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in English

The guarantor

The rise and controversies of the economist Paulo Guedes, the ultraliberal who has entered into a marriage of convenience with Jair Bolsonaro

Malu Gaspar | Edição 144, Setembro 2018

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Translated by James Young
Revised by Flora Thomson DeVeaux

 versão em português


The sense of euphoria inside Rio de Janeiro’s SulAmérica Convention Center was so thick that one could nearly reach out and touch it. On that July Sunday, the 3,000 attendees at the convention for the Partido Social Liberal – PSL (the Social Liberal Party) had already applauded speeches from General Augusto Heleno, Senator Magno Malta, and two of Jair Messias Bolsonaro’s five sons. Janaina Paschoal, the lawyer who authored the impeachment request against Dilma Rousseff, was given an even more enthusiastic ovation when she took the stage. In the audience that filled the 2,500m2 space, supporters of all stripes – from the biker with Bolsonaro’s face tattooed on his calf to porn actor-cum-congressional candidate Alexandre Frota, as well as families with children – awaited the climax of the event, the speech with which the congressman and former army captain would officially launch his campaign for president of Brazil.

Bolsonaro’s voice cracked as he began to recount his journey from his days in uniform to the process of putting together his campaign team. “We’ve been mustering our army,” he said, “and recently, we gained an asset for which I thank God: the economist Paulo Guedes.” Applause and whistles erupted throughout the hall. Sitting at a table onstage between General Heleno and congressman Major Olímpio, Guedes’s head was bowed, eyes and fingers glued to his phone as he typed on WhatsApp. Interrupted here and there with shouts of “legend, legend!”, “yeah!” or “that’s it!”, Bolsonaro meandered through several topics before circling back to the man who will be a key figure in the administration, should he be elected. “And hey, Paulo Guedes, just in case people say I don’t understand economics: there’s a passage in the Bible that says God doesn’t summon the skilled. He trains the chosen!” he said. A roar of applause, with chants bellowed among honking horns.

Guedes remained impassive, his face serious, almost rigid, as if unable or unwilling to betray a reaction. “You can’t get our team at the Ipiranga gas station,[i] but it will bring the solution for Brazil,” continued Bolsonaro, before finishing with his slogan, chorused by the crowd: “Brazil above all, and God above everyone!” After this grand finale, the candidate began walking off to the left, accompanied by advisers and security guards who struggled to herd the hundreds of people who rushed the stage in search of selfies or simple physical contact. Paulo Guedes turned the opposite direction and exited discreetly through a side door.


At age 69, with a career spanning 40 years, Paulo Roberto Nunes Guedes is no newcomer to Brazilian economic debates. Born in Rio, with a bachelor’s in economics from Minas Gerais Federal University, a master’s degree from the Getulio Vargas Foundation, and a doctorate from the University of Chicago, he became known in the 1980s for his criticism of then-president José Sarney’s Cruzado Plan to control rampant inflation. He later challenged the next president, Fernando Collor, when he froze 80% of the funds in citizens’ savings accounts as part of the war on hyperinflation, and expressed misgivings about the Real Plan, which created Brazil’s present-day currency in 1994 in yet another move to curb inflation. In each case, he argued in favor of solutions shaped by orthodox liberalism, small government, spending cuts, a floating exchange rate and the opening up of the country to international trade. Whether for his bluntness or his hyperbolic warnings of catastrophe, Guedes was given a nickname by the Sarney economic team: Beato Salu, after the character from the soap opera Roque Santeiro who wandered around town proclaiming that the end of the world was nigh. Guedes was also one of the founders of Banco Pactual (the bank was renamed BTG Pactual in 2009), ran Ibmec, a business school, and helped create the Millenium Institute, a think tank sponsored by some of Brazil’s biggest businesses. He was a partner in an asset management firm and is now CEO of Bozano Investimentos in Rio de Janeiro. He’s an in-demand public speaker and an active figure in the media – for years he wrote for Exame magazine and Rio’s O Globo newspaper.

In February of this year, Guedes made a radical move. He joined Jair Bolsonaro’s team and began making the rounds on the financial market, explaining his plans. This made him the guarantor of a politician who sent shivers through the establishment, not only for his defense of the military dictatorship or his controversial positions on subjects like public security, but most notably for his support for the maintenance of state-run companies and a protectionist stance towards the military and civil servants. By lending the former army captain a new set of neoliberal credentials, Guedes gave the campaign a shot in the arm. In return, he was dubbed an absolute authority by the candidate himself, a status ratified by the campaign platform unveiled in mid-August. In it, Bolsonaro promised to fuse the Finance, Planning and Industry and Commerce Ministries, as well as the secretariat that deals with concessions and privatizations, into a single organization. The “super-minister” at its helm, of course, would be Paulo Guedes.

During a conversation at his office in Leblon in late July, Guedes admitted that he had been a little embarrassed at the PSL convention. He told me he’d decided not to go, even after being invited by party president Gustavo Bebianno via WhatsApp. “Can you talk, Paulo? I’d like to put you onstage. Or at least in the first row. What do you think?” Bebianno wrote. In Guedes’ reply, he referred to himself in the third person: “Paulo Guedes has more credibility outside party politics. I trust his [Bolsonaro’s] intuition. And if he hasn’t invited me to the event, then he’s on the same page. We stick to what we agreed on.” Later that day, Bolsonaro himself sent a voice message: “Paulo, there’s a convention tomorrow, you’ve seen how they’re saying that I’m isolated. You can do whatever you want, but I’d be very proud if you could make it.”

“I saw it was important to him,” Guedes says. On the stage at the SulAmérica, the economist’s speech lasted only a few minutes. He framed it as “a statement about the man I’ve come to know,” focusing on three points. Number one: Bolsonaro is sincere, a patriot and a republican, who doesn’t strike “mercenary deals” and doesn’t bend to corporate interests. Number two: he represents order and the preservation of life and property. Hence, Guedes entering the campaign would be “the combination of order and progress” – in an echo of the positivist motto on Brazil’s flag. Number three: Bolsonaro is “fully prepared to serve.” In the speeches that afternoon, the “fearless economist,” in the words of another speaker, was toasted and lauded. Still, he kept his presence at the convention to the bare minimum. “I was the last one there and the first one out. It wasn’t my scene.”


Paulo Guedes and Jair Bolsonaro met for the first time at eight o’clock on a Tuesday morning in the middle of last November, in the boardroom of a Barra da Tijuca hotel. The congressman had liked a column by Guedes entitled “Vacuum at the Center,” published in O Globo, in which he classified Bolsonaro’s candidacy and that of center-left dark horse Ciro Gomes as “irreversible”. As Guedes saw it, Bolsonaro was the “legitimate heir to the old political trenches of the ‘right’.” Three weeks later, the economist returned to the subject in his column. “Against all this and all those who have led us since redemocratization, Bolsonaro stands for the law-and-order right wing, for the values of a middle class crushed between a corrupt elite and the masses who vote for Lula in search of protection and welfarism.” The congressman proudly posted excerpts from the article on Twitter. Then he asked a friend for Guedes’s phone number and told an assistant to invite him to talk. As well as Bolsonaro, his three politician sons, Bebianno, and an advisor were present at the meeting.

Early on in the conversation, Guedes said he was in talks with TV presenter and presidential hopeful Luciano Huck. After that bucket of cold water, some of those present talked about cutting off contact, but the candidate stepped in. “I liked Paulo right away. He was frank, he came from the headquarters of the enemy and he told the truth,” he said, according to Guedes. By this time Bolsonaro had already established himself as a political phenomenon, stubbornly hanging on to second place in the polls – or first, in polls that didn’t include former president Lula – but was troubled by persistent questions about economics, his generic, superficial responses to which made it clear that his knowledge was worse than limited. His go-to argument was that a president doesn’t need to understand economics. Look at Lula, or even Fernando Henrique Cardoso, who was Finance Minister before making it to the Planalto. Bolsonaro liked to add that if he ran the Brazilian economy like Dilma Rousseff, who had a degree in economics, he’d be better off not knowing anything at all. Occasionally he would offer a more neoliberal proposal or two. He wasn’t taken seriously, however, and felt that the media treated him unfairly.

That was how things stood until last year when an aide decided to speak frankly during a cabinet meeting. “Bolsonaro, we have to accept that certain criticisms are valid. The press knows that Fernando Henrique didn’t understand economics, but the PSDB had a deep bench of specialists to call on. It’s the same with the PT” – Partido dos Trabalhadores, or Workers’ Party – “Lula has a ton of folks to advise him. Not you. You’re alone. You don’t even have a party!” the aide told me, after requesting anonymity. The candidate was still searching for a party to take him in, and only joined the PSL in March of this year. But he took the charges on the chin. From that point on, he started to look for an unaffiliated economist to call his own.

In that first meeting, at the hotel in Barra da Tijuca, Guedes’s proposal to privatize all of Brazil’s state-owned companies shocked Bolsonaro. “All of them? What about the strategic ones?” he asked. It seemed too drastic a shift for a politician who, from his first term in office, had voted against ending the state oil and telecommunications monopoly, against salary caps for public servants, against a number of privatizations and against every attempt at welfare reform, in addition to backing special pensions for members of congress and senators. In response, Guedes said, he challenged Bolsonaro. “In the PT years, if you asked them, they’d say that Petrobras was ‘strategic.’ Are you happy with the strategic use they made of Petrobras? Don’t you understand that they’ve used the companies as tools to corrupt Brazilian democracy?” he asked. “You’re right, it’s a den of corruption,” Bolsonaro replied, before adding, still unsatisfied – “But still, oil is strategic…” Guedes didn’t give in. “Strategic for what?! What if the electric car takes off, if energy becomes nuclear, solar? It’s a fossil, Jair! Look how much it was worth back then and how much it’s worth today. I’m telling you that if Petrobras had been sold back then, we could’ve paid off the national debt. Today, it’ll pay for forty welfare stipends! You could’ve handed out money. Look at the cost, look how expensive ideology is. It’s stupid to have an ideology.”

As usual with Guedes, the conversation went on for a long time: five hours. In the end, Bolsonaro made a request. “If Luciano drops out, I’d like us to keep on talking. Could you help me?” he asked, according to Guedes. “Of course,” the economist replied.

Two weeks later, Bolsonaro took to the stage of the auditorium of the Santander Theater in São Paulo, with journalist Augusto Nunes, at an interview session put on by Veja Magazine. From the outset, Nunes wanted to know if the candidate had anyone in mind for Finance Minister. Bolsonaro was eager to reveal his news. “I started to test the market to see who I could ask and might accept the job. I was looking for people who’d been critical of economic policy in the past. So far I’ve had two conversations which lasted around eight hours,” he explained, “so there isn’t an engagement yet. We’re still flirting. But the fact that we met again means that we got along pretty well. I’m talking about the economist, Dr. Paulo Guedes.” “You’re giving us quite a scoop here,” Nunes commented. Bolsonaro agreed with him. “It is a scoop! Nobody knew about this until today, apart from him and me.” “So would he be your Finance Minister?” the presenter insisted. “No, he’s someone we hope to keep on seeing. Who knows, maybe it’ll end in an engagement,” answered the candidate. Then, making the most of the opening, he revealed a still-confused sketch of his economic platform. “I basically asked him for a miracle. In addition to maintaining the tripod” – the economic policy comprising a fluctuating exchange rate, inflation targeting, and a primary surplus” – “raising more with lower taxes, and cutting down the public debt, I asked for some way to address the issue of civil servants – because, not to be corporatist about it, but there’s an enormous discrepancy in the salaries of civil servants, and the military come out the worse for it… And I asked for his view on pension reform too. I put all that on the table and said, is it possible? Can we ask you for this miracle, and can you deliver it? And he said, ‘it’s possible.’” “I think there’s already a date for the wedding,” summed up Nunes. “A straight wedding!” Bolsonaro shot back, getting a laugh from the audience.


This orthodox turn was well received, and invitations for Bolsonaro and his economist to speak at banking and asset management events multiplied. Since February, Guedes has taken part in more than 15 meetings and lecture events, not to mention countless interviews and a number of trips with Bolsonaro. The candidate, meanwhile, has visited BTG Pactual and XP Investimentos and appeared at dinners, lunches and breakfasts with business leaders such as Abilio Diniz, former owner of Pão de Açúcar and Brasil Foods stock holder, David Feffer, of the Suzano group, and Rubens Ometto, the owner of Cosan. In early July, he was fêted at an event organized by CNI, the National Confederation of Industry. On each occasion, he defended reforms of Social Security and labor, and measures to promote competitiveness and entrepreneurship.

Now he had an answer ready for thorny questions about the economy – “I don’t know, I’ll ask Paulo Guedes.” The answer became a running joke within PSDB strongholds, and gave rise to the nickname “Posto Ipiranga,” or Ipiranga Gas Station, in reference to the TV commercial that suggests you can find everything you need at the franchise’s stores. But the joke would be embraced by the candidate himself, who began referring to Guedes as his personal “Posto Ipiranga.” With some success in the polls, as Márcia Cavallari, director of the Ibope polling institute, explains. “Voters can see that Bolsonaro doesn’t flimflam. He admits he doesn’t understand economics and he’s going to find someone who does. Even if they don’t know who Paulo Guedes is, voters think: ‘Bolsonaro is modest, and he’s not lying.’”

It remains to be seen, however, to what extent Bolsonaro’s neoliberal shift will earn him the support of the market. In the second week of July, I visited three of Brazil’s largest mutual fund managers to assess the mood about the Bolsonaro-Guedes double act. It was time to form alliances. The congressman’s attempt to nominate Magno Malta as his vice president and get on board with the Partido da República (PR) had come to naught, with the party choosing to follow the other centrists and align itself with Geraldo Alckmin of the PSDB. All these managers – who asked not to have their names revealed – had met with either Guedes or with Bolsonaro himself a few days before. Only one of them had known the economist for any length of time. The other two had only had contact with Guedes at public talks. All three expressed a clear preference for Alckmin, but were willing to bet that Bolsonaro was much more likely to make it to a run-off.

One of them told me that the surveys organized by his institution had identified a strong anti-Workers’ Party tendency among the electorate which Alckmin hadn’t been able to capture in his campaign. Another said that the other place in the election run-off would definitely be a leftist candidate. And the third summed up the opinions of the others, saying that Guedes’ support for the presidential candidate would make all the difference: “If Bolsonaro has a chance to win, it’s better that he have an orthodox economist on his side. Lots of businesspeople want to vote for him, but are scared or embarrassed,” he continued, “and Paulo Guedes gives them the excuse they need.” The managers predicted that a Bolsonaro victory would bring a wave of optimism around the expected free-market shift in the first few months, with stocks soaring and the dollar falling. However, another big question about the “straight marriage” between Bolsonaro and his neoliberal guru still lingers: how long will Guedes remain in the administration before there’s a divorce? “Paulo Guedes is brilliant. He has a perfect vision of the economy. But at the first meeting of the Economic Affairs Committee, if one congressman starts getting on his case, he’ll tell the guy to you-know-what himself and walk out,” said the fund manager who, of the three I spoke to, knew Guedes the best.

Two weeks later, on an afternoon at the beginning of August, all eyes and ears were trained on the “Ipiranga Gas Station” around a conference table at the São Paulo headquarters of XP Investimentos. At the table were five representatives of funds that administered more than R$100 billion for Brazilian and foreign investors, and who had had to press hard to find a window in the candidate’s advisor’s diary. After an introductory speech, Guedes explained that he’d had twelve working meetings with Bolsonaro up to that point. “Isn’t that a short time to change the mind of someone who thinks so differently?” said one of those present. “No,” answered Guedes, “he’s intelligent, and I’m persuasive. He learnt faster than [former BNDES and Central Bank president] Persio Arida that you have to privatize!” During a two-hour conversation, the economist repeated his mantra. By privatizing as many state-owned companies as possible and cutting costs, the Bolsonaro administration would have the resources to reduce the deficit and pay off part of the national debt.

Despite agreeing with the premise, the small group at XP continued to pressure Guedes. Even so, he failed to explain where he intends to find the money for the current pension commitments when new workers with formal contracts start putting their social security contributions into private funds, as foreseen by the capitalization system he proposes (a few days later, without going into detail, Guedes told me that he intends to make the transition in stages). He accepted that he might not be able to sell all the state-owned companies because Bolsonaro wants to keep those that he considers “strategic” – although he hasn’t identified any apart from the company that runs the Itaipu Dam. He also admitted that he has yet to reach an agreement with the candidate on a number of issues, such as the reform of the pension system or readjustments to the minimum wage, which is currently linked to a formula that combines the National Consumer Price Index with the GDP growth rate. The rule created under Dilma Rousseff’s presidency will expire under the next administration. Guedes believes there shouldn’t be a fixed formula. Bolsonaro is in favor of indexation.

When asked at the meeting how he intended to persuade the congressman to change his position, Guedes joked: “Pray for me!” As for relations with Congress, he said that in under Bolsonaro there will be no “horse trading” or pork-barrel spending. This is because, under his proposed government reforms, states and municipalities would receive greater resources than at present and would be less dependent on federal funds. “Government as we know it won’t exist anymore. There will be uncertainties and you’ll have to get used to it.” When the meeting was over, no one left feeling particularly reassured. Only Guedes was still excited. “Spending, spending, spending!” he exclaimed aloud down the corridor as he walked away.


“Don’t think we’ll have a falling-out,” Bolsonaro said about Guedes in an interview with the TV Cultura program Roda Viva. “We talked a lot at the start, and I think that I convinced him on a few things. I kept saying: ‘Paulo, your proposal is fantastic, but there’s a filter ahead of us called the Congress and the Senate. We don’t want to put out a bill that has no chance of passing.’”

Three days after the program, Bolsonaro was promoting himself in another interview, this time with right-wing bloggers, broadcast on YouTube and Facebook. The session featured Guedes, who was there to answer questions about the economy. But that wasn’t all. During the conversation, the economist provided solutions to questions from other areas. In education, he suggested that high-performing students from public schools be given vouchers study at private institutions, and then defended the privatization of all Brazil’s prisons. Bolsonaro disagreed only once, shaking his head when the economist said that the military should have handed power over to the civil authorities three years after the 1964 coup. The rest of the time he listened carefully and agreed. In the end, he complained that he couldn’t take Guedes to his interview on GloboNews the next day.

Guedes’ influence on Bolsonaro is such that sometimes aides turn to the economist to try and persuade the candidate about something. It doesn’t always work. At the end of May, when the nationwide truckers’ strike paralyzing the country’s highways began to lose momentum, they asked Guedes to convince Bolsonaro to support the continuation of the movement, since the candidate was reluctant to do so. Guedes said no. A few days later, Bolsonaro publicly declared that the strikers had gone too far. The economist was also pressured to ask his candidate to go to a meeting of right-wing higher-ups in Foz do Iguaçu. Bothered, Guedes went to the candidate: “Jair, your guys have been calling me and asking me to do this and that…” The former captain responded: “Paulo, the only thing that matters is what we agree to. Don’t let anyone manipulate you.” The month before, when Guedes was the subject of a cover story in Veja Magazine, under the headline “He Could be President of Brazil,” Flávio Bolsonaro, Jair’s son and a candidate to the Rio de Janeiro state legislature, had posted a message on Instagram. “This week, that rag Veja put Paulo Guedes on the cover. They wanted to rub it in Bolsonaro’s face, to create jealousy that would lead to conflict and a split. It’s a waste of time. The press and our enemies can eat their hearts out, because we have the best economist in the country on our team – team Brazil! And yeah, he’ll have total autonomy – lock, stock, and barrel! We’re in this together, Teach!”

Guedes has also intervened in the turbulent relationship between Bolsonaro and “the media.” “You’re seen as a barbarian,” said the economist at the beginning of their talks, explaining to the candidate that it would be important to build bridges with the owners of the largest media vehicles in Brazil. Earlier this year, he took Bolsonaro to speak to Giancarlo Civita, the former president of the Abril publishing house. The economist and the entrepreneur had known one another for years but became closer in 2011, when Guedes’ BR Investmentos firm bought a stake in Abril Education for around R$226 million. The deal ended happily – in 2015, the Civita family sold its controlling share in the company to Tarpon for R$1.3 billion. In July, I asked Guedes how the meeting had gone. “When they meet him, people forget their prejudices,” was all he said. In July, the Civita family relinquished control of the company. Abril went into insolvency.

Guedes put the most work into a meeting that took place in August, when Bolsonaro visited Globo’s headquarters in Jardim Botânico to speak with the media group’s vice-president, João Roberto Marinho. Guedes and Marinho had known each other for a long time, but the hostility against the network is one of Bolsonaro’s hobbyhorses. At the PSL convention, one of the most frequently heard chants was Globolixo – “Globo is trash”. A few days before, at an event in the city of Registro in the state of São Paulo, Bolsonaro himself had said that he had “a fixation with Globo,” and stated that if elected, he would consult the National Development Bank (BNDES) to find out “just how much everyone owes them. Especially Globo.”

Bolsonaro has also strongly criticized the network’s soap operas, which, to his eye, are “destroying the families of Brazil.” This seems to be one of the points on which the former captain has convinced the economist. Several times in our conversations, Guedes criticized episodes of soap operas or shows which discussed sexual diversity among adolescents. “How many genders are there? Science says there are two. But according to Globo, there are six.” The last fight with the station came during the GloboNews interview; Bolsonaro praised a 1984 editorial in O Globo in which Roberto Marinho paid tribute to the “revolution,” as he described the military coup of 1964 – and the mediator, Miriam Leitão, had to recite a statement dictated by a producer from the control room, explaining that Globo had later revised its position on the coup.

According to Guedes, however, the subject didn’t come up during the conversation. Bolsonaro arrived before the economist, who was about ten minutes late. After a brief moment of awkwardness, the Globo heir decided to show him some photos from his father’s life; Bolsonaro took the opening to praise Roberto Marinho, and the conversation flowed from there. In our conversation, Guedes defined the mood at the meeting as “respectful.” “I’m trying to put an end to misunderstandings. I want to avoid what is going on in the United States, where the media is in battle mode.” On the same day that Bolsonaro was interviewed by William Bonner and Renata Vasconcellos on Globo’s nightly newscast, Guedes and Marinho met for lunch, this time without the candidate.

In July, when Guedes told me about the initiatives he had adopted, I noted that his role in Bolsonaro’s campaign was broader than an economic adviser. He looked uncomfortable. “I could wash my hands of it all, but this guy can win the election. Really. With or without us. You can write whatever you want and I can say whatever I want. It has nothing to do with me, or with you, because we’re in the bubble. There’s something huge happening out there. If I get fed up with how people are discriminating against me and attacking me, all because I’m trying to help the country… Here’s the thing: they all worked for Aécio [Neves, 2014 presidential runner-up], who’s a crook and a dopehead. They worked for Temer, who’s a crook. They worked for Sarney, a crook and an all-round lowlife who turned the whole country into a racket. Now there’s this crude, coarse guy who gets votes like Lula did. The Brazilian elite, instead of understanding this and thinking about it – I mean come on, we have the opportunity to change Brazilian politics for the better – they all go…” Guedes paused and continued, paraphrasing the critics of his candidate: “Ah, but he said this, he said that… you’ve got to tame him!” I asked whether Bolsonaro can be tamed. “I think so. He’s already a different person.”


Ironically, Guedes first began to think seriously about going into government after an episode during the death throes of the Rousseff administration. In the middle of December 2015, days after the impeachment process began in Congress, he was called to the Palácio da Alvorada by the president. After months of going back and forth with her Finance Minister, Joaquim Levy, Dilma had decided to fire him and find a replacement. Gilberto Kassab, Minister for Cities, and the president of Sebrae, Guilherme Afif Domingos, both from the PSD, recommended Guedes. He had drawn up Afif’s campaign platform in 1989, when he ran for president of Brazil for the Liberal Party with the slogan “We’ll get there together.” At dinner there was no mention of the invitation; according to Guedes, they only talked economic policy. “First she told me something. She said, ‘I’m going to get rid of Levy, and if I can’t find an external solution, I’ll find an internal one.’ Then she asked me a question: ‘Why didn’t you come on board, Paulo? I know you were invited. Delfim told me he invited you.’”

When Delfim Netto was Planning Minister, in 1984, he sent word for Guedes to be sounded out for a position on the board of directors of the Central Bank. Affonso Celso Pastore, the bank’s president at the time, made the invitation, but Guedes suspected it was a “trap” to discredit him, because he’d been critical of Delfim’s economic policy. “Did he tell you it was an assassination attempt?” was Guedes’ answer to Rousseff. Shortly after Tancredo Neves’ election to the presidency that year, the new president of the Central Bank, Antônio Lemgruber, also sounded out Guedes for the role of director. Guedes refused. “I presented my proposals, and Lemgruber said: ‘Man, are you trying to solve all of Brazil’s problems at once?!” From that moment on, Guedes says he decided to take the advice of Mário Henrique Simonsen, under whom he had studied at the Getulio Vargas Foundation: “First you get independent, and then you can think about governing.”


Listening to Bolsonaro’s guru narrate the story of his route to the top, one is reminded of a Forrest Gump of Brazil’s economy: at every milestone, he’s there, behind the scenes or just off-camera. “In 1989, when I created Afif’s platform, I predicted that if you sold all the state companies, you’d wipe out the public debt. Do you know what that means? Thirty years of low interest and thirty years of a much higher exchange rate, without spending what we spend today. But we didn’t do it, and so Brazil became a paradise for rentiers and hell for entrepreneurs.” Collor won the election, and Guedes said that the new finance minister, Zélia Cardoso de Mello, invited him to join her economic team. “As soon as Collor took office, she invited me, along with Eduardo Modiano. He accepted, I didn’t.” Modiano was named president of the National Development Bank.

According to his version of events, during dinner Rousseff asked him what he would do if he were Finance Minister. The first thing, answered Guedes, would be to adopt the economic plan of then-vice president Michel Temer, entitled “A Bridge To The Future”. “Brazil needs a change, and the problem isn’t Levy. The problem is the policy. If you do this, you’ll have someone to pay the bill, politically speaking. Because Temer will make Congress pass the plan.” Rousseff’s chief of staff Jaques Wagner, also present at the dinner, was enthusiastic about the idea, but the president rejected it out of hand. The second suggestion was that the president force Congress to pass a political reform in exchange for its support for Temer’s plan. “She asked me: ‘And how am I going to do that?’ I said: ‘Madam President, the whole country knows that politics has become a dirty business. There’s nothing wrong with admitting the error and fixing it.’” Once again, Rousseff wouldn’t come on board. At eleven in the evening, after four hours of conversation, they said their farewells. “Maybe she wasn’t even thinking of inviting me. She must have said, ‘I’m going to ask Nelson Barbosa, but let me hear this guy here out.’” Barbosa, who was Planning Minister, was subsequently made Finance Minister.

Guedes describes how, the morning after, he landed in Rio de Janeiro a worried man. “I came out of there saying: ‘Inflation is going to rise nonstop and Brazil is going to take a nosedive!’” Days later, he described the meeting with the president to his daughter, Paula, the director of a startup that processes enormous quantities of data to help companies select their employees. Paula had done some cross-referencing and arrived at the conclusion that the next president of Brazil would be an outsider, not a traditional politician, who had a strong presence on social media. “The media is asleep, and when it wakes up someone will already have been elected,” she said. Guedes began to think about who that person might be, and arrived at the name of Luciano Huck.

Huck and Guedes had a friend in common: the banker Gilberto Sayão, who worked under the economist at Pactual in the 1990s. A friend and partner of Huck’s at Joá Investimentos, Sayão had lunch with Guedes in early 2016, at a restaurant in Rio, and listened to his vision of the scenario. The economist asked to meet Huck, and the three got together days later at the presenter’s home in the Rio neighborhood of Joá. Guedes presented the figures his daughter had run and promised that Huck would be the next president of Brazil. “‘Your life will change,’ I said. ‘There’ll be 25% of the vote on one side, 25% on the other. The establishment has lost all credibility, and there’ll be a vacuum in the center. You’ll be Mecca.’” The rest is history. After rejecting the idea for a while, Huck dipped a toe into the water, talked to parties and possible supporters, half-quit multiple times, and finally announced that he would not be entering the presidential race in February 2018. By that time, Guedes was already dating Bolsonaro.


“We would like to invite our guests to stand and pay tribute to the nation. Your attention for the Brazilian national anthem,” announced the speaker. The approximately eighty business leaders present in the events room of the Gran Marquise Hotel, a five star establishment on Mucuripe Beach in Fortaleza, got to their feet. It was the middle of July and the sun outside was fierce. Many put hands over hearts. Standing at center stage, Paulo Guedes accompanied the anthem without singing a word, circumspect, gazing into the middle distance. The Ceará branch of Lide, an association of businesspeople founded by former Brazilian Apprentice host, former São Paulo mayor, and current candidate for São Paulo governor João Doria, had organized the event just to hear the economist speak. There was a discreet celebratory air to the gathering. In part because Guedes was the first economic advisor to a presidential candidate to visit them, but mainly because he was the right-hand man to Bolsonaro, whom many had already picked as their candidate. “We need a neoliberal shake-up,” said Luiz Carlos Fraga, owner of a network of clinical analysis laboratories, at the welcome drinks that preceded the lecture. “It has to be someone with the authority to take the PT’s hand out of the cookie jar,” his brother, Carlos Henrique Fraga, cut in. Several in the group nodded. Guedes’ speech did not disappoint those present. Enthused by the warm welcome, he lingered on what had become one of his favorite topics, ever since he became the focus of attention in the campaign: the failure of his colleagues in past administrations, especially under the PSDB.

Without naming names, Guedes attacked the Cruzado Plan and the mistakes of the Real Plan – committed, according to him, by “unprepared” individuals. “Never before in the history of mankind had there been such a long program to combat inflation,” he said. “What all our plans, including the Real, lacked was a fiscal element. Cutting spending. That’s where everything would’ve had to start, way back under Sarney. But no, they froze prices and persecuted entrepreneurs. They only figured out that they had to have a monetary policy eight years later, and they created the Real. But they still didn’t have an exchange rate policy. Five years later, they figured that out, and they went for a floating exchange rate. By that point Fernando Henrique Cardoso had burned through 50 billion dollars not to lose his reelection. We never actually chose a flexible exchange rate – it came about because the exchange rate exploded. From then on, the exchange rate fluctuated, and they’d only come around to the fiscal part fourteen years later. While they were learning, Brazil was falling behind.”

The speech went on for almost fifty minutes, and the audience was eager to ask questions. But Guedes didn’t seem to be in a hurry. “We all make mistakes. I’ve been wrong millions of times. The difference is that when I make a mistake, I pay with my own money. There’s an economist, I’m not going to say his name, who’d say, ‘Oh, I’m experimenting!’ In his first experiment, he froze Brazil and led us to hyperinflation. In his second, he got fired from the Central Bank because he was leaking information.”

It’s unclear whether anyone in the audience took the trouble to identify the recipients of Guedes’s potshots. It wouldn’t have been difficult to realize that the main target was Persio Arida, the man responsible for Geraldo Alckmin’s economic platform, one of the authors of the Cruzado Plan, in the 80’s, and who served as president of BNDES and the Central Bank under Fernando Henrique Cardoso. Arida left the administration in 1995 following disagreements with the director of international affairs of the Central Bank, Gustavo Franco, and amid accusations that the government’s decision to devalue the exchange rate had been leaked to a former partner (subsequent investigations were shelved due to a lack of evidence). This episode is one of many which Guedes likes to cite in long perorations about his relationship with the so-called “PUC Rio gang”, a reference to the Pontifical Catholic University in Rio de Janeiro, today a redoubt of orthodox economic thought, but which had a more heterodox bent in the 1980s.

Guedes’ first contact with PUC was in 1979, when, at age 30, he returned to Brazil after obtaining his PhD in mathematical economics at the University of Chicago, having written his dissertation on fiscal policy and foreign debt. Buoyant after his stint abroad, he had his eye on a full professorship at PUC or FGV. But the only work he could get was part-time teaching at the two universities and the Institute of Pure and Applied Mathematics (Impa).

Brazilian economists were going through turbulent times. A controversy among FGV professors as to how to explain the unequal distribution of income in Brazil had led to a schism, after which several colleagues moved over to the PUC economics department. Carlos Langoni interpreted the inequality as a function of levels of education. Since few in Brazil have many years of schooling, and the accelerated growth of the period was fueling demand for skilled workers, wages at the top tended to grow more than the income of the poor. Thus, according to Langoni, the bulk of income maldistribution was due to the job market’s reaction to the economic miracle, as the years of steep GDP growth under the dictatorship were dubbed. Edmar Bacha and his group, meanwhile – which included Pedro Malan and Albert Fishlow – blamed the problem on state intervention in the economy and wage leveling policies during the dictatorship.

Guedes says that it took him a long time to understand that if he wanted to succeed in Brazilian academia, he would need to join one group or another. “I’m a late bloomer as a politician. I took a long time to discover that I wasn’t orthodox enough for FGV or heterodox enough for PUC.”

Days after this conversation, I asked Bacha for a comment. He laughed. “I’ve heard him say those sorts of things, but I find it surprising because he never even tried to get a full-time job. He would have had to publish articles and write working papers, and he showed no interest. He simply doesn’t participate in the debates. I’ve invited him to attend the events at the Casa das Garças [Bacha’s think tank], but he never comes. Maybe because he wants to be a speaker.”

Guedes was still living off sporadic teaching gigs when, as he tells it, he received an invitation he couldn’t refuse: a position at the University of Chile. The salary of $10,000 a month, plus flights home once a year, would be more than he earned from all his jobs in Brazil put together. It was the early 1980s; the Pinochet dictatorship was at its height, and the university was controlled by the military. The regime had invited economists from the University of Chicago to implement a liberal economic policy based on the market-driven economic fundamentals favored by Milton Friedman. The “Chicago boys” settled in at the university and took turns serving in government posts. The invitation to Guedes came from Jorge Selume, then director of the Economy and Business School and Pinochet’s Budget Director.

When I pressed him on the topic for the first time, Guedes rejected any association with the Chilean dictatorship. “Bacha taught here at PUC during the dictatorship and nobody says anything about that.” I pointed out that there was one major difference: the University of Chile was run by a general, and PUC was not. He looked uncomfortable, then responded: “I knew nothing about the political regime. I knew there was a dictatorship, but I thought that was irrelevant from an intellectual point of view.”

Guedes decided to leave Chile when he found members of the secret police searching the apartment where he lived. Around the same time, an earthquake struck Santiago, terrifying his wife Cristina, who was pregnant with the couple’s only daughter. Back in Rio, however, he still couldn’t find an academic job. “I realized that there was a terrible stain on my reputation. Then I began to see that politics is a dirty tool in the hands of the least fit.” He eventually found a home at the nonprofit Funcex, then moved on to another think tank, the Brazilian Institute of Capital Markets (Ibmec), which is funded by the government and other financial institutions. As a skilled speaker, he began to participate in debates, seminars and lectures, and soon became a regular source for journalists – and a vocal critic of state interventionism in the economy. He was a fixture on International Monetary Fund missions to Brazil. Then, in 1983, he was invited by the financier Luiz Cezar Fernandes to set up Pactual, which began as a small distributor of securities and shares. He became a partner and chief strategist, writing a regular publication on economics in which he made invariably cutting and often accurate projections. In his writings he criticized price controls and, later, the Cruzado Plan, which he saw as little more than “anesthesia” because it tackled inflation without combatting the deficit. On the other side, directing the plan, were his former PUC colleagues: Bacha, Persio Arida and André Lara Resende – now the chief economic advisor to presidential hopeful Marina Silva – as well as Luiz Carlos Mendonça de Barros, who is credited with giving Guedes the nickname Beato Salu.

Those bad feelings would soon curdle into a brawl. At the end of 1985, the Pactual directors went to Mendonça de Barros’s office in the Rio de Janeiro headquarters of the Central Bank to ask him to sign the authorization to allow their asset management firm to become an investment bank. The technical requirements had already been met, but Mendonça de Barros wouldn’t sign the documents, Luiz Cezar Fernandes told me over coffee in a bookshop in downtown Rio. “Mendonça de Barros said he’d make it an investment bank over his dead body, and Paulo was furious. If it weren’t for Luis Octavio da Motta Veiga, president of the CVM [the Securities Commission], they would’ve come to blows.” Motta Veiga remembers the episode only vaguely, but it remains fresh for Guedes. “I jumped down their throats. When I criticized Delfim, it was okay, but I couldn’t do the same to them? I was righteously furious.” The solution to the impasse only came a year later. “Fortunately, Mendonça de Barros had kidney failure, was hospitalized, and the Central Bank specialists gave the authorization. When he came back and saw we’d succeeded, he wanted to kill us,” Fernandes said. Mendonça de Barros didn’t want to speak to me for this piece.

At the same time, Minister of Finance Dilson Funaro ordered the Central Bank to cut off funding to Ibmec and called for Guedes’ head. Once again, Motta Veiga got involved and went to speak with the minister. Without cutting it off entirely, Funaro slashed funding dramatically.

When Guedes is asked if the quarrels of the past upset him, at first he says no. “Look, I got rich and I was very happy. I’m the only economist who’s made a name for himself without serving in government,” he said. “Today, with what I know about their political aspirations and ideological bias, I even feel grateful. They kicked me out into the right place,” he continued. But then he can’t help himself, and adds: “I know that people say I’m bitter. That comes from Elena Landau [former BNDES director of privatization under FHC and the ex-wife of Persio Arida], who flunked my class during her master’s. As my student, she was mediocre.”

I went to speak to Landau. She said that his version doesn’t hold water and showed me her transcript, which indicates that she passed. “That never happened, I passed his class! Paulo was a bad teacher. He missed classes, didn’t correct our work, and then he’d test us on the content he’d never properly taught us! I wanted to study, but he never showed up. So I organized a protest and got him out of PUC.” Guedes says he left PUC of his own volition. “It’s a clique. They go around together, join the government together. It’s a very successful lifestyle, because they’re all happy and rich.”

I commented that joining the Bolsonaro administration would be a way for Guedes to prove himself to the PUC group for once and for all. He took offense at the suggestion and, becoming irate, almost called off the interview. “I have nothing to prove! They came to me! It’s not like I’m out for revenge, they’re the ones bringing this up! These guys are used to running Brazil without being challenged. They cornered the market and shut me out of academic life. Now they want to come and attack me? They need to get some intellectual integrity, admit their mistakes, admit when they changed their minds about certain things, and stop giving me shit!” Guedes gesticulated emphatically. “‘Prove myself,’ my ass. If I find out that that’s what everyone thinks, you know what? I’d tell them to fuck off!”


Persio Arida is short, with an aquiline nose and thinning gray hair. He speaks slowly and meticulously, seeming keen to make sure he’s understood. In addition to being one of the creators of the Cruzado and Real Plans, he also served at Banco Opportunity and BTG Pactual, where he worked from 2008 to 2017. Last February, he joined the team drawing up Alckmin’s platform. At the end of May, in an interview with InfoMoney TV, an online TV station, he spoke about Paulo Guedes joining Bolsonaro. “People are wrong. They think that Bolsonaro was on the road to Damascus, had a vision and became orthodox because he talked to Paulo Guedes. Bolsonaro is a con. He’s just as statist as the left.” The phrase caught on in financial circles, and Arida would repeat it in our conversation in the café of a hotel in Jardins, in São Paulo.

“What Paulo Guedes doesn’t understand is that what Brazil needs isn’t a good economic adviser to the president, it’s a president with the right ideas,” he snapped as soon as he sat down, without ordering so much as a water. He was in a rush to get everything across before his next meeting, which would take place in the same cafe, with foreign diplomats. “When it comes to educating the president and negotiating with the president, I have much more experience than he does. The president tells the economist that he’s convinced, but then he goes and does something else. He’s in charge, and the only thing the economist can do is quit,” said Arida. He rejected the suggestion that he didn’t try to implement a fiscal adjustment under Sarney. “You talk to the president and say, ‘Let’s apply a fiscal adjustment, right?’ He says, ‘Right.’ And then he doesn’t do it. You say, ‘I’ll freeze prices for three months, and then release it.’ The Cruzado was that, a way of following the Israeli experiment, which was a brief freeze followed by a fiscal adjustment. Sarney agreed, but it made no difference. The Cruzado didn’t last three months. It lasted much longer, because there was an election.”

I asked Arida if he thought there was discrimination against Guedes in the academic world. He said no. “There were a lot of other Chicago economists at Brazilian universities, and all of them were successful. The problem isn’t FGV or PUC. It’s him. Paulo wasn’t cut out to be an academic. He’s cut out to be a businessman and a polemicist. I don’t even know why he wants it so much,” he said, mocking his colleague’s obsession with government. As for Guedes’ jibes, he takes a pragmatic view. “It’s opportunistic. Bolsonaro wants to take on the PT in the elections, and for that he needs to discredit Alckmin. So he keeps saying that Alckmin is leftist and that I’m not orthodox. It’s that simple.” According to Arida, when his rival gave an interview to the Estado de S. Paulo in April, saying that “the guy created the Cruzado and should be ashamed of himself,” he thought about responding, but friends dissuaded him. Now he’s changed his mind. “He continues to attack me instead of discussing proposals.”

I told Arida that at an event in Fortaleza, in front of business leaders, Guedes said that he left the Central Bank because he leaked information. “I left because I didn’t agree with the fixed exchange rate proposed by Gustavo Franco, just like Guedes. Delfim Netto was the one who accused me, and he never presented any proof. The prosecution opened an investigation and then dropped it for lack of evidence. It’s unbelievable that he’s digging that back up now.”

Arida is not the only person with whom Guedes has fallen out since he started advising Bolsonaro. In middle of June, he upset several people at the same time, telling Estadão journalist José Fucs that he would seek out economists who were “known for respecting good market fundamentals” to discuss the election manifesto. He mentioned a few names, including those of former Central Bank presidents Armínio Fraga and Gustavo Franco; Fabio Giambiagi of BNDES; Samuel Pessôa of Ibre-FGV; Marcos Lisboa, the president of Insper; and Maria Silvia Bastos Marques, the president of Goldman Sachs in Brazil and a former president of BNDES. Several of those cited were not pleased to have their names linked with Bolsonaro. Most preferred not to comment publicly, but one decided to speak out. Marcos Lisboa reached out to the journalist and made it known that he wouldn’t talk to Paulo Guedes: “I’ll talk to everyone, as long as they don’t think that Venezuela is a democracy or say that museums should be shut down because there’s naked folks in them.”[ii] Fucs informed Guedes that he would remove Lisboa’s name from the article. Guedes took it personally, and began to send indignant messages to Lisboa via Fucs. “Lisboa worked for Lula, who defended the dictatorships of Chávez and Fidel. And he works for Claudio Haddad, who collaborated directly with the Central Bank during the dictatorship,” one read.

Haddad, founder of Insper and chairman of the board of the institute, is another name that evokes no fond memories for Bolsonaro’s adviser. Haddad, who also has a PhD from the University of Chicago, directed monetary policy for the Central Bank under the administration of General João Figueiredo and was a managing director at Banco Garantia, which was sold to Credit Suisse after heavy losses in the late 1990s. In 1999, Guedes proposed that they buy Ibmec, which had been facing financial difficulties, together. They paid R$2.9 million for the school, but the partnership lasted only four years. In 2003, the two fell out. Guedes wanted to invest in a model focusing on MBAs for executives, while Haddad wanted an American-style university, with investment in research and donations from institutions and individuals. Faced with the impasse, they resorted to the partnership agreement, by which one would buy the other’s share in case of disagreements. Guedes even tried to buy Haddad out with the help of a foreign fund. But he ended up selling his slice for about R$30 million and left Ibmec, which split in two under Haddad. The schools in Rio de Janeiro and Belo Horizonte continued under the name Ibmec, maintained their graduate and MBA courses, and were sold for R$700 million to DeVry in 2015. The São Paulo unit became Insper and turned into a non-profit institution.

In the messages he sent to Marcos Lisboa, Guedes returned to the episode. “I founded the school he runs, but I paid taxes. They turned it into a nonprofit school for rich kids.” When he told me the story in July, he went further. “If an institution is very rich and doesn’t pay taxes, I call it ‘pillage-thropic’. While the maid’s child studies at Kroton and pays taxes, São Paulo elites study at a place that’s only exacerbating income maldistribution. Why subsidize the education of the rich and tax the education of the poor?”

Days later, I called Lisboa. He confirmed that he had refused the invitation to work on Bolsonaro’s platform, but chose to defend Insper rather than talk about Guedes’ WhatsApp messages. “Paulo talks, but he doesn’t know what’s going on at the school, which doesn’t surprise me,” he said. “We refused to be a philanthropic entity, which offers several tax exemptions. Our employees have formal contracts, everything’s on the up-and-up. We just don’t pay income taxes because we’re a non-profit. We reinvest everything we earn in teaching, research and scholarship.” According to Lisboa, the school gives scholarships to about 250 low-income students, including housing and expenses. Claudio Haddad declined to give a statement. “I’d rather not comment on what Paulo says”, he said.


Before becoming Bolsonaro’s guru, Paulo Guedes could have passed for a character in one of the luxurious soap operas set in Rio. His daily routine takes place almost entirely in the upscale neighborhood of Leblon, where he has lived for more than twenty years, 900 meters from the headquarters of Bozano Investmentos. In the morning, he walks along the beach and then goes to his office, where he stays until late at night. He has an imported car in his garage, but if he needs to travel around the city, he goes by taxi or Uber, which he finds more practical. He can always be found in a shabby brown tweed suit jacket, likes playing the piano and soccer, travels more for work than leisure, and drinks only a little, with a few friends. While respected in the financial market, he had never acquired great fame outside it.

His involvement in Bolsonaro’s campaign changed all that. Memes and videos celebrating Guedes are now common on the social networks of Bolsonaro supporters, and people stop him on the street for selfies or just to say hello. During our last meeting for this story, at the end of August, a passerby made a point of shaking his hand in front of the Bozano building. “Congratulations on your ideas,” he said.

Bozano is Guedes’ fourth asset management firm since leaving Pactual in 1998. In the ecosystem of national finances, it isn’t one of the biggest fishes: it manages R$3 billion, distributed into four funds. Its mission is to invest in companies that have the potential to be listed on the stock market, and then gain value through capital appreciation. After a period investing in education, the firm has turned to healthcare-related acquisitions, buying hospitals and medical schools.

Guedes built a successful career at Pactual. During the Real Plan, in spite of his reservations about FHC’s economic policy, he evaluated that, at least at first, things would work out. He advised bank staff to lend money in dollars to issue securities linked to the appreciation of the real. It was one of their many “big scores.” Guedes himself says that his performances earned him the highest individual bonuses paid out by the bank each year. He is reluctant to go into details, but it is known that, unlike other former Pactual members, such as Andre Esteves or Gilberto Sayão, he didn’t make it into the billionaires’ club. Three partners estimate that in his years with Pactual Guedes earned something like $150 million at the time. After leaving the company, he and former Pactual executive André Jakurski set up an asset fund dubbed JGP (Jakurski, Guedes & Partners). It didn’t work out.

Guedes agreed with the partners that they would focus primarily on looking after their own money. He spent most of his time involved in day trading – the most risky mode of stock trading, since the results have to be cleared at the end of the day. Since daily variations tend to be small, day traders generally need to apply a lot of money to make a significant profit. Those who lose, however, need to cover the shortfall quickly, without being able to wait for the market to “bounce back”. Market operators therefore usually compare day trading to a casino, where instinct and luck are key. Guedes was already day trading at Pactual and carried on at JGP, where it became a true obsession. He spent all day on the phone, buying and selling – and, most of the time, losing a lot of money (two of the former partners I talked to estimated Guedes’ losses at that time at R$20 million). When I asked him about it last July, he tensed up and refused to talk about sums. He said, yes, he lost a lot, but he also made big profits. And also that, from the beginning, everyone at JGP knew that he was there on a “sabbatical”.

“It was an experiment. I wanted to master day trading because day trading has its own demons. A guy can think that he walks on water, and suddenly he gets screwed.” Worried about his behavior and losses, partners and colleagues insisted that Guedes take a break. But he only stopped when the money set aside for the “experiment” was gone. Asked to put further funds into the partnership, he decided to walk away.

The episode pushed Jakurski and Guedes apart, adding yet another drop to the latter’s bucket of resentment. But he says the two never quarreled. “We were such good friends that Jakurski baptized his son with my name. Then, when I didn’t do what they wanted, they started saying that I’d lost it, that I was difficult. They went straight to character assassination.” Jakurski did not want to talk to Piauí.


“Senhora Malu,” said the voice at the other end of the line in a strong Syrian accent. “Mr. Paulo is a good partner. Very good, very upstanding. I want to go on the record about that,” Elie Horn is the founder of Cyrela, a development firm; since 2017 he has been Guedes’ partner in a Bozano Investimentos fund focused on health. A self-made man known for his wealth (he is the 41st Brazilian on Forbes magazine’s list of billionaires), his dedication to philanthropy and his aversion to self-promotion, Horn returned my call after Guedes himself insisted.

When I told Guedes that several of his former partners and employees had brought up his difficult temperament, he became worried and began to list the names of people who could speak positively about him. He called some and asked them to get in touch with me. Horn, 74, who meets with Guedes every week, was one of those who complied. “Paulo is a great manager,” he said, “and I’m very pleased with the results of our investment.” I seized the opportunity and asked if he was also planning to vote for Bolsonaro. “I don’t talk about politics. Don’t get me into any more trouble than I already am,” he said.


The son of a school-supply salesman and a civil servant who worked at IRB, the Brazilian Reinsurance Institute, young Paulo Guedes dreamt of being “the best economist in the world” – which, according to him, didn’t mean winning prizes, but instead “absorbing all the knowledge in the world.” Today he says he’s satisfied – “no one had better training than me.” Perhaps that is why one of the few subjects that excites him as much as his PUC rivals is the victories he claims to have scored in intellectual duels.

One such clash was with the French economist Thomas Piketty, at the University of São Paulo, in 2014. Piketty was at the peak of his fame after publishing the bestseller Capital in the Twenty-First Century, on the concentration of income in rich countries. While very well received, the book was also criticized, especially by orthodox economists. Guedes contested Piketty’s thesis, arguing that the influx of billions of Asians into the capitalist system has increased per capita income and reduced inequality in those countries, affecting the entire global economy. “I said to Piketty, choose your weapons. He smiled, but saw that he had a tough task ahead of him. André Lara Resende [who was also at the debate] hid under the table and just watched the fists fly. In the end, the students went crazy, saying, ‘our Piketty is better than theirs!’”


If there’s one thing that bothers Paulo Guedes, it’s questions about Bolsonaro’s plans beyond the economy. He skirts topics like drugs, public safety, and military coups, and the only way to get a less elusive response is to press him hard. In two interviews, when asked about Bolsonaro’s admiration for the dictatorship and Colonel Carlos Alberto Brilhante Ustra, who ran the DOI-Codi torture complex, Guedes avoided giving an opinion. He would only say that, according to Bolsonaro, Ustra wasn’t a torturer. When he saw the quotes in both the Folha de S. Paulo and Valor Econômico, he was indignant. “I repeated what Bolsonaro said to me, and they wrote that I supported the dictatorship.”

I asked about Bolsonaro’s declarations regarding the journalist Vladimir Herzog, who was found hanging by the neck in a DOI-Codi cell in 1975. At the time, the military treated the case as a suicide, but three years later federal courts found that he had been tortured to death. In a recent interview, Bolsonaro didn’t accept that evaluation, stating that he regretted Herzog’s death and that “suicide happens, you know, people commit suicide.” In response, Guedes only said, “There’s no way to sugar-coat that,” before quickly changing the subject.

While troubled by the complete Bolsonaro package, Guedes points out that in their first conversation, the candidate made a point of talking about the key points of his views. There were unsuspected affinities between them. “It was there, in the values, that I began to understand who the guy was,” said Guedes. “There’s no more law, no more order,” he explained. “Brazil has become a shambles. Politicians steal and nothing happens. Black blocs steal and nothing happens. The Landless Workers’ Movement breaks into your house with a tractor, do whatever they want, and nothing happens. No politician says anything. They’re cowards. They’re afraid of the landless movement.” When I asked whether he is for or against the proposal to facilitate people’s access to firearms, Guedes replied that the idea doesn’t scare him. “I lived in the United States for four years, where everyone has a gun,” he said. “But are you for or against the idea?” I asked again. “I don’t know. In the countryside, I think you need it. If I lived in the countryside and had folks wanting to break into my house, I’d want to have a machine gun.”

More at ease when the conversation turns into education, Guedes said that “there’s a lot of talk today about political indoctrination in schools. I can understand when Bolsonaro says that the left is destroying the quality of teaching. Teaching an obsolete, wealth-destroying, socially disruptive ideology to a child is an abomination.” At one of our meetings at the Gávea Golf Club, he showed me a video in which children from the Landless Movement sang revolutionary songs as they marched. “You think that’s normal? Using public money to teach children how to start a revolution?”

The economist believes that the debate over public security is contaminated by “ideology”. “They killed that woman” – referring to Rio city councilwoman Marielle Franco, shot to death in March of 2018 – “and everybody starts going, ‘Marielle, Marielle, Marielle!’ When one person dies and everybody starts talking about it, I get suspicious. I’m not an idiot. If 300 people die in Rio de Janeiro and you follow only one, I’ve got to suspect there’s something behind it, that they’re trying to do something with her death.” I ask what he thinks that people want to do with Franco’s death. “There’s some use for it. So the death of someone on the left is a tragedy, and nobody gives a shit about someone on the right? Sorry, I’m a social scientist, and I observe things. I don’t get involved in things I don’t understand, but I don’t buy any old story either.”

Over the eight weeks in which we talked, Guedes often became enraged when criticizing the left, the press, or rival candidates’ economists. While he seems to appreciate his new role, Bolsonaro’s guru says he is discriminated against. He refuses any suggestion that government is a personal ambition, or that his proposals are miraculous. And he says that he will only go to Brasília if he has the power to put his ideas into practice.

At some point during every single one of our conversations, he threatened to walk away. The last time we met, he became impatient once again after several questions about Bolsonaro’s platform. “Want to know something? If you can’t do something well, if it’s not worth it, why would I do it? Why keep listening to the shit they’re saying about me? Do you think I want it? I’m collecting enemies. Now everyone hates me. Do you know what that is? It’s political passion. And you all in the media take advantage of it.” I replied that the press is only reproducing what he and his opponents say, and that dealing with journalists is part of the deal. “I don’t want that deal,” he replied peevishly. “So I can put that you’ve given up?” I asked him. Guedes laughed wryly. “That’s everybody’s dream. Everybody wants to fuck Bolsonaro over. But I won’t give them that pleasure. Only after he’s elected.”

[1] A reference to a series of TV commercials for the Ipiranga gas company, which suggest customers can get everything they could possibly need at the corporation’s gas stations.

[2] A reference to the right-wing protests against an artistic performance from September of last year entitled “La Bete” at Ibirapuera Park in São Paulo, in which the artist was fully naked. A video of a small child touching the artist’s feet sparked a wave of indignation and boycotts.