Mexico’s Economy in
late 19th Century
Only recently have scholars come to realize that the most significant
institutional changes in Mexico occurred after separation from Spain in 1821,
but before Porfirio Diaz took office in 1876.[1] Even though growth rates had reached
2.3 percent annually in the 1890s, Mexico never succeeded in closing the gap
that now separated it from richer and poorer nations.[2]
The long term result of its economic misadventure before 1867 was economic
dependency.[3] People in Latin
America saw that economic manipulation played a central role in their political
structure during the 19th century and this in turn had a negative
effect on their spending power. The people were being taken advantage of by
foreign corporations, and according to the dependency theory, they had to
overthrow a regime which was not operating in their interests but in the
interests of other nations.
In Mexico, the dependency theory can be traced back to 19th
century polemicist Manuel Payno, the liberal politician who denounced the
penetration of Mexican commerce by foreign capitalists.[4]
Another view on Mexican economics during the late 19th century that
has emerged is the structuralist perspective. Unlike dependency theorists,
structuralists are more cognizant of the immediate ramifications as opposed to
long term results.[5] Whereas structuralists
stress the positive elements of transformation, dependency theories warn of the
exploitative process – underdevelopment.[6]
This is exactly what occurred in Mexico during the reign of Porfirio Diaz.
U.S.
economic expansion after the Civil War accompanied with it the “second
industrial revolution”, which brought new wealth and power to the North
Atlantic.[7]
Raul Fernandez and Gilbert Gonzalez make the argument that foreign monopolistic
interests were the determining factor in the economic policies implemented by
Diaz.[8] These policies influenced migration
and mining. For instance, Mulege, the port near the cooper boomtown of El
Boleo, Baja California, grew from 1,500 in 1880 to 14,000 in 1910.[9]
European and U.S. interests constrained local development, producing poverty,
inequality, authoritarian politics, and underdevelopment.[10] The major consequence was the plight
of the peasants and natives, who were essentially forced off their lands due to
foreign modernization.[11]
Mexican labor also began to enter the United States as a result of the economic
depression in 1907, causing a slowdown in mining, and motivating a northward
migration.[12] The story of
technological change is also one of dependence.[13]
To make great strides in agricultural innovation, Mexico had to import hardware
such as tools and machine parts, from countries in Northern Europe or the U.S.[14]
The
Mexican government in this period failed to make the distinction between the
public and private interests of British foreign policy in Mexico.[15]
Foreign merchants had greater access to credit and more useful international
trade connections.[16]
The beneficiaries were foreign merchants such as Ewen MacKintosh, who abused
their positions as diplomatic representatives for personal gain.[17]
Interestingly enough, Mr. MacKintosh was even accused of doing business with
shady foreign stockbrokers and Greek merchants such as Charles T. Mavrocordato.[18]
The document I obtained also states:
“Aristides Carridia said that he was agent to Mr. John Ewen
MacKintosh, a stock and share broker of Cornhill. He had known the prisoner for
two or three years, and he knew that he was a member of the “Baltic”. He sold
to the prisoner £5,000 worth of Spanish bonds.”[19]
Walker also states that dependency theorists
blame Mexico’s industrial failure in the 19th century on
importations of cheaper manufactures from other industrialized nations such as
Great Britain.[20] The nation became poorer
as foreign nations doing business with Mexico grew richer.[21]
Just to give you a sense of how far Diaz went with these trade policies, in
1886, in order to shore up foreign capital, Mexico repealed laws requiring the
registration of foreigners and bestowed equal rights upon them.[22]
It is also worthwhile to ask why Mexican industry was not more competitive,
even though it had access to the same machine-based technologies that made
Western European and North American textile industries so formidable.[23]
Scholars
still debate, often in sterile fashion, whether the Mexican Revolution was
directed against a feudal or bourgeois regime.[24] While a handful of powerful families
and their clients monopolized economic and political power in the provinces;
the whole system was being fueled by new money pumped into the economy.[25]
Between 1877 and 1910 national income per capita grew at an annual rate of 2.3
percent – extremely rapid growth by even world standards, so fast that per
capita income more than doubled in 33 years.[26]
Railways spanned the country while mines and export crops flourished.[27]
The cities acquired paved streets, electric light, trams, and drains.[28]
The precarious budget was stabilized in the 1890s and Mexico’s credit rating
was the envy of Latin America.[29] However, that would change
within 20 years. Many had profited from the Porfirian economic miracle, but the
people resented the continued dominance of provincial oligarchies.[30]
This becomes rather apparent when Francesco Madero enters the scene and echoes
the discontent within Mexico by stating on November 20th, 1910 his
Plan of San Luis Potosi:
“In exchange for that tyranny we are offered peace, but peace
full of shame for the Mexican nation, because its basis is not law, but force;
because its object is not the aggrandizement and prosperity of the country, but
to enrich a small group who, abusing their influence, have converted the public
charges into fountains of exclusively personal benefit, unscrupulously
exploiting the manner of lucrative concessions and contracts.”[31]
The ruthless assault on Mexico’s credit rating
eventually debilitated the economy and fomented the dissatisfaction that culminated
in the movement for independence.[32]
Before
the Mexican revolution occurred, Mexico had become dependent on overseas trade
and foreign investment. Economic dependency played a key role in
commercializing the way people thought during the late 19th century.
The economic expansion of the United States had essentially curtailed the rights
of the Mexican people and during this period, they also misread the intentions
of Western European powers such as Great Britain. I would not go so far as to
say Mexico did not have a chance to compete with these nations, but that the
policies implemented by Diaz had surely affected the outcome of how Mexican
economic policy progressed before the end of the Porfirian regime.
[1] David W.
Walker. Kinship, Business, and Politics:
The Martinez Del Rio Family in Mexico, 1824-1867 (Austin: University of
Texas Press, 1986), pp. 10-15. Accessed as Google eBook: November 18, 2015.
[2] Ibid
[3] Ibid
[4] Ibid
[6] Ibid
[7] Ibid
[8] Gilbert G.
Gonzalez and Raul A. Fernandez. A Century
of Chicano History: Empire, Nations, and Migration (Routledge: New York,
2003), pp. 35 & 43. Accessed as Google eBook: November 18, 2015.
[9] Ibid
[10] Edward Beatty. Technology and the Search for Progress in
Modern Mexico (Oakland: University of California Press, 2015), pp. 1-2. Accessed
as Google eBook: November 19, 2015.
[11] Ibid
[12] Ibid
[13] Ibid
[14] Ibid
[16] Ibid
[17] Ibid
[18] The Accountant: A Medium of Communication between
Accountants in all parts of the United Kingdom Vol. 1 - New Series (London: Published for the
Proprietor by Williams and Strahan, 1875), p. 12. Accessed as Google eBook:
November 19, 2015.
[20] Ibid
[21] Ibid
[22] Jonathan C.
Brown. "Foreign and Native-Born Workers in Porfirian Mexico." American Historical Review 98 (June
1993) 786–818.
[23] Ibid
[25] Ibid
[26] John H.
Coatsworth, “Obstacles to Economic Growth in Nineteenth-Century Mexico." American Historical Review vol. 83, no.
1 (Feb. 1978), p. 81.
[27] Ibid
[28] Ibid
[29] Ibid
[30] Ibid
[31] United States
Congress. Senate Subcommittee on Foreign Relations, Revolutions in Mexico, 62nd Congress, 2nd Session (Washington,
D.C.: Government Printing Office, 1913), pp. 730-736, passim.
[32] Flores
Caballero, La contrarrevolución, 28-65: Asunción Lavrin, "The Execution of
the Law of Consolidación in New Spain." Hispanic American Historical Review: 52 (February, 1973); 27-49.
Bibliography
Alan Knight. “The Mexican Revolution.” History Today Vol. 30 Issue 5 (May
1980).
David W. Walker. Kinship,
Business, and Politics: The Martinez Del Rio Family in Mexico, 1824-1867. Austin:
University of Texas Press, 1986.
Edward Beatty. Technology
and the Search for Progress in Modern Mexico. Oakland: University of
California Press, 2015.
Flores Caballero, La contrarrevolución, 28-65: Asunción
Lavrin, "The Execution of the Law of Consolidación in New Spain." Hispanic American Historical Review: 52
(February, 1973); 27-49.
Gilbert G. Gonzalez and Raul A. Fernandez. A Century of Chicano History: Empire,
Nations, and Migration. Routledge: New York, 2003.
John H.
Coatsworth, “Obstacles to Economic Growth in Nineteenth-Century Mexico." American Historical Review vol. 83, no.
1 (Feb. 1978), p. 81.
Jonathan C.
Brown. "Foreign and Native-Born Workers in Porfirian Mexico." American Historical Review 98 (June
1993) 786–818.
The Accountant: A Medium of Communication between
Accountants in all parts of the United Kingdom Vol. 1 - New Series. London:
Published for the Proprietor by Williams and Strahan, 1875.
United States
Congress. Senate Subcommittee on Foreign Relations, Revolutions in Mexico, 62nd Congress, 2nd Session (Washington,
D.C.: Government Printing Office, 1913), pp. 730-736, passim.
