic systems has still not been formulated. The disaster of the
Soviet Union left it very clear that such systems can no longer survive having
the structures of bureaucratic and military control as their only support.
While during the prolonged historical period of the primary export model the
economic links between the diverse regions of Brazil were very scarce, at mid-
century beginning with the Thirties strong links of interdependence were
established between those regions thanks to the considerable economic growth,
supported by an industrialization based upon the internal market.
One can not ignore that the dynamism of the internal market was based, in
large measure, upon activity in Brazil of foreign enterprises, but it was done
in an epoch when international competition for sources of capital was much less
intense than what it now is, and in which the external debt of the nation was
much less. For that reason, the first challenge that Brazil should now confront
is that of increasing its capacity for self-financing, which requires a greater
savings effort, public and private, and greater discipline and transparency in
the use of the foreign currency generated by exports.
It is indispensable to emerge from the recession so that a greater savings
effort and greater social discipline shall be viable. In other words, it is
necessary to better utilize the productive capacity that already exists. For
that it is necessary to re-establish the efficacy of the instruments of
macroeconomic control, cleansing the public finances and regulating monetary
flows and external financiers. In Brazil, efficacy of governmental action
begins with the ability to regulate the foreign sector of the economy. At the
middle of the 1990's, with the Real Plan, the Brazilian government once
more based policies of stabilization (of prices and of the type of exchange)
upon a growing external indebtedness. All the great Brazilian crises were
started with exchange rate problems. It remains to be seen whether, in fact, it
is still possible to regain the ground lost in this vital area. At the least,
the conclusion may be that it is already inappropriate to speak of Brazil as an
economic system.
IV. OVERCOMING UNDERDEVELOPMENT
WHEN human creative capacity is applied to the discovery of our potentialities
and the project of enriching the universe, that which we call development
results. Development only appears when accumulation leads to the creation
of values that are spread among the collectivity. The theory of development
alludes to two processes of creativity. The first has to do with technics,
with the attempt by man to utilize instruments to amplify his capacity
for action. The second refers to the significance of human activity, to the
values with which humanity enriches its existential patrimony.
Industrial civilization is characterized by the fact that human inventive
capacity is channelized in a preferential manner towards the creation of
technology; this is, towards the opening of new pathways for the accumulation
process, which explains the formidable expansive force of such a civilization.
It explains too the fact that the central point, dominant in the study of
development, should have been the logic of the process of accumulation.
But it was the rejection of a simplistic vision of the process of the
geographic diffusion of industrial civilization from which emerged the theory
of underdevelopment, whose essential objects of study are the social
malformations engendered during this diffusion process. The denunciation of the
false neutrality of technology placed in relief a hidden, yet determinate,
characteristic of the development process: the definition of its objectives,
the creation of substantive values.
The theory of underdevelopment makes clear the limitations imposed on the
peripheral nations by the international division of labor, a product of the
particular form by which the diffusion of industrial civilization was produced.
The first step consisted of awareness that the principal obstacles that impeded
the transition from simple imitative modernization to authentic
development corresponded to the social sphere. The advances in accumulation did
not always open into transformations of the social structures to allow
substantive modifications in the distribution of income and the allocation of
the new surplus. While in the central economies accumulation led to scarcity of
labor power, which created the conditions for social pressures to emerge that
favored the elevation of real salaries as well as social homogenization, in
peripheral ones the effects were completely different: it led to social
marginalization and reinforced traditional structures of domination, or
replaced them with similar others. In fact, peripheral accumulation was in the
service of the internationalization of markets that brought with it the
diffusion of industrial civilization.
The concept of technological dependency permits articulation of the
diverse components contained in this problem. Technological development is
dependent when it is not limited to the assimilation of new techniques, but
instead imposes acceptance of consumption patterns, under the rubric of new
final use goods that represent a level of accumulation and of technical advance
which, in the society in question, only exist in the form of enclaves.
A better comprehension of this problematic allowed the formulation of
certain questions and the opening of new lines of reflection upon
underdevelopment. Does the possibility exist of acceding to the vanguard
technology of industrial civilization and, at the same time, escaping from the
logic of the existing system of international division of labor? Or, better
put, up to what point can technology be placed in the service of reaching
goals, defined in an autonomous fashion, of a society whose level of
accumulation is relatively low and which hope to achieve social homogenization?
Technological dependence - might it perhaps be a simple consequence of the
acculturation process of the dominant groups in the peripheral economies? Is it
possible to have access to modern technology without submitting to the world
leveling process of values imposed through the dynamics of the market? Is it
possible to avoid the system of incentives, required to reach the efficiency
levels that characterize modern technology, engendering growing social
inequalities in the countries with a low degree of accumulation?
The reflections provoked by all these issues have permitted a better
delineation of underdevelopment as a field of study. On one hand, it shows the
demands of a globalization process, imposed by the logic of the markets, which
comprises the basis for the diffusion of industrial civilization. On the other,
it depicts the requirements of a technology that is the result of the history
of the central economies and which exacerbates its initial tendency to limit
generation of jobs. Finally, it includes the specifics of the most apt social
forms to operate those technologies, that is, the organizational forms for
production and manpower utilization that tend to limit the possibility of
systems of centralized decision-making recurring.
The overcoming of underdevelopment requires an attempt to respond to these
multiple interrogations. What must be sought is to discover the road of
creativity in relation to the goals, taking advantage of the resources of
modern technology to the extent that they are compatible with the preservation
of autonomy in the definition of substantive values. Expressed in other words:
how to obtain effective development beginning from a relatively low level of
accumulation, keeping in mind the social distortions imposed by the
international division of labor and the restrictions established by the
globalization of markets. How to attain access to modern technology without
falling into forms of dependency that limit autonomy of decision and frustrate
the objective of social homogenization.
The most significant attempts to overcome underdevelopment in the second
half of the 20th century correspond to the following three models.
1. COLLECTIVIZATION OF THE MEANS OF PRODUCTION
This first model was based upon the collective control of the most important
economic activities, whether at the level of the productive unities (self-
management) or at the level of the nation set (central plannning) or also in
ways that combine both modes of collective organization of the economic system.
The roots of the collectivization project are found in the Marxist
doctrine. On the one hand, it appears evident that the prevailing forms of
social organization in the peripheral countries leads to an acculturation of
the dominant minorities, those who integrate the internal structures of
domination with the external and, consequently, exclude the majority from the
benefits of the accumulation effort. And thus economic growth does not lead, by
itself, to development. On the other hand, it seems certain that market logic
does not compel the structural changes required to defeat the inertial factors
that are opposed to development of the productive forces in conditions of low
levels of accumulation. In actuality, this logic favors international
specialization based on the criteria of static comparative advantage. So then,
the surplus derived from that specialization, retained locally, stimulates
dependent modernization, which goes on to condition the process of
transformation of the productive structures that comes later. The
industrialization that emerges from dependent international specialization
reinforces the pre-existing social structures.
If the collectivization is founded upon self-management, strong pressures
to elevate consumption may arise, which reduce the margins for reproductive
accumulation. If, otherwise, the point of departure is centralized planning,
the emergence of a unifying bureaucratic power tends to provoke a growing
breach between the decision centers and the masses of population and,
ultimately, to create new structures of privilege. Furthermore, problems exist
specific to the operation of an economic system ruled by centralized decisions.
Theoretically, it is possible to plan the activities of a discrete group of
productive unities considered as a single system. But full collectivization
transforms that theoretical possibility into a practical necessity. The
difficulties that exist in executing the plan are greater the lower is the
level of development of the productive forces.
In synthesis, experiences with collectivization of the means of production
encountered difficulties stemming from three categories of problems:
a) that of social organization, which follows from the definition of
priorities for the allocation of scarce resources;
b) that of the system of incentives, which reconciles the improved
performance of the productive activities with the distribution of income that
is considered desirable, and
c) that of insertion into the international economy, which ensures
access to technology and to financial resources on the border of dependency
relations.
2. PRIORITY TO THE SATISFACTION OF BASIC NECESSITIES
Another way that those intent on overcoming underdevelopment have adopted has
been that of giving priority to satisfaction of the set of necessities which a
given community considers fundamental, even when those are not found perfectly
defined and identified. It starts from evidence that late penetration by
industrial civilization brings with it modes of social organization that
exclude important segments of the population, if not the majority of them, from
the benefits of accumulation.
The solution of this problem is of a political nature, and demands that a
part of the surplus be destined to modify the profile of income distribution in
a deliberate way, such that the population group have the possibility of
meeting their basic needs for food, health, housing, education, etc. This
problem is not one that is present exclusively in the backward nations,
although is those it is manifested with undeniable gravity. There is no doubt
whatsoever that if a portion of the product increment in an economy is
devoted to eliminate what is conventionally called absolute poverty, it
would disappear at the end of a certain time. That goal can be reached,
however, in various manners: from structural reforms, like the reorganization
of the farming and livestock sector with a view to a real increase in basic
salaries, to the introduction of compulsory measures capable of assuring
reduction in the consumption levels of the highest-consuming groups without
provoking negative effects on the magnitude of the interest rate.
The greatest difficulty that is confronted is that of generating a
political will capable of placing a project of this type in motion, for mutual
conditioning exists between the structure of the productive system and the
profile of income levels. Modification of the relationships between both can
carry a considerable social cost, not only in terms of the obsolescence of the
physical plant, but also in immediate unemployment. We deal, therefore, with a
more complex operation than it appears to be at first sight.
Problems also arise in the area of external relations. The underdeveloped
economies that industrialize with the participation of the transnational
companies use technology and even equipment that was already amortized in the
countries of origin of those corporations. The redirecting of the productive
systems to accord with less elitist consumption patterns can cause new
disruptions, which elevates the costs. In this approach, a perverse effect is
produced: the technology required to satisfy the needs of a population of low
income level may be more expensive, given that it would replace another which,
although more advanced, has an opportunity cost equal to zero for the company
that uses it.
3. INCREASE IN EXTERNAL AUTONOMY
A third strategy for overcoming underdevelopment consists in assuming an
aggressive position in international markets. Investments are channeled toward
the sectors that, potentially, possess external competitive capacity and which,
at the same time, stimulate national activity. The latter permits them to
foment the expansion of the internal market. Exports are supported by economies
of scale and by technological advances more than by static comparative
advantage. The success of this model depends upon export activities retaining
their vanguard position, as much in process technology as in the products. It
is this vanguard position that gives flexibility and adaptability to the export
activity. This strategy can be affected if the transnational enterprises
control the productive activities, for that would limit the capacity for action
in the external markets.
The principal trait of this model is the conquest of autonomy in relations
with the exterior. It permits overcoming the situation of dependency and
passivity imposed by the traditional system of the international division of
labor, and adoption of an offense in a position founded on control of certain
advanced technologies and on commercial initiative. This model requires
selective and careful planning and the attainment of a high rate of savings.
The problem that arises from the beginning is identification of the social
bases of the structure capable of putting it into practice. This explains how a
strategy of this type can frequently lead to reinforcement of state structures
of an authoritarian cast.
The three strategies examined above encapsulate the experiences lived in the
second half of the century by the peripheral economies who adopted
voluntaristic development politics. The point of departure was, in every case,
the critique of the way in which industrial civilization was spread; from the
situations of dependency deriving from the international division of labor, and
from the social malformations generated by the logic of the market in the
peripheral nations. The tactical goal was always to win autonomy in the
ordering of economic activities, with a view to reducing the social
inequalities that the propagation of industrial civilization causes, in an
apparently inevitable manner, in the peripheral nations. The strategic
objective is to achieve a development that translates into enrichment of the
culture, in its multiple dimensions, and to permit contributing with their own
creativity to that civilization which tends to extend itself over the entire
world. At root, it involves an expression of the desire to preserve their own
identities in the common adventure of the civilizing process.
The experiences mentioned make clear that, in the world of today, the
nations of the periphery who hope to overcome underdevelopment should comply
with certain conditions, among which we distinguish the following:
a) a level of decisional autonomy that permits limiting as much as
possible the flight to the exterior of investment potential;
b) that power structures which make it difficult for this potential to
be absorbed by patterns of consumption through the processes of reproduction in
the rich countries, and that assure a relatively high investment level in human
resources, which is what opens the road to social homogenization;
c) a certain degree of decentralization of business decisions,
necessitated in order to be able to adopt an incentive system capable of
ensuring utilization of the productive potential, and,
d) social structures that open spaces for creativity within a wide
cultural horizon and that generate preventive and corrective forces to the
processes of excessive concentration of power.
The fulfillment of these objectives evidently presupposes the exercise of
a powerful political will supported by an ample social consensus.
V. REFLECTIONS UPON MY FIRST THEORETIC ESSAYSBRAZILIAN THOUGHT
When I began to study economics--about a half century ago--the idea was
dominant in Brazil that ours was a conditioned economy, an expression
coined by the most influential voice in our discipline during that era,
professor Eugênio Gudin. In that type of economic structure, the principal
stimuli come from the outside: the system of the international division of
labor in which we were embedded delimited the space in which we moved. The
patterns of consumption that determined the behavior of the elites were
dictated by the exterior and demanded a level of income which was only enjoyed
by a small part of the population. Therefore, the internal demand for
industrial products was satisfied almost exclusively with imported articles.
The greatest part of the population continued integrated into a subsistence
economy, with little monetization. It was assumed, naturally, that the
conditioned economy completely lacked its own dynamism and followed, in
a passive fashion, the cyclical movements of international commerce.
My theoretical works started from disagreement with that conventional
vision of Brazilian economic reality. Leaving aside areas in common with the
imported doctrines and performing a careful analysis of the available data--
this data almost always rejected by the harried academics--I arrived, without
too much difficulty, at surprising conclusions.
Thus, for example, despite Brazil being the classic case of an economy
whose dynamism depended upon the export of a few primary products, it had, in
the decade of the Great Depression, a growth rate no worse than its historical
average. Throughout that period, the coefficient of foreign trade (which
measures the importance of exports in the GDP) decreased considerably. The
economy found "internally directed" means of growth, through expansion of the
internal market. I denominated this phenomenon "displacement of the dynamic
center."
It was the study of this "anomalous" growth, in opposition, that led me to
conclude that Brazil's historical form of insertion into the system of
international division of labor narrowed the horizon of possibilities for the
country's economy. It remained subjected to structural relations with the
exterior that curtailed its development. Since the system functioned beneath
its capacity, it failed to fully utilize the country's enormous potential in
natural resources and demographics. In accord with the then current logic, the
Brazilian economy was to remain prostrate in profound stagnation, since the
depression in world markets, following the great crisis of 1929, had dismantled
its system of external arrangements.
Studying the statistics of the period, I noticed that that logic had not
prevailed: the Brazilian economy detached from the international system in
crisis and won dynamic autonomy by means of widening and diversifying its
internal market. To overcome the limitations derived from import capacity, it
even turned to the international market for second-hand equipment. What is
certain was that, despite the volume of imports being reduced by half, the
economy already resumed growth in 1932, supported by the incipient internal
market.
The explanation of this "miracle" is found in the politics of support for
the coffee sector. Reluctantly, under political pressure, the federal
government assumed the financing of immense plots of coffee, which increased
under the double pressure of production growth and of the brutal fall in
prices in the international market. The fact that this expansion of the means
of payment would not lead to a disorderly inflation and would act as a creator
of effective demand demonstrated that the Brazilian economy had been
functioning with excess capacity under the influence of an international system
concerned with ensuring service on the external debt. It is true that no one
noticed that, by accumulating and burning mountains of coffee, Brazil was
building the pyramids which, years later, Keynes would recommend as a last
resort remedy to overcome the depression. This policy of creation of effective
demand was not consciously adopted by the Brazilian government. It was, more
likely, a byproduct of the measures taken before the pressure of the powerful
coffee-producing interests, which had as their object the pacification of
groups even inclined to take to arms, as they did in 1932.(16)
Upon reflection upon this historical experience, during the years of the
Forties, I observed that the development of a conditioned, peripheral or
semi-colonial economy, as it was called at the time, depends on willful
actions, almost always adopted in opposition to market forces. In other words:
the fact that such backwardness should have accumulated demonstrated the
incapacity to conceive, formulate and execute effective development policies.
The measures that permitted Brazil to emerge from the depths of the Great
Depression were the result of historical circumstances linked to the struggle
for power among regional hegemonic groups. The performance of the Brazilian
government, upon burning 80 million sacks of coffee, was seen at that moment as
a show of desperation, whose irrationality caused shock.
In the same way, the deepening of the industrializing process in the
Forties is linked with the disorganization of international commerce provoked
by the war. It is clear that the essential occurred in the political field,
through which the importance of planning, which ensures the coherence of long-
term actions, is easily seen. If mere chance could lead to development, as
occurred during the Thirties, it was because that pertained to the universe of
the possible, because it was within arm's reach. In summary, if structural
change is a necessary condition for the fostering of development, this will
not emerge easily in a spontaneous manner from the interaction of market
forces. That is the lesson which was gleaned from the experience of the years
when the basis for the industrialization of Brazil became established.
THE THEORY OF UNDERDEVELOPMENT
In my theoretic disquisitions, the problem whose elucidation most motivated me
was that of explaining the fact that the elevation of the income level of the
population and the considerable advance in the industrialization of Brazil
would not lead to a reduction in social heterogeneity, as opposed to what had
happened in the so-called developed economies. How to explain the persistence
of underdevelopment, Brazil being one of the economies with the greatest growth
over the past half century? Approaching the problem from another point of view,
why did the above-mentioned increase in the nation's wealth only benefit a
reduced portion of the population?
My ruminations about this problem led me to formulate what I called a
theory of underdevelopment. The social configuration of the countries
designated underdeveloped derived from the particular form that the diffusion
of technological progress followed, which shaped contemporary civilization.
The nodal characteristic of the historical era initiated with the
industrial Revolution was the sustained increase in the productivity of labor,
stemming from technical advances and from the efforts toward capital
accumulation. Even though those two factors mutually conditioned each other,
their behavior followed autonomous trajectories. The mere accumulation of
capital generated increments in labor productivity by virtue of the economies
of scale. Additionally, always assuming access to new markets, the increase in
productivity--independently from the advances in production techniques--
resulted from simple reallocation of existing resources. In this situation, a
nation that caused its agricultural exports to grow by the employment of lands
and manpower previously occupied in subsistence agriculture could achieve
increments in productivity and income, even without changing its production
techniques.
No one denies that foreign trade may have, for centuries, been the creator
of wealth, independent from the introduction of new technologies. When Ricardo
formulated his theory of comparative advantage, which explains the increases in
productivity generated by international interchange, he did not need to append
the factor of technological advance.
The considerable increases in income derived from the expansion of
international commerce in the 19th century stimulated the diffusion of new
consumption patterns created by the industrial Revolution. In this way, it was
not the new industrial technologies that were universalized, but instead the
emerging consumption patterns in the countries which spearheaded the
industrialization process.
The new productive techniques also tended to become general, particularly
in sectors subsidiary to international commerce, such as that of the means of
transportation. Slower was the diffusion of new techniques concerned with
directly productive activities. This gave birth to differences in the economic
and social structures in two types of countries: those in which accumulation
and technical progress advanced in a conjoint manner and those others in which
such progress favored accumulation in non-productive endeavors and in durable
consumer goods, in general imported. One should, therefore, distinguish those
two historical processes, whose differences persist until today, independently
of the growth rates in income and in access to industrialization.
These reflections convinced me that the persistence of underdevelopment is
due to factors of a cultural nature. The adoption by the dominant classes of
the consumption patterns of nations with much higher levels of accumulation
explains the powerful concentration of income, the persistence of social
heterogeneity and the mode of insertion into international commerce.
In the final analysis, the independent variable is the current of
innovations in patterns of consumption which comes from the nations with a high
income level. It is this cultural emulation that underlies the pattern of
income concentration which is well know. To overcome the effects of this
damaging cultural imperative, it is necessary to modify the patterns of
consumption in a framework of comprehensive social policies and, at the same
time, increase savings in a substantial fashion, restricting the consumption of
the groups with highest incomes. These two lines of action are only effective
if they are following in a joint manner, and require the planning mechanisms to
be supported by an extended social consensus.
The challenge that must be confronted is that of achieving these changes
without compromising the spirit of initiative and innovation upon which the
market economy depends. With respect to the form of combining planning with
private initiative, the experience of the late-industrializing nations of
southeast Asia, who occupied the forefront in the difficult task of
reconstructing anachronistic social structures, is very instructive.
VI. THE NEW CHALLENGES
THE POINT of departure for my intellectual work was the desire to clarify the
reasons why Brazil's participation was backward in the industrialization
process occurring in the world beginning in the last quarter of the 18th
century. Upon understanding the reach of the effects of the industrial
Revolution on the international division of labor, I understood as well the
origin of the phenomenon of underdevelopment, which permitted me to establish
the conceptual framework that provided the basis for the essential part of my
theoretic work. From there emerged as much the inclusive vision, which
conceives development and underdevelopment as dimensions of a single historical
process, as the idea of dependency as the political component of that process.
It seemed to me that, to comprehend the meaning of the historical process
of formation of an economic system that tended to universalize itself and which
had as its starting point the acceleration of accumulation and technical
progress, it was necessary to examine it from two points of view. The first
alludes as much to the transformations in modes of production--that is, to the
disappearance, total or partial, of feudal, guild and artisan forms of
organizing production--as to the progressive implantation of factor markets for
production: manpower, instruments of labor and natural resources, subjects of
appropriation on the part of private agents or the public power.
The second viewpoint alludes to the activation of commercial relations
tied to the implantation of an inter-regional system for the division of labor.
In this system, the regions in which accumulation intensifies specialize in
those productive activities that, thanks to the transformation of the mode of
production, have the greatest possibilities for technological advances, in that
they become generating centers of technological progress. For its part, this
geographic specialization, by virtue of the effect of comparative advantages in
an expanding market, also brings with it increases in productivity, independent
of the advances in production techniques, always given that they proceed to a
more effective usage of the available productive resources. These increases in
productivity, supported above all by foreign commerce, serve as a transmission
belt for innovations in the material culture, which march pari passu
with intensified accumulation in the nations that constitute the vanguard of
the industrial Revolution.
Thus, in privileged regions, technical progress permeates the forms of
production without lags, at the same time that it modernizes the patterns of
consumption. Otherwise, in marginalized regions, that penetration initially
circumscribes the consumption patterns, and limit their effects to the
modernization of the lifestyles of some segments of the population. It is true
that, further along, the industrialization process tended to become universal,
through what was called import substitution. Yet belated industrialization,
ruled by the law of the market, tended to reinforce existing social structures
due to the scant absorption of manpower and to the high propensity to consume
of the modernized segments of the society.
In consequence, underdevelopment is nothing but a certain configuration of
the economic structure, derived from the way in which technical progress was
propagated on the international plane.
This unifying vision of industrial capitalism led me to conclude that the
overcoming of underdevelopment would not be the product of the simple action of
market forces, but instead would call for a political project oriented towards
the mobilization of social resources, with the object of starting the task of
reconstructing certain structures. Therefore I have endeavored, since the time
when I worked for CEPAL during the Fifties, to elaborate a technique of
economic planning that would make viable the overcoming of underdevelopment at
a minimum social cost. That technique attempts to modify the structures which
block the socioeconomic dynamic, such as landlordism, corporatism and the
inefficient channeling of savings or its wastage on abusive forms of
consumption or in its flight to the exterior. The structural modifications
would have to be treated as a liberating process for creative energies and not
as a task of social engineering as it had always previously been conceived. The
strategic objective is that of removing the obstacles to the creative action of
the people, which, in underdevelopment, is limited by institutional
anachronisms and by bonds of external dependency.
I was clearly conscious that true development is manifested in the men and
in the women and has an important political dimension. This inclusive global
vision also permitted me to see, from the beginning of the Seventies, that the
underdevelopment breach would become more traumatic to the degree in which the
crisis was aggravated that, evidently, affects the consumerist global
civilization. For a long time one was conscious that that civilization has a
predatory process as a characteristic component: it is en route to drying up
the wells of energy that nourish the lifestyle which it favors; the phenomenon
of climate change on a global scale exists, and biodiversity is ever more
impoverished.
One cannot simply ignore the indices, very clear to others, that the
civilization which emerged from the industrial Revolution advances towards
great calamities. It concentrates wealth in a minority whose lifestyle requires
growing waste of non-renewable natural resources, which is only sustainable
because it imposes great penury, including hunger, upon the majority of the
human species. A minority disposes of the natural resources of the world,
without demonstrable worry about the consequence for future generations of the
waste that it incurs.
If it is in fact true that underdevelopment itself represents an efficient
mechanism for lessening the pressure upon resources, that it keeps consumption
levels low for the great majority of the world's population, it is also so that
it permits the diffusion of consumption patterns not in correspondence with the
low income levels of that majority. One can expect a sharpening of the ever
more drastic expedients to ensure the effectiveness of this discrimination, by
the demonstration effect exercised by the new forms of consumption that radiate
from the dominant centers and by the pressure derived from the demographic
growth of the poor nations. The financial pressure exercised over the
underdeveloped nations who fell into the trap of external indebtedness presages
the forms of control that will be exercised in the future for the purpose of
containing the expansion of consumption in the underdeveloped world.
The challenge to be confronted at the dawn of the 21st century is that of
altering the course of civilization, changing its axis in a relatively short
period from logic or means, placed in the service of accumulation, to the logic
of ends, as a function of social well-being, the exercise of liberty and of
cooperation between peoples. To respond to this challenge shall be the central
task among those that demand man's attention in the unfolding of the new
century: to establish new priorities for political action as a function of a
new conception of development, which locates this within the reach of all
peoples and which permits preserving ecological equilibrium on the planet. The
frightfulness of underdevelopment should be neutralized. The main goal of
social action has to cease being the reproduction of the consumption patterns
of the opulent minorities and to orient itself toward the satisfaction of the
population's fundamental necessities and to education conceived as development
of human potentialities in the ethical, aesthetic domains and that of mutually
binding action. Human creativity, now directed in an obsessive manner towards
technical innovation in the service of economic accumulation and military
power, must reorient itself towards the search for collective well-being,
conceived as the realization of individual and community potentialities in
mutual solidarity.
An idea that now begins to stand out is that of the responsibility of the
nations which now comprise the vanguard of industrial civilization in relation
to the laggards--which is very expensive, yet not impossible, to repair--
deriving from the common patrimony of humanity, consisting of natural resources
and of the cultural inheritance. The United Nations Conference on Environment
and Development, held in Rio de Janeiro in 1992, represented the platform on
which, for the first time, the thesis was defended that there exists an
ecological bill charged to the countries that, occupying positions of
power, benefited from the startling destruction of non-renewable (or renewable
at high cost) natural resources which provides the foundation of their
populations' lifestyle and from the type of development spread throughout the
world by their enterprises. In a recent work from CEPAL, presented at the
Inter-American Conference of Tlatelolco, in Mexico, preparatory to the Rio
conference, the responsibilities of the rich nations were defined in five areas
where the environmental degradation had been particularly severe: destruction
of the ozone layer; climate change; reduction in biodiversity in the countries
of the Third World; contamination of rivers, oceans and soils; and the export
of toxic waste.
The development model that should be progressively implanted over the next
century could be designed beginning with two guiding ideas: a) to five
priority to the satisfaction of fundamental necessities to which the Universal
Declaration of Human Rights refers, in a development framework aimed at
stimulating individual initiative and solidarity, and b) to establish
international responsibility for the deterioration of the natural patrimony of
the earth.
The strategic objectives are clear:
a) to preserve the natural patrimony, whose actual degradation would
lead in an inexorable manner to the decline and collapse of civilization, and
b) to liberate creativity from the logic of means (economic accumulation
and military power) to place it at the service of the logic of ends: the full
development of human beings, conceived as a end in themselves by their being
the possessors of inalienable values.
These objectives should be considered as a project whose realization
requires, if not the cooperation of all people, at least its progressive
adoption by the majority of them.
Before the threat of destruction of the human species, arising from the
accumulation of nuclear arms, a half-century ago the embryo emerged of a
political entity that had begun establishing links of interdependence among
peoples, going beyond the traditional relations of domination and dependency.
The long and difficult apprenticeship of coexistence among people, who
continue in opposition due to economic, religious or cultural motives--or
simply due to their respective historical inheritances--was initiated in that
framework. That political entity, still in formation, is the United Nations,
an organization to which I dedicated ten years of my life and in which I
learned to view the world as a contradictory metropolis which is, at the same
time, a village under construction, for there are powerful forces that nourish
a process of rapprochement among peoples which renders solidarity imperative.
The threat of nuclear destruction, first, and the environmental disaster
that now begins to take shape impede human survival in the absence of
cooperation. The path for that cooperation includes a change of course from a
civilization dominated by the logic of means, in which accumulation is placed
over everything else.
In what most directly concerns us, that change of course requires the
abandonment of many illusions, exorcism of the fantasies of a modernity that
condemns us to sterile cultural imitation. We must recognize our historical
situation and open the way to the future beginning with understanding our
reality. The first condition to escape from underdevelopment is that of
escaping the obsession with reproducing the profile of those who proclaim
themselves developed. It is to assume our own identity. Under the existing
crisis of civilization, only confidence in ourselves will be able to restore to
us the confidence of arriving at a good place.
In the new framework now being shaped, the destiny of peoples will depend
less on utterances from the centers of political power and more on the dynamics
of civil societies. Without the State having to wither away, in accordance with
the socialist utopia of the 19th century, it shall become impossible for it to
be controlled by minorities of a totalitarian spirit if vigilance from the
international civil society which is emerging is effective. The consciousness
that it is the survival itself of the human species which is in play will
consolidate feelings of solidarity and will favor the strengthening of the
figure of citizen, dedicated to the defense of values common to all humankind
and who knows that that fight does not permit enmities, except in defense of
liberty itself.
One's eyes cannot be closed to the evidence that human survival depends
upon the course taken by a civilization which has been the first to prepare the
means for its own destruction. The possibility of confronting that challenge
demonstrates that the possibility for survival exists. Yet it is impossible to
overestimate the degree of responsibility of persons called to take certain
political decisions in the future. Only a citizenry conscious of the
universality of the values that unify free peoples can guarantee the
suitability of the political decisions.
VII. THE CULTURAL DIMENSION OF DEVELOPMENT
THE EXTENSION that today is attributed to the concept of cultural politics is
relatively recent. It originated in the conviction that increase in material
wealth does not always translate into improvement in the quality of life. I do
not refer to the fact that, in countries of high per capita income,
there continue to exist considerable population groups who do not attain
satisfaction of their basic necessities, but more to the existence of
population groups who, despite enjoying significant improvements in their
material levels of existence, continue to be prisoners of very narrow cultural
molds. Indeed, experience clearly shows that augmentation in the material
levels of life is not necessarily accompanied by improvements in the richness
of cultural life and, more likely, reproduces the social stratification
existing in the past.
The accumulation of goods usually allows increased wastage at certain
levels of consumption, without provoking true diversification in their
enjoyment and without allowing, to that extent, an effective enrichment of
life. Reflection on these themes caused me to critically examine the
development models that usually were enthusiastically recommended at the
beginning of the Fifties. All those models are based on the idea that the
logic of accumulation, insofar as it refers to the system of productive forces,
should prevail over the set of factors which comprise the social process. We
deal with the principle that, since the means at the disposition of societies
are scarce, the criterion that should govern their utilization is that of
maximum efficiency, which assumes an emphasis on the quantitative.
This reasoning implicitly carries the notion that the ends which determine
the social order behave in an autonomous manner with respect to the means, and
that this behavior reflects the options which individuals prefer as a function
of their natural necessities, their aspirations and their ideals. Almost no
attention is paid to the interrelations between means and ends, to the fact
that the control which individuals, groups or nations exercise over means can
lead to manipulation of the ends of other individuals, groups or nations.
Thus then, I conceive of ends as goals of the collectivities, as symbolic
systems that define cultures. Why should we not concern ourselves, then, with
the true meaning of things, with the restrictions that limit individuals' basic
options, with the logic of ends? If development policies have enriching the
lives of people as the objective, their point of departure would have to be
perception of the ends, of the goals that the individuals and communities
propose. Therefore, it is the cultural dimension of those policies that should
prevail over all others.
In previous pages, with another analytical focus, I offered a critical
vision of the development models that had been followed in industrial
civilization. It has been known for a long time that the productive processes
consume energy, destroy non-renewable resources, increase the entropy in the
universe. The perception of these facts made clear the importance of observing
economic systems in a global way and, especially, of examining the effects of
their integration on a world scale, which places in evidence the relations
between ends and means. Expressed more modestly, if the agriculture that is
practiced in a country destroys the soils and their restoration presupposes
growing costs, it is clear that the interests of the current generation,
measured by economic criteria, come into direct conflict with the interests of
future generations. The same can be said of all productive systems based upon
the exploitation of non-renewable resources, this being, in an especially
notorious way, the case for the nations who live off of income derived from the
exploitation of oil.
The ecological focus allowed this critical vision to be refined in making
explicit the non-market costs of productive processes.
Nevertheless, that which directly concerns me here is the cultural
dimension. The culture should be seen, simultaneously, as a process of
accumulation and as a system, that is, as something that has internal
consistency and whose totality cannot be fully explained by the meanings of
each part, thanks to the effects of synergy.
In this sense, what characterizes the societies which insert themselves in
international trade as exporters of several primary products and which,
subsequently, experienced an industrialization process based upon export
substitution, there the accumulation of cultural goods found in them is
determined in large part from the outside, as a function of the interest groups
who control the international transactions: the internal consistency of the
cultural system is, to that degree, subjected to destructive pressures. To
think, and even to dress, in a dysfunctional fashion may be lifestyles carried
to an extreme; certain forms of urbanization can lead to the destruction of an
important cultural patrimony.
The foregoing explains how material development of the economically
dependent nations has a particularly large cultural cost. Discontinuities
between the present and the past are not only the fruit of creative
breakthroughs, but more frequently reflect the predominance of the logic of
accumulation over the coherence of the cultural system
This is the reason why those societies whose flows of new cultural goods
possess great autonomy with respect to their own cultural system--the
coherence of which is constantly subjected to tests--require, more than others,
a cultural politics. This accentuates the importance of the concept of cultural
identity, that expresses the idea of keeping the past in an enriching
relationship with the present.
On making reference to cultural identity, we allude to the coherence of
the value system from a double point of view, synchronous and diachronic. This
is the area of widest application which should be embraced by the politics of
development, economic as well as social. Only a clear consciousness of identity
can provide meaning and direction to the permanent effort at renovation of the
present and construction of the future that constitutes development. Without
that, they remain subjected to instrumental logic, which brings more urgency
insofar as it tends to be governed by the technological dimension.
VIII. THE RISK OF UNGOVERNABILITY (17)
INCREASE IN DEPENDENCY
Having internal savings as the essential basis of financing, the Brazilian
economy reached, over a long period, a relatively high rate of growth. Today,
the rates of growth are low, investments are depleted and the nation finds
itself immersed in a process of considerable external indebtedness. The
macroeconomic maladjustment is evident. In accord with the data of the
Brazilian Institute of Geography and Statistics (IBGE) the annual deficit on
the current account of the balance of payments exceeded, in 1997, 30 billion
dollars, at a time when the value of the exports was approximately 50 billion
and that of imports on the order of 62 billion. Half of the imports were
financed with external debt, and the country is faced with an economic growth
rate that is not very different from the rate of increase in the population. A
large part of that indebtedness is destined to finance consumption, at the same
time that, to tranquilize the speculators, copious reserves are maintained and
elevated interest is paid. All this translates into the sterilization of
savings and into a growing risk of ungovernability for the nation. If it
depends ever more on external resources, any setback in the international
arrangement can have destabilizing consequences, with political repercussions.
Thus, potential macroeconomic instability points towards ungovernability.
WHAT SORT OF GLOBALIZATION?
All democratic governance presupposes diversity of opinions. With greater
diversity, greater firmness of leadership is required. It is true that in the
present Brazilian government there are persons seriously occupied with the
consequences of indiscriminate globalization who recommend certain negotiating
patterns. The above was evident in the recent discussion with the North
Americans regarding the project of establishing a Free Trade Area of the
Americas (ALCA).
It cannot be overlooked that the reality is an era of enormous
concentration of power, which favors the large enterprises. Modern technology
stimulates that process, but one cannot ignore that the current world
physiognomy was molded by political forces. Globalization has many obvious
negative consequences, highlighted among them the growing external
vulnerability and the worsening of social exclusion. In the United States,
social exclusion is manifested as concentration of income and wealth; in
western Europe, as widespread unemployment. The great challenge consists in
minimizing the evils resulting from the loss of control caused by
globalization, and to respond to it policies that take the specificity of the
country into consideration are required.
To do so, globalization must not force the adoption of uniform policies.
The illusion of a world that follows an arrangement of a single set of rules,
dictated by a super-IMF, exists only in the imagination of some people. The
differences between economies derive not only from economic factors, but also
from the diversity of cultural characteristics and historical particularities.
The idea that the world tends to become homogeneous stems from an uncritical
acceptance of the economistic thesis.
The debate that actually dominates the European scene centers on the ways
of avoiding that globalization aggravate social exclusion. The results of the
1997 elections in the United Kingdom and in France shows that that problem
captures the attention of the citizenry. In Brazil, it is evident that the
social question requires a politics of wide outreach, given that its
unemployment is as much the result of the economy's stagnation as of its
growth. Some projects initiated by governmental entities, such as the
restructuring of the steel industry, are big generators of layoffs. They base
themselves upon the principle that there is no goal of greater importance than
that of augmenting international competitive capacity. How can it be ignored
that also fundamental are the struggles against hunger and social exclusion?
The problem is that the groups who most benefit from globalization are those of
greatest political weight, which is what the economic logic tends to impose.
The development strategy that favors international involvement reduces the
political weight of the working class, especially of the unionized sector. It
provides a means of making the economic system flexible and of reducing
salaries. There is a generalized movement that is oriented towards increasing
microeconomic productivity, with disregard for the social effects. Now then,
what is important is not competitiveness per se. Brazil was always competitive
in some sectors. This is demonstrated by the fact that the nation had been
capable, in a relatively short period, of profoundly transforming the structure
of its exports, at the same time as establishing one of the world's principal
industrial plants. I knew a Brazil limited to exporting a few primary products
and I followed the trajectory that converted it into the important exporter of
manufactures that it now is. Nevertheless, to elevate international
competitiveness to the rank of a strategic objective that subordinates
everything else is equivalent to entering a situation of dependency reminiscent
of the pre-industrial age.
Globalization is, above all, a financial phenomenon, with significant
consequences to the systems of production. Today, the great enterprises plan
their locations with the entire planet in mind. This is evident in the
automotive industry. The final effect upon international commerce is positive,
but it is necessary to include important adjustments. In the half century that
followed the second World War, the growth of international trade was more than
double the growth in world production. This shows that, in that period, there
was an important opening of economies, despite that for a good part of it the
vision emerged from Bretton Woods predominated, according to which the balance
of payments was something too important to leave dependent on the market.
PRESSURE OF SOCIAL FORCES
There are many who ask why, as opposed to what the heralds of the liberal
doctrine foresaw, the internationalization of productive structures is not
bringing along with it a reduction in income disparities. This is because the
income distribution, on the national plane as on the international, is a
question fundamentally determined by political factors. If the world had
evolved in obedience to the canons of a pure capitalism, income would be more
concentrated than what occurs today. However, since the 19th century, the
contesting social forces were very militant in Europe and interfered with the
structures of political power, opening space for important structural reforms,
such as the reduction in the workday.
The above demonstrates that the formation of modern societies reflects not
only the appearance of new techniques, but also that it has been a process with
wide social projection. It was thanks to the pressure of social forces that
salaries rose, following improvements in productivity; that systems of social
security were established; and that policies of assistance were defined for
less developed regions. By modifying the profile of income distribution, these
new political forces changed the physiognomy of the society and, paradoxically,
engendered within it new forms of dynamism.
If the tendency toward concentration of income had been maintained, the
narrowness of the markets would have been manifested. The cyclical crises would
have been even more acute. If they were attenuated, it was because capitalism
changed due to pressure exerted by the masses. The expression of this
phenomenon in political-economic terms is found in Keynesianism, which
legitimates the growing recourse to political instruments in economic
management, opening the era of social democracy. Even in the United States,
where the development of capitalism was less restricted by institutional
factors, the State exerted itself to defend some sectors of economic activity
or certain regional interests.
It can be shown that capitalism, over the entire length of a century,
benefited ever wider social groups, not so much because income inequalities had
abated, as that it could satisfy the basic necessities of the majority of the
population. Specific historical factors influenced this evolution, giving way
to very diverse results. Upon comparing the historical genesis of the United
States with that of Brazil, one notices that in the nation to the north it was
the model of colonialization, of territorial occupation, that prepared the
society for modernization. A social model was defined there based upon the
patrimonial division of the land, while in Brazil there persisted, throughout
the process of territorial expansion, an extremely concentrated appropriation
of the land that was characteristic from the beginning. In summary, the U.S.A.
built on a social model that stimulated the diffusion of the fruits of
technical progress, which permitted and motivated direct investments in the
development of human resources and opened space for individual initiative. It
does not take much imagination to notice that this provided a special basis for
the flowering of the capitalist spirit, in the sense it was understood by Max
Weber.
The perception of the importance of investment in human resources was much
delayed. I became conscious of this fact when I presented the Triennial Plan,
at the outset of the Seventies.(18) Darcy Ribeiro,(19) who was charged with
developing that aspect, launched a bold and lucid project; it fell to me to
present it and obtain the approval of the Council of Ministers for it. With the
Darcy plan, the problem of basic education, which is the most difficult, would
have been resolved in that generation. Unfortunately, the history of the nation
took a well-known turn,(20) and priority was given to other goals.
THE LANDLESS RURAL WORKERS' MOVEMENT
The foregoing does not mean that history has no surprises reserved for us.
Let us consider that surprising phenomenon which is the migration of the
inhabitants of the cities towards the rural areas, in search of productive
employment. In modern history, population movements--with the exception of
international migrations--have always occurred in the inverse sense: from the
countryside to the cities. The population that abandons the rural zones,
displaced by technical progress, struggles determinedly to obtain employment in
the urban areas. If the urban markets become incapable of continuing to absorb
the labor force, the phenomena of structural unemployment and of social
exclusion, present in a great number of countries at different levels of
development, are produced. This problem is being approached in Europe through
changes in the structure of employment. Some nations in Asia have reverted
recently to the ancient methods of expelling the foreign population. We deal
with a problem from which few nations will be able to escape. In Brazil one
confronts an uncommon situation: there is an enormous availability of
cultivable lands; there are groups of workers who desire to return to the
countryside, from where they were expelled not long ago, and there is a
potential demand for agricultural products, within and outside the country.
In Brazil, the only new social force with great capacity for mobilization
is the Landless Rural Workers' Movement (MST) which pursues basic objectives:
the fight against the ancestral regime of land tenancy, which supported the
country under backwardness, and recommends investments in small landholdings,
with the idea of promoting the emergence of a more structured civil society in
the rural zones. Through adequate planning, it turns out to be completely
viable to accommodate a large fraction of the actual four million landless
workers in small productive units. The organization of several of their
activities in the form of cooperatives would provide them greater consistency
and would improve their negotiating power vis-à-vis the powerful commercial
organizations.
INTEGRATIVE ROLE OF THE STATE
The Brazilian State fulfilled a strategic role in the unique construction that
has given rise to Brazil, country-continent, of surprising ethnic heterogeneity
and linguistic, and even cultural, homogeneity. Brazil was born and unfolded as
a creature of the Portuguese State, not unlike the trade companies that emerged
in the century of the great transoceanic expeditions. The surprising fact that
territorial unity had been preserved during an historical phase which
stimulated the multiplication of nation-states was also the result of
deliberate political action. It was also the State that was charged with
coordinating the efforts permitting a response to the challenge of
industrialization. When the establishment of the basic elements of a modern
productive system had been achieved and the circumstances had been created to
complete national construction on the social plane, an inversion of the
historical process was produced. The shutdown of the political process, upon
destroying the bases of democratic participation, gave impetus to a process of
degradation of the State. It suffered a metamorphosis, growing in a disordered
manner and escaping the control of civil society.
The dysfunctionality of the state apparatus is easily perceived in the
financial sector. In past epochs, the public sector usually contributed to
capital formation with at least 5 percent of the GDP, although a part of these
resources arose from inflation. Today, a consensus exists that inflation should
not recur in the financing of investment. Thus, only a change in the tax base
could replace the role of inflation; this is, only the State could correct the
tendency of the middle classes toward consumerism.
The option consists of fundamentally modifying the profile of income
distribution, which becomes more difficult to the degree that globalization
advances, or achieving fiscal reform that ensures a substantial increase in the
savings rate.
The political economy of Brazil should adopt as a strategic goal the
expansion of the internal market, which means giving priority to the interests
of the population. The principal engine for the internal market is the mass of
salaries. International participation is important for many reasons: it permits
completing the availability of natural resources; it facilitates access to
vanguard technologies; it widens, within certain limits, the total available
savings, etc. Furthermore, in an economy with the characteristics of the
Brazilian, all these factors have at least a complementary role. The essential
is the growth of the internal market, upon which depends a nine-tenths portion
of the economy.
Only ignorance or bad faith would permit confounding this opinion with a
sermon in favor of closing the economy. During the long period in which Brazil
maintained a policy of defense of its internal market, the transnational
corporations made strong investments in the country, as is seen in the
establishment of a great automotive industry beginning in the decade of the
Seventies. The immediate goal was not international competitiveness, as seen in
that, in many cases, equipment may have been used which was not the most
modern. It was more to facilitate the expansion of the internal market, with a
target of much greater social coverage.
Economic growth should be seen as a means for increasing the well-being of
the population and of reducing the degree of misery inflicted on a part of it.
As these two objectives are qualitatively different, one should be very
cautious in using indices that claim to measure the average well-being of the
population. How can values of a type different from those of satisfaction or
pain be added or subtracted? Students of development must confront paradoxes of
this sort. Perhaps most appropriate would be to present two maps: that of
social well-being and that of social penury. In this latter map, hunger and
social exclusion could be reflected in an adequate fashion and the negative
effects of the globalization process would be explicitly demonstrated.
International competitiveness could be measured in terms of job losses and this
in terms of the hunger imposed on some segments of the population. If to the
social costs are added the environmental costs, one will arrive at the
conclusion that the existing data used to measure or express the behavior of
the Brazilian economy are totally inadequate. She will also conclude that such
data, by obscuring the reality, become instruments of the groups who make up
the structures of domination which sustain the strategy of globalization.
NOTES
1. An early version of this text appeared in the journal Economia Aplicada,
vol.1 no.3, July-Sept.1997, Sao Paulo.
2. Gilberto Freyre (1900-1987). Casa-Grande & Senzala: a study in the
development of Brazilian civilization, Random House, New York, 1964.
3. CEPAL - U.N. Comision Economica para America Latina y el Caribe.
4. Eugenio Gudin (1886-1986), principal exponent of the Brazilian monetarist
school. [Navarrete]
5. Raul Prebisch (1901-1986) was executive secretary of the CEPAL from 1950 to
1963. [Navarrete]
6. The second government of Getulio Vargas (1883-1954) occurred from 1951 to
1954. [Navarrete]
7. Banco Nacional de Desenvolvimento Economico e Social (BNDES). [Navarrete]
8. Juscelino Kubitschek de Oliveira (1902-1976), president of Brazil from 1956
to 1961. [Navarrete]
9. A Spanish edition exists: La formacion economica del Brasil, Fondo de
Cultura Economica, Mexico City, 1969. [Navarrete]
10. Irineu Evangelista de Sousa, baron and viscount of Maua (1813-1889),
pioneer of Brazilian industrialization, established a shipyard and a foundry
in Niteroi. [Navarrete]
11. Roberto Simonsen (1889-1948), economist, historian and businessman, author
of Historia economica do Brasil, Rio de Janeiro, 1937. [Navarrete]
12. Getulio Vargas, in 1954. [Navarrete]
13. Juscelino Kubitscheck de Oliveira. [Navarrete]
14. See "The USA's Twin Deficits", World Imbalances, WIDER report of
1989, Helsinki.
15. See Non-Alignment in the 1990's (a study prepared by the Jakarta
Conference) South Centre, Geneva, 1992.
16. The allusion is to the so-called "constitutionalist revolution" of the Sao
Paulo elite against the government of Getulio Vargas, which took place from
July 9th to October 2nd of 1932. [Navarrete]
17. A first version of this text appeared in the Jornal dos Economistas,
no.97, May 1997, Rio de Janeiro.
18. The Triennial Plan, of 1963, was elaborated during the government of Joao
Goulart. [Navarrete]
19. Darcy Ribeiro (1922-1997), distinguished anthropologist, educator,
politician, and intellectual. [Navarrete]
20. An allusion to the military coup of April 1st, 1964. [Navarrete]