Industry and Revolution

Aurora Gómez-Galvarriato

• Publisher: Harvard University Press
• Year: 2013
• ISBN:
  9780674074354
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

The Mexican Revolution has long been considered a revolution of peasants. But Aurora Gómez-Galvarriato's investigation of the mill towns of the Orizaba Valley reveals that industrial workers played a neglected but essential role in shaping the Revolution. By tracing the introduction of mechanized industry into the valley, she connects the social and economic upheaval unleashed by new communication, transportation, and production technologies to the political unrest of the revolutionary decade. Industry and Revolution makes a convincing argument that the Mexican Revolution cannot be understood apart from the changes wrought by the Industrial Revolution, and thus provides a fresh perspective on both transformations.By organizing collectively on a wide scale, the spinners and weavers of the Orizaba Valley, along with other factory workers throughout Mexico, substantially improved their living and working conditions and fought to secure social and civil rights and reforms. Their campaigns fed the imaginations of the masses. The Constitution of 1917, which embodied the core ideals of the Mexican Revolution, bore the stamp of the industrial workers' influence. Their organizations grew powerful enough to recast the relationship between labor and capital, not only in the towns of the valley, but throughout the entire nation.The story of the Orizaba Valley offers insight into the interconnections between the social, political, and economic history of modern Mexico. The forces unleashed by the Mexican and the Industrial revolutions remade the face of the nation and, as Gómez-Galvarriato shows, their consequences proved to be enduring.

CHAPTER 1

The Mexican Textile Industry

An Overview

THE LONG AND EXCEPTIONAL HISTORY of Mexico’s textile industry winds through a complex and intriguing historical landscape. Very few countries in the world share with Mexico such a long and continuous history of textile manufacturing. Cotton spinning and backstrap weaving were widespread in pre-Hispanic America and continued uninterrupted after the arrival of the Spaniards. Early in the sixteenth century, a new technology and organization of production was developed for the manufacturing of woolens: obrajes, large workshops that vertically integrated every part of woolen cloth production, employing twenty to a hundred workers, usually in some form of coerced labor. Mexico is one of the two present-day Latin American countries where obrajes acquired large economic importance during the sixteenth century, the other being Ecuador.¹

Woolen textiles production increased until the end of the seventeenth century. But by the 1750s its heyday had passed, a result of greater labor costs and increasingly fierce competition from British and Catalan cloth and from a growing Mexican cotton textile production. When obrajes began to falter, a putting-out system, similar to that which flourished in preindustrial Europe, appeared in Mexico, Tlaxcala, and Guadalajara, but nowhere on more solid grounds than in Puebla.²

Colonial regulations granted substantial protection to New Spain’s textile manufacturing. Even after extending to New Spain the so-called free-trade ordinance of 1778, foreign textiles imported via the Spanish ports remained expensive enough to dress only the upper classes. Moreover, the Napoleonic wars in Europe cut off communications between New and Old Spain, encouraging the expansion of textile manufacture in Mexico.³

Domestic cotton faced increasing hardship after 1805, when Spanish policy allowed neutral powers to trade directly with the Indies, allowing textile imports to surge. The wars of independence together with greater foreign competition gave obrajes a final blow; whereas there were still nineteen obrajes with 291 looms operating in Queretaro in 1810, only four obrajes were still working in 1812. Cotton textile production was greatly weakened as well. Guadalajara’s textile production, which by 1802 was similar in dimensions to that of Puebla, “was virtually eliminated by competition from imports through the newly opened Pacific ports.”⁴

The emergence of Mexican Independence did not improve the situation of textile producers. The first Mexican governments adopted liberal policies that were designed primarily to increase government revenue rather than protect domestic manufactures; textiles represented 60% to 70% of total imports from 1821 and 1830, and about 50% of government revenues came from import duties.⁵ Despite its wish to implement protectionist policies, the government was prevented from doing this by the loss of revenue that would have resulted.

The Origins of the Mechanized Mexican Textile Industry

Important changes had been taking place in the world since 1750, to which New Spain became suddenly exposed. European policy moved away from anti-global mercantilism and toward pro-global free trade; a worldwide transport revolution reduced transport costs and integrated world commodity markets; and important technological changes in the manufacturing process, first in England and later in other core economies, led to a rapid expansion of industrial output and productivity, sharply reducing production costs. The price of manufactures relative to agriculture and other natural-resource-based products fell everywhere. The cost of British cottons fell by as much as 70% between 1790 and 1812.⁶

Like the rest of the poor periphery, Mexico had to deal with the deindustrialization forces that resulted from the Industrial Revolution, but it did better on this score than most countries around the periphery. In fact, Mexico’s textile industry not only survived but prospered. Five conditions explain Mexico’s early industrial growth, relative to other countries in the periphery. (1) Its relatively large population provided the consumer market necessary for industry to develop. (2) During this period, there was a relatively small improvement in Mexican terms of trade, compared to those experienced by most nations in the periphery. (3) Compared to other countries in the periphery, Mexico maintained better wage competitiveness vis-à-vis the core, based on a better relative agricultural productivity performance. (4) A tradition of artisan textile production was able to generate political support for protectionist policies, and Mexico had the autonomy to implement these policies, unlike many other countries in the periphery, which were in colonial status.⁷ Finally, (5) the high transport costs resulting from the concentration of population far from the sea in rugged terrain provided additional protection against competition from imports.

Although the cotton textiles sector was heavily damaged, it survived the three decades of foreign competition and Insurgencia. Even in the midst of foreign competition some 6,000 looms were in operation in Puebla.⁸ Further, in spite of the difficult situation, two Puebla merchants made important investments in the textile business during the 1820s. One of these, the Catalan Francisco Puig, introduced in 1820 the first modern machinery (brocas) in Puebla to produce medium-quality cloth (paño entrefino), coarse cloth (jerga), and blankets (colchas) in a two-story building. The Casa Puig continued producing until 1850 and became an important supplier of both woolen cloth and cotton yarn for artisan weavers, besides selling its own product. The other merchant was Estevan de Antuñano from Veracruz, who had been involved before Independence in the trade of raw cotton. In 1821 he established modern spinning machinery in a house in the weavers’ district of San Francisco, Puebla. But the factory closed in 1824, defeated by cheap foreign imports.

Between 1830 and 1840 the national government, under the influence of statesmen such as Lucas Alamán and industrialists such as Estevan de Antuñano, provided both tariff protection and means of finance through a public development bank, the Banco de Avío para Fomento de la Industria Nacional.⁹ Mexico’s “industrialists,” as they called themselves, established the first mechanized mills in the 1830s, around the same time that the mills were built in Lowell, Massachusetts, and only twenty years after the first mechanized mill was established in the United States. La Constancia Mexicana, established in 1835 by Estevan de Antuñano and financed by the Banco de Avío, was the first enduring mechanized textile mill to operate in Mexico. Mechanized textile mills appeared in Mexico earlier than in any other country outside of Europe and British North America, except for, notably, Egypt.¹⁰ Brazil, the other early industrializer in Latin America during this period, established its first mills in the 1840s. Yet by 1853 it had only eight mills with 4,500 spindles, whereas ten years earlier Mexico’s textile manufacture included fifty-nine mills with more than 100,000 spindles.¹¹

The Banco de Avío was run by Lucas Alamán (1792–1853), who in 1830 became minister of interior and foreign affairs.¹² Alamán designed a precise and cogent industrial policy. His goal was not merely to protect the inefficient artisan production of colonial times, but to promote a mechanized industry that could produce at a price and quality equal to those of foreign competitors. He believed that by itself the “invisible hand” was not going to lead to industrialization.¹³

Alamán devised a plan whereby one-fifth of the total duties accrued from textile imports would be used to form the capital of the Banco de Avío until one million pesos had been accumulated. The bank would lend money at low interest rates to entrepreneurs proposing to establish modern factories.¹⁴ Although the bank was never able to accumulate the planned capital of one million pesos, it managed to finance industrial projects until 1840, when it ceased to function as an industrial loan agency.

Despite the haphazard way the bank functioned during those unstable years, it was able to implement a machine-purchasing program. Thirteen of the forty loans granted from 1830 to 1840 went to establish cotton textile factories; the rest financed paper mills and iron foundries. Half of the cotton textile mills that opened with Banco de Avío credit were still operating in 1845. Three of those mills—La Constancia Mexicana, Cocolapan, and Industrial Jalapeña—were still functioning in 1893.¹⁵

The impact of the Banco de Avío on Mexican industrialization must not be exaggerated, however. Of the fifty-nine companies Alamán lists in the 1843 “Report on Industry and Agriculture,” only six received a bank loan. Nevertheless, it is possible that the establishment of the first firms, which received loans from the bank, stimulated the creation of firms that came later by showing clearly that the government was committed to industrialization.

Alamán’s industrial policy required lasting, stable political conditions based on well-organized public finances, an effective system of tax collection, and a gradual transition to an era of steady economic growth.¹⁶ Unfortunately, political instability, a cause and consequence of a permanent disorder in public finances, made these requirements impossible to attain in Mexico during most of the nineteenth century.¹⁷ Political instability generated institutional frailty under which it was impossible for the government to implement a cogent industrial policy.¹⁸

In 1836, representatives of the cotton-growing regions of Veracruz and Oaxaca successfully introduced a bill to ban the entry of raw cotton. The textile manufacturers did not oppose the bill at first, but the prohibition of raw cotton imports soon yielded terrible consequences.¹⁹ Within a matter of months the national cotton crop was no longer sufficient to provide the cotton needed by the established factories. From 1838 onward, cotton started to become scarce; and its price, which at that time was only 16 or 17 pesos per quintal, had increased to 40 pesos. The manufacturers had to either stop production entirely or shorten daily production in an effort to continue, waiting anxiously for the arrival of new crop.²⁰

In 1843 Estevan de Antuñano wrote several letters to President Santa Anna to explain the problems that the ban on raw cotton was creating for the textile industry. Santa Anna, the political boss of a major cotton-growing region, had too many commitments to cotton growers to relax the ban and the protection it gave them. Instead of lifting the ban, Santa Anna arbitrarily granted special cotton import licenses, which usually ended in the hands of moneylenders (agiotistas). One such agiotista was Cayetano Rubio, a man of considerable influence who was both a merchant selling cotton and the owner of a textile mill.²¹ It is likely that the government granted the import licenses as part of its negotiations in order to obtain further credits to support their permanent deficit.²²

Textile industrialists also had to withstand the granting of licenses for the importation of manufactured textiles. The precarious fiscal situation of the Mexican governments made their commitment to protect textile manufactures very vulnerable. In 1841, for example, in order to finance the war against Texas, General Mariano Arista authorized the sale of special import licenses for textile manufactures. Guillermo Drusina and ...