A History of Wealth and Poverty: Why a Few Nations are Rich and Many Poor, by John P. Powelson.

Appendixes for Chapter 17

Appendix 17.1: Newspaper References to Centralization and Power Concentration in Modern Mexico

  1. "When necessary, Mexico's regime can be crudely repressive. In 1968, for example, a massive anti-government protest led by leftist students was crushed with the loss of more than 300 lives. In the early 1970s, several leftist guerrilla groups emerged and were duly wiped out, with more than 500 persons disappearing in the process. And when anti-government trade unions began agitating in 1977, their leaders were quickly arrested. In the countryside, the government uses the army as its police force, but it also maintains its own highly efficient security apparatus, which carefully monitors opposition movements and leftist exiles from Latin America." [382]
  2. "In order to drive a truck for hire in the state of Jalisco, you must have commercial license plates issued by the PRI-controlled state government. [PRI is the dominant political party.] To get those plates, you must join the union. . . . The state leader of the union is a PRI congressman, and the national leader is a PRI senator. Of course, nothing in the union by-laws says one must be a PRI member in order to belong. It just happens that way." [383]
  3. " 'Nearly everyone has been co-opted by the P.R.I. in one way or another, admittedly not always by legitimate means,' said a Government official. 'If you arrange to get taxi plates for someone, no matter how, that man will vote for you for life, because you've given him his way of making a living.' " [384]
  4. "Checks of the voting rolls showed instances of fictitious names listed by the hundreds, and other names — including one opposition mayoral candidate — had been purged. In Nuevo León, the local congress did not even bother to wait for the official results before declaring the governing party candidate the winner." [385]
  5. "When peasants organize land takeovers, the patrones work with the PRI to form a co-opted group of peasants, which then receives the support of the police to kick out the genuine organizers. . . . In virtually every major and medium-sized town in the south, well-compensated PRI loyalists in unions, town councils and even health centers make sure that independent movements do not grow to the point where they threaten the PRI's base of control." [386]
  6. In 1980, President Lopez-Portillo announced a "Mexican Food System," designed to increase agricultural production through central control. "The key to the Mexican Food System appears to be the coordination of all aspects of the cycle, from credit for seeds, fertilizer and machinery, through technical assistance for planting and harvesting, to improved transportation and storage facilities, nationwide marketing and occasional price subsidies. The Government, according to the President, will 'share the risks of the peasantry.' " [387]
  7. "It happens again and again: A non-PRI labor movement springs up, then gets beaten down. Last fall, Mexico City garment workers unionized outside the PRI labor confederations; now, the courts are challenging their certification. In 1983, the nation's nuclear workers struck; the government shut down the whole uranium industry. This fall, Mexico City trolley drivers tried to strike without PRI permission; riot police and attack dogs dispersed the picketers after just one day." [388]
  8. Often the law is capriciously enforced to convict a political foe. Whereas many labor leaders have been armed, illegally but with impunity, in 1989 the law against holding arms was capriciously enforced against a powerful labor leader, Joaquín Hernandez. Hernandez had been accusing the national oil company, Petróleos Mexicanos (Pemex) of corruption in order to embarrass the President. Since the unions themselves have been beds of corruption, the accusation had a clear political base. So did the President's "law enforcement:" Hernandez was convicted and imprisoned. [389]

Appendix 17.2: Newspaper References to Lack of Accountability in Modern Mexico

  1. Some Mexicans see "rampant corruption" as "a natural consequence of a political system that lacks checks and balances on the enormous power of the executive branch and, particularly, of the President. . . . [T]he oil boom enabled the government to postpone many of the fundamental reforms needed to modernize the economy. As a result, inefficiencies remained hidden by state subsidies, uncompetitive domestic industry was protected by tariff barriers, an antiquated tax system was able to survive and huge public deficits were covered by foreign borrowing." [390]
  2. "Between 1970 and 1980, federal spending in Mexico City 'far exceeded the worth of the entire existing plant in the city,' according to Gustavo Garza, a noted urbanologist at the Colégio de México." [391]
  3. President "Lopez Portillo could have tried to harness these [oil] riches to fundamental development. Instead he let the economy take off on a headlong boom, indulging inflation, piling up debt and fertilizing high-level corruption." [392]
  4. After the earthquake of 1985, "while volunteers clawed for survivors under tons of cement and steel, top officials tried to preserve an image of self-reliance by refusing specialized foreign help. 'They sacrificed concrete lives for abstract ideas,' says Enrique Krauze, a historian." [393]
  5. "The government owns hundreds of enterprises, and about half lose money. . . . La Libertad is one of eight state-owned sugar mills that government reformers tried to close. . . . [W]ork stopped but the workers didn't. They come each day and collect their pay each week. . . . Sugar workers don't have cars, so they wouldn't be able to get to work if the government stopped sending the bus. That would be tantamount to a layoff, and in Mexico businesses must pay severance pay when they lay off workers. . . . So the mills keep losing money, production fell and Mexico spends millions of dollars to import sugar." [394]
  6. "If you decide to be an activist, you have to decide that you may, at some point, confront naked force with no constitutional balances against it," says Lorenzo Mayer, a political scientist at the Colégio de México." [395]
  7. "Between 1977 and 1982, according to the Government, state enterprises accounted for half of a swelling public-sector deficit." [396]
  8. Critics argue that by reserving certain oil operations for Pemex, the government makes oil production more costly. "Pemex . . . has its own rigs and drilling crews. However, the private drilling companies have always been more efficient. Says a manager of one of the private firms, who, like every other private rigger interviewed for this story, agreed to talk only if his name would not be used: 'In the time it takes a Pemex operation to produce oil from a well, a private company can begin pumping under the same conditions in approximately half the time.' " [397]

Appendix 17.3: Newspaper References to Land, Lack of Accountability, and Break-the-System in Nicaragua


Proposition: Land, historically always subject to confiscation, continued to be so under both Somoza and Sandinista governments.

  1. Domingo Sánchez Salgado, candidate for the presidency, reported that his "parents were of Indian ancestry and held title to a modest farm . . . but were pushed out by soldiers after President Anastasio Somoza García decided to give their land to one of his supporters." [398]
  2. "Pasqual, a small grower, can't get a loan from the [Sandinista] state-owned bank because he won't join a co-op. The farm of Jaime, who was a medium-sized grower, was expropriated. Another grower would like to sell out but fears that if he asked permission, it will simply be seized." [399]
  3. To gather support for a forthcoming election, "dozens of trucks were mobilized [by the Sandinista government] to bring farm laborers to Matagalpa so they could receive titles to work on cooperative farms." [400]
  4. To bring the Contra war to an end, the rebels were promised that if they laid down their arms, they would be given land. When the land was not distributed as expected, they seized a cooperative and again called for war. (Apparently, they still had arms). [401]

Lack of Accountability and Pluralism

Proposition: Power over economic matters is concentrated in the government, and disputes tend to be met by confrontation, or stonewalling, rather than by negotiations.

  1. "Entrepreneurs are forbidden to send their profits abroad, and their businesses can be confiscated if the Government decides they are "decapitalizing" by refusing to modernize them. They cannot raise prices, or even wages, without Government consent. Thus, many businessmen have concluded that the economy is closer to being state-run than it appears on the surface." [402]
  2. "Tomas Borge, [Sandinista] Minister of the Interior: 'Class struggle can be seen either from the point of view of hate or from the point of view of love. State coercion is an act of love.' " [403]
  3. "The [coffee] growers must sell to the state, instead of exporting directly. The government gets dollars for their coffee, pays the growers in local currency and cheats on the exchange rate." [404]
  4. "A former Maryknoll nun . . . calmly accused Nicaragua's Sandinista leaders of aligning themselves with the Soviet bloc, assassinating government opponents, massacring Indians and generally betraying the democratic spirit of the 1979 revolution." [405]
  5. "[E]ssentials are in short supply, are sometimes refused to those who object to the government's policies." [406]
  6. "A private businessman complained that 'his primary competitor, a state-run outfit, undersells him and hogs the best-quality raw materials for itself. . . . [T]he Central Bank rarely provides . . . enough foreign exchange. . . . [T]he government fixes wages, prices and frequently even what an enterprise can or can't produce.' " [407]
  7. " 'They began to bother me three years ago because I wouldn't join their cooperative,' Mr. Martinez said of the Sandinistas [explaining why he had joined the Contra army]. 'I refused because I knew they formed the cooperatives to have us all controlled.' " [408]
  8. "[T]he habit of rule from above dies hard. The new [Violeta Chamorro] Government's pluralistic exterior has given way to the familiar image of a closed, even secretive group of leaders, pursuing its vision of Nicaragua's future with little attention — or even advance notice — to its allies and the public." [409]


Proposition: Significant elements of the political system are so lightly held that they are willingly sacrificed to win individual points.

  1. Arturo Cruz, opposition candidate, refused to register for elections, unless the government agreed to have a dialogue with the rebels. [410] He knew that his refusal would threaten the system of elections, which he was willing to put on the line in order to gain his point.
  2. Crippling or destroying an economy, such as when Salvadoran rebels destroyed village electricity or shot mayoral candidates, is frequently a ploy by an out-group to gain a particular point. After losing the elections in 1990, the Sandinistas refused to give up patronage government jobs or control of the army, and the new (Chamorro) government lacked the power to force them. Sandinista leaders declared their intention to "rule from below" despite their defeat. In the ensuing struggle, Sandinista-controlled unions declared strikes that would paralyze key economic sectors. [411] Finally, the Chamorro government yielded, "by agreeing to double wages and suspend a decree that gave her Government wide powers to dismiss workers." [412] There might be some debate as to whether this incident should be classified as break-the-system or as a legitimate strike, since the boundary is not clear. The argument for break-the-system is that the system was one of elections, but the results were partially voided when, through economy-crippling measures, the new government was not allowed to assume power in strategic areas.


Copyright © 1994 by the University of Michigan. First published in the USA by the University of Michigan Press, 1994.

Published on the World Wide Web by The Quaker Economist with permission from the University of Michigan Press, 2005.

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