Maria da Conceição de Almeida Tavares (1930-2024) Matías Vernengo and Esteban Pérez Caldentey

Maria da Conceição de Almeida Tavares was born in Portugal on April 24, 1930, and passed away in Brazil on June 9, 2024. She was one of the key heterodox economists of Brazil and Latin America, and was influential both in academia, and economic policy, being central to the debates about economic policy, from a left Structuralist perspective, starting in the 1960s and almost to the time of her demise. She was a fierce opponent of the Brazilian civic-military dictatorship (1964-1985), an activist for redemocratization as well as a key participant and defender of the heterodox stabilization plans of the 1980s, and a critic of the neoliberal turn, in Brazil and the region at large, in the 1990s. She was a key advisor to Luis Inácio Lula da Silva, and, in many ways, she was the intellectual godmother of the progressive, redistributive economic policies of the Workers’ Party (PT, in Portuguese), which were part of the so-called Pink Wave in Latin America.

Conceição Tavares studied mathematics at the University of Lisbon, where she graduated in 1953. She emigrated to Brazil the following year, and found work as a statistician at the National Economic Development Bank (BNDE, for the Portuguese acronym, later BNDES with the addition of Social), where she was part of a team analyzing income inequality. She was shocked by the extreme inequality of Brazilian society, and that experience drove her to study economics, which she did at the then called University of Brazil (now Federal University of Rio de Janeiro, UFRJ, in the Portuguese acronym), where she studied under two prominent liberal economists, Octavio Gouvêia de Bulhões and Roberto Campos (grandfather of the current president of the Brazilian Central Bank), who became finance and planning ministers, respectively, during the dictatorship. After that she studied, in a course organized jointly by BNDE and the Economic Commission for Latin America (ECLA, then ECLAC with the addition of the Caribbean), under Aníbal Pinto, one of the key Structuralist authors at the Economic Commission for Latin America, who she considered her main mentor and intellectual influence, together with Celso Furtado, another economist from ECLA. Right after that, in the early 1960s, she started working at the Brazilian office of ECLA (and in the Center of Economic Development (ECLA/BNDES) during 1960-1967. In the 1970s she worked at the ECLA headquarters through the Latin American and Caribbean Institute for Social and Economic Planning (ILPES). During her career she shaped the direction of academic institutions such as the State University of Campina and the State University if Rio de Janeiro. She also became elected to Congress in the 1990s as a member of the Workers Party.

Her first major and one of her most influential publications was on the limits of the import substitution development strategy (ISI), which, by the early 1960s, seemed to had run its course. For Tavares, ISI was stimulated by external strangulation which eventually, as ISI advanced, became more of a barrier than an inducement to industrial development as the import composition became more capital intensive. Later on, Tavares argued in favor of a self-sustaining model of growth driven by the autonomous demand for capital goods.

Critics of the inefficiencies of the system argued for a return to the old liberal policies based on comparative advantage. Tavares, as many other researchers at the time, noted the tendency to stagnation, once the easy phase of import substitution was completed. Many on the left, including within the government of João Goulart, in which Furtado was the planning minister, believed that structural reforms, including an agrarian reform, redistributive policies, in particular higher taxes on corporations, and more so transnational ones, were needed if growth was to be resumed. This was a period of excitement about the possibilities of more radical redistributive policies in the region, in the aftermath of the Cuban Revolution.

The view that stagnation resulted from the patterns of consumption of the elites, that imitated the trends in advanced economies, and reduced the savings available for capital accumulation, was relatively popular among ECLA economists, including Furtado, as a well as Dependency theory authors. However, by the late 1960s, the Brazilian economy was growing at a fast pace, even without the structural reforms, and, in fact, with a significant worsening of income distribution, since wage increases were repressed, and kept below inflation. This period was referred to as the Brazilian economic miracle. Tavares was critical of the policies of the dictatorship, but noted that Furtado, and to some extent herself, have been wrong in assuming that the economy would stagnate, and together with José Serra, an exiled economist, and later political opponent, she wrote the classic response to the stagnationist thesis. In their view, there was not stagnation as Brazil had always been a dynamic economy. The analysis linked economic performance to income distribution which gave way to structural heterogeneity. The economy was able to grow, in part, because the worsening of income distribution, in particular with the increase of wages of the managerial and professional middle groups of society, had led to an expansion in consumption, that together with higher public investment explained the economic boom, in a period with no significant external constraint. The fears of the negative effects of elite consumption had been exaggerated, and demand-led growth was possible, even in the periphery. That was a new message, with important policy, but also theoretical implications.

By the 1970s, after being jailed, and tortured, by the dictatorship, and freed with the intervention of some close friends, including Mario Henrique Simonsen, the conservative finance minister of the dictatorship, she helped create two graduate programs at her alma matter UFRJ, and the University of Campinas (Unicamp), and an association of graduate programs. These academic projects, jointly pursued with her two colleagues from her undergraduate times, Antônio Barros de Castro and Carlos Lessa, were fundamental to promote the development of critical, heterodox ideas, not only in Brazil, but in many Latin American countries. She wrote two dissertations that dealt with the Brazilian economy, but that incorporated the works of Michal Kalecki and Joseph Steindl, and that emphasized the role of demand in the process of accumulation. These ideas would be developed, expanded and modified, by Mario Luiz Possas and Franklin Serrano, and would become central to heterodox views on demand-led growth.

As the inflationary crisis became more acute in the 1980s, she wrote, with a colleague from Unicamp, Luiz Gonzaga de Mello Belluzzo, a paper in which she emphasized that the Volcker shock and the subsequent debt crisis were at the heart of the exchange-rate/real-wage spiral that explained the inflationary acceleration. She became a national figure in her defense of the Cruzado Plan, that tried to contain inflation with a program to freeze prices, and eventually failed because the lack of external reserves and the depreciation of the domestic currency put pressure on prices, while controls failed and led to chronic shortages of goods and services. She also stood by Ulysses Guimarães, the leader of the Party of the Brazilian Democratic Movement (PMDB, in Portuguese), and the main political figure in the fight against dictatorship, that lost the first democratic election in 1989.

In the 1990s, as many of her colleagues, that had abandoned PMDB and entered the Brazilian Social Democracy Party (PSDB, in Portuguese), moved to the right, accepting the main precepts of the Washington Consensus, prominent among them, Fernando Henrique Cardoso, she remained grounded on Structuralist ideas, and got closer to Lula and the Workers’ Party, running and winning a seat in the national congress. She was critical of the Real Plan, which was successful in stabilizing the economy once the flows of capital of the Brady Plan allowed for a stable nominal exchange rate, but that promoted the deindustrialization of the Brazilian economy that she had predicted, leading eventually to a crisis, and the election of Lula to the presidency in his third attempt.

Lula’s first appearance as president elect was from the window of Celso Furtado’s apartment, with him and Conceição, which was to convey explicitly the new direction of the Brazilian economy (see photo). The period from 2003 up to 2015, going beyond the Global Financial Crisis of 2008-9, was one of higher growth and lower inequality. Hope had defeated fear, and a more socially just society seemed possible. However, the rise of China, and the increasing specialization on primary commodity exports made the process of reindustrialization difficult. Criticism from the left and an increasingly militant extreme right led to a retrenchment of the progressive policies, worsening of the economic indicators, and a parliamentary-mediatic coup against Dilma Rousseff, the first female president of Brazil, that had been Conceição’s student at Unicamp, in 2016.

The geopolitical limitations of any national process of economic development had been a constant preoccupation of Conceição Tavares’ work. Arguably, her main contribution was associated to the notion that the end of Bretton Woods had presaged not the end of American hegemony, but, on the contrary, its apogee, as she wrote in 1985, and the idea that economic development is ultimately a political phenomenon. Dollar diplomacy implied that the United States could dictate who could become developed and what countries could be constrained by limited access to the key currency. The fall of the Berlin Wall and the demise of the Soviet Union proved her right. In a series of papers and books, organized often with José Luis Fiori, in the late 1990s and early 2000s, she discussed the geopolitical underpinnings of economic development. In particular, she suggested that dependency was fundamentally a financial phenomenon deriving from the lack of the key currency, and not, as Raúl Prebisch, ECLAC authors, and old dependency theory authors had suggested, a technological phenomenon.

Conceição was not always right in her predictions, and she was aware of that. She did not have what she referred to as the patience of conceptual analysis, even if she was technically skilled. She was intuitive and she could be explosive. But she did have an incredible and rare combination of talents. She was, as in the proverbial master-economist of Maynard Keynes, “a mathematician, historian, statesman, philosopher — in some degree.” And she did study “the present in light of the past for the purposes of the future.” She did it with a contagious passion for knowledge, and with the preoccupation with building what she referred to, in the famous phrase by Darcy Ribeiro, as a multi-racial democracy in the tropics. Brazil is a better place because of her ideas and her legacy.