The Elite

The primary fact of life in contemporary Mexico is that although the government has a political monopoly it does not control the economy. Seven banking groups in Mexico are as strong in the economic life of the nation as the PRI is in the political life.

Stephen Niblo, 1975133

The Mexican elite that emerged after 1940 contained two groups—one controlling the reins of political power and the other the reins of economic power. As the Mexican economy grew, the political elite increasingly shared power with domestic and foreign business interests. The public-sector elite of necessity maintained dialogue with the private-sector elite since the government was a major economic player. The two groups existed symbiotically—in exchange for relative impunity in business operations, including tax evasion, the business elite supported the PRI. Antonio Ortiz Mena, finance minister from 1958 to 1970, commented: “Our contact with the private sector leaders was constant when I was in government. We would call them, give them our ideas about a policy, wait for their reactions, take them into account, and incorporate them into our final policies.”134

After 1940, the political elite promoted development policies that clearly reflected the interests of national business and its foreign partners. Policy makers justified their pro-business stance by stating that it: 1) contributed to national development, 2) safeguarded national security, and 3) created the wealth necessary to raise the general standard of living.135

After 1940, the business elite grew more powerful, reflecting the increased wealth of its members, who diverted substantial human resources from production to lobbying for government favors, making personal contacts with the political elite, and to maintaining such business organizations as the National Federation of Industrial Chambers (CONCAMIN). Political discourse pointedly ignored the intimate links between the PRI and big business. Government subsidies, trade protection, and other government benefits became the key to success, not lower production costs and higher quality goods.136

Membership in a business group increased an individual’s political clout, which was key to prospering in Mexico’s highly regulated economic atmosphere. Business groups had enough power to prevent the implementation of a progressive tax scheme, which could have laid the groundwork, via investing in education, for higher future economic growth. The failure to implement substantial tax reforms in the early 1960s would have far-reaching consequences since it forced the government to finance later efforts to increase its social and infrastructural spending by borrowing abroad. This would contribute to the debt crisis of the 1980s.137

Through the 1960s, the political and economic elites existed harmoniously since, as political scientist Lorenzo Meyer observed:

For the private sector, regime legitimacy depended not on its democratic merits, which it never had, but on its capacity to maintain workers under its control, as well as to develop a system of tariff protection, with fiscal incentives, subsidies, and the construction of infrastructure, which permitted investors an acceptable profit rate.138