Economic Globalization

The contemporary Mexican system is a degraded and decaying hegemonic regime, headed by the Partido Institucional Revolucionario (the Institutionalized Revolutionary Party or PRI), whose seventy years of control over Mexico has eroded as it confronts a growing class struggle for real democracy in Mexico. This class struggle involves rejection of the PRI at the ballot box, constant and massive street demonstrations for social justice, increased labor militancy by new labor organizations independent of the PRI, and armed struggle in Chiapas and Guerrero. The outgrowths of neoliberal policies and economic globalization in Mexico are growing corruption, exploitation, and economic misery. These have given rise to social movements and to political parties--organized under varying and, at times, competing banners of democracy--that attempt to engrave their axioms on a social order that has removed from its poor a cushion under them as they fall from the column of misery to the column of absolute disaster. No longer able to provide patronage to maintain discipline among local PRI bosses, the PRI exercises a degraded hegemony marked by a growing feudalization of power within it and a growing class struggle from without. To maintain its substantial, albeit degraded hegemony, the PRI employs military force in Chiapas and Guerrero and alternates power selectively in a few states, mostly by co-opting the conservative PAN (Partido Acción Nacional or National Action Party.) The growing struggle of social classes for real democracy in Mexico is once again Mexico's central political drama and Mexico's hope.

The growing crisis in Mexico relates closely to Mexico's transition to a more market-oriented form of state capitalism since the 1980's. Substituting for a poorly developed capitalist class, the Mexican state provided capital investment and protected national industry through high tariffs and through import substitution. The state organized and coordinated the most important social and economic sectors under a populist, nationalist, corporatist party structure. The PRI maintained a revolutionary façade that allowed foreign capital and its allies to control Mexico through its "popular sector. When leftist resistance movements opposed misery and repression, they were destroyed to maintain an autocratic form of state capitalism based on wage exploitation and social destitution (Adler Hellman, 1983:148-163). But lower international demand in the early 1970's, the saturation of the Mexican market for manufactured goods not competitive in international markets, and a declining capacity of the state to continue to provide business subsidies sent Mexico into deep economic recession.

Meanwhile, declining rates of profit and economic recession in the United States and Europe (combined with a surplus of "petrodollars") made Mexico more attractive to European and American investors. They made massive loans to Mexico at interest rates higher than could be obtained in their home countries. Mexico's debt tripled in the 1970's as the government borrowed ostensibly to develop newly discovered petroleum resources. Mexico's growing debt gave even greater leverage to the World Bank and the International Monetary Fund (IMF) to impose Structural Adjustment Programs (SAPS) requiring that Mexico promote open markets, foreign invests, and integrate its economy more closely to the world economy in ways that would facilitate debt payment. Mexico embarked on its latest cycle of economic globalization.

Globalization and Neoliberalism-The strategic goal of economic globalization is to maximize profits by penetrating economies and appropriating their human and natural resources in order to exploit them more fully and to incorporate them more closely into the ambit of global capitalist relations. Regimes such as the World Trade Organization, the International Monetary Fund, and the Multilateral Investment Agreement supervise and coordinate this process of incorporation. The tactical dimension of economic globalization is neoliberalism--an operational set of policies designed to meet the strategic objectives of economic globalization that includes privatizing state-owned enterprises, tariff reductions, eliminating barriers to foreign investment, reducing social provision, currency devaluation, decentralized decision-making, and market-oriented policies (Mittleman, 1994:427-444).

Neoliberalism does not reduce state power but rather the state becomes stronger as it expands its capacity to impose policies that are unpopular. State capacity shifts more to the exigencies of enforcing austerity and to collecting debt. Neoliberalism is state capitalism without social provision. This is what Jorge Nef has labeled a "receiver state"- a state whose "power" is reduced primarily in the areas of social provision and the social regulation of capital (1991:197-216). Dropping the mask of class mediation, the state aligns forcefully with foreign capital and with domestic interests with liquid assets.

Neoliberal regimes override democratic accountability because the technocrats who now manage the state view democratic accountability and social provision as "demagogic." Growing unemployment, declining social provision in health and education, lower real wages, and growing insecurity even for the middle classes intensifies class struggle. It is common for the state in Mexico and other parts of Latin America to appear more democratic by making concessions that do not compromise the market-oriented model. For example, technocrats promote decentralization in the name of greater efficiency but also to deflect and fragment opposition to local political arenas. States initiate electoral reform in a global and regional economic context that forecloses alternatives to neoliberalism. Opposition alliances form, most often in urban centers, to denounce corruption, lower living standards, and the lack of social provision. But even when oppositions control or gain influence in national legislatures, they are overruled by presidents through executive decrees.

These processes of neoliberalism and economic globalization have been the subjects of extensive debates. Some view globalization as financialized capitalism extracting surplus value on a global scale (Sweezy, 1997; Tabb, 1997). Others claim that the stress on globalization replaces the focus on class struggle with a focus on identity politics and in a way that reduces the importance of national arenas of struggle (Meikskim, 1997b). Tabb argues that globalization implies a defeatist acceptance of the triumph of capitalism. He minimizes the importance of technological changes that have enhanced the global reach of capital (1997). In contrast, DuBoff and Herman (1997) and Piven and Cloward (1997) reject Tabb's position and argue that capital’s ability to locate plants anywhere in the world (the mobility of capital) has transformed labor’s relation to capital in ways which give capital a decided upper hand over labor. I agree with this latter perspective. Both qualitative changes (e.g., computer technology) and quantitative changes in the scope and breadth of global markets, market integration, and rapidity of capital flows make globalization more then mere financialized capitalism. While these constitute fundamental changes in the forces of production, they do not imply the end of class struggle nor its replacement with identity politics or a reduced importance for national arenas of struggle. In Latin America, globalization has heightened class struggle and spurred alliances of peasants, workers, sectors of the middle class, and even national capital impoverished by export- oriented policies and competition with transnational corporations. The dynamics of globalization and its harmful effects reveal themselves dramatically in Mexico where two decades of economic restructuring has sunken most Mexicans into deeper poverty, more than doubled Mexico's national debt, and has compelled the Mexican people to fight back against growing exploitation and misery.

Globalization in Mexico- The PRI moved from a state-centered to a more market-centered economy when an eficientista or hard-market oriented faction of the PRI gained control of the Mexican government during the fiscal crisis of the 1980's (Veltmeyer, Petras, and Vieux, 1997: 140-145). This faction of the PRI "won out" over the state-oriented faction headed by Alfredo del Mazo and a moderate, pragmatic faction headed by Jesus Silva Herzog during the presidency of Miguel de la Madrid (1982-1988). Understanding how the eficientista faction transformed Mexico's economy and the impact of that transformation are fundamental to understand the social crisis and the class struggle taking place in Mexico today (See Kaufman, 1989).

Under President Jose Lopez Portillo (1976-1982) Mexico entered its most severe economic crisis. Encouraged by the availability of petrodollars (a product of European and American recessions) and a doubling of proven oil reserves in Mexico, the government to pursued a debt-driven economic strategy of economic development. According to John Ross, oil constituted only 10 percent of Mexico’s exports in 1972. By 1980, oil production surpassed 2 million barrels per day and accounted for 75 percent of all Mexican exports (1997:171).[i] Mexico’s oil dependency, increasing debt, and the looting of public funds brought Mexico to bankruptcy. In 1981 alone, the Mexican government borrowed $24 billion. The $5 billion borrowed in the month of September 1981 was equal to the loan obligations incurred by Mexico from its inception as an independent nation to 1970 (Ross, 1997:172). By 1982, the last year of López Portillo’s presidency, Mexico’s debt was $80 billion mostly in dollar-denominated, short-term debt at a 15 percent rate of interest.

The head of the Secretariat of Budget and Planning, Carlos Salinas de Gortari, and technocrats in the government of Miguel de la Madrid imposed policies such as wage controls and tightening the money supply that resulted in a lowering of wages by 40 percent during de la Madrid's administration. Dissident unions were repressed. Mexico joined the General Agreement on Trade and Tariffs (GATT) in 1986 in an effort to promote liberalized trade (especially with the United States in the maquiladora sector). As the economic and social crisis in Mexico worsened and PRI party stalwarts resisted party democratization, a faction emerged within the PRI known as the Democratic Current that later became an opposition party Partido Revoluciónario Democratico (Revolutionary Democratic Party or PRD). The PRD challenged the austerity program of de la Madrid and supported the former PRI governor of Michoacán, Cuauhtémoc Cárdenas, as its candidate for the presidency of Mexico in the 1988 elections.

Carlos Salinas de Gortari was barely "elected" president in one of the most corrupt elections in Mexican history. Some 30,000 ballot boxes disappeared and the federal government declared the final ballots to be a state secret in order to avoid the uncovering of the massive political fraud that led to Salinas' election. The new president tore what little remained of the social contract that was the legacy of the Mexican Revolution. He amended Article 27 of the Constitution (prohibiting the sale of communal lands called ejidos) to allow the selling of ejidos. State-owned enterprises were sold to the politically presidential cronies and laws requiring fifty-one percent ownership by Mexicans in strategic industries were rescinded. Salinas' then made his biggest decision: to make the Mexican economy and extension of the U.S. economy through the North American Free Trade Agreement (NAFTA).

The major winners under Salinas and de la Madrid were business groups with liquid assets that enabled them to monopolize large sectors of the Mexican economy. By 1990, the grossly uneven distribution of wealth in Mexico grew even worse as 2 percent of the population controlled 78.5 percent of national income. More than two dozen Mexicans became billionaires under the Salinas administration mostly through investments in newly privatized industries while hardships were imposed on peasant farmers, workers, and even on the middle class. The major losers were workers and small farmers many of whom joined two million new rural poor as they were driven deeper into poverty by the neoliberal policies of Salinas (Moguel, 1994:38-39).

The turbulent year of 1994 included the assassinations of PRI presidential “candidate” Luis Donaldo Colosio and of José Ruiz Massieur, General Secretary of the PRI. The 1994 election victory of Ernesto Zedillo presaged continuity as the "devaluation crisis of late 1994 drove even more Mexicans into destitution (See Castañeda, 1995):

· The cost of the basic food basket increased by 60 percent while the minimum wage rose by only 31 percent in 1995.

· One million Mexicans lost their jobs in 1995 as large companies “streamlined.”

· More than 45 percent of the bank credits were not being serviced under the original terms of the agreements and 30 percent of all bank loans were overdue.

Mexico’s inability to meet short-term debt obligations led to the so-called devaluation crisis that, in turn, produced a deep contraction in the Mexican economy in 1995 and 1996. Mexico acquired an additional 40 billion dollars in debts, a part of which was “collaterized”, in part, by Mexican oil sales receipts deposited directly at the First Federal Reserve Bank of New York. The net capital outflow for the years 1995 and 1996 was $36 billion per year and Mexico’s debt surpassed $170 billion (Marichal, 1997:28-30). Since 1994, “La Crisis” (as the crisis is called) has devastated groups already ravaged by the austerity of the previous fifteen years (Naim, 1995; Springer and Molina, 1995). Yet in the midst of this crisis, Jaime Zabludovsky, a sub-secretary for the Secretariat for Commerce and Finance (SECOFI) insisted that tariff reductions would continue as a signal of Mexico’s continued commitment to NAFTA (Muñoz Rios, 1996).

While severe hardships were imposed on Mexico’s majority, a study of 500 privatized Mexican corporations shows that they received increased government subsidies after they were privatized (Edgar W. Butler, et al. 1996). In the crisis year of 1995, 13.5% of Mexico’s GNP (a total of $47.2 billion) went to bailout faltering banks that had recently been “privatized (Smith, 1997, D14).” A number of new bank owners had looted their banks of hundreds of millions of dollars and only 8 of 18 privatized banks remained under control of the original purchasers. This pales in comparison to the more than $60 billion bailout of the banks that was eventually approved by a coalition of the PRI and the rightist PAN (Partido Acción Nacional or National Action Party) parties in Mexican national Congress in December of 1998. Under the bailout agreement the government buys past-due loans from private banks and issues long-term bonds that increase greatly Mexico's debt.

Under Zedillo, Mexico is a “receiver state” intent mostly on servicing foreign debt and on implementing structural adjustment policies to liquidate its own bankruptcy (Nef, 1991:197-216). Zedillo's poverty program, that allocated $155 million to 177,416 poor families in ten of Mexico's states, pales in size in comparison to his payback of billions of dollars of debt by refinancing $6 billion at lower rates of interest (DePalma, 1997:2).[ii] By making a multi-billion dollar debt payment to the United States three years in advance, Mexico maintained a façade of credit worthiness with lenders by further sacrificing Mexico's poor. Early debt payment only increased Mexico’s debt load because the money for early payment was borrowed from European banks. This is the Receiver State at work. Quick debt service is a higher priority than meeting the needs of Mexico’s desperate majority in a seemingly endless cycle of belt-tightening.

Opposition and Class Struggle-Three forms of resistance to the PRI party-state have emerged: the ballot, social protest, and armed struggle. The Ejercercito Zapatista de Liberación Nacional (The Zapatista Army of National Liberation or EZLN) rose in a rebellion on January 1, 1994 that constitutes "…the most dramatic and coherent expression of a worldwide reaction against neoliberalism (Veltmeyer, Petras, and Vieux, 1997:200). For more than five years the government of Mexico has sought to extirpate the EZLN and to contain its influence to Chiapas using endless dialogue to mask a military occupation of that state (See Harvey, 1995:39-75; Roman and Velasco, 1997:98-116). Paramilitary groups are organized and paid by the local PRI bosses commit mass killings against “subversives.” The government’s strategy has been to have slow dialogue with the Zapatistas, reach agreement, and then renege on the accords, while occupying Chiapas militarily and building roads to make EZLN strongholds more accessible to military vehicles.[iii] The December 22, 1997 assassinations of 45 persons (mostly women and children) in Acteal Chiapas by a paramilitary group linked to the state PRI organization has served only to erode further the legitimacy of the PRI locally and nationally (Hernandez Navarro, 1998; Kampwirth, 1998).[iv]

The EPR (Ejercito Popular Revoluciónario or Popular Revolutionary Army) emerged in mid-Summer of 1995 in the state of Guerrero after the governor, Ruben Figueroa, had ordered police to stop a protest demonstration by militants of the OCSS (Organización Campesina de la Sierra del Sur or Peasant Organization of the Southern Sierra) at Aguas Buenas on June 28, 1994. Motorized police units fired on the protestors killing 17 peasants and injuring 23 others. On the anniversary of the massacre, the EPR emerged at the site of the massacre and, in the presence of Cuauhtémoc Cárdenas, issued a manifesto calling for the overthrow of the Mexican government. The manifesto proclaims the EPR to be a part of the People’s Democratic Revolutionary Party—a populist, democratic, and revolutionary organization-- and proclaims its support of multiple forms of struggle to overthrow the government. The EPR claims to be part of an organization of 14 separate groups and has been barely active since the election of July 6, 1997. It is possible that the EPR “declared themselves when they did to inform the Zapatistas that the armed option must be kept open (John Ross, correspondence, December 14, 1997).” It became harder to dismiss the EPR as a fringe group after its attack on strategic targets in six states on August 28, 1996. Within the next 48 hours after the attack, the Mexican stock exchange (the Bolsa) dropped 3 percent of its value falling by more than 100 points. The peso lost 11 cents against the dollar (Ross, 1997:271). The government sent 10,000 additional troops to Guerrero and stepped-up surveillance of all opposition groups. This, in turn has led to an avalanche of complaints posted with human rights groups on serious violations of human rights in Guerrero under cover of law. The violations include torture, disappearances, and forced interrogations undertaken to uncover information regarding the EPR.

The ballot has also become a weapon of struggle against the malgobierno (the EZLN's term for the Mexican government) as massive confrontations in the street and occupations of municipalities have forced the PRI to make some concessions to opposition parties. Cuauhtémoc Cárdenas' election as mayor of Mexico City in July of 1997 makes him, arguably, the second most powerful political figure in Mexico and the most powerful voice in a state with one-quarter of Mexico’s population (Reding, 1997: 63). But now Cárdenas and the PRD are “the government” in Mexico's capital and can be saddled with blame for policy failures. Jesus Ignacio Carrola, who Cárdenas designated as chief of Mexico City's investigative police, resorted to a face-saving leave of absence within five days of Cárdenas' inauguration when he was implicated in tortures and linked to Tijuana drug traffickers (Sheridan and O’Connor, 1997:A1). Another member of Cárdenas’ team, Francisco Castellanos de la Garza, resigned as head of the auto thefts department on the following day after it was revealed that he had been fired as the director of a prison accused of sexual abuse and drug trafficking (Los Angeles Times, December 13, 1997, A:12). Both the PRD’s capacity to govern and to control corruption came under immediate challenge within the first week that Cárdenas assumed “power” as mayor of Mexico's largest city with one-fifth of Mexico's population.

If Cárdenas remains within the old rules of Mexican politics, governing from the top, and does not resort to mass mobilization, he will not touch the major issues affecting Mexico City and he will lose prestige with the mass base of the PRD. The PRD is limited at this juncture because it must operate within the narrow confines of a market-oriented model that it cannot reverse. Cárdenas' challenge is to prove wrong those who believe that under neoliberal regimes, people “… can now be given more freedom to make political choices through formal democratic processes, leaving them free to choose governments with no power, politicians with no capacity to deliver on promises, or social movements with little possibility of mounting a coherent political challenge (Bienefeld, 1994:43).” In Mexico, the margin for action is a narrow one but the economic model does not preclude radical political mobilization—against crime, pollution, class exploitation, lack of democracy, and political corruption. Of utmost importance is Cárdenas’ willingness to trust the people of Mexico City and to encourage them to mobilize to solve their own problems—as they mobilized after the earthquake of 1985 when it was evident that the government was to incompetent and corrupt to help them.

Cárdenas has lowered the expectations of radical intellectuals and in the mass base of the PRD who wanted him to challenge the neoliberal model head-on. But this might have less relevance than his willingness to become a facilitator of the people’s efforts in Mexico City to solve their own problems. For now, he is focused more on the incremental tasks of improving the delivery of services, more efficient administration, and less corruption in order to increase his chances for victory in the next presidential elections (see Reding, 1997:69). But by diffusing demands for more radical changes, the PRD runs the risk of becoming a shock absorber for transnational capital.

Short of mass mobilization, there is no viable way to govern Mexico City and disruption of the current political game might be the only viable, albeit risky, course of action. Maintaining Cárdenas’ connection to the mass base of the PRD is crucial if his election to be something other than a hollow victory that allows the PRI to transit from party hegemony to party domination, showing its "commitment" to democracy by cohabiting with the PRD while doing everything in its power to sabotage Cárdenas' chances for success as mayor as part of a broader strategy to make him a less viable candidate for the presidential elections in the year 2000.

The rightist Partido Accíon Naciónal makes common cause with the PRD in certain procedural areas to erode the power of the PRI.[v] There is little difference between the PAN and the PRI on substantive issues but the PAN has staked out the clean route to power, attacking the ruling groups’ long history of corruption in state management. Zedillo’s appointment of a PAN member, Antonio Garcia Lozano, to the important post of Attorney General was meant to signal his commitment to legality and to co-opt the PAN in light of the growing challenge from the PRD. Indeed, as far back as 1989, “Salinas had adopted much of PAN’s traditional platform, [and the PAN] party leadership opted for ‘co-governance’ instead of what it saw as fruitless opposition (Reding, 1996:63).” It is now even more crucial for the PRI to co-opt the PAN because only the combined vote of the PRD and PAN could dethrone the PRI from the presidency or deny it a majority in the Chamber of Deputies. While in northern Mexico some Panistas are major capitalists, it is still the PRI that has the largest share of big business and the upper class support. The PAN has been mostly a middle class party at its mass level. In neglecting to address the problem of poverty, in a country where most people are poor, the PAN has limited its appeal among the mass of the national electorate (Reding, 1996:66).

New PAN leaders such as Governor Vicente Fox are poised to transform the PAN into the perfect party for Mexico in an era of global capitalism. Fox has been described ”a nationalist with a global outlook, a corporate manager and exporter with a strong social and ecological conscience (Reding, 1996:61).” Elected in May of 1995 as governor of Guanajuato by a two-to-one majority, Fox campaigned for a decentralized Mexican federalism, democratic accounatability, and "self-reliance." He has decentralized administration in his state; given more power to municipalities; encouraged greater citizen participation in local government; and increased the return of “federal” tax dollars to Guanajuato. Running as a “shirtsleeves populist,” Fox was elected governor with rural and working class support on a platform that emphasized democratic accountability and self-reliance.[vi]

A more modern and moderate PAN--the kind represented by Fox--could serve transnational capital better than the PRI. The corporatist political model established by the PRI is no longer viable without a large and flexible state budget to buy social peace. Feuding cliques of the PRI have turned the once unified party-state into a divided and leaky vessel with which to carry the balsam of neoliberalism. Fox’s prospects of winning the candidacy of the PAN in the next presidential election have improved since the defeat of the PAN governor of Chihuahua in early July 1998. But an internal feud with Diego Fernández de Ceballos, the PAN's candidate for president in 1994, leaves that issue still in doubt.

Emerging from an emboldened civil society, social movements constitute another form of struggle against the PRI-dominated political system of Mexico. The middle class debtor’s movement, “El Barzón (The Yoke),” has collaborated with the PRD and the FZLN (the political arm of the EZLN or the Frente Zapatista de Liberación Nacional) not because they share class interests but out of the tactical political necessity of pressuring and opposing the PRI. “El Barzón” represents small and medium businesses and mortgage holders who were faced with mounting interest rates in the early 1990’s and large increases in their debts after the 1995 devaluation of the Mexican currency.[vii] More than 200,000 lost their businesses in the first 18 months of the devaluation and many now fear they will fall into poverty. Their middle class status, political acumen, and the threat posed to lending institutions should they default on their debt have enabled Barzonistas to force the government to absorb one-third of their debt (Ross, 1997:260). Given the specificity of El Barzón’s debt agenda, its alliance with the FZLN and the PRD has a built-in fragility. For now, however, they are united in their opposition to the policies and methods of the PRI that have impoverished them.

The Frente Zapatista de Liberación Nacional (FZLN) is the political offspring of the Ejecito Zapatista de Liberación Nacional (EZLN). It holds that the current government is illegitimate because it has destroyed whatever bases of legitimacy it might have had as the heir of the Mexican Revolution.[viii] Javier Elorriaga, an FZLN coordinator, views democratic transitions such as the one purported to be underway now in Mexico as “change which changes everything so that everything remains the same (1997:5).” The Mexican political elite, he argues, is not functional to the logic of capital because it is no longer a coherent and secure channel for capitalist development. Thus it can be passed over or sacrificed and replaced by another elite from within Mexican “political society” as long as such a passage respects the basic institutions of the old regime. According to Elorriaga, the difficulty in establishing an elite pact in Mexico is that despite the willingness of the PRD to reach accords with the PRI, the PRD’s Cárdenista base frightens the international and Mexican power elite. (1997:6). The PAN’s internal divisions and a lack of consensus in the populace behind the PAN’s “reactionary project” place it in a similar light. Thus a political transition in Mexico involving an elite pact between the PAN or the PRD remains a risky and problematic proposition to transnational capital that would rather continue to support a known entity like the PRI while encouraging it to "reform."

The FZLN eschews partisan activity and elite-brokered transitions that use state power in the current system to repress real popular participation (defined by the FZLN as popular self-determination) The FZLN holds that political parties want to control society through the state rather than promote the interests of the majority. In contrast to elite-based transitions based on political parties, the FZLN favors a democratic transition that can come about only as a result of the “break down of the current system of domination (Elorriaga, 1997:7).” The EZLN has a strained relationship with the PRD because it suspects that the new political parties will replace the PRI-dominated corporate system with their own corporatist systems of domination (neocorporatism) that will ignore Mexico's poor majority. They see in the PRD and other political parties the same signs of caudillismo and facciónalismo found in the PRI.

The new labor coalitions that have broken from the PRI heighten the prospects for forging a rural/urban alliance against the PRI that the Zapatistas support. In August of 1997, unions representing 1.5 million members established an independent labor federation—the Union Naciónal de Trabajadores (National Worker’s Union or UNT). Within the UNT, the independent Frente Autentico de Trabajadores (Authentic Worker’s Front or FAT) represents manufacturing workers in at least half of the states of Mexico and is particularly active in organizing maquiladora workers in collaboration with U.S. trade unions and support groups. The more radical CIPM is a part of the Frente Zapatista. Nonetheless, Douglas A. Payne cautions that “…while the end of state unionism can now be at least contemplated, the guts of the state-party system remain intact, and the next stage looks to be a drawn-out, uncertain, and ugly affair (1998:24).” [ix]

Conclusion: From Neoliberalism to Real Democracy- Mexico's political system is a degraded hegemonic regime whose "…monopoly on privilege and power has slowly eroded as each new wave of change rolls across Mexico's political landscape (Sam Quiñones, 1998: M2)." As the PRI lacks the resources to buy off everyone who requires it, narcotics traffickers have filled the void infiltrating top ranks of the PRI, the police, the judicial system, and even the military (Valle, 1995; Maglioni, 1997). But the PRI party-state can hobble around as a degraded model of its former self for some time to come with the help of its northern neighbors.[x] Defections from the PRI both at the mass base and at the leadership level by gubernatorial candidates joining and often winning election for opposition parties are signs of this degraded hegemony.[xi] Former president Carlos Salinas' attacks on the government of Zedillo is a break with the Mexican version of omerta in the PRI political class that shows fissures and a breakdown of the established rules of the game in the PRI "revolutionary family."[xii] The PRI' resorts to authoritarian controls to maintain party unity as it professes a commitment to internal democratization. It refuses to allow transparency in its campaign financing when there are signs that Zedillo's presidential campaign was bank rolled by corrupt bankers. These illustrate the PRI's lingering corruption and of its lack of capacity to change.[xiii] But the recent public protests from the ranks of junior military officers constitute one of the most ominous signs of erosion within the Mexican institutions of power.[xiv]

Real democracy in Mexico would mean an end to this system of corruption and an end to broker-mediated politics. It would require political parties with organic links to forces in civil society such as independent labor organizations practicing shop floor democracy, independent peasant organizations, and independent neighborhood associations (Volk, 1998). Real democracy requires parties following what the Sandinistas called "the logic of the majority." Real democracy is incompatible with governing "from above" and it is incompatible to the very logic of neoliberalism that imposes policies of austerity engineered by technocrats "from above."

Mexico's hope lies in the changes wrought "from below" to policies that have crushed Mexico's poor and damaged all but those Mexicans involved in the dollar economy with liquid assets (See Cockcroft, 1999:365-371). The struggle for real democracy in Mexico is now being waged by an awakened civil society of independent labor movements, neighborhood associations, peasant-based organizations like the EZLN and the EPR, the FZLN and the PRD as they move from the margins to the center stage of Mexico's political drama. As the seventy-year-old hegemony of the PRI crumbles, it "…has grown a cancer and as it spreads, the PRD grows healthier (R. Riva Palacios, 1997, B7)." Links to narco-traffickers also corrode the negligible legitimacy of the PRI. Manipulation and coercion reign in the countryside, where the PRI is strongest. The party's strength has all but collapsed in large urban centers where it governs in only two to the twelve largest cities of Mexico and where the combined support for the PRD and the PAN exceed that of the PRI.

From without, social movements clash with the PRI as they break away from the established corporatist political culture that has discredited Mexican political parties altogether. Only by building a viable alternative to the PRI can social movements gain room to negotiate and, until recently, the only viable alternative to the PRI was the PRD. But the relationship between parties and social movements is far-from-facile, even for the reformist PRD. Wary of political parties, Mexican social movements offer cyclical support to them at election time only to distance themselves in between elections as part of a bargaining strategy of "strategic, conjunctural alliances (Bruhn, 1997:162)." Resourse competition and differences in "movement logic" versus "party logic" increase tensions between movements and parties because movements place greater priority on substantive goals and local struggles over the broader partisan goals of electoral success with the hope of controlling the nation's political mother lode--the presidency. The institutional context of Mexican politics, compensatory programs to co-opt possible opposition, and competition in party-movement relationships place strains on the PRD as a party built on top of pre-existing organizations. All of these factors constitute obstacles to stable party-movement relationships.

Popular movement traditions of bargaining with the state once conflicted with the PRD's identity as a party of confrontation and non-negotiation. More recently, relations between social movements and the PRD have been strained by the party's move toward the political center. Conjunctural alliances between social movements and the PRD lent a cyclical and unstable character to the relationship to such a degree that in 1994 the PRD reserved fifty percent of its candidacies for leaders of popular organizations to lend the relationship greater stability (Bruhn, 1997:164). Party activists have resisted turning over candidacies for political offices to leaders of social movements who, while seeking office as PRD candidates, want to maintain autonomy and control over their movements.

The luster of the PRD has dulled and the PRD is under increasing attack as a leader-run (caudillo-led) organization lacking in a mass base of militants and resting on the momentum of the 1988 elections and its aftermath. Even from the left, the PRD is attacked for lacking institutionalization, ideological rigor or coherent programs, and for caudillo-style leadership (Riva Palacios, 1997; Scherer Ibarra, 1999). Cárdenas' reputation was damaged by the revelation that he met with Carlos Salinas in secret in the weeks following the 1988 elections. Because all of the PRD governors won their posts shortly after they had switched to the party from the PRI, the PRD is now perceived by leftists like Enrique Semo as a party that can win elections only when there are divisions within the PRI. In 1998, PRD leader Andres Lopez Obrador was pelted with eggs in Yucatan after he appointed ex-PRI members to important party posts. The PRD has to overcome the perception that it is the party of disgruntled members of the PRI exploiting the party for opportunistic gain. That the PRD's primary elections of March 14, 1999 had to be cancelled due to irregularities that served only to further undermine the prestige of the party and its unity. Strong attacks on Cárdenas accusing him of clientelism and bossism by PRD leader Porfirio Muñoz Ledo have produced a loss of confidence in the PRD by its rank and file (Scherer Ibarra, 1999).

Mexico is awash in rumors of a grand coalition of all major parties against the PRI in the presidential elections in the year 2000. The Mexican party system is in shambles barely one year before the presidential elections. This can be interpreted as a sign of growing "democratic pluralism" or of the incapacity and irrelevance of the party system that is emerging in Mexico. In John Ross' view, "…the Zapatista consulta and indeed all the consultas (there are many) is a popular non-party way of doing politics and (is) gaining credibility (as) civil society doing politics.[xv] Meanwhile, the suciedad (dirtiness) that keeps leaking-out of the parties sells lots of [news journals] but continues to alienate the average voter.[xvi]

The political game "from above"--involving dissident PRI leaders co-opted into the PRD --and possible "conjunctural alliances" between the PRD and leading opposition parties has more to do with terminating the electoral hegemony of the PRI than meeting the needs of Mexico's increasingly impoverished majority. While the PRD has opened up democratic dialogue and raised a serious challenge to the PRI, it cannot itself escape the corporatist political culture of political caudillos and co-opted groups. Nor should anyone be surprised that surmounting that culture will take struggle over a considerable period of time. Even should Mexico's fractured party system become stable, the battle for economic democracy still remains to be fought as all major political parties in Mexico support some variant of neoliberalism (the PAN minus corruption and the PRD minus corruption and with support for mitigating social policies). Thus the politics "from above" is necessary but only as a prelude that broadens the political space for a larger struggle for true democracy that can come only with political liberty, jobs, food, housing, and education. Mexico remains one of the most inequitable societies in the world and the fundamental redistribution of wealth necessary to achieve real democracy cannot be achieved within the limits of Mexico's present neoliberal regime that relies, ultimately, on force.

A likely scenario for Mexico's future is the continued "maquiladorization" of the Mexican economy with maquiladora growth and expansion to central and southern Mexico. The PRD and the PAN will expand as the PRI continues to fragment and as discontented PRI defectors run under the banner of "the opposition." As the political game "from above" widens political spaces, a mass movement must be developed from below among those alienated from a political and economic system wedded to Mexico's historic pattern of low wage exploitation. This requires a critical engagement of the left in the current struggle to broaden that political space and to push the challenge to Mexico's historic pattern of wage exploitation to the limits of the political space that is being created. Only in these social movements is there a possibility for a continued broadening of political spaces in Mexico to wage the battle for economic democracy.

The real fissure that has been exposed by Mexico's "democratic opening" is between those pressuring for fundamental change at the mass level and variants of the political game "from above." Forced by internal divisions, defections, and declining resources to maintain its local bosses under control, the PRI will move from an authoritarian and semi-authoritarian clientelism in the countryside--varying only in degrees of political subordination--to a greater degree of associational autonomy in urban areas that reflects the degraded hegemony of the PRI especially in large cities. The movement from one-party authoritarian politics to multi-party electoral politics can stabilize far short of democracy depending on the degree of social mobilization by movements at the shop floor, in union halls, in the countryside, and in the urban streets. Thus "the prospects for democratization in Mexico depend on how conflict between more or less authoritarian policy currents within the state interact with growing civic pressures from below (Fox, 1997:147)." The challenge is how to link the considerable social mobilization against neoliberalism already in place within local and national arenas into a global movement and to overcome the social atomization that is the key resource of capital and its state and global apparatus.

Bacon, David

1994 “The New World Order: Echoes of a New Imperialism.” Third World Quarterly 15

1997 “Mexico’s Recovery By Passes the Poor.” New York Times, August 12, A:3.

1997 “A Critique of Tabb on Globalization.” Monthly Review 49 (November): 29-35.

1997 “La Transición: Continuidad o Ruptura,” California State Polytechnic University,

1995“Rebellion in Chiapas: Rural Reforms and Popular Struggle.” Third World Quarterly 16 (March): 39-74.

1997 “Red Harvest in Long-Bloodied Chiapas.” Los Angeles Times December 27, B:6.

1997a “2^nd Police Official Quits, Marring New Mexico City Regime.” December 13,

1997b “Workers at Tijuana Factory Win Independent Union.” December 17, A:28.

1994 “Salinas’ Failed War on Poverty.” NACLA Report on the Americas. XXVIII

1996“El TLC seria chivo expiatorio del año electoral en EU: Kolbe,” La Jornada

1988 “Mexico at a Crossroads: the 1988 Election and Beyond.” World Policy Journal.

Roman, Richard and Edur Velasco Arregui

1997 “Mexico’s New Police Chief Ousted.” Los Angeles Times, December 11, A:1.

1998"Mexican Army Officers' Protest is 'Wake-Up Call' for Military." Los Angeles

1995 “The Mexican Financial Crisis: Genesis, Impact, and Implications.” Journal of

1997b “Labor, the State, and Class Struggle.” Monthly Review 49 (July-August): 1-17.

[i] Half of these exports were destined for the United States market (Ross, 1997:168).

[ii] One week before this paltry program was announced, Finance Minister Guillermo Ortiz Mena proclaimed that Mexico had regained investor confidence by paying back to the United States, three years in advance, billions of dollars in loans incurred in the wake of the “devaluation crisis” of 1995.

[iii] In Chiapas and other rural areas PRD members often take revolutionary positions, especially around land questions. These do not necessarily reflect the line of the national PRD.

[iv] Luis Hernandez Navarro, secretary of the commission charged with verifying compliance with the February 1996 peace agreements in Chiapas between the Mexican government and the EZLN, has charged that the local government in Chenalho municipality aided the paramilitary group Peace and Justice fight a dirty war against those it considers EZLN sympathizers in lieu of an open war. Peace and Justice is blamed for more then 200 deaths in northern Chiapas, many of them documented by Human Rights Watch and other reputable human rights organizations. Declining support for the PRI in the state and the existence of 30 parallel governments controlled by the Zapatistas threaten to destroy the power base of PRI strongmen (caciques) who then resort to a dirty war to maintain their power (Hernandez Navarro, 1997).

[v] Together the opposition constitutes a majority of 269 votes to 239 votes for the PRI in the Chamber of Deputies.

[vi] Had Fox been an American or British politician, he would qualify as a New Democrat or a leader of New Labor. In the Mexican context, he represents the new face of PAN as a conservative on social issues, and a moderate on economic issues who can “mediate” the needs of national capital, global capital, and mass groups.

[vii] 200,000 businesses closed in the first eighteen months of the crisis. Forty percent of the loans in Mexico’s 18 private banks were uncollectable with the top three banks holding $6 billion in uncollectable loans (Ross, 1997:258, 260).

[viii] These bases are the ejido system; government control of oil resources; free public education; a social security system sufficient for the reproduction of the work force; a state economic sector not guided by the logic of individual gain; and a foreign policy opposed to U.S. economic intervention in Mexico. In place of these guarantees, the government has put in place an economic model that excludes the majority, deindustrializes Mexico, and transfers resources abroad (Elorriaga, 1997).

[ix] Pedro Martinez, director of the Mexican Employers Council of Baja California Norte (COPARMEX) and the head of the Maquiladora Industry Association have called the strike at the Han Young Factory in Tijuana a threat to invest all along the U.S.-Mexican border. The Mexican federal government and the PAN in Baja California have called for weakening labor protection laws even further. The federal government, the state police in Baja California, and city police in Tijuana have tried continually do suppress the strike at the Han Young factory despite rulings by the Baja Califronia state and Mexican federal courts that the strikes are legal under article 123 of the Mexican Constitution and under federal labor law. On April 6, 1999, the First Collegial Court of the Fifteenth District, the highest judicial authority in Baja California, ruled that federal and local efforts suppress the Han Young strike were illegal. Federal,, state, and local authorities continue to ignore the courts in violation of Mexican law (David Bacon, 1999: 1-3).

[x] For example, on June 15, 1999, the Mexican government got $23.7 billion in loans to forestall another election-year crisis, such as that of 1994, that caused the Mexican economy to plummet. Private banks, the International Monetary Fund, the World Bank provided the loans. An additional $6.8 billion was provided by the governments of United States and Canada (James F. Smith, 1999:C1).

[xi] In February 1998, 5,000 PRI members in Zacatecas left the PRI to follow leaders Ricardo Monreal into the ranks of the PRD. One thousand young PRI members quit the party in Veracruz to protest the imposed gubernatorial candidacy of Miguel Alemán. PRI leaders in Campeche, Queretaro, Veracruz, Nayarit, Zacatecas, and Baja California Sur abandoned the PRI as nine of Mexico's 31 states and the federal district were controlled by opposition parties in 1998. The PRI, however, still managed to win seven of ten gubernatorial races held in 1998 (Quiñones, 1998:M:2; Sheridan, 1998, 1999a, 1999c;).

[xii] A code of silence is the norm to be followed by former Mexican presidents and former party leaders. Former president Carlos Salinas has broken this norm in an open feud with the current president. Salinas has stated that if the Mexican government acts on a Swiss police report alleging that his brother, Raul Salinas received money from the Cali drug cartel, many members of the current Mexican government will be affected. Pointedly, Salinas indicated that Attorney General Jorge Madrazo would be hurt (Riva Palacio, 1998: B9).

[xiii] President Ernesto Zedillo's efforts to project an image of legality and honesty are undermined by remarks made from an Australian prison by banker Carlos Cabal Peniche. Cabal claims that he personally collected $15 billion for the last presidential race--one third of all contributions reported by the PRI. He claims that his banks raised an additional $4.5 million in illegal payments made to the PRI in 1994 and that he discussed these with then presidential campaign manager and now Mexican president, Ernesto Zedillo (Sheridan, 1999b, A:). The appointment of Fernando Gutierrez Barrios, long time spymaster and enforcer for the PRI, to oversee the party's presidential primary election reveals that the authoritarian culture for which the PRI is known still dominates its core. As a reaction to the continuing corruption within the PRI, 100,000 persons in Cuernavaca voted to remove the governor of Morelos in an unofficial referendum in March of 1998. Another 10,000 marched through the city demanding his resignation in February of that year (Sheridan, 1998a: A:1).

[xiv] Lt. Col Hildegardo Bacilio Gómez led a march of 50 soldiers down the Paseo de la Reforma in December of 1998 calling for an end to Mexico's system of secretive military trials. He demanded changes in the free market economic model claiming that "Mexico…is in flames, living a Dantesque inferno." Analyst Roderic Ai Camp stated this event was "so exceptional as to be extraordinary" because officers have never challenged the military in an organized way (James F. Smith, 1998, A:22).

[xv] Consultas are popular consultations in the form of mass rallies. Quote is from John Ross, author of The Annexation of Mexico: From Aztecs to the IMF, correspondance, April 19, 1999.

[xvi] Ibid.