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Sustainable Economic Development the Neo-Capitalist Assault in Mexico

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Sustainable Economic Development the Neo-Capitalist Assault in Mexico The Jus Semper Global Alliance Living Wages North and South Sustainable Economic Development February 2004 A TLWNSI ISSUE ESSAY The Neo-Capitalist electoral process, we have only vindicated the ruling class so that it can keep subjecting the Assault in Mexico: country to its usufruct and we are still quite far from real democracy. In this way, this essay Democracy vis-à-vis the logic of reflects on the manner in which the oligarchy the market operates, and it disserts about its connivance with the first world to impose neoliberalism in Mexico, within a global context, and on how it pretends to a By Álvaro J. de Regil consolidate it. Lastly, it poses the urgent need to organize a civil society, strong and supportive of the socially disadvantaged, which incorporates all Periodically, TJSGA publishes essays of relevance ranks of society, gets fully and permanently for The Living Wages North and South Initiative involved in the public matter and commits itself (LISDINYS). This essay explores what lies behind to the common good in order to build a real the growing pauperization and disintegration of democracy and a new country. Otherwise, we the social fabric that Mexico has experienced in would be left to deal with an increasingly brutal the last quarter century as a consequence of a ethos –always in a global context– reminiscent of change of economic paradigm imposed by those times that were assumed we have long ago who wield power in Mexico. It argues that only if transcended. there is success in building an organized civil so- ciety, inclusive of and in solidarity with the disad- vantage, would it be possible to stop the dictates of the market and force a paradigmatic change. Summary Global background Introduction . Democracy and Aggregate demand . Plutocracy and supply For twenty-five years México has walked a path . Financial markets – the new of permanent decline in its human and economic Olympus development. The gap between rich and poor . Moribund democracy has exacerbated to unimaginable levels that take us back to the early XIX century. In the economic Background in Mexico stage, instead of reaching full-blown develop- . The holy oligarchic alliance ment, we have been incapable of laying out our . Alliance with the centre own destiny and we are more dependent than . End of Mexican Keynesianism ever on the first world and especially on the United States. Instead of developing our own The neo-capitalist assault in Mexico technology, of developing our domestic market . Neoliberalism and oligarchy and of strategically opening only those sectors . Structural change where top competitiveness has been reached, we . Garage sale free trade have gone down the easy path of speculation, of . Assault at point blank technology dependency and, especially, of the . Consolidating the assault pseudo-attraction of foreign direct investment by . The challenge surrendering our labour force for a miserable price. This has been possible because Mexico continues to be a profoundly oligarchic country. Albeit we have finally lived a duly democratic 1 ©TJSGA/TLWNSI ESSAY/SUSTAINABLE DEVELOPMENT (E003) FEBRUARY 04/Álvaro J. de Regil Sustainable Economic Development Living Wages North and South The Neo-Capitalist Assault in Mexico Global background dikes against communism. For this reason, the . Democracy and aggregate demand emphasis is centred on the development of the domestic markets by supporting the income of the In 1971 Richard Nixon, in the midst of his population to provoke the growth of aggregate electoral campaign, breaks with the gold standard demand. With this scenario, Third World and the original spirit of the Bretton Woods countries, especially in East Asia and Iberian Conference. The conviction to drive post-war America, also embarked on their social and development, anchored on the expansion of the economic development by building their own markets under the logic of the Keynesian domestic markets, supporting aggregate demand economic paradigm to support aggregate demand generation through the support of full generation, is abandoned. Keynesianism, within employment and the increase in the income of the context of democratic societies, delineates an their workers. economic logic that demands the regulating role of the State through a very visible hand to counter However, this period barely lasts thirty years both the natural predatory and speculative instincts of in the centre and in the periphery, for the capitalism. If these instincts are not controlled, a economic and personal interests and the very unequal wealth accumulation in favour of geopolitics of the major powers have very rarely the owners of capital is generated at the expense abided by the rules of economic discipline. On of the welfare of the majority of population, for countless occasions, military spending or political most people participate in the market always campaigning have disrupted any possibility of under unequal terms. In times of recession, economic discipline in the entire capitalist world, regulating Keynesianism outlines the need for the such as occurred with Nixon in 1971. At the State to increase public spending, even when same time, the decadent U.S. industry, with its generating deficit, both in infrastructure, to rigid Taylorist production system, suffered the increase productivity, and in the support of the embattlements of the efficiencies of the flexible Welfare State anchored on the Social Security Japanese production system, which overwhelmed System. In times of expansion, it demands fiscal many sectors, such as the automotive, where their discipline to eliminate the deficit generated brands capture large portions of the global during recession and balance the public budget. market. This forced U.S. corporations to establish Thus, in broad terms, Keynesianism outlines a structures of maximum flexibility in production capitalist logic in which the central regulating role and labour costs and in the access to markets. In of the State is legitimized because it parts from the this way, the U.S. completely abandons John idea that the first responsibility of any society that Maynard Keynes at the start of the eighties and boasts to be democratic is to procure the welfare adopts Milton Friedman’s monetarism where of all ranks of society. Therefore, it does not aggregate demand –the workers’ income– is no allow the accumulation of capital to be placed longer supported, and supply –the owners of above the social welfare. In this way, capital– is instead exclusively supported. This Keynesianism aspires to subject the interests of paradigm constitutes the return to the classical capital to the need for social welfare through the British capitalism of Victorian carriages and support of high levels of equilibrium of supply Dickensian infrahuman factories of the industrial and demand, with full employment, and not at revolution. It is the return to the great trusts of the inferior levels of equilibrium: recessive, gilded age of savage capitalism of the U.S. robber speculative, with unemployment and idle capital, barons. as today occurs in Mexico. The nature of any sort of capitalism is the This is how, with the full application of accumulation of capital, which forces it to go on Keynesianism in 1945 in the U.S. and Europe, the an unrelenting search for commodities, cheap opportunity as well emerges for the periphery to labour and consumer markets. Thus, capitalism, apply this paradigm to generate relative benefits in pursuit of maximum profits and efficiencies, is for the majority of the population. The emphasis by nature exploitative of human beings. This is a for the U.S. was to recover the economies of its feature inherent since the birth of modern main European allies, and even Germany, and of capitalism in the mercantilist era of the XVII and Japan and South Korea in the East as essential XVIII centuries with the great merchant ©TJSGA/TLWNSI ESSAY/SUSTAINABLE DEVELOPMENT (E003) FEBRUARY 04/Álvaro J. de Regil 2 Sustainable Economic Development Living Wages North and South The Neo-Capitalist Assault in Mexico companies of spices of the empires. Hence, there about the levels of labour productivity and the has always been a colonialist relationship growth of production. Keynesianism is between the power centres and the periphery. preoccupied for a balanced development. These centres exploit in partnership the human Monetarism only seeks the plutocratic and material resources of the periphery, first in accumulation of capital. their colonies in the South and, after their independence, in a North-South partnership In this way, monetarism asserts that governments through a neo-colonialism that keeps maintaining should only intervene in the control of the money in usufruct the exploitation of resources for the flow and abstain from promoting demand through exclusive enjoyment of the North-South elites. public spending. It proposes as well low taxes This relationship is reproduced when the U.S. and a deficit-free fiscal budget. Thus, it demands emerges as the new central power of the capitalist the reduction of social spending to its lowest world with the post war. common denominator, especially in unemployment programs so that people become Nonetheless, the specific feature that distinguishes motivated to look for work. It also demands the global neoliberalism is not any more a strict deregulation of all sectors of the economy, both relationship between a power and a periphery domestically and internationally, supposedly so country. It is now
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