Brazil's Steel City presents a social history of the National Steel Company (CSN), Brazil's foremost state-owned company and largest industrial enterprise in the mid-twentieth century. It focuses on the role the steelworkers played in Brazil's social and economic development under the country's import substitution policies from the early 1940s to the 1964 military coup.
Counter to prevalent interpretations of industrial labor in Latin America, where workers figure above all as victims of capitalist exploitation, Dinius shows that CSN workers held strategic power and used it to reshape the company's labor regime, extracting impressive wage gains and benefits. Dinius argues that these workers, and their peers in similarly strategic industries, had the power to undermine the state capitalist development model prevalent in the large economies of postwar Latin America.
Brazil's Steel City presents a social history of the National Steel Company (CSN), Brazil's foremost state-owned company and largest industrial enterprise in the mid-twentieth century. It focuses on the role the steelworkers played in Brazil's social and economic development under the country's import substitution policies from the early 1940s to the 1964 military coup.
Counter to prevalent interpretations of industrial labor in Latin America, where workers figure above all as victims of capitalist exploitation, Dinius shows that CSN workers held strategic power and used it to reshape the company's labor regime, extracting impressive wage gains and benefits. Dinius argues that these workers, and their peers in similarly strategic industries, had the power to undermine the state capitalist development model prevalent in the large economies of postwar Latin America.
Brazil's Steel City: Developmentalism, Strategic Power, and Industrial Relations in Volta Redonda, 1941-1964
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Brazil's Steel City: Developmentalism, Strategic Power, and Industrial Relations in Volta Redonda, 1941-1964
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Brazil's Steel City presents a social history of the National Steel Company (CSN), Brazil's foremost state-owned company and largest industrial enterprise in the mid-twentieth century. It focuses on the role the steelworkers played in Brazil's social and economic development under the country's import substitution policies from the early 1940s to the 1964 military coup.
Counter to prevalent interpretations of industrial labor in Latin America, where workers figure above all as victims of capitalist exploitation, Dinius shows that CSN workers held strategic power and used it to reshape the company's labor regime, extracting impressive wage gains and benefits. Dinius argues that these workers, and their peers in similarly strategic industries, had the power to undermine the state capitalist development model prevalent in the large economies of postwar Latin America.
Product Details
| ISBN-13: | 9780804775809 |
|---|---|
| Publisher: | Stanford University Press |
| Publication date: | 10/01/2010 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 352 |
| File size: | 3 MB |
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Brazil's Steel City
DEVELOPMENTALISM, STRATEGIC POWER, AND INDUSTRIAL RELATIONS IN VOLTA REDONDA, 1941-1964By Oliver J. Dinius
STANFORD UNIVERSITY PRESS
Copyright © 2011 Board of Trustees of the Leland Stanford Junior UniversityAll right reserved.
ISBN: 978-0-8047-7168-9
Chapter One
Inducing an Industrial RevolutionTHE CREATION OF THE NATIONAL STEEL COMPANY The key to solving our economic problems and even to defining our political destiny lies in the establishment of a national steel industry. -Elysio de Carvalho, 1919 Brasil, potência mundial, opening sentence
By 1940, the state of Brazil's economy still posed major obstacles to fulfilling Elysio de Carvalho's dream of a national steel industry. The economy was industrializing, not yet industrial. The use of mechanized power had begun in the mid-nineteenth century, spread more widely in the 1890s, and reached most Brazilian states after World War I. Still, by the 1930s, only the country's southeast had a developed industrial economy, and even there the extensive use of industrial power remained limited to urban centers and the railroad corridors. The forces of mechanization had yet to transform the mode of production in the vast interior. Advocates of an industrialization policy, often military officers, became more vocal after World War I, which had taught them that the ability to fight a modern war depended on industrial development. They hoped that a modern steel industry would jump-start an industrial revolution in Brazil and ultimately help develop an industrial sector that could produce modern armaments. The advocates of a national steel industry found a champion of their cause in President Getúlio Vargas (1930-1945), who promised to provide the political, institutional, and financial support needed to set Brazil on a course of rapid and extensive industrial development.
The first part of this chapter surveys the key features of Brazil's industrialization up until 1940 to illustrate the structural obstacles the government faced in its push to implant heavy industry. The sketch of the country's industrial geography focuses on the spread of mechanization and on the creation and growth of particular sectors as key indicators for industrial development. Topics that have dominated the economic historiography on Brazil-entrepreneurship, the "onset of modernization," and the trajectory of economic growth-receive less attention because they do not speak directly to the technological state of an industrial economy. The argument is that Brazil's state of industrial development until well into the twentieth century conspired against the creation of a large-scale steel industry, which depended on a developed transportation infrastructure, specialized technical expertise, and reliable supplies of industrially mined iron ore, coal, and minerals. The analysis thus illuminates why Brazilians celebrated the construction of the Volta Redonda steel mill in the early 1940s as a breakthrough. The observation that only Brazil's most developed region offered the infrastructure and industrial expertise to support the creation of the steel industry, however, reminds us of the inherent limits of development policies based on rapid industrialization. The backward and forward linkages created by a modern steel industry initially benefited above all the region that was already most industrialized, thus reinforcing rather than diminishing economic disparities.
The second part of the chapter casts light on how Vargas's Estado Novo government (1937-1945) overcame political, diplomatic, and financial obstacles to create the National Steel Company (Companhia Siderúrgica Nacional; CSN). Very few Brazilians at the time had the technical expertise to contribute to such an ambitious project, and Vargas selected the best of them to lead the implementation of the steel industry. They relied on firm government support and used their national as well as international connections to overcome the political resistance at home and diplomatic obstacles abroad. They accomplished the task in a time of crisis, during a fast-expanding global war, which aided their effort on the diplomatic front but disrupted plans for the financing of the mill and the production of its equipment. The additional obstacles the government and its technical experts had to overcome because of World War II only added to the sense that the creation of the CSN was a national triumph and a sign of better (industrial) times to come.
Brazil's Industrial Development to 1940
Brazil's industrialization from the mid-nineteenth century to 1940 occurred in four phases (Table 1.1). The chronological divisions correspond to major shifts in national politics that changed the institutional framework for industrial capitalism. After the abolition of slavery in 1888 and the end of the Empire in 1889, the new republican government tried to jump-start industrialization in an economy dependent on the export of plantation crops. World War I (1914-1918) highlighted Brazil's dependency on industrial imports and convinced the military leadership that the country needed to promote strategic industries. The overthrow of the republican government by Getúlio Vargas in 1930 resulted in a weakening of the federalist system that had benefited wealthy states such as São Paulo and ultimately replaced it, in 1937, with a stronger central state capable of a concerted industrial policy. Each of these political transitions did trigger a renewed sense of urgency among national elites and helped transform patterns of investment by domestic and foreign capitalists as well as the Brazilian state.
The first extensive use of industrial machinery and mechanized power occurred on plantations that produced cash crops for export with slave labor. By the 1850s, steam engines powered sugar mills as well as mechanized processing equipment on coffee plantations (fazendas). Railroads, textile mills, light manufacturers, and metalworking companies were the drivers of Brazil's first wave of industrialization. Investment in railroads took off in the 1850s, above all in the southeast, where they served the booming coffee economy. Railroad maintenance shops, private machine factories, and army arsenals all used industrial power to manufacture spare parts, and navy shipyards manufactured steam engines, propellers, pumps, and boilers for its vessels. By 1885, the southeastern states were home to thirty-three textile mills that used industrial power.
Fast-growing food-processing and metalworking sectors, the expansion of ports, and the shift to electric power shaped the industrial development from 1889 to 1914. Twenty-two sugar refineries operated in Brazil by 1907; flour mills satisfied two-thirds of the domestic demand by 1914. The 1890s saw the founding of numerous metalworking companies, above all in São Paulo, which supplied railroads, coffee plantations, and construction sites. Most produced simple items such as nails, screws, hinges, and spare parts, but larger ones such as Companhia Mecânica e Importadora de São Paulo and Trajano de Medeiros in Rio de Janeiro manufactured steam engines, water turbines, and railcars. The two most important ports, Santos and Rio de Janeiro, expanded, modernized their facilities, and greatly increased their use of industrial power in the 1890s and 1900s, respectively. The Mascarenhas textile factory in Juiz de Fora (MG) had pioneered the use of electric power in 1889, but it took large-scale investment by a Canadian company to demonstrate the full potential of the industrial use of electricity. In 1901, the São Paulo Tramway, Light, and Power Company-popularly known as LIGHT-inaugurated the first large hydroelectric plant at Parnaíba on the River Tieté; by 1907, its electricity powered 418 engines in 257 industrial factories in the city of São Paulo. LIGHT's sister company, the Rio de Janeiro Tramway, Light, and Power Company, built a hydroelectric plant damming the Piraí River in the Serra do Mar near Riberão das Lages to supply power for public lighting, tramways, and industrial manufacturing in the city of Rio de Janeiro.
By 1914, Brazil had not yet undergone its Second Industrial Revolution. The country had no chemical industry and no modern steel industry. Coal mining in the southern states was not industrial, construction companies used little industrial power, and the country had no cement industry. Domestic industry could not have supplied the inputs to build a modern steel mill, a chemical plant, or a large hydroelectric dam. The disruption of trade during World War I reinforced the existing industrial structure. It benefited light manufacturers that processed domestic raw materials, while companies that depended on imports for machinery, spare parts, and raw materials struggled. Domestic industry only met the demand for hats, shoes, textiles, bagging, fiber and rope, nails, iron and kitchen utensils, matches, rough paints, and wrapping paper, and it came close to meeting it for processed sugar, flour, and beverages. The textile industry remained dominant. Arthur Redfield's 1919 survey of Brazil's economic conditions devoted as many pages to the textile sector as to all other industries combined.
The years after World War I witnessed a spurt in industrialization as domestic investment increased and foreign investment diversified. Multinational companies from North America and continental Europe invested in Brazil, thus diminishing the share of British capital, which had dominated investments in railroads, tramways, light and power, meatpacking plants, flourmills, and urban development companies. Swift/Armour opened meatpacking plants, General Electric manufactured lightbulbs, and a joint venture of DuPont, Imperial Chemical Ind., and Remington produced shells and gunpowder. Unilever opened a soap factory, Philips assembled radios, and Pirelli produced insulated copper cable. Most significantly, the capacities in two industries that had been at the heart of the second Industrial Revolution in Western Europe and North America-electrical generation and iron and steel-expanded rapidly throughout the 1920s and 1930s. The metalworking, construction, and mining industries saw growth as well.
Brazil's capacities to produce capital goods expanded. As railroads operated more trains on existing lines, accelerating wear and tear, they made more spare parts and began manufacturing their own rolling stock. The shops of the Mogiana Railway Company (Companhia Mogiana de Estradas de Ferro) in Campinas built railcars starting in the 1910s. The Central Railway of Brazil (Estrada de Ferro Central do Brasil; EFCB) took over Trajano de Medeiros in 1930 and merged the workshops to create an industrial complex that manufactured six hundred wagons and one hundred carriages annually. In the 1930s, LIGHT Rio de Janeiro created the Cidade Light, a maintenance city with bronze and iron foundries, a chemical test laboratory, and mechanical shops to produce tramcars, engines, and gas and water meters. It employed more than two thousand men. In response to import shortages during World War I, the armed forces established industrial metalworking shops in four of its nine arsenals. The cartridge and shell factory at Realengo had a small rolling mill, and the army arsenals in Porto Alegre and Rio de Janeiro manufactured portable arms. In the 1930s, the government opened an artillery shell factory in Andaraí that applied the principles of scientific management to its production. In a major expansion completed in 1930, the navy arsenal on Ilha das Cobras added a large dry dock, a foundry, its own generating plant, and shops for electrical repairs, machine tools, and armaments. It completed the first domestically manufactured reconnaissance ship in 1936 and built six minelayers and nine antitorpedo boats in the years to follow. By 1941, the arsenal had grown into the country's largest industrial operation with more than five thousand workers.
Port modernizations and urban reforms had triggered a construction boom in the 1900s, but until the 1920s large contracts usually went to foreign companies. British and French firms expanded the ports of Rio de Janeiro, Manaus, and Recife. British and American firms built the earliest hydroelectric dams in Rio de Janeiro and São Paulo. As late as the 1930s, LIGHT Rio de Janeiro chose Dwight P. Robinson & Co. from Philadelphia over domestic bidders to build its maintenance shops. The one exception had been the construction of the Santos docks and the Itatininga power plant, before World War I, by the Guinle family's Companhia Docas de Santos. Domestic firms took a greater share of the market in the 1920s, when the Companhia Mecânica e Importadora de São Paulo built the new navy shipyards in Rio de Janeiro and Roberto Simonsen's Companhia Constructora de Santos expanded army barracks all across southern Brazil. Large-scale construction became feasible with the use of reinforced concrete. Examples include the EFCB's shops in Belo Horizonte (1924), the warehouses in the Rio de Janeiro and Porto Alegre ports (1926), the Rio de Pedras dam near Cubatão (late 1920s), and the navy shipyards on the Ilha de Cobras (1931). Many Brazilian engineers considered reinforced concrete to be their profession's greatest gift to industrial progress in the First Republic, and the country's leading engineering schools all taught the applied mathematics of reinforced concrete. The statue of Cristo Redentor (1931), towering over Rio de Janeiro, became the monument to this new domestic expertise.
By 1920, Brazil's chemical industry remained so insignificant that the Commercial Encyclopedia listed it under "various minor industries." The cement industry, which employed simple chemical processes, did not develop until the 1930s. Imports accounted for 97 percent of all cement consumption in 1926, a share that dropped to 82 percent in 1930, 34 percent in 1934, and 8 percent in 1938. The government offered financial incentives to domestic producers in the face of a construction boom. Brazilian Portland Cement Company opened the country's first plant at Perús (SP) in 1926; the Portland Mauá National Cement Company, also a subsidiary of a U.S. firm, opened a second plant in São Gonçalo (RJ) in 1933. By the late 1930s, five plants were in operation and two more under construction. Until the 1920s, the only important chemical industry was Du Pont's factory in Piquete, opened in 1909, which produced smokeless gunpowder for the army. The production of rayon was the first industrial application of synthetic chemistry in Brazil. Indústrias Reunidas F. Matarazzo opened a plant in 1926, followed by Nitro Química and the Companhia Brasileira Rhodiaceta-Fábrica de Rayon in the 1930s. The fact that Brazil had to import all of its petroleum and all refined petroleum products hampered the development of a chemical industry. Three small refineries opened in 1935, two in Rio Grande so Sul, and one in São Paulo, but the nationalization of the sector in 1938 curtailed foreign investment.
The expansion of hydroelectric power propelled industrialization in the 1920s and 1930s. It accounted for over 80 percent of overall capacity, which increased from 160 MW in 1910 to 357 MW in 1920, 779 MW in 1930, and 1,243 MW in 1940. In São Paulo, industry used over 7.7 million kWh per month, with textile mills (five million kWh), metalworking (560,000kWh), and food processing (500,000kWh) as the largest consumers. In the 1920s, LIGHT São Paulo responded to increasing demand by building the Rio de Pedras dam and the Cubatão hydroelectric plant. Also in the 1920s, LIGHT Rio de Janeiro built the Ilha dos Pombos hydroelectric plant on the Paraíba River, which generated 117 MW in the late 1930s. In 1938, LIGHT São Paulo and LIGHT Rio de Janeiro together generated 596 MW of electricity, or roughly 54 percent of national consumption. Further expansions more than doubled their plants' capacities to 1,453 MW by 1942. General Electric's subsidiary Electric Bond and Share Company (EBASCO) and its subsidiary, the American Foreign Power Co. (AMFORP), generated electricity and operated streetcars in Natal, Recife, Maceió, Salvador, Vitória, Belo Horizonte, Niterói, Curitiba, Porto Alegre, and Pelotas. AMFORP also owned the Companhia Paulista de Força e Luz, which had created a pioneering regional power grid for 106 municipalities in the São Paulo coffee zone. Otherwise, the southeast remained a patchwork of grids with different technical standards. LIGHT São Paulo and CBEE in northeastern Rio de Janeiro transmitted at 60 cycles; LIGHT Rio de Janeiro at 50 cycles. The Estado Novo failed in its attempt to impose a uniform standard, which delayed the integration of the grid until the 1960s.
(Continues...)
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Table of Contents
Contents
List of Illustrations....................ixList of Tables....................xi
Acknowledgments....................xiii
Abbreviations....................xix
Introduction....................1
1. Inducing an Industrial Revolution: The Creation of the National Steel Company....................14
2. Industry Comes to a Village, Villagers Come to an Industry....................39
3. State Paternalism in the Making of a Company Town....................70
4. From Construction to Production: Labor Management in Transition....................98
5. Beware of the Communists: Political Policing and Labor Control....................124
6. Power over Production: The Technical Division of Labor and Workers' Strategic Positions in Steel....................147
7. Strategic Power, Labor Politics, and the Rise of the Metalworkers Union....................179
8. The Crisis of Developmentalism: From Union Hegemony to the Military Coup....................206
Conclusion....................233
Appendix....................239
Notes....................243
Bibliography....................301
Index....................317