Emerging Finance Capitalism in Mexico and Turkey
Chapter 3: States, Banks, and the History of Postwar Development in Mexico and Turkey
Two pre-capitalist societies, colonial Mexico and the Ottoman Empire, existed worlds apart. The vast majority of Mexicans and soon to be Turks knew little of each other. Yet within the first two decades of the twentieth century their societies would share national revolutionary upheavals with far reaching consequences. Within a couple more decades Mexico and Turkey would also have in common an expanding wage labor workforce, an integrated and domestically controlled banking system, and a state apparatus geared towards national capitalist development. Specific and important differences characterize each society’s historical consolidation of capitalism and the evolution of their state–bank relationships. Nonetheless, this chapter explores how by the late 1970s both societies had become subject to the power of money and credit as never before. The newly institutionalized relationships between the state apparatus and banks set the historical backdrop against which one can interpret the 1980s debt crisis and subsequent turn towards neoliberal strategies of development. Section 3.1 below looks at Mexico and Turkey’s historical consolidation and Section 3.2 considers the expansion within both countries of state-led development and banking. Section 3.3 then explores the breakdown of these state–bank relationships during the 1970s and following the impact of the US-authored Volcker shock. This is followed by a brief conclusion. 3.1 CONSOLIDATING CAPITALISM IN MEXICO AND TURKEY 3.1.1 Mexico In colonial Mexico most Mexicans survived on subsistence-based production and lived outside any sort of a generalized wage labor or money economy (Cockcroft 1998). Wealth was highly concentrated among a 40...
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