As the capital of Portugal this city was built on the prosperity that came from to it from foreign possessions. But like Spain, Portugal was unable to keep up with the new economic vitality of Northern Europe, and by the 20th century it had lost its most important colonies to other powers. It also was slow to keep up with the Industrial Revolution, and by the 1950's was a relatively poor backwater of Europe, surviving mainly on the export of agricultural commodities like "canned fish, raw and manufactured cork, cotton textiles, and wine" (countrystudies.us).

In the 1970's a number of factors coincided to change the conservative city with the narrow streets that had been laid out in a grid pattern by the Marques de Pombal following the 1755 earthquake that destroyed 85% of the city (en.wikipedia.org). From 1928 to 1968 Antonio de Olivieria Salazar ruled Portugal with an iron hand, emulating his fellow dictator Francisco Franco across the mountains in Spain in his statist control of political and economic activity for the benefit of the oligarchy.

At this time armed resistance by guerrillas in Portugal's African colonies

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In the Western world anyone who tries to ameliorate the conditions of the poor becomes an object of ridicule, political attack, and even assassination. Lula in Brazil, Chavez in Venezuela, and of course Cuba's Castro, and the Nicaraguan Sandinistas are all cases in point. It is said that the ten richest families of Lisbon, related by intermarriage, were the prime beneficiaries of the Salazar dictatorship. But they were no different than the various oligarchies who benefited from Franco, Pinochet, Trujillo, all the other right wing dictatorships that were invariably supported by the United States and most European states throughout the world.

Cities are usually contrasted with the agricultural-based rural areas surrounding them, but one of the peculiarities of Lisbon is that there seem to be far more garden plots and small farms within the greater metropolitan area of Lisbon than in other urban areas û many of them illegal, but officially tolerated for generations.

In other words, while many of the rural poor left the country, others simply moved to the urban-industrial coastal strip to the makeshift shanty towns. The problems of these marginal, illegal communities on the fringes of the great cities of the world like Lisbon are well known: poverty, substandard housing, lack of legal title to the land, poor sanitation, lack of running water and heat, few public services, high crime, drug addiction, prostitution, gang warfare, poor health care û the list goes on and on.