At roughly 1.3 million employees, Foxconn is one of the largest private employers in the world. Its scale is astounding: Its Longhua campus, sometimes referred to as “Foxconn city,” is reportedly staffed by 450,000 employees – more than the entire population of Oakland, California.
On the other hand, Foxconn’s factory in Manaus, Brazil – a low-slung building just a couple kilometers from dense Amazon rainforest – had just a few dozen cars in the parking lot on a Tuesday morning in August.
Foxconn is not alone in Manaus: Samsung, LG, and a whole host of other multinational manufacturers have factories there. They do so at significant cost. Manaus is located in northwestern Brazil, roughly at the geographic center of the Amazon Basin, and is effectively disconnected from the rest of South America’s road and rail infrastructure. Manaus is closer to Bogota, Colombia, and Caracas, Venezuela than it is to São Paulo (Brazil’s largest city by a factor of almost two) or Brasilia (Brazil’s capital). But none of these cities are close to Manaus per se: If you started in Manaus and tried to drive to any of them, your route would pass through thousands of kilometers of rainforest, and would include multiple sections of unpaved road.
As a result, nearly all the raw materials needed to make cell phones, dishwashers, and motorcycles must be floated 1,500 kilometers up the Amazon River. And because the region around Manaus doesn’t produce most of the raw materials that manufacturers need, a shocking range of goods make this journey up the Amazon – from microprocessors to lithium-ion batteries to a wide range of staple foods. As one observer wrote, “Food, housing, fuel, medical care, indeed virtually everything that contributes to the overall cost of living, is generally higher in Manaus than for most other regions of the country.”
As isolated as it is from the rest of Brazil, Manaus is even more isolated from the rest of the world. International flights from Manaus’s airport are extremely limited: As far as I can tell, the only regular routes are to Bogota, Panama City, Fort Lauderdale, and Miami, none of which are known as key nodes in any electronics supply chain. Flights to Manaus from the People’s Republic of China (Brazil’s largest trading partner) take more than thirty-six hours, and most trips to the US (Brazil’s second largest trading partner) take well over twenty-four hours. To get from Foxconn Manaus to the company’s headquarters in Taipei could take more than 48 hours.
Manaus isn’t on the way to anything but more rainforest, and that rainforest is famously hostile to long-range planning and infrastructure, and Manaus itself isn’t a big enough market for multinational brands to want to make their widgets there. Yet for well over a century, Manaus has been a critical link between Brazil and the rest of the world.
I learned about Manaus’ manufacturing ecosystem in 2018 from my friend Dan Hui, who uncovered a few factories there while we were researching Apple’s supply chain. It has been on my mind ever since. Manaus developed as a result of the lucrative Amazonian rubber trade, which collapsed in the nineteen-teens and left Manaus as “a moribund boom-town far up the Amazon.” But the city was eventually rebuilt in a way that exploited the bizarre logic of trade policy, global supply chains, and corporate strategy – the forces that have come to define twentieth century industrial history.
To learn about Manaus is to learn about the forces that shaped modern life. The transition from hunter-gatherer societies to industrial-agricultural production; the rise of material science and synthetic chemistry; the vertical integration of industry; the tension between free trade and protectionism; the slow, deliberate, and often brutal ways that humans have literally sapped value – and life – out of the natural world.
I have been thinking about Manaus for five years. During that time I accumulated a respectable library of books on South American history and the rubber industry, with titles ranging from The Discovery and Conquest of Mexico (originally published in 1568), to Crude Rubber and Compounding Ingredients (1909), to the epic and highly informative The Devil’s Milk: A Social History of Rubber (2011). My idle curiosity has slowly morphed into a research project, leading me to seek out information that in many cases has been deeply unpleasant: the absolute decimation of pre-Columbian South American society, the brutal rubber plantation systems that developed in British Malaya and Liberia, the synthetic rubber factory that made up a significant part of the Auschwitz concentration camp.
This all feels like an accident. Initially, my interest in Manaus was subordinate to my interest in Apple, a company whose supply chain I thought might provide interesting fodder for a newsletter that focused on making stuff. But the industrial history of Manaus – and the broader history of rubber – has become a bit of an obsession, and I see it now as a lot more informative and compelling than anything I’ve read about Apple in the past five years. Rubber is more fun to think about in idle moments; it does more to enrich my understanding of the world around me; it’s more interesting to talk about at dinner parties and meetups. But I’ve struggled to understand what my research project has been leading up to.
And yet here I am, writing, and the only thing I want to write about is rubber, and the city deep in the Amazon from which the rubber industry emerged.
So let this be my flag in the ground: Over the coming weeks and months, I am writing about rubber. If I am successful, I will have convinced you that the history and future of rubber is worth as much brain space as you have I’m sure already devoted to concrete, and steel, and semiconductors, and petrochemicals. Rubber is critical to understanding modern technological history. And in the coming months, I want to explain how.
I have a few interviews in the works, and a few essays drafted, and with your support, there are any number of places along the rubber supply chain that I would love to visit and report from. All of which would be impossible without direct support from readers like you, who are really the best force keeping this newsletter from the long slide into commercial tech news. So if you have any faith in me – if you’re willing for a moment to assume that it would be enriching to better understand the forces that shaped a supply chain in the jungle – then please join us as a Member or Supporter today, and help make this project a reality.
To show you that I’m serious – and to give you a taste of the things I’ve been thinking about for the past half-decade, here are a few interesting tidbits that I’ll be exploring more in the coming months:
- My earliest awareness of Manaus came from Werner Herzog’s 1982 film Fitzcarraldo (which you can watch for free with ads on YouTube, or for a couple of bucks on other streaming platforms). Based on the true story of a decidedly unsympathetic Peruvian rubber baron (played charismatically by an aloof Klaus Kinski), Fitzcarraldo’s production was documented wonderfully in Burden of Dreams (which you can stream for a couple of bucks). While Fitzcarraldo is in many ways hyperbolic to the real events that inspired it, I still find that both the film and the documentary communicate something essential about what it’s like to take on Big Projects in the middle of the Amazon.
- Manaus was the epicenter of the Brazilian rubber boom, which lasted from the mid-1800s until 1912, when it peaked and then promptly collapsed. At its peak the wild rubber industry accounted for one quarter of Brazil’s exports; just a decade later its value had declined by 90%.
- The rubber boom brought extravagant wealth and many modern marvels to Manaus, which are represented with a degree of flourish in Fitzcarraldo. Electric streetlights were installed there in 1896, around the same time that minor cities in the US were electrified; Seattle, which was larger than Manaus in 1900, didn’t electrify until 1905.
- Rubber trees are native to the Amazon, and the Amazon alone. Up through the 19th century, Brazil’s rubber industry was thus insulated from competition, a situation which was reinforced by a Brazilian ban on rubber seed exports. Enforcement of that ban wasn’t particularly effective, though. By 1872, the British government (through its India Office) had studied the feasibility of transplanting rubber trees to its colonies, and by 1880 at least 76,000 rubber seeds had been smuggled out of Brazil to the botanists at Kew Gardens, London. It might seem odd today to think of a botanic garden as a tool for imperialist power, but that’s just what Kew functioned as. It was a center for applied research, directed towards the commercial interests of the British empire and the exploitation of its Colonies. And with rubber, it was massively successful: Once the first rubber trees in British Malaya matured – right around 1912 – production there quickly obliterated Brazil’s.
- During the twentieth century, Brazil developed a rather intense system of trade barriers, resulting in an economy that really doesn’t trade much with the rest of the world. As of 2016, Brazil’s GDP was the 8th largest in the world – but it ranked 24th for both imports and exports. Brazil also had the fourth-highest tariffs of any WTO member in 2016, and the highest tariffs on capital goods of any G20 developing economy in 2015. But Manaus’s free trade zone, established in 1967, offers a range of financial and operational incentives that make it appealing to multinational companies. The free trade zone has in many ways been a success, but it is also dominated by multinational firms that have for the most part not invested in local supply chains.
I’m excited to dive into all of this – the development of Brazil’s early resource-based economy, the research and development that was required to make rubber a mature technology, the geopolitical factors that shaped what Manaus looks like today. And I’m excited for this newsletter to mature a bit too, and for the opportunity to explore and explain the history behind the manufacturing ecosystem that we have today. There are more of my thoughts posted in the #meta-newsletter channel on the SOW Members’ Slack; if you’re excited about this too, please head over there and join the discussion 🤜🤛
A huge thanks to everyone who supports the work we do at Scope of Work, from the first few folks who gave me $5 back in 2017, to anyone who clicked on the big blue “support” buttons above, to everyone else who is reading this and thinking “I should consider supporting this newsletter too” (the link is here 🙏). I’ll provide a longer bibliography as this series progresses, but if you’re looking for a single (somewhat academic) book to read about rubber, I recommend The Devil’s Milk: A Social History of Rubber by John Tully.
Love, Spencer Wright
p.s. - I’d love to know you better. I set up 40 minute onboarding calls with everyone who joins as a Member of Scope of Work; join us, won’t you?
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