------------ EH.NET BOOK REVIEW --------------  
Published by EH.NET (July 2005)  
  
Sarah Babb, _Managing Mexico: Economists from Nationalism to   
Neoliberalism_. Princeton, NJ: Princeton University Press, 2004. xv +   
292 pp. $21.95 (paperback), ISBN: 0-691-11793-4.  
  
Reviewed for EH.NET by Jaime Ros, Department of Economics, University   
of Notre Dame.  
  
  
This book provides a captivating account of the evolution of   
economics as a discipline and the economics profession in Mexico, as   
well as of the changing ideological and political context within   
which this evolution took place.  
  
After an introductory chapter that places the contributions of the   
book in the context of various subfields of sociology, chapters 2 and   
3 examine the origins of Mexican economics. Chapter 2 describes the   
creation of the first Mexican economics program at the National   
University (UNAM) in 1929 by a group of Mexican intellectuals,   
particularly such state-institutions builders as Jesus Silva Herzog   
and Daniel Cos�o Villegas. The economics profession at the time was   
state-centered, resembling the Continental European model more than   
the Anglo-American one. This was so in at least two ways. First,   
teachers were full time public servants (the taxi professors) that   
taught early in the morning or after leaving the office in the   
evening. Second, the main, in fact practically the only, employers of   
UNAM graduates were government organizations (the Ministry of   
Finance, the Central Bank, and the Ministry of Trade and Industry   
being the major ones). Chapter 3 illustrates how the spirit of the   
era, shaped by the Great Depression and the nationalist Cardenas   
government, influenced the economics profession at the UNAM in its   
initial years. It also examines the reaction of conservative business   
leaders to what they regarded as the dominance of leftist ideology at   
the UNAM, a reaction that would lead to the creation of Mexico's   
Technological Institute (ITM, later ITAM) in 1946.  
  
Chapter 4 looks at the evolution of economics during the Mexican   
miracle, the period from 1940 to 1970. In particular, it examines how   
the postwar developmentalist and Keynesian consensus had a role in   
the increasing internationalization and technification of the   
profession together with the role in this of the Central Bank (Banco   
de Mexico) as an elite institution of professional economists. The   
consensus was reflected in a relative degree of convergence in the   
economics programs at UNAM and ITM and the shared policy paradigm,   
favorable to state intervention in the economy, in the undergraduate   
theses written during this period.  
  
Chapter 5 describes the breakdown of the Keynesian-developmentalist   
consensus in the 1970s and how this led to the division of economics.   
On the one hand, the revised economics program of studies at UNAM   
came to reflect the influence of a radicalized student movement after   
the 1968 massacre at Tlatelolco with the inclusion of several courses   
on political economy (largely Marxist political economy) and   
extensive training in economic history and history of economic   
thought. By contrast, with the Central Bank acting as a professional   
constituency, academic reforms at ITAM were inspired by U.S. academia   
and took the opposite direction by emphasizing the teaching of   
neoclassical economic theory, mathematics and statistical methods. At   
first sight, revolutionary Marxism at UNAM and Chicago-school   
monetarism at ITAM replaced developmentalism, but as argued in   
chapter 6, the consequence of the changes in the UNAM curricula, at   
least as reflected in the theses produced, was not so much an ascent   
of radicalism as a decline of developmentalism. At the same time, at   
ITAM the emphasis on Chicago-school economics was to some extent   
diluted by other mainstream American approaches. In any case, changes   
in the economics programs at both institutions were accompanied by   
changes in the employment and career prospects of UNAM and ITAM   
graduates -- increasingly bleak for UNAM graduates and progressively   
more successful in both the private sector and the government for   
ITAM students.  
  
Chapter 7 describes the rise and triumph of neoliberalism in the   
1980s and 1990s as a result of the interplay of external factors --   
external pressure from international financial markets and leverage   
of the U.S. government and international financial organizations --   
and internal factors, the presence of a large group of U.S.-trained   
economists within the Mexican government. It also addresses the key   
question of whether neoliberalism has worked to generate growth and   
rising living standards in Mexico. The author's answer is that the   
"evidence suggesting that Mexican neoliberalism is a success is   
surprisingly weak." From 1983 to 1999, GDP growth has averaged 2   
percent compared to 6.5 percent during the stabilizing development   
period (1955-1970). By the mid 1990s real wages were still a fraction   
of their 1980 level, and poverty and inequality persisted.  
  
The final chapter reflects on the globalization of economic expertise   
and the convergence across the world towards American economics and   
standards, considering the role of professional success in America   
leading to voluntary imitation and, more crucially, the role of   
resource dependence, particularly in developing countries, as well as   
leverage of international financial institutions following the 1982   
debt crisis. It also looks at the contrast between Europe and Latin   
America: while U.S.-trained technocrats were able to flourish in   
Latin America, due to the strong influence of international finance   
in internal political affairs, they did not in some European   
countries as their presence in high government positions could weaken   
electoral support. The book concludes that neoliberalism is here to   
stay unless catastrophic events, similar to the Great Depression,   
were to happen. One wonders, however, whether developmentalism is not   
bound to make a comeback in some new form if neoliberalism continues   
to fail in delivering economic growth.  
  
Despite some sporadic lack of precision -- such as regarding Celso   
Furtado and Osvaldo Sunkel as dependentistas rather than   
structuralists or developmentalists (p. 143) or officials such as   
Javier Alejo and Jose Andres de Oteyza as having taught at the Center   
for Economics Research and Education (CIDE, p. 157) -- and some   
occasional repetition across chapters, this book makes a very fine   
contribution to the history and sociology of the economics profession   
and of economics as an academic discipline in Mexico, while providing   
useful insights on the rise of neoliberalism in Mexico and other   
developing countries.  
  
  
Jamie Ros specializes in development economics with special reference   
to Latin America. His books include _Development Theory and the   
Economics of Growth_ (University of Michigan Press, 2000).  
  
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