Financialization in Mexico - Dr. Gregorio Vidal

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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

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