Shanty Life in Brazil: Onward and Upward

The Economist’s review of a long-term study of favela residents in Rio de Janeiro points out the social mobility behind the middle class in emerging markets – as well as the risk from the drug trade.

“Still, for a while the occupants of the favelas made the best of it, with the determination of people with the chutzpah to leave their home villages far behind (and helped by the “economic miracle” that briefly came to pass in Brazil during the third quarter of the 20th century). Talk to elderly Cariocas (as present or former residents of the city are known) about the favelas of the 1950s and they often turn misty-eyed, recalling peaceful places with the best views in the city and plenty of good live music. The city authorities saw things differently, particularly after the military coup that snuffed out democracy for two decades in 1964. Favelas were cleared around the lagoon between Ipanema beach and the hills behind and in Leblon, now the most expensive part of town. Sometimes this was done by sending in the army, sometimes, it seems, by starting fires. The people who lived there gathered up their surviving family members and possessions and started again elsewhere, occasionally separated according to their income and ordered into government-built blocks on the edge of the city. Into this sadness, in the late 1960s, came Janice Perlman, a young American sociologist and self- confessed lover of favelas. Despite arousing the government’s suspicion (in 1969 she was branded an international agent of subversion), Ms Perlman and her team completed a study of 750 people. The book that came out of this, “The Myth of Marginality” (1976), argued that far from being a cancerous growth that was harming the city, favela dwellers actually kept the place going, by doing all of the low- income jobs that a city needs to get done. Earlier this decade Ms Perlman went back and tried to track down as many of the original participants as she could, to see how they had fared. She managed to find just over 40% of the original study group, and set about working out why some had stayed poor while others had flourished, and whether the favelas were the poverty traps that they seemed to be. Her findings were surprising. More than half of the original study group had moved out of the favelas, suggesting they are not the dead-end that many people suppose. In general, Ms Perlman finds far more social mobility than the reams of favela studies would suggest. Whereas education levels were the best prediction of whether someone born in a favela would make it out, hard work and good luck were also needed. The main brake on human achievement in Rio’s favelas, however, is the drugs trade. Since the 1980s, when Rio became a transit point for cocaine heading to Europe, the Brazilian state has given over the monopoly of violence in these areas to drug gangs and militias. Many of Ms Perlman’s study group, their children and grandchildren, have been caught in the crossfire.”

Published by Janar Wasito

Janar Wasito is the manager of Magis Capital in San Diego, CA. He is a graduate of Harvard and Stanford Law School, and a former Marine Officer.

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