Italy and Mexico

It is trendy to say that the crisis finally “caught up with us”. The notion that the country has not defined its “national project”, that the actions and decisions of the past decades were not the right ones and that the reforms that were undertaken have been unsuccessful if not wrong, is ubiquitous. Obviously there is much truth in this, but I would propose that what really hit us is the core of our being, a very PRI-like way of behavior, which consists of always avoiding the hard choices, pretend to accommodate all postures, interests and positions, and only to change as much as needed so that everything remains the same. It is that unwillingness to decide and to assume the costs of the urgent choices that the country needs (and that everyone involved in politics knows full well, regardless of whether they like them or not), that caught up with us. The problem today is that more of the same is no longer viable because it does not address our problems. As Ayn Rand once wrote, “you can avoid reality but you cannot avoid the consequences of avoiding it.”

In recent days President Calderon proposed a package of far-reaching measures that could help address the crisis, while the other parties, especially the PRI, responded with a set of concrete proposals, very different from the ones put forth by the executive. While we should welcome the change of tone implicit in the fact that solutions, rather than mere criticisms and disqualifications, were discussed, what is remarkable is the closed and circular debate all of these proposals entail.

The history of the last four or five decades speaks for itself. The collapse of the policy of “stabilizing development” in the mid-sixties was followed by a state driven project that was only made possible by the availability of external debt as well as by the fact that oil prices were high. When both of these disappeared from the scene, that whole project collapsed, giving way to the first two mega financial crises of 76 and 82. Then came the project of reform and economic liberalization that involved joining a rapidly globalizing world economy, but the profound reforms this project needed to be successful were never made.


The president’s proposal is an attempt to address the deficiencies and limitations of the liberalization project which, with all the adjustments that are required both because of the structural defects with which it was conceived and because of the new international reality, is the only one capable of generating jobs and wealth in the long term.

The PRI proposal is an invitation to recreate the seventies (in fact, its architects are the same people responsible for economic policy and for the crises back then) and, although it includes some ideas that could help alleviate the immediate situation, its most ambitious elements, aside from derailing what already works, would only contribute to stimulate demand in a country whose problem is lack of supply and, therefore, would lead us directly to a crisis of domestic manufacturing (in contrast with the current, imported crisis). The lack of imagination and, worse, of memory, is extraordinary: it is as if this proposal stemmed from the assumption that society doesn’t notice or did not suffer the consequences of those crises.

What really hit us was not the international crisis but our own way of being. The PRI’s tradition of “stay put” has been a way of not deciding, of avoiding the responsibility to govern. That way of reacting and responding inflicted on us a terrible damage. Even in times when far reaching reforms were advanced, all came tainted with an inevitable reluctance to complete the job, especially when this meant disturbing significant interests, something that in turn guaranteed deficient results and underperformance. Instead of tackling problems, finding solutions and accepting the inevitability of paying the costs of any reform, the PRI’s tradition consisted of “negotiating”, conceding, co-opting, subsidizing, avoiding and evading. Never a hard choice.

When, in the eighties, things for the PRI turned electorally sour, the PRI’s own coined the term concertacesión”, a term that mixed the word fixing with conceding, to criticize the eternal wheeling and dealing that, from the perspective of those party members, entailed ceding too much. But the important thing is that those arrangements never clarified anything and didn’t even serve as a quick fix. In retrospect, this neologism illustrates more about the priistas and about the country than they imagined: it summarized an entire way of being that infected all Mexicans. So much so that the unwillingness of the later panista governments to introduce radical change and to renegotiate the rules of the game reflects the depth and extent of the PRI’s culture and tradition across all of society. That’s what really hit us.

Italy offers a very interesting and relevant point of comparison. As the PRI in Mexico, Italy was for decades ruled by Christian Democrats. While the Germans rebuilt their nation after the destruction caused by the war, the Italians set out to enjoy life, avoid the hard choices, pretending that this course of action was all that was needed. Led by its enormous entrepreneurship and increasing European demand, the Italian economy grew and developed. Good judicial and police systems were able to control the mafias, all of which seemed to indicate that political instability and uncertainty were a minor problem that would have no consequences. The problem is that Italians, like us, believed their own lies. Once the euro was established as the common currency, what was previously flexibility became a straitjacket. The Germans have raised their productivity in a remarkable way, while the Italians have been unable to face their problems. Their only option now would be to carry out the kind of reforms they have been avoiding for decades. The notion that one can maintain the status quo permanently and without costs proved to be a monumental mistake.

The “stay put” mentality protects business interests, favors friends and partners, preserves impunity and allows participants to think that the problem is temporary and that with a little time, and a lot of spiel, everything will be solved. That explains why instead of tackling the crisis, our politicians focus on their own interests: “not one step back in the budget” says the president of the National University, UNAM, a concept that seems unintelligible to governors who can only conceive increases to their own budget as the basis for negotiation. They are all avoiding reality.

The president’s implicit invitation is to begin to understand that the world of the past, the one of fantasies financed by oil, is coming to an end and that only an ambitious mental transformation, followed by structural changes, can give us the opportunity to break the vicious circle in which we find ourselves. Now it will be up to society to hold politicians accountable and ask them to fulfill their mandate.