Brazil's "Slave Labor" (2007)

Josino Moraes
Latin America Economic Researcher

I. The Myth of Slave Labor in Brazil

Recent news reported in Brazil (Folha de S. Paulo, 11-28-2006, B7) that two
Democratic congressmen, Dennis Kucinich (D-OH) and Eliot Engel (D-NY),  are heading
a commission to verify the existence of slave labor in Brazil.

What is the origin of such an absurd investigation? It is the insanity of the Brazilian
media. And what is the origin of such insanity? A little more than a century of influence
of Comte's positivism and Marxist ideas. The political face of positivism developed into
fascism as well as marxism into classical communism. So, the main ground of the
Brazilian media is a mix of fascist and communist ideas, to put it into a simple and
concise way.

Are the two American congressmen barking at the moon? No, of course not, the only
source of information they have is the Brazilian media reproduced in the USA by the
American media focused on Latin America. That reminds me of my experience when in
touch with an American university trying to get a fellowship with a proposal of a
comparative study between Portugal and Brazil on labor relations based on my
twenty-year experience as a businessman in Brazil and reported in a recent book.

The proposal was interesting and the two recommendations were excellent. Mailson da
Nobrega, a rare case of a talented and well-educated former minister of finance, said
that he had learned a lot when reading my book, and Professor Keith S. Rosenn,
University of Miami, said among another things about my work: "He writes extremely
well, and he sees Brazil through a quite distinct and original perspective..... He is very
much his own person and an original thinker".

I lost the application and afterwards when reading more carefully on the site of the
American university I found out that its main objective was to strengthen the ties with
the Brazilian institutions, i.e., the academic nomenklatura. No way! I use the concept
of the nomenklatura as inspired by the late phenomenon of the Soviet Union to name
the class of people that lived with privileges -  see Wikipedia.  But  if you think about
it a little more, it is quite comprehensible: the American university looks at the
Brazilian university as its equal, its alter ego. The same way as the American media
looks at the Brazilian media. This is the most important reason explaining why
American researchers on Latin America will never say anything interesting.

In fact, the Brazilian national university is just one of the segments of  nomenklatura.
The professors begin their career looking forward to their huge, premature and
hereditary public pensions. They are naturally lazy and, for instance, never think about
how to win a Nobel Prize. There is no competition among them.

The idea of the existence of "slave labor" in the Brazilian media came up in the last
few years while referring to farm work. What was reported a "slave labor"?  It was the
informal work on our farms. What is considered informal work? All work that does  
rigidly not obey the rules created by the Mussolini's  Carta del Lavoro ( Work Letter ?)
copied here by the Brazilian dictator Getulio Vargas in the distant 1930.

An intricate question is the fact that in our cities 60% of the work force is informal as
reported by most sources. And, it is not considered "slave labor". One of the very few
exceptions was a report from
The New York Times that denounced the existence of
"urban slaves" in S. Paulo (O Estado de S. Paulo, 3-12-04, A14).  A possible
explanation for this nonsense reasoning is that there were real black slaves on our
farms in a distant past, as well as in the United States plus the lack of intelligence of
the local media.

One of the highlights that the media focused on in those reports was the economic
figure of "O Gato".(The Cat). He is the intermediary between the farmer and the work
force. He recruits people to easy the process of working, so the farmer can hire the
wnole team, not just one after one. That would almost make the process impossible.
Why did people choose the figure of a cat to this particular economic function? Because
in the Brazilian culture, the cat is associated with someone who steals. The business
of foods is sometimes associated with thieves, for instance.  Stimulated by the media,
people think the consumer should be in direct contact with the producer. That is part of
the local culture working against the idea of an efficient free-market economy.

II. Memories of "Slave Labor"

The first time I heard this expression in this context was in a debate with lawyers and
judges about Labor Justice System. Yes, in Brazil there is a specific federal branch of
justice charged with "disputes" in labor relations. Brazil is the absolute world champion
on this issue (O Estado de S. Paulo, 12-02-07, B3). There are two million of such
lawsuits a year. It is quite obvious that the Labor Justice System is the source of such
"conflicts". What really matters is that it generates a lot of sinecures! Brazil is also the
absolute world champion of labor regulation as showed in the Working Paper 9756,
Regulation of Labor
, Juan Botero et al., from the National Bureau of Economic Research.

Besides, this idea of "slave labo" reminds me of the soybean crop of 1982/3. My late
father recommended applying herbicides. I probably did not accept that due to my old
left ecological ideas. There was a marvelous summer, plenty of rain. Weeds  
threatened the crop. The only solution was to hire help to weed to try to save the crop.

I went to the two villages nearby. We had a small truck and I put a cover on the bed of
the truck so I could carry people a little more safely. I properly did not use the figure
of "the cat", but there was a guy in the group with some leadership who helped me
pick up people early in the morning.

Most of the time I got 20 people together - men and women. I drove leaning on the
left door so we could have one more squeezing into the cabin. I drove slowly fearing an
accident. They came happy, joking. There were not such groups as the current
Movimento dos Sem-Terra (Movement of  Landless) who fights for a nonsensical land
reform based upon increasing taxes to support them. They are the rabble of the

There were some sad days because it began raining and so they could not work no
money. What a horror would say the Marxists - one of the main Latin America plagues  
- who think wealth is generated by taxes, not production. Other days we had to stop
working because of the rain. It was quite difficult for me to keep pace with them when
working on my row and when I got behind one of them helped me. Hard times. I payed
them weekly in cash.  

Just now I found out I hired "slave labor"!  I did know my great-grandfather had black
slaves on his coffee farm as well as he hired Italian immigrants escaping from hunger
in Italy, one of them being my great-grandfather also.  The country had prospects for
the future. Nowadays we export illegal immigrants, among them prostitutes and
travesties. How awful was the victory of Fascist ideas as a result of the victory of
Vargas in 1930.

Why is the topic of "slave labor" so interesting to the Brazilian media? Because it has
opened an enormous field to denounce characteristic misery of a "capitalist" society
and to explain the Marxist theory of the exploitation of man by man. They show photos
of "poor workers in this miserable situation" (if you look carefully they are quite normal
and healthy workers, one of them is even  smoking , see photo below). That is a
consequence of the perennial media Marxist education. Universities are still
impregnated with Marxist thinking. As pointed out by Lord Keynes "the difficulty is not
to accept new ideas but to get rid of the old ones".

III. Objectives and Consequences of this "New Finding"

The main objective and generally not transparent in this matter is to attack private
property, one of the pillars of economic development. Brazil like most of Latin
American countries has a long tradition in this matter. In fact, there is a project in the
Brazilian House of Representatives purposing the dispossession of farms where "slave
labor" might be detected.  Already now, the president using his legal imperial powers -
a heritage of fascism - has done that in some cases. There is a book by a young
journalist, Nelson Barreto,
Trabalho Escravo, Nova Arma Contra a Propriedade Privada
(Slave Labor, a New Arm Against Private Property) about this subject.

The right of private property has always been limited in Latin America. In most of the
original Spanish colonies such as Venezuela, for instance,where the subsoil as well as
other natural resources - mines above all, not trees, of course - belonged to the King
of Spain. After independence, the "Libertadores" hurried up to make sure they
continued under the control of the new state. Here, there is a tip of the roots of
America nomenklatura

However, in the case of Brazil, subsoil etc. continued as private property until the
Vargas' Constitution of 1934 when it was confiscated. Since then things have got a lot
worse. In the last constitution, 1988, the political nomenklatura added the figure of
the need of a "social function" (?) to beatify the rights of private property. That gave
origin to the vague notion of productive and non-productivies farms and opened the
way to the presently powerful MST (Movement of the Landless) who occupies hundreds
of private properties and maintain themselves at government expense, i.e., a new
burden for taxpayers. In the current days, the MST exports this new "technology" to the
rest of Latin America (Currently, Brazil also exports new kinds of evangelical sects to
these countries including the United States in this case.).   

The Department of Labor  together with the Federal Police set up new teams to look
for  the existence of "slave labor" in the field. They have begun a new crusade to ban
this new kind of "slavery". The International Labour Organization (ILO) enthusiastically
greeted the initiative and made estimates about the number of "slave workers" in
Brazil. Probably, since it was a long time ago -  1948  , they have forgotten that Brazil,
due to its Fascist legislation, did not sign their Convention  87 that asks for freedom of
association. In fact, I do not know what some international organizations are good for
besides the creation of sinecures for international bureaucrats and members of
American and African nomenklaturas

This tropical crusade has resulted in human tragedies. Senator Joao Ribeiro told the
country the sorrow he felt about his farmer friend Joao Rosa who went into depression
after the Department of Labor and Federal Police had fined him for hiring "slave labor".
His crime was to hire 17 people in a free market way, not using the Fascist letter of
labor, just as I did in 1982/3. The case came up in the local press and feeling he had
been humiliated he committed suicide saying his life did not make sense anymore.

In Unai, a small town not far from Brasilia and the most important country beans
producer, three labor officers and their driver were killed. The  purpose of the ambush
would be to get one of the officers who was considered the most strict one, but the
others were also killed for "file burning" as it is usually said here. The main suspect
was an association of farmers, and the killers ordinary hired assassins, whose supply is
plentiful here.

What about the economic consequences of this new imbroglio in labor relations in
Brazil? First of all, the huge fines that have been applied to farmers and agricultural
companies have led to a lethal strike to their economic life, or, perhaps in some cases
to total ruin. In addition, an English newspaper,
The Daily Telegraph, accused Brazil of
subsiding beef export through "slave labor"! What does the reporter know about beef
cost structure in extensive lands holdings? Labor is less than 5% of the cost.

The two American congressmen possibly coming to Brazil are concerned about slave
labor used in the production of charcoal by very small companies that is used in the
production of pig iron, the main input in the later-stage production of steel that Toyota
and General Motor have been buying from Brazil. Thus, the investigation is quite
rigorous looking at the whole production chain, however, the main practical
consequence is more unemployment and poverty.