Pandora’s box

Abstract

When the captains took control of Portugal in April 1974, there were more than 1 million Portuguese—of the country’s 10 million nationals—living and working abroad. They sent back £400 million in remittances every year to their families, because there was so little chance of finding work in their native country. Salazar’s monetary policies had kept the economy stagnant, and had kept many Portuguese underemployed, until the African wars forced the government to raise taxes, expand the money supply and allow prices to rise. Price rises increased militancy among Portugal’s normally tame labour force, and increased administrative costs, so that the money going into industrial investment fell to the lowest level in Western Europe.