Order Against Progress: Government, Foreign Investment and Railroads in Brazil, 1854-1913 (review)

Based upon thorough research, this well-written book represents a welcome and useful addition to the scattered literature on the history of Brazil's railroads. Its eight chapters and two appendices will be read with profit even by those who do not share either the author's faith in the solutions of cliometrics, or his abhorrence of all analysts who have mentioned Latin America's postcolonial economic dependency.

William Summerhill's work is basically a financial history of Brazil's railroads. The period he focuses on encompasses the first sixty years of railroad construction and operation, after which less than twenty percent of their present mileage came into use. This includes the strategic Estrada de Ferro Noroeste do Brasil, under construction between 1905 and the First World War and running from Baurú in the state of São Paulo to the southern part of Mato Grosso. On the other hand, the years up to 1913 also marked the height of foreign capital's participation in their exploration.

His main objectives, duly stated in the Introduction, are the following: (1) to identify and quantify the costs and benefits of the Brazilian railroads expansion, both on the private and on the social levels, (2) to compare the performance of their public and private enterprises, and among the latter between the foreign-owned and those that were controlled by local shareholders, (3) to document the consequences of foreign investments in the country's railroads sector, and (4) to assess the role of this sector in determining the course of Brazil's long-term economic development.

Already at p. 8, his bold preliminary conclusion in this regard could not have been more affirmative: "By relying heavily on subsidies, foreign capital and government regulation, Brazil both obtained the railroad projects that it sought and succeeded in capturing substantial gains from them. Thanks in large part to the resource savings generated by the railroads, Brazil emerged around 1900 as one of the fastest growing economies in the Western world."

Summerhill's proofs of these statements are presented in the six substantive chapters of his work. Chapter 2 deals with the pre-railroad transportation in nineteenth-century Brazil. The next chapter's subject is the country's railroad policy, finance, and expansion. The two chapters that follow chronicle the gains and benefits derived by the Brazilian economy from the railroads' freight services and transport of passengers. Chapters 6 and 7 consider the railroads' role within the country's economic structure and the ways in which their resulting surplus was divided between users and operators by the Brazilian state's policies and regulation.

In his concluding chapter, the author extrapolates the specific subject of his work and discusses other aspects and effects arising from railroads development that might have been important for Brazil's long term change, namely those entailing on the country's social and political map, and their role in fostering domestic entrepreneurship and financial institutions and in promoting market interventions by the state. Curiously, Summerhill does not refer to the influence of the Brazilian railroads' maintenance departments on the creation of local mechanical and metallurgical industries. Already during the last decades of the nineteenth century, the Estrada de Ferro Dom Pedro II, later renamed Central do Brasil, began to produce wheels and even wagons, the same occurring with the Brazilian owned private railways of the state of São Paulo.

The two appendices are also quite valuable in themselves. The first one refers to the theory and method of the social savings approach, and is a very clear and updated exposition on the ways of measuring the railroads direct effects and main linkages. One may even be tempted to say that Summerhill's contributions in refining these methods are more important than his historiography of Brazilian railways. The second appendix has to do with the sources and systematization of his empirical...