Emerging Finance Capitalism in Mexico and Turkey
Chapter 4: Neoliberal Idealism, Crisis, and Banking in Mexico’s State-led Structural Transformation, 1982–94
By the 1980s the Mexican state apparatus had grown to an unprecedented size supported by an equally unprecedented bank-based and predominantly private Mexican-owned financial system. State-led strategies of development, however, had begun to absorb significant financial resources, organized labor had grown stronger, and Mexican capital wanted more access to areas of the economy previously developed and owned by the state apparatus. This led to social, economic, and political instability and the weakening of Mexico’s postwar class compromises. The breaking point came with the 1979–82 US-based Volcker shock, which sent global interest rates through the roof instigating the 1980s debt crises in the periphery and the rollout of neoliberal structural adjustment programs. What followed in Mexico and elsewhere left the once predominant state-led strategies of development in ruins and a state apparatus restructured towards facilitating capital accumulation.1 The transition to neoliberalism in Mexico, however, should not be interpreted just as a top-down process of imposed structural adjustment that led to the withering away of the once strong state apparatus. Rather, I argue that advocates of neoliberalism within the Mexican state and society actively pursued changes that led to the restructuring and strengthening of the state’s capacity to support capital accumulation. This occurred in contradictory ways. Notably, while intended by the outgoing López Portillo administration to revive state-led capitalism amidst the 1982 debt crisis, the 1982 bank nationalization decree unintentionally handed the incoming Miguel de la Madrid administration a powerful financial tool with which to take charge of neoliberal state...
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