Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World (9 page)

The easy navigability afforded by the Río de la Plata and the rivers that feed into it helps explain why Argentina became one of the world's wealthiest countries late in the nineteenth and early twentieth centuries, while Brazil languished. Like the United States, Argentina (and to a lesser extent Uruguay) rapidly achieved prosperity by exploiting its favored natural transportation system. Meanwhile, no such system facilitated the early export of Brazil's products.

Put simply, the engineering required to provide infrastructure for transport of Brazilian products has been much more complicated and costly than the equivalent infrastructure in the United States. Although Brazil may be potentially the world's richest country, many of its riches have been effectively locked out of circulation by difficult and complicated topography. Remember, it is 10 to 30 times more cost-efficient to haul goods via water transport than doing so overland.

The geography of the United States was well understood after Thomas Jefferson commissioned the Lewis and Clark expedition early in the nineteenth century. Not so with Brazil. It is no exaggeration to say that much of Brazil was terra incognita (or, “unknown land”) until the twentieth century. Consider that the U.S. President Theodore Roosevelt authored
Through the Brazilian Wilderness
, a travel memoir of his long expedition through Brazil begun after his defeat in the election of 1912. Just the titles of some of his chapters convey a sense of how unmapped and inaccessible Brazil was in the twentieth century:

As a traveler to Brazil on the eve of the First World War, the former president was in a far different frame of mind from the one that brought him to advocate expanding the National Park System in order to preserve “scenery” for future generations. In 1913 Brazil, he was literally making his way through uncharted territory. Roosevelt explains how he was invited by the Brazilian foreign minister to “undertake the leadership of a serious expedition into the unexplored portion of western Matto Grosso,” to explore and to attempt the descent of a “very big river, utterly unknown to geographers.”

Later, he recounts,

We were within the southern boundary of this great equatorial forest, on a river which was not merely unknown but unguessed at, no geographer having ever suspected its existence. This river flowed northward toward the equator, but whither it would go, whether it would turn one way or another, the length of its course, where it would come out, the character of the stream itself, and the character of the dwellers along its banks—all these things were yet to be discovered.
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Another prominent foreigner who took a hand in exploring Brazil in the twentieth century was the eccentric English geographer, Colonel Percy Fawcett. He famously disappeared somewhere in Mato Grosso or Goiás state in 1925, on an expedition to find a “Lost City of Z.” It is telling that, as late as 1925, the jungles where Colonel Fawcett sought his lost city were home to Indian tribes that had never before encountered white men. That is an unmistakable indication of how remote and unsettled the Center/West region of Brazil was within living memory. Peter Fleming, later travel editor of the
Times
of London, and brother of James Bond originator, Ian Fleming, joined an expedition in 1933 into the little-explored reaches of Brazil to search for Colonel Fawcett. Fleming tells of his journey on which he discovered “one new tributary to a tributary to a tributary of the Amazon” in the comic masterpiece,
Brazilian Adventure.
Reading it makes clear that even in living memory travel through central Brazil could be so difficult that it made the Lewis and Clark Expedition seem like a stroll in the park. And accurate knowledge of the land was so sketchy that mountain ranges that did not exist figured in the coordinates of the search for Colonel Fawcett. Only three decades later, a corner was cut out of Goiás to form the Federal District where Brasilia, the new capital of Brazil, was located.

Another comparative marker of the difficulty of the Brazilian environment as compared to the United States is the relative frequency and success of slave revolts in the past. There were no successful slave revolts in the United States, partly because there were no unmapped and inaccessible regions where runaway slaves could escape and live beyond the reach of authority. But there were runaway slave communities in the wilds of Brazil, called
quilombos
.
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These were not always located in the vast interior of Brazil. In fact, the most famous of the
quilombos
was the fortified settlement of Palmares, in the coastal state of Alagoas, which survived for 60 years and fought off six failed efforts to subdue it, reaching a population of 20,000 runaway slaves at its height. There was no equivalent to Palmares in the United States, mainly because there were no wilds equivalent to those found in many parts of Brazil in the past.

The United States, in contrast to Brazil, began life relatively devoid of wilds with an extensive installed transportation system provided by nature, an elaborate network of navigable rivers, and a relatively flat coastline, dotted with many excellent harbors. Think of Boston, where the Charles River meets the Atlantic; New York, where the Hudson empties; Philadelphia, located at the confluence of the Delaware and Schuylkill rivers on the eastern border of Pennsylvania; Baltimore in the Chesapeake Bay, fed by more than 150 rivers and streams; and Charleston at the confluence of the Ashley and Cooper rivers, which flow together into the Atlantic Ocean.

Imagine how it would have affected the development of the United States if the Appalachian Mountains had extended to the Atlantic shore. And if the great eastern rivers, like the Hudson, the Susquehanna, and the Potomac, instead of emptying into the sea or tidewater bays, had taken different turns—either tumbling down rapids and waterfalls to the east, or flowing on meandering tracks that eventually emptied into the ocean thousands of miles away through a great port in Mexico or Canada. The story of U.S. economic development would have been very different. The United States would not have developed as rapidly. And it would not now be facing collapse because of a severe and irremediable decline in production of crude oil and the debt crisis it has engendered. As I spell out later in this book, U.S. oil output peaked in the early 1970s and global oil output appears to have peaked around 2005, with far-reaching consequences.

As it was, the United States happened to be well endowed for success under nineteenth- and twentieth-century conditions. Historian of water, Stephen Solomon, comments,

the global ascendance of the United States closely paralleled its mastery of its 3 disparate hydrological environments: its rainy, temperate, river-rich eastern half, dominated by the continent's arterial Mississippi River; its predominantly arid, drought-prone, Far West descending to the Pacific ocean from the 100th meridian of the high Great Plains; and its frontage on the sea lanes between the world's two largest oceans. By fusing these diverse water frontiers into a coherent national political and economic realm, America leveraged its favorable geographical location and the abundant natural resources of its vast island-continent to become civilization's world superpower in the twentieth century.
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From its early days, the United States was able to grow, building capital by cheaply exporting goods through a number of excellent eastern harbors formed where rivers flow into the sea. Later, when settlement extended into the Midwest, the United States continued to bootstrap its way to wealth, utilizing the Mississippi River and its feeder waterways, including the Ohio and Missouri rivers, to provide low-cost transportation of products for export. The plains areas surrounding the Mississippi were relatively flat, simplifying the engineering challenge and the cost of constructing roads and railroads. For example, Minneapolis is 1,299 miles upstream from New Orleans, but it has an elevation of only 298 meters. By comparison, Brazil's most favorably situated city, São Paulo, is only 70 kilometers (43 miles) inland from the port city of Santos, but São Paulo's elevation is 760 meters.

This helps explain why São Paulo was relatively slow to develop compared to New York. In 1870, New York City had a population of 942,292. By contrast, in 1870 just 23,000 people lived in São Paulo, making it about 10,000 inhabitants smaller than Reading, Pennsylvania. Since then, according to the Fernand Braudel Institute of World Economics, São Paulo has topped world growth charts enjoying “the fastest long-term rate of big-city growth in human experience.”
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Today, according to the CIA, greater São Paulo has a population of 19.96 million, making it larger than the New York–Newark metropolitan area, which has a combined population of 19.3 million.
20
Meanwhile, Reading's population has expanded to 88,082 (with the highest urban poverty rate in the United States). An early lead in industrialization doesn't always foretell a bright future.

The topographical advantage the United States enjoyed opened a gateway for building capital and rapidly exploiting plentiful energy resources, running from wood to coal to oil. Crucially, this precipitated a growth spurt employing the great energy-consuming innovations of the nineteenth and twentieth centuries—tractors, assembly lines, steam- and diesel-powered ships and locomotives, then cars, and airplanes. These technologies, along with electricity and modern communications, introduced more than a century ago, were the building blocks of the modern economy, powered by cheap oil.

In contrast to the United States, Brazil developed slowly because of its daunting topography. In effect, Brazil was obliged by nature to conserve its prosperity for a future time, almost as if a forward-looking decision had been taken in terms similar to those that economic theorist Harold Hotelling spelled out in his seminal 1931 article, “The Economics of Exhaustible Resources.”
21
Hotelling suggested that owners of such resources as oil should only produce to optimize cash flow if the returns on the proceeds of the sales placed in bonds or cash deposits in the bank exceeded the rate of appreciation of the asset in the ground. In other words, don't trade appreciating oil for depreciating money if the oil is gaining value faster than interest on the funds compounds.

Of course, the actual situation with the early U.S. oil industry was more complicated than Hotelling's simple trade-off implies. The United States pioneered the world oil industry before there was any real understanding of how far-reaching the effect of adopting oil would be in raising growth and reconfiguring the economy. The consequences of introducing oil were so far-reaching that they were not only unimaginable in advance; they are still barely understood a century and a half later.

The amount of energy, per capita, powering the U.S. economy compounded by more than 4,000,000 percent from 1850, the decade when Edwin Drake launched the oil business, through 1990. Energy use rose from a baseline contribution of one-tenth of one horsepower per capita, per annum, mostly unaided human and animal muscle power, in 1850, to an astonishing 140,000 horsepower per capita, per annum in 1990. This not only permitted an escalating rise in living standards, it also precipitated radical changes in the nature of the economy itself.

Three of the more far-reaching changes involved:

Notwithstanding the myth of limited government that figures so prominently in the political narrative of the United States, the surge in energy use made the U.S. government the largest, richest, most powerful government in the history of the world.

Prior to the harnessing of hydrocarbon energy, the standard for the predatory diversion of human energy by rulers was set by the pharaohs of ancient Egypt who famously conscripted labor four millennia ago to build gigantic mausoleums for themselves. The Great Pyramid of Giza, built for Pharaoh Khufu circa 2540 B.C., was the largest building on earth until early in the twentieth century. The Greek historian Herodotus reported 2,000 years after the pyramids were built that the pharaoh “made all Egyptians work for him . . . . One hundred thousand men at a time worked for three months. Ten years of this forced labor were consumed merely in making the causeway along which the stones were hauled.”
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Harvard Egyptologist Mark Lehner disputes the image transmitted from Herodotus through Cecil B. DeMille's
The Ten Commandments
of legions of slaves toiling “in the scorching sun beneath the whips of pharaoh's overseers.”
23
Lehner suggests that just a few thousands skilled workers at a time held down the ancient equivalents of cushy government jobs, in which they were fed “tremendous quantities of cattle, sheep and goat.” Lehner also argues that the pyramid builders were not slaves, but that all Egyptians owed obligatory labor, called
bak
, to their overlords.
24

Although Lehner is silent on the question of whether Egyptian peasants were healthy enough to toil in the scorching sun, there is good reason to suppose that they were not. Papyrus scrolls authored by Egyptian physicians, at about the time the Sphinx and the pyramids of Giza were built, detail an annual epidemic that struck Egypt each year as the Nile flooded. Professor Dorothy H. Crawford suggests in
Deadly Companions
that the annual epidemic was malaria. But that wasn't the worst of it. According to Crawford “the most problematic infection at the time was schistosomiasis, a fatal disease caused by waterborne microbes that exploited irrigation farming to aid its spread.”
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It was this infection that was so common as to account for Herodotus' reference to Egypt as “the land where men menstruate.”
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If the population of Egyptian farmers was weakened by exposure to dangerous microbes transmitted through the irrigation channels, that argues in favor of Lehner's thesis that the pyramids were built by a smaller, professionalized force, perhaps drawn from Egypt's growing urban population rather than from the infected and therefore weakened mass of peasant farmers.