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Elites and Economic Modernization

in Portugal (1945 1995): Authoritarianism,

Revolution and Liberalism1

By Manuel Loff

Portuguese transition from authoritarian rule to democracy, in the 1970s, set a

significantly exceptional example in European political transitional processes ofthe second half of the 20th century. What could have been expected to be a plainmilitary coup putting an end to a 48-years reactionary colonialist dictatorship at avery definite breaking point (a 13-years Colonial War in three different Africanterritories), evolved into a revolutionary process, both politically and socially,described as the last socialist revolution in Europe. Between April 1974 and No-vember 1975, Portugal seemed to be slipping away from the capitalistic economic-al paradigm and the politico-military West of the 15 final years of Cold War. Aswift rupture was operated at both political and (to a lesser extent) institutional

level, while the state intervened in private enterprise in order either to take into thepublic sector, or at least control, most of the financial sector and what had becomeself-managedindustries whose owners had left the country.

After a complex and extremely intense political and social process, which devel-oped from April 1974 to the end of November 1975, those who described them-selves as the revolutionary Left (communists and all components of the far-Left:Maoists, Trotskyists, radicalized progressive Catholics), including an importantmilitary segment, were ousted from power by an amalgamated coalition of moder-ate socialists, all right-wing parties, catholic hierarchy, and a hardly compatible

variety of military commanders, ranging from moderate left-wing to ultra-rightneo-Salazarists, internationally supported by Western European and American gov-ernments. By then, decolonization of the Portuguese African colonies was finallycarried out, during the politically extremely hot summer and autumn of 19752, un-der the Cold War complex circumstances. A new Constitution was passed in April1976, parliamentary elections were held a few weeks later, and were won by theSocialist Party, led by Mrio Soares, and general Ramalho Eanes, one of the mili-tary commanders of the 25th November coup, was subsequently elected President

Pfad: E:/BBU_Daten/Werke/Sattler ua. (SWS)/06-Loff.3d Pl. 2 2. 7. 2009 Seite 153-196

1 I have to thank for Bruno Monteiros generous and persistent help in finding some of the

bibliographical sources which I found essential to this research.2 The expression Vero quente [hot summer] is currently used to describe that period of

political and social confrontation.

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in July, supported by socialists and the two right-wing main parties, the PeoplesDemocratic Party (Partido Popular Democrtico, PPD) and the Democratic andSocial Centre (Centro Democrtico e Social, CDS).

The democratic normalization process (1976 onwards), as the hegemonic politi-cal discourse depicts it, paved the way to the European integration negotiating pro-cess (1977 85), moulding, after all, a post-authoritarian transitional period alto-gether a lot more similar to the Spanish one than that very same discourse usuallysustains. Apparently, one would expect to see a whole new set of political, socialand business elites took over the control of most of political, institutional and eco-nomic instruments, in a systemic context in which the state was still at the core ofsocial engineering, with most social groups feeding high expectations either in itstransformation or control abilities, depending on the ideological perspective. I will

try to show that there were a lot more continuities than breaches between the eliteswho led the economic modernization process of the 1960s, under the dictatorship,and the ones who did guide Portuguese economic policies in the post-1974 Revolu-tion 30-years long democratic regime.

I. Salazarist authoritarian regime

48-year-long Salazars dictatorship, self-designated New State ( Estado Novo),resulted from the institutionalization of a military regime (1926 33), soon led by

a civil elite organized around a Political Economy university professor, Antnio deOliveira Salazar (1889 1970), propelled into power through his successful abilityto federate all right-wing Portuguese political factions of the 1920s, from Conser-vative Republicans to Organic Monarchists, including modern extreme-right acti-vists and a very well articulated group of Catholic Clericalists (to which he be-longed to) who became the crux of the new political system. Salazar was appointedMinister of Finance for the second time in 19283 in a military-led Cabinet, andwas able to control quite effectively the whole state apparatus and the political pro-cess, at least since 1930, (1) leading the creation of the new regimes single-party

(the National Union Unio Nacional, UN) in 1930, (2) re-centralizing in Lisbonpolitical control over colonial administrations (Colonial Act, 1930) and re-launch-ing an imperialistic nationalist discourse (or rather endorsing a new colonial para-digm) as a cement holding together economic and political interests supporting thenew regime, (3) producing a new constitutional text (1931 33), imposing a prag-matic authoritarian platform where both republicans and monarchists could meet 4,

3 He left that same office a week after his appointment in June 1926, soon after the 28th Maymilitary coup.

4 The republic vs. monarchy debate mobilized Portuguese elites political discussions, atleast since the 1890 crisis over colonial conflict with Britain, until 1933, when Salazar forcedupon the monarchists the continuity of a Republican form of government in order to secureright-wing republican support to the new regime.

154 Manuel Loff

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(4) attracting catholic hierarchy to a renewed alliance with the state adapted to20th centurys social and political conditions.

Salazar was formally appointed President of the Council of Ministers in 1932

and remained in office for the following 36 years, until September 1968, when, at79, a cerebral hmorrhage incapacitated him and forced an uni-personal dictator-ship to find a substitute in Marcello Caetano (1906 80, former Minister of Colo-nies and, in some way, in the 1950s, a vice-president, briefly mistaken for an ap-pointed-successor, driven out of Government by Salazar himself in 1958) for thosewhich would be the final six years of the Estado Novo. Salazars sharp ability tobring together all segments of the Portuguese ruling class at a crucial historicalstage, as it was mentioned earlier, assured him a long-term adhesion built upon anunprecedented charismatic government, leading an essentially conservative and

progress-fearful elite through a complex path made of key economic options be-tween a state-protected economy based on large property agriculture and strongtrading lobbies (prevailing from the beginning of the dictatorship until the end ofWorld War II and a state-coordinated industrialization (launched in 1945 50)which could hardly prevent its inevitable social consequences (urbanization, grow-ing implosion of an until then sturdy rural society), in spite of all the corporativesystem rhetoric.

Fundamentally, Salazarism meant, for Portuguese elites of the 1920s, 1930s and1940s, a clear and safe, self-described as specifically Portuguese, response to theprocess of social and political massification which in Portugal was maturing in arelatively belatedly form a precocious political evolution towards a Republicanform of government (1910) and a resultant strict separation between state andchurch, with no correspondence in its social foundations: no universal suffrage waspassed until 1975;5 no undeniably massive political and social movements pre-ex-isted the creation of Salazarist single-party, militia, compulsory labor unions andyouth organizations; no massive schooling covered the whole territory and the low-er classes until the 1940s. In this sense, the expression Salazarism condenses moreaccurately than Estado Novo the historical meaning of the whole political systemdominating Portugal between 1926 74, covering not only Salazars years (1932

68) but the whole dictatorships historical experience, fundamentally shaped to thedictators persona.

Accordingly, historical legacy of what was a wide social elite consensus over thecharacter and over its political paradigm still plays a central role in what may bedescribed as the present day Portuguese dominant social groups obvious ambi-guity towards the memory of the dictatorship and of their own course throughout

Elites and Economic Modernization in Portugal 155

5 Male universal suffrage was passed in 1918, under the charismatic military rule of Sid-nio Pais, and enforced for a single election, before being immediately revoked in 1919, whenthe constitution of 1911 was restored. See: Manuel Loff, Electoral Proceedings in SalazaristPortugal (1926 1974): Formalism and Fraud in a 150-year old Context of Elitarian Fran-chise, in: Raffaele Romanelli (ed.), How Did They Become Voters? The History of Franchisein Modern European Representation, The Hague / London / Boston 1998, pp. 227 250.

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the final 15 years of the regime (1960 74). Obvious continuity (family ties, classsociability) of a very significant part of pre- and post-1974 social, economic andcultural elites in fact, a widespread phenomenon of post-dictatorial societies is

an important factor to consider when assessing discourses over the dictatorshipyears produced in the upper-classes, not only of those who feel close to the ideolo-gical nature of the elapsed regime, but more importantly of those who make cleartheir hostility to it and, at the same time, tend to bail out, so to speak, their ownrelatives or next of kin by and large, their class from the negative core of thepast experience.

II. A traditionally elitist society

Socio-culturally speaking, and in broad terms, the Portuguese special case in

Western European context is based upon a clearly distorted social access to culturalmodern practices and forms. Schooling, scientific and technical qualification andpress reading levels remained until the mid-20th century phenomena as limited aspolitical rights were. A fundamentally broad-minded intellectual elite read, heardor dressed what Paris, London, and even Berlin and Rome, produced in the secondhalf of the 19th and the first third of the 20th centuries, but looked upon the massesthey were surrounded by in quite obviously derisive terms.

The 1910 26 republican experience, in which the state concentrated most of itsefforts to break the spine of catholic hegemony over education and cultural Bil-

dung, replacing it, with scarce results, by a liberal rationalistic educational philo-sophy, was soon replaced by a half-century hard cultural and moral repression,exerted both by the state apparatuses and Catholic Church, leaving very heavy con-sequences on mass culture representations. One of those, in fact, has specificallyto do with the core of this essay: a recurrent discourse on state prestige and sym-bolic hegemony in society, on legitimatization forms of power exercise througheconomic wealth, traditional social forms of prestige and professional qualificationthrough schooling.

Studies made on the 1960 population census help to perceive an already modern

society heavily polarized between an upper layer, gathering great landowners andemployers, technically and scientifically highly qualified professionals, and largeenterprise (over 100 workers) executives representing not more than 1 percent ofmale active population, and a huge 61 percent composed of unskilled workers(21 percent), autonomous peasants and fishermen (9 percent) and wage-earningand family workers in agriculture and fishery (31 percent). At that turning-pointof Portuguese social history, again, not more than 1 percent of all active male Por-tuguese had a higher education, and only 5 percent had completed secondary edu-cation.6

156 Manuel Loff

6 See Manuel Villaverde Cabral, Classes sociais [Social Classes], in: Antnio Barreto /Maria Filomena Mnica (eds.), Dicionrio de Histria de Portugal [Dictionary of the Historyof Portugal], Suplemento [Supplement] (Vol. VII), Oporto 1999, pp. 328 337, here pp. 330 f.

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The first generation of Portuguese true sociologists (a scientific domain deliber-ately banned from Portuguese Acadmia by Salazarism) who had the chance towork with these social data were relatively surprised with the oligarchic charac-

ter of this high bourgeoisie, nearer to a group unified through multiple familyties and education rather than to an abstract elite whose members merely shareleading positions.7

The dictatorship led by Salazar took over power after a century of liberal modernstate-building which have never compromised the high-bourgeoisie grasp of socialand economic power, not even in the last 16 years of this historical cycle, the Portu-guese First Republic years (1910 26). Salazarist authoritarianism proved to beable to develop an intrinsically effective way to seduce and control different seg-ments of a national bourgeoisie frightened with social unrest, representing such

contradictory interests as the ones which could be satisfied by a simultaneousexploit of both traditionalist and modernizing discourses. This particular sort ofhegemonic elite had been allowed to decades of undisputed power, affected byboth bureaucratization, i. e. parasitic use of political-administrative structureswith some cleptocratic shades, and aristocratization, i. e. a mimetic adoption ofostentatious attitudes and behavior distinctive of an idle aristocracy.8

From a strict political and institutional point of view, an economically poor Esta-do Novo (whole public expenditure amounted to 21 percent of the Gross DomesticProduct (GDP) in 195152, 20 percent in 196061, 26.1 percent in 197273)9

would offer comparatively few opportunities to a modern European elite, althoughthose were probably proportional to the statistically minuscule Portuguese elites ofthe 1930s and 1940s. A sequential analysis of the authoritarian regimes strategy torecruit political elites and of the elites / state relation shows a three-component coa-lition, gathering military, political direct representatives of the upper-classes andcatholic scholars, controling state apparatus all throughout the 48 years dictator-ship, in four different stages:

(1) From the fall of the liberal regime (1926) until the end of WW II (1945),i. e. during the continuing and clear process of fascistization, the military kept animportant and inevitable role while political repression fell more heavily over dis-sidence, bringing into the regimes institutional ranks a representation of a rela-tively significant variety of social and regional segments of the bourgeoisie. 10 This


7 Hermnio Martins, quoted from Cabral, Classes sociais (fn. 6), p. 336.8 Ibidem.9 See Alfredo Marques, Poltica econmica e desenvolvimento em Portugal (1926 1959).

As duas estratgias do Estado Novo no perodo de isolamento nacional [Economic Policy andDevelopment in Portugal (1926 1959). The Two Strategies of the Estado Novo in the Periodof National Isolation], Lisbon 1988, p. 184 (table 6).

10 See Maria Carrilho, Foras Armadas e mudana poltica em Portugal no sc. XX. Parauma explicao sociolgica do papel dos militares [Armed Forces and Political Change inPortugal in the 20th Century. Towards a Sociological Explanation of the Role of the Military],Lisboa 1985.

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was the stage in which the more reactionary components of the high-bourgeoisie(wealthy landowners and colonial merchants) kept inside of the administration ap-paratus a more significant number of direct representatives.

(2) Postwar years paved the path to an actual industrial revolution: Portugalknew its first real and intense modernizing boost only in the aftermath of WW II,while the rest of Europe was engaged in reconstruction, a process which had inevi-table consequences also in the Portuguese case. Urbanization, intensive private andpublic investment in new productive infrastructures, slow economic internationa-lization, and mainly state new planning policies opened the gates to the apparenttriumph of a first technocratic elite inside Salazarism. The Development Plans(Planos de Fomento) [implemented by the dictatorship] after WW II,11 industrialgrowth ( . . . ), expansion of the education system, particularly post-secondary tech-

nical and scientific ( . . . ), all these trends converged towards a higher level of so-cial and political participation, though merely illusive in some cases, of a socialsegment whose main characteristics were higher education, being an active part ofthe Public Administrations Technical Departments, of big corporations and liberalprofessions12. Not only economic planning, with all its complex bureaucratic or-ganization, offered a vast range of opportunities to a new generation of qualifiedSalazarist technicians. The post-WW II process of modernizing Portuguese Colo-nial Administration, adapting in order to resist to the world-wide impact of decolo-nization, offered a variety of professional, political and business opportunities. Asfor elite composition, both military and traditional bourgeoisie lost a significant

amount of power in favor of these bureaucrats representing the more modern frac-tions of urban bourgeoisie, namely those connected to industrial capital. Catholicreactionary scholars, essentially close to the dictators profile, remained, neverthe-less, in control of most political higher decision-making posts.

(3) Armed guerrilla activity of national liberation movements in PortugueseAfrican colonies opened a 13-year war cycle (1961 74) that changed the wholecourse of Portuguese modern History. Salazars decision to hold on! (Aguentar!

Aguentar!), to resist to any political change processes, compromised the future ofhis regime. All state policies had to endorse the war effort, which inevitably jeopar-

dized the impact of the embryonic social policies the regime had been forced toconsider when it realized how potentially explosive were the vast and hasty seriesof social and economic changes. Again, during this period, military elite took con-trol of a very significant part of national resources: all defence policies consumed48 percent of all ordinary tax revenue in 1973, the last complete year of war; 15years earlier, before war in Africa started, they were responsible for 36 percent;

158 Manuel Loff

11 Four Planos de Fomento [development plans] were adopted by the Estado Novo regime:195358; 195964; 196567 (Plano Intercalar Intermediate Plan) and 1968 73; a fifth(the fourth Plan excluding the 1965 67 one) was ready to be implemented for the 1974 79

period when the 25th April 1974 revolution suspended its application.12 Jos Manuel Leite Viegas, Elites e cultura poltica na histria recente de Portugal [Elites

and Political Culture in Portuguese Recent History], Oeiras 1996, pp. 85 f.

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during this same period, social expenditure in policies such as education and healthrose from 18 percent to 28 percent, but they were unbearably insufficient and in-effective; on the whole, defence absorbed 133 billion Escudos from 1961 to 1973,

while all public economic investment along the same period did not exceed 62 bil-lion.13 Nevertheless, we were dealing here with a broader military elite, represent-ing a wider range of social groups: from 4.850 officers existing in 1960 in theArmy, Navy and Air Force (plus 342 of the Complementary Rank Quadro Com-

plementar of the Air Force), the Portuguese Armed Forces had 6.884 officers in1973 74 (plus circa 1.800 2.000 more of the same Complementary Rank of theAir Force), i. e. plus 42 percent (plus 69 percent considering these latter). 14 Along-side the military, that technocratic segment of the civil elite which were sociallyrising since the postwar period kept their expectations intact, hoping the regimewould have to grant them more visibility to produce the necessary measures to con-tain social and political unrest.

(4) The 1968 Government re-shufflement, with perceived-as-reformer MarcelloCaetano replacing a physically incapable Salazar, opens a final six-year stage ofthis 1961 74 war period. Caetano would soon proved impotent to change the poli-tical course of the war presuming he had ever wanted to change it. . . but he didtry to go beyond the modernization project of the 1945 68 period, an autarkicindustrialism based upon imports substitution, searching instead for (in vain, asrecent history is still proving) a specialization line of national production in areasin which Portugal had comparative advantage, articulating it with foreign markets,

especially European, granting, on the other hand, greater importance to socialfactors education, social welfare, health disregarding the effective conditionswhich may have allowed or prevented such aims to be accomplished. In this sense,Caetano and the politicians who were close to him, recruited amidst that techno-cratic elite made of those social segments of higher scientific and technical quali-fication, seem to point out towards a social state subtle form to change the pri-mary meaning of the corporative state but evading the regimes democratizationand liberalization problem15. In literature, it is often discussed about connectionsbetween what has been described as the modernizing undercurrent embodied by

the Marcelistgroup inside Salazarism, close to which we will f ind, in the 1968 74years, a reformist sector who, after the 1971 72 breakup with Marcello, re-trieved their political autonomy, and the so-called modern capitalist interests. ToJos Manuel Leite Viegas, it is an unacceptable simplification to mechanicallyidentify the economic liberal thought conveyed by modernizers and the indus-trial, finance and trading capital interests, committed to develop and modernize


13 See: Amrico Ramos dos Santos, Abertura e bloqueamento da economia portuguesa[Opening and Hindrance of Portuguese Economy], in: Antnio Reis (ed.), Portugal Contem-porneo [Portugal Today], Vol. V, Lisbon 1989, pp. 109 150; Eugnio Rosa, A economia

portuguesa em nmeros [The Portuguese Economy in Statistics], Lisbon 1975.14 See: Carrilho, Foras Armadas (fn. 10), pp. 440 442.15 Viegas, Elites (fn. 12), pp. 101 f.

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its connections with the democratic industrialized countries economy. The factremains that expansion of this politico-social thought was reinforced because itdid not collide, and partly adjusted to16 such interests. Additionally, it has been

pointed out that the highest representatives of those modern capital lobby, the own-ers of the strongest Portuguese industrial corporation, CUF (Companhia UnioFabril), the Mello family, have surely had some influence in [president] AmricoToms who paid them much attention decision to appoint Marcello Caeta-no17, a close friend of the Mello, to succeed to Salazar, in the Autumn 1969.

In this final dictatorial stage, the Marcelist period, so evidently full of contradic-tions and growingly uncontrolled tension, the authoritarian regime proved its in-ability to eventually integrate and articulate all these politically pragmatic techno-crats, although they were frankly elitist as far as their governance framework was

concerned. Politically speaking, the liberal group of Members of the NationalAssembly, the Estado Novo parliament, known as the Liberal Wing (Ala Liberal) most of whose members would converge in the creation of the right-wingPeoples Democratic Party (PPD)18 in 1974 , integrating the 1969 single party(UN) electoral ticket by a special invitation of Caetano himself, was virtuallythe political nucleus publicly recognized as best representing that reformer move-ment, although even at the state political institutions and public administrationlevel, there have been other centres for instance, the Central Department forPlanning (Secretariado Tcnico da Presidencia do Conselho / Departamento Cen-tral de Planeamento) where political and socioeconomic thought was being ela-borated and renovated19. Already when the whole set of illusions created by Cae-tanos promise of Renovation in continuity (Renovao na continuidade) werefading away, this growingly exasperated selective group of elitist liberals created in1970 a society for the Study of Economic and Social Development (Sociedade de

Estudos para o Desenvolvimento Econmico e Social, SEDES), apparently com-mitted to create an alternative route between the regime forces and the traditionalopposition, ( . . . ) [by then] moving leftwards its gravity centre20.

There was more, nevertheless, to this generation of bright and ambitious youngtechnocrats produced by Lisbon, Oporto or Coimbras Economy & Management,21

160 Manuel Loff

16 Ibidem, p. 102.17 Fernando Rosas, O Marcelismo ou a falencia da poltica de transio no Estado Novo

[Marcelismo or the Failure of Transitional Policy in the Estado Novo], in: J. M. Brando deBrito (ed.), Do Marcelismo ao fim do Imprio. Revoluo e democracia [From Marcelismoto the End of the Empire. Revolution and Democracy], Lisbon 1999, pp. 15 59, here p. 45.

18 Francisco S Carneiro and Francisco Pinto Balsemo were the two first right-wingPrime-Ministers (1980 83) in the democratic period and had been members of the Ala

Liberal under Caetano.19 Viegas, Elites (fn. 12), p. 86.20 Antnio Reis, A abertura falhada de Caetano: o impasse e a agonia do regime [Caetanos

Missed Opening: Impasse and Agony of the Regime], in: Reis, Portugal (fn. 13), pp. 45 60,here p. 53.

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Engineering and Law Schools. Social change and economic modernization, to-gether with war, produced a surprising change in an extremely elitist university likethe Portuguese. In 1962, a student movement left Salazar stunned: a politically,

initially very cautious, student strike in Lisbon spreaded to Coimbra and, partially,to Oporto; police invaded Lisbon University against the will of its rector, none lessthan Marcello Caetano, and violently charges on those who were the sons anddaughters of this very narrow and conservative Portuguese bourgeoisie, some ofthem, naturally, relatives of relevant Salazarist leaders. Since then, universitybenches became a focal point of the anti-Salazarist fighting and the intensely poli-ticized student movement was able to reach larger segments of society when theiractivists came out of the university and into corporations, offices, factories, publicservices, after being forced (in the case of the young men) into two to four years ofmilitary service, more than half of those spent in some African war front.

Two obvious consequences came out of this process: i) the authoritarian regimebecame unable to ensure its own generational renovation, at least through the sameways proved effective in the past; when Salazar stepped out of power and was re-placed by Caetano, in 1968, the latter had already to deal with a number of youngtechnical managers, often appointed by himself to some second-line economic de-partment position, who did not share any longer some of the essential elements ofSalazarist political culture; ii) that portion of those involved in these consecutive

Academic crisis22 (expression through which literature describes all sorts of strikemovements, symbolic mournings and other forms of students protest), although

perceived as politically subversive, inevitably took hold of their share of leadingpositions in private enterprise, and even in state administration, namely in areas inwhich the modernization process required technical skills and a new attitude em-ployers and state were obviously unable to find outside the university.

These men mostly, although a few women were already opening their waythrough the political and entrepreneurial elites were young enough (25 40 yearsold) when in 1974, the democratic revolution came to expect to live most of theiradult years ahead of them participating quite freely in public affairs, and the few ofthem who fought dictatorship in its final years legitimately took credit for public

relevance earned in it. Taking the wide ideological range of political activists ofthe revolutionary period of 1974 76 into consideration, a significant number ofthe leading personalities of the Socialist and far-Left Parties (namely the very pro-


21 See: Carlos Gonalves, Emergencia e consolidao dos economistas em Portugal [Riseand Consolidation of Economists in Portugal], Oporto 2006.

22 In spring 1962 (Lisbon and Coimbra: demonstrations, police raids, student strikes), in1965 (Lisbon and Oporto: student strikes, more than 60 student leaders were expelled fromuniversity, arrested, tortured, and some sent to African war fronts), in 1967 (two thousandstudents volunteered, facing a government ban, to help people affected by tragic floods in theLisbon area), in 1969 (Coimbra: student leaders facing up to the president and members ofgovernment were imprisoned, a student general strike, the university was closed down by thegovernment for two months). After 1969, students protest became permanent until the fall ofthe dictatorship.

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lific Maoist), and a less significant part of those of the Portuguese CommunistParty (Partido Comunista Portugues, PCP), had fought, one way or the other, theirfirst political struggle (and, most of the times, single one under the dictatorial re-

gime) as student activists in the 1960s and 1970s. After the 1976 so-called demo-cratic normalization, they sat on a large number of parliamentary and governmen-tal seats ever since. After severely shifting rightwards their ideological views, fre-quently from Maoist to clearly liberal and conservative positions for instance,former Prime-Minister (2002 04) Jos Manuel Duro Barroso, presently presidentof the European Commission , they won university chairs, managed to edit themost popular media and were called to executive positions in some of the largercorporations operating in Portugal.

In fact, as it could be expected, all those who became either Head of Government

(eleven Prime-Ministers) or of State (four Presidents of the Republic, two of themhaving been Prime-Minister before) under the 1976 constitution (thus, excluding thetwo presidents and three Prime-Ministers of the Provisional Governments undermilitary rule during the 1974 76 revolutionary process) were members of this post-1945 modern bourgeois elite, university produced, except for the last three Prime-Ministers J. M. Duro Barroso, 2002 04, Pedro Santana Lopes, 2004 05, andJos Scrates, 2005-today, all three were born in 1956 57 and about to start theirdegree in 1974, even if the first of these had started his political activity still underthe dictatorship.

Table 1

Portuguese statespersons under the 1976 constitutionwith political / professional activity before 1974

PersonalitiesYear of birth

Political posts Other relevant activities

Mrio Soares1924

Min. Foreign Affairs,197475;Min. of State, 1975;PM, 1976 78 and198385;

President of Republic,19861996

Historian and lawyer; opposition activist,first PCP (until 1952), then Liberal-Republican (1952 64), finally Socialist(Socialist Action and PS, 1964-); secretaryPS, 1973 85; series of arrests, deportation

to S. Tom (Africa, 1968), exile in France(1970 74); Member of national and Euro-pean Parliament (1999 2004); createsMrio Soares Foundation, 1991.

Antnio RamalhoEanes1942

President Republic,197686

Military officer; several missions of war inAfrican colonies; head of Program Depart-ment national Television (RTP), 1974 75;head of operations in 25th November 1975military coup; President of DemocraticRenovator Party (PRD, 198687)

Nobre da Costa1923 Min. Industry andTechnology, 1976 77;PM, 1978

Engineer; Companhia Portuguesa deSiderurgia, 1953; EFACEC, 1969.

162 Manuel Loff

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Carlos Mota Pinto1936

Min. Trade andTourism, 1976 77;PM, 1978 79;

Deputy PM and Min.National Defence,198385

Lawyer; professor at Law School, Universityof Coimbra; Member of ConstitutionalAssembly, 1975 76; President ofPSD,

198485.

Maria de LourdesPintasilgo1930

Min. Social Affairs,197475;PM, 1979 80

Engineer; CUF (Head of Project Dep.),1954 1960; young Catholic leader, 1956 58; Corporative Chamber, 1969 1974;Executive Council UNESCO, 1976 1980;Presidential candidate 1986 (7 percent of thevotes); Member of European Parliament(with PS), 1987 89.

Francisco

S Carneiro1934

Assistant Min. PM,1974;PM, 1980

Lawyer; Member of National Assembly(Liberal Wing), 1969 73; President ofPSD,1974 75 and 1976 80.

Francisco PintoBalsemo1937

Assistant Min. PM,1980;PM, 1980 83

Lawyer; press and (after 1992) TV busi-nessman; Member of National Assembly(Liberal Wing), 1969 73; Member ofParliament (1979 87); President PSD,198183.

Anbal CavacoSilva1939

Min. Finance and Plan,1980;PM, 1985 95;

President of Republic,2006

Economist; Professor of Economics andFinance Institute at Technical UniversityLisbon, then Catholic University, 1966 ;

President PSD, 198595.

Jorge Sampaio1939

Under-Sec. State Inter-national Cooperation,1975;President Republic,19962006

Lawyer; student leader, 1960 62; opposi-tion activist until 1974; Left Socialist Move-ment (MES, far-Left) activist, 1974 78;Member of Parliament, 1979 89; SecretaryPS, 1989 91; Mayor of Lisbon, 1989 96.

Antnio Guterres1949

PM, 1995 2002 Engineer; young Catholic non-anti-Salazarist militant; Assistant Professor atTechnical High Institute Lisbon; Member

of Parliament, 1976 83 and 1985 95;Secretary PS, 1992 2002; Vice-President,then President of Socialist International,1992 2002; UN High-Commissioner forRefugees, 2005 .

Jos M. DuroBarroso1956

Under-Sec. State Inter-nal Administration,198587;Sec. State For. Affairsand Cooperation,198792;

Min. For.Affairs, 1992 95;PM, 2002 04

Lawyer; Maoist activist (RevolutionaryMovement for the Reconstruction ofProletariats Party), 1973 78; AssistantProfessor Law School at UniversityLisbon, then (private) Lusada University;President ofPSD, 1999 2004; President of

European Commission, 2004.


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Nevertheless, in this group of the eleven most relevant statespersons in the last31 years of Portuguese history four either socialists or considered to be left-wing,five Social-Democratic Party (PSD) members or considered to be right-wing, two

right-wingers (Ramalho Eanes and Nobre da Costa) hard to classify because ofvery ambiguous political contexts they operated in who had started their profes-sional or political activity under the authoritarian regime, only three (Soares, Sam-paio and Barroso) had been actually engaged in political activity openly againstthe dictatorship, one of which at 17 years of age when the regime fell. Of the othereight characters, another two (S Carneiro and Balsemo), although having politi-cally collaborated with the regimes single party, carried out an attempt to renovateand liberalize it, cutting their ties with it (1973) soon before it fell. The remainingsix (one military officer, five civilians), 25 to 50 year-old when the dictatorshipbroke down, had either collaborated with the regime, serving in official posts(Eanes had been an effective and committed officer in the Colonial War,23 Pintasil-go had been a member of the regimes upper chamber and performed special Uni-ted Nations missions for Caetano), worked discreetly at the university when repres-sion fell harder over the student movement (Mota Pinto, Cavaco Silva, Guterres),or had been working in high executive positions in the biggest industrial corpora-tions (Nobre da Costa and already mentioned Pintasilgo).

III. A time for change: economic development

and social tension in the 1960s and 1970s

A sort of flashing glance at Portuguese society in those final 15 years of dicta-torship, running from the 1958 62 permanent political crisis to the 1974 militaryuprising which ended it, suggests the perception of a permanent movement: a large,a very large part, indeed, of the population moved from one place to the other,slowly in a first stage but growingly faster. Most of them were, as usual in thesecircumstances, men, and mainly young male adults, in a rush to change radicallytheir lives, running from the deep country rural areas to coastland (sub)urban areas(Metropolitan Lisbon, mainly, and Oporto, secondarily), but mostly emigrating toEurope France (62 percent) in the first place, but also West-Germany (13 per-cent), Luxemburg the U.S. East Coast, Canada, Venezuela, but not Brazil any-more, as most Portuguese emigrants would have done in the previous hundredyears. If they had not done it before they went to the Army, they were to bear awhole new weight of state interference in their lives, heavier than in any othermoment in Portuguese History: since 1961, Salazars Government was pushingyoung men into war in Angola, and after 1963 to Guinea, and after 1964 toMozambique, forcing them to endure a two year military service, quickly doubling

164 Manuel Loff

23 As almost every military officer who joined the Armed Forces Movement (Movimentodas Foras Armadas, MFA) before it overthrew the dictatorship. Eanes, in any case, did notjoin the MFA before the 25th April 1974 triumphant coup.

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it into four years in 1968 when military administration was already scraping thebarrel for potential soldiers.

Politically, the Colonial War years (1961 74), the final years of the regime,

were lived in Metropolitan Portugal, especially in the late 1960s and early 1970s(Caetanos period), as the regimes violent agony. Growingly confronted by a con-solidated industrial working class, strengthened by the massive emigration whichpushed up wages and provided for comparatively better social conditions, the re-gime had to face new urban young activists who reinforced communist under-ground organization, but also a new far-Left that, after 1963, broke up with thePCP in ideological disputes that reproduced at a Portuguese scale both the Sino-Soviet rupture and the Guevarist urge for armed struggle against the dictatorial es-tablishment.

Demographically, the thirteen long years of the colonial armed conflict, holdingpermanently no less than 250 thousand military active in three different Africancolonies, represents a definite landmark in social change processes in Portuguesemodern history. Never in Portuguese history so many people have seen their livesand social experiences changed in such a short period. Portugal became the onlycountry in Europe to lose population in the 1960s (from 8.9 million in 1960 to 8.6million in 1970) due to a massive emigration (1.4 million from 1960 to 1973, over40 percent illegally). The end of the war and the inevitable subsequent decoloniza-tion process produced the opposite result, thus, confirming the negative impact of

the conflict: in 1981, the population census registered already 9.8 million people,half a million of which were so-called retornados (Portuguese brand of the Frenchpieds noirs) who fled from the newly independent States of Africa (a significantpart of whom Capeverdian and of Hindustani origin) in 1974 76. Another100.000 were repatriated soldiers from the African war fronts, and 182.000 otherwere returning emigrants, mostly from Europe.

The fact remains that inwards and outwards migrations produced a cutback, inonly ten years (the 1960s), from 20 percent to 35 percent (according to each spe-cific area) of the population of the Eastern North-to-South strip of Portugal, and(sub)urbanized a conspicuous part of the Portuguese. After 150 years of systema-tically unsuccessful socio-economic modernization expectations (more than actualplanning, virtually absent from the political culture of the Portuguese elites untilthe 1950s), rural Portugal, a deeply conservative, mostly (Northern and Centralareas) religious, educationally unqualified society, who had embodied until then thecore of Portuguese historical identity, and had severely played down the countrysrhythm of change that Portugal was irrevocably disappearing, mostly throughsheer de-population. Until then, over-dimensioned agricultural Portugal would notrepresent, in 1973, more than a fourth of the active population (around 800.000people), producing not more than one eighth of the GDP, whilst thirteen years ear-

lier, in 1960, they were still almost 45 percent of the active population, producingtwice (25 percent) of that part of the GDP. It had been, in fact, a low-technologyand low-productivity industrialization which, after the 1950s, propelled such a sig-


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nificant change, finally paving its way through Portuguese economy, bringing to-gether half of the GDP in the mid 1970s, at the moment in which democracy re-placed the authoritarian regime. The service sector was already, nevertheless, the

one generating more employment in Portugal (27.7 percent in 1960, 37.3 percentin 1970, almost 1.2 million people, a little bit ahead of the industrial sector), but itsscarce productivity (still attracting mostly unskilled workers to unqualified jobs,offering mostly a sort of services coherent with a still very traditional and servilesociety) provided a comparatively low share of the national wealth (38.4 percent ofthe GDP in 1960, 36.1 percent in 1970).

Nevertheless, a change had started before the 1960s. Salazar had already intro-duced or was forced into it by a whole complex of circumstances a significantchange in his economic policies in the 1950s. At the end of WW II, a number of

factors concurred to push the regime into a significant change in its economic poli-cies, with all the obvious consequences deductible from an authoritarian regimecontext:

(1) A significant amount of capital had been amassed by different social groupsall throughout the war, especially by those few who could benefit from the neutral-ity status of Portugal, eventually profiting from its geographical position and poli-tical ambiguity of its Government (formally stuck to an old diplomatic alliancewith Britain, thus, attracting some benevolence from the Anglo-Americans; ideolo-gically perceived as pro-Axis until 1943, developing a swift and economically effi-

cient trade-relationship with Nazi Germany).(2) Defeat of Nazi Germany and the Allied victory under an antifascist coalition

flag strengthened the most emblematic and lasting united opposition movementassembled under the Portuguese dictatorship.24 A clearly radicalized relevant frac-tion of a new urban working class, growingly impressed and mobilized by theCommunist Party (PCP), had, thus, to be, from the dictatorships point of view, dis-ciplined and tamed through a different set of economic and social policies.

(3) A new stage was opening in international economy, especially in the West,where economic international co-operation and planning procedures were keyne-

sianly being laid down has the best remedies to face both reconstruction and com-petition, at least ideological, from the socialist bloc led by the Soviet Union.

After WWII, as Alfredo Marques underlines, a second strategy pops into the[regimes] agenda. Its configuration takes place, mainly, during the 1950s and it

166 Manuel Loff

24 Fernando Rosas, Unidade antifascista [Antifacist Unity], in: Fernando Rosas / Jos MariaBrando de Brito (eds.), Dicionrio de Histria do Estado Novo [Dictionary of the History ofthe Estado Novo], Vol. 2, [No place specified] 1996, pp. 991 996, here p. 992. Sequentially,it brought to life the National Unity Anti-Fascist Movement (Movimento de Unidade Nacio-nal Anti-Fascista, MUNAF) in 1943 45. Then it reunited in the Democratic Unity Movement( Movimento de Unidade Democrtica, MUD, 1945 48) and its youth association (MUDJ,1946 48), finally created a broad movement supporting the very first presidential oppositioncandidate (General Norton de Matos, 1948 49).

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culminates in the last years of the decade, the moment the Second DevelopmentPlan (Plano de Fomento) is enacted. According to Marques, the global aim towhich [this strategy] points out is the constitution of a developed and autonomous

capitalism (...), aiming to economic growth and structural transformation. Itsdriving force lies, nevertheless and contrary to the extroversion strategy emergingin the 1960s Salazarist economic policys third stage in the internal market,thus an endogenous dynamic being predominant over the external impulse of capi-tal accumulation. This all happens in a context of national autonomy. Such a strat-egy was based on active support to the constitution of a new industrial capital,mainly through capital concentration and centralization, in which, naturally,State plays a new and decisive role. Interestingly enough, and reversing the trendin all other political and symbolic features of the Estado Novos evolution, in thewhole history of the Portuguese dictatorship, this set of economic policy mea-sures are those which remind, in some of its aspects, the interventionism of para-digmatic European dictatorships (German and Italian). Anyway, the whole pro-cess of carrying out this strategy soon headed to a total failure.25

What could be described as what had become an inevitable industrialization pro-cess under state control developed along three parallel lines through which Sala-zars regime tried to respond to a new stage in Portuguese history:

(1) An intense state intervention in economy through central planning, attract-ing to a new alliance new sections of the bourgeoisie on the grounds of economic

nationalist rhetoric, trying to make sure they would be as state-dependent as hadbeen the Agrarian-Industrial Alliance mentioned by Alfredo Marques who bothsupported and was intimately connected to the regime, emerging in the lastyears [of the 1920s], its apogee [being] achieved at the end of the 1930s and duringthe next decade.26

(2) A new gasp of the corporative system in the mid-1950s27 the 1956 sec-ond corporative legislation impulse, paving the way to new corporations createdbetween 1957 and 196628 offered Salazar, not only the bureaucratic means tocontrol social and economic change, and to try to promote the one pattern ofchange admitted by the regime, but also the possibility to renovate the bureaucratic


25 Marques, Poltica (fn. 9), pp. 25 f.26 Ibidem, p. 24.27 Howard Wiarda, Corporativismo [Corporatism], in: Baretto/Mnica, Dicionrio (fn. 6),

pp. 421 425, here p. 423.28 Six in 1957, two in 1959, three in 1966; after twenty years of a halt to which the evolu-

tion of our corporative system was brought to, as Adrito Sedas Nunes puts it in 1954 (see:Adrito Sedas Nunes, Situaes e Problemas do Corporativismo [Condition and Problems ofCorporatism], Lisbon 1954, p. 38). The first corporative wave spread throughout the 1930s,under a clear Fascist spell: after the 1933 constitution establishing a Corporative state, in-stating the Cmara Corporativa as its second chamber, Salazar passed the National LaborStatute (Estatuto do Trabalho Nacional, a clear Portuguese adaptation of Mussolinis Cartadel Lavoro see DL No. 23,048 and 23,050, 23. 09. 1933).

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elites, attracting a whole series of catholic intellectuals and academics29 whowould be, together with Salazarist young technocrats, the nucleus of a new Estado

Novo leading generation, committed to economic modernization without question-

ing political authoritarianism. In addition, this new corporative discourse thatspread all the way through every sectorial policy represented another Salazaristattempt to smarten the 1930s typically fascist Third Way (anti-liberal capitalist,anti-socialist) rhetoric, and to claim a paternalistic social concern from above to-wards growingly anxious and dissatisfied working classes. The whole logic underwhich Salazar himself overlooked the most massive process of social change thecountry underwent was still completely reactionary. At the very moment in whichthousands were starting to abandon rural Portugal and flooding into Lisbon andOporto suburbs and soon after into Paris or the Rheinlands, for instance , thedictator praised agriculture in opposition to industry, because of its greater stabi-lity, its natural roots in the soil and closer connection with food production, con-stituting a basic assurance of life itself and, due to the moral values it impressesinto the soul, an endless source of social resistance of those who will not letthemselves be obsessed with illusions of getting rich through indefinite means,but aspire, above all, for a sufficient life, healthy, deep-rooted to the earth,although modest.30

(3) A slow, controlled, often contradictory31 but steady choice for what a prob-ably too condescending view would describe as an opening to Europe in the1960s, abandoning the 1940s-1950s project of a nationalistic and autarkic devel-

opment in favor of economic liberalization and European integration.32 The factthat Salazar chose to concede to the economic managers inside his administrationand to accept Portuguese status as a founding member of the European Free TradeAssociation (EFTA), in 1960, as well as his Government signing (April 1962) theGeneral Agreement on Tariffs and Trade (GATT), more than a starting point of asignificant change process, should be read as a result of that contradictory processinitiated with Salazars similar concession in the 1947 48 process of adhesion tothe Organization for European Economic Cooperation (OEEC, turned into Orga-nization for Economic Co-operation and Development, OECD, in 1960), tardily

168 Manuel Loff

29 Wiarda, Corporativismo (fn. 27), p. 423.30 Salazar, 1953, quote in: Fernando Rosas, O Estado Novo (1926 1974) [The Estado

Novo], in: Jos Mattoso (ed.), Histria de Portugal [History of Portugal], Vol. 7, [No placespecified] 1994, p. 457.

31 See details in Fernanda Rollo, Salazar e a Construo Europeia [Salazar and the Euro-pean Building], in: Antnio Costa Pinto / Nuno Severiano Teixeira (eds.), Portugal e a Unifi-cao Europeia, [Portugal and the Unification of Europe], revista Penlope No. 18, Lisbon1999, pp. 51 76.

32 David Corkill, O desenvolvimento econmico portugus no f im do Estado Novo [Portu-guese Economic Development at the End of the Estado Novo], in: Fernando Rosas / PedroAires Oliveira (eds.), A transio falhada. O Marcelismo e o fim do Estado Novo (19681974) [Failed Transition. Marcelismo and the End of the Estado Novo], [No place specified]2004, pp. 213 232, here p. 215.

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benefiting from the Marshall Plan funds. According to Rollo, the OEEC integra-tion has represented not only one of the first steps towards [economic] opening,and moreover to Portuguese economys internationalization, but the Marshall

aid, through mechanisms it put into motion, ( . . . ) concurred to what was still anincipient industrialization process, ( . . . ) paving the way to new forms to look ateconomic policies through economic planning materialized in a series of devel-opment plans [Planos de Fomento], promoting a new technical elite formed incontact with and working inside a number of international institutions (first ofthem all, the OEEC), an additional knowledge on the workings of internationaltrade and an intensive learning on how to deal with the new instruments of theinternational monetary and financial system that came out from Bretton-Woods33. From this point of view, the formal creation of a Portuguese Economic

Area (Espao Econmico Portugus)34, although reinforcing the same trend to-wards bureaucratic planning and economic rationalization, offering, again, a num-ber of opportunities to a new generation of qualified bureaucrats recruited intothe ranks of a growingly agonizing regime, was never an effective alternative to aclear Europeanization of Portuguese foreign trade, while the relative position ofthe trade with former colonies is not only weak but it suffers an expressive cut: in1958 and 1968 it represented 20 percent of [Metropolitan Portugal] foreign trade,while in 1973 it could no longer exceed 12 percent35.

Table 2

GDP growth rate (1960 80)

Period GDP growth rate (%)

1960 65 6.44

1965 70 6.20

1970 75 4.37

1975 80 5.06

1960 70 6.32

1970 80 4.72

Source: Antnio Barreto (ed.), A situao social em Portugal,1960/ 1995 [The Social Situation in Portugal], Lisbon 1996, table5.05.


33 Rollo, Salazar (fn. 31), p. 64.34 See Drecree-Law (Decreto-Lei, DL) No. 44,016, 08. 11. 1961. Manuel Ennes Ferreira,

Espao Econmico Portugus / Mercado nico Portugus [Portuguese Economic Area / TheIntegrated Portuguese Market], in: Fernando Rosas / J. M. Brando de Brito (eds.), Dicionrio

de Histria do Estado Novo [Dictionary of the History of the Estado Novo], Vol. I (AL),[No place specified] 1996, pp. 312 315.

35 Santos, Abertura (fn. 13), pp. 140 f.

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Table 3

Portuguese GDP per capita / EU 15 GDP per capita (1970 90)

Year

Portugal / EU 15

(GDP per capita) (%)

1970 53.2

1973 61.2

1975 60.6

1980 58.5

1985 55.7

1990 64.2

Calculations according to data in: OECD Factbook 2006: Eco-nomic, Environmental and Social Statistics.

Table 4

Labor / Gross National Income (1960 90)

YearLabor / Gross National

Income (%)

1960 44.84

1965 43.80

1970 44.51

1973 43.71

1975 59.30

1976 57.79

1980 44.52

1990 41.82

Source: Antnio Barreto (ed.), A situao social em Portugal,1960/ 1995 [The Social Situation in Portugal], Lisbon 1996, table5.09.

Social and economic change was obvious at the end of the 1960s, while the warwas pushing the dictatorship into a blind alley, and a highly contradictory one:economy was growing, emigration and military draft was opening new job oppor-tunities for women, education rates were finally heading up, but political dissatis-faction and social unrest had never been so evident since 1945.

Additionally, Caetanos short period in power was a stage of strong expansion of a

monopolistic nucleus of the larger capital corporations, the Magnificent Seven36

:

170 Manuel Loff

36 Ibidem, pp. 116 120.

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Table 5

Portuguese main financial corporations (the Magnificent Seven) (1973)

Corporation CUF

Esprito

Santo

Champa-

limaud BPA37

Borges BNU38

Burnay

Companiesunder control 112 20 14 70 40 22 22

Share ofBankingSystem(commercial) 10.6% 15.1% 14.4% 13.2% 4% 11.8% 5%

Share of

Insurancemarket 22% 11.4% 12.9% 1.8% 1.5% 3.7% 1.6%

Colonialinvestment

bankingtradeshipping

Sugarcoffeeoilinsurancebanking

bankinginsurancecementchemicals

bankingbeercotton

bankingoilbeer

bankinginsuranceagricul-turesugarcellulosecashewmining

bankingdiamonds

Connection

to foreigncapital

Billerud

PedrineyUKR. NoledRn-Schelde-VeroneBrocadesLudlowICI

F.N. City

BankFirestoneSchlum-bergerRocke-fellerITTSTABInterfood

(Negotiat-

ing con-nectionsin LatinAmerica)

W. Moreira

SalesMitsuiYtongSt. Gobain

G. Tire

andRubber

Launoit

LonLevyAnglo-AmericanCorp.Danishcapital

Soc.Gn.

BelgiqueIT Chrys-lerCETECWesting-house

Source: Santos, Abertura (fn. 13), p. 119.39

Inescapably described as an oligarchy, intrinsically associated to an authoritarianstate who, in the words of the post-1974 period largest individual fortune in thecountry, Belmiro de Azevedo, solved Labor Relations troubles for us40, andwho conceived most of its post-WW II economic policies counting on their actual


37 Banco Portugus do Atlntico.

38 Banco Nacional Ultramarino.

39 A monographic description of these financial corporations and their industrial invest-ments in: Maria Belmira Martins, Sociedades e grupos em Portugal [Societies and Groups in

Portugal], Lisbon 1973.40 Interview to Mnica, in: Maria Filomena Mnica, Os grandes patres da indstria por-

tuguesa [Big Entrepreneurs of Prtuguese Industry], Lisbon 1990, p. 138.

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support and allegiance, these Magnificent Seven were enormously favored by the1945 60 autarkical industrialization, preparing themselves to face the controlledinternationalization Portuguese economy underwent along the 1960s and 1970s,

carefully choosing their foreign partners (British, French, German, some Belgianand U.S.).

Foreign investment, central to processes of technological transfer, was now at-tracted through different sorts of administrative, tax and bureaucratic means rightfrom the beginning of Caetanos rule, at the end of the 1960s. Strategy outlined inthat period focused on a double association: one between national and foreign capi-tal who jointly played the role of the [economic] systems engine; another between[national capital] and a net of small and middle companies, ( . . . ) who on the wholewould build up the main branch of the national capital41. Nevertheless, the foreign

investments role in Portuguese economy modernization process should not beoverrated: so clearly scarce until 1968, although having increased significantlyas soon as the war started in Africa, in 1961, it did not get, according to Ramosdos Santos, globally speaking, a strategic control over Portuguese economy42. Atany rate, foreign direct investment amounted at the beginning of the 1960s toaround 10 percent of private capital middle- and long-term investment, but itwould rise to almost a fourth of it in 1973. Thus, Lus Salgado de Matos consid-ers the penetration of foreign companies in the [Portuguese] economic web to bevery strong: out of the 100 largest Portuguese industrial companies, 42 had for-eign capital participation, and the same happened with 16 out of the 50 biggest

commercial companies43.

These Magnificent Seven economic groups have initially developed an indus-trial expansion strategy, creating or buying companies in productive sectors, [but]from 1968 1969 onwards they point out to new directions: service, real estate andtourism companies, investment and stock market management societies. In the fi-nal years [of the dictatorship] there was also a growing presence in trading businessand media44. Each of them, at any rate, evolved differently: in an industrial / fi-nancial capital equation, (i) the older (and also two of the three largest) corpora-tions (CUF, Champalimaud) had rooted in industry their starting point and accu-

mulation ground, extending later their activity towards finance; (ii) the reversecourse, from finance towards industry and services, was followed by prototypically

172 Manuel Loff

41 Amrico Ramos dos Santos, Grupos econmicos / Conglomerados [Economic Groups /Conglomerates], in: Rosas / Brito, Dicionrio (fn. 34), pp. 406 409, here pp. 406 f.

42 Santos, Abertura (fn. 13), p. 119.43 Lus Salgado de Matos, Investimento estrangeiro [Foreign Investment], in: Rosas / Brito,

Dicionrio (fn. 34), pp. 491 495. Santos mentions around 270 companies [at the end of1973] participated or controlled by multinational companies: 150 focused on mining orimports substitution; 95 on the exports market, taking profit from local low costs; 14 on phar-

maceutical and chemical imports and distribution; 20 on real estate speculation, see: Santos,Abertura (fn. 13), pp. 118 f.

44 Ibidem, p. 118.

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state-well-connected Esprito Santo corporation (the third of the three biggest), aswell as one of the best examples of Oporto area financial tycoons, Pinto de Magal-hes, one of the second league corporation leaders, though deeply interconnected

with the Magnificent Seven; (iii) hybrid expansion processes were developed byBPA or the Borges group. Corporation strategies towards internal and colonialmarkets and their relation with foreign capital was also diversified: (1) EspritoSanto and Burnay were solidly articulated with foreign capital, followed, after196869, by CUF; (2) BNU, Esprito Santo and Champalimaud were deeplyrooted or articulated with colonial exploitation and openly lobbied for the prose-cution of the war effort in Africa; (3) on the contrary, CUFand Borges based theirexpansion process essentially on protected metropolitan economy, relatively inde-pendent from foreign capital45.

Capitalistic concentration, together with a financial system huge expansion,was, thus, the mot dordre under Marcello Caetanos rule 1968 74: bank depositsgrew from 132 million Escudos in 1968 to 328 million in 1973, two-thirds ofwhich were under control of the Magnificent Seven, an amount which had tripledin those f ive years; a growing proportion of the financial system gains came fromstock-market speculation, without which it would be impossible to understand thegreat monopolistic acceleration of that period; in 1972, 16.5 percent of the indus-trial companies produced 73 percent of all industrial goods.46 Eventually, grossomodo, in April 1974 Portuguese economy was dominated by 44 families, most ofwhich controlled [these] seven large financial groups, and through them holdingcontrol over two-thirds of private investment, 75 percent of the banking system,55 percent of the insurance market, four of the most important industrial activitiesconcerning productivity, profit rate and technology (beer, tobacco, paper and ce-ment); ( . . . ) all industrial basic activities (iron and steel, chemicals, shipbuildingand maintenance, heavy metalworks and mechanics); ( . . . ) most of shipping; onthe whole, these included the largest eight industrial companies and five of themain export companies47.

These speedily growing financial corporations became a strategic standpoint forprofessional, as well as political, opportunities to the younger members of the ur-ban bourgeois elite of the 1960s and 1970s. In the first place, they were the naturalfield of operation for all those 44 families, 14 of which were the dynamic basis ofthe monopolistic nucleus48. But furthermore, there was a growing interpenetra-tion of [these financial corporations] and the state, in which a new technocracy be-


45 Santos, Grupos econmicos (fn. 41), p. 408.46 Ibidem, p. 407.47 Santos, Abertura (fn. 13), pp. 116, 118.48 See Santos, Grupos econmicos (fn. 41), p. 408. These were: Mello; Esprito Santo;

Champalimaud; Quina; Mendes de Almeida; Queirs Pereira; Figueiredo (Burnay); Feteiras;Bordalo; Vinhas; Albano de Magalhes; Domingos Barreiro; Pinto de Magalhes; Brandode Miranda.

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comes predominant, circulating between different executive positions inside thecorporations, and in some cases between corporations and the state apparatus49.

In fact, some of the most characteristic features of the institutional and socialrole of this new technocratic elite, emerging in modernizing Portugal in the secondhalf of the century, is that it obviously benefited from both capitalistic concentra-tion and state intervention, and had a central role both under Salazars and Cae-tanos authoritarian state and during the revolutionary 1974 76 period and, whenthe revolutionary experience was brought to an end, to what hegemonic ideologydescribes as the normalization process of the late 1970s and 1980s. Tracking downindividual itineraries of some of these elite members throughout the final 15 yearsof the dictatorship and the first 20 of the democratic regime, it is quite evident, thepragmatism of choices and strategies of both individuals and these corporations,

and even of the authoritarian state in its final stage. Apparently, one could haveopposed the regime in university rallies, then get a job at some planning or strategydepartment in a corporation whose interests and policies were interdependent fromthe states, and finally be appointed to some second-rank economic policy-designadministration department before the 1974 revolution. If this professional and insti-tutional tour and an obviously political one, although many would deny it wouldhave been successful, and not too compromising, it would be highly probable to f indthese same individuals in socialist, right-wing or so-called technical administrationsafter 1976.

IV. Elites and Revolution

After 13 years of war fought in three African territories, almost a whole genera-tion of young Army captains in his late twenties-early thirties organized themselvesin an Armed Forces Movement (MFA) while carrying, in fact, most of the militaryefforts burden, and engaged on a conspiracy, initially on professional grounds,which evolved through the Autumn 1973, Winter 1973 74 and, becoming impos-sible to refrain by either military hierarchy or the political police, got definitelypolitically menacing to the regime in February 1974. On 25 th April 1974, with

almost not a single shot fired by the rebel forces (only the political police resistedby force and shot dead four civilians who approached its Lisbon headquarters), theregime fell into the hands of politically inexperienced young officers who, simulta-neously, called two of the most graduated Army generals (Antnio de Spnola, im-mediately appointed president by his fellow high-ranking officers, and Franciscoda Costa Gomes, who became Chief-Commander of the Armed Forces and re-placed Spnola as president in October 1974) to get hold of power, asked demo-cratic opposition leaders to participate in government and, most of all, opened widethe gates for political participation, improvising a transitional process to democ-

racy which turned fastly into a social, political and cultural Revolution.

174 Manuel Loff

49 Santos, Abertura (fn. 13), p. 118.

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The previously prepared MFA program was soon most evidently surpassed by asurprisingly strong popular movement, shaping a revolutionary experience appar-ently astonishing in Western Europe since the beginning of Cold War. Massive

political participation became an identifiable sign of the revolutionary period(1974 76), historically unimpaired before and after it. This political mobilizationwould prove to be substantially ephemeral in the long run, but the truth remainsthat no other electoral process in Portugal attained the participation level (91.2 per-cent) of the 1975 election of the Constitutional Assembly when, for the very firsttime in Portuguese history, universal suffrage was introduced, allowing every citi-zen over 18 to vote. The two years that separate the 1974 military coup from the1976 approval of the democratic constitutional text opened in Portuguese modernhistory the most complete and archetypical revolutionary cycle, historically [re-presenting] the deepest and most threatening shake suffered by an oligarchy whichhad always ruled in Portugal, undamaged and self-assured50. Inside this chronolo-gical specific stage, an even more intense revolutionary period may be drawn be-tween the aborted Spnolas right-wing coup of 11th March 1975 and the victoriousanti-communist one of 25th November that same year, following which an impor-tant number of left-wing military officers were arrested for some months and allmajor military and political departments still led by left-of-socialists were takeninto the hands of right-wing or moderate socialist officers and civil leaders.

From a semantic point of view, social reality was now described with very differ-ent words and metaphors, fastly dyeing all public discourse with clearly Marxistand radical-democratic shades, produced in almost every level and instance of so-ciety and culture, coming from almost all sorts of legal political forces, right-wing(PPD, liberal, and CDS, conservative christian-democratic) included. Mass mobili-zation was soon achieved mainly by social and political movements of the revolu-tionary Left (communists and far-Left, more effective achieving it than the socia-lists until the Summer of 1975), forcing, under what became an evident left-wingcultural and ideological hegemony, to use Gramscis concept, all active leadingcharacters of political change (military necessarily included) to define as a Revolu-tion the historical process launched by the military coup. Thus, nationalist, colonial

rhetoric, confessional and ultraconservative imagery from the Estado Novos half-century, as well as technocratic modernization discourses, were substituted in poli-tical discourse by revolutionary vocabulary opposing Revolution to Reaction orcalling out for Peoples Power, a Popular Unity of Chilean shades, demanding landsownership for those who work it(A Terra a quem a trabalha!), soon amplified to theprinciple of political and social organization of all power to the workers (O Poderaos trabalhadores!). In the specific field ofPCP vs. Maoist organizationsdispute,the latter recuperated Stalinist concepts of the 1930s such as Social fascism or So-cial imperialism to designate PCP strategy at a national and international level.


50 Fernando Rosas, Portugal sculo XX (1890 1976). Pensamento e aco poltica [20th

Century Portugal. Political Thought and Political Action], Lisbon 2004, p. 138.

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An antiauthoritarian military coup as was the MFAs 25th April 1974 promptlyconverted into a revolutionary political break with the past and inevitably producedan almost general political and institutional elite replacement. First of all, the new

political order was probably expected to act very severely against those responsiblefor repressive action under the dictatorship. It became soon quite evident that itwas not going to be the case. The main consequences, from this point of view, werenot massive imprisonment and / or legal prosecution against political leaders orpolice and military chiefs. It all came to what in those days was called the purging(saneamento) of the state apparatus, a lustration process. At the beginning, themilitary authorities decided the purging of the Armed Forces ranks, both of mili-tary51 and civil servants,52 and of state administration, corporative and economiccoordination bodies,53 as well as of all public services and companies, local ad-ministrations and all other public right entities.54 Heavily pressed by the resentfulmasses, Provisional Government, the f irst of which was exceptionally led by a civi-lian (Palma Carlos, May-July 1974), soon replaced by a military (left-wing generalVasco Gonalves, August 1974-August 1975), strove for formal procedures, super-vised by Ministerial Committees of Purging (Comisses Ministeriais de Sanea-mento)55 and a General-Directorate for Reclassification and Purging (Direco-Geral de Reclassificao e Saneamento) created within the General-Staff of theArmed Forces.56 A whole new decree was passed a few days before Spnolas andhis ultra-right-wing allies 11th March 1975 attempted putsch, clearly specifyingfour kinds of civil servants who should be immediately considered dismissed from

Civil Service: (1) Presidents of the Republic and Heads of Government between1926 and 1974 (among which remained alive only the last two in office: AmricoThomaz and Marcello Caetano); (2) members of the political police and all thosewho had taught in its schools; (3) informers of the political police57, or all thosewho voluntarily contributed to assist in its repressive action; and (4) the so-calledformer vigilant agents working inside universities and every civil servant oragent responsible for any sort of information service for repressive purposes, andmembers of special forces of the militia58, the Portuguese Legion (Legio Portu-guesa).59

176 Manuel Loff

51 DL No. 190 / 74, 30. 04. 1974.52 DL No. 775 / 74, 31. 12. 1974 and No. 497 / 75, 12. 09. 1975.53 DL No. 193 / 74, 09. 05. 1974.54 DL No. 277 / 74, 25. 06. 1974.55 DL No. 366 / 74, 19. 08. 1974.56 DL No. 36 / 75, 31. 01. 1975.57 Lists of almost all those active in 1974 were burnt by DGS chiefs [Direco-Geral de

Segurana, General-Directorate for Security] in the first hours of the 25th April coup.58 DL No. 123 / 75, 11. 03. 1975.59 For all these documents see: Jos-Pedro Gonalves (compiler), Dossier 2a, Repblica,

Vol. 1: 25/4/197425/4/1975, pp. 417 f., 420423, 429434, 440445, 448455,and Vol. 2: 25/ 4 / 1975 25 / 11 / 1975, pp. 1056 1062, Lisbon 1976 respectively 1977.

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As for the purging of the armed forces, the military authorities made public inthe months following to the deposition of the dictatorial regime that until October1974 the Navy [had been] purged of 103 officers and, in the end of that year, 300

different ranks officers had been dismissed60

. In fact, probably more have beenremoved from the ranks after the political and military anti-communist change ofdirection in the end of 1975, a process which underwent for several years, until, atleast, the constitutional reform of 1982 which suppressed the Council of the Revo-lution (Conselho da Revoluo). In the Ministry of Justice, not more than 42 in agroup of 500 magistrates had been punished until mid-1975, 28 of which for hav-ing participated in decisions over political crimes and the rest for having workedwith the censorship [department] and the political police, or having been membersof the Government during the previous regime. ( . . . ) At the end of 1974, eightmonths after the coup, around 4.300 civil servants had been submitted to proce-dures of purging61, which does not mean, obviously, that they were expelled oreven merely suspended from Civil Service.

On the whole, however, huge delays in the legal purging procedures reduced itseffect and made possible speedy reintegration after a short number of years. ( . . . )Most of these high officials, including former political police agents, would bereintegrated between 1976 and 1980, though most of them did not return to thestrategic positions they formerly held.62

Even more revealing is the fact that no hard stance was taken in the case of the

highest-rank leaders of the authoritarian regime. By the end of the 1970s, theywere made to know that the authorities would not raise any impediment to theirreturn to the country. Former president Thomaz did so and quickly around him rosethe idea of publishing in the early 1980s his autobiography with the provocativetitle ofLast Decades of Portugal 63, as if the nation he had formally presided overhad ceased to exist. The former Head of the Government, Marcello Caetano, re-fused to return and, having regained his academic career in Rio de Janeiro, died inBrazil in 1980, not before having published two self-explanatory autobiographicaltestimonies.64 Almost every other former political leader, government member or


60 Antnio Costa Pinto, Enfrentando o legado autoritrio na transio para a democracia(1974 1976) [Confronting Authoritarian Legacy Through Transition to Democracy], in:J. M. Brando de Brito (coordinator), O pas em revoluo. Revoluo e democracia [Countryin Revolution. Revolution and Democracy], Lisboa 2001, pp. 359 384, here p. 367.

61 Ibidem, p. 368, quoting data from O Sculo (Lisbon), 19.04 and 27. 02. 1975.62 Pinto, Enfrentando (fn. 60), pp. 369 f. The author quotes the 1976 1977 1978 re-

port of the above-mentioned Commission. See Antnio Costa Pinto, O legado do autoritaris-mo e a transio portuguesa para a democracia (1974 2004) [The Legacy of Authoritarian-ism and Portuguese Transition to Democracy, 1974 2004], in: Manuel Loff / Maria da Con-ceio Pereira (eds.), Portugal: 30 anos de Democracia [Portugal: 30 Years of Democracy],

Oporto 2006, pp. 57 70, for some details on its proceedings.63 Amrico Thomaz, ltimas dcadas de Portugal [Last Decades of Portugal], 2 Vols., Lis-

bon 1980 1983.

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high official, if having left the country in the 1974 75 period, returned freely toPortugal in the late 1970s or early 1980s. Practically all of them were reintegratedin the higher ranks of the Civil Service and were generously repaired for having

been submitted to the purging procedures. Very few of them were actually arrestedin the tensest moments of the revolutionary period and a single one sent to courtand sentenced.65

As far as Marcello Caetanos Cabinets are concerned, eight of their members

regained some governmental office sometime after the first years of democracy,

both in socialist and right-wing cabinets, revealingly. A ninth member of the last

dictatorial government, Caetanos Secretary of State for Budget, became presi-

dent of the Supreme Court 14 years after the Revolution (1988 90). Finally, a

former Secretary and Minister under Salazar, Adriano Moreira (Overseas, 1960

62) was frequently elected as Member of the Parliament for the CDS, and even-tually became its leader (1986 87).

66The same party was able to elect to Parlia-

ment a former Caetanos Secretary (Housing), Nogueira de Brito. Most impor-

tantly, a very significant number of all these were either founders or administra-

tors of the main Portuguese industrialists association, the Confederao da Inds-

tria Portuguesa, an institution which owes largely to the cadres of Marcellos

period67

.

The first eleven months of the revolutionary period (April 1974 March 1975)have been a classical case of clash between different political projects to build up a

new political and social order in the aftermath of the fall of a dictatorship. All sortsof conservatives, including former liberal elites of the Marcelismo, were beingpushed to the right by the radicalization of the political process, and especiallyalmost every relevant member of the business elites, amalgamated behind generalSpnola, appointed provisional President right after 25th April 1974, and tried torefuse to accept a self-determination process for the colonies (a political battle theylost in July 1974) and structural changes in economic policies. A first militaryclash was avoided on 28th September 1974, when the spinolistas prepared a seriesof public demonstrations associated with military mobilization, but Spnola was

178 Manuel Loff

64 Marcello Caetano, Depoimento [Biography], Rio de Janeiro 1974, and Marcello Caeta-no, Minhas memrias de Salazar [My Memories of Salazar], Lisbon 1977. See also: JoaquimVerssimo Serro, Marcello Caetano. Confidencias no exlio [Marcello Caetano. Revelationsin Exile], 10th ed., Lisbon / So Paulo 1985.

65 According to a research led by two journalists in 1993: Jos Pedro Castanheira/Valen-tina Marcelino, Os homens de Marcello: onde esto e o que fazem[Marcellos Men. WhereAre They and What Are They Doing], in Expresso-Revista (Lisbon), 24. 04. 1993, pp. 22 29), out of 36 ministers, Secretaries of State and Under-secretaries of State, only 5 (MarcelloCaetano and the ministers for Defence, Home Affairs and Army, and the Under-Secretary ofthe Army) were arrested for some time, leaving the country soon after being released to, to-

gether with 17 others.66 He kept some relevant institutional offices thereafter, especially in academic activities.67 Castanheira/Marcelino, Os homens (fn. 65), p. 27.

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forced to resign two days later. Radicalization to the left was intensified, namelythrough property occupation and socialization, following workers movements de-manding for new rights, higher wages,68 but also for responsibilities for oppressive

and penalizing actions undertaken before what was evidently perceived as a libera-tion process launched by the 25th April. Strong popular pressure for lustration in-side private companies started achieving its aims at the end of 1974 and was parti-cularly boosted by the 11th March 1975 reactionary coup, led by Spnola and itsmilitary accomplices who had took refuge in Francos Spain, in a desperate attemptto stop the revolutionary process.

This whole political and social process evolved under a severe economic crisis:1973 oil crisis impact, stagflation (inflation at 7.8 percent in 1973, 20.5 percent in1974, 27.9 percent in 1975; GDP growth fell from 11.2 percent in 1973 an excep-

tional year, at any rate , to 1.1 percent in 1974 and 4.3 percent in 1975), acutecutback of the exports (12 percent in 1974, 14 percent in 1975) and, obviously,of investment (7.7 percent in 1974, 12.3 percent in 1975).69

Business elites response to a social movement that they could no longer controlusing state coercion, as it always happened under the Estado Novo dictatorship,was a classic one: lock-out strategies, decapitalization and illegal export of capitals(through mechanisms of under-declaration of receipts and over-declaration of ex-ported goods prices70). At the end of this course of action, hundreds of them fledabroad, mainly to seek refuge in dictatorial Francos Spain and Brazil, or in

Apartheids South Africa and Rhodesia, sometimes in Britain and Switzerland,where they were able, often with official or semi-official support, to recreate a partof their former wealth. At any rate, not more than 2 percent of all industrial ownerswere purged out of their companies, although 19 percent abandoned [their] posi-tions, according to Harry Makler71.

At an early stage of the process, in August 1974, leading owners and managersof the most significant private companies (including most of the MagnificentSeven) launched an Entreprise / Society Movement ( Movimento Dinamizador Em-

presa / Sociedade), trying to establish themselves in an uncertain social and politi-

cal terrain where their class interests were less and less ensured. Eventually every-one of them backed Spnolas efforts to halt a clear swing to left on Portuguese


68 Real wages grew 12 percent in 1974, 9 percent in 1975, see: Emanuel Reis Leo, Dastransformaes revolucionrias dinmica europeia [From Revolutionary Transformationsto European Dynamics], in: Antnio Reis (ed.), Portugal Contemporneo [Portugal Today],Vol. VI, Lisbon 1992, pp. 173 224, here p. 177. See table 1 for the exceptional growth oflabor remuneration in the GDP.

69 Ibidem, pp. 177 179.70 Ibidem, p. 179.71 Harry M. Makler, The Consequences of the Survival and Revival of the Industrial Bour-

geoisie, in: Lawrence Graham / Douglas L. Wheeler (eds.), In Search of Modern Portugal.The Revolution and its Consequences, Madison 1983, pp. 251 295.

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politics, financed the creation of some improvised ephemeral right-wing organiza-tions,72 and those who were adequately organized, offered their logistics to preparethe 28th September 1974 and 11th March 1975 conspiracies to reverse the revolu-

tionary social changes. When the whole political process seemed lost from theirpoint of view, in Spring 1975, those who have led the Magnificent Seven, togetherwith a representative section of Northern Portuguese middle-range businessmen,became active supporters of those few armed movements organized from withinand out of Portugal to counteract the revolutionary experience,73 as well as oflegal right-wing parties and, under those specific circumstances, Soares SocialistParty.

The most relevant characters amongst them used all sorts of business and classconnections to rebuild their fortunes. The case of two of the Magnificent Seven

was recently described by two journalists, Filipe Fernandes and Hermnio Santoswho, 30 years after, wanted to narrate the wild life of businessmen and mangersin the hot years following 25th April 197474. The core managers [ncleo duro]of the Esprito Santo corporation who had fled the country the first semester of1975 met that summer in Toledo (Spain) to follow a business plan conceived anddrawn by those who had been arrested. First task was to lobby amongst the inter-national community on the situation of arrested businessmen in Portugal, includ-ing contacts with President Giscard dEstaing, banker David Rockefeller or PrinceBernard of the Netherlands. Secondly, they tried to disperse their activitiesthroughout Brazil, London, Lausanne and Luxemburg, relying on a large support

from international banking, offering credit lines to the [Esprito Santo] family.They were soon back to business in London under Citibanks protection, got holdof a Brazilian bank more than legislation allowed them to, benefiting from specialGovernment exemptions, created a fortune management society in Switzerland anda Esprito Santo International Holding in Luxemburg. Most of them went back toPortugal already in 1976.

180 Manuel Loff

72 The Progress and Liberal Parties (Partido do Progresso and Partido Liberal), the Portu-guese Federalist Movement (Movimento Federalista Portugues).

73

Portuguese Liberation Army ( Exrcito de Libertao de Portugal), Democratic Move-ment for the Liberation of Portugal (Movimento Democrtico de Libertao de Portugal, ledby Antnio de Spnola), operational Maria da Fonte Plan (Plano Maria da Fonte). Filipe S.Fernandes/ Hermnio Santos, Excomungados de Abril. Os empresrios na Revoluo [Ex-communicated From April. Entrepreneurs during the Revolution], Lisboa 2005. Dom Quixotegathers some information on the financing role of these exiled industrialists and bankers. Onthe ultra-right anti-revolutionary terrorism in 1975 and 1976, see: Josep Snchez Cervell, Arevoluo portuguesa e a sua influncia na transio espanhola (1961 1974) [Portuguese Re-volution and its Influence on the Spanish Transition], Port. ed., Lisbon 1993; Eduardo Dma-so, A invaso spinolista [The Spinolist Invasion], Lisbon 1999.

74 The whole of Fernandes and Santos book is a journalistic manifesto against those twoyears of collective drunkenness (according to corporation lawyer Daniel Proena de Car-valho), i. e. the revolutionary 1974 and 1975 years, praising those representatives of some ofthe most respected families in the country (Fernandes/Santos, Excomungados [fn. 73],pp. 15, 56) who felt it better to leave the country.

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Of the two brothers who held control over CUF, Jos Manuel de Mello, themoment he understood where the Revolution was heading to, decided to ( . . . ) con-sider emigration with some of his direct associates. Two different groups left the

country for Brazil and Switzerland, creating in both countries, with local capitalconnections (including Arab capital in the latter), technology, shipbuilding andtrading companies. Mello boasted to Fernandes and Santos about being at the timein good relations with Margaret Thatcher. Although he never lost touch withremarkable Portuguese who were in the political struggle frontline against left-wing forces, one of whom was Mrio Soares, Mello waited for 1979 to returndefinitely to Portugal.75

When 15 years later, sociologist Maria Filomena Mnica interviewed some ofthem, together with the more prominent new Northern Portuguese industrialists

and some of the members of what was speculated to have turned out as a newPortuguese entrepreneurial class, practically unknown men before 1974, whosecompani

Documents

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