mexico:( - uky.edu
TRANSCRIPT
Mexico:
Industrializa3on, economy, neoliberalism
Background factor: Income inequality
No income for Mexicans = no ‘effec3ve demand’, no economic s3mulus
Current Gini Coefficient = .45 (aJer taxes, transfers)
Everything else, all other strategies, constrained by income inequality
Stimulate economic activity: methods I. cheapen labor? How?
depress real wages:¿What is a 'real' wage?? II. cheap food? how? (agrarian question)
i. foodimport ii. capitalize food production (irrigation/
mechanization, green revolution) iii. squeeze peasants
III. gov’t subsidized housing / cheap housing IV. depress nominal wages
Paths of industrialization
Newly industrializing countries (e.g. Mexico, S. Korea, Taiwan, Brazil) typically combine the following development strategies:
primary commodity industrialization (PCI)
(Resource rich countries Resource poor countries)
b. Primary ISI Primary EOI
c. Secondary ISI Secondary EOI
South Korea d. market broadening (new products) and
deepening (backwards/forwards linkages creation)
Mexico’s historic path: Primary CI >>Primary ISI>>Secondary ISI>>Secondary EOI
ISI= Import Substitution Industrialization:"replacement of imported goods with nationally produced goods
EOI= Export-oriented industrialization:"production of goods for export markets
"a. high tariffs b. state subsidies to heavy industry c. tendency (consumer politics) to overvalued currency
"a. low tariffs b. state subsidies to export industries c. tendency (producer politics) to undervalued currency"
ISI reaches point of exhaustion Economic problem = political problem
i. anti-agricultural bias: agriculture subsidizes industrial growth, decline in agriculture results for both subsistence and agro-export sectors
ii. incorporation of ‘elite’ workers into development coalition fuels disarticulated nature of accumulation
a. economic inequality ≠ back to disarticulated accumulation
b. political inequality, lack of political channels through which to challenge economic marginalization
iii. lack of market widening dooms ISI: too small a base iv. tariffs allow ISI, but fail to stimulate competitiveness
lack of market widening dooms ISI: too small a base Case study: San Mateo Atenco i. US closes na3onal shoe industry ii. Mexico produces lots of great, high-‐quality leather shoes iii. US imports shoes from Brazil instead! iv. Doomed by currency overvalua3on and lack of
government aVen3on to sector
incorporation of ‘elite’ workers into development coalition fuels disarticulated nature of accumulation