Structuralist macroeconomics and new developmentalism

This paper, first, presents some basic ideas and models of a structuralist development macroeconomics that complements and actualizes the thought of structuralist development economics that was dominant between the 1940s and the 1960s including in the World Bank. The new approach focus on the relation between the exchange rate and economic growth, and develops three interrelated models: the tendency to the overvaluation of the exchange, the critique of growth with foreign savings, and a model of the Dutch disease based on the existence of two exchange rate equilibriums: the “current” and the “industrial” equilibrium. Second, it summarizes “new developmentalism” – a sum of growth policies based on these models and on the experience of fast growing Asian countries

The Two Methods of Economics

A Teoria Econômica Emprega Dois Métodos: o Método Hipotético-Dedutivo, Utilizado Principalmente Pelos Economistas Neoclássicos, e o Método Histórico-Dedutivo, Adotado Pelos Economistas Clássicos e Keynesianos. Ambos são Legítimos, Mas, Desde que a Economia é Substantiva, não uma Ciência Metodológica, Onde o Objeto é o Sistema Econômico, o Método Histórico-Dedutivo é o Mais Apropriado. o Método Hipotético-Dedutivo Permite que o Economista Desenvolva Ferramentas para Analisar o Sistema Econômico, Mas Falha ao Analisar o Sistema como um Todo. em Contrapartida, o Método Histórico-Dedutivo Parte da Observação Empírica da Realidade e da Busca por Regularidades e Tendências. é um Método Empírico, Apropriado para as Ciências Substantivas que Tratam de Sistemas Abertos, como é o Caso da Economia.

Why economics should be a modest and reasonable science

Unlike the methodological sciences such as mathematics and decision theory, which use the hypothetical-deductive method and may be fully expressed in complex mathematical models because their only truth criterion is logical consistency, the substantive sciences have as their truth criterion the correspondence to reality, adopt an empirical-deductive method, and are supposed to generalize from and often unreliable regularities and tendencies. Given this assumption, it is very difficult for economists to predict economic behavior, particularly major financial crises.

National Development Strategy: the Key Growth Institution

O Crescimento Econômico é Quase que Invariavelmente o Resultado de uma Estratégia Nacional DeDesenvolvimento. o Efetivo Desenvolvimento Econômico Ocorre Historicamente Quando a Nação é UmaNação Forte, e as Diferentes Classes Sociais são Capazes de Cooperar e Formular uma Efetiva EstratégiaPara Promover o Crescimento e Enfrentar a Competição Internacional. uma Estratégia Nacional DeDesenvolvimento é Essencialmente uma Instituição ou um Conjunto de Instituições que Estimulam AAcumulação de Capital e o Progresso Técnico. Segue uma Discussão das Principais Características de TaisEstratégias. o Artigo Finaliza com uma Análise dos Conflitos ou Tensões Envolvidos nas EstratégiasNacionais de Desenvolvimento.

From old to new developmentalism in latin America

The failure of the Washington Consensus and of macroeconomic policies based onhigh interest rates and non-competitive exchange rates to generate economic growthprompted Latin America to formulate national development strategies. Newdevelopmentalism is an alternative strategy not only to conventional orthodoxy but also toold-style Latin American national developmentalism. While old national developmentalismwas based on the tendency of the terms of trade to deteriorate and, adopting a microeconomicapproach, proposed economic planning and industrialization, the new nationaldevelopmentalismassumes that industrialization has been achieved, although in differentdegrees by each country, and argues that, in order to assure fast growth rates and catching up,the tendency that must be neutralized is that of the exchange rate to overvaluation. Contraryto the claims of conventional economics, a capable state remains the key instrument to ensureeconomic development, and industrial policy continues to be necessary; but whatdistinguishes the new approach is principally growth with domestic savings instead of withforeign savings, a macroeconomic policy based on moderate interest rates and a competitiveexchange rate instead of the high interest rates and the overvalued currencies prescribed byconventional orthodoxy.

From the national-bourgeois to the associated dependency interpretation of latin America

In the 1960s and 1970s Latin America was the setting of modernizing militarycoups and of the transition of their intellectuals from nationalism to associated dependency.In the 1950s two groups of public intellectuals, organized around ECLAC, in Santiago, Chile,and ISEB, in Rio de Janeiro, Brazil, pioneer the thinking on Latin American societies andeconomies (including Brazil’s) from a nationalist standpoint. ECLAC mainly criticized thelaw of comparative advantage and its underlying imperialist implications; ISEB focused onthe political definition of a national-developmentalist strategy. The idea of a nationalbourgeoisie was key to this interpretation of Latin America. The Cuban revolution, theeconomic crisis of the 1960s, and the military coups in the South Cone, however, made roomfor criticism of these ideas from a new interpretation – the dependency one. By fully rejectingpossibility of a national bourgeoisie, two versions of the dependency interpretation (the“associated” and the “over-exploitation” interpretations) also rejected the possibility of anational-development strategy. Only a third one, the “national-dependent” interpretation,continued to affirm the need for and possibility of a national bourgeoisie and a nationalstrategy. Yet, it was the associated-dependency interpretation that was dominant in LatinAmerica in the 1970s and 1980s.

The Global Financial Crisis And After: A New Capitalism?

The 2008 global financial crisis was the consequence of the process offinancialization, or the creation of massive fictitious financial wealth, that began in the1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based on selfregulatedand efficient markets. Although capitalism is intrinsically unstable, the lessonsfrom the stock-market crash of 1929 and the Great Depression of the 1930s weretransformed into theories and institutions or regulations that led to the “30 glorious years ofcapitalism” (1948–77) and that could have avoided a financial crisis as profound as thepresent one. It did not because a coalition of rentiers and “financists” achieved hegemonyand, while deregulating the existing financial operations, refused to regulate the financialinnovations that made these markets even more risky. Neoclassical economics played therole of a meta-ideology as it legitimized, mathematically and “scientifically”, neoliberalideology and deregulation. From this crisis a new capitalism will emerge, though itscharacter is difficult to predict. It will not be financialized but the tendencies present in the30 glorious years toward global and knowledge-based capitalism, where professionals willhave more say than rentier capitalists, as well as the tendency to improve democracy bymaking it more social and participative, will be resumed.