A Third Path

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Following the Great Depression, Brazil and Portugal explored corporatism as a “third path” between laissez-faire capitalism and communism. In this model, the government integrates economic and social groups to manage labor and production. In the 1930s, the dictatorships of Getúlio Vargas in Brazil and António de Oliveira Salazar in Portugal adopted corporatist ideas to drive state-led economic development. This examination highlights the unique aspects of Portuguese and Brazilian corporatism, particularly how both leaders dismantled liberal democratic institutions, prioritizing economic recovery and social stability over individual freedoms and property rights. By tracing the exchange of people and ideas across the South Atlantic, the author illustrates how these nations, often overlooked for their economic innovation, became significant centers for policy experimentation. Officials enacted laws and established agencies to regulate pricing and production, which led to new social tensions and economic challenges as individuals and businesses sought to circumvent the regulations. Despite the shortcomings of these corporatist initiatives, the ideas and institutions developed during this period provided a foundational legal and technical framework for economic planning, influencing how governments continue to regulate labor and market relations today.