Early Globalization and the Economic Development of the United States and Brazil 9780313010712, 9780275971991

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Early Globalization and the Economic Development of the United States and Brazil John DeWitt

Library of Congress Cataloging-in-Publication Data DeWitt, John, 1934– Early globalization and the economic development of the United States and Brazil / John DeWitt. p. cm. Includes bibliographical references and index. ISBN 0–275–97199–6 (alk. paper) 1. United States—Economic conditions. 2. Brazil—Economic conditions. 3. Globalization. I. Title. HC103.D44 2002 338.981—dc21 2001051369 British Library Cataloguing in Publication Data is available. Copyright © 2002 by John DeWitt All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2001051369 ISBN: 0–275–97199–6 First published in 2002 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984). 10 9 8 7 6 5 4 3 2 1

Contents

Illustrations Acknowledgments Introduction 1. The Mother Countries: World Power and Vassal State; Mercantilism Dominates Colonial Policies 2. 3. 4. 5. 6. 7.

Atlantic Ocean Circulation Systems, Early Settlements, and Land Distribution Systems

vii ix xi 1 17

Plantation Agriculture Creates a New World Civilization Engines of Economic Development (Part I): Fishing, Whaling, and Ship Construction

59

Engines of Economic Development (Part II): Trade, Commerce, and Family Farm Agriculture

75

1808: “Economic Fault Line” and “Line of Demarcation”; Protectionism and Free Trade as Development Strategies

95

Global Economy Relationships between Core and Noncore States

8. Nineteenth-Century Transformations 9. From the Colonial Era to the Gilded Age and the Belle Epoque Selected Bibliography Index

41

113 129 155 167 175

Illustrations

MAPS 1. 2. 3. 4. 5.

Political Map: Brazil Political Map: Contiguous United States Ocean Currents of the North and South Atlantic New England Southeast Brazil

xii xiii 19 83 86

Acknowlegments

Sincere thanks to Cynthia Harris of the Greenwood Publishing Group for her patience, help, and encouragement. She made this a better book. Thanks also to Jim Sloan for making the maps. Friends, colleagues, and students in the United States and Brazil provided invaluable support during the preparation of the text. Many librarians gave generous assistance, including those at Radford University, the University of Florida, the Biblioteca Nacional, the Instituto Brasileiro de História e Geografia, and the Biblioteca da Marinha on the Ilha das Cobras. Their unfailing courtesy and high degree of professionalism made research a pleasure. A deep debt of gratitude is owed to my wife and our son—to Eliana for suggestions, reassurance, and proofreading and to Danny for sacrificing many computer hours with Pajama Sam and Spy Fox so I could work on the manuscript. Help came from many sources, but the responsibility for the book, its content, and opinions is mine.

Introduction

As the two most populous states of the Americas, the United States and Brazil have long attracted close attention. The populations of both states include descendants of Native Americans and voluntary and involuntary immigrants from Europe, Asia, and Africa. Today the United States and Brazil possess productive and efficient industries and are major exporters of agricultural products. Both countries are proud of their international contributions to art, literature, music, sport, theater, and cinema. From small, scattered colonial outposts on the Atlantic coast in the sixteenth and seventeenth centuries, Brazil and the United States expanded aggressively, as colonies and as independent states, at the expense of weaker neighbors to obtain national territories of continental proportions by 1900. Brazil is larger than the contiguous territory of the United States, but in total national territory the United States ranks fourth in the world and Brazil fifth. Both states have a federal form of government to reconcile regional differences in their vast domains. (See Maps 1 and 2) Brazil and the United States began as colonies of powerful European maritime states that practiced mercantilism to increase the economic strength of the mother country. Both developed plantation agriculture to export crops to Europe. Mainland British America was a world leader in the production of tobacco, rice, and indigo. Portuguese America was the most important sugar exporter of the globe for one hundred years. Following independence the United States produced more cotton than any other country in the world, and Brazil was the global leader in the export of coffee. To provide labor for their plantations, Brazil and the United

Introduction Map 1 Political Map: Brazil

States became the world’s leading slave states. In 1860 there were four million slaves in the United States, more than in any other country. Brazil led the world in the importation of African slaves. Many Europeans and Asians immigrated voluntarily to both countries. Brazil and the United States are similar in many ways, but different rates of economic development are dramatic. At the dawn of the twenty-first century the United States had the world’s most powerful economy. After five hundred years Brazil still struggled to break the shackles of underdevelopment. In 1954 Brazilian historian Clodomir Vianna Moog asked: How was it possible for the United States, a country younger than Brazil and smaller in contiguous continental area, to achieve almost miraculous progress . . . whereas Brazil, whose history antedates that of the United States by more than a century, still appears, even in the light of the most optimistic interpretations and prophecies, only as the uncertain land of the future? What facts have determined the course of the two histories to produce so great a contrast?1 xii

Map 2 Political Map: Contiguous United States

Introduction

The purpose of this book is to offer an explanation for the enormous contrast between the economic development of the United States and that of Brazil.

“NATIONAL CHARACTER” Interpretations of Brazil’s slow development pace based on population composition were widely accepted in the nineteenth and early twentieth centuries. These theories alleged that the Brazilian people were deficient in those qualities and characteristics required for sustained economic development. Analysis based on “scientific racism” and cultural deficiencies caused by climate or religion found the Brazilian “national character” flawed to the extent that it was impossible for Brazil to compete successfully in the world economic arena. “National character” theories originated in Europe and provided justification for imperialism and the exploitation of peoples judged inferior because of their race or culture. The “superior” elites of the United States and Brazil also accepted these pernicious doctrines as rationale for subjugating many of their fellow citizens. Simplistic analyses of the Brazilian reality drew the fire of literary critic Alfredo Bossi. He deplored attempts to describe the characteristics and defects of the Brazilian “national character,” which he called a “treacherous notion” that produced stereotypes manipulated “with the rusty tools of a ‘psychology of the people.’ ”2

MODERNIZATION THEORY AND DEPENDENCY THEORY Since the middle of the twentieth century, explanations of economic development have, for the most part, shifted emphasis from “national character” themes to descriptions of individual states and their place in the international economy. Modernization theory and dependency theory are two examples of this kind of analysis. Modernization theory portrays economic development as a phased process, with all countries passing through the same stages from underdevelopment to development. The race to industrialization and prosperity is linear, with all countries traveling on the same track. World economic leaders are further along than others. All countries pass by the same mileposts on a course first traveled by Great Britain. With a little outside help from rich and friendly developed states, poor countries can achieve “takeoff” and close the economic gap with the wealthy provided they work hard, make sacrifices, restructure their economies, and follow the rules of international economic relations laid down by economically powerful countries.3 xiv

Introduction

Brazilians, including Teotonio dos Santos and Fernando Henrique Cardoso, were leaders in the development of dependency theory, which holds that today’s modern states industrialized at a time when relationships with underdeveloped regions were important factors in economic growth. Wealthy country development resulted in the underdevelopment of subordinate areas of the globe. Less developed countries have always been in a state of dependency. During the colonial era they were dominated by European mother countries. Following political independence they were dependent on world economic powers in Europe and North America. Less developed states today are dependent on transnational firms and international financial institutions. Economic development that takes place in developing states under these circumstances is dependent development.4 Modernization theory and dependency theory provide useful insights, but they have drawbacks for understanding the economic development process. Modernization theory that uses Great Britain as a model looks almost exclusively at the internal changes that produced the world’s first industrialized state. The significant impact on development made by imperialism and international commerce, including the slave trade, is largely ignored. Some advocates of dependency theory portray developing regions as the helpless victims of malevolent external forces while ignoring internal factors.

THESIS OF THIS BOOK Economic development is an evolutionary process that depends on many internal and external factors acting over centuries within the context of an increasingly globalized world economy. It is the result of many forces interacting during hundreds of years. “Underdevelopment is not improvised. It is the work of centuries,” wrote Brazilian journalist and poet Nelson Rodrigues.5 The thesis of this book is that the existing differences in the levels of economic development of Brazil and the United States are caused by the different ways that these two states were incorporated into the global economy. The legacies produced by the way that these two regions joined the world economic system continue to influence economic performance. Huge social deficits accumulated during centuries of material development still trouble the United States and Brazil. The beginning of European settlement in the Americas is an obvious starting point for this volume. An appropriate era to conclude the text includes the last years of the nineteenth century and the first of the twentieth. One hundred years ago the United States had emerged as the world’s leading industrial power and, with the end of the frontier, was embarking on foreign conquests. In Brazil slavery had been abolished, the monarchy xv

Introduction

overthrown, and the production of coffee using immigrant labor seemed to guarantee future prosperity. Politically, both countries entered a conservative period of continuity and stability—the United States with a series of Republican administrations controlled by industrial and financial interests and Brazil with the national government dominated by large landowners of São Paulo and Minas Gerais. In the United States the latter part of the nineteenth century became known as the Gilded Age, when the glitz and glitter of economic excess masked serious social problems. In Brazil the first decade of the twentieth century was the Belle Epoque (Glorious Era) of Rio de Janeiro. Massive urban renewal converted the nation’s capital into one of the world’s most magnificent cities, while in the vast interior of the country economic and social patterns that had prevailed since colonial times remained unaltered.

FIVE HUNDRED YEARS OF GLOBALIZATION Wall Street Journal reporter Marcus Brauchli wrote that globalization is not a recent phenomenon. His article, subtitled “The Roots of the Global Economy Go Back Many Centuries,” said, “Globalization may be a catch phrase of the 1990s, but more and more economists and historians are looking for its roots deeper in history.”6 In 1500 the inhabited world consisted of many self-sufficient regional economies ranging from East Asia to the Andes Mountains that had little or no contact with economic, political, or cultural events in other areas of the globe. By conquest, coercion, persuasion, and subversion during the last five centuries all regional economies have been consolidated into one global economy dominated by Western Europe, Japan, and the United States. The world economy consists of states grouped in three tiers—core, semiperiphery, and periphery. Core states are the United States, Japan, and the countries of Western Europe. Brazil, Russia, China, Mexico, and India are examples of semiperipheral states engaged in a Sisyphean struggle to advance within the global system. States in the periphery are the poorest of the poor, represented by Haiti, Bangladesh, Bolivia, and African countries south of the Sahara except South Africa, a semi-peripheral state. Competition is the basic economic relationship among core states. Each strives to be the core leader. The relationship between core and noncore states is economic domination. The powerful states of the world economy seek to maintain the noncore in economic subservience and prevent semiperipheral states from advancing to the core, where they would compete for global economy leadership. Globalization creates enormous profits and huge economic inequalities. Wealth is concentrated in core states. The economic gap between core and noncore increases. Income distribution within states becomes more skewed. xvi

Introduction

The composition of the three tiers of the global system has been remarkably stable for centuries. There has been little upward or downward movement. Only the United States and Japan have succeeded in joining Western European countries in the core. During the twentieth century several countries, including Brazil, experienced short periods of spectacular economic growth called “economic miracles,” but no state has advanced to the core since Japan joined the elite in the first decade of the last century. By 1900 the modern world economy was global in scope.7 The ways in which the United States and Brazil became participating members of this economy best explain why the United States has become the world’s dominant economic power while Brazil is still mired in the semiperiphery of the world economy. AUTHOR’S VIEWPOINT The perspective presented in this book is the result of extensive review of secondary sources, including works in English and Portuguese on anthropology, economics, geography, political science, sociology, literature, and history. Research analysis is based on my experience, which includes six years in Brazil as a graduate student in Bahia, foreign service officer in Brasilia and Rio de Janeiro, and resident of Curitiba, Parana, and Barra Mansa, Rio de Janeiro. I have visited states from Acre to Rio Grande do Sul. Development issues were a central theme while teaching geography at Radford University for eleven years and at the Federal University of Pernambuco during several short courses. Countless conversations with friends, colleagues, and students in the United States and Brazil have contributed to my understanding of the issues discussed in this book. I wrote the text based on research and long experience involving Brazil for an interdisciplinary audience interested in globalization, economic development, and Brazil. I hope that the book will increase understanding of the important topics discussed. To focus the text and keep its length to manageable proportions, several interesting lines of inquiry such as state and nation building, the rule of law, property rights, and development comparisons with other Latin American states were not included in this work. The chapters present material that relates directly to how economic development was influenced by the ways that Brazil and the United States joined the world economy. CHAPTER SUMMARIES Incorporation of British and Portuguese America into the economy of Western Europe occurred during an early phase of globalization. The mother country’s position within the world economy was an important determinant of colonial development. Great Britain became the world’s stronxvii

Introduction

gest economic power, while Portugal declined from greatness to the status of Britain’s commercial vassal. Mercantilism dominated the economic policies of European states until the middle of the nineteenth century and provided the guidelines for the economic relationships between mother countries, their colonies, and the world economy (Chapter 1). Chapter 2 discusses the circulation systems and natural resources of the Atlantic Ocean north and south of the equator, the kinds of colonies established in the Americas, and the systems that evolved in British and Portuguese America for land distribution to private owners. Plantation colonies and colonies on the periphery of the plantation zone were two basic kinds of settlements established by Europeans. Plantation regions were made part of the world economy by exporting crops produced on large landholdings worked by African slaves. Exports went exclusively to the mother country. Colonies on the margins of the plantation region were of little direct economic interest to European states. New England and the Middle Atlantic colonies used the circulation system and resources of the North Atlantic to develop a thriving maritime, commercial, and small farm economy. They joined the global economy by exporting to markets outside the mother country. The southern periphery of Portuguese America was part of the weak circulation system of the South Atlantic with its meager resource base. Brazil from São Paulo south was thinly populated and had a sluggish economy with little connection with the world economy until late in the nineteenth century. Large landholdings prevailed in Portuguese America. It was always difficult, and sometimes impossible, for the small farmer to obtain legal title to the land that he tilled. The same situation existed in the plantation region of British America. In the northern colonies of North America, however, a landholding system favoring family farmers evolved. Squatters’ rights were widely recognized during the colonial period. Development of family farms expanded in free-labor United States following independence. Plantation colonies, peripheral colonies, and their legacies are discussed in more detail in Chapters 3, 4 and 5. In British North America two powerful and distinct civilizations evolved, one in the plantation region and the other in the zone north of the plantation zone. The North’s counterpart in Brazil, the region from São Paulo to Rio Grande do Sul, failed to achieve economic and political influence until late in the nineteenth century. The civilization based on plantation agriculture located from Pernambuco to Rio de Janeiro, similar in many ways to that of the South, was the only one that wielded power in Brazil. The year 1808 was decisive in the economic development of Brazil and the United States. The former began an era of free trade with ports open to ships of all countries. The latter started its Industrial Revolution behind trade barriers that protected domestic manufacturers. With the Anglo-Portuguese commercial agreements concluded after the move of the xviii

Introduction

Portuguese Crown to Rio de Janeiro, Brazil leaped from the frying pan of Portuguese mercantilism to the fire of British free trade. It was impossible for Brazilian industries to compete with the flood of cheap European imports. In the United States barriers to imports created by the Embargo Act of December 1807 and the War of 1812 were continued by protectionist tariffs when war ended. An expanding domestic market protected by tariff walls allowed industry to grow and prosper throughout the nineteenth century. The leading political economists of the United States and Brazil when these states achieved independence were Alexander Hamilton and José da Silva Lisboa, Viscount Cairu. Both had profound influence on government policies and generations of economists in their respective countries. Hamilton urged the United States to develop a balanced economy based on industry and agriculture. He warned against depending on Europe as a source of manufactured goods. Cairu believed that Brazil would achieve greatness by developing its vast agricultural potential. He favored importing European manufactured products rather than developing a Brazilian industrial park (Chapter 6). Great Britain dominated the world economy during the nineteenth century. Policies were directed at maintaining international economic supremacy by dominating a huge imperial empire, formal and informal, and by undermining economic development of global economy competitors, actual and potential. Belief that the Anglo-Saxon was superior to all other “races” provided justification for Britain’s harsh treatment of peoples in Asia, Africa, and Latin America. Following independence, Brazil and the United States had distinctly different relationships with the world’s economic superpower. The United States asserted economic independence from Britain early in the nineteenth century and by 1900 had an economy strong enough to assure world economy membership as a core state. Brazil remained subservient to Great Britain and was still a British economic colony and semiperipheral state at the beginning of the twentieth century. The experiences of India, China, and Japan illustrate the importance to economic development of relationships between developing areas and core states. India and China, like Brazil, remained subordinate to the core in the 1900s. Japan, like the United States, advanced from the semiperiphery to the core (Chapter 7). During the nineteenth century the United States was transformed from a maritime and agricultural country in the periphery of the global economy to the world’s leading industrial state competing with Great Britain for core leadership. The huge national territory was bound together by the explosive growth of railroads. The 1800s witnessed great changes in territorial limits, transportation, industry, agriculture, immigration, and population size and distribution. A greatly expanded and protected domestic market made economic development possible. xix

Introduction

Many changes took place in Brazil as well, but the giant of South America ended the century as a semiperipheral state exporting agricultural products and importing manufactured goods. As in the United States, national territory expanded, and there were important changes in agriculture, population size, and immigration. Brazil did not have a transportation revolution, however, which limited settlement of the interior, expansion of the domestic market, and economic development. In the United States the national political power of the large landowners of the South, wielded since the founding of the Republic, was destroyed by the Civil War. Beginning in the 1860s, industrial, commercial, and financial leaders of the North exercised control over national policies. In Brazil, the emancipation of the slaves did not diminish the decisive national political influence that large landowners had possessed since the colonial era. The landed oligarchy continued to wield disproportionate political influence through the nineteenth century and beyond. In both Brazil and the United States former slaves joined the ranks of the rural poor who were exploited economically and excluded from political influence. Prevailing racist theories provided the powerful with excuses to deny millions of their compatriots the full rights of citizenship (Chapter 8). Chapter 9 concludes the text. Different patterns of economic development in the United States and Brazil evolved during centuries within the context of globalization. Tremendous material advances coexisted with enormous social problems. Social Darwinism, the dominant philosophy of elites in both countries, said that extremes of wealth and poverty were decreed by the Creator. There is a tendency to concentrate attention on recent events to explain today’s reality. This is a mistake. C. Vann Woodward observed that “America has a history. It is only that the tragic aspects and the ironic implications of that history have been obscured by the national legend of success and victory and by the perpetuation of infant illusions of innocence and virtue.”8 Brazil also has national legends and infant illusions that obscure its history. To improve, each state must objectively evaluate its past and plan for the future accordingly. There is no magic formula to solve social problems or to transform developing states to economic superpowers. Economic miracles are a snare and a delusion. Individual states must chart their own economic development, concentrating on improving the lives of all citizens while reducing the harshest effects of inevitable globalization. NOTES 1. Clodomir Vianna Moog, Bandeirantes and Pioneers, translated from the Portuguese by L. L. Barrett (New York: George Braziller, 1964), 5. One of Brazil’s most important cultural leaders, the singer, composer, and writer Caetano Veloso observed that “Brazil is the other giant of America, the other melting pot of races and xx

Introduction cultures, the other promised land for European and Asiatic immigrants, the Other. The double, the shadow, the negative of the great New World adventure” Caetano Veloso, Verdade tropical (São Paulo: Companhia das Lêtras, 1997), 14. 2. Alfredo Bossi, História Concisa da Literatura Brasileira (São Paulo: Editôra Cultrix, 1983), 428. 3. A good example of modernization theory is Walt Rostow’s “noncommunist manifesto.” W. W. Rostow, The Stages of Economic Growth (Cambridge: Cambridge University Press, 1966). 4. See F. H. Cardoso and E. Faletto, Dependency and Development in Latin America (Berkeley: University of California Press, 1979); Peter Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton, NJ: Princeton University Press, 1979). 5. Quoted in Roberto Campos, “Os falsos canalhas,” Veja, 13 October 1999, 21. 6. Marcus W. Brauchli, “Echoes of the Past: The Roots of the Global Economy Go Back Many Centuries,” Wall Street Journal, 26 September 1996, R24. 7. Peter J. Taylor, “Understanding Global Inequalities: A World-Systems Approach,” Geography (United Kingdom) 77 (January 1992), 10––20. 8. C. Vann Woodward, The Burden of Southern History, 3rd ed. (Baton Rouge: Louisiana State University Press, 1993), 209.

xxi

CHAPTER 1

The Mother Countries: World Power and Vassal State; Mercantilism Dominates Colonial Policies

The status of European states within the global economy greatly affected the early economic development of their colonies in the Americas. All colonies were brought into the world economy according to the principles of mercantilism, but the power and influence of the mother country dictated how policies would be applied. Because Portugal was reduced to Britain’s commercial vassal by the middle of the seventeenth century, British policies had an enormous impact on the development of Portuguese America as well as on its own New World possessions. Great Britain was the first state to experience the agricultural and industrial revolutions. In the nineteenth century it was the most powerful country in the world with a growing and mobile population, an expanding economy, a mighty navy and merchant marine, and a colonial empire that spanned the globe. Portugal was the world’s greatest maritime state in the sixteenth century. By the late 1600s it had fallen from the pinnacle of global influence to the status of a semiperipheral state. With political independence guaranteed by British military power and an economy dependent on inefficient agriculture and the wealth of Brazil, Portugal became economically subordinate to Great Britain. PORTUGAL: FROM GLORY TO SUBSERVIENCE Few states can rival Portugal’s spectacular international success. Maritime exploration led to the creation of a rich Asian trading empire and pos-

Early Globalization and Economic Development

session of the most profitable colony in the Americas. Few states can equal Portugal’s precipitous fall from greatness, surviving as a European state because of military protection provided by Great Britain and economic sustenance received from Brazil. In 1550 Portugal dominated more world trade routes than any other country, but within fifty years the Netherlands and Great Britain had become the new leaders of global commerce. From a commanding role in the core of the European economy Portugal plummeted to semiperipheral status. In the early 1500s Portugal was the world’s leading maritime state. Capture of Cueta in North Africa in 1415 was the first of many foreign conquests by Europeans. French historian Fernand Braudel wrote that “Portugal was the detonator of an explosion that reverberated round the world. This was her finest hour.”1 The Portuguese pioneered sea routes from Europe to Asia. Explorations down the west coast of Africa were capped by the 1488 voyage of Bartholomeu Dias that reached the Cape of Good Hope. Ten years later Vasco da Gama sailed around Africa to Calicut on India’s southwest coast and returned to Lisbon with trade goods that earned an enormous profit. Portugal secured the route to the East and an uninterrupted supply of pepper and cloves with better weapons, aggressive action at sea and ashore, superior ships, and skilled seamanship.2 Seamen suffered greatly for the glory of Portugal. Many perished at sea. More than half of Vasco da Gama’s sailors died of scurvy on his first voyage to India.3 Brazil was claimed for Portugal by Pedro Álvares Cabral on 22 April 1500. Following Vasco da Gama’s route of sailing to the west to take advantage of South Atlantic winds and currents instead of heading south along the African coast, Cabral made a landfall in South America on his voyage to India. The site of Cabral’s landing was a stroke of good fortune for Portugal. It lay east of the line dividing the world by the Treaty of Tordesillas of 1494. This agreement between Spain and Portugal was designed to give the former sole rights to exploit the Americas (believed to lie entirely west of the treaty line) and the latter a monopoly on Asian trade. Europe, Africa, and the Americas were first linked to the global economy by the slave trade, which for over a century was essentially a Portuguese monopoly. As Portugal’s power declined, stronger European states—the Netherlands, Great Britain, and France—became the leading slavers, all eager to secure profits from the sale of human beings. Portugal’s Golden Age was brilliant and brief. Between 1500 and 1580 it was a world power. The forced union with Spain, 1580–1640, was a disaster. Portugal lost its Asian empire to the Dutch and the British. The powerful merchant marine was reduced by more than 50 percent, and the productive cod fishing fleet ceased operations off the North American coast. 2

The Mother Countries

Treaties with Great Britain Reduce Portugal to Vassalage Fragile independence was regained in 1640 under the Bragança dynasty. Aweak Portugal maintained a semblance of sovereignty by signing treaties with Great Britain, obtaining military protection in exchange for commercial concessions. British guarantees of Portuguese political independence came at a high price. The trade advantages given to England became serious obstacles to the economic development of Portugal and Brazil. Four major treaties were signed from 1642 to 1703 that made Portugal a semiperipheral state subservient to Great Britain. Portugal and Brazil were rich economic prizes for the British in their drive to become the dominant core state of the world economy. Britain enjoyed special trading advantages with Brazil for more than two hundred years until 1844, when the first protectionist tariff was enacted. Dutch geographers Ligthart and Reitsma wrote that the Anglo-Portuguese treaties forced Portugal into the subservient position of a commercial vassal by reducing her—together with Brazil—to a protected semi-colonial market for English-made textiles and other manufactured products. These treaties were major factors in England’s growth into a strong economic power, not so much because of the relationship established with Portugal but because of the relationship established with Brazil.4

The Methuen Treaty of 1703 is the best known Anglo-Portuguese agreement. It provided that the British would admit Portuguese wines at a third less duty than that imposed on French and German wines, and the Portuguese would remove the existing restrictions on the importation of English woolens. Writing in the late 1800s, the Portuguese political-economist Joaquin Pedro Oliveira Martins concluded that to remain free from Spain, Portugal “subjected herself and us to the exploitative protection of an England that preached free-trade, this excellent doctrine of the strong against the weak.” Portugal became “a nation of obscure wine makers, subservient people, farmhands, and serfs.”5 British writers like historian C. R. Boxer and Cambridge fellow J. B. Trend have scoffed at claims that the Methuen Treaty damaged Portugal’s industrial potential. Boxer claimed that the negative effects of the treaty have been grossly exaggerated. Trend maintained that Portugal failed to industrialize because of national character traits, not because of the treaty. He wrote that the Portuguese were more inclined “to a life of adventure and money made easily than to the slow, monotonous regularity and application which industry demands.”6 Trend failed to explain how Portuguese immigrants to the United States, burdened with this cultural baggage, became productive, highly valued factory workers in the industries of New Bedford, Fall River, and other New England cities. Morse Stephens of 3

Early Globalization and Economic Development

Balliol College, Oxford declared that the treaty was advantageous to both countries. The English imported port wine instead of claret and hock, and “the Portuguese imported everything they wanted beyond the bare necessities of life from England.”7 Boxer, Trend, and Stephens are understandably reluctant to acknowledge their country’s shabby treatment of an ally. The fact remains that a world power took economic advantage of an impotent friend, a common occurrence in the relationships between core and noncore countries. The commercial agreements with Great Britain resulted in a trade imbalance in England’s favor, paid for by Portugal with gold and diamonds from Brazil. About 40 percent of the world’s gold in the eighteenth century was mined in Brazil, and much of it went to Great Britain to help finance its Industrial Revolution.8 Admiral Alfred Thayer Mahan, American naval historian and geopolitician, wrote in 1890 that the Methuen Treaty “gave England the practical monopoly of Portuguese trade and sent the gold of Brazil by way of Lisbon to London.”9 An often cited quotation is the first Braganca King’s affirmation that “Brazil is Portugal’s milch cow.” In fact, the milch cow was Britain’s. Portugal was merely the milkmaid, skimming off a little cream before passing the brimming bucket to Great Britain. By the early 1700s Portugal had lost its Asian empire, and treaties with Britain blocked industrialization. The agricultural economy was weak, and the commercial fleet was devastated. Portugal tenaciously clutched Brazil to provide economic well-being. Caio Prado, Jr., wrote that Portugal “became a simple parasite of its colony.”10

GREAT BRITAIN: THE RISE OF A SUPERPOWER While Portugal was in free-fall descent from world power to vassal state, Great Britain was going from strength to strength to become a global superpower. The agricultural and industrial revolutions are both indispensable to modern economic development, and both occurred first in Great Britain. In a long series of European wars, the British fleet defeated the navies of the Netherlands, Spain, and France. The British merchant marine became the world leader in international commerce. Beginning with Ireland and Newfoundland as its first colonies, Great Britain expanded overseas influence until by 1900 it controlled 25 percent of the earth’s land surface occupied by 30 percent of the world’s population. This does not include the many nominally independent states, Portugal and Brazil among them, where British influence was so great that state sovereignty was a flimsy facade barely concealing British control. 4

The Mother Countries

Agricultural Revolution Increases Production, Consolidates Farms The agricultural revolution introduced changes that increased production and efficiency. Different crop rotation, more effective planting methods, better marketing and distribution systems, improved soil fertility, and mechanization were among the innovations. Land use patterns were restructured, destroying the fragmented landholding system that had included a commons used by small farmers. A large segment of the rural population living at the subsistence level could no longer make ends meet. The Enclosure Acts were part of a process that increased the size of landholdings and the number of landless villagers while decreasing the number of farms. The traditional agricultural system was smashed, and fragmented farm parcels were consolidated. The open-field system of England and the infield and outfield system of Scotland were destroyed. Early enclosures transformed large tracts of land from crop agriculture to pasture. Landlords raised sheep, selling wool to Flanders and a rapidly expanding domestic cloth industry. Growing urban populations required greater food production which increased pressure for greater agricultural productivity. Between 1760 and 1815 approximately six million acres were enclosed, about 25 percent of the arable land of England. By 1825 the main work of enclosure had been completed.11 Farm consolidation was a disaster for the rapidly expanding population. Much of rural England became pauperized.12 Many small farmers became itinerant wage laborers, wandering the countryside seeking temporary work. Others moved to the cities to swell the ranks of slum dwellers seeking industrial employment. Still others sailed for America as indentured servants or redemptioners. The First Industrial State: Textile Exports Lead the Way The Industrial Revolution began early in the eighteenth century and was completed by 1850. By the middle of the nineteenth century twice as many people were employed in industry as in agriculture, and more than 90 percent of exports were manufactures. Machinery made by industry improved agricultural output. The agricultural revolution produced the food required by ever larger urban populations. Some displaced farmers and their wives and children became factory workers. Britain was the world’s first industrialized and urbanized state. London tripled in size between 1801 and 1851. With a population of 2,500,000, it was the largest city in the world. Enormous wealth and great economic inequality were created. “Whoever says Industrial Revolution says cotton. . . . Cotton was the pacemaker of industrial change.”13 Textiles led industrialization and attracted capital, profits, and labor, stimulating other industrial sectors.14 The 5

Early Globalization and Economic Development

importance of textiles at the beginning of Europe’s Industrial Revolution can be equated with that of steel in its later stages. Textiles made up over 50 percent of British exports by value in 1750 and over 60 percent by 1800. About 85 percent of textile exports went to Africa before 1750, and over 40 percent during the next two decades. Much English cloth went to Lisbon for the domestic market, for re-export to Brazil, or to be traded by Portuguese merchants for slaves.15 Cotton goods and woolen products made up 60 percent (by value) of British exports in 1850. Textiles continued as the chief item of Britain’s export trade through the nineteenth century, accounting for 39 percent of all exports in 1896. With Indian textiles barred by the British government in 1700, the cotton textile industry developed in a protected home market until strong enough to withstand competition from foreign imports.16 Cotton textiles became an export industry, with 90 percent of production going to foreign markets by the end of the nineteenth century. More than 85 percent of cotton exports went to the underdeveloped world in 1900. Cotton textiles became the most important industrial product in terms of output, capital investment, and number of workers.17 Other major producers of cloth such as France, Spain, Austria, and Prussia adopted mercantilist policies to shield their textile industries from foreign imports. France made it illegal to import textile yarns or fabrics of any kind. European states protected their textile industries—Portugal was a notable exception—but in other parts of the world markets were open. J. H. Clapham, author of a three-volume work on Britain’s economic history, wrote that “Manchester lived on shirts for black men, and yellow men, and brown men, and for the Moslem world.”18 The British Empire Spanned the Globe Britain’s increased imperial power coincided with changes in domestic economic structure caused by the industrial and agricultural revolutions. There was a strong, direct relationship between domestic growth and overseas expansion. Britain came late to the Caribbean after Spain had claimed the larger islands. Its first activities in the region were piracy, privateering, and raiding Spanish shore installations, stealing from the Iberians what they had plundered from mainland Indian civilizations. It soon became evident that greater profit could be obtained by producing tropical agricultural products with slave labor on Jamaica, wrested from the Spanish, and smaller islands such as Barbados, Antigua, Nevis, St. Kitts, and Montserrat. Britain also began American mainland colonization in the Guianas, Virginia, and along the Massachusetts coast. The empire expanded in India, Australia, New Zealand, Asia, and Africa. The possessions in the Americas represented but one segment of a vast imperial domain. By 1895 Great Britain “was at the zenith of empire. . . . Not since the Romans had imperial dominion been flung as wide.”19 6

The Mother Countries

With improved efficiency and productivity in industry and agriculture, an overseas empire that provided markets for domestic manufactures, a strong navy to enforce its dictates, and leadership in international commerce, Britain became the world’s dominant power in the global economy. The world’s economic and financial capital moved from Amsterdam to London. By 1850 Britain supplied 50 percent of the cotton cloth and more than 25 percent of all goods in international trade.

MERCANTILISM: CORE STATE POLICY FOR THREE CENTURIES Two economic principles have dominated economic relations between states for the last five hundred years. Both were developed by core states and imposed on the rest of the world. Mercantilism governed European economic policies for more than three hundred years. It dominated international economic relations during the colonial and early independence periods of the United States and Brazil. European states brought their colonies into the world economy under mercantilistic policies to strengthen the domestic economy of the mother country. Adam Smith’s Wealth of Nations, written in 1776, was a powerful polemic that justified the jettisoning of mercantilism in favor of free trade. Smith’s advice was followed in the middle of the nineteenth century when it became economically advantageous for core states to become free traders, a posture that they have maintained ever since. For five centuries mercantilism and free trade have provided the guidelines for globalization. Mercantilism consisted of policies adopted by emerging European territorial states to strengthen their economies and provide national security.20 European countries adopted similar mercantile policies. Atreasury surplus of gold and silver to support the central government and finance military operations was a universal goal. Afavorable balance of trade was necessary to keep the current account in the black. Specie was the commodity most coveted by European mercantilists. Export expansion was required to increase bullion reserves. States sought self-sufficiency through protection of domestic agriculture and industry to avoid reliance on foreign suppliers. Mercantilism dictated how European colonies would be incorporated into the global economy. Colonies existed to increase the economic well-being of the European parent in a tightly closed economic system.21 Colonial economies were organized to export raw materials to the mother country, eliminating the need for purchases from rival states and providing national merchants with a lucrative re-export business when colonial production exceeded domestic needs. Colonies were markets for mother country manufactures and were discouraged or prohibited from establishing local industries or importing manufactured goods from other states. Only merchant vessels of the mother country were to be employed in colonial trade. 7

Early Globalization and Economic Development

Colonies devoted to plantation agriculture from the Chesapeake Bay in British America to Guanabara Bay in Portuguese America approximated the mercantilist ideal, creating great wealth for the mother countries. In comparison, the British Middle Atlantic and New England colonies and Portuguese America south of Rio de Janeiro were of little direct economic importance to the European parent.

British Mercantilism: Policies of a Strong State Enmity between the Netherlands and England increased as the seventeenth century progressed. Dutch strength came from foreign commerce and an extensive merchant marine devoted to the “carrying trade”—transporting the cargos of foreign shippers. The Dutch controlled much of England’s European trade and were active in commerce between England and its colonies. By 1650 they owned more than half the ships engaged in European commerce. The English passed a series of Navigation Acts between 1651 and 1696 to weaken the Dutch. This legislation was a mainstay of British mercantilism. Victory in three Anglo–Dutch wars between 1652 and 1675, a robust economy, a growing colonial empire, a powerful navy, and an expanding merchant marine enabled Britain to replace the Netherlands as the European economy’s dominant state by 1700. The Navigation Acts: Britannia Rules the Waves The Navigation Acts regulated British trade. Imports from Southern Europe on Dutch vessels were banned, and colonial products could be carried to England only on English ships. European products were admitted to the colonies only on English vessels or on ships of countries of product origin if they first docked at an English port.22 Ships were English if the captain and three-fourths of the crew were British, a provision that made colonial ships the equals of those from the mother country. Eliminating Dutch traders from British empire commercial activity created as many opportunities in trade and commerce for British merchants and shipowners in mainland British America as for those in England.23 The acts specified “enumerated products”—sugar, indigo, cotton, tobacco, naval stores—that could be shipped only to England or other English colonies. Tobacco from Spain, Brazilian sugar from Portugal, and naval timber and naval stores (tar, pitch, and turpentine) from Scandinavia and the Baltic region were replaced by imports from the colonies. Britain reduced dependence on other European states and improved her balance of trade. Virginia, producing tobacco on plantations with slave labor, was dear to the hearts of British mercantilists. The tobacco-processing industry in England supplied the domestic market and created a valued product for ex8

The Mother Countries

port. By the end of the colonial period 85 to 90 percent of the tobacco imported by Britain was re-exported to markets in continental Europe. “Employed very profitably in the process were English merchants, English shipowners, English capital, English workers and English sailors.”24 Virginians imported slaves from Africa and manufactured goods from England on British ships. Agricultural Policy: Corn Laws Protect Domestic Producers Britain sought self-sufficiency in agriculture. The Corn Laws regulated trade of all cereals for the benefit of domestic producers. Competitive imports were discouraged or banned. (In Britain “corn” refers to wheat, oats, and barley. In the United States “corn” means maize.) Colonies to Consume Manufactures, Not Make Them Curtis Nettels wrote, “There was no more important ingredient in English policy than the determined effort to retard or prevent the growth in America of industries that would produce the sort of goods that England could export at greatest profit, such as cloth, ironwork, hats and leather goods.”25 As early as 1699 the export of wool, yarn, and woolen cloth from the colonies was banned. Making woolen yarn and cloth as a cottage industry was allowed, but exporting these commodities in competition with English industry was outlawed. By 1730 American beaver hat manufacturers had captured part of the British market. The Hat Act of 1732 made it illegal to export hats from the colonies. Britain was more tolerant of the colonial iron industry because it wanted to reduce dependence on Swedish imports. Parliament eliminated duties on bar and pig iron imported from the colonies but banned the making of finished iron products. Construction of steel furnaces, plating forges, and rolling mills in America was forbidden. The colonists paid little attention to these limitations. By the 1770s, Pennsylvania, Maryland, and New Jersey had 175 plants producing iron products for the domestic market. By 1775 the mainland colonies were major iron producers with eight thousand workers and 15 percent of world production. Legislation could be enacted in Britain, but enforcement in America was difficult. Some control could be exercised over exports, but producers for the growing domestic market evaded restrictions. Lord Chatham said, “If America so much as considers making a stocking or a horseshoe nail, she shall feel the full weight of British might.”26 His sentiments were shared by English manufacturers and mercantilists, but they carried little weight on the American side of the Atlantic. West Indian Trade Vital to Mainland Colonists Trade with the West Indies was the basis for the prosperity of New England and the Middle Atlantic colonies.27 Mercantilism held that the trade of 9

Early Globalization and Economic Development

the mainland colonies with the Caribbean should be limited to the British West Indies only. Restrictions on trade to the other islands posed a serious threat to the economic well-being of northern mainland colonies. In the seventeenth century the British struggled against the Dutch free trader. In the eighteenth century they sought to control the Yankee free trader.28 British attempts to crack down on trade between mainland settlements and non-British Caribbean colonies were a major source of conflict before the Revolution.

Portuguese Mercantilism: Weak State with a Rich Colony Portugal was a pioneer in establishing mercantile policies for colonial possessions. In 1571 King Sebastion decreed that Portuguese ships would have exclusive rights to conduct trade with Brazil. Unlike Britain, however, Portugal was not strong enough to prevent foreign countries from trading with its American possessions. The Portuguese merchant marine had too few ships to meet the demands of the Brazil trade, and the navy was too weak to prevent smuggling by foreign flag vessels.29 Dutch ships carried about 66 percent of Brazil’s trade during the sixteenth century. Brazil’s sugar was refined in mills in Rotterdam and Amsterdam.30 In the seventeenth century English ships were active in the carrying trade between Lisbon and Brazil because the Portuguese merchant fleet could not freight the cargo.31 Portugal tried to control the Brazil trade by establishing monopoly trading companies, requiring all ships departing Brazil to sail directly to Portugal, and insisting that foreign ships admitted to the Brazil trade travel only in official convoys. Efforts to enforce exclusivity met with little success.32 Contraband flourished, with English, Dutch, French and North American ships participating in this illegal commerce. Caio Prado, Jr. observed, “The English, the great friends, allies and protectors of Portugal, were the principal smugglers.”33 Manufacturing Banned in Brazil Portugal reacted against early growth of Brazilian textile production with the decree of 5 January 1785, which prohibited industry in Brazil. Provisions called for the elimination of all factories and workshops except those producing coarse cottons used for clothing slaves and packaging agricultural products for export. Looms were dismantled and shipped to Portugal. The decree was the death blow for the textile industry in Brazil.34 Portugal’s textile industry was insignificant, throttled at birth by commercial treaties with England. Britain banned North American industry to provide a colonial market for its domestic manufactures. Portugal destroyed industrial development in Brazil hoping to reap the middleman’s profits on British-manufactured goods shipped to its colony via Lisbon. 10

The Mother Countries

The Effects of Mercantilism Mercantilism was an economic boon for European states. Plantation products grown with slave labor made American colonies valuable possessions. Brazil, Haiti, Barbados, Cuba, and Jamaica carried the title “world’s richest colony” during different periods of the colonial era. Mercantilism brought the plantation colonies into the world economy in a subservient position to the mother country. Great economic wealth was created for the European parent and planters in America, but economic development in the colonies was stifled. Outside plantation America a weak colonial economy developed in Portuguese America. In mainland British America north of the plantation zone, however, mercantilist policies unintentionally encouraged the creation of a diverse and balanced economic region that grew to challenge the commercial activities of the mother country itself. The Navigation Acts stimulated American shipbuilding and colonial commerce. Britain’s navy barred other European states from the Great Fishery, creating a monopoly for British and New England fishermen in the world’s richest fishing grounds. Mercantilism dictated that Britain protect domestic producers so imports of American fish and cereal grains were prohibited. New England fish was sold in Southern Europe and the West Indies. The Corn Laws were of great benefit to the Middle Atlantic colonies. Unable to ship their products to Britain, farmers, millers, merchants, and mariners developed a prosperous wheat and flour trade with the same markets where New Englanders sold their fish. This commerce also helped local merchants, shipbuilders, and colonial firms providing “invisibles”—maritime insurance and shipping services. Forced to find markets other than England, New England and the Middle Atlantic colonies developed lucrative trading relationships with other European states and the West Indies. The policies of mercantilism did not prevail in America solely by rigorous enforcement by mother country officials. To the contrary, colonial elites, well satisfied with their positions of wealth and dominance, gave strong support to most policies. Mercantilism produced great wealth for planters and merchants in plantation America. Economic and social structures were established that remained firmly in place long after Brazil and the United States became independent. From Mercantilism to Free Trade Mercantilism dominated international economic relations until the British decided that free trade provided greater advantages. Preeminence in world trade and a feared and powerful navy gave Britain tremendous leverage in setting international commercial guidelines. In the early years of industrialization and colonial expansion Britain had been a strong advo11

Early Globalization and Economic Development

cate of mercantilism. The Navigation Acts and the Corn Laws were the basis of economic policies until the middle of the nineteenth century. As Great Britain’s domestic industries grew in strength, competitiveness, and productivity, enthusiasm for protectionist policies waned. By the 1860s, free trade, the absence of protective tariffs, had become an accepted orthodoxy of British politics, “almost as entrenched as the Protestant succession.”35 The British abandoned mercantilism and became aggressive free traders when it was to their advantage. Practically all the underdeveloped world was their economic colony and would remain so under free trade.36 By the 1850s Great Britain had discarded the Navigation Acts and the Corn Laws. The former were repealed in 1846, and three years later, when agriculture was thrown open to foreign competition, “that other great limb of economic policy over the centuries was cut away.”37 The British opened their ports to imports, knowing that no foreign rival could undersell their manufactured goods.38 British author and historian Lawrence James wrote in 1996: Free trade required the uninterrupted passage of goods and services through nations and local legal systems that offered justice to the businessman who had suffered losses. These conditions did not exist on the shores of the Mediterranean, the Ottoman Empire, the coastal states of Africa, the Latin American republics and China. It was necessary for the British government to teach the rulers of such nations where their duty lay, and when they refused to heed the lesson, to make them see sense through the application of naval force.39

In what he termed a “typically candid explanation of the principles of unofficial empire,” James cited the presentation of Foreign Secretary Lord Palmerston (Henry John Temple, 3rd Viscount Palmerston of Palmerston) to the House of Commons in September 185040: These half-civilized governments such as those of China, Portugal, Spanish America all require a dressing down every eight or ten years to keep them in order. Their minds are too shallow to receive an impression that will last longer than some such period and warning is of little use. They care little for words and they must not only see the stick but actually feel it on their shoulders before they yield to that argument which brings conviction.41

Palmerston’s remarks reflected not only his devotion to free trade but also the mid-nineteenth-century English belief in Anglo-Saxon racial superiority. Europeans regarded the peoples of Asia and Africa and their descendants in the Americas as inferior beings determined by their biological makeup or backward culture. During imperialist activity over many centuries including the slave trade, colonization of the Americas, the dominance of China, and the conquest of India, Indonesia and Southeast Asia, the racist classification of human beings played a major role in the ways that Europeans viewed the world.42 12

The Mother Countries

NOTES 1. Fernand Braudel, Civilization and Capitalism: 15th–18th Century, 3 vols. (New York: Harper and Row, 1985), 3: 138. 2. Miriam Estensen, Discovery: The Quest for the Great South Land (New York: St. Martin’s Press, 1998), 26; Stanley Wolpert, A New History of India, 4th ed. (Oxford: Oxford University Press, 1993), 136. 3. Estensen, Discovery, 81. 4. Henk Ligthart and Henk Reitsma, “Portugal’s Semi-peripheral Middleman Role in Its Relations with England, 1640–1760” Political Geography Quarterly 7 (October 1988), 357–60. 5. Joaquin Pedro Oliveira Martins, Portugal nos mares (Lisboa: Instituto Geographico Portuguez, 1889), 30–32. Celso Furtado said that the Methuen Treaty destroyed Portugal’s industry. “Portugal became an agricultural dependency of England” and accepted its role of “economic vassalage.” Celso Furtado, The Economic Growth of Brazil: A Survey from Colonial to Modern Times (Berkeley: University of California Press, 1971), 38, 86–91. 6. C. R. Boxer, The Portuguese Seaborne Empire, 1415–1825 (New York: Alfred A. Knopf, 1969), 174; J. B. Trend, Portugal (New York: Praeger, 1957), 167. 7. H. Morse Stephens, Portugal (London: T. Fisher Unwin, 1891), 338. 8. Frederic Mauro, “Political and Economic Structures of Empire, 1580–1750,” in Leslie Bethel, ed., Colonial Brazil (London: Cambridge University Press, 1987), 59, 61; A.J.R. Russell-Wood, “The Gold Cycle,” in Leslie Bethell, ed., Colonial Brazil (London: Cambridge University Press, 1987), 241–42; Pinto de Aguiar, “A economia portuguêsa no fim do século XVIII,” Revista do Instituto Histórico e Geográfico Brasileiro 298 (January/March 1973), 251. 9. A. T. Mahan, The Influence of Sea Power upon History, 1660–1783 (New York: Dover, 1987), 206. 10. Caio Prado, Jr., História econômica do brasil, 42nd ed. (São Paulo: Editôra Brasiliense, 1995), 125. Portuguese historian Oliveira Marques wrote, “From the late 1600s to 1822 Brazil was the essence of the Portuguese Empire. With some exaggeration one might even say that Brazil was the essence of Portugal itself.” A. H. de Oliveira Marques, History of Portugal, 2 vols. (New York: Columbia University Press, 1972), 1: 431. 11. Isser Woloch, Eighteenth-Century Europe: Tradition and Progress, 1715–1789 (New York: W. W. Norton, 1982), 137. 12. E. J. Hobsbawm, Industry and Empire: From 1750 to the Present Day (Middlesex, England: Penguin Books, 1986), 102–3; Henry Hamilton, England: A History of the Homeland (New York: W. W. Norton, 1948), 32–33. 13. Hobsbawm, Industry and Empire, 56. 14. Braudel, Civilization and Capitalism, 2: 312. 15. Hugh Thomas, The Slave Trade: The Story of the Atlantic Slave Trade, 1440–1870 (New York: Simon and Schuster, 1997), 320. 16. Hobsbawm, Industry and Empire, 57. 17. Woloch, Eighteenth-Century Europe, 140–41. Christopher Harvie, “Revolution and the Rule of Law,” in Kenneth O. Morgan, ed., The Oxford History of Britain (Oxford: Oxford University Press, 1988), 479–80. 18. Quoted in Hamilton, England, 242. 13

Early Globalization and Economic Development 19. Barbara M. Tuchman, The Proud Tower: A Portrait of the World before the War, 1890–1914 (New York: Bantam Books, 1967), 2. 20. Fernand Braudel wrote that “mercantilism was none other than the insistent, egoistic and vehement forward thrust of the modern state.” Braudel, Civilization and Capitalism, 3: 544. 21. French foreign minister Colbert, “the incarnation of seventeenth century mercantilism,” developed a system with three essential features: colonies were necessary to build up French trade, colonies were the exclusive property of the metropolitan country, and colonial interests must be subordinated to those of the metropolitan country. Eric Williams, From Columbus to Castro: The History of the Caribbean, 1492–1969 (New York: Vintage Books, 1984), 156, 160. 22. Israel, The Dutch Republic, 714–15. 23. John J. McCusker and Russell R. Menard, The Economy of British America, 1607–1789 (Chapel Hill: University of North Carolina Press, 1985), 47. 24. Ibid., 35–38, 46–48; Richard B. Sheridan, “The Domestic Economy,” in Jack P. Greene and J. R. Pole, eds., Colonial British America: Essays in the New History of the Early Modern Era (Baltimore: Johns Hopkins University Press, 1984), 56–66; Edwin J. Perkins, The Economy of Colonial America 2nd ed. (New York: Columbia University Press, 1988), 19–21. 25. Curtis P. Nettels, “British Mercantilism and the Economic Development of the Thirteen Colonies,” Journal of Economic History 12 (Spring 1952), 112–13. 26. Quoted in Perkins, The Economy of Colonial America, 19–20. 27. Andre Gunder Frank, Dependent Accumulation and Underdevelopment (London: Macmillan Press, 1978), 65. 28. Williams, From Columbus to Castro, 218. 29. Fernando A. Novais, Portugal e brasil na crise do antigo sistema colonial, 1777–1808 (São Paulo: Hucites, 1985), 176; Pierre Verger, Bahia and the West Coast Trade, 1549–1851 (Ibadan: Ibadan University Press, 1964), 6. 30. Eul Soo Pang, In Pursuit of Honor: Noblemen of the Southern Cross in Nineteenth Century Brazil (Tuscaloosa: University of Alabama Press, 1988), 15. 31. Boxer, The Golden Age of Brazil, 86, 24. 32. Fernando A. Novais, “Brazil in the Old Colonial System,” in Richard Graham, ed., Brazil and the World System (Austin: University of Texas Press, 1988), 26–28; Francisco M. P. Teixeira and Maria Elizabeth Totini, História econômica e administrativa do brasil (São Paulo: Editôra Átca, 1989), 34–36. 33. Caio Prado, Jr. Formação do brasil contemporâneo, 22nd ed. (São Paulo: Editôra Brasiliense, 1992), 230. Brazilian geographers Bertha Becker and Claudio Egler wrote, “Foreign trade remained a legal monopoly of the Portuguese but was consistently dominated by the English through treaty and contraband.” Bertha K. Becker and Claudio A. G. Egler, Brazil: A New Regional Power in the World-Economy (Cambridge: Cambridge University Press, 1992), 25. 34. Prado, História econômica do brasil, 108; Heitor Ferreira Lima, Formação industrial do brasil (Rio de Janeiro: Fundo de Cultura, 1961), 167. 35. H.C.G. Matthew, “The Liberal Age (1851–1914),” in Kenneth O. Morgan, ed., The Oxford History of Britain (Oxford: Oxford University Press, 1988), 524. 36. Hobsbawm, Industry and Empire, 232. 37. J. Holland Rose et al., The Cambridge History of the British Empire, 8 vols. (New York: Macmillan, 1929), 2: 402. 14

The Mother Countries 38. Henry Hamilton, England: A History of the Homeland (New York: W. W. Norton, 1948), 243. 39. Lawrence James, The Rise and Fall of the British Empire (New York: St. Martin’s Press, 1996), 121, 174. 40. Lord Palmerston was foreign secretary 1830–1834, 1835–1841, and 1846–1851. He served as prime minister 1855–1858 and 1859–1865. He was in the House of Commons from 1807 until his death in 1865, one of the longest careers in British public life. The Temple family dated from Saxon times. Lord Palmerston was a true Victorian and a fearless fox hunter. 41. Quoted in James, The Rise and Fall, 121, 174. 42. Robert Ross, “Reflections on a Theme,” in Robert Ross, ed., Racism and Colonialism (The Hague: Martinus Nijhoff, 1982), 2, 7.

15

CHAPTER 2

Atlantic Ocean Circulation Systems, Early Settlements, and Land Distribution Systems

The Atlantic Ocean has distinct circulation systems north and south of the equator. The northern system made travel to British America during the age of sail easier and faster than to Portuguese America. Even more important for economic development, the northern circulation system offered much greater fish resources and commercial opportunities than were available in the South Atlantic. American colonies were established to improve the economies of the mother countries. Plantation colonies extended from Chesapeake Bay in North America through the Caribbean to Guanabara Bay in Brazil. Exporting agricultural products to Europe and importing manufactured goods, they were close to the mercantilist ideal. Colonies on the fringes of the plantation region were of little direct economic interest to the European parent. Within plantation America large landholdings predominated, creating a society where a few large landowners controlled political and economic life while the vast majority of landless agricultural workers, slave and free, were exploited by wealthy planters. In British America north and west of the plantation zone, land was distributed to family farmers who formed a large agricultural middle class with political and economic influence. The aim of U.S. land policy was to settle poor farmers on small farms. The goal of land policy in Brazil was to provide wealthy farmers with huge landholdings.

Early Globalization and Economic Development

ATLANTIC OCEAN CIRCULATION SYSTEMS Maritime focus shifted from the Mediterranean Sea to the Atlantic Ocean when Europe’s economic center of gravity moved from the Mediterranean region to Northwest Europe in the 1400s. The ocean’s systems of winds and currents made the Atlantic a difficult barrier for European seamen. Few ships were rigged to sail in any direction except directly before the wind until well into the fifteenth century. Determination of latitude had been a nautical skill for centuries, but the ability to fix accurately a ship’s longitude was not refined until the Englishman John Harrison developed a dependable ship’s clock in 1736.1 Most captains “sailed the latitude,” heading due east or west and then, with longitude estimated by dead reckoning, shifted course to due north or south with prayers that the ship would make the desired landfall. Such sailing strategies worked well in the Mediterranean Sea but were inadequate for mastering the Atlantic. The Atlantic Ocean is divided into two distinct circulation systems of winds and currents that made travel from Europe to Portuguese America considerably more difficult and time consuming than a voyage to British America (see Map 3). Sailing from Lisbon to Rio de Janeiro took about three months, while the voyage from London to New York lasted about one month.2 The North and South Atlantic systems contained dramatically different natural resources and trade opportunities. The North Atlantic had the world’s richest fishing grounds. Trading possibilities were offered by Europe, the Wine Islands (Madeira, Cape Verde, Canaries, and Azores), European colonies in the West Indies, and British colonies in mainland North America. The circulation system of the South Atlantic was very poor in comparison. There were no rich fishing grounds off Brazil’s long coast. The only trading opportunities were with slave ports on the west coast of Africa. The differences in the two Atlantic systems in distance from Europe, in commercial possibilities, and in fish resources gave mainland British America a huge economic advantage over Portuguese America. British mainland colonies north of the plantation region took advantage of North Atlantic opportunities to develop a prosperous economy based on maritime activities, commerce, and small farm agriculture. Because the South Atlantic offered meager development opportunities, the Portuguese colonies south of the plantation region stagnated economically until the 1850s. Currents of the North and South Atlantic The Atlantic Ocean contains two distinct circulation systems, two large elliptical movements of water. The South Atlantic system consists of the 18

Atlantic Ocean Systems and Settlements Map 3 Ocean Currents of the North and South Atlantic

South Atlantic Equatorial Current, the Brazil Current, the South Atlantic Current, and the Benguela Current. The North Atlantic system consists of the North Atlantic Equatorial Current, the Gulf Stream, and the Canaries Current.3 In the Northern Hemisphere the currents move clockwise. In the Southern Hemisphere they move counterclockwise. The pattern of prevailing winds is the same as the ocean currents. 19

Early Globalization and Economic Development

Separating the two large circulation systems is an equatorial belt of variable winds and calms that extends about five degrees north and south of the equator. Known as the doldrums, this region was dreaded by seafarers under sail who feared lying becalmed for long periods. Two other areas of calms are found at the centers of the circulation systems. New England sailors called the calms region of the northern system the horse latitudes because animals destined for the West Indies were often thrown overboard from becalmed ships when freshwater supplies ran low. The South Atlantic counterpart of the horse latitudes is the Capricorn Calms. European seamen developed three sailing routes to the Americas during a long period of trial and error, exploration, improvement in ship design, and advances in navigation science. The first led to the fishing grounds of the North Atlantic, the second to the Caribbean and mainland North America, and the third to Brazil. The Route to the Fisheries During the fifteenth century the northern route to the Great Fishery was developed when fishermen made their way across the Atlantic and returned with boats loaded to the gunwales with cod. For most months the prevailing westerlies at northern latitudes were barriers to sailing directly west. Through experience fishermen learned of periods in spring and early summer when the normal wind directions were reversed, and westward sailing was possible. By the 1500s, the cod fisheries off Newfoundland were the source of important business enterprises in Portugal, England, France, and Spain.4 The Route to the Caribbean In the early fifteenth century Portugal was the most important Atlantic sea power. With the fast, lateen-rigged caravel, which could sail close to the wind, the Portuguese led European seafaring exploration.5 In spite of maritime superiority the Portuguese failed to reach the Americas along a southern route until 1500. Their ships sailed west along Lisbon’s line of latitude, reaching the Azores in 1427. Ships sailing farther west near this latitude never reached the Americas because they either were beaten back by prevailing westerlies or became becalmed in the region later christened the horse latitudes. Thwarted in their westward sailing attempts, the Portuguese sought to reach India by sailing around Africa. Their persistence was crowned with success with the historic voyage of Vasco da Gama in 1498. Portugal had the finest fleet in the world, but the discovery of a southern route to the Americas was left to Christopher Columbus, an Italian sailing for Spain who was a master mariner in the Portuguese merchant marine. Columbus succeeded in reaching the Americas where the Portuguese had 20

Atlantic Ocean Systems and Settlements

failed because he sailed south before heading west. His plan for the voyage was simple. He sailed south to the Canary Islands and made a right turn.6 From his reading of Marco Polo, Columbus believed that he could “sail the latitude” of the Canaries due west to “the noble island of Cipangu (Japan).” This route took him to the islands of the Caribbean. On his return to Europe he completed the circuit by following the powerful Gulf Stream. Columbus’ course followed the “inevitable ellipse,” a triangle formed by the three main Atlantic currents north of the equator. Circulation within this system reflects the general movements of winds and currents.7 The Route to Brazil The journey from Portugal to Brazil was much more difficult and of longer duration than that from Europe to the West Indies or mainland North America. Distance was greater, and the voyage required the formidable transition from the North Atlantic system to that of the South Atlantic. The South Equatorial Current runs west. Off Brazil’s Cabo São Roque it splits. The northern fork, the swift Guiana current, moves along the coast at a rate of up to one hundred miles a day. It then passes through the Caribbean Sea and the Straits of Florida to form part of the Gulf Stream. The southern fork of the South Equatorial Current is the Brazil Current. It drifts south in a counterclockwise direction from 120 to 150 miles from shore until it meets the north-flowing Falkland (Malvinas) Current, which deflects it eastward to form the South Atlantic Current. The Brazil Current is weak, shallow, and slow moving compared to the mighty Gulf Stream, its counterpart in the Northern Hemisphere.8 Detailed sailing instructions were developed for Portuguese navigators, but the lack of instruments for finding longitude, the unpredictable alterations of winds and currents, and different optimal courses for different months made a successful voyage more dependent on the experience, skill, and luck of the navigator than on rigorous adherence to written instructions.9 The route from Lisbon to Brazil followed the Canary Current south to Madeira and the Cape Verde Islands and then west with the Atlantic North Equatorial Current. Thus far, a ship followed the same course as that to the West Indies, but ships headed for Brazil had to cross the equator to the South Atlantic.10 A threat on every voyage was becoming becalmed in the doldrums, which varied in width from one hundred to three hundred miles depending on the time of year.11 If the captain sailed too far west before making his run to the south, his ship would be caught by the Guiana Current as it swept up the north coast of Brazil to the Caribbean. Instead of a landing in Pernambuco, the hapless skipper would find himself in Caribbean waters.12 Brazilian admiral Max Justo Guedes wrote that perfect mastery of winds, currents, and local conditions was indispensable for navigators who operated under the constant risk of loss of ships, cargo, and crew.13 21

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The return voyage to Portugal often took longer than the outward-bound leg. Ships sailed north to the Guiana Current, which they followed to the Gulf Stream, and on to home. The westerlies bore ships back to Portugal on a course frequently patrolled by pirates, privateers, and enemy warships. Atlantic Systems of Trade and Commerce Besides the mainland colonies, the North Atlantic system of trade and commerce included Europe, the Wine Islands, the West Indies, and the Great Fishery. These components of the northern circulation system enabled the New England and Middle Atlantic colonies to create a prosperous, diversified, and balanced economy. Colonists incorporated this portion of British America into the world economy by exporting fish and agricultural staples on their own ships to North Atlantic markets other than the mother country. Circulation of goods and services, people, technology, and ideas within the North Atlantic system made it the most important avenue for international trade and commerce in the world. The ocean ceased to be a barrier and became a bridge. Bernard Baylin wrote, “The northern mercantile nations of Europe created not only a crisscrossing web of transoceanic traffic but also a cultural community that came to form the western periphery of European civilization.”14 Fish resources off the Brazilian coast were meager. There were few trading opportunities within the South Atlantic region. The slave trade between Brazil and European-controlled ports in West Africa and Angola was the only extensive commercial activity that developed completely within the southern circulation system. Lacking the economic opportunities available to their counterpart region in North America, the southern colonies of Portuguese America did not prosper during the colonial period. EUROPEAN SETTLEMENTS IN THE AMERICAS Disaster struck Africans and American Indians when European economic expansion brought all continents bordering the Atlantic into the world economy. Millions of Indians lost their land. Millions of Africans lost their liberty when brought to the New World to work as slaves on plantations created from Indian territory. As Marlow said in Joseph Conrad’s Heart of Darkness, “The conquest of the earth, which mostly means the taking it away from those who have a different complexion or slightly flatter noses than ourselves, is not a pretty thing when you look into it too much.”15 Indian civilizations were destroyed. Indians were enslaved, killed, or driven to interior territories considered unsuitable for habitation by Euro22

Atlantic Ocean Systems and Settlements

peans. Millions died of European diseases, warfare, and starvation in one of the worst demographic catastrophes in human history. More than ten million Africans were brought to the Americas to provide plantation labor. The African slave trade and plantation slavery produced fabulous riches for thousands of Europeans and Americans and death and degradation for millions of Africans for more than three centuries. Europeans sought to profit from American possessions by establishing colonies. European governments, trading companies, investors, and the colonists themselves wanted economic improvement. For a colony to prosper, linkages had to be forged between American enterprises and the world economy under the guidelines of mercantilism. The civilizations that evolved in the Americas reflected how settlements were incorporated into the global economy. American colonies may be divided into two broad categories, plantation colonies and peripheral colonies, depending on how closely they fit the mercantilist model. The American plantation using slave labor fulfilled the mercantilist’s goal of producing an export crop that would benefit the mother country’s economy. European states established profitable plantation colonies in North America, the West Indies, and South America.16 Peripheral colonies were initially located in New England, the Middle Atlantic region, and Georgia in North America. In Portuguese America they were found in Maranhão and Pará in the north of Brazil and from São Paulo to Rio Grande do Sul in the south. During early settlement peripheral colonies were of minor economic importance to the European parent. They developed economies that, in many respects, were not directly tied to the mother country and, as a result, had a more independent relationship with the global economy than plantation settlements.

Populating the Colonies: Europeans and Africans Colonies had to be populated to make them pay. The population of Portugal in 1700 was about 1.5 million, and that of Great Britain almost 6 million. One hundred years later Portugal’s population was approximately 3 million, and Britain’s 10 million. Neither country had a sufficiently large population to meet colonial labor demands. An American workforce was formed by Europeans who came on their own as indentured workers or as convicts and by Indian and African slaves. The first census of the United States, in 1790, listed 3,929,214 persons—750,000 of African descent (19 percent of the total) and 3,100,000 Europeans. The population of Portuguese America in 1798 was about 2,600,000—1,600,000 of African descent (62 percent of the total) and 1 million of European descent. In Brazil most of the population consisted of Portuguese colonists, their descendants, and African slaves concentrated in plantation colonies from 23

Early Globalization and Economic Development

Pernambuco to Rio de Janeiro. A sparse population of Europeans, Indians, and mestizos was located in peripheral colonies outside the sugar zone. Miscegenation between Portuguese men and Indian and African women produced a large percentage of the population. Bahia had a population of about one hundred thousand in 1803. Approximately thirty thousand were white, thirty thousand were mulatto, and forty thousand were black. In mainland British America there were large population differences between plantation and periphery colonies. African slaves were concentrated in the plantation South, representing more than 43 percent of the population in South Carolina, more than 40 percent in Virginia. The English represented most of the white population in all colonies except Pennsylvania (35.3 percent) and New Jersey (47 percent). The second ranking nationality in these two colonies consisted of Germans in Pennsylvania (33.3 percent) and Dutch in New Jersey (16.6 percent).17 Before 1808, when the Portuguese Crown moved to Rio de Janeiro, only Portuguese could immigrate to Brazil. There were few potential immigrants. Rarely did more than five thousand per year settle in Brazil. Britain actively encouraged its excess population to go to colonial possessions, but Portugal at times banned emigration to retain scarce population resources.18 Population size and population mobility caused by the agricultural and industrial revolutions gave Great Britain advantages as a colonizer not possessed by Portugal. In England, in contrast to Portugal, there was an excess of unemployed workers.19 Leaving out the Puritan immigration of 1630–1640, at least half of all European immigrants to British colonies were indentured servants, redemptioners, or convicts. Indentured servitude had its roots in the widespread poverty and human dislocation of seventeenth-century England.20 The civilizations formed in plantation America were based on large landholdings worked by slaves. Colonists enslaved more Indians in Brazil than in North America. In British colonies Indian slavery was concentrated in South Carolina, while others were sold in the West Indies and Virginia. Brazilian bandeirantes (flag followers) from São Paulo trekked the vast interior of South America in search of gold and slaves. Thousands of Indians were sold to coastal plantations, mining operations, and urban areas. To meet rising demands for labor, Africans replaced Indians in American slave shacks. During the colonial period four or five African slaves arrived in the New World for every European who came. Of the ten million African slaves landed in the Americas, 41 percent went to Brazil. British and French colonies in the Caribbean and the Spanish American empire received 47 percent. Dutch, Danish, and Swedish colonies took another 5 percent. The remaining 7 percent represents the share of African slaves sent to British mainland colonies in North America.21 24

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Plantation Colonies: The Darlings of Mercantilists The “economic miracle” of eighteenth-century Europe depended heavily on American plantation slavery. Between 1600 and the 1850s commodities produced on plantations by slaves dominated world trade.22 Under mercantilist policies plantation colonies produced fantastic profits for the mother country. David Brion Davis described them as “the richest and most coveted colonies in terms of large-scale capital investment, output and value of exports and imports.”23 For centuries the American plantation was the most important economic, political, and social institution of Brazil and the South. The plantation colonies in these two regions had similar economies and developed similar civilizations. The society created by plantation agriculture grew in power and influence during the colonial and early independence periods. The economic and societal structures of plantation America were formidable obstacles to balanced development long after slavery was abolished. Writing from opposite ends of the Brazilian political spectrum, Darcy Ribeiro and Oliveira Vianna described in similar terms the importance of the plantation in forming Brazilian civilization. Ribeiro said the plantation was the basic institution shaping Brazilian society.24 Oliveira Vianna wrote: We have been since the beginning a nation of latifundia: among us the history of the small farm can be said to go back only a century. All the long colonial period is one of the splendor and glory of the immense territorial property. In this period it alone appeared and shone; it alone created and dominated; it is the central theme interwoven throughout the entire drama of our history for three hundred fecund and glorious years.25

In the classic Mind of the South, Wilbur Cash said that the plantation’s influence in the South remained strong well into the early decades of the twentieth century. It was “the single great basic social and economic pattern of the South.”26 Plantation colonies were made part of the world economy as wealth producers for European parents under mercantilist policies. Peripheral colonies became part of the world economy by developing much more independently than those in the plantation region. The plantation heartlands of Portuguese America and mainland British America, northeast Brazil, and the South of the United States were transformed from rich and coveted colonial areas to poor and economically backward regions by the end of the nineteenth century. Economic and social structures produced by centuries of plantation agriculture using slave labor blocked development. From regions of marginal interest to European mercantilists, the peripheral colonies in British and Portuguese America became areas of modernization, industrialization, and economic dynamism—in the United States in the nineteenth century and in Brazil in the twentieth. 25

Early Globalization and Economic Development

Peripheral Colonies: On the Plantation Margins Subsistence farming and ranching were the main economic activities in southern Brazil. Economic linkages to regions producing export staples were made by the sale of Indian slaves, food crops, and livestock to urban areas, mines, and plantations. The region was economically backward, sparsely populated, and politically of minor significance throughout the colonial period. The South Atlantic circulation system offered these colonies neither fish resources nor trade opportunities for economic development. In British North America colonists north of Chesapeake Bay took advantage of their position within the North Atlantic circulation system. The Great Fishery, trade with plantation colonies of the Caribbean and the southern mainland, and commerce with Southern Europe helped them develop a thriving, diversified, and balanced economy. This region, unlike the southern periphery area of Portuguese America, prospered, attracted European immigrants, and, with an expanding western hinterland, became an area of substantial political influence. The regions occupied by plantation colonies developed similar civilizations and similar historical trajectories. Stark differences marked the destiny of colonies in the periphery. Georgia and Maranhão became plantation colonies. Southern Brazil stagnated throughout the colonial era but as a late blooming agricultural and industrial region became an economic dynamo in the twentieth century. Maritime activities, commerce, and family farm agriculture in New England and the Middle Atlantic region produced prosperity and balanced development. This region became the American industrial heartland whose growth enabled the United States to become a core state of the global economy by the end of the nineteenth century. From Peripheral Colony to Plantation Colony: Georgia and Maranhão European states wanted plantation colonies for revenue. If plantation agriculture using slave labor was profitable, it replaced free labor agriculture in the Americas. Early settlements in Maranhão and Georgia were established to create buffer regions protecting plantation colonies. Maranhão prevented incursions by the British, French, and Dutch, and Georgia blocked northern expansion by the Spaniards from Florida. Both colonies quickly abandoned peripheral status and subsistence agriculture when they developed plantation agriculture using African slaves to produce staple crops for export. Maranhão: Slaves Produce Cotton and Rice for Europe The northern and southern extremes of Portuguese colonization in Brazil were quite different from the sugar-producing regions of the humid 26

Atlantic Ocean Systems and Settlements

northeast coast. The areas from São Paulo to the south and from Maranhão—Pará in the north were peripheral areas through the seventeenth century and only marginally integrated into the export economy of the rest of the colony. These regions were markedly Indian in character. They were poor frontier areas with few white men, fewer white women, little wealth and hardly any black slaves.27 Maranhão was isolated from Pernambuco and Bahia by the Atlantic’s winds and currents. It was faster and easier to sail from São Luiz to Lisbon than to Recife or Salvador. The economy stagnated for lack of an export crop for European markets. In the early seventeenth century about three thousand Azoreans were sent as colonists to prevent a takeover by the British, French, or Dutch. They struggled to survive because they had no export crop that would provide entry to international trade. According to British historian Robert Southey, in the late 1600s “the people were nearly in the condition of backwoods settlers; they receded from civilized society in their habits and manners, and still more in their feelings, approaching the savage state.”28 In 1755 sparsely populated Maranhão was one of the most backward, sluggish, and underdeveloped regions of the Portuguese empire. Twenty years later it was dynamic and prosperous. Cotton and rice grown on plantations using African slave labor transformed the colony. From receiving 1 or 2 ships a year Maranhão began to receive 150 ships annually. Between 1757 and 1777, almost twenty-five thousand African slaves were imported into Pará and Maranhão to work on cotton and rice plantations. Cotton exports soared between 1770 and 1818. The cotton crop was shipped to Portugal, and most was then reexported to other European countries, mainly Great Britain. Cotton was shipped directly to England after 1810.29 Portugal imported rice from South Carolina until Maranhão rice plantations came on line. Slaves planted Carolina rice. Production soon met Portugal’s needs and the surplus was reexported to London, Hamburg, Rotterdam, and other European ports. Roberto Simonsen called this the Golden Age of Maranhão.30 Georgia: Plantations and Slave Labor Doom a Noble Experiment The transformation of Georgia from subsistence farming to plantation agriculture was dramatic. Founded in 1733, Georgia was the only British colony in the Americas where there was a sustained effort to ban the importation of African slaves. Colonization took place at a time when slavery was a well established institution in other colonies. The lure of enormous profits from cotton plantations ended the free labor, small farm experiment. Established for humanitarian and strategic purposes, the lust for great wealth overwhelmed founding principles. 27

Early Globalization and Economic Development

The goal of James Oglethorpe was the creation of a utopian sanctuary for England’s downtrodden poor. At a time when British prisons were overcrowded with vagrants, debtors, and minor criminals, Georgia was regarded as a haven for convicts who would have a secular and spiritual redemption in the New World.31 Georgia was a buffer between the prosperous Carolina plantations and Spanish Florida. A society of town-oriented tradesmen and yeomen farmers could provide military troops to oppose a northern thrust by Spain. A populated Georgia would also be an obstacle to slaves fleeing Carolina plantations for the religious sanctuary and freedom offered by the Spanish in St. Augustine, Florida. Georgia was the poorest of the king’s American possessions until slavery was allowed. The colony succumbed to the temptation of profits generated by plantation agriculture with slaves as the labor force and cotton as the crop. The ban on slavery was removed, and by 1820, 44 percent of the population consisted of African slaves. “Land, cotton and slaves—the emerging Georgia version of the American dream.”32 The dream paid off. In 1860 the per capita wealth of Georgia whites was twice that received by the average person in Pennsylvania or New York. Wealth was highly concentrated. Fewer than four thousand Georgians owned thirty or more slaves on plantations of five hundred or more improved acres. These large landholders, constituting about 3 percent of the free families, set the social and political tone. Before the American Revolution “the great planters towered above the rest of society not only by the size of their estates but also by their prominence in politics.”33 Wealthy slaveholders controlled almost all official positions.

Two Civilizations in British America, One in Portuguese America A huge chasm opened between the powerful economies that developed in the plantation and peripheral regions of North America. Richard Hofstadter wrote that “two distinctly different civilizations” evolved in North and South.34 Political and economic power in Brazil was monopolized by the plantation colonies. The influence of the peripheral colonies was insignificant. Two civilizations developed in mainland British America. One civilization developed in Portuguese America. The two powerful, competing civilizations in the United States found it impossible to coexist peacefully within the boundaries of the same state. The conflict was resolved by the Civil War, which caused six hundred thousand deaths. Extensive national political power of the South, wielded since the founding of the Republic, was destroyed. After 1860 the civilization of the North dominated the United States. 28

Atlantic Ocean Systems and Settlements

In Brazil there was no counterpart to the civilization formed by New England and the Middle Atlantic region. Emilia Viotti da Costa wrote that the essential difference between the Brazilian elites and the planters of the South was that Brazilian large landholders alone controlled their country.35 The civilization created by Brazilian plantations, similar to that of the South, prevailed without competition and continued to dominate Brazil long after slavery was abolished in 1888.

LAND DISTRIBUTION METHODS Once Native Americans had been dispossessed of the lands that they had occupied for thousands of years, Europeans had enormous territories to distribute to settlers. America presented previously undreamed of possibilities for land-hungry Europeans. Different land distribution systems evolved. Large landholdings dominated Brazil and the South. It was difficult and often impossible for the small farmer to obtain legal title to the land that he tilled in plantation America. In the peripheral colonies of North America, however, a landholding system favoring family farmers evolved. Small farms worked by family members predominated in New England and the Middle Atlantic colonies and, at a later date, the West. Even during the colonial period squatters’ rights were widely recognized. Land distribution systems had an enormous influence on economic development.

Pioneers and Posseiros In his analysis of “national character” Clodomir Vianna Moog used the pioneer and the bandeirante (flag follower)36 as symbols of American and Brazilian civilizations. He claimed that the latter was unstable and predatory, lusting for quick riches. The former, according to Moog, cherished the dignity of labor and moral perfectibility. This basis for his explanation of different rates of economic development in Brazil and the United States not only used highly questionable stereotypes but also discussed two groups that functioned in different stages of the land occupation process in the Americas.37 The bandeirantes are best compared with the fur trappers of North America, not the pioneers. Both explored immense territories previously uncharted by Europeans. The bandeirantes hunted for gold and Indians to be sold as slaves. Animal pelts highly prized by fashionable Europeans were the staple of the fur trappers. Success for both groups depended on cooperation with American Indians. For the bandeirantes, Indians were allies in capturing other Indians. For the fur trapper the Indians were partners in obtaining beaver pelts. There was a high degree of miscegenation between men of both groups and Indian women. 29

Early Globalization and Economic Development

The pioneers of North America are comparable to the posseiros (squatters) of Brazil, not as representatives of mythical national characters but as groups who performed similar functions in the occupation of territory. The pioneer occupies an honored place in North American folklore. His counterpart in Brazil, the posseiro (squatter), is “the unsung hero of Brazilian history.”38 Both pioneer and posseiro moved to unsettled land beyond established settlements, cleared frontier farmsteads by slash-and-burn methods, built homes, engaged in subsistence agriculture, and survived in difficult environments. Both pioneers and posseiros were usually squatters, bringing land into cultivation to which they had no legal claim. Squatters in North America outside the plantation region could became family farmers with legal title to their land. In Brazil it was almost impossible for posseiros to become landowners. The squatters in the South also had difficulty securing land titles. Like the posseiros, they were condemned to farm land that was not their own. It is impossible to calculate the huge influence on economic development caused by the difference between squatters who could become landowners and productive family farmers and squatters who had no hope of gaining secure title to their home and the land that they tilled. Pioneers could became prosperous farmers who passed to their children a thriving farmstead. At best, posseiros and southern squatters could achieve a benevolent, dependent relationship with a large landowner. At worst, they could be murdered or driven without payment from the farm that they had created. The establishment of productive family farms in the nonslave United States was an important factor in national development. In Brazil and the slaveholding South the large landholding fostered economic growth. The transition from subsistence to commercial agriculture in most of the United States was accomplished by the family farm. In Brazil and the South commercial agriculture was created by the large landholding. Many family farmers shared the wealth created by agricultural development in the nonslave United States. Wealth was concentrated in a few families in Brazil and the South, while most rural residents lived in misery and insecurity. The aim of land policy in the United States was to settle poor farmers on small farms. The goal of the land policy in Brazil was to provide wealthy farmers with huge landholdings.

United States: Land Policy Favors Family Farmers The public domain was the most important asset of the newly independent United States. Proceeds from land sales funded operating expenses and paid government financial obligations. Land policy was shaped by the need for revenue and a philosophical bias favoring family farmers, considered indispensable for a stable democracy in the new Republic. Immedi30

Atlantic Ocean Systems and Settlements

ately following independence, with slavery regarded as a vanishing institution, this opinion was widely shared in both North and South. Virginia agrarians advocated an economy based on family farms though they themselves owned plantations and slaves. Opposed to industry and urbanization, Thomas Jefferson was convinced that the United States should remain a rural country. He believed that a society of yeomen farmers was more stable, more virtuous, and more republican than any other.39 Jefferson wrote in 1783, “Those who labor in the earth are the chosen people of God, if ever He had a chosen people, whose breasts He has made His peculiar deposit for substantial and genuine virtue.” He loathed factories and cities. “Let our workshops remain in Europe,” he wrote. “The mobs of great cities add just so much to the support of pure government, as sores do to the strength of the human body.”40 John Taylor of Caroline County, Virginia, “the philosopher and statesman of agrarianism,” saw agrarian democracy as the best bulwark against the central government and wealthy classes. In support of the family farm Taylor wrote, “Wealth, like suffrage, must be considerably distributed to sustain a democrratick republick.”41 The Land Ordinances of 1784 and 1785 and the Northwest Ordinance of 1787 are among the most important laws in U.S. history. The Ordinance of 1785 decided how the public land was to be divided and distributed. The Northwest Ordinance prescribed how new states were to be admitted to the Union and barred slavery north of the Ohio River and east of the Mississippi River. These laws had enormous impact on the economic, social, and political development of the United States. They “began a series of distributions that transformed successive Wests into stabilized promised lands.”42 Fee-simple ownership by many family farmers changed the frontier into settlements. One striking difference between northern and southern mainland colonies was plain when the Ordinance of 1785 was debated. Northerners spoke of landholdings of less than one hundred acres, and Southerners wanted at least one thousand.43 The system adopted created the township and range system. The entire country west of the Appalachian Mountains was surveyed and laid out in giant checkerboard squares, six miles on a side, called townships. Each township was subdivided into thirty-six sections, with an area of one square mile or 640 acres. Finally, each section was divided into four squares of 160 acres each. The quarter section became the standard size of the American family farm, sold at low rates by the government until the Homestead Act of 1862, when it was given away. No country in history has imposed such a regular geometry on its landscape. No country in history has provided so much land to so many family farmers at such low prices. A great benefit of the system was property boundary accuracy. The farmer’s title was secure, protecting his home and his land from powerful neighbors and crafty speculators. In Brazil the small farmer lacked security. The vagueness of property boundaries and obstacles to title registration 31

Early Globalization and Economic Development

prevented the formation of a large, influential, and productive agricultural sector composed of yeomen farmers. Squatters’ rights had become a recognized method of obtaining legal title to land during the colonial era. It was impossible to enforce a land law that required prior purchase on the rapidly expanding colonial frontier. Pioneers in search of farms took land without payment. As early as 1740 it was estimated that four hundred thousand Pennsylvania acres were occupied by squatters. There were so many pioneers occupying land without legal title that they could resist eviction attempts. They became a potent political force. After 1750 a settler who cleared land and established a farm was given priority to purchase.44 Legislation designed to simplify acquisition of public lands by family farmers preceded the famous Homestead Act of 1862. The laws that legalized preemption or squatters’ rights were of great significance, giving the squatter the right to settle on unappropriated public land and buy it, without competition, at the minimum government rate. The federal law of 1830 made preemption of 160 acres at $1.25 an acre temporarily legal. This provision was made permanent by 1841 legislation that ensured that the primary purpose of land sales was to be settlement, not to raise revenue. Preemption had an enormous positive impact on the economic development of the United States. Squatting on public lands was accepted practice. It was reported in the U.S. Senate in 1837 that most of the legislators of the Territory of Wisconsin were squatters.45 Homestead Act of 1862 The South’s opposition to free land for family farmers developed after 1820, together with greatly expanded production of cotton on plantations using slave labor. When southern states seceded from the Union, northern and western agitation for accessible, cheap land culminated in the Homestead Act of 1862. The law provided that any settler over the age of twenty-one could obtain title to 160 acres of the public domain by living on the land for five years and paying a small registration fee. Protection was provided for preemptive squatters. Before the end of the Civil War fifteen thousand homesteads were claimed, ten thousand in Minnesota and five thousand in Wisconsin, Kansas, and Nebraska. Individual states also sold thousands of acres during this period. The Illinois Central Railroad, granted 2,600,000 acres by the federal government, sold about one-third of the land that it had received. Spurred by the Homestead Act, the population of Minnesota, the Dakotas, Nebraska and Kansas grew from three hundred thousand in 1860 to over two million in 1880.46 Between 1862 and 1900, 1,400,000 people applied for quarter-section family farms. In the distribution of the public domain too much land was given to railroads, and land speculators made a killing. So much land was involved that 32

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speculation and corruption were inevitable in the wealth-worshiping, materialistic America of the Gilded Age. Railroad owners, however, would never have rapidly constructed the lines that integrated the entire country without government subsidies. Railroads performed important development functions, recruiting settlers, selling land, and transporting farmers to their land and their produce to market. The story of the public lands is full of terms like speculators, land monopolists, rings, corrupt officials, hush money, and land sharks. The system was far from perfect. Millions of honest land seekers, however, got their farms without violating either the spirit or the letter of the law.47 Family farmers who got land by purchase or by homesteading created the most productive agricultural system in the world. They played an essential role in the economic and political development of the United States. Brazil: Land Policy Favors Large Landowners In Portugal the government used sesmarias (land grants) to recover poorly used land, seize land of expelled Moors, and to grant land for cultivation. The purpose of sesmarias was to expand agricultural production. In Brazil sesmarias retarded agricultural production because grants were so huge that the land could not be effectively farmed. The sesmaria was the only legal method of gaining land-ownership and title during the colonial period. Farmers took unclaimed land for their use by squatting, a custom known as posse (possession). These marginal agriculturists could not obtain legal title to their farmstead.48 Sesmarias usually measured at least two leagues (about eight miles) on each side and in pastoral regions ten leagues (about forty miles) on a side. Some were considerably larger.49 Land grants were issued in terms of imprecision and confusion. The king, governors, and municipal councils made no effort to coordinate their grants. The same land often had different owners. Sesmarias never clearly specified boundaries. Confusion was an advantage to the powerful and the ruthless who expanded their holdings.50 After independence, Resolution 17 of July 17, 1822, ended the practice of awarding land by sesmarias but did not set forth another legal method to get land. Independent Brazil, a new nation dependent on agriculture and dominated by large landowners, had no land law for twenty-eight years. Small farmers continued to clear land, build homes, and cultivate subsistence plots. Large landowners made claims to vast areas. In the middle of the nineteenth century probably less than 1 percent of the rural population owned land.51 The landed elite had perverted the sesmaria system to their advantage in the colonial era. In independent Brazil they grabbed huge tracts in the absence of a land law. Landholdings of ten-, twenty-, and fifty-square leagues were claimed.52 Brazilian novelist João Guimarães Rosa described settlement patterns in the sertão (backlands) of the northeast. 33

Early Globalization and Economic Development The sertão describes itself—it is where the grazing lands have no fences; where you can keep going ten, fifteen leagues without coming upon a single house. . . . The sertão is where the strong and the shrewd call the tune. God himself, when he comes here, had better come armed. . . . The same thing is true along the banks of the river and if you go down the São Francisco, every place is held by a big landowner, with his whole family, his thousand jagunços (hired guns).53

The Land Law of 1850 Even before the African slave trade ceased in the early 1850s, many Brazilians realized that the end of slavery itself was inevitable. A new labor source was essential. National power was in transition from the coffee barons of the Paraiba Valley who used slave labor, to the rising Paulista coffee fazendeiros (planter or rancher) who wanted to shift the labor force from slaves to European immigrants. The purpose of the Land Law of 1850 was to keep immigrants on the large fazendas (plantation or ranch) long enough to fulfill their contracts. It prohibited posse and put land purchase price beyond the means of newly arrived workers and poor Brazilians.54 The Land Law of 1850 (1) banned acquisition of land by any means except by cash purchase, (2) increased valuation of land above market value to make purchase difficult (in comparison with the United States, where land was sold below market value to promote settlement), and (3) dedicated the profit from land sales to programs to increase European immigration.55 The national government claimed all terras devolutas (unoccupied lands) and recognized previous claims to land, both those of sesmarias and those of posse, provided the land was occupied and cultivated by the claimant. Land claims had to be surveyed, registered, and confirmed by the state. In theory the state could reward the family farmer with title to his land. This occurred rarely because few posseiros could overcome the bureaucratic and financial hurdles of surveying and land registration. The large landowners who claimed enormous tracts, however, had the economic and political clout to get land titles recognized by the state.56 Land-ownership was highly concentrated in the coffee regions of São Paulo. A few hundred families owned vast tracts of land subdivided in fazendas with from one hundred thousand to one million trees.57 Under the Constitution of 1891 legal ownership and political control of terras devolutas passed from the national government to state governments dominated by large landowners. The opportunity for the posseiro to get title to his land was reduced even further.58 The “agro-commercial oligarchy secured unopposed control of rural Brazil.”59 RURAL POOR IN THE SOUTH AND IN BRAZIL SHARE SIMILAR FATES The rural poor in the South and in Brazil were illiterate, lived in poverty, survived on a miserable diet, and suffered from disease. After abolition for34

Atlantic Ocean Systems and Settlements

mer slaves joined the ranks of impoverished agricultural workers. All were economically exploited, politically powerless, and held in contempt by the leaders of society. Marginalized agricultural workers in plantation areas of the South were known as rednecks, white trash, and squatters. Daniel R. Hundley, an Alabamian educated at the University of Virginia and Harvard, wrote in 1860 that poor whites were derisively known as “squatters” in the new states of the South because they occupied public lands without obtaining title to their farm. When the land was registered by others, the squatters were forced to move farther and farther west until they became “absorbed and lost among the half-civilized mongrels who inhabit the plains of Mexico.”60 There was no place for prosperous small farmers in the plantation South. In South Carolina large plantations “swallowed up” small farms. Plantation agriculture brought great wealth and greater economic inequality. Opportunities for poor farmers declined. Rice and indigo plantations pushed small farmers to the periphery of the plantation district, causing out-migration.61 Squatting was prohibited in Virginia as tobacco plantations grew in size. Small farmers were forced to move or become dependents of large planters.62 Poor whites were driven “back to the red hills and the sandlands and the pine barrens and the swamps—to all the marginal lands of the South.” Everything about “poor white trash” could be explained “by the life to which the plantation had driven him back and blocked him in.”63 The same process occurred in Brazil. The coffee plantation system of Rio Claro, São Paulo, originated in massive land-grabbing and the elimination or marginalization of existing subsistence farmers by a small, wealthy group that had accumulated capital in the colonial export trade. Small farmers displaced by large coffee holdings became squatters on unoccupied frontier lands or wage laborers on large fazendas.64 In Brazil the rural poor were called posseiros, moradores (sharecroppers), and caipiras (rednecks). The small farmer could not get legal title to his plot. Sugar plantation owners opposed subsistence farming because it depleted forest reserves used for fuel and construction. Landowners kept rural workers in a dependent status, either as sharecroppers or tolerated squatters. When a legally registered owner wanted land occupied by a posseiro, he pastured cattle on the farmer’s crops, bought him off for a miserly sum, or ordered jagunços to kill him or drive him from his farm.65 NOTES 1. David B. Quinn, North America from Earliest Discovery to First Settlements (New York: Harper and Row, 1977), 73–75. 2. C. R. Boxer, The Portuguese Seaborne Empire, 1415–1825 (New York: Alfred A. Knopf, 1969), 225; Frederick Mauro, “Political and Economic Structures of Empire, 1580–1750,” in Leslie Bethell, ed., Colonial Brazil (London: Cambridge Univer35

Early Globalization and Economic Development sity Press, 1987), 50; A.J.R. Russell-Wood, A World on the Move: The Portuguese in Africa, Asia and America, 1415–1808 (New York: St. Martin’s Press, 1992), 34. 3. Max Justo Guedes, El condicionalismo fisico del atlantico y la expansion de los pueblos ibericos (Madrid: Instituto Fernandez de Oiredo, 1983), 387; J. N. Carruthers, “The Atlantic Ocean—North and South,” in Georg Borgstrom and Arthur J. Heighway, eds., Atlantic Ocean Fisheries (London: Fishing News Books, 1961), 16. 4. Quinn, North America, 73–75, 88–89, 523–27. 5. Samuel Eliot Morison, The European Discovery of America: The Northern Voyages (New York: Oxford University Press, 1971), 94–95; Michael Chandeigne, Lisboa ultramarina, 1415–1580 (Rio de Janeiro: Jorge Zahar, 1990), 51; João da Gama Pimentel Barata, “A navegação a vela no litoral brasileiro,” in História Naval Brasileiro, 3 vols. (Rio de Janeiro: SDGM, 1975), 1: 62; Daniel J. Boorstin, The Discoverers (New York: Vintage Books, 1985), 163–64. 6. Samuel Eliot Morison, Christopher Columbus, Mariner (Boston: Little, Brown, 1942), 13, 38. 7. Guedes, El condicionalismo, 385–87. 8. R. Jackson, The Principal Winds and Currents of the Globe (London: Simpkins, Marshall, Hamilton, and Kent, 1896), 8. 9. For detailed sailing instructions, see Luiz Serrão Pimentel, Practica da arte de navigar (Lisboa: Ministerio das Colonias, 1940); Manoel Pimentel, Arte de navegar: Roteiro das viagems e costas marítimas de guine, angola, brasil, india e ilhas accidentales e orientales (Lisboa: Antonio Rodriguez Galhardo, 1819). 10. Guedes, El condicionalismo, 387–89; Bailey W. Diffie and George D. Winius, Foundations of the Portuguese Empire, 1415–1580, 2 vols. (Minneapolis: University of Minnesota Press, 1977), 1: 122. 11. Jackson, Principal Winds, 7. 12. Diffie and Winius, Foundations, 1: 189–90; H. B. Johnson, “Portuguese Settlement, 1500–1580,” in Bethell, Colonial Brazil, 6–7. 13. Guedes, El condicionalismo, 421. 14. Bernard Baylin, “Communications and Trade: The Atlantic in the Seventeenth Century,” The Journal of Economic History 13 (Fall 1953), 378. 15. Joseph Conrad, Heart of Darkness and the Secret Sharer (New York: New American Library, 1950), 69. 16. Charles S. Aiken, The Plantation South since the Civil War (Baltimore: Johns Hopkins University Press, 1998), 5. 17. Roger Daniels, Coming to America: A History of Immigration and Ethnicity in American Life (New York: HarperCollins, 1990), 66–67. 18. Caio Prado, Jr., História econômica do brasil, 42nd ed. (São Paulo: Editôra Brasiliense, 1995), 18, 21–22; Mircea Buescu and Vicente Tapajos, História do desenvolvimento econômico do brasil (Rio de Janeiro: Casa do Livro, 1968), 80–82. 19. David Brion Davis, Slavery and Human Progress (New York: Oxford University Press, 1984), 62. 20. Richard Hofstadter, America at 1750 (New York: Alfred A. Knopf, 1971), 34. 21. Robert William Fogel, Without Consent or Contract (New York: W. W. Norton, 1989), 18; Isser Woloch, Eighteenth-Century Europe: Tradition and Progress, 1715–1789 (New York: W. W. Norton, 1982), 131. 22. Eric Foner, “Plantation Profiteering,” The Nation, 31 March 1997, 27. 36

Atlantic Ocean Systems and Settlements 23. Davis, Slavery and Human Progress, 51. 24. Darcy Ribeiro, The Americas and Civilization (New York: E. P. Dutton, 1971), 204, 206. 25. F. J. Oliveira Vianna, O povo brasileiro e sua evolução: Recenseamento do brasil, 1920 (Rio de Janeiro: Ministério da Agricultura, Indústria e Comércio, 1922), 282; for additional comments on the role of the plantation in Brazil, see Vera Ferlini, A civilização do açúcar (São Paulo: Brasiliense, 1980), 95; T. Lynn Smith, Brazil: People and Institutions (Baton Rouge: Louisiana State University Press, 1963), 323; Stuart B. Schwartz, Plantations in the Formation of Brazilian Society: Bahia 1550–1835 (London: Cambridge University Press, 1985), 245. 26. W. J. Cash, The Mind of the South (New York: Vintage Books, 1991), 200–202. 27. Stuart B. Schwartz, “Plantations and Peripheries, c. 1580–1750,” in Bethell, Colonial Brazil, 110. 28. Robert Southey, History of Brazil, 3 vols. (New York: Burt Franklin, 1972), 2: 450. 29. Boxer, The Portuguese Seaborne Empire, 1415–1825, 192–93; Celso Furtado, The Economic Growth of Brazil: A Survey from Colonial to Modern Times (Berkeley: University of California Press, 1971), 66, 98. 30. Roberto C. Simonsen, História econômica do brasil (1500/1820) (São Paulo: Companhia Editôra Nacional, 1967), 369. 31. Betty Wood, Slavery in Colonial Georgia, 1730–1775 (Athens: University of Georgia Press, 1984), 7, 11. 32. Numan V. Bartley, The Creating of Modern Georgia (Athens: University of Georgia Press, 1983), 1–5, 15–16. 33. Alan Gallay, “Jonathan Bryan’s Plantation Empire: Land Politics and the Formation of a Ruling Class in Colonial Georgia,” William and Mary Quarterly 45 (April 1988), 257. 34. Hofstadter, America at 1750, 157. 35. Emilia Viotti da Costa, The Brazilian Empire: Myths and Histories (Chapel Hill, NC: University of North Carolina, 2000), 91. 36. Member of an armed expedition, bandeira (flag), that went into the interior during the colonial period to capture Indian slaves and search for gold. 37. Clodomir Vianna Moog, Bandeirantes and Pioneers, trans. L. L. Barrett (New York: George Braziller, 1964), 137, 165, 179. 38. Joe Foweraker, The Struggle for Land: A Political Economy of the Pioneer Frontier in Brazil from 1930 to the Present Day (New York: Cambridge University Press, 1981), 83. 39. Stanley Elkins and Eric McKitrick, The Age of Federalism (New York: Oxford University Press, 1993), 199–200. 40. Quoted in Elkins and McKitrick, The Age of Federalism, 195, and in Nathan Schachner, Alexander Hamilton (New York: Appleton-Century, 1946), 278. 41. Quoted in Arthur M. Schlesinger, Jr., The Age of Jackson (Boston: Little, Brown, 1953), 21, 269, and in Vernon Louis Parrington, Main Currents in American Thought, 3 vols. (New York: Harcourt, Brace, 1930), 3: 14–15. 42. Harold M. Hyman, American Singularity (Athens: The University of Georgia Press, 1986), 88; Samuel Eliot Morison, The Oxford History of the American People, 3 vols. (New York: Meridian, 1994), 1: 388–89. 37

Early Globalization and Economic Development 43. Francis S. Philbrick, The Rise of the West, 1754–1830 (New York: Harper and Row, 1966), 106. 44. Sylvester K. Stevens, Pennsylvania (New York: Random House, 1964), 45–46. 45. Philbrick, The Rise of the West, 1754–1830, 305, n. 73. 46. Eric Foner, Reconstruction: America’s Unfinished Revolution, 1863–1877 (New York: Harper and Row, 1988), 463. 47. Hyman, American Singularity, 19. 48. Warren Dean, With Broadax and Firebrand: The Destruction of the Brazilian Atlantic Forest (Berkeley: University of California Press, 1995), 72–73; Thomas H. Holloway, Immigrants on the Land: Coffee and Society in São Paulo, 1886–1934 (Chapel Hill: The University of North Carolina Press, 1980), 113. 49. Stuart B. Schwartz, “Plantations and Peripheries, c. 1580–c. 1750,” in Bethell, Colonial Brazil, 103. 50. Dean, With Broadax and Firebrand, 72–73. 51. Robert M. Levine, Vale of Tears: Revisiting the Canudos Massacre in Northeastern Brazil, 1893–1897 (Berkeley: University of California Press, 1992), 43. 52. José Arthur Rios, “Estrutura agrária brasileira na época da independência,” Revista do Instituto Histórico e Geográfico Brasileiro 298 (January/March 1973), 305. 53. João Guimarães Rosa, The Devil to Pay in the Backlands (New York: Alfred A. Knopf, 1963), 91. 54. Alberto Passos Guimarães, Quatro séculos de latifúndio (Rio de Janeiro: Editôra Paz e Terra, 1969), 133–34; Julio José Chiavenato, O negro no brasil, da senzala a guerra do paraguai (São Paulo: Brasiliense, 1980), 100; José Murilo de Carvalho, Teatro de sombras: A política imperial (São Paulo: Edições Vertice, 1988), 99; da Costa, The Brazilian Empire, 82–83. 55. Guimarães, Quatro séculos de latifúndio, 134. 56. Foweraker, The Struggle for Land, 83. Aspects of Brazil’s land system that deterred immigration and braked economic development were listed by T. Lynn Smith: (1)

lack of surveys to establish property boundaries;

(2)

faulty land titles that made ownership uncertain;

(3)

concentration of land ownership in the hands of a few;

(4)

maintenance of slavery;

(5)

perhaps the most important of all, the failure to provide grants of land to settlers and to abandon the rigid practice, made law in 1850, that land could be secured only by purchase. Smith, Brazil, 119–20

57. Warren Dean, A industrialização de São Paulo, 1880–1945 (São Paulo: Editôra da Universidade de S. Paulo, 1971), 12. 58. Foweraker, The Struggle for Land, 84–85. 59. Levine, Vale of Tears, 63. 60. D. R. Hundley, Social Relations in Our Southern States (New York: Henry B. Price, 1860), 271; Hodding Carter, The Angry Scar: The Story of Reconstruction (New York: Doubleday, 1959), 236. 61. Russell R. Menard, “Slavery, Economic Growth and Revolutionary Ideology in the South Carolina Lowcountry,” in Ronald Hoffman, John J. McCusker, Russell R. Menard, and Peter J. Albert, eds., The Economy of Early America: The Rev38

Atlantic Ocean Systems and Settlements olutionary Period, 1763–1790 (Charlottesville: University of Virginia Press, 1988), 247–61. 62. John T. Lemon, “Spatial Order: Households in Local Communities and Regions,” in Jack P. Greene and J. R. Pole, eds., Colonial British America: Essays in the New History of the Early Modern Era (Baltimore: Johns Hopkins University Press, 1984), 103. 63. Cash, The Mind of the South, 25. 64. Warren Dean, Rio Claro: A Brazilian Plantation System, 1820–1920 (Stanford, CA: Stanford University Press, 1976), 194; Dean, A industrialização de São Paulo, 12. 65. Manuel Corrêia de Andrade, Abolição e reforma agrária (Sào Paulo: Ática, S.A., 1987), 39–40.

39

CHAPTER 3

Plantation Agriculture Creates a New World Civilization

Plantation colonies in Brazil produced the wealth that sustained Portugal. Brazil led the world in sugar exports for one hundred years. The leadership position was lost when British and French plantations in the Caribbean came on line using production techniques transferred from Pernambuco by the Dutch. Sugar from Caribbean colonies and tobacco from the mainland were the two most important products that Great Britain received from America. Tobacco represented 45 percent of mainland exports in 1760. Eighteenth-century merchants and capitalists considered these two commodities mainstays of British prosperity. The influence of tobacco and sugar in shaping British policy toward the colonies “was probably greater than even that of politics, war, and religion.”1 The American plantation using slave labor was developed by European states to produce valuable export crops that would make the Americas part of the expanding global economy. Policies of mercantilism dictated that agricultural staples be exported only to the mother country. Manufacturing was banned in the colonies so they would serve as a market for the parent’s industrial goods. For centuries the plantation was the most important institution of Brazil and the South. Created to benefit the economic interests of the mother country, plantations produced the products that linked colonies with the world economy. Legacies of plantation agriculture using slave labor influenced economic and social structures of the South and Brazil through the nineteenth century and beyond. The plantation was much more than an economic institution. It created a new way of life that continued after Brazil

Early Globalization and Economic Development

and the United States became independent. The plantation was the foundation for a new American civilization. THE SOUTH AND BRAZIL: DEPENDENT ON AFRICAN SLAVES The large number of slaves, the vast territory dominated by slavery, and the long period that slavery endured made it a powerful force in shaping the economic, political, and social structures of plantation America. Slavery was not abolished in the United States until 1865 and in Brazil until 1888. The legacies of slavery and plantation agriculture continued to exercise profound influence on plantation regions long after slaves were freed. Slavery in the Americas developed because governments and investors in Europe and colonists in America sought economic gain. Slavery was a direct result of the search for profitable agricultural activities that would link colonies to the mother country and the world economy. Economic actors were the architects of the slave plantation systems that dominated American society from the South, through the Caribbean, to Brazil.2 By the time of the Civil War the South was home to four million slaves. In the three decades prior to the Civil War the United States was the greatest center of slavery in the world, and Brazil was second. The relative concentration of land and slaves differed to some extent in the United States and Brazil, but similarities were much greater than differences.3 The civilizations that developed in the South and in Brazil were remarkably similar. On the eve of the Civil War slavery had existed in the United States for more than two hundred years and was an entrenched and flourishing institution.4 A prominent South Carolina planter declared, “Slavery informs all our modes of life, all our habits of thought, lies at the basis of our social existence and of our political faith.”5 Slaves performed practically all manual labor, rural and urban. By the end of the sixteenth century slaves were indispensable for the economic functioning of Brazil.6 Prominent Brazilians observed that “slavery was the most important occurrence of our history”7 and that “slavery was practically the reason for being for Brazil, that which made it possible.”8 PLANTATION MONOCULTURE: ONE CROP FOR EXPORT Plantations made America an agricultural cornucopia. They specialized in one crop for export. Sugar, tobacco, rice, indigo, coffee, and cotton grown with slave labor made New World colonies a part of the global economy. Sugar occupied the place in the eighteenth-century world economy that oil occupied in the twentieth. “Sugar was king.”9 Sugar made Brazil the wealthiest colony in the world. Tobacco was the most important staple crop of the British American mainland with twenty-eight million pounds exported in 1700 and eighty million pounds exported in 1760. Virginia pro42

Plantation Agriculture

duced 70 percent. Tobacco was also an important crop in Brazil. Under Portuguese mercantilist policies the highest two grades of Brazilian tobacco had to be shipped to Lisbon, but legislation allowed the trading of third-grade tobacco directly with Africa, where it was an important medium of exchange in the slave trade. By 1740 rice was the dominant export of the lower South and the third most important export staple of the British American mainland, trailing only tobacco and wheat products. “Rarely has a single crop ever dominated so completely the energies of a group of agriculturalists as did rice during its heyday along the South Atlantic coast.”10 Rice production was also important in Brazil. With the development of rice plantations in Maranhão, Portugal ceased purchase of Carolina rice and imported enough from Brazil to meet domestic demand and have sufficient stocks left over for reexport to other European countries. Following independence, plantation-grown cotton and coffee became the most important exports of the United States and Brazil. Between 1840 and 1860 over 60 percent of the world’s cotton was produced in the South. By 1820 slave-grown cotton had replaced slave-grown sugar as Britain’s number one import. Throughout the first half of the nineteenth century Britain took half or more of the total U.S. cotton crop. In 1860 cotton accounted for two-thirds of the total exports of the United States.11 Brazil also produced cotton. Between 1780 and 1820 Brazil was an important source of cotton for British mills. The rate of expansion declined after 1820 as Britain increasingly turned to the United States, Egypt, and India for its raw cotton. Cotton increased to almost 20 percent of exports in the 1860s during the Civil War in the United States.12 By the late 1830s coffee had surpassed sugar as Brazil’s most important export crop. Production was centered on large plantations using slave labor in the valley of the Paraiba River, west of the city of Rio de Janeiro. After 1850 Brazil led the world in coffee production. The coffee plantation of the mid-nineteenth century was the political, economic, and social core of Brazil.13 As coffee production increased on the São Paulo plateau, planters shifted from African slaves, to European immigrants, to work fazendas. São Paulo replaced the Paraiba Valley as the primary source of Brazilian coffee. By the 1890s São Paulo’s port of Santos had displaced Rio de Janeiro as the leader in coffee exports. For the fifty years after 1885 Brazil supplied more than half the world’s coffee, and from 1900 through World War I Brazil’s share of world coffee production was about 75 percent.14

PLANTATIONS WERE SELF-SUFFICIENT AND SELF-CONTAINED American plantations were large, complex organizations. In Brazil and the South the plantation was an independent social unit, a self-contained 43

Early Globalization and Economic Development

and largely self-sufficient world of its own that represented an entire economic, social, and political system.15 The plantation generated great wealth but did little to stimulate economic development because it had practically no linkages with the local economy. There were no forward or backward linkages because the plantation itself made practically all required production inputs, and agricultural products were either processed on the plantation before shipment or shipped directly to the mother country after harvesting. Wealth was highly concentrated. Rich planters satisfied their needs in Europe or colonial capitals. Slaves had no income. Free workers were poor. There was almost no income multiplier effect to energize the local economy. George Washington’s Mount Vernon had a smithy, charcoal burners, brick kilns, and a flour mill. Weavers, shoemakers, masons, coopers, and carpenters worked on the plantation.16 Washington considered economic self-sufficiency to be the basis of freedom and prosperity.17 At Monticello, Thomas Jefferson had a successful nail factory worked by slaves, and others were trained in carpentry, cabinet-making, weaving, tailoring, and shoemaking.18 Brazilian sugar operations included a factory in the field. The plantation required an army of skilled blacksmiths, carpenters, masons, and technicians. The term engenho included the mill, buildings for boiling and purging cane syrup, cane fields, pastures, woodlots and forest reserves, slave quarters, and planter’s house.19

PLANTERS DOMINATE THE ECONOMY, POLITICS, AND SOCIETY Throughout plantation America planters “were the lords of the earth and of men” with “absolute control of government and every social engine.”20 In the South about two-thirds of the whites did not own slaves, but wealth was concentrated in the hands of a few large slaveholders. The 1850 census showed that the earnings of one thousand families at the top of the economic pyramid in the South averaged fifty-thousand dollars a year, while the remaining 660,000 whites earned on average ninety-one dollars a year.21 The large planter dominated all aspects of the life of the region through ownership of wealth, control of county government, and influence over state legislators and federal members of Congress.22 Yeomen farmers were clustered in the upland South, outside the plantation region. Those located in the plantation area were economically dependent on the large planters. This acceptance of the planter standard as an ideal to be struggled for, this admission that the acquisition of land and slaves was the sine qua non of “getting on,” gave the planter-professional class a dominance that mere economic, educational and social advantage would not have given alone.23 44

Plantation Agriculture

In Brazil the situation was the same as that of the South. It was not the slave owners with one or two slaves who set the patterns of the society and economy but the senhores de engenho, the planters, who for almost three centuries dominated life in the northeast.24 The small farmers who managed to exist in plantation America were inescapably dependent on the large planters. In Brazil lavradores (small sugar planters) had to take their cane to the mills owned by planters. Small farmers in the plantation South made purchases at the planter’s store while he milled their corn and ginned their cotton. Dependency existed after slavery was abolished. William Faulkner wrote in The Hamlet that Will Varner owned most of the good land in the county and held mortgages on most of the rest. He owned the store and the cotton gin and the combined grist mill and blacksmith shop in the village proper and it was considered, to put it mildly, bad luck for a man of the neighborhood to do his trading or gin his cotton or grind his meal or shoe his stock anywhere else.25

PLANTATION AMERICA WAS RURAL AMERICA The development of an urban hierarchy of hamlets, villages, towns, and cities was stunted because plantations performed economic functions found in villages and towns in free labor agricultural societies. The plantation was the local economy. No amount of urging or scolding by government authorities in distant Lisbon or London could create in Bahia or Virginia the conditions necessary to form a hierarchy of central places in plantation America. The Portuguese who settled Brazil did not transplant the village communities of small farmers that were the typical settlement pattern of the mother country.26 The government in Lisbon tried unsuccessfully to establish villages and market towns, but they remained artificial villages, exotic stage sets erected in the bush, whose buildings stood empty most of the year, coming to life only on religious holidays or the days set aside for processions, or when the municipal council was in session and the plantation owners left their country estates to discuss their affairs and pay homage to God.27

London instructed the governor of Virginia in 1662 “that care be taken to dispose the planters to be willing to build towns upon every river.” The only result was the building of a few houses in rundown Jamestown. Lacking marketing functions, county seats remained tiny hamlets “enlivened only by the socializing, horse racing, cock fighting, and ephemeral fairs that accompanied periodic court sessions.”28 In 1770 Maryland and Virginia had more than 30 percent of the population of mainland British North America but no important city. 45

Early Globalization and Economic Development

The South had a few large cities, but the almost complete lack of small towns was one of the most striking features of the southern landscape. Alabama had only thirty towns with a population of more than two hundred in 1853, while Indiana had seventy-seven towns of this size in 1833, when its population was less than half that of Alabama.29 The urban population of the Lower South in 1860 was only 7 percent of the total. In New England the percentage was 37 percent; the Middle Atlantic states including Ohio, 35 percent; and in Indiana, Illinois, Michigan, and Wisconsin the percentage was about 14 percent.30 “Agrarianism and its values were the essence of the southern tradition and the test of southern loyalty,” wrote C. Vann Woodward.31 The ruling elites of plantation America regarded the cities of Europe and the North as cesspools of crime, sin, and vice. The belief in the superiority of rural life was equally strong in Brazil. Oliveira Vianna wrote, “Our race was formed in the country and there the intimate forces of our civilization were developed. The dynamism of our history in the colonial period comes from the country.”32 ALL CAPITAL INVESTED IN LAND AND SLAVES Ownership of land and slaves was the most important indicator of social prestige and the most respected economic activity in plantation America. Slave owning represented success and defined achievement.33 Almost all available investment capital was absorbed by plantations. Historians with different views of the role of slavery in the United States agree that accumulation of land and slaves was the prime motive, “perhaps even the obsession,” of slaveholders in the South before 1860.34 Planters wanted more land and more slaves to improve their economic position and their standing in the community. Those with a few slaves wanted more to join the ranks of the elite. Those with no slaves wanted to become slave owners to move beyond the status of despised freemen who did the same work as slaves. For merchants, purchasing land and slaves promised social advancement. “To rise in the social and economic order, a settler had to accumulate both land and slaves.”35 James L. Petigru, the leading lawyer of Charleston, “engaged in the ordinary and legitimate proceeding of investing his professional profits in a plantation and negroes,” according to his contemporary biographer. “It was the approved Carolina custom in closing every kind of career. No matter how one might begin, as lawyer, physician, clergyman, mechanic, or merchant, he ended, if prosperous, as proprietor of a rice or cotton plantation.”36

Countless wills of large coffee growers in the Paraiba Valley began with the words, “My property consists of land and slaves.”37 The objective of the senhor de engnenho in the northeast was the accumulation of slaves and 46

Plantation Agriculture

land.38 Admission to the ranks of the elite was generally closed to anyone not connected by blood or marriage to the agricultural barons.39

FEW INDUSTRIES IN PLANTATION AMERICA Mercantilism decreed that colonies should import manufactured goods from the mother country. Industrial production in the colonies was discouraged or banned. These policies met with practically no resistance in Plantation America. Large landowners had no capital to invest in industry and regarded work in manufacturing as far inferior to that of running a plantation. Immigrants were repelled by a region where manual labor was scorned. Planters favored cheap European imports to more expensive, locally made products, an attitude that continued in the South and Brazil long after political independence was achieved. A detailed analysis of the wills of wealthy Rio merchants compiled by Fragoso and Florentino showed that in 1797/1799, 1 percent of thirty-nine estates was invested in industry. In 1820, 1.1 percent of thirty-six estates was so invested, and in 1840 the fifty-five estates examined had no investment in industrial activity. Many wealthy merchants were recent arrivals from Portugal. The strong desire of these men and their wives to join the ranks of the granfinos (the social elite) dictated investment in land, slaves, and urban real estate even when these activities resulted in lower economic returns than commercial ventures.40 Manufacturing was of minor economic importance in Brazil until the first decades of the twentieth century. The rate of population growth and industrialization in the two North American civilizations was radically different by 1860. There were 18.5 million northerners (not counting border or Pacific states) to 5.5 million white southerners and 4 million slaves. There were almost as many factories in the North as there were factory workers in the South. The North had 100,500 factories with 1.1 million workers, and the South had 20,600 factories with 111,000 workers. Northern industrial output was estimated at $1.5 billion; southern at $155 million.41 The value of cotton textiles made in the South was 10 percent of the national total. There were more spindles in Lowell, Massachusetts, than in the eleven states of the South combined. Virginia Tech historian James I. Robertson, Jr., described industrial differences. All American railroad track was manufactured in the North: At war’s outset, the total value of manufactured goods in Virginia, Alabama, Louisiana, and Mississippi combined was less than $85 million. In the single state of New York, the total value of such goods exceeded $380 million. The eleven member-states of the confederacy produced together in 1860 just under 37,000 tons of pig iron. Production of pig iron in Pennsylvania that year was over 580,000 tons.42 47

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Ponta de Areia and the Tredogar Ironworks It was not impossible to establish industries in plantation America, but obstacles to success were formidable. Ponta de Areia in Niteroi and the Tredogar Ironworks in Richmond showed the enormous problems faced by manufacturers. Serious difficulties included the lack of capital for industry, the scarcity of qualified labor, elite society’s attitude toward industry, and the contemptuous opinion of manual labor prevalent in plantation America. Both Ponta de Areia and Tredogar demonstrated that African slaves were capable, competent, and productive industrial workers. Both relied heavily on slaves for skilled and unskilled labor. Attracting qualified free workers was difficult. Ponta de Areia Irineu Evangelista de Sousa, the Baron Mauá, was the greatest Brazilian industrialist of the nineteenth century. In 1846, two years after Brazil’s first protectionist tariff was enacted, Mauá purchased an iron foundry and shipyard, the Estabelecimento de Fundição e Estaleiros da Ponta de Areia, in Niterói across Guanabara Bay from Rio de Janeiro. Mauá made a success of the first large industry in Brazil. Ponta da Areia constructed steamships for the navy, cannons for the army, rails, steam engines, and other products. Mauá’s efforts were often met with indifference or hostility from public and private sectors. Historian Jorge Caldeira wrote, “To exchange commerce for industry in Brazil was almost madness in that epoch. All investment efforts in the national economy revolved around clearing land, buying slaves, constructing fazendas, and waiting for the harvests.”43 Mauá received little assistance from the government. To the contrary, officials often seemed intent in blocking his path. A third of Mauá’s purchase price was for twenty-eight slaves who worked in the factory. He preferred wage laborers, but because of prevailing negative attitudes toward those who worked with their hands it was impossible to hire enough free workers to run the industry. “Any manual labor, well paid though it might be, was considered degrading work by free citizens.”44 Unable to find sufficient qualified labor in Brazil, Mauá imported workers from Europe, guaranteeing a high salary and a round-trip ticket. By 1850 Mauá’s workforce had three hundred employees—seventy-five were slaves, and the rest were Europeans or free Brazilians. The industry was in operation for seventeen years before Mauá was forced to close in 1863 because of financial difficulties. Tredogar Ironworks Richmond’s Tredogar Ironworks was the most important industrial installation in the South. Employing eight hundred workers—slaves, free blacks, and whites—the factory produced cannons, locomotives, spikes, 48

Plantation Agriculture

rail wheels, axles, bridge parts, and machinery for sugar refineries and sawmills.45 At Tredogar slaves were used extensively to do skilled work such as puddling, heating, and rolling.46 They were excellent workers who mastered complicated skills. Industrial slavery was widespread in antebellum Richmond. Slaves worked in factories and coal mines and processed tobacco and cotton. Owned and managed by Joseph Reid Anderson, Tredogar was the industrial bulwark of the Confederacy, casting more than one thousand cannons during the Civil War. Anderson’s labor problems were compounded when white workers were recruited for the Confederate army. He used convict labor, Union prisoners of war, and more slaves. The industry survived the war but never recovered from the financial panic of 1873.

INTENSE CONTEMPT FOR MANUAL LABOR “National character” as defined by cultural traits, especially religion, has been proclaimed the most important factor in economic development. Some scholars have equated Protestantism with economic progress and Catholicism with economic stagnation, contending that the latter fails to provide the work ethic and moral imperative to labor inherent in the former. Professor Carl Degler wrote in 1971: Like Portugal, the mother country, Brazil lacked that conception of the moral value of work, which goes under the name of the Protestant ethic. . . . Englishmen brought with them to the New World a belief in the virtue of work that contrasted with the hidalgo (fidalgo in Portugal) tradition of Iberia and Brazil.47

More recently, Lawrence Harrison, former U.S. Agency for International Development (USAID) mission director in several Latin American countries, said that “culture, more than any other factor, explains why some countries develop more rapidly than others.”48 Brazilian economic development, he claimed, was retarded by “the Ibero-Catholic antientrepreneurial, antiwork tradition.”49 These analyses are wide of the mark. Attitudes toward work in the South and Brazil were conditioned by life in a civilization based on African slavery, not by the religion of the slave owners. In discussing how labor was regarded in medieval Europe, Jacques Le Goff wrote: Above all, there was the weight of the association of labor with slavery. This gave rise to the notion of “opus servile” (servile occupation) and the antithesis of labor and freedom. During the various medieval “renaissances” . . . the mere use of the ancient vocabulary (i.e. “opera servilia”) encouraged a contempt for labor.50 49

Early Globalization and Economic Development

In any society where slavery exists, manual labor, the work of slaves, is held in low esteem. Throughout plantation America those who performed manual labor were objects of even greater contempt than in early European societies because African slaves were regarded as members of an inferior race. Manual labor in the Caribbean “became a badge of dishonor.” Once the slave labor system was established, no white man would work with his hands if he could avoid doing so.51 Writing from his Virginia plantation in 1736, Colonel William Byrd said, “I am sensible of many bad consequences of multiplying these Ethiopians amongst us. They blow up the pride and ruin the industry of our white people who, seeing a rank of poor creatures beneath them, detest work, for fear it should make them look like slaves.”52 Prejudice against manual labor extended to all levels of society in Brazil. “To flee from the stigma of slavery was an imperious necessity even for those who had no other option in life but to gain their bread with the sweat of their brow.”53 If Portuguese immigrants found slaves working their trade, they would seek other employment where black workers were barred, preferring to be “loafers or soldiers simply so they would not have to submit themselves to ‘work of negros.’ ”54 Contempt for manual labor in plantation America was not contempt for all work, either in Brazil or in the South. Planters produced crops, expanded landholdings, and purchased more slaves. Successful landowners led the conversion of a wilderness into plantations that supplied the world with sugar, coffee, tobacco, cotton, rice, indigo, and cacao. Alberto Torres wrote that the Brazilian slave owner was a tireless worker, although he may have been an ignorant and poorly informed agriculturalist.55 The work—ethic of planters was described by José Lins do Rego Cavalcanti and Jorge Amado, who wrote about the northeast of the early 1900s. Lins do Rego was raised on the sugar plantation of his maternal grandfather in Pernambuco; Amado, on the cacao plantation of his father in southern Bahia. Written by authors of international stature, the portraits of the former’s grandfather, José Lins Cavalcanti de Albuquerque, the José Paulino of the novels, and the latter’s cacao colonels provide insights into the attitudes toward work of large landowners based on firsthand experience of plantation life. Jose Lins do Rego said, “I looked at my grandfather as if he were the engenho. The grandeur of the land was his grandeur.” Jose Paulino was conscientious and worked tirelessly. He was “a man attached to the land like a tree, putting down roots, spreading branches. And he never heard that trees had holidays or rested for even a moment.”56 The cacao colonels of Jorge Amado were “indomitable, titanic men of unlimited courage” who “fought the forest and themselves to build plantations and control the black earth of southern Bahia that was the best in the world for the planting of cacao.” Colonel Horacio and his men cleared the 50

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forests “with fire, with sickle, with axes, and with scythes, felling the large trees and routing the jaguars and the spirits. . . . The Badaros were a power before which the law and religion alike bent the knee.”57 In plantation America producing bountiful crops for export was admired and respected. The work of running a plantation was highly regarded. The manual labor required to produce the crops was despised. Included in the venomous legacies of plantation slavery is the contemptuous treatment accorded those who perform manual labor. Centuries of slavery conditioned attitudes toward work and laborers that survived in the postslavery era. “In Brazil almost the entire nation has inherited all of the vicious attitudes toward human toil that are the inevitable aftermath of a system of slavery,” wrote sociologist T. Lynn Smith. He added that “a comparable attitude towards manual labor still plagues those parts of the United States which knew the slave system and the extreme social stratification that went with it.”58 Contempt for manual labor resulted in exploitation of all who worked with their hands. In an observation as true of Brazil as it was of the South, Gunnar Myrdal wrote in 1944 that the tradition of human exploitation, not just of blacks, “has remained from slavery as a chief determinant of the South’s economic life. . . . the pattern of common exploitation where everyone is the oppressor of the one under him . . . is obviously an extension into the present of a modified slavery system.”59

IMMIGRANTS REPELLED BY PLANTATION REGIONS On board the Increase when she left Britain for New England in 1636 were 116 passengers, including a butcher, carpenter, clothier, stonemason, sawyer, plowwright, surgeon, tailor, two linen weavers, a joiner, and a dozen farm laborers.60 The Narbone House in Salem, Massachusetts, was built in 1670 and is one of the oldest houses in the United States. During a long history it was home to a weaver, longshoreman, tanner, seamstress, butcher, rope maker, and several seamen. The hard physical labor, skilled and unskilled, required to create the civilization that flourished north and west of the Chesapeake Bay was performed by millions of immigrants like those who sailed on the Increase and occupied Narbone House. The hard physical labor, skilled and unskilled, required to create the civilization of plantation America was performed by millions of slaves from Africa. Immigrants were essential for economic development in the Americas. They made possible the dynamic economy of the North and West of the United States in the nineteenth century and of São Paulo in the late nineteenth century. Immigrants shunned slave holding regions, rural and urban, in Brazil and the United States. From 1820 to 1861 over five million 51

Early Globalization and Economic Development

immigrants came to the United States. Very few settled in the South. Up to 1850, fewer than fifty thousand immigrants had entered Brazil.61 Even after emancipation few immigrants were attracted to former slave areas, where manual labor was despised. Rural areas of plantation America held no attraction for European immigrants who lacked capital to purchase land and slaves. Family farmers had no desire to work in a region where manual labor was held in contempt and where securing title to small farms was difficult, if not impossible. Urban areas also repelled immigrants. In Brazil and the South, slaves and free blacks dominated those city jobs for manual laborers that were held by immigrants in New England and the Middle Atlantic colonies. Public works were heavily dependent on slaves for grading and paving streets, building bridges, collecting garbage, and digging canals and sewers. In Brazilian municípios (counties), slaves and the so-called free Africans (slaves confiscated in the suppression of the slave trade) were rented to public and private contractors.62 The population of Charleston, South Carolina, was more than 50 percent slave during most of the antebellum period. Slaves and free blacks dominated many occupations and had a near monopoly of certain activities. They were rented out by their owners or worked as apprentices. A sample of 372 black males during the period 1730–1799 found slaves in fifty different occupations. Jobs held by men included carpenter, cooper, shoemaker, bricklayer, tailor, blacksmith, butcher, sawyer, saddler, wheelwright, barber, painter, caulker, ship carpenter, rope maker, silversmith, gunsmith, brickmaker, cabinetmaker, sailmaker, chair maker, and jeweler. Blacks dominated jobs in public markets, shipbuilding, fishing, and local maritime and riverine traffic. Female slaves worked as house servants, seamstresses, cooks, washerwomen, prostitutes, street peddlers, and market vendors.63 In Brazil “the slave practically monopolized manual labor.”64 Slaves were essential to life in Rio de Janeiro, where they made up more than 50 percent of the population. “The entire existence of the people was dependent on the role played by slaves in economic and domestic activities.”65 Jean Baptiste Debret arrived in Brazil in 1816 as a member of the French Artistic Mission, which sought to make Rio de Janeiro a center “from which civilization would radiate to all parts of the national territory.”66 His paintings of Rio street life portray in striking detail the great variety of jobs performed by slaves in the capital of the Portuguese empire, including porters (carrying tobacco, roof tiles, firewood, coffee, and people), shoemakers, barbers, knife sharpeners, sawyers, masons, fishermen, broom makers, and carpenters. Black women are shown as washerwomen, seamstresses, prostitutes, market vendors, and street peddlers of a variety of products such as flowers, sweets, coffee, turkeys, sausages, and chickens.67 52

Plantation Agriculture

Of the almost 2.2 million foreign-born residents of the United States recorded in the 1850 census almost 90 percent lived north of the Potomac and Ohio Rivers. Large regions of the South received practically no immigrants—fewer than twenty thousand in Georgia, Alabama, and Mississippi—while the Northeast recorded large concentrations of foreignborn—more than 1 million in New York, New Jersey, and Pennsylvania.68 Only 14 percent of the foreign-born population of 1850 lived in the sixteen slave states, and 60 percent lived in just four northern states: New York, Pennsylvania, Ohio, and Massachusetts. In 1860 the percentage of foreign-born in Alabama, Arkansas, Georgia, North Carolina, and South Carolina was less than 2 percent. The percentage of foreign born in Connecticut, Illinois, New Jersey, Ohio, and Pennsylvania was between 10 and 20 percent; in Massachusetts and New York, 20 to 30 percent; in Minnesota and Wisconsin, 30 to 40 percent.69 Many members of the ruling elite in the South scorned immigrants, seeing them as causes for the urban ills of vice, corruption, and poverty prevalent in the large cities of Europe and the North. Southern leader Edmund Ruffin declared that “one of the great advantages of African slavery to the southern states is its effect in keeping away from our territory, and directing to the north and northeast, the hordes of immigrants now flowing from Europe.”70 Because few immigrants went to the South, the white population was more homogeneous than that of any other part of the country. Henry Steele Commanger observed that the white population of the South in 1860 was about 98 percent Anglo-Saxon and almost entirely Protestant.71 Between 1871 and 1920, 3,357,000 immigrants went to Brazil; 26,278,000, to the United States. Until 1886 immigration to Brazil was at a low level, reaching thirty thousand only in 1876. It increased substantially after the abolition of slavery. São Paulo and the three southern states, Paraná, Santa Catarina, and Rio Grande do Sul, were the destinations of most newcomers. Approximately 55 percent of all persons immigrating to Brazil between 1878 and 1937 located in the state of São Paulo. After 1887 São Paulo took at least 50 percent of immigrants every year and in some years more than 65 percent. In Brazil in 1890 the percentage of foreign-born in selected states that had been dominated by plantation slavery was as follows: Paraiba—0.53 percent, Pernambuco—0.99 percent, Alagoas—0.52 percent, Sergipe—0.01 percent, Bahia—1.39 percent, and Rio de Janeiro—6.23 percent. The percentage of foreign-born in São Paulo and the southern states was São Paulo—23.19 percent, Paraná—13.8 percent, Santa Catarina—10.04 percent, and Rio Grande do Sul—12.76 percent.72 53

Early Globalization and Economic Development

A NEW WORLD CIVILIZATION Plantations were established in the Americas to create wealth for the mother country. Plantation America became part of the global economy as a producer of agricultural products using slave labor. The operation of this process over hundreds of years produced a New World civilization that had fantastic economic growth but precious little economic development. “Slavery worked through terror and violence,” wrote American historian Stephen Ambrose.73 No member of society was immune from its influence. The legacies of slavery continued to haunt Brazil and the United States throughout the nineteenth century and beyond. The great Brazilian abolitionist Joaquim Nabuco said: The crime consumes the criminal. Slavery and the slave trade took the virtues of free people from generations down to the present. . . . Slavery brings with it its own revenge, its own punishment. How can a democracy be created by a people that practices equality with slavery, liberty with slavery, and fraternity with slavery?74

As the globalization of the world economy accelerated, plantation America had decreasing ability to compete with the rapidly modernizing, industrializing, and urbanizing regions of the United States and West Europe. Slaveholding regions were rural instead of urban, agricultural instead of industrial, and shunned by immigrants. Their societies were highly stratified, with wealth, power, and land-ownership concentrated in a small group. Manual laborers were viewed with contempt. During the colonial era northeast Brazil and the southern colonies of mainland British America were enormously successful wealth producers, far outstripping economic contributions of peripheral colonies to Portugal and Great Britain. By the end of the nineteenth century the legacies of plantations, slavery, and export agriculture had made the Northeast and the South the most economically undeveloped, backward, and impoverished regions of Brazil and the United States.

NOTES 1. Charles M. Andrews, The Colonial Background of the American Revolution (New Haven, CT: Yale University Press, 1931), 98. 2. Eric Foner, “Plantation Profiteering,” The Nation, 31 March 1997, 25. 3. Stuart B. Schwartz, Plantations in the Formation of Brazilian Society: Bahia 1550–1835 (London: Cambridge University Press, 1985), 160; Philip D. Curtin, The African Slave Trade: A Census (Madison: University of Wisconsin Press, 1969), 288. 4. Kenneth M. Stampp, America in 1857: A Nation on the Brink (New York: Oxford University Press, 1990), 113. 5. Quoted in Peter J. Parish, Slavery: History and Historians (New York: Harper and Row, 1989), 124–25. 54

Plantation Agriculture 6. C. R. Boxer, The Golden Age of Brazil: 1695–1750 (Berkeley: University of California Press, 1962), 2. 7. Alberto da Costa e Silva, “O brasil, a africa, e o atlântico no seculo xix,” Revista Marítima Brasileira 112 (October–December 1992), 146. 8. Rubens Ricupero, quoted in Roberto Pompeu de Toledo, “Entrevista: Rubens Ricupero—trágica herança,” Veja, 20 April 1994, 7. 9. Eric Williams, From Columbus to Castro: The History of the Caribbean, 1492–1969 (New York: Vintage Books, 1984), 121. 10. Sam B. Hilliard, “Antebellum Tidewater Rice Culture in South Carolina and Georgia,” in James R. Gibson, ed., European Settlement and Development in North America (Toronto:University of Toronto Press, 1978), 92–93. 11. Michael Goldfield, The Color of Politics: Race and the Mainsprings of American Politics (New York: New Press, 1997), 85–86. 12. Stanley J. Stein, The Brazilian Cotton Manufacture: Textile Enterprise in an Underdeveloped Area, 1850–1950 (Cambridge: Harvard University Press, 1957), 45. 13. Stanley J. Stein, Vassouras: A Brazilian Coffee County, 1850–1900 (Princeton, NJ: Princeton University Press, 1983), vii. 14. Thomas H. Holloway, Immigrants on the Land: Coffee and Society in São Paulo, 1886–1934 (Chapel Hill: University of North Carolina Press, 1980), 10. 15. W. J. Cash, The Mind of the South (New York: Vintage Books, 1991), 32; Philip D. Curtin, The Rise and Fall of the Plantation Complex (Cambridge: Cambridge University Press, 1998), 53; Gilberto Freyre, The Masters and the Slaves, trans. Samuel Putnam (Berkeley: University of California Press, 1986), 7, 8, 10. 16. Emory Q. Hawk, Economic History of the South (New York: Prentice-Hall, 1934), 110. 17. Wendy Moonan, “Both Founder of a Nation and a Designer,” New York Times, 23 April 1999, B35. 18. Henry Adams, The United States in 1800 (Ithaca, NY: Cornell University Press, 1957), 56; Eric C. McKitrick, “Portrait of an Enigma,” The New York Review of Books, 44 (24 April 1997), 28. 19. Stuart B. Schwartz, “Plantations and Peripheries, c.1580–c.1750,” in Leslie Bethell, ed., Colonial Brazil (London: Cambridge University Press, 1987), 69, 76–77; Mitchell Gurfield, Estrutura das classes e poder político—brasil colonial (João Pessoa: UFPb, 1983), 135; Roger Bastide, The African Religions of Brazil: Toward a Sociology of the Interpretation of Civilizations (Baltimore: Johns Hopkins University Press, 1978), 38–39. 20. Freyre, The Masters and the Slaves, 10; Cash, Mind of the South, 21–22. 21. Howard Zinn, A People’s History of the United States (New York: Harper’s, 1980), 231. 22. William B. Hesseltine, A History of the South, 1607–1936 (New York: Prentice-Hall, 1936), 122; D. W. Meinig, The Shaping of America, 3 vols. (New Haven, CT: Yale University Press, 1986), 1: 185, 187; Randolph B. Campbell, An Empire for Slavery: The Peculiar Institution in Texas, 1821–1865 (Baton Rouge: Louisiana State University Press, 1989), 209, 231, 256. 23. Harriet L. Herring, “The Industrial Worker,” in W. T. Cough, ed., Culture in the South (Chapel Hill: University of North Carolina Press, 1935), 345. 24. Stuart B. Schwartz, “Patterns of Slaveholding in the Americas,” American Historical Review 87 (February 1982), 68. 55

Early Globalization and Economic Development 25. William Faulkner, The Hamlet (New York: Vintage Books, 1991), 6, 9, 67. 26. T. Lynn Smith, Brazil: People and Institutions (Baton Rouge: Louisiana State Press, 1963), 318; Pierre Deffontaines, “Como se constituiu no brasil a rede das cidades,” Boletim Geografico 2, no. 15 (1939), 299, 307. 27. Bastide, African Religions of Brazil, 38–39. 28. Meinig, Shaping of America, 1: 148, 155–56, 364; Hesseltine, A History of the South, 318; Parish, Slavery, 98. 29. Gavin Wright, Old South, New South: Revolutions in the Southern Economy since the Civil War (New York: Basic Books, 1986), 24. 30. Eugene D. Genovese, The Political Economy of Slavery: Studies in the Economy and Society of the Slave South (New York: Random House, 1965), 171. 31. C. Vann Woodward, The Burden of Southern History, 3rd ed. (Baton Rouge: Louisiana State University Press, 1993), 8. 32. Oliveira Vianna, Recensamento de 1920, 5. 33. Russell R. Menard, “Slavery, Economic Growth and Revolutionary Ideology in the South Carolina Lowcountry,” in Ronald Hoffman, John J. McCusker, Russell R. Menard, and Peter J. Albert, eds., The Economy of Early America: The Revolutionary Period, 1763–1790 (Charlottesville: University of Virginia Press, 1988), 270. 34. Parish, Slavery, 50–51. 35. Edwin J. Perkins, The Economy of Colonial America, 2nd ed. (New York: Columbia University Press, 1988), 81; John A. Garraty, Interpreting American History: Conversations with Historians (London: Macmillan, 1970), 197. 36. Samuel Eliot Morison, The Oxford History of the American People, 3 vols. (New York: Meridian, 1994), 2: 257. 37. Stein, Vassouras, 54. 38. Vera Ferlini, A civilização do açúcar (São Paulo: Brasiliense, 1980), 81. 39. Robert M. Levine, Vale of Tears: Revisiting the Canudos Massacre in Northeastern Brazil, 1893–1897 (Berkeley: University of California Press, 1992), 53. 40. João Fragoso and Manolo Florentino, O arcaísmo como projeto: Mercado atlântico, sociedade agrária e elite mercantil no Rio de Janeiro, c.1790–c.1840 (Rio de Janeiro: Diadorim Editôra, 1993), 72–74. 41. Edward R. Crews, “The Industrial Bulwark of the Confederacy,” Invention & Technology (Winter 1992), 9–12. 42. James I. Robertson, Jr., “A Lopsided Contest,” broadcast on 10 January 1997 on the Morning Edition program of National Public Radio. Text of the broadcast was provided the author by Professor Robertson. 43. Jorge Caldeira, Mauá: Empresário do império (São Paulo: Companhia das Lêtras, 1995), 180–81. 44. Ibid., 182. 45. Crews, “Industrial Bulwark of the Confederacy,” 12, 16. 46. Richard C. Wade, Slavery in the Cities: The South 1820–1860 (New York: Oxford University Press, 1964), 34–36. 47. Carl N. Degler, Neither Black nor White: Slavery and Race Relations in Brazil and the United States (New York: Macmillan, 1971), 246–47. 48. Lawrence E. Harrison, Subdesenvolvimento e um estado de espírito (Petropólis: Editôra Vozes, 1995), 16, 211. 56

Plantation Agriculture 49. Lawrence E. Harrison, Who Prospers? How Cultural Values Shape Economic and Political Success (New York: Basic Books, 1992), 30. 50. Jacques Le Goff, Time, Work, and Culture in the Middle Ages (Chicago: University of Chicago Press, 1980), 75. 51. Richard S. Dunn, Sugar and Slaves (Chapel Hill: The University of North Carolina Press, 1972), 200. 52. Quoted in Hugh Thomas, The Slave Trade: The Story of the Atlantic Slave Trade, 1440–1870 (New York: Simon and Schuster, 1997), 461. 53. Caldeira, Mauá, 182–83. 54. Ferlini, A civilização do açúcar, 95. 55. Alberto Torres, O problema nacional brasileiro, 3rd ed. (São Paulo: Companhia Editôra Nacional, 1938), 73. 56. José Lins do Rêgo Cavalcanti, Meus verdes anos (Rio de Janeiro: José Olympio Editôra, 1956), 55–56; José Lins do Régo Cavalcanti, Menino de engenho (Rio de Janeiro: Editôra Nova Fronteira, S/A, 1987), 80–83; 104–6; José Lins do Rêgo Cavalcanti, Bangue, 14th ed. (Rio de Janeiro: Editôra Nova Fronteira, 1984), 32–36. 57. Jorge Amado, The Violent Land (New York: Avon Books, 1988), 32, 76. 58. Smith, Brazil: People and Institutions, 231–32. 59. Gunnar Myrdal, An American Dilemma: The Negro Problem and Modern Democracy (New York: Harper and Brothers, 1944), 220–21. 60. Lawrence James, The Rise and Fall of the British Empire (New York: St. Martin’s Press, 1996), 39. 61. Emilia Viotti da Costa, The Brazilian Empire: Myths and Histories (Chicago: University of Chicago Press, 2000), 91. 62. Wade, Slavery in the Cities, 44; Stein, Vassouras, 75. 63. Perkins, The Economy of Colonial America, 106; Philip D. Morgan, “Black Life in Eighteenth-Century Charleston,” Perspectives in American History new series, 1 (1984), 194–202; David R. Goldenfield, Cotton Fields and Skyscrapers: Southern City and Region (Baltimore: Johns Hopkins University Press, 1989), 49–50. 64. Myriam Ellis, Aspectos da pesca da baleia no brasil colonial (São Paulo: Coleção do Revista de História, 1958),96–7. 65. Vivaldo Coaracy, Memórias da cidade do Rio de Janeiro (Rio de Janeiro: José Olympio Editôra, 1965), 351. 66. Rinaldo Gama, “Escravos nas ruas,” Veja, 2 March 1994, 100–101. 67. Paintings viewed by author at exposition Debret—Aguarelas do Brasil in Casa das Rosas, São Paulo, March 1994. 68. Ira Berlin and Herbert G. Gutman, “Natives and Immigrants, Free Men and Slaves: Urban Workingmen in the Antebellum South,” American Historical Review 88 (December 1983), 1176–78; Meinig, The Shaping of America, 2: 411. 69. Hawk, Economic History of the South, 224. 70. Quoted in Genovese, The Political Economy of Slavery, 231. 71. Quoted in Garraty, Interpreting American History, 109. 72. Anuário estatístico do brasil 5(1939/1940) (Rio de Janeiro: IBGE, 1940), 1302. 73. Stephen E. Ambrose, Undaunted Courage: Meriwether Lewis, Thomas Jefferson, and the Opening of the American West (New York: Touchstone, 1996), 34. 74. Joaquim Nabuco, A escravidão (Recife: Editôra Massangana, 1988), 67.

57

Chapter 4

Engines of Economic Development (Part I): Fishing, Whaling, and Ship Construction

The civilization that evolved in the South of the United States and in Brazil was shaped by the American plantation using slave labor. The civilization that evolved in New England and the Middle Atlantic colonies had a totally different economic foundation. Most colonists in the North American periphery were farmers, but the maritime sector provided economic dynamism. Fernand Braudel declared that sailors were the real founding fathers of the United States.1 The North Atlantic circulation system helped the Middle Atlantic and New England colonies develop a strong and robust economy. Fishing, whaling, ship construction, and trade combined with family farm agriculture to create the civilization of the northern mainland colonies. In stark contrast with plantation agriculture, these activities had strong linkages, or spread effects, with the local economy and created a balanced, diversified, and prosperous region. Also in contrast with plantation America, most exports that linked New England and the Middle Atlantic colonies with the world economy went to regions other than the mother country because of, and in some cases in spite of, mercantilist policies. This trading pattern gave additional stimulus to the northern colonies’ economic development. New England and the Middle Atlantic colonies became participants in the global economy in a way fundamentally different from that of the plantation colonies. Early in the colonial period British merchants complained that competition from shipping and trade activities by the northern colonies was undermining England’s commerce. They asked Parliament to bring the colonists

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to heel. Their pleas were ignored. British mercantilists did not view the colonies as isolated units but as parts of an integrated whole that consisted of the North Atlantic system plus Africa. The mercantilist doctrine of “the self-sufficing empire” held that the mother country, the plantation colonies, the periphery colonies, the fisheries, and Africa formed a single economic entity. Each was indispensable to the whole. The mercantilists valued the northern colonies for the ships and naval stores that they sent to Britain, the market that they provided for British industry, and the products, ranging from fish and flour to horses and lumber, exported to the plantation colonies. Mainland–island commerce was vital to the productivity of the British Caribbean cash cows. American plantation colonies in the South and Brazil had similar characteristics, but the settlements from Chesapeake Bay north in British North America and from São Paulo south in Portuguese America had very different development histories. The southern portion of Brazil remained a thinly populated region of little economic importance until the second half of the nineteenth century, when coffee production expanded on the São Paulo plateau. Until then the main economic activities of the few settlers of this area were subsistence farming and the sale of livestock and food crops to urban areas, mining regions, and the plantation zone. British and Portuguese colonies were settled by countries with proud and glorious maritime traditions. Portugal and England had led the world in naval science, innovative ship construction, audacious mariners, and intrepid fishermen. Brazil did not develop a maritime industry. The United States built on England’s seafaring heritage to become the world’s strongest sea power. Brother Vicente of Salvador observed that settlers in Portuguese America “were content to scratch along the coast like crabs.”2 His comment described a population concentrated on the coast with little penetration of the interior. It also accurately portrayed the lack of maritime ventures by Brazilians. This chapter discusses fishing, whaling, and ship construction, and Chapter 5 looks at trade, commerce, and family farm agriculture. These components of economic life were fundamental to robust development in the northern periphery but were completely overshadowed by the export of agricultural staples in plantation America. The economic activities discussed in these two chapters created the distinctive civilization of the northern colonies.

ABUNDANT FISH IN THE NORTH ATLANTIC The greatest and most productive fishing region in the world lay off the northeast coast of North America.3 One of the poorest was off the northeast coast of Brazil. There has never been an extensive fishery from São Luiz to 60

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Salvador because the waters of the equatorial current are practically barren.4 Fishing Environments The Banks are part of the North American continental shelf southeast of Newfoundland. The Grand Bank, over forty thousand square miles in area, extends roughly three hundred fifty miles north to south and four hundred twenty miles east to west, including submarine plateaus that extend to Georges Bank, about ten thousand square miles in area. The cold Labrador Current, bearing plankton, and the warm Gulf Stream, with plant life, meet over the Banks, producing conditions favorable for herring, mackerel, and other surface fish. The offshore banks have a depth of about two hundred feet, allowing sunlight to reach the ocean floor and sustain life necessary for bottom fish like cod and haddock. Off the coast of northeast Brazil the narrow continental shelf varies in width from seven to twenty miles. It has a rugged and jagged bottom traversed by the warm, south-flowing Brazil current. The mean annual water surface isotherm of seventy-five degrees is carried as far south as the Tropic of Capricorn. The environment is decidedly unfavorable for fishery development. In contrast to the Great Fishery, where there were huge schools of a few species, off northeast Brazil there are small schools of many species, including yellowtail, snapper, sea bass, sea bream, mackerel, and mullet. Large quantities of fish in the South Atlantic are found only off the coast of Argentina.5 European Competition for the Great Fishery Europeans exploited the Great Fishery long before they made permanent settlements on the American mainland. The Portuguese fished for cod on the Newfoundland banks as early as 1453.6 They were soon joined by fishermen from Britain, France, the Netherlands, and Spain. Cod fishing became one of Europe’s most important business enterprises. The flesh of the cod is rich and gelatinous and may be simply and efficiently cured by salting and drying in the sun on platforms called flakes. Because of its high protein content the cod was called “the beef of the sea.” Dried cod provided the essential protein that made possible the long voyages of the Age of Discovery and subsequent sailings bringing commerce, slaves, and settlers to the New World. European wars in the latter part of the sixteenth century almost eliminated the Spanish and Portuguese from the Banks. Ships of the Royal Navy and English pirates attacked boats of the Iberian fishing fleets. With the restoration of peace in 1604 the English began supplying the Spanish and Portuguese markets with fish. The long period of warfare, heavy taxation, and 61

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impressment of fishermen to serve as sailors on the Indies fleet almost destroyed the Portuguese fishing industry. Portugal, the pioneer of North Atlantic cod fishing, was reduced to purchasing fish from Britain and New England. Under the provisions of the Treaty of Utrecht (1713) and the Treaty of Paris (1763) the British practically eliminated the French cod fleet. Banks fishing became a virtual monopoly of the British. New England fishermen had as much right to exploit the Great Fishery as did those from Great Britain. United States: “The Staple from Hence to Produce Is Fish” John Smith wrote to the settlers at Plymouth, Massachusetts, that “the staple from hence to produce is fish.”7 New Englanders, confronted with soil ill-suited for productive agriculture, made fishing the cornerstone of their economy. By 1650 more than six hundred New England fishing vessels manned by almost four thousand men fished the banks each year. Dried cod became New England’s most important export staple. There were three grades. The best was exported to Portugal, Spain, and the Wine Islands. The average grade was sold throughout the mainland British colonies. The lowest grade was the most important product traded in West Indian commerce. This “refuse cod” was “sun burnt” or “salt burnt.” It was used as slave food on Caribbean plantations. Americans exploited fishing resources with the same beneficial results for economic development obtained by the English. The fishing industry gave elasticity, variety, stability, and continuity to the economic organization of New England.8 The fishery had strong economic linkages with local economies, creating thousands of jobs ashore and at sea. It provided the staple for a flourishing export trade and created demand for ships, provisions, and supplies for the shipbuilding industry. Each year New Englanders exported more than ten million pounds of cured fish. “They outdid the mother country in the quantity and quality of the catch.”9 The French cod fleet was so reduced that it could not supply France’s Caribbean colonies. By 1730 New England ships were supplying cod to San Domingo, Guadeloupe, and Martinique. New England’s fish was not welcome in England because mercantilism decreed the domestic market reserved for fishermen from the British Isles. Forcing colonists to seek other markets for their fish was a boon to New England economic development. At its peak, about ten thousand New Englanders found employment in the fishing industry. Provincetown on Cape Cod was typical of many small fishing ports. The Provincetown Advocate reported in 1869 that most fishermen were Americans or Portuguese, who made up about one-third of the town’s six thousand inhabitants.10 In 1784 a wooden codfish was hung in the Massachusetts House of Representatives “as a memorial of the importance of the Cod-Fishery to the 62

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welfare of this Commonwealth.” The Sacred Cod still hangs today opposite the Speaker’s chair.11 SCANT FISH RESOURCES OFF BRAZIL’s EXTENSIVE COASTLINE In spite of an extensive coastline few fish resources are found in Brazilian waters. During the colonial and empire periods some fishing was done between the states of Maranhão and Bahia on jangadas, sailing rafts of balsa logs. Jangadeiros went far from land for a pitifully small catch with little to ensure a safe return except superb seamanship.12 At the beginning of the twentieth century Brazil still did not have a true fishing industry. There were many commercial ports but no fishing port. Indigenous canoes and jangadas differed little from the 27,945 canoes and 3,501 jangadas that as late as 1966 constituted 80 percent of the Brazilian fishing fleet. Fishing was not a source of enrichment. Little is heard about Brazilian fishing during the nineteenth century.13 Since the sixteenth century bacalhau (dried cod) has been the Portuguese national dish. Cod remained the favorite fish of Portugal and Brazil even when Portuguese fishermen ceased supplying the national and Brazilian markets. British and American ships brought cod to Lisbon for domestic consumption and reexport to Brazil. During the 1770s Portugal imported from New England almost fifteen million pounds of cod per year.14 To savor bacalhau a moda da casa (codfish, chef’s style) at ALisboeta Restaurant on the Rua Frei Caneca in Rio de Janeiro is to understand why to this day tropical Brazil continues its love affair with the cod of the cold and forbidding North Atlantic. COURAGEOUS FISHERMEN: GLOUCESTERMEN AND JANGADEIROS Gloucestermen of Massachusetts and jangadeiros of northeaast Brazil are among the finest fishermen in the world. Gloucestermen worked rich fishing grounds, while jangadeiros fished an almost barren sea. Gloucestermen: Captains Courageous Gloucester, thirty miles northeast of Boston, was incorporated as a town in 1642 and has been a maritime and fishing center ever since. After 1850 the cod fishery was carried on almost exclusively from this port. In 1879, there were 152 vessels engaged in the Georges Bank fishery, landing over twenty-three million pounds of cod.15 Georges Bank is an oval shoal that lies between Cape Cod and Nova Scotia, about ten thousand square miles in area. The turbulence of winds, tides, 63

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currents, and waves makes a high-energy environment that creates exceptionally rich and very dangerous fishing grounds. Rudyard Kipling described Georges as “a waste of wallowing sea, cloaked with dark fog, vexed with gales, harried with drifting ice, scored by the tracks of the reckless liners and dotted with the sails of the fishing fleet.”16 The title of Kipling’s novel Captains Courageous accurately describes the Gloucestermen who brave the dangers of Georges Bank. “Her sons worked for such wage as the seas gave; and they all knew that neither Georges nor the Banks were cow pastures.”17 Gloucester’s Fisherman’s Memorial honors the more than ten thousands fishermen who have been lost at sea. The base of the memorial bears the inscription: They that go down to the sea in ships, that do business in great waters; These see the works of the Lord, and his wonders in the deep (Psalm 107:23–24 King James Version). The crew of a Georges boat consisted of from eight to twelve men. In 1860 about twelve hundred were engaged in the fishery. One-third were Americans, one-third were British nationals, and the remaining third were about equally divided between Swedes and Portuguese. The dangers and hardships of the Georges fishery are so great that only the most daring and hardy fishermen participate. Crewmen are required “in whose natures is combined hardihood, doggedness of purpose, and bravery. Owing to the fact that each man’s success depends in great part on his own individual efforts, the Portuguese and Irish have a special fondness for this fishery.”18

Jangadeiros: Their Valor Consecrated by Poets For centuries jangadeiros of northeast Brazil were the main suppliers of fish caught in Brazilian waters for the domestic market. The classic jangada is a raft consisting of three to six logs. The craft measures fifteen to twenty-four feet in length and up to six in width. It uses a centerboard and triangular sail and is manned by a crew of one, two, or three. The jangadeiros go well beyond the sight of land to the edge of the continental shelf. Sailing without nautical instruments, they rely on “seaman’s eye” to return home safely.19 In 1837 Richard Henry Dana, Jr., recorded his observations of jangadas off the coast of Pernambuco in his classic Two Years before the Mast. “They are composed of three or four logs lashed together upon the water, have one large sail, are quite fast, and, strange as it may seem, are trusted as good sea boats. We saw several, with from one to three men in each, boldly putting out to sea, after it had become almost dark.”20 The fame of jangadeiros is included in the history of every seaport of northeast Brazil. They are heroes known for their daring and bravery. Abundantly endowed with moral and physical courage, jangadeiros were active in the abolition movement, ferrying fleeing slaves to freedom and barring slave imports to Ceará, where slavery was first abolished in Brazil in 1884. “This audacious caboclo 64

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(mixed-race Brazilian), unfazed by danger, has his valor consecrated in the verses sung by poets.”21 Gloucestermen and jangadeiros are courageous mariners and hardworking fishermen. Their contribution to regional economic development has had nothing to do with their race, religion, culture, or some mythical “national character.” Gloucestermen worked one of the world’s most productive fishing grounds and were important agents of development. Jangadeiros worked barren seas for a meager catch and a subsistence livelihood. WHALING: AMERICANS SAIL SEVEN SEAS; BRAZILIANS HUG THE COAST To emphasize the economic importance of whaling to European governments, Herman Melville asked, Why did the Dutch in DeWitt’s time have Admirals of their whaling fleets? Why did Louis XVI of France, at his own personal expense, fit out whaling ships from Dunkirk, and politely invite to that town some score or two of families from our own island of Nantucket? Why did Britain between the years 1750 and 1788 pay to her whalemen upwards of one million pounds in bounties?22

Brazilians and Americans participated in the lucrative international whaling industry. Brazil never used vessels larger than longboats, which rarely went beyond sight of land. Americans sailed floating factories in all oceans with the most productive and prosperous whaling fleet of its time. United States: The Leading Whaler of the World Whaling began in North America when residents of Nantucket Island and the coasts of New England discovered whales close inshore. They were captured by crews in longboats and towed to land, where the blubber was rendered in large vats to extract the oil. By 1700 fewer whales were found close to shore, and the demand for whale products increased. Whaling activity moved to the high seas. In 1730 shipbuilders found a way to process whale oil on deck. It was then stored in barrels in the hold. Whalers began staying at sea for extended periods before making port to sell their cargo.23 In the early 1800s small sloops returned to port after taking five or six whales. By the 1850s three-hundred-ton three-masters with a crew of forty were floating factories returning only after voyages of up to five years.24 Between the 1820s and the 1880s the United States dominated global whaling. During the 1840s and 1850s Americans had 70 percent of whaling industry world production.25 American whaling was almost entirely a New England industry. In 1846 there were 736 whalers in operation, and all but two were from ports in 65

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New England or Long Island.26 New Bedford, Massachusetts, fifty miles south of Boston, became the whaling metropolis of the world with a fleet of more than four hundred vessels providing seagoing and shore-based employment for ten thousand men. The city’s population grew from about four thousand in 1820 to almost twenty-four thousand by 1860. The increased demand, both domestic and foreign, for whale oil and products of the whaling industry caused a dramatic growth in the whaling fleet of the United States. Whale oil was used for illumination and in the curing of leather and carding of wool. There was a growing demand for spermaceti candles. Whalebone, or baleen, was transformed into buggy whips, skirt hoops, collars, umbrella ribs, and corset stays. Increased use of lighthouses along the coast added to the demand for oil. Whale oil consumption grew dramatically during the early Industrial Revolution. The volume of whale oil used as lubricants for cotton spindles increased almost seven times between 1827 and the Civil War. Railroad cars used whale oil as lubricants, and locomotive headlights were whale oil lamps. The rolling stock of 1859 was eighteen times greater than that of 1840.27 Linkages to the local economy were strong. The demand for whale oil caused ship construction to soar. Around whaling grew a network of manufacturers, chandler shops, whaling agencies, ropewalks (to make rigging), and sail lofts. With oil refineries, cooper’s shops, toolworks, and other industries subsidiary to whaling, New Bedford became a manufacturing center. It was the fifth port for shipping in the United States, threatening to overtake fourth-place Baltimore.28 Whalers outward-bound for the South Atlantic and beyond frequently stopped at the Azores and Cape Verde Islands to complete their crews. Portuguese were sought after by Yankee whalers, who gave them rock-bottom pay in return for passage to the United States. By 1830 nearly half the crews of Nantucket whalers were Cape Verdians, recruited in Cape Verde.29 Between 1900 and 1920 some eighteen thousand Cape Verdians went to New Bedford to work in textiles, construction, and maritime trades. Today there are more Cape Verdians in New Bedford than in any other city outside the Cape Verde Islands.30 American whaling’s Golden Age lasted from 1850 to 1862. Competitive products hastened its end. Kerosene replaced whale oil for lighting, and petroleum came into use as a lubricant. A substantial assist to the end of whaling was provided by the Confederate raiders Alabama and Shenandoah, which sank much of the New England fleet during the Civil War.31 Profits from whaling were invested in industry. New Bedford “found in the cotton mill a substitute for harpoon and whaleboat.”32 Nowhere in the Americas is there a better demonstration of the “spars to spindles” phenomenon than New Bedford, Massachusetts. Maritime profits shifted to industry in the metamorphosis of this whaling metropolis to a prosperous 66

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industrial city with thirty-two cotton-manufacturing companies employing thirty thousand people. In the decades after the Civil War, New Bedford whaling merchants pooled their capital to form a textile industry specializing in fine cotton cloth. New Bedford continued as a one-industry town. During the first three decades of the twentieth century about 90 percent of the city’s manufacturing employees worked in cotton textile mills. New Bedford changed from a port city to an industrial city between 1880 and 1920. The population tripled to over one hundred and twenty thousand. The percentage of foreign-born rose from 14 percent in 1865 to over 40 percent in 1900. About 75 percent of the textile workers were immigrants. In the late 1800s immigrant nationalities included English, Irish, German, French-Canadian, Eastern European, and Middle Eastern. By 1900 most of the immigrants were Portuguese, and most worked in the mills.33

Brazil: Longboat Whaling Whales seeking warm waters for breeding moved north along the Brazilian coast. They were found in large numbers in Bahia’s Bay of All Saints and Rio de Janeiro’s Guanabara Bay. Brazilian whaling began in longboats, as it did in New England, but never progressed to the high seas. Plantation society’s disdain for economic pursuits other than growing export crops with slave labor, the lack of investment capital for any venture except land and slaves, and contempt for those who worked with their hands prevented expansion.34 A typical longboat crew consisted of six oarsmen, the harpoonist, and the helmsman. The oarsmen were generally slaves or free blacks. Captured whales were towed ashore. Whale oil and other by-products were rendered at land installations such as the one on Bahia’s Itaparcia Island in the 1750s, which had 420 workers—20 whites, 2 Indians, 55 mulattoes, 71 free blacks, and 272 slaves.35 The whaling labor force at sea and ashore included slaves and escravos da pena (convicts), who often worked in chains. The latter performed the more hazardous tasks because slaves represented a capital investment to the owner. Whaling was one of the few fields of activity in Brazil that was open to mulattoes, Indians, and free blacks in a society in which the slave practically monopolized manual labor.36 Lighting in homes, businesses, and city streets consumed vast quantities of whale oil. After the Portuguese Court moved to Rio in 1808, a major effort was made to illuminate city streets using lamps fueled by whale oil. “The lamplighters were slaves who slept on the pavement in the dampness of the night with body and clothing always reeking of oil which constituted one of the most melancholy sights of the city.”37 67

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By the 1750s whaling stations were established in Bahia, Rio de Janeiro, and Santa Catarina. Whaling declined in the last years of the eighteenth century, when European and American whalers began operating in the Falkland (Malvinas) Islands, letting fewer whales get north to the Brazilian coast. Competition from British, French, and American ships caused the collapse of the onshore rendering installations. In 1819 twenty-two whalers entered port on the Island of Santa Catarina, fifteen American and seven French.38 At the time that whaling entered its Golden Age in the United States, it was in sharp decline in Brazil. SHIP CONSTRUCTION Both British mainland North America and Portuguese America were colonies of maritime states that adopted mercantile policies to encourage shipbuilding. Both had extensive stands of timber prized by shipbuilders. Shipbuilding became a major industry in New England and the Middle Atlantic colonies. Ship construction in the South and in Brazil was not an important factor in economic growth.

Portuguese America/Brazil: Shipbuilding Falls Short of Potential Colonists engaged in sugar production opposed shipbuilding in Brazil. Shipbuilding was in direct competition with sugar plantations for wood, which became increasingly scarce as the Atlantic forest was destroyed by plantation owners. In the Northeast there was strong resistance by large landowners to any economic activity that would compete with the sugar engenhos for forest reserves. As early as 1548 the Portuguese government issued decrees to encourage shipbuilding. The first governor, Tomé de Sousa, tried to stimulate ship construction in Bahia. Plantation owners were adamant in their opposition. Sugar monoculture devastated the rich timber stands of the coastal zona de mata (forest zone). Wood was used for mill construction and fuel, and the oxcarts, canoes, boats, and boxes used to transport sugar. Stock raising was prohibited in the sugar zone to prevent conversion of forest to pasture. Small farmers who cleared forests by slash-and-burn agriculture were opposed by planters. A large naval industry could have been established in the sugar areas, but it was exactly in these regions that the industry met the greatest resistance.39 There was little local demand for a shipbuilding industry. Most vessels used in fishing, whaling, and coastal trade—jangadas, longboats, canoes, and saveiros (lateen-rigged sailboats)—were small and built by their owners.40 Canoes handled much local commerce. Those in Pernambuco ranged in size from small canoes for one person to oceangoing vessels forty feet in 68

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length. Canoes were engaged in the carrying trade on the Beberibe and Capibaribe Rivers and between Recife and small ports on the coast. Most canoe crew members were negros de ganho (slaves who gave earnings to their owners) or free blacks.41 The saveiro was the beautiful workhorse of Bahia’s Bay of All Saints. The traditional saveiro is lateen-rigged, about twenty-four feet long, and has a crew of two. Larger versions, constructed in small boatyards, are thirty-six to fifty feet in length and have a crew of four. Communication by water linked Salvador with the Recôncavo (the land around the bay) and its towns from Nazaré das Farinhas to Cachoeira and their rich agricultural hinterlands producing sugar, tobacco, and food crops. As Les Halles was the belly of Paris, so the Mercado Modelo was the belly of Salvador, supplied by saveiro with a huge variety of products from Reconcavo subsistence farmers. Jorge Amado described the market’s saveiro harbor: And from the saveiros came baskets of okra and mangoes, hogs, flitches of bacon, cans of dende oil, charcoal, cashews, pottery, and a splendid world of things all carried to shore on the heads of porters, true balancing artists who pass from one saveiro to another with the agility of cats, with the same elegance whether they are carrying three sacks of farinha or a fighting cock.42

The biggest local demand for ship construction was for the caravelão (not a large caravel, as might be expected, but a smaller one), the ship most popular during the early colonial period. Caravels, the “ships of discovery,” displaced about one hundred and sixty tons; caravelões, from forty to fifty tons. The latter, small and fast, were popular in Brazil because they were simple to build, required few workers for construction, and sailed well in the calm seas off the Brazilian coasts.43 Portugal’s requests for ships differed from those levied by Great Britain on its North American colonies. The English wanted small ships suitable for construction in colonial yards. The Portuguese wanted huge ships beyond colonial capabilities. The Portuguese sailed some of the largest ships in the world in the sixteenth and seventeenth centuries, with tonnages ranging from one thousand to more than two thousand tons. While the Portuguese remained committed to their seagoing behemoths, the English and Dutch led the way in the shift to smaller ships. British exploits, whether voyages of discovery or privateering, were often made in vessels of less than one hundred tons.44 Government shipyards were established during the colonial period in Pará, Pernambuco, Bahia, and Rio de Janeiro. Some ships were built, but the yards were mainly repair shops. The first drydock in Brazil was not completed in Rio de Janeiro until 1861, thirty-seven years after construction began.45 After the colonial capital was transferred from Salvador to Rio de Janeiro in 1763, the Arsenal de Marinha became the most important naval 69

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construction installation in Brazil.46 Little major work was done, however, until after the arrival of the Portuguese Court in 1808. The scarcity of competent workers was a serious problem. Slaves provided much of the labor. Master shipwrights, carpenters, and caulkers were often imported from Europe. Brazilian admiral Juvenal Greenhalgh wrote that all branches of the Brazilian government used slaves. Some who worked in the shipyards were purchased in Brazil by the government, others were rented to the yards by private owners, and still others were purchased in Africa specifically for the navy. At times some workshops of the Rio shipyard had only slaves working under free supervisors.47 The Rio yards employed 409 caulkers and carpenters in 1865–195 slaves, 130 foreigners, and eighty-four free Brazilians.48 Ships built in Rio were high in quality but few in number. Most Brazilian vessels participating in the war with Paraguay were built in Rio de Janeiro. The frigate Amazonas, constructed in 1851, was the flagship of Admiral Barroso in the Battle of Riachuelo of 11 June 1865, the most famous of Brazilian naval battles.49 From 1870 to 1890 the Rio yard launched fifteen ships, including the Almirante Barroso. Under the command of Admiral Custodio de Melo, she became the first Brazilian navy ship to sail around the world.50 In spite of serious obstacles the Baron Mauá made a success of Ponta de Areia, the first large private industry in Brazil, constructing steamships, steam engines, and other products. Opened in 1846, two years after the Alves Branco tariff, Mauá was forced to close the shipyards in 1863 because of financial difficulties. Mainland British America/United States In New England and the Middle Atlantic colonies shipbuilding was an essential component of the economy. By the middle of the nineteenth century the United States was building more ships than any other country in the world. In North America there was great demand for ships from the colonists for fishing, whaling, and commerce. Britain purchased merchant ships from American yards. The Navigation Acts restricted trade between Britain and its colonies to English- and colonial-built ships. Elimination of the Dutch from the British carrying trade resulted in enormous business for American shipbuilders. By the end of the seventeenth century shipbuilding was a major colonial industry. Colonists in New England and the Middle Atlantic settlements were enthusiastic about a profitable industry that would link them to the European economy. By 1750 there were more than 125 shipyards in the mainland colonies building up to four hundred ships a year.51 Most of New England-built ships saw service in the West Indies or coastal trades. New England accounted for about two-thirds of the new vessels constructed in the colonies. Ships were sold abroad to British and other foreign buyers. During the eighteenth century the British merchant fleet was expanding rapidly. By 1775 about 398,000 tons, or nearly one-third 70

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of the tonnage of the British merchant fleet, had been built in America. Of the 7,694 vessels that made up the British merchant marine on the eve of the Revolutionary War, 2,343 were American-built.52 On the eve of independence the value of ships sold to foreign buyers combined with earnings from freight carried on American ships enabled shipping to make a contribution to the colonial balance of payments rivaling that of tobacco, the principal export staple.53 With strong forward and backward linkages and an important income multiplier effect, ship construction made a large contribution to colonial economic diversification and laid the basis for industrial expansion. Shipbuilding was unimportant in the South except in the border state of Maryland. Baltimore required merchantmen to export wheat brought from central Pennsylvania by barges on the Susquehanna River. With English ships to carry tobacco, rice, indigo, and naval stores to English markets, there was neither desire nor need to develop a southern shipbuilding industry.54 In 1850 the South built 136 vessels (including 68 in Maryland and 32 in Virginia) with a total tonnage of 39,478, while the North built 835 with 173,414 total tonnage.55 In 1860 the Bath customs district in Maine built more tonnage than all the southern states from North Carolina to Texas. On the eve of the Civil War New England had over 2,000 ship masters, and the South had 118. New England had almost forty thousand mariners and fishermen, and the South had fewer than five thousand.56 Maritime activities did not prosper in plantation America. Independence from Great Britain was a boon to U.S. shipbuilders. Independence from Portugal gave no such stimulus to shipbuilding in Brazil. Following independence the percentage of U.S. foreign trade carried by British ships decreased. Following independence the percentage of Brazilian foreign trade carried by British ships increased. By 1840 a major boom in American shipbuilding was under way. The tonnage engaged in foreign trade grew from 763,838 in 1840 to 2,494,894 in 1861, the highest figure for foreign tonnage ever recorded in U.S. history. Including ships in coastal trading and fishing, the tonnage of the United States was one-third that of the world total and about equal to that of Great Britain.57 The high-water mark for the ship construction industry was the period 1847–1857, when the United States was the world’s leading shipbuilder, constructing 3.4 million gross tons compared with 1.8 million gross tons in Great Britain and 1.7 million gross tons in British possessions, mainly Canada.58 The American merchant marine and the shipbuilding industry were hit hard by the Civil War. Ship construction was on a downward trend from the 1860s to the end of the century. NOTES 1. Fernand Braudel, Civilization and Capitalism: 15th–18th Century, 3 vols. (New York: Harper and Row, 1985), 3: 420. 71

Early Globalization and Economic Development 2. Quoted in Golbery do Couto e Silva, Geopolítica do brasil (Rio de Janeiro: Livraria José Olympio Editôra, 1967), 43 and in Darcy Ribeiro, O povo brasileiro, 2nd ed. (São Paulo: Companhia das Lêtras, 1995), 156. 3. Gerog Borgstrom, “U.S. Atlantic Fisheries and Current Trends in Supply and Use,” in Gerog Borgstrom and Arthur J. Heighway, eds., Atlantic Ocean Fisheries (London: Fishing News Books, 1961), 225. 4. Stanley A. Beatty, “Brazilian Fishing,” in Borgstrom and Heighway, Atlantic Ocean Fisheries, 205–6. 5. Paulo Moreira da Silva, “O problema da pesca no brasil,” in Paulo Mireira da Silva et al., Estudos do mar brasileiro (Rio de Janeiro: Renes, 1972), 28–30. 6. Albert C. Jensen, The Cod (New York: Thomas Y. Crowell, 1972), 84–85. 7. Quoted in Robert G. Albion, William A. Baker, and Benjamin W. Labaree, New England and the Sea (Mystic, CT: Mystic Seaport Museum, 1972), 27. 8. Harold A. Innis, The Cod Fisheries: The History of an International Economy (New Haven, CT: Yale University Press, 1940), 133–34. 9. Raymond McFarland, A History of the New England Fisheries (Philadelphia: University of Pennsylvania Press, 1911), 275. 10. George Brown Goode, The Fisheries and Fishery Industries of the United States, 2 vols. (Washington, DC: Government Printing Office, 1887), 1: 231. 11. Samuel Eliot Morison, The Maritime History of Massachusetts, 1783–1860 (Boston: Houghton Mifflin, 1941), 134; Jensen, The Cod, 12–13. 12. Antonio Carlos Diegues, Pescadores, camponesas e trabalhadores do mar (São Paulo: Ática, 1983), 107–9. 13. Moreira da Silva, “O problema da pesca no brasil,” 9, 19. 14. Richard J. Hauk, “The Portuguese Fishing Industry,” in Borgstrom and Heighway, Atlantic Ocean Fisheries, 167; James G. Lydon, “Fish for Gold: The Massachussets Fish Trade with Iberia, 1700–1773,” The New England Quarterly 54 (October 1981), 568; C. R. Boxer, The Golden Age of Brazil: 1695–1750 (Berkeley: University of California Press, 1962), 25. 15. Daniel Merriman, “The History of Georges Bank,” in Guy C. McLeod and John H. Prescott, eds., Georges Bank: Past, Present and Future of a Marine Environment (Boulder, CO: Westview Press, 1982), 24. 16. Rudyard Kipling, Captain’s Courageous (New York: Doubleday, Page, 1923), 141–42. 17. Kipling, Captain’s Courageous, 306. 18. Goode, Fisheries and Fishery Industries, 1: 188, 190. 19. “Jangadeiros,” Revista Brasileira de Geografia 3 (January-March 1941), 151; Luis da Câmara Cascudo, Jangadeiros (Rio de Janeiro: Ministério da Agricultura, 1957), 17; Shepard Lewis Forman, “Jangadeiros: The Raft Fishermen of Northeast Brazil” (Ph.D. dissertation, Columbia University: 1966), 1. 20. Richard Henry Dana, Jr., Two Years before the Mast: A Personal Narrative of Life at Sea (Los Angeles: Ward Ritchie Press, 1964), 24. 21. “Jangadeiros,” 151. 22. Herman Melville, Moby-Dick (London: J. M. Dent, 1992), 93. 23. Laurie Robertson-Lorant, Melville: A Biography (New York: Clarkson Potter, 1996), 93. 24. Jacques Costeau, Whales (New York: Harry N. Abrams, 1988), 25–26; Edward A. Stackpole, The Sea-Hunters: The New England Whalemen during Two Centuries, 1635–1835 (Philadelphia: Lippincott, 1953), 97. 72

Engines of Economic Development (Part I) 25. Lance Edwin Davis, In Pursuit of Leviathan: Technology, Institutions, Productivity, and Profits in American Whaling, 1816–1906 (Chicago: University of Chicago Press, 1997), 18–19. 26. Albian, Baker, and Labaree, New England and the Sea, 116; Stackpole, The Sea-Hunters, 452–54. 27. Davis, In Pursuit of Leviathan, 348–51. 28. Morison, Maritime History of Massachusetts, 319; see also Daniel Georgianna, The Strike of ‘28 (New Bedford: Spinner, 1993), 12–13; Pat Amaral, They Ploughed the Seas: Profiles of Azorian Master Mariners (St. Petersburg, FL: Valkyrie Press, 1978), xvi–xvii. 29. Robert C. Hayden, African Americans and Cape Verdean Americans in New Bedford (Boston: Select Publications, 1993),69; Melville, Moby Dick, 102–3. 30. Marilyn Halter, Between Race and Ethnicity: Cape Verde American Immigrants, 1860–1965 (Urbana: University of Illinois Press, 1993), 4–10. 31. Ralph H. Brown, Historical Geography of the United States (New York: Harcourt, Brace, 1948), 353; Georgianna, The Strike of ‘28, 13. 32. Hokman, The American Whaleman, 300. 33. Georgianna, The Strike of ‘28, 20–23. 34. Moreira da Silva, “O problema da pesca no Brasil,” 9; Myriam Ellis, A baleia no brasil colonial (São Paulo: Edições Mehoramentos, 1968), 199; Henry W. Furniss, “Whaling in Brazil,” Bulletin of the International Union of the American Republics (June 1909), 1048. 35. Heitor Ferreira Lima, Formação industrial do brasil (Rio de Janeiro: Editôra Fundo da Cultura, 1961), 214–16. 36. Ellis, Aspectos da pesca da baleia, 96–97; Ellis, A baleia no brasil colonial, 97, 110, 113–14. 37. C. J. Dunlop, Rio Antigo (Rio de Janeiro: Gráfica Laemmert, 1955), 18. 38. Ellis, Aspectos da pesca da baleia, 71–87. 39. Carlos Francisco Moura, “Os caravelões brasileiras,” Navigator: Subsidios para a história marítima do brasil (June 1974), 55–58. 40. Roberto C. Simonsen, História econômica do brasil (1500/1820) (São Paulo: Companhia Editôra Nacional, 1967), 439. 41. Evaldo Cabral de Mello, “Canoas do Recife,” in Mario Souto Maior and Leonardo Dantas Silva, eds., O Recife: Quatro séculos de sua pasagem (Recife: Editôra Massangana, 1992), 201–4,211. 42. Jorge Amado, introduction to As sete portas da bahia by Hector Julio Paride Bernabo (Carybe) (São Paulo: Livraria Martins Editôra, 1962), 35–36. 43. José da Gama Pimentel Barata, “A navegação a vela no literal brasileiro,” in História Naval Brasileira, 3 vols. (Rio de Janeiro: SDGM, 1975), 1: 77–78. 44. Fernand Braudel, The Mediterranean and the Mediterranean World in the Age of Phillip II, 2 vols. (New York: Harper and Row, 1972), 1: 300–306. 45. A. L. Porto e Albuquerque, “Impressões sobre a constução naval no brasil durante a monarquia, (1822–1889),” Navigator (June 1971), 15–17, 21. 46. Pedro Paulo Charnaux Serta, “Construção naval,” in Mireira da Silva et al., Estudos do mar brasileiro, 47–48. 47. Juvenal Greenhalgh, O arsenal de marinha do Rio de Janeiro na história: 1822–1889 (Rio de Janeiro: IBGE, 1965), 170, 183–84. 48. Aureliano Cândido Tavares Bastos, Chamber of Deputies speech of 1 June 1865, Jornal do Commércio (Rio de Janeiro) 16 (June 1865), 1–2. 73

Early Globalization and Economic Development 49. Max Justo Guedes, “Cochrane e a construção naval no brasil,” Navigator (June 1971), 4; Reliquias navais do brasil (Rio de Janiero: Biblioteca do Serviço de Documentaçao Geral da Marinha, 1983), 35, 51. 50. Pedro Paulo Charnaux Serta, “Construçao naval,” in Mireira da Silva, Estudos do mar brasileiro, 47–48. 51. Clifton H. Whitehurst, Jr., The United States Shipbuilding Industry (Annapolis, MD: Naval Institute Press, 1986), 14. 52. Henry Hamilton, England: A History of the Homeland (New York: W. W. Norton, 1948), 379. 53. John J. McCusker and Russell R. Menard, The Economy of British America, 1607–1789 (Chapel Hill: University of North Carolina Press, 1985), 319–20). 54. Joseph A. Goldenberg, Shipbuilding in Colonial America (Charlottesville: University of Virginia Press, 1976), 117. 55. Emory Q. Hawk, Economic History of the South (New York: Prentice-Hall, 1934), 113. 56. Albion, Baker, and Labaree, New England and the Sea, 150. 57. Ernest Ludlow Bogart, An Economic History of the United States (New York: Longmans, Green, 1937), 215–17. 58. Whitehurst, Jr., United States Shipbuilding, 17–19.

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Chapter 5

Engines of Economic Development (Part II): Trade, Commerce, and Family Farm Agriculture

The economic mainstays of New England and the Middle Atlantic colonies included trade, commerce, and family farm agriculture in addition to fishing, whaling, and ship construction. Plantation America developed an economy that relied almost entirely on the export of plantation crops to the mother country, while northern mainland colonies evolved a diversified economy trading with many different markets. INVISIBLES British mercantilist policies to protect domestic fishermen and farmers from competition were blessings in disguise for American colonists in the periphery. Settlers had to find markets other than the mother country for their fish and grain. American-based firms profited from “invisibles” such as freighting, insurance, short-term credit, and other commercial services on shipments to non-British markets. When tobacco was exported to Britain, invisibles were handled by the importer in England. When wheat or fish were shipped to the West Indies or Southern Europe, the invisibles were executed in the colony. It is difficult to overemphasize the importance of invisible earnings.1 Shipbuilding was a smaller source of foreign exchange for the colonists than the sale of shipping services. From 1768 to 1772 the five highest-valued exports from mainland British America were (in order of importance) tobacco, bread and flour, rice, dried fish, and indigo. Statistics on exports did not include sales of ships or invis-

Early Globalization and Economic Development

ibles. The income from invisibles was greater than the value of any single export commodity except tobacco. The dominance of the South in the export trade disappears when ship sales and invisibles are included, making North and South almost equal in foreign exchange earnings.2 In Brazil, some slave trade merchants in Salvador and Rio de Janeiro also dealt in invisibles. When the slave trade ended, many slavers returned to Portugal with their profits. Most who remained became plantation owners, real estate speculators, or commission agents. International economic relations in Brazilian ports became the business of foreign merchants, mainly British. THE ROLE OF MERCHANTS Merchants were among the wealthiest men in the American colonies. In New England and the Middle Atlantic colonies they dominated politics and were society’s elite. By 1690 Philadelphia leadership rested with a group of Quaker merchants, many with American trading experience in other colonies, including Barbados, Jamaica, New York, and Boston. Wealth from trade and commerce rather than landholdings was the source of social and political influence and power in colonial Massachusetts and Pennsylvania.3 Those with social aspirations aped the merchant class. In plantation America merchants were also among the richest individuals, but society and politics were ruled by large landowners. Merchants who sought high social standing purchased land and slaves. When profits from maritime and commercial ventures began to wane in New England and the Middle Atlantic regions, merchants invested in industry. The “spars to spindles” shift of capital was an essential element in industrialization. In plantation America wealthy merchants invested in land, slaves, and urban real estate to buy their way into high society. New England and Middle Atlantic merchants owned the bulk of colonial shipping engaged in trade with the West Indies and provided much of the cargo sold in the Caribbean. The merchant was the key to the success of American shipping.4 The economic, political, and social leaders of Philadelphia and Boston were merchants. They owned most of the ocean-going vessels and arranged joint ventures to provide marine insurance on voyages to Europe and the Mediterranean.5 TRADE AND COMMERCE In North America, the slave trade and coastal, West Indian, and European commercial routes were important contributors to colonial prosperity. Following independence, ships of the United States traded in all the ports of the world. In Portuguese America, colonists had limited maritime commercial activities. Brazilian participation in the African slave trade was the only maritime activity of substantial economic importance. 76

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Americans developed a near monopoly of the provision trade with Caribbean plantations, furnished Newfoundland fishermen, developed profitable commercial links with Southern Europe, and challenged England’s supremacy in European fish markets. Northern colonies became competitors and commercial rivals of England.6 Except for the slave trade, Brazilians were not commercial competitors of Portuguese or other European traders. The Slave Trade The slave trade led the globalization of the Atlantic economy. As Europe brought the Americas and Africa into its economic system, the trade and commerce among the four Atlantic continents evolved into a triangular trade. Manufactured goods were shipped from Europe to Africa, slaves from Africa were the cargo to the Americas on the notorious “Middle Passage,” and agricultural products produced by slaves in plantation America were shipped to Europe. Much of the commerce between these three regions was bilateral, and some was quadrilateral. Colbert viewed the French Caribbean colonies as one corner of a rectangle, the others being France for manufactured goods, West Africa for slaves, and Canada for foodstuffs. The triangle, however, best represents the flow of commodities and slaves that forged the economic bonds between Europe, Africa, and the Americas that endured for centuries. During 350 years about 10 million African slaves were landed in the Americas. From 4 to 6 million perished at sea, and countless millions more died between capture and boarding slave ships. Portugal/Brazil and Great Britain/British North America/United States were the leading slavers, carrying to the Americas 4.7 million and 2.9 million slaves, respectively.7 Besides Europeans, merchants in Bahia, Rio de Janeiro, and Rhode Island earned huge profits as slavers.8 Brazil: Tobacco Traded for Slaves to Grow Sugar Beginning in the latter part of the sixteenth century, slaves for Brazilian sugar plantations formed part of a triangular trade. Ships from Lisbon went to the Guinea Coast with textiles and other manufactured goods produced in other European countries, slaves were taken to Brazil, and Brazilian sugar was sent to Europe. Another pattern involved sending manufactured goods, wine, cod, and other products from Lisbon to Brazil and cachaça (rum) and tobacco from Brazil to Africa to trade for slaves shipped to Brazil. On the final leg sugar was sent from Brazil to Europe.9 Brazilians traded tobacco to maintain a slave supply for sugar plantations. About 90 percent of the tobacco produced in Brazil was grown in Bahia. The first and second grades of tobacco had to be shipped to Portugal 77

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according to mercantilist policy. Permission was granted, however, to ship third-grade tobacco directly to Africa to be exchanged for slaves. “Reject tobacco” was deemed unsuitable for consumption by Europeans. It had to be liberally brushed with molasses so that small and broken leaves would not dry when rolled into ropes for shipment. Tobacco prepared in this way was so popular in Africa that it became an indispensable article of the slave trade. Almost four hundred tobacco ships sailed from Bahia to Africa between 1680 and 1710.10 Participation in the slave trade was Brazil’s most important maritime activity. While under Spanish rule, Portugal was expelled from its Guinea Coast slaving forts by the Netherlands. The Dutch insisted that only Bahian tobacco could be bartered for African slaves to be shipped to Brazil. Beginning in the seventeenth century, the direct trade between Bahia and Dahomey was conducted almost exclusively by slavers resident in Salvador in spite of the strong objections by Lisbon merchants.11 The merchants were told that slaving was practically the only branch of overseas trade in which profits remained in Luso—Brazilian hands. Trade with Europe was controlled by English and other foreign merchants who operated through Portuguese agents in Brazil.12 Rio de Janeiro was also a major slave port. Resident merchants carried on the slave trade as in Salvador. Rio merchants owned 74 percent of the slave ships and controlled six of the seven companies that provided insurance for slave sailings. While slaves landing in Bahia came mainly from Dahomey, most arriving in Rio de Janeiro were from Angola. Cachaça, produced by sugar mills in the city’s hinterland, was among the items traded for slaves.13 Rhode Island: Rum Traded for Slaves to Trade for Molasses to Make Rum Most American ports had a few ships engaged in the slave trade, but only in Rhode Island did the trade have significant economic and social significance. Rhode Island ships brought to America an estimated 106,000 slaves between 1725 and 1807. Slavers were the cream of Rhode Island’s commercial and political elite.14 Rhode Island rum distilled from West Indian molasses purchased African slaves. Rum to Africa, slaves to the Caribbean, and sugar and molasses to Rhode Island formed the triangle. Molasses imported on returning slave ships supplemented that imported by Rhode Island’s large molasses fleet. Rum was Rhode Island’s staple. Almost eleven million gallons were exported to West Africa from 1709 to 1807. In 1770 the slave trade accounted for 25 percent of Rhode Island rum. The remainder was exported, consumed in the Americas, or sold to traders for barter with Indians. Rum distilleries using free labor had strong linkages with the local economy. 78

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Cachaça, produced on plantations with slave labor, had weak linkages with the local economy. The slave trade to the United States became illegal in 1808. As early as the 1790s merchants began withdrawing capital from maritime ventures, including slaving, for investment in the cotton industry. Capital shifted from commerce to industry, stimulating local economies throughout Rhode Island.15 The West Indian Trade: “We Have Occasion for Each Other” By the 1680s almost half the ships serving the British sugar islands came from New England, and over half the ships entering and clearing Boston were trading with the West Indies.16 John Adams said on 23 June 1783, “The commerce of the West India Islands is part of the American system of commerce. They can neither do without us, nor we without them. The Creator has placed us upon the globe in such a situation that we have occasion for each other.”17 Devoting almost all good land to sugar production, the planters, with a thriving agricultural economy, were unable to feed themselves or their slaves. By the 1770s the British West Indies received from New England and the Middle Atlantic colonies dried fish, pickled fish, wheat, flour, oats, corn, beans, butter, cheese, rice, lumber, barrel staves, horses, sheep, and hogs.18 The West Indies trade was essential for the prosperity of northern mainland colonies. Colonial exports to the islands provided profits to buy British manufactured goods. West Indian molasses was the raw material for Massachusetts and Rhode Island rum distilleries. The British islands did not produce enough molasses to supply the demand of New England rum industries, nor did they provide a market large enough to absorb mainland colony exports. Strict adherence to the tenets of mercantilism and the elimination of trade with the non-British West Indies would have been a severe blow to the economic system developed in North America outside the plantation region. Britain long tolerated the illegal commerce with non-British Caribbean islands because prosperous mainland colonies made excellent customers for British manufactured goods. New England and Middle Atlantic commerce with the French islands continued even when the mother country was at war with France. Shippers obtained authorization, often through bribery, to visit French islands under a flag of truce to “exchange prisoners of war.” Ships returned to the mainland not with freed prisoners but with French sugar and molasses. “Fraudulent papers and fraudulent flags were an open business.”19 Colbert’s mercantilist design for colonial economies made no provision for the by-products of sugar production. France placed a high tariff on colonial rum and molasses to eliminate competition with domestic brandy and wine. French planters continued their commerce with the British mainland colonies in spite of their government’s refusal to allow legal trade of molas79

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ses for food and livestock. Contrary to England’s mercantilist principles, mainland colonies traded with the French islands in spite of objections by British sugar producers in the Caribbean who demanded a monopoly of mainland colony trade. Trade with the French West Indies was a basis of conflict between Britain and its mainland colonies nearly one hundred years before the Declaration of Independence.20 To control West Indian trade, the Molasses Act was passed by Parliament in 1733. It was evaded by the colonists. Two years before the Declaration of Independence, Molasses Act provisions were enlarged and strengthened by the Sugar Act of 1764 to tighten the Navigation Acts and satisfy West Indian planters. John Adams wrote, “It is no secret that rum was an essential ingredient of the American Revolution.”21 A flourishing trade with the West Indies continued after American independence, even though Britain closed the ports of its colonies to American commerce. Before the Revolution there were legal trade with the British islands and smuggling with the rest of the Caribbean. After the Revolution there were smuggling with the British colonies and legal trade with the other islands. Philadelphia was the main American port for flour exports. From 1794 to 1822 the Caribbean was the destination of nearly one-half of all ships and two-fifths of all tonnage departing her wharfs for foreign ports. Cuba, Santo Domingo, and Puerto Rico were favored trading partners. From 1800 to 1805 Havana led all foreign clearances from Philadelphia, including those to Europe and Asia. Wheat flour made up about 50 percent of all Philadelphia exports to the Spanish West Indies.22 There is no way to find out how much of the cargo consigned to the Spanish West Indies had British Caribbean ports as the final destination. The West Indies component of the North Atlantic circulation system had no counterpart in the South Atlantic. Brazilian writers, ranging from Darcy Ribeiro to General Golbery do Couto e Silva, use the term “archipelago” to describe Brazilian colonial settlements as isolated population clusters along the coast linked only by sea.23 The word “archipelago” can be misleading. If the Brazilian plantation colonies had, in fact, been a group of islands forming a true archipelago like the islands of the Caribbean, southern Brazil would have been called upon to supply the same kind of market available to the Middle Atlantic colonies and New England. In reality, of course, Brazilian sugar colonies had vast hinterlands and supplied most of their own food, livestock, and forest products.24 Coastal Commerce Coastal trading was an important element in the commerce of the New England and the Middle Atlantic regions but a marginal activity of plantation America colonies. During the colonial era in North America coastal 80

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shipping was reserved for British flag vessels and was dominated by Americans. In Brazil coastal shipping was a Portuguese monopoly with little Brazilian participation. Following independence coastal shipping was reserved for national flagships by both the United States and Brazil. The former retained this monopoly, including commerce between east and west coasts that traveled around Cape Horn, but coastal shipping in Brazil was opened to foreign flags in the 1860s. North American coastal trade was diverse in products and markets. Its total worth before the Revolution could have been as much as 70 percent of the total value of overseas trade.25 New Englanders traveled the mainland coast in search of profit. Southern cotton was shipped to New York on northern ships. The North provided the ships for an extensive north-south trade that included fish, manufactures, boots and shoes, and dry goods sent south and cotton, tobacco, and hay returned north. Tonnage of vessels engaged in coastal shipping, including river and lake traffic, went from 500,000 tons in 1817, to 1,000,000 tons in 1840, to 2,500,000 tons in 1860.26 Brazilian coastal trade was reserved for Portuguese ships during the colonial period. Commerce was not as extensive as in North America because colonies had similar economies. The 1810 Anglo-Portuguese Treaty gave Britain the right to participate in Brazil’s international trade but reserved coastal shipping for Portuguese flag vessels. Newly independent Brazil gave Brazilian ships a monopoly on coastal trade. This right was reaffirmed in 1834 and 1860. Because of British actions against Brazilian shipping to halt the African slave trade, Brazil’s merchant fleet was in such a battered condition by 1850 that it was unable to fulfill maritime responsibilities.27 The national merchant marine had difficulty in meeting the demand for coastal shipping. In the 1860s Federal Deputy Aureliano Cândido Tavares Bastos, encouraged by British diplomats and businessmen, led the fight to eliminate the coastal shipping monopoly of Brazilian ships. He said that Brazil’s destiny was in the land. Shipping drained labor from the agricultural sector. Brazilians did not have a maritime vocation. “A Brazilian will be everything except a man of the sea. The Brazilian who can, works as a farmer, exercising the only truly noble profession of the planet.”28 The law of 1866 opened Brazilian coastal commerce to ships of all nations, and coastal shipping became dominated by foreign ships. Brazilian monopoly was regained when coastal shipping was nationalized by the Constitution of 1891.29 Writing in 1880, an anonymous Brazilian author said that opening coastal shipping to foreign flags ruined Brazil’s most powerful national industry. He predicted that the decadence of the Brazilian merchant fleet was so great that the national merchant marine would soon be extinct.30 Thirty years later Affonso Costa concurred in this assessment. Opening coastal shipping to foreign flags had disastrous effects because the national shipping industry could not compete with ships of maritime countries. The law 81

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destroyed Brazilian flag coastal shipping and greatly weakened the ship construction industry.31 Foreign Trade British mercantilist policies promoted North American shipping ventures that began with coastal trading, expanded to the West Indies, and graduated to international trade. These same policies barred colonial ships from rounding the Cape of Good Hope. Following independence the American merchant marine was active throughout the world. Brazilian international trade was dominated by foreign flag vessels during the colonial period and throughout the nineteenth century. The period from the conclusion of the War of 1812 to the Civil War was the Golden Age of the American merchant marine. Several factors spurred growth. Increased immigration from Ireland and Germany required more shipping. England abolished its Corn Laws in 1846, and American grain exports soared. Textile industry growth in England and the North created a huge demand for cotton as plantation agriculture spread across the lower South to the Gulf Coast of Texas. The Cotton Fleet composed of northern ships freighted the harvests. The California gold rush required sea transportation for thousands in a trade monopolized by American ships. U.S. foreign trade suffered from the ravages of the Civil War, foreign competition, and more attractive investment opportunities in railroads, manufacturing, western lands, and mining. In 1853 the tonnage of the American merchant fleet was 15 percent greater than Britain’s; by the end of 1866 it was 30 percent less than Britain’s. Just before the Civil War U.S. vessels carried about two-thirds of all American foreign commerce, at the end of the Civil War less than one-third, and by the end of the century less than 10 percent. SALEM AND PARATY: A TALE OF TWO PORT CITIES On the New England coast and offshore islands scores of small ports developed during the colonial era ranging in size from the great shipping center of Boston to small fishing villages. Most engaged in several maritime activities but specialized in one—Nantucket and New Bedford were whaling ports; Newport was the leading slaver; Gloucester, Plymouth, and Marblehead were fishing ports; Newburyport built ships; and Salem became the leader in Far Eastern trade. During the colonial era Rio de Janeiro province had many ports along the Atlantic coast, on offshore islands, and around Guanabara Bay. They ranged in size from Brazil’s most important city, Rio de Janeiro, to small hamlets. These ports included Cabo Frio, Niteroi, Mangaratiba, Angra dos Reis, Ilha Grande and Paraty. Most were only small, coastal market towns and distribution points connecting a limited hinterland with Rio. Paraty, 82

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however, was important for three centuries as the terminus of the trail that linked the coast with inland regions. Salem: Its Ships Traded in All Ports of the World Founded in 1629 about forty miles north of Boston, Salem soon became an important maritime center (Map 4). Fishing, ship construction, and commerce were all important in Salem’s rise to prominence as an important port, a position that it held for two centuries. The city grew in size, stature, and wealth from a colonial fishing village to one of the richest urban centers in the United States in 1800. The “sacred cod” provided Salem with its first economic activity, and the cod fishery remained important for more than two hundred years. Fishing Map 4 New England

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was rivaled by ship construction and maritime commerce in terms of economic importance. Shipbuilding became a major industry beginning with the construction of forty-ton fishing shallops in the 1660s. Salem vessels sailed in the American and British merchant marine. Ship size gradually increased until East Indiamen of more than three hundred tons were constructed in the early 1800s. The largest ship built was the eight-hundred-and-fifty-ton frigate USS Essex, the only warship made in Salem. The Essex made a remarkable voyage in the War of 1812 under the command of Captain David Porter, “that boisterous champion of free trade and sailors’ rights.” The Essex destroyed the British whaling fleet in the Pacific Ocean after being the first American warship to round Cape Horn.32 Maritime commerce started with mainland colonies from Newfoundland to Carolina. It expanded during two hundred years to the West Indies, Europe, and Asia. Mainland trade involved fish, timber, shingles and barrel staves for hides, tallow, horses, tobacco, corn, rice, and wheat. The main items traded with the West Indies were “refuse cod” to feed slaves, horses to turn the sugar mills, and wooden staves for casks to ship molasses to New England rum distilleries. Legal voyages to the British islands and illegal trade with French, Dutch, and Spanish colonies were the basis of Salem’s commerce until the Revolution.33 The Navigation Acts gave American colonists a virtual monopoly of shipping between the mainland and the West Indies. In the trans-Atlantic trade Salem ships carried New England’s best cod, tobacco, and pipe staves to exchange for wine, hides, fruit, salt, and gold coins in France, the Iberian Peninsula, and the Wine Islands. To the Netherlands and Britain, Salem merchants traded timber, masts, wool, and rum for linen, hardware, bar iron, and bills of exchange. By 1750 Salem had grown from a provincial fishing village to a thriving port city with five thousand inhabitants. Salem was prosperous for 150 years before its ships sailed beyond the Cape of Good Hope. By 1790, with a population of eight thousand, Salem was the nation’s sixth largest city and one of the wealthiest. Before the Revolution ships had not ventured beyond coastal, West Indian, and trans-atlantic routes. Trade with Asia was banned by British mercantilist policy. After the war Asian commerce became a Salem specialty. Salem’s Golden Age was from 1790 to 1807. It began with American independence and ended with the Embargo Act. Trade in tea, coffee, and pepper made the port one of the most prosperous cities in America. Salem so dominated the international pepper trade that Sumatra and adjoining islands were commonly known as the Salem East Indies.34 Ships from Salem were the first to fly the American flag in many foreign ports. Its municipal seal bore the inscription “to the farthest port of the rich East.” Calcutta, Bombay, and Madras were among the most popular desti84

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nations where captains obtained Indian cotton goods bartered for spices and tea in other Asian ports. In 1807 most of the city’s ten thousand inhabitants made their living from the sea. Salem’s fleet consisted of two hundred ships. There were hundreds of flakes for drying fish, tanneries for treating imported hides, rum distilleries, ropewalks, sail lofts, warehouses, ship’s chandlers, and countinghouses. Shipyards required many skilled workers. Shipwrights were in charge of construction, and caulkers were the highest paid artisans. Other skilled laborers included coopers, carpenters, and blacksmiths. The Embargo Act and the War of 1812 ended Salem’s Golden Age. Its fleet was reduced 75 percent. Important maritime activities continued, but Salem never regained its status as one of the nation’s leading ports. Many merchants shifted investments from maritime ventures to textile mills and other industries. Manufacturing became a mainstay of Salem prosperity. Instead of seeking berths on East Indiamen, local youths looked for industrial employment in Salem and nearby Lawrence, Lowell, and Lynn. The necessity of establishing factories near waterpower sites ceased when steam was harnessed for textile mills. The Naumkeag Steam Cotton Co. was built in Salem on a former shipyard. Cargoes to Zanzibar, opened to trade by Salem mariners in the 1830s, always included this factory’s unbleached cotton cloth because of its popularity in the bazaars. A varnish industry was established in Salem to process the gum copal carried on returning ships.35 Cotton textiles, shoes, varnish, burlap, and woolens were Salem industries. Bootmaking and shoemaking had long been an important domestic industry in New England. It was a winter occupation for farmers and fishermen who made shoes from material purchased by local merchants.36 In the 1750s a Welshman, John Adams Dagyr, the father of American shoemaking, began a factory system of shoe production at Lynn, Salem’s near neighbor. By the end of the nineteenth century Salem held a secure position in the state’s shoe and leather industry, ranking third behind Lynn and Haverhill in the production of women’s shoes. Paraty: Gold and Coffee Exported to the World Paraty, about 130 miles southwest of Rio de Janeiro, was the sea terminus of the old trail of the Guaianas Indians that linked the coast with the Paraiba Valley and beyond (Map 5). Lucio Costa, the designer of Brasilia, called Paraty the city where sea routes and land trails mesh. The first European settlers arrived in the late 1500s from São Vicente, and the town of Paraty was established in 1630, a year after the founding of Salem. The Serra do Mar is the rugged escarpment from Bahia to Santa Catarina that makes access from the coast to the interior difficult. It was considered impassable behind Rio de Janeiro, blocking the city and its port from direct land communication with the Paraiba Valley and lands farther west. The 85

Early Globalization and Economic Development Map 5 Southeast Brazil

trail over the escarpment from Paraty became increasingly popular, going from sea level to almost three thousand feet before descending to the Paraiba Valley. The route of this ancient Indian trail was used by the Portuguese and Brazilians for three centuries. Brazil produced more than four hundred tons of gold during the eighteenth century. After the Minas Gerais gold discoveries the trail to Paraty became the main artery linking the mines with the coast.37 For decades it was the only gold shipment route authorized by the Portuguese government. Mule trains brought gold from the mines centered on Ouro Preto to Paraty, where it was transshipped to Rio de Janeiro by boat. The Casa de Registra de Ouro (Gold Registration Office) was established in Paraty in 1703 to ensure that all gold exported was accounted for and the royal fifth paid. Gold shipments created Paraty’s first Golden Age. Mule trains took from four to six weeks to reach Paraty from Ouro Preto. Loss of cargo, mules, and human life was not uncommon on steep and dan86

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gerous stretches of the trail. Pirates attacked ships sailing to Rio from Paraty. Land routes were sought to link Rio de Janeiro with the mines. The Caminho Novo de Piedade, a mule trail from Minas Gerais to Rio de Janeiro, was opened in 1750. The fortunes of Paraty went into decline. In the nineteenth century Brazil supplied most of the world’s coffee. The Paraiba Valley was the early center of coffee production. The Paraiba River runs from the state of São Paulo through the state of Rio de Janeiro before flowing into the Atlantic. This strategically placed river in the region that was the main coffee-producing area of Brazil from the 1830s to the 1860s was of little use for transporting coffee harvests because shallows, rapids, and waterfalls are found throughout its course to the sea.38 Mule trains brought the coffee harvests from fazendas to the coast. The mules returned to the interior with cargo for the coffee barons—necessities such as salt and olive oil and luxuries including fine European wines, porcelain from Sevres and Limoges, silks from Asia, English and German pianos, and French perfume.39 Boom times returned to Paraty. The port’s second Golden Age lasted until the 1870s. Fortunes were made by large landowners in Paraty who owned mules and slaves. Rented slaves repaired the trail and carried cargo when heavy rains made the trail impassable for mules. Mule train leaders were often Portuguese immigrants from the Azores who managed the mule skinners, usually slaves or free blacks. The Paraty municipal council levied tolls for trail maintenance. Paraty had a rich agricultural hinterland where sugarcane cultivation using slave labor predominated. Plantation owners hired professors to teach their children, sons of the wealthy studied in Rio de Janeiro and Europe, and European theater companies performed in Paraty. Four churches flourished. The Igreja das Dores (Church of the Sorrows) was exclusively for the aristocratic elite, consisting primarily of plantation owners and their families, while the Matriz dos Remédios (Church of the Remedies) was for white store owners and merchants. Igreja de Santa Rita (Saint Rita Church) was attended by the free, nonwhite population, and the Igreja do Rosário (Rosario Church) was for slaves.40 Sugar plantations produced the cachaça that has been internationally famous for centuries. “Paraty” became synonymous with cachaça. Large amounts of “Paraty alcohol” were sent to Portugal from more than two hundred distilleries. In later years Carmen Miranda sang about the man who had a Paraty instead of tea and toast. Today the distillery owned by Prince Dom João de Orleans e Bragança, a contender for the emperor’s throne should Brazil reestablish the monarchy, produces the much-prized Mare Alta brand. Paraty became one of the wealthiest cities in Brazil. The population, including the rural area, was about sixteen thousand. Fifty percent were slaves. In the city there were five thousand slaves working as stevedores, 87

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ship crew members, small boat operators, market salespersons, peddlers, street cleaners, and skilled and unskilled construction workers. Prosperous sugar plantations surrounded Paraty. Commercial houses thrived. Mule trains clogged city streets. The docks and harbor were crowded with sailing vessels. The powerful and influential coffee barons complained to the government about the lengthy, dangerous, and costly route used to transport coffee by mule and ship via Paraty to Rio. They lobbied for a railroad from the national capital to the Paraiba Valley. Inauguration of a line from Rio de Janeiro over the escarpment to Barra do Pirai was a boon for coffee producers, but it sounded the death knell for Paraty. The abolition of slavery in 1888 was the final nail in the city’s coffin. There were no more slaves to maintain the trail. The route over the escarpment was abandoned. Contact and commerce with the interior ceased. Paraty remained isolated on the coast. In the first decades of the twentieth century the city’s population dwindled until it consisted almost entirely of old men, women, and children. In 1936, 239 died of malaria, 187 of tuberculosis, and 98 of dysentery, and 179 children under the age of one year died of consumption and intestinal infections. “Paraty became the image of death and ruin.”41 Since the last decades of the twentieth century Salem and Paraty have become important tourist centers, receiving thousands of national and international visitors each year. The well-preserved architecture—Salem’s Federal style and Paraty’s “our style” (Lucio Costa’s term)—is a major drawing card. The histories of Salem and Paraty fascinate visitors. Many aspects of the development processes of New World plantation and peripheral regions are illustrated by their past. When Salem’s overseas connections were severed by the Embargo Act and the War of 1812, merchants invested accumulated capital in industry. Shore workers and seamen found employment in a variety of manufacturing establishments. The city continued to prosper and contribute to the region’s economic development. Paraty merchants invested in urban real estate in Rio de Janeiro or in sugar plantations and slaves when connections with the interior ended. No new employment opportunities were created in Paraty. The city died.

FAMILY FARM AGRICULTURE: ESSENTIAL COMPONENT OF DEVELOPMENT Outside the plantation zone in North America most colonists engaged in family farm agriculture. In the north and west the small landholding was an essential component of economic development. Pennsylvania became an American economic leader early in the colonial period, with small farms providing the basis for the colony’s flourishing economy. Wheat was grown in Philadelphia’s hinterland which became the first North American 88

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“bread basket.” Wheat, flour, and other agricultural products were exported to other mainland colonies, the West Indies, and Southern Europe. With extensive iron ore deposits and ample forest reserves Pennsylvania was an early leader in manufacturing. Shipbuilding was an early industry. The variety of products exported shows the diversity of the Pennsylvania economy. Shipments from Philadelphia in 1752 included flour, wheat, corn, bacon, beef, barrel staves, ginseng root, iron, flaxseed, furs, and deerskins.42 Philadelphia became the most important port in British America. Family farm agriculture played a negligible role in Brazil’s economic growth. São Paulo, on the southern fringe of the plantation region, was Pennsylvania’s counterpart in Brazil. Lacking connections with the world economy, São Paulo remained a thinly populated region until the second half of the nineteenth century. There were no markets to exploit in the South Atlantic comparable to those available north of the equator. Most settlers were subsistence farmers. The early economy was based on the sale of Indian slaves. Later, livestock and food crops were sold to plantation regions and to mining areas in Minas Gerais. When explosive development began in the second half of the nineteenth century, coffee was grown on large landholdings. Early Pennsylvania Prosperity Based on Family Farm Agriculture Excellent farmland was found on both sides of the Delaware River. Philadelphia was founded in 1681 and soon was almost surrounded by small farms producing grain. The colony remained the country’s largest wheat producer until the 1840s, when wheat farms west of the Appalachian Mountains became the national leaders. William Penn’s policies of religious freedom and the offer of family farms at low prices attracted many English and German farmers. The agricultural prosperity of Pennsylvania was built on a network of small farms that spread throughout the state. Land was obtained by purchase and by squatting. In 1740 it was estimated that four-hundred-thousand Pennsylvania acres were occupied by squatters. There were too many to be evicted. Squatters became a potent pressure group that prompted recognition of land acquisition by preemption (squatters’ rights). Wheat was most economically produced on small farms, with the farmer and family members doing the work, helped by an indentured servant or seasonal wage laborers. Wheat, bread, and flour became the main staples integrating Pennsylvania with the world economy. Southern Europe, the West Indies, and other mainland colonies were its markets. Philadelphia was the most important North American port until the 1820s, when New York moved into first place. Wheat farming had strong linkages with the local economy. By the end of the colonial period rural Pennsylvania was dominated by family farms 89

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and market towns that provided services for a flourishing agricultural sector.43 Farmers made purchases in nearby villages and towns. Village craftsmen did work for farmers. Flour mills processed wheat. In the period 1700–1775 about one-hundred-thousand indentured servants arrived in the mainland colonies from the British Isles, and an additional thirty-five-thousand came from Germany. One-half went to Pennsylvania.44 About two-thirds of Pennsylvania’s immigrants came under some form of voluntary servitude with agreements to provide service for a specific period, usually four years or more, in return for transportation and payment of other expenses required for immigration. Indentured servants made contracts before sailing. Redemptioners agreed with a ship’s captain at port of embarkation to contract employment for themselves and their families on arrival in America to repay transportation costs. Immigration of indentured servants and redemptioners flourished between 1730 and 1770. Germans, Irish, English, Scotch, and Welsh immigrants predominated. Many were Scotch-Irish from the impoverished province of Ulster. Most worked in the agricultural sector, but some were employed as apprentices by urban craftsmen. Colonial legislation required that upon completion of four or more years of service the redemptioner “be fully Cloathed with two compleat suits of Apparel, whereof one shall be new, and shall also be furnished with one new Ax, one Grubbing-hoe, and one Weeding-hoe.” The colony also guaranteed the redemptioner fifty acres of land upon successful completion of his contract. “Nothing in the various regulations and laws prescribed by the government of the Province was more generous and wise than that.”45 Philadelphia became the market center of the fertile Delaware Valley. The city boasted a great variety of craftsmen who had been manual workers in London, Bristol, Dublin, or small British towns. Of the 119 skilled and semiskilled craftsmen identified in Philadelphia around 1690, 34 were in the building trades—carpenters, sawyers, bricklayers, and plasterers. Twenty-six were in the clothing industry—weavers, dyers, tailors, and shoemakers. Fourteen were identified as working in food processing—bakers, butchers, and brewers. Another 22 manufactured household goods—coopers, chandlers, potters, clock makers, and cabinetmakers. Four were carpenters and rope makers in the shipbuilding industry. The remaining 19 were in the service trades—barbers, physicians, tavern keepers, and carters.46 In plantation America slaves did most of the work performed by these Philadelphia craftsmen. The income multiplier effect made free craftsmen working in northern societies powerful agents of economic development. Without income, slave craftsmen performing the same work in plantation America were not agents of economic development, although their skills may have been equal to, or greater than, those of their northern counterparts. Skilled craftsmen became respected members of their community in 90

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free labor colonies. Skilled craftsmen were regarded with disdain in colonies dominated by slavery because they worked with their hands. Because Britain’s Corn Laws barred importation of wheat, Pennsylvania’s main export staple, there were large deficits in the balance of trade with the mother country. In 1766 Benjamin Franklin described the commercial pattern that evolved: The balance is paid by our produce carried to the West Indies and sold in our own islands, or to the French, Spaniards, Danes, and Dutch; by the same carried to other colonies in North America, as New England, Nova Scotia, Newfoundland, Carolina and Georgia; by the same carried to different parts of Europe, as Spain, Portugal and Italy: In all which places we receive either money, bills of exchange, or commodities that suit for remittance to Britain; which together with all the profits on the industry of our merchants and mariners, arising in those circuitous voyages, and the freights made by their ships, center finally in Britain, to discharge the balance, and pay for British manufactures continually used in the province, or sold to foreigners by our traders.47

Products were shipped on colonial ships, and invisibles were provided by local merchants. Philadelphia commanded commercial supremacy in British America in 1775 measured in terms of population, value of foreign and coastal trade, and tonnage cleared. Philadelphia’s population rose from about 6,000 in 1700, to 14,563 in 1753, and 41,200 in 1800. In 1900 the population of Pennsylvania was 6,302,115. Philadelphia, the nation’s second largest city, had 1,293,697 inhabitants. THE CIVILIZATION OF NEW ENGLAND AND THE MIDDLE ATLANTIC COLONIES One civilization developed in plantation America, and another civilization evolved in New England and the Middle Atlantic colonies. The first had an economy based on large landholdings producing export crops for Europe with slave labor. Linkages with the local economy were weak. The second had an economy based on maritime activities, trade and commerce, and family farm agriculture. Linkages with the local economy were strong. Because the southern colonies in Brazil were of marginal economic importance until the middle of the nineteenth century, only the plantation-based civilization emerged in Brazil. Economic development in Britain’s northern colonies created an urban hierarchy of cities, towns, villages, and hamlets. Immigrants swarmed to the region, drawn by urban and rural job opportunities. The economy laid a solid basis for future industrial growth. The economic foundations established during the colonial period permitted amazing development in the nineteenth century, enabling the United States to become Britain’s chief competitor for leadership of the global economy. 91

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NOTES 1. James F. Shepherd and Gary Walton, Shipping, Maritime Trade and the Economic Development of Colonial North America (Cambridge: Cambridge University Press, 1972), 135–36. 2. Ibid., 162–63. 3. Sylvester K. Stevens, Pennsylvania: Birthplace of a Nation (New York: Random House, 1964), 45. 4. Joseph A. Goldenberg, Shipbuilding in Colonial America (Charlottesville: University of Virginia Press, 1976), 98, 123. 5. Thomas C. Cochran, Pennsylvania: A History (New York: W. W. Norton, 1978), 21. 6. Charles M. Andrews, The Colonial Background of the American Revolution (New Haven, CT: Yale University Press, 1931), 87. 7. Hugh Thomas, The Slave Trade (New York: Simon and Schuster, 1997), 804. 8. Herbert S. Klein, “Eighteenth-century Atlantic Slave Trade,” in James D. Tracy, ed., The Rise of Merchant Empires: Long Distance Trade in the Early Modern World, 1350–1750 (New York: Cambridge University Press, 1990), 301. 9. Vera Ferlini, A civilização do açúcar (São Paulo: Brasiliense, 1980), 64, 72–75. 10. Pierre Verger, Bahia and the West Coast Trade, 1549–1851 (Ibadan: Ibadan University Press, 1964), 7–8, 11. 11. Ibid., 4–6; Fernando A. Novais, Portugal e brasil na crise do antiga sistema colonial (1777–1808) (São Paulo: Editôra Hucitec, 1985), 193. 12. Verger, Bahia and the West Coast Trade, 6; C. R. Boxer, The Golden Age of Brazil: 1695–1750 (Berkeley: University of Califoria Press, 1962), 156. 13. João Fragoso and Manolo Florentino, O arcaísmo como projeto: Mercado atlântico, sociedade agrária e elite mercantil no Rio de Janeiro, c.1790–c.1840 (Rio de Janeiro: Diadorim Editôra, 1993), 81–85; A.J.R. Russell-Wood, A World on the Move: The Portuguese in Africa, Asia and America, 1415–1808 (New York: St. Martin’s Press, 1992), 140. 14. Jay Coughtry, The Notorious Triangle: Rhode Island and the African Slave Trade, 1700–1897 (Philadelphia: Temple University Press, 1981), 6, 17, 20, 37. 15. Ibid., 82–83, 236–37. 16. Richard S. Dunn, Sugar and Slaves (Chapel Hill: University of North Carolina Press, 1973), 336. 17. Quoted in Eric Williams, From Columbus to Castro: The History of the Caribbean, 1492–1969 (New York: Vintage Books, 1984), 228. 18. Selwyn H. H. Carrington, “The American Revolution and the British West Indies’ Economy,” Journal of Interdisciplinary History 17 (Spring 1987), 823. 19. Catherine Drinker Bowen, John Adams and the American Revolution (Boston: Little, Brown, 1950), 206. 20. Williams, From Columbus to Castro, 166–67. 21. Quoted in Jack Shepherd, The Adams Chronicles: Four Generations of Greatness (Boston: Little, Brown, 1975), 25. 22. Linda K. Salvicci, “Supply, Demand and the Making of a Market: Philadelphia and Havana at the Beginning of the Nineteenth Century,” in Franklin W. Knight and Peggy K. Liss, eds., Atlantic Port Cities (Knoxville: University of Tennessee Press, 1991), 40–45. 92

Engines of Economic Development (Part II) 23. Darcy Ribeiro, O povo brasileiro, 2nd ed. (São Paulo: Companhia das Letras, 1995), 156; Golbery do Couto e Silva, Geopolítica do Brasil (Rio de Janeiro: Livraria José Olympio Editôra, 1967), 47; see also Bertha K. Becker and Claudio A. G. Egler, Brazil: A New Regional Power in the World-Economy (Cambridge: Cambridge University Press, 1992), 28. 24. Celso Furtado, The Economic Growth of Brazil: A Survey from Colonial to Modern Times (Berkeley: University of California Press, 1971), 60–61. 25. John McCusker and Russell R. Menard, The Economy of British America, 1607–1789 (Chapel Hill: University of North Carolina Press, 1985), 109. 26. Ernest Ludlow Bogart, An Economic History of the United States (New York: Longmans, Green, 1937), 220; Samuel Eliot Morison, The Oxford History of the American People, 3 vols. (New York: Meridian, 1994) 3: 57. 27. Jorge Caldeira, Mauá: Empresário do império (São Paulo: Companhia das Lêtras, 1995), 220–21. 28. Quoted in Carlos Pontes, Tavares Bastos (Aureliano Cândido), 1839–1875 (São Paulo: Companhia Editôra Nacional, 1975), 95–97. 29. Barbosa Lima Sobrinho, “Navegação de cabotagem,” Jornal do Brasil (Rio de Janeiro) (30 January 1994), 11. 30. “R. Q.” [pseud.], Causas da decadência da marinha mercante do Brasil (Rio de Janeiro: Typ. Economica, 1880), 3–7. 31. Affonso Costa, A marinha mercante no brasil (Rio de Janeiro: Liga Marítima Brasileira, 1910), 33–34. 32. John K. Mahon, The War of 1812 (Gainesville: University of Florida Press, 1972), 250; C. S. Forester, The Age of Fighting Sail (Garden City, NY: Doubleday, 1956), 203–5. 33. National Park Service, Salem: Maritime Salem in the Age of Sail (Washington, DC: U.S. Department of the Interior, 1987), 20. 34. Robert G. Albion, William A. Baker, and Benjamin W. Labaree, New England and the Sea (Mystic, CT: Mystic Seaport Museum, 1972), 60. 35. Ibid., 109. 36. Morison, The Oxford History of the American People, 2: 233. 37. Stanley J. Stein, Vassouras: A Brazilian Coffee County, 1850–1900 (Princeton, NJ: Princeton University Press, 1983), 7. 38. Richard Graham, “Slavery and Economic Development: Brazil and the United States in the Nineteenth Century,” Comparative Studies in Society and History 23 (October 1981), 623. 39. Thereza Maia and Tom Maia, Paraty (Rio de Janeiro: Expressão e Cultura, 1991), 16. 40. Heitor Gurgel and Edeliveiss Campos do Amaral, Paraty: Caminho do ouro (Rio de Janeiro: Livraia São José, 1973), 63–65. 41. Ibid., 49–50. 42. Struthers Burt, Philadelphia: Holy Experiment (Garden City, NY: Doubleday, 1946), 118. 43. McCusker and Menard, The Economy of British America, 195–207. 44. Gary B. Nash, The Urban Crucible (Cambridge: Harvard University Press, 1979), 106. 45. Frank Ried Diffenderffer, The German Immigration into Pennsylvania and the Redemptioners (Baltimore: Genealogical Publishing Co., 1988), 267. 93

Early Globalization and Economic Development 46. Mary Marples Dunn and Richard S. Dunn, “The Founding, 1681–1701,” in Russell F. Wiegley, ed., Philadelphia: A 300–Year History (New York: W. W. Norton, 1982), 19–21. 47. Quoted Shepherd and Walton, Shipping, Maritime Trade, 115–16.

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Chapter 6

1808: “Economic Fault Line” and “Line of Demarcation”; Protectionism and Free Trade as Development Strategies

The year 1808 was decisive in the economic development of Brazil and the United States. Brazil began an era of free trade with ports open to ships of all countries. The United States started its Industrial Revolution behind trade barriers protecting domestic manufacturers. Brazilian economist José Gabriel de Lemos Brito wrote that the arrival of the Portuguese Court in Rio de Janeiro in 1808 marked an “economic fault line. . . . Brazil was economically free before being politically free.”1 According to American economist Ernest Ludlow Bogart, 1808 was a “line of demarcation” ending industrial dependence of the United States upon European countries and beginning industrial self-sufficiency and diversified internal development.2 Before 1808 the United States was still an economic colony of Great Britain, although politically independent. When the Portuguese Crown was transferred to Rio de Janeiro under British fleet protection, Brazil became an economic colony of Great Britain while remaining a political colony of Portugal. In 1808 Great Britain, the world’s strongest economic power, was about to enter its era of greatest influence. The one hundred years from 1815 to 1914 was the British century. During most of the nineteenth century Brazil sought to work with Britain to progress economically. The United States followed an independent path to economic development, even when it resulted in war with Great Britain. As the twentieth century dawned, Brazil remained locked in the periphery of the world economy, exporting agricultural staples and importing industrial products. The industrialized United

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States, however, had become a core state in competition with West European countries. FROM THE FRYING PAN OF MERCANTILISM TO THE FIRE OF FREE TRADE Many Brazilians hailed the opening of the ports to foreign flags as marking “our true economic emancipation.”3 Ayoung Brazilian wrote soon after the Crown’s arrival in Rio de Janeiro that “Brazil is no longer a maritime colony barred to the trade of nations, as until now, but rather a powerful Empire, which will come to be the moderator of Europe, the arbiter of Asia and the dominator of Africa.”4 The number of foreign ships entering Rio’s Guanabara Bay soared from 1 in 1807, to 90 in 1808, to 340 in 1819, and to 354 in 1820.5 Life in Brazil’s capital was transformed. The Rua de Ouvidor (Ouvidor Street) reflected the dramatic changes in Brazil’s economy that occurred with free trade. Besides newspaper offices, publishing houses, cafés, and restaurants, the street boasted scores of foreign retail outlets stocked with a flood of imported merchandise. In symbolic terms the Rua do Ouvidor was Europe, the meeting place of the elites, the fashionable promenade.6 On this narrow, one-half-mile street perpendicular to Guanabara Bay there were 205 commercial establishments in 1862, including 91 French, 68 Portuguese, 35 Brazilian, 4 Swiss, 2 North American, 2 Italian, 1 German, 1 English, and 1 Spanish.7 Most British businesses were wholesale and import/export enterprises located on the Rua Direita (today, Rua Primeiro de Março) which paralleled the bay: It is easy to imagine the enthusiasm with which Brazilians fought over the copious and varied products of the advanced English and French industries. . . . After learning our needs, the English supplied us with Manchester textiles, porcelain, iron, lead, copper, zinc, cheeses, butter, and beer and the French competed with other articles: jewelry, furniture, wax candles, medicine, watches, liquors and, above all, high fashion merchandise, toilet articles, and fine knickknacks.8

On 1 April 1808 Brazilian industry was freed from the restrictions of the 5 January 1785 decree that prohibited all factories in Brazil except those producing rough cloth used in making slave clothing and sacking for agricultural shipments. The open ports policy, however, ensured that Brazilian industry would be stillborn. Freedom to establish industries was a cruel hoax for any Brazilian who wanted to manufacture products in the colony. Local factories could not compete with European imports without protection. Tariff protection was denied by the 1810 treaty between Portugal and Great Britain, “the most damaging and unequal agreement ever signed be96

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tween two independent countries.”9 The British ambassador, Percy Clinton Sidney Smith, sixth viscount of Strangford, negotiated the treaty with the Portuguese government in Rio de Janeiro. As ambassador to Portugal, Lord Strangford had convinced the Portuguese Crown to sail from Lisbon to Brazil with British fleet protection to escape Napoleon’s invading army. Lord Strangford acted with the arrogance of a Roman proconsul. Great Britain received a favored position under the treaty that brought an influx of British goods and the establishment of British agents throughout the country.10 The treaty also provided that British subjects resident in Brazil were to be tried only before judges appointed by Britain. Imported English goods paid 15 percent ad valorem, and imports from all other countries paid 25 percent. Brazil became a dumping ground for stockpiled British manufactures that had not been exported to Europe because of Napoleon’s continental blockade.11 “The Brazilian market was given to English manufacturers.”12 British exports dominated the Brazilian market, but Britain refused to grant trade concessions. It barred importation of sugar and tobacco from Brazil to protect West Indian producers. Independent Brazil continued the free trade policy established by the Portuguese Crown. By the terms of the 1825 treaty with Great Britain the Portuguese milkmaid was banished to the scullery, and the Brazilian milch cow was tethered securely in the British barn. The treaty provided that the British would pay a 15 percent tariff, the Portuguese 24 percent, and all other countries 25 percent. Domestic industries remained unprotected. Brazil also agreed to assume responsibility for the 1.4 million pounds (US$7 million) that Portugal had raised in London to finance its attempt to defeat Brazil’s bid for independence. Because of the treaty Brazil was “to be held in bondage until 1844 by a treaty offensive in countless ways to the independence and honor of the nation.”13 Nogueira de Paula wrote, “The beginning of our industrial evolution is a sad page of international politics. . . . As a price for political emancipation Brazil had to mortgage her economic autonomy to England.”14 By convincing the Portuguese to recognize Brazilian independence, Great Britain obtained increased possibilities of economic and political expansion in Brazil while weakening Portugal and making it still more dependent on Britain.15 Both the United States and Brazil received aid from European states to secure their independence. Alliance with France aided the United States, and Great Britain brokered Portugal’s recognition of Brazil as an independent state. Both France and Great Britain sought commercial advantages for their assistance. The count of Vergennes, French foreign minister, wrote to the finance minister: “Always keep in mind that in separating the United States from Great Britain, it was above all their commerce that we 97

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wanted.”16 France failed to control the American market, but Britain’s “friendship” for Brazil paid off handsomely. During most of the Brazilian empire (1822–1889) tariffs were essentially a fiscal policy, not a means to encourage industry.17 Protectionist policies were opposed by foreigners and Brazilians engaged in import/export activities, liberals, and large landowners. Large landowners and merchants supported the commercial treaties with Great Britain, welcoming the close economic association and cheap imports. In 1844 Brazil passed its first protectionist tariff, the Alves Branco Law, named in honor of treasury minister Manuel Alves Branco. Duties of 30 to 60 percent were placed on most foreign goods. For the first time Brazilians refused to follow Great Britain’s dictates and made economic policy according to their own interests.18 The Alves Branco tariff increased ad valorem taxes on some three thousand imported products and was in effect until 1860. Landowners, merchants, and the foreign business community reacted negatively, claiming that a protectionist tariff benefited a few inefficient industrialists while consumers suffered. Immediately after Brazilian independence, British interests had been the most important group objecting to a protectionist tariff. Beginning in the 1850s, however, Brazilian liberals, whose economic doctrine coincided with the goals of export agriculturists and importers/exporters, joined forces with foreign opponents of protectionism. In the 1850s the liberal argument was strengthened by booming coffee production in the Paraiba Valley. Brazilian coffee dominated the world market, confirming faith “in the eminently agricultural destiny of Brazil.”19 With coffee providing more than half of Brazilian exports (1858–1860), the country had a favorable balance of trade for the first time since independence.20 Exports and imports increased. The 1857 tariff reflected the conclusions of the 1853 tariff commission that considered a protective tariff the equivalent of a return to Portuguese mercantilism. To support its findings, the commission cited the writings of José da Silva Lisboa, Viscount Cairu, who had recommended the opening of Brazilian ports in 1808.21 The brief experiment with protection for industry ended, and Brazil returned to a tariff designed primarily to produce revenue. Federal deputy Aureliano Cândido Tavares Bastos was a leader in the fight for free trade, the elimination of protectionist tariff provisions, and the opening of coastal shipping to foreign flags. In June 1865 he quoted with approval the 1827 statement of Congressman Bernardo Pereira de Vasconcelos that “[s]killed craftsmen, merchants and agriculturists ask of the government only that which Diogenes asked of Alexander: ‘Get out of my sun. We don’t need favors, we need only liberty and security.’ ” Tavares Bastos said that the same message should be sent to Brazilian industrialists. Everyone must depend only on his own efforts.22 98

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The formative stage of the Brazilian textile industry was between 1840 and 1890. Protection provided by the 1844 Alves Branco tariff was largely eliminated by 1857 legislation. Eight textile mills employing 424 workers were in operation in 1853, and there were forty-eight mills with 3,172 workers in 1885. Tariff rates for revenue purposes rose slowly between 1860 and 1879, making investment in the textile industry more attractive. The cotton manufacture in Brazil had much weaker linkages to the domestic economy than that of the United States. Early textile manufacturers of Lowell, Massachusetts, designed and produced their own machinery. Early Brazilian manufacturers looked to Great Britain, France, and the United States for both equipment and trained personnel to supervise installation and maintenance. The textile industry was characterized in 1885 as the product of “foreign invention, foreign workers, and foreign engineers.”23 There was a 10-fold increase in cotton textile production between 1885 and 1905.24 In 1892 Brazilian cotton manufacturing began three decades of steady development. The industry had 110 mills with 734,928 spindles and 39,159 workers in 1905.25 Urban sectors favoring industrialization gained political influence following the overthrow of the monarchy and the establishment of the Republic (1889). They agitated for higher tariffs, believing that economic independence would be fostered by new industries. Large landowners regained their traditional power broker role in 1894. Tariffs during the 1890s were designed to produce government revenue, not to protect industry, but manufacturers benefited from higher rates. The government’s position on tariffs at the end of the nineteenth century was articulated by Joaquim Murtinho, minister of industry, transportation, and public works in 1897 and minister of finance (1898–1902) in the government of President Manuel Ferraz Campos Sales. His prestige was so great and his support from Campos Sales so strong that he became a virtual prime minister.26 Murtinho was against direct government support to industry and strongly opposed protectionist tariffs. Instead of the benefits of protectionism championed by the Republican Party in the United States, he emphasized its defects. Protectionism “contributes to the exaggerated development of great fortunes that create among us an aristocracy of money. . . . The supremacy of industrialization could bring us great social evils, leaving us the form of our liberty but causing us to lose its substance.” Agriculture, industry, and government services should be the three productive sources of Brazil’s wealth, Murtinho declared: In reality, only agriculture produces; government services and industry become parasites, one under the action of socialism and the other through the influence of protectionism. These parasites dress themselves in attractive colors—industry with patriotism and government services with public welfare—and suck without mercy the juice with which agriculture seeks to nourish our impoverished organism.27 99

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MARITIME DISASTER SPARKS INDUSTRIAL REVOLUTION At the end of the eighteenth century the economy of the United States remained little changed from that of the colonial era. Frank Tausig wrote, “The year 1789 marks no such epoch in economic as it does in political history.”28 Upon gaining independence, the United States opened its ports to the ships of the world. Great Britain gained a virtual monopoly of American trade. From 1790 through 1792 the value of U.S. exports to Britain was $8.5 million, while the value of British imports was $15.28 million.29 After 1783 British economic policy toward the United States followed Lord Shefield’s premise that if the Americans wanted political independence, they would have to pay for it. He argued that Britain’s superior industrial plant would guarantee it the lion’s share of the American market despite British policies toward the United States. Lord Shefield recommended the exclusion of American shipping and American exports whenever it was in Great Britain’s interests to do so.30 In spite of providing a profitable market for British manufactured goods, the United States was barred from trade with the British West Indies. The early free trade policy of the United States forced some industries founded during the Revolutionary War to close and left others struggling for survival. In 1803 there were only four cotton factories in the United States competing with massive British textile imports. Britain dumped goods on the American market at such low prices that new industries could not compete. For U.S. maritime interests, the wars between England and France in the late eighteenth–early nineteenth centuries produced massive gains and huge problems. American tonnage tripled. The United States had sixty-five thousand seamen, and annual ship construction reached seventy thousand tons. As a neutral state, American ships traded with both France and Great Britain and practically monopolized European commerce with the Caribbean. All was not smooth sailing, however. Both England and France harassed American ships. The British were the most aggressive. American neutral shipping with the French West Indies was an especially popular target. Three hundred ships engaged in that trade were seized by the British in just one year.31 Royal Navy ships anchored in Chesapeake Bay. Boarding parties shanghaied American sailors on American ships in American waters. The Royal Navy searched American vessels in the West Indies, off the coast of Europe, and even in the Indian Ocean to impress sailors and to ensure that ships were not carrying cargo from one enemy port to another. The impressment of seamen and the seizure of ships within the three-mile limit were clear violations of international law.32 Great Britain had no respect for the sovereignty of a weaker nation. 100

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Faced with an annual desertion rate of twenty-five hundred men, Britain had long relied on press-gangs to supply sailors to man its expanding fleet. British boarding parties searched American merchant vessels and hauled off seamen, claiming that they were British citizens. Britain impressed from eight-thousand to ten-thousand bona fide American citizens. Many were killed in action or died of maltreatment.33 Some impressed American seamen were singled out for especially thuggish treatment by the brutal breed of masters represented by Patrick O’Brian’s slave-driver captain, “that horrible, sometimes half-mad figure that stained the naval record for too long, and made some ships a floating hell.”34 In June 1807 a boarding party from the HMS Leopard arrested four U.S. Navy sailors on the USS Chesapeake after raking broadsides had killed three American seamen and wounded fourteen others.35 All four were condemned to death, but only one was hanged. Unable to defend its ships, sailors, or harbors, the United States passed the Embargo Act in December 1807, which prohibited all exports from the United States and forbade American vessels to engage in foreign trade. For fourteen months all American ships were confined to American ports. Exports dropped 80 percent in 1808. The embargo made “graveyards out of all the American ports.”36 Philadelphia commerce came to a halt. Mayor Robert Wharton wrote, “Our city as to traffic is almost a desert, wharves crowded with empty vessels, the noise and buzz of commerce not heard, whilst hundreds of laborers are ranging the streets without employ or the means of getting bread for their distressed Families.”37 When American legislation failed to obtain concessions from Britain, the United States went to war against the world’s strongest naval power in 1812 with the battle cry “Free Trade and Sailors’ Rights.” The Embargo Act and the war were disastrous for maritime interests. Northern shipping and commercial interests had invested in manufacturing before 1808, but the shift from “spars to spindles” and “wharves to waterfalls” greatly accelerated during the period of extreme protection provided by the Embargo Act and the War of 1812. “The industrial situation changed abruptly in 1808,” wrote Frank Taussig. Factories producing cotton goods, woolen cloths, iron, glass, pottery and other articles “sprang up with mushroom growth.”38 In Massachusetts, textile mills, paper mills, iron foundries, and shoe factories were established with capital accumulated through neutral trading before the Embargo Act. By 1840 Massachusetts was predominantly a manufacturing state. Between 1808 and 1840 Philadelphia changed from a commercial center to a manufacturing city. An economy based on exports was transformed to one serving domestic markets. Investments shifted from maritime activities to industry, expanding Pennsylvania’s manufacturing base that had evolved in the colonial era. Iron production was a rural industry on “iron plantations” that included a blast furnace for smelting iron, ore near the 101

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surface, limestone, and from five to ten thousand acres of woodland. English, German, and Welsh settlers were familiar with iron manufacture. By the American Revolution pig iron was shipped to Philadelphia, where, contrary to British mercantilistic decrees, it was made into steel, plate, nails, and tools for home consumption. Surplus pig iron was exported to Britain.39 After 1808 investment increased in iron plantations, textiles (Philadelphia’s leading industry), and other manufactures. Rapid growth of manufacturing after 1808 resulted in strong pressure for protection from foreign competition when peace was concluded in 1815. Great Britain dumped stockpiled manufactured goods in New York and auctioned them for whatever they would bring. Discussing industrial policy in the British Parliament in April 1816, Henry Brougham said, “It is worthwhile to incur a loss upon the first exportation in order, by a glut, to stifle in the cradle those rising manufactures in the United States which the War has forced into existence contrary to the natural course of things.”40 The results of a market overstocked with high-quality, low-cost English goods were widespread unemployment and the disappearance of hundreds of American firms.41 The revival of British competition virtually destroyed the Philadelphia textile industry. Employment fell almost 90 percent. Beleaguered American industrialists demanded help. The tariff of 1816 was the first in a long line of protective measures that continued for more than one hundred years.42 The economic transformation begun in 1808 started a process that made the United States the world’s leading industrial power by the end of the century. After 1808 the textile industry grew with “prodigious rapidity,” and by 1812 there were fifty factories within thirty miles of Providence, Rhode Island, operating nearly sixty thousand spindles.43 At the end of the War of 1812 almost four thousand were employed in the Philadelphia textile industry. Textile manufacturing increased in Philadelphia after the protectionist tariff of 1816. There were thirty factories in 1823 and fifty in 1827, and by the Civil War Philadelphia textiles employed fifteen thousand workers.44 By 1831 cotton textiles had become a substantial industry in the United States. States with more than one-hundred thousand spindles in 1831 were all in the North.45 From 1808 to the Civil War production of the New England textile industry increased fifteenfold, and textile employment rose to over one-hundred thousand workers. There were more factory workers in the textile industry of New England in 1860 than in all Brazilian industries in 1905.46 Textile manufacturing transformed New England in four decades.47 The industrial boom was significant throughout the United States except in the South, where export agriculture continued to reign. By 1860 the United States was second in the world only to Great Britain in industrial 102

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production, and it surpassed Britain in the production of pig iron by 1890 and cotton textiles by 1910.48 Tariff policy was a major source of conflict between North and South before the Civil War. Planters in the South, like those in Brazil, favored free trade. The economy of the South, like that of Brazil, was based almost entirely on exporting agricultural products and importing manufactures. Southern agriculturalists, like their counterparts in Brazil, objected to high duties on the grounds that protection for domestic industry was obtained at their expense and prevented them from buying cheap foreign imports. Opposition to the protective tariff drove South Carolina to the edge of rebellion in 1832.49 The power of the South in Congress prevailed in the Tariff Act of 1857, which represented “as near approach to free trade as the country had since 1816.”50 After secession from the Union the Constitution of the Confederate States of America prohibited enactment of tariffs for any purpose except to raise revenue. The Congress of the Confederacy passed a free trade tariff that caused consternation in the North. Both the Boston Transcript and the Philadelphia Press of 18 March 1861 viewed this tariff with alarm. The former said, “The difference is so great between the tariff of the Union and that of the Confederate States, that the entire Northwest must find it to their advantage to purchase their imported goods at New Orleans rather than at New York.” The latter worried about the serious difficulty caused by “the different rates of duty established by the two tariffs that will soon be in force.”51 With the political influence of plantation owners eliminated by the secession of the southern states, Congress passed the 1861 Morrill Tariff which started an upward trend in the rates of protection. After the Civil War the South did not regain its former national political influence. The United States increased import duties, developing a tariff system of “extreme protection” that remained in effect through the rest of the nineteenth century.52 Presenting the tariff as a nationalistic and patriotic issue, the Republican Party, dominated by industrial and financial interests, declared that high rates were necessary to protect industry and to ensure that labor had high wages. The 1888 presidential campaign was run primarily on the tariff issue. Republicans identified the protective tariff with American nationalism. They offered the patriotic assurance that American goods and American labor would monopolize the home market and predicted that a flood of sweatshop goods from Europe would enter the United States if “free-trader Democrats” were returned to power. In Republican campaign posters Benjamin Harrison was shown against the background of the American flag, and the incumbent, Democrat Grover Cleveland, was draped in the British Union Jack. 53 103

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SAMUEL SLATER: FATHER OF THE AMERICAN TEXTILE INDUSTRY Textile production consists of two processes, spinning and weaving. The former consists of stretching and twisting fibers into yarn. The latter makes fabric by interlacing groups of yarns. In Great Britain, Richard Arkwright, an itinerant barber and hair merchant, successfully mechanized the spinning process in 1769. He built his first water-powered mill in 1771 and received a patent for his entire carding and spinning system in 1775. Arkwright’s accomplishments earned him a knighthood. The Arkwright mill made skilled hand spinners obsolete. It required a different kind of worker—the unskilled operator whose labor was paced by mechanized production. Instead of artisans working at home or in small shops, laborers in the spinning process became predominantly unskilled women and children working in factories. By the 1850s more than 60 percent of the workers in British textile mills were children between the ages of eight and twelve years and women. The export of machinery, industrial models, and machine plans from England was forbidden—mercantilist policy banned technology transfer. Samuel Slater, the son of a yeoman farmer, was apprenticed at age fourteen to Jedediah Strutt, Arkwright’s former partner. Working in a mill that used Arkwright-designed machines, he mastered the process of textile production, including carding, drawing, roving, and mule-spinning. Slater left England in 1789 disguised as a farmer and arrived in America carrying in his head the design of the new textile machinery.54 Moses Brown, a prosperous merchant of Providence, Rhode Island, was one of the first in the United States to become interested in cotton manufacturing. He sent Slater a letter of invitation: “Come and work our machines, and have the credit as well as advantage of perfecting the first water mill in America.” Brown established a water-powered textile mill on the banks of the Blackstone River at Pawtucket, Rhode Island, and financed Slater’s construction of new machinery. Slater built a frame from memory and put it into successful operation. The year 1791 marks the birth of the American cotton textile industry. Slater, “the founder of the cotton industry in the United States,” played an active role in the establishment of other cotton mills in Rhode Island, Massachusetts, Connecticut, and New Hampshire. Providence and the Blackstone Valley became “the nation’s nursery of manufacturing.”55 Samuel Slater’s story shows the enormous benefits that immigrants brought to the United States. The father of American shoemaking was a Welshman, John Adams Dagyr, who began a factory system of shoe production at Lynn, Massachusetts, in the 1750s. At Pottsville, Pennsylvania, in 1839 another Welshman, Benjamin Perry, was the first to successfully use 104

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anthracite coal for smelting iron. English, Cornish, Welsh, and Scottish miners and ironmasters were mainstays of the Pennsylvania iron industry. The Slater saga consisted of several elements. Amill in Great Britain served as a model, a skilled worker memorized mechanical details and immigrated to America, a region in the United States was in the early stages of industrialization, a prosperous merchant was willing to risk capital to finance new textile production techniques, and American industry received protection from foreign competition beginning in 1808. All these factors combined to establish the cotton textile industry. Not one was present in Brazil. There were no Portuguese Arkwrights because Portugal’s industrialization had been stifled by a series of treaties with Great Britain. Portugal produced no Slaters with factory experience who could transfer industrial technology to Brazil. There were no regions in the early stages of industrialization because Brazil was a part of plantation America, where manufacturing was disdained. Brazilian Moses Browns willing to risk capital in industry were exceedingly rare because profits in Brazil were invested in land, slaves, and urban real estate. Brazil, as colony and as independent state, did not provide continuing and effective tariff protection for domestic industries. POLITICAL ECONOMISTS: ALEXANDER HAMILTON AND VISCOUNT CAIRU Thomas Jefferson’s Declaration of Independence and Adam Smith’s Wealth of Nations were published in 1776. Both now have the aura of sacred texts. Jefferson’s Declaration has inspired millions in their struggle for a just society. Since the end of the eighteenth century the Wealth of Nations has been a widely used handbook of economic laws and policies.56 Smith called for a free and competitive economy, liberty from government interference, and the elimination of barriers to international trade. Mercantilism was his target.57 The leading political economists of the United States and Brazil, Alexander Hamilton and José da Silva Lisboa, Viscount Cairu, were both influenced by the Wealth of Nations, but they formed very different visions of American economic development. Hamilton and Cairu were disciples of Adam Smith, wrote Celso Furtado, but the former championed industrialization, while the latter “superstitiously believed in the ‘invisible hand.’ ”58 Hamilton modified Smith’s ideas to fit the needs of the fledgling United States. Cairu uncritically applied Smith’s recommendations to Brazil as colony and as independent state. Alexander Hamilton: Brilliant Visionary From September 1789 to January 1795, Alexander Hamilton was secretary of the treasury. Only George Washington had greater achievements as 105

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an early builder of the United States.59 Hamilton’s genius elaborated policies that, when put into practice, enabled the United States to move from peripheral to core status. He insisted that an overwhelmingly agricultural and undeveloped country must have an industrial base to prosper in the international economy. Without government help infant industries would be destroyed by competition from established European manufacturers. The “Report on Manufactures,” delivered to the House of Representatives on 5 December 1791, gave industrialization its political philosophy. Arthur Schlesinger, Jr., wrote that the report “was the first great expression of the industrial vision of the American future.”60 French physiocrats had claimed that agriculture was the source of all wealth. Hamilton destroyed their arguments by quoting Adam Smith. He then rejected Smith’s central thesis that economic activity is most productive when free of government interference.61 Hamilton believed that free trade would keep the United States an agricultural country condemned to permanent subservience to Europe. World demand for agricultural exports fluctuated while demand for manufactured imports increased. “Mercantilism, not laissez-faire, was Hamilton’s creed.”62 Hamilton wrote, “The importations of manufactured supplies seem invariably to drain the merely agricultural people of their wealth.”63 An agrarian country with a weak government would forever remain a pawn in the European game of power politics.64 The French statesman Talleyrand declared, “I consider Napoleon, Fox, and Hamilton the three greatest men of our epoch, and if I were forced to decide among the three, I would give without hesitation the first place to Hamilton. He divined Europe.”65 Hamilton’s arguments for the protection of industry opposed Smith’s thesis that unregulated private initiative would find the best use of resources. Free trade was honored more in the breach than in the observance by the countries of Europe. Hamilton reported that the greatest obstacle to the development of new industry in the United States was competition from established European industries. The recommendations of the “Report on Manufactures” met determined resistance from agricultural interests in the South. Planters feared that they would lose foreign markets if industry was protected. Southern leaders maintained that high duties would increase the cost of manufactured goods to consumers. The planters’ political power in Congress delayed government help for domestic industry. A protective tariff was not enacted until 1816, the first in a long line of protective legislation that allowed American industry to develop without challenge from foreign competitors. Viscount Cairu: Staunch Advocate of Free Trade José da Silva Lisboa, Viscount Cairu, was the most important and influential Brazilian economist during the late colonial and early independence 106

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periods. Historian, writer, senator, and public official, he is regarded as the father of Brazilian political economy. The author of Princípios de Economia Política and many other works, Cairu has had an important influence on generations of Brazilian economists. Barbosa Lima Sobrinho, president of the Brazilian Press Association, lamented in 1994 that “Brazilian economists have never freed themselves from the influence of Adam Smith since the time of the Viscount Cairu, José da Silva Lisboa.”66 The Wealth of Nations shaped Cairu’s views.67 Biographer Elysio de Oliveira Belchior described him as the “lucid expositor of the theories of Adam Smith.”68 Cairu made persuasive recommendations to the prince regent when he arrived in Brazil under protection of the British fleet. Brazilian philosopher Alceu Amoroso Lima wrote that “with all the British liberalism in his intelligence and his heart” Cairu urged the prince regent to open Brazilian ports to the ships of all foreign nations.69 A national economy based on agriculture and dependent on imported manufactured products did not alarm Cairu. “For now and for a long time, agriculture should be our Great and Principal Manufacture,” he wrote.70 He believed that Brazil should have only those industries that could sell their products at a lower price than foreign imports. Cairu protested against government assistance to manufacturers. He shunned industrial competition with Europe, fearing that a reduction of manufactured imports would have a negative impact on Brazilian agricultural exports.71 Throughout the nineteenth century Cairu’s declarations were used by those advocating development of “natural industries” only. Supporters of free trade said that “artificial industries,” those requiring government assistance to survive against foreign competition, should be abandoned. In Brazil the agrarian-based, free-trade, laissez-faire doctrines of Cairu dominated government policy without serious challenge during the nineteenth century. In the United States there were competing views on national development. The industrial vision of Hamilton eventually triumphed over the agrarianism of southerners who advocated policies similar to those of Cairu.

PROTECTIONIST UNITED STATES, FREE TRADER BRAZIL For most of the nineteenth century the United States had a protectionist tariff, while Brazil followed a free trade policy. The Embargo Act and the War of 1812 provided American industry with a protected domestic market that enabled the United States to begin its Industrial Revolution. Legislation in 1816 began a policy of protective tariffs that continued through the nineteenth century. The United States ceased to be an economic colony of Great Britain in the first decade of the nineteenth century. By developing an industrial base while improving agricultural productivity, its relationship with the world economy changed dramati107

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cally. In one hundred years the United States moved from peripheral to core status. By 1900 the United States was the world’s leading industrial state. On achieving independence in 1822, Brazil continued the open-ports policy begun in 1808 by the Portuguese Crown. Great Britain pressured Brazil to maintain a low tariff policy. Large landowners in Brazil, like large landowners in the South, supported free trade. During almost the entire nineteenth century the Brazilian government used tariffs as a source of revenue for the national treasury, not as a means to stimulate industrialization. Aprotectionist tariff was adopted in 1844, but duties were soon reduced. As the twentieth century dawned, Brazil’s manufacturing base remained weak. Throughout most of the nineteenth century Brazil was an economic colony of Great Britain. As an exporter of agricultural products and an importer of manufactured goods, Brazil’s role in the world economy was the same in 1900 as it was as a colony. Domestic economic growth increased, but economic development lagged. Brazil entered the twentieth century a semiperipheral state.

NOTES 1. José Gabriel de Lemos Brito, Pontos de partida para a história econômica do brasil, 3rd ed. (São Paulo: Companhia Editôra Nacional, 1980), 264. 2. Ernest Ludlow Bogart, An Economic History of the United States, 4th ed. (New York: Longmans, Green, 1937), 159–60. 3. José Arthur Rios, “Estrutura agrária brasileira na época da independência,” Revista do Instituto Histórico e Geográfico Brasileiro 298 (January/March 1973), 297. 4. Quoted in Roderick J. Barman, Brazil: The Forging of a Nation, 1798–1852 (Stanford, CA: Stanford University Press, 1994), 50. 5. Roberto C. Simonsen, História econômica do brasil (1500/1820) (São Paulo: Companhia Editôra Nacional, 1967), 439. 6. Jeffery D. Needell, A Tropical Belle Epoque: Elite Culture and Society in Turn-of-the-Century Rio de Janeiro (New York: Cambridge University Press, 1987), 164. 7. Gastão Cruls, Aparência do Rio de Janeiro, 2 vols. (Rio de Janeiro: José Olympio Editôra, 1965), 2: 561. 8. Ibid., 1: 297–300. 9. Luiz Edmundo, A Corte de D. João no Rio de Janeiro, 2 vols., 2nd ed. (Rio de Janeiro: Conquista, 1957), 2: 400. 10. Barman, Brazil, 19–20. 11. Herman G. James, Brazil after a Century of Independence (New York: Macmillan, 1925), 354. 12. Nicia Vilela Luz, A luta pela industrialização do Brasil: 1808–1930 (São Paulo: Alfa Omega, 1978), 23. 13. Barman, Brazil, 46–50, 141, 147–48. 14. L. Nogueira de Paula, Síntêse da evolução do pensamento econômico no Brasil (Rio de Janeiro: Ministério do Trabalho, Indústria e Comércio, 1942), 82–83. 108

1808: Protectionism and Free Trade 15. A. H. de Oliveira Marques, History of Portugal, 2 vols. (New York: Columbia University Press, 1972), 1: 462. 16. Jack Shepherd, The Adams Chronicles: Four Generations of Greatness (Boston: Little, Brown, 1975), 97. 17. Werner Baer, Industrialization and Economic Development in Brazil (Homewood, IL: Richard D. Irwin, 1965), 14–15. 18. Jorge Caldeira, Mauá: Empresário do império (São Paulo: Companhia das Lêtras, 1995), 176; Luz, A luta pela industrialização do brasil, 24–28. 19. Luz, A luta pela industrialização do brasil, 24–28. 20. E. Bradford Burns, A History of Brazil, 3rd ed. (New York: Columbia University Press, 1993), 155. 21. Stanley J. Stein, The Brazilian Cotton Manufacture: Textile Enterprise in an Undereveloped Area, 1850–1950 (Cambridge: Harvard University Press, 1957), 11. 22. Tavares Bastos, Aureliano Cândido, speech of 1 June 1865, Jornal do Commercio (Rio de Janeiro) (16 June 1865), 1–2. 23. Stein, The Brazilian Cotton Manufacture, 35. 24. Baer, Industrialization and Economic Development, 14–15, 25. 25. Stein, The Brazilian Cotton Manufacture, 7, 15, 98, 191, Appendix I. 26. Richard Graham, Britain and the Onset of Modernization in Brazil, 1850–1914 (Cambridge: Cambridge University Press, 1968), 238; Luz, A luta pela industrialização 75, 87–94. 27. Joaquim Murtinho, “Relatório da Indústria, Viação e Obras Públicas: 1897,” in Revista do Instituto Histórico e Geográfico Brasileiro 219 (April–June 1953), 240, 243–45, 263; Virgilio Corrêa Filho, Joaquim Murtinho (Rio de Janeiro: Imprensa Nacional, 1951), 71, 103. 28. F. W. Tausig, The Tariff History of the United States, 8th ed. (New York: Capricorn Books, 1964), 8. 29. Stanley Elkins and Eric McKitrick, The Age of Federalism (New York: Oxford University Press, 1993), 69, 383. 30. Ibid., 378–79. 31. Jonathan Goldstein, Philadelphia and the China Trade 1682–1846: Commercial, Cultural, and Attitudinal Effects (State College: Pennsylvania State University Press, 1978), 34; Shepherd, The Adams Chronicles, 230. 32. Donald R. Hickey, The War of 1812: A Forgotten Conflict (Chicago: University of Illinois Press, 1990), 12. 33. Thomas A. Bailey, A Diplomatic History of the American People, 6th ed. (New York: Appleton-Century-Crofts, 1958), 118; Hickey, The War of 1812, 11; John K. Mahon, The War of 1812 (Gainesville: University of Florida Press, 1972), 7. 34. Patrick O’Brian, The Golden Ocean (Thorndike, ME: Thorndike Press, 1997), 351. 35. Hickey, The War of 1812, 17. 36. Struthers Burt, Philadelphia: Holy Experiment (Garden City, NY: Doubleday, 1946), 132. 37. Edgar P. Richardson, “The Athens of America, 1800–1825,” in Russell F. Wiegley, ed., Philadelphia: A 300–Year History (New York: W. W. Norton, 1982), 212–13. 38. Tausig, The Tariff History of the United States, 16–17; Samuel Eliot Morison, The Maritime History of Massachusetts, 1783–1860 (Boston: Houghton Mifflin, 1941), 109

Early Globalization and Economic Development 195, 213; Ralph H. Brown, Historical Geography of the United States (New York: Harcourt, Brace, 1948), 152. 39. Thomas C. Cochran, Pennsylvania: A History (New York: W. W. Norton, 1978), 14; Charles Morris, The History of Pennsylvania (Philadelphia: J. P. Lippincott, 1912), 139. 40. Quoted in Thomas C. Cochran and William Miller, The Age of Enterprise: A Social History of Industrial America (New York: Harper and Row, 1961), 11. 41. Diane Lindstrom, Economic Development in the Philadelphia Region, 1810–1850 (New York: Columbia University Press, 1978), 2. 42. Tausig, Tariff History, 60. 43. Ibid., 27–28. 44. Lindstrom, Economic Development in the Philadelphia Region, 34, 42. 45. Robert William Fogel, Railroads and Economic Growth: Essays on Econometric History (Baltimore: Johns Hopkins University Press, 1964), 122–23. 46. Baer, The Brazilian Economy, 25. 47. Steve Dunwell, The Run of the Mill (Boston: David R. Godine, 1978), 51. 48. Robert William Fogel, Without Consent or Contract: The Rise and Fall of American Slavery (New York: W. W. Norton, 1989), 102–3. 49. Kenneth M. Stamp, ed., The Causes of the Civil War (Englewood Cliffs, NJ: Prentice-Hall, 1974), 63. 50. Tausig, Tariff History, 109–15. 51. Boston Transcript and Philadelphia Press of 18 March 1861 in Stamp, The Causes of the Civil War, 68–70. 52. Tausig, Tariff History, 115. 53. After the election, the defeated Cleveland summed up his views on high tariffs in his Farewell Address by saying, “Protectionism fostered trusts and monopolies and was part and parcel of a dangerous tendency towards increasing economic inequality and social unrest in American society.” Richard E. Welch, Jr., The Presidencies of Grover Cleveland (Lawrence: University of Kansas Press, 1988), 95, 98–99. 54. D. W. Meinig, The Shaping of America, 3 vols. (New Haven, CT: Yale University Press, 1986), 1: 428–29; Dunwell, Run of the Mill, 47–49. 55. Tausig, Tariff History, 26; Brown, Historical Geography, 155. 56. Daniel J. Boorstin, The Discoverers (New York: Vintage Books, 1985), 655–56; Broadus Mitchell, Alexander Hamilton: The National Adventure, 1788–1804, 2 vols. (New York: The Macmillan, 1962), 2: 120. 57. Boorstin, The Discoverers, 656; Mitchell, Alexander Hamilton, 2: 120. 58. Celso Furtado, The Economic Growth of Brazil: A Survey from Colonial to Modern Times (Berkeley: University of California Press, 1971), 109. 59. Saul K. Padover, The Mind of Alexander Hamilton (New York: Harper and Brothers, 1958), 23. 60. Arthur M. Schlesinger, Jr., The Age of Jackson (Boston: Little, Brown, 1953), 9–11; Stuart Gerry Brown, Alexander Hamilton (New York: Twayne, 1967), 73; for the text of the “Report on Manufactures,” see Padover, The Mind of Alexander Hamilton, 300–377. 61. Forrest McDonald, Alexander Hamilton: A Biography (New York: W. W. Norton, 1979), 232; Henry Cabot Lodge, Alexander Hamilton (Boston: Houghton 110

1808: Protectionism and Free Trade Mifflin, 1898), 108; Robert A. Hendrickson, The Rise and Fall of Alexander Hamilton (New York: Van Nostrand Reinhold, 1981), 310. 62. Elkins and McKitrick, The Age of Federalism, 259. 63. Quoted in Padover, The Mind of Alexander Hamilton, 318–19. 64. Jacob Ernest Cooke, Alexander Hamilton (New York: Charles Scribner’s Sons, 1982), 98–100. 65. Quoted in James Thomas Flexner, The Young Hamilton: A Biography (New York: Fordham University Press, 1997), 449; Richard Brookhiser, Alexander Hamilton: American (New York: Free Press, 1999), 136. 66. Barbosa Lima Sobrinho, “Navegação de cabotagem,” Jornal do Brasil (Rio de Janeiro) (30 January 1994), 11. 67. Paula, Síntese da evolução do pensamento econômico no brasil, 11, 17; Simonsen, História econômica do brasil, 435; Sergio Buarque de Holanda, Raizes do brasil, 21st ed. (Rio de Janeiro: José Olympio Editôra, 1989), 52–53. 68. Elysio de Oliveira Belchior, Visconde de Cairu: sua vida e sua obra (Rio de Janeiro: SENAC, 1959), 13. 69. Quoted in Ibid., 56–57. 70. José da Silva Lisboa, Princípios de economia política (Rio de Janeiro: Pongetti, 1956), 32. 71. Belchior, Visconde de Cairu, 59–60; Luz, A luta pela industrialização do Brasil, 21–22.

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Chapter 7

Global Economy Relationships between Core and Noncore States

During the nineteenth century Great Britain was an economic superpower, the leading core state of the world economy. Economic self-interest dictated Britain’s goals of maintaining dominance over weaker states and preventing the development of potential rivals. This chapter examines the distinctly different relationships that the United States and Brazil had with Britain and how these associations affected economic development. The British wanted to obstruct further development of rising economic competitor United States. Because America was an emerging power, however, it had to be handled with caution. Brazil, on the other hand, was a weak state that could be treated like a palooka and pummeled with impunity. A review of events that brought India, China, and Japan into the world economy concludes the chapter to illustrate the influence of core–periphery relationships on development. GREAT BRITAIN AND BRAZIL Britain played an active role in the suppression of the Brazilian slave trade. British abolitionists undoubtedly had strong moral reasons for their campaign to stop the abominable commerce in human beings. The British government’s actions against the slave trade, however, were motivated by factors other than moral fervor. A series of British treaties with Portugal and Brazil called for ending the slave trade. These conventions were para inglês ver (to show the English). Brazil signed agreements to meet British demands without the intention of

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enforcing them. The British government was well satisfied with this diplomatic minuet as long as Britain enjoyed highly advantageous commercial access to Brazil. The treaties were sops for abolitionists who demanded action against slavery while merchants continued to prosper from Brazilian trade. In 1822 British abolitionists urged that Brazilian independence not be recognized until the slave trade was abolished. Foreign Secretary George Canning wrote to abolitionist leader William Wilberforce, “There are immense British interests engaged in the trade with Brazil, and we must proceed with caution and good heed; and take the commercial as well as moral feelings of the country with us.”1 Britain was the strongest state of the world economy. Brazil was its compliant economic colony until the protectionist Alves Branco Tariff of 1844 eliminated preferential commercial treatment for Great Britain for the first time in Brazil’s history. Duties on British textile imports were doubled. This was no small defeat for Britain. Latin American imports were the salvation of the British cotton industry in the first half of the nineteenth century. This region, especially Brazil, was the largest single market for British exports, importing 35 percent in 1840.2 Great Britain’s Industrial Revolution received substantial stimulus from the export of manufactured goods. By 1840 two-thirds of cotton exports were absorbed by the underdeveloped world. Brazil’s action was an unwelcome demonstration of independence. A protectionist tariff set a bad example for other members of Britain’s huge formal and informal empire. Acquiescence to British demands was essential for profitable commercial transactions. The Alves Branco Tariff also came at a time when Britain faced serious domestic difficulties. Both the working class and the middle class demanded fundamental changes during the 1830s and early 1840s, a tense period of political and social difficulties.3 The Aberdeen Act The year after Brazil passed its first protectionist tariff Britain began a campaign to end the Brazilian slave trade by force. The British wanted the world to know that insubordination within its commercial empire would be dealt with severely. Countries that resisted British demands would pay a heavy price. Military action against weak Brazil also strengthened abolitionist support for the government and influenced all Englishmen to rally round the flag during a time of domestic tension. Ending the slave trade would produce economic advantages for Britain. Sugar produced by slaves in Brazil competed in the world market with British sugar from West Indian colonies, where slavery had been abolished. An end to the slave trade would also facilitate British commercial penetration of Africa. The British Parliament passed the Aberdeen Act in 1845. The law gave the Royal Navy authorization to pursue, apprehend, and destroy ships of foreign countries in international waters when it was suspected that the 114

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vessels were engaged in the slave trade. Pierre Verger observed that earlier the British had gone to war to secure the contract for slave supply to the Spanish Indies. “After being the principal slave traders, they had become fervent abolitionists.” He concluded that under the provisions of the Aberdeen Law the British Admiralty took control of Brazilian navigation.4 Ships suspected of being slavers that sailed under Brazilian colors were searched and seized on the high seas and in Brazilian territorial waters. Brazil was powerless to resist. Great Britain ignored Brazilian diplomatic protests. The Royal Navy seized almost four hundred ships in five years.5 The United States refused to allow the Royal Navy to search suspected slavers flying the American flag. Search and seizure of American ships and the impressment of American seamen, major causes of the War of 1812, left deep wounds that had not yet healed. Following enactment of the Aberdeen Act, both the number of slave ships flying the flag of the United States and the number of slaves landed in Brazil increased. The U.S. minister in Rio de Janeiro calculated that 50 percent of the slaves arrived on ships flying the American flag. He reported to Washington that the slave trade could not be conducted “without the help of our citizens and our flag.”6 Slave ships flew the American flag because of a 1792 policy designed to stimulate ship construction. American consuls were authorized to give ship’s papers to any U.S. citizen who declared himself a resident of the United States and a bona fide purchaser of an American ship. Slavers of any nationality could fly the U.S. flag on an American built ship by persuading a U.S. citizen to obtain the required papers from a consul.

Racism Influences Policy Lord Palmerston (foreign secretary 1846–1851) had nothing but contempt for the Portuguese and the Brazilians. “The plain truth is that the Portuguese are of all European nations the lowest on the moral scale, and the Brazilians are degenerate Portuguese, demoralized by slavery and the slave trade.”7 He said that the military victories of the United States in the Mexican War offered proof of the “immense superiority” of the Anglo-Saxons and contended that this “race” would become masters of the Americas “by reason of their superior qualities as compared with the degenerate Spanish and Portuguese Americans.”8 Other British officials shared Lord Palmerston’s scorn for Brazilians. William Ouseley, British charge d’affaires in Brazil between 1838 and 1844, believed that the Brazilians were “a vain, mediocre, and ostentatious people.” His successor, James Hudson, had only disdain for Brazilian governments, assuring Palmerston that all were “equally vicious, corrupt, and abominable.”9 Minister Hudson’s racist views regarding Africans were expressed in his 5 August 1848 report to Lord Palmerston: 115

Early Globalization and Economic Development It has long been admitted that slavery is a curse to Brazil, but when to that curse is added the still greater of thousands of barbarians annually imported and introduced into the very heart of society, where they become domestic servants and nurses in Brazilian families, impressing, unknown or unremarked by the Brazilians, their very features upon society in this country, which is gradually and visibly retrograding and becoming more deeply tinged with the blood of the most worthless outcasts of the most worthless family of the human race.10

Racist Theories and Religious Bigotry Lord Palmerston’s remarks and those of British diplomats in Brazil reflect widely held racist convictions. The Races of Men by Robert Knox, published in 1850, is but one example of the rampant racism of the nineteenth century. The book described a world where “[R]ace is everything: literature, science, art, in a word, civilization, depend on it.” Fair races were superior to dark races. The Anglo-Saxon “race” was superior to all. “No Saxon will mingle with dark blood; with him the dark races must be slaves, or cease to exist.” Black races can never become civilized. The Anglo-Saxon, however, is “industrious beyond all other races, a lover of labour for labour’s sake.” He is the perfect democrat, and no race exceeds him “in an abstract sense of justice, and a love of fair play, but only to Saxons.”11 Knox described Spaniards and Portuguese as despised members of an inferior race. Writing of the colonization of South America, he said, “A Celt-Iberian and Lusitanian population makes a descent on America; Old Spain and Portugal send forth their emigrants—men of a race already decaying, men of a province of Rome, an off-set of Carthage—a combination of races themselves in decay, and tottering to their fall.”12 Portuguese and Brazilians were inferior in English eyes not only because of their race but also because of their religion. Protestant England viewed Catholic countries as corrupt. In the early 1800s British historian Robert Southey said that Brazil’s progress was held back by the evil of an idolatrous religion that was intolerant, hostile to improvement, and harmful to morals.13 Protestant North America shared this view. In their 1857 volume on Brazil the Reverend D. P. Kidder and the Reverend J. C. Fletcher wrote, “England’s independence of the Papal power was the beginning of her greatness as a state.” They said, “Brazil is in every respect the superior State of South America just so far as she has abandoned the exclusiveness of Romanism.”14 Lord Palmerston Attacks Since early 1849 the Conservative government had begun work on a Brazilian law, rather than a new treaty with Britain, to stop the slave trade. There was growing sentiment among Brazilians that the slave trade must 116

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end. The strength of Brazil’s abolitionist movement, with respected leaders like Joaquim Nabuco, was expanding. Brazil’s discredited international reputation was a matter of increasing concern. Experiments were under way to employ European immigrants instead of slaves in coffee cultivation. The 1849 recommendations to end the slave trade made by Euzébio de Queiroz to cabinet colleagues closely followed the provisions of the law eventually passed.15 In early 1850 Brazilian officials informed British diplomats that all details of a law ending the slave trade and implementing legislation were ready to be presented to Congress. The proposals of Brazil’s leaders were ignored by the British. Lord Palmerston wrote to his embassy in Brazil suggesting that a British admiral be sent “to straighten out accounts; our Navy needs practice in times of peace and Rio would serve well this purpose.” Minister Hudson thought that warships attacking Brazilian ports was a splendid idea. “Courage, physical or moral, is not a Brazilian virtue,” he wrote.16 Royal Navy cruisers were ordered into action in June 1850.17 HMS Sharpshooter entered the port of Macae and apprehended a Brazilian ship. HMS Cormorant entered port at Cabo Frio and burned a vessel, then went to Paranaguá, where it exchanged fire with the fort and fired on five ships in port. Brazilian reaction to this trampling of sovereignty was strong. Some members of Congress wanted to declare war, but pragmatists prevailed. Congress approved the Law Euzébio de Queiroz, prepared before the attacks began. The slave trade ended in the early 1850s.18 Concerning British acts against the slave trade, Joaquim Nabuco wrote “the ends honor Great Britain, the means dishonor her.” José Murilo de Carvalho observed that the British government, Lord Palmerston, and the “domineering and arrogant” Hudson insisted on taking all credit for terminating the slave trade.19 Lord Palmerston said that “the achievement which I look back on with the greatest and purest pleasure was forcing the Brazilians to give up their slave trade.” British historian Hugh Thomas observed that the “moral crusade” against the slave trade “was one of Britain’s most remarkable achievements.”20 Ten years after the end of the Brazilian slave trade the British government, under Lord Palmerston’s leadership, was providing support to the Confederate States of America, whose government was based “upon the great truth that the Negro is not equal to the white man; that slavery—subordination to the superior race—is his natural and moral condition.”21 Moral principles motivated British abolitionists. Economic and political interests drove British politicians. Inside the eloquent statesman mouthing noble sentiments lurks the gimlet-eyed bookkeeper, hunched over ledgers of profit and loss, calculating the bottom line. Britain showed no hesitation in humiliating Brazil and shredding its sovereignty in much the same way that it had trampled the sovereign rights of a weak United States in the first two decades of U.S. independence. Brit117

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ain was the superpower of the world economy, and weak countries had to dance sprightly to the tune that it played or suffer the consequences. Great Britain’s treatment of Brazil sent a strong message to other weak states that might be contemplating defiance of British might. Britain had long sought entry to the lucrative Brazilian coastal trade reserved for Portuguese ships during the colonial period and for Brazilian ships after independence. British naval actions against the slave trade left Brazil’s merchant marine in a battered condition. The remaining Brazilian overseas fleet consisted of fifty decrepit ships, insufficient to fulfill responsibilities in the coastal trade or compete with foreign flags in international trade.22 British officials increased pressure to open coastal shipping to foreign flags. In 1866 liberal Brazilian congressmen like Aureliano Cândido Tavares Bastos from Alagoas, encouraged by British diplomats and businessmen, enacted legislation that opened coastal shipping to foreign ships. The Brazilian monopoly was not regained until the establishment of the Republic. Allowing foreign countries to participate in the coastal carrying trade had disastrous effects on Brazilian shipping. National vessels could not compete with the ships of advanced countries. The law devastated Brazilian flag coastal shipping and weakened the ship construction industry.23

GREAT BRITAIN AND THE AMERICAN CIVIL WAR U.S. national territory increased by two-thirds between 1845 and 1848. Mexican cessions and the annexation of Texas added land area equal to the Louisiana Purchase. The Oregon settlement increased total area by another 287,000 square miles. Great Britain feared America’s growing strength. The power potential of the United States clearly threatened British leadership of the world economy. Victory by the Confederate States of America would have been an economic boon for Great Britain and crippled a brash and aggressive rival. Britain wanted to subvert the growing power of the United States to hobble a strong state on the verge of achieving core status. Southern success in the Civil War would have furthered this objective. At the beginning of the Civil War the British government issued a proclamation of neutrality that gave belligerent rights to the Confederate States of America. Britain did not extend diplomatic recognition to the Confederacy for fear of reprisals by the United States. Many sectors of English society supported the South in the early 1860s. Commercial interests welcomed the possibility of a successful Confederacy devoted to free trade. Manufacturers resented trade barriers that gave northern industries a virtual monopoly of the U.S. market. A Confederate victory would create a low tariff market that would welcome British imports. Shipping merchants dreamed of obtaining the carrying trade of an 118

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independent cotton kingdom and were delighted by the prospect of the defeat of their primary competitor. Textile manufacturers, who received most of their raw material from the South, believed that a southern victory would further improve access to cotton at the expense of their competitors in New England and Pennsylvania. The Union had few influential partisans in the England of 1861.24 “We do not like slavery, but we want cotton, and we dislike very much your Morrill tariff,” declared the British prime minister, Lord Palmerston.25 In the summer of 1862 Foreign Minister Lord Russell wrote to Lord Palmerston, I agree with you that the time is come for offering mediation to the United States government with a view to the recognition of the independence of the Confederates. I agree, further, that in the case of failure, we ought ourselves to recognize the Southern States as an independent state.26

Before he could act on Lord Russell’s recommendation, Lord Palmerston learned the results of the Battle of Antietam, Maryland, fought by Union and Confederate armies on 17 September 1862. More than twenty thousand casualties made Antietam the bloodiest single day in the military history of the United States. The Confederate army was forced to return to Virginia. Failure of the South to secure a victory stayed Lord Palmerston’s hand. He withheld diplomatic recognition of the Confederate States of America. Fear of an American invasion of Canada and loss of merchant shipping to American privateers convinced him that recognition of the Confederates was not worth the risks.27 British ships ran the northern blockade of the South, bringing military supplies and clothing. Confederate vessels were welcomed in British ports and outfitted beyond the limits allowed by belligerent status. Lacking ships and a naval construction industry, the Confederacy contracted with British yards to build its navy. The most destructive vessels were the raiders Alabama, Shenandoah, and Florida. It was common knowledge in England that the vessels were designed as Confederate warships. The Alabama was allowed to sail from Liverpool in 1862, even though American ambassador Charles Francis Adams presented conclusive evidence to British authorities that she was a Confederate raider. To provide Britain with a fig leaf of neutrality, the Alabama sailed without armament. British-made cannons were placed on board at an Azores port of Britain’s servile ally, Portugal. Sailing under the Confederate flag with Confederate officers and crew members who were mostly British, she destroyed Union merchant ships from Europe to Asia.28 The Alabama was sunk by the USS Kearsarge off Cherbourg, France, in 1864. A Boston plate commemorating the battle was inscribed, “Built in an English yard, of English oak, manned by an English crew, armed with English guns, and sunk in the English Channel.” 119

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Planning to round Cape Horn and attack the Pacific whaling fleet, the Florida made port in Bahia’s Bay of All Saints, where she was rammed by the USS Wachusett, violating Brazil’s neutrality. The Union ship towed the Florida from port but could not return her as Brazil requested because she sank “accidentally.” The Shenandoah‘s final engagement took place in the Bering Sea after General Robert E. Lee had surrendered at Appomattox in 1865. After burning eighteen New Bedford whalers, the Shenandoah fled to England. Confederate raiders wreaked havoc with Britain’s most important maritime competitor by sinking fishing, whaling, and merchant ships. Their most devastating impact was creating the fear of capture, reflected in war-risk insurance rates. Marine insurance costs for American flag vessels were higher than during the War of 1812, when the British blockaded the coast. Most American and European shippers and merchants were so afraid of the Confederate raiders and so reluctant to pay high insurance costs that they refused to ship cargo on American flag vessels. Some northern vessels were sold to the British. Many shippers used the British Union Jack as a flag of convenience to save them from the raiders and high insurance premiums. About one thousand ships shifted to British registry during the war, and another three hundred vessels switched to other flags. These ships were not allowed to regain American registry at war’s end. In 1853 the tonnage of the American merchant fleet was 15 percent greater than Britain’s. By the end of 1866 it was 30 percent less. Just before the Civil War American vessels carried about two-thirds of all American foreign commerce, at the end of the war less than one-third, and only one-tenth by the end of the century.29 Great Britain did not achieve the goal of an independent Confederacy, but it did realize substantial Civil War benefits from the devastation of the American merchant marine, directly and indirectly, by Confederate privateers and cruisers. “This destruction was done without England lifting her hand, except in a benediction upon the Confederacy for doing her work so thoroughly.”30

THE GLOBALIZATION OF INDIA, CHINA, AND JAPAN A prosperous and successful textile industry was essential for economic development during nineteenth-century globalization. The British industry supplied a protected domestic market and flourished with exports to a large formal and informal empire. The United States became a powerful center of textile manufactures by erecting tariff barriers to protect a growing internal market from foreign competitors. Through most of the nineteenth century Brazil’s textile industry remained weak and anemic because the Brazilian market was dominated by cheap British imports. The way 120

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that India, China, and Japan were brought into the world economy determined the fate of their textile industries. Globalization of their economies illustrates the effect of core–noncore relationships on economic development.

Indian Textile Industry Destroyed by Globalization For three centuries after Vasco da Gama’s first voyage to Calicut hundreds of ships from Portugal, Holland, England, and France followed his route, “forming a chain of floating power that would bind India to Western Europe, as a giant elephant might be bound by a chain secured to one of its ankles.”31 India was gradually relegated to a peripheral status within the global economic system. Centuries of competition between Portuguese, Dutch, British, and French traders for commercial access ended with Great Britain triumphant. Beginning with the Battle of Plassey in 1757, the British brought the entire subcontinent under their control in one hundred years.32 The government took control of Indian affairs from the British East India Company in 1858 after suppressing the Indian Mutiny. Queen Victoria assumed the title “Empress of India” in 1877. Cotton spinning and weaving were India’s major home industries long before the arrival of the Europeans. Arab merchants who sailed to Asian and African ports prized Indian textiles as trade goods. Dutch, British, and American traders invested their gold in Indian textiles, which were then traded for pepper and cloves at other Asian ports. They followed this practice as long as the manufacture of textiles prospered in India. Until the English Industrial Revolution the Indian cotton industry led the world in quantity and quality of its product and the scale of its exports. To support and protect the Lancashire textile industry, imports of Indian silks and printed “calicoes” (cottons) for domestic use were forbidden at the end of the eighteenth century. Textiles from British factories, however, flooded India, destroying the market for local producers. The British cotton textile industry grew in a protected home market with ready access to India.33 Between 1813 and 1833 Bengal’s homespun cotton industry collapsed because of British imports. “British cloth swept Dacca muslims from Bengal’s vast market wherever the two competed, in village bazaars as well as cities and towns.”34 Millions were thrown out of work. The economy was transformed from self-sufficiency to foreign dependence. Textiles from Lancashire mills made up between one-half and two-thirds of India’s annual imports during the last quarter of the nineteenth century. The Cambridge History of the British Empire records an Englishman’s comments in the 1840s about the increase of textile imports: 121

Early Globalization and Economic Development Cheapness has forced our manufactures into India, and as long as we can by the power of our machines make them cheaper, though they may not be as durable as their own, yet that is nothing compared to the cheapness which to a poor people is the first object they have in view.35

China Bludgeoned into World Economy China’s reluctance to trade blocked extensive commerce with the West. The Chinese were quite satisfied with their own self-sufficient regional economy. After 1759 Guangzhou (Canton) was the only port open to European and American traders. Western merchants and mariners who wanted Chinese exports of tea, silk, porcelain, and lacquerware had to purchase them with bullion. China maintained a highly favorable trade balance with the West. Great Britain created a triangular trade that linked Britain, India, and China to resolve the vexatious balance-of-payments problem. British textiles were sent to India in exchange for opium traded in China for tea and other goods to be shipped to Britain. Payment of specie to the Chinese was eliminated. The balance-of-payments situation was reversed in Britain’s favor. The production and sale of opium in British India became officially regulated in the late 1700s and remained so until the twentieth century. If it had not been for expanded cultivation, control, and sale of Bengali opium, huge amounts of silver would have been required to pay for Chinese exports sought by the British.36 The Chinese were appalled at the devastating effects of widespread opium use. Without success the government in Peking issued decrees banning opium imports. Leading merchants of the West responded by increasing their smuggling activities. The quantity of opium landed in Canton by British merchants increased 10-fold between 1820 and 1839. From 1805 to 1807 Americans annually sold in Canton between 100 and 200 chests of opium purchased at Smyrna (today, Izmir), Turkey. In the years after 1815 the American opium trade with China quadrupled. Benjamin Wilcox, the grandson of a Pennsylvania chief justice, was the U.S. consul at Canton, a job that he held simultaneously with his position as a leading opium merchant.37 The Chinese government sent an imperial commissioner to Canton in an attempt to block the flow of illegal opium. He confiscated twenty thousand chests of contraband opium worth 6 million dollars from the warehouses of foreign merchants and dumped them in the river. Leaders of British trading houses like the most successful opium trader, William Jardine, were outraged by this “act of trade piracy” and “insult to the Crown.”38 Harvard University professor John King Fairbank wrote that “Dr. William Jardine went to London and helped Lord Palmerston work out the war aims and strategy.”39 British gunboats went into action. China 122

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capitulated. Armed intervention was ended by the Treaty of Nanjing (1842) between China and Great Britain, which inaugurated the treaty century, 1842–1943. The Second Opium War, 1856–1860, pitted China against Great Britain and France. The European powers wanted to expand the trading privileges that they had received under the Treaty of Nanjing. Chinese customs officials lowered the British flag on a ship of doubtful British registry suspected of smuggling. Canton was bombarded because of this “insult” to the British flag. War followed. Lord Palmerston sent an expeditionary force. France provided troops because a French missionary had been killed. Canton was captured. China was quickly defeated. Lord Palmerston said that this “will form an epoch in the progress of civilization . . . attended with the most important advantages to the commercial interests of England.”40 The conventions that concluded the two Opium Wars and subsequent Chinese treaties with the United States and European powers contained the terms for China’s entry to the global economy. The Chinese were forced to (1) open five ports to trade, later increased to more than eighty; (2) establish a uniform low tariff that amounted to about a 5 percent duty; (3) cede Hong Kong to the British; (4) legalize the importation of opium; (5) concede extraterritoriality (foreign consular jurisdiction over foreign nationals); (6) provide most-favored-nation treatment (“all foreign powers shared whatever privileges any of them could squeeze out of China”41); (7) pay the British an indemnity for the smuggled opium destroyed and reimburse the British for expenses incurred conducting warfare against the Chinese; and (8) grant freedom of movement to foreign missionaries. China was humiliated and coerced into joining the global economy with peripheral status. The superior firepower of the Royal Navy ended China’s War on Drugs. Lord Palmerston’s biographer, Herbert C. F. Bell, sneered at the emperor of China’s refusal to trade with the West and his campaign to destroy smuggled opium. He wrote that Lord Palmerston “ordered” his plenipotentiaries to “demand” concessions from the Chinese, including reimbursement for the smuggled opium destroyed. Bell concluded that Lord Palmerston and his colleagues “can scarcely be called bullies for deciding that the Son of Heaven would have to be chastised.”42 John King Fairbank wrote, “Opium smoking was a social curse that destroyed both individual smokers and their families. . . . by 1900 there were about forty million Chinese consumers of opium, of whom about fifteen million were addicts. This meant that for every Chinese converted to Christianity there were some fifteen addicted to opium.”43 Chinese imports of cotton yarn and cotton cloth increased significantly after 1860, replacing locally produced yarn and undermining cottage industry textile production.44 Foreigners made strenuous efforts to promote the sale of manufactures in the interior. They established factories in the treaty ports using cheap Chinese labor. The breakdown of handicraft textile 123

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production should have provided the basis for the growth of China’s own infant industries. Instead, the market was captured by products from European factories.45 Cotton cloth became the leading British export to China. Between 1894 and 1898 the annual value of British exports to China was £5,322,081. Cotton cloth and yarn made up almost 70 percent of the total.46

Japan Joins the Global Economy after Two Centuries of Seclusion The United States played a leading role in convincing the Japanese to abandon isolation. Besides lucrative trade possibilities, Americans were concerned about seamen imprisoned in Japan, mostly sailors from whalers shipwrecked off the Kurile Islands. Visits in 1853 and 1854 by Commodore Matthew Perry and his fleet of “black ships” persuaded the Japanese to end two hundred years of seclusion and sign trade agreements with the United States, England, France, and Russia. Japan was deprived of the right to regulate tariffs, and a rate of 5 percent was imposed. It was forced to grant extraterritoriality to Westerners residing in treaty ports. Western powers received most-favorednation treatment but denied this privilege to Japan. England became Japan’s main trading partner. Exports included silk, tea, and lacquerware. Among the imports were cotton yarn, cotton cloth, woolen fabrics, ironware, and sugar. Hand-spun cotton yarns could not compete with foreign imports. A flood of foreign yarn devastated the domestic industry.47 Japan’s opening to the West undermined the authority of the government and paved the way for the Meiji Restoration (1868–1912), which transformed Japan from a traditional, agrarian society to an industrial nation. The Japanese enthusiastically adopted external aspects of Western civilization such as technology and industrialization but retained those elements of their culture regarded as intrinsically Japanese.48 Interaction with the West and internal reforms produced a remarkable period of economic development. Government policies and programs played a significant role in the industrialization of Meiji Japan. Businessmen in the private sector made important contributions to the transformation of the economy. Victory in the Russo–Japanese War (1904–1906) showed that Japan had the economic and military strength required to be counted a core state of the world economy along with the United States and Western European countries. Cotton textile production led Japan’s Industrial Revolution. The cotton industry began in 1867. In less than fifty years Japan was a world leader in the export of cotton goods. During the first ten years of the Meiji era cotton yarns and cloth ranged from 22 percent to 41 percent of all imports. By 1909 Japanese exports of cottons exceeded imports. 124

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Treaties with Western countries barred Japan from protecting infant industries with tariff barriers. The government supported industry in other important ways. In 1878 two modern spinning mills of two thousand spindles each were built by the government. They were sold to private operators at bargain prices. Cotton mill machinery was imported from Great Britain with government funds and sold to private individuals on favorable terms—ten years to pay, no interest. Ten mills of two thousand spindles each were built in this way in the 1880s. Government funds were lent to individuals wishing to import their own machinery.49 Government programs helped industrial entrepreneur Shibusawa Eiichi, who employed eleven hundred workers in his Osaka Spinning Mill plants in 1888. Other industrialists followed his lead, and between 1886 and 1894 thirty-three new plants were established near Osaka.50 Japan supplied its domestic market and exported textiles to China and South Asia.51 The textile industry expanded rapidly and was the most important component of the economy until World War II. In 1900, 70.7 percent of the factories produced textiles and employed 67 percent of all factory workers. Unlike China, Japan was transformed from an agrarian society to a predominantly industrial one in the first decades of the twentieth century. Japan freed itself from unequal treaties with the West and protected its sovereignty and economy from foreign influence. Albert Feuerwerher writes that an important factor contributing to this successful drive for economic independence was the relative neglect of Japan by the Western powers, which concentrated their efforts on what they imagined was a much more lucrative China trade.52

THE UNITED STATES AND JAPAN JOIN THE CORE WHILE BRAZIL, INDIA, AND CHINA REMAIN IN THE SEMIPERIPHERY Early in the nineteenth century the United States ended its status as Britain’s economic colony and began independent economic development based on industrialization protected by high tariffs. Japan was forbidden by treaties with Western powers to provide tariff protection for infant industries. Instead, it developed an industrial plant led by textiles with a strategy of massive government assistance to private industry. Japan avoided economic domination by core countries because these states were preoccupied with controlling the more lucrative Chinese market. By 1910 the United States and Japan were strong industrial states and joined West European countries in the core of the world economy. Brazil, India, and China failed to industrialize during the nineteenth century. With their economies dominated by Great Britain, they were unable to achieve balanced and diversified economic development. They remained economically subservient to core states, importing manufactured 125

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goods from West Europe and the United States. The year 1900 found Brazil, India, and China in the semiperiphery of the world economy. NOTES 1. Quoted in Eric Williams, From Columbus to Castro: The History of the Caribbean, 1492–1969 (New York: Vintage Books, 1984), 110. 2. E. J. Hobsbawm, Industry and Empire: From 1750 to the Present Day (Middlesex, England: Penguin Books, 1986), 146–47. 3. Ibid., 77. 4. Pierre Verger, Bahia and the West Coast Trade, 1549–1851 (Ibadan: Ibadan University Press, 1964), 29, 36. 5. Roderick J. Barman, Brazil: The Forging of a Nation, 1798–1852 (Stanford, CA: Stanford University Press, 1994), 230. 6. Julio José Chiavenato, O negro no brasil, de senzala a guerra do paraguai, (São Paulo: Brasiliense, 1980), 69; Robert Conrad, Tumbeiros: o tráfico escravista no brasil (São Paulo: Brasiliense, 1985), 148, 160–61; José Antônio Soares de Souza, “O final do tráfico de escravos,” Revista do Instituto Histórico e Geográfico Brasileiro 323 (April/June 1979), 9. 7. Hugh Thomas, The Slave Trade (New York: Simon and Schuster, 1997), 656; Herbert C. F. Bell, Lord Palmerston, 2 vols. (London: Frank Cass, 1966), 2: 411. 8. Robert W. Johannsen, To the Halls of the Moctezumas: The Mexican War in the American Imagination (New York: Oxford University Press, 1985), 306. 9. Leslie Bethell, The Abolition of the Brazilian Slave Trade (Cambridge: Cambridge University Press, 1970), 317. 10. Extract from report of James Hudson to Viscount Palmerston, 5 August 1848 in Appendix 1 of W. D. Christie, Notes on Brazilian Questions (London: Macmillan, 1865), 184–85. 11. Robert Knox, The Races of Men (Philadelphia: Lea and Blanchard, 1850), 8, 43–47, 162, 175, 194. The French diplomat, writer, and ethnologist Joseph Arthur, Count Gobineau, boasted that he was the first to produce “scientific” proof that “the racial question overshadows all other problems of history.” Influential in Europe, the United States, and Brazil, the count wrote that all civilization is created by the white race, that blacks will lapse into barbarism if left on their own, that racial mixing produces degenerate progeny, and that “Aryan” society can flourish only as long as its blood remains free of “contamination” by black and yellow races. Joseph Arthur, The Inequality of Human Races (New York: Howard Fertig, 1967), xiv, 50, 205–12. The count was posted to Brazil in 1869 as French minister to the court of Dom Pedro II. He wrote that “not a single Brazilian has pure blood causing a degeneration of the most depressing type among the lower as well as the upper classes.” Quoted in Thomas E. Skidmore, Black into White: Race and Nationality in Brazilian Thought (Durham, NC: Duke University Press, 1993), 30. 12. Knox, The Races of Men, 79. 13. Robert Southey, History of Brazil, 3 vols. (New York: Burt Franklin, 1972), 3: 878. 14. D. P. Kidder and J. C. Fletcher, Brazil and the Brazilians: Portrayed in Historical and Descriptive Sketches (Philadelphia: Childs &and Peterson, 1857), 140–42, 586. Kidder and Fletcher validate Richard Hofstader’s contention that “[a]nti- Catholi126

Global Economy Relationships cism has always been the pornography of the Puritan.” Richard Hofstadter, The Paranoid Style in American Politics and Other Essays (New York: Alfred A. Knopf, 1966), 21. The two Protestant ministers wrote that “there is no class of men in the whole Empire whose lives and pratices are so corrupt as those of the priesthood.” They related that of five priests who applied for a position in Bahia, “four were men of such a grossly immoral character that I dare not insult my readers by the particulars.” The job was given to the fifth priest, “an old man of good repute . . . but only a few months elapsed before he was discovered to be living in open concubinage with an abandoned character and on remonstrance would not give up this sinful union.” Kidder and Fletcher, Brazil and the Brazilians, 140–42, 586. 15. José Murilo de Carvalho, Teatro de sombras: A política imperial (São Paulo: Ediçóes Vertice, 1988), 53–54. 16. Ibid., 56. 17. Richard Graham, Britain and the Onset of Modernization in Brazil, 1850–1914 (Cambridge: Cambridge University Press, 1968), 165. 18. Jorge Caldeira, Mauá: Empresário do imperio (São Paulo: Companhia das Lêtras, 1995), 212–15; Leslie Bethell and José Murilo de Carvalho, “1822–1850,” in Leslie Bethell, ed., Brazil, Empire and Republic (1822–1930) (New York: Cambridge University Press, 1989), 108; Bethell, The Abolition of the Brazilian Slave Trade, 329–30; Souza, “O final do tráfico de escravos,” 7–9. 19. Joaquim Nabuco, A escravidão (Recife, Editôra Massangana, 1988), 95; Carvalho, Teatro de sombras, 55. 20. Thomas, The Slave Trade, 746. 21. Speech by Confederate vice-president Alexander H. Stevens, 1861, quoted in Jeffrey Rogers Hummel, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War (Chicago: Open Court, 1996), 135. 22. Caldeira, Mauá, 220–21. 23. Affonso Costa, A marinha mercante no brasil (Rio de Janeiro: Liga Marítima Brasileira, 1910), 33–34. 24. Samuel Eliot Morison, The Oxford History of the American People, 3 vols. (New York: Meridian, 1994), 2: 411; Hummel, Emancipating Slaves, 167–68. 25. Quoted in Bailey, A Diplomatic History, 322. 26. Morison, The Oxford History, 2: 434–35. 27. Frank Lawrence Owsley, King Cotton Diplomacy: Foreign Relations of the Confederate States of America, 2nd ed. (Chicago: University of Chicago Press, 1959), 347. 28. Bailey, A Diplomatic History, 343. 29. Robert G. Albion, William A. Baker and Benjamin W. Labaree, New England and the Sea (Mystic, CT: Mystic Seaport Museum, 1972), 161–66; Morison, The Oxford History, 3: 57. 30. Owsley, King Cotton Diplomacy, 554. 31. Stanley Wolpert, A New History of India, 4th ed. (Oxford: Oxford University Press, 1993), 135. 32. Alan K. Smith, Creating a World Economy (Boulder, CO: Westview Press, 1991), 243. 33. Fernand Braudel, Civilization and Capitalism: 15th–18th Century, 3 vols. (New York: Harper and Row, 1985), 3: 509; Bertha S. Dodge, Cotton: The Plant That Would Be King (Austin: University of Texas Press, 1984), 72–73; Hobsbawm, Industry and Empire, 31. 127

Early Globalization and Economic Development 34. Wolpert, A New History of India, 214, 248. 35. J. Holland Rose et al., The Cambridge History of the British Empire, 8 vols. (New York: Macmillan, 1929), 2: 401. 36. Wolpert, A New History of India, 200. 37. Jonathan Goldstein, Philadelphia and the China Trade 1682–1846: Commercial, Cultural, and Attitudinal Effects (College Station: Pennsylvania State University Press, 1978), 8, 53, 54, 59. 38. J.A.G. Roberts, A Concise History of China (Cambridge: Harvard University Press, 1999), 165. 39. John King Fairbank, China: A New History (Cambridge: Harvard University Press, 1992), 200. 40. Quoted in Smith, Creating a World Economy, 244; see also H.C.G. Matthew, “The Liberal Age (1851–1914),” in Kenneth O. Morgan, ed., The Oxford History of Britain (Oxford: Oxford University Press, 1988), 558; R. K. Webb, Modern England: From the Eighteenth Century to the Present, 2nd ed. (New York: HarperCollins, 1980), 311. 41. Fairbank, China: A New History, 200–204. 42. Bell, Lord Palmerston, 1: 273–78. 43. Fairbank, China: A New History, 199, 234. 44. Roberts, A Concise History of China, 194. 45. Albert Feuerwerher, China’s Early Industrialization (Cambridge: Harvard University Press, 1958), 56. 46. Robert Lee, France and the Exploitation of China: 1885–1901 (New York: Oxford University Press, 1989), 16–17. 47. Keizo Seki, The Cotton Industry of Japan (Tokyo: Japan Society for the Promotion of Science, 1956), 14. 48. Mikiso Hane, Modern Japan: A Historical Survey, 2nd ed. (Boulder, CO: Westview Press, 1992), 67–74, 97–99. 49. Seki, The Cotton Industry of Japan, 15. 50. Hane, Modern Japan, 99, 142–43. 51. Feuerwerher, China’s Early Industrialization, 54–55. 52. Ibid., 56.

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Chapter 8

Nineteenth-Century Transformations

Many dramatic changes occurred during the nineteenth century as the United States and Brazil continued their distinct economic development courses set during early globalization. The United States was transformed from a maritime and agricultural country in the global economy periphery to the world’s leading industrial state competing with Great Britain for core leadership. Explosive growth of railroads united the huge national territory. The 1800s witnessed great changes in territorial limits, transportation, industry, urbanization, agriculture, immigration, and population size and distribution. Many changes took place in Brazil as well, but the giant of South America ended the century as a semiperipheral state with an economy based on the export of agricultural products. As in the United States, national territory increased, and there were major changes in regional transportation networks, immigration, agriculture, urbanization, and population size. Brazil did not develop a national transportation network, however, which hampered industrialization, settlement of the interior, and formation of a national market. Slavery was abolished by the Civil War in the United States and by parliamentary action in Brazil. National political influence of large landowners in the United States was demolished, but the landed elite continued to dominate national, state, and local politics in Brazil through the nineteenth century and beyond. Freed slaves joined the ranks of the rural and urban poor. The fate of agricultural workers in former slave areas of Brazil and the United States was

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disgraceful. Most were blocked from becoming landowners. They endured a marginal existence as sharecroppers or wage laborers with practically no possibility of social and economic improvement. Racist theories and social Darwinism provided intellectual justification for subjugation and maltreatment of millions of citizens. A rapidly expanding domestic market protected by tariffs was the basis of U.S. prosperity. In 1810 the region west of the Appalachian Mountains had 14 percent of the national population and more than 40 percent in 1860. By 1900, 27 percent of Americans lived west of the Mississippi River. The Industrial Revolution began in 1808 and was completed in the 1920s. In 1900, 85 percent of all Brazilians still resided within one hundred miles of the Atlantic Ocean. There were several regional economies. Most of the territory made little contribution to a national economy that relied on exporting agricultural products and importing manufactured goods. Coffee from São Paulo and rubber from the Amazon basin led exports. There was little industrialization. During the 1800s the population of the United States grew from more than five million to more than seventy-six million inhabitants. Brazil’s population grew from about two million to almost eighteen million. Between 1821 and 1924 fifty-five million Europeans emigrated overseas. Thirty-five million (64 percent) went to the United States, and almost four million (7 percent) went to Brazil.1 Very few immigrants settled in regions in Brazil or the United States that had relied primarily on slave labor. The United States urbanized. In 1800 about 6 percent of the population lived in cities; in 1900, almost 40 percent. The population of New York City (including Brooklyn) was more than three million, and both Chicago and Philadelphia had more than one million. The United States had more than thirty cities with a population greater than one-hundred thousand in 1900. Of the thirty, only the important Mississippi River port, New Orleans, was located in the South. Urbanization also increased in Brazil during the nineteenth century but at a rate more comparable with that of the South than with the entire United States. Most Brazilians continued to live in rural areas. In 1890 about 10 percent of the population resided in the capital cities. Only four cities, Rio de Janeiro, São Paulo, Salvador, and Recife, had more than one-hundred thousand inhabitants in 1900. With a population of more than eight-hundred thousand, Rio was the commercial, industrial, administrative, cultural, and political center of Brazil.2 In 1900 the United States had 5,316,802 industrial workers, and Brazil had 136,000. Industry was regionally concentrated in the United States, with 85 percent of the manufactured goods produced in the North Atlantic and North Central regions in 1890.3 The first general and complete Brazilian census, completed in 1907, listed 3,258 industrial establishments with 130

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150,841 employees. Industry was concentrated in Rio de Janeiro (40 percent), São Paulo (16 percent), and Rio Grande do Sul (15 percent). No other state had 5 percent of the national industrial plant.4 Many momentous changes took place during the nineteenth century. Selecting those that best illustrate the economic development process is difficult. Four transformations that illustrate important facets of the development paths traversed by Brazil and the United States are examined in this chapter: (1) the end of slavery and its effect on national power groups and agricultural laborers in plantation America; (2) national transportation networks; (3) industrialization in the South; and (4) expansion of coffee production in São Paulo. ABOLITION OF SLAVERY AND THE DISTRIBUTION OF POLITICAL POWER Slavery was abolished in the United States by Civil War and by an 1888 act of the Brazilian Congress. The impact of slavery’s end on the national power structure was very different in the United States and Brazil. In the former the national power of plantation owners was smashed by the Civil War, and in the latter the national power of large landowners remained intact after abolition. Former slaves in the two countries were denied economic opportunity and political influence. In the United States the Civil War and its aftermath produced a shift of power from the states to the national government. In Brazil the establishment of the Republic resulted in a shift of power from the national government to the states. Businessmen, industrialists, and bankers of the United States influenced a strong national government to further their interests after 1860. During the First Republic (1889–1930) the large landowners of Brazil dominated the powerful state governments and the national government to advance their policies and protect their interests. The United States: Planter Political Power Destroyed Slave owners had great political power in the United States and Brazil after independence. Planters of the South were one of the most powerful landed elites in the Western world.5 Southerners predominated in key national government positions in the executive, legislative, and judicial branches until the Civil War. The South had an overwhelmingly disproportionate influence in national politics.6 National political power of southern planters, wielded since the founding of the Republic, was destroyed by the Civil War. Industrial, commercial, and financial leaders of the North exercised control over national policies from the 1860s onward. Slave owners helped write the U.S. Constitution, which made slavery lawful and guaranteed federal government protection 131

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of the slave owners’ right to human property. Five of the first seven presidents owned slaves, holding office for thirty-two of the country’s first thirty-six years. Both chief justices of the Supreme Court after 1800 were southerners, as were eighteen of the twenty-nine justices of the Court. In the Congress the South supplied twenty-four out of thirty-five presidents pro tem of the Senate and twenty-three out of thirty-five Speakers of the House. In the key cabinet post of attorney general, fourteen of nineteen were southerners.7 The South’s influence on national policy was greater than the figures suggest. To achieve high executive office in the national government, northerners had to come to terms with a Congress dominated by the South. John C. Calhoun could become secretary of state, but no person could become secretary of state who was in any way associated with an antislavery viewpoint until Lincoln’s first administration.8 Two civilizations had been developing in mainland North America since the first settlements. North and South had radically different views on slavery, tariff policy, ship construction subsidies, a national bank, strength of the central government, internal improvements, and distribution of public lands. By 1860 the differences between the two civilizations were so great that they could not be resolved by peaceful compromise. The result was the bloodiest war ever fought in the Western Hemisphere. There were six hundred thousand casualties. Within a decade of war’s end southern elites had regained political mastery of their own region, but they remained excluded from influence on government policy decisions in Washington. Between 1865 and 1912, southerners received only seven of thirty-one Supreme Court appointments, two of thirteen House speakerships, and 14 of 133 cabinet positions. During this period no major party candidate for president or vice-president was from the South.9 With southern influence eliminated from national policy decisions, banking, monetary, land, and tax policies that greatly strengthened the federal government and aided the manufacturing and financial sectors were enacted. Wilbur Cash observed that “the tariff gang got what it wanted—that the Republican party had time and freedom to establish itself in the national trough so solidly that it would never really be got out again until the coming of the Great Depression of 1929.”10 Industrialization transferred political and economic dominance in the United States to manufacturers and bankers after the Civil War. Northern industrialists replaced southern plantation owners as the most powerful group in the nation.11 C. Vann Woodward wrote, “Never in the history of the country, and rarely in the history of any country, had there been a comparable shift in the geography of political power.”12 132

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Brazil: Large Landowners Retain Political Power after Abolition There was also a dramatic shift in the geography of Brazilian political power following abolition and the establishment of the Republic. The center of power moved from regions where export crops had been produced on large landholdings with slave labor in the Paraiba Valley and the northeast to São Paulo, where coffee was produced on large landholdings with immigrant labor. Traditional oligarchies that had held power during the empire collapsed, and a new oligarchy emerged that would rule the country during the First Republic (1889–1930).13 The geographic base of political influence shifted but large landowners continued to control political and economic policy at the national, state, and local levels. The African slave trade was halted in the early 1850s, and slavery was abolished by the Lei Áurea (the Golden Law) of 13 May 1888. Brazilian planters had almost forty years to shift from chattel slavery to free labor. By 1888 the center of economic power had moved from the state of Rio de Janeiro to São Paulo. European immigrants became the labor force on large coffee plantations on the São Paulo plateau. For the first time in Brazil’s history African slaves were not the main source of manual labor. The 1894–1930 period had several names in Brazil, including the Republic of Oligarches, Republic of Fazendeiros, Republic of the Few, Republic of the Colonels (Coroéeis, Rural Bosses), Republic of Coffee with Milk (Café-com-Leite, the political alliance of powerful agricultural interests of São Paulo and Minas Gerais), and the Politics of the Governors. All titles reflected the control of government by large landowners. Peter Flynn wrote: How the rural landowners exercised control is the main key to politics throughout the nineteenth century and, indeed, well beyond. It is the basis of Brazilian political life, the core of a system which, though modified, still survives and which explains in large part many of the issues which the nation still faces.14

RURAL POOR EXPLOITED IN FORMER SLAVE AREAS Legacies of plantation agriculture based on slavery shaped the relationships between landowners and a landless workforce composed of former slaves, poor whites, mulattoes, and mestizos. Systems of landowner control exploited wage workers and tenants and blocked economic development in former slave areas of Brazil and the United States. Landless agricultural workers in areas that had been dominated by slavery did not share in the economic bonanzas of the last half of the nineteenth century. Landowners were determined to maintain their privileged position with a docile and dependent labor force after the abolition of slavery in the United States and Brazil. Three mutually supporting institutions replaced 133

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slavery in the South following Reconstruction—sharecropping, racial segregation, and one party politics. Eric Foner wrote that blacks found themselves “enmeshed in a seamless web of oppression, whose interwoven economic, political, and social strands all reinforced one another.”15 Sharecropping was the dominant economic institution in the South for eighty years following the Civil War. Some of the South’s poorest farmers worked some of the region’s richest land. In Dougherty County, southwest Georgia, blacks outnumbered whites five to one in 1900 but owned only 5 percent of the county’s acreage. White farmer F. F. Putney owned thirteen thousand acres, 20 percent more land than owned by all of the county’s eleven thousand blacks. Only eighty-one black families owned land. The overwhelming majority barely survived as farm laborers and sharecroppers.16 Crop lien laws, debt peonage, vagrancy laws, convict labor, abysmal educational systems, and denial of political rights combined to subjugate the rural poor.17 Economic exploitation was the fate of the poor white farmer as well as the black. Poor whites made up about 20 percent of the South’s white population in the 1860s. They were contemptuously classified as crackers, sand-hillers, squatters, and white trash.18 Under the crop lien laws of the South the tenant had no legal right to dispose of his crop until he paid the landlord everything owed in rent, advances received, and interest due. The cropper shopped at the owner’s store, often using script instead of money and buying on credit at high interest rates. The sharecropper ginned his cotton at the owner’s gin. The owner sold the crop. Account keeping was exclusively in the hands of the owner. There was nothing to prevent dishonest behavior by a planter toward a sharecropper.19 The situation of the white sharecropper was deplorable. That of the black sharecropper was infinitely worse. With no political rights, with local police forces and judicial systems totally controlled by white supremacists, and with a national government that refused to intervene on their behalf, black citizens in the South had no defense against white aggression that ranged from verbal insults to murder and rape. Gunnar Myrdal said, “Any white man can strike or beat a Negro, steal or destroy his property, cheat him in a transaction and even take his life, without much fear of legal reprisal.”20 In Brazil former slaves were not terrorized because of their race. Poor agricultural workers were, however, exploited economically and excluded from political influence as in the South. Literacy requirements, the lack of educational facilities, the absence of the secret ballot, and the power of coronéis (rural bosses) ensured that the poor had no voice in the political process. Landowners wanted former slaves to remain on their properties as moradores (sharecroppers) or wage laborers. Both had to buy from the 134

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barracão (landowner’s store), which kept them permanently in debt and tied to the property. Some landowners sought the establishment of rural police to prevent former slaves from leaving fazendas where they worked. The power of the landowners was often great enough to prevent departure whether written into law or not.21 Rural Workers Had No Alternative to Servile Existence Alternatives to large landowner dominance and worker exploitation had to be eliminated if rural laborers were to meekly accept a subjugated existence. The rural poor had to be denied land-ownership. Neither the United States nor Brazil established programs to provide land to former slaves. Instead of becoming family farmers, agricultural laborers in Brazil and the South worked for meager wages or as tenants under arrangements that provided neither security nor well-being. In the United States few former slaves benefited from the Homestead Act. Practically all homesteaders were white, either Americans or European immigrants. The West was declared a “whites only” region before the Civil War, and most states of the old Northwest banned free blacks from entering their boundaries. Every new state in the West admitted to the Union after 1820 excluded blacks from the vote while granting universal white male suffrage.22 Former slaves sought land-ownership as a basis for family survival.23 The vast majority were denied this goal by a lack of capital, lack of education, hostility of white settlers in the West, and barriers to emigration built by southern whites to keep blacks in the South as a servile labor force. Poor agricultural laborers were unable to get clear title to their own land in the huge territory of Brazil. The Land Law of 1850 provided for land acquisition by purchase only. It was practically impossible for illiterate former slaves, landless rural workers, and recently arrived immigrants to obtain the capital and political influence needed to fulfill land purchase requirements. Large landholders had the right to expel squatters from their property and did so with impunity when they pleased. Blacks, poor whites, mulattoes, and mestizos were relegated to dead-end work in favor of millions of Europeans who immigrated to the United States and Brazil in the decades bracketing the dawn of the twentieth century. Immigrants became family farmers and filled industrial jobs in the United States. In Brazil they worked in booming São Paulo coffee production. Racist theories and social Darwinism fortified Brazilian and American elites in their conviction that the rural poor were inferior, indolent, incompetent, and “unfit.” The poor were condemned to the unrewarding drudgery of marginal employment that provided little hope for economic advancement. Those in power denied poor agricultural workers access to land or attractive jobs in agriculture and industry reserved for immigrants. Efforts by 135

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rural workers themselves to improve their situation were smashed to eliminate alternatives to the system controlled by society’s leaders to provide a subservient workforce. In 1897 the Brazilian army attacked and destroyed a community of about twenty thousand followers of Antônio Conselheiro, a religious mystic, at Canudos in the remote backlands of Bahia, more than four hundred miles from Salvador. The settlement had existed for four years, and its inhabitants included freed slaves, Indians, and caboclos. The people of Canudos created a self-sufficient community dedicated to subsistence farming and stock raising. Armed groups from the community itself defeated government attempts to disband the settlement. A heavily armed Brazilian army expedition of five thousand men commanded by the minister of war finally destroyed Canudos. Almost all men, women, and children were killed. Scorched earth was the order of the day. All traces of the community were obliterated.24 The traditional system of agriculture and livestock raising in the Northeast required that landowners have a large, docile, dependent labor force. Impoverished and illiterate workers were also essential for the political system based on control of the rural vote by coronéis. Robert Levine wrote that Canudos challenged both systems. Rural workers moving to Canudos threatened the political and economic systems controlled by the rural oligarchy. It weakened their grip on a compliant and dependent labor force and the voto de cabresto (herd vote). Canudos “had to be crushed because it upset the stability of the status quo in the sertão.”25 In the South following Reconstruction, systems of economic, social, and political control also evolved based on a large, illiterate, docile workforce dominated by landowners. Threats to the stability of this system were also eliminated by force. Violence against the black community was a control measure. Between 1889 and 1918, 2,522 blacks were lynched.26 Lynching was not just murder by a mob but a disciplinary device against all blacks.27 Lynching created “a poisoned atmosphere, one that permeated life far beyond those counties where a lynching had actually taken place, one that pervaded all the dealings each race had with the other.”28 The inhuman treatment of blacks in the South reached a nadir from 1890 to 1920. One hundred and sixty-two blacks were lynched in 1892, the greatest number on record for any year.29 The annual number of lynchings declined after that date, but treatment of blacks became even more barbaric. Torture and mutilation increased.30 States disfranchised blacks. Racial segregation was harshly enforced. During the 1880s and 1890s vigilantes and southern sheriffs backed by state militia crushed efforts to organize agricultural workers. In 1887 a strike for higher wages on Louisiana sugar plantations led to the massacre of more than one hundred blacks by the militia and groups of white vigilan136

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tes. Four years later, fifteen leaders of an Arkansas cotton pickers strike were killed. Nine were lynched after being arrested.31 The plantations and the slaves of the South and Brazil created enormous riches. These regions experienced impressive economic growth. Of balanced and diversified economic development and an equitable distribution of wealth there was practically none. The areas where slave labor predominated became locked into the world economy as producers of agricultural staples for the global market. Legacies of plantation agriculture and slave labor kept these regions subservient to core regions. By the last decades of the nineteenth century the South and northeast Brazil had become the poorest, least developed, most backward regions of the United States and Brazil. Flight was the only escape for those trapped in repressive social and economic systems. In the first half of the twentieth century ten million blacks left the rural South for the urban North, and millions of northeasterners left their homes for São Paulo, Rio de Janeiro, and other cities of southeast Brazil.

Racist Theories Justify Exploitation, Stunt Economic Development Theories about the natural superiority of the “white race” were widely accepted in Brazil and the United States in the nineteenth century. The ruling elite believed that “scientific racism” justified economic exploitation and political marginalization of nonwhites. A large segment of the population of the United States and Brazil was denied social, educational, and economic opportunity. Millions were forced to live an insecure and impoverished existence. Economic development suffered because no effort was made to make maximum use of all human resources. Professor Elisha Benjamin Andrews was president and professor of moral and intellectual philosophy at Brown University in the 1890s. In his history of the United States, Professor Andrews spoke for many prominent intellectuals when he quoted with approval “one of the ablest men of the South,” who said that “an isolated community of colored people, however well civilized and educated, would be unequal to the task of self-government, and would lapse into barbarism within two generations.”32 Harvard professor of natural history Louis Agassiz influenced Americans and Brazilians. He reinforced belief in inherent racial differences and mulatto degeneracy, saying that the black race was indolent, submissive, and imitative by nature.33 Married to Boston socialite Elizabeth Cabot Cary, the first president of Radcliffe College, the couple visited Brazil in 1865. They wrote that miscegenation was more widespread in Brazil than in any other country, creating “a mongrel, nondescript type, deficient in mental and physical energy.”34 137

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One of the prominent Brazilians influenced by Agassiz, Dr. Raymundo Nina Rodrigues, was a pioneer of anthropological studies of Africans in Brazil. Amulatto himself, he said that “the organic constitution of the negro does not permit him to adapt to the civilization of superior races.”35 Citing Agassiz as an authority on mulatto degeneracy, Rodrigues wrote that the strong African influence in Brazil “would forever constitute one of the causes of our inferiority as a people.”36 Influential federal deputy Aureliano Cândido Tavares Bastos echoed the same sentiment: “Without the immigrants of Germany and Great Britain, Brazil will never progress. It is necessary that the pure blood of the Northern races come to develop and renovate our degenerate race.”37 Joaquim Murtinho was a powerful cabinet minister at the turn of the twentieth century. In a report detailing the work of his ministry in 1897, he said that inadequacies of the Brazilian people blocked industrialization: We cannot, as many would like to, take the United States as a model for our industrial development because we do not have the superior aptitudes of her race, the force that represents the main ingredient in the industrial progress of this great country.38

Franz Boas and Alberto Torres worked to reverse the tide of racism that engulfed their countries. Boas taught at Columbia University from 1899 to 1942 and shaped American anthropology during the early twentieth century. Among prominent American social scientists he was almost alone in believing that innate racial differences were inconsequential.39 Torres had a distinguished career as attorney general, governor of Rio de Janeiro state, and member of the Brazilian Supreme Court. In the early 1900s he castigated those Brazilians who accepted racist theories as valid explanations for Brazil’s problems. Torres wrote that a deplorable aspect of the Brazilian mentality “is the custom of despising our blood, disparaging our physical and moral fitness, and regarding ourselves as a degenerate and corrupt people. . . . Nothing could be further from the truth.”40 At the dawn of the twentieth century Franz Boas and Alberto Torres were among the very few who raised voices of reason against prevailing “scientific racism.” CREATING A NATIONAL TRANSPORTATION NETWORK Both the United States and Brazil are huge territorial states. Uniting these vast domains by transportation networks was essential for national economic development. Both states possess world-class river systems. Brazil’s has been of marginal use for unifying national territory, but the United States’ system was a major factor in early settlement and development. Massive railroad expansion in the United States combined with existing river transport to unite the United States in one national market by 138

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1900. Railroad construction in Brazil was weak in comparison, and at the end of the nineteenth century it lacked a unifying transportation network. Hydrologic Systems There are almost seventeen thousand miles of navigable rivers in the trans-Appalachian West. The Mississippi drainage basin, third largest in the world, includes all or part of thirty-one states and contains some of the most fertile and productive farmland in the world. Navigable upstream from New Orleans for about twelve hundred miles, the Mississippi and its tributaries have been important arteries of transportation and commerce since the early 1800s. The Ohio River was an especially important tributary for early western settlement, flowing southwest more than one thousand miles from Pittsburgh to join the Mississippi at Cairo. More than three thousand miles of canals were constructed by the 1840s to increase the utility of the river transportation system. Brazil has more than twenty-five thousand miles of navigable rivers, but they have been of little value in promoting settlement and economic development. Almost all are located within the Amazon basin, which has the largest drainage system in the world. The Amazon penetrates the Brazilian interior like an arm of the sea, and transatlantic steamships can travel upstream twelve hundred miles. Unfortunately for the economic development of Brazil, the Amazon hydrographic network serves a region of marginal utility for productive agriculture.41 Railroads Unify Territory of United States Textile manufacturing was the leading industry during the first phase of the Industrial Revolution in the United States. Railroads and steel were the most important industries during the second phase from the Civil War to the early 1900s. Railroads opened territory for agriculture, served as colonizing agents, provided transportation for industrial raw materials and finished products, created an insatiable demand for coal, iron, and steel, and became the country’s largest single employer by the end of the century. The railroad network bound all regions together and created a national market. In 1830 thirteen miles of railroad went into operation. By 1840 there were 3,328 miles of track and 35,000 miles in 1860. Construction expanded greatly after the Civil War with 94,000 total miles in 1880 and 193,000 in 1900. At the beginning of the twentieth century the United States had more railroad mileage than all of Europe and 40 percent of all the track in the world.42 Federal and state governments gave railroads huge subsidies. In all they received 242,000 square miles of land, a territory larger than France.43 Rapid western population growth and agricultural development were made possible by land-rich railroads. Potential settlers received credit to 139

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buy land and move West. The railroads recruited immigrants, sold them land, transported them to their new home, and carried their farm products to market. There were only two hundred miles of track in the Midwest in 1840. By 1860 there were ten thousand miles, more mileage than Brazil had in 1900. One-third of the country’s rail mileage was west of the Appalachian Mountains, and most farmers lived within twenty miles of cheap transportation. An elaborate railroad network evolved in the Midwest with lines linking the region to eastern markets. By 1860 the region was producing 75 percent of the nation’s cotton, 60 percent of the corn, and 50 percent of the wheat.44 The railroads were far from an unmixed blessing in western development. When only one railroad provided service, the greed for excessive profits typical of the Gilded Age led companies to exact the highest freight charges possible and give kickbacks to favored customers. Public resentment against the high-handed tactics of many railroads caused Congress to create the Interstate Commerce Commission in 1877, the first federal regulatory agency. Railroads used immense amounts of iron and steel, coal, lumber, and other products. The demand for steel rails powered industrial expansion. At Andrew Carnegie’s steelworks production went from six hundred thousand tons in 1888 to two million tons nine years later. In the decade 1881–1890, railroad companies bought nearly fifteen million tons of rails (75 percent of all rolled steel). They purchased $87.3 million worth of rolling stock in 1889, bringing the total number of passenger and freight cars to over one million.45 In the South, as in Brazil, rail lines were constructed to connect interior agricultural regions with port cities. Jefferson Davis had to follow a circuitous route from his home near Vicksburg, Mississippi, to Montgomery, Alabama, for his inauguration as president of the Confederate States of America. The cities were less than three hundred miles apart, but Davis had to travel eight hundred and fifty miles on six different railroads using three different gauges.46 Southern railroads were all focused on ports. As in Brazil, they did not unify regions because there were no interconnecting lines. The use of several gauges prevented the use of the same locomotives and cars on different lines. In 1880 more than 20 percent of the nation’s track was different from the standard gauge (4’ 8 1/2"). By 1887 all lines had been converted to standard. Regional networks were united, and regional markets were subsumed in one national market. Railroads had completed territorial integration of the United States by 1890. Brazilian Railroads Concentrated in South and Southeast At the end of the nineteenth century Brazil’s immense territory lacked unity, cohesion, and integration. The country’s enormous hydrologic sys140

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tems offered little assistance in developing the interior. Fragmented rail lines did not provide a circulation system that fostered economic development. In 1900 mules were the primary transportation means in interior regions except the South and Southeast. Brazil has a difficult topography for railroad construction. North of Salvador, Bahia, there is a gradual rise in elevation from the coast to the interior, but from Salvador to Santa Catarina in southern Brazil the coast is backed by a steep, wall-like escarpment called the Serra do Mar. Behind Rio de Janeiro and the port of Santos the escarpment rises to an elevation of more than twenty-six hundred feet. This huge massif between the Brazilian plateau and the sea has steep vertical drops on its eastern side.47 After the obstacle of the coastal escarpment has been surmounted, the railroad engineer is confronted by uneven terrain that requires many cuts, fills, tunnels, and bridges to construct a satisfactory roadbed.48 For centuries Brazil’s internal transportation network consisted of trails for animals. Oxcarts were used mainly for internal transportation on fazendas. Undulating relief (a “sea of hills”), slippery and impermeable clayey soil, high humidity, and thick forest cover blocked improved transportation. Natural obstacles and an agricultural economy devoted to producing crops for export worked against construction of a unifying rail network. There were many regional markets. A national market did not exist. In 1900 the domestic economy remained a distant second in importance to the export of agricultural products as it had since the 1500s. The first railroad in Brazil was inaugurated on 30 April 1854. It went a distance of 8.4 miles from the port of Estrela on Guanabara Bay to Fragoso, a town at the foot of the escarpment connected by trail with the summer capital at Petropolis. The line was opened by Emperor Dom Pedro II and other dignitaries. Its builder, Irineu Evangelista de Sousa, received the title baron of Mauá. Brazil had 133 miles of railroad in 1860, 2,040 in 1880, and 9,190 in 1900. As many as thirteen gauges were used. There was no integrated railroad system. Provinces of the Empire laid out their own railroads independently, a policy continued by the states during the early First Republic. Tracks went from ports to the interior ending in bocas do sertão (undeveloped regions). Each local system consisted of a fan-shaped arrangement of lines linking seaports with inland regions.49 In 1873 imperial policy encouraged foreign investors to participate in railroad construction. Contracts that paid builders a fixed amount per mile of track laid attracted British, French, Belgium, and North American capital. By the end of the nineteenth century about two dozen foreign companies dominated railroads in the economically productive Southeast and South. Signing contracts to pay by miles of track laid proved to be a disaster. Construction companies increased the length of the roadbed to increase 141

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profits. Lines meandered and zigzagged through the countryside, creating permanent inefficiencies.50 At the beginning of the twentieth century the Brazilian railroad network was concentrated in the southeast and the south. Three states—Minas Gerais, São Paulo, and Rio Grande do Sul—had 55 percent of the nation’s track. The south and southeast (the Federal District and the states of Rio de Janeiro, Espírito Santo, Minas Gerais, São Paulo, Santa Catarina, Paraná, and Rio Grande do Sul) had 75 percent.51 The São Paulo rail network was constructed between 1867 and 1890, organized and financed by Paulista coffee planters and foreign investors and built with British technology and rolling stock. Mule trains following precarious trails down the Serra do Mar to Paraty or Santos were the only connections between the São Paulo plateau and the sea until the Santos to São Paulo railroad, the Ingleza, was built in 1867. Before the Ingleza was in operation, two hundred thousand mules a year arrived in Santos from the highlands. Trains ascended and descended the escarpment by means of cables and stationary steam engines built in Britain and fueled by British coal. On the steepest stretches of the eighty-five-mile route trains were hauled up four inclined planes with slopes of 10 percent. The railroad handled three million tons of freight during its first year of operation.52 The São Paulo–Santos route in both mule and locomotive eras has been the jugular of the plateau.53 From São Paulo the rail network fanned out, opening new coffee lands. Three major and many smaller lines that fed into the Ingleza constituted about twelve hundred miles of track by 1890. Pierre Deffontaines wrote in 1939 that Brazilian territory was not united by rivers, roads, or railroads. Mule trains led by tropeiros (mule-skinners) made possible the export of crops and minerals over huge distances well into the twentieth century. Tropeiros maintained Brazilian unity.54 Commercial transport in many states depended on the backs of mules.55

SOUTHERN INDUSTRY: JULEPS FOR THE FEW AND PELLAGRA FOR THE CREW Leading American industries from the end of the Civil War to 1900 were textiles, iron and steel, other metal products, food processing, lumber, paper and printing, alcoholic beverages, chemicals, and leather. In 1890, 824,000 worked in textiles, 548,000 in the lumber industry, 532,000 in iron and steel, and 249,000 in food processing.56 In 1890, 85 percent of the manufactured goods were produced in the North Atlantic and North Central regions, with the states of New York, Pennsylvania, Illinois, Massachusetts, and Ohio leading by a wide margin.57 The South remained overwhelmingly agricultural through the nineteenth century, producing cotton, sugar, tobacco, rice, corn, and wheat. The 142

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pre–Civil War cotton crop record was 4.5 million bales in 1859. During the 1880s cotton production ranged from 5.4 to 7.3 million bales. There was little industry. In 1890 the industrial production of the entire region was worth only slightly more than half that of the state of New York.58 Southern industrialization demands special attention because the problems faced in establishing a manufacturing base mirror those encountered in Brazil. Both regions came late to the Industrial Revolution because both began participation in the world economy as agricultural exporters and importers of manufactures. Besides a late industrial start the South and Brazil also had to superimpose a manufacturing economy on social and economic structures established by centuries of plantation agriculture and slave labor that were incompatible with the creation of a modern industrial park. The agrarian economy of both the South and Brazil was based on large landholdings that created highly stratified societies where the purchasing power of most of the population was small. Both the South and Brazil were former slaveholding regions where illiteracy was high and public education poor. Both lacked sufficient capital to finance industry and had to offer incentives to attract outside investment. Immigrants were repelled because manual laborers were held in contempt. Industrialization took place in the face of powerful competition—the South from northern United States and Brazil from Britain. Southern industry sought niches in the national and global economies—cheap iron, cheap cloth, cheap coal, cheap lumber, turpentine, and tobacco products. Manufactured goods from the North flooded the South, undermining small firms producing for local markets. Like many noncore countries today, the South attracted industry that was labor-intensive. C. Vann Woodward labeled the South’s development policies as “juleps for the few and pellagra for the crew,” an apt description for much of the industrialization taking place in noncore countries today.59 Industrial investors prospered. Workers labored for meager benefits. Like noncore countries attempting to industrialize today, the South had limited choice of development strategies. It could not create a large formal and informal empire to serve as an overseas market as Britain had done. As part of the United States it could not build high tariff walls to keep out cheap goods from the North. The South could not copy Japan’s example and provide massive government subsidies to manufacturers. Southern leaders had to accept, like policymakers of many noncore countries today, “low wages, discriminatory hiring, blatant antiunionism, tax exemptions, and worker exploitation as unpleasant means to an ultimately redemptive end.”60 To attract outside investment capital, the South, like most noncore states today, had to create a “favorable business climate” that translated into low pay for docile workers, no unions, financial incentives, and minimal government intervention in the economy. 143

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Cotton textiles became the leading southern industry. There was a major shift of textiles from the urban North to the rural South. In 1880 the southern textile industry produced less than the state of Massachusetts and only about 5 percent of the industry’s total national output. By 1900 the South’s share had grown to 23 percent, to 30 percent by 1910.61 The most powerful force driving this change in industrial location was the availability in the South of a low-wage, nonunion, and compliant labor force. David Goldfield observed that by the early decades of the twentieth century the cotton textile industry had moved to the South. “The profits went north, and the human and environmental refuse stayed behind.”62 Industrialization was a rural phenomenon in the South. The biggest textile cities had a population of ten to twenty thousand while Lowell and Fall River, Massachusetts, had more than one hundred thousand. Southerners established mills in rural areas and built company towns for workers and their families because they regarded cities as centers of corruption and vice. In 1900, 92 percent of southern textile workers lived in mill villages.63 Between 1880 and 1900 the number of textile workers in the South rose from seventeen thousand to ninety-eight thousand. Men were in the minority. In the leading textile states, the Carolinas, Georgia, and Alabama, men were 35 percent of the workers, women 40 percent, and children 25 percent. The industry excluded blacks from all except the most menial and dangerous jobs, in South Carolina by law and elsewhere in the South by custom.64 Mill wages were low, and hours long. Adult male workers in North Carolina received about one-third the salary of counterparts in New England. There was a high incidence of pellagra and other dietary diseases. Workers were often paid in scrip that could be spent only at company stores. Little was done to improve labor conditions because of laissez-faire state governments and the widespread conviction that southern factories should not be handicapped in their competition with New England. Strikes were broken by lockouts, firing union members, and evicting “agitators” from their mill-owned homes. Townsfolk regarded mill workers as failures because of southern scorn for anybody who had to work with his hands for a boss. Millworkers were known as “factory rats,” “lintheads,” and “cotton mill trash.”65 State legislation mandating education for children and protecting workers was gradually enacted in the North. By 1900 no child under the age of fourteen could legally work in a Massachusetts factory. The workweek for women and minors was limited to fifty-eight hours. Unions became stronger and more aggressive. Strikes became more frequent. Industrialists and investors looked south for a more exploitable labor force. North and South Carolina, Georgia, and Alabama led the South in cotton textile production. Poor rural Americans of Anglo-Saxon ancestry were the workers. Child labor was readily available in the South. Southern states had neither compulsory education laws nor child labor laws. To gain a 144

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competitive advantage over northeastern factories, states refused to regulate child labor. In 1902 southern mills employed thirty thousand children under fourteen, twenty thousand under the age of twelve.66

COFFEE PRODUCTION BOOMS ON THE SÃO PAULO PLATEAU São Paulo was a Brazilian backwater until the latter part of the nineteenth century. The New England and Middle Atlantic colonies prospered because of North Atlantic fish resources and trade opportunities. There were no such opportunities for São Paulo to exploit in the South Atlantic. Full realization of the agricultural potential of the São Paulo plateau depended on the growth of European and North American markets and development of steam-driven transportation systems. Railroads opened the interior for agricultural development. Steamships brought immigrants to work new coffee plantations and carried coffee to foreign markets. Beginning its explosive development in the second half of the nineteenth century, São Paulo became the most dynamic and prosperous region of Brazil. Colonial São Paulo had few export opportunities to stimulate the domestic economy, and rugged terrain blocked easy access to the coast. Lacking staples coveted by the world economy, São Paulo remained a thinly populated region until the latter part of the nineteenth century. Stunted early development was caused more by the lack of markets than by topographical obstacles between plateau and coast. The coffee trade proved that when global markets demanded Paulista products, mule trains could conquer the escarpment. The crest of the escarpment is the edge of a vast plateau of about eighteen thousand square miles that slopes gradually from an altitude of twenty-six hundred feet to the west and south to an altitude of about one thousand feet near the Paraná River. Jesuits founded a mission on the site of the city of São Paulo in 1534. Throughout the colonial era São Paulo was a poor, isolated, and self-supporting region. Climate and soil favored diversified agriculture and stock raising. There was no direct linkage with the global economy because nothing could be exported to Europe with profit. In 1600 São Paulo had about one thousand free citizens and many Indian slaves. Subsistence farms of the first settlers produced manioc, other food crops, and some livestock. The settlement was extremely poor in comparison with plantation colonies on the coast. In 1620 there were about one hundred mud houses with thatched roofs. Domestic animals wandered freely through the community. Most Paulistas lived on their fazendas and small farms and came to the settlement only for holidays.67 Trekking the interior in search of gold and slaves became a mainstay of the São Paulo economy. Bandeiras were mobile communities consisting of a few hundred whites and thousands of Indian allies who explored the vast 145

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interior of South America for more than one hundred years. In 1623 so many bandeiras departed São Paulo that the only remaining inhabitants were women, small children, and the elderly.68 Bandeirantes discovered gold in Minas Gerais in 1698 and Mato Grosso in 1719. They traveled west to the foothills of the Andes and north to the Amazon and laid the foundation for successful Portuguese claims to much of the vast interior of the continent, recognized by Spain in the Treaty of Madrid of 1750. Spanish attempts to contain Portuguese America to the limits set by the Treaty of Tordesillas were defeated. Enslavement of Indians was a central aspect of the Paulista economy during the seventeenth century. To convert the Indians to Christianity, Jesuits had gathered thousands in missions where they practiced sedentary agriculture. “It is hard to imagine a more tempting prize for slave hunters,” wrote Brazilian historian Capistrano de Abreu.69 Bandeirantes attacked missions and sold captured Indians to plantations in Rio de Janeiro, São Vicente, Bahia, and Pernambuco. Pedro Calil Padis wrote that of the one hundred thousand Indians in Jesuit missions, fifteen thousand were killed and sixty thousand enslaved by bandeirante raids.70 The settlement of Sorocaba, São Paulo, was important from the early eighteenth century to the late nineteenth century as a specialized market town. Gold and diamond mining in Minas Gerais beginning in the 1700s required mules to bring supplies to the mines and carry minerals to the coast. When coffee cultivation boomed in the Paraiba Valley and the São Paulo plateau, mules carried harvests to ports. Mule trains carried gold, produce, and merchandise between the interior and the coast, linking Mato Grosso, Goiás, Minas Gerais, and São Paulo with seaports. Rivers could not be used for transportation, it was impossible to maintain roads for oxcarts through the rugged topography, and horses were not strong enough to do the work. Mules did the job. The pampas of Rio Grande do Sul were ideal for raising cattle, horses, and mules. Export of livestock from the extreme south to the central regions began in the early 1700s. Sorocaba, located between centers of supply and demand, became the center for huge livestock fairs. Sorocaba was to the goldfields of Minas Gerais what Salta, Argentina, was to the silver mines of Potosi. Thousands of horses and mules moved north from Rio Grande do Sul each year. Livestock were the economic foundation of Brazil’s south until the early 1800s.71 Steam power facilitated direct linkages between São Paulo and the world economy. Steamships reduced the cost and time of trans-atlantic crossings, accelerating the immigration of hundreds of thousands of Europeans to work the coffee fazendas. Steamships transported coffee harvests to Europe and North America. Railroads opened new lands to coffee cultivation, carried immigrants to the interior, and replaced mules in hauling coffee from fazenda to Santos via São Paulo. 146

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Coffee production made steady progress through the 1850s, and in the early 1880s coffee planting fever raged. In 1854 the Paraiba Valley produced 77 percent of Brazil’s coffee, and São Paulo produced 23 percent. In 1886 the Paraiba Valley produced 20 percent of the coffee harvest, and São Paulo, 80 percent.72 The dominance of coffee growers in the province of São Paulo was unquestioned. No other group competed for power. Workers had no political voice. The government of São Paulo was the instrument of the planters.73 Expanded coffee production required a huge labor force. Even before the end of the slave trade planters were looking for a workforce to replace slave labor. Nicolau Pereira de Campos Vergueiro, an influential senator and large landowner, developed the parceria (partnership) system to provide European immigrants for coffee plantations.74 The landowner signed a contract with colonists to pay transport expenses from point of origin to fazenda. He also agreed to provide coffee trees to cultivate and harvest and subsistence until colonists were established. The colono (colonist) agreed to work for a specific period, tend the coffee trees, and repay advances received. The proceeds from the harvest were usually split fifty-fifty between colono and landowner. Vergueiro first used the parceria to bring colonists to his São Paulo coffee plantation, Ibicaba, in the 1840s.75 Within ten years the system had been copied by other São Paulo planters and landowners in Rio de Janeiro, Espírito Santo, Minas Gerais, and Paraná. Parceria encountered great difficulties. Serious problems arose between workers and landowners, many caused by planters’ difficulties working with free workers after owning slaves. Colonists regarded planters as demanding and devious. Planters saw colonists as lazy and disrespectful. Colonists wanted to become landowners in their own right as quickly as possible. Planters wanted to retain colonists on their fazendas. There were revolts on some plantations. Governments of Prussia and Italy warned potential immigrants of the hazards of Brazilian agricultural employment.76 Planters sought better programs to employ immigrants including wage labor and piecework. The contract system was modified. Debt repayment schedules and rates of interest were made less burdensome. Colonists were allowed to cultivate more food crops that could be sold in local markets. Immigrant transportation costs were subsidized by state and national governments controlled by coffee planters. Best results for immigrant and landowner were obtained when colonos were placed on farms where young trees had already been planted rather than starting from scratch on virgin lands. Before abolition there were three kinds of labor in the new coffee zones. Native Brazilians (caipiras and caboclos) cleared the land, slaves planted the coffee trees, and immigrants tended the new coffee farms. 147

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Following abolition former slaves joined caipiras in the hard and unremunerative work of clearing new land and planting young trees. After establishing new coffee farms to be tended by immigrants, they moved on to clear more land, became low-paid wage laborers doing dangerous and difficult jobs on fazendas, or raised subsistence crops as squatters with no hope of owning the land that they tilled. Former slaves and native Brazilians were excluded from the social mobility offered by the parceria system. Landowners regarded caipiras, caboclos, and former slaves with the same disdain reserved for blacks and poor whites in the South.77 Coffee expansion occurred at the same time that many Brazilian elites were convinced by reigning racist doctrines that their country had to “whiten” its population to become like Europe. The national immigration decree of 1890 excluded Africans and Asians from freely entering the country to ensure that booming coffee production did not attract nonwhites. This provision was enforced until 1902.78 Many agreed with Oliveira Vianna’s support for increased European immigration, calling it “o trabalho de aryanização do nosso povo (the task of ayrianizing our people).”79 Until 1886 there was little immigration to Brazil, reaching an annual rate of 30,000 only in 1876. It increased after slavery was abolished, with a peak of 215,239 in 1891. Immigration remained at a high level until World War I, reaching 164,831 in 1895 (third highest year) and 190,000 in 1913 (second highest year). Approximately 55 percent of all persons immigrating to Brazil between 1878 and 1937 located in São Paulo. After 1887 São Paulo took at least 50 percent of all immigrants every year and in some years more than 65 percent. Between 1882 and 1934, 2.3 million new arrivals went to São Paulo. About 73 percent of the more than 900,000 immigrants who arrived between 1887 and 1900 were from Italy. During the same period Spain and Portugal supplied about 10 percent each. About 100,000 Japanese arrived in Brazil between 1908 and 1930.80 Commercial coffee cultivation began on the São Paulo plateau just prior to the Land Law of 1850, which made purchase the sole means of getting legal title to land. Coffee growers wanted to make land acquisition difficult to block immigrant laborers from getting their own farms. In 1891, when coffee production was booming, the Constitution of the newly established republic placed all public land and tenure regulation under the jurisdiction of state governments controlled by large planters. National and state land acquisition laws have always favored large landowners in Brazil. Large landholdings dominated coffee production. A few hundred extended family groups had huge holdings subdivided into plantations of from one hundred thousand to more than a million trees. The largest of the holdings included the five hundred thousand coffee trees of Baron Geraldo de Rezende in Campinas; the plantation of Martinho Prado, Jr. in Ribeirão Prêto, where two million trees were worked by sixteen hundred immigrants and fifty native Brazilians; the English-owned Dumont fazenda, 148

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which had four million coffee trees and twenty-four hundred immigrants and six hundred native Brazilian laborers; and the thirty-five plantations of Francisco Schmidt in Ribeirão Prêto, which covered almost fifty thousand acres and employed three thousand immigrants and eight hundred native Brazilian workers.81 Coffee cultivation with an immigrant labor force transformed São Paulo. The state became the prosperous and dynamic leader of Brazil. Economic and social mobility was possible for many thousands of poor newcomers from Europe and Japan. Families immigrated together. Coffee cultivation provided tasks for women and children. Food crops were grown by colonos, and the surplus was marketed, establishing linkages with the local economy. A network of villages and towns evolved. A working family could save enough to buy land or move to the city for urban jobs. Many colonos became landowners and employed newly arrived immigrants. Coffee exports from Santos doubled each decade from 1870 to World War I. By 1890 Santos was equal to Rio de Janeiro in coffee exported. Santos moved into first place in 1894 and has never been headed since. São Paulo produced more than 50 percent of the world’s coffee from 1900 to 1918. From the 1880s to the 1930s São Paulo was the number one coffee-producing region in the world. Coffee production was the foundation for national industrial growth.82 Coffee planters and merchants invested profits in manufacturing in the 1880s. Textiles led the way. Devaluations of the Brazilian currency vis-à-vis the British pound accelerated industrial growth by increasing the cost of imported goods. A1901 industrial survey of the state of São Paulo listed 170 factories, including seventeen textile mills and seven foundries, but only fifty employed more than one hundred workers.83 The 1907 national census listed 3,258 industrial establishments with 150,841 employees. Industry was concentrated in Rio de Janeiro (40 percent), São Paulo (16 percent), and Rio Grande do Sul (15 percent).84 In 1920 Sao Paulo replaced Rio de Janeiro as Brazil’s manufacturing leader. São Paulo was launched on the course that would make it one of the world’s biggest cities and most important industrial centers.

NOTES 1. Roger Daniels, Coming to America: A History of Immigration and Ethnicity in American Life (New York: HarperCollins, 1990), 43. 2. Emilia Viotti da Costa, The Brazilian Empire. Myths and Histories (Chapel Hill: University of North Carolina Press, 2000), 198–99. 3. John A. Garraty, The New Commonwealth, 1877–1890 (New York: Harper and Row, 1968), 82. 4. Caio Prado, Jr., História econômica do brasil, 42nd ed. (São Paulo: Editôra Brasiliense, 1995), 260. 149

Early Globalization and Economic Development 5. Steven Hahn, “Class and State in Postemancipation Societies: Southern Planters in Comparative Perspective,” American Historical Review 95, no. 1 (1990), 78. 6. Michael Goldfield, The Color of Politics: Race and the Mainsprings of American Politics (New York: New Press, 1997), 86–87. 7. R. S. Cotterill, The Old South: The Geographic, Economic, Social, Political and Cultural Expansion, Institutions, and Nationalism of the Ante-Bellum South (Glendale, CA: Arthur H. Clark, 1937), 242–43. 8. Don Fehrenbacher, quoted in Michael J. Birkner, “James Buchanan and the Political Crisis of the 1850s: A Panel Discussion,” Pennsylvania History 60 (July 1993), 274. 9. Hahn, “Class and State,” 94. 10. W. J. Cash, The Mind of the South (New York: Vintage Books, 1991), 105. 11. Vernon Louis Parrington, Main Currents in American Thought, 3 vols. (New York: Harcourt, Brace, 1930), 3: 3–4. 12. Quoted in Hahn, “Class and State,” 94. 13. Costa, The Brazilian Empire, 168. 14. Peter Flynn, Brazil: A Political Analysis (Boulder, CO: Westview Press, 1978), 13. 15. Eric Foner, Reconstruction: America’s Unfinished Revolution, 1863–1877 (New York: Harper and Row, 1988), 598. 16. John Dittmer, Black Georgia in the Progressive Era, 1900–1920 (Urbana: University of Illinois Press, 1977), 23–24. 17. Edward L. Ayers, The Promise of the New South: Life after Reconstruction (New York: Oxford University Press, 1992), 153–55. 18. Hodding Carter, The Angry Scar: The Story of Reconstruction (New York: Doubleday, 1959), 241. 19. Gunnar Myrdal, An American Dilemma: The Negro Problem and Modern Democracy (New York: Harper and Brothers, 1944), 246; Nicholas Lemann, The Promised Land: The Great Black Migration and How It Changed America (New York: Alfred A. Knopf, 1991), 17–19. 20. Myrdal, An American Dilemma, 559. 21. Manuel Correia de Andrade, Abolição e reforma agrária (São Paulo: Ática, S. A., 1987), 23–27; Ademir Gebara, O mercado do trabalho livre no brasil (1871–1888) (São Paulo: Brasiliense, 1986), 198–99. 22. Carl N. Degler, Neither Black nor White: Slavery and Race Relations in Brazil and the United States (New York: Macmillan, 1971), 28, 295. 23. D. W. Meinig, The Shaping of America, 3 vols. (New Haven, CT: Yale University Press, 1986), 2: 522. 24. The story of Canudos has been told and retold during the last one hundred years, beginning with the Brazilian classic Rebellion in the Backlands, by Euclides da Cunha. Euclides da Cunha, Rebellion in the Backlands, trans. Samuel Putnam (Chicago: University of Chicago Press, 1964). There have been many interpretations of the brutal destruction of the people and the settlement. American historian E. Bradford Burns, for example, wrote that Canudos was the site “of one of those great historical moments when the past and the future interlock.” The victory of the army “signified the opening of the interior to modernization.” The War of Canudos “proved to be both a farewell to the Brazilian past and a salutation to its 150

Nineteenth-Century Transformations future.” E. Bradford Burns, A History of Brazil, 3rd ed. (New York: Columbia University Press, 1993), 256–57. Professor Burns misses the mark. Canudos did not signify a surge toward modernity. The total destruction of the backlands community anchored the northeast firmly in the past by strengthening the economic and political structures that had dominated rural Brazil since colonial times. The army’s victory proclaimed that no alternative to the system of large landowners controlling powerless workers would be tolerated. 25. Robert M. Levine, “‘Mud-Hut Jerusalem’: Canudos Revisited,” Hispanic American Historical Review 68 (August 1988), 564, 570. 26. Dittmer, Black Georgia, 131. 27. Myrdal, An American Dilemma, 561. 28. Ayers, The Promise of the New South, 158. 29. Cash, The Mind of the South, 170. 30. August Meier and Elliot Rudwick, From Plantation to Ghetto, 3rd ed. (New York: Hill and Wang, 1976), 204; Noel Jacob Kent, America in 1900 (Armonk, NY: M. E. Sharpe, 2000), 118–19; Ayers, The Promise of the New South, 495, n. 69; Carter, The Angry Scar, 190; Clive Ponting, The Twentieth Century: A World History (New York: Henry Holt, 1999), 472, 474; Maldwyn A. Jones, The Limits of Liberty: American History, 1607–1992, 2nd ed. (New York: Oxford University Press, 1995), 269; Samuel Eliot Morison, The Oxford History of the American People (New York: Oxford University Press, 1965), 791–93. 31. Foner, Reconstruction, 595. 32. E. Benjamin Andrews, The United States in Our Time: A History from Reconstruction to Expansion (New York: Charles Scribner’s Sons, 1903), 768–69. Andrews’ views remained popular well into the twentieth century. The 1938 Pulitzer Prize in history was awarded to Professor Paul Herman Buck, who taught at Harvard, 1926–1942. He served as dean of faculty, 1942–1945 and provost, 1945–1953. In his prizewinning work Professor Buck wrote that the minds of southern whites were strong in the conviction that orderly society could exist only when the Negro was rigidly disciplined. . . . The new discipline excluded the colored man from politics by disenfranchising him, rendered him economically impotent by making him a peon, and isolated him socially by an extensive practice of segregation. The net result was to deprive the Negro of more privileges than was necessary to keep him from becoming a menace . . . the discipline possessed advantages which far outweighed its evils. . . . Best of all the discipline prevented the Negro from slipping into semi-barbarism. Paul H. Buck, The Road to Reunion, 1865–1900 (New York: Vintage Books, 1961), 295, 301, 394

33. Garraty, The New Commonwealth, 1877–1890, 21. 34. Louis Agassiz and Elizabeth Agassiz, A Journey in Brazil (Boston: Tichnor and Fields, 1868), 293. 35. Raymundo Nina Rodrigues, Os africanos no brasil (São Paulo: Companhia Editôra Nacional, 1935), 388–89. 36. Quoted in Thomas E. Skidmore, Black into White: Race and Nationality in Brazilian Thought (Durham, NC: Duke University Press, 1993), 60; Levine, “‘Mud-Hut Jerusalem,’ ” 559. 37. Quoted in Burns, A History of Brazil, 181. Lawyer and historian Francisco Jose Oliveira Vianna was a widely read interpreter of Brazilian society who extolled white racial superiority. He wrote: 151

Early Globalization and Economic Development The forces that have impelled our civilization forward have been the exclusive work of the white man. The negro and the Indian, during the long process of our formation, gave not one valuable element to the superior ruling classes that accomplished the work of construction and civilization. F. J. Oliveira Vianna, O povo brasileiro e a sua evolução: Recensamento de 1920 (Rio de Janeiro: Ministério da Agricultura, Indústria e Comércio, 1922), 53

38. Joaquim Murtinho, “Relatório da Indústria, Viação e Obras Publicas: 1897,” Revista do Instituto Histórico e Geográfico Brasileiro 219 (April–June 1953), 243. 39. Franz Boas, “Changing the Racial Attitudes of White Americans,” in George W. Stocking, Jr., ed., A Franz Boas Reader: The Shaping of American Anthropology, 1883–1911 (Chicago: University of Chicago Press, 1974), 316–18; Meier and Rudwick, From Plantation to Ghetto, 211. 40. Alberto Torres, O problema nacional brasileiro, 3rd ed. (São Paulo: Companhia Editôra Nacional, 1938), 139, 149, 169. 41. Pierre Deffontaines, “Geografia Humana do Brasil,” Revista Brasileira do Geografia 1 (July 1939), 37; Preston James, Latin America, 4th ed. (New York: Odyssey Press, 1965) 698–700. 42. Morison, The Oxford History of the American People, 3: 50; Garraty, The New Commonwealth, 1877–1890, 86; Sean Dennis Cashman, America in the Gilded Age (New York: New York University Press, 1984), 2. 43. Paul Johnson, A History of the American People (New York: HarperCollins, 1998), 534. 44. Carville Earle, “Regional Economic Development West of the Appalachians, 1815–1860,” in Robert D. Mitchell and Paul A. Groves, eds., North America: The Historical Geography of a Changing Continent (Totowa, NJ: Rowman and Littlefield, 1987), 176–78; Robert William Fogel, Without Consent or Contract: The Rise and Fall of American Slavery (New York: W. W. Norton, 1989), 304. 45. Robert William Fogel, Railroads and Economic Growth: Essays on Econometric History (Baltimore: Johns Hopkins University Press, 1964), 130. 46. Meinig, The Shaping of America, 2: 478. 47. Pedro Calil Padis, Formação de uma economia periférica: o caso de paraná (São Paulo: Editôra Hucitec, 1981), xii, 4, 24–32. 48. Andrew C. O’Dell, Railways and Geography (London: Hutchinson, 1956), 134. 49. Anuário Estatístico do Brasil, 5(1939/1940) (Rio de Janeiro: IBGE, 1940), 1336; Moacir M. F. Silva, “Um guia ferroviário do fim do século XIX,” Revista Brasileira de Geografia 16 (April/June 1954), 252–266; Ademar Benevola, Introdução a história ferroviária do brasil (Recife: Edições Folha de Menha, 1953), 217; Nilson Thome, Trem de ferro: A ferrovia no contestado (Florianópolis: Editôra Lunardelli, 1983), 29. 50. Thome, Trem de ferro, 24; Thomas H. Holloway, Immigrants on the Land: Coffee and Society in São Paulo, 1886–1934 (Chapel Hill: University of North Carolina Press, 1980), 6; Benevola, Introdução a história ferrovária do brasil, 66. 51. Moacir M. F. Silva, “Geografia dos transportes no brasil,” Revista Brasileira de Geografia 2 (July 1940), 431–35. 52. R. H. Whitbeck, Economic Geography of South America (New York: McGraw-Hill, 1931), 492. 152

Nineteenth-Century Transformations 53. Richard M. Morse, From Community to Metropolis: A Biography of São Paulo, Brazil (Gainesville: University of Florida Press, 1958), 20. 54. Pierre Deffontaines, “Geografia Humana do Brasil,” Revista Brasileira de Geografia 1 (July 1939), 37–41. 55. Silva, “Geografia dos transportes,” 64. 56. Garraty, New Commonwealth, 81–82. 57. Ibid., 82. 58. Ibid., 85. 59. Quoted in James C. Cobb, Redefining Southern Culture: Mind and Identity in the Modern South (Athens: University of Georgia Press, 1999), 15. 60. Ibid., 17. 61. Garraty, The New Commonwealth, 84. 62. David R. Goldfield, Cotton Fields and Skyscrapers: Southern City and Region (Baltimore: Johns Hopkins University Press, 1989), 125. 63. Ayers, The Promise of the New South, 112–14. 64. Sue Ann Presley, “With Textile Jobs Departure Goes a Way of Life: Mill Towns in the South Struggle to Adjust to Economic Globalization and Attract New Businesses,” Washington Post 28 March 1999, A3. 65. Cash, The Mind of the South, 200–202. 66. John Spargo, The Bitter Cry of the Children (New York: Macmillan, 1915), 142, 148–49; Elizabeth H. Davidson, Child Labor Legislation in the Southern Textile States (Chapel Hill: University of North Carolina Press, 1939), 12–13. 67. Revista do Arquivo Municipal (São Paulo: Departamento do Patrimônio Histórico Municipal, 1992), 16–17. 68. Ibid., 17. 69. João Capistrano de Abreu, Capítulos da história colonial: 1500–1800 (Rio de Janeiro: Livraria Briquiet, 1954), 183–84. 70. Padis, Formação de uma economia periférica, 17; Stuart B. Schwartz, “Plantations and Peripheries, c.1580–c.1750,” in Leslie Bethell, ed., Colonial Brazil (London: Cambridge Univeisty Press, 1987), 114–15. 71. José Alipio Goulart, Tropas e tropeiros na formação do brasil (Rio de Janeiro: Conquista, 1961), 35–42. 72. Morse, From Community to Metropolis, 167. 73. Holloway, Immigrants on the Land, 39. 74. Djalma Forjaz, O senador Vergueiro, sua vida e sua época (1778–1859) (São Paulo: Diario Oficial, 1924), 30–41. 75. Helio Vianna, História administrativa e econômica do brasil (São Paulo: Editôra Nacional, 1955), 236. 76. Costa, The Brazilian Empire, 101–5; Pierre Denis, Brazil (New York: Charles Scribner’s Sons, 1911), 187; Forjaz, O senador Vergueiro, 47–53. 77. Paula Beiguelman, A crise do escravismo e a grande imigração (São Paulo, Brasiliense, 1982), 31–34, 42; Andrade, Abolição e reforma agrária, 24. 78. Michael George Hanchard, Orpheus and Power: The Movimento Negro of Rio de Janeiro and São Paulo, Brazil, 1945–1988 (Princeton, NJ: Princeton University Press, 1994), 53. 79. Vianna, O povo basileiro e a sua evolução, 61. 80. Costa, The Brazilian Empire, 124, 160; Daniels, Coming to America, 23–25. 81. Holloway, Immigrants on the Land, 139. 153

Early Globalization and Economic Development 82. Warren Dean, A industrialização de São Paulo, (São Paulo: Editôra da Universidade de S. Paulo, 1971), 10–11. 83. Ibid., 19. 84. Prado, História economica do brasil, 260.

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Chapter 9

From the Colonial Era to the Gilded Age and the Belle Epoque

Since the beginning of the colonial era plantation America followed one economic development path, and the North and West of North America followed another. Brazil and the South, the southern and northern anchors of the plantation region, were incorporated into the global economy as producers of agricultural products and consumers of industrial goods manufactured in the core of the world economy. The economic and social structures created by large landholdings and slavery were not conducive to economic development or industrialization. The global economy function of the South and Brazil was the same in 1900 as it had been during the colonial era. The South’s economically subordinate relationship to the rest of the United States was similar to Brazil’s relationship with Britain. Independent Brazil followed a free trade policy for much of the nineteenth century. Imported British goods overwhelmed Brazilian attempts to launch industries. In 1900 the manufacturing base remained weak. A strong agricultural export sector was the main source of economic growth. Brazil was still a semiperipheral state at the end of the nineteenth century even though it was one of the most important agricultural exporters in the world. New England and the Middle Atlantic colonies were not brought into the world economy as exporters of products to the mother country. The fish resources and commercial opportunities of the North Atlantic provided trade openings that contributed to economic development. Commerce with a variety of foreign markets made globalization a more independent process than that experienced by plantation colonies. The northern colo-

Early Globalization and Economic Development

nies developed a balanced and diversified economy based on maritime activities and family farm agriculture that had strong linkages with the local economy. Independent United States fought free from Great Britain’s strangling economic embrace early in the nineteenth century and chartered a course to industrialization based on a protected domestic market. By 1900 the United States had become the world’s leading manufacturing state and a member of the world economy core. The nation became a power in the Caribbean, the Pacific, and Asia. Alexander Hamilton and the Viscount Cairu both had visions of development. Both visions became reality. The United States followed the Hamiltonian route to a balanced agricultural and industrial economy. Brazil believed Cairu’s view that concentration on export agriculture would allow full realization of economic potential. Hamilton correctly foresaw that without industry a new American state would remain subservient to Europe and a pawn in European power politics. Talleyrand said that Hamilton divined Europe. Hamilton also divined the workings of the global economy. The dawn of the twentieth century found political leaders of the United States and Brazil satisfied with their positions in the world economy. The different development routes followed since the colonial era had produced dramatically different results. In 1900 Brazil’s position in the global economy, although different from that of the United States, was acceptable to ruling elites. The United States had productive agriculture and powerful industries. Brazil was a world-class agricultural exporter. Both economies seemed to guarantee these two giant states a place in the ranks of the powerful. Alexander Hamilton’s statement that “[t]he importations of manufactured supplies seem invariably to drain the merely agricultural people of their wealth”1 became recognized as indisputable truth only during the twentieth century as the pace of globalization accelerated. During the early years of the last century the three-tiered hierarchy of the world economy was only dimly perceived. The United States and Japan had joined West European countries in the core, and there seemed to be no insurmountable obstacles preventing other states from joining the favored few. As globalization progressed, however, it became more difficult to advance from semiperipheral to core status, a feat accomplished by not one state during the last one hundred years. Remarkable material advances obscured the enormous social problems that existed in 1900. No one could doubt the extraordinary material achievements of the United States and Brazil during the nineteenth century, but few saw with equal clarity the enormous social deficit accumulated with economic advancement. The failure to meet the needs of all citizens as economic development progressed would plague the United States and Brazil through the twentieth century and beyond. 156

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UNITED STATES: AN INDUSTRIAL POWER The 1890 McKinley Tariff raised protectionist rates to more than 45 percent. When the author of this legislation, Republican William McKinley, became president in 1897, economic and social leaders settled back for a period of high protection, plenty, and prosperity. The Dingley Tariff of 1897 raised duties to an average of 52 percent, the highest in American history. Industrialists, businessmen, and financiers controlled the government. For the first time in the country’s history the value of manufactured goods exceeded that of agricultural products in 1890. Adecade later industrial products were worth twice as much as agricultural commodities. Big business dominated the economy. The industrial era produced business tycoons of enormous wealth and power like Andrew Carnegie (steel), John D. Rockefeller (oil), and J. Pierpont Morgan (investment banking). Between 1880 and 1900 annual steel production soared from 1,140,000 to 11,000,000 tons. In 1900 the production of iron and steel almost equaled that of Great Britain and Germany combined. Henry Clay Frick, who controlled 80 percent of the coke plants, and Andrew Carnegie formed a partnership in 1889 that was the forerunner of the U.S. Steel Corporation, founded in 1901. The new corporation owned 149 steel plants, several railroads, Great Lakes shipping interests, and thousands of acres of reserve lands for coal, iron ore, and limestone. Financing was arranged by J. Pierpont Morgan, the first of his moves to integrate big finance with big business. Frick and Carnegie did not tolerate interference in factory policy by steelworkers. All stops were pulled to break steel unions in the Homestead strike of 1892. Frick ordered the plant closed and barricaded. Pinkerton guards arriving as reinforcements for local police clashed with strikers. Twenty-five persons were killed. The state governor sent in the National Guard to patrol Homestead for six months. Steelworker unions were destroyed. In the last two decades of the nineteenth century the number of manufacturing plants, the number of factory workers, and industrial production all more than doubled. The United States surpassed Britain in textile production in 1910. Agriculture flourished and prospered. The Industrial Revolution was driven by an expanding internal market. Protected from foreign competition by high tariff walls, American industry thrived. In 1900 the United States made about 30 percent of the world’s manufactures but because of its huge internal market accounted for only about 10 percent of the manufactured goods in international trade, less than a third of what Britain exported.2 BRAZIL: AN AGRICULTURAL GIANT The government of President Manuel Ferraz Campos Sales (1898–1902) took office with economic and political stability intact. Government poli157

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cies in the early years of the Republic had created economic instability. A frenzy of speculation produced economic chaos called the encilhamento.3 Countless firms failed. Faced with economic mayhem and regional revolts, President Floriano Peixoto turned to powerful São Paulo landowners for help in restoring stability. Coffee planter and future president Francisco de Paula Rodrigues Alves was given control of economic policy in 1894. Large landowners remained the Brazilian power brokers until 1930, a role that they had played almost without interruption since the colonial era. Prior to assuming office, Campos Sales negotiated the “funding loan” with foreign creditors to ensure government solvency. The future president had to submit a letter to Alfred de Rothschild, personally committing himself to the austerity programs called for in the agreement. The “funding loan” restored economic stability. Loan terms gave considerable control of the Brazilian economy to British financial groups.4 Booming agricultural exports drove the economy. Coffee marketed abroad averaged four hundred million pounds between 1870 and 1875 and soared to an average of more than one thousand million pounds in the last five years of the century. Rubber exports from the Amazon basin rose from ten million pounds in 1870 to fifty-two million pounds in 1900. Cacao, sugar, meat products, lumber, and forest products were other export items.5 Campos Sales believed that Brazil’s destiny lay in agricultural production. His government’s role was limited to indirect support of export agriculture by providing infrastructure, encouraging foreign investment, and subsidizing immigration of labor.6 The president informed Congress in 1899 that Brazil should return to “sound economic principles . . . to try to export everything we can produce under better conditions than other peoples and seek to import those items that they can produce under better conditions than us.”7 Having abolished slavery, ousted the emperor, and survived the turbulence of the Republic’s first ten years, the Brazilian elite believed that their role as the world’s greatest exporter of coffee and rubber entitled their country to a place among the leading nations of the globe. During the administration of Campos Sales’ successor, Francisco de Paula Rodrigues Alves (1902–1906), Rio de Janeiro was completely changed by the construction of modern docks, a concerted campaign against yellow fever and smallpox, and a massive urban renewal program. The transformation of the national capital into a marvelous city symbolized Brazil’s desire to show the world that it was a modern country worthy of respect.

THE DARK SIDE OF DEVELOPMENT Agricultural and industrial progress in the United States and agricultural development in Brazil were spectacular in the nineteenth century. Incredible economic gains tended to mask the existence of enormous social 158

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problems that repressed millions of citizens and retarded economic development. Crass materialism of the Gilded Age dominated society in the United States at the end of the nineteenth century. The rich squandered millions while millions lived in squalor. During the Belle Epoque of Rio de Janeiro wealthy elites aped European fashions while most Brazilians lived in poverty and ignorance. In both Brazil and the United States many leaders of society, inebriated by a witch’s brew of unbridled materialism, social Darwinism, and racism, glorified the Arabian Nights wealth of the few and ignored the misery of the many. Problems of poor people and depressed regions were ignored or regarded with contempt. The Northeast and the South festered in poverty, dominated by archaic political, social, and economic structures. Ninety percent of the United States’ black citizens lived in the South, where white supremacy reigned. Howard University history professor Rayford W. Logan wrote, “The United States had emerged as a ‘world power’ but at home it was faithless to its own basic principles as far as nine million black citizens were concerned.”8 The poor of both countries were exploited economically and scorned socially. Attempts by workers in the United States to organize were destroyed by a powerful array of public and private forces. Federal troops and state militia broke strikes. Police and judicial systems opposed organized labor. Judges often invalidated state labor legislation. Large private police forces were employed by companies. Public opinion weighed heavily against the workers. Labor organizers were called “un-American” and “communist.”9 The Gilded Age of the United States In 1873 Mark Twain and Matthew Josephson coauthored The Gilded Age, a novel about the corruption and greed of post–Civil War America. The title characterizes U.S. history from the end of the Civil War to the 1890s. Theodore Roosevelt said that the last quarter of the nineteenth century was “[a] riot of individualistic materialism, under which complete freedom for the individual . . . turned out in practice to mean perfect freedom for the strong to wrong the weak.”10 During the Gilded Age the wealthy few made flagrantly extravagant expenditures while impoverished millions struggled to survive. Leaders of “the 400,” New York’s high society, built “cottages” at their summer retreat, Newport, Rhode Island. Aworthy representative of this group was William Henry “the public be damned” Vanderbilt,11 who controlled the largest railroad empire in the world. His Newport cottage was christened Marble House, the only private residence in the Americas built entirely of marble. A private ten-ton derrick lifted huge blocks of stone off specially chartered steamships at a Newport wharf leased solely for this purpose. One hundred workmen imported from Italy cut and polished the stone dockside before it was hauled to the building site. French craftsmen were im159

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ported to work on interior rooms that were “sumptuous almost beyond belief.” Inside, the residence was “a glittering jewel box, overwhelmingly ornate, brimming with metal, gold, crystal, mirrors, and, above all, marble.” For their ballroom, the Vanderbilts used the Gold Room, “this dazzling interior space, suggestive of the Hall of Mirrors at Versailles.”12 While Marble House was being constructed, thousands of men, women, and children, many of them recent immigrants, lived in dark, crowded, unsanitary, and fetid tenements surrounded by filth. From 1879 until the end of the century the “dumbbell tenement” was practically the only kind of slum housing built in New York City. The buildings were designed to crowd as many people as possible into the smallest possible space. Each building housed from one hundred and fifty to two hundred human beings. It was not unusual for a block of tenements to be home for four thousand people. From five to eight stories high, ninety feet deep, and pierced by a narrow hallway three feet wide, each floor was honeycombed with rooms, many without direct light or air and most providing shelter for one or more families. Single lodgers paid five cents a night for floor space. Sunless, foul-smelling air shafts ensured rapid spread of flames during fires. The rat-infested dwellings lacked decent sanitary facilities. Contagious diseases like typhoid fever, scarlet fever, smallpox, and diphtheria were common. One dense slum area was known as “lung block” because of the many deaths from tuberculosis. Tenements in the infamous Mulberry Bend section were called “slaughterhouses” because of high death rates. In 1888, the year William Henry Vanderbilt purchased the Newport site for Marble House, the death rate for children under five in several tenement blocks of New York’s East Side was 139.83 per 1,000 compared with 85 per 1,000 in the entire city.13 The Belle Epoque of Rio de Janeiro The concentration of wealth in the hands of a few in the United States was no less extreme in Brazil. High-society Brazilians turned their backs on the nation’s interior and most of their own countrymen, who lived in appalling poverty. They sought to “civilize Brazil” by imitating Europe. Desire to see a European image in the Brazilian mirror was not new. Wealthy Brazilians had long believed that French culture could be transplanted to tropical soil.14 The Belle Epoque was the apogee of the deification of all things French. The name of the period itself was appropriated from the Parisian Belle Epoque (1890–1914), when pleasure reigned before the onslaught of World War I horrors. High culture in Brazil during this period was “rigorously French.” The Brazilian Academy of Letters with forty immortals was created and housed in a building called the Petit Trianon, and the new Municipal Theater was a replica of the Paris Opera House. 15 Urban renewal of Rio de Janeiro was the crown jewel of the Belle Epoque, illustrating the best and the worst of Brazil in the early 1900s. Rio de Janeiro 160

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became one of the world’s most spectacular cities, the Paris of South America. In the process thousands of the city’s poorest residents were brutally evicted and their homes destroyed. Francisco Pereira Passos, appointed Rio mayor 1903–1906, was given complete authority to use draconian measures. This Paris-trained son of a Brazilian coffee planter took inspiration from Baron Georges—Eugene Haussmann, who remodeled Paris during the reign of Napoleon III. He ruthlessly followed the Haussmann blueprint for urban development. The heart of Rio de Janeiro was a maze of narrow, winding streets crowded with workers, residents, street vendors, cortiços (tenements), and small commercial establishments. This “bastion of an essentially Brazilian milieu and its Afro-Brazilian culture” was gutted by Pereira Passos.16 Buildings that housed thousands of the city’s poorest inhabitants were destroyed along with small commercial and manufacturing enterprises. Streets were widened, straightened, and paved. Lighting and sewage were improved. The construction of the splendid boulevards and magnificent buildings that so impressed foreign visitors caused massive displacement of the urban poor, who moved to slums on the outskirts of the city. During the Belle Epoque a few amassed great wealth while economic and social patterns that had prevailed since colonial times maintained most of the population in misery and ignorance. While wealthy Cariocas (resident of Rio) polished their French, striving to master the subtle nuances of the Parisian accent, millions of their illiterate countrymen endured an impoverished existence without access to education, health care, or economic opportunity. In the countryside most lived in isolation and deprivation. The bloody destruction of Canudos was hailed as a victory of the high civilization of the coastal cities against the barbaric civilization of the backlands. Thousands of desperate northeasterners, driven by drought from the sertão, were transported to the Amazon basin to labor as seringueiros (rubber tappers), chained to their work by a vicious system of debt peonage. In the northeast, agricultural workers were little better off than serfs of the large landowners. Former slaves and native Brazilians in the São Paulo coffee areas were offered only marginal or dangerous employment considered unsuitable for European immigrants.

SOCIAL DARWINISM JUSTIFIES SOCIAL AND ECONOMIC INEQUITIES Social Darwinism was the dominant philosophy of elites during the Gilded Age and the Belle Epoque. Few among the powerful concerned themselves with the plight of the poor. Social Darwinism consecrated wealth as the reward that nature bestowed on society’s fittest and most virtuous members. Poverty was the natural condition of the unfit. Tampering with this arrangement was evil meddling with the Creator’s grand design. Her161

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bert Spencer’s doctrine assured success of the worthy and economic progress of the state when laissez-faire and unrestrained individual competition prevailed. The phrase “survival of the fittest” became the mantra of the wealthy.17 Spencer’s views blessed unrestrained competition and endorsed possession of great wealth.18 State intervention to help the poor impeded progress, according to Spencer. The problems of the destitute were “the decrees of a large, farseeing benevolence.”19 He insisted “that there shall not be a forcible burdening of the superior for the support of the inferior.”20 Social Darwinism provided philosophical justification for ignoring social responsibility. The leading American exponent of social Darwinism was William Graham Sumner, who had a wider student following than any other teacher in Yale’s history.21 He regarded millionaires as the naturally selected agents of society for work that benefited all.22 Sumner believed that any attack on hereditary wealth began with an attack on the family and ended by reducing men to swine. He asserted that the government should deal with two main things, “the property of men and the honor of women. These it has to defend against crime.”23 In Brazil, the powerful Joaquim Murtinho typified the many passionate admirers of Herbert Spencer. While treasury minister, he wrote: Improvidence, the love of laziness, and dissipation are vices that can only be cured by the evils and suffering which they bring on. To try to remove this suffering . . . is to perpetuate those vices and destroy the only natural and efficient agent of regeneration.24

Social Darwinism coincided nicely with prevailing racism. Because blacks, mulattoes, and mestizos were regarded as racially inferior, they were “fit” only to be exploited laborers performing menial tasks. Society’s leaders believed that the poor were deprived by nature of the intelligence and skills required for success in the modern state. In the United States religious bigotry and racism combined with Spencerism to provide sanction for the exploitation of thousands of new immigrants. As followers of a corrupt religion, new arrivals from Ireland and Eastern and Southern Europe were regarded as fit only for the bottom rung of the economic ladder. Catholics from Mediterranean Europe and Slavic countries were doubly damned because they were regarded as members of races inferior to the Aryan and the Anglo-Saxon.25 THE FUTURE LIES AHEAD When the first settlers arrived in Brazil in the 1500s and in mainland North America in the 1600s, even the most translucent crystal ball would have failed miserably to foresee the fantastic transformations of these scat162

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tered colonies that would occur by 1900. Material advances beyond wildest dreams took place. Early settlements were drawn into the orbit of the European economy in different ways that created distinct routes to development. The United States has emerged as the world’s most powerful economic power, and Brazil, although experiencing extraordinary changes, remains in the semiperiphery of the global economy. Many in the United States and Brazil still suffer unnecessary hardship in spite of, and sometimes because of, the tremendous material advances achieved. It is a mistake to concentrate attention on recent events to explain today’s reality. C. Vann Woodward observed that “America has a history. It is only that the tragic aspects and the ironic implications of that history have been obscured by the national legend of success and victory and by the perpetuation of infant illusions of innocence and virtue.”26 Brazil also has national legends and infant illusions that obscure its history. Legends and illusions are useless guides to progress. Future improvement demands that each state chart carefully its own economic development based on objective understanding of its past, seeking to improve the lives of all citizens while decreasing the harshest shocks of inevitable globalization. Reviewing the past, José Murilo de Carvalho, history professor at the Federal University of Rio de Janeiro, wrote, “After five hundred years of history . . . Brazil remains a country of the future, a country of many dreams come untrue.”27 Brazilians have waited too long to make Brazil a country of the present, a country of dreams come true. Looking to the future, General George Washington wrote to all state governors in June 1783 when he resigned the command of the army. He said that Americans, owners “of a vast tract of continent, comprehending all the various soils and climates of the world, and abounding with all the necessary conveniences of life . . . are now actors in a most conspicuous theater which seems to be peculiarly designed by Providence for the display of human greatness and felicity.”28 Americans have waited too long to make the United States a country of human greatness and felicity for all citizens.

NOTES 1. Quoted in Saul K. Padover, The Mind of Alexander Hamilton (New York: Harper and Brothers, 1958), 318–19. 2. Clive Ponting, The Twentieth Century: A World History (New York: Henry Holt, 1999), 105. 3. The name is taken from the term for the warm-up ring that is the last stop before racehorses enter the track. Touts hang out here, dealing in hot tips on “sure winners” for the next race. 4. Victor A. Valla, A penetração norte-americana na economia brasileira, 1898–1928 (Rio de Janeiro: Livro Técnico, S/A, 1978), 4; Richard Graham, Britain 163

Early Globalization and Economic Development and the Onset of Modernization in Brazil, 1850–1914 (Cambridge: Cambridge University Press, 1968), 104. 5. Annibal Villanova Villela and Wilson Suzigan, Política do governo e crescimento da economia brasileira, 1889–1945 (Rio de Janeiro: IPEA, 1975), 9. 6. Valla, A penetração norte-americana na economia brasileira, 1898–1928, 17–20; Jeffrey D. Needell, “Making the Carioca ‘Belle Epoque’ Concrete: The Urban Reforms of Rio de Janeiro under Pereira Passos,” Journal of Urban History 10, no. 4 (August 1984), 420, n. 45. 7. Luz, A luta pela industrialização do Brasil: 1808–1930 (São Paulo: Alfa Omega, 1978), 87–95. 8. Rayford W. Logan, The Betrayal of the Negro from Rutherford B. Hayes to Woodrow Wilson (New York: Collier Books, 1972), 104. 9. John A. Garraty, The New Commonwealth: 1877–1890 (New York: Harper and Row, 1968), 313; Sean Dennis Cashman, America in the Gilded Age (New York: New York University Press, 1984), 141–44. 10. Quoted in Samuel Eliot Morison, The Oxford History of the American People (New York: Oxford University Press, 1965), 764. 11. In the late 1880s the New York Central Railroad discontinued the popular Chicago Limited, which ran between New York and Chicago. When reporters asked William Henry Vanderbilt, “Don’t you run the train for the public benefit?” the richest man in the world replied, “The public be damned.” Quoted in Thomas E. Schaefer and Sid Streicher, “The Public Be Damned . . . Again,” The Freeman (Foundation for Economic Education) 34 (April 1984), 3. 12. John Foreman and Robbie Pierce Stimson, The Vanderbilts and the Gilded Age: Architectural Aspirations, 1897–1901 (New York: St. Martin’s Press, 1991), 88–90. 13. Arthur M. Schlesinger, Sr., “The City in the Gilded Age,” in John H. Cary and Julius Wienberg, eds., The Social Fabric: American Life from the Civil War to the Present, 5th ed. (Boston: Little, Brown, 1987), 67; Vincent P. DeSantis, The Shaping of Modern America: 1877–1920, 2nd ed. (Arlington Heights, IL: Forum Press, 1973), 98; Oscar Handlin, The Uprooted: The Epic Story of the Great Migrations That Made the American People (New York: Grosset and Dunlap, 1951), 149–50; Noel Jacob Kent, America in 1900 (Armonk, NY: M. E. Sharpe, 2000), 87; Verlyn Klinkenborg, “Where the Other Half Lives,” Mother Jones (August 2001), 55–57. 14. During the Empire the great novelist Machado de Assis observed with a critical eye the presence of the French influence in everything from tonsorial taste to gait. In the short story “Final Request,” an elegant Carioca “never let a day pass without having his hair dressed at the establishment of Demarais and Gerard, coiffeurs de la cour, on the Rua do Ouvidor.” Machado de Assis, The Psychiatrist and Other Stories (Berkeley: University of California Press, 1966), 146. In Dom Casmurro, José Dias observed, “This craze for imitating the French girls of the Rua de Ouvidor is palpably silly. Our young ladies should walk as they have always walked, in their gentle, leisurely way, and not with this frenchified ticki-ticki.” Machado de Assis, Dom Casmurro (Berkeley: University of California Press, 1966), 117. Machado de Assis would have rejoiced if he could have joined Tom Jobim and Venicius de Moraes observing the girl from Ipanema stroll to the sea. 15. Robert M. Levine, Brazilian Legacies (Armonk, NY: M. E. Sharpe, 1997), 26. 164

Colonial Era, Gilded Age, and the Belle Epoque 16. Jeffery D. Needell, A Tropical Belle Epoque: Elite Culture and Society in Turn-of-the-Century Rio de Janeiro (New York: Cambridge University Press, 1987), 50. 17. John D. Rockefeller told his Sunday school class, “The growth of large business is merely the survival of the fittest. . . . This is not an evil tendency in business. It is merely the working-out of a law of nature and a law of God.” Quoted in DeSantis, The Shaping of Modern America: 1877–1920, 9. 18. Thomas C. Cochran and William Miller, The Age of Enterprise: A Social History of Industrial America (New York: Harper and Row, 1961), 119. 19. Quoted in Robert M. Crunden, A Brief History of American Culture (New York: Paragon House, 1994), 132. 20. Quoted in Cochran and Miller, The Age of Enterprise, 125. 21. Richard Hofstadter, Social Darwinism in American Thought (New York: George Braziller, 1959), 53. 22. Quoted in Maldwyn A. Jones, The Limits of Liberty: American History, 1607–1992, 2nd ed. (New York: Oxford University Press, 1995), 307. 23. Quoted in Hofstadter, Social Darwinism, 58, 62. 24. Quoted in Graham, Britain and the Onset of Modernization in Brazil, 1850–1914, 245. 25. Patrician Madison Grant, chairman of the New York Zoological Society, trustee of the American Museum of Natural History, and councillor of the American Geographical Society, wrote that unlimited immigration caused the rapid decline in the birth rate of native Americans because the poorer classes of Colonial stock, where they still exist, will not bring their children into the world to compete in the labor market with the Slovak, the Italian, the Syrian, and the Jew.

Grant also condemned racial intermarriage, claiming that it produced “a population of race bastards” and a “mongrel race.” Concerning Brazil, he wrote, “Negro blood together with that of the native inhabitants is rapidly overwhelming the white Europeans.” Madison Grant, The Passing of the Great Race or the Racial Basis of European History (New York: Charles Scribner’s Sons, 1926), 17–18, 51, 77–78, 91, 211, 263. 26. C. Vann Woodward, The Burden of Southern History, 3rd ed. (Baton Rouge: Louisiana State University Press, 1993), 209. 27. Josê Murilo de Carvalho, “Dreams Come Untrue,” Daedalus (Spring 2000), 78. 28. George Washington, A Circular Letter from His Excellency George Washington, Commander in Chief of the Armies of the United States of America Addressed to All State Governors on His Resigning the Command of the Army (Philadelphia: Robert Smith, 1783), 7–9.

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Abreu, João Capistrano de. Capítulos da história colonial: 1500–1800. Rio de Janeiro: Livraria Briquiet, 1954. Agassiz, Louis and Elizabeth Agassiz. A Journey in Brazil. Boston: Tichnor and Fields, 1868. Albion, Robert G., William A. Baker, and Benjamin W. Labaree. New England and the Sea. Mystic, CT: Mystic Seaport Museum, 1972. Andrade, Manuel Correia de. Abolição e reforma agrária. São Paulo: Ática, S.A., 1987. Andrews, Charles M. The Colonial Background of the American Revolution. New Haven, CT: Yale University Press, 1931. Andrews, George Reid. Blacks and Whites in São Paulo, Brazil (1888–1988). Madison: University of Wisconsin Press, 1991. Arthur, Joseph. The Inequality of Human Races. New York: Howard Fertig, 1967. Ayers, Edward L. The Promise of the New South: Life after Reconstruction. New York: Oxford University Press, 1992. Bailey, Thomas A. A Diplomatic History of the American People. 6th ed. New York: Appleton-Century-Crofts, 1958. Barman, Roderick J. Brazil: The Forging of a Nation, 1798–1852. Stanford, CA: Stanford University Press, 1994. Bastide, Roger. The African Religions of Brazil: Toward a Sociology of the Interpretation of Civilizations. Baltimore: Johns Hopkins University Press, 1978. Becker, Bertha K. and Claudio A. G. Egler. Brazil: A New Regional Power in the World-Economy. Cambridge: Cambridge University Press, 1992. Beiguelman, Paula. A crise do escravismo e a grande imigração. São Paulo, Brasiliense, 1982.

Selected Bibliography Belchior, Elysio de Oliveira. Visconde de Cairu: sua vida e sua obra. Rio de Janeiro: SENAC, 1959. Bell, Herbert C. F. Lord Palmerston. 2 vols. London: Frank Cass, 1966. Benevola, Ademar. Introdução a história ferroviária do brasil. Recife: Edições Folha de Menha, 1953. Bethell, Leslie. The Abolition of the Brazilian Slave Trade. Cambridge: Cambridge University Press, 1970. ———, ed. Colonial Brazil. London: Cambridge University Press, 1987. Bogart, Ernest Ludlow. An Economic History of the United States. 4th ed. New York: Longmans, Green, 1937. Boxer, C. R. The Portuguese Seaborne Empire, 1415–1825. New York: Alfred A. Knopf, 1969. Braudel, Fernand. Civilization and Capitalism: 15th–18th Century. 3 vols. New York: Harper and Row, 1985. ——— . The Mediterranean and the Mediterranean World in the Age of Phillip II. 2 vols. New York: Harper and Row, 1972. Brito, José Gabriel de Lemos. Pontos de partida para a história econômica do brasil. 3rd ed. São Paulo: Companhia Editôra Nacional, 1980. Burns, E. Bradford. A History of Brazil. 3rd ed. New York: Columbia University Press, 1993. Caldeira, Jorge. Mauá: Empresário do império. São Paulo: Companhia das Lêtras, 1995. Carter, Hodding. The Angry Scar: The Story of Reconstruction. New York: Doubleday, 1959. Carvalho, José Murilo de. Teatro de sombras: A política imperial. São Paulo: Edições Vertice, 1988. ——— . A construção da ordem: A elite política imperial. Rio de Janeiro: Editôra Campus, 1980. Cash, W. J. The Mind of the South. New York: Vintage Books, 1991. Cashman, Sean Dennis. America in the Gilded Age. New York: New York University Press, 1984. Chandeigne, Michael. Lisboa ultramarina, 1415–1580. Rio de Janeiro: Jorge Zahar, 1990. Chiavenato, Julio José. O negro no brasil, da senzala a guerra do paraguai. São Paulo: Brasiliense, 1980. Coaracy, Vivaldo. Memórias da cidade do Rio de Janeiro. Rio de Janeiro: José Olympio Editôra, 1965. Cobb, James C. Redefining Southern Culture: Mind and Identity in the Modern South. Athens: University of Georgia Press, 1999. Cochran, Thomas C. Pennsylvania: A History. New York: W. W. Norton, 1978. Cochran, Thomas C. and William Miller. The Age of Enterprise: A Social History of Industrial America. New York: Harper and Row, 1961. Corrêa Filho, Virgilio. Joaquim Murtinho. Rio de Janeiro: Imprensa Nacional, 1951. Costa, Affonso. A marinha mercante no brasil. Rio de Janeiro: Liga Maritíma Brasileira, 1910. Costa, Emilia Viotta da. The Brazilian Empire: Myths and Histories. Chapel Hill: University of North Carolina Press, 2000. 168

Selected Bibliography Coughtry, Jay. The Notorious Triangle: Rhode Island and the African Slave Trade, 1700–1897. Philadelphia: Temple University Press, 1981. Cruls, Gastão. Aparência do Rio de Janeiro. 2 vols. Rio de Janeiro: José Olympio Editôra, 1965. Cunha, Euclides da. Rebellion in the Backlands. Trans. Samuel Putnam. Chicago: University of Chicago Press, 1964. Daniels, Roger. Coming to America: A History of Immigration and Ethnicity in American Life. New York: HarperCollins, 1990. Davis, David Brion. Slavery and Human Progress. New York: Oxford University Press, 1984. Davis, Lance Edwin. In Pursuit of Leviathan: Technology, Institutions, Productivity, and Profits in American Whaling, 1816–1906. Chicago: University of Chicago Press, 1997. Dean, Warren. With Broadax and Firebrand: The Destruction of the Brazilian Atlantic Forest. Berkeley: University of California Press, 1995. ——— . Rio Claro: A Brazilian Plantation System, 1820–1920. Stanford, CA: Stanford University Press, 1976 ——— . A industrialização de São Paulo, 1880–1945. São Paulo: Editôra da Universidade de S. Paulo, 1971. Degler, Carl N. Neither Black nor White: Slavery and Race Relations in Brazil and the United States. New York: Macmillan, 1971. Diegues, Antonio Carlos. Pescadores, camponeses e trabalhadores do mar. São Paulo: Ática, 1983. Diffenderffer, Frank Reid. The German Immigration into Pennsylvania and the Redemptioners. Baltimore: Genealogical Publishing Co., 1988. Dunn, Richard S. Sugar and Slaves. Chapel Hill: University of North Carolina Press, 1972. Elkins, Stanley and Eric McKitrick. The Age of Federalism. New York: Oxford University Press, 1993. Ellis, Myriam. A baleia no brasil colonial. São Paulo: Edições Melhoramentos, 1968. Estensen, Miriam. Discovery: The Quest for the Great South Land. New York: St. Martin’s Press, 1998. Fairbank, John King. China: A New History. Cambridge: Harvard University Press, 1992. Ferlini, Vera. A civilização do açúcar. São Paulo: Brasiliense, 1980. Feuerwerher, Albert. China’s Early Industrialization. Cambridge: Harvard University Press, 1958. Fogel, Robert William. Without Consent or Contract: The Rise and Fall of American Slavery. New York: W. W. Norton, 1989. ——— . Railroads and Economic Growth: Essays on Econometric History. Baltimore: Johns Hopkins University Press, 1964. Foner, Eric. Reconstruction: America’s Unfinished Revolution, 1863–1877. New York: Harper and Row, 1988. Forjaz, Djalma. O senador Vergueiro, sua vida e sua época (1778–1859). São Paulo: Diário Oficial, 1924. Foweraker, Joe. The Struggle for Land: A Political Economy of the Pioneer Frontier in Brazil from 1930 to the Present Day. New York: Cambridge University Press, 1981. 169

Selected Bibliography Fragoso, João and Manolo Florentino. O arcaísmo como projeto: Mercado atlântico, sociedade agrária e elite mercantil no Rio de Janeiro, c.1790–c.1840. Rio de Janeiro: Diadorim Editôra, 1993. Freyre, Gilberto. The Masters and the Slaves. Trans. Samuel Putnam. Berkeley: University of California Press, 1986. Furtado, Celso. The Economic Growth of Brazil: A Survey from Colonial to Modern Times. Berkeley: University of California Press, 1971. Garraty, John A. The New Commonwealth, 1877–1890. New York: Harper and Row, 1968. Gebara, Ademir. O mercado do trabalho livre no brasil (1871–1888). São Paulo: Brasiliense, 1986. Genovese, Eugene D. The Political Economy of Slavery: Studies in the Economy and Society of the Slave South. New York: Random House, 1965. Georgianna, Daniel. The Strike of ‘28. New Bedford: Spinner, 1993. Goldfield, Michael. The Color of Politics: Race and the Mainsprings of American Politics. New York: New Press, 1997. Goode, George Brown. The Fisheries and Fishery Industries of the United States. 2 vols. Washington, DC: Government Printing Office, 1887. Goulart, José Alipio. Tropas e tropeiros na formação do brasil. Rio de Janeiro: Conquista, 1961. Graham, Richard. Britain and the Onset of Modernization in Brazil, 1850–1914. Cambridge: Cambridge University Press, 1968. ——— , ed. Brazil and the World System. Austin: University of Texas Press, 1988. Greene, Jack P. and J. R. Pole, eds. Colonial British America: Essays in the New History of the Early Modern Era. Baltimore: Johns Hopkins University Press, 1984. Greenhalgh, Juvenal. O arsenal de marinha do Rio de Janeiro na história: 1822–1889. Rio de Janeiro: IBGE, 1965. Guedes, Max Justo. El condicionalismo fisico del atlantico y la expansion de los pueblos ibericos. Madrid: Instituto Fernandez de Oiredo, 1983. Guimarães, Alberto Passos. Quatro séculos de latifúndio. Rio de Janeiro: Editôra Paz e Terra, 1969. Gurfield, Mitchell. Estrutura das classes e poder político-brasil colonial. João Pessoa: UFPb, 1983. Hahn, Steven. “Class and State in Postemancipation Societies: Southern Planters in Comparative Perspective.” American Historical Review 95, no. 1 (1990). Hamilton, Henry. England: A History of the Homeland. New York: W. W. Norton, 1948. Hane, Mikiso. Modern Japan: A Historical Survey. 2nd ed. Boulder, CO: Westview Press, 1992. Harrison, Lawrence E. Who Prospers? How Cultural Values Shape Economic and Political Success. New York: Basic Books, 1992. Hawk, Emory Q. Economic History of the South. New York: Prentice-Hall, 1934. Hayden, Robert C. African Americans and Cape Verdean Americans in New Bedford. Boston: Select Publications, 1993. Hobsbawm, E. J. Industry and Empire: From 1750 to the Present Day. Middlesex, England: Penguin Books, 1986. Hofstadter, Richard. America at 1750. New York: Alfred A. Knopf, 1971. ——— . Social Darwinism in American Thought. New York: George Braziller, 1959. 170

Selected Bibliography Holland, Endesha Ida Mae. From the Mississippi Delta. New York: Simon and Schuster, 1997. Holloway, Thomas H. Immigrants on the Land: Coffee and Society in São Paulo, 1886–1934. Chapel Hill: University of North Carolina Press, 1980. Huntington, Elsworth. Civilization and Climate. 3rd ed. New Haven, CT: Yale University Press, 1948. Innis, Harold A. The Cod Fisheries: The History of an International Economy. New Haven, CT: Yale University Press, 1940. Israel, Jonathan I. The Dutch Republic: Its Rise, Greatness, and Fall: 1477–1806. Oxford: Clarendon Press, 1995. Jackson, R. The Principal Winds and Currents of the Globe. London: Simpkins, Marshall, Hamilton, and Kent, 1896. James, Lawrence. The Rise and Fall of the British Empire. New York: St. Martin’s Press, 1996. Kidder, D. P. and J. C. Fletcher. Brazil and the Brazilians: Portrayed in Historical and Descriptive Sketches. Philadelphia: Childs and Peterson, 1857. Landes, David S. The Wealth and Poverty of Nations: Why Some Are So Rich and Some Are So Poor. New York: W. W. Norton, 1998. Lemann, Nicholas. The Promised Land: The Great Black Migration and How It Changed America. New York: Alfred A. Knopf, 1991. Levine, Robert M. Vale of Tears: Revisiting the Canudos Massacre in Northeastern Brazil, 1893–1897. Berkeley: University of California Press, 1992. Ligthart, Henk and Henk Reitsma. “Portugal’s Semi-peripheral Middleman Role in Its Relations with England, 1640–1760.” Political Geography Quarterly 7 (October 1988). Lima, Heitor Ferreira. Formação industrial do brasil. Rio de Janeiro: Editôra Fundo de Cultura, 1961. Lindstrom, Diane. Economic Development in the Philadelphia Region, 1810–1850. New York: Columbia University Press, 1978. Lisboa, José da Silva. Princípios de economia politica. Rio de Janeiro: Pongetti, 1956. Luz, Nicia Vilela. A luta pela industrialização do Brasil: 1808–1930. São Paulo: Alfa Omega, 1978. Marques, A. H. de Oliveira. History of Portugal. 2 vols. New York: Columbia University Press, 1972. Martins, Joaquin Pedro Oliveira. Portugal nos mares. Lisboa: Instituto Geographico Portuguez, 1889. McCusker, John J. and Russell R. Menard. The Economy of British America, 1607–1789. Chapel Hill: University of North Carolina Press, 1985. Meier, August and Elliot Rudwick. From Plantation to Ghetto. 3rd ed. New York: Hill and Wang, 1976. Meinig, D. W. The Shaping of America. 3 vols. New Haven, CT: Yale University Press, 1986. Melville, Herman. Moby Dick. London: J. M. Dent, 1992. Mitchell, Broadus. Alexander Hamilton: The National Adventure, 1788–1804. 2 vols. New York: Macmillan, 1962. Moog, Clodomir Vianna. Bandeirantes and Pioneers. Trans. L. L. Barrett. New York: George Braziller, 1964. 171

Selected Bibliography Morgan, Kenneth O., ed. The Oxford History of Britain. Oxford: Oxford University Press, 1988. Morison, Samuel Eliot. The Oxford History of the American People. New York: Oxford University Press, 1965. ——— . The Maritime History of Massachusetts, 1783–1860. Boston: Houghton Mifflin, 1941. Morse, Richard M. From Community to Metropolis: A Biography of São Paulo, Brazil, 1941. Gainesville: University of Florida Press, 1958. Murtinho, Joaquim. “Relatório da Indústria, Viação e Obras Públicas: 1897.” Revista do Instituto Histórico e Geográfico Brasileiro 219 (April–June 1953). Myrdal, Gunnar. An American Dilemma: The Negro Problem and Modern Democracy. New York: Harper and Brothers, 1944. Nabuco, Joaquim. A escravidão. Recife: Editôra Massangana, 1988. Needell, Jeffery D. A Tropical Belle Epoque: Elite Culture and Society in Turn-ofthe-Century Rio de Janeiro. New York: Cambridge University Press, 1987. Novais, Fernando A. Portugal e brasil na crise do antigo sistema colonial, 1777–1808. São Paulo: Editôra Hucites, 1985. Owsley, Frank Lawrence. King Cotton Diplomacy: Foreign Relations of the Confederate States of America. 2nd ed. Chicago: University of Chicago Press, 1959. Padover, Saul K. The Mind of Alexander Hamilton. New York: Harper and Brothers, 1958. Parish, Peter J. Slavery: History and Historians. New York: Harper and Row, 1989. Paula, L. Nogueira de. Síntêse da evolução do pensamento econômico no brasil. Rio de Janeiro: Ministério do Trabalho, Indústria e Comércio, 1942. Perkins, Edwin J. The Economy of Colonial America. 2nd ed. New York: Columbia University Press, 1988. Pontes, Carlos. Tavares Bastos (Aureliano Cândido), 1839–1875. São Paulo: Companhia Editôra Nacional, 1975. Prado, Caio, Jr. História econômica do brasil. 42nd ed. São Paulo: Editora Brasiliense, 1995. ——— . Formação do brasil contemporanêo. 22nd ed. São Paulo: Editôra Brasiliense, 1992. Rapley, John. Understaning Development: Theory and Practice in the Third World. Boulder, CO: Lynne Rienner, 1996. Ribeiro, Darcy. O povo brasileiro. 2nd ed. São Paulo: Companhia das Lêtras, 1995. ——— . The Americas and Civilization. New York: Dutton, 1971. Rodrigues, Raymundo Nina. Os africanos no brasil. São Paulo: Companhia Editôra Nacional, 1935. Rose, J. Holland et al. The Cambridge History of the British Empire. 8 vols. New York: Macmillan, 1929. Ross, Robert, ed. Racism and Colonialism. The Hague: Martinus Nijhoff, 1982. Russell-Wood, A.J.R. A World on the Move: The Portuguese in Africa, Asia and America, 1415–1808. New York: St. Martin’s Press, 1992. Schwartz, Stuart B. Plantations in the Formation of Brazilian Society: Bahia 1550–1835. London: Cambridge University Press, 1985. Shepherd, James F. and Gary Walton. Shipping, Maritime Trade and the Economic Development of Colonial North America. Cambridge: Cambridge University Press, 1972. 172

Selected Bibliography Silva, Golbery da Costa e. Geopolítica do brasil. Rio de Janeiro: Livraria José Olympio Editôra, 1967. Simonsen, Roberto C. História econômica do brasil (1500/1820). São Paulo: Companhia Editôra Nacional, 1967. Skidmore, Thomas E. Brazil: Five Centuries of Change. New York: Oxford University Press, 1999. ——— . Black into White: Race and Nationality in Brazilian Thought. Durham, NC: Duke University Press, 1993. Smith, Alan K. Creating a World Economy. Boulder, CO: Westview Press, 1991. Smith, T. Lynn. Brazil: People and Institutions. Baton Rouge: Louisiana State University Press, 1963. Stampp, Kenneth M. America in 1857: A Nation on the Brink. New York: Oxford University Press, 1990. Stein, Stanley J. Vassouras: A Brazilian Coffee County, 1850–1900. Princeton, NJ: Princeton University Press, 1983. ——— .The Brazilian Cotton Manufacture: Textile Enterprise in an Underdeveloped Area, 1850–1950. Cambridge: Harvard University Press, 1957. Stephens, H. Morse. Portugal. London: T. Fisher Unwin, 1891. Tausig, F. W. The Tariff History of the United States. 8th ed. New York: Capricorn Books, 1964. Thomas, Hugh. The Slave Trade: The Story of the Atlantic Slave Trade, 1440–1870. New York: Simon and Schuster, 1997. Torres, Alberto. O problema nacional brasileiro. 3rd ed. São Paulo: Companhia Editôra Nacional, 1938. Trend, J. B. Portugal. New York: Praeger, 1957. Valla, Victor A. A penetração norte-americana na economia brasileira, 1898–1928. Rio de Janeiro: Livro Técnico, S/A, 1978. Veloso, Caetano. Verdade tropical. São Paulo: Companhia das Lêtras, 1997. Verger, Pierre. Bahia and the West Coast Trade, 1549–1851. Ibadan: Ibadan University Press, 1964. Vianna, F. J. Oliveira. O povo brasileiro e a sua evolução: Recensamento do Brasil, 1920. Rio de Janeiro: Ministério da Agricultura, Indútria e Comércio, 1922. Vianna, Helio. História administrativa e econômica do brasil. São Paulo: Editôra Nacional, 1955. Villela, Annibal Villanova and Wilson Suzigan. Política do governo e crescimento da economia brasileira, 1889–1945. Rio de Janeiro: IPEA, 1975. Wiegley, Russell F., ed. Philadelphia: A 300-Year History. New York: W. W. Norton, 1982. Williams, Eric. From Columbus to Castro: The History of the Caribbean, 1492–1969. New York: Vintage Books, 1984. Wolpert, Stanley. A New History of India. 4th ed. Oxford: Oxford University Press, 1993. Wood, Peter H. Black Majority: Negroes in Colonial South Carolina. New York: Alfred A. Knopf, 1977. Woodward, C. Vann. The Burden of Southern History. 3rd ed. Baton Rouge: Louisiana State University Press, 1993. Wright, Gavin. Old South, New South: Revolutions in the Southern Economy since the Civil War. New York: Basic Books, 1986. Young, T. M. The American Cotton Industry. London: Methuen, 1902. 173

Index

Aberdeen Act, 114 Abolition of slavery, 88, 129, 131, 133 Abreu, Capistrano de, 146 Adams, Charles Francis, 119 Adams, John, 79, 80 Agassiz, Louis, 137 Alves, Francisco de Paula Rodrigues, 158 Amado, Jorge, 50, 69 Ambrose, Stephen, 54 Anderson, Joseph, 49 Andrews, Elisha Benjamin, 137 Anglo-Brazilian treaties, 96–97 Anglo-Portuguese treaties, 3–4, 81, 96–97 Antietam, Battle of, 119 Arkwright, Richard, 104 Atlantic Ocean circulation systems, 18–22 Bandeirantes (flag followers), 24, 29, 145–46 Bastos, Aureliano Candido Tavares, 81, 98, 118, 138 Bell, Herbert C.F., 123 Belle Epoque (Glorious Era), 160–61

Boas, Franz, 138 Bogart, Ernest Ludlow, 95 Boxer, C.R., 3, 4 Bragança, João Orleans e, 87 Branco, Manuel Alves, 98 Braudel, Fernand, 2, 59 Brito, José Gabriel de Lemos, 95 Brown, Moses, 104 Cabral, Pedro Álvares, 2 Cairu, Viscount, 106–7, 146, 156 Caldeira, Jorge, 48 Calhoun, John C., 132 Canning, George, 114 Canudos, 136, 161 Carnegie, Andrew, 140, 157 Carvalho, José Murilo de, 117, 163 Cary, Elizabeth Cabot, 137 Cash, Wilbur, 25, 132 Cavalcanti, José Lins do Rego, 50 Civil War, 28, 32, 42, 82, 118–20, 131–32 Codfish, 20, 61–63, 83–84 Coffee, 35, 43, 87, 98, 133, 145–49 Columbus, Christopher, 20

Index Confederate States of America, 117, 118–20 Conrad, Joseph, 22 Conselheiro, Antônio (“Anthony the Counselor”), 136 Contempt for manual labor, 49–50 Corn Laws, 9, 12, 82, 91 Costa, Affonso, 81 Costa, Emilia Viotti da, 29 Costa, Lucio, 85, 88 Cotton, 8, 29–28, 43, 114, 124 Dagyr, John Adams, 85, 104 Dana, Richard Henry, Jr., 64 Davis, David Brion, 25 Davis, Jefferson, 140 Debret, Jean Baptiste, 52 Deffontaines, Pierre, 142 Degler, Carl, 49 Dias, Bartholomeu, 2 Doldrums, 20, 21 Dumbell tenements, 160 Eiichi, Shibusawa, 125 Embargo Act, 85, 101, 107 Enclosure Acts, 5 Fairbank, John King, 122 Family farm agriculture, 30, 88–91 Faulkner, William, 45 Feuerwerher, Albert, 125 Fishing, 22, 60–65 Fletcher, J.C., 116 Florentino, Manolo, 47 Flynn, Peter, 133 Foner, Eric, 134 Fragoso, João, 47 Free trade, 3, 11–12, 107–8 Frick, Henry Clay, 157 Furtado, Celso, 105 Gama, Vasco da, 2, 20 Georges Bank, 63 Georgia, 27–28 Gilded Age, 33, 140, 159–60 Gloucestermen, 63–64 Goff, Jacques Le, 49 Gold, 4, 86 176

Golden Age: of American merchant marine, 82; of Maranhão, 27; of Paraty, 86–87; of Portugal, 2; of Salem, 84; of whaling, 66 Grand Bank, 61 Greenhalgh, Juvenal, 70 Guedes, Max Justo, 21 Hamilton, Alexander, 105–6, 146, 156 Harrison, Lawrence, 49 Hofstadter, Richard, 28 Homestead Act, 32, 135 Horse latitudes, 20 Hudson, James, 114, 117 Hundley, Daniel R., 35 Immigration, 23–24, 27, 51–53, 67, 90, 148–49 Impressment of seamen, 100 Industrialization, 5, 47, 66–67, 85, 100; Brazil, 10, 47, 48, 114, 149; the South, 48–49, 102, 142–45; United States, 9, 47, 101–2, 142, 157 Invisibles, 75–76 Jangadeiros (raft fishermen), 63–64 Jardine, William, 22 Jefferson, Thomas, 31, 44, 105 Kidder, D.P., 116 Kipling, Rudyard, 64 Knox, Robert, 116 Land Law of 1850, 34, 135 Land Ordinances, United States, 31 Lei Áurea (Golden Law), 133 Levine, Robert, 136 Linkages, economic, 44, 62, 66, 71, 89–90 Lisboa, José da Silva. See Cairu, Viscount Livestock fairs, 145–46 Logan, Raymond W., 159 Lynching, 136, 137 Mahan, Alfred Thayer, 4 Maranhão, 26–27, 43 Marble House, 159–60

Index Marciel, Antônio Vicente Mendes. See Conselheiro, Antônio Martins, Joaquim Pedro Oliveira, 3 Mauá, Baron, 48, 70, 141 McKinley, William, 157 Meiji Restoration, 124 Melo, Custodio de, 70 Melville, Herman, 65 Mercantilism, 7–11, 60, 79–80, 91, 96, 106; Corn Laws, 9, 12, 82, 91; Navigation Acts, 8, 11, 12, 70 Merchants, 41, 76, 78 Miranda, Carmen, 87 Moog, Clodomir Vianna, 29 Morgan, J. Pierpont, 157 Mule trains, 86–87, 142, 145 Murtinho, Joaquim, 99, 138, 162 Myrdal, Gunnar, 51, 134 Nabuco, Joaquim, 54, 117 Navigation Acts, 8, 11, 12, 70 Nettels, Curtis, 9 New Bedford, Massachusetts, 66–67 O’Brian, Patrick, 101 Oglethorpe, James, 28 Opium, 122 Opium Wars, 122–23 Ouseley, William, 114 Palmerston, Lord, 12, 115, 117, 119, 122–23 Paraty, Rio de Janeiro, 82, 85–88 Parceria (partnership), 147 Passos, Francisco Pereira, 161 Peixoto, Floriano, 158 Peripheral colonies, 23, 26, 29; economies of, 59–71, 75–91 Perry, Matthew, 124 Pioneers, 29, 30 Plantation colonies, 23, 25, 29; characteristics of, 41–54 Ponta de Areia, 48 Porter, David, 84 Posseiros (squatters), 29, 30, 35. See also Squatters Prado, Caio, Jr., 4 Preemption, 32

Queiroz, Euzébio de, 117 Racism, 12, 49–50, 115–16, 134–35, 148, 159, 162 Railroads, 33, 88, 139–42 Ribeiro, Darcy, 25, 80 Rice, 43 Robertson, James I., Jr., 47 Rockefeller, John D., 157 Rodrigues, Raymundo Nina, 138 Rosa, João Guimarães, 33 Royal Navy, 100–101, 114–15, 117, 123 Rubber, 158, 161 Ruffin, Edmund, 53 Rum, 78–79 Russell, Lord, 119 Salem, Massachusetts, 82–85 Sales, Manuel Ferraz Campos, 99, 157–58 Schlesinger, Arthur, Jr., 106 Sesmarias (landgrants), 33 Sharecropping, 35, 134 Ship construction, 68–71 Silva, Golbery do Couto e, 80 Simonsen, Roberto, 27 Slater, Samuel, 104–5 Slavery, 23, 27, 42, 50, 52, 67, 87, 146 Slave trade, 2, 24, 77–79, 113–15, 133 Smith, Adam, 7, 105, 107 Smith, John, 62 Smith, T. Lynn, 50, 51 Social Darwinism, 115, 130, 135, 161–62 Sousa, Irineu Evangelista de. See Mauá, Baron Southey, Robert, 27, 116 Spencer, Herbert, 161–62 Squatters, 29, 30, 32, 35, 89 Stephens, H. Morse, 3, 4 Sugar, 8, 10, 41–42, 77, 87, 114 Sumner, William Graham, 162 Tariff, 97–98, 102–3, 108, 157; Alves Branco, 70, 98, 114; Dingley, 157; McKinley, 157; Morrill, 103, 119 Taussig, Frank, 100, 101 Taylor, John, 31 177

Index Temple, Henry John. See Palmerston, Lord Textile industry: Brazil, 10, 99, 120, 149; China, 123–24; Great Britain, 5–6; India, 5, 121–22; Japan, 124–25; Portugal, 10; the South, 144–45; United States, 67, 85, 102, 104–5 Thomas, Hugh, 117 Tobacco, 8–9, 41–42, 77–78 Torres, Alberto, 50, 138 Township and range system, 31 Treaty of Madrid, 146 Treaty of Tordesillas, 2, 146 Tredogar ironworks, 48 Trend, J.B., 3, 4 Triangular Trade, 77–78

178

Urbanization, 45–46 Vanderbilt, William Henry, 159–60 Verger, Pierre, 115 Vergueiro, Nicolau Pereira de Campos, 147 Vianna, F.J. Oliveira, 25, 46 War of 1812, 85, 101, 107 Washington, George, 44, 105, 163 West Indian Trade, 9, 79–80, 84 Whaling, 65–68 Wharton, Robert, 101 Wheat, 80, 88–89, 91 Wilberforce, William, 114 Wilcox, Benjamin, 122 Woodward, C. Vann, 46, 132, 143, 163

About the Author JOHN DEWITT is Adjunct Professor of Geography at the University of Florida.