Category Archives: economics

From Antonio’s Gun and Delfino’s Dream: True Tales of Mexican Migration, by Sam Quinones (U. New Mexico Press, 2007), pp. 210-212:

They [immigrants from Atolinga in Zacatecas, Mexico] became part of a Chicago ecosystem of immigrant nonfranchised fast-food restaurants that included Chinese food, Greek gyros, Italian hot-dog stands, and sandwich and donut shops owned by Indians. Several Atolingan taquerías replaced Polish and Italian hot-dog stands that went out of business.

Atolingans pooled knowledge, shared experiences, aided those in need. For a while, they formed an informal cooperative to buy vegetables and supplies. When one of Salinas’s taquerías burned down in 1998, he reopened two weeks later using equipment from other Atolingan restaurateurs.

This kind of cooperation was a radical concept for men from an isolated Mexican village. Back home, anyone who wedged his way into a small business wasn’t about to help or cooperate with the competition. Envidia was rife and pernicious. Envidia means “envy,” but it also implies backbiting and in commerce, even sabotage. Envidia is behind the common Mexican proverb “Pueblo chico, infierno grande” (Small town, big hell). When discussing envidia, particularly as it relates to business, many Mexicans tell the story of crabs in a pot of boiling water. When one crab tries to get out of the pot, the others pull him back down; if they can’t get out, why should he?

Chon Salinas came to view envidia as a devastating force. He felt it was behind the drug-smuggling rumors with which he’d had to contend.

A significant cause of Mexican poverty in small villages, he believed, was the way people not only wouldn’t cooperate in business, but at times actively tore each other apart. He told the story of Urbano Garcia, a great carpenter in Atolinga years ago, who so feared competition that he refused to teach the trade to his own sons. As Salinas went out on his own and then helped others do the same, he railed often against envidia.

“The loans we eventually gave each other weren’t that important,” he said. “What was important was to recognize the strength of unity, this support, backing each other up, this confidence that we all need. It’s what I learned at John Barleycorn‘s and what other people taught me there. I’d tell those who were starting restaurants that we have to break the pattern of those famous crabs.”

Chicago was a huge market that offered opportunity for everyone. The new immigrants found themselves together in the same strange land, facing the same challenges: the English language, U.S.-born children, business permits, leases, taxes, snow. The envidia impulse withered, and unity came easier.

From Antonio’s Gun and Delfino’s Dream: True Tales of Mexican Migration, by Sam Quinones (U. New Mexico Press, 2007), pp. 230-232:

In the 1950s, the invention of the turbine water pump allowed [people in western Kansas] finally to suck water from the massive Oglalla Acquifer, a sea of underground freshwater that stretches under the High Plains from South Dakota to Texas and New Mexico. New irrigation systems let them spread that water across wide swaths of land and decreased the threat of drought. Farmers could grow huge amounts of grain-corn, milo, and alfalfa—which could be fed to cattle. With that came the cattle feed yard.

In 1951, a Garden City farmer named Earl Brookover built the first cattle feed yard in Kansas, with large pens in which cattle ate locally grown grain from a trough. Cattle fattened faster and more efficiently—on high-protein milo, corn, and alfalfa—than when they grazed aimlessly on the range. Dozens of ranchers opened feedlots across the High Plains. The Irsik family, another feedlot operator near Garden City, built the first processor that turned corn into cattle feed. Today, there is feed yard space for a million head of cattle within a sixty-mile radius of Garden City.

Poets would find potent symbols of America’s vanished frontier in these yards, with their acres of penned and tagged cattle that once roamed the range. The cowboy was now as penned in as the cattle. He rode from yard to yard, culling the sick head.

Still, the feed yard changed the American diet. The price of beef dropped. On rangeland, cattle exercised as they grazed, making their meat lean and tough, so not much of the animal was usable for anything other than hamburger or pot roasts. America’s hamburger tradition was due to the fact much of the range-fed cattle was appetizing only when it was ground up with some of the animal’s fat. But in feed yards, cattle didn’t move much, so their meat was fattier and thus more tender and better tasting. Demand for beef rose. This added protein to the U.S. diet. Cattle producers could now harvest more profitable specialty cuts—brisket, chuck, inside skirt, flatiron, and flank steaks—from all over the animal.

Brookover’s idea was to keep in Kansas what was raised in Kansas. Up to that point, Kansas and a lot of rural America resembled the Third World: its commodities—cattle and corn, in this case—were shipped away to be transformed into more profitable products elsewhere. The feed yard transformed Kansas corn into a more profitable product—cattle. Thus a bit more of the wealth that these rural communities produced remained in the area.

By the 1970s, southwest Kansas was a cattle center unlike anything early settlers could have dreamed. Yet it was only a hint of what was coming.

The man who completed the transformation of southwest Kansas— and changed America in the process—was a tall, jowly fellow with a slow Iowa drawl named Andy Anderson.

Anderson cofounded a company known as Iowa Beef Packers—later IBP. Anderson had intense energy and creativity where building things was concerned. He’d been a butcher, then a meat wholesaler in Los Angeles. Anderson had no schooling in engineering but would become an expert, and endless tinkerer, in the science of meat-packing and refrigeration. He built the meat-packing plant of the future.

Meat-packing began in the big cities, near large populations of workers, many of whom were Eastern European immigrants. Legions of well-paid union butchers in Chicago, Omaha, and Kansas City slaughtered the cattle that came in on trains from the High Plains. Anderson and IBP moved the meat industry to the small town in the American heartland where the cattle were raised. Anderson retired from IBP in 1970 and died in 1990 at the age of seventy-one. But by then, he and IBP had reinvented the way meat was slaughtered and sold. They’d also ended butcher unions and brought millions of Mexican immigrants to the heartland.

In 1960, Anderson and his partner, Currier Holman, used a U.S. Small Business Administration loan to form IBP in the town of Denison, Iowa. Anderson applied assembly-line principles to the disassembly of cattle. In this factory, the jobs of slaughtering, cutting, vacuum wrapping, and boxing the meat for shipping were mechanized and consolidated under one roof. His factories broke down these tasks until anyone could do them. A production line would send a cow carcass on a hook through the plant. A worker would make one cut, then the carcass moved to the next worker, who made another cut, and so on, until the skeleton remained. The cuts were then sealed in plastic and boxed for shipment.

This passage merely serves as background to a long and fascinating story about how Latino-dominated soccer displaced Anglo-dominated football as the top sport in Garden City High School, Kansas, in 2003.

From Antonio’s Gun and Delfino’s Dream: True Tales of Mexican Migration, by Sam Quinones (U. New Mexico Press, 2007), pp. 42-45:

On a map, Zacatecas looks like an amoeba in the middle of Mexico. Its lines curve in and out of territories with the logic of a modern art painting. On the ground, the state is vast and beautifully rugged. In parts, mesquite trees pock forbidding deserts of beige dust. Elsewhere, the-desolation gives way to dirt the color of cayenne pepper. But whatever its color, the land of Zacatecas never could hold people to it.

The Zacatecan upper classes owned large tracts of land, much of which they’d inherited, but were averse to investing in anything more than their houses.

“There are very few classic entrepreneurs in Zacatecas, in the strict sense of people who, with their own resources, create jobs,” said Rodolfo Garcia, a professor of immigration and development studies at the University of Zacatecas. “In Mexico, the capitalist class has mostly grown due to the support and money of the government. The capitalist class in Zacatecas, more than in any other state, has grown up on public money.”

The extraction and export of raw materials began in the late 1800s, when mining ruled Zacatecas. The minerals from Zacatecas went elsewhere to be processed into something of greater value. When the mines gave out, they were replaced by ranching and agriculture but not by a new attitude toward risk. Zacatecas, the Mexican state that produces more beans and chiles than any other, still has few companies that process those products into, say, canned beans and canned chiles. Almost everything produced in Zacatecas leaves for places where it is transformed into something of greater profit.

This includes its people. Nothing has left Zacatecas like its people. Emigration to the United States began in the late 1800s, declined in the 1930s, then picked up a momentum in the 1940s that it hasn’t lost. No Mexican state has a greater percentage of its people in the United States than craggy, red Zacatecas.

The folks who left were the state’s real risk-takers. They risked their own capital—their lives—on the promise of a better return than Zacatecas offered. For most of them, the bet paid off. In time in the United States, they opened businesses, bought houses, and sent their kids to school….

Strangely, immigrants’ daring and risk-taking indirectly stymied what the state needed most—which was a daring, risk-taking state of mind. Instead of using immigrant dollars to jump-start an industrial economy, Zacatecas simply limped along, addicted to the dollar injections. Immigrants became the state’s primary foreign investors and job creators. They hired local folks to build lavish homes in the villages they’d left as paupers.

Then came the Mexican presidential election of 1988. The ruling PRI faced real competition for the first time in its history. Cuauhtémoc Cárdenas—a PRI apostate who had left the party—formed a movement that would become the left-wing Party of the Democratic Revolution (PRD). Sinaloan businessman Manuel Clouthier rejuvenated the National Action Party (PAN) by swiveling it away from right-wing social morality and toward the issues of corruption and efficient government services.

Cárdenas and Clouthier were the first Mexican presidential candidates to visit the United States and avidly court immigrants. The PRI and its candidate, Carlos Salinas de Gortari, beat back their challenge through massive vote fraud. But the 1988 election showed the PRI that immigrants up north were a dangerously uncoopted source of dissent. Salinas set up an office of Attention to Mexicans Abroad.

Zacatecas Gov. Genaro Borrego tried another idea. Every dollar immigrants put up for public works projects in their villages, he announced, the government would match. It started as “1 for 1” and quickly expanded to “2 for 1″—with money from the state and federal governments. Immigrants could stretch their dollars, and Zacatecan villages could get the schools, wells, and clinics they needed.

For decades, the PRI had used budgets to buy off union leaders, businessmen, academics, and neighborhood groups. Zacatecas’s “2 for 1” was the party’s first try at buying off immigrants in the United States, and it grew largely from the PRI’s 1988 election scare. Zacatecan immigrants were urged to form village clubs and raise money for projects back home.

But the PRI miscalculated. These immigrants were no longer the humble campesinos who went hat-in-hand to mayors across Mexico. They’d done well in the United States, and felt confident in their abilities. They blamed the PRI for having to leave their villages. They weren’t about to let the party push them around up in the United States, too.

The clubs they formed were not docile. On the contrary, as the party pushed, immigrants pushed back. They insisted on a say in how their money was spent. The PRI was adamantly secular, but when some clubs insisted that the money they put up be used to renovate village churches, the government relented.

Because of “2 for 1,” Zacatecans became the best-organized Mexican immigrants in the United States. By the time Andres Bermudez ran for mayor of Jerez, there were some 240 of these clubs in the United States. No other Mexican state had even half that number. They invested millions of dollars in public works. Their money built the necessities for their people back home that the government hadn’t provided. In time, immigrants nurtured a righteous sense of their economic importance to Zacatecas.

Yet they religiously avoided politics. Mexican politics had been the exclusive domain of lawyers, teachers, merchants. Every ranchero seemed to know some fool who’d gone into politics and lost everything, been jailed or killed, or gotten rich and turned on his friends. So while Zacatecan immigrant prosperity created a vast ranchero constituency in the United States with money, organization, and talent, it was oblivious to its own political potential. That’s how things remained until the late 1990s, when a lot began to change back home.