Mexico by Ruiz Ramon

Author:Ruiz, Ramon
Language: eng
Format: epub
Publisher: University of California Press
Published: 2010-06-28T16:00:00+00:00

EIGHT

False Miracle

I

Miracles, as everyone knows, are hard to come by. Only zealots, skepticism cast aside, can believe that even the parched desert will bloom with flowers. Yet, according to a plethora of pundits and scholars, Mexico enjoyed a miracle starting in the 1940s. The miracle, growth of the gross domestic product (GDP), was indeed a miracle. Not only did the GDP triple from 1940 to 1960, but it did so again in the seventies, with, miracle of all miracles, manufacturing taking the lead. It was a time when bumper stickers on autos and trucks proclaimed, “Lo hecho en México está bien hecho” (What Mexico makes is well made). Much of this heady progress stemmed from the adoption of import substitution, begun earlier as simple ad hoc measures taken to shield particular local industries, and then blessed as theory by a strategy advocated by CEPAL, the Economic Commission for Latin America of the United Nations, which encouraged Latin American countries to manufacture goods that had previously been imported.

Euphoric Mexicans, the rich and the middle class, feasted. Bureaucrats, university professors, storekeepers, and the like could buy automobiles, acquire homes of their own, and take vacations in Acapulco, the mecca of the affluent. Not since the 1880s, the golden years of the Porfiriato, had middle- and upper-class Mexicans basked in the glow of such good times. As Joan Robinson recalled, “The great slump of the 1930s was a nightmare forgotten in the dawn of a seemingly permanent prosperity.”1 The architects of these halcyon days were the magnates of industry and banking, and their allies in politics, out to prove that a business-run economy could give Mexico a face-lift.

With industrialization, Mexico would be proudly capitalistic, a paradise for private enterprise and a haven for the laws of supply and demand. Some observers, however, particularly American ones, saw a mixed economy, implying that they detected a bit of socialist planning. This was nonsense. What they had in mind were the paraestatales, industries owned and run by the government, but these were often positioned as aids to private business. Many of these state-run enterprises, scores of which had been on the verge of bankruptcy, were purchased by the government from their owners; others performed tasks of no interest to private investors. A popular saying sums up this sweetheart deal between government and empresarios: “If they invest, we will subsidized them; if they lose their shirts, we will bail them out; if they go belly up, we will buy their bankrupt enterprises.”2 The trickle-down theory held sway. Business owners were part and parcel of the government entourage. As early as 1942, industrialists from Monterrey, the most conservative of conservative bastions, joined the parade when the Garza-Sada clan, the local kingpins, made their pilgrimage to Mexico City to pay homage to the nation’s authorities.

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