Date Published:
Jan 1, 2007
Abstract:
In this paper I discuss what Mexico can learn from the economic and political history of
the United States about how to facilitate the creation of a dynamic innovative industrial
economy. The challenges facing Mexico are how to overcome the institutional and economic
overhang from the long period of one-party rule under the PRI. Though democracy has
finally arrived, the form that this rule took has in many ways shaped the initial conditions in
which the new democracy must function. Of these many conditions, key ones are the very
unequal distribution of power and wealth that arose during this period. These inequalities
were not simply a coincidence, they were a natural outcome of the strategy that the PRI used
to consolidate and sustain its power (see Haber, Klein, Maurer and Middlebrook, 2006).
Why and how do these inequalities matter for the future economic prospects of Mexico?
I illustrate the issues at stake by an analysis of two critical periods in the history of the
United States. One, the US South after the Civil War, is a period of failed reform. The other,
the Populist and Progressive movements from around 1880 to1920, is an experience of
successful reform. In both instances the main issue was whether not to tackle critical
inequalities of power and influence. In the U.S. South the victorious North abandoned the
attempt to challenge the real power structures after 1877. In consequence the Southern
economy stagnated for the next 80 years and a highly unequal and divisive system
perpetuated itself. The story during the Progressive era was different. The Federal state
challenged the "Robber Barons," monopolies and political bosses who engaged in endemic
political fraud and corruption. These interventions helped to sustain the dynamic nature of
the Northern and Midwestern economy and facilitated rapidly falling inequality over the
subsequent half century.
Notes:
Download PDF
