The twentieth century

The Mexican Revolution (1910s) and Reconstruction (1920s-1930s) had an impact on Mexican economic thought. While there may have been some foreign influence, many ideas were rooted in Mexican history and experience.

There was an intensification and modification of these revolutionary ideals in the 1930s, when President Lazaro Cardenas came to power. He nationalized foreign (American and British) oil in 1938. Nationalism stemmed from a labor dispute between Mexican workers and foreign owners (reflecting the Constitution’s progressive position on labor rights), not a vision of national development based on state control over the energy sector. The ejido program accelerated under Cardenas, but it shifted by conceiving ejidos as a permanent form of land tenure (for Molina Ennquez they were a temporary solution) and by promoting collective rather than individual ejidos, revealing the influence of socialist ideas.

Cosio Villegas, for example, loosely echoing Humboldt’s critique of silver, maintained that the agrarian sector was the most significant since it provided sustenance to the population, and the oil sector only enriched foreigners. This social concern also inspired Cosio Villegas’s social critique of Porfirian material progress, and separated revolutionists from cientlficos. Nevertheless, there were continuities. Following Sierra, revolutionaries critiqued the Humboldtean legend of riches. But they did so for distinct ends: cultural nationalism. Economist Jesus Silva Herzog maintained Indians did not cause Mexico’s backwardness; rather, natural impediments were the culprit.

The influences of the Mexican and Russian Revolutions along with the collapse of the international economic system and the subsequent Depression influenced Central American thought, posing a challenge to economic liberalism. Some trends from revolutionary Mexico — especially nationalism, agrarian reform, and redistribution of wealth — were echoed in Central America. There was a direct connection between Mexico and Nicaraguan nationalist Augusto Sandino, for he spent some time in Mexico in the 1920s. Sandino protested American intervention in Nicaragua, but his resistance was cut short in the 1930s when the Nicaraguan National Guard killed him. Nevertheless, his influence lived on since a group of Nicaraguan revolutionaries took his name — the “Sandinistas” — and came to power in 1979. More closely paralleling the Mexican model, nationalist-agrarianist-redistributionist reformers with socialist leanings came to power in Guatemala in the 1940s and 1950s, expropriated the American United Fruit Company, and carried out significant land reform.

An industrial ideology emerged in the post-Second World War era.

Mexicans and Central Americans were in agreement that laissez-faire was not the road to industrialism, but their interventionist ideas were distinct. In Mexico, two perspectives emerged. One, influenced by German industrial planning, called for rational state planning. Technocrats at The Bank of Mexico’s Office of Industrial Research (OII), e.g. Gonzalo Robles, advocated this strategy. J.M. Keynes, too, influenced OII technocrats. They cited him to support their assertion that the state could bolster capitalism. Spanish translations of Keynes’ articles and The General Theory of Employment, Interest, and Money appeared in Mexico in the early 1940s. The other position, championed by Mexico’s National Chamber of Manufacturing Industry, called for a more prominent role for the private sector, with the state intervening on behalf of business, since the latter was driven by profit and was the creator of wealth. The ECLA strategy for Central America called for cooperation in the form of a Central American Common Market.

An intellectual controversy generated by scholar Frank Tannenbaum, the famed foreign scholar and supporter of Mexico’s agrarian Revolution, clearly illustrates the prominence of the industrial ideal. In 1950, with the so-called “Mexican miracle” of rapid industrialization speeding forward, Tannenbaum published Mexico, The Struggle for Peace and Bread. It argued that the industrial model was doomed to failure and that Mexico should revert to an agrarian economy that focused on local markets. Tannenbaum argued that Mexico had inadequate industrial resources, financing industrialism would be too costly, and the industrial model would create a privileged minority of industrial workers and an impoverished agrarian majority that was forced to purchase overpriced shoddy goods.

Mexican intellectuals loudly attacked Tannenbaum in the daily press, monographs (e.g. Manuel German Parra) and journals (Problemas Agricolas e Industriales de Mexico [Industrial and Agricultural Problems] dedicated an issue to refuting Tannenbaum). The influence of structuralism and dependency was evident in some critiques, which condemned Tannenbaum as a tool of foreign imperialists who sought to relegate Mexico to exporter of raw material and importer of finished goods in the international division of labor. Political Scientist Pablo Gonzalez (whose writings influenced Frank's “Dependency” analysis) charged that Tannenbaum's strategy was akin to European theories of “free trade” that supported European industrial exports to America.

Debates notwithstanding, if manufacturing was more extensive in Mexico than Central America, so too were academic economics. The idea of developing academic economics in Mexico can be traced back to the early nineteenth century, when Mora championed the idea. Guillermo Prieto, influenced by the French Liberal School, wrote the first comprehensive Mexican economics textbook in the 1870s.

The way philosophies of academic programs have evolved mirrored broader trends in Mexican economic thought. In the 1930s social economics and rural agrarian concerns dominated. In the 1940s, concerns about growth held sway over preoccupations with development, and in the 1950s state interventionism predominated. Marxism became more prominent, at least amongst radical economists at UNAM, in the 1960s, and neo-liberalism has predominated in recent decades, especially at ITAM. For most of its history, Mexican academic economics has been eclectic; borrowing what it saw fit and placing its own Mexican stamp on it. Thus, while Marx was most cited in the 1930s, it was to critique capitalism rather than adhere strictly to his ideology.

Similarly, while Keynes was widely read around mid-century, Mexican interventionists cited him more as an afterthought than a blueprint. Perhaps the exception to this trend of autonomy is Mexican neo-liberal thought, which has been heavily influenced by the United States. Methodologies in Mexico have followed trends in the discipline, with mathematical models becoming more prominent since the 1950s (especially at ITAM), as well as the tendency to study small isolated problems (eschewing the earlier style of economist-philosophers who tackled larger social and economic issues). Economists have increased their influence in Mexico over time. Since the inception of the profession in the 1930s economists have worked as bureau­crats. But in recent decades their role has been expanded in national discourse, as it is not uncommon for economics experts to write opinion pieces for newspapers.