The nineteenth century

As far as Portuguese late eighteenth-century economic literature is concerned, the main contributions came from the activity of the Lisbon Academy of Science, which published between 1789 and 1815 a five-volume set of Memorias Economicas.

Another direct influence on Portuguese authors was Adam Smith, either on topics relating to the circulation of paper money, or particularly on subjects related to the extension of the domestic market, the elimination of barriers to the free circulation of goods, the reduction of the tax burden, and the liberalization of overseas trade.

But the writer who showed the greatest zeal in his unconditional support of Adam Smith's system of political economy was Jose da Silva Lisboa, an author of Brazilian origin responsible for introducing the liberal economic language into the reform of colonial administration. His son translated the Wealth of Nations, which was published in Rio de Janeiro in 1811—12, and thanks to this type of influence it was possible to legitimize the process of economic autonomy of Brazil which would lead to its political independence in 1822. Jose da Silva Lisboa deserves outstanding mention for the theoretical polemic he carried on against Rodrigues de Brito, on the theoretical and doctrinal merits of the physiocrats and Adam Smith. In the books they published between 1803 and 1805, these two writers showed the importance of a public debate on questions of political economy, insofar as it is a basis for decisions and guidance for a country’s economic development. Furthermore, they also showed some skill in making analyses, and engaging in profound debate on questions related to the theory of value and prices.

During the nineteenth century, in both Spain and Portugal, political economy and public finance were two disciplines which attracted interest and consideration in the public sphere. This was due to the process of institutionalization of their teaching in schools of commerce, technical schools and Law faculties. In the case of Spain, from 1807 onwards, when political economy was incorporated into university studies, there was a consolidation of economic studies which gave rise to the appearance from mid-century onwards of the subjects of political economy and public finance in the curriculum of all Law faculties.

In the Portuguese case, an identical process of institutionalization of economic theory could be observed, either through the creation of the first course in the Faculty of Law of the University of Coimbra in 1834, or even by creating political economy courses in the Trade Associations of Porto (1837) and Lisbon (1838). The manuals produced by Manuel de Almeida, Jose Ferreira Borges, Antonio Oliveira Marreca, Agostinho Albano da Silveira Pinto, and Adriao Forjaz de Sampaio clearly show the capacity for spreading the basic principles of a science which could be shown as benefiting the modernization of Portuguese society. Beyond the precociousness of this process of institutionalization by means of teaching, it should be noted that the question began to occupy the attention of public authority in the Liberal Constituent Cortes of 1821—2, in which there was a specific discussion concerning the relevance of studying political economy for the civil training of state officials.

The principal classical economists received a very mixed reception in Spain and Portugal. The thoughts of classical French economists such as Say or Bastiat made a deeper impression than that of the British. Therefore Smith was more frequently read by the end of the eighteenth century and up to 1812, than in the nineteenth century.

Furthermore, at the end of the nineteenth century, more confusion came about regarding the reception of different currents of thought originating in Germany, such as the Historical School, protectionism, the pragmatic interventionism of Otto von Bismarck, and Katheder-socialism. Marginalist economists, who were beginning to be quoted in Spain in the last third of the nineteenth century, did not establish themselves in monographs and manuals of the period. The low analytical level of Spanish, nineteenth-century economists can be judged in the arguments used in one of the main debates in which most of them took part, between proponents of free exchange rates and protectionists. The former were incapable of explaining clearly the theory of comparative advantage, and the latter were more influenced by private interests in preparing the tariffs than by economic ideas.

Nevertheless, we can single out some economists who played an important role in forming the economic ideas and debates of the nineteenth century over agrarian reform, trade policy, and tax and monetary reforms. Initially we should mention two economists from the first half of the century, firstly Jose Canga Arguelles. Outstanding among his works is the Diccionario de Hacienda (Public Finance Dictionary) published in 1826—7 during his exile in London. Secondly Alvaro Florez Estrada, who published his Curso de Economia Politica also in London in 1828, a manual clearly influenced by Ricardo, McCulloch, James Mill, Say, Storch, Sismondi, Richard Jones, Jovellanos, and Canga Arguelles.

Resistance to the faithful adoption of classical political economy was even more visible in the Portuguese case. No translation was produced of any of the works of the principal writers who contributed to the creation of the canon of this school of economic thought (Malthus, Say, Ricardo, Mill, and Marx). The Portuguese writer who was most familiar with the funda­mental works of political economy was Francisco Solano Constancio, who lived in exile in Paris till the beginning of the 1820s. He was responsible for the translation of the Principles of Malthus and Ricardo from English to French. However, in the texts he authored he distanced himself from supposedly universal principles of political economy, considering that they did not give sufficient importance to national motivations for economic development, using a similar argument to that used in American protectionist literature (Carey and Hamilton), and very close to that which would be adopted by List in Germany. Another aspect which attracted Constancio’s critical attention was that classical economists paid little attention to the ‘evil’ social consequences of economic growth, coming close to the critique elaborated by Sismondi.

Despite the protectionist inclination prevailing in debates on questions of economic policy throughout the second half of the nineteenth century in Portugal, the French liberal school had some impact, particularly in the ideological field. Claudio Adriano da Costa and Carlos Morato Roma — the latter being the author of an interesting project for the creation of a single European currency at the beginning of the 1860s — deserve a reference for the exceptional quality of their contributions. But the characteristic element which was so noticeable in Portuguese economic literature in the second half of the nineteenth and early decades of the twentieth century is the lack of any theoretical developments anchored in orientations which were known in neoclassical economics following the marginalist revolution and later consolidated in the Marshallian tradition.

In fact, Portuguese authors had limited themselves for a long time to polemics on subjects of economic policy and the organization of sectors of activity, or to producing eclectic, not very up-to-date manuals of descriptive teaching on basic economic notions. The first signs of following modern thought only became visible after 1949, when an important reform of higher education took place in the fields of economics and finance. At this level the contributions of neoclassical microeconomics were assimilated, accompanied by a new macroeconomic vision inspired by Keynes. In an atmosphere very marked by corporatist ideology and by the suspicion that free competition would not help to bring about the much-desired social harmony, the Keynesian appeal for greater state intervention was a boon to the aims of a group of economists and engineers who in Portugal, after the Second World War, tried to challenge the conditions and instruments to promote economic and social growth.