Spending of the Portuguese Crown led Brazil to Independence

The book addresses the fiscal impact of the transfer of the Court from D. João VI to Rio de Janeiro (Portrait by Albertus Jacob Frans Gregorius)

Few people know, but Brazil was one of the main suppliers of cotton that supplied the Industrial Revolution in England; and the only one among the great exporters to quickly lose ground in this market, tied to taxes created by the Portuguese Court, immersed in uncontrollable expenses.

This story, told in a doctoral thesis by FGV economics professor Thales Zamberlan Pereira, caught the attention of historian and journalist Rafael Cariello, and started one of the most interesting books released on this 200th anniversary of the proclamation of Independence in Brazil. .

“Goodbye, Senhor Portugal – Crisis of absolutism and the Independence of Brazil”, edited by Companhia das Letras, brings unpublished numbers in the bibliography about the end of the United Kingdom of Portugal and Algarves, to prove that it was the economic malaise caused by the spending excesses of the Portuguese Crown that led the country to separate from Portugal.

The same fiscal irresponsibility would end Portuguese absolutism. Dom Pedro I, by the way, instead of being the creator of an independent Brazil based on a heroic gesture, was part of the problem.

The book shows with unprecedented emphasis the popular participation of black and brown Brazilians in the process. It also recounts events in newly independent Brazil, when D Pedro I, who inaugurated his administration with austerity measures, ends up giving in to fiscal lack of control to finance wars over territory, and thus fuels strong opposition from the elites.

Its prime minister of finance, Martim Francisco de Andrada, is soon dismissed, also inaugurating the tradition of Brazilian rejection of economic teams obsessed with fiscal balance.

Its prime minister of finance, Martim Francisco de Andrada, is soon dismissed, also inaugurating the tradition of Brazilian rejection of economic teams obsessed with fiscal balance.

With new light on known documents and revealing findings from research done largely during the pandemic, Thales Zemberlan Pereira and Rafael Cariello see in this episode of History a demonstration that authoritarian regimes usually generate problems that can only be solved with regimes of political freedom. The following are the main excerpts from their conversation with the NeoFeed:

When you started your research for the book, did you already have this conviction that the fiscal issue was behind the Independence movement?
Rafael Cariello: I love Economic History, I read Thales’ thesis when it came out, in 2017, in which he talked about the fiscal impact of the transfer of the Court of D. João VI to Rio de Janeiro. They began to charge much more tax than what they called the North, from Bahia onwards, which was rich, with the sale of tobacco, sugar and cotton. I had made a profile of (historian and diplomat) Evaldo Cabral de Mello, for the (magazine) Piauí, and, reading his book on Independence, I thought that there was still nothing to consolidate everything on the subject.

Have you ever worked together?
CR – I didn’t know Thales, I called him, suggested that we do something about the tax issue. It starts with the dissatisfaction of this elite of the North, but there is something that we discovered in the research process, the general dissatisfaction, the accounts didn’t close; even raising taxes like crazy, spending increased even more. In the final years, more than 30% of the Luso-Brazilian state’s revenue came from loans from Banco do Brasil. And there is gross inflation; It’s not just the elite, everyone is angry.

“In the final years, more than 30% of the Luso-Brazilian state’s revenue came from loans from Banco do Brasil. And there is gross inflation; It’s not just the elite, everyone is angry”

Is this documented?
CR – In the book about D. João VI, by Oliveira Lima, when he explains the Revolution of 1817, in Pernambuco, there is a letter from the French consul in Pernambuco, which says: “look, the guys started a revolution here because they received money to buy flour and it’s not giving anymore”. We went to see: the price of flour doubled in four years. The beef jerky tripled. Discontent was widespread in Portuguese America.
Thales Zamberlan Pereira – Evaldo’s book, focused on the revolution in Pernambuco, points out that there is this issue of taxes; but the difference is that we put numbers on things. They talked about complaints, about loans from Banco do Brasil…. It was a lot of money, how much? Many authors say that the problem was the spending of the Crown, they complained about the “ucharia”, the royal pantry where they went to get food, and the king used it to attract allies. We showed that there were much more relevant expenditures by the royal household, especially the Army.

Portrait of Martim Francisco Ribeiro de Andrada, Collection of the Museu Paulista at USP

And with that…
TZP – With the numbers, we can see where the problem begins, which also explains why it is 1822. These problems start from D. João, but monetary instability begins to gain momentum there, in 1818, 19. The deficit was already coming, but it starts to explode around 1820. So you can understand the Porto Revolution and what happened in Brazil.

You say that the crisis comes with the depletion of other sources of revenue…
CR – When alternatives run out, the solution in Brazil is to take money without paying it back, that is, increase the monetary base and have inflation; people are dissatisfied because their income loses purchasing power. In Portugal, it is even more dramatic: they simply stop paying civil servants and the military. Councilors of D. João say: “Your Majesty, it would be good if we paid the military again, there will be a revolution, if not…

“When alternatives run out, the solution in Brazil is to take money without paying it back, that is, increase the monetary base and have inflation”

You remember that the Marxists were the first to emphasize the economic issue, but you criticize the authors of this current, such as Caio Prado Júnior. Is there anything from these works that remains valid?
CR – Caio Prado is very good; does not sufficiently explain Independence, but it has a lot of truth, such as that, at first, the colony was left to its own devices, political power coincided with economic power for a long time, especially in Pernambuco: the great planters and mill owners they were the ones who held power in the municipal councils, especially in Olinda. With the increase in the economic importance of the colony, there is greater importance for merchants and attempts to take control of the landowners.

You refute Caio Prado showing that with the arrival of the royal family, the conflict subsides, merchants also become landowners and sugar producers…
CR – Yea. Fernando Novais, on the other hand, has a mega-scheme, involving England, the Industrial Revolution, very logical, but it does not explain the day-to-day problems, the political crisis that leads to the fall of absolutism in the United Kingdom of Portugal and the Algarves and the process of separation. Why did absolutism end in 1820 and independence come in 1822? It makes no sense, because the colonial system he criticizes ends in 1808, with the opening of ports.

If it weren’t for the Court’s fiscal spending, could independence have been avoided, despite the political and social factors that you also describe, such as the influence of liberal ideas?
CR – There could be a Canadian solution, Brazil with enormous importance in a United Kingdom with Portugal… Independence, in our case, was a fiscal crisis, which became a political crisis, everyone pissed off on both sides of the Atlantic with the collection of taxes. tax and its misuse. There were already examples in other corners of the world, and that’s where ideas matter: with a parliament, a constitution, the sovereign’s excess spending is controlled, as in England, the USA, France. There, they met in Portugal to write a Constitution, limit the king, create a budget, but the blanket remains short. And the dispute begins about where the tax will be taken from, who will keep the safe, who will decide the destination of the money in the safe.

“Independence, in our case, was a fiscal crisis, which became a political crisis, everyone pissed off on both sides of the Atlantic with the collection of taxes and their misuse”

And Brazilians are divided there…
CR – Exactly, there are three groups, to simplify: the Portuguese, people from the South led by Rio, and the North, led by Bahia and Pernambuco, wanting more federalism. Then the king falls, negotiation is open, the old world is over and there is still no new one.
TP – The first proposal of these groups was not Independence, it was constitutional monarchy. If there was money for everyone, why would they change that plan?

How did the economic issue make the popular layers, not just the elites, be active in the independence process?
CR – Deep down, everyone is affected by the rising cost of living, and is dissatisfied. We were able to measure this dissatisfaction; a job mainly of Thales: you take the price increase of basic items from the population, what would be the cost of a survival basket. During the Dom João period this income dropped by almost half. We found qualitative, sensational evidence. The middle classes, for example, teachers in Bahia, send a letter to the palace saying: “there’s no more, we can’t pay rent (sic) and food”. And the king authorizes the readjustment of their salaries. The chaplains in the capital also send a letter.
TP – The interesting thing is that we have data that show: there is a small increase in the salary of the chaplain, and, soon after, inflation covers this increase.

“What we want is not to treat Independence as the formation of Brazilian society”

Did you already intend to talk about the role of slavery and the black population, or did the research draw attention to this aspect?
CR – Independence is closely associated with the idea of ​​the birth of Brazil, which is this horrible society due to its inequalities, violence… And we have this hero of liberalism, Cipriano Barata, who is arrested, and yet he keeps one enslaved with him. What we want is not to treat Independence as the formation of Brazilian society; the connection of independence with a political, institutional form of representative government, much better than absolutism, must be celebrated. Basically, independence shows that, in Brazil, in general, authoritarian regimes create problems that representative regimes need to solve. It was so in democracy and in the New Republic.
TP – Treating this story in a cynical way, Dom Pedro with cramps, this is irrelevant to the process. He was not a central figure in the independence process, he was part of the problem. Dom Pedro was still a representative of the past.

GOODBYE, LORD PORTUGAL – Crisis of absolutism and the Independence of Brazil
Rafael Cariello and Thales Zamberlan Pereira
416 pages
Print edition: BRL 99.90
Ebook: BRL 45.90
Companhia das Letras

The article is in Portuguese

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