Pesos and Politics

Porfirio Díaz is receiving much historical revision of late. His centralizing rule still appears to have depended on managing elites and the intensive though not necessarily pervasive use of force. However, the veneer of economic liberalism has been shattered by a host of studies demonstrating substantial state economic intervention. By extension, he is shown to have had more autonomy vis-à-vis foreign business than previously argued. Mark Wasserman adds important depth to these new interpretations of Díaz. Drawing on Peter Evans's idea about Brazil's triple alliance, Wasserman contends that foreign businesspeople were part of an evolving “elite-foreign enterprise system” in which their interests were balanced against those of other elites and federal, regional, and local officials. Most revealing in Wasserman's analysis is this inclusion of local and regional interests in checking both foreign aspirations and federal actions. Díaz's power was never absolute, but neither was that of foreign owners.This is a complex study of the balance of forces determining the relationship between business and politics across six decades, with the weightiest contributions covering the years 1880–1920. Using research from an exceptional array of archives, Wasserman examines multiple groups, companies, and sectors, including Mexican entrepreneurs like the Terrazas-Creel and Madero families and foreign landowners and mineowners, including the American Smelting and Refining Company (ASARCO) and the Corralitos Company. He measures each against their access to six preconditions for success: sufficient capital, good management, steady markets, accessible transportation, reliable workforce, and good government relations. He shows how domestic and foreign entrepreneurs were subject to similar opportunities and limitations, and that success was never guaranteed, even in the most propitious circumstances.Wasserman engages multiple threads in the field of Mexican business history. He questions the significance of personalism, showing that favoritism or discrimination alone never determined a business decision or outcome. For example, ASARCO, the most successful US-owned company during this period, succeeded not because it got special political favors compared to Mexican counterparts but rather because it played by Mexican rules, even when it had to do unpalatable things like build unwanted smelters and bend to labor unions. Moreover, while policy was important, balancing social forces always took precedence in its interpretation and implementation. This was especially true as federal initiatives were frequently waylaid by local forces. Finally, Wasserman argues that political leaders made credible commitments to select property owners by bringing multiple enforcers into the system of checks and balances, though in his rendering, the state was the primary actor. Those that succeeded, such as the Terrazas-Creel family and ASARCO, did so because they adapted to this system and remained flexible within it.While not absolute, Díaz's power over foreign owners was substantial, according to Wasserman. Even US railway trusts were outsmarted by Díaz and his allies. In one of his most convincing chapters, Wasserman shows how the national government snapped up controlling shares in key railway companies, forestalling the growth of foreign trusts in the Mexican railway industry. According to him, keeping a US trust from upsetting the balance of power among government and business elites was Díaz's key concern, since it allowed him to retain control over Mexico's development.Wasserman's goal is to challenge assertions that unchecked foreign influence caused underdevelopment. He concludes that foreign influence was limited by pointing to foreign owners' inability to exploit the country, which he measures through profit extraction and labor conditions. Many foreign businesses failed, and consistent profits were rare; those that did profit most often either reinvested profits or profited only after substantial capital outlays. Moreover, no evidence exists, he argues, that workers were treated worse by foreign companies than domestic ones. To Wasserman, underdevelopment occurred, but the typical explanations for it—excess profit extraction, foreign favoritism, unchecked foreign power, and labor abuses—are either incorrect or insufficient. Foreign businesses acted as any other Mexican-owned business did at the time, and, if judged by profits, not very successfully. Even the Hearst estate, with all its assets and connections, failed to make much of a profit before the revolution and fell prey to agrarista incursions after.Wasserman finds revealing continuities in the elite-foreign enterprise system after the revolution, though it was modified by the entry of labor unions and agraristas. This persistence of the search for equilibrium among social forces seems on its surface to be dynamic, as postrevolutionary forces adjusted to new pressures. But Wasserman's revelations about the durability of the elite-foreign enterprise system and the failure to institutionalize interest group participation suggest something else. By limiting the ability of business—whether foreign or domestic—to shape predictable outcomes, the state-dominated system of checks and balances discouraged innovation and inclusion and, ultimately, development.Historians of business, politics, and economy in Latin America and Mexico will surely find this book of interest, not least because it provokes new ways to discuss the origins and enduring features of dependency. Wasserman's analysis intimates that the elite-foreign enterprise system was oriented more around regime preservation than anything else. Díaz and postrevolutionary leaders may not have sold out the country to foreigners, but they did sell out development to maintaining power

Alliance · Autonomy · Balance (ability) · Economics · Economy · Elite · Foreign direct investment · Foreign policy · Government (linguistics) · Political economy · Political science · Politics · Power (physics) · State (computer science) · Law · Politics and Society in Latin America

• Propiedad extranjera y minería en México

  Open Access•Oscar Sánchez Rangel•Estudios de Historia Moderna y…•2018

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