Volume 45 Number 179,
October - December 2014

The Global Crisis and its Effects on Mexico: An Analysis by Sector and Region, Alejandro Álvarez and Germán Sánchez (coords.), Editorial Ítaca-BUAP, 2013.

The great crisis of 2008 has taught us important lessons about how the economic system works. Now, more than ever, we must acknowledge that the commercial and financial liberalization model created at the 1989 Washington Consensus has failed to eliminate the cyclical effects of economies to achieve natural long-term growth. Undeniably, the global economy over the past 30 years has been marked by more frequent and longer lasting crisis periods, as well as an increased propensity for the crises to spread.

It has become evident that neither new classical macroeconomics nor the new (mainstream) Keynesian school of thought have been able to help eliminate the structural and cyclical problems plaguing economies. In this way, the big crisis could be an opportunity, a watershed moment to rethink what we know as economists and what we can contribute to the economic sciences. I believe the time has come to critically evaluate the fundamentals on which economics as a science rests, and rethink and rebuild it from the ground up. It is time to move away from the axiomatic economics and rational individualism that have prevailed in every branch of economics.

With this in mind, the book The Global Crisis and its Effects on Mexico: An Analysis by Sector and Region is an original contribution from a cyclical perspective, a critical approach to the repercussions of the great crisis of 2008 in Mexico, emphasizing effects felt by region and sector.

The book offers an overall perspective on the origin of the great crisis. Various points of view regarding this origin, its effects and the ways in which the damaging repercussions of the crisis were transmitted exist. In this regard, works by Sánchez Daza, Álvarez Béjar and other authors throughout the book provide an account of the origin of the crisis as a phenomenon, the outcome of stagnating production at the global level, the centralization of capital, income concentration, reduced salaries, labor market flexibility, growing financialization, speculation, financial deregulation and debt bubbles, among other factors. The authors begin with an adequate understanding of the origin of the crisis, which supports the arguments they build as to the transmission channels to determine the negative impact of the crisis on the Mexican economy.

The book also addresses the global crisis and Mexican regions. In this framework of reference, the first chapters address the crisis and its effects on Mexico from a regional perspective. The book distances itself from traditional mesoeconomic and macroeconomic treatments of the crisis. I believe the regional approach is a key element of analyzing the crisis, strengthening its conclusion that the concepts of space and proximity are relevant. In this sense, Mendoza Pichardo explores the concept of regional welfare and the lack of regional convergence, explaining that regional inequality tends to be perpetuated because the social needs and profitability of less populated regions with less infrastructure and services, such as traditionally rural regions, are incompatible. The chapter by Basurto Álvarez analyzes how regional dynamics in Mexico have been transformed, focusing on border regions, as do Vázquez Ruiz and Bocanegra Gastelum. The former defines regions as spaces for accumulations that respond to the organizational evolution of capitalism in the information age (far from the logic of capitalism directed by finances). The latter two analyze the Northern border and its integration with the United States, focusing on the formal and informal channels that define the socioeconomic space in the region.

The book then discusses the global crisis, sectors and the market. The great crisis of 2008 has undeniably shed light on the weakest parts of the economy, while also magnifying the fundamental structural problems of the Mexican economy. Contributions from Campos Ríos, Martínez de Ita and Sánchez Daza on the labor market, as well as contributions from Juárez Núñez, Pérez Romero and Romero Arce on three branches of Mexican manufacturing (automotive, apparel and aerospace), in addition to writings from Rappo Míguez on the effects on the primary sector, are all examples of the structural weakness at the foundation of the national economy and the unstable position from which the country must face the effects of the great crisis. This approach is especially valuable and is a good complement to the previous section on regional issues.

Next is the concept of cycles, regions and a proposal. Another fundamental topic that the book addresses is the issue of economic cycles, which have long been abandoned in academic circles but have now made a strong comeback in both orthodox and heterodox schools of thought. To this effect, the book makes a significant contribution by placing the concept of cycles once again at the heart of the debate. The chapter by Gómez López does just that, discussing the effect of and relationship between macroeconomic variables and foreign trade variables (imports and exports) in a cyclical crisis environment. So too does the chapter by Erquizio Espinal and Ramírez Rodríguez, which analyzes the scope of the crisis from a cyclical economic approach that is different for regions and states, using the Frish metaphor.

Overall, it could be argued that the crisis, from a cyclical-structural perspective, is the outcome of a process of inadequate policies and a poor understanding of economic-social relationships, on top of the financial fragility inherent to financial systems, whose consequence has been to redistribute the income of the productive sector to the financial sector and of salaries to financial profits. For this reason, their analysis is relevant.

This book’s contribution rests on three key pillars. First, an understanding of the global crisis as a cyclical economic process magnified by an economic model that stresses liberalized markets, deregulation, labor market flexibility and control of macroeconomic variables. Second, a recognition of how the effects of the great global crisis vary depending on the structural and regional conditions of each state. In this sense, the analyses reveal that space and proximity, as well as sector diversification, are key factors in determining the scope and ways in which the crisis was transmitted through the various regions. Third, the relevance of findings in the research process that may help create more realistic public policies with a broader reach to take on the great global crisis.

Marco Antonio López
Benemérita Universidad Autónoma de Puebla

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 193, April-June 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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