Download A farewell to urban/rural bias: peripheral finance capitalism in Mexico

ELFUTURODELAALIMENTACIÓNYRETOSDELA
AGRICULTURAPARAELSIGLOXXI:
Debatessobrequién,cómoyconquéimplicacionessociales,económicasy
ecológicasalimentaráelmundo.
THEFUTUREOFFOODANDCHALLENGESFOR
AGRICULTUREINTHE21stCENTURY:
Debatesaboutwho,howandwithwhatsocial,economicandecological
implicationswewillfeedtheworld.
ELIKADURARENETORKIZUNAETANEKAZARITZAREN
ERRONKAKXXI.MENDERAKO:
Munduanork,nolaetazer-nolakoinplikaziosozial,ekonomikoetaekologikorekin
elikatukoduenizangodaeztabaidagaia
Afarewelltourban/ruralbias:peripheral
financecapitalisminMexico
NadineReis
Paper#6
Apirila–Abril–April
24,25,26
2017
www.elikadura21.eus
Afarewelltourban/ruralbias:peripheralfinance
capitalisminMexico
NadineReis
BasedonadiscussionofthestructuraltransformationoftheMexicaneconomy,
thispaperinvestigatestheimpactoffinancializationonagriculture’srolein
capitalistdevelopment.Itarguesthatunderfinance-ledaccumulation,the
national-levelrural/urbanandagriculture/industrydistinctionshaveceasedtobe
adequateconceptsforexplainingthehistoricalpathofcapitalistdevelopmentin
theperiphery.Financecapitalisindifferenttothesedistinctionsonanational
scale,becauseaccumulationworksthroughwealthextractionfromlabouratlarge
bytransnationalfinancecapital.Ratherthanurban/ruralbias,themainproblem
infinancializedcountriesoftheperipherytodayis‘financebias’.Amajor
contradictionofthecurrentaccumulationsystemdoesnotonlystemfromthe
increasedrelevanceof‘functionaldualism’,butalsofromthefinancingofcheap
food/cheaplabourthroughrisingdebt.
Keywords:financialization;urban-rurallinks;Mexico
1. Introduction
Thequestionofagriculture’sroleintheeconomicdevelopmentofacountry,and
thequestionoflinksbetweenruralandurbandevelopment,areamongtheoldest
andmostcontroversiallydebatedissuesofdevelopmenttheory.Atthecoreofthe
debateinagrarianstudieswaswhatBernsteincalledthe‘agrarianquestionof
capital’,focusingon“thetransitiontocapitalisminwhichtwodefinitive
(“stylized”)classesofpre-capitalistagrariansocialformations(“feudalism”)–
namelypredatorylandedpropertyandthepeasantry–aretransformed
(displaced,“eliminated”),bytheemergenceofcapitalistsocialrelationsof
production,inturnthebasisofanunprecedenteddevelopmentoftheproductive
forcesinfarming”(Bernstein2006,450).Foralongtimethroughoutthe20th
century,thisquestionwascentralsinceitwasassumedoratleasthopedthatif
onlyitwassolved,thiswouldinaquasi-automaticmannerleadnationalsocieties
intoasituationwhereeconomicdevelopmentwouldsortitselfoutthroughthe
developmentoftheproductiveforces.Hence,thedefeatofthepredatorylanded
classthroughlandreformsandtheestablishmentofbourgeoispropertyrightsin
landwereonthetopoftheagendaofbothMarxistandbourgeois‘modernizers’
(DeJanvry1981,12).TheMexicanagrarianreforminthe1930sisafamous
instanceof‘bourgeoisrevolution’(Knight1989,26;Gómez-Oliver2012,222f.),
andtheSovietcollectivizationofagriculturewasthemosttragicallyfailed
political-strategicattempttosolvetheagrarianquestionofcapitalbyforce
(Bernstein2006).AsBernsteinfurtherpointsout,theclassicagrarianquestionof
capitalhaspracticallybecomeobsoletesincetheendofthe1970s,when
predatorylandedpropertyhadbecomeinsignificantasadominantclassforce
(Bernstein2006).Itcanbehypothesizedthatitwasinthiscontextthattheinter
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Abstract
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sectoralaspectsofcapitalistindustrialization-thatis,therelationshipbetween
theagriculturalsectorandindustrialization-shiftedmoretotheforefrontofthe
debateaboutdevelopment,sinceevenwhereagriculturehadbecomelargely
capitalist,‘development’didnotseemtoautomaticallysucceedfromthere.
2
Hence,thedebateabout‘rural-urbanlinks’pickedupmomentuminthe1970s
and1980s,andinparticular,duetoLipton’s‘UrbanBias’thesis.1Inhiswidely
citedandinfluentialbook,‘Whypoorpeoplestaypoor’(Lipton1977),heclaimed
thateconomicstagnationandpovertyindevelopingcountriesexistedduetothe
classconflictbetweenthe‘urbanclass’andthe‘ruralclass’,whereasthe‘urban
class’wassopowerfultodivertthelargestshareofavailableresourcesina
countrytourbanareas.Thisinturn,heargued,hinderedtheoveralldevelopment
ofacountry,sincenotonlywasthewealthofthe‘urbanclass’createdatthe
expenseoftheruralareas,buttheavailableresourceswerenotinvested
efficientlysodevelopmentcouldoccur.Inthefollowingdecades,Lipton’sthesis
waswidelyadoptedindevelopmenttheoryandpractice,eventhoughithasalso
beenheavilycriticized.
Itgotratherquietarounddevelopmenttheoryandtherural-urbanlinksdebate
withtheendofthe‘grandtheories’andtheradicalcallingintoquestionofthe
ideaof‘development’bypoststructuralistscholarsintheacademicworldinthe
1990s(Escobar1992).However,thisdoesnotmeanthatdevelopmenttheories
andtheirelementsarenotpresentinpublicdiscourseandpolicyanymore.The
UBthesiswasrepeatedlyrenewedbyLipton(Eastwood/Lipton2000;Lipton
2005),arguingthatUBwasstillpresentorevenworsenedafterneoliberalreforms
indevelopingcountries,eventhoughstructuraladjustmentmeasureshad–sohe
claims-improvedthetermsoftradeforagricultureagainstindustry.Most
notably,theUBthesisgainedrenewedpopularity(evenifmostlynotexplicitly)
withthe2008globalfoodcrisis(Kay2009,deJanvry2010;JonesandCorbridge
2010).Inthesameyear,theWorldBankpublisheditsWorldDevelopmentReport
titled‘AgricultureforDevelopment’,signallingthekeyimportanceassignedtothe
roleofagriculturefortheoveralldevelopmentofcountries.Thepoliciesof
internationalorganizationssuchasFAOandtheWorldFoodProgramme,aswell
asthepoliticalagendasofmanynon-governmentalorganizationsandsocial
movementshavesincethenechoedthemainclaimoftheUBthesisthaturban
classesdominatenationalpoliciesattheexpenseofagricultureandrural
development.Jones/Corbridgegosofartostatethat“theideathatcities
dominatethecountrysidehas,onoccasions,seemedtobetheonepointof
commongroundbetweenpro-marketreformersattheWorldBankandsocial
movementsarguingforsocialjusticeandredistribution”(Jones/Corbridge2010,
2).InitsrecentAgricultureActionPlan,theWorldBankrestatestheneedto
address“cross-sectorallinkagesbetweenagriculturalactionsandoutcomesfor
economicgrowth,livelihoods,theenvironment,nutrition,andpublic
health”(WorldBank2013).Inshort,itisevidentthatagricultureisstillassigneda
keyplaceintheeconomicandsocialdevelopmentofcountriesindominantpolicy
practiceduetoassumptionsaboutitsfunctionsfordevelopment.
Nevertheless,atheoreticallyandempiricallyinformedreflectionofrural-urban
linkshaslargelybeenlackingfromthemorerecentacademicdebate.Exceptions
1
Liptonarguedthattheurban-ruraldistinctionwaspreferabletotheagriculture-industrydivision
sinceitwasmoreencompassing(Lipton1977,60).
areKay(2002,2009)andJones/Corbridge(2010),whobothresumethediscussion
aroundUBsupportingearliercriticismsofboth‘agrarianist’and‘industrialist’
modernizersasbeingbasedonfalsedichotomies(cf.Corbridge1982).Basedon
ananalysisoftheplayingoutofrural-urbanlinksintheactualdevelopment
experiencesofSouthKoreaandTaiwan,Kay’smainconclusionisthat“themost
successfuldevelopmentstrategyisoneinwhichtheStateisabletoexploit
creativelythesynergiesbetweenbothsectorsbydevelopingtheir
complementaritiesandenhancingtheirdynamiclinkages”(Kay2009,104;
emphasisadded).Further,Kayconcludesthat“theformofdualisticthinkingas
expressedintheUBthesisisanincreasinglyunhelpfulwayofthinkingabout
development”,consideringtheincreasingfluiditybetweenurbanandruralsectors
intermsofcapital,commoditiesandlabourinthecontextofneoliberal
globalization(Kay2009,122;HartandSitas2004).Inasimilarlineofargument,
referringtotheworkofEllisandHarriss(2004),Jones/Corbridgepointoutthat
thedistinctionofurbanandruralsectorsisincreasinglyoutofdateconsidering
thehigherlevelsofnationalandglobalintegrationofspaces(JonesandCorbridge
2010,11f.).Inparticular,bothKayandJones/Corbridgearguethatthisisevident
withregardtotheincreasinglymultilocationallivelihoodstrategiesofruraland
urbanhouseholdsthatincludethemixingoffarmandnon-farmactivitiesinurban
andruralareas,anddifferentformsofnationalandinternationalmigrationthat
combinetraditional‘rural’and‘urban’activities(Kay2009,122f;Jonesand
Corbridge2010,11f;seealsoBernstein2009).Moreover,oneofLipton’sbasic
assumptions,namelythatpovertyispredominantlyrural,isincreasingly
questionablenotonlyinviewoftherisingnumberofurbanpoor,butalso
regardingtheunstableandinconsistentdefinitionsofwhatcountsas‘urban’and
‘rural’inofficialstatistics(JonesandCorbridge2010,8-9).
ThispaperdepartsfromtheseearliercriticismsoftheUBthesis,butaimstotake
thedebateonestepfurther.Basedonaninvestigationofthestructural
transformationoftheMexicaneconomysincethe1970s,Iarguethatthinking
aboutdevelopmentintermsofrural-urbanoragriculture-industrylinkageshas
furtherlostgroundinbeinganaptwayofconceptualisingtheeconomicreality
thatacountrylikeMexicofacestoday.Thisrealitycanbecharacterizedas
peripheralfinancecapitalism.Financializationhasrecentlygainedmuchattention
infoodandagrarianstudies,butmostlywithaviewonthesectoritself(seefor
instanceFairbairn2013,2014,2015andOuma2014onland;Russi2013and
Isakson2014ontheagrofoodindustry;Murphyetal.2012oncommoditytraders;
Breger-Busch2014onagriculturalderivativemarkets;Clapp2014onthe
implicationsoffinancializationforglobalfoodpolitics).Whathaslargelybeen
lackingsofarisaninvestigationoftheimpactoffinancializationonagriculture’s
roleincapitalistdevelopment.Thepresentpaperaimstofillthisgapinthe
literatureandexplorehowfinance-ledaccumulationshapesanddismantles
urban-rurallinksandtheirimpactonbroaderdevelopment.
MexicowasamongthefirstcountriesinLatinAmericatoimplementathorough
neoliberalreformagendabeginninginthe1980s,almostcompletelyopeningits
economyandprivatizingstateownedcompaniesandbanks.Sincethe
implementationofNAFTAin1994,Mexicohasreceivedenormousquantitiesof
foreigncapitalinflows.Today,Mexicohas44freetradeagreements,including
withtheEU,ChinaandJapan.Inthissense,Mexicoisa‘bestcase’ofneoliberal
developmentpolicy.Bothagricultureandindustryhavedevelopedatagreatpace
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
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ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
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andintensity,andthecountryistodayamongtheworldleadingexportnationsfor
severalagriculturalaswellasmanufacturedproducts.Atthesametime,economic
growthhasbeenslow,anditsbenefitshaveonlyreachedapartofthepopulation:
46%ofMexico’spopulation–55.3millionpeople–livedinpovertyin2014,2
millionmorethanin2012(CONEVAL2016).Thispaperarguesthatthediscussion
aboutinter-sectoralaspectsofcapitalistindustrializationindevelopingcountries-
oneofthemajordimensionsoftheagrarianquestion–musttakeintoaccount
thefinancializationofglobalcapitalaccumulation,andtheparticularwayinwhich
itshapesthepossibilitiesfordevelopment2intheperiphery.Financialization
impliesthatthedominantlocusofcapitalaccumulationhasshiftedfromthe
sphereofproductiontothesphereoffinancialmarkets(Harvey,1989,pp.191-94;
Arrighi,1994;Krippner,2005,p.181;Lapavitsas,2013).Theliteratureon
financializationindevelopingcountriesfromacriticalperspectiveisstillrather
scarce,butthereisgrowingevidencethatitisamajordimensionofnewunequal
developmentonaworldscale(Lapavitsas2009;Painceira2009;Beckeretal.
2010;Bonizzi2013;Powell2013).
InthispaperIusetwostrandsofdataonMexico,andconfrontthesewiththe
debateoncapitalistindustrializationassketchedabove.Thefirstistheavailable
literatureandstatisticaldataonthedevelopmentofMexicanagricultureand
industry,payingspecialattentiontoagriculture-industrylinksincapitaland
labour.ThesecondistheliteratureonthefinancializationoftheMexican
economy.Bydoingso,Ireconstructthedismantlingofthenationalmodelof
economicdevelopment,whichaimedforeconomicgrowthbasedonthe
productivesectorsoftheeconomy,andthetakingoverofthetransnational
finance-ledaccumulationregime,whichisorientedonwealthextraction.Therole
ofthestatehastherebyturnedfromthedevelopmentalstatetothecrisismanagingstate.Underconditionsoffinance-ledaccumulation,capitalist
agriculturehasover-alldeveloped,inthesenseofincreasingmechanization,
outputandexportvalues.However,insteadofservingbroad-baseddevelopment,
finance-ledaccumulationfeedstheaccumulationofprofitbyatransnational
financialelite.Thisdevelopmentmodelisinherentlyunsustainablenotonlydueto
theexpatriationofprofit,butparticularlyduetoitsdebt-financednature.
Thepaperisstructuredasfollows.Section2reviewsthedebateonrural-urban
linksincapitalistdevelopment,andhowthenationaldevelopmentmodelin
Mexicofollowedthisgrowthmodel.Section3tracksthedevelopmentof
agricultureandindustryinMexico,investigatinghowtheinter-sectorallinks
betweenagricultureandindustrydevelopedsincethefinancialopeninginthe
1990s.Itconcludesthatlinksarepracticallyabsentintermsofcapitalflowsmainly
duetotheincreasingdominanceoftransnationalcorporations(TNCs)inboth
sectors,whilethesectorsarelinkedthroughagriculture’sprovisionofcheap
labourforindustry.Section4reconstructsthefinancializationoftheMexican
economystartinginthe1970s,andcomingtofullpowersincethe1990s.Itshows
thatmonetarypolicyhasbeenadaptedtotheneedsoftransnationalfinance
capital,andhowthisaffectsthedevelopmentoftherealeconomy.Section5
concludesonperipheralfinancializationanditsimplicationsforthedebateon
agriculture’sroleincapitalistindustrialization.Ithypothesizesontherenewed
2
Theterm‘development’isusedhereinthesenseofavisionof‘goodchange’inbothpossible
meanings,i.e.bothas‘developmentalongsidecapitalism’and‘developmentagainstcapitalism’
(Thomas,2000,29).
relevanceoftheoriesofdependencyandglobalunequaldevelopment,which,
however,needtoberefinedandadaptedaccordingtothenewandstillunderresearchedconfigurationsoftransnationalizedclassrelations.
2. Rural-urbanlinksintheclassicdebate
Acrossideologicalstandpoints,thereisarangeoffactorsthathavelargely
uncontroversiallybeenseenasfunctionalcontributionsofagriculturefor
economicdevelopmentofcountries.Theidentificationofthesefunctionswas
basedontheEuropeanexperience,andtheycanroughlybegroupedintotwo
sets.First,therearefunctionalcontributionsthatrelatetotheformationof
capitalandadomesticmarket.BothneoclassicalandMarxistdevelopment
theoristsagreedthatgrowthintheagriculturalsectorisanecessaryprecondition
ofgeneraleconomicdevelopmentinthatitservesasan‘engine’for
industrializationthroughtheprovisionofcapitalsurplusesfortheinvestments
neededintheindustrialsector,particularlyintheearlystagesofindustrialization,
andincountriesthatdonothavelargerevenuesfrompetroleumormineral
exports(JohnstonandMellor1961,576f.;Byres1982;Kay2009,116).
Onceindustrializationhassucceededtoacertainlevelandisabletogenerate
sufficientsurpluswithinthesector,theneedforcapitaltransfersfromagriculture
becomeslessandindustrialresourcescanthenbeusedtofinancethegrowthof
agriculture(Kay2009,116).ReferringtothecasesofTaiwanandSouthKorea,Kay
highlightsthecentralroleofthesynergiescreatedthroughcapitalflowsbetween
agricultureandindustryfortheirdevelopmentsuccess(Kay2002;Kay2009,118).
Notonlywasthecreationofsufficientsurplusinagricultureseenasfundamental
forreinvestmentsintothedomesticindustry.Agriculturalsurpluseswerealso
seenasnecessaryforearningforeignexchangethroughtheproductionforexport,
whichwouldbeneededforfinancingtheimportofmachineryandotherindustrial
inputsthatcannotbeproduceddomestically(JohnstonandMellor1961,574;
JohnstonandKilby1982,53;Calva1999,36).Further,sufficientgrowthofthe
agriculturalsectorwasexpectedtohavepositiveeffectsontheoverallnational
economythroughthecreationofahomemarket,inthathighercashincomein
ruralareasincreasesruraldemandforindustrialproducts(Byres1982,82).
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Functions/contributionsofagriculturefordevelopment
“Abroadlybasedexpansionoffarmcashincomegeneratingdemand
for low-costandrelativelysimpleinputsandconsumergoodscanbe
expected to foster efficient, evolutionary growth of domestic
manufacturing that is characterized by relatively low import content
andwhichleadstothestrengtheninganddiffusionofentrepreneurial
andtechnicalcompetence”(JohnstonandKilby1982,53)
Otherscholars,oftencategorizedas‘neopopulists’,assignedanimportantroleto
agrarianreform,sinceitwouldleadtoamoreequitableincomedistribution,
whichwouldinturnstimulatethehomemarket–afactorthatisalsoseenas
havingsignificantlycontributedtosuccessfulindustrializationinTaiwan(Kay2002,
1076f.;Kay2009,120).
Second,developmenttheoryassumedthatintheprocessofexpandingnon-farm
sectorsoftheeconomyandlabourforce,growthinagricultureiskeyfor
developmentinthatitprovidesincreasedsuppliesoffoodandagriculturalraw
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materialsforthedomesticmarket,thatis,avoidingtheneedofhavingtospend
foreigncurrencyforfoodimportsandhencecompromisingonthebalanceof
trade.Inparticular,thiswasseenasimportantforcountriesthatdonothave
foreignexchangeincomesthroughlargerevenuesfromexportingmineral
products(JohnstonandMellor1961,574,590;JohnstonandKilby1982,53).In
thedevelopmentexperienceofTaiwanandSouthKorea,thesupplyofcheapfood
totheindustriallabourforcebydomesticagriculturewasanimportantfactorwhy
labourremainedcheapinthebeginningphaseofindustrialization(Kay2002,
1095;Kay2009,119).
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Thethirdsetoffunctionalcontributionsofagricultureforoveralldevelopment
relatestoitsroleinthestructuraltransformationofthelabourforce.Early
developmenteconomistsassumedthatdevelopmentwouldgainforcethrough
thetransferoflabourfromtheruraltotheurbansectorsinceunproductive,
cheaprurallabourwouldachieveahigherlabourproductivityinindustryandthus
contributetocapitalaccumulationandgrowth(Mandelbaum1945;Lewis1954).
Indeed,viewingagaintheexperienceofSouthKoreaandTaiwan,thecheap
labourforcereleasedfromagriculturewaskeyforindustrialization,allowing
capitaliststocompeteonworldmarketsandgainhighprofitsthatcouldbe
reinvestedintheirproductivecapacity(Kay2002,1095;Kay2009,119).
The‘UrbanBias’thesisanditscritics
Due to the rural-urban linkages that were established by early development
theorists, which basically assumed that agriculture’s role was to contribute to
industrializationthroughthetransferofvariousresources,“itwasgenerallytaken
for granted that development strategy should give primacy to industrialisation”
(Kay2009,105;cf.Lipton1977,63ff.).Withhis‘UrbanBias’thesis,Liptonradically
challenged this idea. Lipton argued that the main cause for underdevelopment
wasthatpoliciesindevelopmentcountrieswerebiasedtofavourthe‘urbanclass’
againsttheinterestsofthe‘ruralclass’,inturnhinderingtheoveralldevelopment
of the country (Lipton 1977). ‘Urban class’ thereby not only includes the urban
population, but also the group of richer farmers, who were allies of urban
consumersintheirsupportofcheapfoodsupply(Lipton1977,67;1982,68).
“Thecitieswanttoreceivepreferablycheapsurplusesformtherural
areas: surpluses of food, surpluses of savings over rural investment;
surplusesofexportablesoverimports,toprovideforeignexchangefor
industrial development; surpluses of ‘human capital’, in the shape of
rural-borndoctors,teachers,engineersandadministrators,aschildren
broughtuplargelyatruralexpense,butasadultsservinglargelyurban
needs. Who, in the rural areas, can provide such surpluses? Clearly,
thebetter-off,especiallythebigfarmers”(Lipton1982,68).
Lipton’s most important insight was that ‘urban biased’ policies caused ‘price
twists’,i.e.termsoftradeworkinginfavourofurbanconsumersandagainstrural
producers.‘Pricetwists’madeagriculturalproductsrelativelycheapercompared
to the prices of urban products, which caused structural disadvantages for rural
areas (Lipton 1977, 287ff.). A key instrument in urban-biased policies was the
overvaluation of national currencies, which favoured food imports and distorted
domesticagriculturalprices.Becausethemajorityofthepoorlivedinruralareas,
‘UrbanBias’ultimatelymeantthatresourcesaretransferredfromthepoortothe
less poor. According to Lipton, supporting small farmers would benefit overall
developmentnotonlythroughfavouringamoreequitabledevelopmentpath,but
in particular, because small farmers were better at providing the functions of
‘agriculturefordevelopment’byusingcapitalmoreefficiently(‘inverserelation’).
Lipton’sanalysiswasmostforcefullychallengedbyByres,whoarguedthatthe
lackofeconomicdevelopmentwasnotdueto‘UrbanBias’,buttothelacking
resolutionofthe‘agrarianquestion’:thefulldevelopmentofcapitalistrelationsof
productioninagriculture,andfinally,theachievementof“undisputed
hegemony”oftheurbanbourgeoisieagainsttheinterestsofcapitalistfarmers
(Byres1982,82f.).
“Until then the full unleashing of productive forces in industry could
be frustrated where, through their political power, rural capitalists
couldmaintaintermsoftradewhichwerepersistentlyunfavourableto
industry:amajorfactorpreventingindustrialgrowth,whichwaslikely
tobecompounded,wherethelandedinterestdominatedthepolicy”
(Byres1982,83)
Becauseofthepoweroflandlords,whichpreventeda‘squeezing’ofagriculture
fortheprovisionofsurplusnecessaryforindustrialization,theproblemwasrather
‘ruralbias’than‘urbanbias’(Byres1974,1979).ThedebatebetweenLiptonand
Byresalsoillustratesageneralcontroversybetween‘modernists’thatbelievedin
thedevelopmentofcapitalist,large-scalefarmingastheonlyroadtowardsoverall
development3,andthe‘populists’whoadvocatedtheadoptionofcapitalintensivesmall-scalefarming,takingfulladvantageoftheefficiencyofpeasant
familyfarmingforthetransformationoftheeconomy–acontroversythatliveson
today,evenifinmodifiedways.
Inmorerecentwritings,Liptonholdsthaturbanbiasisstillpervasivein
developingcountries,evenafteranti-ruralpricedistortionswerereducedthrough
structuraladjustmentmeasures(EastwoodandLipton2000;Lipton2005,725).
Whileanti-ruralpricedistortionshavebeenreduced,otheranti-ruraldistortions
haveincreased,e.g.regardingallocationsforhealthandeducation,andoverall
rural-urbandisparitieshaveoftenworsenedthroughthegreaterpowerofthe
urbanclassoverresourceallocation(EastwoodandLipton2000;Lipton2005,
725).
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
“Theunder-useofthehumanresourcesofsmallfarmersandlandless
labourerspreventstheruralsectorfromgeneratingalasting,soundly
based,efficiently(becauselabour-intensively)produced,farmsurplus
forexchangeonfairtermswithurbanproducts,andpermitsonlyabig
farmsurplus,costlybecauseintensiveinitsuseofcapitalandenergy,
but (due to inadequate, urban-biased incentives) too small and too
unreliabletoserveasfirmbaseforurbangrowth”(Lipton1982,74).
Mexico’snationaldevelopmentmodel,1934–1982
Mexico’sdevelopmentpathuptothe1970sfollowedthelinesofanational
developmentprojecttunedtothecreationoflinksbetweenagricultureand
industryforachievinggrowththroughmacroeconomicpolicies.Afterthe1930s
TheSovietexperimentofthecollectivizationofagricultureasprojectedroadtowards
industrializationanddevelopmentcanbeseenastheSocialistvariantofthis‘modernist’
developmentstrategy(cf.Bernstein2006).
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ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
‘bourgeois’agrarianreform,Mexico’scommunalejido-sectorownedmorethan
halfofproductiveagrarianlandinMexicoandwasthemajorfactorinthehigh
growthratesofthesectorbetween1934and1950.Inthisperiod,public
investmentintotheagrariansectorgrewatanannualrateof17%inrealterms
(Gómez-Oliver2012,224).Duringthe‘agriculturalmiracle’between1946and
1965,theagriculturalGDPgrewatanannualrateof6.1%,contributingtobroader
economicdevelopment:agriculturesuppliedfoodandrawmaterialstotherapidly
growingindustrialandurbansector;itproducedsurplusforexportwhichwas
usedforcompensatingtheindustrialtradedeficit;andithelpedtheexpansionof
theinternalmarketfordomesticindustrialproducts(Calva1999:37f.).
Theperiodbetween1940and1982wascharacterizedbythetypicalfeaturesof
agriculturalpolicyaccordingtotheImport-SubstitutingIndustrialization(ISI)
model,asitprevailedthroughoutLatinAmerica,AfricaandAsia.Macro-economic
policyconsistedinthesupportofdomesticconsumptionandcreatingfavourable
conditionsfordomesticindustrythroughanovervaluedexchangerateandtrade
protection(GereffiandEvans1981).Thenegativeeffectsonagriculturalprices
werecompensated–initiallysuccessfully-byheavypublicsupportofthe
agriculturalsectorintheformofirrigationinfrastructure,subsidiesforinputand
credit,extensionservices,andaboveall,asystemofguaranteedprices(Calva
1999,39f.;Gómez-Oliver2012,226f.).Thefirst,‘horizontal’phaseofISIsawthe
successfuldevelopmentoflocalmanufacturingoflightconsumergoods,
stimulatedbytheeffectsofWorldWarIIandtheKoreanWaroncentre
economies.Thisphasewascharacterizedbyarisingnationalbourgeoisieand
diminisheddependencyonforeigncapitalascomparedtothephaseofprimary
productexportsbeforetheGreatDepression(GereffiandEvans1981,38f.).
However,thischangedaftertheeconomiccrisisof1954,whentheMexicanstate
embarkedona‘vertical’ISIstrategy,focusedonbroadeningtherangeofdomestic
productiontoincludedurablegoods,especiallycars.Thisrequiredmore
technologicallyadvancedandcapital-intensiveinvestments,whichcouldbemet
byforeigncapital.Localmanufacturingbecameincreasinglyforeign-owned,and
theverticalISIstagelaidthebasisforthe“’triplealliance’ofstate,TNC,andlocal
capital”,marking“thefullblossomingoftheprocessof‘dependentdevelopment’
(ibid.,39f.).Althoughlocaldomesticmanufacturingroseandimportsfell,alarge
shareofthesurpluswasabsorbedbytransnationalcapital.Atthebeginningofthe
1970s,52%ofassetsofthelargest300manufacturingfirmswereforeignowned
(ibid.,41).
Inagriculture,thestructureofrelativeagriculturalprices4madeagricultural
exportslessprofitable,markingthebeginningofincreasingimports(Gómez-Oliver
2012,226).Moreover,thesystemofsubsidiesintensifiedtheexistingpolarization
oftheagriculturalsector,sinceitmainlybenefittedlargefarmers(FoxandHaight
2010,11).Inthisperiod,smallfarmersbegantodiversifytheirincomesources
andincreasinglyreliedonadditionalwagelabourfortheirlivelihoods(GómezOliver2012,228f.;Eakinetal.2014).
8
Hence,evenifofficialpolicyfollowedthenationaldevelopmentmodel,
stimulatinglinksbetweenagricultureandindustrywerealreadyweakeninginthe
laterISI-phaseduetotheincreasingrepatriationofsurplusesabroad.The
dominanceoftheurbanovertheruralsectorhadtobeattributedtoeconomic
4
Pricescomparedtointernationalagriculturalpricesandpricesofotherdomesticsectors
dependencyratherthanto‘urbanbias’(Redclift1984).Iwillargueinthe
remainingpartofthispaperthatexternaldependencyhasintensifiedwiththe
financializationoftheeconomy,andfurtherdismantledfunctionallinkages
betweenagricultureandindustry.Todevelopthisargument,thenextsection
examinesthedevelopmentoftheagriculturalandindustrialsectorsinMexico
sincethebeginningoftheneoliberalreforms,puttingspecialattentiontointersectorallinks.
Theclassicagrarianquestionreferredtothedevelopmentofsocialrelationsof
productioninagriculture,andhowagriculturecanormustcontributetothe
accumulationofcapitalnecessaryforindustrialization.Inthefollowing,Iwill
analysethedevelopmentofagricultureandindustryinMexicosincethe1990s,
andshowthatthedualeconomicstructurehasconsolidated:Ontheonehand,
thereisagrowing,fullygloballyintegratedexportsectorinbothagricultureand
industry,whichthrivesonthebasisoflargestatesubsidies,whilethesurplusis
increasinglyappropriatedbytransnationalcapital.Ontheotherhand,thereisa
domesticeconomicsectorthatlacksaccesstocredit,isunderdeveloped,
stagnatingand(inthecaseofagriculture)subsistence-oriented.Whilelinks
betweenagricultureandindustryarealmostnon-existentintermsofcapital
flows,thedestructionofsmall-scalefarmingthroughanagriculturalpolicy
favouringindustrialfarmingprovidesanecessarycomponentforthelatter:an
abundantsourceofcheaplabour.
3.1Agriculture-industrylinksthroughcapital
Agriculture
Sincethe1990stherehasbeenanintensificationandconsolidationofthe
divergingdevelopmentofagriculture’stwosubsectors,whichgoesbacktoa
changeinagriculturalpolicy.Incontrasttoofficialneoliberaldiscoursepromoting
marketliberalizationandstatewithdrawal,theperiodsincethe1990shasbeen
characterizedbyincreasingagriculturalsubsidies.However,thesehavebeen
heavilyconcentratedtowardsasmallgroupoflarge-scaleproducersand
transnationalagribusiness(FoxandHaight2010;Appendini2014).Between1994
and2010,atleastUS$20billionwerespentindirectpaymentstofarmers(Fox
andHaight2010,13).Between2000and2009,publicspendingonagriculture
doubled(WorldBank2009,6).Totalruralexpenditureamountedtoaquarterof
publicspendingin2009andissimilartoexpendituresforurbansectors,which
leadstheWorldBanktoacknowledgethatthereisno‘urbanbias’inMexico
(WorldBank2009,29).However,between50and80%ofallagriculturalspending
wenttotherichest10%ofproducers(WorldBank2009,52ff;Scott2010).The
municipalitieswiththegreatestpovertyandthegreatestsharesofindigenous
populationreceivedaminimalpartofagriculturalspending,eventhoughtheyare
theonesmostdependentonagriculturefortheirlivelihoods(Fox2013,58).
“Ironically, while the popular claim is that the government has
abandonedmaizeproducersandthe‘campo’,therealityisthatfiscal
expenditure has increased for maize over the past decade, but has
beentargetedatasmallandselectgroupofparticipants”(Appendini
2014,22).
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
3. Agriculture-industrylinksviewedthroughcapitalandlabour
9
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
Whiletheprovisionofmaize,Mexico’sbasicfoodcrop,hasbeentakenoverbya
smallgroupofproducersintheNorthernstateofSinaloa,globalcorporate
businesshastakenovertheotherpartsofthemaize-tortillachain(Appendini
2014,3;Eakinetal.2014,144).5Haight(2010,34)concludesthat“[i]nsteadofthe
governmentrunningthegrainmarketatartificiallyhighprices,thegovernmentis
nowpayingprivate(transnational)corporationstodoso–andpayingasmanyas
threedifferentsubsidiesforthesamegrain”.Akeycomponentinsupporting
large-scaleproductionhasbeentheexpansionofirrigatedlandthroughfurther
publicinvestmentintonewirrigationschemesandinparticular,throughthe
heavysubsidisationofelectricityforpumping(WorldBank2009,47;Scott2010,
86).ThishasespeciallybenefittedthelargecommercialproducersintheNorthern
states(FoxandHaight2010,12f.).
Duetomassivestatesupport,industrialandexport-orientedagriculturehas
enjoyedhighgrowthrates.AsshownbyAppendini(2014,6),maizeoutputin
Mexicohassteadilygrownsince1989,whilethemostdynamicyieldincreases
(from2.9to9.9tonnesperhectare)havetakenplaceonirrigatedland,mostlyin
theNorthernstates(especiallySinaloa).Thecontributionofirrigatedlandto
overallmaizeproductionincreasedfrom25%in1989to40-50%in2009.Average
yieldsfornon-irrigatedmaizeinmostpartsofcentralandsouthernMexicohave
remainedstableat1.5tonnesperhectare(Appendini2014,6).Intotal,maize
productioninMexicohasincreasedfrom14to23.4milliontonsbetween1990
and2015(Appendini2010,3;INEGI2016).Similarly,thecountryhasachieved
highgrowthratesforotheragriculturalproductslargelydestinedforexport.
Today,Mexicoisamongtheworldleadingproducersandexportersofvegetables
andfruitssuchastomato,avocado,watermelon,mango,guava,organiccoffee,
squash,andpapaya(Promexico2012).Theproductionofmeat,chicken,milk
productsandhoneyhassteadilyincreasedovertheyears(INEGI2016).In2013,
Mexicowasthe4thlargestproducerofchickenandthe6thlargestproducerof
beefintheworld(INEGI2016).Thetotalvalueofagriculturalexportsincreased
from4to26.7billionUS$between1993and2015,whilebothprimaryand
agroindustrialexportsincreased(seeFigure1).IncollaborationwithMexican
businessassociationsandcommercialbanks,theMexicangovernmentpresents
highoutputandgrowthratesinagribusinesstoattractinternationalinvestmentin
theagriculturalsector(cf.Promexico2012).
10
5
Inspiteofthismarketconsolidation,localinformalmaizemarketsarestillwidespread,where
smallholderssellsurplusesfromtheirsubsistenceorientedproductiontorelativesandneighbours,
ortointermediariescomingtothevillages(Eakinetal.2014,144f.).
Althoughthestrongstateeffortshavebeensuccessfulinrisingtheagricultural
outputandexports,thishasnotresultedinapositivetradebalanceinagriculture.
Whileexportshavegrowntounprecedentedlevels,atthesametimeimport
dependencywasconsolidated.Theeconomicopeningledtoarelativefallin
pricesofagriculturalproductsthatamountedtoalmost60%formaize,45%for
wheatand61%forsoy(Calva1999,40).Therehasbeenamassiveincreasein
agriculturalimports,andMexicoturnedintooneoftheworld’smainfood
importingcountries:In2006,itwasthethirdlargestimporterofcereal(after
JapanandtheEuropeanUnion),fourthinoilcrops(aftertheEuropeanUnion,
ChinaandJapan),thirdinfiber(afterChinaandtheEU),fifthinmeat(afterJapan,
Russia,USandEU),andfirstformilk(Gómez-Oliver2012,241).Afterall,Mexico’s
tradebalanceintheagriculturalsectorhasmostlybeennegative(Calva1999,47;
Gómez-Oliver2012,242).
Clearly,notallfarminginMexicoislarge-scale.Appendini(2014,6)estimatesthat
60percentofmaizeisstillproducedbysmall(21%)-andmedium-scale(38%)
producers.However,inthecaseofmaizeasinthecaseofothercropsand
vegetables,thereisevidencethatproductionisdominatedbycontractfarming
(SteffenandEchanove2005;Appendini2014).UndertheASERCAprogramme,the
governmentactivelysupportscontractfarmingthroughsubsidiesforparticipating
producersandbuyers(Appendini2014,16ff.).Intheirstudyoncontractfarming
inthehorticulture,barleyandwheatsectors,SteffenandEchanove(2005)found
that“despitethedisadvantagesofcontractfarmingforgrowers,andthe
disproportionalrisksbornbyproducers,theyenterintocontractfarminglabour
agreementsbecausetheylackalternativesforfinancing,technicalassistanceand
accesstomarkets”.Consideringthatthemajorityofbuyersinthecontract
agreementsaretransnationalagribusinesscorporations(Appendini2014,16ff.)6,
itisevidentthattheseappropriatethemajorshareoftheincreasingsurplusvalue
ofagriculturalproduction.
Inthisstructuralcontext,small-scaleagriculturalproduction,althoughstillpresent
throughoutMexico,hasbecomeanactivitythatisinmostcasesonlya
AlsoseeSchwentesiusandGómez(2002)onthetransformationofwholesaleinMexicointhe
contextofthegrowingpowerofsupermarketchainsinthefoodsupplychain.
6
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
FIGURE 1: AGRICULTURAL AND AGROINDUSTRIAL EXPORTS IN MEXICO , 1993-2015
(SOURCE :ILLUSTRATIONBYAUTHORBASEDONBANXICO2016)
11
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
complementaryelementinthelivelihoodstrategiesoftheruralandsemi-urban
population.Themajorityofincomeoftheruralandsemi-urbanpopulationis
todaymadeupofwagelabour,andincreasinglyso(deJavryandSadoulet2001;
Verner2005;Scott2010,80ff.;Eakinetal.2014,143f.).Asurveyconductedinthe
peri-urbanareaofTolucabyLerneretal.(2012)foundthatthelargestshareof
ejidohouseholdscontinuedmaizecultivationonlyoutofsocio-culturalpreference
forhome-madetortillas,whilethesecondlargestgroupreliedonmaize
cultivationasinsurancestrategyduetotheinsecurityandinstabilityofwagelabourincome.Inmyownqualitativeempiricalresearchconductedin2015/2016
inthesamearea,itwasevidentthatejidolands,ifstillusedforagricultural
productionatall,areusuallycultivatedbytheoldestgenerationinthe
households,whilemanyhouseholdshavegivenupcultivationeithertousethe
landforbuildinghomesfortheyoungergeneration,or,tosellthelandonthe
informallandmarketoutofsurvivalnecessity.
AtthispointitmustbeclarifiedthattheagriculturalsectorinMexicoalso
comprisesaninformalsectorofsubstantialsize,thatis,thedrugproductionand
processingsector.Obviouslythesectordoesnotshowinanyofficialstatistics,but
itisclearthatitmakesupasignificantpartoftheMexicaneconomy.Itis
estimatedthatthesectorhasayearlyexportvalueofUS$19to40billion(Lange
2010;Nájar2010).Incomparison,petroleumexportsamountedtoUS$23billion
in2015,whereasthebalanceoftradeinpetroleumhasbeennegativeformost
periodssince2008,reachingaminusofUS$10billionin2015(Banxico2016).Even
atthemostconservativeestimation,drugexportsareatleastequaltotheincome
outofmigrantremittances,whichamountedtoUS$19billionin2015(Banxico
2016).TheparamountsignificanceofthesetworevenuesourcesfortheMexican
economywillbefurtherclarifiedbelow.Aftertheabandonmentofruralstate
supportmeasuresthroughtheneoliberalreforms,andtheimplementationof
anti-drugpoliciesinColombia,PeruandBolivia,thecultivationofmarihuanaand
poppieshasturnedintothemajorlivelihoodsourceforlargepartsoftherural
populationinareasofNorthernandCentralMexico(Nájar2010;Maldonado
2013).Intheseareas,drugcartelshavetakenoverthestate’sroleinagricultural
supportpolicy,subsidisingseed,fertilizers,waterandharvest.Thepresidentof
theStateAgrarianTribunal(TribunalSuperiorAgrario)estimatedin2010that30%
ofMexico’sarablearea(around8millionhectares)co-cultivatelegalcropswith
marihuanaandpoppies(Nájar2010).
Insummary,theMexicanagriculturalsectoristodaymadeupofaproductiveand
(moderately)growingexportsectortiedtotransnationalagribusinessthat
coexistswithasmall-scale,subsistence-orientedorillegalsector.
Industry
12
Thedevelopmentoftheindustrialsectorsincethe1990shasbeeninmanyways
similartothatofagriculture.UScorporationshadoperatedinMexicobefore
NAFTA,and,asmentionedabove,alargeshareofmanufacturingassetshad
alreadybeenforeignowned(GereffiandEvans1981,39ff.).However,inthe
contextofISI,theyproducedalmostexclusivelyforthedomesticmarket(ibid.;
Moody1995,98).Aftertheeconomicopening,Mexicobecamethelargest‘export
power’inLatinAmerica,withthetotalvalueofmanufacturedexportsincreasing
FIGURE 2: MANUFACTURINGEXPORTSIN MEXICO , 1993-2015 (SOURCE :ILLUSTRATIONBY
THEAUTHORBASEDON B ANXICO 2016)
However,thegrowthofindustrialexportshasbeenaccompaniedbyanenormous
growthintheimportsformanufacturingandtheimportcontentofexports,a
trendvisibleforthewholeofLatinAmerica(CibilsandPinazo2016,82f.).This
impliesthatlinkagesbetweentheexportindustryandtherestoftheeconomyare
almostnon-existentinMexico8(E.Ortíz2016,165f.).Intotal,importedinputs
accountfor80%ofexports,mostofwhichcomefromtheUS.Therateiseven
higherformaquiladoras,where97%ofinputsareimported(Guíllen2012,68f).
ThestudyofthemaquilagarmentsectorbyBairandPeters(2006)foundthatit
hasnotcreatedinternalcommoditychains.Mexico’sexport-orientedsectorexists
alongsidealocalindustrialandservicessector“whoseratesofgrowthare
meagre,havenoknock-oneffectsandbarelyrespondtostimulithatcouldhelpto
increaseproductivity”(E.Ortíz2016,166).
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
fromUS$41billionin1993to340billionin2015(seeFigure3).7In2015,athirdof
thesederivedfromtheautomobilesector,and84%ofthetotalwenttotheUS
(Banxico2016).Aswiththeagriculturalsector,thisstronggrowthhasbeenbased
onthemassivesubsidisationoftheassemblingexportindustry,primarilyinthe
formoftaxincentivesandtheminimizationofcustomstariffsonimportedparts
andcomponents(Guíllen2012,69).
Insummary,exportshavemassivelyincreasedinbothagricultureandindustry
sincethe1990s,whileimportshavegrownequallyoreventoahigherextent,
causinganegativetradebalanceinmostofthetimeperiod.
3.2Agriculture,industryandlabour
Besidestheflowsofcapital,classicaldevelopmenttheoriesassumedlinks
betweenagricultureandindustrywithregardtolabour.Inparticular,theyheld
thatagriculturesupportsindustrializationthrougha)thesupplyofcheapfoodfor
labourandb)thesupplyofcheaplabourforindustry.Analysingtheroleoflabour,
itbecomesclearthatthepriceoflabourstillplaysacentralroleintheMexican
systemofcapitalaccumulation.However,incontrasttothedevelopment
Figuresincludeagroindustrialexports.
8
InviewoftheenormoussizeoftheinformalsectorinMexico,itislikelythatthisstatementmust
bequalified,takingintoaccounttheroleoftheinformalserviceeconomyforTNCcapital.
7
13
experiencesofEuropeandEastAsia,thefunctioningofthesystemdependson
labourremainingcheap.
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
Thepriceoffoodplaysacentralroleincapitalaccumulationbecauseofits
influenceonthepriceoflabour(Marx2009,172,551ff.).Itwouldgobeyondthe
scopeofthispapertopresentadetailedanalysisofthepoliticaleconomyoffood
inMexico(forthis,seee.g.Fox1993;Baker2013).Whatisimportantinthe
contextofthisanalysisisthatlabourischeap,butnotprimarilybecauseofa
growingdomesticagriculturalsectorprovidingcheapfood.Undercurrent
conditionsinMexico,thepriceoffoodisonlymarginallyrelevantforthepriceof
labourforcapital,becausethepriceoflabourissubsidizedthroughfourmeans:
First,acontinuingandintensifyingtrendofsemiproletarianizationsupporting
‘functionaldualism’(DeJanvry1981);second,increasinggovernmentsupportto
thepoorintheformofcashtransfersandfoodaidprogrammes;third,migrants’
remittances;andfourth,increasinghouseholddebt.
14
Firstofall,itneedstobeclarifiedthatwhatissystemicallyimportantisnotthe
priceoffoodfortheconsumer,butthepriceoffoodasaningredientofthewage
thatneedstobepaidbythecapitalistinordertoensurethereproductionof
labour.Theanalyticaldifferenceisimportantsincetheperiodsincearound2000
hasbeencharacterizedbygenerallyhighpricesonworldfoodmarkets(which
rapidlytranslatetothedomesticMexicanmarketasitisfullyopen)andin
particular,byhighpricevolatility.However,itisevidentthatthishasnot
translatedintohigherwages(CONEVAL2007,12).Inthiscontext,itisusefulto
recalltheanalysisbyDeJanvry(1981)onthe‘cheaplabor-cheapfoodand
functionaldualism’relation(Eakinetal.2014,149f.).ThekeyinsightofDeJanvry’s
studyconcernedthefunctionalityoftheco-existenceofsubsistenceagriculture
withcapitalistagriculture,astheyarelinkedthroughthe‘semi-proletarian’
householdthatsimultaneouslydependsonthecultivationforsubsistence(and
moreorlesscommercializationofsurplus)andonincomefromwagelabour
derivedfromworkinginfullydevelopedcapitalistagriculture.
“The salaried labor of “free semiproletarians” settled on subsistence
plotsoutsidethelatifundio–theminifundistas–constitutesasource
oflaborpowerthancanbestillcheaperforthelandlordthanservile
labor. In this case two advantages are secured: the possibility of
exploiting family labor on subsistence plots that cost the employer
nothingandthepossibilityofpayingtheworkerforhiseffectivelabor
onlywhenitisneeded.[…][S]emiproletarianization[thus]permitsthe
wagestobefarbelowthepriceoflaborpower”(DeJanvry1981:83f.).
Subsistenceagricultureisthusanimportantsourceofsubsidyforcapital’slabour
costandamajorreasonwhyhigherfoodpricesdonothavetotranslateinto
higherwages.Ashefurtherpointsout,semiproletarianizationisfunctionalin
peripheralaccumulation,butalsosubjecttoinherentcontradictionsthatstem
fromdemographicandecologicalpressuresthatleadtothecollapseofthe
resourcebaseofthepeasanthousehold,andmarketpressuresderivingfromthe
developmentofcapitalistagriculture(DeJanvry1981,39,86ff.).Thereisstrong
evidencethatdepeasantizationhasacceleratedwiththeneoliberalreformsand
theeconomicopeninginMexico.TheimplementationofNAFTAcombinedwith
thedismantlingofthestateagriculturaltradeagencyCONASUPOcauseda
massivelossin(largelyfamilybased)employmentinsmall-andmedium-scale
Sinceagriculturehasprovidedlessandlessasufficientsourceofincome,and
thereisnotenoughwageemploymentavailabletosubstituteit,otherfactors
havebecomeimportantinthesubsidisationofthecostoflabourinMexico,such
asmigrationtotheUS.Unemploymentandpovertyhaveledtocontinuously
increasinglevelsofbothinternalandinternationalmigrationsincethe1990s.OutmigrationtotheUShasexponentiallyincreasedinthe1990s(King2006,15).In
2014,1.3millionhouseholdsinMexicoreceivedremittancesfromabroad(INEGI
2015).Atanaveragehouseholdsizeof3.8members,thisamountstoaround5
millionMexicanswhoreceivepartoftheirincomethroughremittances,froma
totalpopulationof129million.
Moreover,thegovernmentrunsaconditionalcashtransferprogrammeforthe
poorsince1997,whichalsoincludesfoodaid(formerlycalledPROGRESAand
OPORTUNIDADES,nowPROSPERA).Theprogrammeisfinancedthroughloans
fromtheIADBandWorldBank.In2016,6.8millionhouseholdsreceivedsupport
throughthegovernmentprogramme(GobiernodeMéxico2016).Attheaverage
householdsize,thisamountstoatleast26millionpeople.Theprogrammewas
criticalasgovernmentresponsetothe2008foodcrisis.Inthecourseofrising
foodprices,thegovernmenthasalsoissuedvariousotherfoodaidpoliciesforthe
poor,suchasVivirMejor,PAZM,PALandPESA,andfoodpricesubsidiesthrough
thestateretailshopsDICONSA(FAO2014,127ff.).Interviewswithofficialsfrom
theMinistryforSocialAffairs(SEDESEM),theMinistryofAgriculture(SEDAGRO),
andmunicipalauthoritiesintheStateofMexicoprovidefurtherevidencethat
governmenttransfersareamajorsourceoflivelihoodforthemajorityofthepoor
inMexico.Moreover,itshouldbementionedagaininthiscontextthataccording
togovernmentestimations,another500,000householdsdependonincomefrom
thedrugeconomy(Nájar2010b).
Anothersubsidyforlabourofincreasingimportanceispersonalcredit.Household
debthasbeenontheriseinrecentyears,especiallywiththerelaxationofbanking
regulationin2006(FINCA2014;BBVA2014;ElFinanciero2016).
“Mexico[…]hasexhibitedanenormousincreaseinconsumerlending,
not just among microfinance institutions and commercial banks, but
9
Between1991and2007,thenumberofunpaidfamilyworkersinagriculturedecreasedfrom8.3
to3.5million,whilethatofseasonalworkersincreasedfrom1.8to4.7million(Scott2010,75).
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
agriculture,goingalongwithastarkincreaseinseasonallypaidagriculturalwage
labour(Scott2010,75,80f.;Fox2013).9However,insteadoffull
proletarianization,thishasresultedintheintensificationandconsolidationof
semi-proletarianizationsincecapitalistagricultureandindustryhavenotbeen
abletoabsorbthenewlyfreedlabour(Otero1999,56ff.;Eakinetal.2014,145f.).
Theincreasingdiversificationofincome-generatingactivitiesbypeasant
householdsandtheincreasingimportanceofnon-agriculturalemploymentand
incomehavebeenatrendall-overLatinAmericaandhasbeencapturedbythe
conceptof“newrurality”(foradetailedsummaryanddiscussion,seeKay2008).
Arroyo(2002)evenfoundthattherehasbeenanetlossof0.3%inemploymentin
themanufacturingsector,notwithstandinga45%productivityincrease.Neither
capitalistagriculturenorindustrythusprovidesufficientincometosustainthe
livelihoodsofthemajorityofMexicans.Thishasgivenrisetotheincreaseofthe
informalsectoroftheeconomy.In2014,around60%oftheMexicanpopulation
engagedininformalwork(ILO2014).
15
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
also payday lenders, pawn shops, and retailers. As early as 2007,
Business Week noted that in Mexico, “even Walmart has a banking
license.”Newplayersaren’ttheonlyonesfuelingthisgrowth.Credit
cards are proliferating, and banks have increased lending limits for
many customers. According to Euromonitor, a financial strategy
researcher, payday loans alone increased by 100 percent in 2012
(FINCA2014,7).
16
Themarketstudyofthemicrofinanceorganizationgoesontoelaborateonthe
increasingover-indebtednessofthepoor,findingthatitwas“increasinglydifficult
tofindqualifiedborrowers–peoplewhoseexistingdebtburdenswouldnot
impairtheirabilitytorepaynewloans”.Inmostcases,loansareusedtocopewith
familyemergencies,suchasdeathormedicaltreatment,orusedforessential
needssuchaspayingforschoolequipment(FINCA2014,17f.).Thereport
concludesthat“theevidenceshowsanalarminglyhighincidenceandseverityof
over-indebtednessandarrearsthroughoutthecountry,andmicrofinance
organizationsarerightinthethickofit”(FINCA2014,11).
Takingondebtisoftenanecessityduetothecontinuousdecreaseofwages
comparedtolivingcosts.Realwageshavesubstantiallydecreasedsincethe1980s
(Soederberg2010,82),andwithaminimumwageofMXN73(aroundUS$4)per
dayMexicohasthelowestbasepayrelativetopurchasingpowerofallOECD
countries(SAT2016;Bain2016).Thebrutalexploitationoflabourisespecially
prominentintheagribusinesssector,wherelabourarrangementsaremostly
informal,andifformalized,oftendonotcomplywithMexicanlabourlaws
(Morvant-Roux2012,10).NGOandmediainvestigationsreportthatnear-slavery
workingconditionsarecommoninMexicanagriculture,affectingaround2million
farmlabourers,amongthemanestimated100,000children(EscaladaMedrano
2015;Rodriguez2015).Anin-depthmediareportrevealedthatdebtrelations
havespurredasanewformoflabourbondage,inparticularthroughemployers
withholdingpaymentuntiltheendoftheseasonandchargingexcessivepricesat
localshopssellingfoodandbasicnecessitiesinthelabourcampsintheNorthern
Mexicanstates.
“Many farm laborers are essentially trapped for months at a time in
rat-infested camps, often without beds and sometimes without
functioning toilets or a reliable water supply. […] Laborers often go
deepindebtpayinginflatedpricesfornecessitiesatcompanystores.
Somearereducedtoscavengingforfoodwhentheircreditiscutoff.
It's common for laborers to head home penniless at the end of a
harvest”(Marosi2014).
Athalfthe30campsthejournalistsvisitedoverthecourseof18monthsinnine
Mexicanstates,“labourerswereineffectpreventedfromleavingbecausetheir
wageswerebeingwithheldortheyowedmoneytothecompanystore,orboth”
(Marosi2014).Thisisinlinewithasurveyamongagriculturalwagelabourersin
thestateofJalisco,whichfoundthattheymostlyincurintodebtwith
shopkeepersforconsumptionpurposes,thatis,basichouseholdneedsandcoping
withshocks(Morvant-Roux2012,19).
Undersuchconditions,thereisenormouscompetitionforscarcejobsinthe
formalsector–whichofferbenefitssuchasaccesstobetterhealthservicesanda
stableincome-evenifwagesarebelowthesubsistenceminimum.The
deteriorationoftheruraleconomyhasthusturnedintothebasisforthemajor
comparativeadvantageMexicopossesses(nexttoitsgeography)inthe
competitionofdevelopingcountriesforforeigncapitalinflows:anabundant
sourceofcheaplabourthathaspracticallybecomepowerlessintheinstitutional
structureoftheMexicanstate(Bain2016).The‘cheaplabour’isthepoorthat
engageinthevariouscomponentsofthesurvivaleconomytryingtosecurethe
livelihoodoftheirfamilies:inpoorlypaidwagelabourintheexport-oriented
sectorsofagricultureandindustry,ifavailable;inthedrugbusiness;inmigration
totheUStosupportfamilymembersremaininginMexico;andfinally,in
‘relentlessmicro-capitalism’,whichappliestoboththeurbaninformaleconomy
andpettycommodityproductioninruralareas(Bernstein2006,457)andoften
goesalongwithover-indebtedness.
Provisionofcapitalsurplusesfor
investmentsneededintheindustrial
sector
No,duetodrainingofprofitsbyTNCs
Earningforeignexchangethroughthe
productionforexport
Yes,butstillinsufficientdueto
increasingimports
Creationofahomemarket
No,duetolowincomeofrurallabour
Supplyoffoodandagriculturalraw
materialsforthedomesticmarket
(avoidingfoodimports)
No
Provisionofcheaplabourforindustry
Yes
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
3.3FunctionsofagriculturefordevelopmentinMexico
TABLE1:FUNCTIONSOFAGRICULTUREFORDEVELOPMENTINMEXICO Table1summarizesthedevelopmentofagriculture-industrylinksaccordingtothe
criteriaestablishedfromtheliteratureinsection2.Itshowsthatinspiteofthe
massivegrowthofexportsinbothsectors,inter-sectorallinkagesintermsof
capitalflowsarepracticallyabsent.Thisismainlyduetotheincreasingdrainingof
profitsabroad–anissuethatwillbefurtherelaboratedbelow.Becauseofthelow
incomeofrurallabour,theruralareasdonotcontributetothecreationofa
domesticmarket.Foodispartlyproduceddomestically(especiallycorn)and
export-agricultureearnsforeignexchange,butimportsstillsurpassexports.There
isonlyoneestablishedanddeepenedfunctionalcontributionofagriculturefor
industrialization,namelytheprovisionofcheaplabour.InthenextsectionIwill
developtheargumentthattheseempiricaltrendscanonlybeunderstoodby
takingintoaccountthefinancializationofcapitalaccumulationinMexico.
4. Developmentunderfinancializedperipheralcapitalism
“Inretrospect,the1970sseemstohavebeenasdefinitiveamarkerof
subsequentstructuralshiftsintheworldeconomyaswasthe1870s,a
centurybefore”(Bernstein2010,79).
Sincethe1970s,thenationalmodelofcapitalaccumulationinMexicohas
transformedintoanaccumulationmodelthatisfullygloballyintegrated,
particularlyintotheUSeconomy,andisdominatedbyfinance-ledaccumulation.
InthefollowingitwillbecomeclearthatfinancializationinMexicocanbe
17
characterizedasperipheralorsubordinatedfinancialization(Becker2010;Powell
2013).Historically,financializationinMexicodevelopedasaconsequenceofthe
debtaccumulatedinthe1970s,andtheconjunctionofUSandMexicanbourgeois
classinterestssincethe1990s.Supportedbyinternationalfinancialorganizations
andtheUS,theMexicanstatewastransformedtoserveanewaccumulation
strategy,whichisbasedontheextractionofwealth.Finance-ledaccumulationhas
createdaviciouscycleofhighinterestrates,largeforeigncapitalinflows,
increasingdebt,andthedeteriorationoftheproductiveeconomyinMexico.
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
4.1ThehistoryoffinancializationinMexico
18
FinancializationinMexicoisstructurallyrelatedtotwounderlyingprocesses
gainingimportance.First,onthedomesticlevel,andlikeinotherdeveloping
countries,theISI-ledeconomicdevelopmentstrategyranintoincreasing
problemssincethe1960s:inparticular,thecrisisofbothpeasantandcapitalist
agricultureduetotheexcessiveextractionofeconomicsurplusfromagriculture
bythestate(BartraandOtero1987),andthelackofforeignexchangetoimport
necessarycapitalgoods,creatingchronicbalance-of-paymentproblems(Ernst
1979;GereffiandEvans1981,42;Moody1995,100;Kay2009,18f;Gómez-Oliver
2012,230f.).Theseeconomicproblemstranslatedintoagrowingcrisisofpolitical
legitimacyoftheMexicanstate.Thesecondsetoffactorswasglobalinnature.
Theeconomicrecessioninthebeginningofthe1970sledUScorporationstolook
fornewwaystoincreasetheircorporateprofits.Thecoreofthenewstrategywas
theincreasingrelianceoftheirprofitsonsubsidiaries,subcontractorsandthe
shiftingofsupplynetworkstodevelopingcountrieswithlowlabourcosts,which
wasfacilitatedbyUSforeignpolicynegotiatingforgreateraccesstoforeignstock
andbondmarkets(Cox2013,11f.;CibilsandPinazo2016,74).Mostimportantly,
thishasbeentakingplacethrough‘MergersandAcquisitions’,whichhave
increasinglybeenfinancedbyinstitutionalinvestorsthroughthepurchaseof
corporatesharesindevelopingcountries(Correaetal.2012,7;Cox2013,6).Itis
thusimportanttonotethattheemergenceoftheTransnationalCorporation
(TNC)isintrinsicallylinkedtothefinancializationoftheglobaleconomy,whichwill
befurtherclarifiedbelow.Anotherkeyglobalfactorwastheexcessliquidityofoil
exportingcountriesafterthe1973/74oilpricespike,whichwerelookingfor
investmentopportunitiesto‘recycle’theirenormousrevenuesthroughthemajor
commercialbanks(Lipson1981,604f.).Inthiscontext,andintheperceivedneed
ofinflowsofforeigncapitalduetothefailedeconomicdevelopmentmodel,the
Mexicangovernment(likeotherLatinAmericangovernmentsatthetime)
borrowedmassivesumsofmoneyoninternationalcapitalmarkets,leadingtoa
doublingofexternaldebtbetween1979and1983fromUS$43billiontoUS$86
billion.NearlyUS$52ofthelattersumwaspublicorpubliclyguaranteeddebt
(Marois2014,314).Inordertoserveforeigndebtobligations,Mexicoincreasingly
becamedependentonpetroleumexportsinthe1970s.Acombinationoffalling
pricesandexportvolumesofoilandthe1979‘Volcker-Shock’–thesuddenraise
ofinterestratesbytheUSFederalBank-ledtothe1982Mexicanstatedefault
(Marois2012,65ff.),markingthebeginningoftheLatinAmericandebtcrisisand
theso-called‘lostdecade’.Thecrisisledtohighunemploymentandthe
continuingtrendofdeterioratingrealwages(Correaetal.2012,12).
Untiltoday,theMexicaneconomyhasnotrecoveredfromthepermanentstateof
crisis,whichhascontinuouslybeenexacerbatedbytheneoliberalreformsand
“InthecaseofMexico,atransnationalpoliticalcoalitioncouldemerge
more easily than was possible in other contexts due to the historical
ties between US capital and Mexican capital, especially in the
Maquiladora sector, which had been established as a legal
arrangement in the 1960s, and in agribusiness, which large-scale
Mexican firms and financial interests were already deeply connected
to US agribusiness firms in the purchase of machinery, fertilizer and
trade relationships. This process was connected to the ongoing
transformation of global agriculture toward more elaborate supply
chains that linked to food processing, marketing and distribution
networksdominatedbylarge-scaleUSagribusinesscorporations”(Cox
2013,17f.).
Asaresultofthis,Mexicobecamethelargestdestinationforforeigninvestment
among‘emergingmarkets’between1990and1993,whereas70%ofthe52.8
billionUS$capitalinflowintoMexicowereportfolioinvestments,mostlyinthe
Mexicanstockmarket(Soederberg2010,82;Correaetal.2012,13).
Atthispoint,itisimportanttoreflectonthekeyroleofachangeinmonetary
policyforunderstandingthepersistentcrisis-proneandanti-developmental
natureofthefinance-ledaccumulationregimeinMexico.
4.2Increasingextractionofrentthroughportfolio
investments
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
deepeningfinancializationsincethe1980s.Theprivatizationofstate-owned
enterprisesandbanks(Marois2012)bytheSalinaspresidency(1988-1994)
offeredhugesourcesofprofitfordomesticandinternationalinvestmentbanks
andcontributedtotheemergenceofatransnationalUS-Mexicancapitalistclass
(Cox2013,13).Privatizationwasledbythe37membersoftheMexican
Businessmen’sCouncil,whowerepartofthefivelargestprivatizationsamounting
for80%ofthevalueofallprivatizationsupto1991(Carlsen1991).Inthedisguise
ofMexican‘debtrestructuring’inthecontextofthe‘BradyPlan’10andthe
negotiationsoverNAFTA,USfinancialcorporationswereallowedtobuyequity
stakesofMexico’snewlyprivatizedfirms.Duetohistoricalpath-dependencies,
theformationofthecross-bordercorporateclasscoalitionwasparticularly
effectiveinthemaquiladora11andagribusinesssectors.
Nexttofinancialopening,akeyconditionalityofinternationalcreditorsinthe
debtrestructuringprocessesofthe1990swasthelegalimplementationof
‘centralbankindependence’(PolilloandGuillén2005,1774ff.).Thethreekey
featuresofan‘independent’centralbankarepricestability,political
independencefromthegovernment,andtherestrictionorbanningofmonetary
financing,i.e.governmentfinancingthroughthecentralbank(orinotherwords
‘printingmoney’bythecentralbank)(Carrière-Swallowetal.2016,5f.).As
elaboratedinthefollowing,theselegalchangesserveasstructuralbasisforthe
The‘BradyPlan’wasdesignedbyUSTreasurySecretaryNicholasBradyinordertoaddress
developingcountries’debtcrisisandrestoreglobalstability.Theaimwastoencouragenew
foreigncapitalinflowsthroughtheimplementationofexport-orientedgrowthstrategiesand
financialmarket-orientedreforms(EMTA2009;Marois2012,74).
11
MaquiladorasareSpecialEconomicZones,i.e.manufacturingplantswhereduty-freeandtarifffreeimportedpartsareprocessedorassembledandthenexported.
10
19
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
extractionofrentfromtheMexicaneconomybytransnationalfinancecapital,
whichfunctionsthroughaninterdependentsystemofforeigncapitalinflows,
foreigncurrencyreserveaccumulation,andrisingpublicdebtheldbytheprivate
sector.
‘Pricestability’or‘inflationtargeting’hasbecomethekeystrategyforthe
instalmentoffinancialrentierinterestsinthecentralbanksoffinancializedcentre
andperipherycountries(Epstein2002;Soederberg2010)andispartofthe‘New
MacroeconomicConsensus’policyequallypursuedinotherLatinAmerican
countriessuchasBrazil,Chile,ColombiaandPeru(DePaulaetal.2013;CarrièreSwallowetal.2016,5f.).InMexico,inflationcontrolwasacommitmentofthe
Salinasadministrationtogaintheconfidenceofinternationalinvestors,andwas
formallyadoptedin1999(Marois2014,316;Ortíz2016,170;DePaulaetal.2013,
221).Indevelopingcountries,themainstrategytocomplywith‘inflation
targeting’intheaftermathofthe1990scrises,whichhasleftmanyeconomiesin
LatinAmericaandAsiadevastated,hasbeenthehoardingofthemassiveforeign
capitalinflowsinforeignexchangereserves(Gray2006;AizenmanandGlick2008;
Paincera2009,2012;Marois2014,321;Ortíz2016).Between2000and2005,
developingcountriesaccumulatedforeignexchangereservesatanannualrateof
3.5%oftheircombinedGDP,almostfivetimeshigherthanthelevelintheearly
1990s(MohantyandTurner2006).Thebuildingupofhugeforeignreservesin
developingeconomies,whichexceedthereservesofdevelopedeconomiesmany
timesoverinrelationtotheirincomeandtrade(Rodrik2006,254),hascoincided
withfinancialliberalizationandthestronginflowsofforeigncapitalsincethe
financialopening,andinparticularsince2000(AizenmanandLee2007;Paincera
2009).Between1995and2014,theforeignreservesofemerginganddeveloping
countriesincreasedfromUS$456billionto8,057billion(US$8.1trillion)(IMF
2016,seeFigure1).
20
FIGURE 3: FOREIGN EXCHANGE RESERVES OF EMERGING AND DEVELOPING ECONOMIES ,
1995-2015(SOURCE :IMF2016)
Inthemainstreamdiscourse,thismassivebuilt-upofreservesbydeveloping
countriesismostlyseenasnecessaryeitherto‘drainsurplusliquidity’createdby
themassivecapitalinflowsandinthiswayavoidexcessivelevelsofexchangerate
appreciation,oras‘insuranceagainstfinancialcrisis’(AizenmanandGlick2008,
4f;MohantyandTurner2006;Rodrik2006;IMF2016).However,fromacritical
politicaleconomyperspective,whichpostulatesthateconomicrelationsreflect
socialrelationsofpowerandclass,thephenomenonappearsinadifferentlight.
FIGURE4:“STERILIZATION ”OFFOREIGNCAPITALINFLOWS(ELABORATIONBYTHEAUTHOR )
BuildingupaforeignexchangereservemeansthattheCentralBankbuysUSDollarsintheformofUSgovernmentdebt(1)(Lapavitsas2009,15;Labrinidis
2013,21).InordertobuytheUStreasurybonds,itfirstbuysdollarsonthe
internationalforeignexchange(forex)marketwithpesos(2).ItthenbuystheUS
treasurybondsissuedbytheUSFederalBank(3).
Thecruxaboutthe‘sterilization’offoreigncapitalinflowsisthatthecentralbank
doesnotbuythedollarswithmoneythatit‘prints’itself(i.e.givestothe
governmentintheformofcentralbankmoney)–asmentionedbefore,such
‘monetaryfinancing’wasbannedinthecontextofthestructuraladjustment
measuresinthe1990s.12Rather,theforeignexchangeisboughtwithcredit
12
InLatinAmerica,monetaryfinancingwasalsobannedinBrazil,Chile,Colombia,CostaRica,
DominicanRepublic,Guatemala,Honduras,Nicaragua,Paraguay,PeruandUruguay(CarrièreSwallowetal.2016,5).AccordingtoofficialIMFdiscourse,‘unsterilizedintervention’intheform
ofmonetaryfinancing(MohantyandTurner2006)wouldleadtoareductiononshort-term
interestratesthrough‘excessliquidity’,andconsequentlytoinflation(Gray2006,8;Mohantyand
Turner2006,42f.;AizenmanandGlick2008,5;Lapavitsas2009,14;Paincera2009;Ortíz2016,
251).However,asGraeberremindsus,thecausallinkofmonetaryfinancingandinflationseems
highlydoubtablewithaviewonthe‘quantitativeeasing’pursuedbytheUSFederalReserveand
theEuropeanCentralBankwhohave“printedmoneylikemad”inthelasttwodecades,without
sparkinganyinflation(Graeber2016,47).Inthislight,theimplementationof‘centralbank
independence’indebtorcountriesappearsaspartofcreatingtheconditionsforatransnational
elitetoextractwealthfromtheperiphery.Mexicangovernmentbondsareaverywelcomeand
lucrative‘investmenthaven’intimesofdesperatelyneededopportunitiesforabsorbing
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
TheMexicancentralbankusestheforeignreservestomanagethetwobasic
variablesofeconomicpolicyintheinterestoffinancialinvestors:theexchange
rateandtheinterestrate.Ineconomists’terms,thecentralbankimplements
‘exchangeratemanagement’throughthe‘sterilization’offoreigncapitalinflows
(Gonzalez2013;L.Ortíz2016).Figure1illustratesthe“sterilization”ofcapital
inflowsthroughbuildingupaforeignexchange(FX)reserve.
21
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
moneythatitborrowsonthefinancialmarketfromcommercialbanks,inthe
formofpeso-denominatedgovernmentbonds(4).Thismeansthatinthepast,the
governmentborrowedpesosfromthecentralbankcreatedbythelatter.Withthe
banningof‘monetaryfinancing’,thecentralbank’sroleswitchedfrombeinga
creditortobeingadebtor.Accordingtoatheoryofmoneythatpresumesthatthe
creationofmoneycomesalongwiththecreationofdebt(Vernengo2004,16;
Graeber2011),thismeansthatthelargestpartofmoneysupplyinMexicoisnot
ownedbythepublicinformofthecentralbank,butbyprivatebanks.The
problemwiththisisthatforthePesosthatMexicoborrows(theliabilitiesofthe
centralbank)ithastopayahigherinterestratethanitgetsfortheDollarsitowns
(theassetsofthecentralbank)(5)-whereasthelatterissetbytheUSFederal
bankandtheformerbytheBancodeMéxicoitself.AccordingtoForbesMéxico,
citingBancodeMéxico,in2013morethan60%oftheforeignexchangereserve
wascapitalthatenteredthecountryforthepurposeofbuyingpeso-denominated
governmentbonds(GómezTamez2013).Inessence,thismeansthatMexico
lendsUSdollarstotheUSAatlowcost(becauseMexico’sassetsarelow-yielding
USgovernmentbonds),whileprivateinvestorslendMexicanpesostoMexicoata
costlyrate(becauseMexico’sgovernmentbondsareinthehandsofprivate
investorsaskinghighinterest).Thismechanismappliestomuchofthedeveloping
worldandisamaincauseoftheincreasingnetcapitaloutflowsfromdeveloping
countriestodevelopedcountriessincethe1990s,inparticulartotheUS
(Lapavitsas2009;Paincera2009).Inotherwords,developingcountriesincurmore
debtinordertofinancedevelopedcountries’stagnatingeconomy,especiallythe
USasissuerofquasi-worldmoney(Paincera2009,10).ForMexico,ithasimplied
thatthatwhiletheDollarreservesaregrowing,thenetpublicdebtisequally
growing(Gonzalez2013)(seeFigure2).Itistherebykeytonotethatthecreditors
areprivateinvestors,andnotthecentralbank.
22
FIGURE 5: FOREIGN RESERVES AND NET PUBLIC DEBT IN MEXICO , 2000 – 2016 (SOURCE :
BANXICO2016)
overaccumulatedcapital(onthepopularityofMexicangovernmentbondswithfinancialinvestors
seee.g.FinancialTimes2016;TheWallStreetJournal2016).
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
The‘sterilization’oftheinflowingdollarsbybuyingthemandcreatingadollar
reservehasturnedintoastructuralconditionduetothecrisis-pronenatureofthe
entiresystem.Thecountryisnowdependentontheforeignportfolioinflows
(FPI),becausethevalueofthepeso(thatis,peopleinMexicobeingabletobuy
anythingwithpesos)isnowfullydependentonthedollarreserves(Gonzalez
2013)(seeFigure6).Iftheforeigncapitalflowsshowsignsofstagnation(asithas
beenthecaseacrossdevelopingandemergingeconomiessince2010(IMF2016)),
becauseinvestorsfearthatMexicosoonwillnotbeabletokeepitspromises
anymoreandactuallypaythehighinterestratethatitset,thiscouldleadtothe
chainreactionofinternationalcapitalsellingMexicangovernmentbonds–which
wouldsoonresultinabankruptcyofthestateandhyperinflation(whichiswhat
happenedinthefinancialcrisisin1994).Inordertopreventthis,thecentralbank
usesdollarreservestostabilizethevalueofthePeso,i.e.tobuyPesoswith
Dollars,insituationsofdecreasingcapitalinflows(‘exchangeratemanagement’).
ThisisthereasonfortherecentdecreaseinforeignexchangereservesinMexico
anddevelopingandemergingeconomiesingeneral(seeFigures1and2).
FIGURE6:DEPENDENCYOFTHEMEXICANPESOVALUEONFOREIGNCAPITALINFLOWS
Thestabilityofthesystemstandsonveryshakygrounds.Thegovernmentalways
needstoensurethatithassufficientdollarreservestokeeptheexchangerate
stableinmomentsofthreateningcrisis.Momentsofdecreasingcapitalinflows
signifythethreateningbreakdownofthesystem.Consequently,thecentralbank
raisestheinterestrateinordertore-attractcapitalbyofferingahigher
compensationfortheincreasedrisk(ithasdonesoseveraltimesin2016).
However,ahigherinterestrateputsmorepressureonthesystem,becauseit
meansthatthegovernmenthastopayevenhigherinterestsforthepesosit
borrowsonthemarket.
“Aslongastheexternalcapitalflowscontinue,thereimbursementof
short-termgovernmentbondsandthereturnsobtainedfrominterest
rates are ensured, since both depend on the new entry of external
capital.Iftheabundanceofcapitalishighandpermanent,thelevelof
internationalreservescangrowinspiteofthegrowingdeficitonthe
current account, which makes agents believe that such flows are
continuous. But the financial dependence also grows, because the
financing of the external disequilibrium and, consequently, whether
the crisis erupts or not, depends as much on new external capital
23
flowsasonthecontinuationofoldones.Inotherwords,thecredibility
of the central bank being able to keep the exchange rate stable and
maintain the positive differential between internal and external
interest rates depends on the movement of international capital”
(Gonzalez2013,translationandemphasisNR).
Aslongasinterestratesaresethighenough,themoneywillflow,butatthe
expenseofincreasingdebtforwhichhigherinteresthastobepaid.
4.3Financializationandtherealeconomy
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
Thisleadstothequestionofhowfinancializationhasaffectedtherealeconomy
andcreatedthespecificstructuressketchedinsection3.Thecausalrelationship
worksthroughthemainfeaturesofmonetarypolicy,whichisattractivefor
financecapitaltoextractrent,butdevastatingforthedomesticrealeconomy:the
exchangerateandtheinterestrate.
FIGURE 7: CURRENT ACCOUNT OF MEXICO , 1980-2015 (OWN ELABORATION BASED ON
DATAFROM B ANXICO 2016)
24
Figure7showstheMexicancurrentaccount.13Itshowsthatafterthe1994/95
crisis,thecurrentaccounthasbeenincreasinglynegativeduetoanegativetrade
balance,serviceaccount,andinparticular,netincome.Beforediscussinghow
thesetendenciesarerelatedtofinancializationandwhatthisimplies,itmustbe
emphasizedhowcrucialcashtransfers,i.e.migrants’remittances,areforthe
Mexicannationaleconomy.Thegraphclearlyshowsthatthesehavebeenthe
13
Thecurrentaccountofanycountryconsistsoffourparts:thetradeaccount(exportsand
importsofgoods),theserviceaccount(exportsandimportsofservices,e.g.businessservices,
transportation,tourism),thenetprimaryincomeaccount(inflowsandoutflowsderivingfrom
investments,suchasdividendsandinterests)andcashtransfers(suchasmigrants’remittancesor
foreignaid).
onlysourceofforeignexchangewithapositivebalancesincethemid-1990s,and
thus(nexttotheillegaldrugmoney)theonlysourceofincomeforthenational
economycounteringthemassiveoutflowofmoneyintheothersegmentsofthe
currentaccount.
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
Figure8summarizestheaccumulationsystemunderfinancializedconditionsin
Mexico.Theprevailingmonetarypolicyhassetinmotionseveralmechanismsthat
causethesteadilyincreasingoutflowofsurplusandwealthfromthecountry
alongsideincreasingdebtandastagnatingrealeconomy.Thiscausesagrowing
pressureinthebalanceofpaymentstoobtainforeignexchangethrough
increasingexports,FDIandFPI,furthergearingthesystemtowardscrisis.
FIGURE8:THEMEXICANECONOMYUNDERPERIPHERALFINANCIALIZATION
Thefirstmainproblemofthelargeinflowsofforeigncapitalinboomphases,
triggeredbyhighinterestrates,isthatitcreatesanovervaluationofthePeso
againsttheDollar(1),resultinginnegativetermsoftradeforthedomestic
economyinrelationtoimports.Itisdifficulttosaywhetherthisismorea‘natural’
effectoftheinflowingforeigncapital,oraneffectofthecentralbank’s‘exchange
ratemanagement’(1*).Although‘sterilization’isusedtopreventexcessivelevels
ofappreciation14,variousscholarsseetheovervaluationoftheexchangerateas
thekeyanchoragainstinflationsincethe1980sreforms(Gray2006,6f;Guíllen
14
Underfinancializedconditions,stronglevelsofappreciationduetolargecapitalinflowsare
problematicnotonlybecauseoftheeffectontheexportsectoroftheeconomy,butbecauseit
exertspressureontheCentralBanktolowertheinterestrate(Gonzalez2013).Thiscanleadtothe
diminishingofcapitalinflows,whichcanquicklyresultinachainreactionofdepreciation
(‘overshooting’)(Gray2006,6),shouldmoreandmoreinvestorsloosetrustintheeconomy:In
essence,thisiswhatledtothecrisisin1994.Beforethecrisis,thepesowasovervaluedby29.5%
(Gonzalez2013).Thismechanismillustratesoncemorethecrisis-pronenatureofthesystemin
thattheinterrelationsbetweenexchangerateandinterestrateareextremelydelicate,and
entirelydependontheconfidenceofthefinancialmarketintheabilityofthecentralbanktopay.
25
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
2012,61;Gonzalez2013;Powell2013,235;Ortíz2016,170).Ingeneral,
overvaluedexchangeratesandhighinterestratesareconsideredthekey
characteristicsofmonetarypoliciesinfinancializedcountriesoftheperiphery
(Beckeretal.2010,229).Thisispeculiarinsofarasovervaluedexchangerates
standincontrasttotheIMFandWorldBankstructuraladjustmentdiscourseof
the1980s,whichpromotedfreefloatingexchangeratestosupportproducersin
developingcountriesinordertoovercome‘UrbanBias’underISIpolicies.Hence,
whilemostcentralbanksof‘emergingeconomies’claimtohavefree-floating
exchangerates,“thefactsindicateotherwise”(L.Ortíz2016,246).Theeconomy
becomesincreasinglyimportdependent,exertingpressureonthecurrent
account.
26
Theprevailingmonetarypolicy,whichisentirelyorientedonmaintainingthe
confidenceoffinancialmarkets,leadstothesituationthatitismoreprofitablefor
(bothfinanceandindustrial)capitaltoinvestinthefinancialsector,i.e.publicand
individualdebt,thanintotheproductiveeconomy(Demir2009;Gonzalez2013;
Powell2013,141,180)15.Moreover,globallyoperatingfirmsarealsoforcedto
participateinderivativesmarketsinordertohedgeexchangerateandinterest
raterisk(Powell2013,144).Thissituationleadstothefinancializationofthereal
economy(2):Bankshavecutcredittofinanceproductiveinvestmentsofthe
domesticeconomy,whilenon-financialsectorfirmsequallyprefertoinvest
surplusesintofinancialassets.AsshownindetailbyPowell(2013),Mexicannonfinancialfirms(acrossallsectors)havefinancializedtheirbusinessactivities,in
particularsince2000.Thisisreflectedinthesignificantriseintheratiooffinancial
assetsascomparedtoassetsheldasnetproperty,plantandequipmentofthe
Mexicannon-financialcorporatesector(Powell2013,271).Duetothe
financializationoftherealeconomy,fixedcapitalformationinMexico-asinother
highlyfinancializedcountriesoftheperiphery–hasfallentolevelsbeyondthose
thatUNCTADidentifiedasnecessaryforgeneratingsustainedeconomicgrowth.
Therefore,Mexicohasbeenundergoingaprocessofdeindustrializationsincethe
financialliberalization(Demir2009,315).Thisexplainsthestagnationand
deteriorationoftherealeconomyinMexico(3).Ithasturnedfroman“overdraft
economy”orientedonproductiveinvestmentsintoan“autoeconomy”,where
companiestrytomaximizetheirprofitsthroughfinancialinvestments(Gonzalez
2013).
ThefinancializationoftherealeconomygoesalongwithaconsolidationofTNC
powerandincreasingforeignownershipofMexicanfirms(4).Thisisbecausedue
totheinterestratedifferential,firmsturnawayfromfinancingthroughbanksin
Mexicoandinsteadissuebondsinforeignmarkets.Theconsequencehasbeen
twofold:first,ithasledtoafurtherconsolidationofthepowerofTNCs,sincethey
haveeasieraccesstosuchsourcesoffinancingabroad.Second,whereMexican
companieshavemanagedtobepartofthegameandissuebondsonthe
internationalfinancialmarket,theyhavebeensubjecttoatransnationalization
themselves,thatis,anincreasingownershipofMexicanfirmsbyforeigners.Thisis
reflectedindramaticincreaseinpurchasesofMexicansecuritiesbyUSresidents.
ForeignliabilitiesoflargeMexicanfirmsnowrangebetween50and90percent,
whilethelevelsaresignificantlylowerforsmallerfirms(Powell2013,249,271).
15
Infoodandagriculture,thisisevidentinthegrowingfinancializationoffoodtraders,processors,
andretailers.Financialactivitiesallowthesetransnationalcompaniestosatisfytheirshareholders
inthefaceofmeagreprofitsthroughtheiractualbusiness(Isakson2014).
„[Hi]ghdomesticinterestratesassociatedwiththeinflation-targeting
policy serve the requirements of both international financial capital
and domestic capital which holds its liabilities denominated in world
money. This has resulted in a bifurcated domestic funding market,
with large corporates able to tap cheaper international sources of
financing,whiledomesticSMEsareleftreliantonretainedearningsto
fund their investment, shut out of expensive credit markets and
unable to enter capital markets. With smaller domestic suppliers
lacking the funds to invest, large firms turn increasingly to
internationalsuppliers,findingthatlocalrivalsareunabletocompete”
(Powell2013,304).
Insum,theincreasingcapitalinflowstobuy(a)Mexicangovernmentdebtand(b)
thefinancializationoftherealeconomycausetheincreasingoutflowofmoney
fromtheMexicaneconomy(5),visibleas‘netprimaryincome’inthecurrent
account(seeFigure7):a)intheformofinterestpayments,b)intheformof
dividendsleavingthecountry.Combinedwiththeincreasingimports,these
mechanismscauseastructurallygrowingdeficitinthecurrentaccount(6).In
consequence,thepressureonthebalanceofpaymentsiscounteredbythree
means(7).Thefirstisincreasinglevelsofdebt,reproducingthedependencyon
FPI;thesecondistheearningofforeignexchangethroughtheincreaseofexports;
andthethirdisthedrawofforeignexchangeintotheeconomythroughFDI.Next
toattractingforeignenterprisestoinvestinstocksofMexicancompaniesandto
openproductionfacilitiesinMexico(supportedbythesubsidizationofcheap
labourasdiscussedabove),FDIisattractedthroughtheprivatizationofstate
properties,naturalresources,andpublicinfrastructure,servicesandpolicies.
Sincethe1990s,themajorinvestmentchannelsforforeigncapitalconsistedinthe
agribusinessandmanufacturingindustries,andintheprivatizationofstate-owned
enterprises,banks,minesandsocialsecurity.Morerecently,thegovernment
addedastrategyofcontractingprivatesectorfirmsfortheimplementationof
evergrowingpartsofpublicfunctions(Correaetal.2012,13).In2012,seven
governmententitiesamountedto42%ofthedebtemittedontheMexicanstock
market:TheNationalBankforInfrastructure(Banobras),theMexicanstateownedpetroleumcompany(Pemex),theFederalElectricityCommission(CFE),the
statehousingagenciesFOVISSSTEandInfonavit,theFederalMortgageCompany
(SociedadHipotecariaFederal),andthegovernmentoftheFederalDistrict
(MexicoCity)(ElEconomista2012).Inauthor(forthcomingin2017),Ishowhow
housingpolicyhasbeentransformedinordertoextractwealthfromtheworking
classes.Statepolicytherebyconsistsinfacilitatingbanks’useoftheworking
Oneconsequenceoftheinvolvementofagribusinesscompaniesinfinancialmarketsisthatthey
themselvescontributetotheincreasingpricevolatilityonagriculturalcommoditymarkets(Clapp
2012;Murphyetal.2012;Isakson2014;757ff.).Higherpricevolatilityinturntranslatesintohigher
premiumsforinsuranceagainstpricerisks.Oneofthepeculiaritiesofstate-facilitatedfinancecapitalismisthattheMexicanstatesubsidizesprizeriskinsurancethroughapriceinsurance
programme,whichispartofASERCA,thecommercializationsupportprogrammeoftheMexican
MinistryofAgriculture,SAGARPA.Theprogrammebecameespeciallysignificantafter2007andin
2009accountedfor44%oftheASERCAbudgetformaize(Appendini2014,15).
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
TheconsolidationofthepowerofTNCsisclearlyvisibleintheMexican
agribusinesssector,whichparticularlyderivesfromthehighmarketconcentration
inmarketization(Spieldoch2010;Pons-Cortés2015).16
16
27
classes’personalincomeasasourceofprofit17,andattractingforeigncapitalto
thesesortof‘investments’throughsecuritization,i.e.insuringtheinvestments,
resultingingrowinghouseholddebt(cf.Lapavitsas2009,18f;Soederberg2014).
Mexico’senergyreformofDecember2013,whichopenedtheoilandgassector
toprivateinternationalinvestorsandpromotesMexicoasthe“newelDorado”
(cf.Gayetal.2014),isafurtherattemptofthegovernmenttoattractFDI.18
5. Conclusion
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
DevelopmentoftheMexicaneconomy
28
Sincethe1970s,thenationalmodelofeconomicdevelopmenthasbeentaken
overbyafinance-ledglobalaccumulationregime.Thepaperhastrackedthe
mechanismsofthistransitioninMexico,aneconomydefinedthroughits
peripheralpositioninthefinancializedcapitalistworldsystem.Thecollapseof
Mexico’spublicfinancesduetothemassiveamountsofexternalUS-Dollar
denominateddebtcollectedinthe1970shasprovidedthebaseforthe
breakthroughoffinance-ledcapitalismafterthe1980sand1990sfinancialcrises.
Thisbreakthroughhasstronglyshapedthedevelopmentofagriculture,andits
roleinthebroadercapitalistindustrializationprocess.Thestructuraladjustment
anddebtrestructuringmeasuresafterthe1980scrisiscreatedtheconditionsfor
thefinancialopeningofthecountry,andthetakeoverofrentierinterestsasthe
primaryorientationofeconomicpolicy.Amonetarypolicycommittedtohigh
interestratesand‘exchangeratemanagement’throughtheaccumulationofa
largeforeignexchangereservehascreatedadverseconditionsfortheproductive
economydueto:a)anovervaluedexchangerateleadingtonegativetermsof
tradeforMexicanproductsvis-à-visUSproducts;b)highinterestratesimpeding
accesstocredit;andc)higherratesofreturnforcapitalinthefinancialsector
thanintheproductivesphere.
Nevertheless,agricultureandindustryhavebothsubstantiallygrownsincethe
1990sintermsofoutputandexportvalues.Ihavearguedthatthenatureofthe
developmentinbothsectors,isaconsequenceofthefinancializationofcapital
accumulation.Intermsofcapitalflows,thethrivingagriculturalandindustrial
sectorsarelargelydelinkedfromeachotherandfromtherestoftheeconomy,
sincebothinvestmentsandtheextractionofprofitaremostlycontrolledby
transnationalcorporations.Incontrasttotheideathatagricultureshouldbe
‘squeezed’forfinancingindustrialization,transnationalcapitalappropriatesthe
largestpartofthesurplusinbothsectors,whileitsproductiveactivitiesthriveon
heavystatesubsidies.Ratherthanthestate‘squeezing’agricultureforan
17
Expandingthepersonalcreditmarketisakeystrategyofinvestorsin‘emergingmarkets’,as
evidentfromthisanalysisofaresearchfirmoftheratingagencyFitch:“Webelievethaton
aggregate,consumerandhouseholddebtinemergingmarketwillcontinuetoriseoverthecoming
yearsasamajorityofeconomies-mostnotablyIndia,Mexico,IndonesiaandRussia-stillenjoy
verylowlevelsofhouseholdleverage.Whencombinedwithadeepeningofthebankingsector
overthecomingyears,still-strongincomegrowthinmostemergingmarketsandfavourable
demographics,risingdebthasthepotentialtodrivetheconsumerstoriesinthesecountries”(BMI
research2016).
18
Moreover,theenergyreformisseenasnecessarysincetherearehopesthatforeign
investmentsintotheexploitationofnaturalgas(‘fracking’)willlowerthecostsofelectricity
supply,therebyincreasingthecompetitivenessofthemanufacturingindustry(Alvarezand
Valencia2015).
Theexport-orientedindustrializationmodelhasnotbroughtaboutbroad-based
development,norhasitcreatedtheconditionstodosointhenearfuture.The
sectorsareintegratedthroughthereproductionofacontinuoussupplyofcheap
labour-notonlydirectlybetweenagricultureandindustrythrough‘functional
dualism’,butalsoindirectlythroughtheroleoffinancecapitalinprovidingcredit
tothestateandhouseholds.Clearly,thisiscontradictoryandunsustainableinthe
longrun,asthesystemworkstowardsthedestructionofboth.Ifitisnotthe
developmentofcapitalistagriculturealienatingpeasantsfromtheirlandsand
liquidatingfunctionaldualism(cf.DeJanvry1981,39f),itisthedebt-financed
natureoffinance-ledaccumulationthatisinherentlycontradictory:First,the
financingofthestructurallyrisingcurrentaccountdeficitthroughincurringmore
publicdebtwhiletherealeconomyisnotyieldingsufficientsurplusforthestate
toredeemitsclaims;second,thefinancingofcheapfood(andotherbasicneeds
suchashousing)forlabouron(publicandhousehold)debtthatwillcometoan
endwhenthecontradictionbetweenincreasinglevelsofdebt,astagnating
domesticeconomy,andbelow-subsistencelevelwagesbecometoolarge.These
contradictionsarelikelytoresultinnewfinancialcrisissoonerorlater.Uptonow,
thecostsofthecriseshavebeenalmostunilaterallybornebyMexicanlabour
(Marois2011).19Thequestionisthusnotonlywhenthebubblebursts,buthow
longthecostscanbeimposedonlabourwhenthereislessandlesstosqueeze
outofit.
Incontrasttothewidespreadview,theMexicancaseexemplifiesthatthe
enormousinflowsofforeigncapitaltodevelopingcountries(duetoexport,but
mainlyduetofinancialinvestments)havenotbeeninfavourofbroadbased
development,buttothecontrary,ledtonetcapitaloutflowsandfurther
impoverishment.Theironyofperipheralfinancecapitalismisthatthesystemis
dependentonthecontinuousinflowsofforeigncapital,whiletheseare
simultaneouslyleadingtoperdition.Sincethestopofforeigncapitalinflowsisthe
triggerofcrisis,thestate’srolehasshiftedfrombeingadevelopmentaliststateto
adebt-financedcrisismanager.Inordertopayfornecessaryinvestments,
subsidiesandbasicoperations,thestatelendsfromtransnationalfinancecapital.
Thestatefurtherinsuresinvestmentsoffinancecapitalintostatetasksthatwere
takenoverbyprivatefirms(e.g.housing)throughsecuritization.Atthesametime,
thestate’sroleconsistsofkeepingupthetrustofinvestorsthatinterestscanbe
paid.Therefore,itcontinuouslycreatesnewinvestmentopportunitiesforforeign
capitalandmanagesinterestandexchangeratetothebenefitofinvestors,
furtheringtheconditionsofperipheralfinancecapitalism.
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
industrializationproject,wecanconcludethattransnationalcapital‘squeezes’
Mexicanlabourtoincurmoredebttofinanceitsextractiveactivities.
FromUrban/RuralBiastoFinanceBias
In1982,Corbridgedeclaredthat“thecollapseoftheUBtheorydoesnot
guaranteethevalidityoftheconceptofruralclassbiasanymorethanthefailure
ofByres’industrializationteleologyjustifiesaunitaryandnecessarypathof
developmentledbyagriculture”,accusingbothofthinkingintermsof“acrudely
dualisticsocialtheory”(Corbridge1982,112).Thehistoryofthepast30years
haveproventherelevanceofthisstatement.Theanalysishasshownthatthe
19
Importantly,Maroisalsoshowsthatthesocializationoffinancialriskisanecessaryand
constitutiveelementoffinancecapitalism(Marois2011).
29
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
urban/ruraldistinctionhasceasedtobeausefulanalyticaltoolforexplaining
Mexico’sdevelopmentpathunderneoliberalism.Anovervaluedexchangerate
andcheapfoodimportsareimportantcharacteristicsofthecurrentaccumulation
regime.However,evenifsuchpoliciesareintheinterestoftheurbandwellers
whomakeupthemajorityofthepopulation,andthesubsidizationoffood
consumersisstillakeyaspectofstatepolicy,adomesticpolicybiasfavouring
urbanfoodconsumersoverruralproducersisbynomeanstheoriginofkeeping
foodpriceslow.Thedatahasshownthat-asinmostotherpartsoftheworld–
eveninruralareasandamongpeasanthouseholds,peoplearefoodconsumers
ratherthanproducers,whichmakestheurban/ruralclassseparationobsoletein
thisrespect.
Aboveall,theanalysisshowsthatthequestionofagriculture’sroleincapitalist
developmentmustbeapproachedfromaworldhistoricalperspective,asthe
nationaldevelopmentpathisincreasinglyabsorbedbytheoperationsofglobal
financecapital.Itisquestionablewhethertheinterpretationofthedevelopment
problem(only)throughanationallenswaseverappropriatetothehistorical
realities(McMichael2013,69ff.).Withthebreakthroughofglobalfinance
capitalism,itisunmistakablethatthenational-levelrural/urbandistinctionis
neitheranadequateconceptualizationforexplainingthehistoricalpathof
capitalistdevelopment,norforexplainingpovertyandsocialinequalitiestoday.It
seemsthatfinancecapitalisindifferenttotheagriculture/industryand
urban/ruraldistinction(atleastonanationalscale),becauseaccumulationworks
throughwealthextractionfrom(paidandunpaid)labouratlargebyan
increasinglytransnationalandtranssectoralcapitalistclass.Ratherthan
urban/ruralbias,themainprobleminfinancializedcountriesoftheperiphery
todayisthus‘financebias’.With‘agrariancapitalbeyondthecountryside’and
‘rurallabourbeyondthefarm’(Bernstein2016,642)underfinancialized
conditions,itisclearthatagrarianchangeandindustrializationarenotlinked
throughthesamemechanismsasintheeraofnationaldevelopmentalism.Oneof
thekeyquestionsis,ifthesectorshavedisintegratedcapital-wiseonanational
scale,howaretheyrelatedonaworldscale?Questionsaboutwhoproduceswhat
onwhichlandandforwhichpurposearecentralnotonlyinviewofan
emancipatoryproject(McMichael2013),butalsoanalytically,sincefinance
capitalismcontinuestobelinkedtolabourinproductionandthereforecannot
decouplefromthepriceoffood.Foodregimeanalysisisthuscentralandmust
startfromquestionsaboutchangingpatternsofaccumulationandtheir
contradictions(cf.Bernstein2016,639;Friedmann2016,684f.).Forinstance,how
dofinancializationandnewmechanismsenforcingunequaldevelopmentona
worldscalerelatetofoodandagriculture?
Unequaldevelopment,dependencyandclassrelationsunderperipheralfinance
capitalism
30
Thediscussionofforeignreserveaccumulationshowedthatitiscrucialtonote
there-emergenceofacleardistinctionofcentreandperipherycountriesinthe
worldeconomyalongthelinesofissuersandhoardersof‘quasiworld-money’
(Lapavitsas2009;Labrinidis2013).Akeyquestionthisraisesishowwehaveto
understandglobalunequaldevelopmentandcentre-peripheryrelationsintheage
offinance-ledcapitalism.Ontheonehand,theMexicancaseexemplifieshowthe
‘discipliningregimeofdebt’(Sassen2014)(re)producesperipheralcountries’
positioninthenewinternationaldivisionoflabour,andhowitimpedes
investmentsintheproductiveeconomyandcreationoflinksbetweensectorsfor
thecreationofemploymentanddevelopmentinthesenseofincreasinglevelsof
wealthforthemajorityofsociety(Powell2013).Mexico’sinternaldevelopmentis
stronglyshapedbyitsparticularinsertionintotheglobaleconomicsystem,
revokingtherelevanceoftheoriesofdevelopmentofunderdevelopment,
dependencia,andunequaldevelopmentonaworldscale.Itsdependentstatus
therebyseemsevenmorepronouncedthanunderthemodelofnational
development.However,thenatureofdependencyisdifferentfromthephaseof
nationaldevelopmentalism,inatleasttwowaysthatneedfurtherresearchand
clarification.First,atthecoreofthesystemofappropriationfromtheperiphery
bythecentreistheextractionofwealththroughthemechanismofinterest.
Hence,thecentre-peripheryrelationshipisnotanymorecharacterizedbythe
appropriationofasurplusfromtheperiphery,butbypureextractivism.Second,
whileitseemsthattherearenewdependenciesalongthelinesofcentreand
periphery,thenatureofwhatandwhoconstitutescentreandperipheryarenot
clear-cut.TheMexicanstatemaybedependentonkeepinguptheconfidenceof
internationalinvestorstoavoid(orrather,postpone)economiccrisis,andstandin
competitionwithotherperipheralstatesforthesameinvestments.Butwhoisthe
Mexicanstate,andwhoisdependentonwhomorwhat,whentheperiphery’s
financialandpoliticaleliteisbecomingpartofatransnationalcapitalistelite
extractingwealthfromthecountry?Whatistherelationshipbetweenthe
domesticandinternationalcapitalistclass,andwhereandhowhasfinancecapital
(not)beenabletoco-optproductivecapital?Whataretheclassdynamicsof
peripheralfinancecapitalism?Classrelationsaretodayconstitutedglobally,and
attentionneedstofocusonhowtheystructureandreproducepovertyand
inequalitywithinandbetweencountries(Selwyn2015).
Finally,theanalysishasshownthatwithfinancialization,wehavemovedfurther
awayfromthestructuralconditionsthatfacilitatedevelopmentinthesenseof
increasinglevelsofincomeforsocietyatlarge.Thisgoesbacktotheaccumulation
mechanismoffinancecapitalism:interest.Interestisaclaimonthesurplusvalue
createdintheproductionprocess,andinthiswaylinksfinancecapitaltolabourin
production(Marois2012,33).Withtransnationalcapitalgainingmorepowervisà-vislabourunderneoliberalism,andperipheralcountriescompetingfor
investments,thismeansthatlabourmustbesqueezedmoreinordertosettlethe
claimsoffinancialinvestors.Developmentisthereforeunlikelytotakeplace
undertheconditionsofglobalfinancecapitalism.Ifnewfreetradeagreements
suchasTPPareimplemented,Mexicoislikelytobearolemodelforother
countriesoftheperiphery.Financecapitalwillthenpenetratedeeperinto
developingcountriestoappropriatemorepublicgoods,naturalresources,and
people’spersonalincome.Sincethebalanceoffinance-ledaccumulationisonly
temporalbynature,thiswillcontinuouslyexpulsemorepeoplefromsocietyand
pushthemtothelimitsofsurvival.Thereisahighriskthatthiswillleadtostrong
surgesinmigrationandorganizedcrime–bothofwhicharecharacterizedbythe
mostextremeformsofviolenceandlackofhumandignity.Areformofthe
internationalmonetarysystemandthede-financializationoftheworldeconomy
areasinequanonforrenderingpossiblehumandevelopment,andmustobtain
moreattentionbyresearchersandactivistsalike.
ElfuturodelaalimentaciónylaAgriculturaenelSigloXXI.
31
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