Volume 43, Number 169,
April-June 2012
The 1980's: Mexican Political Economy
Reinterpreted through the Hypothesis of Financialization
Violeta Rodríguez*
Date submitted: August 9, 2011. Date accepted: December 2, 2011

This paper aims to describe the analytical and statistical evidence supporting the hypothesis that the economic policies implemented by the Mexican government in the eighties, pushed the process of financialization that by then had settled in the country, to move toward a more advanced stage, the latter associated to an environment that favored the conditions for, and further increase, the financial profits.

For this purpose, I define the financialization as an accumulation regime that replaced the industrial capitalism era's regime1, following the process shown in the diagram above.2 I agree with the argument that this process had an external source, because of the delayed develop of the country's financial system3, which took place only as a consequence of the goverment's active participation and public funding.

I specifically base my argument on the hypothesis that Mexican financialization began in the 1970's,4 when the government made use of secondary reserves to tackle the exchange-rate instability of the period. The resources from these branch lines of the Mexican Federal Reserve came from external loans which were the first set of economic investments recived by Mexico in the financialized economy way; because these financial funds were placed in the main business sector for this kind of accumulation regime –debt– with the prospect of appreciating in value through the simple push of financial indicators, which were externally sourced since Mexico's financial system was still under-developed at the time.

Based on the fact that in the early 1980's Mexican financialization was at its Conflictual Capitalism stage, I propose the hypothesis that the policies implemented during the decade, pertaining to the neoliberal and globalization era's kind policies gave the impetus for financialization to reach its next level, the stage of Leveraged Buy-Outs Capitalism. And it achieved this because those policies guaranteed that the domestic economy would comply with the following two determinants for this progress:5 on the one hand, defining the valuation of financial capital based on automatically defined domestic reference points, and on the other, laying the foundations for the permanent expansion of the value and yield from debt-based financial operations.

* Researcher at the Economic Research Institute, National Autonomous University of Mexico (Universidad Nacional Autónoma de México, Instituto de Investigaciones Económicas–unam-iiec). Email: violetta@unam.mx

1 As defined by Krippner, 2005: 174.

2 This takes the stages-of-development approach used by Palley (2009) for the US and adapts it to Mexico. The years cited, however, are not proposed as strict limits (they can differ by indicator and measure of economic policy), and are only specified in reference to an approximate average of each stage.

3 Levy, 2011: 16.

4 Rodríguez (2011) provides the basis of this hypothesis.

5 These determinants made it possible to lessen the financial yields’ dependency in regard the government's intermediary role and financing, as a sign of the search for the autonomy of financial capital as referred to by Chenais, 2003: 45-46.

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Published in Mexico, 2012-2018 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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