Mexico: López Obrador under threat from the ruling class

The left-wing government of Andrés Manuel López Obrador is attempting to balance between the will and aspirations of the masses who brought it to power, and the demands of bourgeoisie. Despite attempts to placate the ruling class, they don't trust AMLO and want him gone.

In Africa, Latin America and Asia the exploitation of the majority of the population by small ruling elites in cahoots with imperialism is much coarser than in the advanced capitalist powers. Here, millions of workers, peasants, and urban poor already live on the brink in “ordinary” times. The COVID-19 pandemic and the concomitant capitalist crisis threatens to tip them into utter desperation. But the masses will not take this lying down.

In Mexico, the left-wing government of Andrés Manuel López Obrador was propelled to power in 2018 by the anger of millions and the desire for radical change. The injustices he vowed to combat are now being exacerbated manifold by the crisis – as is the incompatibility of his promises with capitalism and imperialism. Indeed, the pandemic is aggravating the tensions between the government and the Mexican bourgeoisie, which threaten to spiral into an open conflict.

Dubious allies

López Obrador embodies the yearning for radical change in Mexican society. He has promised to embark Mexico on its “fourth transformation”, of a scope comparable to the war of independence against Spain, the liberal movement of Benito Juárez in the 1850-60s, and the Mexican Revolution of the 1910s. Many of his plans are bold and would improve the livelihoods of millions of Mexicans. He is genuinely committed to improving the lot of the masses. Some of his policies, such as grants for students and apprentices and extra pensions for the elderly poor have already alleviated the plight of the most vulnerable in society.

However, López Obrador believes it is possible to transform society within the bounds of capitalism. This recent statement encapsulates his reformist philosophy: “Of course, we want to support businessmen, but we also want to support the indigenous people, the peasants, the taxi drivers, the small shopkeepers, the students, we want to support everyone.” In his opinion, it is not capitalism as such that is to blame for the injustice that scourges Mexico, but neoliberalism, that is, a specific strand of capitalist ideology. Therefore, he has tried to enlist the support of “progressive” capitalists by embarking on state-sponsored development projects, such as the Maya and Transísmico railways in the south of the country, the creation of special economic zones in the north, lucrative oil leases, or by using private banks to distribute social benefits. López Obrador has made efforts to seduce the country’s richest man, Carlos Slim, who will be one of the main beneficiaries from his development projects. Others, such as Ricardo Salinas, who owns vast monopolies in retail, the media, and finance, and tycoon Alfonso Romo, have been brought into special advisory boards. The government draws a distinction between the businessmen who “make investments and generate employment with tenacity and persistence, making legitimate profits and assisting the development of the country” and those “who amass great fortunes illegally, on the basis of corruption”.

Carlos Slim Image ITU Pictures FlickrLópez Obrador has made vain efforts to seduce the bourgeoisie, including the country’s richest man, Carlos Slim, who will be one of the main beneficiaries from his development projects / Image: ITU Pictures, Flickr

Inequality, underdevelopment, and corruption are, in López Obrador’s opinion, ultimately the consequence of wrong ideological choices by policymakers. This also exonerates the state apparatus from any blame. It had simply been “highjacked by a small minority”. Under adequate leadership the state can be geared to protecting the weak and checking the greed of the powerful. In this spirit, he has respected constitutional protocol and the formalities of the division of powers, guaranteeing the “independence” of the judiciary and the Central Bank, for instance. However, the state apparatus is not neutral, but is an instrument to maintain class exploitation. Amidst the prevailing misery and the gross inequality of ex-colonial countries such as Mexico, the ruling class must secure the loyalty of the state through inordinate privileges, which are invariably complemented through corruption, and by instilling reactionary ideology into this repressive apparatus and imbuing it with a feeling of impunity. The close connections between Mexican state officials at all echelons of the administration, from local policemen to state governors, drug cartels and organised crime is a point in fact. The violation of the human rights of activists and protesters is recurrent. At times, this has reached the point of mass murder, as in the massacre of the leftist Ayotzinapa students in 2014. As López Obrador is starting to realise, the administrative machine he officially wields is far from neutral.

Mexican capitalism is tied hand-and-foot to US imperialism. The latter absorbs 80 percent of Mexican exports. The division of labour between the two countries displays a classic imperialist structure, whereby Mexico exports raw materials and cheap industrial goods and imports commodities with a high added value. The moguls of Mexican industry depend mostly on the US market and care little for internal demand. It is therefore unsurprising that López Obrador has also tried to accommodate US interests. He rubberstamped USMCA, an update of the North American Free Trade Agreement of 1994, which López Obrador’s party considers a “useful instrument for economic and commercial exchanges”. Under pressure from Donald Trump, he deployed the armed forces on the Guatemalan border to block the entrance of Central American migrants into Mexico on their way to Rio Grande. The two governments have also collaborated on the so-called “war on drugs”.

Economic giants, political dwarfs

López Obrador’s notion that social justice can be achieved without challenging the fundamental interests of the Mexican bourgeoisie, the state apparatus, and US imperialism has been unravelling since he took power. The COVID-19 pandemic is making this truth more apparent. Even if the government has vowed to protect and even foster private enterprise, the bourgeoisie is against him. They fear López Obrador’s commitment to redistribution will bite into their profits. His campaign against corruption threatens to dry up an important source of income for the ruling class, which complements its “legal” activity with illegal or “semi-legal” earnings drawn from the state coffers. The reversion of the privatisation programmes and some public-private partnerships launched by previous governments, most notably in oil and energy and in the building of a new airport for Mexico City, will deprive capitalists of juicy investments.

Yet the bourgeoisie’s main concern is not directly economic, but political. They do not control López Obrador as they used to control previous presidents, who were obedient puppets in their hands. His social base is an effervescent, impatient mass. He rode to power on a wave of social unrest and he embodies expectations for radical change. If he does not deliver, his voters will hold him accountable. He is sensitive to pressure from below. The Mexican bourgeoisie is especially domineering politically because it is especially rapacious economically; it requires a government that will keep the working class under its jackboot. López Obrador will not do this, and his promises have whetted the self-confidence of the masses. The state bureaucracy is also weary of the president’s “republican austerity”, which involves cuts to the wages of high-ranking officials and greater transparency. The upper echelons of the state apparatus and the armed forces are very sensitive to the pressure of the ruling class, to which they are bound by a million threads.

Filipe Image World Economic Forum FlickrThe Mexican bourgeoisie are very weak. Attempts by figures like ex-president Felipe Calderón launch a new right-wing parties and movements have flopped / Image: World Economic Forum, Flickr

Since López Obrador took office in December 2018, a strike of capital has loomed over the Mexican economy. In 2019, investments dropped by 2.2 percent, falling to its lowest level in six years. This drop is even starker when foreign investment is factored out. Some powerful capitalists, such as Claudio X. González, have come out with a strategy of open insurgency against the government. Sectors of the state apparatus have also hindered the executive’s policies and exerted open blackmail. For instance, in July 2019 the police in the capital orchestrated a series of mutinies and protests, supposedly against the reorganisation of the security forces, but these demonstrations had a clear political tack. In November, army general Gaytán Ochoa openly criticised the government and claimed it did not represent the entire nation. He was voicing out loud what many of his colleagues think in private. López Obrador has tried to appease the military through economic concessions, such as the building of a new airport in the capital, all while establishing a new, praetorian force directly accountable to him, the National Guard. A sector of the ruling class has also tried to whip up reactionary mobilisations against the president. A number of far-right organisations have cropped up in recent months, some of them with openly violent, putschist rhetoric. Nevertheless, the right has failed resoundingly in its effort to challenge López Obrador in the streets. They attempted to co-opt the women’s strike on 8 March, but once again were unsuccessful.

This reveals the political impotence of the bourgeoisie. Although they wield economic power and have influential allies within the state apparatus, they lack a social base. They are economic giants but political dwarfs. Thof eir traditional parties, the PRI (Institutional Revolutionary Party), the PAN (National Action Party), and the PRD (Democratic Revolution Party) are extremely unpopular after decades disastrous administration at both national and regional level. They hover around 5-10 percent in opinion polls. The attempt by ex-president Felipe Calderón to launch a new right-wing party, México Libre, has so far also been ineffective. López Obrador won the elections with an absolute majority. Although he has lost steam, he remains popular and tops the opinion polls. Indeed, it is the weakness of his adversaries rather than his own strength that accounts for the political solidity of the government.

In light of their political vulnerability, a sector of the ruling class has been trying to influence (and undermine) the government from within rather than challenge it from without. This is especially true for the mightiest oligarchs in the country, such as the aforementioned Carlos Slim, Alfonso Romo, or Ricardo Salinas; as well as others such as Antonio del Valle (Mexichem), Valentín Diez Morodo (Citibanamex), Emilio Azcárraga (Televisa), or Rogelio Zambrano (Cemex). López Obrador has welcomed them with open arms. These moguls are in a stronger position to pressure the government and are more confident than middling capitalists. The cleverest capitalists and imperialists also value López Obrador’s ability to control the masses, something that was thrown into stark relief during the insurrections that shook Latin America in the autumn. Similarly, the Trump administration has tolerated López Obrador out of the lack of a better alternative, and insofar as he has toed the line of basic US interests. The president has used the threat of a rapprochement with China and migration controls as a lever to strengthen his hand vis-à-vis Washington. This has had an effect, as attested by US concessions to Mexico on oil price negotiations. Yet these are all dubious allies that are ready to betray him at any moment. The COVID-19 crisis has brought this to surface.

The ruling class rebels

There is now an open conflict between the government and a growing number of capitalists. Faced with the COVID-19 pandemic and the deep economic slump it has brought about, López Obrador has decided to temporise. The magnitude of the depression is unprecedented. The country’s GDP may have fallen by almost 10 percent, according to some estimates. The paralysis brought about by the lockdown and the fall in exports to the US and remittances from migrant workers is compounded with the collapse in the price of oil, a major source of income for the state. Yet López Obrador has insisted the crisis will not spoil his social programmes. On the contrary, in April he announced a battery of new measures to assist the poorest in society, as well as small businesses and entrepreneurs. As many as 22 million Mexicans are now eligible to receive state benefits. To make up for lost income, the government will cut deeper into the wages of high-ranking state officials and into unnecessary expenses. López Obrador has also refused to subsidise large corporations. Additionally, he is firmly against taking on additional debt, which weighs like a tombstone on Latin American economies.

The ruling class, both in Mexico and abroad, is furious at these policies. Paradoxically, they are asking the government to abandon its “republican austerity”, take on as much additional debt as is necessary, and embark on a policy of economic “stimulus”, putting the exchequer at the service of private capital. An extremely aggressiveeditorial in the Financial Times set the tone of these demands:

“More and more voices in Mexico’s elite are speaking of a looming tragedy. Business leaders have proposed an alternative virus response plan. The odd dissenting voice within Mr López Obrador’s governing alliance can sometimes be heard. But Mexico has an imperial presidency and an imperious president. Time is perilously short. Politicians across party lines, state governors and business leaders should unite to agree a comprehensive economic and health programme to deal with the coronavirus and press it upon their president. Legal challenges should be launched against some of his more questionable policies. The appalling humanitarian catastrophe of Venezuela stands as a clear warning of what another four and a half years of Mr López Obrador could do to Mexico.”

The main bosses’ unions in Mexico, COPARMEX, COPAMIN, and CCE, have issued calls for the state to underwrite private debt, for a less stringent lockdown, for state subsidies for wages, deregulation, tax breaks, and similar policies aimed to bail out capitalism and make workers foot the bill. “The plan of López Obrador is not what we expected, what we needed”, said the leader of COPAMIN, “the consequences could be very serious”. In an act of blatant defiance that marks a qualitative change in the relationship between the presidency and the oligarchy, a TV station owned by Ricardo Salinas, who forms part of a government advisory board and was deemed a “progressive” capitalist, advised its audience to ignore the advice of health authorities. Indeed, Salinas’ retail empire remained open during the lockdown in defiance of government regulations. Rather than punish this dangerous act of rebellion, López Obrador tried to appease Salinas, emphasizing he respects freedom of speech. He has also forged ahead with public-private development projects, such as the Maya railroad, to help sweeten the mood of the ruling class. The government calls for “national unity”. But when faced with such a crisis, no halfway concessions will satisfy the bosses.

AMLO 2 Image Eneas De TroyaThe bourgeoisie is redoubling its pressure on the government. Their aim is to ensure the absolute submission of the president and, ultimately, to oust him / Image: Eneas De Troya

The bourgeoisie is redoubling its pressure on the government. Their aim is to ensure the absolute submission of the president and, ultimately, to oust him. A recording was recently leaked of a meeting between right-wing journalist Ferriz de Con and a group of important businessmen, including the president of one of the most important employers’ unions in Mexico, CCE. The tenor of this conversation was openly putschist: “It will be very difficult to rescue our businesses if, on top of our current difficulties, we have a government that will not make any concessions and does not provide us with any oxygen. We must adopt a different tactic”. He went on to outline plans to oust the president through a rebellion of right-wing governors. They are trying to mobilise the state apparatus against the executive. Three governors in the northern states that border the US issued a joint statement denouncing the government’s management of the crisis. The governor of Baja California also issued similar criticisms. He belongs to the ruling party MORENA. Indeed, the latter is becoming seriously divided. In the last period, López Obrador adopted an open-doors policy in MORENA. As part of his reformist, conciliatory vision, he welcomed the arrival in the party of all manner of opportunists, many of them defectors from the PRI, PRD, and PAN, as well as agents of the ruling class, such as neoliberal hack Esteban Moctezuma. Many of them are now throwing spanners in the government’s wheels.

At the same time, sectors of the bureaucracy are also rebelling against the executive. The Central Bank of Mexico announced a stimulus package, whereby it will inject 750 million pesos into the financial sector. This goes against López Obrador’s pledge not to subsidise banks and corporations. He issued stern remarks against the bank’s policies, but he is hamstrung by his commitment to the so-called division of powers. More seriously, the Washington-based Interamerican Bank of Development announced it would provide 12,000 million US dollars for Mexican businesses. Supposedly, the ultimate beneficiary will be “small companies”. In reality, however, the bonds will cater to large banks and corporations, which are later meant to lend cheap credit to smaller businesses. Giants of Mexican industry, such as Cemex, Mabe, and Axtel have already applied for the programme. The Ministry of Finance rubberstamped the agreement – in defiance, it seems, of the will of López Obrador, who openly criticised the way this plan had been “imposed” on the government, and warned the state would not underwrite any of these loans. This episode points to deep divisions within the cabinet.

The COVID-19 pandemic has radicalised the opposition against López Obrador. However, a violent coup d’état is highly unlikely at the present moment. While there are surely many officers who would back such a movement, it would be a reckless gamble that would inevitably backfire. The bourgeoisie is still very weak politically. In fact, the pandemic has increased the popularity of López Obrador. The government has been seen to manage the crisis effectively, as the number of deaths remains relatively low. Most importantly, the attacks against the government have galvanised its base of support. For instance, after Ricardo Salinas’ TV station called on citizens to ignore the authorities, a petition asking the government to suspend its licence obtained 150,000 signatures on a single day. Therefore, only the most deranged reactionaries contemplate violent action against López Obrador. Most capitalists have opted for a strategy of attrition: to engage in economic sabotage, to drive a wedge within MORENA and within the state apparatus, and to step up the media flak, with a view to undermining its base of support. In the future, this could lead to a “soft” coup, whereby López Obrador would be ousted constitutionally, as occurred in Brazil with Dilma Rousseff’s impeachment in 2016.

The Mexican government has also been taking heat from US imperialism. Washington has urged Mexico to keep its industries working as it attempts to reopen its economy. As production chains in both countries are intertwined, Mexican economic policy must march in lockstep to Trump’s. So far, this pressure has regarded the economy, but if the political situation becomes more polarised open meddling against López Obrador cannot be ruled out. The re-opening of industry itself could rapidly become politicised, as workers in the maquilas (factories in border areas) have already staged wildcat strikes.

Bonapartism, sui generis

In ex-colonial countries such as Mexico, foreign capital dominates the economy. This means that the national working class is relatively strong vis-à-vis the national bourgeoisie. Moreover, the latter is socially isolated by the lack of a large workers’ aristocracy or a prosperous petty bourgeoisi,e as exist in imperialist countries. Reflecting on the policies of Lázaro Cárdenas, Trotsky explained that such an unbalanced social structure inevitably carries Bonapartist tendencies of a peculiar kind:

“In the industrially backward countries foreign capital plays a decisive role. Hence the relative weakness of the national bourgeoisie in relation to the national proletariat. This creates special conditions of state power. The government veers between foreign and domestic capital, between the weak national bourgeoisie and the relatively powerful proletariat. This gives the government a Bonapartist character of a distinctive character. It raises itself, so to speak, above classes. Actually, it can govern either by making itself the instrument of foreign capitalism and holding the proletariat in the chains of a police dictatorship, or by maneuvering with the proletariat and even going so far as to make concessions to it, thus gaining the possibility of a certain freedom from the foreign capitalists.”

The Mexican government today clearly displays such “plebeian” Bonapartist features. The COVID-19 crisis will exacerbate them. Pitted against the bourgeoisie, López Obrador will lean on his powerful base of support to reaffirm its authority. He could even call his followers out on the streets if he feels cornered. Such a balancing act between classes will increase the power of the government. Yet this will be based on a catastrophic equilibrium that could implode at any moment.

López Obrador is very popular at the present moment, but this popularity is not written in stone. It is predicated on the expectation that he will deliver radical social change. If he continues his policy of appeasement towards the ruling class, he will eventually undermine his own base of support and disappoint his followers. This would prepare the ground for the victory of reaction, as occurred in Brazil in 2016. So far, the working class has largely been a passive observer of the recent skirmishes. A decisive showdown between the government and the ruling class would inevitably drag it into combat. If López Obrador calls on the masses to mobilise to defend his government against the attacks of the ruling class, the workers, peasants and the poor would respond enthusiastically, as they have always done in the past.