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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 of
the second half of the 20th century. What could have been expected to be a plain
military coup putting an end to a 48-years reactionary colonialist dictatorship at a
very definite breaking point (a 13-years Colonial War in three different African
territories), 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. A
swift 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 the
public sector, or at least control, most of the financial sector and what had become
self-managed industries 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 important
military 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-right
neo-Salazarists, internationally supported by Western European and American gov-
ernments. By then, decolonization of the Portuguese African colonies was finally
carried out, during the politically extremely hot summer and autumn of 19752, un-
der the Cold War complex circumstances. A new Constitution was passed in April
1976, parliamentary elections were held a few weeks later, and were won by the
Socialist Party, led by Mário Soares, and general Ramalho Eanes, one of the mili-
tary commanders of the 25th November coup, was subsequently elected President

1 I have to thank for Bruno Monteiro’s generous and persistent help in finding some of the
bibliographical sources which I found essential to this research.
2 The expression Verão quente [hot summer] is currently used to describe that period of
political and social confrontation.
154 Manuel Loff

in July, supported by socialists and the two right-wing main parties, the People’s
Democratic Party (Partido Popular Democrático, PPD) and the Democratic and
Social Centre (Centro Democrático 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 usually
sustains. Apparently, one would expect to see a whole new set of political, social
and 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 of
social engineering, with most social groups feeding high expectations either in its
transformation or control abilities, depending on the ideological perspective. I will
try to show that there were a lot more continuities than breaches between the elites
who 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 Salazar’s 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, António de
Oliveira Salazar (1889 – 1970), propelled into power through his successful ability
to 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 appointed
Minister of Finance for the second time in 19283 in a military-led Cabinet, and
was 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 regime’s single-party
(the National Union – União Nacional, UN) in 1930, (2) re-centralizing in Lisbon
political 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 the
new regime, (3) producing a new constitutional text (1931 – 33), imposing a prag-
matic authoritarian platform where both republicans and monarchists could meet4,

3 He left that same office a week after his appointment in June 1926, soon after the 28th May
military coup.
4 The republic vs. monarchy debate mobilized Portuguese elite’s political discussions, at
least since the 1890 crisis over colonial conflict with Britain, until 1933, when Salazar forced
upon the monarchists the continuity of a Republican form of government in order to secure
right-wing republican support to the new regime.
 Elites and Economic Modernization in Portugal 155

(4) attracting catholic hierarchy to a renewed alliance with the state adapted to
20th century’s 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, at
79, a cerebral hæmorrhage 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 those
which would be the final six years of the Estado Novo. Salazar’s sharp ability to
bring together all segments of the Portuguese ruling class at a crucial historical
stage, as it was mentioned earlier, assured him a long-term adhesion built upon an
unprecedented 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 strong
trading lobbies (prevailing from the beginning of the dictatorship until the end of
World 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 corporative
system rhetoric.
Fundamentally, Salazarism meant, for Portuguese elites of the 1920s, 1930s and
1940s, a clear and safe, self-described as specifically Portuguese, response to the
process of social and political massification which in Portugal was maturing in a
relatively belatedly form – a precocious political evolution towards a Republican
form of government (1910) and a resultant strict separation between state and
church, with no correspondence in its social foundations: no universal suffrage was
passed until 1975;5 no undeniably massive political and social movements pre-ex-
isted the creation of Salazarist single-party, militia, compulsory labor unions and
youth organizations; no massive schooling covered the whole territory and the low-
er classes until the 1940s. In this sense, the expression Salazarism condenses more
accurately than Estado Novo the historical meaning of the whole political system
dominating Portugal between 1926 – 74, covering not only Salazar’s years (1932 –
68) but the whole dictatorship’s historical experience, fundamentally shaped to the
dictator’s persona.
Accordingly, historical legacy of what was a wide social elite consensus over the
character and over its political paradigm still plays a central role in what may be
described as the present day Portuguese dominant social groups’ obvious ambi-
guity towards the memory of the dictatorship and of their own course throughout

5 Male universal suffrage was passed in 1918, under the charismatic military rule of Sidó-
nio Pais, and enforced for a single election, before being immediately revoked in 1919, when
the constitution of 1911 was restored. See: Manuel Loff, Electoral Proceedings in Salazarist
Portugal (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 Franchise
in Modern European Representation, The Hague / London / Boston 1998, pp. 227 – 250.
156 Manuel Loff

the final 15 years of the regime (1960 – 74). Obvious continuity (family ties, class
sociability) of a very significant part of pre- and post-1974 social, economic and
cultural elites – in fact, a widespread phenomenon of post-dictatorial societies – is
an important factor to consider when assessing discourses over the dictatorship
years 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 clear
their hostility to it and, at the same time, tend to bail out, so to speak, their own
relatives or next of kin – by and large, their class – from the negative core of the
past 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 cultural
modern practices and forms. Schooling, scientific and technical qualification and
press reading levels remained until the mid-20th century phenomena as limited as
political rights were. A fundamentally broad-minded intellectual elite read, heard
or dressed what Paris, London, and even Berlin and Rome, produced in the second
half of the 19th and the first third of the 20th centuries, but looked upon the masses
they were surrounded by in quite obviously derisive terms.
The 1910 – 26 republican experience, in which the state concentrated most of its
efforts 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 specifically
to 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 through
economic wealth, traditional social forms of prestige and professional qualification
through schooling.
Studies made on the 1960 population census help to perceive an already modern
society heavily polarized between an “upper layer, gathering great landowners and
employers, technically and scientifically highly qualified professionals, and large
enterprise (over 100 workers) executives” representing not more than 1 percent of
male active population, and a huge 61 percent composed of “unskilled workers”
(21 percent), “autonomous peasants and fishermen” (9 percent) and “wage-earning
and family workers in agriculture and fishery” (31 percent). At that turning-point
of 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

6 See Manuel Villaverde Cabral, Classes sociais [Social Classes], in: António Barreto /
Maria Filomena Mónica (eds.), Dicionário de História de Portugal [Dictionary of the History
of Portugal], Suplemento [Supplement] (Vol. VII), Oporto 1999, pp. 328 – 337, here pp. 330 f.
 Elites and Economic Modernization in Portugal 157

The first generation of Portuguese true sociologists (a scientific domain deliber-

ately banned from Portuguese Acadæmia by Salazarism) who had the chance to
work with these social data were relatively surprised with the “oligarchic charac-
ter” of this high bourgeoisie, nearer to “a group unified through multiple family
ties and education rather than to an ‘abstract elite’ whose members merely share
leading positions”.7
The dictatorship led by Salazar took over power after a century of liberal modern
state-building which have never compromised the high-bourgeoisie grasp of social
and 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 be
able 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 simultaneous
exploit of both traditionalist and modernizing discourses. This particular sort of
hegemonic elite had been allowed to “decades of undisputed power, affected by
both ‘bureaucratization’, i. e. parasitic use of political-administrative structures
with some ‘cleptocratic’ shades, and ‘aristocratization’, i. e. a mimetic adoption of
ostentatious 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 Domestic
Product (GDP) in 1951 – 52, 20 percent in 1960 – 61, 26.1 percent in 1972 – 73)9
would offer comparatively few opportunities to a modern European elite, although
those were probably proportional to the statistically minuscule Portuguese elites of
the 1930s and 1940s. A sequential analysis of the authoritarian regime’s strategy to
recruit political elites and of the elites / state relation shows a three-component coa-
lition, gathering military, political direct representatives of the upper-classes and
catholic 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 an
important and inevitable role while political repression fell more heavily over dis-
sidence, bringing into the regime’s institutional ranks a representation of a rela-
tively significant variety of social and regional segments of the bourgeoisie.10 This

7 Hermínio Martins, quoted from Cabral, Classes sociais (fn. 6), p. 336.
8 Ibidem.
9 See Alfredo Marques, Política económica e desenvolvimento em Portugal (1926 – 1959).
As duas estratégias do Estado Novo no período de isolamento nacional [Economic Policy and
Development in Portugal (1926 – 1959). The Two Strategies of the Estado Novo in the Period
of National Isolation], Lisbon 1988, p. 184 (table 6).
10 See Maria Carrilho, Forças Armadas e mudança política em Portugal no séc. XX. Para
uma explicação sociológica do papel dos militares [Armed Forces and Political Change in
Portugal in the 20th Century. Towards a Sociological Explanation of the Role of the Military],
Lisboa 1985.
158 Manuel Loff

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: Portugal
knew 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 and
public investment in new productive infrastructures, slow economic internationa-
lization, and mainly state new planning policies opened the gates to the apparent
triumph of a first technocratic elite inside Salazarism. The “Development Plans
(Planos de Fomento) [implemented by the dictatorship] after WW II,11 industrial
growth ( . . . ), 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 social
segment whose main characteristics were higher education, being an active part of
the Public Administration’s Technical Departments, of big corporations and liberal
professions”12. Not only economic planning, with all its complex bureaucratic or-
ganization, offered a vast range of opportunities to a new generation of qualified
Salazarist 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. As
for 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. Catholic
reactionary scholars, essentially close to the dictator’s profile, remained, neverthe-
less, in control of most political higher decision-making posts.
(3) Armed guerrilla activity of national liberation movements in Portuguese
African colonies opened a 13-year war cycle (1961 – 74) that changed the whole
course of Portuguese modern History. Salazar’s decision to “hold on!” (Aguentar!
Aguentar!), to resist to any political change processes, compromised the future of
his 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 to
consider when it realized how potentially explosive were the vast and hasty series
of social and economic changes. Again, during this period, military elite took con-
trol of a very significant part of national resources: all defence policies consumed
48 percent of all ordinary tax revenue in 1973, the last complete year of war; 15
years earlier, before war in Africa started, they were responsible for 36 percent;

11 Four Planos de Fomento [development plans] were adopted by the Estado Novo regime:
1953 – 58; 1959 – 64; 1965 – 67 (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 José Manuel Leite Viegas, Elites e cultura política na história recente de Portugal [Elites
and Political Culture in Portuguese Recent History], Oeiras 1996, pp. 85 f.
 Elites and Economic Modernization in Portugal 159

during this same period, social expenditure in policies such as education and health
rose 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 the
Army, 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 in
1973 – 74 (plus circa 1.800 – 2.000 more of the same Complementary Rank of the
Air 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 socially
rising since the postwar period kept their expectations intact, hoping the regime
would 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 Marcello
Caetano replacing a physically incapable Salazar, opens a final six-year stage of
this 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 did
try to go beyond the modernization project of the 1945 – 68 period, an autarkic
industrialism based upon “imports’ substitution”, searching instead for (in vain, as
recent history is still proving) a “specialization line of national production in areas
in which Portugal had comparative advantage, articulating it with foreign markets,
especially European”, granting, on the other hand, “greater importance to social
factors” – education, social welfare, health – “disregarding the effective conditions
which 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 regime’s democratization
and liberalization problem”15. In literature, it is often discussed about connections
between what has been described as the modernizing undercurrent embodied by
the Marcelist group inside Salazarism, close to which we will find, in the 1968 – 74
years, a “reformist sector” who, after the 1971 – 72 breakup with Marcello, re-
trieved their political autonomy, and the “so-called modern capitalist interests”. To
José Manuel Leite Viegas, it is “an unacceptable simplification” to “mechanically
identify” the economic “liberal thought” conveyed by modernizers and “the indus-
trial, finance and trading capital interests”, committed to “develop and modernize

13 See: Américo Ramos dos Santos, Abertura e bloqueamento da economia portuguesa

[Opening and Hindrance of Portuguese Economy], in: António Reis (ed.), Portugal Contem-
porâneo [Portugal Today], Vol. V, Lisbon 1989, pp. 109 – 150; Eugénio Rosa, A economia
portuguesa em números [The Portuguese Economy in Statistics], Lisbon 1975.
14 See: Carrilho, Forças Armadas (fn. 10), pp. 440 – 442.

15 Viegas, Elites (fn. 12), pp. 101 f.

160 Manuel Loff

its connections with the democratic industrialized countries economy”. The fact
remains that “expansion of this politico-social thought was reinforced because it
did not collide, and partly adjusted to”16 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 União
Fabril), the Mello family, “have surely had some influence in [president] Américo
Tomá’s – who paid them much attention – decision to appoint Marcello Caeta-
no”17, 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 National
Assembly”, the Estado Novo parliament, known as the Liberal Wing (Ala Liberal)
– most of whose members would converge in the creation of the right-wing
People’s Democratic Party (PPD)18 in 1974 –, integrating the 1969 single party
(UN) electoral ticket by a special invitation of Caetano himself, “was virtually
the political nucleus publicly recognized as best representing that reformer move-
ment”, although “even at the state political institutions and public administration
level, there have been other centres” – for instance, the Central Department for
Planning (Secretariado Técnico da Presidencia do Conselho / Departamento Cen-
tral de Planeamento) – “where political and socioeconomic thought was being ela-
borated and renovated”19. Already when the whole set of illusions created by Cae-
tano’s promise of “Renovation in continuity” (Renovação na continuidade) were
fading away, this growingly exasperated selective group of elitist liberals created in
1970 a society for the Study of Economic and Social Development (Sociedade de
Estudos para o Desenvolvimento Económico e Social, SEDES), apparently com-
mitted to “create an alternative route between the regime forces and the traditional
opposition, ( . . . ) [by then] moving leftwards its gravity centre”20.
There was more, nevertheless, to this generation of bright and ambitious young
technocrats produced by Lisbon, Oporto or Coimbra’s Economy & Management,21

16 Ibidem, p. 102.
17 Fernando Rosas, O Marcelismo ou a falencia da política de transição no Estado Novo
[Marcelismo or the Failure of Transitional Policy in the Estado Novo], in: J. M. Brandão de
Brito (ed.), Do Marcelismo ao fim do Império. Revolução e democracia [From Marcelismo
to the End of the Empire. Revolution and Democracy], Lisbon 1999, pp. 15 – 59, here p. 45.
18 Francisco Sá Carneiro and Francisco Pinto Balsemão were the two first right-wing
Prime-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 António Reis, A abertura falhada de Caetano: o impasse e a agonia do regime [Caetano’s

Missed Opening: Impasse and Agony of the Regime], in: Reis, Portugal (fn. 13), pp. 45 – 60,
here p. 53.
 Elites and Economic Modernization in Portugal 161

Engineering and Law Schools. Social change and economic modernization, to-
gether with war, produced a surprising change in an extremely elitist university like
the 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 less
than Marcello Caetano, and violently charges on those who were the sons and
daughters of this very narrow and conservative Portuguese bourgeoisie, some of
them, naturally, relatives of relevant Salazarist leaders. Since then, university
benches 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 their
activists came out of the university and into corporations, offices, factories, public
services, after being forced (in the case of the young men) into two to four years of
military service, more than half of those spent in some African war front.
Two obvious consequences came out of this process: i) the authoritarian regime
became unable to ensure its own generational renovation, at least through the same
ways 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 young
technical managers, often appointed by himself to some second-line economic de-
partment position, who did not share any longer some of the essential elements of
Salazarist political culture; ii) that portion of those involved in these consecutive
Academic crisis22 (expression through which literature describes all sorts of strike
movements, symbolic mournings and other forms of students’ protest), although
perceived as politically subversive, inevitably took hold of their share of leading
positions in private enterprise, and even in state administration, namely in areas in
which 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 way
through the political and entrepreneurial elites – were young enough (25 – 40 years
old) when in 1974, the democratic revolution came to expect to live most of their
adult years ahead of them participating quite freely in public affairs, and the few of
them who fought dictatorship in its final years legitimately took credit for public
relevance earned in it. Taking the wide ideological range of political activists of
the revolutionary period of 1974 – 76 into consideration, a significant number of
the leading personalities of the Socialist and far-Left Parties (namely the very pro-

21 See: Carlos Gonçalves, Emergencia e consolidação dos economistas em Portugal [Rise

and Consolidation of Economists in Portugal], Oporto 2006.
22 In spring 1962 (Lisbon and Coimbra: demonstrations, police raids, student strikes), in
1965 (Lisbon and Oporto: student strikes, more than 60 student leaders were expelled from
university, arrested, tortured, and some sent to African war fronts), in 1967 (two thousand
students volunteered, facing a government ban, to help people affected by tragic floods in the
Lisbon area), in 1969 (Coimbra: student leaders facing up to the president and members of
government were imprisoned, a student general strike, the university was closed down by the
government for two months). After 1969, students’ protest became permanent until the fall of
the dictatorship.
162 Manuel Loff

lific Maoist), and a less significant part of those of the Portuguese Communist
Party (Partido Comunista Portugues, PCP), had fought, one way or the other, their
first 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) José Manuel Durão Barroso, presently president
of the European Commission –, they won university chairs, managed to edit the
most popular media and were called to executive positions in some of the larger
corporations 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 them
having been Prime-Minister before) under the 1976 constitution (thus, excluding the
two presidents and three Prime-Ministers of the Provisional Governments under
military 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. Durão Barroso, 2002 – 04, Pedro Santana Lopes, 2004 – 05, and
José Sócrates, 2005-today, all three were born in 1956 – 57 and about to start their
degree in 1974, even if the first of these had started his political activity still under
the dictatorship.

Table 1
Portuguese statespersons under the 1976 constitution
with political / professional activity before 1974

Personalities Political posts Other relevant activities

Year of birth
Mário Soares Min. Foreign Affairs, Historian and lawyer; opposition activist,
1924 1974 – 75; first PCP (until 1952), then Liberal-
Min. of State, 1975; Republican (1952 – 64), finally Socialist
PM, 1976 – 78 and (Socialist Action and PS, 1964-); secretary
1983 – 85; PS, 1973 – 85; series of arrests, deportation
President of Republic, to S. Tomé (Africa, 1968), exile in France
1986 – 1996 (1970 – 74); Member of national and Euro-
pean Parliament (1999 – 2004); creates
Mário Soares Foundation, 1991.
António Ramalho President Republic, Military officer; several missions of war in
Eanes 1976 – 86 African colonies; head of Program Depart-
1942 ment national Television (RTP), 1974 – 75;
head of operations in 25th November 1975
military coup; President of Democratic
Renovator Party (PRD, 1986 – 87)
Nobre da Costa Min. Industry and Engineer; Companhia Portuguesa de
1923 Technology, 1976 – 77; Siderurgia, 1953; EFACEC, 1969.
PM, 1978
 Elites and Economic Modernization in Portugal 163

Carlos Mota Pinto Min. Trade and Lawyer; professor at Law School, University
1936 Tourism, 1976 – 77; of Coimbra; Member of Constitutional
PM, 1978 – 79; Assembly, 1975 – 76; President of PSD,
Deputy PM and Min. 1984 – 85.
National Defence,
1983 – 85
Maria de Lourdes Min. Social Affairs, Engineer; CUF (Head of Project Dep.),
Pintasilgo 1974 – 75; 1954 – 1960; young Catholic leader, 1956 –
1930 PM, 1979 – 80 58; Corporative Chamber, 1969 – 1974;
Executive Council UNESCO, 1976 – 1980;
Presidential candidate 1986 (7 percent of the
votes); Member of European Parliament
(with PS), 1987 – 89.
Francisco Assistant Min. PM, Lawyer; Member of National Assembly
Sá Carneiro 1974; (Liberal Wing), 1969 – 73; President of PSD,
1934 PM, 1980 1974 – 75 and 1976 – 80.
Francisco Pinto Assistant Min. PM, Lawyer; press and (after 1992) TV busi-
Balsemão 1980; nessman; Member of National Assembly
1937 PM, 1980 – 83 (Liberal Wing), 1969 – 73; Member of
Parliament (1979 – 87); President PSD,
1981 – 83.
Aníbal Cavaco Min. Finance and Plan, Economist; Professor of Economics and
Silva 1980; Finance Institute at Technical University
1939 PM, 1985 – 95; Lisbon, then Catholic University, 1966 –;
President of Republic, President PSD, 1985 – 95.
2006 –
Jorge Sampaio Under-Sec. State Inter- Lawyer; student leader, 1960 – 62; opposi-
1939 national Cooperation, tion activist until 1974; Left Socialist Move-
1975; ment (MES, far-Left) activist, 1974 – 78;
President Republic, Member of Parliament, 1979 – 89; Secretary
1996 – 2006 PS, 1989 – 91; Mayor of Lisbon, 1989 – 96.
António Guterres PM, 1995 – 2002 Engineer; young Catholic non-anti-
1949 Salazarist militant; Assistant Professor at
Technical 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 for
Refugees, 2005 –.
José M. Durão Under-Sec. State Inter- Lawyer; Maoist activist (Revolutionary
Barroso nal Administration, Movement for the Reconstruction of
1956 1985 – 87; Proletariat’s Party), 1973 – 78; Assistant
Sec. State For. Affairs Professor Law School at University
and Cooperation, Lisbon, then (private) Lusíada University;
1987 – 92; President of PSD, 1999 – 2004; President of
Min. For. European Commission, 2004 –.
Affairs, 1992 – 95;
PM, 2002 – 04
164 Manuel Loff

Nevertheless, in this group of the eleven most relevant statespersons in the last
31 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 of
very 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 against
the dictatorship, one of which at 17 years of age when the regime fell. Of the other
eight characters, another two (Sá Carneiro and Balsemão), although having politi-
cally collaborated with the regime’s single party, carried out an attempt to renovate
and liberalize it, cutting their ties with it (1973) soon before it fell. The remaining
six (one military officer, five civilians), 25 to 50 year-old when the dictatorship
broke 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 regime’s 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 military
uprising 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 these
circumstances, men, and mainly young male adults, in a rush to change radically
their lives, running from the deep country rural areas to coastland (sub)urban areas
(Metropolitan Lisbon, mainly, and Oporto, secondarily), but mostly emigrating to
Europe – 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 hundred
years. If they had not done it before they went to the Army, they were to bear a
whole new weight of state interference in their lives, heavier than in any other
moment in Portuguese History: since 1961, Salazar’s Government was pushing
young men into war in Angola, and after 1963 to Guinea, and after 1964 to
Mozambique, forcing them to endure a two year military service, quickly doubling

23 As almost every military officer who joined the Armed Forces Movement (Movimento
das Forças Armadas, MFA) before it overthrew the dictatorship. Eanes, in any case, did not
join the MFA before the 25th April 1974 triumphant coup.
 Elites and Economic Modernization in Portugal 165

it into four years in 1968 when military administration was already scraping the
barrel 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
(Caetano’s period), as the regime’s violent agony. Growingly confronted by a con-
solidated industrial working class, strengthened by the massive emigration which
pushed 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 the
PCP 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, holding
permanently no less than 250 thousand military active in three different African
colonies, represents a definite landmark in social change processes in Portuguese
modern history. Never in Portuguese history so many people have seen their lives
and social experiences changed in such a short period. Portugal became the only
country in Europe to lose population in the 1960s (from 8.9 million in 1960 to 8.6
million in 1970) due to a massive emigration (1.4 million from 1960 to 1973, over
40 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 French
pieds noirs) who fled from the newly independent States of Africa (a significant
part of whom Capeverdian and of Hindustani origin) in 1974 – 76. Another
100.000 were repatriated soldiers from the African war fronts, and 182.000 other
were returning emigrants, mostly from Europe.
The fact remains that inwards and outwards migrations produced a cutback, in
only 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 actual
planning, virtually absent from the political culture of the Portuguese elites until
the 1950s), rural Portugal, a deeply conservative, mostly (Northern and Central
areas) religious, educationally unqualified society, who had embodied until then the
core of Portuguese historical identity, and had severely played down the country’s
rhythm of change – that Portugal was irrevocably disappearing, mostly through
sheer de-population. Until then, over-dimensioned agricultural Portugal would not
represent, in 1973, more than a fourth of the active population (around 800.000
people), 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, producing
twice (25 percent) of that part of the GDP. It had been, in fact, a low-technology
and low-productivity industrialization which, after the 1950s, propelled such a sig-
166 Manuel Loff

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 percent
in 1970, almost 1.2 million people, a little bit ahead of the industrial sector), but its
scarce productivity (still attracting mostly unskilled workers to unqualified jobs,
offering mostly a sort of services coherent with a still very traditional and servile
society) provided a comparatively low share of the national wealth (38.4 percent of
the 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 significant
change 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 regime
context:
(1) A significant amount of capital had been amassed by different social groups
all 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 alliance
with 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 movement
assembled under the Portuguese dictatorship.24 A clearly radicalized relevant frac-
tion of a new urban working class, growingly impressed and mobilized by the
Communist Party (PCP), had, thus, to be, from the dictatorship’s 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
[regime’s] agenda. Its configuration takes place, mainly, during the 1950s and it

24 Fernando Rosas, Unidade antifascista [Antifacist Unity], in: Fernando Rosas / José Maria
Brandão de Brito (eds.), Dicionário de História do Estado Novo [Dictionary of the History of
the 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 Democrática, MUD, 1945 – 48) and its youth association (MUDJ,
1946 – 48), finally created a broad movement supporting the very first presidential opposition
candidate (General Norton de Matos, 1948 – 49).
 Elites and Economic Modernization in Portugal 167

culminates in the last years of the decade, the moment the Second Development
Plan (Plano de Fomento) is enacted”. According to Marques, “the global aim to
which [this strategy] points out is the constitution of a developed and autonomous
capitalism ( . . . ), aiming to economic growth and structural transformation. Its
driving force lies, nevertheless and contrary to the extroversion strategy emerging
in the 1960s” – Salazarist economic policy’s 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 trend
in all other political and symbolic features of the Estado Novo’s evolution, “in the
whole 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-
zar’s 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 had
been the “Agrarian-Industrial Alliance” mentioned by Alfredo Marques who both
supported and was “intimately connected” to the regime, “emerging in the last
years [of the 1920s], its apogee [being] achieved at the end of the 1930s and during
the next decade”.26
(2) A “new gasp of the corporative system in the mid-1950s”27 – the 1956 sec-
ond corporative legislation impulse, paving the way to new corporations created
between 1957 and 196628 – offered Salazar, not only the bureaucratic means to
control social and economic change, and to try to promote the one pattern of
change admitted by the regime, but also the possibility to renovate the bureaucratic

25 Marques, Política (fn. 9), pp. 25 f.

26 Ibidem, p. 24.
27 Howard Wiarda, Corporativismo [Corporatism], in: Baretto / Mónica, Dicionário (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 Adérito Sedas Nunes puts it in 1954 (see:
Adérito Sedas Nunes, Situações e Problemas do Corporativismo [Condition and Problems of
Corporatism], 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 Câmara Corporativa as its second chamber, Salazar passed the National Labor
Statute (Estatuto do Trabalho Nacional, a clear Portuguese adaptation of Mussolini’s Carta
del Lavoro – see DL No. 23,048 and 23,050, 23. 09. 1933).
168 Manuel Loff

elites, attracting a whole “series of catholic intellectuals and academics”29 who

would 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 that
spread all the way through every sectorial policy represented another Salazarist
attempt 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 under
which Salazar himself overlooked the most massive process of social change the
country underwent was still completely reactionary. At the very moment in which
thousands were starting to abandon rural Portugal and flooding into Lisbon and
Oporto suburbs – and soon after into Paris’ or the Rheinland’s, for instance –, the
dictator 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 impresses
into the soul, an endless source of social resistance” of those who “will not let
themselves 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 the
1960s, abandoning the 1940s-1950s project of “a nationalistic and autarkic devel-
opment in favor of economic liberalization and European integration”.32 The fact
that Salazar chose to concede to the economic managers inside his administration
and to accept Portuguese status as a founding member of the European Free Trade
Association (EFTA), in 1960, as well as his Government signing (April 1962) the
General Agreement on Tariffs and Trade (GATT), more than a starting point of a
significant change process, should be read as a result of that contradictory process
initiated with Salazar’s similar concession in the 1947 – 48 process of adhesion to
the Organization for European Economic Cooperation (OEEC, turned into Orga-
nization for Economic Co-operation and Development, OECD, in 1960), tardily

29 Wiarda, Corporativismo (fn. 27), p. 423.

30 Salazar, 1953, quote in: Fernando Rosas, O Estado Novo (1926 – 1974) [The Estado
Novo], in: José Mattoso (ed.), História de Portugal [History of Portugal], Vol. 7, [No place
specified] 1994, p. 457.
31 See details in Fernanda Rollo, Salazar e a Construção Europeia [Salazar and the Euro-
pean Building], in: António Costa Pinto / Nuno Severiano Teixeira (eds.), Portugal e a Unifi-
cação Europeia, [Portugal and the Unification of Europe], revista “Penélope” No. 18, Lisbon
1999, pp. 51 – 76.
32 David Corkill, O desenvolvimento económico português no fim do Estado Novo [Portu-
guese Economic Development at the End of the Estado Novo], in: Fernando Rosas / Pedro
Aires Oliveira (eds.), A transição falhada. O Marcelismo e o fim do Estado Novo (1968 –
1974) [Failed Transition. Marcelismo and the End of the Estado Novo], [No place specified]
2004, pp. 213 – 232, here p. 215.
 Elites and Economic Modernization in Portugal 169

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 economy’s internationalization, but the ‘Marshall
aid’, through mechanisms it put into motion, ( . . . ) concurred to what was still an
incipient industrialization process, ( . . . ) paving the way to new forms to look at
economic policies through economic planning materialized in a series of ‘devel-
opment plans’ [Planos de Fomento], promoting a new technical elite formed in
contact with and working inside a number of international institutions (first of
them all, the OEEC), an additional knowledge on the workings of international
trade and an intensive learning on how to deal with the new instruments of the
international monetary and financial system that came out from Bretton-
Woods”33. From this point of view, the formal creation of a Portuguese Economic
Area (Espaço Económico Português)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 into
the ranks of a growingly agonizing regime, was never an effective alternative to a
clear Europeanization of Portuguese foreign trade, while “the relative position of
the trade with former colonies is not only weak but it suffers an expressive cut: in
1958 and 1968 it represented 20 percent of [Metropolitan Portugal] foreign trade,
while in 1973 it could no longer exceed 12 percent”35.

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: António Barreto (ed.), A situação social em Portugal,

1960 / 1995 [The Social Situation in Portugal], Lisbon 1996, table
5.05.

33 Rollo, Salazar (fn. 31), p. 64.

34 See Drecree-Law (Decreto-Lei, DL) No. 44,016, 08. 11. 1961. Manuel Ennes Ferreira,
Espaço Económico Português / Mercado Único Português [Portuguese Economic Area / The
Integrated Portuguese Market], in: Fernando Rosas / J. M. Brandão de Brito (eds.), Dicionário
de História do Estado Novo [Dictionary of the History of the Estado Novo], Vol. I (A – L),
[No place specified] 1996, pp. 312 – 315.
35 Santos, Abertura (fn. 13), pp. 140 f.
170 Manuel Loff

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)

Year Labor / 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: António Barreto (ed.), A situação social em Portugal,

1960 / 1995 [The Social Situation in Portugal], Lisbon 1996, table
5.09.

Social and economic change was obvious at the end of the 1960s, while the war
was 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, Caetano’s short period in power was a stage of “strong expansion of a
‘monopolistic nucleus’” of the larger capital corporations, the Magnificent Seven36:

36 Ibidem, pp. 116 – 120.

 Elites and Economic Modernization in Portugal 171

Table 5
Portuguese main financial corporations (the Magnificent Seven) (1973)

Corporation CUF Espírito Champa- BPA37 Borges BNU 38 Burnay

Santo limaud
Companies
under control 112 20 14 70 40 22 22
Share of
Banking
System
(commercial) 10.6% 15.1% 14.4% 13.2% 4% 11.8% 5%

Share of
Insurance
market 22% 11.4% 12.9% 1.8% 1.5% 3.7% 1.6%
Colonial banking Sugar banking banking banking banking banking
investment trade coffee insurance beer oil insurance diamonds
shipping oil cement cotton beer agricul-
insurance chemicals ture
banking sugar
cellulose
cashew
mining
Connection Billerud F.N. City (Negotiat- W. Moreira G. Tire Launoit Soc. Gén.
to foreign Pedriney Bank ing con- Sales and Léon Belgique
capital UK Firestone nections Mitsui Rubber Levy IT Chrys-
R. Noled Schlum- in Latin Ytong Anglo- ler
Rÿn- berger America) St. Gobain American CETEC
Schelde- Rocke- Corp. Westing-
Verone feller Danish house
Brocades ITT capital
Ludlow STAB
ICI Interfood

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

Inescapably described as an oligarchy, intrinsically associated to an authoritarian

state who, in the words of the post-1974 period largest individual fortune in the
country, Belmiro de Azevedo, “solved ‘Labor Relations’ troubles for us”40, and
who conceived most of its post-WW II economic policies counting on their actual

37Banco Português do Atlântico.

38Banco 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 Mónica, in: Maria Filomena Mónica, Os grandes patrões da indústria por-
tuguesa [Big Entrepreneurs of Prtuguese Industry], Lisbon 1990, p. 138.
172 Manuel Loff

support and allegiance, these Magnificent Seven were enormously favored by the
1945 – 60 autarkical industrialization, preparing themselves to face the controlled
internationalization Portuguese economy underwent along the 1960s and 1970s,
carefully choosing their foreign partners (British, French, German, some Belgian
and U.S.).
Foreign investment, central to processes of technological transfer, was now at-
tracted through different sorts of administrative, tax and bureaucratic means right
from the beginning of Caetano’s rule, at the end of the 1960s. “Strategy outlined in
that period focused on a double association: one between national and foreign capi-
tal who jointly played the role of the [economic] system’s engine; another between
[national capital] and a net of small and middle companies, ( . . . ) who on the whole
would build up the main branch of the national capital”41. Nevertheless, the foreign
investment’s role in Portuguese economy modernization process should not be
overrated: so clearly “scarce” until 1968, although having increased significantly
as soon as the war started in Africa, in 1961, “it did not get”, according to Ramos
dos Santos, “globally speaking, a strategic control over Portuguese economy”42. At
any rate, foreign direct investment amounted at the beginning of the 1960s to
“around 10 percent of private capital middle- and long-term investment”, but it
would rise to “almost a fourth” of it in 1973. Thus, Luís Salgado de Matos consid-
ers the “penetration of foreign companies in the [Portuguese] economic web” to be
“very 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 companies”43.
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 and
tourism companies, investment and stock market management societies. In the fi-
nal years [of the dictatorship] there was also a growing presence in trading business
and media”44. 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 reverse
course, from finance towards industry and services, was followed by prototypically

41 Américo Ramos dos Santos, Grupos económicos / Conglomerados [Economic Groups /

Conglomerates], in: Rosas / Brito, Dicionário (fn. 34), pp. 406 – 409, here pp. 406 f.
42 Santos, Abertura (fn. 13), p. 119.

43 Luís Salgado de Matos, Investimento estrangeiro [Foreign Investment], in: Rosas / Brito,
Dicionário (fn. 34), pp. 491 – 495. Santos mentions “around 270 companies [at the end of
1973] participated or controlled by multinational companies”: 150 focused on mining or
imports 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.
 Elites and Economic Modernization in Portugal 173

state-well-connected Espírito Santo corporation (the third of the three biggest), as

well as one of the best examples of Oporto area financial tycoons, Pinto de Magal-
hães, one of the second league corporation leaders, though deeply interconnected
with the Magnificent Seven; (iii) “hybrid expansion processes” were developed by
BPA or the Borges’ group. Corporation strategies towards internal and colonial
markets and their relation with foreign capital was also diversified: (1) Espírito
Santo and Burnay were “solidly articulated with foreign capital”, followed, after
1968 – 69, by CUF; (2) BNU, Espírito Santo and Champalimaud were “deeply
rooted or articulated with colonial exploitation” and openly lobbied for the prose-
cution of the war effort in Africa; (3) on the contrary, CUF and Borges “based their
expansion process essentially on protected metropolitan economy, relatively inde-
pendent from foreign capital”45.
Capitalistic concentration, together with a financial system huge expansion,
was, thus, the mot d’ordre under Marcello Caetano’s rule 1968 – 74: bank deposits
grew from 132 million Escudos in 1968 to 328 million in 1973, two-thirds of
which were under control of the Magnificent Seven, an amount which had tripled
in those five years; a growing proportion of the financial system gains came from
stock-market speculation, “without which it would be impossible to understand the
great monopolistic acceleration” of that period; in 1972, 16.5 percent of the indus-
trial companies produced 73 percent of all industrial goods.46 Eventually, “grosso
modo, in April 1974 Portuguese economy was dominated by 44 families, most of
which controlled [these] seven large financial groups”, and through them holding
control over two-thirds of private investment, 75 percent of the banking system,
55 percent of the insurance market, “four of the most important industrial activities
concerning productivity, profit rate and technology (beer, tobacco, paper and ce-
ment); ( . . . ) all industrial basic activities (iron and steel, chemicals, shipbuilding
and maintenance, heavy metalworks and mechanics); ( . . . ) most of shipping”; on
the whole, these included “the largest eight industrial companies and five of the
main export companies”47.
These speedily growing financial corporations became a strategic standpoint for
professional, 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 natural
field of operation for all those 44 families, 14 of which were the “dynamic basis of
the monopolistic nucleus”48. But furthermore, “there was a growing interpenetra-
tion of [these financial corporations] and the state, in which a new technocracy be-

45 Santos, Grupos económicos (fn. 41), p. 408.

46 Ibidem, p. 407.
47 Santos, Abertura (fn. 13), pp. 116, 118.

48 See Santos, Grupos económicos (fn. 41), p. 408. These were: Mello; Espírito Santo;
Champalimaud; Quina; Mendes de Almeida; Queirós Pereira; Figueiredo (Burnay); Feteiras;
Bordalo; Vinhas; Albano de Magalhães; Domingos Barreiro; Pinto de Magalhães; Brandão
de Miranda.
174 Manuel Loff

comes predominant, circulating between different executive positions inside the

corporations, and in some cases between corporations and the state apparatus”49.
In fact, some of the most characteristic features of the institutional and social
role of this new technocratic elite, emerging in modernizing Portugal in the second
half of the century, is that it obviously benefited from both capitalistic concentra-
tion and state intervention, and had a central role both under Salazar’s and Cae-
tano’s authoritarian state and during the revolutionary 1974 – 76 period and, when
the revolutionary experience was brought to an end, to what hegemonic ideology
describes as the normalization process of the late 1970s and 1980s. Tracking down
individual itineraries of some of these elite members throughout the final 15 years
of the dictatorship and the first 20 of the democratic regime, it is quite evident, the
pragmatism of choices and strategies of both individuals and these corporations,
and even of the authoritarian state in its final stage. Apparently, one could have
opposed the regime in university rallies, then get a job at some planning or strategy
department in a corporation whose interests and policies were interdependent from
the state’s, and finally be appointed to some second-rank economic policy-design
administration department before the 1974 revolution. If this professional and insti-
tutional tour – and an obviously political one, although many would deny it – would
have been successful, and not too compromising, it would be highly probable to find
these same individuals in socialist, right-wing or so-called technical administrations
after 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 themselves
in an Armed Forces Movement (MFA) while carrying, in fact, most of the military
effort’s 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 definitely
politically menacing to the regime in February 1974. On 25th April 1974, with
almost not a single shot fired by the rebel forces (only the political police resisted
by force and shot dead four civilians who approached its Lisbon headquarters), the
regime fell into the hands of politically inexperienced young officers who, simulta-
neously, called two of the most graduated Army generals (António de Spínola, im-
mediately appointed president by his fellow high-ranking officers, and Francisco
da Costa Gomes, who became Chief-Commander of the Armed Forces and re-
placed Spínola as president in October 1974) to get hold of power, asked demo-
cratic opposition leaders to participate in government and, most of all, opened wide
the gates for political participation, improvising a transitional process to democ-
racy which turned fastly into a social, political and cultural Revolution.

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

 Elites and Economic Modernization in Portugal 175

The previously prepared MFA program was soon most evidently surpassed by a
surprisingly 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 mobilization
would prove to be substantially ephemeral in the long run, but the truth remains
that 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 first
time 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 the
1976 approval of the democratic constitutional text opened in Portuguese modern
history the most complete and archetypical revolutionary cycle, “historically [re-
presenting] the deepest and most threatening shake suffered by an oligarchy which
had always ruled in Portugal, undamaged and self-assured”50. Inside this chronolo-
gical specific stage, an even more intense revolutionary period may be drawn be-
tween the aborted Spínola’s right-wing coup of 11th March 1975 and the victorious
anti-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 all
major military and political departments still led by left-of-socialists were taken
into 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 Marxist
and 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-wing
cultural and ideological hegemony, to use Gramsci’s concept, all active leading
characters 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 Novo’s half-
century, as well as technocratic modernization discourses, were substituted in poli-
tical discourse by revolutionary vocabulary opposing Revolution to Reaction or
calling out for People’s Power, a Popular Unity of Chilean shades, demanding land’s
ownership for those who work it (A Terra a quem a trabalha!), soon amplified to the
principle of political and social organization of all power to the workers (O Poder
aos trabalhadores!). In the specific field of PCP vs. Maoist organizations’ dispute,
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 século XX (1890 – 1976). Pensamento e acção política [20th
Century Portugal. Political Thought and Political Action], Lisbon 2004, p. 138.
176 Manuel Loff

An antiauthoritarian military coup as was the MFA’s 25th April 1974 promptly
converted into a revolutionary political break with the past and inevitably produced
an almost general political and institutional elite replacement. First of all, the new
political order was probably expected to act very severely against those responsible
for repressive action under the dictatorship. It became soon quite evident that it
was not going to be the case. The main consequences, from this point of view, were
not massive imprisonment and / or legal prosecution against political leaders or
police 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, the
military authorities decided the “purging of the Armed Forces ranks”, both of mili-
tary51 and civil servants,52 and of “state administration, corporative and economic
coordination 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 resentful
masses, Provisional Government, the first of which was exceptionally led by a civi-
lian (Palma Carlos, May-July 1974), soon replaced by a military (left-wing general
Vasco Gonçalves, August 1974-August 1975), strove for formal procedures, super-
vised by Ministerial Committees of Purging (Comissões Ministeriais de Sanea-
mento)55 and a General-Directorate for Reclassification and Purging (Direcção-
Geral de Reclassificação e Saneamento) created within the General-Staff of the
Armed Forces.56 A whole new decree was passed a few days before Spínola’s and
his ultra-right-wing allies 11th March 1975 attempted putsch, clearly specifying
four kinds of civil servants who should be immediately “considered dismissed from
Civil Service”: (1) Presidents of the Republic and Heads of Government between
1926 and 1974 (among which remained alive only the last two in office: Américo
Thomaz and Marcello Caetano); (2) members of the political police and all those
who had taught in its schools; (3) informers of the political police57, or all those
who “voluntarily contributed to assist in its repressive action”; and (4) the so-called
former “vigilant agents” working inside universities and every “civil servant or
agent responsible for any sort of information service for repressive purposes”, and
members of “special forces of the militia”58, the Portuguese Legion (Legião Portu-
guesa).59

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 [Direcção-Geral de
Segurança, 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: José-Pedro Gonçalves (compiler), Dossier 2a, República,
Vol. 1: “25 / 4 / 1974 – 25 / 4 / 1975”, pp. 417 f., 420 – 423, 429 – 434, 440 – 445, 448 – 455,
and Vol. 2: “25 / 4 / 1975 – 25 / 11 / 1975”, pp. 1056 – 1062, Lisbon 1976 respectively 1977.
 Elites and Economic Modernization in Portugal 177

As for the purging of the armed forces, the military authorities made public in
the months following to the deposition of the dictatorial regime that until October
1974 “the Navy [had been] purged of 103 officers and, in the end of that year, 300
different ranks officers had been dismissed”60. In fact, probably more have been
removed from the ranks after the political and military anti-communist change of
direction in the end of 1975, a process which underwent for several years, until, at
least, the constitutional reform of 1982 which suppressed the Council of the Revo-
lution (Conselho da Revolução). In the Ministry of Justice, not more than “42 in a
group 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 worked
with the censorship [department] and the political police, or having been members
of the Government during the previous regime. ( . . . ) At the end of 1974, eight
months after the coup, around 4.300 civil servants had been submitted to proce-
dures of purging”61, which does not mean, obviously, that they were expelled or
even merely suspended from Civil Service.
On the whole, however, “huge delays in the legal purging procedures reduced its
effect and made possible speedy reintegration after a short number of years. ( . . . )
Most of these high officials, including ‘former political police agents’, would be
reintegrated between 1976 and 1980, though most of them did not return to the
strategic 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, they
were made to know that the authorities would not raise any impediment to their
return to the country. Former president Thomaz did so and quickly around him rose
the idea of publishing in the early 1980s his autobiography with the provocative
title of Last Decades of Portugal 63, as if the nation he had formally presided over
had 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 in
Brazil in 1980, not before having published two self-explanatory autobiographical
testimonies.64 Almost every other former political leader, government member or

60 António Costa Pinto, Enfrentando o legado autoritário na transição para a democracia

(1974 – 1976) [Confronting Authoritarian Legacy Through Transition to Democracy], in:
J. M. Brandão de Brito (coordinator), O país em revolução. Revolução e democracia [Country
in Revolution. Revolution and Democracy], Lisboa 2001, pp. 359 – 384, here p. 367.
61 Ibidem, p. 368, quoting data from O Século (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 António Costa Pinto, O legado do autoritaris-
mo e a transição portuguesa para a democracia (1974 – 2004) [The Legacy of Authoritarian-
ism and Portuguese Transition to Democracy, 1974 – 2004], in: Manuel Loff / Maria da Con-
ceição Pereira (eds.), Portugal: 30 anos de Democracia [Portugal: 30 Years of Democracy],
Oporto 2006, pp. 57 – 70, for some details on its proceedings.
63 Américo Thomaz, Últimas décadas de Portugal [Last Decades of Portugal], 2 Vols., Lis-
bon 1980 – 1983.
178 Manuel Loff

high official, if having left the country in the 1974 – 75 period, returned freely to
Portugal in the late 1970s or early 1980s. Practically all of them were reintegrated
in 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 arrested
in the tensest moments of the revolutionary period and a single one sent to court
and sentenced.65
As far as Marcello Caetano’s 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, Caetano’s 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).66 The same party was able to elect to Parlia-
ment a former Caetano’s 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 Confederação da Indús-
tria Portuguesa, “an institution which owes largely to the cadres of Marcello’s
period”67.
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 sorts
of conservatives, including former liberal elites of the Marcelismo, were being
pushed to the right by the radicalization of the political process, and especially
almost every relevant member of the business elites, amalgamated behind general
Spínola, appointed provisional President right after 25th April 1974, and tried to
refuse to accept a self-determination process for the colonies (a political battle they
lost in July 1974) and structural changes in economic policies. A first military
clash was avoided on 28th September 1974, when the spinolistas prepared a series
of public demonstrations associated with military mobilization, but Spínola was

64 Marcello Caetano, Depoimento [Biography], Rio de Janeiro 1974, and Marcello Caeta-
no, Minhas memórias de Salazar [My Memories of Salazar], Lisbon 1977. See also: Joaquim
Veríssimo Serrão, Marcello Caetano. Confidencias no exílio [Marcello Caetano. Revelations
in Exile], 10th ed., Lisbon / São Paulo 1985.
65 According to a research led by two journalists in 1993: José Pedro Castanheira / Valen-
tina Marcelino, Os homens de Marcello: onde estão e o que fazem[Marcello’s Men. Where
Are 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 (Marcello
Caetano and the ministers for Defence, Home Affairs and Army, and the Under-Secretary of
the 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.

 Elites and Economic Modernization in Portugal 179

forced to resign two days later. Radicalization to the left was intensified, namely
through 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 Spínola and its
military accomplices who had took refuge in Franco’s Spain, in a desperate attempt
to 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 in
1974, 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), acute
cutback 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 control
using 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’ prices”70). At the end of this course of action, hundreds of them fled
abroad, mainly to seek refuge in dictatorial Franco’s Spain and Brazil, or in
Apartheid’s South Africa and Rhodesia, sometimes in Britain and Switzerland,
where they were able, often with official or semi-official support, to recreate a part
of their former wealth. At any rate, not more than 2 percent of all industrial owners
were 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 managers
of the most significant private companies (including most of the Magnificent
Seven) 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 Spínola’s 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 Leão, Das
transformações revolucionárias à dinâmica europeia [From Revolutionary Transformations
to European Dynamics], in: António Reis (ed.), Portugal Contemporâneo [Portugal Today],
Vol. VI, Lisbon 1992, pp. 173 – 224, here p. 177. See table 1 for the exceptional growth of
labor 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.
180 Manuel Loff

politics, financed the creation of some improvised ephemeral right-wing organiza-

tions,72 and those who were adequately organized, offered their logistics to prepare
the 28th September 1974 and 11th March 1975 conspiracies to reverse the revolu-
tionary social changes. When the whole political process seemed lost from their
point of view, in Spring 1975, those who have led the Magnificent Seven, together
with a representative section of Northern Portuguese middle-range businessmen,
became active supporters of those few armed movements organized from within
and out of Portugal to counteract the revolutionary experience,73 as well as of
legal right-wing parties and, under those specific circumstances, Soares’ Socialist
Party.
The most relevant characters amongst them used all sorts of business and class
connections to rebuild their fortunes. The case of two of the Magnificent Seven
was recently described by two journalists, Filipe Fernandes and Hermínio Santos
who, 30 years after, wanted to narrate “the wild life of businessmen and mangers
in the hot years following 25th April 1974”74. The “core managers” [núcleo duro]
of the Espírito Santo corporation who had fled the country the first semester of
1975 met that summer in Toledo (Spain) “to follow a business plan conceived and
drawn 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 d’Estaing, banker David Rockefeller or Prince
Bernard of the Netherlands. Secondly, they tried to disperse their activities
throughout Brazil, London, Lausanne and Luxemburg, “relying on a large support
from international banking, offering credit lines to the [Espírito Santo] family”.
They were soon back to business in London under Citibank’s protection, got hold
of a Brazilian bank more than legislation allowed them to, benefiting from special
Government exemptions, created a fortune management society in Switzerland and
a Espírito Santo International Holding in Luxemburg. Most of them went back to
Portugal already in 1976.

72 The Progress and Liberal Parties (Partido do Progresso and Partido Liberal), the Portu-
guese Federalist Movement (Movimento Federalista Portugues).
73 Portuguese Liberation Army (Exército de Libertação de Portugal), Democratic Move-
ment for the Liberation of Portugal (Movimento Democrático de Libertação de Portugal, led
by António de Spínola), operational Maria da Fonte Plan (Plano Maria da Fonte). Filipe S.
Fernandes / Hermínio Santos, Excomungados de Abril. Os empresários na Revolução [Ex-
communicated From April. Entrepreneurs during the Revolution], Lisboa 2005. Dom Quixote
gathers some information on the financing role of these exiled industrialists and bankers. On
the ultra-right anti-revolutionary terrorism in 1975 and 1976, see: Josep Sánchez Cervelló, A
revolução portuguesa e a sua influência na transição espanhola (1961 – 1974) [Portuguese Re-
volution and its Influence on the Spanish Transition], Port. ed., Lisbon 1993; Eduardo Dâma-
so, A invasão spinolista [The Spinolist Invasion], Lisbon 1999.
74 The whole of Fernandes and Santos book is a journalistic manifesto against those “two
years of collective drunkenness” (according to corporation lawyer Daniel Proença de Car-
valho), i. e. the revolutionary 1974 and 1975 years, praising those representatives of some “of
the most respected families in the country” (Fernandes / Santos, Excomungados [fn. 73],
pp. 15, 56) who felt it better to leave the country.
 Elites and Economic Modernization in Portugal 181

Of the two brothers who held control over CUF, José Manuel de Mello, “the
moment 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 capital
connections (including Arab capital in the latter), technology, shipbuilding and
trading companies. Mello boasted to Fernandes and Santos about being at the time
in “good relations with Margaret Thatcher”. Although “he never lost touch with
remarkable Portuguese who were in the political struggle frontline against left-
wing forces, one of whom was Mário Soares”, Mello waited for 1979 to return
definitely to Portugal.75
When 15 years later, sociologist Maria Filomena Mónica interviewed some of
them, together with the more prominent new Northern Portuguese industrialists
and some of the members of what was speculated to have turned out as a “new
Portuguese entrepreneurial class”, practically “unknown men” before 1974, whose
companies remained fundamentally untouched by revolutionary legislation and
took advantage from the destruction of the oligarchic Magnificent Seven, they all
blamed harshly the “revolutionary excesses” of 1975 for all sorts of harm done to
Portuguese economy, although none ever believed a communist regime could or
would be imposed on Portugal. According to one of the younger interviewees,
Portuguese “are very individualistic: they all want their piece of land and their
house”76. Virtually all shared globally positive (“undoubtedly, the greatest charac-
ter of the present century”, António Raposo de Magalhães), or at least condescend-
ing (“Salazar had some liberal aspects”, “I have never thought Salazar was, in fact,
a execrable dictator because in this country people always had some freedom of
speech”, Belmiro de Magalhães)77 views on Salazarist dictatorship.
Nevertheless, those who had not been members of the very strict Magnificent
Seven corporation oligarchy would naturally point the finger out at the regime’s
economic restrictions to a free competition market they apparently would give
preference to: State policies of “industrial restraint [condicionamento industrial]
asphyxiated everything. There was always trouble to the new ones who wanted to
do something productive” (Américo Amorim). But in some cases there was a clear
perception of what the marcelist period meant: while “under Salazarism one would
still have some reliability, so to speak”, because, “although there were some special
advantages for certain people, at least they were not flagrant”, “marcelismo favored
very few people. ( . . . ) Marcello yielded to pressure exerted by certain economic
groups, the only ones who eventually got advantage” (Francisco de Almeida Gar-

75 See further details in Fernandes / Santos, Excomungados (fn. 73), pp. 109 – 114, here
p. 131. English expressions in Italic.
76 José António Barros, interviewed by Mónica, in: Mónica, Os grandes patrões (fn. 40),
p. 260; see also opinions by Américo Amorim, Queiroz e Mello and Belmiro de Azevedo:
Ibidem, pp. 63 – 65, 91, 122.
77 Ibidem, pp. 104, 119.
182 Manuel Loff

rett).78 Unsurprisingly enough, according to Jorge de Mello (brother of José Man-

uel), the only representative of the pre-1974 Magnificent Seven (one of the main
owners of Mello family controlled CUF) interviewed by Mónica in the late 1980s,
“it was not the most advanced [evoluídos] businessmen who needed protection
from political power, it was political power who needed to keep businessmen de-
pendent from politicians’ decisions”; these state industrial policies, “more than an
economic demand, were convenient to political power to exert a permanent control
over economy”.
Amidst the late 1980s industrialists, nothing could be further away from Améri-
co Amorim’s explanation for the 1975 nationalization process we will soon look
upon. “Those groups”, the so-called Magnificent Seven, “were not dynamic, they
did not earn money all by themselves. They needed protection from the system”,
i. e. the authoritarian state. From the point of view of one of the two Portuguese
individual largest fortunes since the 1980s until the present day, “the way this
whole thing was taken by assault in 1975 was a result of the fact that these people
had left the country. If ours had not been a 15 to 20 families [controlled by] coun-
try, but of 50.000 businessmen, scattered throughout several geographical areas, I
assure you that it would not have happened. ( . . . ) It was their own wealth which
scared them and pushed them out of the country”79.
Finally, Mónica heard some of them (Belmiro de Azevedo and Jorge de Mello)
praise the Spanish transitional model as a superior form of negotiating a gradual
liberalization process,80 an attitude which would become absolutely consensual in
all conservative and liberal Portuguese elites in the turn of century.
An interesting phenomenon took place inside the state economic departments:
one fraction of that same University-produced elite of the 1960s and 1970s, inti-
mately associated with the marcelist project of economic modernization without
political change, was substantially (but only temporarily) wiped out of the state ap-
paratus and replaced by another fraction, clearly more to the left (communists, so-
cialists, progressive Catholics), most of whom would lead economic departments
in future socialist administrations (1976 – 78, 1983 – 85, 1995 – 2002). These left-
wingers would, nevertheless, work together with a number of pragmatic techno-
crats who were kept in place, people who had obviously subscribed to Caetano’s
economic policies but would not object significantly to the Provisional Govern-
ments economic policies while the revolutionary period lasted, and would soon be
heading the same departments, both in right-wing administrations (PSD / CDS ad-
ministrations, 1980 – 83, 1985 – 95, 2002 – 05) and in those of the so-called presi-
dential initiative (three cabinets directly appointed by President Eanes, 1978 – 80).
Another relevant change resulted from the sudden immigration of the so-called
retornados, i. e. the Portuguese settlers and some of the so-called assimilated Afri-

78 Ibidem, pp. 65, 166.

79 Mello and Amorim interviewed by Mónica, in: Ibidem, pp. 206 f.
80 Ibidem, pp. 121, 211, for instance.
 Elites and Economic Modernization in Portugal 183

cans who fled from the newly independent states (a significant part of whom Cape-
verdian and of Hindustani origin) in 1974 – 76. Mostly politically conservative and
deeply resentful against the decolonization process, they represented themselves as
more liberal and open-minded and their business elites would claim a significant
role in right-wing administrations in the 1980s and 1990s.
Literature on the Portuguese elites’ political culture along the modernization
process which extended from the last 1940s to the 1970s tend to identify “a wide
consensus in the economic sphere” of both opposition forces (communists but also
socialists and moderates who gravitated around the latter) and liberal reformers
who participated in the economic policy-conception of Marcelism: “to dismantle
the corporative area”, towards which official policy was aiming already in the final
years of the dictatorship, “to control and to stimulate productive activities, eco-
nomic and social planning, and to increase salaries”. In contrast, “deeper reforms
aiming to change the overall structure of private ownership and [to promote] state
direct intervention in goods and services production” remained clearly a matter of
conflict. “Political conditions” under the dictatorship “not always allowed these
differences” among opposition and reformist forces “to become visible”, but they
were inevitably “aggravated after 25th April 1974 and were the cause of intense
political clash”81.
With the democratic revolution, a new political actor rushed decisively into
the political arena: the MFA, who militarily prepared the fall of the dictatorship,
was led by a generation of young “petit-bourgeois captains, with their vague and
contradictory ideology, their appeal to an abstract ‘people’ and their attempt to
overcome political parties and to build a revolutionary democracy sustained on
‘people’s power’ and their leaders charisma”82, and soon (June 1974) refused to
dissolve as was demanded by all right-wing forces (former regime supporters, the
spinolistas aggregated around the provisional President and most of the Liberal re-
formists who had collaborated and then got disappointed with Caetano and had
converged towards the newly formed PPD). Alongside the opposition movements
who occupied most of the political debate once the dictatorship came to an end
– communists, socialists, progressive Catholics, and far-left Maoists and Gue-
varists –, the MFA emerged as “a metamorphosis of the military institution to
achieve its insubordination and the collapse of the dictatorial regime”, but also,
and somehow surprisingly for the military themselves, “to run the complex and
convulsive following period”, finding it inevitable to “‘mobilize’ a special politi-
co-military intervention unit”83, the Operational Command for Continental Portu-
gal (Comando Operacional do Continente, COPCON), led by charismatic, bewil-
dering and passionate Otelo Saraiva de Carvalho.

81 Viegas, Elites (fn. 12), p. 104.

82 Dawn Linda Raby, A resistência antifascista em Portugal. Comunistas, democratas e
militares em oposição a Salazar, 1941 – 1974 [Antifascist Resistance in Portugal. Commu-
nists, Democrats and Military in Opposition Against Salazar], Port. ed., Lisbon 1990, p. 284.
184 Manuel Loff

As Fernando Rosas brightly underlines, the MFA conspiratorial action “breaks

the hierarchical chain of command of the Military Forces (MF), subtracting them
from the traditional control of the state and state appointed commanders, thus pa-
ralyzing or eliminating the normal purpose of the MF as a central organism for
state violence, i. e. as the spinal column of state power”. Secondly, “this deliques-
cent military power weakens, pulverizes and paralyzes all remaining state institu-
tions” because these “lack political unity or military force to sustain resistance
against the revolutionary wave which spreads throughout the country”. To make
things worse, from the state’s perspective, “the MFA, in spite of several hesitations
and contradictions, will tend to stand behind the revolutionary process, its dele-
gates assuming, in almost every more complicated or conflicting circumstances,
normal ministerial bureaucracy”84.
Consequently, the revolution meant, from its very starting point, a new twist
upon the thread with which Portuguese elites had been socially manufactured for
the previous 30 years:
(1) Not only industrial capital had opened its way in the 1950s through a rul-
ing class made of rich landowners and traditional trading and financial interests,
and
(2) an urban young technocratic enlightened bourgeoisie had proved to be es-
sential to the new economic prospects of the 1960s and 1970s, but now
(3) a new and completely different elite layer – young military, socially repre-
senting a significant part of society, unexpectedly drove into power – was about to
play a decisive (although quite ephemeral) role for the following couple of years,
claiming to have a legitimate right to carry out (in fact, to support) major changes
in Portuguese society, economic organization and political system.
In any case, the Portuguese elites’ hegemony over society as a whole, and over
all major social processes, had been shattered. Eventually, for the first time in Por-
tuguese modern history, it was mainly the pressure from down under that forced,
pushed or prevented policies to be adopted and decisively guided political action.
Most observers of the Portuguese Revolution warn against any interpretation of the
state action during this revolutionary period as if it had been the outcome of a stan-
dard political choice procedure, as if its actors could have used their state preroga-
tives in a context in which popular movements had not been as central in the whole
social process as history shows they were. Again, as Fernando Rosas reminds us,
that was “the deepest and most threatening shake suffered by an oligarchy which
had always ruled in Portugal, undamaged and self-assured”85.

83 José Medeiros Ferreira, Portugal em transe (1974 – 1985) [Portugal in a Trance (1974 –
1985)], in: José Mattoso (ed.), História de Portugal [The History of Portugal], Vol. 8, [No
place mentioned] 1993, p. 224.
84 Rosas, Portugal século XX (fn. 50), pp. 135 – 136.

85 Ibidem, p. 138.
 Elites and Economic Modernization in Portugal 185

Finally, when social tension produced inevitable politico-military consequences

such as the 28th September 1974 and mostly the 11th March 1975 armed attempts
to stop revolutionary change, a radical step forward was taken in economic poli-
cies: three days after the latter of these two unsuccessful military right-wing coups,
the newly institutionalized Council of the Revolution (Conselho da Revolução,
CR) passed a resolution pressing the Provisional Government to adopt a series of
legal measures86 through which, from March to December 1975, 244 companies
were nationalized. “Two main objectives” were aimed with such a policy: “the de-
struction of the main economic and financial groups” – the Magnificent Seven –
“and centralization into state hands of the key-areas of Portuguese economy”87.
Consequently, all non-foreign capital banks and insurance companies were nationa-
lized in March 1975, thus, achieving an indirect nationalization of quite a number
of industrial and service companies. The same logic (avoid international problems,
not touching any foreign company) was to be followed in the months to come,
when the Provisional Government decided to proceed with the nationalization of
major companies operating in the oil (April), shipping, harbours and transportation
(April, June and December), steel (April), electric power (April), cement (May),
paper manufacture (May), tobacco (May), glass (August), mining (August), heavy
chemicals (August), beer (August), ship building (September), agriculture (No-
vember), radio and television (December) businesses. At the end of the process,
the Portuguese State held a productive public sector in national economy globally
similar to the French, West-German or British, but clearly less prominent than the
Italian:

Table 6
Public companies in some European national economies (1978)

GVA public GFCF public Public companies’

Country companies / GDP companies / National workers / Active
economy GFCF population
Portugal 19.8 % 30.0%* 6.5%
Italy 24.7 % 47.1%* 25.4 %
France 12.9 % 30.7% –
F.R.G. 10.4 % 11.9% 9.1%
U.K. 11.4 % 20.8% 8.0%

GVA = Gross Value Added; GFCF = Gross Fixed Capital Formation.

* Investment.
Source: Maria Manuela António et al., O sector empresarial do Estado em Portugal e nos
países da CEE [State Owned Business in Portugal and the Countries of the EEC], Lisbon
1983, p. 178.

86 List of all nationalization decrees on in Viegas, Elites (fn. 12), p. 123, table 4.1.
87 Leão, Das transformações revolucionárias (fn. 68), p. 174.
186 Manuel Loff

In fact, only in the financial system area Portuguese public property’s weight
(83 percent of all banking, insurance and real estate operations in 1979) was
clearly higher than in any other Western European case (63.1 percent of bank de-
posits in Italy, 46.8 percent of bank employees in France). The proportion of Portu-
guese public owned companies operating in power industries (71.4 percent in Por-
tugal vs. 100 percent in Greece, 94 percent in France, 92.5 percent in Italy or
84 percent in the UK) and transforming goods industries (9.3 percent in Portugal
vs. 13.1 percent in Italy, 6.5 percent in France) was either inferior or quite similar
to other European cases.
A strong left swing in governmental and MFA leadership eventually produced
an “economic model” based upon the nationalization of “big corporations”, an
agrarian reform which was already in progress through the occupation by peasants
of the huge land properties of the southern part of the country (Alentejo and some
Ribatejo and Beira Baixa areas), a “statist centralization of economic planning,
a social distributive policy operating upon salaries, prices, social security, credit
and public investment”88.

V. Post-Revolution (new?) elites

In spite of most political and media discourse produced after 1976, there was –
at least, apparently – a wide consensus in 1975, as far as the nationalizations were
concerned, among all segments of the 1950s and 1960s newly qualified elite we
have been talking about, from which all socialist and liberal (PPD / PSD) leading
economists and, generally speaking, economic policy-makers had been recruited,
as well as most of Communist Party ones. From a moderate or conservative point
of view, it was clearly preferable state intervention in private companies whose
owners were being systematically questioned and even harassed by relentless work-
ers’ movements, than to leave it in the hands of the workers’ committees who
usually took charge of the management the moment the owners fled the country,
taking money and equipment away with them. In fact, as José M. L. Viegas sus-
tains, when socialists and liberals started confronting the 1975 MFA revolutionary
stance, they were questioning what they perceived as “a threat to the democratic-
parliamentary model and to political pluralism, rather than nationalizations”,
which were actually “comparable with similar processes that had taken place in
other Western European countries, except as the financial sector was concerned”89.
In fact, communists, socialists and “the more radical wing of liberal reformists”
of the Caetano period (namely those assembled around SEDES, most of them PPD
organizers in 1974) endorsed, at the end of the dictatorship, “a strong state inter-
vention in the economic area”, “consolidating and amplifying state’s ownership” in

88 Viegas, Elites (fn. 12), p. 139.

89 Ibidem, p. 140.
 Elites and Economic Modernization in Portugal 187

economic activity, “reinforcing strategic economic planning” and “state control

over monopolistic and strategic areas in Portuguese economy”. If one takes a wider
view over socioeconomic policies, “public investment in education, socialization
of medical practice, social welfare universalization, state policy on salaries and in-
come, globally aiming to reduce social inequality” enjoyed an even wider political
consensus, including, apart from all left-wing parties and most Liberal reformists,
“some independents who, later on, will describe themselves as Christian-Demo-
cratic”90.
Apart the fact that they all still shared a political culture in which the state was
expected to plan and to intervene in national economy in order to ensure social en-
gineering, and the fact that they represented a middle-class political clientele ob-
viously resentful against dictatorship oligarchy, which the nationalizations came to
deprive from their disproportionate control over economy, socialists (PS) and liber-
als (PPD) had an additional reason not to object to nationalization policy. In fact,
nationalization also allowed to “allot power to a new and amplified clientele, based
upon political parties and its influence”91. PS and PSD were already in 1975 and
1976 the two most voted parties92 and they could well expect to hold control of
Portuguese administration for the next decades – which, unsurprisingly, they actu-
ally did. Their leaders and economic policy decision-makers would be the ones to
run over these state-owned companies for the next fifteen years, but also the ones
who decided when and how to privatize them at the end of the 1980s and especially
during the 1990s.
Hard criticism fell in the next decades over the kind of management strategies
carried out by the executive managers of state-owned companies, a new and power-
ful elite group emerging from a sudden change introduced by the revolutionary
process in such heavy and rigid structures as private property and elite recruitment.
These new managers were initially (1975 – 76) recruited amidst relatively young
technocrats, coming forward at the end of the short marcelist cycle still unblem-
ished by too compromising forms of commitment with the dictatorship techno-
cratic development policies or with the Magnificent Seven oligarchy. 13 years later,
socialist João Cravinho, Minister for Industry and Technology in 1975 and a typi-
cal member of the young technocratic elite of the 1960s,93 would state that man-

90 Ibidem, pp. 250 f.

91 António Luciano Sousa Franco, A economia [The Economy], in: António Reis (coord.),
Portugal 20 anos de Democracia [Portugal: 20 Years of Democracy], [No place specified]
1993, pp. 170 – 293, here pp. 189 f.
92 1975: PS: 37.9 percent; PPD: 26.4 percent; 1976: PS: 34.9 percent; PPD: 24.4 percent.
Since then, they have been always the two most voted parties, gathering from a minimum of
50.7 percent of the popular vote in 1985 to a maximum of 79.7 percent in 1991.
93 Young left-wing anti-Salazarist activist, he got a Yale PhD in the 1960s, worked for in-
dustrial corporations and was appointed collaborator of the Technical Secretariat of the Presi-
dency of the Government during some of the Marcello Caetano years. Relevant member of the
Radical-Left movement MES created in 1974, he moved to the PS at the end of the 1970s. In
188 Manuel Loff

agers of the newly state-owned companies “had to be recruited almost entirely

from third-rank technical executives” of the nationalized corporations: “The first
rank executives went practically all to Brazil”, together with the capitalist owners
themselves; “in the second rank, some stayed, some went away, and it was the third
rank who offered the raw material”, the people who got the management positions
“and were highly promoted”.94 At the end of the 1980s, José de Abreu, one of the
“big Portuguese industrialists” interviewed by sociologist Maria Filomena Mónica,
self-described as “an active freedom fighter” against the left radicalization process
of the revolution years, had “no complaints against nationalized banks” because
“on the whole”, he felt, “they had not underwent through any significant turmoil:
high rank officials and staff had kept their jobs”95.
When the revolutionary process was definitely brought to an end in 1976, socia-
lists (PS), Liberals (PPD / PSD), and secondarily Christian-Democrats (CDS), were
to fill in all Portuguese political power ranks until the present day. “Politicians,
‘public managers’, local administrators, leaders and agents appointed by party lea-
derships, scattered by the thousands on top of a public administration headed by
growingly incompetent officials, dependent on the power who appoints them on
sheer party criteria, and who assigns them budget and personnel, all these, through
licences, subsidies and public expenditure, allocating over 50 percent of the GDP,
decide on all key economic areas (from credit to media and basic industries), under
a monopoly and protection logic”96.
Among those who, on the left, and namely in the Communist Party and some
minority fractions of the Socialist Party, defended state ownership of some of the
most strategic areas of economic activity, but also among those who, on the right,
very soon after the nationalization process started to call for privatization, there is
nevertheless some consensus over three main explaining features for the “econom-
ic and financial deterioration of most of nationalized companies” throughout the
first 15 years following the 1975 legislation: “[i] contradiction between companies’
interests in the market and national policies, [ii] Government policy indefinition
and, lastly, [iii] the economic and financial crisis”97 Portugal underwent through
that historical period.
The setback of the revolutionary process, at the end of 1975, produced a strong
political and ideological shift to the right, especially towards economic liberalism,

1995 – 99, he returned to the government, under socialist PM Guterres, as Minister for Social
Infrastructure, Planning and Territorial Management. Appointed in 2007 member of the
Board of Directors of the European Bank for Reconstruction and Development.
94 Cravinho interviewed by Diário Popular, quote in: Fernandes / Santos, Excomungados
(fn. 73), p. 90.
95 José de Abreu interviewed by Mónica, in: Mónica, Os grandes patrões (fn. 40), pp. 240,
249.
96 Franco, A economia (fn. 91), p. 190.

97 Viegas, Elites (fn. 12), p. 208.

 Elites and Economic Modernization in Portugal 189

which was about to sweep the West at the end of the 1970s. Inside the political
elites of the three ruling parties – PS and right-wing PPD / PSD and CDS – became
clear a reversion to pre-1960s Portuguese elites ideological patterns. Not only the
CDS had voted against the 1976 constitution, and had particularly fought against
all its economic and social chapters, but the largest right-wing party, the PPD
(paradoxically renamed Social-Democratic – PSD – in 1977) “joined the CDS to
condemn an excessively statist constitutional economic order”, soon “radicalizing
its position in a liberal trend, not only on the whole of economy but also on social
areas, contradicting some principles and guidelines of the [PPD] established in
1974, with ideological antecedents” rooted before the dictatorship’s fall. With more
political consequences for the near future, and “coherently with the conceptions of
a new technical and professional elite who joined the [Socialist] Party after the
revolutionary process”, socialist 1976 – 78 administration “passed liberalizing leg-
islation in the economic and social areas”98, and the altogether peculiar Grand
Coalition 1983 – 85 Government (a PS / PSD Cabinet led by Mário Soares, known
as the Central Bloc) endorsed a definite consensus between the two main parties
rotating in power, each representing most of the left- and right-wing voters, on so-
cial and economic liberalization.
By that time, administration and the new business elites (both private and state-
appointed) agreed upon gradual denationalization policies and articulated wide
and clear liberal principles of economic organization and management. António
Sousa Franco, a social-democratic politician highly critical with the whole nationa-
lization process,99 recalls, however, that “the critique of state direction over the
economy often tends to forget that it is deeply rooted in the Portuguese State tradi-
tion since [19th century’s] Liberal regime’s consolidation, as a false remedy – and
also as a determinate cause – for insufficient dynamism of private productive en-
terprise, tardy industrialization and lack of renovation of production organization
and technology”100.
Another scholar, José M. L. Viegas, who studied Portuguese elites political cul-
ture on the state economic responsibilities, confronted himself in interviews he
made to elite members in the first half of the 1990s, as well as in “today’s political
discourse on the 1974 / 76 events”101, with what he described as “interpretations

98 Ibidem, p. 207.
99 Professor at the University of Lisbon and Catholic Universty’s Law Schools, he was a
PSD dissident in 1978. He was appointed Finance Minister in a socialist cabinet led by Antó-
nio Guterres (1995 – 99). He died while campaigning for European Parliament in 2004, head-
ing socialist ticket.
100 Franco, A economia (fn. 91), p. 193.

101 Probabably the best examples can be found in PM Cavaco Silva (an economy professor
at the conservative Catholic University) speeches during his three terms leading the Gov-
ernment (1985 – 87; 1987 – 91; 1991 – 95) when he recurrently discussed the “revolutionary
legislation legacy”: Cumprir a Esperança [Transforming Hope into Reality], Lisbon 1987;
Construir a Modernidade [Building Modernity], Lisbon 1989; Ganhar o futuro [Winning the
190 Manuel Loff

produced by political agents with no factual confirmation”. He summarized them

in three main items:
“i) ‘defence and extension of a state-owned productive entrepreneurial sector is
an ideological prejudice of communists and socialists’ – [while,] in fact, ( . . . ) part
of the liberal and reformist groups” active under the final years of the dictatorship
“advocated state direct control over large economic and social areas, invoking a
number of reasons reflected in the PPD [1974] program and even, particularly in
some social areas, in the CDS program”. Viegas also evokes the fact that “in the
other Western European countries, extension of a productive entrepreneurial state-
owned sector was caused by economic nationalism and the search for economic
growth, not as result of socialist or communist policies”;
“ii) ‘nationalizations in Portugal gave birth to a state-owned sector incomparable
in dimension with any other Western European country’ – [while,] in fact ( . . . ),
nationalizations in Britain and in France, as well as the dimension of the state-
owned sector in countries like Austria, outline situations comparable with the Por-
tuguese”;
“iii) ‘countries like Western Germany based its prosperity upon liberal policies,
particularly with no state intervention in private companies’ – [while,] in fact, dur-
ing the economic reconstruction period in post-war Germany, not to mention the
Nazi period, the state intervened in a number of companies, in the infrastructure
level, in finance, in services, in the productive sector, although pursuing a pattern
different from those imposed in Britain, France or Portugal”.
Why would these elite members so daringly produce such un-historical (and an-
other adjective could be well placed here. . . ) interpretations? According to Viegas,
to “reconstruct their political past coherently with what they want to show in the
present situation and [because they subscribe to] strategies adopted to conceal in-
terests and contradiction in [ideological] positions they once [gave their support to]
in a specific historical moment”102.
Portuguese Government was negotiating since 1977 European Community inte-
gration, which was finally agreed upon in 1985 and turned effective the 1st January
of the following year, decisively determinating Portuguese economic policies and
promoting a new ideological paradigm. Finally, the 1982 and 1989 constitutional
reforms, especially the latter, voted by a socialist-liberal-christian-democratic large
majority, leaving only the communists apart,103 dismantled virtually all of what

Future], Lisbon 1991; Afirmar Portugal no Mundo [Consolidating Portugal in the World],
Lisbon 1993.
102 Viegas, Elites (fn. 12), pp. 245 f.

103 The electoral coalitions led by the PCP, including remains of pre-1974 anti-Salazarist
organizations and the new, and very small, Ecologist Green party, got around 18 percent of
the popular vote between 1979 and 1983 (18.8 percent in 1979, 16.9 percent in 1980, 18.2 per-
cent in 1983), and started to lose support in the mid-1980s (15.6 percent in 1985, 12.2 percent
in 1987, 8.8 percent in 1991). Parliamentary and presidential election results in 2005 and
 Elites and Economic Modernization in Portugal 191

had been the constitutional socialist architecture, which, in fact, had remained sub-
stantially unaccomplished after its approval in 1976. Meanwhile, a considerable
ideological adjustment had been introduced in the Socialist Party programmatic
discourse.
In 1985, a puzzling election, right after the Portuguese integration treaty was
signed, produced the most divided Parliament of post-1974 democratic regime: a
right-wing party, the PSD, had won the election with less than 30 percent of the
popular vote, while three left-wing parties (socialists, communist-green coalition
and the newly created Democratic Renovator Party (Partido Renovador Democrá-
tico, PRD), each getting 15 – 21 percent of the votes) held a parliamentary majority
unable to back a coalition Government. Cavaco Silva, a political and moral conser-
vative and an economic liberal, led a minority PSD administration who started to
administer the flood of European resources pouring into Portugal very generously
– amounting to around 25 percent of all public investment and, in 1993, to 3 percent
of the GDP104 – after a 13-year economic recession cycle. For the first time since
1976, an incumbent administration could face confidently elections, and in 1987,
also for the first time since 1975, under a proportional representation method, a
single party – PSD – was able to get an absolute majority in parliament, replicated
in 1991. Those ten consecutive years (1985 – 95) in which Portugal was led by
Cavaco Silva’s administration, the Cavaquismo, may be read as some sort of demo-
cratization of Marcello Caetano’s authoritarian modernizing project for Portugal,
what sociologist Villaverde Cabral, in the first place, but also historians Fernando
Rosas and Vasco Pulido Valente, and Sousa Franco himself, have been calling a
“democratized marcelism” (marcelismo democratizado): European integration
would have, according to this interpretation, “made real an expansion myth re-
placing the colonial one”, allowing Portugal to “revisit some old acquaintances”
Franco found in Portuguese History: “another external source of wealth – ‘Europe’
as if Portugal was not European . . . ; a third version of the infrastructure policy
( . . . ) as the main substance of a ‘modernizing reformism’ (see Pombal’s enlight-
enment105, Fontismo106 and Salazarism)”.
The one feature which turned Cavaquismo particularly close to the Estado No-
vo’s dictatorship political paradigm, especially as elite-recruiting is concerned, was
its very obvious determination to build up “a strong power, centralized, aggregating
around the Government a rigid social and political bloc [bloco situacionista] – who
has in its nucleus the power and interests amassed by the ruling party, which grow-

2006 still confirm these last results, although a concurrent Radical-Left movement – the Left
Bloc (Bloco de Esquerda) re-emerged on the left, its representation ranging from 2.5 percent
to 6.5 percent of the popular vote since the late 1990s.
104 See Franco, A economia (fn. 91), p. 283.

105 Reference to the Marquis of Pombal rule (1750 – 77), under King Joseph I.

106 Reference to policies implemented in the 1850s-1860s-1870s by Fontes Pereira de

Melo, a modernizing Liberal, though politically conservative.
192 Manuel Loff

ingly controls, in different practical forms, autonomous social forces, plurality,

consensus, dialogue, political alternation”. This new authoritarian reformism was
determined to assemble “a new social basis – supported on a confined set of party
politicians, scarcely renovated and lacking quality, and the ‘nouveau-riches’, very
seldom productive businessmen, living preferably on public concessions, real es-
tate speculation, Èuropean funds’, and underground economy”.
This highly critical assessment of the politically most successful experience of
post-1974 Portuguese democracy – self-depicted as a successful democracy (demo-
cracia de sucesso) – produced still under the experience itself (a couple of years
before Cavaco stepped out of power), described quite acutely, nevertheless, what
the turn of the century would confirm to be a systematically replicated pattern of
“renovation” of what Franco called the “dominant personnel”: this new political
and administrative elite, “invoking pragmatism, establishes itself behaving in ser-
vile way” in a period of “stable single-party and personalized power”, highly con-
centrated on the Prime-Minister, with a “technocratic, businesslike” attitude, its
younger members profiting from “an ephebocracy”, i. e. a dominant party system
in which young and ambitious activists are called to get governmental experience
in decision-making positions.107 On the whole, Franco sums up the Cavaquismo as
“the search for an enduring hegemony of power and its identification with the new
political class” – “class” is the concept he actually chose – “and the nouveau-
riches, in a wide populist and clientele-based perspective, supported by the old
myth of Portuguese sebastianist108 right-wing: the ‘providential man’”109.
European integration and a comparatively long liberal-conservative rule – in this
sense, the 1985 – 95 Cavaquismo, following a 1980 – 85 period in which PSD had
been in power inside right-wing or PS / PSD coalitions, is quite parallel to contem-
porary lengthy right-wing administrations in Britain (1979 – 97), Germany (1982 –
98) or the U.S. (1981 – 93) – smoothed hegemony of what has been described as an
“economicist and ideology-devaluating pragmatism”110 and, apparently, gave So-
cialist Party a decisive impulse towards an ideologically liberal turn in its dis-

107 All critical observers of present PM, blairite socialist José Sócrates, elected, also with a
single-party absolute parliamentary majority in February 2005, perceive his political model
as a replica of Cavaco Silva’s. Incidentally, the latter got elected President of the Republic a
year later, January 2006, and the two, representing competing parties, seem to get along better
than any other pair of PM and PR in Portuguese democratic history.
108 Sebastianism is described to be the specifically Portuguese version of a political, cul-
tural or spiritual messianism, based on the historically often re-elaborated character of young
King Sebastian who disappeared in 1578, at 24, in a disastrous northern Morocco military
campaign. His death / disappearance paved the way, two years later, to the crowning of
Philip II of Spain as King of Portugal. In the early decades of the 17th century, popular
mythology evoked the possibility of Sebastian’s messianic return to Portugal, in some symbo-
lically misty beach, an episode obsessively re-enacted by Nationalist intellectuals of the 19 th
and 20 th centuries.
109 Franco, A economia (fn. 91), pp. 258 f.

110 Viegas, Elites (fn. 12), p. 257.

 Elites and Economic Modernization in Portugal 193

course, thus, “consolidating” what Viegas perceived as a wide “ideological swing

in the party elites as far as state intervention in economy is concerned”, produced
in the 1980s. The role of Vítor Constâncio, another economist of the 1960s and
1970s generation,111 as Secretary of the PS (1986 – 89) has been underlined be-
cause of his personal commitment in introducing substantial changes in the PS pro-
gram at its VI. Congress, in 1986. Nonetheless, the 1985 parliamentary election PS
program presented to the voters already stated socialist resolution to re-examine all
constitutional “rules with a philosophical and ideological substance which pro-
vokes division among the Portuguese”112. Three years later, in 1988, socialists
decided to sign a political agreement with majoritarian PSD to reform the 1976
Constitution in order to de-constitutionalize nationalization policies and any re-
maining reference to socialization of property, purging the constitutional text of
what socialists themselves described as an “unilateral ideological essence”, with “a
strong partisan mark”.113
One of the most enlightening attitudes to typify that specific elite group of state-
owned company managers has to do with their attitude towards privatization of the
very same companies they were heading through Government appointment. All
along the 1980s, even before socialists joined the right-wing parties consensus on
privatization, it became clear that the so-called public managers plea for “the need
for radical denationalization solutions”, “while taking legitimate or illegitimate
profit from state-owned companies, deteriorating its productivity and competitiv-
ity, [imposing] high charges on tax-payers through the state budget”114. In a 1992
political elites’ inquiry, sociologist José M. L. Viegas sent to 1.024 party, adminis-
tration, culture, economy and unions’ leading members, public managers (gestores
públicos) very clearly shared with “private owners and managers” a “total agree-
ment” opinion (67 percent and 70 percent, respectively) in face of privatization of
state-owned companies, an attitude shared by “social and cultural elites” (69 per-
cent), “high-ranking administration officials” (56 percent) and “government mem-
bers” (88 percent).115
Finally, a vast privatization program evolved throughout Cavaco Silva’s right-
wing administration, mostly after 1989 constitutional reform,116 and António Gu-

111 Born in 1943, he was appointed Secretary of State for State Budget and Planning in
three of the six Provisional Governments of the 1974 – 76 period. He worked for the Bank of
Portugal in different stages since 1975, and was appointed its Governor in 1985 – 86 and
again from 2000 to this day.
112 PS 1985 election program, quote in: Viegas, Elites (fn. 12), p. 200.

113 Quotes from socialist MP, in: Ibidem, p. 201. Symbolically, concepts present in 1976
constitutional text such as “classless society” were replaced by “free society” (art. 1), and
“to abolish exploitation and oppression of men by other men” (art. 9) set as one of the “fun-
damental responsibilities of the state” was simply revoked.
114 Franco, A economia (fn. 91), p. 194.

115 Presumably government members at the moment of the inquiry, i. e. of Cavaco Silva’s.
See: Viegas, Elites (fn. 12), pp. 210, 213, 214 (Table 7.2).
194 Manuel Loff

terres socialist administration (1995 – 2002). At the end, as it happened all through-
out world capitalist economies, the state abandoned a lot more economic areas than
the ones nationalized in 1975.
A 50-year long historical cycle of state intervention in economy was being shut
down while, curiously enough, the most successful political power projects (Cava-
quismo in the 1980s and 1990s; post-2005 arrogant-perceived Sócrates’ ruling
style) were being built upon a clear reinforcement of state symbolic power instru-
ments. Again, historical similarities may seem surprising: a socially incompetent
state, deliberately deprived from most of its economic instruments, pretends to ap-
pear sort of decisionist, muscled. . . 1930s Salazarism, except for its quintessential
brutal repression, was not very far from this picture.
From the more strictly private business elites point of view, early 1990s privati-
zations tended to somehow rectify an immediate consequence of the 1975 nationa-
lizations: as the capitalist concentration had clearly been more evident in Lisbon-
based companies – six of the Magnificent Seven huge corporations had most of its
investments and companies under control in the Lisbon industrial belt – and as this
would turn out the most politically active area for the more radical left-wing revo-
lutionary forces in 1974 – 75, pressure to socialize and actual nationalizations
would affect a lot more Lisbon and Southern companies than Oporto and Northern
ones. At the end of the 1970s and early 1980s, when growingly liberalizing mea-
sures were being taken by socialist or right-wing governments, the most creative
and strong segments of private capital remained in the hands of Northern Portugal
industrialists, basically unaffected by nationalizations. The two largest Portuguese
personal fortunes at the end of the century belonged to two leaders (Belmiro de
Azevedo and Américo Amorim) of Oporto area based corporations. In Filomena
Mónica’s inquiry to 16 of the most significant Portuguese industrialists at the end
of the 1980s, some of them acknowledged the existence of a widespread nouveau-
richisme (Henrique Neto), “not really” composing a new “elite” according to in-
dustrialist association leader Rocha de Matos, but a net of “many medium and
small entrepreneurs”, some with “no roots in the industry”, but merely “young lads
who went to school and started to idealize ( . . . ) they could become industrial-
ists”117.
Nevertheless, the 1990s privatizations process allowed the richest families of
pre-democratic Portugal (the Mello family, Champalimaud and, mainly, the Espí-
rito Santo family, holders of the three largest corporations amongst the Magnificent
Seven) to get hold of most of their 1975 nationalized assets. For the Espírito Santo
corporation, “everything went so well that today [we are] ‘more important than [we

116 See Law No. 11 / 90 (05. 04. 1990) and DL No. 380 / 93 (15. 11. 1993) and 65 / 94
(28. 02. 1994), but also, prior to constitutional reform, Laws No. 72 / 88 (26. 05. 1988) and
84 / 88 (20. 07. 1988). See: Ibidem, pp. 204 f., Tables 6.1 and 6.2 for list of all privatized
companies between 1989 and 1993.
117 See Mónica, Os grandes patrões (fn. 40), pp. 185, 229 f.
 Elites and Economic Modernization in Portugal 195

were] before the Revolution’, CEO António Ricciardi admits”118. When the pro-
cess was launched, in 1989, out of the Lisbon and Oporto’s Stock Exchange 200
operating companies, 75 were “original families strongholds”119. Out of the 174
Portuguese biggest fortunes in 1992, 35 belonged to families as such; amongst
them, one would find 6 of those 14 families who had gotten hold of the pre-1974
Magnificent Seven.120
From Filomena Mónica’s point of view, the Portuguese “bourgeoisie which de-
veloped in these last decades is not as independent from power as some think: it
suffices to look at the names of politicians on management doors of famous com-
panies; to look attentively to the way some [state-owned companies] have been
sold; to examine contacts made prior to privatizations; verify the vulnerability of
Portuguese main industrial sector [– textiles –]; to observe what sort of public one
would find at a Cabinet Minister waiting-room; to study the logic of public aid to
industrial investment”121.

118 Fernandes / Santos, Excomungados (fn. 73), p. 112.

119 According to “Os Patrões na Bolsa”, in: Exame (Lisbon), September 1989, quoted in:
Mónica, Os grandes patrões (fn. 40), p. 28.
120 See footnote 48. See: Vasco Pulido Valente, Os nossos ricos, in: O Independente (Lis-
bon), 10. 07. 1992, quoting Fortuna magazine, July 1992 issue.
121 See Mónica, Os grandes patrões (fn. 40), p. 51.