By Robbin Laird
In the shadowy world of 18th-century colonial Brazil, monks conducted business through holes in convent walls, French diplomats openly discussed bribing governors, and British ships feigned distress to access forbidden ports.
This wasn’t the chaotic underworld we might imagine. It was a sophisticated economic system that would ultimately reshape the Portuguese Empire and create the foundation for Brazilian independence decades before any political revolution began.
The new book by Professor Ernst Pijning reveals a startling truth: Brazil achieved virtual independence not through dramatic political upheaval, but through the quiet, persistent growth of what he terms “institutionalized illegality.”
By 1800, powerful Brazilian interests had effectively broken free from Lisbon’s economic control, creating a de facto sovereignty that would only later be formalized in law.
The story begins with a fundamental misunderstanding of what “illegal” meant in colonial Brazil. Modern observers often assume clear distinctions between legal and criminal activity, but 18th-century Portuguese authorities operated under a much more flexible system. Smuggling wasn’t necessarily seen as an ethical problem; rather it was a practical tool of governance.
Portuguese officials distinguished between two types of contraband: the kind they condemned and the kind they permitted. Whether something was truly illegal depended largely on who was doing it, their social status, and critically, whether it served the interests of the Portuguese crown. Trade with Buenos Aires to obtain silver, for instance, was technically forbidden but often encouraged because it brought precious metals into Portuguese coffers.
This selective enforcement created remarkable scenes: Benedictine monks in Rio de Janeiro conducting illegal trade through a hole in their convent wall with smugglers on the beach below, while officials looked the other way. As one contemporary put it, “breaking the law was seen as something very positive” when it served the right purposes.
The arbitrary nature of this system becomes clear when comparing how different foreign captains were treated in Brazilian ports. In 1748, the captain of the French warship Arkansas arrived in Rio, paid proper respects, followed protocol, and received full cooperation from Governor Gomes Freire de Andrada including free supplies, use of a country house, and freedom to move about the city.
Twenty years later, Captain James Cook arrived with the Endeavor and experienced an entirely different reception. Unfamiliar with local protocols and secretive about his mission, Cook saw his first officer arrested, guards board his ship, and himself placed under house arrest. He was accused of being a smuggler and forced to buy supplies through official intermediaries.
The difference wasn’t in their legal status but in their understanding of the unwritten rules which was a diplomatic chess game played out in every Brazilian harbor.
This flexible approach to legality wasn’t born from Portuguese benevolence but from weakness. Portugal found itself caught between more powerful European nations, dependent on British, French, and Dutch support to prevent Spanish conquest. This vulnerability forced massive concessions: foreign powers gained special rights and sovereign jurisdictions within Portugal itself, while Portuguese gold flowed to Britain through technically illegal but widely condoned exports.
Portugal had become, in Pijning’s striking phrase, “virtually a British colony itself.” French diplomats like Duverger openly pushed for access to Brazilian ports and suggested that governors could be persuaded with “appropriate compensation.” Bribes became an open secret of colonial administration.
Foreign ships developed theatrical methods to gain access to Brazilian markets. British and North American whalers were notorious for feigning distress — claiming damaged ships or scurvy-ridden crews — just to enter ports for illicit trading, even when they carried supplies for twenty months of sailing.
By the late 18th century, this institutionalized illegality had created a self-perpetuating system of corruption that reached every level of society. Officials whose job descriptions required them to combat illegal trade had become its biggest facilitators. Their power came not from stopping smuggling but from controlling it by deciding which illegal acts were acceptable and which weren’t.
The incentives were overwhelming. Governors received low official salaries, creating massive pressure to engage in private trading despite official prohibitions. The municipal council in Rio, responsible for paying the governor’s salary, used this leverage to complain about governors who were too strict in suppressing illegal trade, calling them “despotic” for actually doing their jobs.
Government positions could be purchased through the donativo system, while customs officials, especially secretaries with individual regulatory authority over contraband, commanded high salaries precisely because they controlled this lucrative gray market.
By 1806, the system had broken down completely. The customs judge in Rio reported that his officials faced actual threats, not just from smugglers, but from common people, if they tried to confiscate goods. The public had become invested in the illegal economy. Officials became “evasive in their work,” closing their eyes to contraband to avoid trouble.
The final blow came when a new law required all confiscated goods to be publicly burned rather than allowing officials to keep one-third as incentive. With financial rewards removed and physical threats increasing, enforcement collapsed entirely.
This widespread corruption provided rich material for satirists and critics, even under censorship. Writers like Diogo do Couto, the anonymous author of “Arte de Furtar” (The Art of Thieving), and poets Gregório de Matos and Tomás Antonio Gonzaga created scathing critiques of the system.
These works reveal deep public awareness of systemic rot. They explicitly blamed Portuguese administration and policies for what they saw as Brazil’s decline, arguing that corruption seeped through every level of society “from the King himself right down to the street peddler.”
Meanwhile, Brazilian economic thinkers began pushing back against the official Portuguese philosophy that whatever benefited the mother country automatically benefited the colony. By the late 18th century, influenced by ideas like Adam Smith’s free trade theories, Brazilian intellectuals started distinguishing Brazilian interests as separate from Portuguese ones. The intellectual foundation for future independence was being laid.
Everything changed when Napoleon’s 1807 invasion forced the Portuguese court to flee Lisbon for Rio de Janeiro. This wasn’t simply moving a capital. It was a fundamental shift in Atlantic power structures that formalized what had already happened economically.
The immediate result was the official opening of Brazilian ports to friendly foreign nations, legalizing overnight a huge amount of trade that had operated in gray zones for decades. As Brazilian merchant Salvador Correia Sá immediately recognized, Rio de Janeiro had become the center of the empire while Portugal was now on the periphery.
This was, of course, a complete reversal of traditional colonial relationships.
For local officials whose power had been built on regulating illegal trade, this transformation was catastrophic. Their leverage disappeared when trade became legal, fundamentally altering governance structures throughout Brazil.
This history challenges our basic assumptions about how law, power, and economics interact. It shows that economic realities, even underground ones, can shape national destinies more powerfully than official decrees or political declarations.
The Brazilian case reveals how systems of governance can adapt to and even depend on activities they officially prohibit, creating complex webs of institutionalized contradiction that ultimately reshape entire societies. When the Count of Arcos, the last viceroy in Rio, wrote that “the crime of contraband trade is so prevalent as to have lost the taint of criminality,” he was documenting not just administrative failure but societal transformation.
Brazil’s path to independence wasn’t forged in revolutionary assemblies or dramatic declarations, but in the daily decisions of merchants, officials, and ordinary people who created an alternative economic reality that eventually became the foundation of a new nation.
It reminds us that history’s most profound changes often happen not through grand political gestures, but through the accumulation of countless small acts that gradually redefine what’s possible and what’s legal.
In our own era of rapid economic and technological change, this colonial Brazilian experience offers a powerful reminder: the future is often built not by those who follow the rules, but by those who understand when and how the rules have already changed.
In my dissertation which I wrote to complete my process of receiving my PhD from Columbia University, my dissertation sponsor, Dr. Zbigniew Brzezinski, let my explore a path unusual for a dissertation effort. I went a voyage of discovery to think about how historical change actually occurs. It was successful in part; but left open-ended in a sense.
But what I clearly took away is that even when there seems to be historical stability, the forces for change are already operating. At any point in history, the forces of continuity contain the seeds of the next iteration of history. What intrigued me about Ernst’s book was a clear demonstration of what I learned when I worked on my dissertation.
It was therefore a pleasure for our Second Line of Defense team to publish his book in our series on Amazon which is entitled: “Portugal and Brazil Confront the Contemporary World.”
