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University of California Press
Mexico: Why a Few Are Rich and the People Poor / Edition 1

Mexico: Why a Few Are Rich and the People Poor / Edition 1

by Ramon Ruiz
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Product Details

ISBN-13: 2900520262361
Publisher: University of California Press
Publication date: 08/24/2010
Edition description: NE
Pages: 304
Product dimensions: 6.00(w) x 1.25(h) x 9.00(d)

About the Author

Ramón Eduardo Ruiz (1921–2010) was Professor Emeritus of History at the University of California, San Diego. He was author of many books, including Triumphs and Tragedy: A History of the Mexican People, Memories of a Hyphenated Man, and On the Rim of Mexico: Encounters of the Rich and Poor.

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Why a Few are Rich and the People Poor

By Ramón Eduardo Ruiz


Copyright © 2010 The Regents of the University of California
All rights reserved.
ISBN: 978-0-520-94752-8


Ramblings on Mexican Underdevelopment


Let me spell out why I believe Mexico is underdeveloped. But first, permit me to digress just a bit. Some pundits, fixated on the banal details of human idiosyncrasies, tend to think that we are the authors of our own fate, but life is surely more complicated. To that truism I can only say amen. I know that the millions of rich, and often arrogant, residents of this planet are the perfect historical refutation that the meek shall inherit the earth. Just the same, I do not believe that only the poor will pass through the eye of a needle on their way to salvation. So how to explain why inhabitants of certain countries, specifically the United States and Western Europe, and now Japan, are wealthy, while others, peripheral countries such as Mexico, are poor? I leave the first question to others far more knowledgeable; I can try to explain only Mexico's plight.

One apocryphal story portrays Mexico as a beggar sitting on a cornucopia of plenty. Mexico may be a beggar, but it is hardly well heeled, rich in neither rainfall nor land for the plow and harrow. Across the centuries, Mexicans have not lived high on the hog; instead poverty and sundry inequities have plagued Mexico, and not just because Mexicans wasted resources. Even presidents of the Republic, not always known for their candor, have conceded that their country is no Garden of Eden. José López Portillo, a leader prone to extravagant displays of emotions but at times speaking brutal truths, asserted time and time again in his gigantic autobiography, Mis tiempos, that Mexico "es un país subdesarrollado" (is an underdeveloped country). True, that aphorism is complicated, and is as hotly debated in Mexico now as it was when López Portillo's tome was published. Underdevelopment—or, as some Mexicans, made skittish and fearful by what they refuse to acknowledge, claim is a "distorted economy"—has long been a controversial topic of study for economists, historians, poets, and writers. A popular descriptor favored by mainstream economists is "developing nation," which sounds more palatable, implying that it is only a question of time before Mexico will reach the promised land, that is, join the circle of the rich.

What exactly is underdevelopment, that pernicious malady I have ascribed to Mexico? Definitions abound, but what all of them have in common is that, more than anything else, an underdeveloped country is poor. Poverty is widespread and chronic, not some temporary misfortune. It has always been there. The lost, the damned, and the dispossessed live in poverty, and have always done so. That, unfortunately, describes Mexico to a T.

But underdevelopment is a complex illness. Underdevelopment means an extremely unequal distribution of wealth and income. A few are very rich; millions are very poor. Mexico, according to one United Nations report, ranks near the top of the list of countries with the most glaring inequalities of wealth and income. These inequalities take on territorial dimensions: the south is poorest, and the north, comparatively speaking, the richest. In the countryside, except for a favored few, Mexicans are poor, while Indians, constituting perhaps 12 percent of the Republic's inhabitants, are wretchedly poor. At the top of the list of the poorest regions stands Chiapas, where 76 percent of the inhabitants, largely Indian, are as poor as the proverbial church mouse. In Santiago del Pinar, one of its Indian communities, according to a United Nations report, lamentable conditions resemble those of villages in the Congo of Africa. Not far behind come the states of Guerrero, Oaxaca, Tabasco, and Veracruz, where, with Chiapas, nearly 19 million Mexicans live. In contrast, in Baja California, Nuevo León, Distrito Federal, Coahuila, and Chihuahua, only minorities struggle to obtain their canasta alimentaria (basic needs). In Baja California, to give an example, only 9.2 percent of the people are poor. But, before we jump to the conclusion that all is well there, bear in mind that 78 percent of urban dwellers across the country know poverty.

At the other extreme one finds the wealthy. One Mexican, Carlos Slim, the telephone magnate, is one of the richest men in the world, and a dozen or so Mexicans lag not far behind him. Slim's bankroll totals almost 7 percent of the country's output of goods and services, one out of every fourteen dollars Mexicans earn. Every twenty-four hours of every month of every year, his income grows at the rate of 27 million dollars, yet one out of five Mexicans survives on just two dollars a day. Like the legendary King Midas, Slim turns everything he touches to gold. A fastidious collector of art, he takes special pleasure in two sculptures by Auguste Rodin he owns that grace the Museo Soumaya in Mexico City, which he helps fund. Slim also collects old editions, particularly those dealing with Mexican history. Inequality, which Slim symbolizes, is found in many important areas, such as schooling, health care, housing, and child care. Equality of opportunity simply does not exist.

Narciso Bassols, a respected economist, insists that underdevelopment refers to a country that is not just poor but bereft of the technology required for economic growth. As López Portillo pointed out, one distressing aspect of the malady, given the usually adverse commercial picture, is the inability to develop local resources for lack of funds. One sure sign of underdevelopment is the flight of campesinos from the countryside to the city, a seemingly irreversible tide in Mexico. Those who leave behind their small plots of land, when they have them, seldom, if ever, find the road back to the village.

But poverty implies more than simply the absence of material things. Poverty breeds alienation, an internalized feeling of deprivation and hopelessness, at times even feelings of inferiority, a belief that improving one's life lies beyond human capacity. One is born poor and will die poor. It is psychological, as Fidel Castro, a flamboyant apostle of social change, acknowledged. People, he explained, who for centuries lived "without the hope and the resources and the education that make optimism possible, feel paralyzed by the challenges before them, the tasks required to build a nation." The psychological aspects of poverty, he avowed, can be just as important as the material. It is the "filosofía de que no se puede," the belief that nothing can be done.

Underdevelopment is a historical phenomenon; it has deep roots in the past. Much time has gone by and much water has flowed under the bridge since underdevelopment first took root in Mexico. It is a logical result of a special historical circumstance not shared by the nations of the First World, the industrialized, technically advanced countries of Western Europe, the United States, and Japan. André Gunder Frank, the political economist, noted perceptively that neither the past nor the present of these countries resembles in any important aspect the past of the underdeveloped countries. Underdevelopment rises out of a unique historical process; it is not simply backwardness in relation to the First World, writes Héctor Guillén Romo, but a structural characteristic that blocks economic growth. For Alfonso Aguilar Monteverde, the factors that determine the "backwardness" of countries are not simply random. They did not just happen, nor are they merely skin deep; they are linchpins of the socioeconomic structure. As the economist Paul Baran knew, the historical forces that shaped the "fate of the backward world still exercise a powerful impact" on today's conditions. Forms change, intensities differ, but "their origin and direction [remain] unaltered." Given Mexico's colonial heritage, the results of a European conquest, and the failure of mother Spain to join the modern European world, the inevitable result was a Mexico on the periphery. But even had Spain not lagged behind, as the example of British India reminds us, the heart of the matter is the colonial relationship, not the nature of the mother country. It was a relationship of unequals, of dependency, with Mexico the tail of the dog.


How did this unequal relationship come about? History tells us that it evolved over centuries. It began, undoubtedly, with the Industrial Revolution, although some scholars argue that its foundations were laid earlier, between 1450 and 1640, when the European feudal mode of production transformed itself gradually into a capitalist economy. No matter what the truth, by 1500, England, France, and the Low Countries had shed most of their serfs, their lands farmed largely by yeomen and free tenants. England's enclosure, the shift from the open fields of small farmers to the large fenced-in holdings of wealthy landlords, led to the commercialization of agriculture and abundant wool for textile mills. The use of the water wheel for power to grind corn, shape metal tools, and spin yards of woolen and cotton cloth began in England and spread to Western Europe, where nature had endowed the land with rivers and streams. The English, nonetheless, cannot take credit for the water wheel, which came from the hill country of Mesopotamia, where its use languished for lack of water. Meanwhile, the ocean harbors of England made water transport an inexpensive method for shipping textiles and iron goods to far-off lands, as well as obtaining raw materials.

Yet, before we jump to the conclusion that English ingenuity fueled the Industrial Revolution, it is well to keep in mind that Providence had a hand in the process. England led because of its bountiful deposits of coal, which eventually replaced water as the principal source of power. British coal and the steam engine stood on the cutting edge of industrialization. Surely, without coal England's industrialization would not have occurred as it did and certainly not at that early time. The basic change occurred when machines replaced animal power. None of this happened overnight, but over a century or more, with England leading the way between 1770 and 1870. During this era, James Watt invented an engine whose fuel efficiency was good enough to make the use of steam profitable; capital from the colonial trade, in turn, helped finance Watt's invention. New technology brought about a transformation in production methods, in the process cementing a growing asymmetry between England (and later France), the industrial core, and the laggards on the periphery.

But coal alone does not explain the giant strides of the English Industrial Revolution. History records that in 1492 Christopher Columbus, an Italian sea captain sailing under the royal Spanish flag, discovered what Europeans baptized the Americas. With their colonies, Spain and Portugal would eventually control much of the "New World." England, however, did not lag far behind, winning a colonial foothold in the Caribbean and on the North American continent. The chance discovery of the Americas proved a boon to England's nascent industry, for without the colonies, its own and those of Spain and Portugal, England faced an ecological hurdle with scant chance of an internal solution. To move beyond eighteenth-century levels of production and consumption, England, and Western Europe, needed a new trading partner, and the New World offered it. Its lands gave England a haven for its surplus populations, while its resources and markets helped England, as well as Europe, move beyond its ecological boundaries. Raw materials, markets for manufactured goods, and abundant cheap labor, whether Indians or their misbegotten offspring, stood at the beck and call of English farmers, merchants, and manufacturers.

The silver and, to a lesser extent, gold from the mines of New Spain and Peru, which because of the foolishness of Spaniards ended up in foreign coffers, opened the way for England to expand its imports of raw materials and food as well as fatten its share of New World markets. Cheap cotton from colonial Brazil and the southern English colonies transformed Manchester into a textile manufacturing giant. A goodly share of this prosperity came on the backs of African slaves, from the sweat and tears of the cotton and sugar plantations of the Caribbean colonies and the American South. The labor of these slaves, as well as that of the Indians of Mexico and their mestizo descendants, financed the capitalization of Western Europe's industrial empires. Later, the new republics of Hispanic America played a similar role for British merchants and manufacturers. These satellite economies were structured such that, instead of working for local needs, their systems of production and distribution mainly served their dominant metropolises. European control of markets, exports, and raw materials partly explains the underdevelopment of Mexico and the rest of Latin America, a relationship that Pierre Jaffee calls the "pillage of the Third World."

We live in a capitalist world, as Immanuel M. Wallerstein, a world-systems theorist, reminds us, one that took shape as an expansionist European economy in the sixteenth century and three centuries later embraced the entire world. Why then, if this is so, have some countries, such as Mexico, failed to enjoy development similar to that of other capitalist countries? Steps on the highway of capitalist modernization, as it is known, have been slow or absent. It is a good question, but there are good answers too. We must not forget that history never stands still; time changes nearly everything. What was possible in the past may no longer be possible today. The former colonies, now largely dependent economies, confront an entirely different situation than that faced by Western Europe in the age of discovery and colonization. The easy acquisition of capital is no longer possible. Dependent economies live in a world run by industrialized nations, owners of investment capital blessed with advanced technology and markets for the primary products of peripheral exporters. Capitalism has created a core of wealthy nations and, on their periphery, poor or moderately poor countries, among them Mexico, as Latin American economists under the tutelage of Raúl Prebisch, the Argentine political sage, have stated time and time again.

From its inception, according to Samir Amin, whose essays on Third World economies are legendary, capitalism has been a polarizing system of dominant cores and dominated peripheries, one developed, dominant, and independent, and the other subordinate, dependent, and underdeveloped, serving the needs of the other. Economic development and underdevelopment, as Frank observed, are the opposite sides of the same coin. Or to cite Wallerstein, capitalism makes for a world of inequality: "In order to develop it needed the connivance of an international economy." European plundering of the colonial world gave birth to the chasm that stands between core countries and peripheral ones, a relationship that endures. The incorporation of former colonies into expanding world capitalism reinforced their dependency, or, as some say, their underdevelopment. The nature of capitalism, after all, rests on the exploitation of resources, both national and international, and, to cite Fernand Braudel, opportunities. Whatever its nationality, capitalism relies on legal or de facto monopolies, devised and controlled by powerful interests. Benefits seldom trickle down to the poorest of society. When searching for the roots of underdevelopment, we must understand the origins of capitalism: Europe's brigandage opened the chasm that separates core countries from peripheral ones.

Underdeveloped countries, furthermore, do not simply dwell at an earlier point on the road taken by modern industrial states, but remain entrapped in a subservient role in a world capitalist economy. At the dawn of capitalism, Westerners shaped and subordinated the economies of the peripheral world. Starting with the maritime discoveries of the fifteenth and sixteenth centuries, the mother of colonial commerce and the origin of early capital accumulation, the Europeans took it upon themselves, frequently in acts of piracy, to take what they coveted from primitive peoples unable to defend themselves. For colonials, there followed three centuries of living off exports and using the profits to buy manufactured goods, largely from English merchants.

Given these origins, Mexican society, as we shall see, found it virtually impossible to develop in an autonomous fashion. It is nonsensical to expect the historically exploited to march in tune with European phases of development. Today, the underdeveloped countries, or to use current jargon, the "developing nations," exist in a world dominated by rich nations, as well as subservient elites. As López Portillo wrote, the powerful seldom assume "responsibility for the ills of the economic system they have imposed on the world, let alone admit blame, but judge normal the negative results." Yet the ills of the underdeveloped countries, he went on, are but different aspects of what is essentially a global problem.


Excerpted from Mexico by Ramón Eduardo Ruiz. Copyright © 2010 The Regents of the University of California. Excerpted by permission of UNIVERSITY OF CALIFORNIA PRESS.
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Table of Contents

Preface xi

1 Ramblings on Mexican Underdevelopment 1

2 El Mexicano 17

3 The Legacy 33

4 Free Traders and Capitalists 53

5 Colonialism's Thumb 83

6 Lost Opportunity 104

7 Internal Market 127

8 False Miracle 147

9 Death of a Dream 180

10 NAFTA 200

Epilogue 232

Notes 241

Bibliography 265

Index 275

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