FIVE |
Colonialism’s Thumb |
The golden age of capitalism, when the tree of the Industrial Revolution bore ripe fruit, was no time for the peripheral world to free itself from colonialism’s thumb. Known as the Gilded Age in the United States, Mexico’s new trading partner, it saw the triumph of the world economy of industrial capitalism, when Western Europe, and then the United States, embarked on imperial adventures, acquiring colonies by trade and investments and, if that failed, by rifle and cannon. By 1914, these colonies of the rich and powerful covered nearly 85 percent of the globe’s surface. As international commerce expanded, so too did Western capitalists’ investments in the peripheral world. Steamships, railroads, the telegraph, and bank loans opened the door for the sale of factory goods in faraway corners of the globe. Western factories now had markets in Asia, Africa, and Latin America for their expanding productive capacity.
The Gilded Age was a time of splendid Western hypocrisy, when deeds and spoken words rarely coincided. Englishmen dressed fastidiously in somber clothes, led the vanguard of this globalization, and saw themselves as the bearers of respectability and Victorian virtue, while caste societies and even slavery prevailed in their colonies. It was a time when dual standards dictated the behavior of upper-class men, usually bearded and sporting drooping mustaches, who gawked at women with breasts, hips, and buttocks swelled huge by perverse and punitive Victorian corsets, demanded chastity from their wives and daughters, but made women of the lower classes fair game for their sexual escapades.1
These Englishmen and their cohorts in the West bore in their souls the seeds of a virulent racism.2 Herbert Spencer and his silly doctrine of social Darwinism made deep inroads in liberal thought, the prevailing dogma of the Gilded Age.3 A horror of miscegenation spread like wildfire through Western Europe and the United States, prompted by a belief that half-breeds inherited the worst of their parents’ races. A horde of Mexicans wishing to deny their mestizo roots, especially the middle class, which was always uncertain of its place on the social ladder, fervently embraced Spencer’s nonsense to distant themselves from the Indian and the swarthy poor. As Federico Gamboa had a Spaniard say in his novel Santa, the “vices of Mexico sport aboriginal roots, nasty after-tastes of savages and characteristic of pre-Hispanic Indians.”4
With Spencer as their bible, Europeans, capitalists, and liberals one and all, and soon their cousins in the United States, would dictate events in Mexico and the rest of Spanish America, cementing in place, by trade, finance, and steel, the colonial structure of underdevelopment under the mantel of free trade. As in colonial times, Mexico kept on strumming the same old guitar, relying on an export economy choreographed by hacendados, powerful merchants, foreign mine owners, and a servile burguesía. In its relations with the advanced capitalist countries, Mexico served as an adjunct, supplying them with raw materials, industrial metals, cheap labor, fertile soil for investment, and a market for goods.
After the restoration of the Republic, another day dawned, calling forth decades of peace and order, all under the Liberal Party banner, an era now remembered as the Porfiriato. At the helm of the ship of state was an elite embracing the Western capitalist values of money, personal success, schooling, and science. Urban growth, a signpost of rising middle-class importance, was a hallmark of the times; the populations of Mexico City, Guadalajara, and León, three of the booming cities, multiplied rapidly. With the Western European hunt for raw materials for industry and markets, investment capital slowly started to come, primarily to Mexico’s metropolises and the mining districts of the northern border states. Little of the money found its way into factories, partly because the investors did not want competitors. Despite the flow of capital into Mexico, the poor went from want to want. Dirt farmers and artisans alike swelled the ranks of job seekers, while campesinos who held on to their parcels of land had little money to spend. Designed to supply the needs of the industrial nations, the local economy gave birth to a burguesía that blossomed at the cost of its independence. Nor did Mexico, much admired by Westerners, rid itself of the age-old sin of corruption in public office and business. It went on as before, to quote the novelist Gregorio Lopez y Fuentes: “El que tiene chiche mama, y el que no, se cría sanchito” (He who has a tit to suck, sucks; he who hasn’t grows up an orphan).5
To share the benefits of the outsiders, upon whom they came to depend, the Porfiristas bid change a hearty welcome, conceding to foreigners power over their economy and aping their culture. A dependent but prosperous economy of benefit to the few rested on political stability, so law and order took top priority, along with the need for a cheap and docile labor force. In politics, it was a time of lobotomized accommodation, when docile and obedient politicos did the masters’ bidding. Out of this concoction of need and circumstance surfaced a strong, centralized state, which rid itself of domestic trade barriers such as the alcabala. Banks too made their appearance, mostly with English capital. Trade between Mexico and the West helped establish political stability, the cherished peace and order. Dependency, that of Mexico on the capitalist nations, offered benefits sufficiently lucrative for better-off Mexicans to abandon anarchy.
It befell Porfirio Díaz to preside over this veneer of progress, with its lavish superficiality. Befell may be the precise term, given the flowering of Western capitalism, and as the stability and prosperity of Argentina, Uruguay, and Chile testify, what occurred in Mexico, more likely than not, would have taken place no matter who governed. Díaz, to his credit, did everything possible to speed the transformation. For his contemporaries, Don Porfirio was a remarkable man. In an age when men apotheosized Herbert Spencer’s social Darwinism, Díaz, his admirers proclaimed, exemplified its truths; his amazing accomplishments verified the axiom of the “survival of the fittest.”
If Díaz proved anything, it was the nonsense of Western racial categories. He was not, according to current definitions of race, a white man. His skin the color of the earth, he was the son of a Mixtec woman and a mestizo father. Whether he was proud of his racial heritage is problematic, though he was wont to boast, “Yo soy mexicano porque soy indígena” (I am Mexican because I am Indian). That acknowledged, he also spoke with crocodile tears of the “wickedness of the Yaquis of Sonora,” then being robbed of their lands by the federal army.6 As Díaz aged, especially after his second marriage, persons who saw him up close noticed that, in an effort to look less swarthy, he dusted his face with white powder. The mate a person chooses can tell something of that person’s beliefs and values. Little is known of Díaz’s first wife, but his second, whom he married at age fifty-two, was a criollo girl of eighteen, white of skin and clearly of European heritage, the daughter of Manuel Romero Rubio, a former cabinet minister. Socially pretentious, Porfirio’s wife once attended a ball given by the English minister dressed as Diana the huntress, carrying a bow and arrows.
A self-made man, the type eulogized by social Darwinists, Díaz was only superficially schooled. More shrewd than intelligent, he read poorly and wrote worse, knowing little about grammar and being a poor speller. He preferred to learn by listening and observing. He rose early, worked ten to twelve hours a day, and seldom stayed up late. During the American invasion, he enlisted in the militia of Oaxaca and, finding military life to his taste, fought the Conservatives and the French on the side of the Liberals, whose principles he came to espouse. For his services against the French, he rewarded himself with the Hacienda de la Noria on the outskirts of the city of Oaxaca.
A military man by vocation, Díaz employed force when necessary and could be ruthless. Don Porfirio’s worship of power, “a passion impossible to curb,” asserted Emilio Rabasa, who knew him well, matched his analysis of Mexico’s needs.7 Mexico, Díaz believed, could not afford the luxury of politics and at the same time enjoy economic growth. If it were to “progress,” peace and order had priority. To quote Justo Sierra, one of the adulators, “The political evolution of Mexico had to await economic growth.”8 Partly because of this, critics of Díaz called him a dictator; that epithet ignores his popularity, a fact of life until the turn of the century. He was indeed popular, but nevertheless these Liberals, who earlier had been vociferous critics of the Conservatives, whom they accused of tyranny, once in power resorted to harsh measures and dictatorship. Whether Díaz, who took over the reins of Mexico in 1876, had read Adam Smith or any classical economists is highly doubtful, but his multiple administrations, in theory at least, certainly hewed to them.
During Díaz’s thirty years in office, the state bowed to the wishes of the rich and powerful, natives and foreigners alike, both identified with exports. As Octavio Paz wrote, “The past returned, decked out in the trappings of progress, science and republicanism.”9 Paz had truth on his side; the Porfiriato, as the era is known, not only kept alive the old colonial dependency, but foreigners, notably Americans, reaped huge profits. It was a rapacious moral order, of vicious injustices shamelessly flaunting the cruelty of Mexican life for the poor and weak.
As for the church, the traditional enemy of Liberals, Díaz never proclaimed a policy of conciliation. He let others smooth relations with the church for him, and the clergy, fully aware of the rules of the game, hailed him. And well they should have, because during his tenure in office the number of priests and nuns, monasteries and seminaries, multiplied. Officials turned a blind eye to church schools, where priests and nuns taught the children of the well-to-do, to religious processions, and priests who wore black cassocks in public, banned by the Constitution of 1857. In the Indian villages, meanwhile, hybrid forms of Catholicism survived, sometimes within sight of the nearby priest.
How did this stability come about? One irrefutable reason for it is that the times were ripe. Western capitalist expansion, the needs of its industry, that of England, France, and the United States, more than any other factor, explain Mexico’s stability and prosperity. Markets for Mexican industrial metals, copper particularly, as well as railroads to transport them north of the border, in turn lured foreign capitalists to invest their money in Mexico. Exports supported the Porfiriato’s golden years.10 Díaz also had the good sense to appoint acolytes of Western capitalism, upon whom he relied for advice and guidance, to his cabinet. The two he chose for the ministry of the economy, the key post, were neither men of the people nor men of Indian blood. Matías Romero, a native of Oaxaca, who had served Benito Juárez, was a criollo so enamored of the United States that he came to be known as the “biggest pocho,” as Mexicans refer to devotees of American ways. Like many others of that time, Romero believed in the myth of the Mexican cornucopia; one had merely to exploit the country’s plentiful, rich resources. He had spent years in Washington as head of the Mexican legation and thought American investments in Mexico to be necessary, regardless of the danger posed by such a weak country being beholden to capital from a powerful neighbor. Romero had scant use for tariffs that hindered the exchange of goods, and he overlooked their need to protect infant industry.11
Romero’s successor, José Ives Limantour, in office for nineteen years, left heavy footprints on policy. Although not an aristocrat, he never knew what it was like to be poor, to be unable to acquire something he desired. He was the owner of an opulent estate not far from Mexico City. Of French ancestry, an admirer of everything French, he saw Mexico through the eyes of a rich man, a snobbish attitude he barely concealed. When he fled Mexico, he chose to live out his life among the people of Paris, whom he adulated. As a young man, he had spent four years in Europe, had read Spencer, and had accepted his theory of the survival of the fittest. Like Romero, he welcomed foreign capital, believing it the road to Mexico’s salvation. A moderate protectionist, Limantour conceded the necessity for some barriers to protect what was produced at home, but not “ones in conflict with sensible economic theories.” He confessed that he had been inclined to support free trade, but it could not be implanted over night, without taking into consideration special circumstances, such as geography and “race,” that helped mold the character of a people.12 A politico with his ears finely tuned, he seldom forgot his Porfirista allies and was always alert to the need to shield the enterprises of friends of the regime with tariffs.
Lord Acton, the English sage, once remarked that the bonds of class were stronger than those of nationality; in Mexico this was undoubtedly true. The elites of Mexico sought to identify themselves with the elites of Europe and, later, the United States, rather than with their countrymen. The Mexico of the Porfiriato was a stratified society: the rich, constituting just 1 percent of the population, controlled the lion’s share of income and wealth, while a small urban middle class that fed at the public trough spent sleepless nights worrying about making ends meet but nearly always parroted the opinions of the rich. At the bottom of the strata languished the common folk. Acton’s wisdom perfectly describes the class society of the Porfiriato, which came to denigrate everything Mexican and sought, wrote the philosopher Samuel Ramos, European models to emulate.
The well-off sent their sons and daughters to private schools, mostly run by the church, and when finances permitted, so did the middle class, while public schools, where they existed, catered to the poor. The rich and middle classes, read Friedrich Nietzsche, Henri-Louis Bergson, and William James and attended plays by George Bernard Shaw and Henrik Ibsen, but would not have been caught reading the Mexican novel Astucia.13 It was all a farce: just one out of five Mexicans could read and write. When the Porfiristas celebrated the centennial of Mexican independence in 1910, an orgy of foreign adulation, things Mexican were conspicuous by their absence. It was an age when art for the sake of art had center stage, when members of “la clase decente” felt shame on seeing the shoddy clothes worn by the poor, dark-skinned, bedraggled compatriots, whom they believed soiled the image of the homeland. No one “embarked on an enterprise without first acquainting himself with what Europeans had done in similar cases,” wrote one critic.14 Certain that peace required a philosophy of order, intellectuals embraced Positivism and Spencer’s social Darwinism.15 As Ramos recalled, the upper classes “dressed in the French Parisian style, and imitated its good and bad customs.” The descriptive term for this masquerade was afrancesado, referring to a Mexican who imitated the French. Bankers, textile magnates, empresarios, and rich hacendados lived in splendor in the colonias Juárez, Roma, and Santa María of Mexico City; some even adorned their mansion with mansard roofs, though it never snowed in Mexico City, and decorated their walls with European art.16
Perhaps no intellectual better personifies this age of mimics than Francisco Bulnes, prolific author, popular lecturer, and sociologist of sorts.17 Highly intelligent, he was a keen observer of the human condition and knew Mexico as did few others of his day. As a senator and congressman, he viewed protective tariffs as simply a tool by which to compel consumers to buy goods at inflated prices, and as a friend of foreign investment, he praised opening the petroleum fields to foreign capitalists. An enemy of agrarian reform, and a defender of private property, he called the ejido a form of landholding for primitive peoples, not one for those who hungered to belong to the family of civilized nations. Long on assertions but often light on data, for Bulnes, history demonstrated that the wheat eaters of the world had led the march of modernity, while corn eaters had lagged behind. Corn, of course, meant Indian, while Bulnes equated wheat with white men and the world of Western Europe and the United States.18 Bulnes, of course, merely parroted what good Porfiristas upheld as God’s truth, a concept of modernization founded on wheat-based diets.19
In his famous pyramid, Karl Marx argued that the economic base dictated the nature of intellectual thought, but he conceded that over time ideas modified it. In Mexico, Marx was only partly right. Literature, which takes its cue from the society that produces it, never got beyond simply parroting the conservative culture of the time. An effete elite poeticized and endlessly debated the obscure points of French literature and put into service their farcical infatuation with impressionist art to cloak themselves from the brutal world of hacendados and empresarios busy getting rich off the toil of hapless human beings. However, in one respect, poetry, the reigning art form, departed from the afrancesado, though Verlaine, the French bard, influenced it. The Porfirista epoch was that of modernismo, the poetry of the swan, a genre given birth by Rubén Darío, a diplomat from Nicaragua who spent most of his life in France.20 Modernismo epitomized an age antithetical to all that Antonio Gramsci, the Italian cultural Marxist, stood for, when intellectuals believed it possible to know without understanding, shorn of any feeling for the basic passions of the people, free of any attachment to them. Writers and poets, the intellectuals of the Porfiriato, became a priesthood at the service of the state. An esoteric poetry of flowery verses, modernismo had a host of Mexican disciples, among them Amado Nervo, Manuel Gutiérrez Nájera, and Salvador Díaz Mirón, all of whom served the Porfiristas, usually in the Mexican embassies of the best of the European powers, never losing sleep over the dreadful social conditions of millions of Mexicans. Perhaps the most shameless of the lot was Díaz Mirón, who groveled before the master and whose verse not once touched on the subject of the chicanery and corruption of the Old Regime.
The novel, then just getting off the ground as an art form, had authors of far less talent, although Federico Gamboa’s Santa stood out. A story of a poor girl done wrong by a scoundrel and who then becomes a prostitute in a house of ill fame, the novel displays the influence of Emile Zola’s Nana and the school of “naturalism.”21 However, though that literary school asked for faithful attention to reality, that did not unduly trouble Gamboa. The word syphilis, a constant companion of prostitutes in Mexico, never mars the pages of Santa, nor does the police tactic of returning prostitutes to their bordellos, nor laws forbidding prostitutes to walk the streets in groups. Gamboa served Díaz faithfully, never raising his voice against the inequities of his time. When he wrote La parcela, a novel supposedly sympathetic to the plight of the peon, José López Portillo y Rojas had been a congressman, senator, and governor of Jalisco. La parcela, which sets out to examine social conditions on a hacienda, ends up defending hacendados.22
Art and music were asked to generate sweetness and light, not truculence and disaffection. So José Mará Estrada, father of the pictorial school, painted beautiful landscapes, but with nary a brush stroke to depict inequality and poverty. José Guadalupe Posada, a caricaturist and, at times, a dissident critic, drew for Porfirista journals. Manuel María Ponce, baptized the father of la música mexicana, was a composer influenced by European classical music, especially Italian. His “Lejos de ti,” “Estrellita,” and “Rayando el sol,” a good part of the lyrics taken from modernista poetry, are icons of Mexican music.
On the international scene, huge changes were afoot. Between 1870 and 1913, the industrial growth of the Atlantic nations led to a rising clamor for the natural resources of the peripheral countries. Speculators made fortunes investing in their export sector, especially mining and railroads. Reliance on exports was a two-edged sword; sales abroad engendered foreign funds that fattened the economy and, ironically but logically, helped promote some industry. All the same, reliance on them made Mexico much more dependent on the markets of the outside world. That reliance marched in step with the belief that salvation depended on the know-how and capital of foreigners. At first, European and English bankers lent the money, and then, over time, Wall Street replaced them. As José Ives Limantour, the minister of hacienda, acknowledged, borrowing from Wall Street bankers, which ultimately converted Mexico into a dependency of the Yankee, carried obvious dangers. Yet Limantour helped convince his countrymen, pre-disposed to believe him, that the benefits of these investments out-weighed the dangers. Limantour and like thinkers predicted confidently that, once Mexicans were wealthier, they would redeem what had been lost to foreigners.
On the assumption of future redemption, the Porfiristas, believing fervently in the “open door,” invited the stranger into their home. Slowly Mexico’s foreign debt grew beyond its ability to pay. The profits of foreigners, moreover, were rarely reinvested in Mexico.23 The benefits of this export economy fell into the hands of a small coterie of mine owners and merchants in the import and export trade, a majority of whom were foreigners by 1900. As Mexico became fully integrated into the world market, the engine driving it was the flow of capital from United States. The formation of a national market, though recognized as a proper goal, sat at the rear of the bus. To exacerbate matters, dependency on exports exposed Mexico to the ups and downs of international commerce. It also befell Mexico to suffer the adoption of the gold standard by the United States and the Western capitalist countries, which dealt a heavy blow to sales of silver. While a depreciated currency made Mexican exports cheaper, it also brought inflation and made imports more costly.
For the Porfiristas, foreign capital, as well as exports, embodied the magic bullet of modernization. The challenge, therefore, was how to create the political and economic conditions that would keep foreigners coming to Mexico and, at the same time, find markets for Mexico’s goods. So Mexico had peace and order, opened wide its doors to American investors, and courted American markets. So attractive did Yankees find Mexico that they had invested nearly 2 billion dollars by 1911, monopolizing over 80 percent of all foreign investments. U.S. corporations controlled over 80 percent of mining, owned over 100 million acres of land, and provided nearly 60 percent of imports, while taking 75.6 percent of Mexican exports. These investments represented nearly half of all U.S. investments abroad. Of the manufactures purchased by Mexicans, nine out of ten came from across the border.24
Signs of modernity made their appearance particularly after the arrival of the railroads in the 1880s, which began the integration of regional markets into a semblance of a national one.25 The iron horse made profitable the exploitation of previously neglected minerals, such as copper, lead, and zinc, and spurred the birth of a steel industry when rail transport brought the coal of Coahuila to the foundries of Monterrey. The iron horse, likewise, fostered urban and middle-class growth. Despite that, Mexico remained basically an exporter of minerals and, as such, tied its kite to the windy currents of the international market.26 So long as the United States bought silver, all was well; after that, exports of copper, lead, zinc, graphite, and antimony took over, along with those of henequen. Yet without an uninterrupted flow of foreign capital and technology, a sure sign of underdevelopment, says Enrique Florescano, a Mexican historian, the formula proved unsustainable.27
Worshiping at the altar of foreign capital brought other maladies. The French owned most of the banks; Americans the telegraph, railroads, and mines; and the English and Americans the oil wells. Wages paid Mexican workers usually made their way out of the country for the purchase of imported articles, though spending on food kept some home. Yankee owners employed their own engineers, technicians, and foremen to run their enterprises. Nor did all of them behave honorably. Edward L. Doheny, the oil magnate, remembered Americans who came to Mexico as “young, hardy, and impetuous, not to say ruthless.”28 Or, to quote James Stillman, an American investor, “The people of Mexico will have to be supplanted by another race . . . before a great development can be expected.”29 These nonbelievers in the virtues of the Mexican “race” segregated Mexican workers. Tampico, the oil depot, was overcrowded and polluted, and at Cananea, the copper queen, workers and their families were housed in shacks of discarded tin and scrap lumber, while on the railroads Mexicans laid the tracks but American conductors and engineers ran them.30 At the mines, Mexicans were paid less for jobs also done by Americans. Nor did these Americans lose any sleep when the needs of Mexicans went unmet. In Guanajuato, with Americans at the helm of mining, infant mortality rates reached 84 percent.
Don Porfirio and his supporters believed privatization a panacea for what ailed Mexico. So they set about making sure that individuals owned virtually everything under the sun, even the subsoil. The mining code of 1884 revoked Spanish and Mexican laws declaring the subsoil a national reserve and conferred ownership on owners of surface property, swinging open the doors to Americans who had long yearned to own the mines they operated. The law of 1909 reaffirmed that decision, labeling minerals and petroleum in the subsoil the “exclusive property” of the owner. Most important, the subsoil denoted petroleum, the black gold used to fuel the internal combustion engine of the automobile. Doheny, an American, got the ball rolling in 1900 when he bought 450,000 acres of land in Ebano, not far from Tampico; for part of it, he paid one dollar per acre to campesinos who had no idea that their subsoil had petroleum. Eventually, Doheny’s operations controlled 1.5 million acres of subsoil. A bit later, a similar benevolent fate befell the Englishman Weetman Pearson, who discovered oil near Laguna de Tamiahua in Veracruz, the start of El Águila, eventually a pillar of Royal Dutch Shell, while Doheny sold his holdings to the Standard Oil Company.31
For the Porfiristas, the railroad was the talisman, a magical formula to unite the Republic; create a national market; resurrect the mining industry; spur the cultivation of cotton, sugar cane, tobacco, and guayule; boost cattle ranching; settle idle lands; and, above all, multiply many times the amount and value of exports. But the dream of a national railway grid never fully materialized; it was replaced by lines that ran from the United States to Mexico City, linking Mexican mines to industry north of the border. Still, Mexico had 24,717 kilometers of railroad tracks by 1910. Lands granted the railroad builders in the form of rights of way reached the grand total of 8,200,000 acres. The steam locomotive, in a nutshell, delivered Mexico into the arms of American merchants. Exports from the United States to Mexico grew rapidly and permanently altered relations between the two dissimilar neighbors.
What the railroads did was to make Mexico more export-oriented. Not only did the iron horse tie the country to the United States; it also revived mining, which had been the key to the export economy since colonial days. It did so largely because of the exploitation of industrial metals, which, concomitantly, brought about a flourishing import trade, including capital goods, paid for by the sale of industrial metals. The recovery of mining occurred almost entirely because of foreign investment, mostly American. The effects were dramatic. In 1800 Sonora was the poorest of the states, but because of its copper mines and rail lines, which joined Guaymas and Hermosillo to Arizona, and trunk lines tying Cananea and Nacozari to the American smelter at Douglas, Sonora became the richest state a century later. By 1910, Sonora exported ores worth 26 million pesos, three-fifths of it copper. During the boom, the population of the mining towns multiplied; Cananea led the way, growing from nine hundred inhabitants in 1900 to twenty-five thousand in 1906. Changed too, because of the Southern Pacific Railroad, were the fertile lands of the Mayo and Yaqui Indians, robbed from them by Díaz henchmen on behalf of American speculators, who turned them, with the help of the rivers running through them, into agricultural emporiums producing cash crops for export to the United States. Concurrently, in Hermosillo, Guaymas, and Alamos, the cities of Sonora, importers of American goods, as well as a middle sector of lawyers, accountants, and office clerks dependent for their livelihood on the mining industry, multiplied, few of them advocates of industry.
As for the industrialization of the Porfiriato, much admired of late by some scholars, that too requires another look. It is now popular to say that under the Porfiristas the torch of Mexico’s industrialization had been lit. There is germ of truth in that assertion, above all because the railroads made the transport of goods to a wider public cheaper. The cotton industry enjoyed spurts of growth, doubling in size by 1911, propelled along by tariff walls. Textile mills, many dating from earlier years, turned out cotton and woolen cloth and supplied virtually the entire domestic market, as did paper mills and the cement industry. Established in 1900, the Compañía Fundidora de Fierro y Acero de México, a steel conglomerate, could handle a thousand tons of ore per day; equipped with rolling mills, cranes, and locomotives, it produced finished steel. There were paper mills: one of them operated its own tree farm and a mechanical wood pulp plant, and generated its own electricity. The Cervecería Cuauhtémoc, a brewery, flourished in Monterrey, while the Vidiera de Monterrey, a glass factory, started out making bottles for it. The soap factory in Durango ranked among the biggest in the world. Other enterprises turned out cigarettes, cement, jute, henequen twine, sugar, and sundry explosives. One industry to get a face lift was pulque distilling, once confined to provinces such as Hidalgo but, with the advent of the iron horse, became established in Mexico City.
The truth is, however, as a doubting scholar puts it, that Mexico’s infant industries never made it to adulthood. When the Porfiriato collapsed in 1910, Mexican industry, with one or two exceptions, confined its output to consumer goods. Mexican empresarios imported the machinery as well as the technology required to make the machines that produce these goods.32 Foreign technology, as well as the machinery, designed with a mass market in mind, underlay industrialization. Staffed by foreign technicians, the nascent industries were capital-intensive, copies of their foreign counterparts, too advanced for the Mexican market and often operating at less than capacity. In some cases, workers in the textile industry were laid off so that production not exceed demand. No thought was given to the erection of laborintensive factories; local entrepreneurs copied the Europeans, importing the latest gadgets—into a country with an abundant supply of cheap labor.
In the last fifteen years of the Porfiriato, the labor force employed in industry grew only slowly, below the pace of population growth and below that of agriculture. Inefficient production led to high prices, for steel from the Fundidora Monterrey and cement, to name just two. Overproduction was endemic, making economies of scale impossible.33 Mexican industry proved unable to compete with imported goods. Hampered by high prices, and the absence of a national merchant marine, empresarios were unable to sell their goods abroad. Until the end, profits from mineral exports paid for the purchase of the technology and machinery needed to produce consumer goods. Meanwhile, a shortage of skilled workers hampered industry, multiplying the ills of low productivity and pushing up the cost of manufactures.
In response, entrepreneurs chose to erect monopolies to control the market.34 No laws barred mergers or consolidations; the influence of empresarios in government circles kept out competitors, both Mexicans and foreigners. Monopolies, from textiles to beer, from steel to cement, barred upstarts. In 1910, five cotton textile mills, out of a total of 145 in the Republic, controlled over a third of the country’s productive capacity. As justification, the owners pointed to low profits and to the need to band together to withstand competition from outsiders. True, foreign competitors helped make monopolies almost inevitable; with a head start of half a century or more, Europeans and Americans were selling their wares over the entire globe and undercutting Mexican goods. Trying to expand its monopoly over the world market, United States Steel even sold steel at a loss in Mexico.35
Still, empresarios, though hardly at the forefront of innovation, knew enough not merely to join hands in monopolies, but to band with politicos to erect special tariffs for their industries, textiles and printed paper for one, but as time went on, also cement, iron, and steel.36 However, these tariffs were not simply protective measures but, as in the past, revenues for the national exchequer.37 Empresarios endeavored to build an industrial edifice in a closed market, first behind these special tariffs and a devalued peso, the result in the fall of silver, and then with the help of incentives, the elimination of taxes for five years to new industries, for example.38 Not all empresarios got help, because, as the pragmatic Limantour explained, they had to prove that their industries benefited the country or would be annihilated by foreign competition. Since Mexican industries operated at high cost, no one would have invested in them without some tariff protection, but these measures also passed on the high cost of local manufactures to the consumer. By bankrupting some of Mexico’s empresarios, the depression of 1907 further discouraged investment in plants and equipment and put a brake on industrialization. What Mexico built during its Industrial Revolution, to quote one skeptic, “was underdeveloped industrialization.”39
What went wrong? Why did the effort to build a national industry, one step on the road to independent development, stumble? The answer is complex. For one, the absence of capital hindered industrialization; the funds required for the purchase of machinery, tools, and materials were not in evidence. Largely absent were banking institutions prepared to lend money to industry (or to hacendados); not until the 1880s did they make an appearance. In 1884, Mexico had only eight banks, and by 1911 just forty-seven, but only eleven of them able to lend money for terms of more than a year. Long-term loans were, to call up an old cliché, as scarce as hen’s teeth. Manufacturers, in short, could rarely rely on bank financing.40 Wealthy merchants, mostly foreigners, provided the capital. Few Mexicans were major stockholders of manufacturing companies. In 1910, Mexicans controlled only 20 percent of the money invested in textiles, the oldest of the industries.41 The Mexican capitalist class had emerged at a snail’s pace, one reason being the peculiar nature of the native merchants or financiers of the semicolonial economy, who acted as subordinate collaborators of foreigners. These Mexicans got rich off profits from exports, which paid for the imports they handled, and not by entering into risky ventures.
Above all, it was the nature of the market, too small to support a dynamic and profitable industry, the result of low wages, both in cities and in the countryside, as well as the lopsided nature of income and wealth distribution. As Andrés Molina Enríquez wrote in his eloquent analysis of Mexico’s ills, Los grandes problemas nacionales, only industries relying on exports profited, such as tobacco and henequen. Those relying on the domestic market faltered upon arriving at a certain stage in their development.42 The only way to circumvent this barrier was to sell abroad. Failure to do so meant stagnation, since it was impossible to build industry on the buying power of the Mexican masses. But how did one compete with the more efficient industries of the United States and Western Europe? By the same token, the ups and downs of foreign markets, a result of economic currents outside the control of Mexico, made reliance on exports hazardous. This was the nature of dependency. Julio Sesto, the Spanish tourist and poet, recounted that during the bonanza years of henequen a clerk counting money in a store in Mérida accidentally dropped a quarter and, seeing a janitor standing nearby, asked him to pick it up. “Bah! I don’t stoop for a pinche quarter,” he replied. After the bottom fell out of the export market for henequen, that same janitor, if he was lucky to have a job, labored from dawn to dusk for less than a quarter.43
This was a strange and illogical world. For its survival and prosperity, Mexico’s industry essentially relied on consumers of the lower classes; the better-off purchased foreign goods. If that were so, one would have to conclude that efforts would be made to raise wages in order to multiply the numbers of consumer among the workers. What, if anything, was done? Well, strange to say, nothing—absolutely nothing. Shoe manufacturing, for instance, began only in the twentieth century, because the wearing of shoes was restricted to a small urban sector; campesinos, a majority of the population, by and large, wore homemade huaraches.44 This in no way suggests that Mexican empresarios were ignorant of the problem: to the contrary, they agonized over it, but nonetheless they ruled out paying decent wages. For industrial workers, there were always those waiting to take their place and, concomitantly, keeping their wages low. On a national average, industrial wages seldom exceeded fifty-nine centavos per day, just over three pesos per week. Management, more likely than not, paid wages in “vales,” chits redeemable at the company store, notorious for selling low-grade goods at bloated prices. Between 1897 and 1900, wages fell precipitously. As a result, workers could not buy much beyond coarse cotton cloth, cigarettes, soap, and beer. No wonder that the pulquería where men and women drank themselves into a stupor became the workers’ church.
Lest we forget, Porfirista Mexico was the domain of social Darwinism. Proverbs 28:27, “Whoever gives to the poor will not want,” had scant credibility for the Porfiristas. Mexican burgueses preferred Mark 14:7: “You always have the poor with you.” Labor had to endure a multitude of hardships. The hours of toil were long. Factories opened their doors before the break of day and closed them after dark. Men, women, and children, the industrial labor force, spent their days toiling in sweatshops no better than colonial obrajes or risking life and limb in the mines. Employers displayed a callous disregard for human life. Even Guillermo Prieto, that Liberal bellwether, looked upon labor as merchandise subject to the laws of supply and demand, while José López Portillo y Rojas, the Catholic writer, pronounced that labor turmoil was criminal. The penal code of 1872, a Liberal landmark, branded private property sacred and levied a fine or jail sentence on anyone convicted of exerting moral or physical force to modify wages or to impede the “free exercise of industry or labor.”45 A law in Sonora, a haven for Yankees, punished workers who joined labor unions. Article 4 of the textile codes, symbolic of management’s attitude, permitted workers to complain only in writing to the head of their department. But then this heartless behavior took its cue from contemporary practices in the rest of the world. To cite Joseph Conrad’s acclaimed novel Heart of Darkness, depicting European colonialism in the African Congo and the rape of natives in the pursuit of rubber and ivory, malcontents had to be punished: “Pitiless, pitiless. That’s the only way. This will prevent all conflagrations for the future.”46
What held the growth of industry back even more was the penurious buying power of rural inhabitants.47 Of the total population of the Republic, just over 12 million, some 70 percent dwelled in the countryside, mostly in small communities. Some eleven thousand haciendas monopolized approximately 88 million hectares, an average of eight thousand hectares for each one of them. Two out of three Mexicans survived off some form of farmwork.48 Of the rural population, 63 percent (9,591,752) dwelled on haciendas. More Mexicans toiled in agriculture than had done so earlier: their percentage had risen from 60.3 percent of the workforce in 1895 to 64.4 percent in 1910. Scholars who study development tell us that for a country to industrialize it must modernize its agriculture, required, they add, to feed a growing population and secondly to provide the export earnings needed to finance imports.49 The Porfiristas, however, only partially followed that wisdom. They modernized the export sector of Mexican agriculture, that of the northern states, Morelos and Yucatán, while imports of wheat and corn, what campesinos cultivated and most Mexicans ate, shot upward.
The concentration of landownership gave form and substance to the structure of poverty, putting shackles on the buying power of campesinos. On agrarian questions, the Liberal answers of Juárez and Díaz were one and the same. Their tonic was to “privatize” the land. Setting aside rhetoric about preference for small farms, they eulogized “efficiency and productivity,” identified with big agricultural units, and exhibited scant concern when their nefarious scheme concentrated the land in the hands of the few. As Francisco Pimentel, one of the stalwarts of the regime, told everyone, the communal system had “robbed the Indian of all feelings of individual enterprise.” By 1900, hacendados were the bulwark of the Porfiriato, their numbers swollen from 5,700 in 1876 to more than 8,000 in 1910.50 Foreigners owned 150 million acres, a majority of them in American hands, roughly one-third of the land of Mexico.51 Only 4 percent of rural families possessed any land.52 Yet agricultural output grew by only 0.7 percent, below that of the rate of population growth. A paradox had dogged the Porfiristas: eager to make Mexico more capitalistic, they had intensified the cultivation of agricultural commodities yet left intact seigneurial relations of production inherited from the colonial hacienda.53
On the question of race, it was the old saw again. Mexico, it was proclaimed time and time again, had to bring colonists from Europe, as one científico pontificated, “so as to obtain a cross with the indigenous race.” Only European blood, he insisted, could “raise the level of civilization” or keep it “from sinking.” What he meant, of course, was that Mexico must “whiten” its skin, become more European and less Indian. To lure European colonists, as well as encourage ambitious mestizos to take up farming, Mexico had to hold out the promise of land. In December 1893, the Porfiristas approved the Ley de Terrenos Baldíos, updating the legislation of 1863, which encouraged individuals to blow the whistle on uncultivated lands. Merchants, hacendados, politicos, real estate speculators, and mining moguls rushed to organize bogus surveying companies to take advantage of the legislation that allowed them to keep one-third of the lands surveyed. Legislation passed in 1894 reinforced this policy.
The results were lamentable. Few Europeans arrived, and those who did settled in the cities, usually as merchants. To the delight of the architects of the scheme, however, private individuals gobbled up the land, much of it from the ejidos. In less than a decade, over 38 million hectares were mapped out. Of that total, the government kept for sale just over 12 million hectares; private individuals kept the rest. By 1910, the Porfiristas had accomplished what criollo hacendados and mestizo rancheros had attempted after independence and with the Reforma. By 1900, some 82 percent of the country’s campesinos were landless; just 1 percent of the population owned 97 percent of the fertile land. Given these conditions, the buying power of rural labor plummeted, averaging between 18 and 30 cents for a day’s work. Between 1810 and 1910, wages paid to the peon remained nearly stationary. In the Valley of Toluca, next door to Mexico City, the peon earned a real y medio, less than twenty-five centavos for a day’s work, not enough to sustain the worker’s family. At the end of the week, Gregorio López y Fuentes alleged in his novel El Indio, wages could not pay for “unbleached muslin to make pants and shirts.”
Worse still was the lot of the Indians. In 1910, Mexico was 70 percent rural, and Indians made up the majority, nearly every one of them illiterate. For all intents and purposes, the Indian as a consumer did not exist. Whether a peon on a hacienda or, theoretically, a free worker in a pueblo, the Indian’s life and that of the Indian community were a day-to-day struggle. Survival meant a daily battle against poverty, exacerbated by the racism of mestizos and criollos. Enrique Creel, a Díaz henchman and governor of Chihuahua, claimed that “100,000 Europeans were worth more than a million Indians.”54 To quote Francisco Bulnes, “The Indian is disinterested, stoical and unenlightened” and “loves only four things: the idols of his former religion, the land that feeds him, personal freedom, and alcohol.”55 More and more bereft of lands, the Indians sank into dismal poverty, compelling them to labor for ever-lower wages. Aside from cotton cloth and a bit of leather for huaraches, they purchased little. In their frenzied exploitation, the Porfiristas went so far as to sell as slaves Yaquis and Mayos from Sonora to the henequen lords of Yucatán. Only now and then did a lonely voice speak up in the Indians’ defense, one being that of Heriberto Frías in his novel Tomochic, which movingly describes the resistance of the Tarahumaras of Chihuahua to the Díaz regime.56
Over this scene, Mexico’s national debt hung like the sword of Damocles. Despite the flow of capital from abroad and at times a favorable balance of trade, the cost of servicing the foreign debt could not be covered and was made worse by the loss of profits and interests on investment sent home by foreigners. On four occasions, Mexico had to turn to foreign lenders lest the economy capsize. It was a vicious cycle, as Limantour explained: each new wave of foreign investment meant more money leaving the country in the form of profits. On the heels of these difficulties came the financial panic of 1907, the swan song of prosperity, revealing flaws in Mexico’s economic and social fabric. Until the crisis paralyzed the economy, Americans and Europeans alike paid homage to the Mexican success story. With the onset of the panic, Mexico’s adulators began to abandon ship.