chapter  6
43 Pages

President de la Madrid Hurtado's Sexenio: The Crisis and the Neoliberal Ascendancy

WithJames M. Cypher

This chapter analyzes the underlying causes of the crisis of the 1980s. It examines the "drain-centered" conjunctural theory of the crisis, which stressed the effects of debt repayments. The chapter discusses three theories of the crisis: the overinvestment/underinvestment theory, the falling-rate-of-profit theory, and the monetarist theory. To the extent that one can rely on official data to describe the movements of the macroeconomy, the de la Madrid Hurtado sexenio was defined by extreme stagnation coupled with two serious downturns. As many observers have stressed, the rise of the stock exchange was part of the development of the "parallel financial system." Karl Marx and classical Marxist economists have maintained that the accumulation process slows down and enters into crisis when the rate of profit declines. The speed and scope of the restructuring-export promotion program that the state has increasingly imposed on the economy have not allowed for much of a theoretical assessment.