ABSTRACT OF PAPER
Title: Rui Barbosa and Adolph Wagner: a German influence on the ideas of the first Finance Minister of the Brazilian republic
Author: Bruzzi Curi Luiz Felipe
When the republican regime was introduced in Brazil, in 1889, the first Finance Minister, Rui Barbosa (1849-1923) undertook a series of monetary reforms that created money-issuing banks. The policy should address the shortage of means of payment existent in the Brazilian economy, especially in Rio de Janeiro, the financial hub and most important city of the country at the time. Economic historiography has diverged substantially in the evaluations of the legacy of Rui Barbosa’s policy: liberal interpreters have tended to see them as the main cause for “Encilhamento” a speculative bubble that took over the stock markets of Rio during the 1890s and resulted in bankruptcies and financial disorder; from an “anti-bullionist” point of view, on the contrary, the incentives provided by issue of money supported trade and production, thus fomenting economic growth. Member of parliament, Finance Minister and diplomat, Rui Barbosa studied law and wrote about it, but his vast intellectual legacy also includes works dealing with philology, rhetoric and politics. Concerning his economic ideas, historiography — not unduly — emphasizes the American influences on his thought and on his way of conceiving the monetary reforms he undertook. There are, however, other lineages of economic thought to which Rui eventually resorted: German ideas were among them. The aim of this paper is to highlight one German political economist with whose ideas Rui Barbosa was in contact: Adolph Wagner (1835-1917). Barbosa quoted some excerpts of Wagner’s works and possessed his books in his library. The references dealt with in this paper were made in a speech delivered in January 1892, when Rui Barbosa was Senator, some months after he had left the Ministry of Finance. In the speech he defended the policies carried out when he was in office and criticized an official draft of financial reform under parliamentary discussion. The influence exercised by Wagner on Rui Barbosa’s ideas can be understood in the more general context of monetary policies and thinking related to the gold standard. When the republican regime was introduced in Brazil, following the end of slavery, it was necessary to reform the monetary system in order to provide means of payment for the transactions demanded by a transforming economy. However, the way to conduct these reforms was disputable. Policymakers such as Rui Barbosa faced a dilemma between flexibility in monetary policy, which was represented by inconvertible paper-money issued by private banks or by the State itself, and credibility in international markets, which was guaranteed by convertible, metallically-backed money. The references to Adolph Wagner, in this context, were intended to support the idea that national centralized banks could reconcile flexibility and credibility. Rui Barbosa also implied that the examples from European monetary history presented by Wagner could serve as lessons for Brazil.
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