00:00:11
"The Oil Crisis"
00:00:13
"Tomorrow Is Another Day!"
00:00:16
"Recession"
00:00:18
BRAZILIAN ECONOMY
"A history told by those who built it"
00:00:20
THE BRAZIL BELONGING TO PORTUGAL
1492-1808
00:00:24
Perils, mysteries, tales...
00:00:27
By the end of the 15th century,
that was all for the Europeans, overseas.
00:00:31
Traveling across oceans
was expensive and risky.
00:00:35
Eastern spices were
the major source of wealth,
00:00:39
equivalent to petroleum nowadays.
00:00:42
Cloves, cinnamon,
ginger, pepper...
00:00:45
Those spices improved
food quality and taste so much...
00:00:50
that they were
highly valued in Europe.
00:00:54
There was also the idea
about wealth being linked
00:00:58
to territorial expansion.
00:01:01
Therefore,
the superpowers of that time
00:01:03
would be the nations
which gathered financial,
00:01:08
human and material resources
for achievement activities.
00:01:13
The Mediterranean
was the trade center.
00:01:15
Dominated by the Genoese
and the Venetian traders.
00:01:19
Portugal, Spain and England
could not compete with them.
00:01:23
It would be necessary to find a route
across the Atlantic to reach the Indies.
00:01:28
Portugal was one of the first
European nations
00:01:33
to create a national state.
00:01:36
With tax collection, they could invest
in the breakthrough of that time.
00:01:40
The caravel.
00:01:42
Lightweight, fast and agile, it could
change course and subdue the tides.
00:01:47
With it, the Portuguese explored
the African West Coast.
00:01:52
Spain, also centralized, tried to reach
the Indies through the Atlantic.
00:01:56
The country sent the Genoese
Christopher Columbus to the adventure.
00:01:59
He found land, which was not the Indies
and had no spice.
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Without realizing that
that was a continent,
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with the Treaty of Tordesillas,
Portuguese and Spanish shared waters
00:02:11
and divided land.
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The basis of this treaty
was a longitudinal line.
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A meridian passing 370 leagues
west of Cape Verde.
00:02:22
Something no one knew
where it was.
00:02:24
It was created at a time when people
knew nothing about longitude.
00:02:30
Columbus and other navigators
explored Central America.
00:02:34
Portuguese explorer Vasco da Gama
was the first to reach the Indies.
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The road was open,
but it was not that easy.
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During Vasco da Gama's voyage,
more than half of his crew
00:02:46
died at the sea.
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From scurvy, diseases,
hunger and shipwrecks.
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The ships that returned, however,
brought cargo, which price
00:02:59
was estimated at 6,000 times
their initial investment.
00:03:05
Each trip to the Indies generated
spectacular profit.
00:03:08
Of each merchant fleet
coming out of Lisbon, for example,
00:03:12
they made an agreement with the king.
And part of that cargo
00:03:17
was distributed among
the survivors of the adventure.
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At that time,
Portugal was very interested
00:03:24
in the spice trade in the Far East.
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So Cabral's expedition to Brazil
00:03:31
had the Indies
as its final destination.
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Some say that he arrived in Bahia
accidentally.
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There is a strong debate
about who was the first to get here.
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It's almost certain that
this place had been checked before.
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Discovered in 1500 didn't
mean being the first to arrive here.
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Instead, it was about
acquiring legal ownership rights.
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On the land Cabral believed
to be an island,
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he ordered a Mass to be held,
and soon after he sailed to the Indies
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in search of the spices.
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Spain explored
Central America,
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and sponsored the first
around-the-world trip of history.
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Finally completed by Ferdinand Magellan
three years later.
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Portugal continued to invest in trade
in the African and Asian coastline.
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But in America, the few Portuguese
only advanced thanks to the natives' help.
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Brazilian economy worked
only where the Tupi were.
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The Portuguese wouldn't
go where there were no Tupis.
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If the Tupi were there,
it was an open land. It was Brazil.
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In alliance with Portugal, the Tupi people
expanded their military power
00:04:41
and started to dominate
the ranges of the territory.
00:04:45
Because alliances between the natives
and the Portuguese
00:04:48
generated goods.
The first and best known, brazilwood,
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which started
to be traded in Europe.
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That was when Portugal really started
to have some economic interest
00:04:58
in its American territories.
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At that moment, there was
no commercial interest in Brazil.
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The Portuguese exploited the brazilwood
almost to extinction.
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Seeking another profitable product,
Portugal divided the territory
00:05:15
into Captaincies, not received
with enthusiasm by the Portuguese.
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What was mouth-watering in Europe
was a sweet novelty. Sugar.
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In few years, there were
huge sugarcane plantations
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in the captaincies of Pernambuco
and São Vicente.
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And Brazil enters the 2nd economic cycle.
The sugar, the sugarcane.
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The first business set up in Brazil
was the sugar mill,
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which then became the white gold.
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Actually, during the colonial period,
Brazil responded
00:05:52
to the Portugal projects
and not to the Brazilian projects.
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And therefore, the way
sugar was produced in Brazil...
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a plantation, a monoculture
devoted to exports
00:06:05
with slave labor,
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was in fact, the best
way Portugal came up with
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to profit greatly from the sugar.
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From the product
that would be exported.
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Portugal didn't have people
to occupy Brazil.
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So they began importing huge quantities
of slaves from Africa
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to work in the Brazilian
sugarcane plantations.
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African slaves
were more adaptable.
00:06:30
The Indians could escape to the woods,
and it'd have been hard to chase them.
00:06:34
It was a common practice in Africa
for the conquerers to enslave the subdued.
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Europeans started to sell
them to the Americas,
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boosting the Brazilian
production of sugar.
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Sugar became the main
commodity in world trade.
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By the turn of the 17th century,
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approximately 5% of the total revenue
of the Portuguese empire came from Brazil.
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Thus, Brazil gains an economic importance
that it didn't have
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during the 16th century.
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With the large estates,
other economic activities appeared.
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As well as a domestic market.
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Livestock farming began
to develop strongly inside the Northeast
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in the 17th century.
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Leather, leather goods...
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beans, rice,
flour, dried beef meat,
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the cachaça
and primary products.
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And Brazil was able to start
a dynamic colonial economy,
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which growth rate was higher
than the Portuguese economy.
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The official currency
came from Portugal, the real.
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Counted in mil-réis, escudos, cruzados,
patacas, pennies, crowns...
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One real wasn't worth
half pataca or a penny.
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But no currency
was often used here.
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The currency circulating in Brazil
was the silver minted in Potosí.
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In the 17th century, the Monastery
of St. Benedict in Rio de Janeiro
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where they have
the Silversmiths Chapel,
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was one of the places
where the silver was kept.
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The Santa Casa of Salvador,
institution equivalent to the banks,
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financed the sugar production.
00:08:11
They would lend money.
receive money...
00:08:14
So, basically, it was the financial
institution at the time.
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People had no currency to trade.
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When they received currency, gold, etc.,
they used to keep it.
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and preferred
to use the barter economy.
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Physical trade.
They would exchange beef for sugar.
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In the absence of paper money,
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negotiations were made
by word, and the word was fulfilled.
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Buying on credit
is the most ubiquitous,
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the most extensive economic
institution created in Brazil.
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It is the real basis on which
capitalism in Brazil was created.
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The money was barely seen
in the hands of the people.
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Without money, there was no tax.
Unless from the gold found.
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To circulate, the money should
go through the casthouse.
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Only after they charged a fifth
the bar received the royal seal.
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And the expression
"Bloody Fifth was created."
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The Fifth was the most
practical way to collect the tax.
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In 1580,
this tax changed place.
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Spain dominated Portugal,
creating the Iberian Union.
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The largest Spanish interest
in Brazil were the mills.
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In Pernambuco and Bahia,
there were 300 of them,
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and others in the captaincies
of Rio de Janeiro and São Vicente.
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Under Spanish rule,
the sugarcane cycle reached its apex.
00:09:45
In 1600, England and France began
founding its colonies in North America.
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But there, the colonization
was very different from here.
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Our lags
behind the United States
00:09:57
comes from our delay
in the colonization.
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In the United States, they did
the settlement colonization.
00:10:04
And that replicated the society,
the culture of England,
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the most advanced country
at that time.
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People came. Settlers came
in to occupy, to plant, to produce...
00:10:21
They were entrepreneurs,
independent from the Crown.
00:10:25
While not even 5% of the Spanish
and Portuguese colonizers
00:10:29
brought their wives.
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because they had no real intention
of staying here.
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It was a very predatory spirit
of enjoyment and exploitation
00:10:40
of the colonial Brazil natural resources
to get rich quickly.
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They came to find paradise,
to enjoy paradise,
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to become rich as soon as possible
and return to their metropolis.
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In our case,
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we started with the Captaincies
dominated by the Crown,
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that is, the state presence has always
been most pronounced in Brazil.
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Brazil became the subject
of a large trading company.
00:11:04
Very large coffee plantations,
sugar,
00:11:09
cheap labor and little value added
were needed.
00:11:13
This way, Brazil was born.
00:11:18
Therefore, Brazil was born
poor in this regard,
00:11:22
unlike the United States,
Argentina, Australia,
00:11:27
to where few skilled immigrants
were sent,
00:11:31
and they planted
high value-added crops.
00:11:35
Those countries were born rich.
00:11:38
The British had an institutional vision
different from the Portuguese's.
00:11:43
In 1636, the United States
already had a university.
00:11:46
In "Hispanic America"
there were 30 universities.
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The first one from 1538.
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The Portuguese never
created a university in Brazil.
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Even with colonies,
no country has surpassed Spain,
00:11:58
which had an unbeatable advantage.
Their gold.
00:12:01
At that time, an idea prevailed.
00:12:05
That the wealth came
from the accumulation of precious metal.
00:12:10
The countries that had access
to this wealth were very prosperous.
00:12:17
And so, the idea that a country
could become rich
00:12:22
if it were able to export
more than it exported, appeared.
00:12:27
With that precious metal were
accumulated. Bills between countries
00:12:32
were agreed in gold and silver.
More in gold than in silver.
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It'll soon be discovered that wealth alone
can't support the hegemony of a country.
00:12:42
What could be worth
more than gold?
00:12:45
What would be stronger
than the invincible Spanish Armada?
00:12:54
BRAZILIAN ECONOMY
"A history told by those who built it"
00:13:08
BRAZILIAN ECONOMY
"A history told by those who built it"
00:13:12
What would cause Spain,
the richest nation in the world
00:13:16
to lose its egemony?
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Both Portuguese as Spain
00:13:21
didn't create mechanisms
00:13:25
to transform
the momentary wealth
00:13:28
into a more sustained process
of enrichment to the society.
00:13:33
It's no use to be rich,
00:13:36
just to reach precious metal.
00:13:39
Development
is much more complex.
00:13:41
I would say that England
was extremely successful
00:13:44
in building institutions,
favorable to capitalism.
00:13:49
The Glorious Revolution of 1688
had a crucial importance.
00:13:55
Now, the Parliament
decided on the adoption of laws.
00:14:00
And the king also lost his power
to fire judges.
00:14:05
That created the roots of what
would become the independent judiciary.
00:14:10
Those were also the roots
of what would be
00:14:15
the separation of powers.
Legislative, executive and judiciary.
00:14:20
And the three powers
may question each other.
00:14:25
In addition to making
these institutional reforms,
00:14:28
England was increasing its power
in the colonies and in the world.
00:14:32
There was a navigation law giving
exclusivity for goods transportation
00:14:36
from England and to England.
00:14:39
That was the Navigation Law.
00:14:41
With that, England became
the absolute owner of the seas.
00:14:44
Establishing itself
as the major world power.
00:14:48
Brazil was an ocean
and centuries away.
00:14:52
With the end of the Iberian Union
and the sugarcane cycle,
00:14:55
it was increasingly urgent
to find an alternative to sugar.
00:15:00
Since 1600,
the Bandeirantes sought inland wealth.
00:15:05
They searched for gold, but could
only find the so-called Outback drugs.
00:15:09
such as guarana
and the Brazil Nut.
00:15:11
After one century
of inland-bound expeditions,
00:15:14
they finally found
gold and diamonds.
00:15:17
And that region was named
Minas Gerais, aka general mines.
00:15:21
During the 18th century,
00:15:23
half the world's production of gold
and diamonds came out of Brazil.
00:15:27
Those who found gold,
had money and used money to buy.
00:15:30
And all of that
created an internal market.
00:15:32
Which reminds us of a rich
colonial village where gold was found.
00:15:36
Vila Rica, aka the rich village,
had an orchestra, opera houses,
00:15:40
several churches and all...
00:15:43
A sophisticated social life
with the market around it.
00:15:48
The gold extraction stage only lasted
50 years between inland and outland,
00:15:55
and it only served to consolidate
the England-Portugal alliance.
00:16:02
Brazil was attached
to the colonial pact.
00:16:05
All that was produced
had to go to Portugal,
00:16:09
and all that was consumed
came from Portugal.
00:16:12
For instance, the gold
extracted in Minas Gerais and Goiás
00:16:16
had to be taken to Portugal.
00:16:18
Portugal held the monopoly.
00:16:22
The trade monopoly with Brazil.
00:16:25
But in reality what happened
was that soon Portugal
00:16:30
became very dependent
on England.
00:16:34
The goods that came,
came to Portugal,
00:16:37
were distributed to European countries
under British scrutiny.
00:16:44
When they found gold, the first mint
was founded in Salvador,
00:16:48
which was the capital
of the colony.
00:16:51
And then,
there was a race to Brazil.
00:16:54
The Brazilian population,
which was only 300 thousand inhabitants
00:16:58
by the end of the 17th century,
00:17:00
multiplied 10 times
during the 18th century.
00:17:03
The slaves arrived in Brazil
with more than a million African captives
00:17:09
to work in the mines
of gold and diamond.
00:17:13
The slave product
by the end of the 18th century
00:17:16
was the main
economic activity in Brazil.
00:17:21
And it was more important
than the large estates.
00:17:24
Just consider.
00:17:26
Brazil was the largest
slave depot in the Americas.
00:17:31
The slave trade control
was done in Brazil.
00:17:36
The great businessmen
and big investors
00:17:41
of Salvador and Rio de Janeiro
were slave traders.
00:17:45
Rio de Janeiro became the center
of the slave trade in Brazil.
00:17:51
Profits remained in the internal sector
of the colonial economy.
00:17:56
They weren't sent abroad.
00:18:00
Rio de Janeiro becomes
the economic center of the colony.
00:18:04
And when Brazil became viceroyalty,
the city was made capital.
00:18:09
In the old continent,
00:18:11
London had become
a major center of the Enlightenment,
00:18:14
which renewed the way
of thinking and feeling.
00:18:18
From science to the arts,
and literature.
00:18:20
From the political system
to the philosophical thinking,
00:18:22
the world saw an intense transformation
that would be reflected in the economy.
00:18:28
The great fathers of modern economics,
in terms of economic thought,
00:18:33
are exponents
of the Enlightenment philosophy.
00:18:35
They turned the economic thought
into an instrument
00:18:40
to serve the development
and the progress.
00:18:42
The idea we have of wealth
00:18:46
is basically the one
Mr. Adam Smith defined.
00:18:51
You take something from nature,
leave a mark of work on it,
00:18:55
and then you sell the object,
as a commodity.
00:18:59
This is the biggest assumption
of the entire capitalist economy,
00:19:03
and, by the way,
Marx's socialist ideas.
00:19:07
And the Capitalism gained new contours
with the Industrial Revolution.
00:19:12
By the end of the 18th century,
England recreated the production means.
00:19:16
Up to that point,
all human production capacity
00:19:19
was based on the physical
strength of people;
00:19:22
in some precarious devices,
such as waterwheels and windmills;
00:19:26
or on the use of some animals,
such as oxen to pull plows.
00:19:29
Not much more than that.
00:19:31
So there was an extraordinary
mobilization of knowledge and research
00:19:39
for economic development.
00:19:42
Humankind has conquered
a powerful source of energy,
00:19:47
which was coal.
00:19:49
With the use of steam engines,
England created an exponential
00:19:53
scale production
of goods and merchandise.
00:19:56
And production became
increasingly efficient.
00:20:00
It's the start of mass production
in organized venues.
00:20:06
They sped up
means of transportation,
00:20:09
integrated the global economy,
thanks to the cheapening of transport
00:20:13
by rail and with ships,
powered by steam engine.
00:20:16
And besides, England had a wide,
vast colonial space,
00:20:23
which was used
to ensure its industrialization.
00:20:28
The Industrial Revolution
fostered urbanization
00:20:30
and increased
the wealth in the world.
00:20:33
Within 3,000 years
prior to the 18th century,
00:20:39
the per capita income
was virtually stagnant.
00:20:42
With the Industrial Revolution,
it happened
00:20:45
what some scholars
call the great divergence.
00:20:50
Even with so much
money and power,
00:20:53
England could not prevent
the American independence.
00:20:56
England thought
they had the right
00:20:59
to tax the American settlers.
00:21:04
But the settlers disagree.
00:21:08
And so, the revolt process begins,
00:21:12
leading to the war of independence.
00:21:15
Thirteen years later,
it was the French who rebelled.
00:21:19
The French Revolution comes from
the impoverishment of the population,
00:21:27
the beginning of new ideas
on participation,
00:21:32
on freedom...
The social contract ideas.
00:21:37
The revolutionary
cut off the head of monarchy,
00:21:40
and divided lands of the nobility
and the church.
00:21:44
In the same year,
Tiradentes was arrested in Brazil.
00:21:46
Thus, imposing an end
to the Minas Gerais Conspiracy.
00:21:49
The Inconfindencia Mineira
was inspired by the American Revolution.
00:21:55
Which frightened the power owners
in Portugal.
00:22:00
The Portuguse colonization
meant to leave Brazil
00:22:04
in a situation of little development
in economic terms.
00:22:10
There was a deliberate policy
00:22:13
to prevent Brazilians
from learning the alphabet.
00:22:17
The court wanted
to keep them illiterate.
00:22:20
Keep Brazil illiterate,
captive, isolated and prohibited.
00:22:26
With no ability to mobilize,
to articulate.
00:22:30
Because that was a way
to keep Brazil
00:22:33
under the Portuguese
monarchy's control.
00:22:37
There were no universities,
there were no libraries...
00:22:43
Schools were rare, isolated.
00:22:45
It was forbidden to print
books and newspapers.
00:22:49
There were two instances
of censorship.
00:22:51
It was forbidden to build roads,
00:22:54
except those officially
approved by the royal crown.
00:22:57
There was a monopoly situation
of Portugal in relation to Brazil,
00:23:03
as well as a major constraint
to economic activities here.
00:23:06
Manufactures were prohibited,
00:23:08
with the excuse of protecting
the Portuguese monopoly.
00:23:11
A rather theoretical ban.
00:23:12
They never saw a tax attorney
in the 17th century
00:23:16
because the government
never showed up.
00:23:21
And in the capital,
social difference was more evident.
00:23:26
Brazil had a small
Brazilian-Portuguese elite.
00:23:31
A population of landowners,
00:23:34
usually linked to the metropolis,
to the Portuguese Crown.
00:23:38
Coimbra law-graduated
students...
00:23:41
And occupied the most important posts
at the colonial administration.
00:23:47
But the vast majority
of the population was poor,
00:23:51
slave, illiterate
and isolated in the territory.
00:23:55
There was a floating population,
00:23:58
which was our meager middle class,
00:24:01
with people providing services
to this agrarian export economy.
00:24:06
That prevailed in Brazil
for many centuries.
00:24:09
So I'd say that
until late 18th century,
00:24:12
for most of the Brazilian
population,
00:24:14
their country wasn't very different
from the one Cabral found in 1500.
00:24:19
A very simple country
with a very rudimentary economy.
00:24:25
No heroes, no hopes, no money.
00:24:28
In the late 18th century,
Brazilians had no great expectations.
00:24:35
But chances would
show aces up the sleeve.
00:24:38
French General Napoleon Bonaparte
threw the fate
00:24:42
that expanded
the fields of France.
00:24:45
Harsh winds blew
the Portuguese court to the south.
00:24:49
Fate was uncertain,
but it was called Brazil.
00:24:53
What should
Brazilian people expect?
