CHAPTER 2
In terms of our collective well-being, the politics of pillage has been an unmitigated disaster. In economic and social affairs, we’ve been regressing instead of moving forward. But this is hardly surprising: the model itself is designed to favor a small minority of corrupt politicians and white collar criminals. The model does not seek to meet the needs of the people, or to avoid violence and conflict; it seeks neither to govern openly nor honestly. It seeks to monopolize the bureaucratic apparatus and transfer public goods to private hands, making claims that this will somehow bring about prosperity.
The result: monstrous economic and social inequality. Mexico is one of the countries with the greatest disparities between wealth and poverty in the world. According to a 2015 article written by Gerardo Esquivel, a professor at the College of Mexico and a Harvard graduate, 10 percent of Mexicans control 64.4 percent of the national income, and 1 percent own 21 percent of the country’s wealth. But most significantly, inequality in Mexico deepened precisely during the neoliberal period. Privatization allowed it to thrive.
It’s also important to make note of the following statistic: in July 1988, when Carlos Salinas was imposed as president on the Mexican people through electoral fraud, only one Mexican family sat on the Forbes list of the world’s richest people—the Garza Sada family, with $2 billion to their name. By the end of Salinas’s term in office, twenty-four Mexicans had joined the list, owning a combined total of US$44.1 billion. Nearly all had made off with companies, mines, and banks belonging to the people of Mexico. In 1988, Mexico sat at 26th place on a list of countries with the most billionaires; by 1994, Mexico was in fourth place, just beneath the United States, Japan, and Germany.
The starkest proof of soaring inequality in the neoliberal period is provided by the same financial institutions that have promoted this model. That’s why it’s useful to take a look at the graphic that Esquivel presents in his study, with numbers from the World Bank and the Organisation for Economic Co-operation and Development (OECD).
As is readily observed, economic inequality today is greater than it was in the 1980s, and perhaps greater than the periods before, though a lack of accurate records makes such comparisons difficult. Although Esquivel doesn’t highlight it, in the graphic we see the extent to which inequality skyrocketed during Salinas’s term, when the transfer of public goods to private hands was at its most intense. Under Salinas, the divide between rich and poor deepened like never before. Salinas is the godfather of modern inequality in Mexico.
It’s clear, then, that privatization is not the panacea that its proponents would have us believe. If it were, beneficial effects would by now be visible. At this juncture it’s fair to ask neoliberalism’s supporters: How have Mexicans benefited from the privatization of the telecommunications system? Is it a mere coincidence that, in terms of price and quality, both phone and internet service in Mexico rank 70th worldwide, far below other members of the OECD? What social benefits has the media monopoly conferred—other than to its direct beneficiaries, who have amassed tremendous wealth in exchange for protecting the corrupt regime, through brazenly slanted coverage of opposition candidates? What have we gained through the privatization of Ferrocarriles Nacionales7 in 1995, if twenty-two years later these outside investors haven’t built new train lines, and can charge whatever they want for transport? How have we benefited from the leasing out of 240 million acres, 40 percent of the country (Mexico has 482 million acres total) for the extraction of gold, silver, and copper? Mexican miners earn, on average, sixteen times less than those in the United States and Canada. Companies in this field have extracted in five short years as much gold and silver as the Spanish Empire took in three centuries. Most outrageously, up until recently they were extracting these minerals untaxed. In short, we are living through the greatest pillage of natural resources in Mexico’s history.