Financialization in Mexico - Dr. Gregorio Vidal

Financialization in Mexico - Dr. Gregorio Vidal

Financialization in Mexico - Dr. Gregorio Vidal


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of f<strong>in</strong>ancialization <strong>in</strong> corporations headquartered <strong>in</strong> the United States,<br />

United K<strong>in</strong>gdom, and other European countries (as well as <strong>in</strong> some Asian<br />

and Lat<strong>in</strong> American countries) has also led to a steady centralization of<br />

profits. With<strong>in</strong> this context, the relationship of Lat<strong>in</strong> American economies<br />

with other countries and regions and the differences <strong>in</strong> the composition<br />

of their respective f<strong>in</strong>ancial systems cont<strong>in</strong>ue to be of utmost relevance.<br />

In Lat<strong>in</strong> America, trade open<strong>in</strong>g and f<strong>in</strong>ancial crises have greatly damaged<br />

the position of local corporations and have exerted great pressure<br />

on the largest domestic corporations that are funded abroad. The need for<br />

foreign currency has grown both for domestic and foreign corporations,<br />

<strong>in</strong>vestment funds, pension funds, and hedge funds that require dollars for<br />

capital outflows such as <strong>in</strong>terest payments and profit remittances.<br />

One of the key transformations <strong>in</strong> this liberalized, deregulated, and<br />

global form of capitalism has been the deepen<strong>in</strong>g of the role of f<strong>in</strong>ances<br />

<strong>in</strong> profit generation and therefore the grow<strong>in</strong>g role of f<strong>in</strong>ancial corporations<br />

<strong>in</strong> determ<strong>in</strong><strong>in</strong>g wealth distribution and political power. The current<br />

f<strong>in</strong>ancial crisis has therefore cast <strong>in</strong>to doubt not only the viability of banks<br />

and global f<strong>in</strong>ance, the pr<strong>in</strong>ciple vehicles of the remarkable centralization<br />

of wealth <strong>in</strong> recent decades, but also of the existence and reproduction of<br />

highly concentrated fortunes and wealth based on f<strong>in</strong>ancial assets.<br />

Deregulated or neoliberal capitalism has also profoundly transformed<br />

government <strong>in</strong>stitutions constructed dur<strong>in</strong>g the so-called golden age<br />

of capitalism, imply<strong>in</strong>g changes <strong>in</strong> the ownership of assets and new<br />

mechanisms of profit generation. Some state <strong>in</strong>stitutions were dismantled,<br />

others were renewed, and many others were transformed under various<br />

formulas of privatization, <strong>in</strong>clud<strong>in</strong>g those operat<strong>in</strong>g basic services, health,<br />

education, national security, and justice. Galbraith (2008) has recently<br />

documented <strong>in</strong> the United States the same phenomenon that has been<br />

present <strong>in</strong> much of Lat<strong>in</strong> America for the past three decades, although<br />

under different modalities.<br />

With these factors <strong>in</strong> m<strong>in</strong>d, the follow<strong>in</strong>g questions must be raised:<br />

Are we <strong>in</strong> the midst of a change <strong>in</strong> the regime of accumulation? Are we<br />

fac<strong>in</strong>g the limits of the f<strong>in</strong>ancialization model? Is this the term<strong>in</strong>al phase<br />

of modern globalization? These are questions that currently confront the<br />

conceptual <strong>in</strong>struments whereupon Marxists, regulationists, and post<br />

Keynesians have been analyz<strong>in</strong>g the transformations <strong>in</strong> capitalist economies<br />

and f<strong>in</strong>ancial systems over the past thirty years.<br />

This article seeks to contribute to the debate over the direction of current<br />

capitalism and the process of f<strong>in</strong>ancialization and its limits through<br />

an overview and analysis of the Mexican economy over the past three<br />

decades. First, we exam<strong>in</strong>e various elements that constitute the concept

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