Pesos and Politics: Business, Elites, Foreigners, and Government in Mexico, 1854–1940 by Mark Wasserman (review)

Negotiation. Balance. Equilibrium. These words are fundamental to understanding the nature of Mexico's complex and evolving economic system from 1876 until 1940. In Pesos and Politics: Business, Elites, Foreigners, and Government in Mexico, 1854–1940, Mark Wasserman challenges much of the generally accepted narrative in existing scholarship that has described an exploitative system, controlled by foreign interests. Instead, this new study that was twenty years in the making, demonstrates that the Mexican state successfully maintained equilibrium between the various entities that shaped the nation's enterprise system — be they regional governments, the military, foreign interests (either large corporations or individual entrepreneurs) or national, regional, or local Mexican elite. No one institution dominated the economic system that remained in a state of constant development and transformation during more than six decades.

Wasserman focuses his study on mining, agriculture, and railroads, which he describes as the three most significant pillars of the Mexican economy. Although foreign investors owned a significant share of the Mexican economy, Wasserman asserts that they did not control it. He also argues that, contrary to the conclusions of existing historiography, the fusion of Mexican political and economic elite that existed throughout the Porfiriato did not in fact end with the 1910 Revolution. Instead, the fracturing of the commercial and political sectors did not occur at the regional and local levels; and he finds evidence that some overlap of economic and political interests continued even at the national level until 1940. Underlying these assertions about the role of foreign and Mexican elite, Wasserman contends that the Mexican state served as an intermediary among these powerful interests.

The heart of the study can best be described as a series of case studies in Mexico's main economic sectors. He examines the consolidation of the railroad industry in the late years of the Porfiriato along with the vast expansion of foreign ownership of Mexican land after the 1880s. His chapter on Mexican entrepreneurs provides valuable insight into the intricate network of agriculture, mining, and industrial activities of the Creel and Madero families.

Wasserman finds that the Mexican government played a relatively neutral role with respect to foreign and Mexican landowners, exhibiting a preference for wealthy stakeholders but treating foreigners no differently than their Mexican counterparts. In fact, his evidence suggests that many if not most foreign agricultural interests failed to generate significant profits and few could be considered successful enterprises before, during, or after the revolution. Wasserman devotes an entire chapter to an examination of the Corralitos Company, illustrating that its experiences were similar to many other foreign-owned enterprises. The ranching and mining operation in northwestern Chihuahua only became profitable after three decades of difficulties. Its profits were sporadic despite the fact that the company had access to capital, competent management, dependable transportation, a consistent workforce, a reliable market for its products, and a favourable relationship with state authorities — factors that Wasserman argues were necessary for foreign enterprises to succeed.

Even the mining industry, of which foreigners controlled roughly ninety percent by 1910, did not experience unchecked and consistent profits. Mining investors required the same conditions as landowners to be profitable, and even where all of those factors existed many companies struggled to maintain sufficient levels of profit. Demand fluctuated, often in conjunction with market downturns in the United States; and transportation could be expensive and unreliable, particularly as a result of internal unrest in Mexico. Wasserman offers the American Smelting and Refining Company (asarco) as an example of a large corporation that adapted to Mexico's changing business climate and remained profitable from 1900 to 1940. Wasserman attributes asarco 's success in no small part to the large capital investments it made and to its ability to adapt its labour policies in response to the revolutionary and post-revolutionary era. But even with its large profits and considerable influence, the company still found itself under the thumb of the...