parliamentary debates, especially in debates in other economic sectors, because the
withdrawal of the state regulation of the wine trade of the Douro wines has not come to an
end and because the problems of the winegrowers in the region are not resolved. New
problems appeared like the competition from the wine South of the Douro river.
The 20th century is one of general crisis in the European wine industry with an overall
overproduction following the recuperation form the phylloxera blight (Gide 1907). This leads
to a regained demand for state regulation and Portugal is no exception to that. In 1906-1907
proposals to change the law and the whole regulatory system of the sector are a response to
these demands and continuous problems in the Douro.30 The new system is one of a rather
strong regulation imposed and not negotiated like the liberals hoped for.
The solution encountered is a clear regress to restrictive regulation with the creation of
the demarcation area, the legal definition of port-wine and the ambition to go further in that
direction, and only implemented between 1927 to 1933. In 1908, the recent and already legal
foundation is incomplete. After the fall of Joao Franco’s dictatorship and that of the
monarchy, several political crises in the 1910s and 1920s distract the attention from the Douro
problems but the system and the Douro region continue with their typical problems of
overproduction, falsification, competition from Southern and Central Portugal wines. The
1930s will complete the edifice with the creation of the Casa do Douro and the Instituto do
Vinho do Porto and the Gremio dos Exportadores do Vinho do Porto.
The period ends up with a failure of the liberal doctrines and movements to transform
the legal and regulatory basis of the port-wine system. Part of these doctrines will be used in
the 1930s for the legitimization of the Corporatist structure of the Estado Novo that refuses
both the socialist doctrines and the liberal credo. Indeed, one legitimization of the corporatist
system of the port wine is Antonio Batalha Reis, a reader of Frédéric Bastiat and one of the
doctrinaire of the new system (Reis 1939).31
Conclusions
The case for free-trade in Europe in the years following the great political changes of
the 1810 and 1830s is exemplified by the French optimists, the diffusion of the ideas of the
Manchester School and the British economic liberalism. Bastiat, the most typical of the
30 I refer here to the proposals of Joao Franco in his government before and during his dictatorial government.
31 See the annotated copies of the early editions of the books of Frédéric Bastiat Sophismes économiques kept at
the Biblioteca Nacional. xxx
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