Financialization in Mexico - Dr. Gregorio Vidal

FINANCIALIzATION IN MEXICO: TRAJECTORY AND LIMITS 257
of financialization in corporations headquartered in the United States,
United Kingdom, and other European countries (as well as in some Asian
and Latin American countries) has also led to a steady centralization of
profits. Within this context, the relationship of Latin American economies
with other countries and regions and the differences in the composition
of their respective financial systems continue to be of utmost relevance.
In Latin America, trade opening and financial crises have greatly damaged
the position of local corporations and have exerted great pressure
on the largest domestic corporations that are funded abroad. The need for
foreign currency has grown both for domestic and foreign corporations,
investment funds, pension funds, and hedge funds that require dollars for
capital outflows such as interest payments and profit remittances.
One of the key transformations in this liberalized, deregulated, and
global form of capitalism has been the deepening of the role of finances
in profit generation and therefore the growing role of financial corporations
in determining wealth distribution and political power. The current
financial crisis has therefore cast into doubt not only the viability of banks
and global finance, the principle vehicles of the remarkable centralization
of wealth in recent decades, but also of the existence and reproduction of
highly concentrated fortunes and wealth based on financial assets.
Deregulated or neoliberal capitalism has also profoundly transformed
government institutions constructed during the so-called golden age
of capitalism, implying changes in the ownership of assets and new
mechanisms of profit generation. Some state institutions were dismantled,
others were renewed, and many others were transformed under various
formulas of privatization, including those operating basic services, health,
education, national security, and justice. Galbraith (2008) has recently
documented in the United States the same phenomenon that has been
present in much of Latin America for the past three decades, although
under different modalities.
With these factors in mind, the following questions must be raised:
Are we in the midst of a change in the regime of accumulation? Are we
facing the limits of the financialization model? Is this the terminal phase
of modern globalization? These are questions that currently confront the
conceptual instruments whereupon Marxists, regulationists, and post
Keynesians have been analyzing the transformations in capitalist economies
and financial systems over the past thirty years.
This article seeks to contribute to the debate over the direction of current
capitalism and the process of financialization and its limits through
an overview and analysis of the Mexican economy over the past three
decades. First, we examine various elements that constitute the concept