In this first overview of the Brazilian republican state based on extensive primary source material, Steven Topik demonstrates that well before the disruption of the export economy in 1929, the Brazilian state was one of the most interventionist in Latin America. This study counters the previous general belief that before 1930 Brazil was dominated by an export oligarchy comprised of European and North American capitalists and that only later did the state become prominent in the country’s economic development.

Topik examines the state’s performance during the First Republic (1889–1930) in four sectors—finance, the coffee trade, railroads, and industry. By looking at the controversies in these areas, he explains how domestic interclass and international struggles shaped policy and notes the degree to which the state acted relatively independently of civil society.

Topik’s primary concern is the actions of state officials and whether their decisions reflected the demands of the ruling class. He shows that conflicting interests of fractions of the ruling class and foreign investors gradually led to far greater state participation than any of the participants originally desired, and that the structure of the economy and of society—not the intentions of the actors—best explains the state’s economic presence.

In 1889 the Brazilian empire was overthrown in a military coup. The goodwill and assistance of the United States to the young republic of Brazil helped forge an alliance. But America's apparently irresistible political and economic advances into Brazil were also hampered by disagreements-over naval armaments, reciprocity arrangements, the issue of coffee valorization, and in the 1920s over Brazil's efforts to play an active role in the League of Nations at Geneva. The relationship proved to be unequal, with the United States gaining influence in Latin America, as the Brazilian elite's ambitions and vanities were fed.