The Americas 61.2 (2004) 297-298
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Evan Lieberman's study is a longitudinal comparison of the interplay of fiscal and social structures roughly between 1880 and today, a historically sensitive study of nation building and state-building through the lens of taxation policy. What make this study especially innovative are the countries he analyzes. Brazil and South Africa are rarely compared, even though they would seem to demand comparison. The first is American, colonized by the Portuguese with heavy Italian immigration; the second is African and colonized by the English and the Dutch Afrikaner. Brazil was one of the first American countries to win independence (1822) and to establish a solid central state under a constitutional monarch; South Africa was not a unified country until almost a hundred years later, and separated from the British Commonwealth in 1961. The national myths and conventional wisdom of the two countries are almost diametrically opposed: Brazil is known as the country of racial democracy (slavery was abolished in 1888), while South Africa is the land of racial apartheid, a system institutionalized in 1948.
But Lieberman chose these two countries "due largely to their great similarities in social, economic, and geopolitical terms" (p. 35). Both were among the first European overseas colonies; both were leading raw material exporters; and both used coerced African labor. In the twentieth century both also had militarized authoritarian regimes overseeing a great deal of foreign investment and industrialization. Since 1994, moreover, both appeared to veer sharply away from their authoritarian pasts, as social democrats Nelson Mandela and Fernando Henrique Cardoso were both freely elected president, able to complete their terms, and succeeded in transferring power to other social democrats. This in the context of another striking similarity: both countries still have by some measures the world's worst distribution of income!
Lieberman does not so much attempt to explain these unexpected recent transformations, but rather focuses on taxation policy. Here there are great surprises. Although Brazil and South Africa were similarly overseen by "skeletal tax states" (p. 107) at the end of the nineteenth century, a century later they were more robust yet quite different. Lieberman calculates that in the 1990-94 period the South African state collected taxes equal to almost 15 percent of GDP while Brazil's state only took in 5 percent. This is striking given the reputed strength of the Brazilian state. But the surprises do not end there. The South African state collected a much greater share of revenue through progressive income and property taxes while the Brazilian state collected more through regressive sales taxes. Thus the rich and the white populations in South Africa paid a disproportionately high share of taxes in a "cooperative" relationship, while Brazilian taxes were paid disproportionately by the poor and the black.
Why this notable difference? Lieberman too easily dismisses the importance of the colonial heritages, culture, or tax collecting mechanics, since the two countries [End Page 297] were fairly similar in 1900. Instead, as his title hints, he looks to race and regionalism to explain the divergent practices. The author argues convincingly that South African racism led to a racist populism in which race, rather than class or region, became the "dominant idiom." Minority whites, feeling not only superior but endangered, grouped together to help each other. The rich were willing to use the state to help poor whites in the battle against the blacks. White labor unions were strong and workers well paid. Considering themselves British and embattled, white South Africans greatly enhanced the power of the central state during the world wars. As a result, for the white population the South African income tax is "considerably more progressive in its rate structure" (p. 141) than in the United States, Canada, Australia or the U.K. Later, Cold War ideology was interpreted in racial...