Order Against Progress: Government, Foreign Investment and Railroads in Brazil, 1854-1913.

Pagliarussi, Marcelo Sanches

Order Against Progress: Government, Foreign Investment and Railroads in Brazil, 1854-1913, by William R. Summerhill. Stanford Studies in Social Science History. Stanford, Stanford University Press, 2003. 297 pp. $60.00 US (cloth).

The study is concerned with the first wave of transportation improvements in modern Brazil, which began with the earlier construction of railroads in the 1850s. The author points out that poor transportation conditions were the most important barrier to Brazilian economic growth before 1900 and, therefore, the most important determinant of Brazil's economic backwardness.

After almost a century of poor economic performance, Brazil began the twentieth century rather more auspiciously. The author imputes this fact to the reduced costs of transportation and to the integration of Brazil's market provided by the railroads. Thus, he advocates that railroads played a central role in improving economic efficiency.

Summerhill's study presents a controversial view of the role played by foreigners and external forces in Brazil's economy. As he stresses, the current historiography assumes, by and large, that these elements have secured economic privileges and imposed mediocre outcomes for Brazil. Also, it is usually accepted that railroads played a central role in intensifying Brazil's dependence on foreign product and capital markets in the second half of the nineteenth century. Summerhill attacks this approach by arguing that there is no empirical basis for it. In fact, he demonstrates throughout his study that Brazil captured substantial gains from the railroad projects, as the country emerged around 1900 as one of the fastest-growing economies in the Western world.

Summerhill puts forward four questions in his study: (1) What was the direct impact of railroad in Brazil's economy? (2) What difference did it make that railroads entailed heavy involvement by government as a promoter, regulator and owner? (3) What consequences did foreign investment in the railroad sector pose for Brazil? (4) What role did Brazil's railroads play in determining the course of long-term change?

He structures the analysis in eight chapters, organized around the four broad questions. Chapter one presents an introduction to the study. Summerhill centres his study on the tenets of the new economic history. The reason for that, as he justifies, is the possibility to assess and understand important economic outcomes of the past. According to the author, a combination of economic theory, quantitative evidence, and basic statistical techniques is the best way to create a single, internally consistent story. So one could expect a very technical text, illustrated by plenty of tables and numerical data, all of them analyzed with respect to the selected economic theory.

In the chapters that follow, Summerhill presents the state of overland transport in Brazil at the end of colonial era, introduces railroad development, and examines how Brazil fostered railroad expansion. The author also brings to light the main characteristics of early railroad finance, promotion policy, and government ownership. Then he proceeds to the first main question and assesses the economic impact directly imputed to the railroad introduction, using the variable resource savings. He also analyzes the impact of the railroad over the freight services and passenger transport. His results are measured up against a historically relevant counterfactual scenario, which is a typical expedient of the new economic history, used as a stratagem to find answers that are currently impossible to acquire. For instance, the author intends to assess the economic impact of railroads in Brazilian gross domestic product (GDP). He introduces a scenario where there were no railroads and tries to assess how Brazil's GDP would increase.

Summerhill proceeds to assess the impact caused by railroad transportation, focusing on the structural changes in Brazilian manufacturing and agriculture, and how these changes had consequences on economic dependency. Once more his results differ from those proposed by the current historiography of Brazil's economic development.

One need not agree with the author's rationale, but it does provide a solid basis of analysis, guided by the methods of natural sciences. There has been some well-founded criticism of this experimental methodology and it has not yet emerged as a commonly accepted methodology in the social sciences. However, within the confluence of economics and history, new economic history is achieving interesting results.

The book is very well-written, clearly organized, and the issues at stake are precisely isolated and analyzed. It is an enlightening resource for those who are interested to know what new economic history is able to produce. Moreover, since Summerhill's results contrast with the current trends of historiography about Brazil's economic development, his work represents an antithetical position that, if it should not be promptly accepted, at least it must be accounted as a solid argument against the mainstream.

Marcelo Sanches Pagliarussi

Fundacao Capixaba de Pesquisas--FUCAPE, Brazil