NAFTA’s Road to Ruin: The Decline of the Mexican Social Compact, Part II

August 25, 2008

This is the second of two reports on the decline of Mexico’s “social compact”-—that is, the understanding among citizens and the state that they are bound by ties of mutual support and by networks of social solidarity. Part I examined the threat to the social compact posed by the persistence of impunity—the practice of Mexican politicians, elites, and other social actors to place themselves above or outside the law. Part II focuses on neoliberalism, embodied in the North American Free Trade Agreement (NAFTA), as a socio-political program that has cut back on social protections, removed barriers to the flows of transnational capital, and, most importantly, denied the possibility of a social compact in a world of individuals, all “freely” pursuing their own self-interest.

Neoliberalism reflects a utopian belief in a single world economy in which the most important actors are sovereign private investors, unregulated by any sovereign states. Its advocates in Mexico hope that it will draw more foreign investment to the country by privatizing as much of the energy sector as possible (see cartoonist El Fisgón’s contribution to this Report), breaking up the private near-monopoly of the telecommunications sector, and making labor markets more “flexible,” i.e., breaking what’s left of independent union power and doing away with as many labor protections as possible.

For a majority of Mexicans, many who have left the country in order to support their families and communities back home, the policy of free trade has been nothing short of ruinous. Increasingly, Mexican entrepreneurs and workers alike find themselves enmeshed in a web of global relationships that seem to be beyond their control. In market relationships, as we know, some economic actors are “more equal” than others, and in the NAFTA relationship, as Sergio Zermeño reminds us, “the very low subsidized prices of U.S. agricultural output were meant only to influence the fall in prices for staple goods produced [in Mexico] by small- and medium-size farmers, and essentially drive those farmers out of business.” And this is what has happened.

And what’s the upshot of all this? Silvia Gómez Tagle tells us that the globalization of de facto power has led to a decline of “political citizenship” and the rise of a political culture “characterized by widespread apathy and disappointment.” This, she argues, is because citizens “know that their governments are generally in a less favorable position to make decisions regarding their resources.”

“People live defensively,” comments labor leader Benedicto Martínez in an interview with NACLA, “trying to figure out how to earn enough to live on, how to complement their wages.” Echoing Gómez Tagle’s call for a more active civil society, he argues that the situation can only be challenged from the grass roots, and that the grass roots must be transnational. “I think that’s the only alternative we really have,” he tells us. “We have a situation now where these big companies blackmail workers in various countries. They say to workers in the United States, for example, if you don’t accept the conditions we are offering you, we will simply move to another country. That’s what we have here as well.”

Ominously, in order to effectively defend the regime of investors’ rights, the Mexican state has become increasingly militarized, and the military itself has been strengthened. Laura Carlsen reports on the Security and Prosperity Partnership, negotiated by the presidents of the United States, Mexico, and Canada in 2005. The official description of the SPP states that it is “based on the principle that our prosperity is dependent on our security.” Its unofficial description might be “NAFTA on steroids.” Mexicans and other Latin Americans, Carlsen says, have learned that adopting the U.S.-promoted neoliberal economic model—with its economic displacement and social cutbacks—comes with a necessary degree of force. And so we get the whole package: Military policy enforces as free trade policies exclude and divide.


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