This book tells the story of Mexico City’s rise as the capital of the Aztec empire, to a flourishing colonial capital, to the largest metropolis in North America. Its portraits of historical figures and the ebb and flow between chaos and order are both worthwhile. Its real strength, however, is in its treatment of the economic history of Mexico.

The timeline of shocks to Mexico’s economy begins with the rise of the Aztecs, who constructed a system of islands and canals in Lake Texcoco at the beginning of the 14th century. The stroke of genius in this effort was that it combined resources that had been geographically distant beforehand: fertile soil from the valley rim, and water from the lake (and freshwater springs on the island itself). This allowed them to develop an agricultural society that in turn contributed to their military superiority against other tribes (p. 30ff.).

The next great shock was the arrival of Spanish explorers. Their great desire was gold &emdash; which the Aztecs had in abundance — but they also brought new technology and goods to the region. One of the most significant imports was cattle. The early scarcity of beef resulted in high prices, while maize was relatively inexpensive. As more cattle were shipped from Spain (and bred in the new colony), the price of beef decreased. Land that had been used for growing maize was converted to ranching, resulting in an increase in the price of that staple. These changes benefited Spaniards (who could afford to dine on beef) at the expense of natives for whom maize was the staple of their diet (p. 203ff.).

Another major development in the early colonial period was the introduction of large-scale mining operations, especiall in Zacatecas. Most of the silver extracted was shipped immediately to Spain (p. 184-7). Spain used that wealth to extend its reach in the Pacific. Mexico City’s merchant class soon realized that they could establish direct links to the Philippines that were much more profitable, benefiting as they did from public goods such as Spain’s military power, a common language, and well-developed shipping industry (p. 237-8). Spain responded by taxing mercurcy, a key input to the refinement of silver (p. 238-43).

Those who became wealthy in mining and shipping tended to purchase haciendas with their wealth. One reason for this is that these land holdings could serve as collateral for loans, which in turn helped their businesses to grow. Another motive is that large land estates were easier to divide amongst their heirs compared to silver mines (p. 240-1).

Typically inheritances were divided amongst siblings. The wealthy class soon realized, however, that obtaining noble titles was a path to intergenerational wealth. Becoming a member of the nobility “was often a prerequisite for an ‘entail’ — a royal dispensation which allowed a family to pass on half its fortune intact to a single heir instead of fragmenting it among siblings.” (p. 245) In retrospect this was the first step toward the staggering levels of wealth inequality in Mexico today.

As merchants began to diversify their businesses, they sought to protect themselves against economic downturns (or a change in tax policy from the mother country) in any particular sector. The period immediately after independence, though, saw a depression that across all parts of the economy:

Mining output fell to less than a quarter. Agricultural and industrial production declined by one third…. Internal commerce lagged because of the dearth of commerce and credit.

This period was also characterized by revenge against those who had obtained Spanish nobility. Many renounced those ties, but were still exiled to Spain in the 1820’s (p. 304ff.).

The middle of the 19th century saw a series of wars, first against rebels in Yucatan and Texas; then against the United States in the 1840’s; and finally against the French under Maximilian, sponsored by Napoleon III.

After a period of stability in the final quarter of the century, President Porfirio Díaz began to demobilize soldiers from the swollen ranks of the army. Lacking other opportunities, many of them turned to crime. The long coach route from Veracruz to Mexico was a particularly attractive target: “At best, the travelers might hope to receive a voucher from the first gang to rob them.” (p. 359) Later reforms helped to reduce crime, but it was the introduction of a rail line that finally made the route safe to travel (p. 369).

The interplay between transportation, economic resources, and governance has produced a vibrant history in Mexico. Anyone interested in history or economics would do well to learn more about the country and its people.