International Labor Division and Latin American Modernization

International Labor Division and the Capitalist World-Economy

During the second phase of the Industrial Revolution, significant technological advancements emerged due to improved design:

• Steam engine
• Transport
• Telegraph
• Oil
• Electricity and chemistry

Britain became the world's largest exporter of manufactured goods and capital, commanding maritime transport and the global market.

Changes in Factors of Production in Latin America

To meet growing external demand for raw materials, many changes were implemented in the production of goods:

Land

Governments across Latin America decided to occupy and sell unproductive lands or those belonging to the church or indigenous populations. To facilitate production, they proceeded to expropriate large territories, often resorting to violence.

Capital

Starting in the second half of the nineteenth century, Latin America received a significant influx of foreign capital investment. These funds were directed toward developing the infrastructure required to extract and transport raw materials and food demanded by European industries and populations. Investments funded thousands of miles of railways, new port installations, and electricity companies. The primary targets for these investments were mining, plantations, and sugar mills.

Labor

Various forms of labor coexisted for the production of goods. In many cases, wage labor was combined with various forms of forced labor.

Latin American Modernization

Most investments were British. These investments occurred in two distinct periods:

• First Period: Allowed free trade, the massive influx of British manufactures, and long-term loans.
• Second Period: London directed capital toward direct investments in productive facilities and dynamic infrastructure.

During this second stage, the railway became the symbol of modernization and progress, as it allowed for the introduction of the Industrial Revolution or, at the very least, the adoption of technological advantages. In their quest for modernity, Latin American cities and the customs of their inhabitants became increasingly Europeanized. External borrowing facilitated the introduction of technical progress to beautify the urban landscape.