Mexico in 1908 From a Business Consultant\'s

Mexico in 1908 From a Business Consultant's Perspective

What was it like to take a business trip to Mexico City in 1908? Culturally, and politically, it would certainly be eye-opening for an American filing reports from Mexico during that time period, since the U.S. democracy was very solid, the Industrial Age was well into its launch and workers were beginning to make decent money. A variety of sports, recreational activities, making money and raising families were the big topics for discussion with neighbors over the back fences of America.

Meantime, what a business consultant would see, in terms of the social and popular climate in Mexico City, was quite different. As for the general social climate, which of course has an effect on business, the Mexican people were deeply steeped in the Spanish-inspired bullfighting rituals. Mexicans were also in love with the American game of baseball, horseracing was a growing attraction, and boxing exhibitions were becoming popular too was a horse of a different color. Roller skating was popular (on wooden rollers). So many people were roller skating that in 1907, the police put a stop to roller skating on sidewalks.

But beyond recreation and fun activities in the years leading up to and through 1908, Mexico was in the grip of the regime of Porfirio Diaz had been in power since 1876 and seemed like he would never go away. During his tenure, "tremendous economic changes had been made" (Stearns, et al., 1992), and "foreign concessions in mining, railroads, and other sectors of the economy" around Mexico City's region had brought wealth to the elite in Mexico, although that money did not trickle down to the middle and lower classes.

So, with foreigners controlling substantial sectors of the economy in 1908, it would not be prudent for a consultant to write back to the U.S. And say that investments are a great idea. Basically, research shows that Diaz in effect sold out a lot of property and business interests to foreigners - and, the "hacienda system of extensive landholdings dominated..." regions around and within the Mexico City area, according to Stearns.

The hacienda system, prior to the revolution of 1910, "made up a high percentage of Mexico's agricultural land, and their collective power was enormous" (Street-Porter, 1989). Hacienda were launched in the 16th Century, and by the period around 1908, "the haciendas were not due to a need for, or even interest in, increased production but were usually motivated by the prestige that went with land ownership," according to Street-Porter's research. Only about 10% of the hacienda land was every cultivated, which shows one that Diaz just kept old systems in place, and allowed foreign investors in, to profit personally, and prop up his political supporters.

In his book, A History of Mexico (quoted by Street-Porter), Henry Bamford Parks' writes that most of the rulers of haciendas were "courteous, sensual and decadent...with nothing to live for except pleasure...drawing revenues from lands their ancestors had conquered or stolen from the Indians." Is that the kind of economic climate an investor would want to pour money into? Not at all.

The political system - under a repressive dictator - in any country is nearly always corrupt, and in Mexico during the early 20th Century it was no exception. "In short," Stearns writes, "Diaz ruled with an iron fist through an effective political machine."

The revolution to overthrow Diaz officially began in 1910, but well before that time, there was a sense of bitterness and rage among the less-fortunate Mexicans. If, for example, the business consultant had visited the city of Cananea, Sonora, in 1906, he or she would have witnessed a violent strike against an American-owned mining company; after the strike got underway, American vigilantes came south across the border to intervene for the owners, and dozens of Mexican workers were killed on June 6, 1906 (Mexican Chronology, 1904-1910).

In 1908, there were "droughts and poor harvests" in Mexico in and around the greater Mexico City area; the economic hardships resulting from those problems affected the economy in a very negative way (Mexican Chronology). "Real wages for Mexican workers..." sunk to about "a third of their level of a century earlier."

Imagine, for a moment, wages - which were already desperately low, compared with the booming industrial economy emerging in the United States - dropping to a third what they were in the 19th Century. If you were a business consultant, would you recommend a client in the states invest in Mexico City in any aspect of business?