Assessing the Obstacles to Industrialisation: The ... - Innovation

I 2Stephen H. Haberby the federal government, often at bayonet point. The 'progress' part ofthe equation would be brought about by the infusion of foreign capitalinto the economy. This was, therefore, a reflexive process. Just as Diazneeded to attract foreign capital in order to fuel the growth of federalgovernment power, foreign capitalists understood that it was in theirinterest that a strong centralised government be created that could instiland inspire popular loyalty and maintain order and stability."In short, during the last decades of the century the institutional andtransportation obstacles which had earlier impeded economic growthwere struck down. Peasant agriculture began to give way to higherproductivitycommercial agriculture; the mining sector, in declinethroughout the nineteenth century, began to set new records forproduction and sales, and new industries, like petroleum, were foundedand grew rapidly. The overall result was that the economy began to grow:per capita national income grew from $62 (1950 dollars) in 1877 to $91 in1895 and $132 in 1910.'~From the point of view of the Porfirian elite these economic andpolitical changes created the conditions necessary to foment large-scaleindustrial investment. They controlled a state that would support theirendeavours and keep the working class under control. At the same time,the creation of that expanding, wage-earning work force,2g thedevelopment of a national railroad system, the ending of provincialautonomy and internal tariffs, and the curtailment of banditry, meant thatthe internal market was growing rapidly. The expansion of commerce,both internal and external, was fuelling the process of capital accumulation:Mexico's merchants were growing increasingly wealthy,commanding capital that could be invested in all manner of economicactivities. Most important, hfexico's capitalists believed that the process ofeconomic growth that the country had been experiencing since the 1880swas going to continue. Influenced by the neo-positivist notions ofprogress then popular throughout Latin Amerlca, and convinced that theDiaz dictatorship was going to convert Mexico into a 'modern' nation,they were willing to sink their fortunes into industrial ventures. hlexico'ssecond round of industrialisation had begun.Beginning in the 1890s Mexican industry was transformed. Amanufacturing sector previously characterised by small, family-ownedBarbara Tenenbaurn, 'Plannlng for Alexican Industrial Development: The LiberalNation State, Tariff Pol~cy, and Kationaiism. 1867 to I~IO',unpublished paper,presented at Conference of the *Xrnerican l~iistoricai ,2ssociation. December 1985.'' Coatsa-orth, 'Obstacles to Economic