Thread: A New Kind of Justice in Mexico: Mob Lynching

Originally Posted by Gio

Point taken, they have only but themselves to blame for not doing a thing. What to do, though?

You mean if I was a Mexican? I would buy an automatic weapon, and if a crowd tried to lynch me, there would be a lot of dead vigilantes.

Mexico sounds amazingly corrupt, a 2000 Economist article on PRI, Mexico's largest party:

Back in 1929, Plutarco Elias Calles spotted an opportunity. He had stepped down as president of Mexico the year before, but had developed a liking for power and was holding on to it through a puppet successor. Ever since the revolution that, 18 years earlier, had ousted the dictator Porfirio Diaz and packed him off to France, Mexico had been a fractious and dangerous place. Hundreds of small political parties and movements were squabbling for crumbs of control, and the revolution’s generals were getting uppity. Calles saw a way to bring calm and, in doing so, tighten his own grip. He created the party which eventually became the PRI.

Its first conventions must have been odd sorts of gatherings. Anyone could join, from rebellious peasants to the lords of great haciendas, from Marxist intellectuals to military boneheads. Only the clergy, Calles’s pet hate, were left firmly outside. To this day, the PRI still has no complete membership list. And oddest of all for a political party, it has never had an ideology, save for a pompous nationalism and a broad and much-broken pledge to promote “democracy and social justice”.

But it did the job that Calles set it up for. Mexican leaders began to settle their disputes with polemics instead of pistols. And the PRI’s lack of dogma gave it the adaptability and survival instinct of a living creature. Under a succession of presidents ranging from vaguely socialist generals to eggheads with PhDs in economics, it grew as Mexico grew, extending its tentacles into trade unions, peasant groups, youth movements and just about everything else. It was not so much a political party as the political arm of a permanent government.

Unlike most long-standing regimes, though, the PRI rarely used repression: it was not so much a strict father as a rich, if whimsical, uncle. It co-opted trade unions and their block votes by lavishing money and power on their leaders. It bought the peasants’ eternal gratitude by breaking up huge plantations and handing out millions of small tracts of land. Instead of censoring the press, it kept newspapers afloat—and loyal—with cheap newsprint, floods of government advertising, and generous gifts to journalists. It was the greatest patron of the arts. Sometimes it even funded opposition political parties, both to give its critics a little space to vent their feelings, and to make sure they stayed divided. Its rule was based on collaboration, not coercion. Only when all else failed did it resort to electoral fraud.

Mexico thus became what Mario Vargas Llosa, a Peruvian novelist, in 1990 called a “perfect dictatorship”. It looked like a democracy, headed by a president who could not be re-elected, and equipped with all the institutional bells and whistles usually found in democracies. But since the PRI was everywhere, and since the president could choose all party candidates, including his successor, he enjoyed near-absolute power.

Corruption on the outrageous scale of the oil-mad 1970s is mostly gone, but petty corruption is still endemic. The police no longer collaborate with criminals the way they used to, but nor have they learned to fight them effectively. Most of the population still lives in poverty, and the vast gap between rich and poor is, on some measures, growing, making the PRI’s promise of “social justice” ring especially hollow. That is partly because the divisions between the prosperous, modern north and the backward south are growing too. The cliché that there are “two Mexicos”—one racing ahead and another struggling to keep up—is truer than ever. If anything sums up Mr Fox’s challenge, it is the need to start pushing the two Mexicos back together.

First, many—though not all—of the problems described in this survey are far less severe than they were only a decade ago. Second, clearly not all of them are the PRI’s fault. Corruption, weak institutions, poverty and inequality are part of the fabric and the history of all Latin America. Nor is Mexico the worst off. Inequality is greater in Brazil, violence is far more extreme in Colombia, democracy is weakening in Nicaragua and Venezuela just as it is firming up in Mexico, corruption is more blatant in a number of countries, and the macroeconomic fundamentals are shakier just about everywhere else.

Lastly, much of what is right with Mexico is also thanks to the PRI. Calles may have been a dictator at heart, but his creation nipped in the bud what could have become another civil war. And for the first few decades the PRI watched over an unprecedented boom. In the 1950s and 1960s, while some Latin American countries were torn by civil war or cowered under military dictators, Mexico was a model of economic prosperity and political stability. It’s just that the prosperity was unsustainable, and the stability lasted too long.

WTF is wrong with Latin America..

more:

It was the PRI’s own success and resulting arrogance that started its downfall. The success began after the second world war. Domestic industry had done well during the war as imports from the fighting countries had dried up. The president of the day, Miguel Aleman, built on that by promoting import substitution, imposing high tariffs to protect local industries from foreign competition. The economy flourished: between 1950 and 1970 real GDP per head nearly doubled, and so did the population.

The government started to run out of money, and borrowed more. At the same time it radically stepped up its role in the economy; the number of state-owned companies increased from 84 in 1970 to 845 in 1977. Meanwhile the trade deficit widened, because industry was so spoilt by its captive local market that its heart was not in exporting. By the end of President Luis Echeverria’s six-year term, in 1976, the trade gap had become unsustainable. The peso was devalued for the first time in 22 years.

After that, it became a six-year loop of history repeating itself. With Mexico discovering extensive new oil reserves just as OPEC prices had risen, Jose Lopez Portillo, the next president, borrowed and spent hugely. At a time when the phrase conflicto de intereses was unheard of, this led to massive corruption as government and oil-union officials awarded contracts to companies owned by themselves or their friends, or pocketed hefty bribes. The president, meanwhile, seemed to have allowed the god-like power the PRI gave him to go to his head, for when world oil prices started to drop in 1981, he raised Mexican ones in a fit of nationalism. In another fit, he expropriated the banks, and saddled the country with an $80 billion foreign debt and another disastrous devaluation.

His successor, Miguel de la Madrid, cut corruption and half-heartedly opened up the economy, but was unable to stabilise it. In 1988, when a series of devaluations had reduced the value of the currency by 97%, he passed the helm to Carlos Salinas, a radical reformer who, with a wave of privatisations and the signing of the North American Free-Trade Agreement (NAFTA), turned Mexico into an economic miracle. But like the oil miracle, this was built on corruption and over-ambition. Days after Ernesto Zedillo took over in December 1994, the currency crashed spectacularly. Mr Zedillo and his team bungled the devaluation, causing the economy to shrink by 6.2% in 1995.

One is the crony-capitalism practised by his predecessor. When Carlos Salinas sold off state companies, he not only aimed to make them more efficient and reduce Mexico’s debt, but also used the process to win favours. At an infamous dinner in 1993, he invited two dozen of Mexico’s top businessmen to contribute $25m apiece to the PRI. Some refused and told the press, but others felt so indebted to the government that they were willing to cough up twice the figure demanded. Among the diners were some of the new owners of Mexico’s banks.

Mr Salinas had sold the banks for large sums and with weak oversight. They went on a wild lending spree, and paid the price. After the crash, when interest rates topped 100%, many debtors stopped paying off their loans. Fearing a total banking collapse, Mr Zedillo’s government bailed them out. It put the cost of the rescue at nearly 13% of a year’s GDP, but some think it could be over 20%.

In the same carefree vein, Mr Salinas in 1990 sold the state telephone monopoly, Telmex, without first creating either a telecoms regulator or a competition agency. Not until 1996 was a regulator, Cofetel, set up. It is still weak, pushed and pulled by a dispute within the government between pro-free-market officials and those who would like to cling to protectionism. Three years ago the competition agency declared Telmex to be dominant in five big markets, allowing Cofetel to impose tougher rules on it. Cofetel eventually did so only in September this year, shortly after the United States’ trade representative took a complaint about Telmex to the WTO.

That, together with the favourable terms on which Telmex was privatised, and the company’s clout—it makes up nearly 30% of the stockmarket—have made it hard to ensure its good behaviour. Competitors have been slow to get into the market, and customers still pay too much, especially for local calls. All this has been good for Telmex. A report published by the OECD last year described it as the most profitable telecoms company in that club of industrial countries. It has been less good for Mexico, which with only 12 telephone lines per 100 people has the lowest density in the OECD.

The bidding for toll-road concessions was marred by similar cronyism. Construction companies won the contracts with unrealistic estimates both of what the roads would cost and how many cars would use them. Result: another expensive bail-out, and highways with wildly varying tolls that include some of the highest in the world. Mexico has so few good roads that the last thing it should do is price them out of reach.

Such things made a few people rich while hurting the poor and stifling the country’s development. Little wonder that the self-exiled Mr Salinas, who recently published a 1,400-page defence of his period in office, is still the ex-president Mexicans most love to hate. But there are plenty of other things holding Mexico back, including several remnants of the PRI’s statist days.

One is the energy sector. Schoolchildren continue to be taught that the expropriation of foreign oil companies in 1938 was the finest hour of modern Mexican history. Whenever anyone even hints at private-sector involvement in the state oil firm, Pemex, nationalist flag-wavers can be relied on to scupper the idea. Electricity raises similar passions, if more quietly expressed. It does not help that Mr Salinas’s machinations made privatisation a dirty word among ordinary Mexicans. Mr Zedillo’s attempts to part-privatise petrochemicals and electricity production drowned in storms of protest.

As a result, the oil industry has been closed to foreign investment and management skills for decades. Tied to the Treasury’s purse-strings, Pemex is both badly managed and at the mercy of any budget cuts that an economic collapse or a fall in the price of oil might impose. As the government’s traditional cash cow, it is also squeezed by high taxes. All this has prevented it from investing enough in modernisation and exploration.

As for the electricity industry, it is at breaking point. The government estimated last year that demand would rise by a third in the next six years, and that meeting it would cost around $25 billion, money that it cannot find from its own resources. By privatising the generation and distribution of electricity, Mr Zedillo had hoped to solve that little problem. Now power shortages are looming closer.

Another way in which Mexico remains decidedly old-PRI is in its labour relations. The trade-union movement was one of the party’s key pillars. Its long-standing leader, Fidel Velazquez, spent 53 years at the head of the Mexican Workers’ Federation, the biggest single block of unions, guaranteeing labour peace in times of economic crisis and labour votes in times of electoral need. When he died in 1997, many thought that the unions’ unity would finally crumble, but they were wrong.

The old-fashioned union bosses, with their close connections in the PRI and their sway over millions of workers, have blocked the present government’s attempts to update Mexico’s archaic labour law. High compulsory severance pay—a minimum of three months’ salary, plus a raft of extras for every year worked—discourages companies from both firing and hiring staff. In some circumstances workers may enjoy automatic promotion based on seniority; the union may decide who is hired and who gets which job; it may have the protection of a closed shop.

Only “may”, though, because the law is one thing and practice another. In some companies the union is more flexible, and in others it exists only on paper. In general, high-tech industries, and those in the north of the country, are more likely to have done their own deals with unions outside the union organisations loyal to the PRI. Traditional union leaders deride these “white” unions as sell-outs. Others point out that “white”-union members are better-paid and more productive.

Certainly, the unions loyal to the PRI have not been able to stop wages falling with each economic crisis; in manufacturing, for instance, real wages are now well below the level they had reached in the 1970s. These unions are strongest in the state-owned sector, and have played a large part in blocking reform. Sometimes a split between pro- and anti-PRI groups within a union causes an irreparable breakdown. This has happened with the teachers, whose union is the biggest in the country. Some of its state chapters, led by anti-PRI members, go on strike annually to demand better conditions. Oaxaca’s teachers have struck virtually every year for the past two decades. It hasn’t done them much good, and it has done the schoolchildren a fair bit of harm.

Stiff labour laws, a lack of credit, underdeveloped infrastructure—they all put the brakes on business. But they hurt some kinds of business more than others. The big, the technologically advanced and the employers of skilled workers can get round the problems. The rest find it harder to adapt. And adaptability is the one thing that Mexican companies need most at the moment, because of another of Mr Salinas’s gung-ho innovations: NAFTA.

Hahhahahaha, our neighbor is so f'ed up.