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Modernism, liberalism and morality, or the dual morality.
Note: this is a general attempt to get some of my own thoughts on paper, but they remain quite disorganised. I expect as I actually do re-reading, critique and expand my own understanding that this will become a more coherent post, but this servers as kind of a reminder to myself and way to help describe my own though process.
I think a major mistake that is made when attempting to analyze liberalism is to look at it in a vacuum, particularly without the lens of modernism attached to it. There are several linked ideas here, so I’m going to try to write them all out.
When trying to either critique or promote liberalism, one must define what liberalism is.
The problem with this is that liberalism is a very large ideology that is contextualised by time period, country and thinkers. There is no one single version of liberalism.
Every variation of liberalism acts as a mix-and-match of some of it’s component parts, and therefore the exact variation being critiqued has to be defined. A common theme in the analysis of liberalism is therefore trying to look at it in isolation, and distilling it to a single mode of social and economic relations.
This critique fails, because you inevitably end up arguing against a strawman. Component and complementary ideologies are necessary for the ideology to make sense.
I think one of the inherent problems within the critique is the age of some of the most important scholars, and how changes in thinking have moved liberal positions.
I would argue that from early liberalism the most important thinkers were Locke, Mill and Rousseau. The major shared component here is that they are mostly children of enlightenment thinking.
Within Locke, you can see the idea of rules (in this case, informed by ‘natural rights’) as the foundation of society, but not the end point of personal morality. Personal morality is left to the church, the state is left to be neutral and a simple executor of inherent social rules.
The surety of thought here is typical of enlightenment thinkers. Thinkers, Kant in particular, inform liberal thoughts on *personal morality* (which is defined as separate from government morality) during this period and this is important for later, but in general early liberalism requires the surety of thought that there is an inherent design of society.
Some branches of liberalism almost stop here. Libertarians sometimes take their cues directly from this era, and molds this thinking into a separate branch of thought.
Many critiques of liberalism also approach from this position.
Liberalism is distilled in many critiques to the idea of “I disapprove of what you say, but I will defend to the death your right to say it!”
From this several linked ideas follow.
We don’t judge who you sleep with, who you marry or who you interact with, as that is your private choice.
We don’t make laws about what you do with your money, because private property is protected.
We must give everyone equal, inviolable rules before anything else because those laws inform our morality.
It’s the foundation of modern democracy, including your right to vote, to not be tortured, and to receive due process in a trial.
The only people who are immoral are not selfish or cruel people, but people who break the rules.
This ignores a very important par of thought in the era, which is the interplay of church, religion and government. The government here is a vessel to enforce natural, god given laws which are the absolute of morality. An immoral person is not someone who violates the rules of the government, but instead violates the written rules of god, as defined by a chosen church. While you can create an irreligious version of liberalism based from this (something interrelated to contractualism, I would imagine) but mainline ‘enlightenment liberal theory’ does not utilise the government as the sole (or even the main) moral standard.
Kantian personal morality also intertwines with this style of thought where the morality of an action varies based on the duty. In this way, personal duty is given to follow the greater social rules, because just as every man has general personal duties, within greater society each man has a duty to god to uphold the rules of the state (which are given by god).
There is then debate on this point. If every man has a duty to god, should the state enforce that duty, or should it simply enforce the most basic rules possible that can be agreed on by a wider society? These two opinions would help inform liberal debate for centuries after, with different branches looking to different rules (but the rule based structure mostly unchanged.)
Within the Anglophone world, Mills (and partly by extension, Bentham, but Mills was always more wildly influential) is by far the most important other thinker in liberalism, I would argue. Mills is important because it is here, I think, you start to see the transition of the idea on the role of government. Mills (in addition to other things) promoted utilitarianism, the idea that an action is moral if it helps the most people. External to debate within utilitarian theory, the important part of the ideology is that it is the start of modernism and modernist political thought within liberalism.
Modernism represents a rejection of the unmeasurable. Society, Economics, Nature and even Morality can all be measured though observation, experimentation, new knowledge and technology within a modernist worldview. Utilitarianism, in particular the Bentham variant, represents a bridge between enlightenment and modernist thought. In order for utilitarianism to be a functioning, self contained unit you must be able to measure the harm and good of an action. In this way, morality is ‘now’ a measurable component.
How then does this interface with the previous understanding of morality? Within the liberal framework, (and a modernist rejection of organised religion) utilitarianism simply directly replaces religion. Kantian morality is not abandoned, but instead is modified as such that because we wish to improve the world (and that improvement can be measured) everyone has a duty to the utilitarian cause, but at the same time is not required to abandon the ideas of local morality or duty. One might say that this system of dual morality is incoherent, where every action is measurable, and you might be morally correct (through duty) in taking a morally incorrect (though utilitarianism) action.
They might also be at least partially right.
The expression of utilitarianism and its relationship to religion is also a highly complex one, with major regional variance, one with enough material to easily write a book on, but in short one can say that utilitarianism. The church, once the ‘single’ detemir of morality, is now replaced by a mix of church, scientists, philosophers and the state itself, when it acts as a collective voice on morality.
When interfaced with “mixed republicanism” (and the early elements of humanism) the lack of a single moral authority becomes a problem. Democracy is chosen as the answer in the eyes of many liberals, where the general opinion of the voting public decides what the state should view as moral, external to the state itself, and freedom of religion and the much discussed ‘neutrality of the state’ then has to appear.
This interrelation of religion, Kantian morality and utilitarianism becomes more complex when concepts like the real inability to measure the final result of an action come into play. One kind of morality looks at the duty of a person, or what they know when they took an action, but the other is based on utilitarianism, or the result of the action. There are of course other moral frameworks that can fill this roll, and different liberal thinkers have proposed different ones.
The law of the state, this core component of liberalism, then is not based on any one single moral framework. The example of the crimes of attempted murder and murder are a good example, where neither final result nor intent are the single determinants of a crime. There is thus a dual morality, that must be judged holistically though democracy (a jury) and a systematic authority (a judge).
The nature of the liberal system is then such that elements can be removed, expanded on and changed while still retaining the same structural liberal core, but strangely because of slow evolution might contain almost none of the elements that existed within the original idea of liberalism. I would currently posit that just about the only unmovable core of liberalism is that there is a state enforcing the rules of an external morality through a system.
Liberalism can be constructed without republicanism (beyond simply early thinkers, Latin American liberal dictatorships like under Diaz existed). It can be built without utilitarianism, without religion (indeed, the distinction of freedom from religion is made in some liberal countries like France, and different incantations have taken it to different places). It can exist without Kantian thought or the more recent Rawlsian ideas (pure utilitarian liberalism is but one example of liberal utilitarianism). It seems to thrive without natural rights (many modern liberal branches reject natural rights), can reject the more modern ‘human rights’ (consider all of the liberal slave-holding nations of the past for just a single example). In fact, Liberalism seems to be able to function without the belief in the expansion of either economic or social freedom.
The state enforcing an externally derived set of rights based on an external morality while acting as a centralised actor is then just about the only consistent element. In “Anarcho-capitalism” this is removed, along with some libertarian variants but it is just about the only single factor that causes a distinct separation from liberalism. Other groups that interact and intersect with liberalism sometimes change this, but as far as I can tell none are considered liberalism by adherents or critics (excluding the ‘everyone I don’t like is liberal group’).
This comes back then to the thrust of my argument, that liberalism is a name for a group of linked moral theories placed inside a consistent structure of the state. Not all theories that possess a state and external morality are therefore liberalism, because liberalism can additionally be defined by adherence to thinkers who have built within the liberal tradition of a particular place. The definition of liberalism must then be contextualised to who is being critiqued, as a mass critique of liberalism and all of its principles must inherently be contrarian and contradictory, because there are contradictions and debates within liberalism itself.
The dual morality common within liberalism is another deep component to the ideology, one of the role of the state and the role of the moral voice. I think it may be even worth arguing that even if not in all cases, the dual morality of liberal systems is a component that defines them as liberalism, because the very structure of liberalism encourages it. Even in a system with natural rights and a biblical morality, it may be both moral (through the system of morality) and immoral (through the system of natural right) to take a particular action if there is a mismatch. The logical idea must then be that the government must follow the first system and the individual must follow the second.
I would posit that it is partially this relationship that fuels the liberal general dislike of social regulations, the belief that even with a moral government with moral laws sometimes it might be moral to break the law, and therefore punishments based solely off that concept are dangerous, but at the same time liberals may wish to add social regulations in order to make their personal morality and the government morality better align, for example protections for violence against children or restrictions on some types of substance use/abuse.
Any critique without dealing with the chosen liberal moral philosophy, the chosen way to implement it (for example, the ‘reasonable man’ test) and the functional reasons for that implementation (for the same example, the fact that resources for constant votes and jury trials are impossible to distribute, and the reasonable man test is judged as a reasonably functional alternative).
Brazilian Banking and Crisis in the First Republic
The history of banking within Brazil and the history of the first Republic of Brazil are deeply intertwined. It can be said that the history of banking during the first Republic is a story of crisis, first speculative, then self inflicted, then a function of the international trade system Brazil found itself within. In the early years of the Republic, large scale collapses and crashes characterised both the Brazilian banking sector and the wider economy of Brazil. All of this culminated in an attempted national economic policy in 1905 that proved to be a bitter failure for Brazil in general, but signaled a change in the relationship between banking and the Republic. Effective, small scale interventions by the Brazilian government became massive intervention in the Brazilian banking industry. The banking industry then became the tool of intervention for the government across the Brazilian economy. Rather then being a laissez-faire and generally weak government, the Republic was a highly interventionist and reasonably effective institution crippled by structural economic problems, an inability to deal with a large disenfranchised population, slow industrialisation and poor management of public finances.
In the years before the first Republic, Brazilian banking was still in its naissance. The first true Brazilian bank, the Banco do Brasil, was founded in 1808 by John VI of Portugal. It was also bankrupted for the first time when 1821 when John returned to Portugal with his assets.[1] Brazilian banks would suffer reasonably frequent bankruptcies, with the national Banco do Brasil having to be reorganised due to bankruptcy (and halting the issuing of debt by the Brazilian government) three more times before 1905, at one point becoming the Banco da Republica.[2] Through the early independence period, banking and national economics as a whole developed slowly. Major change would start to appear with the arrival of international lenders, able to provide credit for the massive infrastructure projects that dominated the later part of the century. The British ‘Companies Act of 1858-62’ allowed the incorporation of banks in the UK and started the push of British banking corporations into South America.[3] Brazil was no exception to this expansion, and British banks arrived, willing to act as the first real international financiers of the region. First with the establishment of the London and Brazilian Bank in 1862 then the English Bank of Rio de Janerio in 1863, British banking arrived in Brazil.[4] This expansion brought the knowledge of global banking methods to Brazil, and kickstarted the growth of local Brazilian banks.[5]
Brazilian demographics had seen major demographic shifts in the period leading up to the 1888 revolution and the abolition of slavery. In 1818, free and freed people represented only 41% of the Brazilian population, but by 1874 that number had grown to 84%.[6] This new, free population gave hope for major Brazilian growth, but Brazil failed to meet international and national expectations. This was partly do to the fact that Brazil functioned mostly as a group of weakly connected autonomous regions, with a hierarchical system of separate oligarchies dominating regular life, and little interconnectivity through the nation.[7] By the late 1880s, it was clear that the relationship was about to change. Within the 1870s, German banks had attempted entrance to Brazil, but had largely failed.[8] In 1887 however, Germans were able to make a deal with local elites and the Brasilianische Bank Fur Deutschland got a foothold.[9]
The arrival of the Republic and full emancipation to Brazil prompted a massive speculative boom from 1888 – 1890.[10] The era featured rampant monetary and banking expansion, which eventually lead to an equally spectacular collapse in 1891-92 known as Encilhamento.[11] Brazilian expectations collapsed, and the hope for a Brazilian miracle evaporated for much of a decade. Part of the reason for this was that a major portion of the Brazilian population did not turn to productive industrial jobs or farm estates, but instead was forced into subsistence farming and low skill labour on relatively small farms and plantations.[12] During these years, the strict Brazilian social hierarchy helped prevent a large-scale transition from slave style labour to an urban role for the poorest parts of the Brazilian population.
Brazil thus never made the expected turn into an industrial powerhouse like it was hoped, but massive growth in the consumption of Brazilian agricultural products from other newly industrial economies provided an option for Brazilian expansion. Brazilian exports became the new hope of Brazil, even during the crisis years,[13] and international creditors expanded into Brazil with an eye to the export business, with the London and River Plate Bank in 1891 targeting loans to Brazilian exporters. [14] Brazil, with a weak ability to service its own debt (as Brazilian banks had gone under, including the national bank, during the crisis), languished outside of the export industry for the rest of the 1890s while the government consolidated national power.[15]
By 1898, the national government of Brazil had reorganised itself. From 1888 to 1898 it had been acting to support the export industry, the core of the two most politically powerful regions, Sao Paulo and Minas Gerais.[16] Competition for government power was fierce, and this competition among the Brazilian political and industrial class drove major changes in the way that someone could acquire capital or enter the political elite, with informal networks becoming far less important.[17] Government interventions on the small scale had been reasonably effective and were competitively perused, with the oligarch class spending huge amounts of money on political influence to attract these interventions. [18] In late 1898, burdened by high national debt, a crippled national bank and calls from international investors, the Republican government decided to implement a national fiscal policy to try and reform their country.[19]
In 1898 the government adopted a new metalist policy, and then in 1900 increased the gold tariff. The policy was a disaster, with 17 banks going bankrupt and the Banco da Republica do Brasil itself having to suspend payments to avoid bankruptcy.[20] A capital crunch, where companies were no longer able to acquire needed loans immediately followed, unemployment rose, and export income fell by 20% annually from 1901 to 1904[21] A fall like this was crippling not only to the Brazilian economy, but to the Brazilian government. The government, while effective when it could act, was chronically underfunded and made between one and two thirds of its income from trade tariffs.[22] The government was forced to reorganise the banking system with a range of reforms in 1905-1906, including reforming the Banco do Brasil and depositing the government funds there to stabilize it. The Banco do Brasil was still not a true national bank however, lacking major features of the national banks such as being a lender of last resort.[23]
After the 1905-06 reorganisation, Brazil was able to renegotiate its position in international trade, and modernise its banking system. Its banking system became a dominated by narrowly defined and undiversified organisations with short-term commercial focus.[24] Unlike the large, international corporate banks that were emerging in this era, Brasil became beholden to more local and regional institutions as the consolidations of the last decade was forced back. On the more positive side, the widely varying number of players in the Brazilian national economy meant that even more then before, Brazil became a place where entrepreneurship and financial investment could be obtained through the stock and bond markets, and not through personal connections.[25] This shift, which had started before 1905 but was driven forward by the crash, helped build income mobility and allowed the population significantly more options for advancement, especially compared other Latin American countries like Mexico.[26]
The interlinked control of the government and ownership of the most powerful industries in Brazil by the southern states of Sao Paulo, Rio Grande do Sul and Minas Gerais compounded to create a nation where only a portion of the country was joining the industrial revolution. Outside the urban work centers of the south, a notable portion of the population, especially former slaves, had been forced into subsistence agriculture as a survival strategy.[27] The industrialists of the south instead turned to immigration to attract the workers to fuel their boom, and 4.2 million people migrated to Brazil between 1881 and 1942, which made at minimum 15% of the yearly population increases.[28] From 1880 to 1920, the vast majority of these immigrants moved to these three southern states, another measure of their dominance. Government interventions and infrastructure projects became more concentrated in these states as their economy grew, increasing their dominance in a constant cycle of intervention and growth.
The government of Brazil during the first Republic, especially after 1905, became a major player in the banking industry. In 1905, 46% of banking within brazil was dominated by international banks but as the country recovered from the collapse, this changed. By 1907, only 29% was internationally controlled.[29] This rise was partly due to the small, private banks but it was even more to do with the government either subsiding those small banks or directly using the Banco do Brasil. The Banco do Brasil was the favored tool for government interventions, and more and more private banks became government subsidised entities. By 1930, 30% of Brazilian banking was private domestic banks, 20% was international banks, 22% was controlled by state-subsidised institutions and 28% was controlled by the Banco do Brasil itself.[30]
Characterisations of the government as particularly liberal or loose at the reigns are shown to be false through this analysis. By 1930, half of all banking was government controlled or subsidised. From 1906 to 1930, the Banco do Brasil saw total growth of 6743%[31] and the slow consolidation of banks into the 1920s was driven by government subsidies and other interventions.[32] Both the banking and export sectors saw major growth through the Republic, and government was an active and major part of the Brazilian economic identity during the era.
The export boom in within Brazil never managed to compete with the growth displayed by industrial nations during the period. While the growth of the period has been characterised as simply unequal, in reality the raw GDP growth numbers of allowed Brazil to fall behind other nations. In 1880, the Brazilian economy was about 22% of the size of the British economy per capita, and about 38% of the German when measured in real GDP. In the following decades, every ten years that gap would widen and by 1910 Brazil was only 17% of the British per capita economy, and 23% of the German.[33] In the southern states, per capita real income grew at an average annual rate of 2.5% for 33 years, from 1898 to 1930.[34] Outside this region, real income declined at an average rate of 0.3% annually.[35] The total wage growth of 1.4 percent annually was not enough to activate the large population of the rural poor within the country, and also wasn’t enough to allow brazil to create a large middle class, like many of the emergent global powers, like Brittan or Germany. Incidents like the loss of almost half of it’s exports between 1901 and 1904 during the metalist crash doubtless did not help this, but even during the growth years Brazil was losing ground.
The first world war brought another economic crisis to Brazil, with mass disruption of its markets and the change in the global flow of goods and capital.[36] This crisis forced a movement away from the gold standard in order to maintain a measure of trade, but the crisis forced Brazil to start thinking seriously about how it would develop domestic markets for goods and domestic industrial capacity.[37] Within the government, a major debate developed about the desirability of industrialization, and where it should fit as a goal for the country. When it was first raised, the debate was won firmly by the camp against industrialisation and diversification. The powerful export industrialists of the south saw little benefit to be gained from the rapid and government driven industrialisation that was desired by a faction of the public, particularly in the north. The banking sector, which was dominated by small banks with narrow focus also failed to drive the desired industrialisation.[38] Support for industrialisation lagged all the way into the 1920s, when global economic booms and great amounts of available foreign capital kickstarted industrial growth in Brazil. [39]
Neither the government nor the banks were idle in the period leading up to this. The state continued to be a highly interventionalist actor, and continued to be effective on the small scale it operated with.[40] Small banks grew and consolidated, and support for industrialisation grew as the private industry became more able to tolerate the risk and financial burden associated. [41] International tolerance for the Brazilian unwillingness to spend government money to help with these internationally backed projects faded quickly, and pressure was applied in the early 1920s[42] The government, however, remained largely unwilling to launch wide reaching industrialisation projects.
The reasoning for not expanding the scale of the mostly effective government interventions was simple. The government did not have enough money, and as it took a large portion of it’s revenues from international trade, it was exceptionally vulnerable to international crashes.[43] The problem was well known, debated, and understood, but proved far harder to fix. Several schemes had been attempted from applying single taxes in exchange for interventions within a region,[44] to simply spending itself into debt.[45] Financing Brazilian government debt after these attempts was a major British industry within south America for years.[46] In 1924, Brazil attempted to introduce an income tax, but by 1930 it provided less then 3% of government expenditures.[47] The Republican government, for all that it was effective when it did intervene, was utterly unable to manage its expenditures compared to its income, and expenditures exceeded revenues for 30 of the 41 years of the first Republic.[48] States were better about finacial management, and managed to remain mostly solvent, perhaps due to a lack of international creditors willing to allow them to go into debt.[49] The government was rarely even able to grow the real GDP faster then the debt, which would have reduced the comparative load. From 1889 to 1930, the federal government was forced to spend between 16 and 53% of yearly revenue on repaying debt and interest, usually averaging around 22%. In 1900, 1916, 1917 and 1920 the government was forced to spend more then 35% of all income on this servicing, the latter years due to international credit crunches related to the first world war.[50]
Active changes to banking policy during the latter years of the Republic were few, even as the international banking environment changed. While Brazilian domestic banks, backed by the weight of the government slowly pushed foreign banks out, the establishment of proper national banks, new banking regulations and innovations in finacial theory were all changing the world of international banking.[51] Particularly in America, the way banks were running changed, but this change did not come to Brazil. Still, efforts were made to adapt to new international circumstances and when the café-com-leite alliance finally broke in 1929, new banking regulations were quickly put in place.[52]
Banking and the government of Brazil during the first Republic were deeply intertwined. Crisis and collapses within Brazil characterise the changes of the era, and the economic boom of Brazil was limited to a very small portion of the country. The massive population of slaves freed in 1888 and the fifty years preceding that in many ways never joined the Brazilian economy, remaining subsistence farmers that used the barter more then they touched the controlled economy of the nation. The first Republic of Brazil, rather then being an inattentive laissez-faire oligarchy, was a highly interventionist government plagued by poor long term finacial management and was deeply intertwined with both the failures and successes of the Brazilian economy.
Bibliography
Briones, I., and A. Villela. "European bank penetration during the first wave of globalisation: Lessons from Brazil and Chile, 1878-1913." European Review of Economic History 10, no. 3 (2006): 329-59.
Cameron, Rondo, and V. I. Bovykin. International banking, 1870-1914. New York: Oxford University Press, 1992.
Hebe Maria Mattos De Castro. "Beyond Masters and Slaves: Subsistence Agriculture as a Survival Strategy in Brazil during the Second Half of the Nineteenth Century." The Hispanic American Historical Review 68, no. 3 (1988): 461-89.
Musacchio, Alado, and Read, Ian. "Bankers, Industrialists, and Their Cliques: Elite Networks in Mexico and Brazil during Early Industrialization." Enterprise & Society 8, no. 4 (2007): 842-80. http://www.jstor.org/stable/23700772
Topik, Steven. "State Enterprise in a Liberal Regime: The Banco Do Brasil, 1905-1930." Journal of Interamerican Studies and World Affairs 22, no. 4 (1980): 401-22.
Triner, Gail D. Banking and economic development: Brazil, 1889-1930. New York, NY: Palgrave, 2007.
Triner, Gail D. "Banks, Regions, and Nation in Brazil, 1889-1930." Latin American Perspectives 26, no. 1 (1999): 129-50. http://www.jstor.org/stable/2634041.
[1] Steven Topik, "State Enterprise in a Liberal Regime: The Banco Do Brasil, 1905-1930," Journal of Interamerican Studies and World Affairs 22, no. 4 (1980), 412
[2] Gail D. Triner, Banking and economic development: Brazil, 1889-1930 (New York, NY: Palgrave, 2007), 47.
[3] I. Briones and A. Villela, "European bank penetration during the first wave of globalisation: Lessons from Brazil and Chile, 1878-1913," European Review of Economic History 10, no. 3 (2006), 333.
[4] Ibid, 334.
[5] Triner, Banking and economic development, 17.
[6] Hebe Maria Mattos de Castro, “Beyond Masters and Slaves: Subsistence Agriculture as a Survival Strategy in Brazil during the second half of the Nineteenth Century”, The Hispanic American Historical Review, Vol. 68, No. 3 (Aug. 1988), 461.
[7] Gail D. Triner, “Banks, Regions and Nation in Brazil, 1889-1930”, Latin American Perspectives, Vol. 26, no. 1 Creating Markets in Latin America 1750-1998 (Jan. 1999), 129.
[8] Briones and Villenla, European bank penetration, 334.
[9] Ibid.
[10] Triner, Banking and economic development, 12.
[11] Triner, Banking and economic development, 13.
[12] Mattos De Castro, Beyond Masters and Slaves, 462.
[13] Triner, Banking and economic development, 16.
[14] Briones and Villenla, European bank penetration, 337.
[15] Triner, Banking and economic development, 40.
[16] Triner, Banking and economic development, 18
[17] Aldo Musacchio and Ian Read, "Bankers, Industrialists, and Their Cliques: Elite Networks in Mexico and Brazil during Early Industrialization.", Enterprise & Society, Vol. 8, no. 4 (2007), 842.
[18] Triner, Banking and economic development, 19
[19] Rondo Cameron and V. I. Bovykin, International banking, 1870-1914 (New York: Oxford University Press, 1992), 362.
[20] Ibid.
[21] Cameron and Bovykin, International Banking 1870-1914, 362.
[22] Triner, Banking and economic development, 31.
[23] Cameron and Bovykin, International Banking 1870-1914, 363.
[24] Triner, Banking and economic development, 25.
[25] Musacchio and Read, Bankers, Industrialists, and their Cliques, 844.
[26] Musacchio and Read, Bankers, Industrialists, and their Cliques, 845.
[27] Mattos De Castro, Beyond Masters and Slaves, 462.
[28] Triner, Banking and economic development, 21.
[29] Triner, Banking and economic development, 210.
[30] Ibid.
[31] Triner, Banking and economic development, 208.
[32] Triner, Banking and economic development, 174.
[33] Briones and Villenla, European bank penetration, 7.
[34] Triner, Banking and economic development, 21.
[35] Triner, Banking and economic development, 22.
[36] Triner, Banking and economic development, 23.
[37] Triner, Banking and economic development, 23.
[38] Ibid.
[39] Triner, Banking and economic development, 24-25.
[40] Triner, Banks, Regions and Nation in Brazil, 129
[41] Triner, Banking and economic development, 24.
[42] Triner, Banking and economic development, 55.
[43] Triner, Banking and economic development, 31.
[44] Triner, Banking and economic development, 117.
[45] Cameron and Bovykin, International Banking 1870-1914, 353.
[46] Ibid.
[47] Triner, Banking and economic development, 31.
[48] Ibid.
[49] Triner, Banking and economic development, 219.
[50] Triner, Banking and economic development, 218-219.
[51] Cameron and Bovykin, International Banking 1870-1914, 247.
[52] Triner, Banking and economic development, 93.
Accounting for Actors, the United Fruit Company and Socialism and Man
This is the reflection article I had to do with the Guevara document, and link it to a modern document. It could totally be more coherent if it was more focused, but I just though I would post what I was working on. This article presents a short analysis of two documents looking at the Caribbean and Central America during the twentieth century. Accounting for Taste: Export Bananas, Mass Markets and Panama Disease by John Soluri is an environmental and economic history of the rise of banana production in the Americas, and a critique of other literature in that field. Socialism and man in Cuba by Che Guevara is a primary source document about several related topics surrounding the rise of socialism in Cuba and the vision of the future presented by the Cuban revolutionaries. This analysis argues that just as the functionalist model of behavior fails to encompass the rise of the banana trade, it also fails to describe the Cuban revolutionary movement. It further asserts that just as Soluri argues that previous analysis had erroneously stripped actors of agency at the expense of invisible forces, Guevara makes the same mistakes in his writing.
Accounting for Taste describes the rise of the banana industry in general, but particularly the United Fruit Company from multiple perspectives through the years 1890 to 1960. In recording the history of the United Fruit Company, he discusses the effects of value, taste and aesthetics that led to the mass adoption of the Gros Michael banana. He discusses first how domestic production was concentrated into a few vertical producers of the goods. Discussion of Panama disease is a core part of the article, particularly how it was interrelated to a fall in biodiversity and its economic effects on banana production. Soluri covers the slow adoption of the Chiquita banana and the factors surrounding it. He then briefly discusses the latter stages of the United Fruit Company, including the rise in competition within the market and the pivot by the company in an attempt to market their bananas as a differentiated ‘high quality’ product. He does not, however, link these decisions to the traditional monopoly structure of firms.
Soluri gives an account of the history of the Gros Michael banana. He describes how its seedless nature, large size, high bunch count and ability to be shipped all joined to help make it the dominant banana of the Americas[1]. He then describes how those same qualities, with its distinctive aesthetics and entrenched market position kept it in production even after Panama disease swept through the plantations. The absurd conditions that the plants had to be grown under, with abandoned fields[2] and massive tracts of empty land waiting for crop failure[3], were a statement to the profitability of the fruit, but also the failure to find an alternative. The heavy capital flooding and recovery of field was even more so. Functionalist explanations for the longevity of the banana are not able to fully explain the long-term success of the fruit.
The economic history presented of United Fruit Company and its transition to a vertical structure also gives a clear picture of the goals of the company, and presents a near textbook example of the business model. It is somewhat surprising that Soluri gave so little analysis of the business model of the company, considering how much time he devoted to the environmental history and his comments about the agency of the actors surrounding Panama disease, and their response to it. [4] Considering the massive profits,[5] income and market share[6] of the United Fruit Company, as well as the omnipresence of their marketing within the banana market[7], it seems clear that the United Fruit Company was able to hold at least a partial monopoly. When this is understood, the fact that United Fruit limited production with its massive tracts of unused land makes significantly more sense, as flooding the market would have led to a loss in profit. Instead, they focused the market on quality in an effort to limit the competing supply of fruits and create an artificial shortage of the highest quality bananas, filling the rest of the demand with lower quality fruits. Then, when they lost their production monopoly, they attempted to use marketing to differentiate themselves and re-create a monopoly on ‘luxury bananas’. The anti-competitive tactics they used fall directly in line with this explanation, and it falls squarely into traditional monopoly analysis.
Socialism and man is an ideologically dense and wandering text as Guevara jumps from one topic and concept to another, something Guevara himself notes in his conclusion.[8] Due to this structure, commenting on every single point Guevara speaks on is impossible, and one must take all of his statements as his true opinions (as the scope of this article would otherwise be massive). Within this uncritical reading, some of the topics discussed include: his view of individualism within socialism; a discussion of social duty as a ‘societal function’; the pursuit of morality as a nation; and freedom versus realism within socialist states. He also discusses Castro as a voice of the people, the failure of capitalist social movements, Marxists theory as compared to Marxists-Leninist, the goal of society being education and the “original sin” of artists and intellectuals. He finishes with a warning against dogmatism, and a rallying cry to help create the humans of the 21st century, though he admits to not quite knowing what that would look like.
A reasonable portion of Socialism and man is dedicated to refuting the claim that the socialist revolutionary period removes individuality at the expense of the state. Guevara fails to do that, and also manages to reinforce the opposing point with later statements. He describes the fact that Fidel is the named and known personal leader of the revolution[9]. This does not, as he seems to think, describe individualism within his nation, but instead describes a personalisation of politics. He then describes that Fidel understands and can speak to all problems of the Cuban people due to his personal charisma[10], dismissing dissent out of hand. In order to continue the revolution, he is describing, Guevara then goes on to suggest the construction of revolutionary institutions.[11] These very institutions have had traditionally been effective partly for their role in depersonalization of politics, especially within Latin America.
Through the text, Guevara often both ascribes dissent and resistance he doesn’t like to invisible systems,[12][13][14] and turns to vanguardism[15][16] to describe why all problems are not actually problems at all. This same turn to vanguardism, however, makes any true functionalist explanation of the revolution impossible, as the revolutionaries are in pursuit of intangibles.[17] Also within the text, Guevara within the same few paragraphs laments that he cannot see solutions to certain problems as he is not an artist[18] and the fact that there are no artist revolutionaries[19] while immediately afterwards lambasting them in general without a hint of irony.[20] While he attempts to address this by claiming they are worth less for not being revolutionaries[21] and therefor must be instead educated from the ground up as both artists and revolutionaries, that doesn’t address the possible existence of someone being both a revolutionary and an artist other than his total dismissal of them, nor the lack of them in his movement.
Guevara, within his analysis, makes the very mistake Soluri criticizes previous works in his field of making. In his conclusion, Soluri argues that agency has been stripped from people by ascribing many of the results of their actions to forces of nature, in this case the “the ravages of a disease”[22]. His evidence is strong, suggesting that instead of the being an ‘act of god’, the banana corporations continually and dangerously exposed themselves to risk factors through selection to a single crop and destruction of biodiversity. Guevara ascribes any dissidence to inhuman enemies of the revolution or inevitable results of his ideological models, curbing agency (other than a static choice to ‘join the revolution) in the name of these invisible ideological models, usually capitalism. Those who flee his country after revolution, for example, are characterised as “completely housebroken”[23] instead of any other reasonable motive. Guevara speaks in-depth about how pressures both within capitalism force behaviors, and how that systematic pressure can be used to create his new educated and moral population.[24] This analysis strips actors of agency, instead giving that agency only to systems and revolutionaries. Further, by turning opposition into a purely systematic problem but is allies into heroic individuals struggling against a system, he both dehumanises opponents, delegitimizes anyone disagreeing and grants his followers a ‘savior motive’ as the vanguard of America.[25]
Accounting for Taste: Export Bananas, Mass Markets and Panama Disease and Socialism and man in Cuba represent very different texts written in very different eras. Because of this, more than being comparative pieces Accounting for Taste functions as additional analysis and Socialism and man in Cuba acts as a supporting document when comparing the two. Soluri arguments on functionalism and agency are valuable commentary that can be additionally applied to the Guevara document.
[1] John Soluri, “Accounting for Taste: Export Bananas, Mass Markets, and Panama Disease”, Environmental History, Vol. 7, No. 3 (Jul., 2002), pp 389
[2] (Soluri 2002), pp 395
[3] (Soluri 2002), pp 394
[4] (Soluri 2002), pp 403
[5] (Soluri 2002), pp 391
[6] (Soluri 2002), pp 397
[7] (Soluri 2002), pp 392
[8] Che Guevara, “Socialism and man in Cuba”, trans. Brian Baggins, section Danger of dogmatism
[9] (Guevara 1965) section Introduction
[10] (Guevara 1965) section Participation of the masses
[11] (Guevara 1965) section Conscious process of self-education
[12] (Guevara 1965) section New status of work, Invisible laws of capitalism, The individual and socialism
[15] (Guevara 1965) section Role of the individual
[16] (Guevara 1965) section Love of living humanity
[17] (Guevara 1965) section Love of living humanity
[18] (Guevara 1965) section New impulse for artistic experimentation
[19] (Guevara 1965) section New impulse for artistic experimentation
[20] (Guevara 1965) section New Revolutionary generation
[21] (Guevara 1965) section New Revolutionary generation
[22] (Soluri 2002), pp 403
[23] (Guevara 1965) section New impulse for artistic experimentation
[24] (Guevara 1965) section Conscious process of self-education
[25] (Guevara 1965) section Role of the individual
On vertical integration in the past and future.
The first question I should probably answer is ‘what is vertical integration?’ Vertical integration is when a company takes over all levels of the supply chain and production for a product. It’s not a new concept by any means. In the history of corporations, older examples like the VOC (Dutch East India company), United Fruit Company and even the nominally non-profit (and utterly evil) Association Internationale Africaine are all examples of this in the largest possible form of action. It started even with Italian merchant companies in the 1200s, and it’s an idea older then capitalism as a real institution. It is also, as can be seen by the kind of notoriety of these places, a very scary concept.
These are just some of the most high-profile examples, usually for the fact that their ‘vertical supply chains’ or otherwise corporate run nations can be quite terrible. They are corporate states, where a single corporation becomes a monopoly on a region of land. These companies in particular are imperialistic, not just in the ‘doing bad things’ use of the word, but in the sense that the home or headquarters of the company is not based within the company territory that makes up the de-facto state. Sometimes, like with the United Fruit Company, locals are left in power under a puppet government. Other times, like with the ‘Congo Free State’, a lax overarching and non-corporate government is put in place as a political tool but the government is run by the company and sometimes the company takes and administers lands in the name of a home country (like with the VOC and the Netherlands.)
Some companies are less total in their efforts to manage their supply chain, and don’t really seek political control. The reasoning is simple: bribes, administration and infrastructure (among other tools of control) are expensive.
Why then might a company choose to ‘go vertical?’
It is the only way to fully implement total control, total quality standards and manage resources in places that otherwise would not be able to host a company of that style. When done wrong, it tends to be a total failure, as many colonial companies ended up where the expensive. Why do it then?
Because when you do it right, it’s very, very profitable.
From small examples like mining and mill towns that built fortunes during the industrial age and on past the gilded age, there is profit in both monopoly and vertical growth. Even back to the largest company of all time (The VOC) you can see the potential benefits, with companies of a large enough size and power able to bring forth military support. The United Fruit Company and their Great White Fleet grew profits by six times over in seven years (1913 to 1920) and helped build the very term ‘banana republic’ when they became a true vertical company. Coups, underhanded negotiations and bulling tactics are all valid ground for a company too large to stop.
The disadvantage is that more specialised companies may be better at some aspects of production when compared to a vertical company. The advantage lies in control and quality, and therefor is naturally more beneficial when a monopoly can be maintained.
What about companies who operate in their own country? One famous case, that of Standard Oil, was hit with the anti-trust push of the gilded age. Company towns, built for shipping and mining and milling have long histories within North America of being dangerous organisations for their workers.
Some are seen as beneficial, especially the ones that built and developed infrastructure or education, but by-and-large they are not particularly beneficial for the state they intertwine with.
What happened to them then?
In the modern era, tax laws and competitive markets have seen a general decline in the vertical companies, with monopoly and anti-trust laws lurking in the background to dissuade new expansion. Both the economic and social conditions are generally resistant to their formation.
Yet we still imagine them. Why?
What of futuristic and imagined corporate states and powers? We impose things that we imagine and things from our history into our fiction, and corporate states are no different. In Sci-fi, space-based ‘mega corps’ are a mainstay, with corporate towns and cities re-imagined as entire corporate planets and systems (as space sci-fi often does, lacking the scope to present meaningful differences from world to world, but instead treating planets as cities in a new age of discovery and sail.)
Space, science fiction and the interrelation as (often unintended) commentary on the ages of colonisation, sail, empire and both the Victorian and guilded age interrelated our history and an imagined future based on our experience. Corporations, corporate nations and vertical companies operating in places without the ability to control them all are apart of that.
Closer to our modern world, different kinds of dystopian fiction imagine a world ruled by corporations, with impossible power and strength. Genres of fiction born at the dawn of the information age, most notably cyberpunk, imagine different kinds of corporate futures, some vertical and some simply with massive power.
What then, amid a need for great villains and the un-nuanced world of storytelling and the literary nature of the excesses of science fiction, might a true future ‘corporate state’ look like?
I think you have to go to the only true vertical company left, one that still runs its own towns, influences government and tries to monopolise its trade with impunity.
Saudi-Aramco is the largest company in the world. It is held privately, partly by the actual Saudi government and partly by the Saudi crown. It is probably the last true vertical corporation that exists today, and operates mostly within its own country under the control of its government, which enables it a local monopoly.
It also understands that oil cannot sustain it forever. The company is planning a small (five percent, perhaps) IPO. It may offer up to ten percent.
This is still, at minimum, a 170 billion dollar offering. For a company from a country with a general GDP of about 650 billion, that’s stunningly massive.
The company is also growing in power. The reforms within the country, the push to modernize business and attract trade, and most of all the Saudi 2030 plan all have the hallmarks of the company, and its growing influence. It is a personal estimation that by 2040 Saudi Arabia will be being run behind the scenes by the company at the behest of the royal family. Direct power will be replaced with indirect power as the company diversifies and tries to build itself into a larger company. Saudi Arabia, strangely, might very well be the first cyberpunk style ‘mega corp’ of the next era. With the power of traditionalist and draconian laws to crush opposition and a monopoly on economic might, it will be unrivaled within its nation. It already does much of the construction, why not the education and administration too? While costly, the ownership of the company and that of the country are one in the same, and the company profits are used to fund those things through taxes and then re-distributed.
Who will one day have more power, the owner of Aramco or the king?
Why couldn’t they be the same man.
When the country and the company come up against one another, why not support the beast that lets you profit more deeply? It has all happened before.
There are other ways, partly by the same model, that another company might grow in much the same style. As smaller nations in Africa and Asia really strike the development curb and start to protect themselves from the diseases ravaging their country (perhaps reliant on western medical advancement, but something that I imagine happening nonetheless, a company wishing to create a new ‘banana republic’ with a new kind of good that can benefit from African conditions, be it vast, cheep labour, good climate or weak regulations and a willingness to protect its own may very well emerge.
I think it more likely then not that such a company will show up in the next eighty years. Both international ability to enforce regulations and anti-trust laws are growing more and more toothless as western governments fail to adapt to new technological changes fast enough. Vertical integration, monopolies and a new gilded age, one where information is the new oil (and oil is the old oil, for a while longer at least) are something I can’t help but imagine in the future. Like all things, this is nuanced and not so clear cut as I might make it sound, but I think it’s something to consider.
Essay on Malacca, introduction to the capture of Malacca.
In 1509, two years before the conquest of Malacca, Diogo Lopes de Sequeira recorded his observations on his arrival in the city-state in a letter titled On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands. Two years later, the city was conquered by the Portuguese. These provide a view of the city at the end of its golden age, just before its fall. This letter, along with examination of a variety of secondary sources including essays, monographs and articles about the city build an image of the cultural and economic makeup of Malacca at the start of the 16th century. This examination will look at the geography, national identity, religious makeup, economic core and geopolitical basics that helped define the city-state before conquest. Then Malacca after conquest under rule of the Portuguese will be examined. The Suma Oriental: Which goes from the Red Sea to China, written by the first Portuguese ambassador to China Tome Pires, during his years in Malacca shortly following conquest will be the primary document used. It, supported by a similar variety of secondary sources will show the changes caused by first conquest and true contact. The examination will look at changes brought by Portuguese faith, trade practices and being a part of the greater Portuguese empire. It will be shown that Malacca was a multi-faith trade sultanate, founded and built around commerce, which projected power and protected itself from larger nations through trade, faith, and political maneuvering. It will be further demonstrated that the changes caused by contact and conquest destroyed the mercantile, imperial identity of the city, and was replaced with a highly autonomous, multi-ethnic and multi-faith identity of many nations built around the emerging concept of the Malay people.
In 1508-1509, a Portuguese expedition was sent to make port in Malacca, with stops farther west throughout the Indian Ocean. The Captain, Diogo Lopes de Sequeira, wrote letters with his observations of the expedition, and his general rendition of events. Malacca would fall in 1511, meaning these letters, particularly the part concerning his arrival in the city, are just about the last available description of the free Malacca sultanate as it had been.
Malacca was founded by the last King of the Kingdom of Singapura, after being sacked by larger nations fearing it’s growing power.[i] It was built in a perfect place for trade, as the chosen location was on a major trade route, and it is described that “…the general monsoons die down forty or fifty leagues before the City of Malacca, which is situated half-way along the Straits, but nevertheless the currents and land-winds from both countries suffice for reaching port.”[1] Currents and winds meant Malacca served as a natural stopping point and destination for Indian Ocean, southeast Asian and Chinese traders. The same source, an article by P. E. Josselin De Jong, describes that, “[The] wind and current do always serve them to carry the ships to Malacca.”[2] The Portuguese on arrival describe the geography of the city itself, saying “The town of Malacca is situated almost in the middle of the straits at a latitude of two degrees north. It extends one league along the coast, and has a river which flows from inland and cuts it into two parts…” [3]A major central river flowing from inland allows even more trade to flow, taking goods from the inner peninsula to the city. This geography meant that Malacca was a natural commercial hub built for maritime trade.
With its natural geographic advantages to jumpstart and strengthen it, Malacca built itself as a trading empire. Unlike other regional contemporaries, Malacca was not a decentralised kingdom that took power from its large territory and many cities. Characterized both in contrast to contemporaries and successors by J. Norman Parmer, “The Malacca Sultanate was, however, a city-state with a sea port economy. Political power was centralized, and the Sultan was autocratic” [4] This wealth and central power allowed the city to grab territory for itself, eventually controlling the Malay peninsula including the former site of Singapura. The Portuguese description supports this, by saying that “…the town has an appearance of such majesty by reason of it’s size, the number of ships which are anchored in the harbour, and the extent of the movement of people by sea and by land, that in the opinion of the men of the Portuguese fleet it is greater than what that had heard of it and in it they saw more wealth then there was in India” [5] That massive wealth was supported by a great population of traders from countries all around the greater local region. In addition, the city used the Islamic faith to draw traders and merchants from the entire Islamic commercial sphere. Through this network, it extended its economic reach as far as places like Alexandria. These advantages all served to build a powerful trade empire without the need for the large local population base than was required by its contemporaries.
The national identity of Malacca was not a pre-existing ethnic identity that also applied to the city. Instead, through works produced in the city primarily sponsored by the Sultan, the city created its own national identity, culture, formalized writing and more. There was no one ethnically distinct people within the city, before or after founding. The region surrounding the city was a mix of different peoples, cultures and languages that made up the Malay peninsula. Malacca drew people from many of these groups, from the whole peninsula and beyond into the new city. Combined with the huge mass of foreign traders that resided in the city, as in all similar cities in the region J. M. Guillick described that “…there was a lack of cultural homogeneity in the subject class” [6]. The identity of the city, therefore, had to be formed around other factors. The emergent nation was based on a blend of a great number of differing cultural practices, some local, some Islamic and some imported from other regions. Distinct art, writing and traditions were all started in the city throughout it’s lifespan. Malacca was also strongly centralised, with a great amount of power resting in the city, and a great amount of the cities’ power resting with the Sultan. The Portuguese observed that “Although all the houses are made of wood, with the exception of the mosque and a few buildings belonging to the Sultan…”[7] Central control was strong enough that the only person in the city with actual stone buildings was the Sultan, and his long-time allies of the Islamic faith. This is important because it means the power in the city was concentrated around the rulership instead of with lower nobility, allowing a single identity to emerge from the many groups. Despite the massive wealth of all the traders in the city and the local nobility, only the Sultan had the power for stone construction.[ii] This combination of centralised power, great wealth, no single pre-existing ethnic identity and a unique culture allowed the development of a distinct national identity within the city in a relatively short amount of time.
Religion in Malacca was another important component to the city. While the city was said by both it’s rulers and explorers like the Portuguese to be Muslim, the actual situation was more complex. The local and regional religion at the founding of the city was a syncretic combination of Hinduism, Buddhism and Animism. Malacca was founded as a shift was occurring, and in the words of Kernial Singh Sandhu and Paul Wheatley, “Hindu and Mahayana Buddhist kingdoms that had prevailed in the western parts of the region for more then a millennium were being replaced by polities based … in the archipelago on Islamic doctrines of statehood.” [8] This shift was represented in the religions of the city itself. There was a mix of local faith, Islam, different Buddhist doctrines and Hinduism that were all represented. Conversion in Malacca among the ruling classes to Islam started with the Sultan. This was partly an economic choice to welcome Islamic trade to the city. This meant that Islamic traders, missionaries and scholars were naturally linked to the Sultan. The nobility followed, but “To speak of conversion is perhaps to imply too much. For a considerable part of the Malay nobility this was more a matter of reconciling themselves with the inevitable” describes C.H. Wake [9]. Islam had been spreading in the region for a great many years, and the city embraced it for its offered economic benefits foremost. This adoption of faith, however, did not imply that the lower classes within the city converted. Many of the locals continued to worship as they had since the founding of the city. This meant that Malacca for much of its existence had to deal with being a multi-faith polity. The mix in the city was compounded by the fact that no great efforts from any of the Sultans was made towards conversion. The attitude towards faith that would come to characterize the city allowed a great number of religions to be present and trading, if sometimes taxed at a higher rate under the Islamic jizya taxes. Lopes remarked on that attitude when they came to the city, (unknowingly) noting both Sunni and Shia traders from the Arab world, as well as “…Bengalis, Penguans, Siamese, Chinese, Luzons, Lui-Kius and others who frequented Malacca for trade.” [10] Just about every faith in the monsoon region of Asia at the time could be found in some form in the city, and this helped build the city it’s great riches.
Malacca, despite it’s great wealth and variety of trade partners, was a city under threat. While the city did fight both land and naval wars against it’s more powerful large neighbors, more often than not the survival of the city was built on politics. At different times, the city acted as a tributary of both Ming China, and Ayutthaya in Siam, and on more than one occasion, both at the same time. It played politics for alliances with local Muslim kingdoms as far away as Bengal. Locally, it was alternatively hostile and cooperative with nearby nations in a constant shift of policy, though rarely having to go to war. Because of this, alliances were not long term arrangements with shifts every few years. This policy allowed the city a degree on constant growth. The downside of this policy is that it left Malacca with few long-term friends for when larger nations began to eye the city. Throughout southeast Asia, Malacca looked to project and extend its soft power. Interestingly, it managed to project this power throughout the region with a very small military. As it’s described by M.J Pintado, “Malacca was too insignificant a city to have a navy to antagonize enemies even as Sri Vijaya had antagonized the Chulas and Majaphit. Yet imperialism on a small scale had payed off well.” [11] The city used politics, trade and faith as weapons for influence over the region. While willing to submit in the short term, Malacca would look to benefit from more powerful nations, such as the hegemony of early Ming China, and then throw them off as it suited them. Muslim missionaries proved to be little threat to stability for the city itself, and in fact proved to be some of the Sultans strongest supporters within the city. After conversion, Malacca used them as a weapon against other local kingdoms and to build alliances farther east. Projecting power into even the spice isles, Pintado describes that “Muslim missionaries sailing from its harbour hastened the decay of Majapahit and carried Islam and trade as far as Banda and the Moluccas.” [12] The Malaccan soft power doctrine was used in almost all cases, including against it’s largest enemies. A combination of altering war, antagonization and submission in name to Ayutthaya, while pushing for and helping along the decline of Majaphit were mainstays of Malaccan action. Even the arrival of Portugal, prior to the capture of the city, was not unprecedented to the Sultanate. The Chinese treasure fleets had stopped in the city as well, presenting a distant power projecting might into the city through naval force. Internally the city was drawn between different factions and powers of merchants which played a major part in whom the city favored. This allowed nations to support their traders in the city to gain major influence with the Malaccan government. This approach, however, allowed foreign rivalries to be imposed in the city. At the Portuguese arrival, a conflict is described in the opinion of the city between Arab world traders and non-Arab. “To their discredit those people [Muslim Traders] had frightened the gentiles by telling them about the Portuguese customs and commerce…”[iii] [13]. This extension of other rivalries like the Arab – Portuguese conflict into the city drove several painful conflicts for the city, including its invasion and occupation by the Portuguese a scant two years later.
The Portuguese expedition and its letter about the affair presented the last real look at the city before conquest. Malacca was a state different from its contemporaries for its pure trade economy, it’s slightly odd foreign policy of mostly soft power and its multi-ethnic and multi-religious construction. Rather than being the nation of a distinct ethnic people, Malacca was a city that created its own identity, one that had lasting impact on the region. The Malaccan identity was a trading nation with a multi-faith composition under Islamic governance. These qualities, however, would make it an attractive target for the western nations arriving in the region, and the Portuguese conquered the city less than ten years after their initial arrival. The Portuguese governance, it’s greater empire which Malacca was now a part of, and the echo of the true arrival of European empire would leave deep changes in the city itself.
Tome Pires was a Portuguese apothecary who arrived in Asia in 1511. Through his competence and his merits (and the nature of the Portuguese in Asia at the time), he became the first Portuguese Ambassador to China. Before that appointment, however, he spent two and a half years (through the year 1513 is the main date we have), in Malacca. During his say studying primarily Asian drugs, he wrote a major history text about the region known as the Suma Oriental. The second section of this text concerns Malacca after the Portuguese conquest. By its nature as a contemporary history text, it provides a window into the thoughts of the Portuguese about the city and region.
"Whoever is lord of Malacca has his hand on the throat of Venice"[14], wrote Tome Pires. The trade of Malacca, especially to the Portuguese, represented more than just absurd profits at low risk[iv]; it represented control of trade through Europe. The Portuguese believed that control of the trade flow of Asia through their conquest of Malacca would allow them to strangle trade in the Arab world. This strangling, to the Portuguese, had the twofold advantage of damaging trade for their enemies, Venice and the Muslim sultanates. The Portuguese, looking to put in place the start of a mercantile system, imposed a tax of 20 percent on goods in Malacca[15] which rising power Johor, a rival state to Malacca, did not impose. With the absurd profits earned by trade ventures, the new tax affected but did not destroy trade. It did, however, deeply damage its mercantile identity. No longer a city of free traders under a hegemony, Malaccan identity was became far more reliant on the writing, art, and other cultural artifacts developed under the Sultanate. As Johor became the city of the many Malay villages and began to develop as Malay, the identity of Malacca remained mixed. The Portuguese observed this, and noted the lack of ethnic unity in the city, especially during war. Pires records "...the natives did not back the king of Malacca; because in, trading-lands, where the people are of different nations, these cannot love their king as do natives without admixture of other nations."[16] The Portuguese assumed that mixed loyalties were a natural part of a trading city, and that they could rule the city like the Sultan had, as outsiders. The near existential problem for Southeast Asian trade the Portuguese created was not just high tariffs in a single city. M. C. Ricklefs, an Indonesian historian writes “[The Portuguese] had fundamentally disrupted the organisation of the Asian trade system.”[17] This disruption was caused by the destruction of hegemony in the region, which had secured diverse trade into a single port. Ricklefs expands “There was no longer a central port where the wealth of Asia could be exchanged; there was no longer a Malay state to police the Straits of Malacca and make them safe for commercial traffic. Instead, there was a dispersal of the trading community to several ports, and bitter warfare in the Straits." Bitter warfare often manifested as state-sponsored pirate attacks among the powers of the region, but in no way precluded military action. This collapse in centralised trade in Southeast Asia was compounded by the Portuguese insistence on pirating Arab vessels, primarily in the Indian Ocean, and a state of near constant hostilities between the Portuguese and Aceh within the straits. This warfare meant that no nation, despite ambitions, would be the ‘heir of Malacca’. The conditions that had allowed the Sultanate to thrive, the traditional organisation of trade in Southeast Asia, had been lost.
Faith was a core component of the Portuguese conflicts and strategy within Asia. The Portuguese strongly believed in their own religious and cultural superiority over the native Muslim rulers. The Portuguese viewed that Islam in the region was doomed to fail and that as Christians they were inherently better rulers. "And since it is known how profitable Malacca is in temporal affairs, how much the more is it in spiritual [affairs], as Mohammed is cornered and cannot go farther, and flees as much as he can.”[18] Pires wrote, not long after the conquest of Malacca. The Portuguese failed to understand the vital role of Muslim merchants as a trading go-between from Alexandria to China. The Catholic Portuguese would also never bow to the power of the Dynasties of China as the previous ruler of the city had, seeing them as heretics. Despite this, the Portuguese were confident that there would be no true long-term disruption. Pire continued “… let people favour one side, while merchandise favours our faith; and the truth is that Mohammed will be destroyed, and destroyed he cannot help but be."[19] To them, the failure of the Muslim order in Asia, and the ascendance of Portuguese Malacca as the foremost trading port in the world was just a matter of time. "Malacca cannot help but return to what it was, and [become] even more prosperous, because it will have our merchandise; and they are much better pleased to trade with us than with the Malays, because we show them greater truth and justice."[20] Pires, and the Portuguese themselves saw Portugal as the preeminent global trade power and inherently better trade partners for their faith.
What the Portuguese failed to realise is that, despite its spectacular natural geography, Malacca was not at all the inevitable ruler of the region. Soon, competition from Johor and Aceh was fighting the Portuguese for southeast Asian trade. On the rise of Aceh, one of its new rivals, Ingrid S. Mitrasing, a Malaysian historian writes "The relocation of Muslim trade networks from the conquered port of Malacca to Sumatra's eastern ports was the impetus for Aceh's economic rise, laying the foundations for its becoming one of Asia's greatest maritime powers of that time."[21] Malacca lost a major component of its trade and prominence as Aceh took over as the Muslim trade center of southeast Asia. Within Malacca itself, the institution of Portuguese Christianity failed to gain prominence the way Islam had, and the concept of Islam as a centralising force within the city was simply lost instead of being replaced. Christianity even outside the city itself only gained any prominence later in Portuguese rule, and more as the work of several dedicated holy men than any true Portuguese effort. The Portuguese failed to seek and maintain the ties of faith and trade that the Malacca Sultanate had with used to build its power base. For Malacca, the nature of Islam as a symbol of status and connection beyond the city faded, with Islam simply becoming another part in the multi-faith city.
The Portuguese administration in Asia had deep-rooted problems from its very start. Optimistic about the state of their empire, Pires identifies flaws already present in the Portuguese system, but proposed solutions. He writes "Great affairs cannot be managed with few people. Malacca should be well supplied with people, sending some and bringing back others. It should be provided with excellent officials, expert traders, lovers of peace, ...for Malacca has no white-haired official."[22] The aid and administrative competence, sorely needed, never materialised in the city. Portuguese administration in the region was instead moved to Goa, on the west side of India, and Malacca seemed almost an afterthought to officials in Portugal. Resources from the homeland were few, especially capable men and leaders. Armando Cortesao, historian, remarks that "Castanheda[v] informs us that ‘the King of Portugal did not send any ambassador [from Portugal], because, thinking that the King of China was near, he ordered Femao Peres to send there one of his captains, or whoever he might choose....'[23] This failure to supply the Asian empire from the homeland represented a pattern of a lack of resources provided to the Portuguese administration in the region. In 1581, when the crown of Portugal was combined into the Iberian Union, the resources provided were lessened even more. The administration of the Portuguese Asian territories became a study in making do. The lone Christian power in the region, starved for resources and surrounded by hostile nations[vi], Malacca was forced to act as an autonomous entity to preserve its own interests, rather than those of the Portuguese empire. Internal rebellions[vii], and a vanishing technological advantage[24] provided more problems to the Portuguese, but two main factors allowed them to rule the city for 130 years despite their many problems.
Seamanship and geopolitics were the tools of survival for Portuguese Malacca. "...it is difficult to conceptualize the region before this century, because the boundaries of many states kept shifting and because many of the actors, ... were operating in areas beyond the borders of today's Republic"[25] Dennis Duncanson, historian, remarks. The period of Portuguese Malacca existed in a time and place where states and nations in constant flux and conflict. International relations and realpolitik dominated the region, with powers like Johor sometimes fighting and sometimes helping the Portuguese (and in one notable case, saving the Portuguese from a Chinese fleet). “Inter-state relations were at all times an important ingredient of political activity in Southeast Asia”[26] records S. Arasaratnam, a historian of Southeast Asia. The Portuguese empire in Malacca and other Asian possessions was highly autonomous and ruled by a local Bendahara who functionally ran much of the city and surrounding communities. International relations, in theory to be administered by the king in Portugal or Spain, were far to volatile and active to be run from a distance that took a full year for a round trip. The colonial government, on the far side of India, was often still too far away to run the city. Corruption[viii], confused commands and decisions made with strained resources were mainstays in the Portuguese administration; luckily much of the city ran itself. This culture of autonomy became a powerful part of Malaccan identity. Portuguese married into local families, and much of the colonial government was run by mixed children of locals and Portuguese for lack of lack local manpower. This mixed nature extended into trade, where “ships were seen in the Indonesian archipelago which had part Portuguese and part Indonesian crews, or which were owned by Indonesians and chartered by Portuguese.”[27] Malacca under the Portuguese, like the Sultanate before it, remained reliant on food sources external to itself and was forced to procure food for locals. The Portuguese Asian empire, starved for money and manpower, was reliant on this mixed society. To even call Malacca under the Portuguese ‘Portuguese in nature’ is a mistake. The city-state of Malacca simply accepted both Portuguese and mixed Portuguese as new nations within the wider city, and they had notably Malaccan flavor as a society.[28] The shifting nature of local politics, the able Portuguese and Portuguese/Malaccan naval power and the natural geographic advantages of the empire allowed it to survive long past what would be expected considering its resources and administration.
Conquest, not first contact, was the change that redefined Malacca. In the wake of the conquest, the city that was once the Sultanate of Malacca declined sharply in importance and was never again the kind of power it was after its founding. In the wake of conquest, Malacca lost its nature as a centralised, hyper mercantile nation who ruled the seas. Its identity as a multi-religious, multi-ethnic nation of autonomous peoples who shared a Malay culture was partly strengthened partly formed in the long wake of the capture.
[1] P.E De Josslin De Jong and H. L. A. Van Wijk, “The Malacca Sultanate”, Journal of Southeast Asian History, Vol. 1 No. 2 (Sep., 1960): 22.
[2] Ibid
[3] Manuel Murias, “On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands – Diogo Lopes de Sequeira” in Portuguese Documents on Malacca Vol. I, 1509 - 1511, Edited and Translated by M.J Pintado, (Kuala Lumpur: National Archives of Malaysia, 1993), 43.
[4] J. Norman Parmer, review of Indigenous Political Systems of Western Malaya, by J. M. Guillick, The Journal of Asian Studies, Vol 19, No. 1 (Nov., 1959): 91.
[5] Murias, “On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands – Diogo Lopes de Sequeira”, 43.
[6] J. M. Guillick, Indigenous Political Systems of Western Malaya: Revised Edition (London and Atlantic Highlands, NJ.: The Athlone Press, 1988), 44.
[7] Murias, “On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands – Diogo Lopes de Sequeira”, 43.
[8] Kernial Singh Sandhu and Paul Wheatley “The Historical Context,” in Melaka: the transformation of a Malay capital c. 1400-1980 Volume One, ed. Kernial Singh Sandhu and Paul Wheatley (Kuala Lumpur, Oxford University Press, 1983), 3.
[9] C.H. Wake “Melaka in the Fifteenth century: Malay Historical Traditions and the Politics of Islamization in Melaka: the transformation of a Malay capital c. 1400-1980 Volume One, ed. Kernial Singh Sandhu and Paul Wheatley (Kuala Lumpur, Oxford University Press, 1983), 140.
[10] Murias, “On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands – Diogo Lopes de Sequeira”, 43.
[11] M.J Pintado, Introduction to Portuguese Documents on Malacca Vol. I 1509 - 1511, Edited and Translated by M.J Pintado, (Kuala Lumpur: National Archives of Malaysia, 1993), 4.
[12] Pintado, Introduction to Portuguese Documents on Malacca Vol. I 1509 – 1511, 5.
[13] Murias, “On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands – Diogo Lopes de Sequeira”, 43.
[14] Tome Pires and Francisco Rodriges, The Suma Oriental: an Account of the East, from the Red Sea to China Vol II (London: The Hakluyt Society, 1944), Edited and Translated by Armando Cortesao, accessed March 2 2017, http://www.sabrizain.org/malaya/library/, 287.
[15] (Pires and Rodrigues 1944), 284.
[16] (Pires and Rodrigues 1944), 286.
[17] M. C. Ricklefs, A History of Modern Indonesia since c. 1200 Third Edition, (Houndmills, Basingstoke, Hampshire: Palgrave, 2001), 27.
[18] (Pires and Rodrigues 1944), 286.
[19] (Pires and Rodrigues 1944), 286.
[20] (Pires and Rodrigues 1944), 283.
[21] Ingrid s. Mitrasing, "Negotiating a New Order in the Straits of Malacca (1500–1700)," KEMANUSIAAN Vol. 21, No. 2, (2014): 56.
[22] (Pires and Rodrigues 1944), 285.
[23] Armando Cortesao , Introduction to The Suma Oriental: an Account of the East, from the Red Sea to China Vol I, by Tome Pires and Francisco Rodriges (London: The Hakluyt Society, 1944), xxvii.
[24] (M. C. Ricklefs 2001), 27.
[25] Dennis Duncanson, review of Melaka: The Transformation Of A Malay Capital C. 1400-1980 By Kernial Singh Sandhu; Paul Wheatley, The Journal of the Royal Asiatic Society of Great Britain and Ireland No. 1 (1985): 121
[26] S. Arasaratnam, Intoduction, in International Trade and Politics in Southeast Asia 1500-1800 ed. S. Arasaratnam (Singapore, Cambridge University Press, 1969), 391
[27] (M. C. Ricklefs 2001), 28.
[28] Ingrid s. Mitrasing, "Negotiating a New Order in the Straits of Malacca (1500–1700)," KEMANUSIAAN Vol. 21, No. 2, (2014): 61
[i] It’s recorded that the nations of Ayutthaya and Majaphit destroyed Singapura, and thusly the successor state of Malacca had those two states as it’s foremost enemies.
[ii] Stone buildings provide a level of safety and permeance over wooden buildings, but more then that were a function of status. Both stone and (probably Islamic) architects would have had to be imported to the city to build the structures at great expense, as all local construction was with wood.
[iii] While the Portuguese were rather convinced it was the Muslim traders that disliked them, this is not quite true. Gentiles, who are presented as the neutral traders, is used to refer to non-Christian and non-Muslim peoples of the region. The Portuguese consider the Muslim kingdom of Bengal, among others, to be gentiles. However, another Indian Muslim kingdom Gujarat and the Shia Persians are listed in the same general group of Muslims. The Portuguese, as one might expect from such a short time in the region, make numerous mistakes like this (or simply apply the name Muslim to nations they do not like.)
[iv] Profits varied by expedition destination, but for ever 100 ‘dollars’ put in the expedition would return between 140 for a short, pretty local voyage to 300 or more from a Chinese venture
[v] This being Fernão Lopes de Castanheda, a Portuguese historian from the mid 1500s, though no further information is provided by the source.
[vi] While Islam was a traditional enemy from the first Portuguese arrival, China became very hostile to the Portuguese later in their reign, and fought against them, both moving their main trade to Johor and launching an attempted invasion of Malacca.
[vii] The Malaccans did not simply accept Portuguese rule, with several coup attempts and more then one rebellion in the first few years of rule.
[viii] It’s noted that Malaccan leadership often traded in Johor for personal benefit, to get around the Portuguese tariffs, going against the monopoly the Portuguese were attempting to create.
Bibliography
Arasaratnam, S. “Intoduction”, in International Trade and Politics in Southeast Asia 1500-1800. ed. S. Arasaratnam, 391-395. Singapore, Cambridge University Press, 1969.
Cortesao, Armando. Introduction to The Suma Oriental: an Account of the East, from the Red Sea to China Vol I, by Tome Pires and Francisco Rodriges. London: The Hakluyt Society, 1944.
De Jong, P.E De Josslin and Van Wijk, H. L. A. “The Malacca Sultanate.” Journal of Southeast Asian History, Vol. 1 No. 2 (Sep., 1960): 20-29.
Duncanson, Dennis. Review of Melaka: the transformation of a Malay capital C. 1400-1980 By Kernial Singh Sandhu; Paul Wheatley. The Journal of the Royal Asiatic Society of Great Britain and Ireland, No. 1 (1985): 119-123.
Guillick, J. M. Indigenous Political Systems of Western Malaya: Revised Edition. London and Atlantic Highlands, NJ: The Athlone Press, 1988.
Mitrasing, Ingrid s. "Negotiating a New Order in the Straits of Malacca (1500–1700)," KEMANUSIAAN, Vol. 21 No. 2 (2014): 55-77.
Murias, Manuel. “On the deeds & discoveries & conquests made by the Portuguese in the seas and Eastern Lands – Diogo Lopes de Sequeira” in Portuguese Documents on Malacca Vol. I, 1509 - 1511, Edited and Translated by M.J Pintado, 38-52. Kuala Lumpur: National Archives of Malaysia, 1993.
Parmer, J. Norman. Review of Indigenous Political Systems of Western Malaya, by J. M. Guillick. The Journal of Asian Studies, Vol 19, No. 1 (Nov., 1959): 91-92.
Pintado, M.J. Introduction to Portuguese Documents on Malacca Vol. I 1509 - 1511, Edited and Translated by M.J Pintado. Kuala Lumpur: National Archives of Malaysia, 1993.
Pires, Tome, and Francisco Rodrigues. 1944. The Suma Oriental: an Account of the East, from the Red Sea to China Vol II. Edited and Translated by Armando Cortesao. London: The Hakluyt Society. Accessed March 2, 2017. http://www.sabrizain.org/malaya/library/.
Ricklefs, M. C. A History of Modern Indonesia since c. 1200 Third Edition. Houndmills, Basingstoke, Hampshire: Palgrave, 2001.
Sandhu, Kernial Singh and Wheatley, Paul. “The Historical Context,” in Melaka: the transformation of a Malay capital c. 1400-1980 Volume One, ed. Kernial Singh Sandhu and Paul Wheatley, 3-69. Kuala Lumpur, Oxford University Press, 1983.
Wake, C.H. “Melaka in the Fifteenth century: Malay Historical Traditions and the Politics of Islamization in Melaka: the transformation of a Malay capital c. 1400-1980 Volume One, ed. Kernial Singh Sandhu and Paul Wheatley, 128-161. Kuala Lumpur, Oxford University Press, 1983.
Was the Civil War ‘treason’ and was it about slavery.
When you're talking about massive actions as treason, I think you have to look and allowable actions within a nation. While things like the Whiskey Rebellion might walk the line Arron Burr proved that treason requires a pretty strict amount of evidence, and not just what the president wants (even if the man in question is planning to invade Mexico and set up a monarchy, the Civil war is something pretty different.Treason doesn't mean inherently bad after all (though I might argue that the confederate positions were about as close to inherently bad as you can get in a binary debate), but I think the civil war was pretty clearly treason on the part of the confederate leadership. Their thoughts and intentions are very well recorded. Hamilton talked about being able to withdraw from the union right at founding. "a reservation of a right to withdraw […] was inconsistent with the Constitution, and was no ratification." He said. (https://founders.archives.gov/documents/Hamilton/01-05-02-0012-0099 source). What he was saying was that the Constitution would not have been ratified with a ‘leave clause’. Madison in a letter (http://www.constitution.org/jm/17880720_hamilton.txt) expressed similar feelings, and Washington shared the opinion, saying "In all our deliberations on this subject [the perpetuity of the government] we kept constantly in our view that which appears to us the greatest interest of every true American, the consolidation of our Union, in which is involved our prosperity, felicity, safety, perhaps our national existence". While an anti-federalist argument is that the states should be able to freely leave the union, as Madison noted, the anti-federalists were never able to ratify that opinion and states would not have been accepted if they insisted on the right to be able to leave. "This idea of reserving right to withdraw was started at Richmd. & considered as a conditional ratification which was itself considered as worse than a rejection."
there was no point an ability to leave.
After the 1819 Missouri Crisis, southern politicians started swinging their political power around and pushing against the union. Secession was eventually brought up in a more serious fashion after years of union compromises to southern interests eroded federal power enough that it seemed like a reasonable option. The response to this 30 years of pushing by southern business interests, the founding and election of the republican party (an anti-slavery party). Southerners were terrified that their economic and political free reign was going to come to an end, even if absolute abolition was a very minority position. The slave states had HUGE disproportional political power thanks to the 3/5th compromise, but with the loss (and the upcoming future losses, as forced by demographics) mad them realize that things were going to get uncomfortable for them. The Nullification Crisis, and the fear in the Carolinas of northern economic pressure on their slave empire was then worded as an encroachment on 'state rights'. As the free states started to throw up resistance to the Fugitive Slave Act, the south however did not support that. In fact, they used every tool they could to try and force the northern states back into line with the federal government. When they were unable to force the issue (due to a loss in power at the federal level with the rise of the republicans) , the talk turned to threats of succession. For over a decade, with things like the Georgia Platform in 1850, compromise was attempted, but the refusal of the northern states to send members of it's population into slavery came to a head with Jeff Davis's resolution that "sooner or later [that refusal would] lead the States injured by such breach of the compact to exercise their judgement as to the proper mode and measure of redress"
In other words, the southern states were threatening succession not over their own 'states rights' but because the free states were acting on their own, and it was hurting southern economic power. When Lincoln, the republican was elected, South Carolina acted instantly to leave the union after both holding the election and refusing to list Lincoln on their ballots. You might then say 'It could not have been about slavery, because no one actually proposed emancipation, and they were just acting on their rights, but they neither had the right, the mandate nor the moral grounding to act to secede. This is only true in the national sense, it was still very much a slave-holding issue.
As a very old Madison put it, "[Secession at will] answers itself, being a violation, without cause, of a faith solemnly pledged," (full source http://press-pubs.uchicago.edu/founders/documents/v1ch3s14.html). The southern generals and politicians were traitors who were acting in bad faith to attempt to preserve a system rigged in their favor because other states wished to exercise their right to have no part in slaving.
Research on Brazilian Economic history.
Brazil seems to really suck at capital in general, and seems strangely behind the times in just about every banking innovation. Even within Portugal, Even if you contrast them just to rivals, they were really, really late to the banking game. The first Brazilian banks were not founded until 1808 and in Portugal not until 1821, but the only bank in Brazil was bankrupted twice and went into crisis once, first in 1821 where independence managed to bankrupt it when John VI returned to Portugal with a notable portion of the bank's assets, went into crisis in 1891 under the weight of the Encilhamento during the old republic and then again went bankrupt in 1898 when the government's monetary policy changed to be strictly metallist. By 1900, a million pound loan had to be granted to the central bank by the congress and banks had taken to operating with a 100% reserve ratio. With the massive credit crunch that followed, Brazil lost 20% of it's coffee exports from 1901 to 1904 (which was a huge portion of both it's exports and government income in tariffs).
this is pretty simplified (the distinction over bankruptcy and crisis always is), but the whole affair was dumb. Brazil also had no lender of last resort until 1944.
To contrast to it's rivals, the dutch partly financed the sugar wars (1621 - 1640s) with Portugal and occupied Brazil with the help of it's new shiny Amsterdamsche Wisselbank which had been established in 1609 and developed an international payment system which was used to hire internationals to help the fighting. England founded the Bank of England in 1694 to help finance the 9 years war and provide loans in North American expansion, and while France didn't have an actual national bank until around 1800, they used their colonial companies like banks starting in 1684 but especially in the early 1700s (which blew up in their face rather spectacularly). America, the comparison case, launched the Bank of North America in 1781 to finance the revolutionary war, but removed it's powers for a while (but still had a running and advanced banking system by 1800, despite changing central banks a few times) in the colonial powers, actual modern federal banks started showing up with the American Federal Reserve in 1913 and followed in every other former colonial nation until Canada and New Zealand, which had used British banks, formed their own in 1934. Except Brazil, under the Vagras rule, which didn't reform it's banking until it sort of caught up in 1944, but was actually just using the state-run Bank of Brazil to do the same job which lasted until the American-backed coup in 1964 where it actually established a real central bank. They didn't actual reform it again until the 90s and have hardly changed it since then, and now have the world's highest reserve ratio by a large margin.
LIKE A REAL LARGE MARGIN, 10 times that of Chile and 25% more then the closest other country, which is Lebanon (who is literally next to states in civil war and a moderately frequent target on bombs aimed at financial institutions the whole 1890 - 1910 in Brazil is a document on how to fuck up a massive export boom
it was suggested to me that it was due to the land owning elites and "manoralism" "If most wealth is generated by old money that is extensive rather than intensive there is no need for capital investment."
but this really fails to understand the power of cash-crop exports and infrastructure, so I'm more unsure then anything else.