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Brazil's Steel City: Developmentalism, Strategic Power, and Industrial Relations in Volta Redonda, 1941-1964 Review

Updated on August 4, 2020

Oliver Dinius' genius in Brazil's Steel City is being able to write a book which manages to transcend just being a history of labor, or just a history of development, or just a history of technology, and write a book which integrates all three and shows their relationships to each other. His work is about the development of Brazil's first modern steel mill, at Volta Redonda, built during the Second World War and which had a remarkably unique labor history, one where workers had notably different relations with their company than in the rest of Brazil's economy. Dinius' shows the way in which the develpment of Brazil's economy and its labor relations impinged upon each other, in a book which is a testament to his excellent and thorough understanding of the technical features and social relations of Brazil's steel city of Volta Redonda.

The introduction to the book lays out the author's call for a new study of the unique nature of Brazil's steel industry built at Volta Redonda and its workers, one which would identify why they had markedly different labor patterns from the rest of the country. It lays out the importance of Brazil's governing labor and developmental ideologies, and that there needs to be a focus on workers and their activities and actions rather than as oppressed proletariat or anti-capitalist actors, and how this was well used in Volta Redondoa by workers exploiting their strategic importance in the economy to wring out concessions.

Chapter 1, "Inducing an Industrial Revolution: The Creation of the National Steel Company" provides a history of Brazilian industrial development and desire of the Brazilian government, the "Estado Novo" to develop a Brazilian steel industry, and covers some of the key figures in this drive, such as Macedo Soares, a foreign-trained Brazilian technocrat who would be instrumental in pushing for a Brazilian steel industry. This would be put to good use in negotiations with US Steel, helped by the negotiating leverage of German proposals for a construction of a steel mill and the need to court Brazilian friendship during WW2, which ultimately led to US aid in constructing a Brazilian steel plant at Volta Redonda with large government sponsored investments of Brazilian and American capital.

Volta Redondo, the chosen place, is the subject of the second chapter, "Industry Comes to a Village, Villagers Come to an Industry," discussing some of the reasons chosen for this city near Rio de Janeiro, and how labor was provided for the steel mill's construction with examination of its internal demographics relating to where this labor came from - principally around Volta Redonda, but also with some from father afield across the country. From this point it looks at the problems of labor retention with a very high labor turnover rate, and how the CSN (the steel company) attempted to counter this - with a combination of both the carrot of higher wages, and war-time laws enabling greater control over the work force. The construction of the mill and its associated infrastructure, and the relationship of workers to the mill with the pride they felt in its construction, and how management such as the previously mentioned Macedo Soares attempted to cultivate this attachment and instill a feeling of national achievement.

Chapter 3, "State Paternalism in the Making of a Company Town" takes a look at the ideology of paternalistic and Catholic labor management that developed in Brazil and the Estado Novo's embodiment of these ideas, for social action and reform: these principles were embraced by Macedo Soares and the CSN, This had concrete results in practice, such as the company town for workers, the hierarchical organization of labor relations, its efforts to look after - and control - the spiritual and moral life of the workers of the town, in cooperation with the church. It also endeavored to look after worker health, and provide for social assistance. At the same time this was matched by its coercive side, punishing workers for infringing on its idealized community and revealing in public worker errors and mistakes to discipline and reform them. This went beyond just simple economic functioning, but into a broader attempt to engineer worker values and behavior, and this social engineering went as far as rationalizing worker names and finding their "correct' birth names rather than their used names. Not all of this worked as effectively in practice, and there were shortcomings in some of its social assistance programs and limits to its power - but nevertheless the company tried to create an identity for itself as a generous, motherly, firm and with workers belonging to a steel-making family.

"From Construction to Production: Labor Management in Transition" as is entitled chapter 4, takes a look at the training and retention of workers as the company shifted from labor for construction to labor for steel production, and how workers reacted to new, rationalized, pay scales with their fear that they would earn less - leading to a complicated system to make up pay differences, showing the struggle of rationalizing finances. Rationalization was nevertheless a constant and major theme, in regards to promotion, merit bonuses, and discipline, and all of which formed part of the company's focus on a paternalistic attitude towards its workers, particularly in regards to penalties which sought to improve worker behavior. Over time, this paternalism would grow to breed resentment.

As with other countries, the late 1940s and the 1950s were a time of major concern over communism and heavy repression
As with other countries, the late 1940s and the 1950s were a time of major concern over communism and heavy repression

Chapter 5, "Beware of the Communists: Political Policing and Labor Control," shifts the subject to the repression of the Brazilian Communist Party and the cooperation between the political police and the company to keep workers in line. This was used to keep communists out of the worker's union, and to maintain dossiers on workers, including "ideological attestations" on many. Also workers' expression and rallies were limited, which meant that the union, STIMMMEBM, initially had limited organizational power and was constantly under threat - ironically leading it to closer cooperation with the Communists, but these communists were increasingly repressed over time as CSN-police cooperation drove them out.

Chapter 6, "Power over Production: The Technical Division of Labor and Workers' Strategic Positions in Steel" is devoted to the complicated nature of production organization and why certain aspects of the industrial production process could be viewed as "strategic" with workers who were difficult to replace and/or constituted a vital part of the operating of the steel mill, and thus held power over the company. A particular example of this is the electrical plant, as lack of functioning by it would have resulted in a halt to the operations of the Volta Redonda steel mill. To do so, there is a lengthy examination of the technical process of steel production and the various positions involved. However, the author admits that it is difficult to determine to what extent workers and the union made use of the possibility of exploiting their delicate positions in industry, but argues that nevertheless its general understanding gave the union much bargaining power.

Chapter 7, "Strategic Power, Labor Politics, and the Rise of the Metalworkers Union," looks at the reversal of STIMMMEBM, the union's, nadir, and its rapid increase in power and aim to improve material conditions for workers under the presidency of Allan Cruz. It was able to effectively exploit the gap between the CSN, the steel company's promises about living and working conditions, as well as the government's own definition of rights owned to workers, to bring significant gains for the workers, such as paid rest days. Winning concessions and improving the lot of workers by forcing the application of the letter of the law and exploiting inequalities led to victories for the union and workers, who were able to build up a stout organization which was resistant to attempts by the government and company to intervene in its affairs.

Chapter 8, "The Crisis of Developmentalism: From Union Hegemony to the Military Coup" shows the limits on this union strategy, as the CSN steel company grew increasingly displeased with the constant gains of the powerful union under the leadership of Reis Fernandes, as it began to take an active role in setting out working conditions and management as well. This included taking advantage of the company's scientific management and rewards programs to gain larger and larger benefits for workers, exploiting the state capitalist logic of increasing steel production to gain significantly higher wages, and working to continuously gain a more entrenched status in formulating labor laws, conditions, and regulations. Discrepancies were effectively exploited by the union in the labor courts . Economic crisis in Brazil and the problems for the CSN of spiraling costs and the economic crisis, led to a national coup and the suppression of the union, showing the tensions between trying to both improve production and living standards, as the second cut into the efforts of the former. Most workers accepted the 1964 coup rather passively.

The conclusion lays out the changes in Volta Redonda as company authority was reaffirmed, the union suppressed, the company privatized elements of its social aid and social projects such as the company town, and yet the high wages and living conditions compared to the rest of the economy continued to exist - meaning that for many workers, there was little incentive to resist, as little effectively changed for them. Volta Redonda would show a particular path to industrialization and a special facet of Brazilian industry, shedding light on the strategic power of workers as well as on broader questions of the nature of Latin American industrial development.

There are a great number of facets which are involved in the writing of a work such as Dinius', as he weaves a story about government backed developmental and labor ideology, worker power in the economy, a commanding grasp of the technical aspects of steel production, labor history, negotiations between different sectors of the economy, and the relationship of steel to the broader history of Brazilian development in the 20th century. The workers in Dinius' works avoid coming off as merely oppressed proletariat of the regime, and yet also as simply having a triumphalist narrative: they have agency and used it well, but also fit into the broader nature of development in Brazil, which limited their freedom of action. Workers secured their advancement on the basis of forcing the company to live up to its pledged promises in its treatment of them, but then ran out of steam as their own enrichment and material advancement led them into conflict with the rest of the economy: it adds another key element to understand why the South American development model faced limitations.

This is very clear to see since Dinius does an excellent job defining the concepts he is dealing with, such as developmentalism, with its focus on state-led economic development and import substition industrialization, and workism, with the idea of providing a dignified existence to workers through progressive application of new labor laws. Dinius has a methodical and careful style with the book that ensures that one well understands the stakes of the Brazilian economic experience and how the development of Volta Redonda's steel mill fit into Brazil and its economy as a whole, and which enables one to see how workers and their union were able to effectively utilize the logic of the state-backed ideology to push for greater rights and a higher standard of living.

This is also paired with its excellent chapter on how labor relations were conceive of in Brazil, showing the intellectual heritage of Brazilian management and labor reformers in both scientific management but perhaps even more importantly in Catholic paternalism. Throughout the work the impact of this on the workers themselves, in the paternalist organization and objectives of the company which sought to discipline and manage its workers, is repeatedly demonstrated, providing an excellent depiction of how idealized worker-business relations were supposed to function. Although there could have been more direct comparison to other workers, since we are told that the steel workers are Volta Redonda were substantially better off than the rest of the Brazilian industrial laborers, but there are fewer direct comparisons of living standards and actions between the two, there is an effective compare and contrast with how the unique situation of Volta Redonda and the power of the workers there enabled them to more effectively press their case than elsewhere.

This structural element is matched by a decent provision of actual voices and people, although it is admittedly far from exceptional - while there are important union members and industrial technocrats such as Edmundo de Soares, there are few actual workers who arrive in the spotlight, and there is little exploration of the tensions and social distinctions between workers - such as women workers, as there was a limited role for women workers in the factory, who are shown in one of its pictures, as well as in racial aspects, as differing degrees of blackness and whiteness appear in different pictures of the workers in the factory. Although this takes away from some aspects of the fleshing out of the workers, overall it doesn't detract from the author's principal themes, even if it does mean that the 1950s tend to travel by very quickly, without a feeling of solid attachment to the worker bloc itself, even if there are plentiful statistical tables and charts which are mustered by the author to prove his points and provide for an understanding of the workforce - to a very impressive extent, stretching from the construction period and worker demographics to their pay to their accidents, training, workforce retention, and assignment breakdown, providing a masterful amount of detail.

For anyone interested in the development of Brazil, and South American industrialization more broadly, as well as labor history and comparative studies of the steel industry, Brazil's Steel City is a very good work to read, which shows the possibilities available to workers in the steel industry, as we giving an excellent look at the cold technicalities of steel production. It provides a convincingly holistic look into how the structures of Brazil's populist republic and its emerging steel sector worked together alongside the efforts of workers to improve their own position to drive the structures and forces of Brazil's labor history for two decades in the middle of the 20th century.

© 2020 Ryan C Thomas

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