The following story is part of Walter Block's Autobiography Archive.

Austrian Economist by Accident

I was born in Volta Redonda, State of Rio de Janeiro, where my father worked as an engineer of one of the most famous Brazilian state companies, i.e., Companhia Siderúrgica Nacional (CSN). CSN was founded in 1941 as the first steel producer in Brazil. The U.S. funded it after the then Brazilian President, the dictator Vargas, threatened to join the axis powers instead of allowing American military basis in Brazil. CSN was and it still is considered a watershed in the Brazilian industrialization process, an industrialization with central command. Government, in the words of Vargas, had the duty of organizing the "market anarchy." My father died when I was three years old and my family moved to Porto Alegre.

I always had the passion for economics; I am not sure why. I used to buy books about economics even before going to the university. When I was thirteen years old I used to do my mother’s income tax, my first concrete experience with the "mafia’s" work. Brazil was not yet a democratic country in 1982, the year that I entered a public university to study economics. After years of hampered economy, Brazil had a widespread system of inefficient state owned companies, all kinds of regulation and uncontrolled government debts at all levels of government. CSN was finally privatized in 1993. Its net income jumped from US$ 22 millions to US$ 154 millions in 1994.

My undergraduate studies were pretty much focused on Keynes, Marx and Neoclassical economics. It was then fashionable to study Marx; that no longer was forbidden in universities. During my studies, Brazil went through an external debt repudiation, several price controls and a relentless inflation process. Everything was quite amazing for an economics student. However, I could not make much sense from what I learned in the academy besides ending up deeply disappointed with the Marxist rhetoric and the Keynesian models (and their variants).

I pursued a master degree in economics. After the first year, and the traditional micro, macro, math, and econometrics classes I was again a little disappointed. I was mastering how to deal with math models and textbooks tricks without creating connections with the outside world, actually, the real world. Then I came across, by accident, Austrian books. And it is really meaningful and interesting how it happened.

Walking through the university library I saw a shelf with books which were being given away, for free. I was struck by two new books, recently translated to Portuguese, on that shelf. They were Unemployment and Monetary Policy by Hayek and The Essential von Mises by Rothbard. I asked the librarian why they giving away those books. She told me that they needed more space in the shelves and those books were duplicates and no one, ever, took them out to read (I guess this is better than trashing them). My first surprise was that Hayek was a Nobel Prize winner in Economics whom I never heard of before. Those two books were just fascinating. For the first time, economics was making sense to me. The theoretical approach was coherent, solid, and quite applied to the Brazilian reality. Later, I met the head of the graduate program and asked if he knew about Hayek and Austrian Economics. He said that he did not know much but he believed that Hayek was "a kind of monetarist." I talked with another professor, a neoclassical economist who held a Ph.D. from Vanderbilt. He said that he did not know about Austrian Economics, but actually had brought from the U.S. a book that he never read and he believed would be of interest to me. He lent me The Foundations of Modern Austrian Economics, book edited by Dolan which consists, mainly, of articles by Kirzner, Lachmann, and Rothbard. After that I read The Capitalist Alternative by Alexander Shand and all the Austrian books available in Portuguese. They were Human Action and Liberalism by Mises, Competition and Entrepreneurship by Kirzner, Denationalization of Money by Hayek, and Economics in One Lesson by Hazlitt. Economics was no longer a disappointing science. Actually, it was now fascinating. Perhaps it was even more than that. I was searching and reading Austrian books in an almost frenetic way. Austrian economics was the subject of my masters’ thesis.

In 1991, I spent a few months in Buenos Aires studying Austrian Economics in ESEADE, a Graduate School. ESEADE has the best Austrian program in South America. There I had access of a wide range of Austrian books besides classics of Economics, Political Science, Methodology, Law, and History with several outstanding professors. There I met the best Austrian Economist of Latin America and one of the best professors I ever had, Juan Cachanosky. Cachanosky got his Ph.D. under Hans Sennholz. Luckily, up to today, I am still learning from our conversations and his writings. There I was also in touch with Public Choice and Neoinstitutional economics.

Back in Porto Alegre, I had the opportunity of attending seminars and exchange ideas with Israel Kirzner, Hans-Hermann Hoppe and Walter Block. It was time to pursue a Ph.D. I was accepted at Auburn and George Mason University. Several facts made me choose Auburn. One of them was the proximity of the Mises Institute. The most important, perhaps, was a nice exchange of emails with Professor Robert Ekelund about my research proposal, to investigate how Brazil fell behind the U.S. in terms of economic performance. Ekelund was my adviser and his teaching made an extraordinary contribution to my economic way of thinking.

Curiously, during my first two years in Auburn I never visited the Mises Institute. I had decided to focus on my formal studies. By the middle of the program I was taking an excellent externalities class. Andy Barnett, my professor, realized that I knew about Austrian Economics. He encouraged me be in touch with the Mises Institute. I started to attend some seminars and soon got a scholarship from the institute. It was very helpful at that moment because my studies were funded in reals – the Brazilian currency – and Brazil had a fifty percent currency devaluation. There I was again in touch with Rothbard’s ideas, which I had put aside for several years. I read Man, Economy, and State. If I had to choose one of his books I would pick Power and Market as the most striking.

Currently I am teaching at one of the biggest private universities in Brazil. My university, as are all others, is supposed to follow Education Ministry guidelines. That narrows a little what is possible to teach and research. For instance, by the end of the economics course, all students must go through a national system of evaluation. The national exam is basically mainstream economics. The Economics department got an A in this exam. Despite that, recently I was elected, by direct vote of students, as the best professor of the department. I cannot deny that the clear way of thinking of Austrian economics explains a good deal of this recognition. It seems that the students realize the advantages and the pleasure of studying the real world with coherent deductions instead of fooling around with math models. It is something that the status quo of the academic profession seems to have lost. I cannot stop thinking what I would be doing today if I were not at the right place and at the right time to see, accidentally, those free Austrian books.

February 28, 2003

Fernando Zanella [send him mail] is Economics Professor at Vale do Rio dos Sinos University (UNISINOS), Brazil, and editor of "Perspectiva Econômica" journal.

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