"The Oil Crisis" "Tomorrow Is Another Day! " "Recession" BRAZILIAN ECONOMY "A history told by those who built it" THE BRAZIL BELONGING TO PORTUGAL 1492-1808 Perils, mysteries, tales. .
. By the end of the 15th century, that was all for the Europeans, overseas. Traveling across oceans was expensive and risky.
Eastern spices were the major source of wealth, equivalent to petroleum nowadays. Cloves, cinnamon, ginger, pepper. .
. Those spices improved food quality and taste so much. .
. that they were highly valued in Europe. There was also the idea about wealth being linked to territorial expansion.
Therefore, the superpowers of that time would be the nations which gathered financial, human and material resources for achievement activities. The Mediterranean was the trade center. Dominated by the Genoese and the Venetian traders.
Portugal, Spain and England could not compete with them. It would be necessary to find a route across the Atlantic to reach the Indies. Portugal was one of the first European nations to create a national state.
With tax collection, they could invest in the breakthrough of that time. The caravel. Lightweight, fast and agile, it could change course and subdue the tides.
With it, the Portuguese explored the African West Coast. Spain, also centralized, tried to reach the Indies through the Atlantic. The country sent the Genoese Christopher Columbus to the adventure.
He found land, which was not the Indies and had no spice. Without realizing that that was a continent, with the Treaty of Tordesillas, Portuguese and Spanish shared waters and divided land. The basis of this treaty was a longitudinal line.
A meridian passing 370 leagues west of Cape Verde. Something no one knew where it was. It was created at a time when people knew nothing about longitude.
Columbus and other navigators explored Central America. Portuguese explorer Vasco da Gama was the first to reach the Indies. The road was open, but it was not that easy.
During Vasco da Gama's voyage, more than half of his crew died at the sea. From scurvy, diseases, hunger and shipwrecks. The ships that returned, however, brought cargo, which price was estimated at 6,000 times their initial investment.
Each trip to the Indies generated spectacular profit. Of each merchant fleet coming out of Lisbon, for example, they made an agreement with the king. And part of that cargo was distributed among the survivors of the adventure.
At that time, Portugal was very interested in the spice trade in the Far East. So Cabral's expedition to Brazil had the Indies as its final destination. Some say that he arrived in Bahia accidentally.
There is a strong debate about who was the first to get here. It's almost certain that this place had been checked before. Discovered in 1500 didn't mean being the first to arrive here.
Instead, it was about acquiring legal ownership rights. On the land Cabral believed to be an island, he ordered a Mass to be held, and soon after he sailed to the Indies in search of the spices. Spain explored Central America, and sponsored the first around-the-world trip of history.
Finally completed by Ferdinand Magellan three years later. Portugal continued to invest in trade in the African and Asian coastline. But in America, the few Portuguese only advanced thanks to the natives' help.
Brazilian economy worked only where the Tupi were. The Portuguese wouldn't go where there were no Tupis. If the Tupi were there, it was an open land.
It was Brazil. In alliance with Portugal, the Tupi people expanded their military power and started to dominate the ranges of the territory. Because alliances between the natives and the Portuguese generated goods.
The first and best known, brazilwood, which started to be traded in Europe. That was when Portugal really started to have some economic interest in its American territories. At that moment, there was no commercial interest in Brazil.
The Portuguese exploited the brazilwood almost to extinction. Seeking another profitable product, Portugal divided the territory into Captaincies, not received with enthusiasm by the Portuguese. What was mouth-watering in Europe was a sweet novelty.
Sugar. In few years, there were huge sugarcane plantations in the captaincies of Pernambuco and São Vicente. And Brazil enters the 2nd economic cycle.
The sugar, the sugarcane. The first business set up in Brazil was the sugar mill, which then became the white gold. Actually, during the colonial period, Brazil responded to the Portugal projects and not to the Brazilian projects.
And therefore, the way sugar was produced in Brazil. . .
a plantation, a monoculture devoted to exports with slave labor, was in fact, the best way Portugal came up with to profit greatly from the sugar. From the product that would be exported. Portugal didn't have people to occupy Brazil.
So they began importing huge quantities of slaves from Africa to work in the Brazilian sugarcane plantations. African slaves were more adaptable. The Indians could escape to the woods, and it'd have been hard to chase them.
It was a common practice in Africa for the conquerers to enslave the subdued. Europeans started to sell them to the Americas, boosting the Brazilian production of sugar. Sugar became the main commodity in world trade.
By the turn of the 17th century, approximately 5% of the total revenue of the Portuguese empire came from Brazil. Thus, Brazil gains an economic importance that it didn't have during the 16th century. With the large estates, other economic activities appeared.
As well as a domestic market. Livestock farming began to develop strongly inside the Northeast in the 17th century. Leather, leather goods.
. . beans, rice, flour, dried beef meat, the cachaça and primary products.
And Brazil was able to start a dynamic colonial economy, which growth rate was higher than the Portuguese economy. The official currency came from Portugal, the real. Counted in mil-réis, escudos, cruzados, patacas, pennies, crowns.
. . One real wasn't worth half pataca or a penny.
But no currency was often used here. The currency circulating in Brazil was the silver minted in Potosí. In the 17th century, the Monastery of St.
Benedict in Rio de Janeiro where they have the Silversmiths Chapel, was one of the places where the silver was kept. The Santa Casa of Salvador, institution equivalent to the banks, financed the sugar production. They would lend money.
receive money. . .
So, basically, it was the financial institution at the time. People had no currency to trade. When they received currency, gold, etc.
, they used to keep it. and preferred to use the barter economy. Physical trade.
They would exchange beef for sugar. In the absence of paper money, negotiations were made by word, and the word was fulfilled. Buying on credit is the most ubiquitous, the most extensive economic institution created in Brazil.
It is the real basis on which capitalism in Brazil was created. The money was barely seen in the hands of the people. Without money, there was no tax.
Unless from the gold found. To circulate, the money should go through the casthouse. Only after they charged a fifth the bar received the royal seal.
And the expression "Bloody Fifth was created. " The Fifth was the most practical way to collect the tax. In 1580, this tax changed place.
Spain dominated Portugal, creating the Iberian Union. The largest Spanish interest in Brazil were the mills. In Pernambuco and Bahia, there were 300 of them, and others in the captaincies of Rio de Janeiro and São Vicente.
Under Spanish rule, the sugarcane cycle reached its apex. In 1600, England and France began founding its colonies in North America. But there, the colonization was very different from here.
Our lags behind the United States comes from our delay in the colonization. In the United States, they did the settlement colonization. And that replicated the society, the culture of England, the most advanced country at that time.
People came. Settlers came in to occupy, to plant, to produce. .
. They were entrepreneurs, independent from the Crown. While not even 5% of the Spanish and Portuguese colonizers brought their wives.
because they had no real intention of staying here. It was a very predatory spirit of enjoyment and exploitation of the colonial Brazil natural resources to get rich quickly. They came to find paradise, to enjoy paradise, to become rich as soon as possible and return to their metropolis.
In our case, we started with the Captaincies dominated by the Crown, that is, the state presence has always been most pronounced in Brazil. Brazil became the subject of a large trading company. Very large coffee plantations, sugar, cheap labor and little value added were needed.
This way, Brazil was born. Therefore, Brazil was born poor in this regard, unlike the United States, Argentina, Australia, to where few skilled immigrants were sent, and they planted high value-added crops. Those countries were born rich.
The British had an institutional vision different from the Portuguese's. In 1636, the United States already had a university. In "Hispanic America" there were 30 universities.
The first one from 1538. The Portuguese never created a university in Brazil. Even with colonies, no country has surpassed Spain, which had an unbeatable advantage.
Their gold. At that time, an idea prevailed. That the wealth came from the accumulation of precious metal.
The countries that had access to this wealth were very prosperous. And so, the idea that a country could become rich if it were able to export more than it exported, appeared. With that precious metal were accumulated.
Bills between countries were agreed in gold and silver. More in gold than in silver. It'll soon be discovered that wealth alone can't support the hegemony of a country.
What could be worth more than gold? What would be stronger than the invincible Spanish Armada? BRAZILIAN ECONOMY "A history told by those who built it" BRAZILIAN ECONOMY "A history told by those who built it" What would cause Spain, the richest nation in the world to lose its egemony?
Both Portuguese as Spain didn't create mechanisms to transform the momentary wealth into a more sustained process of enrichment to the society. It's no use to be rich, just to reach precious metal. Development is much more complex.
I would say that England was extremely successful in building institutions, favorable to capitalism. The Glorious Revolution of 1688 had a crucial importance. Now, the Parliament decided on the adoption of laws.
And the king also lost his power to fire judges. That created the roots of what would become the independent judiciary. Those were also the roots of what would be the separation of powers.
Legislative, executive and judiciary. And the three powers may question each other. In addition to making these institutional reforms, England was increasing its power in the colonies and in the world.
There was a navigation law giving exclusivity for goods transportation from England and to England. That was the Navigation Law. With that, England became the absolute owner of the seas.
Establishing itself as the major world power. Brazil was an ocean and centuries away. With the end of the Iberian Union and the sugarcane cycle, it was increasingly urgent to find an alternative to sugar.
Since 1600, the Bandeirantes sought inland wealth. They searched for gold, but could only find the so-called Outback drugs. such as guarana and the Brazil Nut.
After one century of inland-bound expeditions, they finally found gold and diamonds. And that region was named Minas Gerais, aka general mines. During the 18th century, half the world's production of gold and diamonds came out of Brazil.
Those who found gold, had money and used money to buy. And all of that created an internal market. Which reminds us of a rich colonial village where gold was found.
Vila Rica, aka the rich village, had an orchestra, opera houses, several churches and all. . .
A sophisticated social life with the market around it. The gold extraction stage only lasted 50 years between inland and outland, and it only served to consolidate the England-Portugal alliance. Brazil was attached to the colonial pact.
All that was produced had to go to Portugal, and all that was consumed came from Portugal. For instance, the gold extracted in Minas Gerais and Goiás had to be taken to Portugal. Portugal held the monopoly.
The trade monopoly with Brazil. But in reality what happened was that soon Portugal became very dependent on England. The goods that came, came to Portugal, were distributed to European countries under British scrutiny.
When they found gold, the first mint was founded in Salvador, which was the capital of the colony. And then, there was a race to Brazil. The Brazilian population, which was only 300 thousand inhabitants by the end of the 17th century, multiplied 10 times during the 18th century.
The slaves arrived in Brazil with more than a million African captives to work in the mines of gold and diamond. The slave product by the end of the 18th century was the main economic activity in Brazil. And it was more important than the large estates.
Just consider. Brazil was the largest slave depot in the Americas. The slave trade control was done in Brazil.
The great businessmen and big investors of Salvador and Rio de Janeiro were slave traders. Rio de Janeiro became the center of the slave trade in Brazil. Profits remained in the internal sector of the colonial economy.
They weren't sent abroad. Rio de Janeiro becomes the economic center of the colony. And when Brazil became viceroyalty, the city was made capital.
In the old continent, London had become a major center of the Enlightenment, which renewed the way of thinking and feeling. From science to the arts, and literature. From the political system to the philosophical thinking, the world saw an intense transformation that would be reflected in the economy.
The great fathers of modern economics, in terms of economic thought, are exponents of the Enlightenment philosophy. They turned the economic thought into an instrument to serve the development and the progress. The idea we have of wealth is basically the one Mr Adam Smith defined.
You take something from nature, leave a mark of work on it, and then you sell the object, as a commodity. This is the biggest assumption of the entire capitalist economy, and, by the way, Marx's socialist ideas. And the Capitalism gained new contours with the Industrial Revolution.
By the end of the 18th century, England recreated the production means. Up to that point, all human production capacity was based on the physical strength of people; in some precarious devices, such as waterwheels and windmills; or on the use of some animals, such as oxen to pull plows. Not much more than that.
So there was an extraordinary mobilization of knowledge and research for economic development. Humankind has conquered a powerful source of energy, which was coal. With the use of steam engines, England created an exponential scale production of goods and merchandise.
And production became increasingly efficient. It's the start of mass production in organized venues. They sped up means of transportation, integrated the global economy, thanks to the cheapening of transport by rail and with ships, powered by steam engine.
And besides, England had a wide, vast colonial space, which was used to ensure its industrialization. The Industrial Revolution fostered urbanization and increased the wealth in the world. Within 3,000 years prior to the 18th century, the per capita income was virtually stagnant.
With the Industrial Revolution, it happened what some scholars call the great divergence. Even with so much money and power, England could not prevent the American independence. England thought they had the right to tax the American settlers.
But the settlers disagree. And so, the revolt process begins, leading to the war of independence. Thirteen years later, it was the French who rebelled.
The French Revolution comes from the impoverishment of the population, the beginning of new ideas on participation, on freedom. . .
The social contract ideas. The revolutionary cut off the head of monarchy, and divided lands of the nobility and the church. In the same year, Tiradentes was arrested in Brazil.
Thus, imposing an end to the Minas Gerais Conspiracy. The Inconfindencia Mineira was inspired by the American Revolution. Which frightened the power owners in Portugal.
The Portuguse colonization meant to leave Brazil in a situation of little development in economic terms. There was a deliberate policy to prevent Brazilians from learning the alphabet. The court wanted to keep them illiterate.
Keep Brazil illiterate, captive, isolated and prohibited. With no ability to mobilize, to articulate. Because that was a way to keep Brazil under the Portuguese monarchy's control.
There were no universities, there were no libraries. . .
Schools were rare, isolated. It was forbidden to print books and newspapers. There were two instances of censorship.
It was forbidden to build roads, except those officially approved by the royal crown. There was a monopoly situation of Portugal in relation to Brazil, as well as a major constraint to economic activities here. Manufactures were prohibited, with the excuse of protecting the Portuguese monopoly.
A rather theoretical ban. They never saw a tax attorney in the 17th century because the government never showed up. And in the capital, social difference was more evident.
Brazil had a small Brazilian-Portuguese elite. A population of landowners, usually linked to the metropolis, to the Portuguese Crown. Coimbra law-graduated students.
. . And occupied the most important posts at the colonial administration.
But the vast majority of the population was poor, slave, illiterate and isolated in the territory. There was a floating population, which was our meager middle class, with people providing services to this agrarian export economy. That prevailed in Brazil for many centuries.
So I'd say that until late 18th century, for most of the Brazilian population, their country wasn't very different from the one Cabral found in 1500. A very simple country with a very rudimentary economy. No heroes, no hopes, no money.
In the late 18th century, Brazilians had no great expectations. But chances would show aces up the sleeve. French General Napoleon Bonaparte threw the fate that expanded the fields of France.
Harsh winds blew the Portuguese court to the south. Fate was uncertain, but it was called Brazil. What should Brazilian people expect?
