Social and Political Analysis

The Impact of Neoliberalism and Responses from Below

At the dawn of the 21st century, neoliberalism is the predominant political and economic model in the world, impacting every level of society. While giving the appearance of dominance, the neoliberal model is built on increasingly shaky ground, including shrinking democratic spaces, unsuccessful attempts at cultural hegemony under the guise of “modernization,” and a distorted distribution of wealth that has no historic precedent. The majority of the world’s people are in a savage “race to the bottom” – poorer today than they were three decades ago – and no amount of propaganda can hide this stark reality.

For the past four decades, the US-Mexico relationship has been the most important laboratory for the neoliberal model, a sort of proving grounds for corporate-centered globalization. The implications of this experiment will be felt for generations to come, both North and South. The neoliberal era began four decades ago on the US-Mexico border with the Border Industrialization Program, a “free trade zone” that ushered in the era of maquiladoras. Factories that paid decent wages in the US moved south of the border, where wages are typically less than $1 an hour, labor laws are lax, and environmental standards are not enforced. The result is huge profits for transnational corporations, but declining standards of living for the Mexican and the US working classes, and an environmental disaster that affects both sides of the border. The maquiladora/free trade model is now the predominant economic development model throughout Latin America.

In 1981, under pressure from the Latin American debt crisis, Mexico signed the first IMF-sponsored Structural Adjustment Program (SAP) in exchange for bailout loans. Today, SAPs are standard fair throughout the South, forcing governments with progressive tendencies to adopt neoliberal economic policies (or providing more conservative elites with political cover to do the same).

The North America Free Trade Accord (NAFTA), signed on January 1, 1994, is defining future US economic relations with the rest of Latin America – free flows of capital and goods across international borders but strict control of people. NAFTA has meant a loss of democracy in Mexico and the US, and an economic disaster for workers on both sides of the border.

Neoliberal policies have had a dramatic impact in rural areas throughout Latin America, particularly in Mexico. Highly subsidized corn exports from the US destroyed the internal corn market, placing nearly one-quarter of the Mexican population in dire circumstances. The result is massive migration, either to urban centers in Mexico or as undocumented workers to the United States. Neoliberal policies are directly responsible for this historically unprecedented migration, yet they barely enter the discussion on immigration policy.

The neoliberal model represents a globalization of class alliances. The wealthiest 5 or 10% on both sides of the border, those who control the economies and political systems, have more in common with each other than they do with their fellow citizens, and the resulting neoliberal policies reflect their interests. The elites enjoy increasingly strong institutional links, while the rest of us are left with less democracy, fewer economic options, more repression, increased poverty and less sovereignty.

In a world of growing globalization, international grassroots alliances become increasingly important in the struggle for democracy, sovereignty, and economic and political justice. The US-Mexico relationship is central in defining the ties between elites, and it is also central in defining increasingly important grassroots connections within civil society on both sides of the border.

The Mexico Solidarity Network is a community-based organization dedicated to fundamental social change that challenges existing power relationships, builds horizontal relations in directly affected communities and promotes autonomous alternatives.