Alborada presents an exclusive extract from Carmen Boullosa and Mike Wallace’s new book A Narco History.

The administration of Carlos Salinas (1988–1994), building upon the neoliberal policies introduced by de la Madrid, now put into effect a rolling counter-Revolution. In this round it was the larger public enterprises that were sold off at bargain basement prices: among the eighty or so he privatized were the telecommunications company, the two airlines, the national steel company, the fertilizer and sugar companies, the railways, and the commercial banks that had been nationalized in 1982. The process created a new class of Mexican tycoons. In 1987 there was one Mexican on the Forbes billionaire list. When Salinas left office in 1994 there were twenty-four.

Labor, conversely, was battered. When public enterprises were privatized their collective agreements were scrapped, benefits were removed, and “‘flexible” work rules were imposed. Salinas also distanced the party from its long-affiliated labor unions, and ordered a series of attacks on more militant entities. At the same time, state subsidies that had kept the price of basic foodstuffs low were suddenly removed. The price of milk, tortillas, petrol, electricity, and public transport shot up at the same time wages were being slashed. The provision of basic social services, long a feature of post-Revolutionary governments, was similarly cut so that fewer people had access to free health care and education.

The neoliberal offensive was particularly devastating to farm labor, partly as a consequence of the establishment of the North American Free Trade Agreement (NAFTA), which Salinas negotiated with George H. W. Bush (1989–1992) and which went into effect under Bill Clinton (1993–2000). A principal U.S. condition for entering the agreement was that Mexico undo the agrarian reforms embedded in Article 27 of the Constitution, a principal legacy of the Revolution. Communal (ejido) land could now be divided and converted into private property. Price regulation of staple crops was scrapped. Tariffs and quotas on agricultural imports were removed. Subsidies that had supported small-scale farmers were deleted. All this enabled U.S. agribusiness (which, having zero qualms about ideological inconsistency, remained heavily subsidized) to export corn and other grains below cost. Rural Mexican farmers could not compete. This did not escape the attention of the farmers themselves, especially the Indians in Chiapas who, fearing the loss of their communal lands, formed a Zapatista Army of National Liberation. On January 1, 1994, the day NAFTA came into force, they declared war on the Mexican state.

The results of establishing a putatively equal trade between grossly unequal partners was that U.S. agribusiness pushed thousands of Mexican farmers out of their own markets. The price of corn dropped by around 50 percent following the NAFTA agreement, and the number of farmers living in poverty rose by a third. In the six years following the introduction of NAFTA, two million farmers abandoned their land. They flocked from country shacks to the burgeoning barrios of Mexico City; to the spreading slums of Tijuana and Ciudad Juárez to work in assembly plants on the border; and to the United States. (In anticipation of the arrival of a displaced peasantry—a migration NAFTA was supposed to have precluded by providing new jobs in the industrial export sector—the U.S. in 1994 launched the forthrightly named Operation Gatekeeper and beefed up the Border Patrol).

Worse was yet to come. Salinas had pegged the peso to the U.S. dollar, which did reduce inflation, a major accomplishment, though given all the other “reforms” the net result was lower real wages. Over the sexenio, the peso’s real value declined, but Salinas propped it up to reassure U.S. investors and facilitate his NAFTA negotiations. After Salinas left, however, his successor Ernesto Zedillo (1994–2000) was left holding the bag. When Zedillo let the peso float, it promptly sank, losing half its value, triggering double-digit inflation and a whopping recession. Many companies went out of business. In 1995 alone, one million jobs were lost. By the end of 1996, there were eight million unemployed and five million working within the informal economy, out of a total labor force of 35.7 million. Foreign investment melted away, Mexican capital decamped to Miami, and the middle class found its life savings wiped out. The Mexican government responded by adopting another austerity plan—raising the value-added tax, cutting the budget, and increasing electricity and gasoline prices.

The crisis sparked  surge in crime. Despite the steady rise of drug trafficking, modern Mexico had not been an especially dangerous country. Now mugging, carjacking, and kidnapping rates shot up, especially in the capital. Police failed to respond to this crime wave, creating an atmosphere of impunity. Their foot-dragging was not surprising. It was estimated in 1995 that 70 percent of kidnappings were being committed by the police themselves.

The crisis also transformed the narcotics industry. Indeed it is impossible to understand the tremendous changes in the drug business during the combined sexenios of Salinas and Zedillo (1989-2000) without taking into account the massive political, economic, and ideological transformations wrought during that decade and the previous one by the PRI-governed state.

Much of the impact was indirect.

Farmers, unable to sustain themselves due to the removal of subsidies and the arrival of competition from U.S. agri-corporations, found the burgeoning market for marijuana and poppies their only avenue to surviving on the land.

The army of urban unemployed gave the cartels a deep pool from which to recruit foot soldiers, and the miserably paid (and eminently corruptible) police and military provided the muscle with which to protect their interests.

The spread of everyday crime—aided by the rapid declension and corruption of local police forces—demoralized civil society, and provided a climate within which grander forms of criminality would flourish.

A Narco History: How the United States and Mexico Jointly Created the “Mexican Drug War”

Carmen Boullosa and Mike Wallace (OR Books, 2015)

Read Alborada’s introduction to A Narco History