19th Century Mexico

Mexico’s Economy in late 19^th 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 19^th 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 19^th 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 19^th 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 19^th 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 20^th, 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 19^th 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.

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[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

[5] 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

[15] 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.

[19] Ibid

[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

[24] Alan Knight. “The Mexican Revolution.” History Today Vol. 30 Issue 5 (May 1980).

[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.