Brazilian economy

How did Getulio Vargas utilize European Fascist ideals in order to promote economic development in Brazil from 1930-1945.

Bourgeois and military discontent, heightened by the Great Depression's impact on the Brazilian economy, led to a bloodless coup d'état on October 24, 1930 that ousted PresidentWashington Luísand his heir-apparentJúlio Prestes. With this, the liberal backed runner-up of the 1930 elections, Getulio Vargas, was placed in power as the provisional president by the military. His main focus as a newly appointed leader was the reinvigoration of the failing Brazilian economy as he sought to bring it out of the Great Depression through orthodox policies. Vargas developed an economy that was a fusion between the regimes ofBenito Mussolini'sItalyandSalazar'sPortugueseEstado Novo.[1] Through Vargas's nationalist backed corporatist policies, his interventionist domestic development and his suppression of the left wing, he was able to reestablish the Brazilian Economy and by 1945 he averaged a 4% increase each year in the Gross Domestic Product.

The comparisons between Getulio Vargas and the European Fascist State of Mussolini began in 1934 with the establishment of the new constitution. Vargas knew that in order to improve the economy, he needed to develop a balance between labor and capital. For this, he called upon the Italian Fascist ideal of corporatism. The basic idea of corporatism is that the society and economy of a country should be organized into major interest groups and representatives of those interest groups should settle any problems through negotiation and joint agreement.[2] The regime designated corporate representatives according to class and profession, but maintained private ownership of Brazilian-owned business. Behind an impression of increased labor rights and social investment, Brazilian corporatism, like that in Italy, was actually a strategy to increase industrial output utilizing a strong nationalist appeal.Corporatism was formulated as a system that emphasized the positive role of the state in guaranteeing social justice and suppressing the moral and social chaos of the population that pursued self-interests.[3] It was a flexible system, and allowed Vargas room to implement the policies that he wanted in the economy without opposition because of the loyalty that the people felt from his social justice.

Vargas's approach when it came to economic policy was highly interventionist and focused on domestic centralization. Before the crash of 1929, Brazil was a major world exporter. When the world hit the depression, major buyers of Brazilian goods such as the United States and Germany significantly decrease their imports. He utilized tax breaks, lowered duties, and even import quotas as an attempt to strength the Brazilian industrial sector. He looked towards import-substitution as a tragedy for industrialization and sought to bring Brazil out of foreign dependence. Much like Mussolini, Vargas hid behind the notion that he was consolidating mutual interests and uniting all the classes for the betterment of the country. Inflation was on the rise and conditions were tough, but he instilled a sense of nationalism that made people want to follow him. It was essential for him to unite the domestic population in this way because before he arrived, Brazil had been a regionalist country. Vargas was dealing with the economic interests of a variety of people and he needed to unite people under a common “development” goal in order to not only maintain his support, but also improve the economy.[4] While simultaneously expanding the rights of workers, Vargas, like Mussolini, decimated unions independent of his state syndicates. He took away the influence that outside forces could have on his rule and he made his regime the controlling power in the economy. Slowly but surely he was able to get the people to buy into his ideas, and although his plans remained somewhat ambiguous, he was able to guilt-trip the people into trusting in his “developmental” laws.

After 1934, Getulio Vargas began to feel threatened by the pro-communist party and soon began to rely even more on the Fascist ideology as he moved to the right of the political spectrum. Due to communist advances, Vargas turned towards establishing the IntegralistEstado Novo, the only mobilized base of support on theright that would strength his fight against the left. Integralism was deeply rooted in European fascism: a green-shirtedparamilitaryorganization withuniformedranks, street demonstrations, and rhetoric againstMarxismandliberalism.Like the European fascists, Integralists were essentiallymiddle class people, and most of the support came from the military sector.[5] Vargas never truly lived this idea of integralism, as was shown when he plotted against it in 1937, but it was important to him because for the time being, it placed the greater good of the state above the interests of the people. It was a win-win for Vargas. He was able to suppress the communist left, mainly through fear and torture, and was also able to unite the people of Brazil behind a hope of unification.

Like European Fascists, Vargas utilized this fear of communism in order to justify the need for personal dictatorship and in 1937 he dissolved Congress and began his authoritarian regime; legally, many argue that it had started when he first took over in 1930.[6] Vargas took away the elections of 1938 and now had the power to do basically what he wanted. With the establishment of the dictatorship and the Estado Novo, the United States now looked to form good relations with Brazil. The US was unsure of Brazil's intentions and until they could figure this out, they thought that it would be better to make friends with the new, unpredictable state. As a result, the United States started obtaining much needed military supplies from Brazil. In return, they invested huge sums of money into improving Brazilin infrastructure.[7] In addition, the Brazil also used this money to fund the first steel mill and launch steel production in the country. Vargas allowed one union per economic sector. Thus, the labor force was effectively tied to the government much like in Fascism.

The problem that Vargas did not account for was that he was contradicting himself by dedicating to trade with the Allies in World War II. They declared themselves to be anti-fascist and so when Vargas began to supply weapons to them, he put himself once again in a position of ambiguous beliefs. Salazar in the Estado Novo had avoided this conflict by remaining nominally neutral and thus allowing him to keep away the anti-fascist sentiments while still not being alienated by the Allies during the war. Due to the new found antifascism in the middle class, Vargas was forced to stream away from Fascist ideals during the war era. Vargas then promised a new postwar liberty that included presidential elections and much greater mobility in society.[8] He even claimed that the Communist Party, although thoroughly weakened, would once again be present. People now realized that Vargas was essentially supporting political ideas as he needed to in order to keep support. Ironically, this time it led to the loss of support in the Estado Novo and by 1945 the fall of fascism in Europe further hurt Vargas. People were unhappy with the growing foreign debt and the still rising inflation rates. In October 1945, the military that had once supported Vargas deposed him as the leader of Brazil.

Vargas, much like Mussolini, consolidated his dictatorial powers within the already established political system and not through a revolution. Because of this gradual take over, he was able to eliminate, relatively easily, any opposition to his rule.[9] Also, because he did such a great job at industrializing Brazil right after his take over in 1937, it was hard for people to denounce him as a bad leader.[10] He based much of his ideologies on the concurrent policies that were used by Mussolini and Salazar in Europe. Though his predominantly fascist rule was oppressive, it did improve the economic conditions in Brazil tremendously. GDP was on the rise and people were unified at a much greater level than they had been in the preceding Old Republic. Getulio Vargas was able to greatly improve the depression era economy of Brazil as he effectively utilized specific European Fascist ideals until his ousting in 1945.

[1] Chaffee, Wilber Albert. Desenvolvimento: Politics and Economy in Brazil (Critical Perspectives on Latin America's Economy and Society). Colorado: Lynne Rienner Pub, 1997.

[2] Lewis, Paul H.. Latin Fascist Elites: The Mussolini, Franco, and Salazar Regimes. Westport, CT: Praeger Publishers, 2002.

[3] Schneider, Ronald M.. "Order and Progress": A Political History of Brazil. London, England: Westview Pr (Short Disc), 1991.

[4] Chaffee, Wilber Albert. Desenvolvimento: Politics and Economy in Brazil (Critical Perspectives on Latin America's Economy and Society). Colorado: Lynne Rienner Pub, 1997.

[5] Ibid

[6] Morgan, Philip. Fascism in Europe 1919-1945 (Routledge Companions). New York: Routledge, 2002.

[7] Baer, Werner. Brazilian Economy: Growth and Development. New York: Praeger Publishers Inc, 1983.

[8] Schneider, Ronald M.. "Order and Progress": A Political History of Brazil. London, England: Westview Pr (Short Disc), 1991.

[9] Smallman, Shawn C.. Fear and Memory in the Brazilian Army and Society, 1889-1954. Chapel Hill: The University of North Carolina Press, 2002.

[10] Ibid

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