Pena Nieto And The Death Of The Mexican Revolution

What will remain of the socialist ideals of Mexico's 1910 revolution, as the country's rulers dance to the singular drum of global capitalism and North America's elite?

 Peña Nieto has big ambitions
Peña Nieto has big ambitions
Fernando Chávez


MEXICO CITY — The great social revolutions of the early 20th century are dead. Only their myths and founding echoes remain, as the legendary heroes live on in the memories of those who encouraged and defended them yesterday as they do today.

This, of course, is neither new nor surprising, bitter though it may be. It has happened before with other seemingly distant events, like the French and American revolutions of the 18th century.

The Mexican Revolution of 1910 and the 1917 Russian Revolution marked 20th century Western history. The second certainly had a greater impact, but both revolutions were driven by guiding ideas that stood firmly opposed to liberal capitalism. The development of Soviet socialism changed the world’s political geography for much of the century, while the Mexican Revolution laid the foundation for a national project of local capitalism, in the face of unique challenges the United States has posed to us since first becoming a nation in the early 19th century.

President Enrique Peña Nieto's energy-sector reforms have brought down the curtain on the last great public-sector companies born of the Mexican Revolution: Pemex oil and the electricity giant CFE. The liberal restoration that began in 1982 has reached its apex with these reforms. Key revolutionary institutions have disappeared one by one since the 1980s: public lands, strategic public firms, an independent foreign policy, a mixed economy, economic nationalism, and rural education are among the many things that have been lost. The institutional cloth of our revolution is practically torn up, for good.

The decisive agents of this liberal restoration have been the Institutional Revolutionary Party (PRI), currently in power, and the more conservative National Action Party (PAN). This was increasingly clear after 1983, as the anti-nationalist component in our public life was given ever-increasing relevance.

Architects of “restoration”

The core concept is simple: We must modernize economically to integrate into the global economy. But to make up for “lost” opportunities, the restoration architects have turned to electoral fraud, not to mention political filth, to obstruct the reorganization of the revolution’s heirs and guardians.

Pancho Villa, one of the Revolution's military heroes. (Library of Congress)

We keep hearing how the 1917 Constitution has been amended so many times that it’s now hardly recognizable. The constitutional changes implemented for energy reforms have given us another capitalist project and come with the promise of job creation and gradual adjustments to current income distributions. All of this is in the context of increased foreign investment that is expected to fuel a long growth cycle.

Mexico’s social swerve in 1917 enjoyed the backing of peasants and workers, the impoverished middle class and the revolutionaries who began to criticize the staid, self-perpetuating regime of General Porfirio Díaz.

The turn we witness today, led by the Peña Nieto regime is really just a maneuver of big foreign and national companies, backed by international finance and, of course, the North American political elite. Two national projects, two visions of the world and society come face-to-face — and one has lost.

What is the Mexican Revolution’s bequest? Most important was hope that a sovereign and prosperous nation would one day join the world through international commitments and a basic level of diplomatic respect — as shown in the 1930s by the government of Lázaro Cárdenas del Río. Other, less fortunate legacies were the authoritarian politics and government corruption that were side effects of intermittent development from 1920 to 1982. Not surprisingly, the social and political movements emerging since 1988 have demanded three essential elements of democracy — legality, transparency and accountability.

And so what can we expect in the next stage of Mexico's integration in the American and Canadian model? I would note two key subjects. First, there will have to be, sooner or later, a single labor market in the three countries. The speed of adjustment will depend on U.S. and Canadian exigencies, as integration will supposedly have a double effect on them - penetration of more Mexican workers and trade union reactions to this migratory process. A regional labor market would have unprecedented effects on jobs, wages and benefits, but the articulated response of workers will have a decisive impact on the balance of relations in that market.

More difficult to predict is what will happen with currency. The Mexican exchange crisis in 1994-95 was resolved — at the cost of a deep recession — yet we still recall how businesses demanded then that Mexico adopt the U.S. dollar, and end for good the peso’s traumatic devaluations. Today it’s Washington that will decide about monetary integration, and few seem interested right now in replacing three national currencies with one stronger currency.

Like millions of Mexicans of my generation, I grew up with the values and dreams of the 1910 Revolution. I recognize my debt to that culture, which is why I won’t lose my way as we explore the future with optimism.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!