Luis Rubio

“When people stop trusting any institutions or having any firmly held values, they can easily accept a conspiratorial view of the world”. That, says Peter Pomerantsev*, is the ulterior objective of the Kremlin’s strategy of propaganda and control: generating cynicism among the population so that it will accept the command of the government. Cynicism ends up becoming an instrument of political control.

In Mexico the cynicism of the population is ancestral. Although the reign of the old system did not entail the perversity of the Soviet system, the witticisms, jokes and, in general, cynicism comprised the defense mechanisms that the society developed in the face of poor economic performance, governmental corruption and abuse. However, there was, and is, a glimmer of Soviet inspiration in the management of information, which always led to the flowering of conspiratorial explanations. In this light, it is fascinating to observe the inherent contradiction in the protests –before and now- against the exacerbated power of Mexican presidents: how even the civil organizations that pride themselves most in their autonomy heartily end up demanding from the President himself action, response and resolutions.

One of the chief qualities of the old Mexican political system was the equilibrium generally maintained between control and freedom. Although it was doubtlessly a system infused with control accompanied by eventual recourse to authoritarian measures, spaces of personal freedom were also significant. The contrast with military dictatorships and totalitarian societies was brutal: not by chance was the system always referred to (and an infinity of academicians characterized it thus) as relatively unique or at least exceptional. Its paramount defect was the absence of adjustment mechanisms that would have permitted the flexibility necessary to proceed to adapt to changing times. That lack of adjustment capacity explains in good measure the complexity of the moment Mexico is currently experiencing.

Totalitarian systems generated loyalties that were the product of fear, but they never acknowledged the fact that, on attempting to control everything –all aspects of the society and daily life-, those same regimes made it possible for anything to become a source of dissent. Vaclav Havel, the dissident intellectual and later Czech Republic President, exhorted the population to take advantage of that spirit of control and overturn it: if the government wanted to monopolize the entire life of the citizenry, citizens had to, simply, live “the truth”, ignoring the official verities.

One of the objectives of the KGB, the Soviet intelligence and repression organization, consisted of manipulating information, day-to-day life and the economy: things could not “simply happen”; they had to be the product of a decision from above  devoted to manipulating the day-to-day progression. Markets could not be free; they had to be administered. Elections could not be unpredictable: they had to be decided upon beforehand. Everything that is not controlled is hostile. With that logic, the Russian Government and its satellites kept the population subjected for decades.

The Mexican political system learned much from those practices and improved on them in a myriad of cases, beginning with a very simple one: it never fell into the pretentiousness of controlling everything. One day, after I published an article that had upset a functionary, the Minister of the Interior called me. As if we were great friends, he told me, in overly colloquial mode, as if providing harmless counsel, “in Mexico anything can be thought, some things can be said and very little can be written”. The threat was clear, but it wasn’t same as the Gulag.

What the system did not learn was to adapt; while it did achieve the containing of dissident movements when independent candidates emerged in the forties and fifties, the repression of the 1968 Student Movement marked an end and a beginning. Instead of steering clear of the storm as it was wont to do, the government at the time interpreted it as a challenge to its essence and existence and acted in consequence. Fifty years later we are still living with the consequences; not only has the raison d’être of any government, that of maintaining order and security, been cast aside, but any vestige of civility has vanished.

Can the vicious circle be broken? The manner in which diverse tight-spots in recent times have been resolved give the impression that this would be difficult. Seen in retrospect, the great electoral reform, that of 1996, was for all intents and purposes a mechanism of co-optation: in reality the electoral system did not change to open competition, but instead incorporated two additional parties (PAN and PRD) into the old system, that of privileges. In today’s Congress there is enormous diversity of representation, but there is a multiplicity of anecdotes intimating that the actual mechanism of legislative control and voting can be likened to the world’s oldest practice: money under the table. In fact, it seems so obvious and in the open that it is over the table and with well-established tariffs. Some decisions with regard to appointments have been forced upon the legislature and other nominating bodies by the threat of demonstrations and work stoppages. That is, by means of force.

It seems to me that there are two ways to break the conundrum: one would be the product of leadership that understands the risks involved in continuing to pursue the present course. The other would be for organizations of the civil society to mature and develop strategies and coalitions dedicated to driving the development of checks and balances that would impede the abuse and excesses. I do not see how the reality is going to change by requesting action from the individual concentrating the power (indeed, ever more complicated to exercise) if what is sought is checks and balances and transparency. The alternative is cynicism.

*The Kremlin’s Information War, Journal of Democracy, Oct. 2015.

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Luis Rubio

It’s surprising that some are surprised. In the last five decades the country has lost all of its bearings: it changed its strategy of economic development, maintained the system of privilege (increasingly corrupt and visible) and, on top of everything else, undermined its own credibility on incorporating a belief system that hollowed itself out from within. The electoral preferences commanded by potential candidates such as Lopez Obrador, Jaime Rodriguez, El Bronco, and other outsiders are the consequence of what, consciously, has been done –and what was decided not to do- in the last fifty years.

The ideological hegemony in a society, the essence of the work of Antonio Gramsci, is developed, nurtured and preserved through the institutions that sustain it. The old Mexican political system was exceptionally deft at that: it aligned –and submitted to it- all of the social actors and governmental instruments in order to lend viability to its philosophy of “revolutionary nationalism”, over which it sustained its hegemony through the decades. However, when the system encountered problems in the sixties, first in the economic realm and later in the political, it lost its way and, although extraordinarily positive things have been accomplished, the government has never recovered its bearings. A new hegemony never emerged.

Stable societies entail two complementary characteristics. First, they enjoy ideological hegemony because the visions emanating from the educative system, the religious prelates, media, the political and entrepreneurial discourse and from the diversity of social and intellectual entities all coincide. When the loss is suffered of coherence and congruence the system’s credibility is forfeited and support of the sociopolitical regime disappears.

The other characteristic derives from the results of governmental management that strengthens, or reduces, its credibility. It is obviously easier to sustain hegemony in a prosperous society in which all of its members benefit from and entertain a horizon of progress, than in one living from crisis to crisis. Korea possesses great ideological solidity while Venezuela finds itself on the brink of a resounding collapse.

What have we done in Mexico? In the sixties the economic sustenance of the revolutionary regime vanished. In the seventies the sources of economic stability were destroyed and laws and regulations were incorporated that undermined economic development; in the eighties and nineties a new economic strategy was adopted (which has made it possible to survive and succeed for the last twenty years) but this strategy was never thoroughly implemented in an integral way, sapping its own viability, thus its credibility. Throughout this entire process some have been favored at the cost of others, giving rise to deep-seated social resentment. At the same time, the essence of the old regime has been perpetuated, making of the system of privilege an enormous social blemish, with a growing cost: according to some estimates, corruption in the country represents 9% of the GDP, while the impact in terms of credibility and reputation (sufficient to remember celebrated moments such as #LadyProfeco or that of #LordMeLaPelas) is infinite. The sources of unease and anger in the society are obvious.

What has been paradoxical through all of these decades is how rhetorical objectives have clashed with concrete actions. The case of education is paradigmatic: although this was conceived as a legitimizing instrument of the revolutionary government, up to the seventies an ideological equilibrium was maintained that was compatible with the development of a private enterprise-based economy. From the seventies on, the tenor changed to the point that children of following generations only know how bad everything about capitalism is, this despite that all of the later reforms were envisioned to shore up private investment. Flagrant contradictions.

This all generated growing tolerance for mediocrity, while political correction has ended up becoming the mantra and absolute limit of freedom of expression. If to this we add a succession of failed governments, rejection of the political establishment is absolutely logical. In a word, what we are currently undergoing is the consequence of actions, decisions and choices over many years.

Within this context, who does support López Obrador, El Bronco and other potential “dissidents”? All those who have grown up in an era of crisis, of rhetoric that is openly fallacious and full of lies, and growing corruption, waste and impunity. Why would one believe that things are going to get better when things are not carried out that are promised and that would be necessary for this to function? I have no doubt that the employee working at a plant exporting successfully and experiencing growing productivity levels optimistically perceives a future of opportunity, but I am certain that there are millions more who are stuck in an old economy that affords no possibility at all and who know that there is no future. There are real sources of resentment.

In the logic of the mediocrity of the last fifty years, concessions such as the lack of a modern system of education capable of providing equality of opportunity for all might have seemed to be minor and not transcendent, but have undercut the country’s viability and trust in government. As Mario Puzo wrote in The Godfather, “if we let them push us around on the little things, they wanta take over everything”. Successive governments were yielding in everything. Now the question is how to steer the country forward anew.

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Luis Rubio

Two have been the reactions to the announcement by government officials of budget cuts: some complain of the impact that these will exert on concrete programs, on public investment or on aggregate demand. Others criticize the cuts as too little, too late. If one observes, no one defends governmental spending for its virtues or for the opportunities that it could or should generate but rather for the costs that it entails. The budget, in any country, reflects a combination of political priorities and the correlation of forces. That correlation of forces in today’s Mexico produces an enormous fiscal weakness that reflects the institutional fragility of the political system as a whole.

There are three factors that aggravate fiscal fragility: first, the excessive discretionary powers possessed by the functionaries. When one listens to a European or U.S. Minister, what makes him or her different from a Mexican, Venezuelan or Brazilian one is that the former does not have the monies that can be applied at his discretion. In Mexico even third-level Ministers have significant funds that can be employed discretionally, a circumstance that is exacerbated in the case of the Ministry of Finance. The point is that although Congress has the power to approve the budget, its powers to oversee spending are very limited given the enormous clout of the executive, incalculably superior to that characterizing the U.S. Department of the Treasury or its equivalents in developed countries.

The second factor that distinguishes Mexico’s Treasury is the relatively low average fiscal burden. While some pay a lot, others pay nothing.  The tax collection problem is due to circumstances solely explained by power relations or by indisposition, also deriving from political calculation. On the one hand, there are numberless sectors, activities or groups that are, de facto, excluded from tax obligations: unions, court favorites, political clienteles, organized crime, State governments, political parties, agriculture, and a long etcetera. On the other hand, when types of tax alternatives are considered that could be employed to increase tax revenue, no consideration is given to linking spending and tax collection, something that could only happen if state governments were to collect more taxes, which would make them accountable to  voters.

The third factor, and the reason why the government’s fiscal situation is so fragile, is that the political system lost all legitimacy a long time ago. The reluctance to seek better ways of collecting taxes (which doesn’t necessarily imply raising the rates of existing taxes) derives from, at the end of the day, the perception, well earned, that tax collection is nothing more than mirror imaging of the government’s legitimacy. Some Swedes might prefer a fiscal structure distinct from the one they have to prioritize different objectives from the existing ones, but no one doubts the legitimacy of their government (whose tax rates, in some cases, are higher than 60%). The grounds of the latter lies in that the population can see their “taxes at work” in first-rate educative and health systems, an impeccable solicitousness with public funds and an economy that works. The point is that the fiscal powerlessness of the Mexican government is the product of its extremely poor performance: more money does not solve that dilemma, nor does it create better public services.

Although there have been moments of more fiscal strength, the frailty discerned during the last decades has occurred in parallel with the collapse of legitimacy since the seventies. The great good fortune of the government was that it discovered oil precisely during that period. It was from the seventies on that the promise of oil began to generate funds never before imagined, which allowed it to evade the underlying political problem: due to the governmental control of the oil resources, it seemed natural to employ the latter for political ends and for current expenditures rather than for investment.

Four decades later, the evidence is overwhelming: oil rents were wasted from day one, even before the oil began to flow in the second half of the seventies, and it never evolved into an instrument of long-term development. Billions of dollars passed through the governmental coffers leaving very little beyond that of clienteles dependent on patronage, unions turned into vested interests, the great wealth of politicians, governors consecrated to own private businesses and a country that, even though it certainly has improved, is far from having come to enjoy the good government indispensable for achieving that purpose. When the energy reform was being promoted there was much talk about Norway as a “model” to emulate. In both countries there is a great amount of oil; the difference in Norway has been the quality of its administration. It would have been better to count on that type of administration than on oil…

The big question now is whether we find ourselves in a cyclical or in a structural slump of oil prices. In the daily literature it is easy to find arguments in both directions: some who think that there will be a drop in supply, thus eventually strengthening oil prices; and then there are those who note such a pronounced reduction in alternative energy costs that we are at the threshold of a new energy era.

I do not know what really will look like in the future, but I do know that if the price of oil does not improve, the country will be obliged to confront its problem of essence: the issue of power, and that would entail a redefinition of political relations and the creation of effective checks and balances. Of course, the intermediate step of mediocrity is always possible, even probable, but the problem will not disappear simply out of pretending to cut expenditures in the short term only.

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Luis Rubio

The strangest thing about the Peña-Nieto government is its total indifference toward its own legitimacy. It is probable that the presidential team’s calculation lies in the eventual redemption that the projects and reforms it has undertaken produce, but that would imply that its actions in past years would render results of their own and not be products of the day-to-day function of governing. Be that as it may, it is a peculiar wager, above all in the light of the offer that today’s President made in his campaign for the presidency: efficacy.

The governments of past knew that their legitimacy was fragile and that it depended nearly totally on the country’s performance, above all in economic matters. For seven decades, the PRIist governments did even the unspeakable to achieve high growth rates; they knew that the alternative was popular opprobrium. Despite the intrinsic strength of the presidency during that epoch, all of those presidents knew that their credibility depended on the success of their efforts. So exaggerated was that mantra that it led to moments of madness such as those of Echeverría and López-Portillo in which they ran wild with, and in fact bankrupted, the government in pursuit of high growth rates.

The government of Enrique Peña-Nieto not only contrasts with those PRIist governments of before, but also even contrasts with others of this era, such as that of China, which strive to procure the credibility of their populations in spite of being unable to effect the high growth rates like those in the past. The Chinese Government has for decades attained very high growth rates, but it is currently confronting what is perceived there as almost a recession: growth rates of “only” 6%. What is interesting is that, beyond the specifics, the similarities are astounding because, at the end of the day, the two systems coincide in one thing: the fragility of their societies and their incapacity to oblige the government to respond to it.

The Mexican economy is growing at 2%, which is the same it has attained, on average, along the last twenty years. The government vowed to break with this mediocre growth level but has not been able to improve on it despite having raised taxes, augmented public spending, and increased the deficit and the debt. Everything has changed except for the only thing that matters to the citizenry: economic growth.

The growth problem is not exclusive to Mexico. At present the majority of the nations in the South of the Hemisphere are undergoing severe recessions and others are not even achieving the 2% that we have at present. Further than national and regional differences, what is evident is that growth is not obtained merely with greater governmental spending or because functionaries want it to be so. In a globalized world in which everything is interconnected and where communications are ubiquitous, the only thing that counts is the capacity of each nation to attract investment, whether from their own co-nationals or from the exterior. For purposes of investment, the source is the same because the world in its entirety is the playing field and everyone is part of the same space.

What the government has not understood is that legitimacy in this era is not won by the ephemeral growth rate but rather by the quality of the government. It is this factor that determines not only the trust that nurtures the citizenry but also it is, in the last analysis, what attracts investors. Inasmuch as investment determines the growth rate, one would think that the central focus of governmental action would reside in attending to the concerns and needs of potential investors and entrepreneurs but, in Mexico, the sole investors who appear to be relevant are the foreign ones, although their investment continues to be less, much less in absolute terms, than the domestic one. The citizenry does not exist in its vision.

The differentiating factor among nations is one and a very simple one: the quality of the government. By quality of government I understand that deriving from the capacity of collecting taxes and redistributing these intelligently, to that obtained by the certainty that their acts generate, beginning with the existence of predictable game rules known by all before the fact. That is, the country’s challenge does not lie so much in knocking on a thousand doors, but instead in creating general conditions so that all potential investors, including existing businesses, may have confidence in the government. It is much more important for the population to understand the challenges that the country is up against than for the government to squander the citizens’ resources on interminable opacities. The point is that trust, key for enticing investment and generating growth, depends on the quality of governance and not on the promises or individual preferences of the functionaries.

The cause of our stagnation is evident. The government betted everything on growing public spending and now is having to cut back, but is doing so without conviction or a clear sense of direction. This is insufficient in an era in which investors have a whole world as their space for developing and growing. If Mexico does not offer ideal conditions, there will always be opportunities in some other latitude.

The heart of the matter lies in one thing: the government must understand that its initial proposal was correct. What Mexicans want is an effective government, a government that functions because it solves problems and creates conditions for growth to be possible. The problem is that the government identified effectiveness with control but control is not a strategy but a vice. What Mexico needs is a government that works. Nothing more, but nothing less.

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Luis Rubio

Charles Dickens, the celebrated British author who told of the enormous dislocation and impoverishment that the Industrial Revolution represented, began The Tale of Two Cities with extraordinary perspicacity: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on being received, for good or for evil, in the superlative degree of comparison only”. History repeats itself.

The pervasive world issue in recent decades is, again, the grand imbalance: reality advances much more rapidly than the capacity of governments and institutions to adjust. Technology gives rise to inordinate changes in the economy and in families, dislocating companies, sources of work and modes of production, consumption and lifestyles. As the Industrial Revolution destroyed millions of agricultural jobs, the digital revolution is altering the status quo on all fronts. If whoever visited a factory three or four decades ago were to go back now they would note one striking obviousness: production increases exponentially but jobs do not. A half century ago two workers were required per loom; today a sole employee, managing a computer, is responsible for up to ten thousand looms. The social impact is evident.

But the digital dislocation is infinitely more complex that that undergone two centuries ago because, although it displaced many agricultural jobs with the incorporation of machinery in the field, the type of activity did not change radically: in both cases, in the field and in industry, jobs would require manual skills to work on production lines. In contrast, the average worker on an industrial production line does not possess the characteristics that the digital age demands, where intellectual abilities are sought that are the product, in good measure, of the educative process.

Two things are conspicuous on observing the evolution of the automotive industry in the country –perhaps the most advanced of the industrial sector. On the one hand, the skill that workers have had in surmounting the deficiencies of the educative system with which they came on the scene: training programs and the huge capacity to adapt that is typical of the Mexican worker have permitted the rise of productivity and successful competition with the world. On the other hand, the industrial processes found in the country continue being, in the light of international comparisons, relatively simple. That is, the educative system constitutes a huge impediment with regard to incorporation into the world’s most advanced productive systems, the latter accompanied by the best jobs, those that pay most.

The disfunctionality of the educative system is just one very widespread symptom from which the world suffers: there is no country, however well developed, that does not experience the same type of maladjustment. The political manifestation of this phenomenon is apparent in the growing fortification of the French Extreme Right, the ascent of U.S. populism in the person of Trump and, even, in the electoral  appeal that, at its time, was represented by figures like Hugo Chávez in Venezuela and the Kirchners in Argentina. Those who feel pressed by the rhythm of change, the many who have lost jobs or who live on miserable salaries, are auspicious cannon fodder for these movements. The same phenomenon arose at the beginning of the Industrial Revolution and did not desist until decades later, when society and its institutions became acclimatized to the new realities and joined forces with the new economic era. There is no reason to think that this time will be different, but that implies decades of dislocation, with the consequences that this presupposes.

There are at present mechanisms of adjustment (social security, retirement funds such as the Afores, pensions, programs like Prospera) that permit the attenuation of the most obvious costs of these imbalances, but the political phenomenon is not distinct. That is, perhaps the havoc wreaked on humans would be less extreme, but the political impacts without doubt will be.  People who lose their jobs, who cannot find employment or who have unproductive jobs inevitably swell the ranks of the frustrated who revive populist solutions. If we add to this what will inexorably come, the restructuring of monsters such as Pemex, the political dislocation will be colossal because not only will jobs be lost, but also these will be lost by social groups and unions that for decades have been untouchable and that have developed a militant and aggressive culture. The reverberations of the bankruptcy of the Mexican national electricity company Luz y Fuerza in the figure of the Mexican Electrical Workers Union (SME) will have been but child’s play compared with what could emerge from Pemex.

Mexico is particularly ill equipped to confront the imbalance that is ahead. We have weak institutions, a system of government that has already proven itself incapable of dealing with the challenges of the industrial era, and an absent government. At the same time, it would be an imposing opportunity to transform the system of government and to compress two stages into one. The Chinese symbol for crisis incorporates danger as well as opportunity. The question is what our choice will be.

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 Luis Rubio

In his book on inequality, Thomas Piketty obliged the world to confront a politically explosive matter. Although his critics have quashed most of the argument in technical terms, nothing can dislodge the political transcendence that inequality has acquired. Beyond its usefulness for electoral and populist ends, inequality is inherent in human nature; the relevant question from my perspective is whether this has reached such an extreme that it is a menace to stability and if this is so, what should be done about it.

According to Piketty, the proportion of wealth in the hands of a small worldwide elite will continue to grow because the rate of return on the capital is greater than the economic growth rate. His conclusion is that “capitalism generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based”. His solution is to tax the rich.

Ian Morris, a historian, has studied inequality through the last fifteen thousand years (compared with Piketty’s 250). Morris’s conclusion is that each era develops an equilibrium in terms of equality-inequality that ties in with the circumstances and needs of the moment.  “Different economic systems function best with different levels of inequality, creating selective pressures that reward groups moving toward the most effective level and punish those moving away from it.  It is also clear that transitions between systems can be particularly traumatic, and it is possible that we are the verge of such a transition now”.

The main source of inequality at the international level in the last decades appears to arise from a combination of two factors: on the one hand, the accelerated population growth in the seventies and eighties (a period during which the world population doubled), and, on the other, the growing globalization of the economy. Both factors have expedited inequality, above all because, on increasing the reserve of talent worldwide within the context of globalization, each person –from the most modest worker to the most pretentious entrepreneur- was suddenly propelled into a space of competition that had never before existed. In everything relative to standardized production, it is the same whether a product is manufactured in Malaysia or in Guanajuato. On its part, technology facilitates the transfer of services, putting enterprises at the most obscure corners of the planet in competition with each other. In this context, a child born in the northern Mexican city of Hermosillo is competing head to head with another of his same age in Shanghai or in São Paulo. The question is whether he has a similar capacity (or “human capital”) for competing.

In this era, the capacity to compete successfully is reduced to two fundamental factors: costs and human capital. Costs are determined by tangible aspects such as infrastructure and market access, as well as monetary factors, such as exchange rates. Human capital is concerned, essentially, with the education that each person has and his capacity for functioning in niches of high competition, usually determined by the technology itself.

In his book Unequal But Fair, Marc de Vos establishes another dimension. According to him, the accumulation of old money does not determine, as Piketty affirms, future inequality, but rather it has much more to do with the capacities of each individual. De Vos proposes that we are in transit toward an economic system that fuses human with financial capital in which the human element is increasingly becoming dominant. De Vos’s prescription is not to lose oneself in futile attempts to tax the capital but preferably to broaden opportunities for those who are losing ground. This, it appears to me, is the correct focus and the great challenge of the economic development of Mexico.

The inequality in the country stems from two key factors: on the one hand, the enormous polarization that exists in the educative system that tends to preserve (thus, expanding) the inequality. Insofar as a child from the urban middle class retains better opportunities to learn than the son of a farm worker in the southern Mexican state of Oaxaca, the inequality gap grows. In this regard, it is obvious that the core proposal of the educative system –to level the playing field for all children independently of their circumstances or origin- has been an outrageous failure. For many decades, this issue did not seem important because the fatal combination of technological advancement and globalization that has inexorably exacerbated the differences had not yet materialized. Today the challenge is monumental.

The other source of inequality derives from the absence of competition in the Mexican economy, which entails the permanence of sources of wealth of the type that Piketty observes as the engines of a growing gap. A monopoly (or the control of a market) implies that an entrepreneur, union leader or politician does not have to compete, ensuring what economists denominate “rents”, excessive profits that do not derive from the market. In this respect, it is the same for a company that controls a determined service or product, the union leader for whom a percentage of the company’s contracts is guaranteed or the politician with foreknowledge of where an airport is to be built and dedicates himself to buying up land in the area before the fact in order to sell it later at a huge profit.

Inequality in Mexico did not fall from the sky. It was created by individuals of flesh and blood. Thus, it can in turn be dismantled.

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                                                                     Luis Rubio

The need for and importance of an efficient government is obvious and should not be cause for much discussion. However, after reading the fascinating book of Micklethwait and Wooldridge*, it appears evident to me that this will not be achieved as long as basic matters such as what efficient government is and the way that the Mexican State is governed is resolved. While some countries are undergoing what the authors call the “fourth revolution” of the State, in Mexico we haven’t even reached concluding the second, the one that took place at the end of the XVIII and the beginning of the XIX Centuries. Such is the magnitude of our backwardness.

The first revolution to which the authors refer concerns the conformation of the State in the XVI Century and that consequently exuded a semblance of order and peace. That was the era of centralization of power, of submitting feudal lordships in Europe and consolidation of the Emperor in China. The function of the government during that stage was exercising power and the legitimacy of that power was measured by the efficiency of its management, above all regarding the security of the population (the reason for which, according to theoreticians of the era such as Hobbes, the latter was disposed to submit itself to a strong government). Monarchs instituted the monopoly of power within their territory, subordinated the sources of authority and power that defied them (including the Church) and conferred enormous power on the great administrators and bureaucrats: the era of Cardinal Richelieu, who constructed efficient administration and a tax collecting system. According to the authors, Europe procured a much stronger system of government than that of India (plagued by its perennial weakness), but one that was concurrently much more decentralized that that of China, sanctioning the proliferation of novel ideas, methods and, in general, boundless creativity.

The second revolution consolidated the liberal State precisely during the epoch of the French Revolution and the Independence of the United States. The new governors ushered in an era of reforms that had the effect of dismantling the systems of patronage of the previous era, incorporating meritocratic systems of bureaucratic promotion and constructing mechanisms of accountability. The result was the conformation of a civil service métier, the systematic attack on cronyism and privilege in the relationship between government and society, economic liberalization and constitutions designed to protect citizen rights. The third revolution was that of the Welfare State, and the fourth entailed the search for an effectiveness that would furnish the extraordinary efficiency of the system of government of Singapore but within a democratic and liberal context.

In Mexico the second revolution never concluded in terms of these authors’ nomenclature: a government was produced that was weak like that of India, but also highly rigid and centralized like that of China (XIX and XX Centuries), both of these inefficient in the extreme. A modern bureaucracy was never consolidated. For its part, in the economic ambit, liberalization was partial and incomplete: exceptions remain the norm, cronyism, parastatal (and private) enterprises that do not compete, protected spaces and distortive subsidies. More importantly, not only were the structures of privilege and patronage not dismantled, but they now began to be recreated and reinforced. The authors write that “Victorians (of Queen Victoria, 1819-1901) believed that governments should solve problems rather than simply collect rents”. The experience of recent telecoms reform, not to mention the fiscal one, situates us prior to the Victorian era…

One of the reasons why there is such dissatisfaction with the government is precisely its lack of efficacy, which in good measure derives from the rationality of a system of government whose focus is on controlling everything while preserving privileges for a few, and the gluttony characterizing it. The authors incorporate a discussion in their book that seems to me to explain much of what takes place in the reality of the country: in Mexico the private sector has had to transform itself in order not to be leveled by the competition and to grow and develop itself. Globalization has obliged it to raise its productivity, improve the quality of its goods and services and to compete for the consumer’s favor. Not so the government which, with the exception of its loss of revenue from declining oil prices, does not confront fundamental challenges.

According to the authors, many governments around the world implicitly assume that the public sector will continue to be immune and intact in the face of the technological advances and forces of globalization that have wreaked deep havoc on the private sector. That is, it’s not by chance that in Mexico we have a first-world private sector and a government system of the fifth.

The question is whether, in this context, it is possible to construct an efficient government such as that which the President proposed in his campaign. The evidence suggests that what permits –and, in fact obligates- the government to transform itself is the existence of forces and ideas that incite the change, just the opposite of what the government has been advancing: centralization, control and subordination. Mexico is clearly in urgent need of an efficient government because that is the condition sine qua non for development. However, as this book attests, efficiency derives from professionalism, the elimination of privileges and perquisites. Will we pole-vault into the fourth revolution or will we stay stuck between the first and the second?

*The Fourth Revolution: The Global Race to Reinvent the State, Penguin Press, 2014.

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 Luis Rubio

Trump ni neumen niti nerazsoden igralec, pokazal je velikansko spretnost pri prevzemanju jeznih volivcev. V vsakem primeru je njegova iracionalnost, kot pri severnokorejskem vodji Kim Jong-unu, sad računice. V nasprotju s poklicnimi politiki zelo slabo pozna javne politične zadeve, toda zaradi tega ni niti iracionalen niti posebno ideološki.

http://www.portalplus.si/1326/donald-trump-severna-koreja/

Luis Rubio

Is Trump as irrational as many brand him? Is he a fascist as other affirm? The evidence to date, as an excellent article by John Cassidy* suggests, is that he is a highly ignorant actor but, at the same time extraordinarily shrewd in the management of public opinion and the media. Reading about the recent explosion of a nuclear bomb in North Korea, it appears to me that Trump is a great poker player, which implies a great capacity of control and calculation. Perhaps a pertinent question is whether we Mexicans will be equally shrewd as players.

George Friedman writes thus: “Poker is a game in which fear and greed compete… Part of poker is the player’s self-control, but the most important thing is the manipulation of fear, avarice and the reason of the other players, obliging them to fall into foolishness… The objective of the player is to create a sensation in others that you are an unpredictable soul, not given to calculation but the product of nonsense and carelessness”. According to Friedman, the North Koreans have become masters in the art of irrationality, utilizing it as an instrument of manipulation and blackmail of the orbit’s main powers.

Clearly, Trump is neither in the same league nor of the same rationale as the leader of North Korea, but his skill is nonetheless impacting in terms of exploiting the media and capturing the imagination of a not-at-all irrelevant portion of the American electorate. Trump responds to an electorate that is especially irritated with respect to its present and the future:  “The angriest and most pessimistic people in North America are the people we used to call Middle Americans; middle-class and middle-aged; not rich and not poor; people who are irked when asked to press 1 for English, and who do not understand why ‘white male’ became an accusation instead of a description… White Middle Americans express heavy mistrust of every institution in American society: not only the government, but corporations, unions, even the political party they typically vote for—The Republican Party of Romney, Ryan and McConnell, which they despise as a sad crew of weaklings and sellouts.  They are pissed off.  And when Donald Trump came along, they were the people who told the pollsters, ‘that’s my guy’”.**

Trump does not adhere to any rule, but he is very sure about the priorities of the supporter base that he has been able to woo. The use of Mexico, the Mexicans and the border is, in his logic, absolutely rational. Says Cassidy: “Trump has sought to fan the fear that America is losing its heritage, and that the political establishment is complicit in a betrayal. The image of a big wall at the southern border is central to Trump’s campaign—not just in policy terms but also psychologically. It represents a physical manifestation of the desire to place a large stop sign before the onward march of history”.

Paul Berman wrote a book fifteen years ago*** in which he describes the inability of the political establishment to understand the role of the irrational  in human affairs, above all its failure in accepting the possibility that big groups of persons act in a pathological manner. Although he refers to Islamic radicalism, the proposal of Berman is particularly relevant in this era of political polarization where the extremes come together. In fact, there are analysts who argur that it is not inconceivable that many who historically vote for the Democratic Party might feel equally attracted by the bid to recreating North American grandeur. The extremes feed on each other and unite in their extremism.

How to deal with the resentment and sensation of indignity paining many of the potential voters for Trump? That, of course, is the challenge for the Republican establishment as well as for the people of the U.S. in general; but the challenge is not a lesser one for Mexico and Mexicans. Berman notes that there is a tendency to think that it is possible to persuade the extremists with rational argumentation and correct actions. However, if the motivation of the prospective voters for Trump is emotional or “irrational” in the Friedman sense, rational positions are irrelevant.

Trump is neither a crazy person nor an irrational actor, but he has exhibited enormous adroitness in taking an irate electorate captive. In any case, his irrationality is, as in the example of North Korea’s leader Kim Jong-un, the fruit of calculation.  Trump is a successful businessman who not only knows how to handle suppliers, employees, politicians, bureaucrats and union leaders, but who also understands how the world works in general. In contrast with professional politicians -his rivals for the presidential nomination and for the Presidency-, he surely is very ignorant about public policy issues, as tends to occur with businesspeople who venture into politics, but that does not make him irrational nor particularly ideological.

The challenge for the Mexican Government lies in which approach to employ to establish a bridge of communication without adding additional fuel to the fire. Up to now, the Mexican Government has weathered the Trump storm well, not granting space for confrontation. The government’s risk is to be trapped in its own discourse and anti-U.S. attitude. The logic of an approach would be very simple: it is not to convince him and dissuade him, because that is impossible and unacceptable to him; but as with all candidates of countries that are key for Mexico, the bridges are of the essence.

*New Yorker, December 28, 2015

**David Frum: http://www.theatlantic.com/magazine/archive/2016/01/the-great-republican-revolt/419118/

***Terror and Liberalism

www.cidac.org

@lrubiof

a quick-translation of this article can be found at www.cidac.org