Obstacles to industrialization in nineteenth-Century Portugal

Abstract

Portugal shared many of the obstacles facing other European countries on the route to modern industrialization: traditional agricultura1 structures, small domestic markets, difficult integration into the international economy, scarce capital resources, insufficient entrepreneurial and technical skills and high illiteracy rates. But, in Portugal, these formed still greater impediments than those to be found in late developing European countries and the vicious circle of poverty was definitely at work in the combination between unprogressive agriculture, slow and imbalanced urbanization and restricted home demand. Natural endowments could hardly be taken as beneficial, either, and foreign trade, thwarted by over specialization, did little to compensate for the smallness of the domestic market. So, in the nineteenth century, both structural and historical conditions combined to raise almost unsurmountable obstacles the industrialization of Portugal. In this light, the divergent path of the Portuguese economy in the late nineteenth and early twentieth centuries compared to other backward nations of Europe is not at all surprising. In fact, Portugal was a very unlikely industrializer.