On the transmission of Keynes’ and Keynesian ideas in Brazil through Eugênio Gudin’s Principles of Monetary Economics

Abstract

In the mid-twentieth century, Gudin was the main forerunner of the professionalisation of economics in Brazil. His book Princípios de Economia Monetária (Principles of Monetary Economics) was the first textbook in Portuguese published for a Brazilian audience interested in economics. As the book was written during the period of the Keynesian revolution, we show how he kept up with the then-modern debate around Keynes’ ideas and continually incorporated Keynesian concepts into the successive editions of his book. As Gudin was a staunch defender of liberalism and the free market, his presentation of Keynes’ and Keynesian ideas was mainly critical.

Keywords:

• Eugênio Gudin
• Keynes
• Keynesian economics
• Brazil
• transmission of economic thought

JEL CLASSIFICATION CODE:

• A11
• B22
• B31

Acknowledgments

The authors would like to thank two anonymous referees and the participants of the 46th ANPEC Meeting (Rio de Janeiro, 2018) for helpful comments on previous versions of this manuscript.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The then University of Brazil is now named the Federal University of Rio de Janeiro.

2 The opposition between developmentalists and free-market advocates continues to divide the Brazilian economics profession. For more details on the controversy, see Simonsen and Gudin (2010) and Teixeira, Maringoni, and Gentil (2010). About Roberto Simonsen, see Curi (2015) and Cavalieri and Curado (2016). English-language literature about developmentalism in Brazil is scarce; however, Love (1995, 1996) and Schneider (2015) provide a glimpse of the movement against which Gudin defended his free-market agenda.

3 From 1930 to 1979, Fonseca (2014, 56-57) identifies only two Brazilian presidents whose economic policies were not guided predominantly by developmentalist principles: Eurico Gaspar Dutra (1946-1950) and Humberto de Alencar Castelo Branco (1964-1967), the first president of the Brazilian military dictatorship.

4 This attitude differs from the attitudes adopted by some of his liberal contemporaries, like Hayek and Robbins. Both Hayek and Robbins partially sacrificed their political voices on behalf of their theoretical affinities. For more on this matter, see Gamble (2018), O’Brien (1988), and Skidelsky (2006).

5 Castro served as president of the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social, BNDES), between 1992 and 1993. Campos also served as president of the BNDES between 1958 and 1959 and as Minister of Planning from 1964 to 1967. Delfim Netto served as Minister of Finance from 1967 to 1974, as Minister of Agriculture in 1979, and as Minister of Planning from 1979 to 1985. Simonsen served as Minister of Finance from 1974 to 1979 and as Minister of Planning in 1979. Conceição Tavares contributed extensively to the establishment of advanced studies in economics at the Federal University of Rio de Janeiro and at the University of Campinas, acted as a consultant for the United Nations, and was a congresswoman between 1995 and 1999. Belluzzo served as São Paulo state Secretary of Science and Technology from 1988 to 1990, state Secretary of Planning and Economics from 1991 to 1995, and occupied important positions in the Brazilian Ministry of Finance during the 1980s.

6 However, Gudin did not restrict his discussion to Keynesian ideas. He also dealt with other authors’ works, such as Knut Wicksell, Irving Fisher, and Ralph Hawtrey. Among these, Gudin had a distinctive respect for Wicksell. As his biographers report, he used to say in his old age: “If I was not stuck here with this cane, I would stand up, because one should not pronounce Wicksell’s name sitting down” (Scalercio and Almeida 2012, 48).

7 Giraud (2014) and Pearce and Hoover (1995) made a similar endeavour in relation to Paul Samuelson’s main textbook, Economics, first published in 1948.

8 In the preface, Gudin already stated his intention to publish a second volume in the subsequent edition (Gudin 1943, XXIII). Nonetheless, the second volume would be published only with the third edition in 1952.

9 In 1937, Getúlio Vargas had already been governing Brazil as a dictator for seven years. He led a “coup within the coup” in 1937, alleging that communists were planning to takeover power in Brazil. After this coup, Vargas governed Brazil until 1945. Vargas’ dictatorship between 1937 and 1945—the Estado Novo—was undoubtedly harsher against any political and ideological opposition than it had been between 1930 and 1937.

10 This is a two-volume edition. As Gudin had been writing the second volume since the late 1940s, he published this complementary volume in 1952, before the new third edition of the first volume. The new third edition of the first volume, which is roughly a new edition of the book published in 1947, was published only in 1954. After an unsuccessful search for a first volume published in 1952, we found a letter from 1953, in which Gudin explained to Jacob Viner the publishing of the first volume of the third edition was two years late (Gudin to Viner, December 24, 1953, Viner Papers, Box 12, Folder 15).

11 A comparison between Prebisch’s 1947 book (Introducción a Keynes) and the PEM’s second volume may offer important insights regarding the tones adopted by Prebisch and Gudin. This paper oversees this comparison because its length would render this manuscript too long for publication. It is, nonetheless, a major future research opportunity.

12 The third one is Lawrence Klein.

13 According to Tily (2007, 111), although Robertson opposed many of Keynes’ ideas, he played an important role in the Keynesian Revolution, which remains predominantly unrecognised.

14 Dennis Robertson coined this term in 1936 (Boianovsky 2004, 92).

15 Gudin did not cite Modigliani’s seminal 1944 article in the PEM’s third edition.

16 De Vroey (2016) argues that the transition from the economics of Keynes to Keynesian economics was a two-step process: Hicks’ model constituted the first step, while Modigliani’s model answers for the second one. “It is Modigliani’s and not Hicks’s version that underlay the first generation of IS-LM models” (De Vroey 2016, 30).

17 Throughout Gudin’s career, Jacob Viner had been a close friend and the main correspondent of the Brazilian economist, with whom he discussed economics in personal correspondence.

Additional information

Funding

The authors also thank the Brazilian Coordination for the Improvement of Higher Education Personnel and the National Council for Scientific and Technological Development for funding this research.