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Democracy and Privatization in Neoliberal Mexico

In 1994, Princeton sociologist Miguel Ángel Centeno published a book, Democracy Within Reason: Technocratic Revolution in Mexico. Centeno argued that Mexico’s technocratic regime under Carlos Salinas de Gortari (1988-1994) was able to implement widely unpopular privatizations due to the organization of State and bureaucratic power and international support, primarily from the United States and its large financial institutions, along with elite US academics and universities. Centeno described it as a “revolution…directed from above, by a state elite committed to the imposition of a single, exclusive policy paradigm”.

Since then, it has been claimed that Mexico made a “democratic” transition. Yet, this seems ridiculous to say, given the history of policy continuity between the PRI (Institutional Revolutionary Party) and the PAN (National Action Party) from 1988 to the present. Actually, the oil privatization currently underway is a successor policy of Salinas’ technocratic neoliberal regime. The leftist daily newspaper, La Jornada, has gone so far as to label them PRIAN for their continuing shared support of neoliberal policies. As Centeno wrote in 1994, “election results would be respected, but only as long as they supported the right candidate.”

So, even with political party competition, which is what the mainstream academic literature considers democracy, this technocratic regime remains whereby widely unpopular policies are passed without popular consultation. Rather, recent revelations by DeSmog Research Fellow Steve Horn and myself about Mexican oil privatization show that is much more likely that the US Government and transnational corporations were consulted than the Mexican demos itself. The opposition movement to oil privatization called for a popular consultation, which was simply ignored. This happened even though popular consultation is legally mandated to occur if 2% of registered voters petitions for it. That is, the people who have a sovereign interest in Mexican oil were generally excluded from the decision-making process, even when they were formally participating according to the law.

Since Mexico is a ‘democracy’, shouldn’t it be of the utmost importance that the people be consulted about a policy with as large of an impact as oil privatization? Of course, not if you are trying to force through a privatization scheme in the works for at least two decades and know what the Mexican public thinks. As Centeno points out, “the legitimacy of popular participation was accepted only as long as it would support the correct policies.” It is the same now. And what were the Mexican public’s views on oil privatization?

The Mexican Legislature’s Center for Social Studies and Public Opinion’s survey data from July 2013 gives a good picture of Mexican opinion of oil privatization 6 months before it was signed into law. For instance, the Mexican nationalist tendencies over national sovereignty of its oil resources are about economic self-determination much more so than some “pride” in PEMEX. While yes more Mexicans had a favorable opinion of PEMEX (39%; 25% were neutral), most weren’t “proud” [54%) of it. For many Mexicans, PEMEX is an organization they consider opaque (69%), corrupt (88%), and poorly operated (53%). Even so, the majority of Mexicans surveyed (54%) still were not in favor of allowing private investment. That’s even with the majority also in favor of reform (55%)! Mexicans surveyed seem to see a possible place for private investment (40%; 40% against, 20% neutral) and/or working with other companies (47-64%), but maintained (66%) that Mexican oil profits were for all Mexicans and that foreign investment was an attack on national sovereignty (55%). Mexicans get it, they know it’s ludicrous to play austerity, privatization economics with about 40% of the state’s total income and 70% of the total national budget.

Around the same time as the survey was done, the New Course for Development Group at the National Autonomous University of Mexico (UNAM), which included the economist and former Secretary of Budget and Planning, Carlos Tellez Macías and emeritus professor of economics at UNAM, Rolando Cordera, stated that “the expectation of more growth and employment from the proposed changes overlook the economic dynamics from strengthening production.” They went on to state that “for fiscal ends it is extremely risky to adventure a reform under conditions of such high uncertainty and insufficient calculation about possible benefits.” These recommendations were also ignored, because as Centeno points out about technocratic regimes, “discussion was welcomed, but only within preset constraints and assumptions.” Analysis for creating alternative proposals that could lead to a debate in a public and transparent way based on merits is far outside the bounds of the manufactured consent preferred by neoliberal technocrats.

In Mexico, democracy is then little more than a buzzword, a normative signifier to legitimize the current order as representative of the people. In reality, economic and political elites override popular will. Understanding how economic and political elites trump democracy is crucial not just for Mexico, but internationally. Negating democracy is part of what in sociology we call a general trend, and it is a long-term global neoliberal trend in which the “market” overrides any intervention by the demos. The Cornell development sociologist, Philip McMichael, considers this trend beginning in the 1970s and continuing to the present. Think of Pinochet’s Chile, where a “free market” economy was installed under the iron hand of dictatorship. Think of Greece’s referendum on the Troika blackmail, where the ‘No’ vote won, and still the Greek population was forced by SYRIZA to accept a deal. Think of 8.7 billion dollars cut from food stamps in the US, while corporations have seen some of their highest profits following massive federal bailouts.

All around the world, formal democracy has become a farce spectacle masking the socioeconomic tragedy of endemic deprivation caused by austerity politics. Mexico’s oil privatization is just another case study in how it works.