The work of Fernand Braudel (1902-85), the great French economic historian, celebrates the power of markets in the development of civilization. Braudel came to Brazil in 1935 as one of the young French scholars who helped found the University of São Paulo. He stayed for three years and saw a raw vibrant country that left a powerful impression on him for the rest of his life. A half-century later, he recalled that in those days "Brazil was a country in ferment. There was no nation, above all no Brazilian state." He learned that capitalism was limited and precarious in what it could do in the absence of state support. "Capitalism only triumphs when it becomes identified with the state, when it is the state." Braudel's argument rested on historic examples of capitalist states like Venice, Holland, England and the United States.
Braudel's Mediterranean of 500 years ago was the first modern world economy, brought into closer interaction by rapid advances in military and naval technology. Braudel later called the world economy "the greatest possible vibrating surface... which creates uniformity of prices over a huge area, as an arterial system distributes blood throughout a living organism. It is a structure in itself." Nevertheless, the role of capitalism in this structure was privileged and limited. In The Wheels of Commerce [1979], Braudel wrote that "capitalism in the past (as distinct from today) only occupied a narrow platform of economic life. If there were certain areas where it elected residence, that is because these were the only areas which favored the reproduction of capital." By the early 20th Century, however, capitalism adapted to claims of social welfare, to ensure its own survival, in ways that increasingly alienated its operations from market principles.
The Fernand Braudel Institute of World Economics has been formed in São Paulo to study the ways and conditions for strengthening of market forces as a means of survival in the swirl of very rapid changes in the world economy. Like Braudel himself, we believe our Institute must be small, manageable and flexible to be useful. "If you build enormous enterprises, you won't succeed," he said. "What succeeds is five or six people." Being small, we can see, like him, the value of daily concentrated effort.