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Vargas and Brazilian Economic Development, 1930–1945: A Reappraisal of his Attitude Toward Industrialization and Planning

Published online by Cambridge University Press:  11 May 2010

Stanley E. Hilton
Affiliation:
Louisiana State University

Extract

A struggle for industrialization is one of the major themes of the recent history of not only Brazil, but virtually the whole of Latin America. The historical evolution of that struggle finds a common denominator in the structural similarities of the national economies of the region. Assessment of Brazil's experience in the post-1929 period should therefore yield insights into the problems that Latin America as a whole faced during the international upheaval spawned by the financial collapse of 1929. Such an appraisal may also provide empirical assistance for the elaboration of future comparative studies. The specific analytical focus of this article is the attitude of Getúlio Vargas' government toward industrialization and planning, a theme whose re-evaluation serves, furthermore, to do justice to the enigmatic and reluctant revolutionary who governed Brazil during critical years and depression and war.

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Articles
Copyright
Copyright © The Economic History Association 1975

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References

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3 Leff's, NathanielEconomic Policy Making and Development in Brazil 1947–1965 (New York, 1968)Google Scholar borrowed heavily from Dean's 1964 doctoral dissertation on the subject, labeling it a “basic source” for study of the period and adopting (p. 12) Dean's argument. Others who adhere to a similar view are Baer, Werner, Industrialization and Economic Development in Brazil (Homewood, Ill., 1965), pp. 2033Google Scholar; Daland, Robert, Brazilian Planning: Development Politics and Administration (Chapel Hill, 1967), pp. 22, 27Google Scholar; and Jaguaribe, Hélio, Economic & Politícal Development: A Theoretical Approach & A Brazilian Case Study (Cambridge, Mass., 1968), pp. 142144CrossRefGoogle Scholar. Furtado, Celso, The Economic Growth of Brazil (Berkeley, 1963), pp. 203 ff.Google Scholar, does not adopt the anti-industrialization thesis, but he gives the government no credit for conscious developmental measures during the early and mid-1930's. Ianni, Octavio, Estado e planejamento econômico no Brasil, 1930–1970 (Rio de Janeiro, 1971), pp. 1374, is more generous toward VargasGoogle Scholar.

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14 Dean, Industrialization of São Paulo, pp. 185, 196.

15 Roberto Simonsen, As crises no Brasil (São Paulo, 1930), p. 4; Dean, Industrialization of São Paulo, p. 181. São Paulo textile production in 1930 was 30 percent less than in 1928. Suzigan, , “A industrialização de São Paulo, 1930–1945,” Revista brasileira de economia, XXV (April-June 1971), 96Google Scholar.

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19 Peláez, História da industrialização brasileira, pp. 205–207.

20 Lily-Tulip Corporation to State Dept., April 25, 1934, file 632.113/35, Records of the Department of State (henceforth SD), RG 69, National Archives; DOT, Economic Conditions in Brazil … 1932, pp. 38–39.

21 Quoted in Lenhoff Brito, memo, May 18, 1936, file 395, cont. 24, CFCE.

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23 Villela and Suzigan, Política do governo, p. 324. American exporters having difficulty in placing products in the Brazilian market discovered that “essential imports” meant items needed by Brazilian industry, which received “highly preferential” exchange treatment. British observers reported that manufacturers who exported their product also received a higher rate of exchange when converting foreign currencies. State Dept. to International Register Co., January 10, 1934, file 832.5151/239, SD; DOT, Economic Conditions in Brazil … 1936 (London, 1937), p. 2Google Scholar.

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29 Centro de Indústrias de São Paulo to Collor, May 16, 1931, Lindolfo Collor Papers (private), Rio.

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32 The literature is voluminous. See, for example, Machlup, Fritz, Education and Economic Growth (Lincoln, 1970)Google Scholar, passim; Peaslee, Alexander L., “Education's Role in Development,” Economic Development and Cultural Change, XVII (April 1969), 298Google Scholar; Anderson, C. Arnold and Bowman, Mary J., eds., Education and Economic Development (Chicago, 1965)Google Scholar, passim; and, for specific discussion of Latin America, Belle, Thomas La, ed., Education and Development: Latin America and the Caribbean (Los Angeles, 1972)Google Scholar.

33 Vargas, Nova Político, I, 40; O Jornal (Rio), September 1, 1931.

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36 Pimpão, Hirosê, Getúlio Vargas e o direito trabalhista (Rio de Janeiro, 1942), pp. 6585Google Scholar.

37 Vargas, Nova Política, I, 28; III, 132.

38 Leite, Costa and Madeira, Lyra, “Salário minimo,” Boletim do Ministério de Trabalho, Indústria e Comérdo, I (September 1934), 242Google Scholar; Vargas, Nova Política, V, 304. Dean's argument is that Vargas' labor policy was designed merely “to stave off a Politícal crisis, not to enlarge the market for manufactured goods or improve the quality of labor inputs.” Dean, Industrialization of Sao Paulo, pp. 205–206.

39 Dean, Industrialization of São Paulo, p. 184. The general dimensions of the flight to more urbanized regions are sketched in Camargo, José Francisco, Exodo rural no Brasil (Rio, 1960), pp. 104105, 123Google Scholar; Villela and Suzigan, Política do govemo, pp. 282–284.

40 Hauser, Philip M., “Cultural and Personal Obstacles to Economic Development in the Less Developed Areas,” Human Organization, XVIII (Summer 1959), 80Google Scholar; Sjoberg, Gideon, “Rural-Urban Balance and Models of Economic Development,” Social Structure and Mobility in Economic Development, Smelser, Neil J. and Lipset, Seymour M., eds. (Chicago, 1966), p. 252Google Scholar. For a case study of the phenomenon in Andean America, see Vandendries, René, “Internal Migration and Economic Development in Peru,” Latin American Modernization Problems, Scott, Robert E., ed. (Urbana, Illinois, 1973), pp. 193208Google Scholar. For contemporary concern with the problem in Brazil, Eugenio Gudin, “O problema nacional da urbanizeção e as deseconomias de escala,” O Globo (Rio), April 22, 1974; R. C. César, “As migraçoes intemas,” Estado de São Paulo, October 18, 1970.

41 Min. of Labor Pedro Salgado Filho to Mauricio Joppert, September 5, 1934, Pedro Salgado Filho Papers, Arquivo Nacional. For the impact of the rural exodus on agriculture, see Federal Interventor (Ceará) to Vargas, April 26, 1932, folder: Interventor no Ceará, cont. 2-A, Coleção Presidencia da Republics [henceforth PR], Arquivo Nacional.

42 Higgins, Benjamin, “Social aspects of economic development programming,” Social Aspects of Economic Development in Latin America, Echavarria, José Medina and Higgins, Benjamin, eds. (2 vols., Paris, 1963), II, 227228Google Scholar.

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45 Luis Simões Lopes to Vargas, July 28, 1938, file 17.174, cont. 44, PR.

46 Graham, Lawrence S., Civil Service Reform in Brazil (Austin, 1968), p. 26Google Scholar. Lampert, Francis, “Trends in Administrative Reform in Brazil,” Journal of Latin American Studies, I (November 1969), 173Google Scholar, found that the reforms of 1936–1937 were “one of the major revolutions in thinking about the civil service in Brazil.”

47 Vargas, speech of May 30, 1938, Nova Política, V, 227.

48 da Fazenda, Ministério, Comissão de Estudos Financeiros e Econômicos, Finanças dos Estados do Brasil, Vol. I (3rd ed., Rio de Janeiro, 1935), p. 2Google Scholar; director, Departamento National de Estatistíca to Aranha, February 10, 1932, Aranha Papers; Bouças to Aranha, February 23, 1933, Aranha Papers; director, Depto. Nacional de Est. to Aranha, June 8, 1934, Aranha Papers; U.S. comm. attaché (Rio) to Dept. of Commerce, September 18, 1934, cont. 1497, RG 151.

49 Silva, Benedicto, “A cooperação inter-administrativa na estatística brasileira,” Boletim do Ministério de Trabalho …, III (February 1937), pp. 312, 316–317Google Scholar; Minister of Labor Salgado Filho to Federal Interventor (Rio Grande do Sul), December 14, 1932, Salgado Filho Papers.

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51 “In order to determine the path to follow,” Vargas said, “we need a careful examination of the general environment of our [economic] activity, based on a weighing of national possibilities and calculation of the obstacles to overcome.” Nova Política, I, 38.

52 Vargas to Alcides Etchegoyen, February 3, 1932, Getúlio Vargas Papers (private), Rio.

53 On the Niemeyer Mission, see Abreu, Marcelo de Paiva, “A missão Niemeyer,” Revista de administração de empresas, XIV (July-August 1974), 728CrossRefGoogle Scholar.

54 Vargas, Nova Política, III, 85; Villela and Suzigan, Política do govemo, p. 406.

55 Ministério das Relaçōes Exteriores [henceforth MRE], memo, December 14, 1933, folder 32.796, AHI.

56 See, for example, report by Brazilian chargé (Asunción), October 10, 1934, José Carlos de Macedo Soares Papers, Instituto Histórico e Geográfico Brasileiro, Rio; Brazilian minister (La Paz) to secretary general (MRE), January 17, 1935, Questão do Chaco, Vol. II, AHI; Army General Staff, memo, March 12, 1935, AHI; Aranha to Foreign Minister José C. de Macedo Soares, May 14, 1935, Aranha Papers; memo by Macedo Soares, October 1, 1935, file 6884, cont. 21, PR; MRE memo, October 10, 1935, Macedo Soares Papers.

57 Memo by Bougas, January 15, 1935, file 57, cont. 8, CFCE; Torres Filho to Macedo Soares, October 12, 1935, Macedo Soares Papers.

58 MRE to Brazilian embassy (Buenos Aires), June 11, 1931, Vol. 400/3/6, AHI; Vargas to Aranha, July 27, 1935, Aranha Papers.

59 Executive director, CFCE, circular, November 16, 1936, file 426-vol. 2, cont. 26, CFCE.

60 The documents relating to the survey are in Ibid.

61 Vargas, Nova Política, V, 219.

62 CFCE minutes, November 6, 1939, cont. 150, CFCE; director, CFCE to Vargas, November 16, 1940, folder 25.708, AH1; Costa, Souza, Finanças e política: Discurso comemorativo do 11° aniversário da vitória da revolucao (Rio de Janeiro, 1941), pp. 3940Google Scholar; Bouças, , “Independência econômica,” in Brazil, Departamento de Imprensa e Propaganda, Os grandes problemas nacionais (Rio de Janeiro, 1943), p. 172Google Scholar; Coordinator of Economic Mobilization to Vargas, October 30, 1942, folder 37.094, AHI; Eurico Dutra to Vargas, December 2, 1943, Vol.: Presidência da Repúblics, AHI; memo by Colonel A. Gomes (CFCE), August 16, 1943, file 1.319, cont. 124, CFCE; Aranha to Dutra, August 11, 1943, Aranha Papers.

63 See, for example, Federação das Indústrias de São Paulo to Vargas, April 26, 1940, file 9.374, cont. 74, PR; Simonsen et al. to Vargas, May 12, 1941, file 15.121, cont. 94, PR.

64 Villela and Suzigan, Política do govemo, p. 230.

65 Vargas to Brazilian amb. (Wasnington), December 1, 1939, Vargas Papers; Dept. of State to Federal Loan Administrator, August 7, 1940, Dept. of State, Foreign Relations of the United States, 1940 (5 vols., Washington, 1959–1961), V, 609; U.S. embassy (Rio), press release, March 18, 1943, Foreign Relations1943 (6 vols., Washington, 1963–1965), V, 659.

66 Banco do Brasil to Aranha, August 27, 1942, folder 31.816, AHI; CFCE minutes, October 23, 1944, cont. 157, CFCE. For loan statistics, see Villela and Suzigan, Politíca do govemo, pp. 352–353.

67 MRE to Brazilian embassy (Washington), September 24, 1941, folder 32.389, AHI; Banco do Brasil to Aranha, August 27, 1942, folder 31.816, AHI.

68 Villela and Suzigan, Politíca do govemo, pp. 222–223.

69 CFCE minutes, October 2, 1939, May 13, 1940, June 17, 1940, July 8, 1940, November 4, 1940, containers 150, 152–153, CFCE; director, CFCE to Vargas, November 16, 1940, file 1.123, cont. 91, PR.

70 Vargas, speech of July 23, 1938, Nova Político, V, 306.

71 Smith, Peter S., “Bolivian Oil and Brazilian Economic Nationalism,” Journal of Inter-American Studies and World Affairs, XIII (April 1971), 167168Google Scholar; Albert Whately (Comissão Mixta Ferroviária Brasileiro-Boliviana) to Aranha, August 16, 1939, Comissão Mixta Ferro. Bras.-Boliv., Oficios, AHI.

72 Aranha to General Newton Cavalcanti, April 5, 1940, Vol. 425/4/10; AHI; CFCE memo, August 19, 1944, file 1.320, cont. 125, CFCE.

73 CFCE to Aranha, July 16, 1940, folder 36.719, AHI.

74 MRE to Brazilian embassy (Asunción), June 18, 1941, folder 13.041, AHI; MRE, Relatório. … 1941 (Rio, 1944), p. 10Google Scholar; El Paraguayo (Asunción), November 24, 1944; Dept. of State memo, June 30, 1943, Office of American Republics Affairs, Brazil, Vol. 7, box 27, RG 59, National Archives; British ambassador (Rio) to Foreign Office, July 22, 1943, doc. A6861/6170/6, Records of the Foreign Office.

75 MRE to Comissão de Defesa da Economia National, October 26, 1939, folder 34.060, AHI.

76 Brazilian ambassador (Buenos Aires) to Aranha, September 22, 1940, Aranha Papers; Aranha to Vargas, September 27, 1940, file 23.339, cont. 81, PR; MRE memo, April 2, 1941, folder 13.875, AHI.

77 MRE memo, December 3, 1941, folder 35.602, AHI.

78 Euvaldo Lodi, Torres Filho et al. to Souza Costa, November 29, 1940, Ibid.; Centro Industrial de Fiação e Tecelagem (Rio) to MRE, January 22, 1941, folder 13.875, AHI; MRE, Relatório … 1941, p. 33.

79 CFCE memo, n.d. [1946], file 1.406, cont. 135, CFCE.

80 Brazilian Trade Bureau (Buenos Aires) to Ministry of Labor, February 1, 1944, folder 38.018, AHI.

81 See, for example, Eduardo Joffet, “Conservação dos mercados externos,” and Filho, A. Rangel, “Estudo sobre exportação,” Primeiro congresso brasileiro de economia, Anais (3 vols., Rio de Janeiro, 19441946), III, 455464, 663–672Google Scholar.

82 Francisco Matarazzo Junior to Vargas, n.d. [December 1943], file 1.297, cont. 120,, CFCE.

83 CFCE minutes, February 14, 1944, Ibid.

84 Memo by José Jobim, March 6, 1944, Ibid.; Alexandra Marcondes Filho to Vargas, February 6, 1944, file 39.972, cont. 173, PR; statements by Lodi and Torres Filho, CFCE minutes, March 1, 1944, file 1.297, cont. 120, CFCE; CFCE, Camara de Producao, memo, n.d., file 1.297, cont. 120, CFCE.

85 Simonsen to Vargas, October 25, 1943, file 35.902, cont. 170, PR; Primeiro congresso brasileiro de economia, Anais, I, 64.

86 Lodi to Simonsen, January 1945 (English translation), SD 832.00/3–1645.

87 U.S. consul (São Paulo) to State Dept., March 16, 1945, Ibid.; U.S. embassy (Rio) to State Dept., March 17, 1945, SD 832.00/3–1745.

88 Cf. Dean, Industrialization of Sao Paulo, p. 233.