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Carlos Goés, Economic Researcher, International Monetary Fund, Founder, Instituto Mercado Popular

Cato Intern Class of Summer 2012

How did you learn about the Cato Institute? What made you want to be an intern?

Carlos Goés: When I was an undergraduate student in Brazil, I became a huge admirer of Milton Friedman’s philosophy and economics. Unlike many of the younger libertarians, I didn’t learn about classical liberalism online, but rather by stumbling into random books while wandering through the library. Later, through researching about clever solutions to real world problems such as the negative income tax, social security reform, and school choice, I learned about Cato. When I eventually moved to the U.S. to pursue a MA in Economics at Johns Hopkins, I decided to apply for Cato’s summer internship program.

How did the internship affect the way you think about public policy and/or political philosophy?

Carlos Goés: I became fascinated by the U.S. think tank culture. I realized that, regardless of your ideological priors, you can make evidence-based arguments that will help shape public policy. This can significantly increase the quality of policy debate and helps to push us away from radical polarization. It’s virtually impossible to make someone change their subjective beliefs. However, if you show others they have their empirical facts wrong, you can possibly make them compromise and nudge them towards the most efficient policy solutions.

What kind of work are you doing now?

Carlos Goés: I’m wearing two hats right now.

I’m an economic researcher for the International Monetary Fund, where I work as an econometrician and forecaster, writing policy reports and academic papers. Here, I wrote a paper testing Thomas Piketty’s hypothesis on the drivers of income inequality that was widely reported internationally. Economics and statistics are my bread and butter.

At the same time, I created Instituto Mercado Popular, which aims to be the first U.S.-style think tank in Brazil. We design evidence-based public policy solutions that try to both improve economic efficiency and equitable results for the least well-off in Brazil. For instance, we wrote a comprehensive report using household survey data and showed how taxpayer-funded public universities in Brazil are very regressive. Even though we have just recently been incorporated last year, our research has been quoted by several media outlets and Congresspersons.

What advice can you offer to fellow alumni who want to secure a job like yours?

Carlos Goés: If you want to have a comparative advantage in the future, you need to learn how to work with data. Knowing how to collect and present data gives you a huge advantage in the policy world. Invest time to learn statistics and coding. We are transitioning to a data-rich and data-driven world, and if you want to do something new — rather than simply be someone repeating talking points — you need to know how test hypotheses and assess different policy alternatives. Just like knowing how to type might have been a resume-booster in the 1970s and it’s a given today; knowing how to code and use data will likely be a given in 20 years. And if you don’t know how do that, you will be left behind.

What’s a change — a policy perspective, a philosophical point, a messaging strategy, anything — that you would like to see in the libertarian community?

Carlos Goés: There are two important things that I would change. The first one would be focusing on marginal improvements in policy and understanding that most real-world possibilities will second-bests or worse. Calling anything shy of anarchy “socialism” is not only childish, but counterproductive. For instance, it leads libertarians to side with the anti-globalization movement in opposing free trade agreements and ultimately leads us towards less freedom.

Second, we need to address inequality and equity. Classical liberals shouldn’t simply dismiss it as if it is not a problem. Regardless of what we tell ourselves, for the vast majority of persons, what they perceive as unfair inequality *is* a problem. In addition to that, a plethora of government policies increase inequality. For instance, if black kids systematically have worse public education than white kids, either through outright segregation or bad school districting, the gap between them is bound to increase.

We need to emphasize policy changes that will improve equity. We should also show that our basic principles of free markets and rule of law do favor fairness and equality. If the rules of economic behavior are not symmetrically enforced, the rich will have a higher chance to extract economic rents, thereby increasing inequality.

Are there any important ideas (policy, philosophy, or something else) to which you subscribed for a long time, but now believe to be erroneous?

Carlos Goés: All the time. I was a diehard socialist when I was a teenager. I like to joke that sometimes I wake up an anarchist, while some other days I wake up more moderate. The connecting element in all of this is my end goal: I have always wanted a more prosperous world, particularly for the least well off in society. As I studied economics, statistics, and public policy, I realized that my initial socialistic means were misguided — and markets were the way to achieve what I always wanted. But I will always be open to change my mind on the face of new evidence. The moment I stop questioning myself and being a skeptical, I will have ceased to be a social scientist.

What makes you feel most optimistic about the future of liberty?

Carlos Goés: In spite of the recent nationalist renaissance in Europe and the U.S., there is a lot to celebrate. Due to markets, trade, and globalization, we lifted 2 billion people out of poverty in the last 25 years. As poor countries grew at a faster pace than advanced economies, we are watching the world converge: global income inequality has been going *down* since the 1970s. With open markets, came open societies: more countries have competitive democracies than ever before. As a result of such economic and institutional improvement, social indicators like child mortality and life expectancy rates have been improving all over the world — even in Sub-Saharan Africa. The world has never been as prosperous as it is right now.