Opinion – Samuel Pessôa: Edmar Bacha, the passage of time

Edmar Bacha is one of the main Brazilian economists, one of the first with a doctorate in the US, professor, researcher with wide publication in Brazil and abroad, in addition to economic policy maker, writer and member of the Brazilian Academy of Letters. He recently published “In the Country of Contrasts – Memories of Childhood to the Real Plan”, by História Real, published by the publisher Intrínseca.

This is not a detailed memory of a lifetime. The book is short and presents the moments that, in the eyes of Bacha today, at 79, are the most striking.

I read it with great pleasure. I laughed a lot. There’s everything, but mainly the exhibition of important moments in our history by whoever was there doing it.

Three are the most striking excerpts for me. First, the letters he wrote to his mother, Maria de Jesus Lisboa Bacha, when he was studying for a master’s and doctoral degree at Yale. Second, your ticket
as president of IBGE in the Sarney government and the lessons learned from the Cruzado Plan.

And thirdly, the description of his intellectual evolution. There is also his participation in Plano Real and a final chapter with a summarized presentation of his scientific contribution.

In Yale’s letters, young Bacha appears as an excellent observer. Note, in the early 1960s, that racism there is not that different from here.

It doesn’t enter into the sham, so common at the time, that family relationships there are colder. And, disagreeing with master Furtado, who spent a period at Yale, he already saw in 1965 a recovery
cyclical of the Brazilian economy.

In May 1985, he assumed the presidency of IBGE and participated in the Cruzado Plan. His time at IBGE was marked by enormous political pressure to fill positions, especially IBGE delegates in the states.

To meet the demands, if necessary, the rule was created that only career technicians would be appointed. The impression we are left with is that, by leaps and bounds, from the 1980s until today, the professionalization of the State has increased.

As for the Cruzado Plan, Bacha’s best side appears. The art of passing time. To be aware and open. Bacha learns from life. It’s not common. Without learning, we would not have built the Plano Real.

There was a lot of learning from Bacha. First, “you cannot mix a stabilization plan with income distribution.” The stabilization itself, with the end of the inflation tax, is the income gain
of the worker. Second, that, despite inertia being the biggest problem in stabilizing high-digit inflation, one cannot neglect macroeconomic, fiscal and monetary policy. “I started to have
a clear awareness of the limits of government intervention in the economy,” he wrote.

The passage in government also made Bacha review developmentalism. “I found that from it came the evils of statism, protectionism and inflationism. I saw in practice that it was not about economic development, but about the defense of corporate interests.”

It presents its theoretical distance from an exclusively Latin American research program. It recalls the difficulty for the academy, especially in Latin America in times of countless right-wing military dictatorships, to absorb Milton Friedman’s contribution.

Modern macroeconomics, that of the 1990s onwards, with its imperfect markets, endogenous currency, sticky prices, etc., “has harbored themes relevant to my way of thinking about macroeconomics”.

Delightful reading for a summer and a must-have for any student of economics. During the training period, it is a unique experience to follow the professional life of one of the profession’s leaders.