The Military and the Rural Elite Unholy Alliance Maintains Brazil Poor and Unequal

    Down with the dictatorship, writes a tagger in 1968 Brazil

    Down with the dictatorship, writes a tagger in 1968 Brazil

    A very strong traditional establishment governed Brazil since its
    colonization. Arguably, the most powerful elite group was the large landholding
    rural elite who have historically been the primary beneficiary of the Brazilian
    economy. To inoculate elite from destabilizing forces, Brazil’s governing
    institutions were overwhelming represented by oligarchical politicians who
    depended on the votes and financial support of agricultural elites.

    Yet, shielding elites politically would not prevent countervailing movements from challenging the authority of this traditional establishment. Thus, the elites incorporated the military as the protector of traditional rural interests in politics.


    Throughout Brazilian history, threats against elite interest have been met with vigorous resistance by the military, inhibiting structural economic and social reform. Powerful high-ranking military officers became intrinsically linked to the rural oligarchical political and economic order meaning there was never a rupture with the archaic economic and social relations established during colonialism. Brazilian history is inundated with patterns of traditional elites exerting their power in all facets of Brazil’s development.


    The exceedingly powerful traditional establishment garnered much of their strength from the formation of the Brazilian economy. Historically Brazil’s economy was defined as a rural, export oriented, oligarchical economy. Economic elites argued on behalf of the merits of free trade and unfettered markets in hopes of developing the economy and this policy consequently benefited their own economic well-being.


    The wealth and income of rural elites depended on keeping export markets of Brazilian agriculture goods open. Sugar, mining and then coffee were for hundreds of years the primary commodities of the Brazilian economy making the elites exceptionally wealthy and influential in the creation of Brazil (Skidmore, 20).


    Rural elites needed low tariffs to continue trading. The domestic infrastructure, which was sporadically built to serve rural elites, linked domestic production directly to the ports for exports. The domestic infrastructure did not unify Brazil because it served little interest to the dominant economic rural elites yet it inhibited industrialization.


    Industrialization was perceived as detrimental to the long-term health of the economy, which countered rural interests, who had easy access to superior imported manufactured goods from advanced industrialized nations (Skidmore, 84).


    The historical economic development of such an economy in part explains the sizable gap in wealth between the minuscule elite and that of an impoverished majority. To sustain this elitist economy for much of Brazil’s history, the oligarchs wisely developed political institutions and ruled to protect their interests.


    Until recently, the political institutions were governed to serve the traditional establishment. The government for many decades remained heavily decentralized. This provided political strength to rural politicians but it also shielded them from potentially destabilizing interests.


    Even governments, like Vargas, that centralized some political power, did not interfere with sacred elite rural interest. Illiterates, who were heavily concentrated in the rural sector, were denied the right to vote until 1988.


    Rural Elite and Slavery


    By politically disenfranchising the rural masses rural political elites maintained their grip on power allowing agriculture elites to use the poor illiterate masses as dispensable wage laborer. Thus, rural politicians vigorously supported the interest of rural agriculture that had the right to vote and the money necessary to donate to political campaigns.


    The amazing power of rural agriculture and rural political elites is apparent when analyzing Brazilian slavery. Brazil was the last country in the Western Hemisphere to end slavery. A conservative estimate suggests that Brazil received 3.65 million slaves, more than any other country in the Americas (Skidmore, 17).


    The slave trade only came to end in 1850 with the exertion of external pressure placed on it (Skidmore, 68). The army of slaves became an endless supply of cheap labor for rural agriculture elites who accumulated an exorbitant amount of wealth through their labor.


    During the latter half of the 19th century, Brazilian political elites were fearful of the consequences of immediately ending slavery on the economy. Yet, many came to accept the rationale that the institution of slavery was hindering the modernization of Brazil (Skidmore, 69).


    A compromise route to gradually end slavery was implemented which undoubtedly tailored to elite interest. In 1871, freedom was given to all newborns of slaves except that the law also required that children render services to the mother’s slave master until 21 years of age. Fourteen years later, a new law freed all slaves over 65 years of age. This apparent law towards abolition was non-consequential.


    According to official statistics the average life expectancy of Brazilian slaves was merely 18 years suggesting that only a handful of slaves benefited from this law (Skidmore, 69). These two apparent laws were futile attempts by politicians to answer the daunting question of slavery.


    Eventually, on May 13th 1888, Princess Isabel signed the Golden Law legally ending slavery but in compensation to landowners no effort was made towards reforming the unequal social relations (Skidmore, 70). This was contrary to the compromising nature evident in Brazilian politics.


    Yet, within a year of ending slavery, the military established a republic through a military coup. The power of these rural elites, especially by the sympatric wing of the military became apparent. The military for much of Brazil’s modern history would safeguard the rural interest by intervening whenever an act was deemed a threat.


    The elitist economic and social structure was never threatened by the politics of centralization and populism of Vargas. In fact, in 1930, the military endorsed the apparent quasi-fascist, Getúlio Vargas, to the presidency. Vargas meticulously consolidated political power by removing state governors and appointing his own state interventors.


    Elites in the powerful state of São Paulo revolted. By revolting the rural elites felt they sent a blunt message to Vargas that his policies would not cause them to relinquish their political or economic power. But the military’s initial fondness of Vargas would over time come to an end.


    The chaotic internal conditions brewing in 1937 led Vargas to obtain emergency powers further centralizing his power. During Vargas’ tenure in office he shifted his political views towards populism. He felt that this was the best mechanism in transforming Brazilian society.


    Vargas Populism


    President Vargas initiated small-scale domestic industrialization, expanded social-welfare for the urban masses and mandated labor unionism for workers (Tullis 9). The rise of populism included grass-roots support among the burgeoning urban masses which posed a serious political, economic and social threat to the conservative rural elites.


    Vargas’ new labor party, PTB, was seen as a dangerous instrument of promoting radical social change and disorder. The rural political and agriculture elite were relatively marginalized by the inclusion of the urban working masses into political field (Tullis 8-9). Their demands for industrialization, jobs and higher wages scared the governing elites.


    Although power was relatively centralized during this era, Vargas was unsuccessful in curtailing the influence of agriculture elites or political regionalism. The traditional establishment acted to defend their position in Brazilian society. The military, acting in behest of the traditional establishment, came to view Getúlio Vargas as a dangerous agitator causing them to ouster him from power in October 1945 (Tullis, 9).


    The populist movement resoundingly sent Getúlio Vargas back to the presidency in 1950. Immediately after assuming office, in 1951, a drought hit the Northeast region causing economic instability. In response to domestic troubles, President Vargas reformulated his cabinet in June 1953 (Tullis, 10).


    His most controversial appointment was João Goulart as labor minister. Goulart’s appeasing attitude towards labor unions upset the traditional conservative establishment. Eighty-two military officers from the National Brazilian Army, mostly graduates from the National War College, crafted an anti-Goulart manifesto.


    In hopes of courting political favor from the establishment, Vargas capitulated to the military’s demands by firing Goulart and going as far as firing the war minister for not informing him of the brewing discontent among the military brass (Tullis, 11).


    Vargas’ political maneuvering backfired. The support of his leftist base eroded leaving his populist presidency in a fragile political predicament. The military rejected Vargas’ overtures because they now had significant political leverage over Vargas’ increasingly populist and leftist social change rhetoric (Tullis, 12). High ranking military officers exploited an assassination attempt against Carlos Lacerda, a conservative journalist, to demand Vargas removal from the presidency.


    On August 24th 1954, Vargas wrote a poignant suicide note accusing Brazil’s traditional establishment for the country’s problems and for his removal (Tullis, 12). After removing this populist threat the military along with its conservative cohorts remained politically vigilant against future potential threats.


    Eventually the traditional establishment was shocked by the policies of Jânio Quadros their candidate during the 1960 presidential elections. This rightist candidate of the UDN party was an unpredictable figure. After the election, Quadros’ anti-corruption campaign made the rural political elite very uneasy.


    Economic growth was dwindling as inflation was growing. Export earnings for coffee were falling forcing the economy further into debt. This deeply upset the rural elites as they became poorer. Yet, equally disturbing was Quadros’ attempt at tackling corruption which deeply upset corrupt agriculture and political elites (Tullis, 15).


    In the thick of the Cold War, the military began to seriously question Quadros’ independent foreign policy. He re-established relations with communist nations in Eastern Europe and Cuba. Quadros backed communist China in the UN. The military was infuriated with Quadros for awarding, leftist leader Che Guevara, the Cruzeiro do Sul, Brazil’s highest award (Tullis, 15).


    After eight months in office, Quadros abruptly resigned from office arguing that “terrible forces” were retarding his ability to promote change. It seems undeniable that his confusing mandate for greater change was stymied by the traditional establishment.


    Goulart’s Presidency


    This seemingly abrupt detail in Brazilian history would have a profound impact. A showdown would erupt between populism and the traditional establishment. João Goulart, Vargas’ former labor minister, was the constitutional heir to the presidency after congress accepted Quadros’ resignation.


    Initially, João Goulart was open to compromise with dominant political conservatives in power. He accepted a reform to the constitution limiting his presidential power for a new installed parliamentary system (Tullis, 16).


    President Goulart decided to distribute cabinet positions with the UDN, his political opponents, and to his political party, PTB. He anointed an acclaimed general to the war ministry (Tullis, 17). The military was content as long as Goulart’s policies were marginalized.


    It would soon become apparent to Goulart that the parliamentary system was unable to resolve Brazil’s mounting problems. It was merely a political system geared towards gridlock benefiting traditional elites by sideling Goulart. It appeared as if the opportunity for substantial reform was slipping away from Goulart.


    President Goulart won a decisive victory in January 1963 yet maintained his moderate posture. By a five to one margin, Brazilians restored Goulart’s full presidential powers (Tullis, 19). Immediately, the military was on alert that action needed to be taken.


    Within a little more than a year they would have sufficient cause to seize power. The economic and social conditions were rapidly deteriorating but Goulart called on two moderate leftists to implement a tough but necessary comprehensive economic package.


    San Tiago Dantas designed a short-term economic package which wanted to renegotiate Brazil’s external debt with its creditors, find more aid from the West and to slash unnecessary budget expenditures. The cuts in expenditures would be a requirement to restructuring debt servicing with the IMF and Brazil’s main creditors in the US, Europe and Russia (Tullis, 21). This program satisfied an array of political desires from the left to right yet rural elites, mainly UDN rejected it as a ploy by Goulart (Skidmore 14).


    Goulart’s long-term strategy rested with a widely respected economist. Celso Furtado’s economic program sought to undo the structural barriers to Brazil’s long-term economic growth. The economy was in desperate need of a vibrant agriculture sector thus a substantial land reform including additional credit and technical assistance was vital to long-term sustainability.


    The logic of agriculture reform was to stimulate agriculture growth among millions of peasants who would develop a considerable amount of savings and demand for industrial goods spurring industrial development. Another controversial measure proposed by Furtado was to nationalize all communication and electricity production allowing the government to control basic infrastructure (Tullis, 22).


    Undoubtedly, the national congress dominated by corrupt rural politicians, propped up by agriculture elites rejected these reforms. The agrarian reform bill submitted as part of the plan in March 1963 offered treasury bonds for the redistribution of large estates.


    Both the extremely conservative UDN and the conservative PSD blasted this plan and successfully defeated it by seven against four votes in congressional committee (Tullis, 23). Goulart attempt at passing sweeping reform through democratic channels were undeniably blocked. Brazil’s fragile political institutions were overwhelming represented by an entrenched oligarchical alliance that stifled any reforms detrimental to their economic, social and political interests of rural elites.


    Moderate, peaceful, democratic forces were never going to be able to approve such brazen reforms. Goulart at least attempted to answer Brazil’s daunting social questions. Goulart’s only remaining avenue of approving these needed reforms was to battle the traditional conservative establishment by appealing to his core supporters on the left.


    Many elements of the traditional establishment sought to isolate Goulart from the radical left but it was futile. The military removed Getúlio Vargas from office even after he capitulated to the demands of the conservative forces to oust radical elements like Goulart. A few high ranking military officers offered their support to Goulart if he removed communist elements from his government.


    Goulart must have remembered the eventual consequences Vargas faced after appeasing the demand of the military back in 1953. Accepting a political deal would have destabilized his presidency giving the military political leverage over his fading presidency. The military was simply searching for a way to weaken Goulart sufficiently to eventually topple him.


    The Military Take It Back


    The military had been itching to seize power since Kubitschek administration (1955-60). The military had given Goulart two options towards his eventual demise: isolate your presidency for a painfully gradual removal from power or be forcibly removed by a military coup.


    After searching for democratic approval for his program, Goulart radicalized his agenda as a last ditch effort to transform Brazil by striking at the very heart of the traditional establishment. On February 1964, Goulart tried to approve a series of radical controversial measures which included giving illiterates the right to vote.


    The disproportionately powerful rural politicians feared illiterates voting them out of office by voting in their own independent economic interest. The upper echelon of the military hierarchy vehemently opposed Goulart’s extension of political rights for lower-ranking military officers seeing it as a destabilizing maneuver over the military hierarchy.


    Finally, two other crucial reforms attacked the rural agriculture elites. Goulart sought to create a state monopoly in coffee upsetting large coffee barons. A month later, Goulart attempted to impose land reform with minimum financial compensation.


    The elites felt they had to react to such policies that were destabilizing the oligarchical control over Brazil. They claimed Goulart was attempting to destroy order within Brazil. In a way they were correct. but Goulart was trying to create a new Brazil.


    Under assault the traditional elites acted to defend their interests. During Goulart’s final public appearance he criticized low ranking military officers for lacking discipline. This gesture suggested Goulart was trying to tell high ranking military officers that they need to instill discipline over their subordinates.


    Evidently, Goulart underestimated the power of the military because he refused to heed the warnings by Getúlio Vargas and Jânio Quadros. The military never maintained constitutional order. They acted when it was necessary to neutralize elements that posed a danger to traditional elites. Facing a major political conflict or potential civil war the military organized a takeover.


    Goulart wanted to avoid a civil war at all costs, which essentially handicapped his options against the traditional elites who were willing to go to an extreme to seize power. With relative ease the military safeguarded the traditional establishment under the auspice of saving, “democracy” from the communist influence.


    In reality, the military acted to save the oligarchs and to consolidate their interest once in power. Once in power the military rewarded their elitist allies.


    Immediately in power the military government modernized the agriculture sector and protected rural politicians. The government deregulated agriculture production by eliminating price controls on beans, milk and beef. Furthermore, the military government injected billions in expanding agriculture credit.


    Agriculture loans leaped by 500% causing agriculture credit as a percentage of total credit to grow from 11% in 1964 to over 25% by the mid-1970s (Baer, 373). The interest rates on these loans were substantially lower than the official level of inflation essentially subsidizing loans for debtors. Also, 60% of the loans went to the richest 10% (Baer, 374).


    Rural Politicians Rewarded


    In 1973, the military government created EMBRAPA, an agriculture research company which received generous public funding for agriculture research (Baer, 375). Also, once in power, the military reinforced the political structure of giving a disproportional influence to rural political elites over congress.


    This officially propelled rural interest in the congress. The rural political elites were rewarded with maintaining their hegemony in politics as long as they satisfied agriculture elites. The legacy the military government left is a dark part of Brazilian history. 


    The effective statist economy, created by the military dictatorship, unraveled in the 1980s. Although the Brazilian economy was the 8th biggest economy in the world, it accomplished this by accumulating the largest foreign debt in the entire developing world.


    Are you richer if you amass billions in credit card or bank debt and spend it on things you can not afford to pay back? This spectacular growth in the economy benefited a few in society creating one of the most unequal countries in the world.


    The Debt Crisis of the 1980s required the military to constantly devalue the currency to export and pay-off its debt obligations. By the late 1980s, hyperinflation was brewing in Brazil. Brazil has since overcome the economic legacy of the military dictatorship but answering the big questions remain.


    Will Brazil’s economy remain subservient to the historical agriculture interest that has long dominated its economy? Is Brazil going to pursue an agrarian land reform strategy? Is the government capable of rectifying the human right violations that persist in the sprawling slums of the cities instead of finding excuses to why it happens?


    Will Brazil’s future politicians tackle the corrupt rural political elites, from the prominent figures like Senator José Sarney and Antonio Carlos Magalhães, to Senate President Renan Calheiros?


    Brazil is in need of a politician who has deep convictions in changing the country and not compromising with the corrupt political establishment the holds on to political power who are incapable of rectifying the disparities that persist within Brazil society today.


    The traditional establishment has had an unduly influence over the economic and social development of Brazil. Their conservative grip over political and socio-economic events impeded rupture with the historical uneven development of Brazilian society.


    The traditional elites exerted tremendous influence over Brazil’s economic, political and social institutions essentially vetoing transformation. They retarded any movement towards reform by claming to protect the “patria,” except that the country was overwhelming geared towards enriching and sustaining the socio-economic interests of the traditional establishment.


    Populism and communism had no chance at defeating these reactionary elites unless it was willing to use any means necessary to defend their agenda for greater economic, political and social change.   


    Works Cited:


    Baer, Werner. The Brazilian Economy: Growth and Development 5th Ed. Praeger: Westport, 2001.


    Skidmore, Thomas. Brazil: Five Centuries of Change.  Oxford University Press: New York, 1999.


    Skidmore, Thomas. The Politics of Military Rule in Brazil, 1964-85.  Oxford University Press: New York, 1988.


    Tullis, Lamond. Modernization in Brazil: A story of Political Dueling Among Politicians, Charismatic Leaders, and Military Guardians. Brigham Young University Press: Provo, 1973.


    Daniel Torres is a political science and economics major at the University of Massachusetts. Comments welcome at dftorres@gmail.com.

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