The “rush to free trade” that began in Latin America in the 1980s remains inadequately explained. Among several puzzles connected with this shift, the degree of support for free trade among industrialists especially stands out. This article argues that the inability to account for industrialists' behavior lies in political economy's tendency to derive preferences from market position. Instead, the author argues that contextual factors shape preferences and behavior. He makes the argument by examining Brazilian industrialists, a “least likely” group to endorse the policy shift. The author provides evidence that Brazilian industrialists supported commercial liberalization despite real distributive consequences. Factors that help explain support include the effects of economic crisis, bundling of free trade with other desirable policies, the prevalence of adjustment options, and the absence of a distinct class of losers. The author relies on survey evidence, business rankings, and documentary evidence to make his case.
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