Market Power in the Henequen Industry of Yucatã¡N, Mexico

Iowa State University Capstones, Theses and Retrospective Theses and Dissertations Dissertations 1993 Market power in the henequen industry of Yucatán, Mexico Richard Norman Glendening Iowa State University Follow this and additional works at: https://lib.dr.iastate.edu/rtd Part of the Economic History Commons Recommended Citation Glendening, Richard Norman, "Market power in the henequen industry of Yucatán, Mexico " (1993). Retrospective Theses and Dissertations. 10432. https://lib.dr.iastate.edu/rtd/10432 This Dissertation is brought to you for free and open access by the Iowa State University Capstones, Theses and Dissertations at Iowa State University Digital Repository. It has been accepted for inclusion in Retrospective Theses and Dissertations by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. 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In Charge of Major Work Signature was redacted for privacy. or the Hanor Department Signature was redacted for privacy. For the Graduate College Iowa State University Ames, Iowa 1993 ii TABLE OF CONTENTS CHAPTER 1 INTRODUCTION 1 CHAPTER 2 HISTORY OF THE HENEQUEN ECONOMY OF YUCATAN . 7 The Physical Geography of Yucatân 7 Yucatân Prior to the Henequen Era 12 Yucatan During the Henequen Era 13 The Modern Era: Land and Institutional Reform ... 21 CHAPTER 3 MONOPSONY IN THE HENEQUEN INDUSTRY, 1880-1930 29 Introduction 29 Supply Elasticities and Market Power 3 0 Supply Elasticities in Agriculture 3 2 Description of Raising and Processing Henequen ... 47 Henequen Supply Function 50 Description of the Data Set 57 Estimation of the Henequen Supply Function 60 Elasticity of Henequen Supply . 65 The Monopsony Power of International Harvester ... 69 CHAPTER 4 OLIGOPSONY IN THE HENEQUEN LABOR MARKET, 1880- 1930 77 Stylized Model of the Labor Market 77 Theory of Rural Households 80 Birthrate Data 84 Estimation of a Birth Rate Function 86 The Statistical Results 9 0 The Conclusions 99 CHAPTER 5 LAND REFORM AND PUBLIC SECTOR MANAGEMENT, 1957 - 1987 100 Introduction 100 Recent Henequen Data 102 Estimation of Supply Elasticities 104 CHAPTER 6 CONCLUSIONS 120 Henequen: A Staple Export Crop 120 International Harvester as a Monopsonist 122 Oligopsony in the Henequen Labor Market 127 Public Sector Management of Henequen 131 BIBLIOGRAPHY 134 iii APPENDIX A HENEQUEN AND CORN PRICE DATA 143 APPENDIX B BIRTHS AND POPULATION DATA 146 iv LIST OF TABLES Table 1: International Harvester's Controlled Share of Yucatecan Henequen Trade to U.S., 1896 - 1914 16 Table 2: ARIMA Procedures on Henequen Prices, 1880 - 1930 55 Table 3: Lag Analysis of Real Henequen Prices on Henequen Production 63 Table 4: Lag Analysis of Nominal Henequen Prices on Henequen Production 64 Table 5: Regression Coefficients for Real Henequen Prices 65 Table 6: Regression Coefficients for Nominal Henequen Prices 66 Table 7: Regression Coefficients for Nominal Henequen Prices 67 Table 8: Regression Coefficients for Nominal Henequen Prices 68 Table 9: Estimated Price Elasticities of Henequen Supply 69 Table 10: Nominal Prices, Real Prices and Production of Wheat in the U.S. from 1880 to 1930 71 Table 11: Philippine Exports of Abaca, 1880 - 1930 ... 72 Table 12: Estimation of Henequen Demand, I 74 Table 13: Estimation of Henequen Demand, II 75 Table 14: ARIMA Procedures on Corn Prices, 1880 - 1930 . 88 Table 15: Regressions of Henequen and Corn Prices on Births in Acanceh and Conkal 91 Table 16: Regressions of Henequen and Corn Prices on Births in Hoctun and Muna 92 V Table 17: Generalized Least Squares Results - Acanceh . 95 Table 18: Generalized Least Squares Results - Conkal . 96 Table 19: Generalized Least Squares Results - Hoctun . 97 Table 20: Generalized Least Squares Results - Muna ... 98 Table 21: Real Henequen Prices, 1957 - 1987 103 Table 22: Land Area in Henequen Production, 1957 - 1987 104 Table 23: Ejido's Percent of Total Land and Output, 1957 - 1974 105 Table 24: Productivity of Henequen Production, 1957 - 1974 107 Table 25: World Production of Hard Fibers, 1979 - 1981 . 110 Table 26: Regression Coefficients for Real Henequen Prices, 1957 - 1987 117 vi LIST OF FIGURES Figure 1: Yucatân Peninsula 8 vii ACKNOWLEDGEMENTS When one has studied economics for over thirty years, the intellectual debt owed others is enormous and difficult to always recognize. This is particularly true of my colleagues at Central College, where I studied as an undergraduate and taught for more than twenty five years. Three colleagues, now retired, merit specific mention: Don Butler introduced me to economics, challenged me to study at the graduate level, brought me back to Central to teach, and has supported my work through the years. Jim Graham, as academic dean, had the vision and provided the resources to stimulate and excite young faculty. Through his efforts Mary and I first visited Yucatân which led to my teaching in Central's Yucatan program. Harriet Heusinkveld, as the director of the Yucatân program, taught my family and me to love Yucatan and appreciate our experiences there. Harriet kindled my interest in Yucatecan economic history and the topic of this research. The Economics Department at Iowa State University has provided an intellectually stimulating environment for rejuvenating my interest in economics and challenging me to complete their graduate program. I have appreciated the quality of the graduate program and their willingness to work viii with students, even those with significant commitments elsewhere. Lee Fletcher, as my major professor, encouraged me through the years. He always responded positively to my requests for his time and ideas. Lee kept me on the path to complete this research and the graduate program. I also appreciate the patience and the support received from the members of my dissertation committee. Lastly, I want to acknowledge my family - Mary, Eric, Mary K, Kara, Erin, and my children's families. My children have used the years of my involvement with Iowa State to enter adulthood and begin professional lives of their own; their maturity and good judgement along with their support have allowed me the time and energy to complete this research project. Simplicity may be the best way of thanking someone to whom you are most indebted: Thank you, Mary. 1 CHAPTER I INTRODUCTION Henequen has been called the "Green Gold" of Yucatân.' The fiber which comes from the long spear-like leaves of this plant can be dried and then used to produce twine. Henequen twine is strong, resists rot, and is not susceptible to insects. The twine can be used for ship riggings and bags. But as binder or baler twine, henequen became the source of economic wealth and prosperity for Yucatân in the late nineteenth and early twentieth centuries. Three hard fibers can be used to make rope and twine. Henequen (Agave Fourcroydes) and sisal (Agave Sisalana) are native Central and South American plants from the same family, Amaryllidaceae.z The third fiber is abaca or manila hemp 'The term "Yucatân" is commonly used to refer to both the peninsula and the Mexican state. The State of Yucatân is one of three states comprising the Yucatân peninsula. When used by itself in this paper, the term designates the geographical peninsula and not the political state. zpred Carstensen and Diane Roazen in, "Foreign Markets, Domestic Initiative, and the Emergence of a Monocrop Economy: The Yucatecan Experience, 1925-1903," Hispanic American Historical Review 72, no. 4 (1992); 555, state that sisal is native to Africa but other authorities write that East African 2 (Musa Textiles) which

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