Modernization and Industrialization: To what extent (and how) did Brazil develop a modern industrial economy?
One important theme in Brazilian history is its attempt to develop a modern industrial economy to compete with the United States and Europe. In the 19th century, Brazil developed its own small-scale industry for domestic consumption; items such as soap, textiles, and construction materials. There was little government support for industrialization until the 1930s.
Brazil remained reliant on agricultural exports, especially coffee and rubber, well into the 20th century. However, with the 1929 Great Depression, the price of coffee began to fall, losing about 50% of its value. In the southern states, such as Minas Gerais, Rio de Janeiro, and Sao Paulo, industrialization began to emerge during this time. The new opportunities in factories brought an influx of rural workers into the cities, leading to the establishment of shantytowns, or favelas, on the edges and hills of the cities. These neighborhoods often lacked, and continue to lack, basic services such as water, plumbing, and public transportation. The rural poor saw the cities as areas of economic opportunity, while those already living in the city saw the newcomers as dangerous classes and possible criminals.
Most of the 20th century Brazilian politicians, whether democratic or authoritarian, sought to legitimize their rule by promoting economic growth through industrialization. Brazil, like some other third-world countries, developed a third economic path in the Cold War: government-sponsored capitalism. Brazilian leaders such as Jucelino Kubitschek sided with heavy government investment in industry while also promoting incentives for private investment. By 1961, for example, this strategy had led to a successful motor vehicle industry. One symbol of a new, modern, industrial Brazil was the creation of a new capital city, far from the coast: Brasilia. The government hired famous Brazilian architects who designed a futurist, organized urban capital in a rural plateau that was meant to look, from the air, like an airplane.
The World Wars
World War I and World War II had less of an effect on Latin America and Brazil than on most of the rest of the globe, most likely because the region was further removed from the fighting than anywhere else. Like the United States, Brazil began by attempting neutrality in both wars but eventually found itself involved, albeit in a limited manner.
For the Brazilian elite, who looked toward Europe as a model of sophisticated modern society, the carnage of the Great War came as a shock. Brazil stayed neutral for three years, but a series of German U-boat attacks in the Atlantic Ocean eventually led Brazil to issue a 1917 Declaration of War, thereby joining the Great War on the side of Great Britain, France, and the United States. The Brazilian effort was small as they sent a medical unit to France and some officers to join the French army although it was the only Latin American country to participate actual troops. The country, however, did earn three delegates to join in the Paris Peace Conferences that ended the war. For Brazil, the greatest impact of the war was that it found itself cut off from its major trading partners. Historians have argued whether this led to, or stymied, the country’s path toward industrialization.
Brazil’s involvement in World War II was similar. It began with a period of sustained neutrality as Brazil’s leader, Getulio Vargas, weighed the options. It was clear that Brazil was looking for an alliance with the allies or the axis powers based on a strategy of beneficence more than ideology. After all, Brazil itself was a dictatorship with a strong military culture, which made siding with the Nazis possible. Which alliance would help Brazil?
As the tides of war began to turn toward the allies in 1941-42, Brazil looked to enter the war and gain compensation. Their bargaining chip: abundant natural resources important to war such as rubber and quartz as well as a coastline with strategic points for air and naval bases. Brazil allowed the United States to set-up air and naval bases in the northeastern city of Recife, which lay significantly further east than anywhere on North America. Consequently, the U.S. could launch air attacks from Recife into North Africa and use less fuel to traverse the ocean. In return, the Brazilian military gained training from the American forces, military equipment, and financing for a steel mill. Brazil, again the only Latin American country to join the war, sent three army divisions to fight in the Mediterranean theater with the allies. Brazil suffered about 1000 casualties during the conflict and hoped the contribution would lead to greater international status.