II. BOIANOVSKY ON FURTADO: TOPICS

Boianovsky was not alien to Furtado’s activities in Brazil or concerning Brazilian issues. The momentous episode of the building of an institution devoted to the development of Northeast Brazil (SUDENE), a region trapped by poverty and without modern industries, is very typical of Boianovsky’s interest. SUDENE was an experience in regional planning and industrialization directed by Furtado from 1959 to 1964. The literature on SUDENE’s first years emphasizes the difficulties in conciliating the political ebullience in the region with the demands of traditional oligarchies, not to mention the attention of the United States government, concerned about the possibility of Cuban-like revolutions in Latin America. Indeed, the United States government proposed policies to Northeast Brazil and sent “technical” missions, one of them involving Douglass North. Furtado himself was received by President John F. Kennedy at a hearing in Washington. Boianovsky researched and wrote an insightful article on North’s visit to Furtado (Boianovsky and Monasterio Reference Boianovsky and Monasterio2018). Additionally, North’s mission paved the way for an engaging approach to “Economists and Their Travels” (Boianovsky Reference Boianovsky2017b). Indeed, Boianovsky had already written an article on “Furtado, North and the New Economic History” (Boianovsky Reference Boianovsky2009).

In what concerns the Brazilian economic controversies of the 1950s, Boianovsky concentrated on the debates between “developmentalists,” including Furtado, and conservatives or supposed liberals. Most of the debates concerned the routes to development, or policies envisaging industrialization. Eugênio Gudin, a well-known liberal economist, invited important economists, such as Jacob Viner and Ragnar Nurkse, to deliver conferences and even to teach courses in a major institution, Fundação Getúlio Vargas (FGV), and to publish in the main Brazilian economics journal, Revista Brasileira de Economia (RBE).Footnote ³ Furtado also published in RBE and commented on Nurkse’s conferences that were first published in RBE (Nurkse Reference Nurkse1951) and later collected in Problems of Capital Formation in Underdeveloped Countries (Nurkse Reference Nurkse1953b). Nurkse and Furtado were involved in debates, some of which were partially transcribed in articles published in RBE (Nurkse Reference Nurkse1953a).

Yet, Furtado and a small group of critical or “developmentalist” economists founded a debate club and a review to counterpose Gudin’s and FGV’s dominant role in the Brazilian intellectual scene. Boianovsky describes Furtado’s efforts in engaging economists in debates over development in an article (Andrada, Boianovsky, and Cabello Reference Andrada, Boianovsky and Cabello2018) that also illustrates the international connections of the Brazilian intellectuals and enumerates the array of economists who visited Rio de Janeiro. These intellectual excursions were most of all a response to the theses proposed from 1949 and throughout the 1950s by the ECLA economists, especially Raúl Prebisch. To counterpose Prebisch’s thesis on external trade and the role of industrialization in Latin America was one of the main goals of Gudin and of the economists he evoked, especially Viner.

To situate the context of the debates, we must consider not only ECLA’s activities—research, consultancies to governments, courses—and the role of Furtado in its staff but also the fact that postwar Brazil underwent several waves of inflationary pressure. The postwar inflation erupted in debates on stabilization in Latin America, confronting “monetarists” and “structuralists.” In Brazil, Gudin, Roberto Campos, and Otávio de Bulhões aligned on one side, whereas Furtado aligned on the other side. Boianovsky (Reference Boianovsky2012) reports this confrontation, stressing that Furtado’s position on “structural inflation” differed in many aspects from the one held by his ECLA colleagues, Juan Noyola and Osvaldo Sunkel.

Boianovsky’s Reference Boianovsky2012 article also reports a highly successful conference held in January 1963, drawing to Rio de Janeiro names such as W. Arthur Lewis, Dudley Seers, Arnold Harberger, Osvaldo Sunkel, Mario Henrique Simonsen, Albert Hirschman, Nicholas Kaldor, Friedrich Lutz, Roy Harrod, Roberto Campos, and Celso Furtado. Brazil was at that time living the experience of the Plano Trienal (Three-Year Plan) elaborated by Furtado, aimed at combating inflation while preserving economic growth.Footnote ⁴ Roberto Campos and Mario Henrique Simonsen would soon be engaged, after the 1964 military coup, in the anti-inflationary alternative applied by the military government. Furtado’s position on inflation and anti-inflationary policies evolved from 1952, adapting to changing circumstances and to the different inflationary settings of Argentina, Chile, and Brazil, the most evoked national case studies on inflation and anti-inflationary policies.

If the connections between Furtado’s approach to economic phenomena and the urgencies posed by the economic reality—inflation was one of these pressing phenomena—remind us of the practical or contingent instances of ECLA’s policies and of ECLA’s contributions to development and underdevelopment, we cannot forget the historical character of Furtado’s perspectives. Furtado’s commitment to history was a well-known facet of his approach to economic development, and the historical perspective injected into ECLA’s structuralism is attributed to him.Footnote ⁵ We will later return to Furtado’s angle on history, but for now it is important to note that in the 1950s, while he was arguing against Gudin and his team of invited economists, and heading an ECLA-BNDE “mixed group” in Rio de Janeiro,Footnote ⁶ Furtado was at the same time involved in reworking his permanent concern with history. Precisely, in 1954, Furtado published A Economia Brasileira (Furtado Reference Furtado1954), a six-chapter book composed of general essays on economic development and a systematic approach to the Brazilian economic history. This work, which would be the mold for the celebrated Formação Econômica do Brasil (1959),Footnote ⁷ is possibly the best testimony of Furtado’s overall concern with history. Because of the immediate and subsequent repercussions of Formação Econômica do Brasil , Furtado’s Reference Furtado1954 book has been underexamined by most commentators but not by Boianovsky, who on many occasions called attention to the importance of this work.Footnote ⁸

History, economic planning and underdevelopment, ECLA’s perspectives and consultancy to several Latin American countries, industrialization and external trade, regional policies, and stabilization policies were all part of Furtado’s actions and intellectual horizons from 1948 to 1964, or maybe until 1985. This array of interests and perspectives is well captured by Boianovsky’s works.

III. DEVELOPMENT ECONOMICS AND FURTADO

In 2010, Boianovsky published a deep and, one can say, complete approach to the relation between Furtado and the theory of economic development: “A View from the Tropics: Celso Furtado and the Theory of Economic Development in the 1950s” (Boianovsky Reference Boianovsky2010; Boianovsky Reference Boianovsky2017a). A brief list of its sections, along with a partial enumeration of the international economists mentioned in the article, may help to clarify the breadth of Furtado’s accomplishments in development economics.

Boianovsky (Reference Boianovsky2010) includes in his list of topics, first, the historical approach to economic development, naming as contributors, among others, Alexander Gerschenkron, Hirschman, Simon Kuznets, and Walt Rostow. Gerschenkron and Rostow were mentioned and contrasted by Furtado and other Latin American social scientists, the former because he envisaged the advantages of backwardness in achieving progress and industrialization, the latter by setting out a phase-by-phase process of development that was considered an ahistorical utopia. Gerschenkron’s perspective on backwardness in his classic essays (Gerschenkron Reference Gerschenkron1962) differed from what the Latin American authors characterized as underdevelopment. Rostow’s The Stages of Economic Growth (Rostow Reference Rostow1960) was clearly opposed in Latin America.

Another topic, trade and growth, confronts ECLA’s approach to external trade (and the Prebisch–Singer thesis on the terms of trade) with Viner and Gottfried Haberler. Boianovsky remarks that, concerning terms of trade, Furtado stressed cyclical rather than continuous or secular trends. On capital accumulation and technical change, Boianovsky emphasizes the widespread application of the Harrod–Domar model, clearly perceptible in ECLA’s studies of specific countries. Nicholas Kaldor, a notorious influence upon ECLA economists, is also mentioned.

“Dualism” is another important topic. According to Furtado, in underdeveloped economies, technical progress doesn’t spread into all sectors. There is a modern sector, open to updated technology, and a backward sector, impervious to modernization. Of course, underemployment and unlimited supplies of labor are the backstage of Latin American structuralism, and in this respect, the similarities and contrasts with the Arthur Lewis model are unavoidable. Lewis’s contributions would be thoroughly examined by Boianovsky in a further article (Boianovsky Reference Boianovsky2019), but it is important to note that in “A View from the Tropics,” Boianovsky explains that the existence and implications of an unlimited supply of labor had been well explored, especially by Furtado and Noyola, in ECLA’s reports on specific Latin American countries. Additionally, Furtado inserted the unlimited supply of labor as a central element of his historical models, as we will see.

Other articles on Furtado and the structuralist approach highlight central features of Furtado (and ECLA’s) theoretical nucleus. “The Origins and Development of the Latin American Structuralist Approach to the Balance of Payments, 1944–1964,” by Boianovsky and Ricardo Solís (Boianovsky and Solís Reference Boianovsky and Solís2014), delves into external disequilibrium, a central aspect of Prebisch’s and ECLA’s approach to the Latin American economies. Beginning with Prebisch’s first incursions into external disequilibrium in 1944, the article situates Furtado’s and Noyola’s reports on the Mexican economy in 1957, and Furtado’s study on the original position of the Venezuelan economy, which experienced an overappreciation of its exchange rate provoked by the oil exports.

Boianovsky and Solís go further and examine two bottlenecks that were active in blocking the growth of the Latin American economies: domestic saving and the cyclical shortage of foreign exchange. External disequilibrium comes to the fore as an essential part of the cyclical mechanism present in almost all Latin American economies. Boianovsky and Solís examine some aspects of the credit system in Latin America and go deep into the analysis of external disequilibrium, following the contributions of Noyola, Felipe Pazos, and Prebisch himself. Nurkse’s and Haberler’s approaches to external trade and supply and demand, as well as Furtado’s remarks on Nurkse, are also recalled, and the article presents details of Mexico’s external disequilibrium.

A second and very suggestive article on development economics is Michele Alacevich and Mauro Boianovsky’s “Writing the History of Development Economics” (Alacevich and Boianovsky Reference Alacevich and Boianovsky2018). Even though it is not specifically an approach to Furtado’s contributions, this article resets the interfaces between Latin American structuralism and the history of economics. Departing from Dudley Seers’s (Seers Reference Seers1963) contrast between development economics and conventional economics, Alacevich and Boianovsky review a long list of contributors to development economics, contrasting them with neoclassicals and checking the adherence to the major features of structuralism. Additionally, and in line with the article’s title, Alacevich and Boianovsky design a history of development economics, going back to 1960 and evoking earlier insights and contributions.

As already mentioned, what distinguishes Boianovsky’s writings is the attention to the intercrossing between the main contributions of Furtado (and other economists) and the theoretical horizons of post-1945 economics. As seen, the Latin American economists, ECLA’s staff included, were connected to the novelties of the science, especially in what concerns the emergence of development economics. However, as frequently mentioned in the literature on ECLA’s contributions, Furtado’s special touch seems to have been the historical approach of his research. Let’s review some aspects of this approach.

IV. FURTADO AND HISTORY

Furtado graduated in law in Rio de Janeiro in 1944, and received his doctoral degree from Sorbonne in 1948. His thesis, developed under the supervision of Maurice Byé, was about the Brazilian colonial economy.Footnote ⁹ As already mentioned, in 1954, Furtado published A Economia Brasileira (Furtado Reference Furtado1954), a sort of preliminary version of his major Brazilian economic history book, Formação Econômica do Brasil , published in 1959. Indeed, in 1950 and already working at ECLA, Furtado had published “Características Gerais da Economia Brasileira” (General characteristics of the Brazilian economy), an article that anticipated some historical traces of his 1954 and 1959 books.Footnote ¹⁰ In its turn, Formação Econômica da América Latina (The economic formation of Latin America), published in 1969, represents a sort of extension of Formação Econômica do Brasil ’s methodology into Latin America.Footnote ¹¹

Furtado’s approach is considered “historical” by the commentators but not only because of his authorship of books and articles in the field of economic history. The term comes mostly from Furtado’s general approach to economic reality, which always overflows in historical perception. Underdevelopment, for instance, is not seen as a phase in the economic trajectory of a country but as a status related to the position of some countries in the world economy, most of all after the 1929 crisis. In the same thread, external constraints have one meaning in a nation’s agricultural export phase, and another under import-substitution industrialization. Overpopulation, or an unlimited supply of labor, is the result of a historical and populational trajectory that began in the colonial phase and crossed the centuries under different traces. That is, a historical perspective penetrates Furtado’s categories and even the choice of methodological instruments in economic analysis.

Boianovsky was very attentive to the historical character of Furtado’s method, and aware of the “methodological innovation” represented by “the use of historical investigation to identify factors that are specific to each structure through time” (Boianovsky Reference Boianovsky, Durlauf and Blime2008, p. 517). However, as seen above, Boianovsky situates Furtado in the turmoil of the postwar theory of economic development, attentive to the many dimensions of that period’s economic theory. Furtado and his ECLA partners were quite aware of the developments and controversies of the post-1945 economic theory.

The interaction with updated aspects of post-1945 economics, however, does not imply that the theoretical underpinning of Furtado’s historical modeling, typical of his economic history writings, was built upon sophisticated theoretical economic instruments. In Formação Econômica do Brasil , for instance, Furtado recurred to a simple income model, to the Keynesian multiplier, to the discrimination of monetary and non-monetary transactions, to the impact of public expenditure and credit over a retracted economy.Footnote ¹² Additionally, following ECLA’s tradition, Furtado points to the exchange rate dilemmas in the face of export contractions and scarcity of foreign exchange under different exchange regimes.

In Furtado (Reference Furtado1966), Subdesenvolvimento e Estagnação na América Latina (Underdevelopment and stagnation in Latin America), Furtado provided an alternative to the “stagnation perspective” that had penetrated Latin American economic thinking in the early 1960s.Footnote ¹³ In his version of the stagnation model, Furtado added the accelerator to the multiplier, resorting to a Harrod–Domar solution to explain the fall in the rate of growth of Latin American economies. More than the stagnation hypothesis, or the accuracy (or inaccuracy) of Furtado’s analytical device for explaining the fall in the rate of growth in Latin America, in Subdesenvolvimento e Estagnação there is a rephrasing of the traditional model of historical evolution, consolidated between 1954 and 1959, involving a creative insertion of the accelerator in Furtado’s modeling. Besides other achievements, such rephrasing introduced a fresh and alternative view of the dynamics of coffee crops and the industry in Brazil. It can be argued that, once more, Furtado applies a very simple analytical instrument, in a creative way, to describe and explain some aspects of Brazilian historical evolution.

In short, Furtado’s historical modeling relied on economic reasoning but was built upon quite simple—and frequently changing—economic science instruments and categories. I think Boianovsky’s approaches to “Furtado on history” did not capture the simplicity of Furtado’s instruments or, at least, did not contrast the sophistication of ECLA’s and Furtado’s economic analysis in general with the simple analytical instruments of his historical models. On the other hand, Boianovsky’s approaches were immersed in a very sophisticated review of the historical-structural method usually associated with economists and social scientists who orbited around ECLA, including Furtado.Footnote ¹⁴

“Between Lévi-Strauss and Braudel: Furtado and the Historical-Structural Method in Latin American Political Economy” (Boianovsky Reference Boianovsky2015) is a very extensive and authoritative review of the emergence of structuralism and its connections with the Latin American historical-structural method. After a general Introduction, Boianovsky debates the meaning of structuralism in social sciences, the controversies between l’École des Annales and historians, convergences between Furtado and French historians (Henri Pyrenne and Fernand Braudel) and economists (François Perroux), synchronic and diachronic approaches (Ferdinand de Saussure), and Claude Lévi-Strauss, among other topics.Footnote ¹⁵ The article proceeds into Furtado and dependency theory in the late 1960s and 1970s, to finally present a broad comment on “history and theory,” which includes insightful remarks by many commentators on Furtado’s historical method.

I think that Boianovsky’s complex revision of the historical-structural method is very representative of his approach to Furtado, to the Latin American postwar economic debates, and to the several interactions between economic theory and policy in Latin America. Boianovsky’s writings on Furtado and structuralism abound in scholarship—a typical feature of his contributions to the history of economic thought—and offer a vivid account of the political reality of Brazil and Latin America, embracing the perspectives of political scientists, historians, specialists in international relations, and economists. Being attentive to the biographic aspects of his personage, Boianovsky and his coauthors also checked alternative sources and rescued from oblivion many aspects of the vivid 1950s and 1960s economic policy debates. Most of all, Boianovsky situates Furtado’s life and contributions in an international setting, always keeping in view the international literature—not a usual perspective in the ample literature on Furtado and development economics published in Brazil.