In this work on Mexico's foreign trade, Sandra Kuntz Ficker addresses ‘the role of imports in the process of [Mexico's] economic modernisation and the contribution of exports to the development of [its] national economy’ from 1870 to 1929 (p. 23). To this end the author sets five questions: ‘Was there persistent, long term deterioration in terms of exchange for Mexican exports? Was trade policy invariably protectionist, or did it tend to liberalise? Was [government policy] motivated primarily by fiscal necessity or pursued in a manner consistent with developmental objectives? Did imports go mainly to meet the demand of a select group of consumers of luxuries or contribute to the process of industrialisation? And [finally] were the benefits of exports, as is often thought, isolated from the rest of the economy, essentially harmful to [Mexican economic] development, or [were they] real engines of growth for regions and states which each found their unique way out of economic backwardness’ (p. 23)?
While her prose tends to be of the ‘yes, but’ variety, she answers in the affirmative to the latter half of these questions. Foreign trade did, in fact, serve to modernise Mexico. Further, she concludes that for all its disruption and destruction, The Revolution did not ‘definitively’ overturn the economic development achieved in the Porfirato, nor for all its political upheaval and nationalisations, did The Revolution end Mexico's ‘dependence on foreign capital in strategic sectors’ (p. 22). In fact ‘in some respects it worsened’ foreign dependence by diminishing the importance of European trading partners and creating a ‘closer economic and commercial interdependence with the United States’ (p. 184).
Kuntz Ficker's book, like Gaul, is divided into three parts: patterns of trade, imports and the national economy, and exports and their economic contributions. She begins by ‘getting the numbers right’, reconstructing foreign trade statistics and correcting flaws in official sources and interpretations thereof in 47 tables and 56 graphs (p. 33). Her reconstruction is complicated, however, by the changing relative value of the various monies, coin and gold and silver bullion. Her solution is to treat silver as a commodity until coined, accepting it then as money at face value whose worth she normalises in relation to gold standard currencies in two appendices (pp. 465–96). She then adjusts her calculations to account for ‘persistent problems’ in the official trade figures resulting from their ‘underestimation of imports due to smuggling and of exports’, their imposition of ‘qualifying criteria that separated [out] precious metals,’ and from the ‘overvaluation of oil sales’ during the 1920s (p.180). Her challenge to conventional wisdom notwithstanding, her final conclusion differs little, if at all, from that convention: i.e. that Porfirian Mexico made the ‘transition from a closed and very poorly integrated traditional economy into the international market’ and that ‘trade was a central component’ in that transition (p. 180).
Kuntz Ficker then analyses the impact of tariff rates and changes thereto to determine whether the regime's ‘motivation and intent … arose primarily for protectionist or economic development purposes’ (p. 189). She concludes that it was the latter. She identifies five phases in Mexico's progress of economic modernisation as seen in changes in the tariff structure. In 1872 Mexico took ‘one step forward’ with its liberalisation of strict protectionism. In 1880 tariff reform took ‘two steps back’ with the need to reorganise the national debt and simultaneously underwrite a nascent rail system (pp. 196, 203). Yet high tariffs restored during this period, when Mexico's economy relied on traditional exports and a rehabilitated mining sector had the effect of promoting import substitution industrialisation thus laying the groundwork for the second round of tariff reductions in 1890. From this point the ‘composition of the basket of imports’ changed, and industry began to appear as the Porfirian regime programmatically shaped its tariff structure to favour imports beneficial to modernisation projects which spurred the growth of domestic manufacture and import replacement (p. 313). This policy was temporarily thrown off balance by The Revolution and subsequent civil war when Mexico returned to high tariffs. But the continuities with the modernising goals of the late Porfiriato were strong and they were not abandoned. The real turn, says Kuntz Ficker, came with the Great Depression. Thus what is often portrayed as a ‘circulos viciosos’, in which only Porfirian insiders (the friends of Diaz) benefited, just as often gave raise to a ‘circulo virtuoso’ where development was pursued in a rational way given the restraints under which it operated (pp. 455–56). While the Porfirian state is often criticised for over emphasising exports in pursuit of modernity, Kuntz Ficker points out that this strategy was necessitated by the internal chaos and foreign intervention that caused Mexico to ‘miss about two decades of expansion in the international market’ (p. 461). By promoting ‘growth-oriented exports, Mexico reached the conditions for industrialisation: a relatively integrated market, a surplus available to invest in the establishment of an industrial plant, a commercial policy increasingly targeted purposes of development and increased buying power on the part of a growing sector of the population’ (p. 316).
Kuntz Ficker's book has many merits. She gathered a rich load of statistics and marshalled them in a thorough, often fresh analysis of the links between trade, tariffs and modernisation. But her work is not without its problems. Her statistical reconstruction neglects the millions of pesos exported to Asia not in payment for goods or in capital flight but as value added products, as a commodity. Her evaluation of what can be learned from a study of tariffs is inconsistent. Having based chapter four on unveiling assumptions about the political motives underlying tariff structures, she contradictorily writes: ‘[I]n sum, [tariff rates] are an inadequate and uncertain indicator when it comes to studying the politics of trade’ (p. 315). Interestingly, given the well-documented effect of personalismo in the Porfirian regime her analysis omits any serious consideration of its influence on public policy. She is similarly dismissive (by virtual omission) of the influence of foreigners on the economy. While she acknowledges in passing that ‘substantial portion’ of this modernisation was the result of investment by extranjeros (read Americans) it is with a certain reluctance. She prefers to emphasise role of ‘growing domestic capital formation in the success of the export-oriented activities’ as leading to import substitution industrialisation (p. 457). In truth, by 1901, ISI was well underway with over 166 manufacturers operating in Mexico City alone. But of these industries only one, the Zetinas shoe factory, was entirely Mexican owned. All others were foreign owned, although many had Mexican partners that were necessary to open doors in the highly politicised Mexican economy. The 1910 census listed only one-tenth of the city's population involved in any way in commerce or industry and most as political facilitators who greased the gears of the Porfirian political machine. Thus I would venture that what Kuntz Ficker characterises as an era of ‘liberal capitalism’ might better be seen as one of tributary capitalism. My criticisms notwithstanding, Kuntz Ficker has made a significant contribution to New Institutional Economic history which, along with New Cultural History, offers a paradigm to challenge the long reign of the now moribund dependency theory.
