Is it possible for a coffee crisis to happen in the 1850's, and as a side effect begin the industrialization of Brazil, since the coffee barons would be looking to get some extra revenue?
Small, quick, ordinary plausibility check
- Thread starter Rafael stahl
- Start date
Sure, pick one: https://en.wikipedia.org/wiki/List_of_coffee_diseases
[ the crisis part, not so much the industrialization part ]
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IMO it’s not possible. Industrialization requires much more than political will, which at the time was non-existent in Brazil. If there is a coffee crisis in the early 1850’s on the level that you are describing, the imperial government will likely collapse due to lack of revenue. The coffee revenue was what allowed Rio de Janeiro to wage wars of conquest against the Brazilian provinces from 1822 to 1845, not to mention the foreign wars in the 1850’s and 1860’s. Brazilian prosperity is intimately linked to coffee exports at the time and the value chain that it encompassed, including for example the slave trade (international and domestic) and the beef industry in the South, which often supplied the court and the plantations.
Aside from this, industrialization requires several structural conditions which simply are not present in 19th century Brazil. It might seem absurd now, but back then we had a chronic lack of manpower (hence all the slavery and later incentives for immigration). There is not enough available workforce to produce a local industrial revolution. This is even worse when you consider that Brazil was completely a rural society. Industrialization requires a degree of urbanization which does not exist yet in Brazil, both to provide adequate cheap workforce and a strong internal market, since 19th century Brazilian industry would never be able to compete internationally. Thirdly, nineteenth century Brazil does not have access to the resources necessary for industry upstream in the value chain. We don’t have access to good energy resources (firewood may work, but I have yet to see a study describing if industrialization by firewood would be doable) and nor to good enough materials (iron for heavy industry and the like, cotton for textiles; there was a significant cotton industry in the Northeast, but it’s not enough to fuel industrialization, especially as it was all exported). At last, but not least, Brazil and Brazilians lack the technical knowhow of industrialization, including human resources and capital like machinery.
Also, if there is a massive coffee crisis, where would the money for industrialization come from? The government and the coffee elite would both be broke. Importation of machinery relevant for industrialization would also be unfeasible because a collapse of the coffee industry will inevitably lead to a collapse of the Brazilian currency, since our exports sector would be heavily affected.
Bear in mind that this is not to say that some industry is impossible in nineteenth century Brazil. On the contrary, really. Large scale, Vargas-like industrialization is impossible. However, a few choice industries linked to the coffee value chain may be able to prosper in the second half of the century, but this comes as a consequence of economic growth in the coffee sector, not its collapse. This includes infrastructure and logistics (railways, communications, port facilities, but keep in mind that steel will need to be imported), some kind of textile industry to clothe the plantation workforce (often slaves) and otherwise products related to the production and exportation of coffee. In short, there are no structural conditions for large scale industrialization in Brazil in this period, but manufacturing linked to the coffee value chain is not out of the question.
Also, you need to take into account the mentality of our elites and of economic doctrine at the time, which was dominated by David Ricardo’s comparative advantages theory. In brief, Brazil was destined for an agrarian economy because this is where our factors of production (basically capital, land and workforce) were most efficient at. According to Ricardo’s model, it would make no sense for Brazil to industrialize because other countries with more suitable factors of production would be far more efficient than us, in the same way that industrialized economies would not be able to compete with Brazilian agrarian products. This is all about production specialization and efficiency. Unfortunately, you wouldn’t find a majority of policymakers in Brazil contrary to Ricardo’s model and thus big supporters of industrialization. The concept that an industrialized economy fares better in international trade than an agrarian economy, and that an agrarian economy is one of the underlying causes of poverty and underdevelopment, are a construct of twentieth-century economic thought, specifically the Latin American CEPAL school including Raul Prebisch, Celso Furtado and others. This line of thought is mostly non-existent in the 19th century. Not even Getúlio Vargas himself immediately set out to promote industrialization following the 1930 Revolution, it’s something that his regime embraced further down the line.
Aside from this, industrialization requires several structural conditions which simply are not present in 19th century Brazil. It might seem absurd now, but back then we had a chronic lack of manpower (hence all the slavery and later incentives for immigration). There is not enough available workforce to produce a local industrial revolution. This is even worse when you consider that Brazil was completely a rural society. Industrialization requires a degree of urbanization which does not exist yet in Brazil, both to provide adequate cheap workforce and a strong internal market, since 19th century Brazilian industry would never be able to compete internationally. Thirdly, nineteenth century Brazil does not have access to the resources necessary for industry upstream in the value chain. We don’t have access to good energy resources (firewood may work, but I have yet to see a study describing if industrialization by firewood would be doable) and nor to good enough materials (iron for heavy industry and the like, cotton for textiles; there was a significant cotton industry in the Northeast, but it’s not enough to fuel industrialization, especially as it was all exported). At last, but not least, Brazil and Brazilians lack the technical knowhow of industrialization, including human resources and capital like machinery.
Also, if there is a massive coffee crisis, where would the money for industrialization come from? The government and the coffee elite would both be broke. Importation of machinery relevant for industrialization would also be unfeasible because a collapse of the coffee industry will inevitably lead to a collapse of the Brazilian currency, since our exports sector would be heavily affected.
Bear in mind that this is not to say that some industry is impossible in nineteenth century Brazil. On the contrary, really. Large scale, Vargas-like industrialization is impossible. However, a few choice industries linked to the coffee value chain may be able to prosper in the second half of the century, but this comes as a consequence of economic growth in the coffee sector, not its collapse. This includes infrastructure and logistics (railways, communications, port facilities, but keep in mind that steel will need to be imported), some kind of textile industry to clothe the plantation workforce (often slaves) and otherwise products related to the production and exportation of coffee. In short, there are no structural conditions for large scale industrialization in Brazil in this period, but manufacturing linked to the coffee value chain is not out of the question.
Also, you need to take into account the mentality of our elites and of economic doctrine at the time, which was dominated by David Ricardo’s comparative advantages theory. In brief, Brazil was destined for an agrarian economy because this is where our factors of production (basically capital, land and workforce) were most efficient at. According to Ricardo’s model, it would make no sense for Brazil to industrialize because other countries with more suitable factors of production would be far more efficient than us, in the same way that industrialized economies would not be able to compete with Brazilian agrarian products. This is all about production specialization and efficiency. Unfortunately, you wouldn’t find a majority of policymakers in Brazil contrary to Ricardo’s model and thus big supporters of industrialization. The concept that an industrialized economy fares better in international trade than an agrarian economy, and that an agrarian economy is one of the underlying causes of poverty and underdevelopment, are a construct of twentieth-century economic thought, specifically the Latin American CEPAL school including Raul Prebisch, Celso Furtado and others. This line of thought is mostly non-existent in the 19th century. Not even Getúlio Vargas himself immediately set out to promote industrialization following the 1930 Revolution, it’s something that his regime embraced further down the line.
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By accident, because as far as I know Vargas tried to lower the trade deficit by adding some protecionist measures and this resulted on the national bourgeisie making factories, so he embraced this system