Mexican history reveals this trend in economic activity. During the reign of Di??az, the country opened up new markets for its mineral and agricultural products and brought new land under cultivation. Concentration of land ownership during the Porfiriato, coupled with the loss of communal holdings, made it difficult for people to practice subsistence agriculture. Di??az favored the rich owners of large estates, increasing their properties by allowing them to absorb communal lands that belonged to Native Americans.
Many landless peasants fell into debt peonage, a system of economic servitude in which workers became indebted to their employers for both money and supplies and were forced to labor in mines or plantations until the debt was paid. By 1910 some 90 percent of the rural inhabitants of central Mexico were landless. Under Di??az, a two-tier society emerged, as those able to take advantage of modernization became rich and the poor sank further into poverty. As many rural inhabitants and Native Americans lost land to large commercial interests, agricultural workers failed to secure a reasonable share of the nation's growing wealth.
Moreover, agricultural production of staples for internal consumption dropped as agricultural exports reduced food stocks. Corn and beans, the core of the lower-class diet, had to be imported. Periodic food riots occurred throughout the country. In 1905, the government sold food at subsidized prices, and in 1909 it opened 50 subsidized food stores in Mexico City. When Madero adopted a cautious policy on land reform, Zapata revolted and issued his Plan of Ayala in November 1911. The proclamation called for the immediate transfer of land to peasant farmers and insisted on the right of Mexican citizens to choose their own leaders.
Zapata actually stated, "... that the lands, I mount and waters that have usurped the landowners, scientists or caciques in the shade of the venal justice, will of coarse enter possession of those real estate, the towns or citizens who have their titles, corresponding to those properties, of which they have been undressed by bad faith of our opresors, ... that they settle down to the triumph of the Revolution. " This quote supports the fact that Di??az favored the cientificos and the caciques in the distribution of land.
He would sell this "unowned" land to them for cheap, and they would make sure that Di??az profited well from the deal, showing support for his conservative ways and assuring protection of their investments. After his election, Ci??rdenas moved to reduce the role of the army in Mexican politics, and emphasized land reforms (returning land to the peasants), social welfare, and education. This is ironic because of Ci??rdenas's past, being a great landowner who had once served Di??az. (As it turns out, he became the first chief of the revolution before his presidency. Ci??rdenas established a reputation as a revolutionary reformer.
By the end of his term, one-third of the country's population had received land, usually as a member of a communal farm known as an ejido. However, Mexican governments post 1940 rejected the ejido system, which caused a parallel growth of large landed property, leading to the emergence of a new latifundia. Beginning with Ci??rdenas, attempts to expand the economic focus from and agricultural-based economy to and economy with other capitalist opportunities is clearly visible.
Carranza, whom was essentially a conservative with moderate leadings, called for the election of deputies to a convention that was to frame a new constitution and prepare the way for his election as president. The draft that they came up with did not contemplate a radical agrarian reform. In Article 27, which dealt with property rights, he proclaimed the nation the original owner of all lands, waters, and the subsoil. Also, the state had the power to expropriate them, with compensation to the owners. National ownership of water and the subsoil was inalienable, but individuals and companies could obtain concessions for their exploitation.
Foreigners to whom that privilege was granted must agree that they would not invoke the protection of their governments in regard to such concessions. Of prime importance were the same article's agrarian provisions. It declared that all measures passed since 1856 alienating ejidos were null and void; if the pueblos needed more land, they could acquire it by expropriation from neighboring haciendas. These and other provisions of the constitution of 1917 laid legal foundations for a massive assault on the latifundia.
Proof exists that the constitution was not anticapitalist: its sanction and protection of private property; its desire to control foreign enterprises, rather than eliminate them, creating more favorable conditions for the development of capitalism. During November of 1920, Obregi??n becomes president; the next 80 years will be more corrupt and inquisitive than anyone in Di??az's regime. Power under Obregi??n's reign, in comparison to Di??az's, was held by a ruling class of wealthy generals, capitalists, and landlords. Obviously, Obregi??n pretended to be a conservative, but was truly moderate.
He regarded agrarian reform as a safety valve for peasant discontent, and even distributed some land to the pueblos. He distributed 3 million acres of land to the people. Of coarse, the good land was given to the latifundias, and the marginal land to the peasants. Even after a village had received land, its prospect for success was poor. The government failed to provide the peasants with any means of getting loans from the bank, seeds, tools, or modernization. Industry occurred only on the latifundias because that is where the money was.
This was the same reason that latifundia owners were granted loans; they had the money to pay them back. The Labor and Agrarian Party did manage to slow down land reform. The delayed large landowners sued to prevent land distribution. Calles, Obregi??n's handpicked successor, also neglected to provide the peasantry with irrigation, fertilizer, tools, or seed. He established a government bank that was supposed to lend money to the ejidos, promote modern farming techniques, and act as agents for the sale of their produce.
But four-fifths of the bank's resources were loaned not to ejidos, but to haciendados with much superior credit ratings, and many of the bank's agents took advantage of their position to enrich themselves at the expense of the peasants. Land reform had failed once again... big surprise. Calles concluded that peasant proprietorship was economically undesirable, and announced the abandonment of land distribution. Meanwhile, on his own large estates, Calles introduced machinery and other modern agricultural techniques and advised other large landowners do the same. Finally, Ci??rdenas, a self-proclaimed liberal, resumed the ignored Revolution.
Land distribution to the villages on a massive scale was accompanied by a many-sided effort to raise agricultural productivity and improve the quality of rural life. Labor was encouraged to replace the old, corrupt leadership with militant leader and to struggle for the improved conditions that were denied in the past. Land was distributed to the peasantry in a variety of ways, according to the climatic soil conditions of the different regions. The principal form was the ejido, the communal landholding system under which land could not be mortgaged or alienated, with each ejidatario entitled to use a parcel of community land.
The ejido was the focal point of agrarian reform, but land was also distributed in the forms of the rancho and the collective ejidos. Surprisingly, the government generously endowed these enterprises with seeds, machinery, and credit for the Banco de Cri??dito Ejidal. In 1822, hoping to raise revenue and increase production, Rivadavia, chief minister under Marti??n Rodri??guez, governor of the province of Buenos Aires, introduced the system of emphyteusis, a program of distribution of public lands through long-term leases at fixed rentals. This measure actually contributed to the growth of the latifundia.
Argentina had to meet the steadily mounting European demand for Argentine wheat and meat, the Conquest of the Desert triggered the driving of land prices ever higher, due to increased land speculation, and caused a prodigious expansion of cattle raising and agriculture. This expansion took place under the sign of the latifundia. Few of the millions of Italian and Spanish immigrants who entered Argentina in this period realized the common dream of becoming independent small landowners. Argentina, although far more industrialized to begin with, was also dependent upon an export economy.
In fact, Argentina's dynamic economic development during the latter 19th century and early 20th century was particularly due to the influx of large quantities of foreign investment capital, which went to put more land under cultivation. Another factor of economic development at that time was the inflow of millions of immigrants, who provided cheap labor for the expanding agricultural sector. Argentina's prosperity, at that time, depended on its ability to export huge amounts of agricultural commodities, to import the manufactured goods it required, and to attract a steady stream of large-scale foreign investment.
Every sector of the Argentine economy depended on exports. In contrast to Mexico, however, Argentina raises enough agricultural products not only to fill domestic needs but also to export surpluses to foreign markets. Agriculture and livestock raised employment levels 35 percent. The nation's greatest agricultural area, the Pampas, exported 70 percent of its production (including wheat and cereal grains). Irrigated areas, from the Ri??o Negro north through Mendoza, San Juan, Tucumi??n, and San Salvador de Jujuy, are rich sources of fruit, sugarcane, and wine grapes.
The export economy had other major exports besides agricultural goods, which placed less emphasis on the latifundia. Argentine industry centered on food processing and mainly meat packaging. Around 1935, foodstuff processing accounted for 47 percent of all industrial production, and textiles for another 20 percent. The transportation industry handled mostly export commodities, through their railroads and coastal shipping. In addition to large numbers of farm laborers, many urban and industrial workers depended on the exports for their jobs.
The major trade and industrial unions in Argentina arose in the industries of coastal shipping, railroads, dock work, and packinghouses, where their well-being would be guaranteed in their control of overseas trade. Because the government relied on revenues derived from the import taxes, significant numbers of white-collared workers and professionals employed by the government also were intimately tied to the export economy. Both the rich and the poor were reliant upon the export economy for their livelihood.
The ruling elite was composed of large landowners, who produced almost entirely for the export trade. The upper class acquired its wealth and prestige through its ability to capitalize on opportunities presented by the export economy. Large landowners used the export boom of the last quarter of the 19th century to solidify and enhance its power. The most powerful in the elite was the cattle fatteners, who supplied beef for both the domestic and foreign markets. This inner circle was composed of four hundred families that were closely allied through social clubs and business associations.
Geographically, most of the wealth was located in the cattle and cereal regions of the Pampas. From 1880-1912, the elite class that controlled the nation's land also controlled its politics (hence, the larger land owners, or the latifundia owners, were the most powerful politically during this time period). Later, and urban middle class arose, who was still dependent on the export economy. The lower class, conversely, was divided into two groups: workers and urban marginals. A considerable amount of workers were employed by the railways and in the Port of Buenos Aires.
Mexico is still more dependent upon the latifundia system than Argentina, both socially and politically. Argentina has gone further with industrialization, creating more jobs available for the middle and lower classes of their complex class structure. Also, Mexico took much longer to set up their domestic market. By the time they were just beginning to set their goals on producing staples for their own markets, Argentina had a healthy domestic market with plenty of staples for their people. However, both countries tended to rely on exportation as a means of capital for a great deal of time.