Vol. 7 No. 1 (1987): Jan-Mar / 1987

Vol. 7 No. 1 (1987)

Jan-Mar / 1987
Published January 1, 1987


Inequality and capital accumulation in peripherical capitalism
Raúl Prebisch
Brazilian Journal of Political Economy

The paper argues that in developing countries the changing political and social
relations so as the technical progress create a systematic tendency for a dynamic disequilibrium
between consumption and investment. Under these conditions, continued growth
requires a macroeconomic policy directed to increase the rate of accumulation through a reduction
in the aggregate consumption of both capitalist and working classes. Politically this
kind of regulatory policy should be seen as an opportunity for the working class to increase
its share in the wealth ownership.

JEL Classification: E21; E25; O43.

Capital formation and transfer of funds abroad
Paulo Nogueira Batista Jr.
Brazilian Journal of Political Economy

This paper analyses the implication of the increasing transfer of resources to
external sector on the capacity of investment of the Brazilian economy. After 1983 Brazilian
economy is transferring an increasing volume of resources which attained more than 5%
of the GDP in the last two years, contrasting with the decade of 70 when the absorption of
external saving attained about 2% of the GCP. As a consequence of this external constraint,
the rate of investment has dropped from 26% of GDP in the 70’s to an estimated level of
16% in the last years. The paper, using a standard macroeconomic model, establishes the
relationship between alternatives rates of transfer of resources, rate of domestic savings, and
capital-output ratio with the target rate of growth of the Brazilian economy.

JEL Classification: F32; F37; F38.

The resumption of inflation in Brazil: 1974-1986
Werner Baer
Brazilian Journal of Political Economy

From 1974-1985 the Brazilian inflation rate showed a tendency to grow as
opposed to the declining tendency observed in the 1964-1973 period. The causes of this resurgence
of inflation, its impact, and the policies used to control it are analysed in this work,
using two approaches which result from two different schools of thought: the “classical
orthodox tradition” which sees inflation as being caused by excessive increases in the money
supply; and the “neo-structuralist school for which inflation is considered basically the result
from the monopoly power of corporations, trade unions, and the state, culminating in the
concepts of inertial inflation. The failure of orthodox school in both its diagnosis and its inflationary
control policies led to author to conclude, through an analysis of the institutional
structure of Brazil, and the conduct of its components that the neo-structuralist explanation
come closer to the root of the problem, advocating the need to adopt “heterodox” policies. The author also presents a preliminary evaluation of the “Cruzado Plan” – the program of
economic stabilization – inspired by neo-structuralist ideas, which was implemented in Brazil
on February 28, 1986.

JEL Classification: E31.

Industrial mutations and social constraints in Brazil: Two examples of the diversity of attempts to adapt to the crisis
Gerald Assouline
Brazilian Journal of Political Economy

Relying on the analysis of the accumulation trends in the car and textile industries,
this paper pretends to determine the multiform process of adaptation and reaction to
the crisis in a semi-industrialized economy, as the Brazilian one, strongly reached by recession.
In that sense, relations between the process of capital accumulation, technological changes, and
new forms of workforce mobilization are analysed.

JEL Classification: L62; L67; E32.

Against parsimony – Three easy ways to complicate some categories of the economic discourse
Alberto O. Hirschman
Brazilian Journal of Political Economy

The aim of Hirschman’s essay is to confront the tendency of economic theory to economic arguments, postulates and assumptions. According to him, various realms of economic enquiry calls for complication and he tries to answer for this necessity in three different ways, all of them challenging the assumption of a self interested and rational individual who chooses freely between alternative courses of action after calculating their costs and benefits. First, he proposes a distinction within the concept of preferences between first and second order ones and argues that this distinction is important for the analysis of its pattern of change. Only assuming that human beings have the ability to formulate metapreferences (or second order preferences) it would be possible to illuminate the varied nature of this pattern and differentiate, for example, between a change that is purely impulsive and publicity oriented and other which is the result of a process of acquisition of new social or personal values. Second, he proposes distinction within the concept of human activities and explores the idea of the existence of some of them that are noninstrumental, that is, which ends are not predictable and not related with preliminaries efforts. These noninstrumental activities, in spite of its fre-quently painful character have the quality of being striving and attaining. The point Hirschman makes is that economics is growing so fast its ambition that it becomes of increasing importance to incorporate into its scope this other kind of human action, extremely useful, for instance, in stud-ying public policies or in studying the oscillations between individualistic and private oriented actions and actions in pursuit of public happiness. Third, Hirschman tries to complicate economics by reintroducing into its realm the idea that economic system needs, to function, as well as of others factors of production, of a kind of moral input. In sum, to complicate the economic discourse means to accept and take into account the idea that human action can be moral, full of values and sometimes noninstrumental.

JEL Classification: B41; B25.


Economy and politics in the thought of Albert O. Hirschman: an analysis of three texts
Maria Valéria Junho Pena
Brazilian Journal of Political Economy

This paper aims to study the relationship between economic and political areas
in three of Albert Hirschman’s works, namely Exit, Voice and Loyalty, The Passions and the
Interests, and Shifting involvements, and the richness of Hirschman’s thinking going beyond
the pure economic thinking.

JEL Classification: B25; B31; Y30.

De docta ignorantia
Wandyr Hagge
Brazilian Journal of Political Economy

This paper deals with the formation of the mainstream economic methodology
and the challenges inherent to it, particularly in terms of time and uncertainty.

JEL Classification: B41; B10.

Notes and Comments

Raúl Prebisch (1901-1986)
Aníbal Pinto
Brazilian Journal of Political Economy

Obituary to Raúl Prebisch


JEL Classification: B32.

Brazilian industry: prospects for accelerated growth
Wilson Suzigan
Brazilian Journal of Political Economy

the prospects of double-digit growth for the industrial sector prompts the questioning
of the sustainability of such growth in face of many challenges to it, such as low
installed capacity, fluctuations in recent growth, inflation, among others. This paper assesses
the limitations of growth for the Brazilian industry, particularly in light of the Cruzado Plan.

JEL Classification: L11; O40.

Price indices and reserve requirements: a discussion of the fundamentals of the IBGE decision
Edmar Lisboa Bacha
Brazilian Journal of Political Economy

This piece discusses the recent changes in IPCA and INPC methodologies by
IBGE, in light of Decree-Law 2286.

JEL Classification: E31.