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Thursday, April 20, 2017

A Brasilian Inflation Fighter Becomes Immortal

The man who coined “Belíndia”A Brazilian inflation fighter becomes immortal

The Academy of Letters elects a liberal economist

BRAZILIANS who remember the hyperinflationary 1980s cheered the news on April 7th that prices rose by just 4.57% in the year to March. Inflation has not come that close to the central bank’s target of 4.5% in seven years. In a fitting coincidence, on the same day one of the architects of the Real Plan, which tamed inflation in 1994, donned the gold-and-green livery of the “immortals”, as members of the Brazilian Academy of Letters are known.
Edmar Bacha is just the third economist to join the august group, whose 40 lifetime appointments are reserved for towering intellectuals and the finest wordsmiths. His election last November (by members of the academy) was one of the most contentious in its 120-year history. It may also be a sign of the times.

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Besides wrestling with inflation, Mr Bacha was head of the statistics office and the state development bank. He later became an investment banker. He has a way with words. In “Fable for technocrats”, an essay published in 1974, he described Brazil as “Belíndia”, a tiny, rich Belgium surrounded by a vast, poor India. In “End of inflation in the kingdom of Lizarb”—where “everything is back to front”—he skewered the belief that rising prices cause fiscal deficits.
Some doubt that Mr Bacha merits immortalisation. Novelists and poets on the academy argued that most of his dozen books are dry treatises. His liberal economics is anathema to humanists enamoured of Karl Marx.
Still, he beat Eros Grau, a former supreme court justice (who has written erotic fiction). The unusually close vote (of 18 to 15) exposed a rift between the academy’s “culture wing” and its clutch of public servants, including two former presidents. In November a contest between a political scientist and a philosopher-poet ended in an unprecedented tie, forcing a new election with fresh candidates. João Almino, a writer and diplomat, got the open seat.
Mr Bacha’s elevation may be a sign that economic liberalism is regaining ground. In March street protesters called for privatisation and deregulation, among other things. The government of Michel Temer may prove to be one of the most liberal that Brazil has ever had. The academy is also becoming harder-headed. Some immortals were reportedly keen to elect a former banker to oversee its investments.

This article appeared in the The Americas section of the print edition under the headline "Bard of Belíndia"