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Mexico in the Export Era (1870s–1929): Export Boom, Economic Modernization, and Industrialization

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The First Export Era Revisited

Part of the book series: Palgrave Studies in Economic History ((PEHS))

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Abstract

The chapter provides an overall description of the timing, characteristics, and evolution of Mexico’s export sector and uses the set of analytical parameters established for the entire project in order to assess the contribution of exports to the Mexican economy during the first export era. The analysis highlights some specificities of this case, as the fact that regional expansion and productive diversification enhanced the contribution of an export sector that was smaller relative to other Latin American countries, or the way in which the Mexican revolution affected its performance and contribution to the economy. It also shows the various ways in which export expansion contributed to economic modernization and industrialization.

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Notes

  1. 1.

    Both effects ceased when Mexico adopted a gold exchange standard starting in 1905.

  2. 2.

    Henequen and ixtle were hard fibers, the former produced in the Yucatán peninsula and the latter in the north. Guayule was a bush that grew also in the north that produced a type of rubber, while rubber was extracted from a tree cultivated in the Gulf area and in the southern states of Chiapas and Oaxaca (Kuntz-Ficker, 2010).

  3. 3.

    The analysis of Mexico’s exports is based upon the reconstruction of foreign trade series according to both Mexico’s official sources and those of its main trading partners ( the USA, the UK, Germany, France, Belgium, and Spain) (Kuntz-Ficker, 2007, 2010).

  4. 4.

    Under specie we include gold (bullion and coin) and silver (coin), while silver bullion is included in the commodity trade. Mexican silver coin was the main means to pay for imports and was used as a means of exchange in many Asian countries. Mexico’s monetary system was bimetallic until a gold exchange standard was adopted in 1905. However, the monetary chaos provoked by the Mexican revolution led to reassume silver coinage starting in 1918, which continued until 1927. Sterret and Davis (1928, pp. 121–122), Cárdenas and Manns (1992).

  5. 5.

    As we will see later, the effect of the Mexican revolution upon external sales was not as serious as the impact that it had upon linkages and spills of exports upon the rest of the economy.

  6. 6.

    The wrong value for 1857 represents an overestimate of three times the actual value of exports in that year. In Table 1.2, he calculates a 2.2% growth rate between 1850 and 1912 instead of the 4.1% that would result from the correct figures. Another difference with Bulmer-Thomas’ analysis in this respect is that he considers silver currency transfers as part of Mexico’s exports, which leads to overestimate the development of the export sector in the early years of the period. Bulmer-Thomas (2014).

  7. 7.

    For lack of a consumer price index for Mexico, we use a Mexico City price index, which is available only for part of this period. Because of this reason, the estimate is somewhat fragile and subject to revision.

  8. 8.

    For Williamson’s deindustrialization argument, see Williamson (2006); for an assessment on Mexico before the export era, see Dobado González, Gómez Galvarriato, and Williamson (2008).

  9. 9.

    Our figures contrast again with those provided by Bulmer-Thomas for this indicator: according to Table A.2.1, the ratio of exports to GDP would be 0.097 (that is to say, a percentage share of 9.7%) for 1908–1910, including specie, well below our estimates. Bulmer-Thomas (2014, p. 467).

  10. 10.

    GDP data from Coatsworth (1990, p. 117) for 1877 and INEGI (1985, I, pp. 313–331) for 1895–1929, both in values at constant prices with different base years (which were changed to make them comparable). GDP data, originally in pesos, were converted into US dollars at the exchange rate provided by INEGI (1985, II, pp. 810–811).

  11. 11.

    On Mexico’s early industrialization see Cárdenas (1987), Haber (1989, 2006), and Cerutti (1992).

  12. 12.

    Public federal income according to Pérez Siller (1982, p. II); public debt according to Carmagnani (1994). GDP according to INEGI (1985, I, pp. 313–331), converted to dollars.

  13. 13.

    For a couple of examples, in 1883, a processing plant in Guanajuato paid 10.4% of output in taxes, from which 0.9% were municipal duties, 3.2% state taxes, and 6.2% were federal taxes. In the 1920s the company Real del Monte paid between 9 and 11% of total output in taxes. Some agricultural products, like henequen and coffee, paid taxes that were relevant for the states’ finances, while at the federal level were of lesser importance. Kuntz-Ficker, 2010.

  14. 14.

    Carmagnani (1994). About the differential performance of state finances for states with or without export activities, see Kuntz-Ficker (2014a).

  15. 15.

    Cotton thread went from a 70% to a 2% ad valorem duty between 1890 and 1929, while tanned skins went from 82% to 18% within the same time span. Other production goods, as machinery, got the lowest tariffs, of less than 5% ad valorem, or were exempted during most of the period.

  16. 16.

    All this took place, as just said, within a context of diminishing overall tariffs. For a few examples, coarse cotton cloth went from a 134% ad valorem duty in 1889 to a still high of 46% in 1929, and leather articles from 64% to 50% within the same period (Kuntz-Ficker, 2007).

  17. 17.

    Cárdenas (1987, p. 23) acknowledged that consumer goods represented around one third of Mexico’s imports, but failed to give this feature its significance in terms of the use of imports as an instrument to promote the structural change of the economy.

  18. 18.

    The railroad companies included in the sample are: Mexican Central, Mexican National, Mexican, International, Interoceanic, South Pacific, Monterrey to Gulf, Chihuahua to Pacific, Coahuila and Zacatecas, Rio Grande, Sierra Madre and Pacific, Torres to Minas Prietas, Saltillo to Torreon, Nacozari, Carbonífero from Coahuila, Kansas City, Cananea and Rio Yaqui, Mexicano del Sur, Tehuantepec, Unidos de Yucatán. Cargo data were gathered from AGN, SCOP.

  19. 19.

    There is some overestimation of exports in this account, as ores were mostly exported as metals.

  20. 20.

    In this sense, Cárdenas mischaracterized Mexico’s export sector by assuming that “practically all of the products exported were raw materials and almost always non-processed ones” (Cárdenas, 1987, p. 28).

  21. 21.

    The use of values instead of a measure of volume or power may bias the results. However, the information available is not uniform as to the power provided by different types of energy. The clear predominance of modern energies, though, lowers the significance of the possible distortions.

  22. 22.

    Bulmer-Thomas also underestimates this phenomenon due to the exclusion of metallurgy from his account of industrial GDP. As a consequence, he undermines Mexico’s position in the Latin American context. Bulmer-Thomas (2014, pp. 145, 206).

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    Sandra Kuntz-Ficker

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    Sandra Kuntz-Ficker

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Kuntz-Ficker, S. (2017). Mexico in the Export Era (1870s–1929): Export Boom, Economic Modernization, and Industrialization. In: Kuntz-Ficker, S. (eds) The First Export Era Revisited. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-62340-5_7

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