ECONOMY IN THE PORFIRIATO: ECONOMIC DEVELOPMENT AND ACTIVITIES - ECONOMY - 2025

The economy in the Porfiriato refers to the production and trade model established by the Porfirio Díaz government during his term. This economy was made up of mercantile expansion, commercial development, and advances in lucrative activities. During that stage, Mexico went from a precarious state to a capitalist one.

As the external market progressed thanks to national contributions, some internal sectors stopped working due to lack of investment. Furthermore, the peasants had to work as slaves on their own lands to increase production.

Porfirio Díaz won the victory in 1877. Source: El Ágora (public domain).

This work was not paid. In this way, it is perceived that this government was characterized by forging the policy of inequality, since it caused society to hierarchize through financial injustice.

Capital growth only favored the bourgeoisie and limited the quality of life of low-income people. Now, this period arose in 1877. In that year, the leader Porfirio Díaz (1830-1915) obtained the victory and defeated the party of Sebastián Lerdo (1823-1889).

From that moment on, Díaz set about establishing a project that would result in the evolution of the economy. For this, it focused on two principles: the expansion of the agricultural area and the construction of industries.

However, in 1910 a war began. The Mexican Revolution was a response to the exclusion and instability in which the inhabitants lived for around three decades. This demonstration caused that in 1911 the dictatorship of the Porfiriato ceased.

History

After the War of Independence (1810-1821), Mexico had a declining economy. Trade was restricted and means of transportation were meager, as people moved on donkeys or on foot.

That event caused the trips to become infinite and the messages did not arrive on time. Employee fees were low, property rights were absent, manufacturing labor was minimal, and prices were high.

In 1857 the first mercantile plan was created. With the objective of strengthening socio-political progress, the nation sought to build companies through private capital, innovate the technological field and include the population to contribute to the crops.

Also with the elaboration of woven garments, but the church opposed the state strategy. Therefore, the program did not materialize. It should not be forgotten that in the mid-nineteenth century the ecclesiastical institution was the only one with the capacity to mobilize and influence people.

Restorative Republic and beginning of the Porfiriato

As the country was still mired in devastation, another economic law was proclaimed in order to remove the obstacles erected by colonization. This Civil Code was promulgated in 1870 and established the union between the church and the State.

Said code recognized the particular assets of each individual and proposed placing the internal capital in agricultural centers with the purpose of obtaining income that would promote the development of society; although that statute was not exercised because it lacked a profitable reform.

This is how the economy was when Porfirio Díaz obtained power, which is why he stated that he would focus on administration and not politics. Through his state planning, this general sought to impose order and peace; but in reality it succeeded in implanting oppression.

characteristics

The economy in the Porfiriato was characterized by implementing a control over public spending. This aspect benefited the creation of taxes that did not affect the market or imports. In addition, the salary of some workers was increased.

In addition, he invested in structures and artifacts that represented progress, such as power plants, gramophones, automobiles, telephones, and incorporated movie theaters. This fact symbolized the modernization of the nation.

In turn, pedagogical institutes, which were secular and free, increased. However, most of the inhabitants could not enroll in schools because their bosses did not allow them. Therefore, at the beginning of the 20th century, a large part of the population was still illiterate.

Both the indigenous and the peasants were stripped of their lands to work in the large estates acquired by Mexican or foreign landowners. This event caused the internal labor force to be enslaved.

Economic development

After overcoming the economic imbalance that prevailed in the country, the government designed a policy that aimed to centralize the national market. The State abolished the alcabalas and municipal fees.

It also reduced the assets that were earmarked for the army, thereby modifying the military organization. It restructured the public finances, the body that determined the payment of VAT. People had to pay 1% of the purchases or sales of the properties.

It provided various banking systems to make coins, monitor business progress, and balance market exchange. The inclusion of the banks was carried out by an agreement that Díaz had with European corporations. The aim was to reduce the foreign debt.

Following the positivist trend, he approved resources for the reestablishment of academies and museums. However, the most important element for the economy to progress in the Porfiriato was foreign investment.

European investments

In 1880, England contributed 36,907 thousand pounds for the construction of railways, trams and the expansion of the mining field. In 1905 - after oil was found - she began building commercial, construction, mortgage, and storage companies.

He also negotiated rubber factories, haciendas, and sugar plantations. Like the English country, France perceived that Mexico had a market that guaranteed financial performance and did not have technological instruments.

For this reason, it gave the Central American people various bonds to finish building the National Bank, a structure that was inaugurated in 1884. In addition, it participated in industrial and real estate operations.

Instead Germany founded some banks, which were Deutsche, Disconto Gesellschaft and Dresdner. In addition, since the eighties it was incorporating the agencies that were in charge of distributing electricity.

North American investments

American investment had the same orientation as that of England. It began in the late nineteenth century by granting loans to the Mexican government. The aim was to expand the market for higher profits and to establish direct links with politics.

Likewise, it forged three railroad associations and placed capital in the mining sector. As for Canada, this country credited 54 million dollars to create a public transport company, which was called the Mexico Tramways Company.

Economic activities

Economic development during the Porfiriato depended on foreign industries, so lucrative activities leaned toward export areas. Construction, making products with natural materials, and processing minerals were the best rewarded labors.

Due to this, a massive migration movement was generated, since people wanted to settle in central regions with the aim of obtaining greater benefits; But the national workforce was rarely suitable for manufacturing jobs.

This was because the population did not know or dominate the machinery. This event caused companies to seek foreign workers. Thus, it can be seen that Mexico's progress was macroeconomic, since it only increased the value of commercial companies.

However, the inhabitants continued to live in precarious situations because external income was not used for communal prosperity.

This event demonstrated that economic growth was not synonymous with social evolution. It is worth mentioning the main production sectors:

Agricultural sector

Thanks to the agrarian field, the demand for objects both nationally and internationally expanded. Coffee, chickpeas, sugar cane, and cotton became staples. With the passage of time, not only food was grown.

Colorings, tobaccos, vanillas were also manufactured, and cattle were raised on certain farms. This activity arose because in the northern states men considered the harvest to be the fundamental element for subsistence.

It is worth noting that in this productive area there was little intervention from abroad and it stood out for the inclusion of Mexican employees.

Transport

During this period, the railroad was created with the purpose of moving products, delivering mail on time and ensuring the journey of individuals. This transport stood out for its low rates and for expanding trade.

During this period, the railroad was created with the purpose of moving products, delivering mail on time and ensuring the journey of individuals. Source: pixabay.com

The role of this sector was to accelerate the conversion of traditional estates into operational farms, for that reason routes were drawn and trains were built near the cultivated lands. In addition, it supported the progression of the banking system and the textile industry.

This medium had great relevance because it not only connected the different Central American areas, but also communicated Mexico with the United States and Canada.

Mining

In 1887 the Zone Law was enacted. This statute allowed the government and businessmen to increase mineral extraction. From that moment on, the importation of technology to manipulate the deposits was amplified.

The objective was to find gold, pearls and silver; Likewise, non-ferrous metals such as lead, copper, zinc and mercury were produced. Once the oil was found, US agents processed it to create fuel.

Such advances caused the market to expand and the landscape structure of Mexico to be modified due to the exploitation process.

References

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