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

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Industrialisation in ,\/lexico I 9production/mass consumption economies, was inappropriate for theMexican market. This had two ramifications.The first was that there was a severe problem of excess installed capacityin many industries. In the cement industry, for example, Mexicanmanufacturers were able to run at only 43 % of capacity between 1906 andI 9 I I. In the steel industry the situation was even worse. Although therewas only one major producer, Fundidora Monterrey, it still only managedto run at 30 % of capacity between 1903 and 1~10.~' Even in consumergoods, where the capital equipment was more easily divisible and scaleeconomies tended to be smaller, there was a capacity utilisation problem.The scarcity of consistent data makes it impossible to estimate capacityutilisation rates in these industries accurately, but reports from manufacturersand analyses conducted by the hlexican financial press on cottontextile manufacture, the largest and best developed of the consumer goodsindustries, indicate that the industry could not run at capacity. Incompeting for control of the market at the turn of the century, Mexico'smajor textile mills began to switch to the recently developed, highvelocity, automatic machinery. If the entire hlexican textile industry hadthen been run at capacity, the market could not have absorbed all theoutput. Indeed, crises of 'overproduction' occurred on a fairly regularbasis : at least twice during the latter part of the Porfiriato, in I 90 1-2 andagain in 1907-8. Throughout the years of the Revolution (1~10-I~) andthe 1920s the problem was endemic.49The second ramification of the importation of capital goods was that itincreased the costs of entry: Mexican industrialists had higher start-upcosts than did industrialists in the advanced industrial economies. Notonly did they have to pay for the foreign-produced machinery; they alsohad to set aside funds to cover the cost of transport, insurance in transit,and the salaries of the foreign technical personnel who set up the plant. Inthe cotton textile industry, for example, these added expenses pushed upthe final cost of erecting a mill in 1910 from $12.72 per spindle in GreatBritain to $19.72 per spindle in Mexico, a difference of nearly 60 %I."As a result, a large part of Mexican industry was inefficient from itsbeginning. Foreign-produced capital goods led to high costs of entry andlow levels of capacity utilisation, with concomitantly high unit costs ofproduction. Had Mexico been able to export manufactures this unit costproblem could have been solved. An attempt was in fact made in 1902 toHaber, Industcy and Ilnderdeveiopment, p. j j. See EL Economiita 12lexican0, 18 Jan. 1902, p. 245 ; 21 June 1902, p. 203; 5 Sept. 1903 (English edition), p. jj6; 11 July 1908, p. 297. j0 Gregory Clark, '\Y'hy Isn't the Whole World Developed? Lessons from the CottonMills ', Journal of Economic Hirfocy, vol. 47 (1987), p. 146.
zoStephen H. Haberenter the international market, but was a resounding failure. The lack ofa merchant marine to ship its goods to foreign markets, the lack ofinstitutions to provide credit to exporters, the competition of producersfrom the advanced industrial economies, and high tariff barriers in otherLatin American countries, all worked against Mexican industrial exports."A second obstacle to successful industrialisation was the lowproductivity of hlexican labour compared with that in the advancedindustrial countries, and this again pushed up production costs. TheMexican working class had its social roots in the peasantry; many workerswere only recently off the farm; some moved back and forth between thefactory and the field. They therefore worked with the rhythm of apeasantry, not of an industrial proletariat. For this reason Mexicanindustrialists did not have the same degree of control over labour as didtheir counterparts in the United States, England or Germany. Thoughthey could force workers to work long hours, they could not instil inthem the attitudes and values that are essential to the development ofindustrial discipline. Like European industrialists in the late eighteenthand early nineteenth centuries, Mexican factory owners regularlycomplained about the 'laziness' of their work force and their inability toforce the workers to submit to routinised work.'*This resistance on the part of the working class took two forms. One wasthat workers openly resisted employers' attempts to increase productivityor achieve greater discipline on the shop floor. There were even occasionswhen entire shifts of workers abandoned their machines in order to attenda fiesta at a nearby hacienda or Darrio.j3 The second was that hlexicanworkers generally worked less intensively than did their American orEuropean counterparts. In the weaving departments of Mexico's cottontextile mills in 1910, for example, the average worker operated 2.j looms,j1 For a detailed discussion of this attempt to export manufactured goods during thePorfiriato see Haber, Industry and LTnderde~melopment, pp. 39-43j2 For a typical analysis of the productivity of Alesican labour by a Mexican industrialistsee Jose Robredo, Punto de t'ista de los indusfriales de bilados-y fejidos de la Repciblica (Alexico,I 9t r), p. > I. For a similar analysis by a foreign observer see G. Jenner, ' Informe de hfrG. Jenner sobre la inversion del capital ingles en hiexico', in Informesj documentosreiaticos a comercio interior, mes de setiembre 1886 (hiexico, I 886). This experience with theslow transition to 'factory time' u7as not unique to Llexico. In hfeiji Japan, forexample, people returning from stud! or work abroad regularly commented on thelaxness and lack of time discipline of Japanese workers compared to their Westerncounterparts. The transition to modern conceptions of time and work, hourever,appears to have proceeded more rapidly in Japan than in Mexico. See Thomas C.Smith, Satiz'e Sources oj',/apanese Industrialipation, I;JO-1920 (Berkeley, I 98 8), p p z t >-8.j3One of the more notorious cases of this occurred in the San Lorenzo cotton mill inOrizaba \'eracruz in igrj. For details on this case see Archivo General de la Sacion,Ramo de Trabajo, Box > 60, file 6, doc. I I.
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