Since 2006, more than 100,000 people have been disappeared or killed in Mexico, a country where more than 90 percent of crimes go unpunished. While running for president in 2012, Enrique Peña Nieto promised a new security strategy for the country, and an end to the highly militarized campaign waged by his predecessor, Felipe Calderón. Since taking office, however, Peña Nieto’s strategy has focused not on the safety of its people but on the confidence of its international investors. To make Mexico more attractive to overseas capital, he has pursued a market-based reform agenda that includes a technocratic overhaul of education, a move to shake up the telecommunications sector and the opening of the energy sector to foreign private investment. New narratives about the “Aztec Tiger” won’t make the kidnappings, beheadings and mass graves disappear, but Peña Nieto is doing everything he can to make foreign investors forget about them.
The irony of touting market-based reforms as a means of sweeping the drug trade under the rug is that the cartels themselves have become some of the most ruthlessly effective multinational capitalist enterprises in Mexico. The cartels are beginning to diversify, making money not just from drugs and other criminal activities like kidnapping and human trafficking but increasingly from control over industries like mining, logging and shipping.
Meanwhile, finance and real estate sectors in Mexico and the United States are awash with cartel profits, with one United Nations analyst arguing that drug money was the “only liquid investment capital” that kept the international economy from completely imploding in 2008. Over the last few decades Mexican capitalism has become a tangled web of legal and illegal activity, and the distinctions between licit and illicit economies have become increasingly blurred. The policies of the Mexican and US governments are only accelerating this trend.
There are two separate but deeply connected histories that have created the situation in Mexico today: first, the neoliberal restructuring of the economy that began in the 1980s; and second, the rise of the drug trade and the cartels that control it. Squarely at the center of both stories has been the Mexican state, whose corruption, incompetence and often contradictory policy choices (in tandem with those of the United States) have served to create vast sums of wealth for a few, while heightening insecurity for Mexico’s working people. When we talk about the drug trade, we are talking about a deeply entrenched part of contemporary capitalism in Mexico, not its undoing.
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The restructuring of the Mexican economy in the 1980s occurred as the policy of inward-looking, state-led industrial development pursued by Mexico from the 1940s through the 1970s came to a spectacular end with the 1982 debt crisis. A structural adjustment agreement negotiated with the International Monetary Fund required Mexico to devalue the peso, slash government subsidies, cut funding for social programs and privatize hundreds of state-owned enterprises in return for the refinancing of Mexico’s debt.
Then, Carlos Salinas de Gortari, who came to power in a 1988 election widely regarded as fraudulent, moved Mexico from a policy of temporary austerity to one of permanent state restructuring. He amended the constitution to allow for the private sale of communal lands known as ejidos, deregulated the telecom sector, denationalized the banks and, most importantly, reoriented Mexican industry toward the export sector, negotiating of the North American Free Trade Agreement (NAFTA) with the United States and Canada.
Salinas promised that NAFTA would lift Mexicans out of poverty by creating new manufacturing jobs and famously argued that the agreement would create a Mexico that exported goods rather than people. Mexico would become part of the first world, Salinas proclaimed, and to prove it, he oversaw the country’s entry into the OECD, the club for the world’s leading industrial nations.