1. IB History of the Americas
The Great Depression in Latin America Case Study of Brazil under Vargas: Import Substitution Industrialization
IB History of the Americas

2. Guiding Questions What is ISI?
In general, what effect did the Great Depression have on the economies of Latin American countries?
To what extent did Vargas change the economy of Brazil during the 1930’s?
Compare and contrast the economic policies of Roosevelt and Vargas.

4. Latin America and the Depression
Latin America was hit hard by the Great Depression but responded with political reforms and an effort to gain greater economic independence
Cut off during WWI, LA nations experienced industrial growth from ISI (import substitution industrialization)…most was in the form of textile production

5. Latin America and the Depression: Socialism
By the 1930s, the liberal governments of the 19th C began to show failure…the middle class had forged alliances with elites and the military rather than expressing individual democratic beliefs as was done in the West
The “intelligentsia” in LA (artists and writers) reached out to Europe for inspiration and began to form Socialist parties, particularly after the Russian Revolution of 1917
Socialist parties were not the only political entities decrying the unity of the middle and upper class elites…even the Roman Catholic church denounced this unity as “unholy”, presenting secularization in capitalist society

6. Latin American Response
Social reform movements made great headway in the 1930s
In short, it was quasi-Fascism, state control over all aspects of the economy, w/ strict authoritarian rule
The most successful form was instituted in Mexico by Lázaro Cárdenas…through land reforms known as ejidos, millions of acres of land were redistributed into communal farms AND oil production was wholly nationalized into a state controlled monopoly, NO foreign influence

7. The economy before the Great Depression
WWI impacts Brazil.
Coffee was main export
Growing demand for necessary items revitalized economy
The demand for sugar, beans, & other items created an economic boom in Brasil by 1915
Profits derived from coffee provided resources to help create industry in Brazil
Increased urbanization and industrialization strengthened both the industrial bourgeoisie and the working class
The working class became more racially & ethnically diverse as a result of urbanization & industrialization
Brazilian culture was also affected by economic expansion
New immigrants from Japan & the Ottoman Empire joined the African contingent.
In the urban areas the diversity gave birth to the samba (think Carnival)

8. Organized Labor in Brazil
Due to wartime inflation, trade unions got together and there were more strikes.
1917: A strike on São Paulo was led by women seeking higher wages, respect from male supervisors, improved working conditions
Their plight caused a strike wave from in which many employers gave in to the demands
However, permanent improvements did not happen

9. Working conditions pre-depression
Dominant products of agriculture in 1920’s
Coffee
Sugar
Cotton
Food production was so neglected that Brasil had to import 4/5 of their grain
City life
Workers earned around $.60/day; hours a day 6 days a week; women earned 60% of what men made & had to endure the patriarchal setup

10. ISI Defined
Import Substitution Industrialization (called ISI) is a trade and economic policy based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products.
ISI requires state-induced industrialization through government spending

11. ISI in Latin America
Import substitution policies were adopted by most nations in Latin America from the 1930s until the late 1980s.
Adoption of ISI is attributed to the impact of the Great Depression, when:
Latin American countries, which exported primary products (henequen, fruit, beef) and imported almost all of the industrialized goods they consumed (radios, appliances), were prevented from importing due to a sharp decline in their foreign sales.
This served as an incentive for the domestic production of the goods they needed.

12. ISI in Latin America
The first steps in ISI were based on practical choices of how to face the economic limitations caused by recession.
countries placed protective tariffs on imports on products that it wanted to produce locally. Protected industries are also assisted by the government.
Populist government Brazil (Vargas) modeled Fascist Italy (and, to some extent, the Soviet Union) as inspirations of state- induced industrialization.

13. ISI
Positivism: a philosophy that appealed to science (viewed as “positive” knowledge) as the ultimate arbiter of truth
In Latin America: sought a "strong government" to "modernize" society – played a major influence on Latin American military thinking in the 20th century.
Vargas saw industrialization (especially steel production) was synonymous of "progress" and was naturally placed as a priority in ISI policy.

14. ISI in Latin America
ISI was most successful in countries with large populations and income levels which allowed for the consumption of locally produced products.
Argentina, Brazil, Mexico, and, to a lesser extent, Chile, Uruguay and Venezuela, had the most success with ISI

15. ISI in Latin America
In Latin American countries where ISI was most successful, it was accompanied by changes in government. Old neocolonial governments were replaced by semi- democratic governments.
Banks, utilities (gas, water, electric) and certain foreign-owned companies were nationalized or transferred ownership to local businesspeople.

16. Vargas & ISI in Brazil
Getúlio Vargas served as president and dictator of Brazil from 1930 to and from 1951 until his suicide in 1954.
Vargas also won the nickname "O Pai dos Pobres" (Portuguese for "The Father of the Poor") because of his worker's policy.

17. Changes in Brazil’s Economy
Between the two World Wars, Brazil was a rapidly industrializing nation; "the sleeping giant of the Americas" and a potential world power.
However, the oligarchic confederation of the Old Republic, resisted change, industrialization, urbanization, and other broad interests of the new middle class.

18. Vargas-Brazil
October bloodless coup ousted President Julio Prestes and elected president Washington Luís.

19. Vargas-Brazil
Vargas's Liberal Alliance won support of Brazil's growing urban middle class and a group of tenentes (career military officers), who had grown frustrated with the politics of (landed elites in coffee and cattle business)

20. Liberal Alliance backed Vargas (who lost)
Liberal Alliance backed Vargas (who lost). The election outcome was denounced as fraudulent (often the case in the period known as the Old Republic1889–1930).
The military, traditionally active in Brazilian politics, deposed Washington Luís and installed the runner-up Vargas as the “provisional president”

21. Vargas-Brazil
Like FDR in the U.S., Vargas focused on economic stimulus. A state interventionist policy utilizing tax breaks, and import quotas allowed Vargas to expand the domestic industrial base.
Vargas linked his pro-industrial policies to nationalism, advocating heavy tariffs to
"perfect our manufacturers to the point where it will become unpatriotic to feed or clothe ourselves with imported goods."

22. Vargas-Brazil
Coffee Valorization Program collapsed: price support program, a safety net in times of economic crisis
Vargas attempted to bring it back on its feet through:
Restriction of plantings
Purchase of surplus stocks
Burning excess coffee
(however, the coffee industry did not grow in the 30s, but other agricultural goods did like cotton, using similar valorization methods)

23. Vargas-Brazil
Parallels between Vargas and the fascist European states began to appear by 1934, when a new constitution was enacted with some direct almost- fascist influences
Fascist-style programs would serve two important aims in Brazil,
stimulating industrial growth and
suppressing the communist influence in the country.

24. Vargas-ISI in Brazil
The Brazilian constitution established a Chamber of Deputies that placed government authority over the private economy
Vargas implemented import substitution methods through industrialization to improve the local economy and reduce foreign dependency.
Strategy involved using a strong nationalist appeal
While increasing worker’s rights, Vargas greatly imposed labor regulations on labor. The new constitution, expanded social programs and set a minimum wage but also placed stringent limits on union organizing and "unauthorized" strikes.

25. Vargas-Brazil
Industrial production increased by double from to 1936, even when the US was still in depression, Brazil’s national income had begun to rise.
The Brazilian Economy was no longer dependent on outside factors.
In 1940, a Five Year Plan was announced to expand the heavy industries and the railroad system: National Motor Company, National Steel Company, National Petroleum Company
Achieved self-sufficiency; autocracy

26. Vargas-Brazil
Although "the father of the poor“ expanded the electorate, granted women's suffrage, enacted social security reforms, legalized labor unions as a populist, Vargas also whittled down the autonomy of labor and crushed dissent

27. Good Neighbors in Wartime?
Getulio, how about being a Good Neighbor & help me whoop some Nazis.
It’s gonna cost you Yankee!
50 million in gold & a steel mill
In our next unit…
Good Neighbors in Wartime?

28. Diego Rivera “Artist of the People” (1886-1957)
Considered the greatest Mexican painter of the twentieth century, Diego Rivera had a profound effect on the international art world. Among his many contributions, Rivera is credited with the reintroduction of fresco painting into modern art and architecture.
Diego Rivera thought it was important to make paintings for everyday working people to enjoy. He hoped his art would teach people about their past and give them hope for the future.
To make it easier for lots of people to see his artwork, Diego Rivera painted huge pictures called murals on the walls of schools, churches, hospitals, hotels, and government buildings. Diego usually painted on wet plaster with watercolors, a technique known as fresco painting.
Self-Portrait Dedicated to Irene Rich. / Autorretrato dedicado a Irene Rich Oil on canvas. 61 x 43 cm. Smith College Museum of Art, Northampton, MA, USA.

29. Diego Rivera
Diego Rivera is considered the father of Mexican mural art and the father of modern political art in Mexico.
The birth of Mexican mural art in the 1920's was one of the most revolutionary events the government has done for the country because it recognized the power of political art.
One of these ideas was the creation of murals on public buildings so that art could be shared with the masses.

30. Diego Rivera was born in Guanajuato, Mexico.
He began to study art in Mexico City at an early age.
In 1907, he received a grant to study art in Europe.
Diego María Rivera and his twin brother Carlos María were born on December 8, 1886 in Guanajuato, Mexico. Carlos died at fourteen months, leaving Rivera an only child. Rivera's parents had met while working as schoolteachers together. His father was also the editor of a liberal paper, El Democrata, that called for social reform to help the working poor. This commitment to the plight of the working classes would influence Rivera the rest of his life.
Rivera began drawing almost as soon as he could grip a pencil and is quoted in Bertram Wolfe's The Fabulous Life of Diego Rivera as saying, "The earliest memory I have is that I was drawing." He covered the walls and furniture with his work, prompting his father to give him a room of his own covered with blackboard. There the young Rivera spent hours creating worlds on his walls, a precursor of the muralist he would become.
In 1891 the Riveras had a daughter, María, and two years later the family moved to Mexico City. There Rivera fell ill with scarlet fever and typhoid. During his convalescence a great-aunt taught him to read and write. He began to devour his father's books and by eight years old asked to attend school. In at the age of eleven, Rivera began to attend night classes at the San Carlos Academy of Fine Arts. For two years he attended elementary school during the day and art school in the evening. In 1898 he transferred to San Carlos full time. He studied Mexican painters, collected Mexican folk art, and traveled to see the art of Mexico’s ancient Maya and Aztec cultures. He gained a deep respect for his country’s traditions.
The Threshing Floor. La era Oil on canvas. 100 x cm. Museo Casa Diego Rivera, Guanajuato, Mexico.

31. During the 1930s, Diego Rivera was invited to paint murals in the United States.
He used his murals to tell powerful stories of the struggles of working people.
In 1930, Rivera made the first of a series of trips that would alter the course of American painting. In November of that year, Rivera began work on his first two major American commissions: for the American Stock Exchange Luncheon Club and for the California School of Fine Arts. These two pieces firmly but subtly incorporated Rivera’s radical politics, while maintaining a sense of simple historicity. One of Rivera’s greatest gifts was his ability to condense a complex historical subject (such as the history of California’s natural resources) down to its most essential parts. For Rivera, the foundation of history could be seen in the working class, whose lives were spent by war and industry in the name of progress. In these first two commissions and all of the American murals to follow, Rivera would investigate the struggles of the working class.
This commission invoked the ire of the Communist press who derided Rivera for being an agent of North American Imperialism. Meanwhile, in San Francisco, controversy raged because a card-carrying Communist foreigner was chosen over a home-grown American artist to create a work celebrating capitalist glory. The furor kept Rivera's name in the papers but did not stop his work.
Allegory of California. / Alegoria de California Fresco. Mural on wall and ceiling of main staircase between tenth and eleventh floors. Pacific Stock Exchange Tower, San Francisco, CA