Neoliberalism swept over Mexico like a tsunami. It swept away the country’s edifice of economic nationalism and left in its place an economy based on principles of neoliberalism. These neoliberal practices go by the names of the structural adjustment programs (SAPs), or the Washington Consensus. In 1982, when Mexico declared its lack of adequate resources to meet external debt service payments, it (like other Latin American countries) entered into debt renegotiations. These renegotiations required Mexico to implement reforms such as the privatization of state-owned enterprises, currency devaluation, and state budget reductions. Later agreements expanded upon the neoliberal reforms (the 1986 adherence to GATT; the 1992 revision of Article 27 of the Constitution, the 1993 signing of NAFTA, and the 1994 peso devaluation). Multiple iterations of the Foreign Investment Laws opened up Mexico to foreign investors. The goal of the neoliberal adjustments was to stabilize the economy and make it attractive for foreign direct investment. FDI, as well as open trade, promised to bring economic well-being and political stability to Mexico. The evaluations of the post-1982 reforms are mixed, but by the 21st century, tend toward “disappointing.” Increasing globalization has further marginalized Mexico. Neoliberal globalization is essentially about Mexico’s integration into the current global economy and the interaction of the global and the local. Mexico has been integrated into the global economy since Cortez, but the tsunami of neoliberalism has left Mexico with fewer armaments for successful development.
Kathleen C. Schwartzman
The Mexican economy consisted of activities at the international, national, and local levels, including the export of minerals and agricultural commodities, manufactures and agriculture for domestic markets, and production of goods for everyday consumption, respectively. The impact of a decade of civil wars between 1910 and 1920, which comprised the Mexican Revolution, on the economy varied according to which level, the time period, and the geographical region. The crucial aspects of the economy consisted of transportation and communications, banking, mining, export agriculture, and government policies and actions. The important factors were the intensity of the violence, inflation, and the availability of capital. Chronologically, there were several stages to the economic history of the Revolution. The first consisted of the years of the Madero rebellion and presidency, 1910–1913, when there was little damage done and growth continued. The second and worst period was during 1914, 1915, and 1916, when the counterrevolutionary Huerta regime battled the rebel Constitutionalists and after the latter’s victory the ensuing civil war between the divided winners. The third stage occurred with the defeat of the radical factions of the Revolution led by Zapata and Villa and the restoration of a semblance of order in 1917. The fourth included the establishment of the Sonoran dynasty of de la Huerta, Obregón, and Calles and the slow reconstruction of the economy.
First utilized in Latin America in response to the mid-20th-century decline of populist economic policymaking in the region, modern neoclassical theory, or neoliberalism, can be generally defined as a market-oriented form of economy policymaking that seeks to decentralize state authority and redefine state administrative responsibilities through deregulation, privatization, and the creation of common markets. Based on principles of classical 19th-century economic liberalism, the economic and political framework of neoliberalism advocates for a dramatically limited role for the state, which should only act to maintain the integrity of contract law and private property as a means of supporting the market. In the absence of state intervention, neoliberalism in Latin America alternatively emphasized the role of multilateral organizations, such as the International Monetary Fund, the World Bank, Inter-American Development Bank, and the U.S. Agency for International Development in bringing financial stability and growth to the region through the manipulation of interest rates, the devaluation of exchange rates, and the establishment of free-market pricing of goods. Ultimately, the widespread implementation of neoliberal reforms through the 1980s and 1990s ushered in a new era of transnational economic policymaking that had long-term, mixed results for the environmental, political, and social landscape of Latin America.
The years immediately following World War II constituted a watershed in Mexico’s political development: the national government, controlled by the recently renamed Institutional Revolutionary Party (PRI) and led by a new generation of civilian professional politicians, made rapid industrialization its top priority. In a matter of decades, the nation transformed from a predominantly rural to an ever more urbanized society. Significant social and cultural changes followed. The middle classes became the dominant voice in national politics and the beneficiaries of the government’s economic policies, while earlier efforts designed to ameliorate the suffering of the majority were suspended or even reversed, leaving urban workers and the rural poor to wonder what had happened to their revolution. Gradually, a consumerist culture eclipsed the cultural revolution of the 1920s and 1930s. Despite official claims to the contrary, Mexico in this era shed its revolutionary identity and replaced it with a modernizing zeal. Through the 1960s, scholarly assessments regarded the nation as a model of Third World development. In the estimation of foreign and domestic observers alike, the combination of aggressive capitalist development, state protectionism, and foreign investment had created an economic miracle, while the 1910 Revolution had produced a relatively benign, paternalistic form of “soft” authoritarianism. But in the years following the devastating massacre of students in 1968 at the Plaza de Tlatelolco just days before the Mexico City Summer Olympics, scholarly assessments soured. In the coming decades, more and more evidence of political violence, media manipulation, and official corruption would surface, leading to a crisis of political legitimacy that would be severely aggravated by economic crisis in 1982. For these reasons, the period from 1946 to 1982 is a distinct and important chapter in the nation’s 20th-century development.