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The Limited Role of Rural Small-scale Manufacturing for Late-comers: Some Hypotheses on the Colombian Experience

Published online by Cambridge University Press:  05 February 2009

Albert Berry
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Extract

This paper focuses on the question of whether and how rural industry contributed to the advance of modern industrialization in Colombia. The question is of considerable interest to students of developing countries, since rural industry remains quite important (especially when assessed by the level of employment created) in many such countries, and there is evidence that it may be relatively efficient under the prevailing conditions of labour abundance and capital shortage.

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Articles
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Journal of Latin American Studies , Volume 19 , Issue 2 , November 1987 , pp. 295 - 322
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Copyright © Cambridge University Press 1987

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References

1 See Mendels, Franklin, ‘Proto-industrialization: The First Phase of the Industrialization Process’, Journal of Economic History, vol. 32 (1972), pp. 241–61.CrossRefGoogle Scholar

2 Several papers focusing on Third World countries were presented at the 1982 Economic History Congress at Budapest; they are included in La Protoindustralisation: Théorie et Réalité: Rapports. Papers presented at the VIII Congres International d'Histoire Economique, Budapest, August 1982. See K. Chao, ‘Textile Production in Traditional China’; S. P. S. Ho, ‘Small Scale Rural Industries in Contemporary Economic Development: the Cases of South Korea and Taiwan’; M. Johnson, ‘Proto-industrialization in West Africa’.

3 For purposes of this discussion establishments of 5 or more workers are defined as factories, smaller ones as artisanry or cottage-shop.

4 McGreevey, William P., An Economic History of Colombia, 1845–1930 (Cambridge University Press, 1971), pp. 34–6.Google Scholar

5 For a review, see Berry, A., ‘A Descriptive History of Industrialization in Colombia’. In Berry, A. (ed.), Essays on Industrialization in Colombia (Tempe, Arizona, Centre for Latin American Studies, Arizona State University, 1983).Google Scholar

6 Vásquez, Ospina, Industria y Protección en Colombia, 1810–1930 (Medellín, Editorial Santa Fe, 1955), p. 62.Google Scholar

7 Ibid., Industria…, pp. 67–8.

8 Ibid., p. 69.

9 Loc. cit.

10 Ibid., p. 135. Nieto A. does argue that production was reaching a level beyond the workship in scope at this time. See below.

11 Hall, Francis, Colombia: Its Present State (London, 1824).Google Scholar

12 Safford, Frank, Aspectos del Siglo XIX en Colombia (Medellín, Ediciones Hombre Nuevo, 1977), p. 251Google Scholar, citing Ancizar, Manuel, Peregrinación de Alpha (Bogotá, 1956).Google Scholar

13 Ospina reports that ‘little remained of the modern industries which had operated in the previous period (1830–45), and very little new activity was undertaken’ (Ospina V., Industria…, p. 228.)

14 Although the lack of evidence on the number of people involved in manufacturing prior to 1870, and between 1870 and the early 20th century, makes it impossible to ascertain just what happened in the second half of the 19th century, the high figure for 1870, 335,000 people, makes it unlikely that there had been a significant decrease in employment prior to that year. The employment estimates for 1870 and 1918 (Table 2) suggest a slight net increase between those two years but leave it unclear whether there was a decline in the immediate post-1870 decades followed by an increase again by 1918.

15 It is particularly hard to pin down what happened to the artisan sector output during the second half of the nineteenth century. McGreevey has argued that it fell under the effects of the liberal reforms of the mid-century (see his illustrative estimates, An Economic History…, table 21, p. 171), but the more recent evidence on merchandise imports presented by Ocampo (‘Las Importaciones…’) indicates that they rose much less rapidly over 1845–65 than McGreevey's figures implied. This leaves little support for McGreevey's proposition and suggests, rather, that domestic manufacturing output probably continued to rise at this time. See the criticisms of McGreevey's methodology presented by Safford, , Aspectos…. pp. 221–2.Google Scholar He notes that the increasing merchandise imports of the late-19th century included a significant share of capital goods, which would not be competitive with artisan output, and may also have included imports then worked up by the artisans (p. 253).

16 Panama hats were usually produced by women, taking advantage of the hours which were not required by household duties (Samper, Miguel, ‘La Protección’, in La Miseria en Bogotá y Otros Escritos, Bogotá, Universidad Nacional de Colombia, Biblioteca Universitaria de Cultura Colombiana, 1969, pp. 222–3Google Scholar).

17 Safford, , Aspectos…, pp. 251–3.Google Scholar He notes that these latter activities began to develop systematically in Bogotá and Medellín in about the 1870s.

18 Assuming for 1918 that not more than 150,000 manufacturing workers (factory or artisan) were located in urban areas, leaving 250,000 in rural areas if our estimate of a total manufacturing employment of 400,000 is accurate. It must be admitted, however, that the 1918 estimate will remain open to question until some careful analysis is given to the census of that year. A much lower figure of 283,000 was estimated by ECLA for 1925 (Economic Commission for Latin America, Analysis and Projections of Economic Development: The Economic Development of Colombia, New York, United Nations, 1957, Annex Estadístico, cuadro 5Google Scholar). And the 1912 census figure for ‘artes, oficios, y aprendices’ was only 190,000; this figure was low in part due to the failure of the census to include some departments, but there remains some possibility that it measured manufacturing employment no worse than the 1918 census. In this event McGreevey's hypothesized decline in artisan employment prior to 1918 would be borne out.

19 Miguel, Urrutia M. and Villalba, Clara Elsa, ‘El Sector Artesanal en el Desarrollo Colombiano’, Revista de Planeación y Desarrollo, vol. 1, no. 3 (10 1969), p. 49.Google Scholar

20 Loc. cit., and Table i.

21 Ibid., cuadro 4a.

22 Caballero, Enrique, Historia Económica de Colombia, 2nd edn (Bogotá, Italgraf, 1971), p. 188.Google Scholar

23 A. Berry, ‘A Descriptive History…’, table 2.1.

24 Luis, Eduardo Nieto A., Economía y Cultura en la Historia de Colombia (Bogotá, Ediciones Tercer Mundo, 1962).Google Scholar Some students argue that this process never got beyond the putting-out system. Thus Safford observes ‘None of the textile centres of the 18th century appears to have operated in a more elaborate form than cottage industry’ (Safford, Frank, ‘Commerce and Enterprise in Central Colombia, unpublished Ph.D. Dissertation, Colombia University, 1965Google Scholar). Nieto A. seems to suggest a little more than this in saying (Economía…, p. 323) ‘manufacturing quickly replaced the workshop in the Santander region’ while at the same time quoting Camacho Roldan's comment that ‘no factory was established in Santander’ (Ibid., p. 323). This would suggest small establishments of a few workers, rather than just the putting-out system.

25 Ospina V., Industria…, p. 69.

26 As artisan textile production receded in the 20th century, it was found mainly in its earliest centres of colonial times, in the high Andes (Ospina V., Ibid., p. 406).

27 Bell, P. T., Colombia: A Commercial and Industrial Handbook (Washington, Government Printing Office, 1921), p. 183.Google Scholar

28 Ibid., p. 182.

29 Controleriá General de la República, Dirección Nacional de Estadística, Censo General de Población, 5 de Julio di 1938, Tomo XVI: Resumen General del País, Bogota, Imprentá Nacional, 1942, p. 160.

30 Safford, Frank, The Ideal of The Practical: Colombia's Struggle to Form a Technical Elite (Austin, University of Texas Press, 1976), p. 35.Google Scholar

31 Loc. cit.

32 Witness the case of the English textile industry (Chapman, S. D., The Early Factory Masters, Newton Abbott: David and Charles, 1967).Google Scholar

33 Ospina, V., Industrial…, p. 177.Google Scholar

34 Ibid., p. 178.

35 Ibid., p. 405.

36 Safford, , ‘Commerce and Enterprise…’, p. 168.Google Scholar

37 Ibid., p. 170.

38 Cortés, Mariluz, Berry, Albert and Ishaq, Ashfaq, Success in Small and Medium Scale Enterprises: The Evidence from Colombia (Oxford: Oxford University Press, 1987), chapter 2.Google Scholar The evidence is more limited in the early 20th century than for the last couple of decades.

39 A perceptive discussion of class and mobility in Colombia is Martínez, Fernando Guillen, Raíz y Futuro de la Revolución (Bogotá, Ediciones Tercer Mundo, 1963).Google Scholar The prominence of class feelings has varied markedly by region in Colombia: like many other authors, Hagen contrasted the Antioqueños with the Payenses (Hagen, E. E., On the Theory of Social Change, Homewood, Illinois, Irwin, 1962, chapter 15Google Scholar). A recent, revealing study of the Medellín economic élites is Twinam, Ann, Miners, Merchants and Farmers in Colonial Colombia (Austin, Texas, University of Texas Press, 1982).Google Scholar

40 In the early industrializing countries, especially Great Britain and northern Europe, religious nonconformity and lower social class along with artisan background are frequently cited as characteristics of the industrial entrepreneur during incipient industrialization – continuing in Great Britain to perhaps the middle of the nineteenth century. Industrialization was a new phenomenon, one on which many members of the elite classes looked with disdain and disfavour, perhaps also with relatively little concern; it was not initially self-evident that the fulcrum of their economies would increasingly shift to the industrial sector.

41 Safford, Frank, ‘Significación de los antioqueños en el desarrollo económico colombiano: Un examen crítico de las tesis de Everett Hagen’, in Anuario Colombiano de Historia Social y de la Cultura (Bogotá, Universidad Nacional de Colombia, 1967), p. 64.Google Scholar

42 Mendels, , ‘Proto-industrialization…’ pp. 245–6.Google Scholar

43 Samper, , La Protección, pp. 244–5.Google Scholar Samper distinguished between these types of manufactures (textiles, footwear) and the ‘arts’, where he felt the impact of the new flow of imports after Independence was quicker and more pronounced. The urban tailor came to require imported raw materials to produce what the consumer wanted. More advanced products and increasing division of labour among carpenters, upholsters, and others involved in producing furniture was matched by advances in pottery, masonry, and the like. With the construction of the Eastern highway, the production of vehicles became an important industry in Bogotá and later in Tunja (p. 247). The prosperity of these occupations was much greater in Bogotá than in smaller cities, because of greater division of labour and the mutual support among them, and the incentive to improvement was fostered by the wealther clientele.

44 Samper, , La Miseria…, pp. 98–9.Google Scholar

45 Ibid., p. 97.

46 Ibid., p. 100.

47 Caballero, , Historia…, p. 184.Google Scholar

48 Bucaramanga, the capital of Santander, eventually became a significant manufacturing zone, perhaps achieving the fifth place among Colombian cities around mid-century. In 1936, the department of Santander in which Bucaramanga is located ranked fifth in workers reported in a survey of principal industries (Dirección Nacional de Estadística, Anuario General de Estadística, 1936, Bogotá, 1938, p. 148Google Scholar). But a majority of these were in petroleum (in the Barrancabermeja region). Most of the rest were in the cigar/cigarette industry (1600 of about 1900). Only after the middle of the century did Bucaramanga's manufacturing take on a more modern composition (DANE, Industria Manufacturera, 1973, Bogotá, 1977, pp. 66–7Google Scholar).

49 McGreevey, , An Economic History…, p. 196.Google Scholar

50 Safford, , Aspectos…, p. 255.Google Scholar

51 McGreevey, , An Economic History…, p. 105.Google Scholar

52 Nieto, A., Economía…, p. 324.Google Scholar Both the census data (Table 3) and other authors suggest not so much a sharp decline in manufacturing employment (understood broadly to include cottage-shop) as a stagnation with fluctuations. But it is probable, and this may be all that Nieto meant, that the small plants were knocked out and only the household sector held on.

53 Ibid., p. 289.

54 Bell, , Colombia…, p. 287.Google Scholar

55 Ibid., p. 289.

56 The 1870 census recorded municipal populations of 41,000 for Bogota, 30,000 for Medellín, and 11,000 for Bucaramanga. These figures include rural populations found in the same municipality (McGreevey, , An Economic History…, p. 110Google Scholar).

57 The Antioqueños controlled a high share of exports of gold, tobacco and later coffee. And, with Cali not having a reliable outlet to the Pacific until the end of the century, Medellín merchants controlled the import trade of all of Western Colombia (Safford, , ‘Significacion…’, p. 64Google Scholar).

58 Hirschman has argued that this is an important role of imports during the early stages of development (Hirschman, Albert, The Strategy of Economic Development, New Haven, Yale University Press, 1958, chapter 8Google Scholar).

59 Safford, , ‘Commerce and Enterprise…’, p. 143.Google Scholar

60 Ibid., p. 144.

61 Safford, , ‘Commerce and Enterprise…’, p. 149.Google Scholar

62 Ibid., p. 150.

63 In the recent period of import substitution under difficult balance of payments restraints (1950s to late 1960s), Bogotá industry seemed to flourish, partly due to proximity with the centre of power, foreign exchange rationing, etc.

64 Ibid., p. 153.

65 Safford, , ‘Commerce and Enterprise…’, p. 151.Google Scholar

66 In an attempt to lower labour costs a group of the Bogotá industrial elite requested that Congress approve a law decreeing forced apprenticeship in the factories (Safford, , Aspectos…, p. 54Google Scholar).

67 One reflection of the lack of experience of these potential industrialists was the importation of machinery (cited in the case of a cotton mill established in 1836 and which lasted only a decade plus) which could have been produced in Bogotá. Much capital was spent on the imported machinery, to whose cost was added the high transport costs of getting it to Bogotá (Safford, , ‘Commerce and Enterprise…’, p. 171Google Scholar). Possibly the heavy reliance on foreigners for technical advice contributed also to the use of foreign machinery and to the adoption of more advanced techniques than would have been chosen by persons more familiar with Colombian conditions.

68 Safford, , Aspectos…, p. 58.Google Scholar

69 Although the Bogotá élite had capital to invest they did not have it in as large or elastic a supply as their Antioqueño counterparts, and on occasion suffered the consequences.

70 Government policy, as noted earlier, was gradually swinging in favour of protection. The political feasibility of the new protectionist policy was probably facilitated by the fact that both coffee exporting interests and manufacturing interests were centred in Medellín, often in the same family. Thus there was substantial agreement between these two groups on the desirability of a more rapid expansion of manufacturing under protection. This was in contrast to the conflict of the earlier period of tobacco exports (mid-19th century) and the second half of the 19th century when the artisans of Santander favoured tariff protection and the merchants and landowners of Bogotá and Cundinamarca opposed it.

71 Bell, , Colombia…, p. 180.Google Scholar Medellín remained Colombia's leading centre for factory manufacturing until about the 1960s, when Bogotá reclaimed the lead.

72 Ibid., p. 187.

73 See the discussion in Hagen, On the Theory of Social Change, chapter 15.

74 Ospina, V., Industria…, pp. 308–9.Google Scholar

75 Safford notes that ‘nearly all the manufacturing enterprises of Bogotá were organized as joint stock companies’ (Aspectos…, p. 57).

76 Twinam, , Miners…, p. 148.Google Scholar

77 McGreevey, , An Economic History…, p. 214.Google Scholar

78 Low opportunity cost of females has been suggested as a reason for the early concentration of U.S. manufacturing in the Northeast during the 19th century. See, for example, Golden, Claudia and Sokloloft, Kenneth, ‘The Relative Productivity Hypothesis of Industrialization: The American Case, 1820–1850’, National Bureau of Economic Research, Working Paper No. 71, 1981.Google Scholar

79 Ospina, V., Industria…, p. 331.Google Scholar

80 Population growth was more rapid in Antioquia than in Colombia as a whole. From under 10% of the population in 1835, Antioquia's share rose to almost 16% in 1905. (See Gómez, Fernando, ‘Los Censos en Colombia antes de 1905’, in Urrutia, Miguel and Arrubla, Mario, Compendia de Estadísticas Históricas de Colombia, p. 30Google Scholar).

81 McGreevey, (An Economic History…, p. 214Google Scholar) notes the increase in the share of capital goods in all imports from 18.6% over 1912–19 to 27.6% over the 1920s, and argues that this change in composition was permitted by the very fast growth of exports over 1910 to about 1930, which outstripped temporarily the demand for consumer imports.

82 Ospina, V., Industria…, p. 200.Google Scholar

83 If the composition of the non-agricultural labour force in 1918 had been the same as in 1938, manufacturing workers would have made up about 78% of this broader grouping, so differences in its importance across departments would be mainly due to differences in manufacturing employment (see Table 3).

84 McGreevey, , An Economic History…, p. 166.Google Scholar Parts of Santander were something of an exception, at least during the heydey of artisanry.

85 In some regions where industrial activity was distinctly secondary, as with Indians working wool in their spare time for very local markets, they resisted imports more successfully (Ospina, V., Industria…, p. 172Google Scholar).

86 In the 19th century the weaving of fine hand-painted Panama hats was introduced from Ecuador, became localized in half a dozen communities, and in the latter part of the century became a significant export industry. In the late 19th century ceramics and glassware made in the town of Caldas entered domestic and international commerce (Parsons, James J., Antioqueño Colonization in Western Colombia, Berkeley, University of California Press, 1968, p. 174Google Scholar).

87 Tirado, A.M., , Introductión a la Historia Económica de Colombia, 4th edn (Medellín, La Carreta, 1975), p. 179.Google Scholar

88 For example, McGreevey, , An Economic History…, p. 200.Google Scholar

89 Parsons, , Antioqueño Colonization…, p. 179.Google Scholar

90 Ibid., p. 175.

91 Safford, , The Ideal…, p. 8.Google Scholar

92 Loc. cit.

93 Safford, , The Ideal, p. 14.Google Scholar

94 Ibid., p. 224.

95 Ibid., p. 222.

96 Ibid., p. 224.

97 Ibid., p. 211.

98 Ibid., p. 205.

99 Ibid., p. 205.

100 Some of the new manufacturing industries involved export items (as with coffee processing), but most were domestic in orientation. Some had national markets (as with Medellín textiles) while others catered to more local markets.