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

Industrialisation in Mexicoaffluent, which possessed large and well-integrated markets, and whichhad the ability to accumulate and mobilise the capital to financemanufacturing-ventures were the economies which were the first toindustrialise. Scholars have emphasised that no single feature or institutioncan be isolated as the determinant in industrial success, but they wouldagree that the lack of these features as a group would certainly workagainst successful industrialisation. It just so happens that from the 1830sto the 1880s almost all of the features which permitted industrial growthto occur rapidly in the Western European and US settings were lackingin Mexico.First and foremost, those countries which underwent successfulprocesses of industrialisation were already relatively affluent. They hadrealised slow rates of growth in per capita income for a number of decadeswell before they began to industrialise, and attained quite high levels ofnational income for pre-industrial societies. The Mexican economy, on theother hand, was not only significantly smaller than the successfulindustrialisers, it was also shrinking - both absolutely and relatively. In1800, according to John Coatsworth's estimates, Mexico's per capitaGDP (in I 9 j o US dollars) was $73, roughly two-fifths that of the UnitedStates and Great Britain. Throughout the first half of the nineteenthcentury, per capita GDP actually declined, falling to $j 6 per capita in I 845and $49 in 1860. In this last year it was only I 3 O/O of British per capitaGDP and 14 % of the US figure. It was not until the I 860s that per capitaGDP began to increase, rising to $62 in 1877 and to $91 in 18~~.'Underlying this fall in national income were a number of factors, all ofwhich we may also specify as obstacles to industrialisation. It should bekept in mind, however, that these were impediments not only to industrialgrowth, but to economic growth in general. Let us take up each of thesein detail.Perhaps the most noticeable obstacle to Mexican industrialisation wasthe lack of a national market because of high transport costs. Unlike theUnited States, England or the other early industrialisers, whose regionswere connected by low-cost transport systems (canal and riverine traffic,coastal shipping, and toll roads), Mexico's topography prevented thedevelopment of inexpensive modes of transport. Only one-third of theland mass of the country is reasonably level, and there aie almost nonavigable waterways, save for a few rivers in the sparsely populatedsoutheastern states of Veracruz and Tabasco. In addition, the greatmajority of the population has historically lived in the mountainousinterior of the country, meaning that coastal traffic could not play asignificant role in linking markets.John H. Coatsworth, 'Obstacles to Economtc Growth in Nineteenth Century Mextco',Anlerican Historical Review, vol. 83 (1978), p. 82.3