Us mexico economic relationship between colonies

Outline of the U.S. Economy

us mexico economic relationship between colonies

Jan 30, Mexico Institute Fellow Ambassador Earl Anthony Wayne testifies before the U.S. Senate Committee on Foreign Relations on the economic. In the meantime, thriving Spanish colonies had been established in Mexico, the West The new continent was remarkably endowed by nature, but trade with attempts to regulate their external relations, particularly commercial relations. Feb 27, colonial era, the colonists happily accepted their relationship to Britain. economic history of those British mainland North American colonies that .. (and took over) existing extractive institutions, as in Mexico, India and.

An entire array of new taxes and fiscal placemen came to Mexico. They affected and alienated everyone, from the wealthiest merchant to the humblest villager. If they did nothing else, the Bourbons proved to be expert tax collectors. From the mid-sixteenth century onwards, ocean-going trade between Spain and the Americas was, in theory, at least, closely regulated and supervised. Ships in convoy flota sailed together annually under license from the monarchy and returned together as well.

  • U.S.-Mexican Relations from Independence to the Present
  • The Colonial Period

Since so much silver specie was carried, the system made sense, even if the flotas made a tempting target and the problem of contraband was immense. The point of departure was Seville and later, Cadiz. Under pressure from other outports in the late eighteenth century, the system was finally relaxed. As a consequence, the volume and value of trade to Mexico increased as the price of importables fell. Import-competing industries in Mexico, especially textiles, suffered under competition and established merchants complained that the new system of trade was too loose.

But to no avail. There is no measure of the barter terms of trade for the eighteenth century, but anecdotal evidence suggests they improved for Mexico. Admittedly, looking for modern economic growth in Mexico in the eighteenth century is an anachronism, although there is at least anecdotal evidence of technological change in silver mining, especially in the use of gunpowder for blasting and excavating, and of some productivity increase in silver mining.

So even though the share of international trade outside of goods such as cochineal and silver was quite small, at the margin, changes in the trade regime were important. There is also some indication that asset income rose and labor income fell, which fueled growing social tensions in New Spain.

In the last analysis, the growing fiscal pressure of the Spanish empire came when the standard of living for most people in Mexico—the native and mixed blood population—was stagnating. During periodic subsistence crisis, especially those propagated by drought and epidemic disease, and mostly in the s, living standards fell.

Many historians think of late colonial Mexico as something of a powder keg waiting to explode. When it did, inthe explosion was the result of a political crisis at home and a dynastic failure abroad.

What New Spain had negotiated during the Wars of Spanish Succession—regime change— provide impossible to surmount during the Napoleonic Wars Internal commerce was largely paralyzed. Silver mining essentially collapsed between and and a full recovery of mining output was delayed until the s. Thus neglected, they quickly flooded. At the same time, the fiscal and human costs of this period, the Insurgency, were even greater. With a reduced fiscal capacity, in part the legacy of the Insurgency and in part the deliberate effort of Mexican elites to resist any repetition Bourbon-style taxation, Mexico defaulted on its foreign debt in For the next sixty years, through a serpentine history of moratoria, restructuring and repudiationit took until for the government to regain access to international capital markets, at what cost can only be imagined.

Private sector borrowing and lending continued, although to what extent is currently unknown. What is clear is that the total internal plus external indebtedness of Mexico relative to late colonial GDP was somewhere in the range of 47 to 56 percent. Leaving aside simple questions of uncertainty, there is the very real matter that the national government—whatever the state of private wealth—lacked the capacity to service debt because national and regional elites denied it the means to do so.

This issue would bedevil successive regimes into the late nineteenth century, and, indeed, into the twentieth. A rough estimate of output per head in the late colonial period was perhaps 40 pesos dollars.

By the time United States troops crossed the Rio Grande, a recovery had been under way, but the war arrested it. Further political turmoil and civil war in the s and s represented setbacks as well. In this way, a half century or so of potential economic growth was sacrificed from the s through the s.

This was not an uncommon experience in Latin America in the nineteenth century, and the period has even been called The Stage of the Great Delay.

Agricultural Recovery and War On the other hand, it is clear that there was a recovery in agriculture in the central regions of the country, most notably in the staple maize crop and in wheat. The famines of the late colonial era, especially ofwhen massive numbers perished, were not repeated. There were years of scarcity and periodic corresponding outbreaks of epidemic disease—the cholera epidemic of affected Mexico as it did so many other places—but by and large, the dramatic human wastage of the colonial period ceased, and the death rate does appear to have begun to fall.

Very good series on wheat deliveries and retail sales taxes for the city of Puebla southeast of Mexico City show a similarly strong recovery in the s and early s, punctuated only by the cholera epidemic whose effects were felt everywhere.

It is not possible to put numbers on the cost of the war to Mexico, which lasted intermittently from tobut the loss of what had been the Southwest under Mexico is most often emphasized. This may or may not be accurate. Certainly, the loss of California, where gold was discovered in Januaryweighs heavily on the historical imaginations of modern Mexicans.

In the long run, the loss may have been staggering, but in the short run, much less so. The northern territories Mexico lost had really yielded very little up until the War.

In fact, the balance of costs and revenues to the Mexican government may well have been negative. The reasons are several. Inthe government essentially went broke. While it is true that its financial position had disintegrated since the mids, marked a turning point. The entire indemnity payment from the United States was consumed in debt service, but this made no appreciable dent in the outstanding principal, which hovered around 50 million pesos dollars.

The limits of debt sustainability had been reached: While only the French actively prosecuted the war within Mexico, and while they never controlled more than a very small part of the country, the disruption was substantial.

Bywith Maximillian deposed and the French army withdrawn, the country required serious reconstruction. Their beginnings actually went back several decades earlier, to the last presidency of Santa Anna, generally known as the Dictatorship But Santa Anna was overthrown too quickly, and now for the last time, for much to have actually occurred.

A ministry for development Fomento had been created, but the Liberal revolution of Ayutla swept Santa Anna and his clique away for good. So it is appropriate to pick up with the story here. Where did Mexico stand in ? For the moment, let us look at the period leading up towhen the French withdrew from Mexico.

Since the share of the illiterate population was clearly larger, we might infer that living standards for most Mexicans declined afterhowever we interpret other quantitative and anecdotal evidence. The regimes after were faced with stagnation. Real per capita output oscillated, sometimes sharply, around an underlying growth rate of perhaps one percent; changes in the distribution of income and wealth are more or less impossible to identify consistently, because studies conflict.

Its key elements were the creation of a secular, bourgeois state and secular institutions embedded in the Constitution of This was the beginning of the end of the Ancien Regime. This was effectively the largest transfer of land title since the late sixteenth century not including the war with the United States and it cemented the idea of individual property rights. With the expulsion of the French and the outright repudiation of the French debt, the Treasury was reorganized along more modern lines.

Equally, if not more important, Mexico now entered the railroad age innearly forty years after the first tracks were laid in Cuba in The educational system was expanded in an attempt to create at least a core of literate citizens who could adopt the tools of modern finance and technology. Literacy still remained in the neighborhood of 20 percent, and life expectancy at birth scarcely reached 40 years of age, if that.

us mexico economic relationship between colonies

Yet by the end of the Restored RepublicMexico had turned a corner. It was a rural, agrarian nation whose primary agricultural output per person was maize, followed by wheat and beans. For the most part, the indigenous population lived on maize, beans, and chile, producing its own subsistence on small, scattered plots known as milpas. Population growth in the Southern and Eastern parts of the country had been relatively slow in the nineteenth century.

The North and the center North grew more rapidly. The Center of the country, less so. Immigration from abroad had been of no consequence. The nature and effect of these changes remain not only controversial, but essential for understanding the subsequent evolution of the country, so we should pause here to consider some of their essential features. While mining and especially, silver mining, had long held a privileged place in the economy, the nineteenth century had witnessed a number of significant changes.

Until aboutthe coinage of gold, silver, and copper—a very rough proxy for production given how much silver had been illegally exported—continued on a steadily upward track. Incoinage was about 10 million pesos. Byit had reached roughly 15 million pesos. There was something of a structural break after the war with the United States its origins are unclearand coinage continued upward to about 25 million pesos in Then, the falling international price of silver, brought on by large increases in supply elsewhere, drove the trend after sharply downward.

Bycoinage had collapsed to levels previously unrecorded since the s, although in andit had skyrocketed to nearly 45 million pesos. For example, the market price of silver declined sharply relative to lead, which in turn encountered a large increase in Mexican production and a diversification into other metals including zinc, antinomy, and copper.

By the time he had decamped in exile to Paris, precious metals accounted for less than half of all exports. The reason for this relative decline was the diversification of agricultural exports that had been slowly occurring since the s. At one level, it is a well-known story of social savings, which were substantial in Mexico because the terrain was difficult and the alternative modes of carriage few.

That must be true at some level, although recent studies especially by Sandra Kuntz have raised important qualifications. Railroads may not have been gateways to foreign dependency, as historians once argued, but there were limits to their ability to effect economic change, even internally.

They tended to enlarge the internal market for some commodities more than others. The peculiarities of rate-making produced other distortions, while markets for some commodities were inevitably concentrated in major cities or transshipment points which afforded some monopoly power to distributors even as a national market in basic commodities became more of a reality. Yet, in general, the changes were far reaching. Inthere were 19, km about 12, miles.

Monterrey and Tampico in The lines were built by foreign capital e. Large government subsidies on the order of 3, to 8, pesos per km were granted, and financing the subsidies amounted to over 30 million pesos by While the railroads were successful in creating more of a national market, especially in the North, their finances were badly affected by the depreciation of the silver peso, given that foreign liabilities had to be liquidated in gold.

As a result, the government nationalized the railroads in Between railroads, ports, drainage works and irrigation facilities, the Mexican government borrowed million pesos to finance costs. Any data we have prior to are problematic, and beforestrictly speaking, we have no official measures of output per capita at all.

Most scholars shy away from using levels of GDP in any form, other than for illustrative purposes. Aside from the usual problems attending national income accounting, Mexico presents a few exceptional challenges. In peasant families, where women were entrusted with converting maize into tortilla, no small job, the omission of their value added from GDP must constitute a sizeable defect in measured output. Moreover, as the commercial radius of Mexican agriculture expanded rapidly as railroads, roads, and later, highways spread extensively, growth rates represented increased commercialization rather than increased growth.

We have no idea how important this phenomenon was, but it is worth keeping in mind when we look at very rapid growth rates after There are various measures of cumulative growth during the Porfiriato. By and large, the figure from through is around 23 percent, which is certainly higher than rates achieved during the nineteenth century, but nothing like what was recorded after This may well have represented a reversal of trends in the nineteenth century, when some argue that property income contracted in the wake of the Insurgency [41].

There was also significant industrialization in Mexico during the Porfiriato. Some industry, especially textiles, had its origins in the s, but its size, scale and location altered dramatically by the end of the nineteenth century.

The Colonial Period < History < American History From Revolution To Reconstruction and beyond

For example, the cotton textile industry saw the number of workers, spindles and looms more than double from the late s to the first decade of the nineteenth century. Brewing and its associated industry, glassmaking, became well established in Monterrey during the s. Other industries, such as papermaking and cigarettes followed suit. The Mexican Revolution was no Bolshevik movement of course, it predated Bolshevism by seven years but it was not a purely bourgeois constitutional movement either, although it did contain substantial elements of both.

From a macroeconomic standpoint, it has become fashionable to argue that the Revolution had few, if any, profound economic consequences. It seems as if the principal reason was that revolutionary factions were interested in appropriating rather than destroying the means of production.

For example, the production of crude oil peaked in Mexico in —at the height of the Revolution—because crude oil could be used as a source of income to the group controlling the wells in Veracruz state. This was a powerful consideration. As the demographic historian Robert McCaa showed, the excess mortality occasioned by the Revolution was larger than any similar event in Mexican history other than the conquest in the sixteenth century. There has been no attempt made to measure the output lost by the demographic wastage including births that never occurredyet even the effect on the population cohort born between and is plain to see in later demographic studies.

The Revolution increased labor mobility and the labor supply by abolishing constraints on the rural population such as debt peonage and even outright slavery. Moreover, the Revolution, by encouraging and ultimately setting into motion a massive redistribution of previously privatized land, contributed to an enlarged supply of that factor of production as well. The true impact of these developments was realized in the s and s, when rapid economic growth began, the so-called Mexican Miracle, which was characterized by rates of real growth of as much as 6 percent per year Whatever the connection between the Revolution and the Miracle, it will require a serious examination on empirical grounds and not simply a dogmatic dismissal of what is now regarded as unfashionable development thinking: From tothe cultivated area in Mexico grew at 3.

Nevertheless, the long-run effects of the agrarian reform and land redistribution have been predictably controversial. Under the presidency of Carlos Salinas the reform was officially declared over, with no further land redistribution to be undertaken and the legal status of the ejido definitively changed. The principal criticism of the ejido was that, in the long run, it encouraged inefficiently small landholding per farmer and, by virtue of its limitations on property rights, made agricultural credit difficult for peasants to obtain.

The agrarian reform of his presidency, which surpassed that of any other, needs to be considered in those terms as well as in terms of economic efficiency. Like other countries in Latin America, Mexico was hard hit by the Great Depression, at least through the early s.

All sorts of consumer goods became scarcer, and the depreciation of the peso raised the relative price of imports. The effects of this movement—the emigration of the Revolution in reverse—has never been properly analyzed. Demand for labor and materials from the United States, to which Mexico was allied, raised real wages and incomes, and thus boosted aggregate demand. But Madero proved incapable of containing the revolution that he had unleashed and immediately faced opposition both within his own ranks and from the Porfirian old guard that he had neglected to remove from power.

But Huerta turned on Madero. At this crucial moment, the U. Wilson did not stop Villa and other rebels from smuggling weapons across the U.

Convinced that the two nations were about to go to war, they fled in droves. Villa decided to take revenge and incite an international conflict by sacking the small border town of Columbus, New Mexico, on March 9, His men looted, raped, and pillaged, killing ten civilians and eight soldiers in the process.

The death toll among the attackers was even higher. The invasion force pursued the revolutionary outlaw for almost a year but ultimately had to admit failure. Ambulance corps leaving Columbus, New Mex. Despite its neutrality, the country ended up playing an important, if indirect, role in the war. Secretly, both the German and Mexican governments hoped to use each other to distract the United States or gain ground against it. He calculated that if Carranza were to stage another attack on U.

To entice Carranza into cooperating, Zimmermann sent him a coded telegram in January offering to return Texas, New Mexico, and Arizona to Mexico once the United States had been defeated. Wilson, who was trying to convince Congress and the public to agree to take greater measures against Germany, published the telegram, and Zimmermann made the surprising move of publicly confirming its authenticity.

The Mexican Revolution, the corresponding U. The United States protested immediately and then began withholding recognition from the Mexican government after yet another violent uprising unseated Carranza in But questions of foreign investment and intervention continued to dominate U.

Dwight Morrow, a former president of J. Morgan Company who became U. The Great Depression, combined with a series of disastrous interventions in Central America and the Caribbean, had driven U. Mexicans declared that March 18,was the day that Mexico gained its economic independence. But Roosevelt stuck to his Good Neighbor Policy and, instead of invading or otherwise sanctioning Mexico, pushed the U.

Mexico provided strategic metals, oil, rubber, food, and agricultural material. From Allies to Partners Wartime cooperation with the United States was a significant boon to the Mexican economy and laid the foundation for predominantly friendly relations between the two governments thereafter.

Mexican entrepreneurs, workers, and consumers had been pushing for industrialization since before the war, but the markets and financing were lacking until the wartime redirection of U. The United States also helped fund infrastructure projects in Mexico to increase output during the war, including building dams and canals and improving railroad lines.

By the end of the s, someU. The Mexican government established a powerful Department of Tourism to attract and protect its new visitors and financed thousands of miles of highways to facilitate travel. Cooperation between the U. Kennedy and others tried to pressure the Mexican government into joining the anti-Castro crusade.

us mexico economic relationship between colonies

While President Ronald Reagan and other U. When student protests threatened to destabilize the country right before Mexico hosted the Olympic Games inU. Instead of intervening, the United States watched from the sidelines as the Mexican government violently quashed the student movement in the Massacre of Tlatelolco. Numerous African Americans moved from the United States to Mexico in the mid- to late s to seek refuge from racial discrimination and political persecution, just as their forebears had done in the 19th century.

Exile filmmakers, for example, played a seminal role in both Mexican independent film production and the Nuevo Cine movement, while African American artists, including Catlett, were influenced by the Mexican muralist and printmaking traditions and conveyed that influence back to the Black Arts Movement in the United States.

The situation only got worse, however, and at the end of Mexico signed an agreement with the International Monetary Fund to reschedule debt payments in exchange for austerity measures and neoliberal economic reforms.

Mexico–United States relations

Within a decade, trade between the United States and Mexico more than doubled. Mexican president Carlos Salinas had initially been wary of free trade overtures from the United States when he first came into office inbut after the European countries showed little interest in Mexico he turned back to his closer neighbors. Consumers in all three countries have been able to buy a wider range of products at cheaper prices.

The end of the Bracero Program in did not mean an end to Mexican migration to the United States; millions of Mexican citizens have continued to make their way to the United States in search of work. In the two decades after the Bracero Program, the number of legal immigrants rose steadily from 38, in to 67, inwhile the number of illegal border crossings skyrocketed from 87, to 3.

President Ronald Reagan signaled a significant shift in U. The unintended effect of IRCA has been to decrease the number of seasonal, temporary migrants and increase the number of permanent immigrants. Mexicans entering the United States, United States immigration station, El Paso, Texas. At the same time, nativist concerns about Mexican workers taking jobs and depressing wages continued to spread in the United States, beginning in the border states like California where the majority of the immigrants relocated.

The same year that NAFTA went into effect, the voters of California adopted Propositionwhich denied undocumented residents access to nearly all public services, including schools and hospitals.

Inthe U. Congress approved similar anti-immigrant legislation, and other states have since passed their own versions of nativist bills. Mexican immigrants responded by flooding the offices of the U. Immigration and Naturalization Services with millions of petitions for naturalization, hoping to gain the security and voting rights necessary to defend against further attacks.