The Economy of Brazil from 1580 to 1680

Slavery, Sugar and the Economy of Brazil 1580-1680

Introduction

Just like the United States, the economy of Brazil was initially based on plantations and slave labor. Portuguese colonizers set up the plantations in Brazil, and they were mainly sugarcane plantations. The first commercial plantations started in the early 1500s, and they were set up by African slaves shipped to South America by Portuguese colonizers. The slaves worked on the sugarcane plantations and in sugarcane mills in very harsh conditions. The sugarcane plantations led to the establishment of an aristocratic class in Brazil and subsequent stratification of the population in Brazil into various economic classes[footnoteRef:1]. This paper assesses the role played by African slaves and sugar plantations in the early stages of the Brazilian economy and whether the economy would have been weaker today without slaves and plantations. [1: Plinio Mario Nastari. \\\\\\\"The role of sugar cane in Brazil\\\\\\\'s history and economy \\\\\\\" Retrospective Theses and Dissertations. 8948. (1983)]

The economic value derived through sugar cane and slavery

The first sugar plantations in what is now known as Brazil were established in the early 1500s around Pernambuco and Bahia\\\\\\\'s regions. While sugarcane was planted very early in Brazil, it was initially not the main commodity exported from Brazil by the Portuguese colonial authority in the first half of the 16th century[footnoteRef:2]. The main commodity exported was dyewood. This is because the price of sugar had significantly decreased in Europe during the period because of low demand. However, from around 1550, the demand and price for sugar went up because sugar became very popular in jellies, jams, and other products. It is also because sugar started replacing natural honey as a food recipe. The increase in the price and demand for sugar became the main export commodity from Brazil. [2: Mark Johnston. \\\\\\\"The Sugar Trade in the West Indies and Brazil between 1492 and 1700.\\\\\\\" James Ford Bell Library, University of Minnesota, (2012).]

Sugar was first commercially produced on a large scale in Brazil in 1550 when Portuguese colonial authorities set up sugar mills near Sao Vicente and Pernambuco in Brazil\\\\\\\'s Atlantic coast region[footnoteRef:3]. The commercial sugar production system was copied from the system in existence at Madeira, in which the landowner leased portions of his land to planters who shared a portion of what they produced[footnoteRef:4]. [3: Matthew Edel. “The Brazilian Sugar Cycle of the Seventeenth Century and the Rise of West Indian Competition.” Caribbean Studies, Vol. IX, no. 1., 1969, p. 25.] [4: David Watts. \\\\\\\"The West Indies: Patterns of Development.\\\\\\\" Culture and Environmental Change since 1492 (1987): 41.]

During the three centuries of colonization, the amount of money earned from the sugar business was massive. Brazil generated much more wealth from the export of sugar between 1526 and 1822 than it did from the export of diamonds and gold. Moreover, this is even though it was the world\\\\\\\'s largest exporter of diamonds and gold in the eighteenth century. In terms of 1936 British pounds, the total earnings from sugar exports in the colonial period were approximated at £300,000,000, while that of diamonds and gold was approximated at £170,000,000[footnoteRef:5]. [5: Plinio Mario Nastari. \\\\\\\"The role of sugar cane in Brazil…” p. 2]

The sugar mills that were first set up in Brazil extracted sugarcane juice using manual labor, mostly by African slaves. However, with time, the system was replaced by larger sugar mills in which animals or rivers were cleverly used to squeeze out sugarcane juice. During the colonial period, each large sugar mill produces approximately 150 metric tons of sugar every year. This was much more sugar per mill compared to what was produced in Madeira[footnoteRef:6]. Moreover, with time, sugar plantations in Brazil became more sophisticated. For instance, they grew sugarcane and produced sugar products, and were involved in providing food and shelter for the hundreds or thousands of slaves who helped make them work. [6: Roberto Cochrane Simonsen. \\\\\\\"História econômica do Brasil: 1500-1820.\\\\\\\" Brasiliana (1937).]

Role of sugar cane profits in building the Brazilian economy

Sugar and sugarcane plantations in colonial Brazil largely generated wealth for Portuguese colonial landowners, Portuguese colonial authorities, Dutch traders of Brazilian sugar, and other foreign merchants. However, because colonial authorities and foreign merchants spent the money they collected or earned elsewhere, only a small fraction of the sugar trade wealth went back into Brazil[footnoteRef:7]. This was in Brazil\\\\\\\'s infancy stages during the second half of the 16th century and in the 17th century. [7: Plinio Mario Nastari. \\\\\\\"The role of sugar cane in Brazil…”, p. 3]

However, as time went by, things changed. Things changed because, despite rapid fluctuations in sugar demand and prices, Brazil\\\\\\\'s sugar mills modernized using new centrifuges and vacuum pans, thus increasing their efficiency and production[footnoteRef:8]. As the sugar mills modernized and became more efficient, they started producing more sugar and more molasses (a sugar production by-product). Because of the huge quantities of molasses they produced, some sugar factories turned to make ethanol from their molasses. This resulted in many sugar-producing countries turning to molasses as a source of ethanol, leading to a significant increase in molasses\\\\\\\' demand. This demand for molasses brought much wealth to Brazil because most Brazilian sugar mills produced massive molasses. [8: Kit Sims Taylor. \\\\\\\"The Economics of Sugar and Slavery in Northeastern Brazil.\\\\\\\" Agricultural History 44, no. 3 (1970): 267-280.]

The massive quantities of molasses produced by sugar mills in Brazil led to ethanol-producing factories near them. This resulted in Brazil becoming a major producer of ethanol and becoming a major income-earner in the country. Ethanol was initially used as an automobile fuel. It was very popular as a fuel. However, it also quickly became an important agent for the budding chemical industry. This increased its demand and gradually made it more expensive to use as fuel.

Modern-day Brazilian economy through historical lenses

The Brazilian sugar economy was characterized by three elements – structure of ownership, labor supply, and access to credit[footnoteRef:9]. These elements were all linked to a lack of capital, especially in the sugar economy\\\\\\\'s infancy stages. They resulted in practices and structures that have persisted for centuries in the country. [9: Stuart B. Schwartz. \\\\\\\"«A commonwealth within itself». The early brazilian sugar industry, 1550-1670.\\\\\\\" Revista de Indias 65, no. 233 (2005): 79-116.]

First, the structure of ownership of sugar mills has persisted to date. Sugar mills in Brazil were either owned by private individuals, institutions, or the state. The Portuguese crown set up the very first sugar mills to encourage economic growth and settlement. There was a crown-owned sugar mill in Piraja close to Bahia as late as 1587[footnoteRef:10]. Despite many assuming the crown had ceased involvement in direct sugar production or had no involvement at all. [10: Stuart B. Schwartz, “A commonwealth within itself”, 79-116.]

Nevertheless, with time, the Portuguese crown gradually withdrew from directly participating in the production of sugar. The crown/state focused on stimulating sugar production by granting tax exemptions and land to private investors. As investors set up sugar mills, complementary infrastructure and general infrastructure grew throughout the Brazilian sugar belt.

Second, the supply of labor in Brazil has led to several realities in the modern-day economy. The labor force in Brazil\\\\\\\'s sugar economy was initially largely composed of indigenous Brazilians. However, with time, African slaves became the majority in the country\\\\\\\'s labor force. Before African slaves became the majority, indigenous Brazilians were used as workers. This suggests a lack of finances among Brazilian sugar mill owners and operators to import African slaves.