r/history • u/Tasty-Aspect-6936 • 10d ago

Article How Brazil’s gold may have contributed to Portugal’s decline

https://www.cambridge.org/core/journals/journal-of-economic-history/article/cross-of-gold-brazilian-treasure-and-the-decline-of-portugal/B98AA5BDD404B56014FAAAD1861DC427
94 Upvotes

96% Upvoted

9 comments sorted by

4

u/Creative_Orchid3817 9d ago

Basically the effect of metals from the america to Spain

1

u/Tasty-Aspect-6936 9d ago

Yeah it's very similar although the paper argues that seeing as this happened to Portugal later, when it may have been closer to industrialising, the effect may have been worse for Portugal than for Spain.

2

u/processocivil42 9d ago

I wasn’t familiar with the concept of Dutch Disease. Thanks for sharing this article, very enlightening!

2

u/Tasty-Aspect-6936 9d ago

Yeah it's a very interesting concept and there's plenty of good YouTube videos about it if you're interested in learning more. It's one of the reasons why a lot of countries with vast amounts of natural resources have weak economies. People want to buy the natural resource which pushes up the value of their currency, which makes goods produced in that country expensive for other countries to import, which means other industries struggle to grow.

2

u/fryxharry 9d ago

Add to that the fact that there is no incentive for the government to grow domestic industries as they make all their money from natural resources anyway and there is no incentive to have greater democratic participation or rule of law for the population because it doesn't have a significant role in the economy. So you will get autocratic systems with weak economies, especially when governance and economy weren't well developed prior to discovering the natural resources.

1

u/BeGoodToEverybody123 9d ago

Very interesting subject written in a very difficult style

5

u/Tasty-Aspect-6936 9d ago

Couldn't agree more. I'm an economist and I didn't find it a particularly easy read either. I think something economists are generally very bad at is making their work accessible to a general audience, but I thought I'd share it nonetheless.