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

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

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