Decadence and crisis are terms that are used interchangeably in everyday speech, but they really encapsulate essential differences in historians’ theoretical positions toward their object of study. Does decadence exist in history, or is it merely a judgment of the past made a posteriori? Does the definition of a historical period as decadent presuppose the presence of contemporary consciousness about that condition?1 Scholars have differed on this point; for example, Fernand Braudel did not attribute any value to the notion of decadence; and Pierre Chaunnu argued that decadence was an objective reality signaled by a significant decline in the demographic rate and an even more impressive retreat in the cultural sphere.2 The core of the idea of decadence is defined in the consciousness of the past and in the emergence of a new phase. In some ways, the idea of decadence is antithetical to a belief in an irreversible movement towards modernity, and the principle of eternal progress. To assume decadence is to negate a society’s health.Decadence has had a cyclical presence in history. Along with its symbolic dimension, its strong appeal to emotions and sensibilities has transformed decadence into a recurrent issue in Portuguese, and consequently, in Brazilian historiography. It has been in the field of literature that the theme of decadence has had its principal admirers. In Thomas Mann’s Budenbrook, the symbolism of ascension implies a decline, which then points to a new beginning or restoration. Thus decadence appears as a vital moment, as the precursor of a new cycle.3We face a kind of uncontrollable and undeniable naturalization of the historical process in which the seasons of history proceed implacably, much like generations. For every rise there will be a corresponding high point followed by a low point, which creates the space for a new recuperation. In other words, periods of decadence are as normal and predictable as those of growth, resurgence, and apogee. In Portuguese historiography, the concept of decadence has greatly influenced historians’ perceptions and studies of the past.Inevitably, the theme of decadence reiterates the continuity of history. In the nineteenth century positivists and scientific evolutionists in various fields included the concept of decadence in their interpretations and found it to be a natural part of social evolution; however, their interpretive framework was pushed into the background by the theme of revolutions in the twentieth century. Revolution brought with it a sensation of the compression of historical time and the concept of a new age. It was seen as the driving force of history. Within these epistemological parameters the dynamic social force of revolution was more attractive than the monotony of decadences, and thus “decadence” lost it historiographical appeal.The idea of the naturalness of the bourgeois revolution was destroyed by the emergence of proletarian revolutions of a socialist character. The theme of revolutions was born in an era of extremes.4 The 1917 Communist Revolution in Russia not only polarized the world, but also History, historians, and historiography. Until the collapse of the Soviet empire, the revolution nurtured utopias and mobilized illusions.5 For many people, a history without revolutions meant an uninteresting history, without soul, without a raison d’être. For others, the word “revolution” carried a negative connotation, excluding it from the economic approaches then perceived as appropriate for the studies of the industrial revolutions; however, there were isolated voices of resistance.6 French intellectuals especially leaned towards the concept of revolutions, real or imagined.A different perspective of the theme of decadence can be found in studies of failed revolutions, ideas, actions, or political and social movements which fell short because they did not succeed and thus lost their place in the writing of history. In Brazil, examples of this historiographical debate can be seen in the studies of the 1930 Revolution, considered by revisionists as a creation of the winners, more a promise than a reality.7 At the other extreme, in the area of economic revolutions when the process of industrialization was blocked, it created an impression that history was marching backwards, leading not to industrialization but to deindustrialization.8 In these specific cases, there has been the impression that the natural movement of history has been reversed. The march of history towards the future has been interrupted, and this problematizes the classic concept of linear time.The theme of imperial decadence has been recurrent in Portuguese historiography. Without attempting to present a comprehensive view of that historiography, I will focus on those authors who have made the most significant contribution to this idea. Certainly, pride of place should be given to Vitorino Magalhães Godinho, who suggested that economic stagnation occurred at the beginning of the nineteenth century, caused by the contraction of capitalism as part of a longer economic cycle made clear by a general decline of world prices which reached its low point in 1810. He believed that the economic difficulties that emerged between 1806 and 1808 were responsible for a serious depression, which was reversed after 1813–14 by a new industrializing impulse (um novo esforço industrializador).9In more specific terms, this depression can be explained by an innate mechanism of Portuguese economic history in the modern era in which commercial crises are frequently followed by momentary public policies of industrialization, which disappear in proportion to mercantile recovery. Thus “industrializing movements occurred following deep commercial crises and with them a prolonged fall of prices,”10 making it impossible for industry to sink its roots. Undoubtedly, these explanations correspond to the scene generated by the general crisis of the seventeenth century, which in Portugal resulted in the failed attempt of industrialization by the Count of Ericeira and the Marquis of Fronteira. By affirming that “the same thing happened with Pombaline policy in the third quarter of the eighteenth century,”11 Godinho homogenizes the explanation, making for the second half of the eighteenth century the same diagnosis made for the economic crisis of the second half of the seventeenth century,12 and by doing so he reinforces the idea of a cyclical crisis of capitalism.From all the evidence, the crisis of the eighteenth century differed from the crisis of the seventeenth century, above all in the industrializing policies put in place to meet these situations. First, Pombaline policies continued after the crisis and presented an integrated character. Industry, agriculture, and commerce were objects of unified governmental actions. Pombal rightly believed that mines were a kind of “fictitious wealth” and he made agriculture one of the pillars of his administration. The mid-range effects of this were not long in coming and were manifest in the agricultural diversification of the colonial economy, with surprising results in Brazil. Products for reexportation by Portugal, foodstuff for the metropolitan population, and raw materials for manufacturing tied industry to agriculture, and transformed the path to industrialization into a reality.Agricultural development of Brazil fed Portuguese factories and linked the two economies. The third element of this integrated policy of economic development was the creation of commercial companies whose objective was exactly to unite the agricultural and industrial sectors separated by an ocean, thereby closing the economic circuit within the Luso-Brazilian empire during the second half of the eighteenth century. This industrial policy did not result from a temporary change of a conjunctural nature, but effectively represented a structural shift in a Portugal which came, tragically, to depend on the maintenance of the colony. The crisis of the eighteenth century and the industrial policy that followed was not merely part of a temporary commercial crisis. Its significance both for Portugal and Brazil was far more profound.Jorge Borges de Macedo set his explanation of decadence on other paths. Rejecting a cyclical explanation, he denied the importance of the commercial treaties signed with England, and reduced the importance of the material destruction cause by the Peninsula War. He turned instead to an explanation based on “an English industrial and mercantile offensive realized under exceptionally favorable military and political conditions” which became “an increasingly destructive competition.”13 In his eagerness to reinforce this interpretation, Macedo sought to minimize the loss of the monopolized colonial Brazilian market, affirming that, “the opening of the ports of Brazil was much less troubling since it did not affect the trans-shipping nature of the port of Lisbon. Moreover, he minimized the importance of Portuguese factories by stating that “many of the articles shipped were simply reexports.”14If we consider only the income generated by imports received from Brazil and reexported, the indices reach 60.6 percent of the total of Portuguese exports that could be translated into monetary resources, credit, letters of exchange, and the payments for imports. These were not insignificant sums and they were certainly responsible for the historical shift in Portugal’s balance of trade with England which during the eighteenth century had, for the first time, become favorable for Portugal. After 1783, and especially after 1788, English imports of cotton from Brazil increased and came to represent 25 percent of all the cotton arriving in Lancashire. The result was an equilibrium in Portuguese trade with England from 1785 to 1790. In the following five years the balance turned in favor of Portugal, a situation which alarmed Robert Walpole because of the remission of gold from London to Lisbon to pay for the deficits.15 Among the reasons put forward by the English to justify the transference of the Portuguese royal family to Brazil, a project already considered by 1801, was the advantage of trading directly with Brazil, and thus reestablishing an equilibrium in the balance of payments.These considerations should help us evaluate the impact of the loss of the Brazilian market on Portugal. In more limited terms, thinking only of the relationship between Portuguese factories and the Brazilian consumer market— to say nothing of the strategic importance of the raw materials Brazil supplied— one can say that the monopolized Brazilian market was fundamental for the industrial growth of Portugal. Slaves were adequate for the developmental stage of these incipient industries whose products of inferior quality and high prices found captive and less demanding consumers. In this way, Portuguese industry could compete with the technically more advanced industry of England. In reality, the technological disparity between the two industries would only become disastrous for Portugal if it lost its exclusive control of the Brazilian colonial market. Given this situation, it would not be unreasonable to believe that had the colonial exclusion been maintained, the obstacles to a complete transformation of the productive system might have been overcome. Admittedly this is a hypothesis, but one based on concrete historical circum stances. It is, in fact, no more hypothetical than one that affirms that the Industrial Revolution would not have occurred in Portugal even if it had maintained control of Brazil.Rather than being caught up in our academic skirmishes, perhaps it is best to allow those contemporary to the events to have a word. Many times, it is they who can set matters in their place with clarity. I turn to the valuable testimony of historian Acursio de Neves: “The document which I find best able to shed some light on the progress and decadence of our manufactures is the table of exports to Brazil and other overseas establishments … the loss of the exclusive market for the production of our industry which was principally Brazil, our industry cold not sustain itself in Portugal in competition with foreign manufactures.”16 Having lost the Brazilian market, Portuguese industry was incapable of surviving in a competitive market. Would it be too much to say that the maintenance of the colonial system might have provided the necessary technical impulse to Portuguese industry or that its impulse up to this point had been due to a strengthening of relations with Brazil?If the colony provided to the metropolis conditions that made it possible to face economic competition, and despite all difficulties, to construct an industrial base, it was more difficult for Portugal to resist political pressures brought to bear diplomatically and militarily by the English. In the eighteenth century the process of the Great English Revolution was being completed, having begun in the Puritan Revolution of 1640 and consummated in the Industrial Revolution of 1780.17 One of the fundamental reasons for this qualitative leap in the productive structure of England lay in the development of a powerful fleet that gave it control of world markets. To the Continental blockade, the English responded with a maritime exclusion; what they lost in Europe, they could regain in world markets. An excellent example of English aggressiveness was its actions toward Portugal. In 1801, when international relations were becoming strained, Lord Hawkesbury gave instructions to his representative in Lisbon to impress upon the Portuguese authorities that the Court should depart for Brazil in case of a French invasion. Beyond guaranteeing the security of the voyage, he suggested that the most efficient means of consolidating and expanding England’s dominion (seu dominio) in South America would be through collaboration with the Portuguese government.18Contraband trade was an illegal but efficient way of forcing the Portuguese to open their ports to English goods. An analyses of the commercial balances (Balanças do commercio) introduced by treasury official Mauricio José Teixeira de Moraes shows that there was a rapid execution of the plans elaborated in London. In 1802 he expressed his hopes that the “abundance of contraband” would not continue in future years. His own words predicted the future. In 1805 he lamented that “the reduced exports are definitely the result of much contraband whose entry is almost freely allowed in those ports as a most scandalous abuse; and if to the contrary the imports have not diminished, it follows that the said contraband is all sold in exchange for currency which results in the pernicious loss of circulating coin from which follow many ruinous consequences to the nation.” The aggression of the smugglers was supported by the inhabitants of the colony and even by the connivance of Portuguese merchants in Brazil. Thus in 1806 it was said that, “the stagnation of commerce derives from the destructive principle of the clandestine introduction of prohibited goods in this and in that continent because of the lack of patriotism of some merchants, who forgetful of the laws that govern us, seek only their own interests by means of this illicit and ruinous commerce that favors foreign industry and impedes national industry with so much scandal; and this can be seen last year by the great seizures made at sea, one of them alone being worth 500,000 cruzados.” The final consummation of the tragedy was made clear in the comments made about the year 1807 when he stated, “there is little to consider about the state of our commerce in this last year which is not a repetition of the years 1805 and 1806 which is leading us to decadence and ruin.”19The British international policies stipulated in Lord Hawkesbury’s instructions of 1801 became effective only in 1808, when the Portuguese crown arrived in Brazil. The formalized opening of the ports validated the contraband then carried on publicly in Brazilian ports. The commercial treaties of 1810 were a coup de grace for the Portuguese industry. The figures of import and export commerce to the principal Brazilian port, Rio de Janeiro, are eloquent witnesses to this assertion. Rio de Janeiro handled 40 percent of all the commercial transactions within the colony. The colony’s imports, adding up the indices of items such as woolen goods, linens, silk, and metals of industrial nature, bought by the Portuguese and reexported to the colony, con stituted 35.4 percent of the total during the period from 1796 to 1811. During those years, the industrialized goods in Portugal, which were represented as factory products, reached 32.3 percent, of which 50 percent were foreign goods and the other 50 percent were Portuguese. Between 1796 and 1805, the numbers turned to be even more eloquent, reaching 35 percent. During the specific years of 1803 and 1798, the numbers were 40.5 percent and 42.2 percent.20These numbers were fixed in the balance of trade. They were elaborated by accountant Mauricio José, whose data may have been imprecise and are taken here as the point of departure to understand a specific historical phenomenon and not as a point of arrival of knowledge. I emphasize here their tenuous nature. The numbers are illusions, constructions like literary texts. Obviously, a detailed analysis of each category of this data is worthwhile and an essential exercise, but it does not alter the final conclusion that the Brazilian market played a crucial role in the rise and economic, and especially industrial, development of Portugal at the end of the eighteenth and beginning of the nineteenth century.In light of these considerations, I wish to refer to the extensive research of Valentim Alexandre, who analyzes the content of each category of the Balança do comercio. In the specific case of manufactured goods, it is clear that if the gewgaws and iron goods produced in northern Portugal and acquired by foreign merchants appeared in the Balança as reexports, although they were produced in Portuguese factories, this only reinforces the argument in favor of the strength of that activity and of the consequent importance of the colonial market as the main consumer of these goods. Similarly, if linens classified under the category of linen goods (linificios) were produced in Porto to be sold in Brazil, that reiterates the argument. Conversely, to discover that much of the textiles were not produced in Portugal, but were woven in Asia and printed in the metropole, weakens the argument but allows us a glimpse of the game of compensation whose result is that which we already know and which we can arrive at through the absolute numbers of the Balança or by a close analysis of the categories used in them. One needs only to look at final conclusions of my doctoral dissertation written in 1972 and published in 1980, in comparison to the conclusions of Valetim Alexandre, to see the similarities despite the lapse of time between the writing of the two studies.21The numbers do not negate but reinforce what we already know. Perhaps, the biggest difference lies in the way in which the Balanças do comercio are perceived. I consider that they are a balance of payments that include monetary remissions. To exclude the monetary remittances of the colony is a questionable procedure because it perceptively obliterates the results. Part of the monetary remittance certainly constituted compensatory payments, that is, remittances of resources resulting from the payments of importations made by the colony. But these remittances had at least as their partial counterpart, the monetary remittances made by the metropolis to the colony. In addition, it would be necessary to present the monetary resources in the form of patacas, hard currency, obtained in the contraband trade with the Platine region in which Portuguese and Brazilian merchants were involved using both goods arriving from Portugal as well as Brazilian products.We cannot exclude monetary transfers as if they were only payments, weakening in this way the argument according to which the significant deficits of Portugal with its colony were illusory. The mechanism by which the deficits with the colony were compensated by metropolitan reexports to foreign nations aptly demonstrated by Fernando Novais continues to be valid. Therefore, the ramifications related to the importance of the economic diversification of the colony, including the indirect calculations suggesting the importance of contraband remain, on the basis of qualitative analysis, unquestionable.22Details aside, what is essential is that I basically agree with the central thesis of Valentim Alexandre concerning the decisive importance that the loss of Brazil represented to the late economic development of Portugal. Alexandre considered this to be the crucial moment in Portuguese underdevelopment,23 a position which was based on the fact that mercantile prosperity at the close of the eighteenth and beginning of the nineteenth century was sustained by the rise of industrial exports. Portuguese industry was responsible for 42.7 percent of exports to the colonies if we exclude those goods coming from Asia.24If between 1796 and 1806 manufactures made up 35.6 percent of Portuguese exports to Brazil, after the opening of the ports between 1816 and 1822, that figure declined to 21.6 percent and then to 16.8 percent from 1825–31. The rise of English products in the same period corroborates my previous assertions about the British onslaught.Following the excellent research of Valentin Alexandre, Jorge Pedreira centers his attention on the specific relation between the Brazilian market and Portuguese industrial production from 1780 to 1830, resuscitating a theme whose importance had been long recognized but which only now because of research done in the last 20 years could be consolidated into a extensive and creative study. Agreements and disagreements apart, the impact of the loss of Brazil on the process of industrialization in Portugal is once again taken up. In spite of a recognition that “the growth of commerce pulled along the industrial sector which developed into a manufacturing surge,” Jorge Pedreira attributes this dynamism to a peculiar conjuncture.25 He denies characterizing as counterfactual the rational by which the preservation of the Brazilian market could have led Portugal to the edge of the Industrial Revolution. In this case, I have tried to show at least in my published work—a position which Alexandre reaches by other approaches—the relative importance of the colonial market in the crisis of Portuguese industry, rejecting therefore the arguments of Jorge Borges de Macedo who had downplayed the role of the colony and looked instead to English competition as the cause of the crisis. It is from this position that rhetorically it follows that had Portugal not lost Brazil, it could have completed its process of industrialization.To affirm in any way that the growth of colonial commerce would have led Portugal to perfect its industrialization, as Jorge Pedreira does, is also a counterfactual argument. Moreover, this argument does not seek to relate the growth of colonial commerce to industrialization, but rather to relate the loss of the privileged market in the colony with the interruption of industrial development. To say that, “despite mercantile prosperity, the conditions inscribed in the social and economic structure were far from being propitious for a movement toward industrialization”26 is to deny the evidence at hand. We recognize that structural obstacles permeated the Portuguese state; the lack of urban concentrations, poor education, little technological development, entrenched mercantile interests of the elites, a backward agriculture, and a authoritarian and prodigal state. Still, the continuity of the manufacturing process in its situation prior to the crisis of the colonial system could have forced it toward transformations that were indispensable for its continued growth. A notable example of such a process was the transformation of Brazilian agriculture at the end of the eighteenth century during which the measures related to agricultural policy destroyed one of the props of the old colonial structure, the relation between monoculture, large landholdings, and slavery. Small and medium sized properties emerged, agriculture diversified, free and semi-free forms of work converged and at the extreme African slaves were utilized in a mercantilist subsistence economy. Therefore, when we think of the obstacles that Portuguese agriculture represented as blocks to the development of the industrial process it is necessary to remember that Brazil and Portugal were separated by an ocean but part of the same political and economic entity. That is to say, the industrializing wave that crossed Portugal cannot be separated from the transformations taking place in Brazil. In this context, the meaning of the words decadence and crisis need to be historically situated, not only in relation to the specific historical moments in which they happened but also in relation to specific historical contexts in which the analyses and interpretations were produced.Is it possible to speak of a decadence in Portugal at the end of the eighteenth century? Certainly not. We are dealing here with a period of economic prosperity despite difficulties in the political sphere, especially in relation to extremely tense international relations in the midst of which Portuguese diplomacy succeeded by maximizing its neutrality. The positive commercial balance is a sound indicator of the healthy state of the kingdom’s finances. The height of gold production in Brazil corresponded to the highest deficits in Portugal’s trade balance with other nations, especially with England. How can we explain that at a moment of a global retreat in the absolute value of colonial exports that their economic prosperity was greater than it had been. Undoubtedly, the answer lies in the new ties that united colony and metropole, a arrangement of the old colonial system in which without the principle of monopoly, the metropolis established a new type of bilateral relationship. In it the colonies become consumer markets for metropolitan industrial production and suppliers of raw materials and foodstuff as the primacy of so-called tropical products declined. Here we are very far from the classic model of colonization created in the sixteenth and seventeenth centuries within the frameworks of mercantilist policy and that of commercial capitalism in which colonies were the productive centers of exotic products in great international demand and the consumers of goods reexported by metropolitan merchants.The new model did not break the old colonial system. On the contrary, it strengthened the ties between metropole and colony, previewing the arrangement that would become predominant in the second half of the nineteenth century in the neocolonial age in which the principal actors were the industrialized countries and the Afro-Asian colonies. It is significant therefore that we are observing the historical birth of a new model of colonization which emerged from the essence of the old system, a fact which explains to some extent the structural obstacles to its full development. It is certainly precocious not because it was born before its time but because it represents a precursor, an original creation much as the plantation system created by the Portuguese in Brazil had been. We are confronting a vital transformation. The metropole advances creating its factories; the colony diversifies its agricultural production, markets become internally and externally integrated. The incomes generated by export are smaller in both Brazil and in Portugal if compared to the height of gold production, but the wealth created is more intensely distributed thus created higher per capita indices. There was economic growth in Brazil and in Portugal. The conjuncture was one of prosperity not depression. Moments like these as is well known have a great potential for transformation.When can we speak of a new model of accumulation? Eric Hobsbawm believed that the general crisis of the seventeenth century is the dividing line. At first, from the sixteenth to the seventeenth centuries metropolitan monopolies predominated in relation to their colonies. In the case of the Portuguese, their monopoly of sugar production, but after the expulsion of the Dutch and transfer of sugar to the Caribbean islands, the monopoly in production was ended thus inaugurating a phase of rapidly growing competition between the metropoles and their colonies. The colonies grew in importance within metropolitan mercantile policy and at the same time there was an acceleration in the internationalization of mercantile capitalism as it sought out profits regardless of national or imperial boundaries. The production system grew, enlarging consumption by the lowering of prices.At the same time, the colonies were transformed into consumer markets for European goods.27 The English Revolution of 1640 represents the turning point in British foreign policy. Up to then, England had been satisfied with the gains appropriated by piracy, Britain moved quickly toward the development of manufactures, agriculture, and naval construction. This redirection in mercantile policy within a different pattern of accumulation has led Cain and Hopkins to call the period beginning in 1688, the old colonial system.28 In eighteenth-century Brazil, when gold mining predominated, the typical practices of Spanish mercantilism of the sixteenth and seventeenth centuries were reinforced and reproduced within the old model of colonization.29The role of the Dutch in the making of a new step in the process of early modern colonization is undeniable, and it has led Peter Emmer to speak of two Atlantic systems: the first, created by the Spanish and Portuguese, and the second, by the Dutch, English, and French. These two systems were differentiated by their centers of economic gravity, the demographic and racial composition, the organization of commerce and investment, and by their social structures. In the second Atlantic system, there emerged the original type of the plantation colony, with its specialization, the expansion and contraction of productive units determined by profit, closely tied to the economic laws of the market, minimal interference of the state, and a maximization of profits by the best use of the factors of production, and by population movements determined by the market and by investment. In sum, the second Atlantic system was defined by its rigid orientation towards the international market.30Despite recognizing significant differences in the various colonization attempts in the Caribbean in the seventeenth century, the differences are more those of degree rather than type. The essence of the productive system was still monoculture, latifundio, and slavery, with a high degree of specialization, but in keeping with the old patters of colonization.31 What made this new stage different? Precisely, the interrelationship between the metropole and the colony under the aegis of industrialization.If we cannot speak of decadence, can we speak of a crisis in the old colonial system? Contemporary Brazilian historians, especially the generation of the 1960s, had a penchant for crises. They perceived Brazil at that time of the crisis of capitalism from which there seemed to be two possible outcomes; the final crisis of Brazilian peripheral capitalism and the coming of a socialist revolution, or the crisis of capitalism itself leading to the decadence of Brazilian society, socioeconomic stagnation, and ultimately, barbarism. A third possibility, one that history would later confirm, and which was certainly a possibility, was not considered. This was the possible continued development of a capitalism that softened its social transgressions by democratic or democratizing reforms. As a result, the view of the crises of the old colonial system revealed in large measure a projection of the present on the past. The old colonial system was symbolically identified with peripheral capitalism and the revolutionary alternative with the rupture of the colonial pact and the movement for independence. Stagnation without remedy was seen as the situation of Portugal after the loss of Brazil.In Portugal what we have is a crisis of growth which was transformed into a crisis of retreat. This lead to a nostalgic reification of the myth of decadence accompanied by a feeling of a missed opportunity or a lost historical moment. In Brazil the crisis of growth led to a breaking of the colonial relationship and the gradual transformation of the political situation, leading eventually to the construction of the nation state.