The Porfiriato: the Economy, the Land and the People

Modern Mexico Lecture Week 9

Lecture

• “19th C Mexico so far....” • from Politics to Economics and (rural) Society

• Economic Reforms and Porfirian economic growth

• The Countryside

19th C Mexico so far....Primarily a political focus on violent struggles of nation and

state-buildingStruggle between Federalism and Centralismtrauma of American war...yet an agreed bordercontainment of US territorial expansionrise of Liberal Republic 1850s-60s (at expense of

corporate power of Army, Church and Indian Communities)

separation of Church and Statedefeat of Conservatives and Monarchy rise of Liberal “machines” under Juárez and Díaz“civic religion”: funerals, hero cults and commemorations

19th C Mexico so far....• Political culture, ideas and religious belief:

– Political education via the press, catechisms, lithography, photography....– Associations, parties and beliefs: Escoces/Yorkino masonry, “popular

federalism”, “popular liberalism”, Liberal Catholicism v. Ultramontanism; Utopian Socialism and Communism; Altamirano and “Indigenismo”; labour movement…

• Less on economics...a long decline– decline of colonial core: mines and capital cities– slow growth, and mainly on peripheries – fiscal backwardness, chronic internal and foreign debt– backward transport & communications

• Less on society....overall shape changes little: – active elites and (selectively) “armed citizens” (National Guard)– “stagnant”/ “sleeping” (or rebellious) masses

Zavala’s vision in 1830: change in dim future.....

• In his Travels (1834) Lorenzo de Zavala foresaw decades of conflict in central and southern Mexico that would remain firmly “in the grip of the military and ecclesiastical arm as a penalty for their prejudices.”

• But eventually:

• “in the bosom of these states a few generous and enlightened individuals will make efforts to lift their fellow citizens up to the level of the adopted (US) institutions and will seek to give them lessons in liberty and tolerance. . . (and) . . . the American system will obtain a complete though bloody victory.”

• social change would then follow:

• “a glorious and enlightened generation . . . would. . . bring the civilised family into association with the indigenous class, until now debased and vilified, and will teach them to hold in esteem their dignity by elevating their thoughts to a higher level.”

Mexico’s First Economic Miracle• “If before I die morality is restored to our society

and in public administration; if the poor find instruction and bread; if the rich have acquired enough confidence to invest their capital in national enterprises; if, from one end of the Republic to the to other, the engine, with its powerful voice awakens and mobilises all Mexicans, then my desires will have been satisfied.”

• Porfirio Diaz, Presidential Address, 1880

Porfirio Diaz, Presidential Address, 1880

“If before I die morality is restored to our society and in public administration; if the poor find instruction and bread; if the rich have acquired enough confidence to invest their capital in national enterprises; if, from one end of the Republic to the to other, the engine, with its powerful voice awakens and mobilises all Mexicans, then my desires will have been satisfied.”

Jose Maria Velasco, Ferrocarril, 1890

Railways & Revolution

From decline to recovery….

• John Coatsworth (American Historical Review 83, 1978): 1800-1860 drop in Mexico’s per capita GDP of 37 %

• growth constrained until 1880s by “a deficient institutional environment for economic activity”.

• beginnings of turn around came under Manuel Gonzalez (1880-85)

• coincided with expansion of world economy: LA exporter of agric and mines, importer of foreign capital, technology and labour

Two Mexican Miracles Two periods of accelerated growth &

development between 1800 and 1990s:1880-1910 & 1940-1970 “Mexican Miracle”1880-1910 (per annum growth):Railways 12%Industry 12 %Mining 6 %Exports 6 %Imports 5%Oil 1901 : 8,000 barrels, 1910 8,000,000

Dependency or Development ?

• Porfirian economic performance until recently seen through eyes of a critical post-revolutionary historiography and later “structuralist/dependency” school

• Argued that export led, primary resource based, model of growth was structurally flawed and detrimental to national interests.

• -Why ?• Long term decline in terms of trade for primary

products compared with manufactured ones.

Dependency or Development ?• - Mexico locked into dependency on primary prods.

and on foreign markets, capital and technology• - transport improvements – railways geared to export

sector rather than to internal markets• - surrendered national resources to foreigner with

little in return• - prevented pursuit of alternative self-sustaining

model of develop• - emergence of a “comprador” (buyer/seller)

bourgeoisie, servants of foreign capital and unwilling to act in national interests

Dependency or Development ?• Much recent work challenges these views:• No clear pattern of deteriorating terms of

trade...Mexico followed its “comparative advantage” during 19th C

• Porfirian infrastructure laid for 20th C industrialisation• Diaz Govt. promoted national interests: tariffs,

subsidies, regulation of foreign capital..• Diaz becomes progressively more interventionist and

cautious of foreign interests (“Diaz Doctrine” versus the “Monroe Doctrine”)

“Defensive modernisation”: Matías Romero (1837-98)

Liberal regimes from 1850s faced difficult tasks of protecting national sovereignty while opening Mexico to foreign capital, investment and colonisation.... “goals they saw as complementary not contradictory” (Paul Garner, Porfirio Diaz)

Before mid 1880s, in absence of direct relations between Mexico and adversaries, France, Spain and GB, Mexico fostered a “special relationship” with US as key strategy promoted by Matias Romero, Mexican Ambassador in Washington 1882-1898 (also Minister of Juarez in Washington, 1859-68)

“Defensive modernisation”: Matías Romero (1837-98)

• First visit to US in 1859 – at the height of the 3 Years’ War: Romero negotiates Ocampo-McClane Treaty giving US transit rights across Tehuantepec isthmus:

• “The best means of impeding annexation is to open the country to the United States...with the objective of making annexation unnecessary, and even undesirable” (Romero, 1859)

• “Better to yield markets than territory, dollars than dominion.” (Salvucci)

• Richard Salvucci, “The Origins and Progress of US-Mexican Trade, 1825-1884: ‘Hoc opus, hic labor est’”, Hispanic American Historical Review Vo.71, 4, 1991, 607-735.

“Defensive modernisation”: Matías Romero (1837-98)

• On the eve of the French Intervention in February 1862, Matias Romero to Montgomery Blair, US Postmaster General, :

• “We can celebrate…commercial arrangements, in virtue of which the manufacturing states of the North acquire in Mexico the market they have lost in the South, and from which they have been prohibited until now because of the natural jealousy and distrust with which Mexico has viewed the United States. Since our political tendencies and interests are identical, we can make other arrangements…which will result in the United States obtaining all of the advantages…(of) annexing Mexico to the American Union, but without suffering any of the inconveniences.”

“Defensive modernisation”: Matías Romero (1837-98)

• In 1865 Romero’s openness and trust of the Yanquis extended even to proposing a deputation of US soldiers to train the Liberal Army !

• “We (Mexicans) desire to have some of the best soldiers from the United States go to Mexico as much that they would serve as a species of nucleus for our army as for making more useful the sympathies of that people for our cause.”

“Defensive modernisation”

• “Porfirian planners encouraged Yanqui investment as a calculated programme of ‘defensive modernisation’ designed to make the best of Mexico’s geo-political situation”

• William Schell, Integral outsiders The American Colony in Mexico City 1876-1911 2001

• Advantages:

- US investors and entrepreneurs were greater risk takers. Mexicans preferred safer investments (maybe knew the risks better !).

- - the Porfirian political elite used the “ambitious northern neighbour to gain domestic political advantage”

.

US citizens residing in Mexico City

• 1886 600

1898 1200

• 1901 3600

• 1906 5000

• 1910 10, 000 in a population of 471,000•

US investment and trade in Mexico• Trade between Mexico and US rose from $7 million in

1867 to $117 million in 1911

• Investment in Mexico from a “few millions” in 1867 to $1 billion in 1911

• 85% of US investment was in railways and mining in 1911

• Over ½ of US overseas portfolio was invested in Mexico before 1910: Guggenheim, J P Morgan, Rockefeller, all owed their primacy in part to Mexican investments

Imperialism ? neo-Colonialism ? or economic integration ?

Paolo Riguzzi asks whether the asymmetry in power and wealth between US and Mexico was reflected in unequal trade relations ? Concludes:

i) “On the eight occasions that the two countries met to negotiate commercial treaties..., Mexico was able to influence, at times decisively, in defining the agendas, the timing and limits of the negotiation, and in obtaining outcomes suited each time to its interests and preferences”

ii) periods of greater economic integration with the US coincided precisely with the moments in which Mexico enjoyed greater autonomy and power in its interaction with the US (US more flexible on tariffs), while moments of lesser integration coincided with greater weakness in negotiations.

Paolo Riguzzi ¿Reciprocidad imposible ? La política del comercio entre México y Estados Unidos, 1857-1938 (Mexico, 2003)

Imperialism ? neo-Colonialism ? or economic integration ?

• Riguzzi concludes that Mexico was not “avasallado” to, or dominated by, the US

• Economic integration with the US did not act to reduce sovereignty rather it strengthened the negotiating capacity of the weaker over the stronger......

• Yet problems with US Mexican relationship did grow after 1900….

“Poor Mexico, So far from God, so near to the United States” (Porfirio Díaz ?)

• After 1900 Diaz sought counterweights to reduce over-dependence on US by developing economic and diplomatic ties with Europe.• Chief advocate of this pro-European strategy:

Ignacio Mariscal, Min of Foreign relations, 1880-1910, deeply suspicious of danger to Mexican interests of the US• Mariscal provided countervailing voice in

cabinet to Romero’s pro-US enthusiasm

Dangers of US-Mexican economic relationship.

• To moderate US control of strategic sectors, in 1899 Diaz awarded Tehuantepec railway contract went to British Lord Cowdray. In 1907 some US railway companies are nationalised to become Mexican National Railways

• Differential wage rates between US and Mexican workers sparked labour conflicts

• US corporate interests grew to dominate whole states: e.g. Guggenheim in San Luis Potosi (Plan de San Luis Potosi, October 1910)

• US direct intervention bypassed local powers: eg William Greene Cananea Consolidated Copper Company deployed Arizona Rangers to break 1906 Strike

Cananea (Sonora) Strike of 1906

Spreading dependency and the “Diaz Doctrine”

• “Diaz doctrine”: meant balancing US and European investment in key sectors:

• repairing relations with Spain, France and GB, and overtures to Germany and Japan (and to Italy for colonisation)

• opposing US strategic and geo-political – “imperial” – objectives disguised behind masks such as “Monroe Doctrine” such as plan in 1889 a Customs Union which Mexico successfully opposed (would have enabled US to dominate hemispheric trade)

• opposing Theodore Roosevelt (1901-1909)’s “Greater Mexico” plan to incorporate Central America within Mexico thereby dominating the region....

• Hispanismo, Pan-Latinism & LA Nationalism: Diaz discussions with Jose Marti in 1895, Diaz offers sanctuary to Zelaya of Nicaragua deposed by US military coup in 1909....forerunners of Mexico’s radical foreign policy in 1970s (Castro and Sandinistas)

From backwardness to development: Banks

• Before 1880s, absence of modern banks and a stable market for bonds and securities were both a symptom and cause of Mexican backwardness and political instability: unpaid salaries, default on repayments, unpaid war claims, spawned revolutions & interventions…

• Before 1870s Mexico’s “banks” were i) Church & ii) merchant financiers – agiotistas – who doubled as miners, import/export houses, textile entrepreneurs….

• Hence, state faced permanent deficit and mounting indebtedness until 1880s…..

From backwardness to development: Banks

• 1880: restoration of diplomatic relations with France and establ. of Banco Nacional de México, assumed crucial role in financing govt projects, railways, etc

• Renegotiating English debt (UK held 80 % of Mexican national debt in 1870) Dipl. Rels. restored in 1884 when Manuel Dublán, Finance Minister (1884-91) achieved agreement to pay off debt in stages

• soon Mexico was borrowing on European capital market• foreign public debt rose from 52 million 1884 to 441 million in

1910, yet, this was amply compensated by overall expansion & foreign investment and bank assets of 1,116 million pesos in 1910....

Jose Yves Limantour: Ministro de Hacienda

• Jose Yves Limantour, (Finance Minister 1893-1911) see “Apuntes sobre mi Vida Pública, 1892-1911”

• balanced budget and eliminated current account fiscal deficit• managed of public debt• abolished trade restrictions and alcabala• tighter regulation of financial institution• achieved Mexico’s 1st balanced budget in 1896 • Mexico could obtain low interest (4%) loans until 1910• debt servicing fell from 38 % of govt income in in 1895 to 5 %

in 1910

Vertical Political Integration Model (VPI)

• In spite of the “invasión pacífica”, Liberal reforms and independent trade policy, Haber emphasise the determining role of personal ties between Diaz & Ministers (Cientificos), foreign and domestic interests

• “the Porfirian regime was characterised not by laisser faire and market rules, but rather by a politicisation based on an extensive network of privileged contracts between the president and selected groups of asset holders”: VPI or “amiguismo”

• Stephen Haber, Armando Razo & Noel Maurer, eds., The Politics of Property Rights, Credible Commitments and Economic Growth in Mexico, 1876-1929 (Cambridge, 2003)

Vertical Political Integration Model (VPI)

• VPI model explains political stability, economic growth, high levels of market and resource concentration (monopoly), as well as the regime’s “demise and revolutionary cycle” (when “amigos” abandon Diaz in 1910-11)

• Haber et al. conclude that VPI “excludes the state” (and, needles to say, the people) replacing it with a coalition between the dictator and groups of owners

Vertical Political Integration Model (VPI)

• Kuntz questions Haber et al. extreme view of amiguismo on evidence from the José Yves Limantour archive (Finance Minister, 1893-1911) :

• Kuntz: “Limantour daily negated favours and privileges even to the most powerful people”

• She finds that favours could be found at all levels……yet, once the network of amigos was formed, it became self-perpetuating.....

• Sandra Kuntz Ficker “La historiografía económica reciente sobre México decimonónico” Mexican Studies 21, 2005, 461-91.

Railways

• Railways achieved Lorenzo de Zavala’s 1830 vision of populating the North and galvanising the economies and societies of the Centre and South

• Railways broke more bottlenecks in a mountainous country (compared, say, with The Low Countries, with their rivers, meres and canals)….

• David Pletcher, Rails, mines, and progress: seven American promoters in Mexico, 1867-1911. (Cornell, 1958)

• John Coatsworth, Growth against Development: The Economic Impact of Railroads in Porifrian Mexico Northern Illinois, 1981

Railways: consequences

• i) restored Mexico City’s commercial centrality

• ii) Mexico’s recovery as world leader in mineral production by linking remote mines to centralised smelters

• precious metal and more importantly, non precious metals (iron, copper, lead, zinc…) boomed

• US dominance through smelters: Guggenheim in San Luis Potosi, Greene at Cananea in Sonora

Cananea (Sonora) Strike 1999

Copper smelter1999 Cananea strike

Railways: consequences•  • iii) permitted the development of industrial poles

beyond Mexico City by providing a national market:

– textile triangle of Puebla, Tlaxcala and Veracruz (centre of labour radicalism after 1900)

– industrialisation of Monterrey Nuevo Leon): beer, iron and steel

Railways: consequences• iv) recovery and transformation of agriculture: • - after 1900 Chihuahua cattle went in box cars to

Chicago, • - long stagnant colonial altiplano staples - Morelos

sugar and Atlixco wheat – found a national market; • - hurricane swept coastal cotton shifted to the

protected and irrigated Laguna basin (Coahuila), • - henequen boomed in Yucatan, • - sugar in the Valle Nacional in Oaxaca, • - coffee in Chiapas.

Henequen plantation railways

Land & Colonisation Laws and Indian Wars

• Other factors behind Porfirian “economic miracle”:

• - liberal lands laws (Ley Ledro of June 1856) extended from communal lands to all empty lands (baldias)

• - first proper policing of the countryside:

– rural police force (“Rurales”) policed settled peasantry

– plus effective prosecution of northern nomads in Indian wars

Rurales and Firing Squad, c 1900

1860 compared with 1910:

•  What were the social consequences of growth on ethnically complex and regionalised country ?

• 1860 compared with 1910:

• 1860: 8 million pop: • small elite, • tiny middle class, • a large artisan class and small working class,• immobile hacienda and village peasantry, • nomadic Indians. • North sparsely populated •

1860 compared with 1910:

• 1910: 15 million• - still small - but far richer - elite (regionally oligarchies)

• - greatly expanded middle class, especially in N Mexico where wages were higher

• - much greater mobility of rural population (except for nomadic Indians whose mobility almost ceased): wars against the Mayo, Yaqui and Maya, captives exported as slaves to Cuba and Yucatan: consequences for political education…

• - decline in artisan class and growth of modern working class, even in remote locations (such as Cananea copper mine in Sonora) increasingly difficult to incorporate politically and to police.

Social and political implication of these changes best explored regionally:

• See: Friedrich Katz, "Labor Conditions on Haciendas in Porfirian Mexico: Some Trends and Tendencies," Hispanic American Historical Review 54 (February, 1974)

• Katz explores changing labour conditions – pre-conditions for these regions differing experience of the Revolution – in three regions:

• Centre, North and South

Central Mexico:

• Population growth reversed historic labour scarcity that had ensured a stable “symbiosis” between village and hacienda since 17th C (see John Tutino, From Insurrection to Revolution)

• Excess population moved:• to the cities (soon full); • to the developing (coffee and sugar) Sierras; • to the tropics (involuntarily through application of Draconian

vagabondage laws), • to the North (where wages were higher)• and, increasingly after 1900, to US.• Those remaining faced:• - declining paternalism on many central Mexican hacienda

(tougher sharecropping & rental agreements; only the lives of peones acasillados (resident workers) remained secure).

Centre• - mounting tension between landholding villages and

haciendas as “symbiosi”s turned to conflict (competition over land, water and woodland). 1856 privatisation law in face of market expansion favoured hacienda over village. Basis for agrarian movements and agrarista politics after 1910…..

• - growth of small farms (ranchos) in many regions. Rancheros were the classic Liberal propertied rural middle class: anti-oligarchical and powerful influence upon the Indian population. Emiliano Zapata belonged to this class. Rancheros were a vital factor during the revolution and the Cristero War (1926-29). Autonomous and opportunistic……

Former Zapatista, Morelos, 1974

Northern Mexico

• Frontier society became a border society.

• - Close integration with US economy: Pullman from Mexico City to Boston by 1900.

• - Mobile labour force in north where the wage ruled. Wages were higher due choicebetween estates, railways, factories, mines or the US.

• socially problematic only when there was a general economic down turn (1906-1911)

Northern Mexico

• “Serrano” communities • (term used by Alan Knight in The Mexican

Revolution to distinguish the popular agrarian movements of the Central Mexico – zapatismo, etc – from the “serrano” movements of the North):

• alongside its great estates, Northern society developed a village peasantry in the northern Sierras (such as western Chihuahua) based upon military colonies established during the 18th C (for defence against Indians) and continued throughout the 19th.

• enormous extensions of Sierra land granted to these communities in exchange for military service.

Northern Mexico• The serrano landed communities prospered for one hundred

years…a distinctive “serrano” politics & culture developed: valuing political autonomy, land ownership, rather macho and patriarchal…..

• After 1900, especially in Chihuahua, the political and economic projects of the landed oligarchies came into conflict with these serrano ex-military colonies: liberal land privatisation divided serranos into “rich and poor”/ ricos y pobres, centralising municipal legislation removed their autonomy...

• growth of violence, banditry, out which emerged "avengers" such as Pancho Villa... 

The North•  

• Indians : • semi pacified Indian groups, such as the Mayo

and Yaqui, were enclosed as peons within haciendas, or pushed back into the Sierras (or over the Border into the US), where they dreamt of recovering ancestral lands. Yaquis were an active element during the Revolution as rising middle sectors used Indian fighters as clientele. General Obregon armed the Yaquis in 1915.

•  

The South• Another Mexico: see J.K. Turner Barbarous Mexico

(1908):• export enclaves and plantation complexes, poorly linked

with the national system. Labour scarcity resolved by penal and oppressive contract labour.

• with growth in demand for tropical commodities, paternalism on estates declined and slave like conditions became common (see Joseph & Henderson Mexico Reader, “Porfirio Diaz visits Yucatan”).

• enclosed on haciendas, peasants lacked tactical potential – as citizens without towns - for improving their lot.

• Moreover, poles of exploitation were distant from their communities of origin (Highland Chiapas) which were controlled by labour contractors in cahoots with Indian officials.

The South• hence, little prospect in the South of an alliance with

the middle class. In Yucatan and Chiapas conservative middle sectors deferred to oligarchies and were tied to them through patronage.

• There was some social unrest and banditry in 1910 but the oligarchies in SE Mexico succeeded in remaining in the saddle until the “Revolution from Without” (title of book on the Revolution in Yucatan by Gilbert Joseph) in 1916 under northern Constitutionalist General Salvador Alvarado from Coahuila (whose first act was to declare freedom of peons from their debts)

•  

Sugar harvest in Valle Nacional (Oaxaca), 1909

Tzoztzil Indians clearing forest for coffee (Chiapas), 1909