"It will be a historic opportunity for a liberal confrontation," says Langoni – Epoca NEGOCIOS

Carlos Langoni Carlos Langoni, former President of the Central Bank

The Getúlio Vargas Foundation (FGV) World Economic Center was the first Brazilian to obtain a Ph.D. Economics of the University of Chicago, temple of liberal thought in 1970. He says in a good mood that he is now more in Chicago grandfather than for Chicago boy – an expression created to refer to the young economists of Chicago who participated in the reform of the Chilean Economic Economist under the Pinochet government and later adopted by the world in reference to economists graduating from the school

Former professor of Paulo Guedes, future minister of the economy, who also obtained a doctorate in Chicago. (as well as other members of the team), Langoni should help to develop and implement a trade liberalization program.

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In this interview, he states that Chicago oldies as the clbad usually calls it, because of the age of the majority, has to face resistances to adopt measures of modernization of the economy, but must have a historic opportunity to promote a "liberal shock" in Brazil.

. see the arrival of the new economic team in power, with as many alumni of the University of Chicago as Paulo Guedes himself?
I think it is historic, with this group in the government, to set up a liberal clash. This is neither an ideological choice, but a pragmatic choice. I think the condition has never been so favorable. The crisis is so deep and the bankruptcy of the state, both financially and in terms of management, with consequent systemic corruption, so that a liberal shock is the only solution allowing the Brazil to get out of the trap of economic stagnation and regain growth. supported

In terms of economic policy, what should we expect from this clbad?
People from the outside often badociate Chicago with Milton Friedman, monetarism. This is not true I attended clbades with Friedman, but I followed the economic development part of Chicago. This was the reverse of what was normally studied in Brazil, influenced by Celso Furtado (1920-2004), from the Economic Commission for Latin America and the Caribbean (ECLAC), which is a interventionist view of state-based import substitution. 19659003] Who are the main representatives of this component focused on economic development?
Arnold Haberger is an important name. He was the head of the economics department and had a track record of projects and development that was a show. In addition, Robert Mundell of the Chicago Development Zone, Nobel Laureate in 1999 for his studies on the creation of common currency areas that led to the creation of the euro, and Harry Johnson, dedicated to international trade . There was also T.W. Schultz, who received the Nobel Prize in 1979 and was my thesis supervisor, then Gary Becker. Both marked my career a lot because they created the concept of education as human capital, which was a revolutionary thing. So when you talk about economists in Chicago, you do not have this monetarist business, no.
What I consider a liberal state is not just a question of what is a liberal state, it is a lie, a mistake.

In practice, what should this liberal vision represent for the Brazilian economy? a pension reform. It's a much deeper thing. It is a reform of the state in the broad sense. The state must be the provider of essential public goods such as health, education and security. Others must stay with the private sector. This is more than tested in the world. Do not even mention the United States, which is a joke. Let's talk about China. The great Chinese revolution that followed the death of Mao Zedong was the realization of a gradual but continuous process of economic liberalization. In the case of Brazil, what impact does this vision of Chicago have on the economy? In the case of Brazil, we have reached the limit. . As I said, the crisis is a crisis of the state and the public sector, an ethical crisis and that is what needs to change. Chicago's vision is exactly that. There has always been a great concern for efficiency and ethic, with the distributional aspect. You have the pillar of fiscal adjustment, with reforms, social security and taxation. There is a wave of concessions and privatizations to make way for the modernization of infrastructure. And it has the slope of what I call the "forgotten reform", which is the opening of the economy. The opening must be progressive, yes, it must be predictable, yes, but there must be a deadline to start and end. Opening has positive distributive effects and helps keep inflation low.

believes that the new economic team will have to face the resistance of the Congress? I believe that there will be resistance, yes. It will not be an easy task, even if the diagnosis is unequivocal. In my opinion, the Brazilian company is much more attentive to these facts than we imagine. The problem will be the political debate, the political articulations to make the reforms viable. This will be the big challenge, the interface of the executive with Congress.

Did you also encounter resistance at the time you were in power?
The resistance was very strong. I was a lonely voice, I felt like an ET. I was actually a Chicago boy. Today, I am a grandfather of Chicago. I already have four grandchildren. At that time, I was the only one.
What was the reaction to your ideas?
There was an intense debate of ideas. Simonsen (former Minister of Finance and Planning) had a more liberal vision than that of (João Paulo Reis) Velloso (predecessor of Simonsen in planning). Simonsen's ideas often did not coincide with those of Delfim (Neto, also former Minister of Finance and Planning). If you badyze well, the economic model had a strong bias statist, although it is led by economists unrelated to ECLAC. The Delfim and Simonsen both had a liberal bias, but nothing comparable to Chicago's vision of minimizing the role of the state, which has been proven in Chile.

Chile was the largest laboratory of ideas. from Chicago?
Sometimes, in Brazil, people think that Chicago is only Chile. The liberal thinking of Chicago, which comes from Milton Friedman (Friedrich) Hayek, had a great influence in the England of (Margaret) Thatcher. In the UK, there was a very strong state presence, a huge union influence, a relatively closed economy. We now have the opportunity to put into practice those ideas that worked.