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

z6Stephen H. Habereconomy enabled San Rafael to hold on to its control of the market overthe long run. It was not until 1936 that San Rafael's monopoly wasbroken, when the Mexican government, for political reasons, decreed thatthe distribution of newsprint was a strategic industry that should becontrolled by the State, not by a private firm. It therefore created agovernment distribution monopoly, though San Rafael continued tocontrol production.In short, during the 20 years between I 870 and I 910 Mexico underwenta rapid process of economic modernisation and growth. A national marketwas created by the building of a rail network, the mining sector wasrevitalised, a petroleum industry was created, agriculture becameincreasingly commercialised and industry moved into a wide variety ofnew products that had never before been produced in Mexico, drivingimported goods from the market and pushing the nation's artisans to thewall. But the contradictions and obstacles inherent in the rapidindustrialisation of an economy like Mexico's prevented self-sustainingindustrialisation from taking hold. The market was still too small tosupport capital goods industries (it could barely sustain consumer-goodsproducers in many lines of production), the industries that did exist wereunable to compete without extensive support and protection from thegovernment and a group of rent-seeking financiers came to control themanufacturing sector.The end of the Pax Porfiriana, 1910-1930It could be argued that the process of economic growth from I 880 to 1910would have eventually overcome the obstacles which stood in the way ofself-reinforcing industrialisation. The continued growth of the economymight have broadened and deepened the market, expanded the bankingsector and formed a national capital market, built an educational systemadequate to the task of developing engineering and industrial designcapabilities, and continued to break down pre-modern forms ofagricultural production. W'hile this could have happened in theory, thereality was that the uneven process of economic growth in Mexico set offa revolution against the Diaz dictatorship from both above and below, notonly ending the model of growth of the Porjriato, but also producing aslowdown in industrial growth for the next 2j years.Contrary to much of the popular mythology about the effects of thehlexican Revolution (much of it motivated, as John W'omack has pointedout, more by ideological presuppositions than by an analysis of theempirical data),@ the Revolution of 1910-1 7 did not destroy hlexico's66 John Womack, 'The Mexican Economy During the Revolution, 1910-1920:Historiography and ,lnalysis', ,2larxist Pt-r~pt-rttct-S,v01. I (1978), pp. 80-123.