The Organized Fantasy: A Critique of the Brazilian Economic Miracle

Introduction

In his book "The Organized Fantasy", Celso Furtado presents a scathing critique of the Brazilian economic miracle of the 1960s and 1970s. Furtado argues that the miracle was not the result of sound economic policies, but rather a product of a combination of favorable external conditions and a massive influx of foreign capital. He also argues that the miracle was unsustainable and that it ultimately led to the economic crisis of the 1980s.

The Brazilian Economic Miracle

The Brazilian economic miracle refers to the period of rapid economic growth that Brazil experienced from the mid-1960s to the mid-1970s. During this period, Brazil's GDP grew at an average annual rate of 10%, making it one of the fastest-growing economies in the world. This growth was driven by a number of factors, including:

• A favorable external environment, including high commodity prices and low interest rates
• A massive influx of foreign capital, which was attracted by Brazil's high growth rates and its political stability
• A series of government policies that promoted economic growth, such as tax incentives and infrastructure investment

Furtado's Critique

Furtado argues that the Brazilian economic miracle was not the result of sound economic policies, but rather a product of a combination of favorable external conditions and a massive influx of foreign capital. He points out that Brazil's growth was heavily dependent on the export of primary commodities, such as coffee, soybeans, and iron ore. When the prices of these commodities fell in the mid-1970s, Brazil's economy went into recession.

Furtado also argues that the influx of foreign capital led to a number of problems, including:

• A loss of control over the Brazilian economy, as foreign investors increasingly dictated the terms of trade
• A rise in inflation, as the government printed money to finance its development projects
• A growing inequality, as the benefits of economic growth were concentrated in the hands of a few wealthy individuals

The End of the Miracle

The Brazilian economic miracle came to an end in the mid-1970s, when the global economy went into recession. The recession caused a sharp decline in the prices of Brazil's primary commodities, and the country was forced to borrow heavily from international lenders to finance its debt. The debt burden became unsustainable, and Brazil defaulted on its loans in 1982.

The economic crisis of the 1980s had a devastating impact on Brazil. The country's GDP fell by 10%, and inflation soared to over 1,000%. Millions of Brazilians lost their jobs, and the country was plunged into poverty.

Conclusion

Furtado's critique of the Brazilian economic miracle is a powerful indictment of the policies that led to the country's economic crisis. He argues that the miracle was not the result of sound economic policies, but rather a product of a combination of favorable external conditions and a massive influx of foreign capital. He also argues that the miracle was unsustainable and that it ultimately led to the economic crisis of the 1980s.

"The Organized Fantasy" is a must-read for anyone interested in understanding the history of Brazil's economic development. Furtado's analysis is insightful and provocative, and his book provides a valuable perspective on the challenges facing Brazil today.