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

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Industrialisation in ,%.lexicaI jone-third more mills in operation than there had been three decadesearlier, but they were roughly twice the size of the earlier mills.34There had also been an increase in productivity since the early years ofthe industry. Physical productivity (measured in output of pieces of clothper active loom) increased some 3 79 % between I 843 and 1905, an averagerate of growth of productivity of roughly 2.5 % per year. This is a low endestimate, since it does not take into account improvements in the qualityof cloth or the increase in the production of fine-weave goods, both ofwhich were substantial. Labour productivity increased as well, thoughthis is somewhat harder to measure in the years prior to 1895 because ofsignificant changes in the allocation of the labour force between spinningand weaving departments of the mills. Xn analysis of post-1895 data,however, indicates a similar increase in output per worker: labourproductivity grew by 31 % between 1895 and 1905, a 2.7% annualincrea~e.~'Whatever the exact rate of productivity growth, it is clear that Mexico'snewer, highly mechanised firms were more efficient than their oldercompetitors and certainly were able to out-compete the nation's artisans,thereby forcing both of these traditional producers from the market. Ofthe nation's I yo cotton mills in 1905, for example, only 123 wereoperating, the other 27 (almost all of them smaller, older mills) unable tocompete against the newer, more efficient mills." The nation's artisansfared even worse: of the 41,000 artisan cloth producers in 1895, only12,ooo remained in 1~10.~'X similar transformation occurred in the cigarette industry where threegiant firms, employing automated cigarette rolling machinery fromFrance, drove the nation's artisanal producers out of the market. In 1898the nation's output of almost 5 million kilos of cigarettes was divided upamong 766 manufactories. Ten years later, in 1908, though productionhad increased by 76% to almost 8.7 million kilos, the number ofproducers had fallen by over 40% to 437. In other words, output perestablishment trebled over the ten-year period, from 6,410 kilos in 1898to 19,819 kilos in 1908. By June 191 I, the last date for which data exist,there were only 341 manufactories in operation, less than half the numberin existence just 12 years earlier.3s These figures probably understate thedegree to which the major producers forced out the smaller manufacturers,3Valculated from Secretaria de Hacienda y Credito Publico, Docurnentos, doc. 3;hlinisterio de Fomento, Estariljtica de/ Departaniento de ~tfixico, doc. 2; Seminario deHistoria, Estadisticas econo'rnzcas lie/ Porfiriato, p. I oh.35 Ibid." Calculated from Seminario de Historia, Eftadisticas econo'micas del Porfiriato, p. 106. " Anderson, Out~.asts in their Own Land, p. 47." Calculated from Secretaria de Hacienda, Boletin de estadistica fiscal, 1894-zpry (Mexico, x-arious years).
16 Stephen H.Habersince the data on the number of firms includes cigar manufacturers (whichwere not mechanised and therefore not subject to the same kind ofconcentration because of increasing returns to scale) as well as cigaretteproducers. Indeed, firm level data from the three major cigaretteproducers suggest that they controlled 60 % of the market by the close ofthe Porfiriato.Data on the labour force also indicate that the big, mechanised firmswere forcing the artisanal shops out of business. In 1895 there were 10,397workers employed in cigarette production. By 1910 there were but 6,893,approximately half of whom were employed by the nation's three majorfirms.39 If we assume that cigarette output was the same in 1895 as it wasin I 898, the first year for which output data are available, the data indicatethat output per worker increased from 473 kilos in 1895 to 1,216 kilos in1910 - an increase in labour productivity of I 17 % over the I !-year period- the apparent result of the substitution of automated rolling machineryin the big firms for thousands of workers rolling cigarettes by hand inhundreds of small shops. These figures, like those on output per factory,also tend to underestimate the degree of change in the industry. It isunlikely that output in 1895 was equal to the level of 1898 - it was almostcertainly significantly lower. Thus, if anything, the degree to which theautomated machinery employed by the large firms raised labourproductivity was probably greater than the I 5 7 % increase estimatedhere."'Family-owned enterprises remained in Mexico. In some lines ofmanufacturing, like leather goods, cigars and food processing, small firmscontinued to dominate. Even in the increasingly concentrated cotton andwool textile industries, small firms that produced for geographicallyisolated areas continued to hold out. Wherever there were sizeableeconomies of scale or speed, or where the lack of a skilled labour forcecreated incentives to mechanise production, however, big firms werepushing the small producers out. Because no comprehensive industrialcensus was ever carried out during the Porfiriato, it is not possible tocalculate the percentage of industrial production attributable to large-scalemanufacturing. Data from the census of 1929, however, shed some light onthe subject. As a percentage of total national production of manufactures,the subsectors that were becoming increasingly concentrated - steel,textiles, cement, beer, dynamite, soap, paper, glass, tobacco products -accounted for just over half of all manufactures produced in 1929. I39 Anderson, Oxtcasts in their Ou~n Land, p. 41.Calculated from Secretaria de Hacienda, Boietin cir estadistica fircaL, 1894 191j (Mexico,L-arious years).
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