It would seem overconfident to raise this question when the Mexican state is beginning to show signs of a failed state in the face of massive homicidal violence and growing insecurity caused by organized crime bands in many parts of the country, while President López Obrador (AMLO) dispenses them with loving messages (“hugs, not bullets”). This terrible situation, the stridency of theatrical political battles and the ideological Manicheism assiduously stoked by AMLO seem to stifle the emergence of a fundamental fact: the formation of a consensus for the creation of a universal welfare state to lessen inequality and poverty in the country.
All political forces, including business leaders who openly participate in politics, share this consensus. All of them agree that it is neither possible nor desirable to restore the neoliberal economic model, and that the great present task is to build a level playing field to relieve accumulated social tensions and create opportunities for progress for all Mexicans.
This consensus has emerged from the harsh reality of facts, mainly the massive vote and popular support for AMLO and his Morena movement, which has steadily grown since 2018 despite the disastrous results of all their policies. The economy has not grown. Private investment is stagnant. The Covid-19 pandemic management has been lethal. The public healthcare system has been dismantled without creating a new one to date. Public spending is concentrated in grandiose projects whose profitability is dubious and cost much higher than estimated to the detriment of essential social protection expenditures. Political corruption is rampant, while public administration is in the hands of unskilled officials whose only requirement is political loyalty, all of these marked by a clear tendency towards concentration of power in AMLO hands.
These disastrous mistakes, omissions and dangerous trends have forced the opposition´s parties to keep united and awaken the middle class in large cities. As a result of the 2021 mid-term election, a counter-power was created in the Chamber of Deputies, which have stopped regressive government initiatives, such as the reform of the electricity industry, which aimed to heavily use polluting energy sources, obstruct the private use of renewable ones, and compulsively centralize the industry without a viable financial and technical plan. The defeat of this initiative has strengthened the opposition’s conviction to remain united and increase its vote.
Thus, besides the urgent need of creating a universal welfare state, there are strong additional reasons supporting the emerging consensus. These can be summed up as stopping AMLO’s destructive and autocratic drift, while making room for socially responsible private capital. As the 20th century’s history shows, these are some basic conditions for creating a social democratic state.
Social democracy it is a neither a tepid communism nor a benevolent mask for unfettered economic liberalism. Rather, it is a coherent, well-grounded and flexible ideology in its own right, aimed at reconciling social justice with capitalism as the most efficient creator of economic wealth. Social democracy acceptance of capitalism is not a pragmatic device but a coherent assumption of individual freedom, which includes free enterprise, yet limited for the sake of fair wealth distribution. Economic wealth is a social product, not an individual one.
The creation of a social democratic state would not be a novelty in Mexico. With the exception of government’s authoritarianism and the corporatist hegemony of the PRI and its predecessors, this was the country’s prevailing ideology from 1920 to 1982. This political profile ―under the name of “social liberalism― was a product of the Mexican revolution (1910-1920) and began to rule before several developed countries adopted similar policies. During this long period, the Mexican state created a welfare state, encouraged the formation of large labor unions, distributed land to peasants, nationalized basic industries, expanded the middle class and created a Mexican industrial class, all of these without contracting foreign debt.
In the period 1952-1980, the Mexican economy grew more than 6 percent on average per year. Social services ―markedly education and healthcare―, and economic infrastructure exponentially grew. However, big countryside regions remained in poverty while new ones arose. Working classes, teachers and healthcare personnel mobilized for wage increases and better working conditions, while the prosperous industrial cities began to be encircled by poverty belts. This economic model ran out of steam in the late 1960’s, was transformed by contracting large sums of foreign debt in the 1970’s to end in 1980-1982 because of the global financial crisis that hit 40 debtor countries around the world.
The inception of “social liberalism” after the Mexican revolution, and the new situation created by AMLO’s electoral triumph in 2018 after 30 years of neoliberal rule, clearly fit into the “double movement” that Karl Polanyi identified as the dynamics of the modern world (The Great Transformation, 1944). Polany’s “double movement” refers to the process of capitalist expansion and wealth concentration that provoke protective reactions from society, which in turn unleashes new political, economic and social dynamics.
The biggest moments of the Mexican social justice regime were the presidential periods of Álvaro Obregón (1920-1924), Plutarco Elías Calles (1924-1928) ―whose influence prolonged during the ensuing three brief presidencies until 1934―, and its culmination in the Lázaro Cárdenas presidency (1934-1940). Mexico’s social justice regime thus predates Franklin D. Roosevelt’s New Deal, from which it benefited politically in due course. In expropriating the foreign oil companies in 1938, President Cárdenas reasoned that the balance of power in the United States would favor his historical decision, as indeed it occurred.
During the post-war period, the Mexican government adopted industrialization as a priority, so smoothing its social policies, without abandoning them altogether. Since the industrial class was incipient, the government assumed such a role, while encouraging and protecting the birth of a domestic industrial class, which turned out to be very dependent on the government. This model was called “stabilizing development” (1952-1970), which affected the income and living conditions of workers and peasants. The successive governments tried to compensate for this damage by expanding social services, while holding back working class demands in order to protect the new industrial class.
This state of affairs prevailed until 1970, when President Luis Echeverría resumed and reinforced the social commitment of the Mexican revolution. To achieve this goal a tax reform was needed but the vested interests created during the previous period prevented it. It was then, about 1973, that the Mexican government resorted to huge foreign borrowing. This trend was deepened by President José López Portillo (1976-1982) until oil prices plummeted and interest rates increased in the year 1980, so causing a deep economic crisis that lasted throughout the 1980s. However, Echeverría and López Portillo social policies dramatically improved working class, peasants and middle class living conditions, while public services and economic infrastructure grew like never before in Mexico’s history.
The rest is well-known history. Following the hardships of Miguel de la Madrid’s presidency (1982-1990), the Mexican government began to adopt the neoliberal model that prevailed from 1990 to 2018, when history took the turn that now has the country in shambles. However, despite AMLO’s clumsy and boring rhetoric, which paints the entire neoliberal period in black, there was important political progress, such as the adoption of the democratic system supported by sound institutions that have allowed political alternation in almost all the government levels since the year 2000, while speech freedom, muckraking journalism and transparency of public information are flourishing.
Unfortunately, democracy has not yielded material fruits for most people. Throughout the political transition years beginning in year 2000, the political actors dedicated themselves to distribute positions and privileges, leaving the neoliberal model untouched. The mainstream mass-media and public opinion by their part ―which also took the goodness of neoliberalism for granted―, focused on denouncing political corruption and criminal violence as if they were the only obstacles for the neoliberal promised fruits.
The explicit or implicit acceptance of the neoliberal model by political actors, low economic growth, wealth concentration, poverty and inequality increasing and political corruption scandals fueled the fury of both the poor and middle class not only against neoliberalism but also against the political system as a whole, thus paving the way for AMLO’s triumph.
After more than three years of AMLO’s government, most of the middle class that voted for it has become disillusioned, while doubt begins to erode their closest follower’s loyalty, not so the poorest, who still keep AMLO’s popularity very high.
Whether the middle class, participatory businessmen, the media and opposition political parties will be able to offer convincing ideas to the poor majority in the 2004 presidential election, is an open question. One plausible course is that Morena get divided and a candidate able to straighten the boat comes out of its ranks. In any case, the biggest challenge remains to be the state of the poor voters’ political conscience who seem to be satisfied with the handouts that AMLO dispenses them.
Such is the biggest obstacle for the creation of a genuine social democratic state, whose basic subjective condition is the existence of an informed citizenry.