CEPAL Review - Volume 1979, Issue 8, 1979

In the closing decades of the last century and the first decades of the present century railways were regarded as an ideal means of linking the countries of America economically. Clear evidence of this aspiration is provided by the attempts —pursued over many years, but finally frustrated— to build a Pan-American Railway to link North, Central and South America, and the efforts of the Farquhar group to consolidate and link together railways in the southern part of the continent on the basis of control of the Brazil Railway Company.

Incontestably, the picture presented by Latin American agriculture is an ambivalent one. Although in recent decades it has shown that it is not a traditional backward sector, and has been sufficiently transformed and invigorated to meet effective demand successfully, it has not been able to achieve the levels of output required to help to solve the food, employment, income and other problems which persist both in the countryside and in the cities.

The last two decades have seen quite a boom in various activities connected with the subject of national planning in the countries of Latin America: these activities have mainly involved the preparation of various types of plans, the establishment of numerous bodies specializing in this field, and an energetic discussion of the scope, content, procedures, forms, techniques, results and prospects of planning.

The discussion of the options open to the Brazilian economy for the 1980s will only be useful if it manages to break through the hidebound technocratic conservatism which reduces everything to a question of “competence” in managing short-term economic policy. Today as yesterday, the best remedies for this disease are a historical perspective, a critical evaluation of the changing international situation and, no less important, the deliberate return of economics to its original calling, namely, political economy.

It is an undeniable fact that in recent years protectionism has increased in the developed countries, with all its harmful consequences for international trade and the development of the periphery.

The two parts of this article (the first was published in CEPAL Review, No. 7) constitute a systematic attempt to present and analyse critically the major approaches in ‘official economics’ to the theory of economic policy. Part One was devoted to L. Robbins; this part seeks to outline the foundations of ‘welfare economics’ and the latest neoclassical positions on the construction of econometric models.