Mexican Miracle and economic development in postwar Mexico

Mexican Miracle

After the era of Avila Camacho ended in 1946, the spirit of revolution still held the country of Mexico enraptured. While it transformed its citizenry from pragmatic public agents to denizens of great hope, it also lent legitimacy to the governments in place until 1970. By the time they stalled in a frozen revolution, the "Mexican Miracle" of 1940-1968, the legacy of the now governmentally-installed revolution manifested itself in the independence witnessed after 1940. At that point, the new paradigm for leadership pushed for the nation's industrialization, fostering growth among the working and middle classes. These social changes were manifested in Mexico's economics, social fabric, and reputation.

During the time of the "Mexican Miracle," urban bourgeoisie came into such capital that they were able to, for the first time independently, link with foreign investments and markets became a reality, and so by 1960 Mexico was once again as engulfing as it had been during the Porfiriato. ISI's decision to centralize industrialization was a direct reaction to Cardenisimo, but it resulted in a schism between the members of the revolutionary elite. Policy soon followed, clarifying relations between the private sector and the state that would consume the Mexican economy for the next few decades.

It was the duty of the state to create and maintain economic infrastructure, but it was deemed inappropriate for it to intervene in the actions of the market unless to help cultivate markets left undeveloped by the private sector. Quite soon, a mixed economy emerged, with the optimistic state reveling in overzealous development and in constant war with the market-supported bourgeoisie. The agreement they had created was effective in not only the development of a functioning economy, but was also the directly contributing factor to the "Mexican Miracle."

On average, the Mexican economy grow 6% every year between 1940 and 1980, and between the years of 1940 and 1960, national production boomed 320%. (Wyman, 83.) The structure of the economy was markedly different as a result of the "Miracle," with the largest numbers now seen in the manufacturing industries, juxtaposed to historical reliance on agriculture and agrarian economies. Increased production meant an implicit deluge of goods and services, which was unmatched by population growth. While the ratios did not parallel, the population certainly grew, and soon the previously bustling countryside was filling the streets and sidewalks of Mexico's cities in a mass-cultural urban migration.

In 1940, only 20% of Mexicans lived in cities. Others remained in their countryside villages, where the agriculture that had so controlled Mexican economic history was rooted. (Handelman, 17.) But in 1940, the already struggling agricultural economy accounted for only 10% of its national product; within ten years, that number was cut in half. (Ibid.) The meager sustenance previous available in the countryside was becoming noticeably absent, and young people moved to the cities in search of work, spirit, and livelihood. Soon, noticing the dwindling supply of people in the countryside, others followed. In 1940, manufacturing had already increased by at least 19%; by 1977, that number had continued to boom and took with it population rates. Within thirty-seven years, the cities claimed half of the Mexican population. (Wyman, 109.)

At the same time, politics were on the move. In such a transient society, political spirit might have been stalled in a revolution, but it was by no means static. The remarkable economic surge witnessed in the Mexican Miracle forced a shift between the management and the labor, as income distribution soon illuminated all too clearly. The management controlling the manufacturing forces was padding its pockets while the poor continued to lose out, and very quickly the equitable precepts proffered just years earlier fell victim to the natural hierarchy of the mixed market system. In 1950, the poorest half of families had access to nearly one-fifth of the national income; by 1975, the poor saw only 13% of the income reach their hungry mouths. (Ibid.) While many citizens had migrated to the urban centers for hope and better futures, there they found a destitution that did not allow for self-salvation. No longer was the ground beneath their feet able to be tilled, nor was the backyard garden able to produce a family's small meals. Concrete and filth failed to provide for the needs of the growing poor in increasing financial dearth.

Quite to the contrary, the top 20% of Mexico's wealthiest, who clustered behind Cardenas, would be responsible for nearly 60% of national income between 1950 and 1960. (Wyman, 112.) The polarized concentration of wealth mirrored the flawed Obregonian concept that wealth should be first accumulated then distributed. Sadly, for the Mexicans most in need, this fiduciary relief never came.