How a region once decimated by smallpox and measles became a coffee exporting hub?

 

Casey Lurtz, a Business Historian at Harvard Business School discusses her fascinating research on the topic.

She discusses a place in Mexico called Soconusco which was a place of diseases in 1800s and then emerged as a coffee exporting hub at the turn of twentieth century..

Near the Guatemalan border in Mexico’s Chiapas region, sandwiched between the Sierra Madres and the Pacific Ocean, there’s a fertile pocket of land called the Soconusco. While once a hotbed of cacao production for the Aztecs and then the Spanish, the area was decimated by smallpox and measles soon after the Spanish conquest. For most of the 1800s, hardly anyone lived there. But by the turn of the twentieth century, the Soconusco had become a major coffee producer and exporter. It remains so today.

Casey M. Lurtz is intrigued by this unlikely agricultural success story, and has spent much of her academic career studying the coffee economy of southern Mexico in the nineteenth and early twentieth centuries. While her geographical focus is narrow, her research yields insights into export economies—and broad lessons for anyone building an entrepreneurial community in the face of adversity.

“The work is all about the difficulty of building an economy where there’s nothing: where there are no roads, where there’s no reliable labor system, where there are no property rights, where there are no banks for another 30 years,” says Lurtz, the Harvard-Newcomen Fellow at Harvard Business School. “How do you build these institutions that you need for market agriculture in a place where maybe there are laws on the books, but there’s not much apparatus for support? It’s looking at all these entrepreneurs who are working and trying and failing and succeeding—and who eventually build up the largest exporter of coffee in Mexico.”

The drive was led by Mexico finance secretary who failed in his venture but led path for others:

Lurtz’s research has revealed a patchwork of entrepreneurial effort that contradicted common conceptions about agriculture and commerce in that era. Much credit for the expansion of Mexican export crops has gone to Porfirio Díaz, president of Mexico for all but four of the years from 1876 to 1910. Indeed, he built roads and railroads, and he instituted liberal land, labor, and credit laws that favored agricultural commerce for large landowners.

But the transportation infrastructure efforts didn’t reach the rural Soconusco. And farmers there were less aided by national policy than they were by informal, local business deals. As Lurtz writes in her research summary, “Here coffee emerged in the hands of a diverse body of participants. Alongside foreign merchants and migrant planters, local smallholders, migrant laborers, and regional politicians took an active role in the expansion of the coffee economy.”

The coffee economy did receive initial state-sponsored help from Matías Romero, who served as Mexico’s secretary of finance three times at the end of the nineteenth century. “He’s one of my favorite people,” Lurtz says. “He had all these grand ideas, and one of these ideas was figuring out how [the Soconusco] could leverage Mexico’s competitive advantage in export agriculture. So why not try coffee? Coffee for the masses had been a thing for a couple of decades at that point, but there was a new and growing interest in luxury coffee.”

Romero set out to surmount the Soconusco’s geographical isolation. He sent surveyors to assess the region, he negotiated the approval of an international port, and he arranged for an international shipping company to stop there once a month. “The port was not much of a port,” Lurtz says. “It was a stretch of beach.”

Next, Romero moved to the Soconusco, setting up a coffee plantation of his own in an attempt to lead by example. “He was just awful at it,” Lurtz says. “He was a good minister. He was good at politics. He was a great negotiator. But as a plantation owner, he was awful. He didn’t know what he was doing, but he tried. He wrote all these books about how to grow coffee. People laughed at them and at him. After a few years, he left and moved back to Mexico City. He was a failure. But coffee stayed. And coffee succeeded.”

Rest is history..

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