American economist shared her views at the Frontiers of Thought
Photo: Luiz Munhoz
Liberal, progressive Christian and transgender. This was how American economist Deirdre McCloskey introduced herself at the Frontiers of Thought, on Monday, Nov 7, at the UFRGS Commencement Hall, in Porto Alegre. Deirdre holds a Ph.D. in Economics from Harvard University and her dissertation was honored with the David A. Wells Award, in 1973.
In her lecture, she stated she is not fond of the word “capitalism”, because it is an outdated concept. She believes that capital accumulation is the best way to make a nation grow.
She compared the current reality to that of “our ancestors”, whose middle class would produce and consume the equivalent of USD 2 per day. “Today, the average per capita income is USD 40 per day. In England, it is USD 100 whereas in the USA, it is USD 130. When comparing these figures, the percentage of people living under USD 2 per day is much smaller. This is not a crazy economics idea since we are much richer than we used to be in the past”, claims she. Despite the corruption problems (whose roots were jokingly attributed to Chicago, where it is a constant reality), this economic concern has been overshadowed by the economic boom that has been observed recently.
She added that the great enrichment goes far beyond the Industrial Revolution. “In the past, our ancestors had a restricted wardrobe, for instance. Adam Smith’s liberal ideas which preached justice, liberty and equality made it possible for people to grow and set up their own businesses”, says she.
Criticism against the left-wing and Piketty
Frontiers of Thought’s last lecture, delivered on Sept 28, by economist Thomas Piketty, was heavily criticized by Deirdre. In her view (in a very cheerful tone), Piketty has a French view of the economy, in which the greatest moneymakers have to share their profits accordingly. “Contrary to that, I go with the Scottish school of thought and Adam Smith’s view. That is, we offer the basics to people, such as education and health, and thus, it is possible to go on with their lives”, says she. She also mentioned that in Piketty’s books he forgot to mention human capital, which is the most important element for the growth of economy today. “Thomas exaggerates in his views of social inequality”, criticizes she.
She went on to say that it is everyone’s duty to help the poor, but the key is not to take advantage of the income of the producers. “My left-wing friends want to go after the millionaires. I disagree. When people are free, they are able to innovate and then, set up a goal for economic growth”, complements she.
Perspectives for Brazil
Photo: Luiz Munhoz
Using a graph, Deirdre presented approximate numbers of generations (from 1990 to 2016) showing how long it takes for liberal or non-liberal economies to be at the same real per capita income level as that of the USA. China and Chile would take a generation. On the other hand, India would take two However, Brazil would need six generations to be at the same level as that of the USA.
“Free trade countries are at an advantage. Brazilians need to give people more value. People who have money are judged. People have to understand that productive companies do well to the country. I suggest you follow in the footsteps of South Korea and Chile. An economic society relying on liberty and freedom of expression has greater chances to reach the levels of the USA”, claims she. At the closing, she added: “Freedom is the essence of the modern world.”
Civilization
Season 2017 of project Frontiers of Thought is guided by the topic Civilization – society and its values. Relying on cultural support from PUCRS, up until December internationally recognized guests will be coming to Porto Alegre to address the quest for reconstruction, conscience and redemption of values.
