Abstract: Industrializing Iron Ore: Brazil, 1920-1950
This paper examines the interrelationship of fundamental political-economic institutions within the complex world of mineral extraction. Much historiography addresses the early formation of the capital goods industries; the iron-ore story is less well known, but its institutional implications were at least as profound as the efforts to produce steel. Reconciling personal property rights with the distinction between public and private enterprise and with ambitious economic goals resulted in the formation of a state-owned enterprise for iron-ore mining. The paper argues that the emergence of the state as entrepreneur in this early industrial experience was not inevitable. Further, the effort was successful by the terms of its originators' ambitions, and it had fundamental (if unanticipated) externalities with respect to institutions governing finance and participation of the state within the productive sectors of the economy. The state resolved the long-standing barriers of coordination problems and institutional constraints by shaping new institutions of financial and economic governance. The argument relies on newly accumulated data on the financial structure and capital markets activities of mining companies, financial statements of the state-owned iron ore mining company, trade and production data, as well as the documentary evidence of personal archives and parliamentary and public debate.