• 1 This article was enriched with comments and suggestions from the discussant and other participants (...)

1At the turn of the 20th century, Mexico experienced a social revolution that established a regime blending classic liberal republican institutions with quasi-socialist principles.1 Indeed, collective land ownership, a strong protection of workers’ rights, state-led economic growth and public education (even constitutionally “socialist” for a while) were among the pillars sustaining the new regime.

• 2 For example, Stephen Clarkson, who thinks of NAFTA as North America’s “supranational constitution”  (...)

4A defining moment in this process was the government’s decision to liberalize trade and investment with the United States and Canada in the early 1990s. Indeed, the adoption of the North American Free Trade Agreement (NAFTA) meant not only that Mexico’s economy would be from then on latched onto its North American partners, but it also launched a process of massive ideological realignment in the country. These top-down, systemic pressures did much more than “locking in” a specific brand of public policies, as other authors2 have argued; they indeed created a new ideological landscape in Mexico, bringing the country closer to ideologies predominant in the United States.

• 3 Escalante Gonzalbo, Fernando, Historia mínima del neoliberalismo, Mexico City, El Colegio de México (...)

9The term “neoliberalism” was born in specific historical circumstances.3 In August 1938, a group of European intellectuals met in Paris to discuss the French translation of Walter Lippmann’s book The Good Society. In attendance were people who would leave their mark in the global development of ideas, like Lippman himself, Raymond Aron, Alexander Rüstow, Friedrich Von Hayek and Ludwig Von Mises. They gave themselves the task of rethinking liberalism to adapt it to the new global conditions.

• 4 Van Horn, Rob and Philip Mirowski, “The Rise of the Chicago School of Economics and the Birth of Ne (...)

10Rüstow proposed the name that the group of intellectuals would embrace to define their new ideas: neoliberalism. By that they meant that the old laissez faire liberalism was no longer enough to defend human freedom. They acknowledged that the liberal order in a society is not spontaneous, but the result of the deliberate actions carried out by the state. Law creates the framework where freedom is possible. This includes markets, which have to be created with state regulations and law enforcement; adapting institutions to the emergence of new conditions. Neo-liberals do not believe that the proverbial invisible hand makes markets appear spontaneously, they have instead to be crafted through regulation that fosters competition.4

• 6 Peters, Guy, Comparative Politics. Theory and Method, New York City, New York University Press, 199 (...)

18Historical approaches rightfully insist on the fact that expressions of the political right vary enormously in time and space. What is to be considered right wing, they stress, depends on the country and the historical period when the analysis is made; so it is safer to speak of this ideology in the plural: political rights. However, while this approach is valid for the detailed study of discrete right-wing cases, circumscribed by space and time, it is clearly not adequate for the purposes of developing theory. Comparisons are necessary to build theory, to allow social scientists make statements about processes and structures beyond single cases of study or small groups of them.6

• 7 Alain Noël and Jean-Philippe Thérien, Left and Right in Global Politics, Cambridge, Cambridge Unive (...)

20If, for comparative purposes, we wish to avoid the trap of relativism – that is, we know what is right only in reference to something else – we need to come up with a comprehensive definition. Alain Noël and Jean-Philippe Thérien build on D. D. Raphael’s distinction of common contrasting ideas of distributive justice: one that stresses merit and deservingness, another insisting on equal worth and needs.7 This is the basic distinction between the right and the left: even if both ideological syndromes declare their support to the idea of equality, whereas the right understands the term as the opportunity given to each individual to prove her value and reap the benefits of her salience, the left sees equality as the substantive result of social interaction, to which every human being has the right to enjoy.

• 8 Mirowski, Philip and Dieter Plehwe, eds., The Road from Mont Pèlerin. The Making of the Neoliberal (...)

24Mexico’s political right is one of the few in the world that can brag about having a direct connection with the very creators of global neoliberalism. Indeed, since the early 1940s two prominent members of the Austrian School of economic thought, Ludwig Von Mises and Friedrich Von Hayek, visited Mexico and left a lasting imprint on academia and business organizations. As it is well known and documented, Mises and Hayek would later be among the founding members of the Mont Pèlerin Society (MPS) in April 1947, the thought collective that is universally acknowledged as the seed of global neoliberal doctrine.8

• 9 Romero Sotelo, María Eugenia, “The Origins of Economic Orthodoxy in Mexico” in Perrotta, Cosimo and (...)
• 10 Romero Sotelo, “The Origins…”, p. 125.

25Mises visited Mexico for the first time in January and February 1942, invited by Mexican economist Luis Montes de Oca.9 Montes de Oca had occupied important positions in Mexico’s federal government: Auditor General in 1924, Secretary of Finance from 1927 to 1932, and director of the Bank of Mexico from 1935 until his retirement from public administration in 1940. The following year, he participated with other investors in the foundation of a private bank, Banco Internacional. He was known as a staunch opponent of state intervention in economic matters, especially economic planning, and avid reader of both Mises’ and Hayek’s works. It is likely that he introduced the ideas of the Austrian School to Mexico’s economic and political elite circles.10

• 11 Mises, Ludwig Von, “Ideas sobre la política económica de la posguerra”, Cuadernos Americanos no. 4, (...)
• 12 Mises, Ludwig Von, Problemas económicos de México. Ayer y hoy, Mexico City, Instituto Cultural Ludw (...)
• 13 Mises, Problemas económicos…, p. 13. Author’s translation.

29Mises’ intellectual interest in Mexico would go further. Later that year, he penned an article that was published in the recently created journal Cuadernos Americanos.11 The following year, he expanded his ideas in a book-long essay he entitled “Economic Problems in Mexico”. The essay was left unpublished for over half a century, until Mises’ disciple and curator of his library Bettina Bien Greaves discovered the manuscript in April 1997. The essay was translated and published in Spanish the following year.12 In it, Mises develops a critique of the economic policy adopted by the Mexican government, from a neoliberal perspective of course. He wrote: “The only way to improve Mexico’s economic situation is through economic liberalism, that is, a policy of laissez faire… What Mexico needs is economic freedom”.13

• 14 Plehwe, Dieter, “The Origins of the Neoliberal Economic Development Discourse” in Mirowski and Pleh (...)

31Mises’ interest in Mexico also had another crucial intellectual repercussion. During the 4th MPS conference held in Beauvallon, France, in 1951, a panel on “Liberalism and the Underdeveloped Countries” was included in the program. The topic, which was quite novel at the time, was personally proposed by Mises; and formally launched the interest in applying neoliberal principles to face the challenges of development among the core founders of the movement.14

• 15 Romero Sotelo, “The Origins…”, p. 127.

32Mises’ visit also had institutional consequences. Montes de Oca proposed the creation of an International Institute of Social Sciences, under the direction of Mises himself. Furthermore, he asked him to suggest potential faculty members for the Institute. Mises obliged, suggesting five names of possible candidates and, this time, he accepted the prospect of employment in Mexico for himself. However, the stumbling block for the implementation of this project was the hefthy salaries that Mises suggested for himself and his potential colleagues.15

• 17 Romero Sotelo, “The Origins…”, p. 153-154.

36Mises joined Hayek some days later, and they travelled together to the cities of Guadalajara and Monterrey, where Mises delivered more talks. In a dinner hosted by Mexico City’s Rotary Club, Mises expressed that the only way that Mexico would accumulate the capital it badly needed was by adopting free trade, to allow for the mobility of capital and goods and the flow of foreign investment. Later on, addressing a gathering of ABM members in Monterrey, Mises stressed the interdependence existing between Mexican and US economies; noting that far from being negative, it was a fact of life that Mexico should take advantage of.17 In so doing, Mises was in fact anticipating the analysis and policies that would bring about the predominance of neoliberalism in Mexico… half a century before they were actually discussed and adopted with NAFTA.

• 18 This is the view expressed by expert on the study of neoliberalism María Eugenia Romero Sotelo, int (...)

38The seed planted early in Mexico by the Austrian School and its supporters would take some time to mature. For decades it seemed forgotten, insignificant, almost irrelevant for public debate. But its proponents were patiently working, thinking long term for the achievement of their goals;18 as I will discuss in what follows

• 19 The revolutionary party was known as Partido Nacional Revolucionario (PNR) from its creation in 192 (...)

40All these radical measures scared business and liberal-leaning circles in society. A right-of-centre political party was created in 1939: Partido Acción Nacional (PAN), as an electoral alternative to the party that resulted from the triumphant revolution.19

• 20 Interview with Carolina R. de Bolívar, Mexico City, May 12, 2016.

46ICUMI was Carolina R. de Bolívar’s brainchild. Alarmed by government actions in 1982, Ms. Bolívar decided to create an organization to spread out the ideas of the Austrian School, which she grew fond of through her training at Universidad Anáhuac (a Mexican private university).20 She was advised and supported by Anthony Fisher, founder of the London-based, neoliberal Institute of Economic Affairs (IEA). Rather modest at its origins, ICUMI would eventually become a major hub linking advocates of neoliberalism, Mexican and foreign, with civil society and government officials.

• 21 Interview with Bolívar.

50ICUMI was able to create what Ms. Bolívar describes as a “coattail effect”: the Institute prestige rode on the coattails of the big names they invited, and was able to pique the interest of mainstream media by making “trendy” the discussion of neoliberal themes.21

• 22 MacLeod, Dag, Downsizing the State : Privatization and the Limits of Neoliberal Reform in Mexico, U (...)

53Given the acute economic emergency Mexico went through in 1982, when a new president was sworn in December that year he opted for important changes in economic policy. Beginning in 1983, under the helm of president Miguel de la Madrid, the Mexican government started implementing one of the most extensive programs of market-oriented reforms in the developing world.22 Market reforms included an austerity program, drastically reducing public spending, and privatization of several public companies. In 1984, after decades of snubbing the global trade regime, Mexico finally joins GATT.

• 23 Babb, Sarah, Proyecto : México. Los economistas del nacionalismo al neoliberalismo, Mexico City, Fo (...)

54A common explanation for these reforms, usually found in the literature, is that the government was forced to change course under the pressure of powerful external actors. It is true that given the massive public debt the government had to accept stark conditions from international financial institutions to have its payment restructured. But this pressure does not explain the depth and persistence of the neoliberal program in Mexico, long after the emergency situation disappeared and when no pressure from the international financial institutions was exerted. A more accurate explanation will look at the convergence of the decades-long business elite and grassroots activity described above with the changes in leadership within the country’s ruling elite.23

• 24 Tavira, Alberto, Los Salinas. Retratos de los cachorros del poder, Mexico City, Planeta Mexicana, 2 (...)

56Carlos Salinas de Gortari, Mexico’s president from 1988 to 1994, was that person. He became president after a bitterly contested electoral showdown; which casts a serious shadow of doubt over his victory. He is a member of the political elite that promoted revolutionary nationalism. Son of then senator Raúl Salinas Lozano, his father had also been Secretary of Industry and Trade, and ambassador to the Soviet Union; and lifetime PRI loyalist.24

• 25 Carolina R. de Bolívar, founder of neoliberal ICUMI, thinks highly of Salinas : “He did understand” (...)

57Carlos Salinas also was trained as economist at Harvard University. From the summit of political power in Mexico, taking advantage of the extraordinary powers afforded to Mexican presidents at the time, Salinas thus proposed a new paradigm to face the country’s economic challenges, a paradigm that was heavily influenced by neoliberal tenets.25

• 26 Cypher, James and Raúl Delgado Wise, Mexico’s Economic Dilemma : The Developmental Failure of Neoli (...)
• 27 Harvey, A Brief History… ; p. 54 ; MacLeod, Downsizing the State...
• 28 Rousseau, Isabelle, “Las nuevas élites y su proyecto modernizador” in Servín, Elisa, ed., Del nacio (...)
• 29 Rodríguez Araujo, Octavio, “The Emergence and Entrenchment of a New Political Regime in Mexico” in (...)

58James Cypher and Raúl Delgado Wise have discussed the central role that orthodox economists trained in the United States have played in the promotion of neoliberalism in Mexico.26 They formed the core of the ascending technocracy within Mexico’s federal government. Salinas spearheaded control of public administration by professionals trained in US research universities, dominated by neoliberal thought.27 From the moment he was appointed Secretary of Planning and Budget in 1982 (SPP is the Spanish acronym of this department), he created a tight team of officials who shared his overview,28 they would together transform Mexico into a country where the neoliberal paradigm reigned supreme. Outstanding members of that team were Jaime Serra Puche, Secretary of Trade and Industrial Development in his government; Pedro Aspe Armella, Secretary of Finance, and Herminio Blanco, chief negotiator for NAFTA. All of these officials had completed graduate studies in economics at US institutions where orthodox approaches prevail: Harvard (Salinas), Yale (Serra), MIT (Aspe), Chicago (Blanco).29 Aspe had in fact also obtained a bachelor's degree in economics from ITAM, before completing a doctorate in economics at MIT.

• 30 Babb, Sarah, Proyecto : México. Los economistas del nacionalismo al neoliberalismo, Mexico City : F (...)
• 31 Salas-Porras, Alejandra, “Las élites neoliberales en México : ¿cómo se construye un campo de poder (...)

59In fact, throughout the Salinas’ years, ITAM acquired unprecedented importance as think tank and recruiting centre for government-sponsored neoliberalism. From the 1970s on, the Institute had adopted a curriculum that closely mirrored the main trends of teaching and research in economics preaviling in the United States, at the Univesity of Chicago in particular: neoclassic, theoretical, quantitative; neoliberal in one word. It reflected the expectations of the ascending technocracy, in a way that other traditional schools of economics in Mexico could not, and ITAM graduates started being hired in droves. Besides Aspe, other ITAM graduates were eventually called to play important roles in policy making: Francisco Gil Díaz, Antonio Sánchez Gochicoa, Fernando Sánchez Ugarte, Miguel Mancera Aguayo, Agustín Carstens, Luis Téllez Kuenzler, Jesús Reyes Heroles, Jacques Rogozinski, Santiago Levy Algazi, Jaime Zabludosky, Luis Videgaray Caso, Armando Pérez Gea, Emilio Lozoya Austin, Raúl Livas Elizondo, José Antonio Meade, Enrique Ochoa Reza.30 Indeed, 14 out 22 “key officials” forming the neoliberal elite in Mexico got their inital training in economics at ITAM (and 20 out of those 22 pursued graduate studies in US universities).31 After forty years of existence, then, the neoliberal academic institution would finally reach the goal that its founders had defined: educate the people who would lead the private and public centres of power in Mexico.

• 32 Castro Rea, Julián, La démocratisation du Mexique. Diagnostic et potentiel, PhD dissertation, Unive (...)
• 33 The official figures for that election are 50.74 % of the vote for Salinas, 31.06 % for Cárdenas. A (...)

60It would be simplistic to think of Salinas only as a traitor to his party. Of course, he met resistance within the party and even had to cope with open dissidence. As early as August 1986, a group of prominent PRI members started organizing a movement to oppose the first neoliberal reforms promoted by president De la Madrid. The group gave to itself the name Corriente Democrática (Democratic Current, CD), as they were promoting internal democracy for the selection of candidates and the definition of party platform, as a way of bringing the party back to its nationalist roots. Gradually marginalized by the party’s official leadership, the CD chose nonetheless an independent candidate, Cuauhtémoc Cárdenas, who opposed Salinas’ official candidacy head on in the 1988 elections, accusing him of betraying the principles of the Mexican revolution.32 Cárdenas, supported also by several minor opposition parties, was able to challenge the PRI hegemony as no other candidate had done so before; even claiming that he had actually won that year’s presidential election but suffered from massive electoral fraud.33

• 34 Rousseau, “Las nuevas élites…”, p. 266.
• 35 Dresser, Denise, Neopopulist Solutions to Neoliberal Problems : Mexico’s National Solidarity Progra (...)

61However, in the end he managed to prevail, with the support of a substantial majority of leaders and militants within his party. He then played the role of a hinge between revolutionary nationalism and neoliberalism; he even gave a name to his rhetorical and pragmatic synthesis: “social liberalism”.34 He would make efficient use of the revolutionary rhetoric and the corporatist mechanisms put in place by his party to implement a full program of neoliberal reforms in the country. This political leverage became crucial for the reforms’ success, to the point where, paradoxically, neoliberalism woud have had a hard time being established in Mexico without the political mechanisms created by its main ideological opponent, revolutionary nationalism.35

• 36 Salas-Porras, Alejandra, “La red de centros de pensamiento en América del Norte : ¿cómo se construy (...)

64The crown jewel of the neoliberal revolution was, no doubt, NAFTA. Concluding a trade liberalization agreement with the United States and Canada became the top priority of the Salinas administration for four full years, from early 1990 to late 1993. The reason is, of course, that such agreement would lock in the major neoliberal reforms operated during the Salinas years, as an open market approach would become a legal commitment for the Mexican state, thereby tying the hands of future governments to the pursuit of the neoliberal agenda. In order to achieve this goal, Salinas also resorted to the tried-and-tested mechanisms of presidential domination at the time: manipulation of legislatures, selection and exclusion of actors involved in the negotiation, manufactured consensus in the media, etc.He also directed his administration to orchestrate a vast public relations campaign to promote NAFTA in the United States, in alliance with a network of conservative think tanks based mostly in that country but also in Mexico.36

• 37 See for instance Basualdo, Eduardo and Enrique Arceo, comps., Neoliberalismo y sectores dominantes  (...)

66After Salinas, neoliberalism reigned triumphant over public administration. It did not matter that by then critics were well aware of the consequences of the implementation of the neoliberal agenda over public policy and the country’s more vulnerable population.37 The economic doctrine was well entrenched at the top of political power in Mexico, paradoxically making use of the state control mechanisms that neoliberals theoretically condemned.

• 38 Castro-Rea, Julián, « Requiem pour l’État révolutionnaire : l’influence de l’ALÉNA sur la réforme d (...)

67Subsequent governments pursued new waves of neoliberal reforms, including labour and fiscal reform. Roads and railways were mostly privatized, as well as the delivery of quality services such as education, healthcare, and social security. The process culminated with privatization of the energy industry in 2013, up to that point reserved to the public sector by revolutionary nationalist legislation; so important for public finances and economic policy that even Salinas defended the state monopoly during NAFTA negotiations.38 Some highlights of the process of neoliberal entrenchment will be offered in what follows.

• 39 Montalvo Ortega, Enrique, Neoliberalismo : la dictadura (realmente) perfecta, Mexco City : Ariel-IN (...)

69Zedillo decided the creation of Fondo Bancario para la Protección del Ahorro (FOBAPROA). Despite the name, the main goal of this public fund was to rescue and capitalize the recently privatized banks, who were on the brink of collapsing under the financial crisis and had fallen prey to mismanagement and corruption. Over $ 100 billion US dollars of public funds were transferred to the banks; part of this amount was borrowed by the government and, paradoxically, interests for servicing this debt were paid to the same banks who were being rescued.39

• 40 Mexico, Instituto Nacional Electoral. [Online] consulted May 27, 2016. URL : http://www.ine.mx/docu (...)

73The same pattern was repeated during the second consecutive PAN government. The party’s candidate Felipe Calderón won the elections by a very narrow margin of 0.58% of the total vote,40 and became president in late 2006.

• 41 Delgado, Álvaro, El amasiato. El pacto secreto Peña-Calderón y otras traiciones panistas, Mexico Ci (...)

74An investigative report recently published puts forward the hypothesis that Calderón won thanks to an alleged bipartisan pact, that would ensure some PRI’s support to PAN’s candidate for the sake of continuity of the neoliberal project. This way, the two parties excluded alternative economic policy programs; chief among them the one presented by the candidate of the left that came in a close second place, Andrés Manuel López Obrador. The pact included that in the following presidential elections, held in 2012, Calderón would support PRI’s candidate, to allow for party alternance while ensuring the supremacy of the bipartisan alliance favourable to neoliberalism.41 PRI’s return to power that year, and the permanence of the neoliberal program, may seem to confirm the accuracy of this interpretation.

• 42 Salas-Porras, Alejandra, “La red de centros de pensamiento…”, p. 126-146.
• 43 [Online] Consulted May 27, 2016. URL : http://www.caminosdelalibertad.com

75Therefore, predominance of neoliberalism is ensured at the federal government level. It is supported by continued civil society activism, mostly funded by business interests as it was in the 1940s. The network of think tanks that supported NAFTA from its inception keeps active, consistently defending the agreement’s achievement on a regular basis, even when those achievements fall short of the original promises made by its promoters.42 New actors have also joined the fray, such as the global network Caminos de la libertad, led and apparently funded by television magnate Ricardo Salinas Pliego, owner of TV Azteca, the second largest private broadcaster in Mexico.43 Membership to this network includes the most notable neoliberal and right-wing institutions in the Americas, as well as some selected European countries.

• 44 Salas-Porras, “Las élites neoliberales…”

76Neoliberalism reigns supreme in Mexico today. A project that started as a theoretical, almost philosophical, proposition seventy years ago has become an ideological driving force for public policy in this country. More alarmingly, it has also become the cover for the appropriation of public funds in private hands… private hands that are often the same of public officials that brought in neoliberal reforms, hiding behind other names and/or the respectability of private enterprise.44

• 45 Salas-Porras, “Las élites neoliberales…, p. 310.
• 46 Mexico is neither the only country in Latin America “exporting” neoliberal expertise, nor the one w (...)

77Neoliberalism is so well entrenched in Mexico today that the country has made important contributions to the cadres of international financial institutions, bastions of neoliberalism: Ernesto Zedillo (ONU-UNCTAD), Pedro Aspe (North America’s Security and Prosperity Partnership), José Ángel Gurría (OECD, Center for Global Development, Foro Iberoamericano), Guillermo Ortiz (BPI), Jacques Rogozinski (BID), Santiago Levy (BID), Agustín Carstens (IMF, World Bank), Emilio Lozoya (BID, Corporación Interamericana de Inversiones)45 In Mexico, neoliberalism is not only a public policy fad, it has also become an export product.46

• 47 Bonfil Batalla, Guillermo, México profundo. Una civilización negada, Mexico City, Grijalbo, 1987.

78Neoliberalism is the last iteration of modernization projects attempted in Mexico ever since this country became a European colony five hundred years ago. With no exception, modernization projects have in common that they have ignored the real Mexico, the one Guillermo Bonfil Batalla calls “deep Mexico”.47 Neoliberalism is part of “imaginary Mexico”, inspired from abroad, based on alien cultural assumptions, yet sitting on the side of insitutional political power. Mexico’s history boils down to a permanent clash between modernizers, who wish the country to imitate the Western world, and those who resist this imposition and keep practising Mexico’s ancestral ways.