Economic development and the dynamics of class


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Economic development and the dynamics of class the case of Monterrey, Mexico
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xxi, 527 leaves : ; 28 cm.
Vellinga, Menno
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Subjects / Keywords:
Labor -- Mexico   ( lcsh )
Working class -- Mexico   ( lcsh )
Economic conditions -- Mexico   ( lcsh )
Economic conditions -- Monterrey (Mexico)   ( lcsh )
Sociology thesis Ph. D   ( lcsh )
Dissertations, Academic -- Sociology -- UF   ( lcsh )
bibliography   ( marcgt )
non-fiction   ( marcgt )


Thesis (Ph. D.)--University of Florida, 1975.
Bibliography: leaves 509-526.
Statement of Responsibility:
by Menno Lambert Vellinga.
General Note:
General Note:

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University of Florida
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Copyright by
Menno Lambert Vellinga


To Yvon, Michiel
and Bouke


This study has been completed after a consider-

ably longer period of time than originally was anticipated.

Shortly after having done the fieldwork and having finished

part of the analysis of the data, I had to go to Perd where

new and extensive research responsibilities prevented a

rapid completion of the present study. On the other hand,

the delay has made it possible to incorporate new insights

and some more recent material.

I realize that I have put the patience of my

committee-chairman, Dr. Gerald R. Leslie, to a heavy

test. Yet he has never complained and has continued to

give me his loyal support. I have cause to be deeply

grateful to him. He corrected the errors in my English

text and offered me many constructive suggestions of the

utmost value.

I am deeply indebted to the cochairman of my

committee, Dr. L.N. McAlister, who arranged my coming to

the University of Florida in 1967. I know that my

dissertation topic is different from the one he would

have liked me to select, and I appreciate very much his

understanding of the circumstances that made me choose a

topic in an area other than the one that represented

our mutual research interest at the time.

Dr. T. Lynn Smith introduced me to Latin America.

His extensive knowledge of the area and his high standards

of scholarship have made a deep impression on me and I

can only hope that in this study the presence of these

influences can be shown.

Dr. Benjamin Gorman and Sugiyama lutaka have given

many penetrating criticisms and constructive suggestions.

Dr. Gorman discussed the questionnaire and the outline of

the fieldwork with me. Sugiyama lutaka gave much of his

precious time to a discussion of the analysis of the data.

To him I owe an immense debt of gratitude. During my years

at Florida, he taught me the principles of quantitative

analysis and introduced me to computer applications.

The University of Florida Computing Center was

extremely helpful during the stage of analysis of the data.

I am grateful to Ms. Mary Lynch and Ms. Jean Holzer for

their assistance.

The Center for Latin American Studies and the

Department of Sociology at the University of Florida. have

made my studies at the University of Florida financially

possible, a fact which I acknowledge with gratitude. The

Center for Latin American studies enabled me to travel to

Monterrey and covered my daily living expenses. The research

project itself was covered by me from private sources.

In Monterrey, the staff of the Centro de Inves-

tigaciones Economicas at the Universidad de Nuevo Leon

has given invaluable assistance during the actual fieldwork

stage. I am grateful to Lic. Jesus Marcos, Lic. Ernesto

Bolanos, Lic. Alejandro Martinez, Lic. Andres Montemayor

and Ramiro Garcia. Lic. Martinez assisted me in the

selection and training of the interviewers. Lic. Monte-

mayor arranged a number of interviews with Monterrey pro-

minents. Mr. Garcia assisted me in sampling.

It is impossible to mention here all the people

in Monterrey who have helped me in one way or another in

the completion of the research. I would like to make an

exception for Ernesto Leal Flores, publisher of the

weeklies Oiqam6 and El Ciudadano who sent me a complete

copy of all numbers of these journals published in the

years 1970 and 1971, for which I am very grateful.

Dirk Kruyt, my colleague at the Center for Comparative

Sociology, University of Utrecht, made a number of

valuable suggestions on some problems of analysis.

The major share of all the typing has been done by

Ms. Corrie van Wijngaarden and I wish to express to her my

sincere gratitude for the enormous amount of help she has

given me.

My wife Yvon Vellinga has helped me in the many

tedious tasks of producing the manuscript. She has done so

grumbling and grudgingly but with a great show of solidarity.

Thanks Yvon.









1. Introduction .

2. Some Salient Aspects of the Marxia
Framework . .
2.1. Production . .
2.2. The Superstructure .
2.3. The Explanatory Weight of the
Economic Factor .
2.4. Some Final Remarks .

S. iv

. xii

. xix

. . 7

. . 7


3. Class and Class Consciousness .
3.1. Marx's Class Analysis .
3.2. The Concept of Social Class .
3.3. Class Consciousness .

4. Alienation . .
4.1. Some Introductory Remarks .
4.2. The Concept of Alienation .
4.3. The Process of Alienation and
Conditioning Factors .
4.4. Conclusion . .

5. Class Consciousness and Alienation:
Concluding Remarks and a Paradigm

S 10

. 14

S 19
S 19
S 24
. 27

. 35
S. 35
S. 38

. 40
S. 44





1. The Historical Context .

2. Some Notes on the Economic Structure
2.1. Economic Growth Through
Industrialization .
2.2. The Generation and Distribution
of Income . .
2.3. Enlargement of Scale in the
Economy .
2.4. Economic Growth in Dependence .
2.5. Conclusion . .

3. Social Classes . .
3.1. Introduction . .
3.2. The Class Situation .
3.2.1. The bourgeoisie .
3.2.2. The middle class .
3.2.3. The proletariat .
3.2.4. The subproletariat .
3.3. Conclusion: The Class Structure .

4. The Political Process . .
4.1. The Official Party .
4.2. The Political Expression of Class
Membership . .
4.2.1. The entrepreneurial sector
4.2.2. The middle sector .
4.2.3. The labor sector .
4.3. Some Concluding Remarks .


1. Introduction . .

2. The Economic Structure .
2.1. The Process of Industrial Develop-
ment in Monterrey .
2.2. The Process of Economic Growth
in Wider Perspective .
2.3. The Distribution of Income .
2.4. Conclusion . .

3. Social Classes and Political Action .
3.1. Introduction . .
3.2. The Monterrey Class Structure
3.2.1. The bourgeoisie .
3.2.2. The middle class .




. 111

S. 139



. 146

. 146

S. 156
S. 166
. 174



3.2.3. The proletariat ... 185
3.2.4. The subproletariat 194
3.3. Entrepreneurs and Political Action 196
3.4. Labor, Two Forms of Dependence 208
3.4.1. The labor sector: organi-
zation and perspectives 209
3.4.2. The mechanisms of control
over the labor sector 227
3.4.3. The ideology of entre-
preneurial control .. 252
3.5 Conclusion . 258


1. Introduction . ... 264

2. The Four Industrial Settings ... .269
2.1. Introduction . 269
2.2. The Printshops . 275
2.3. The Textile Mill . 278
2.4. The Automobile Factory ... .282
2.5. The Chemical Plant ... 290
2.6. Conclusion . ... 294

3. Work Experience and Working-Class Psy-
chology: An Analysis of Some Determinants 296
3.1. Introduction . 296
3.2. The Influence of Industrial
Setting . 296
3.2.1. Introduction . 296
3.2.2. Work experience .... 297
3.2.3. Working-class psychology .. 300
3.2.4. Work experience and working-
class psychology ..... 303
3.2.5. Conclusion ... 305
3.3. Skill . .. 306
3.3.1. Introduction . 306
3.3.2. The hypotheses ... 308
3.3.3. Results . ... 310
3.3.4. Conclusion . 313
3.4. Social Mobility and Satisfaction 314
3.4.1. Work experience ... 314
3.4.2. Working-class psychology 316
3.4.3. Hypotheses ... 318
3.4.4. Results .. .. .. ... 320
3.4.5. The subjective dimension 329


3.5. Social Background . 336
3.5.1. Introduction . .. 336
3.5.2. Work experience . 337
3.5.3. Working-class psychology 341
3.5.4. Additional social background
factors . 343
3.5.5. Conclusion . 348
3.6. Bread and Butter . 350
3.6.1. Introduction . 350
3.6.2. Hypotheses . 353
3.6.3. Results . .. 354
3.6.4. Conclusion . 365
3.7. Conclusion . 367

4. Work Experience and Working-Class Psy-
chology: Conformity, Resignation and
Latent Militancy . 370
4.1. Introduction . 370
4.2. The Effects of Work Experience on
Working-Class Psychology .. 371
4.3. Horizontal and Vertical Linkages 375
4.3.1. Introduction . 375
4.3.2. Social contact among fellow
workers: frequency and range 378
4.3.3. Vertical links: Some remarks
on patronage and compadrazgo 382
4.3.4. Conclusion . 389
4.4. The Workers and the Company Union 390
4.4.1. Labor and management in the
four industrial settings 390
4.4.2. The unions: membership, at-
tendance and leadership .. 398
4.4.3. Attitudes of the workers
towards their union .. 405
4.4.4. Attitudes towards the union:
a further exploration .. 409
4.5. The Workers and Official Politics .. 417
4.5.1. Introduction . 417
4.5.2. The identification with the
official political structure .422
4.5.3. Conclusion . 426
4.6. The Incidence of Political Radicalism 427
4.6.1. Introduction . 427
4.6.2. Some concomitants of political
radicalism . 433
4.7. Conclusion . .436

5. Conclusion: Alienation and Class Con-
sciousness . . 444
5.1. Alienation . 444
5.2. Class Consciousness . 448




1. Introduction .... 470
2. The Questionnaire .... 472
3. The Fieldwork . 476
4. Population and Sampling . 478
5. Additional Interviews . 485
6. Measures . . 486
7. The Statistical Analysis . 491






Tables Page

Table 1 Economic growth rates of selected Latin
American countries 1960-1969 (percentages) 60

Table 2 The sectoral distribution of the Mexican
G.N.P. in 1936, 1953 and 1967 (percentages) 61

Table 3 The structure of the contribution to the
Mexican G.N.P. by manufacturing in 1950,
1960 and 1965 (percentages). 62

Table 4 Foreign investment in Mexico, 1941-1969
(millions of dollars at current prices) 77

Table 5 Sectoral distribution of total private
foreign investment in Mexico 1911-1968
(percentages) 77

Table 6 Foreign financing of total Mexican public
investment per sector, 1965-1970 (per-
centages) 81

Table 7 Composition of the Cuauthemoc Conglomerate 151

Table 8 Composition of the Fundidora Conglomerate 155

Table 9 The growth of the population in the Mon-
terrey agglomeration 1900-1970 157

Table 10 The distribution of employment of the
total economically active population over
the three sectors of economic activity,
Nuevo Le6n, 1930-1970 158

Table 11 Distribution of family income in metro-
politan Monterrey, 1965 167

Table 12 Personal income distribution of the total
population employed in metropolitan Mon-
terrey 170



Table 13

Table 14

Table 15

Table 16

Table 17

Table 18

Table 19

Table 20

Table 21

Table 22

Table 23

Table 24

Table 25

The composition of the class structure
in metropolitan Monterrey (1965)

Value added by manufacturing, employ-
ment and productivity per worker employed
of the Nuevo Le6n manufacturing industry,

Occupational structure of selected indus-
tries, Monterrey area, 1967

Number of enterprises in four branches
of manufacturing per equity-capital in-
vestment category, Nuevo Le6n, 1969

Relative importance of work experience
dimensions, by four industrial settings

Relative importance of the work experience
dimensions predicting industrial setting

Percentages of the industrial settings
classified correctly according to the
four work experience dimensions

Relative importance of working-class
psychology dimensions by four industrial

Relative importance of the working-class
psychology dimensions predicting indus-
trial setting

Proportion of the industrial settings
classified correctly according to the
four working-class psychology dimensions

Relative importance of the work experience
and working-class psychology dimensions
predicting industrial setting

Percentages of the industrial settings
classified correctly according to the
work experience and working-class psy-
chology dimensions

Sample skill distribution, by four in-
dustrial settings

















Table 26

Table 27

Table 28

Table 29

Table 30

Table 31

Table 32

Table 33

Table 34

Table 35

Table 36

Table 37

Table 38

Table 39

Table 40

Skills work experience and working-class
psychology for all four industrial

Skill and overall work experience, by
four industrial settings

Skill and overall working-class psychol-
ogy, by four industrial settings

Intergenerational mobility, intragener-
ational mobility and factory mobility by
four industrial settings

Regressions of work experience dimensions
on selected independent variables, by
four industrial settings

Regressions of working-class psychology
dimensions on selected independent vari-
ables, by four industrial settings

Degree of upward intergenerational,
intragenerational, and factory mobility,
by four industrial settings

Future plans of workers in four industrial

Future plans and selected independent
variables, by four industrial settings

Career mobility compared with past ex-
pectations for workers of four industrial

Life satisfaction by four industrial

Career satisfaction, life satisfaction
and selected independent variables, by
four industrial settings

State of origin of migrants

Size of community of origin of migrants

Period of last arrival in Monterrey of






























Table 52




Sector first job

Number of years of employment in present
factory, by four industrial settings

Occupation of fathers of workers, by four
industrial settings

Education of fathers of workers, by four
industrial settings

Education of workers, by four industrial

Educational mobility, by four industrial

Education, work experience and working-
class psychology, by four industrial

Education and overall work experience for
all four industrial settings

Education and overall working-class psy-
chology for all four industrial settings

Personal and family income, by four in-
dustrial settings

General income distribution and income
distribution manufacturing industry,
Nuevo Le6n 1970, sample income distri-

Family-income situation according to state-
ments made by workers, by four industrial

Personal income and work experience, by
four industrial settings

Level of prosperity, by .four industrial

Personal income and working-class psy-
chology, by four industrial settings


















Table 56

Table 57

Table 58

Table 59

Table 60

Table 61

Table 62

Table 63

Table 64

Table 65

Table 66

Table 67

Table 68

Table 69

Work experience and working-class psy-
chology, by four industrial settings

Frequency of contact with work mates
outside the working situation, by four
industrial settings

Location in working situation of work
mates with whom contacts are maintained,
by four industrial settings

Range of contacts maintained, by four
industrial settings

Participation in organizations other
than the union, by four industrial

Regressions of workers' first and present
job on job compare first .eleventh
and more child (standardized betas)

Job level compare and location within
or outside the factory where the respective
respondent is presently employed

Union membership, by four industrial set-

Frequency of attendance at union meetings

Self-classification with regard to union
activities, by four industrial settings

Union leadership positions, by four in-
dustrial settings (absolute numbers)

Influence in union management, by union
members in four industrial settings

Motives of union leaders according to the
rank and file, by four industrial settings

Orientations of actual decision-making
by union leaders, according to the rank
and file in four industrial settings



















Table 70

Table 71

Table 72

Table 73

Skill and union identification for union
members of all four industrial settings

Work experience, working-class psychology,
and union identification, by four indus-
trial settings

Working-class psychology and union iden-
tification for all four industrial set-

Party preference and union identification
for all four industrial settings

Table 74 Identification with official politics
and union identification for all four
industrial settings

Table 75 Political radicalism and union identi-
fication for all four industrial settings








Table 76

Table 77

Table 78

Table 79

Table 80

Table 81

Table 82

Table 83

Motives of industrialists and businessmen
according to workers from four industrial

Working-class interests as primary ob-
jectives of political parties' policies,
according to workers from four industrial

Objectives or government policies, by
four industrial settings

Political preferences, by four industrial

Identification with official politics
and selected independent variables, by
four industrial settings

Awareness and identification with official
politics for all four industrial settings

Political radicalism and identification
with official politics for all four in-
dustrial settings

Political radicalism among workers of
four industrial settings











Table 84

Table 85

Table 86


Political radicalism and selected inde-
pendent variables by four industrial

Awareness and political radicalism for
all four industrial settings

Latent militancy, resignation and con-
formism among the workers of four in-
dustrial settings

Table A-1 Characteristics of development of manu-
facturing industry, by state and tradi-
tionality/modernity of industry, 1965






Abstract of Dissertation Presented to the Graduate Council
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy



Menno Lambert Vellinga

August, 1975

Chairman: Dr. Gerald R. Leslie
Cochairman: Dr. L.N. McAlister
Major Department: Sociology

This study has explored the relationship between

the Mexican process of economic development and the dynamics

of its sociopolitical process, with a special emphasis on

the major growth pole of the country: the industrial city

of Monterrey.

The theoretical orientation of the study has been

taken from classical Marxian theory. This metatheoretical

framework has provided the general tendency hypotheses that

guided the study. It further inspired the formulation of

a paradigm as an organizing scheme and a research corre-

late of the general metatheoretical heurisms. In this re-

search, the emphasis has been on class analysis.

A well-known element of the Marxian scheme concerns

the role of the proletariat as the motor of social and

economic change. In particular the urban-industrial pro-

letarian segment, and especially those employed by large


scale industrial settings, are considered as a major determ-

inant of the general dynamics of the system. These phenom-

ena are analyzed within the Marxian metatheory through two

key concepts: alienation and class consciousness. These

concepts, and their research correlated work experience and

working-class psychology, play a key role in this study.

The empirical study of the dynamics of class in Mon-

terrey has entailed a study of the work experience and work-

ing-class psychology of 420 workers in four different indus-

trial settings. This study was complemented by an analysis

of macro and meso level economic and sociopolitical pro-

cesses that function as general conditioning factors.

The central hypothesis concerned the thesis, re-

lated to the Marxian analysis of the role of productive

forces, that variations in work experience and working-

class psychology would find their most important explana-

tion in differences among the various industrial settings,

in technological structure, and the related factors of

division of labor, social organization and economic struc-

ture. The four industrial settings that figured in the

research, several print shops, a textile mill, an auto-

mobile factory and a chemical plant, were selected as ex-

amples of clearly distinct technological structures.

The analysis has shown work experience and working-

class psychology, however, to be very weakly related to

industrial setting. Alternative, potentially explanatory

factors were explored through additional hypotheses that

had a direct or indirect deductive relationship to the

classical theoretical scheme. With the exception of

"skill," the variables introduced by these hypotheses did

not show any significant impact. At least in the Monterrey

situation, the subjective experience of alienation appears

to be overshadowed by the situation of relative privilege

of urban-industrial labor as a whole. A similar phenomenon

has influenced the development of class consciousness. The

process of class formation has not yet resulted in the cre-

ation of a Klasse fUr sich, as the weak manifestations of

class consciousness on the level of ideology, organization

and political struggle do show. The urban-industrial pro-

letarian segment does not fulfill its role as motor of

socioeconomic change towards politically revolutionary ob-

jectives. The structural conflict follows the pattern of

a sectoral struggle, e.g. between those connected with the

urban-industrial sector and those who are not, instead of

a class struggle. Labor-management relations are still

characterized by a persistence of archaic patterns, func-

tioning through mechanisms of cooptation and repression,

in Monterrey with strong paternalistic overtones. The ex-

perience of the European labor movement suggests that this

situation may contain some points of departure for indepen-

dent labor action adhering to more militant orientations

but the question remains if in the long run they will not

continue to follow a line that does not challenge the basic

structure of neocapitalist development.




Since the government of populist president Lazaro

Cardenas in the 1930's, the Mexican economy has been char-

acterized by rather spectacular growth rates. Notably in

the 1960's, before the Brazilian "miracle" came in the

forefront of attention, Mexico's rapid rate of economic

development and the reasons behind it drew the attention

of the international economist community (cf. Goldsmith,

1966; Freithaler, 1967; Fernandez Hurtado, 1967; King,


The various studies focus on different aspects of

this growth process, but they concur in their emphasis on

the importance of government economic policies in foster-

ing high rates of economic growth, which in the Mexican

context means industrial growth. Industrialization has

deliberately been promoted as a means to achieve economic


The outcome of this process can, of course, not

be reduced to the effectiveness of government policies in

this area alone. Economic development requires a series

of complex societal changes. It has other social and

political correlates that result from the process and feed

back on it, and both may not be directly traceable to

government decision making. Yet the leading role of the

government, or rather the state apparatus, in the economic

and the political sphere cannot be denied. Especially its

initiative in this latter sphere has been pronounced.

Parallel to the dynamics in the economic structure, a po-

litical apparatus has been created that has served the goal

of economic development. The equilibrium between the eco-

nomic and the political process, however, has been delicate

from the start. In the course of the 1960's, the growing

tension between the dynamics of economic development and

stagnating political structures, which became manifest in

the increasing demand for autonomous popular participation

in the political process, emphasized the repressive ten-

dencies of the system. The general unrest among the pop-

ular strata in this period, culminating in the student-

worker revolt of 1968 and its subsequent brutal repression,

should be viewed in this context.

The present study concentrates on this area of

tensions between economic and political development. The

main questions directing it, concern not only the general

characteristics of each of the two processes and the way

they are interrelated. More particularly they focus on

the mechanisms by which the political system is maintained,

on the problem of how these function and in whose interests,

and how again social and political forces are related to

economic interests.

The study of these questions utilizes class analy-

sis. The application of this theoretical perspective to

Latin American societies has, as is well known, not been

without debate. This discussion has been carried mainly

by foreign scholars, dedicating themselves to the study of

Latin American problems. Among Latin American scholars

themselves, class analysis is much less an issue and is

generally accepted as a useful key to understanding their

social and economic reality.

The debate has centered around status of horizontal

versus vertical structure mechanisms as the central prin-

ciples which explain the functioning of the sociopolitical

system (cf. Williams, 1969; Hutchinson,. 1966; Jaguaribe,

1968; Leff, 1968). The vertical chains obviously cut

through horizontal class interest groupings and interfere

with class mobilization. Their importance has been empha-

sized through a clientelist model of society that filed an

exclusive claim to the valid interpretation of Latin

1. This model has been defined most adequately by Lemar-
chand and Legg (1972). Clientelism, according to them,
corresponds to "a more or less personalized relation-
ship between actors or sets of actors commanding un-
equal wealth, status or influence, based on conditional
loyalties, and involving mutually beneficient trans-
actions." (151-152)

American political reality, condemning class analysis to

the category of irrelevant approaches.

This discussion pro and contra clientelism or

class analysis has become quite voluminous and cannot be

reproduced here (for an excellent reference: Flynn, 1973).

We would like however to make a few general remarks on the


It is clear that the validity of many of the find-

ings on the functioning of Latin American political systems,

inspired by the clientelist model, cannot be denied. After

all, patron-client ties figure among these systems' most

conspicuous characteristics. The objections against the

model that was used then, primarily concern its prevention

of exclusivity and its incapacity to provide an explana-

tion of the political process in which more justice is

done to the elements of coercion and manipulation, part

of the power relationship expressed in political clientel-

ism. Most studies taking the clientelist approach (cf.

Lemarchand and Legg, 1972; Powell, 1970) almost automati-

cally assume a spontaneous appearance of these patron-

client patterns from below, and bypass the issue of their

deliberate organization and maintenance for political pur-

poses from above (Flynn, 1973: 26), an issue which in

Mexico is very acute (Gonzalez Casanova, 1965, 1968;

Anderson and Cockcroft, 1972; Cockcroft, 1972). This em-

phasis on the alleged voluntaristic aspects of these

vertically oriented structures further assumes consensus

and harmony in mechanisms that, in our opinion, should be

interpreted as instances of class control in a situation

where the alternatives at the lower levels of society are

severely limited.

These points summarize the reasons why, in this

study, we have opted for class analysis without however

negating the heuristic value of clientelism which can make

us understand better the workings of some of the mechanisms

of class control (cf. Flynn, 1973). This class analysis

follows the classical perspective and operates on the

macrolevel as well as on the microlevel. On these levels,

the problem of maintenance and change in the political sys-

tem is studied against the background of the dynamics of

the process of economic development.

The research problem, and the specific approach

taken, suggest an emphasis on the position of urban workers,

and in particular the industrial proletariat, which in

Marxian theory is the source of the dynamics of the system.

This status cannot always be claimed by this segment of

the working class in Latin America (Touraine and Pdcaut, 1967-

1968; Landsberger, 1967). In fact, research indicates

them to form a basis for status quo oriented politics.

These observations, however, concern primarily the leanings

of urban organized labor, reflect the position of the labor

leadership, their firm integration in government-manipulated

patronage networks, and the effective functioning of the

instruments of manipulation and control at their disposal.

The rank and file themselves, and this applies in particular

to Mexico, have not been heard and have been projected into

the role of passive subjects of these instruments.2

This study of industrial workers and their poten-

tial as a dynamic factor with regard to socioeconomic change

will be realized through an analysis of their alienation

and class consciousness. In the next chapter, a summary

will be presented of the classical position on the role of

the economic variable, its "explanato-ry weight" with re-

gard to changes in societal spheres other than the economic

sector, and the role of social classes. In addition the

concepts of alienation and class consciousness will be

elaborated. In this way, the theoretical perspective that

has directed the study will be elaborated.

2. Gonzalez Casanova (1968) laments the general absence
of research in the area. The only study at the time
which had been published on the subject was Kahl



1. Introduction

The adoption of a theoretical perspective that

has drawn its basic inspiration from the Marxian theses

on the source and nature of societal dynamics requires

some further clarification. First, we would like to make

a few remarks on the scientific status of the Marxian ap-

proach within social science.

One of the most characteristic features of Marxian

analysis is its synthetic character. It attempts to grasp

society in its totality, rather than to deal with any spe-

cific aspect in isolation. At the same time it is histor-

ical. It does not analyze societies in terms of their

structures at one given moment, but it attempts to arrive

at an understanding of their structure and functioning

within the context of processes of historical change.

These synthetic-analytic and historical-dynamic

characteristics are among the most attractive elements of

the Marxian approach, and they largely account for the

great upsurge in interest in this type of analysis in

recent years. With this interest has grown an almost meta-

physical orientation towards Marxism emphasizing its exclu-

sive validity which has severely hampered the efforts to

define a sociological approach rooted in Marx's contribu-

tions to social science (Israel, 1970).

These pretensions of exclusivity should be re-

jected. The Marxist approach indeed presents advantages

over other theoretical perspectives, especially in the study

of problems of power, coercion, and control, and an abso-

lute scientific relativism does not seem justified. But

it is obvious that it is certainly not the only approach

that can have legitimate scientific pretensions. Neither

historical materialism nor dialectical materialism repre-

sent the social science or the epistemology. Further, the

propositions that form part of his model of society, as it

was outlined in Capital, cannot claim to be eternal truths,

but have the status of working hypotheses that require em-

pirical verification.

The scientific status of the Marxian approach re-

sides primarily in the fact that it proposes a methodology

for the analysis of the basic determine factors of the struc-

ture and dynamics of societal change (Israel, 1970; Zeitlin,

1967). To this purpose, it directs attention toward the

conditions of production in an effort to understand the way

the societal system functions, and to analyze the source of

the main structural conflicts Marx discovered in social re-

ality (Dahrendorf, 1967).

These conditions are viewed in their historical con-

text and as part of a society that was approached in its

totality. This totality has a structure, through which

Marx means to indicate that the various elements are dis-

tributed according to an organization of the whole. This

organization determines the function of each element with-

in the totality (Bottomore, 1966; 13 ff). These structures

of elements, and subelements, are constantly subject to

change and the mutual interaction between structures, con-

stituent elements and subelements accounts for a complex

series of feedback mechanisms.

Following the systematization of Marx's writings

aspresented by Althusser (1965), Poulantzas (1969) and

Harnecker (1969), we distinguish three main substructures

in a societal system: the economic structure, the ideologi-

cal structure, and the legal-political structure. These

structures will be analyzed shortly, in terms of their con-

stituent elements, the interaction between these elements

and between the substructures and the other structures with-

in the societal system, and their relationship to the dyna-

mics of class. In this summary of some major propositions

of the Marxian theoretical perspective, special attention

will be given to the problem of the "explanatory weight"

of the economic factor.

2. Some Salient Aspects of the Marxian Framework

2.1. Production

The labor process was for Marx, as is well known,

the fundamental human activity. It formed the point of de-

parture in his attempt to formulate an answer to the age-

old question concerning the emergence and maintenance of

social order. Through work, that is productive-creative

activity, man in interaction with "nature" and in mutual

interaction with other men, produces the material and cul-

tural conditions of his existence. The structure of this

production process and its results depend upon two condi-

tions which together constitute the mode of production:

(a) the level of development of the productive forces,

and (b) the nature of the relations of production.

The productive forces conceptualize the relations

between the agents of production and the means of produc-

tion. They are established on the basis of the specific

technological structure that has developed.

The relations of production stand for the rela-

tions of ownership or nonownership which the agents of pro-

duction establish with the means of production. These re-

lations correspond to a well-defined differentiation of

functions in the production process and they constitute the

basic factor conditioning the nature of interhuman relations.

While the productive forces form part of the economic struc-

ture, the relations of production partly belong to the eco-

nomic structure and partly to the political structure.

The existence of economic processes other than pro-

duction as distribution, consumption and exchange, was not

denied by Marx (cf. Marx, 1967a; Harnecker, 1971). In his

analysis, however, they were considered as dependent vari-

ables, that is dependent with regard to production, and

lacking an independent conditioning influence with regard

to the functioning of the economic structure. The way in

which the abstraction was used in Marx's work further served

to keep these processes in the background as not "essential."

With respect to the relationship between productive

forces and relations of production, Marx has defined a rather

general proposition, postulating a general tendency toward

correspondence between the two. A situation of correspon-

dence would constitute the strongest stimulus for a further

growth of the productive forces (cf. Zeitlin, 1967: 63 ff).

Any lack of such correspondence would cause the tension and

conflict which in the Marxian perspective figures as the gen-

eral source of the dynamics of the system.

The phenomenon of no-correspondence is caused by

the fact that the productive forces are in general subject

to constant change, while the relations of production may

experience long periods of stagnation. This way, the latter

may hamper the continued growth of the productive forces.

Thus, the potential development of these forces does not

only depend upon the technological factor-Marx does not

furnish a technological interpretation of social change-

but also upon the elimination of the relations that block

this development. In fact, the productive forces initially

fulfill the role of dynamic agent with regard to the struc-

ture of the relations of production which, in turn, feed

back on the development of the productive forces. In short,

the relationship between the two is dialectical. As Israel

(1970) has pointed out, a satisfactory explanation of the

phenomenon of no-correspondence, however, needs to intro-

duce other variables outside the productive forces and re-

lations of production themselves. He suggests factors that

form part of the superstructures, such as the legal sys-

tem, models of the "alternative society" and other value


2.2. The Superstructure

Within the Marxian model, as mentioned above, an

analytical distinction is made between two substructures:

the ideological structure and the legal-political struc-

ture, which together form the superstructure. In social

reality, these structures and the economic structure in-

terpenetrate, of course.

Especially the ideological structure is a cohesive

force which pervades the entire sub- and superstructure, in-

tegrating the individuals in a totality of roles and social

relationships and, in this way, cementing the societal struc-

ture together (Harnecker, 1969).

Ideology here denotes two types of phenomena: (a)

ideology in a narrow sense, conforming to the modern socio-

logical concept of ideology as a system of values contain-

ing a definition of interests and program of action in ref-

erence to the enterprise of a social group or collectivity,

often formulated in a context of legitimation and ration-

alization (Killian, 1964), and (b) ideology in a wider

sense, referring to the system of "norms" and "values"-

Marx refers to customs, habits, etc. (Marx and Engels, 1963)-

reflected in the daily life of the individual and condition-

ing his tendency to act in a specific way in a certain situ-

ation. Both kinds of ideology do not always overlap and,

in fact, their relation may vary from total identity to

total contradiction.

In a class society the ideology in a more general

sense serves the purpose of integrating the individuals-

dominators and dominated-in a general structure of class

exploitation. It may pervade the consciousness of the ex-

ploited, as well as the exploiters, and make them accept

their situation as something "natural" which is not to be

questioned (Althusser, 1966: 20 ff).

The legal-political structure refers to those

institutions and systems of norms regulating the function-

ing of society as a whole. The most important element of

this structure in a class society is the State. Its prin-

cipal functions concern the maintenance of the societal

order torn by class cleavages (cf. Engels, 1942: 155).

These functions which the State apparatus performs

are basically twofold: (a) technical functions which en-

tail basically the tasks of organization and administration,

necessary in any society that possesses a minimum degree of

division of labor, and (b) functions related to the neces-

sity of political domination (Engels, 1970: 342 ff). The

institutional State apparatus and the system of codified

norms (laws) are geared to the defense of the dominant clas-

ses' interests. This function of political control is ex-

ercised through the mechanisms of organization and adminis-

tration that form part of the technical functions.

The coercive and repressive dimensions of the poli-

tical control function of the State will grow in importance

with the increase in intensity of class conflict and they

will reach full intensity in a prerevolutionary situation

(cf. Engels, 1942: 156).

2.3 The Explanatory Weight of the Economic Factor

The thesis that the dynamics of change in all so-

cietal spheres will findtheir ultimate explanation in changes

in the economic structure is a wellknown element in the

Marxian framework, which however needs further specifica-

tion in order to rise above the level of the commonplace.

With this thesis of "ultimate determination" by the

economic factor, Marx obviously did not think in terms of

a pure mechanistic type of determination. Any resemblance

to this type of cause and effect relationship is due to

his method of investigation. This leads him to establish

ex ante the properties of a highly abstract model with the

help of which the relationship between a few core varia-

bles is clarified, and some tendencies of development are

indicated within definite limits and under certain simpli-

fying assumptions (Marx, 1967a: see the introduction to

volume I). At the stage ex post of the explanation of the

respective phenomena, ample room is.reserved for interaction

effects and feedback mechanisms, while, descending from the

high level of abstraction, additional factors are intro-

duced that may be drawn from other than the economic sphere

(cf. De Schweinitz, 1962).

From Marx's historical political writings, in which

his theoretical perspective was applied to the concrete

problems of his time, it can be inferred that the economic

conditions indeed do play the role of "ultimate determi-

nants," but that superstructural elements play a substantial

role and, at times, are even ascribed a certain degree of

autonomy relative to the substructure. In these writings,

he gives full attention to the complex interaction of the

wide diversity of factors working in a specific situation.

The ideological level is not interpreted as a simple re-

flection of the economic level. Once developed, it is ex-

plained, it acquires an objective reality, inner structure,

and consistency, and tends to show a certain autonomy in

functioning and development (cf. Engels' letter to Bloch

cited by Zeitlin, 1967: 116; also Engels, 1966). In this

context, Marx emphasizes the role of tradition, the insti-

tutions, ways of thinking, and behavior dating from previous

historical structures (Marx and Engels, 1963: 29).

Similarly, Marx refrained from posing a strict paral-

lel development for the legal-political and the economic

structure, and allows for the possibility of a relative

autonomy of the first mentioned sector. In his The Eigh-

teenth Brumaire of Louis Bonaparte, Marx presents a typical

case of absence of correspondence between the economic and

political spheres (Marx, 1967b). The coincidence between

economic power and political power is always present as an

underlying tendency, but it will only work itself out in the

long run and a high correlation in any particular instance

can never be taken for granted.

How can we characterize the relationship of the economic,
ideological, and legal-political structures with regard to

the dynamics of class, the object of our investigation?

It is clear that, in the Marxian perspective, the economic

structure and the elements that form part of it have the

status of necessary causal conditions but, as has been ex-

plained, they are not sufficient. The dynamics of class

do not only correspond to a certain mode of production,

but also to a certain political structure and a certain

ideological structure. The latter two structures can be

viewed as sufficient but not necessary conditions. Togeth-

er the three structures formina necessary and sufficient way

the conditioning factors of a certain class structure (an

explanation of this point is in Israel, 1970: 272 ff).

From this discussion it follows that the dynamics

of class can be investigated at different levels: economic,

political and ideological, keeping in mind, however, the in-

terrelationships between them and the ultimate explanatory

weight of each of them.

2.4. Some Final Remarks

Before we proceed to the issue of class analysis,

a few final remarks should be made on the Marxian perspec-

tive, a summary of which has been outlined above.

(a) This perspective entails a set of methodological prin-

ciples or assumptions of a hypothetical nature, to be used

in approaching social reality. It further contains a num-

ber of theoretical concepts, interrelated through a series

of rather general propositions within a framework that for

some societal spheres is quite elaborate, for others quite

insufficient. These concepts, as such, do not pretend to

define directly any specific concrete social reality. They

are theoretical instruments, tools that serve us in the

process of obtaining knowledge of this reality. The key

concepts used by us to clarify the dynamics of class, alien-

ation, and class consciousness, have to be seen in this light.

(b) It is obvious that the economic structure of the capi-

talist mode of production was most intensively studied by

Marx and here the concepts have been elaborated most sys-

tematically. For other societal spheres, notably those

forming part of the superstructure, they have been less de-

veloped and are more intended as general reference points

for investigation.

(c) In addition, the main lines were indicated of a frame-

work for understanding the change from one mode of produc-

tion to another and last, but not least, the basic elements

were defined of a theory of social class.

(d) Again, rather than presenting a ready made, universally

valid theory, the Marxist perspective provides assumptions,

principles, and building blocks that can be utilized in the

construction of a paradigm for the analysis of societal

change (cf. Zeitlin, 1967: 152 ff).

3. Class and Class Consciousness

3.1. Marx's Class Analysis

In the previous discussion of the Marxian scheme,

we have alluded to the important source of social change:

the tension between productive forces and relations of pro-

duction. The specific dynamics and tendencies of social

change are further analyzed through a two-class conflict

model, acore element of Marxian analysis. The model implies

a conflict of interest between the two classes based on

their differences in relationship to the means of produc-

tion. It is the struggle between these classes which is

the key to understanding the process of historical change

(cf. Zeitlin, 1967; Ossowski, 1958).

The emergence of a class structure is related by

Marx to the general phenomena of the division of labor and

private property, e.g. private ownership of the means of

production. It further settles and solidifies through the

accompanying processes of accumulation and exploitation.

Through history, the productive forces man has cre-

ated have stimulated the development of a division of labor.

In the course of this historical process, the phenomenon of

the division of labor not only has presented itself on a

societal level, where it led to the separation of industrial

and commerical from agricultural labor and, consequently,

to the separation of town and country. Also on the level of

the production process itself, the types of work are more

and more differentiated, with as a point of departure the

separation of manual and intellectual work. When increas-

es in production demanded capital, a beginning was made with

the changes in property relations. Private ownership of

the means of production led to the separation of capital

and labor (Marx and Engels, 1963). It is this basic sep-

aration which conditions societal conflict. It permits the

accumulation of capital on the side of those who own the

means of production, skews the power relations in society,

and sharpens existing socioeconomic inequalities. This ac-

cumulation rests on the exploitation of those who own noth-

ing more than their labor power. Exploitation within the

Marxian framework was not a vague value-loaded concept. It

has rather precise, quantitative meaning determined by the

appropriation of surplus value by the capitalist (an elab-

oration with Harnecker, 1971; Gonzalez Casanova, 1969 offers

an attempt to reestablish the status of exploitation in mod-

ern social science analysis).

The presence of conflict is an essential feature of

a society characterized by this mode of production. It is,

then, a systematic product of the structure of society it-

self. The perspective of the conflict society and the idea

of class struggle was not defined by Marx in a priori ver-

sion. In a letter to his friend Weydemeyer he wrote (Marx,

1967b: 139):

S. no credit is due to me for discovering
the existence of classes in modern society or
the struggle between them. Long before me
bourgeois historians had described the histor-
ical development of this class struggle and
bourgeois economists the economic anatomy of
the classes.

The dialectical approach served to bring to light those

conflicting elements and tendencies which, for him, con-

stituted the reality of capitalist society.

The course of this structural conflict, and its

ultimate outcome, is conceptualized through a theory of

class formation and class struggle that forms the core

element of his wider conflict theory. As explained a-

bove, capitalist society has, according to Marx, an in-

herent tendency to polarize increasingly into "two great

hostile camps, into two great classes, directly facing

each other: the bourgeoisie and the proletariat." (Marx

and Engels, 1965: 14). During this process of polariza-

tion, the socioeconomic situation of the two classes

diverges more and more. Progressive accumulation on the

capitalist side is matched by pauperization on the workers'

side (Marx, 1967a: 763).1 Both become more cohesive,

1. Marx's writings indicate that this pauperization should
not necessarily be conceived of in an absolute sense.
In Wage-labour and Capital he shows an awareness of
the phenomenon of relative deprivation (Marx, 1955:

"A noticeable increase in wages presupposes a rapid
growth of productive capital. The rapid growth of

internally homogeneous units, well aware of their objec-

tive class interests and ready to defend those interests.

As a main factor conditioning the development of an aware-

ness of the position in society opposite the other classes

and of a willingness to unite and to engage in collective

action, Marx points to the shared experiences in the work-

ing sphere under conditions of mass production (Marx and

Engels, 1965: 22 ff). He further mentions active agita-

tion by declassed bourgeois elements who have joined the

proletarian ranks or by intellectuals who have arrived at

a theoretical understanding of the historical movement as

a whole.

This general perspective of the development of a

class structure, which has metatheoretical characteristics,

has been conceptualized through the transition in the pro-

cess of class formation from a Klasse an sich to a Klasse

fUr sich (an elaboration with: Ossowski, 1958). The term

productive capital brings about an equally growth of
wealth, luxury, social wants, social enjoyments. Thus
although the enjoyments of the workers have risen, the
social satisfaction that they give has fallen in com-
parison with the increased enjoyments of the capital-
ist, which are inaccessible to the worker, and in com-
parison with the state of development of society in
general. Our desires and pleasures spring from so-
ciety; we measure them therefore by society and not
by the objects which serve for their satisfaction.
Because they are of a social nature, they are of a
relative nature."

Klasse an sich denotes the common class situation, that is

the shared relationship to the means of production: the

starting point for the process of class formation. This

shared location in society's structure is a necessary, but

not a sufficient, condition for the development of a class

structure. Ultimately, classes are formed through the par-

ticipation as an organized group in political conflict.

On a structural level, this involves the association of in-

dividuals in a common class situation into a movement, par-

ty, or other organization bound to defend their interests.

On a cultural level, it presupposes the growth of an aware-

ness of class position and interests, and the formulation

of subjectively conscious goals of organized action. The

term Klasse fUr sich is meant to define this situation (the

term itself was Bukharin's).

Schematically this process can be represented as


shared position awareness of shared class struggle
in terms of role position, interests in order to
in the social objectives defend class
organization of interests
work and rela- I
tionship to the formation of inter-
means of produc- est organizations

This taxonomy contains the logic of processes of class for-

mation, which obviously does not imply that all concrete

processes necessarily follow a uniform course.

3.2 The Concept of Social Class

Despite its vital role in the analysis of the capi-

talist mode of production, not one clear straightforward

definition of the concept of class can be found in either

Marx's or Engels' work. Marx himself postponed a systemat-

ic exposition of his theory of class and devoted most of

his time to a continuous refinement of the model in Capital.

The manuscript of the third and last volume of Capital breaks

off after little more than one page of what should have been

a systematic discussion of the problem. From Marx's writings,

however, and especially those in which he applied his theo-

retical framework and methodology to the study of the prob-

lems of his time, an adequate definition can be inferred of

the essentials of his theory of class (cf. Marx, 1967b;

Marx, 1964; also Ollman, 1968).

In these studies, he repeatedly mentions more clas-

ses present than the two figuring in his more abstract mod-

el. This phenomenon does not conceal a diversity of focus

and conceptualization, as Ossowski claims (cf. Ossowski,

1963). The number and type of classes as well as their

(secondary) defining criteria depended on the specific prob-

lem that was studied and the level of abstraction on which

the analysis moved. This way, in the study of any concrete

situation, in the classes that were defined, either the

economic, political, or sociological dimension would be empha-

sized. Consequently the number of classes that ultimately

were distinguished would vary (Israel, 1970: 282). The

two-class model, it should be emphasized, is not "refuted"

by a description of any concrete situation in which more

than two classes are distinguished. As he wrote in Capital,

volume III (Marx, 1967a: 886):

S. even in England this class structure is not
displayed in a pure form. Intermediate and tran-
sitional stages obliterate the borderline there
as everywhere However this does not matter
for our investigation. It has been demonstrated
that it is the permanent tendency and law of de-
velopment of the capitalist mode of production
to separate the means of production increasingly
from labor, and to concentrate the separate means
of production more and more in large groups, in
other words, to transform labor into wage labor,
and the means of production into capital.

In order to clarify this point somewhat further, the meth-

odological aspects of his use of the concept of social

class will be explained more extensively. Several of these

aspects already have been alluded to in the short exposi-

tion of the Marxian framework.

Again, Marx meant to use the concept of class on

various interdependent levels of analysis. The ultimate

objective of his studies entailed, as was explained before,

the development of a theoretical model which does not di-

rectly represent empirical reality, but the definition of

which is a prerequisite to an explanation of that reality.

The empirical study of classes is given a definite theo-

retical sense by inserting the empirical, descriptive level

into an abstract theoretical picture. On this high level

of abstraction, the concept of class serves an important

heuristic purpose. This purpose was dynamic and analyti-

cal, rather than stable and descriptive. It was the key

toward an understanding of structural societal change (cf.

Dahrendorf, 1968: 19). Once this model has been defined

it can be confronted with concrete situations. In this

process, the model seeks to encompass the other aspects

(other than those covered by the model) of the specific

reality under study progressively, adding additional vari-

ables at each level.

These various levels are (Dos Santos, 1970: 175


(a) The level of the mode of production (present in Capi-

tal), on which the two-class model is utilized within the

context of the analysis of the interaction between produc-

tive forces and the relations of production. These produc-

tive forces and relations of production, as we have seen,

take on certain modes in connection with history.

(b) The level of social structures: on this level the analy-

sis relates to a concrete, historically specific, society

and focuses on the specific forms of relation between the

components of the mode(s) of production. Although empiri-

cal data come in here to define the basic patterns of these

relations and their dynamics, still no direct description

of empirical reality is pretended.

(c) The level of social situation: here the description

of a concrete society is aimed at, a description, however,

that transcends a "purely" empirical account of the facts

because the theoretical instruments at hand already serve

to order the data in a meaningful context.

(d) The level of cycles: on which Marx analyzes the effects

of specific crises in the phenomenon under study. In situ-

ations of unrest and turmoil the dynamics of reality tends

to reveal itself more clearly. This explains Marx's in-

terest in concrete studies of upheavels (cf. Marx, 1964,

1967b, 1969).

It is clear, now, why the presence of various dif-

ferent class systems does not represent a certain eclecti-

cism in Marx's work, but does relate to the objectives of

the respective studies and further is a logical consequence

of a structural system of levels of abstraction ranging

from the most concrete to the most abstract, and from the

most abstract to the most concrete.

3.3 Class Consciousness

After the previous discussion, the concept of class

consciousness can be placed in proper perspective, some prob-

lems can be clarified with regard to its use in social

science analysis, and the differences can be indicated with

class psychology and ideology (good sources are: Dos Santos,

1970; Lukacs, 1970; Lenin, 1969; Mandel, 1970).

The concept of class consciousness, as has been

shown, forms part of a model that conceptualizes the process

of class formation and moves on the level of the mode of

production. In this sense, class consciousness is a pure,

abstract, theoretical concept and has no direct empirical

referent. On this level, class consciousness can be defined

as the systematic expression of the interests of a class with-

in a given mode of production. This is accompanied by a

unity of perspective of the functioning of their society,

their own position and their opponents, in accordance with

these general class interests.

On a lower level of abstraction, the level of social

structure, the analysis takes on a more concrete tone. Here,

class consciousness refers to the possible forms of conscious-

ness under the specific conditions of a given society. It

still does not represent a direct definition of empirical

forms of consciousness, but serves as an ideal typical con-

struct against the background of which actual states of

consciousness can be interpreted (Dos Santos, 1970: 178).

It is clear that the idea of "class interests," used

in connection with class consciousness, moves on the same

high level of abstraction, where it can be viewed against

the background of the structure and the dynamics of the en-

tire system (Israel, 1970: 288). These interests refer

to collective aspirations based on a combination of values

that are rooted in the class position of a collectivity of

persons. These aspirations concern privilege maximation

within the zero-sum power situation of the two-class model.

Given the fact that the interests of the two classes are

antagonistic, realization of their aspirations by one class

will prevent the other from doing the same. At this stage,

however, additional variables have to be introduced that

concern the long term objectives the aspirations are geared

to, e.g. the creation of the "alternative society," and that

enable the evaluation of the effectiveness of the short term

goals as means toward the realization of these objectives.

These variables appear to represent a normative element, al-

though the Marxian methodology claims them to be based on

judgments of fact flowing from a dialectic approach toward

social reality (cf. Goldmann, 1969; for a discussion of this

point: Aron, 1968: 190 ff; Israel, 1971: 86 ff).

The idea of "false" consciousness or "incomplete"

consciousness (Lukacs, 1970), then, has to be viewed with-

in this context and concerns the negation of class interests

by the respective class members themselves, a failure to

accept the long term goal of maximation of class privilege

and the values on which it is based, and a rejection of

short term goals and means (Israel, 1970: 288). This defi-

nition, which again moves on a high level of abstraction,

seems the only way to define, for this idea, a meaning with-

in a general sociological context..

2. Dahrendorf's formulation of the distinction between
"true" and "false" consciousness in terms of role

In order to complement the discussion on the con-

cept of class consciousness and to clarify further its

status in the analysis, two other concepts-class psychology

and ideology-have to be introduced. Lukacs and Dos Santos

provide a very useful systematization of the original

Marxian ideas on this point (Lukacs, 1970; Dos Santos, 1970).

Both concepts refer to phenomena generated by the class sit-

uation of concrete social groupings or individuals.

Class psychology is meant to conceptualize those

phenomena on the empirical level that concern the percep-

tion of the individuals of their class position, the defi-

nition of their adversary as members of a class or other

type of interest grouping, and awareness of the conflict

of interests; in addition, the manifestation of their will-

ingness to participate in a class organization. On this

level, however, these elements constitute a rather fragmen-

tary and sometimes chaotic conglomerate of thoughts and feel-

ing states, often containing "alien" elements, and lacking

the systematization and the macroperspective that prevail on

the level of class consciousness (Lukacs, 1970; Lenin, 1969).

theory is interesting, but does not add anything and
sows confusion, not in the least caused by the approach
based on an epistemological position, radically differ-
ent from Marx's (cf. Dahrendorf, 1968: 173 ff).

A first systematization and ordering of these phe-

nomena can be promoted by an ideology that defines the pres-

ent situation, indicates the class interests, and suggests

the objectives and means for action. This ideology is,

in first instance, not necessarily identical with a body

of ideas that fulfills merely rationalizing and justify-

ing functions with regard to the enterprise of a social

class. At this stage, an ideology may represent a con-

scious expression of class interests, while at the same

time suggesting a strategy for the realization of these

interests. The rationalizing and justifying element may

come in only at a subsequent stage, when the defense of

their interests forces certain classes to conceal the

sources of structural conflict in society, to negate the

existence of class cleavages, to emphasize the common good,

etc. But, even then this element may correspond to an ef-

fective representation of basic class interests (cf. Dos

Santos, 1970: 182).

It is clear by now that the three phenomena, class

consciousness, class psychology, and ideology are clearly

distinct and should not be confused in the analysis.

From the discussion on the process of class forma-

tion, it can already be inferred that this process does

not necessarily follow a uniform pattern. It may show dif-

ferences in degree of development and intensity per country,

economic sector, or even branch of production. This means,

also, that class consciousness knows a process of develop-

ment and that it can present itself in varying degrees of

intensity (Colabella, 1967: 505).

Lenin has conceptualized this process within the

context of his theory of revolutionary organization (Lenin,

1969), and from this theory some inferences can be made

with regard to the concrete analysis of the development

of class consciousness. These inferences are the following:

(a) On the basis of Lenin's definition of the various forms

of labor action corresponding to the different strategies

that serve the emancipation of the proletariat, three types

can be defined that figure in the process of development of

class consciousness. These are ideal typical constructs

and, in any concrete situation, mixtures may occur.

Very schematically represented, the conditions in

which these types are manifested are defined as follows

(systematized from Lenin, 1969 and Mandel, 1970):

a.l. "spontaneous" consciousness (rooted in the daily

working situation and lacking a perspective transcending

this same situation)

objectives of form of labor ideology
labor action action organization

improvement in destruction/ mutual-aid expressions
working sabotage, funds of solidari-
conditions strikes cooperatives ty
"bread and but- work stop- unions of defense of
ter" issues pages short immediate
duration interests

a.2. "trade-unionist" consciousness (resting on the gen-

eralized experience of a.l., but in its perspective purely

limited to economic issues) (for a discussion of this type

consciousness, see also: Leggett, 1968: 18 ff)

objectives of form of labor ideology
labor action action organization

improvement in work stoppages permanent defense of
levels of and general strike funds, working class
living, wages, strikes, general labor interests in
emancipation general nego- unions, working-legality and
of the working tiations class parties through par-
class in parliament liamentarism
"gradual im-

a.3. "political" consciousness (based on the generalized

experience of a.l. and the scientific analysis of revolu-

tionary intellectuals)

objectives of form of labor ideology
labor action action organization

proletarian strikes, unions and anti-
revolution, planned revolution- capitalist
economic uprising ary party, noncompro-
issues are press missing
also pursued strategy of
but in a paral- revolution
lel way

(b) In these various types of action, organization, and

ideology in which the various types of consciousness mani-

fest themselves, three sectors of the working class can be

distinguished that play a different role in the development

of class consciousness (systematized from: Mandel, 1970):

b.l. the masses of workers who primarily act out of a "spon-

taneous" consciousness. They are only active in periods of

concrete action (strikes, stoppages) and return to their mat-

ters afterwards.

b.2. the workers' vanguard, who guarantee the element of

continuity in the class struggle through their activities

in periods in which no concrete actions are taken, like

organizing, strike funds, worker press, education, etc.

Their experience is fruit of the praxis of the daily strug-

gle and consequently their orientation is empirical and


b.3. the revolutionary cadres show a "political" conscious-

ness based on a scientific analysis of the system concerned,

Schematically this process of development of class

consciousness for these categories can be presented as fol-


masses of workers A--+ E--- C

workers' vanguard E-- C --- A

revolutionary cadres C A--- E

(A=action; C=consciousness; E=experience)

The source of dynamics for the masses is spontaneous ac-

tion, for the workers' vanguard their experience, and for

the cadres the conviction rooted in their consciousness.

(c) It is clear that these elements from Lenin's position

on the development of class consciousness show a character

of generality and a concern with broad macrolevel process-

es which is similar to the one that was noted earlier in

our discussion of the Marxian framework. Their usefulness

resides primarily in the leads for research they offer and

in the factors they suggest to be included in the paradigm

for investigation. Before this paradigm will be defined,

the concept which next to class consciousness has been used as

a key concept in the study of the research problem, will

be elaborated.

4. Alienation

4.1. Some Introductory Remarks

While class consciousness focuses on the process of

class formation, alienation concentrates on the working sit-

uation, and emphasizes the working conditions themselves un-

der an organization of production following capitalist pat-

terns. In this, it is a basic factor conceptualizing a work

experience that, within the Marxian framework, is hypothe-

sized to have a wide range of consequences for attitude and

behavior in other spheres, notably in those of labor action.

The nature of these consequences which form part of the so-

called "generalization hypothesis" will be discussed later

on (cf. Marx, 1963; also Seeman, 1967).

This approach toward alienation and its status in

an explanation of the dynamics of class under a capitalist

mode of production is not universally accepted. This ei-

ther by Marxists or by non-Marxists, although in our opinion

it does have deep roots in the works of Marx himself. Let

us clarify this issue shortly, before proceeding to a more

detailed exposition on the concept of alienation.

Especially in modern sociological studies, the con-

cept of alienation has caused considerable confusion and ul-

timately came to stand for the thousand and one conditions

of tension and strain in industrial societies. Over the

last few decades it has been used as:

(a) A sociophilosophical notion, denoting das Unbehagen in
"Western" culture (Feuer, 1963).

(b) A concept describing a primarily psychological or so-

ciopsychological condition (Davids, 1955; Goffman, 1967).

Some authors, like Erich Fromm, Erik H. Erikson and Norman

D. Brown, combine the Marxist concept.of alienation with

psychoanalysis in a conceptual marriage de convenance which

will arouse man to the dangers of a life without love

(Simpson, 1968, offers a lucid description of these ideas).

(c) A concept denoting problems of social integration, of-

ten equated with anomie and utilized as part of a theoreti-

cal perspective that conflicts with the Marxian approach

(Mizruchi, 1965; Scott, 1965; Dean, 1961; Taviss, 1969;

Hajda, 1961 a.o.).

(d) A concept covering macroprocesses like the decline of

primary group relationships, the trend toward bueaucrati-

zation in various realms of life, based on discussions go-

ing back to Tinnies and Weber (Pappenheim, 1959).

(e) Most of the empirical studies on the subject of aliena-

tion were inspired by Seeman (1959), who was the first to

put alienation on sociological footing. The dimensions of

alienation defined by him represent an ad hoc listing of

many of the previously discussed uses of the concept.

Common elements in these uses of the concept of

alienation are: lack of unity of meaning, its application

to a series of societal processes that do not directly re-

flect on the experience in the immediate working situation,

utilization outside the theoretical context within which

it had a very specific meaning.

Also within Marxian social science, alienation has

caused some debate. The central issue was the status of

Marx's Economic and Philosophical Manuscripts, containing

the exposition on alienation, and the question of continu-

ity in Marx's thought. Althusser is the main representa-

tive of the orientation within that rejects alienation as

a "pre-Marxist" notion, rooted in youthful undigested

Hegelian influences. He maintains that with the mature

Marx, e.g. the writer of Capital, an entirely new approach

was born which represents a radical break with the Marx of

the early writings (Althusser, 1965). This position, in

our opinion, cannot be maintained and certainly not, as

Petrovic (1967) and Israel (1971) have shown, on the basis

of Marx's analysis in Capital. Despite some reformulation,

primarily due to the necessity to fit the alienation theme

into the newly elaborated theoretical framework, also in

this study the idea of alienation is still very much a part

of his model (compare f.e. Marx, 1967a, volume I: 71 ff).

4.2. The Concept of Alienation

Alienation conceptualizes a process that within the

Marxian approach has four dimensions. The well-known defi-

nition of these dimensions is contained in his Economic and

Philosophical Manuscripts (Marx, 1963: 121 ff) and they

all relate to processes that arise under the regime of cap-

italist production:

(a) The separation of the worker from the product he creates

in the course of the production process in which he parti-

cipates. The worker involves himself in the making of this

product which, however, after its completion is appropriated

by his employer and becomes part of a world by which he is

dominated and exploited.

(b) The separation of the worker from the act of produc-

tion within his work activity. Given the complete absence

of any control over his immediate working situation, and

the general lack of alternatives, work assumes a forced

character lacking opportunities for development and self-

fulfillment. Work becomes a means for earning a living,

and no more than that.

(c) The separation of man "from himself." Labor is such

a fundamental process for human self-realization that man

"dehumanizes" when he has to work under exploitative con-

ditions that deny creative productive work, destroy any

autonomy of the worker over the act of production, and

change work for him to a mere instrumental activity that

serves only to maintain his subsistence.

(d) The separation of the worker from other men and nota-

bly from those who control the production process, own his

labor and appropriate the products he creates. The situ-

ation of the worker is paradoxical in the sense that, through

his own production activity, he produces the power of his


With alienation, Marx conceptualizes a process that

is at the root of the class schisms and phenomena of class

exploitation in the immediate working.environment.

The concept of alienation, itself, moves on the

same level of abstraction as the concept of class conscious-

ness does. Both form part of a highly abstract model and

alienation, as class consciousness, lacks a direct refer-

ence to the concrete experience of individuals or groupings

of individuals.

Obviously, the use of this concept involves a few

assumptions concerning human nature. Marx conceived of man,

as is well known, as a dynamic factor in the social process.

This dynamics resides in the mutually related potentiali-

ties to change his environment and to achieve individual

self-realization, obviously through work: "the basic exis-

tential activity of man" (Marcuse, 1968: 275). Especially

this latter idea involves normative notions. When Marx

writes about the full expression of the talents and capacities

of the individual and the satisfaction of his needs, he

clearly has a certain selection out of the potential scale

of talents, capacities, and needs in mind (cf. Israel, 1971:

67). The idea of alienation ties in with this perspective

of the dynamic potentialities of man that the conditions

of capitalist production attempt to cut short.

4.3. The Process of Alienation and Conditioning Factors

Alienation as an objective process knows a develop-

ment and can present itself in varying degrees of intensity.

These variations are rooted, according to Marx, primarily

in a complex of three interrelated factors: division of

labor, private property-e.g. private ownership of the means

of production-, and the process of commodification.

Alienation intensifies under the conditions of cap-

italist production where this factor complex has been most

strongly expressed. Marx viewed the process, however, as

historically transient (cf. Petrovic, 1967). With the elim-

ination of the specific economic and social conditions that

had brought it about under capitalism, alienation would also

disappear. The alternative model of society, in which the

production sector would be reorganized on the basis of self-

management and absolute control over the working situation

by the immediate producers, did however, as we all know,

never get off the drawing table.

Schematically, the relationship of this objective

process of alienation to its conditioning factors can be

presented as follows (the double lines indicate feedback


division of labor

separation of thealienation
means of production-- a-l


Let us specify the workings of these factors.

(a) The division of labor represents the basic condition-

ing factor. On a societal level this phenomenon has led

to a separation of the worker from the means of production,

and to his ultimate exploitation by the capitalist. On the

level of the actual process of commodity production, the

division of labor resulted in a separation between manual

and intellectual skills, and in the subordination of these

manual skills to the machine in the course of the process

of mechanization. The production process, itself, was

separated into various successive steps. Formerly, the

worker was responsible for the entire series of operations

that is required for the production of the commodity but,

more and more, he has become preoccupied with the execu-

tion of very partial operations which have become his ex-

clusive function (Marx, 1967a, vol. I: 359).

This separation between manual and intellectual as-

pects of work and its subdivision into an endless series

of monotonous routine tasks prevents the worker, according

to Marx, from realizing his human potentialities, it lim-

its his power alternatives, and increases the objective

possibilities of his exploitation by others.

(b) Private property; the relationship between private prop-

erty (private ownership of the means of production) and

alienation follows a dialectical pattern. Historically,

the separation in relationship to the means of production

emerged in the course of the process of the division of

labor. In this process, private property can be said to

be the result of alienated laor. Once having achieved a

certain objective reality, private property becomes the

mechanism which deepens existing, and promotes further,

alienation (Marx, 1963: 156 ff).
Marx's view of the role of the institution of pri-

vate property contains the essentials of his theory of ex-

ploitation. This latter concept was defined very precisely,

and used to describe the process of the creation of surplus

value by the worker, its alienation from the worker by the

owner of the means of production, the accumulation and in-

vestment of this value, and the creation of new possibil-

ities for exploitation.
Given the fact that private property is a necessary

conditioning factor for exploitation and consequently the

occurrenceof processes of alienation, its abolition was

viewed by Marx as a precondition for the elimination of

these processes.

(c) Commodification: the exploitative relationship which

is at the core of the process of alienation is further con-

ditioned by the process of commodification. In order to

explain this process, some aspects of Marx's theory of val-

ue have to be mentioned (Marx, 1967a, vol. I: 35 ff).

Any product, according to this theory, has two val-

ue dimensions: first, the use value, which is an instru-

mental value determined by the capacity of the product to

satisfy persistent needs, and second, the exchange value,

which equals the value a product acquires when changed in-

to a commodity. A commodity,-by definition, relates to

other commodities for which it can be exchanged. This ex-

change relationship is expressed in the exchange value of

the product which in modern society is stated in money

Thus, in the case of a commodity, use value and ex-

change value have been separated, the second one being de-

termined by the mechanisms of the capitalist market system.

In the exchange of commodities, a network of power relations

emerges between the independent producers participating in

the system (Israel, 1971: 42).
The capitalist market covers social relations by

commodity relations. Ownership of commodities means power

that, in turn, is dedicated to a further transformation to

a commodity structure. Ultimately, not only products but

also human labor comes to acquire exchange value and is

sold as a commodity (Marx, 1963: 138 ff). The worker has

no alternative but to sell his labor power in the market

in order to subsist. Because of the skewed power relations

that limit his alternatives, work increasingly becomes ex-

perienced as imposed, forced labor. The worker is subject

to processes of alienation because the work he is doing is

not his work, but work for someone else. During this labor

process, the worker does not belong to himself but to another

person. He lacks completely control over his own working

situation (Marx, 1963: 122 ff). The more organized and

advanced the system of production, the more unfree he will

be. The greater his productivity, the greater his poverty.3

The commodity is the economic expression of man's self-aliena-


4.4. Conclusion

Reviewing the exposition on Marx's conceptualiza-

tion of the process of alienation, the following points should

be emphasized:

(a) Alienation has been viewed as an objective pro-

cess and some macrofactors have been indicated that, within

3. Marx refers here to poverty in a relative and not in
an absolute sense. Moreover the term has a wider than
strictly economic meaning and denotes also social and
psychological aspects.

the Marxian theoretical perspective, condition the course

of this process. In our actual research, the subjective

reflection of this process, together with the variations

in its occurrence and the determinants of these variations,

have been emphasized.

(b) The concept of alienation has a multidimensional struc-

ture. It forms part of the Marxian theory of class ex-

ploitation and directs itself towards this exploitation as

it manifests itself in the direct production process. In

doing so, however, the concept moves on a high level of

abstraction. It embodies a macroperspective forming part

of a metatheoretical framework. As such, its utility re-

sides with its heuristic, rather than with its formal ex-

planatory functions. Obviously, the concept lacks a direct

reference to the concrete behavior and feelings of individ-


(c) In the discussion of the impact of the basic determi-

nant of alienation, e.g. division of labor, we have referred

to the importance of the sociotechnical aspects of the ac-

tual process of commodity production. The factor of tech-

nological structure and its effects has an important place

in the Marxian framework (cf. the earlier discussion on

productive forces). The effects with regard to alienation,

concern, first, the subdivision of the actual production

process into a series of small tasks, and the diminishing

of the possibilities for individual self-fulfillment through

work and, second, by atomizing the work force into small

powerless parts in the machine, amplifying the possibili-

ties for exploitation by those who own the means of pro-


In the next paragraph, the ways will be indicated

in which class consciousness and alienation have been oper-

ationalized for the concrete investigation among the

Monterrey industrial proletariat. At the same time, a

paradigm will be defined which, on the basis of the theo-

retical discussion in the preceding paragraphs, will de-

fine the approach of the analysis, and specify the factors

to be included.

5. Class Consciousness and Alienation:
Some Condluding Remarks and a Paradigm

Reviewing the discussion in this theoretical intro-

duction, in reference to:

- general theoretical perspectives that form points of de-

parture for the analysis;

the analysis of the components and correlates of each of

the two core concepts, and

the taxonomy of their theoretical relationships, the ele-

ments of a paradigm can be identified that can guide our


(a) The production sector, with respect to:

its main structural changes specified by subsectors;

the generation of the economic surplus, its distribution

and ultimate uses.

(b) The class situation, with respect to:

- the segmentation of society in classes, subclasses and

related groupings;

- patterns, regularities or trends in the change within

and among the classes;

- the role of each class in production, distribution and


- the degree of proletarization of the sectors of the work-

ing class.

(c) The class relations, with respect to:

- the economic surplus and the exploitation of the labor


- the political structure and the use of control and co-


- the relationship between politically and economically

dominant classes: the decision making with regard to

economic and financial policies;

- legal and ideological structures;

- the state apparatus and its relation to the class struc-


(d) The working class, with respect to:

d.l. its relevant categories:

masses of workers: recruitment, internal segmentation,

level of participation in workers organizations and

political parties;

vanguard: recruitment, internal segmentation, functioning,

relations with the masses of workers and with political


- political parties: membership, internal structure, func-

tioning, relation with vanguard and with masses of workers.

d.2. its alienation and its manifestation on:

- the level of commodity production: technological struc-

ture, property structure, distribution of economic sur-

plus, division of labor, social organization and control

in the working environment.

d.3. its class consciousness and the manifestations on:

- the ideological level, with respect to:

the analysis of society as a whole and the role attrib-

uted to the working class;

the analysis of the common adversary: the employers,

sectors of the bourgeoisie, the classist structure it-

self, the State, foreign economic interests;

the analysis of the working class itself: interests,

programs for action, to be characterized as either

spontaneous or planned (tradeunionist or political


the counterideology of the bourgeoisie: the role at-

tributed to the working class, efforts at class recon-

ciliation, and the negation of class schisms.

- the organization level:

degree of union organization, organizational strength

(strike funds, press, etc.), internal differentiation,

the concrete organizations and their history.

degree of political participation: the party struc-

ture and the history of the parties, their influence

in the working class, action programs (short term and

long term).

- the level of political practice:

forms of struggle and history of struggle: strikes,

meetings, negotiations, legal processes, uprisings,

and other forms of collective action.

intersectorial coalitions, interclass coalitions, poli-

tical pacts, etc.

It is clear that in a study like ours, necessarily some

sacrifices have been made with regard to the general para-

digm, due to the shortcomings of the available data and to

the decision to narrow the actual research down to the

Monterrey industrial proletariat.

The investigation on the micro level, which deals

with individual attitudes and behavior, obviously cannot

study these as direct indicators of either alienation or

class consciousness. On this level, work experience and

working class psychology will conceptualize a discussion

that, afterwards, should be inserted into a more abstract

theoretical picture.

(a) Work experience focuses on the immediate working situ-

ation and, in particular, on a series of objective condi-

tions and subjective feeling states emerging from the

interaction between workers and the sociotechnical dimen-

sions of the working environment. It has a multidimension-

al structure. The individual dimensions are:

- domination: degree of control over the daily work process;

- fractionization: degree of decomposition of the produc-

tion process;

- isolation: degree of development of a community of work-


- distanciation: degree of identification with the job as


The first and second dimension refer to the subjective con-

sequences with the individual workers of technological

structure and division of labor. The third dimension re-

fers to the potentially atomizing effects of both, posing

barriers to the development of a work community that would

stimulate labor unity. The last dimension reflects the

evaluation of the job in its totality, its possibilities

for self-realization and the preference for free time (cf.
S. (alienated labor) is not the satisfaction of

a need, but only a means for satisfying other needs. Its

alien character is clearly shown by the fact that, as soon

as there is no physical or other compulsion, it is avoided

like the plague." Marx, 1963: 125).

These dimensions do not pretend to measure the ear-

lier discussed alienation phenomenon in all its aspects and

nuances. Our intentions are clearly more modest.

(b) Working class psychology, as has been explained before,

focuses on the perception of the individual's class posi-

tion, the definition of his adversary, and the conflict of

interests and his membership of a class organization with

interest group characteristics. The individual dimensions


- class identification

- awareness

- quantitative union participation

- qualitative union participation

The dimensions of both phenomena-work experience

and working-class psychology-know a process of develop-

ment. The classical writings, themselves, suggest a series

of explanatory variables that are hypothesized to relate

to variations in this development, and several have already

been mentioned before. They will be discussed further in

Chapter V, together with those suggested by the modern so-

ciological literature.



Following the framework for analysis presented in

the paradigm, the tendencies will be indicated that on the

macro level characterize the Mexican process of economic

and sociopolitical change. This knowledge, in combination

with the meso level analysis, will serve to place the re-

sults of the empirical research into context, to enable their

interpretation and establish their significance against the

background of the general dynamics of Mexican society.

The historical dimension of the present situation

will be outlined very briefly. The analysis of the pro-

cess of economic development, since the end of the 1930's

based on a strategy of industrialization, will likewise be

limited to the main lines. The basic questions on the nature

and scope of the processes of accumulation, distribution

and utilization of the economic surplus will not be dealt

with exhaustively, and the emphasis will be on the study

of general characterizing tendencies. This procedure will

be continued in the analysis of the class structure and the

political system.

1. The Historical Context

The economic and sociopolitical situation in Mexi-

co has a number of historical antecedents, the knowledge of

which is a precondition for a proper understanding of pres-

ent-day reality. Some of these elements show a remarkable

degree of historical continuity. One of them, which runs

as a thread of consistency through the history of Mexican

socioeconomic development, has been the important role of

the external factor which has preserved its dominant place

on the Mexican scene from the colonial period up till the

present dependent process of industrialization (Wionczek,

1971: 199 ff).

During almost three centuries of colonial rule, the

resources of the country were exploited to the benefit of

the metropolis. Independent economic activity was severely

restricted. Colonial production was directed towards the

interests of the mother country. The cities functioned as

commercial and export centers. Local savings were limited.

The entire economic surplus was transferred to the mother

country and not available for local investment. The eco-

nomy was stagnant. Apart from mining and a few textile manu-

facturers, industrial activity was virtually absent. In

the countryside the presence prevailed of the enormous do-

mains in the hands of the few, contributing little to the re-

gional or national market economy.

In 1821 a formal political independence was achieved

that, as in later cases of decolonization, served the co-

lonial relationship but changed it for a new dependency that

structurally exhibited characteristics analogous to the pre-

vious one. The disappearance of Spanish colonial rule left

a vacuum that initially was filled by British investors who

entered the mining sector and provided credits to the new

Mexican government. In subsequent years this situation of

dependence from foreign investors deepened through the ac-

tivities of French and German capital. The entire mining

sector and also the import and export, trade remained under

foreign control (Solis, 1970: 14 ff).

The years of 1830-1870 were characterized by poli-

tical chaos and economic stagnation. The central authority

was very weak. The power vacuum ona national level resul-

ted in a growing political fragmentation and in the emer-

gence of regional, largely autonomous political units. As

a consequence of the generalized sociopolitical instability,

the resistance was weak against the territorial claims by

the U.S. and against the series of punitive expeditions and

interventions by other foreign powers operating on behalf

of foreign creditors. These operations ultimately even led

to an effort to recolonize the nation.

The Porfirio Diaz regime (1880-1910) brought poli-

tical stability and economic growth. National integration

was pursued with repressive force. Economic development was

promoted at all cost. All barriers against foreign invest-

ment were lifted without restrictions. The foreign inves-

tors' drive for short term profits directed the development

process in the absence of any national plan coordinating the

investments. The construction of the railway system was a

case in point (Padgett, 1966: 19; Solis, 1970: 48). A

number of railway lines were built that served the foreign

enclaves in the agricultural and mining sectors, and did

little to alleviate the acute communication problem in the

country. Mines and oilfields passed into foreign hands at

incredibly low prices. The same happened with the domains

that were acquired by foreign landholding companies. Ac-

cording to various estimates, a fifth to a quarter of the

nation's landed property passed under foreign control

(Gonzalez Navarro, 1969: 207). In addition, also the in-

cipient industry and the trade sector were largely in for-

eign hands. Around 71 percent of the capital invested in

industry between 1886 and 1910 was foreign owned (Solis,

1970: 65). This foreign domination of the economy was

largely established by U.S. capital. During the Porfiriato

the strong dependency relationship was established which

by and large has characterized Mexican-U.S. relations up un-

til present times.

During the first decade of this century the Porfirio

Diaz regime met more and more difficulties. A key economic

problem formed the lack of dynamics in agrarian production.

The incapacity of the hacienda system to absorb modern tech-

nology and to raise productivity made it difficult to meet

the increases in internal demand and to create an agricul-

tural surplus that could have been exported. The rural mass-

es had stayed desperately poor and the bad harvest of 1909

took them to the brink of starvation. In the cities the

workers employed in the new industries had to work at hun-

ger wages. The active discontent of some segments of the

working population (textile workers, miners) was brutally

repressed. An explosive political situation emerged that

contributed to the revolutionary developments of 1910.

The 1910 Revolution ended the Profirio Diaz regime.

It meant to improve the situation of the urban middle sec-

tor, the urban workers and the landless laborers in the

countryside. This was to be done without completely remodel-

ing the economic system and preserving ample space for private

initiative, next to the activities of the public sector

(Gonzalez Navarro, 1969: 206). In the area of agrarian re-

form indeed some advances were made although the peasants

had to wait until the administration of Lazaro Cardenas

(1934-1940) before a serious effort was made to improve

their situation and even then, it was notoriously unsuc-

cessful in the long run. The increases in productivity

in the agricultural sector came mainly on account of the

expansion of agro-industrial production. The Revolution

had not basically changed the country's dependence on

foreign investment. On the contrary, from 1910 to 1926

the number of industrial, commercial and mining enterprises

in the hands of foreign capitalists increased sharply (Solis,

1970: 96). During the revolutionary period many of the

smaller Mexican enterprises had sold their interests to U.S.

investors. Under Cardenas an effort was made to "Mexicanize"

a substantial part of the economic sector through straight

nationalization (railroads, oil), expansion of the direct

government investment and a limit to foreign investment in

those sectors considered vital to the national interest.

This trend towards "Mexicanization," however, weakened un-

der the following governments.

In the mid-1930's finally the process of economic

growth began for which the institutional and legal founda-

tions had been laid at the end of the Revolution (Solis,

1970: 94). In the period from 1940 on, rapid change in

the urban and industrial sphere changed the face of Mexico.

Yet the extreme socioeconomic inequality persisted. The in-

dustrialization of the nation proceeded at the expense of

the lower income strata especially in the rural areas. Ur-

ban workers organized and managed to force some betterment

in their situation although the presence of the constantly

expanding urban subproletarian labor reservoir undermined

the negotiating position of the workers and made enforce-

ment of social legislation difficult. During the Second

World War, as in the rest of Latin America, the process of

economic growth got a strong additional stimulus. The tem-

porary interruption of the ties with the world market pro-

moted the formation of an import-substituting industry. Ag-

ricultural production expanded continuously until the mid

1950's and the economic growth depended heavily on the ex-

port of the agricultural products in addition to those of

the mining sector. Strong investments were made in irri-

gation and in the clearing of new lands. The expansion,

however, was carried mainly by the great agro-industrial

enterprises. The peasant population was left in its condi-

tion of abject poverty (cf. Dumont, 1961: 86 ff).

In the second half of the 1950's the process of eco-

nomic development has been directed to a greater degree on

the internal market and its course has been determined even

more by the growth of industrial production. The continuing

pauperization of extensive rural areas together with an even

increasing demographic pressure as compared to the expansion

of economic opportunities in the cities, led to a tremen-

dous rural-urban migration which especially in the last two

decades has taken on an unprecedented magnitude. The chang-

es in the economic sector had their social and political

correlates. New strata have emerged. The bourgeoisie has

expanded with the new industrial elite and the highly quali-

fied managers who direct the new enterprises in business and

industry and administrate the strongly grown government appa-

ratus. The urban middle sector and the segments of salaried

workers have augmented in size. Nothing, however, has

equaled the growth of the marginalized masses populating

the immense slum areas surrounding almost every city.

2. Some Notes on the Economic Structure

These changes, resulting from the process of eco-

nomic growth in the last few decades, require a more pre-

cise definition. Without pretending to an exhaustive analy-

sis of the subject, we will sketch the main lines of the de-

velopment strategy that was followed and indicate the struc-

tural changes that resulted. Thus an outline will be given

of those conditions that constitute the material basis for

the sociopolitical processes that will be analyzed in the

paragraphs 3 and 4.

2.1. Economic Growth Through Industrialization

The strategy of industrialization, which in Mexico

has been promoted as the means to end underdevelopment,

has resulted in a process of economic growth that especially

in the 1960's reached spectacular proportions. In this

period official publications glowingly reported on the ex-

pansion of Mexico's production and proudly pointed to the

accompanying improvements in economic, social and education-

al opportunities that would put the nation on a certain road

to equality and social justice for all (cf. Gonzalez Navarro,

1969: 219). Looking back, it can rather easily be con-

cluded that this position was far too optimistic. It is

understandable that the process of growth as such generated

a certain feeling of euphoria especially in government cir-

cles, but a more critical analysis of the process of devel-

opment shows us that this feeling had little or no basis in

the characteristics of the process of development in a wider

sense. Indeed, the growth of the G.N.P. all through the

1960's fluctuated between 6 to 7 percent (in 1964 even 10

percent), which was unparalleled among Latin American nations.

Part of this growth, however, was offset by the increase

in population (34 to 36 percent) which left a net growth of

Table 1: Economic growth rates of selected Latin American
countries 1960-1969 (percentages)

countries growth of G.N.P. per capital G.N.P. growth
1960-1966 1967 1968 1961-1969

Mexico 6.3 6.5 7.3 3.3
Argentina 2.9 1.9 4.8 1.9
Brazil 4.1 5.0 8.3 2.6
Chile 5.4 2.0 2.7 2.0
Venezuela 5.1 6.0 5.7 1.3
Latin America 4.6 4.5 6.4 2.2

Source: Labastida, 1972: 102

little more than 3 percent (Wionczek, 1971: 11). This

economic "boom" was mainly the result of industrial expan-

sion. The production has been directed primarily towards

the internal market. Mexican exports consist mainly of raw

materials. These suffer from lack of stability as a result

of price fluctuations on the world market. The volume of

imports, however, has been dictated by the needs of the in-

dustrializing expanding economy with the resulting balance

of payments problems, a familiar pattern among Third World

nations (Padilla, 1969: 14).

The distribution of the economic growth over the

various sectors of the economy is specified in the follow-

ing table. Striking is the strong decline of the tradition-

al workhorses of the economy: agriculture and mining. The

Table 2: The sectoral distribution of the Mexican G.N.P.
in 1936, 1953 and 1967 (percentages)

economic sectors 1936 1953 1967

agriculture 27.7 20.6 15.9
mining 6.0 2.9 1.5
oil 3.0 2.9 3.2
manufacturing 16.4 21.2 26.5
construction 2.5 3.2 3.9
electric energy 1.0 1.0 1.6
services 43.4 48.2 47.4
Total G.N.P. 100.0 100.0 100.0
Source: Solis, 1970: 220

economic growth has been carried by the manufacturing in-

dustry. The dynamics of this sector itself have been deter-

mined to a great extent by the expansion of "modern" indus-

try (metallurgy, chemicals). The industries directly de-

pendent on mass consumption (foodstuffs, textiles, etc.)

did stagnate and decline in relative importance from 54.8

percent in 1950 to 42.8 percent in 1965. These branches

also contain most "traditional" enterprises and artisan

shops. In the same period the relative importance of the

production goods industry (chemicals, metallurgy, machin-

ery, etc.) increased from 16.5 percent for these indus-

tries and 5.6 percent for the other ones (Solis, 1970:

222). Mexican industrial production has emphasized more

and more the fabrication of these capital goods and half

products, a development very similar to the Brazilian pat-

tern (Leff, 1968).

Table 3: The structure of the contribution to the Mexican
G.N.P. by manufacturing in 1950, 1960 and 1965

contribution to G.N.P. by manufacturing
industry 1950 1960 1965

food, drinks, to-
bacco 30.1 28.9 27.2
textiles, shoes,
apparel and
fabrics 24.7 17.4 15.6
wood, paper and
paper products 8.2 4.9 4.4
chemicals 8.8 14.6 16.6
minerals 4.4 4.5 4.3
metallurgy and
metal products 7.7 13.5 14.0
other 16.1 16.2 16.9
total 100.0 100.0 100.0
Source: Solis, 1970: 221

The slow pace at which the demand on the internal

market is expanding, however, threatens to pose sharp limits

to further industrial growth. This applies in particular

to those industrial sectors directly or indirectly dependent

on the institutionalization of patterns of mass consump-

tion. In this respect Padilla (1969: 14), Singer (1969:

168) and Wionczek (1971: 19) point to the phenomenon of

industries producing far below top capacity. A major

stumbling block forms the lack of an institutional frame-

work (in the sphere of taxation, monetary policy, etc.)

which would redistribute the income concentrated in the

hands of those relatively small sectors of the population

which have been the main beneficiaries of the process of

economic growth, give to the great majority of the Mexi-

can population a proportional share of the pie and enable

the government to accumulate the financial resources that

would permit a more extensive participation in the strug-

gle against underdevelopment. This problem of course leads

us directly to the issues of class relations and politi-

cal power that will be further explored.

2.2. The Generation and Distribution of Income

In Mexico, the process of accumulation of capital

has been aided by the depression of popular consumption,

following a policy of "forced savings." Again, a large

scale expansion of the domestic market through a substan-

tial redistribution of income and wealth and other redis-

tributive mechanisms, has not been contemplated as part of

national policy (Gonzalez Casanova, 1967: 475). The

volume of demand instead has expanded slowly by areas and

sectors. Industrialization and related processes have

generated an intermediate level of demand, too weak, how-

ever, to produce full employment for all productive re-

sources. External factors, like tourism, the migrant work-

ers to the U.S., and foreign capital, fill the gap and

make economic growth possible. This does not mean that

the internal potential for capital formation has been ex-

hausted. The savings capacity of the popular sectors is

very small but among the economic elite the situation is

different. The fact that they appropriate the greater

part of the economic surplus does not mean, however, that

it is spent productively. Only part of the accumulated

sums are reinvested, the rest is spent on purposes not

directly related to the country's long term productive

capacity, such as "luxury" consumption, real estate specu-

lation, and foreign bank accounts. A further analysis of

this process of accumulation reveals the exploitative na-

ture of the Mexican economy and the inequalities in the

distribution of income which go with it.

In the period between 1940 to 1970, the size of

the total Mexican labor force grew from 6 to approximate-

ly 16.5 million (Aguilar, 1970a: 144). The size of the

salaried segment increased in the same period from 40 to

60 percent. Despite the increase in employment, the phe-

nomenon of unemployment and underemployment have taken on

massive proportions. Together they are estimated to affect

around 40 percent of the labor force (Dominguez, 1974:

3). In the countryside the situation is particularly

critical as a result of chronic underemployment and sea-

sonal unemployment (Aguilar, 1970a: 145). Against the

background of these phenomena, the generally low levels

of income are not surprising (Singer, 1969: 292). The

legal minimum income is notoriously difficult to enforce.

According to Dominguez (1974: 4) over 40 percent of the

salaried population is not receiving the minimum wages.

Further, in practice the periodic revisions of the col-

lective contracts stay behind the rise in the cost of liv-

ing, fed by inflation. The real wages of the lower income

strata, have shown a descending trend (Singer, 1969: 129

ff). In the second half of the 1960's, the lower third

of the total economically active population suffered a

loss in real wages; the next 50 percent remained virtually

stagnant (La Cascia, 1969: 62; also Cockcroft, 1972: 248).

These phenomena had direct consequences for the process of

accumulation of capital. In combination with inflation they

represented "forced savings," primarily benefitting profit

recipients while hampering wage earners and fixed income

groups (Singer, 1969: 190). These profit recipients, in-

sofar as they represent national industrialists, were great-

ly aided by the policy of industrialization through im-

port substitution which operated behind high tariff walls

(Solis, 1970: 323). The share in wages and salaries of

the N.N.P. dropped from 30.5 percent in 1939 to 24 per-

cent in 1950, increased slowly in the subsequent decade,

reaching 32 percent in 1967 (Solis, 1970: 317). This

meant that it took almost 30 years to parallel the rather

modest achievements of the Cardenas administration. The

result, however, remained an income distribution that was

highly unequal: in 1965, the lower 76 percent of the

economically active population received 7 percent of the

national income, the upper 0.3 percent received 54.9 per-

cent (Padilla, 1969: 100). Corrective action by the gov-

ernment has remained weak. Formerly .the government pro-

grams stressed public welfare as one of their important

goals. However, the rural programs and the urban welfare

policies as low cost housing, food subsidies, enforcement

of minimum wages, etc. have been weakly organized, not

in the least because of the institutionalized corruption

(Carri6n, 1969: 122 ff).

Behind this general picture of the Mexican dis-

tribution of income, stand substantial intersectoral in-

equalities, notably between agriculture, industry and com-

merce,2 while within each of these sectors also great

1. The agrarian sector has received since the 1940's less
and less public money. An absolute low was reached dur-
ing the administration of Lopez Mateos (1959-1964) when
only 10.4 percent of total government investment went
to the rural sector (Puente Leyva, 1969: xvi).

2. The productivity of the agricultural sector as a whole
stays far behind compared with industry and commerce. The

disparities exist. These inter- and intrasectoral inequal-

ities with regard to the distribution of income coincide

with substantial regional inequalities.

Especially the agricultural sector as a whole

scores very badly in the total picture of the income dis-

tribution. It only accounted for 15.9 percent of the G.N.P.

(1967) while still comprising almost 50 percent of the na-

tion's workforce (Wionczek, 1971: 36). The Mexican Rev-

olution, which had agrarian reform written in its banner,

appears to have sacrificed agriculture to industry and the

countryside to the city. It has followed a course which

indicated more and more, as its primary objective, the es-

tablishment of a fullfledged capitalist system in which

economic growth was identified with industrialization. The

way this industrialization was realized, e.g. through im-

port substitution, assigned to agriculture some well-de-

fined tasks. Besides supplying the internal demand for

agricultural products, it had to produce an export sur-

plus. The foreign exchange acquired through the sale of

this surplus on the world market had to cover the imports

of the capital goods, raw products and half-products needed

to maintain industrial production. The export of agricul-

tural products covered in the 1960's more than 50 percent

per capital productivity is only 13.1 and 18.7 percent,
respectively, of the productivity in these other two
sectors (Puente Leyva, 1969: xiv).

of the foreign exchange needed. The other part was contri-

buted by tourism, foreign credits and direct investments.

The subordination of agriculture to industrial develop-

ment and the emphasis on production for the world market

had great consequences for the structure of the sector it-


After the distribution of lands in the 1920's and

1930's an infrastructure, especially in roads and irriga-

tion works, was constructed that brought considerable chang-

es. On the irrigated lands the commercial crops gained im-

portance.3 In the 1940's heavy investments were made in

the mechanization of this type of agriculture. The pro-

duction per hectare increased rapidly, also as a result of

the use of new methods of seed selection, fertilizers and

insecticides. This development benefitted almost exclusive-

ly the owners of the large estates who had escaped division

of their lands and had transformed their latifundios into

big agroindustrial enterprises (Solis, 1970: 148). It

also benefitted the small holders, owning from 100 to 300

hectares (depending on type of land and crop) and the

ejidos on the rich irrigated lands, as f.e. in the north

Pacific area (Gonzalez Navarro, 1969: 217). The ejiditarios

3. In 1940 only 50 percent of the population of the agri-
cultural sector entered the market. In 1960 this per-
centage had increased to 80 (Wionczek, 1971: 29).

on the lands lacking irrigation and the subsistence farm-

ers remained the weaker and neglected elements of the ag-

ricultural sector. More and more the gap was widened be-

tween the advanced rural regions and those with a predomi-

nance of subsistence agriculture. In the first mentioned

areas the commercial agriculture on irrigated lands pre-

vailed, with high productivity, a capacity for the absorp-

tion of changes in agricultural technology and the possibil-

ity for development of an agro-industry. The other areas,

stagnated, suffered from a continuing subdivision of the

land and impoverishment of the soil, were incapable of

implementing new techniques and experienced an ever in-
creasing demographic pressure.

Also the national industry, however, has been dis-

tributed very unevenly over the country. Traditionally it

has been concentrated in Mexico and the Federal District,

Nuevo Leon and Vera Cruz (Aguilar, 1970a: 39). In the

1960's the so-called border industry in the States of Chi-

huahua, Coahuila, Tamaulipas and Baja California has gained

importance (cf. Padilla, 1969: 88). The gap between these

industrializing, urbanizing regions and the backward rural

4. In 1965, 0.5 percent of the total number of agricultur-
al enterprises produced 32 percent of the National Ag-
ricultural Product, the upper 2.9 percent generated
even 76.3 percent of the N.A.P. The lower 50 percent
produced only 4 percent of the N.A.P. (Wionczek, 1971:
31; Aguilar, 1970a: 51).

areas is wide and widening on virtually all socioeconomic

indicators of levels of living one could think of (GonzAlez

Casanova, 1968; De Rossi, 1945). Paradoxically it is also

this gap and its implication for the growth of the demand

for mass consumption articles in the rural areas that ul-

timately will constitute one of the more important barriers

towards further industrial growth.

Mexican peasants have responded to the existing

differentals by shifting in considerable numbers from the

high density, low income areas to those more attractive

economically. This migration was directed primarily to-

wards the Federal District and the States of Mexico, Nuevo

Le6n and Baja California.5 The migrants continued to pour

in all through the 1950's and the 1960's as a result of the

sheer misery in the rural areas aggravated by a steady popu-

lation growth.6 For a considerable part of the migrant pop-

ulation, the migration did not produce an immediate economic

advancement in terms of a raise in real income and levels

of living. Most migrants simply transferred their poverty

5. They received 70.6, 10.5 and 9.5 percent,respectively,
of the migration balance of those 13 civil divisions
which had more migrants arrive than depart during 1960-
1970 (Bridges, 1973: 278).

6. The magnitude of this process is further illustrated by
the fact that between 1950 and 1960, the rural population
grew at an annual rate of 1.5 percent, while natural in-
creases and migration together produced an annual growth
rate of 4.8 percent in the urban areas (Singer, 1969:

from the countryside to the city. Thus the agrarian crisis,

which to an important extent was provoked by a policy in

which economic growth was identified onesidedly with in-

dustrialization, on its turn created the subproletariat

which constitutes industry's large reservoir of cheap un-

skilled labor.

As in the case of agriculture, also within the in-

dustrial and commercial sector great disparities exist. The

most obvious differences show between the more "traditional"

sectors, containing most of the low productivity, labor in-

tensive industries and artisan shops and the big "modern"

capital intensive enterprises in the commercial sector par-

alleled by the differences between the street vendors and

the big commercial houses (cf. Aguilar, 1970a: 154 ff for

some concrete data on this point). These differences cor-

respond to substantial inequalities in the distribution of

income, the "traditional" sectors representing low wage

strongholds in which the low levels of technical differ-

entiation make labor easily interchangeable, given the

presence of a large reservoir of cheap unskilled labor.

Again, on the general level the distribution of in-

come is highly skewed towards the small agricultural, in-

dustrial and commercial enterpreneurial elite whose profits,

in recent decades, have increasingly expanded, especially

in cases of rising productivity and stagnating wage levels.

This situation by and large also prevailed during the heydays

of full capitalism in the Western industrial societies,

with this great difference that in particular the indus-

trial bourgeoisie played a dynamic role in the rapid trans-

formation of the socioeconomic structure, through accumula-

tion of the economic surplus and continuous reinvestment,

thus promoting further development. In Mexico the small

economic elite behaved differently. The combination of in-

flation, exceedingly favorable profits and the growing in-

equalities in the distribution of income, which prevailed

from 1939 on, have proven to be a wasteful way of inducing

savings (Singer, 1969: 181). Puente Leyva (1969: 47)

estimates the private savings in Mexico in the 1960's at

around 9 percent of the G.N.P. while the total profits,

dividends, etc. amount to no less than 27 percent of the

G.N.P. The difference between these two percentages roughly

indicates the part of the G.N.P. dedicated to consumptive

purposes by the profit receiving business elite. This

means that a considerable part of the G.N.P. was spent in

a way unrelated to the nation's productive capacity. In-

vestment in general was not forthcoming unless it could be

recovered in three or four years, a situation that has pre-

vailed from the 1940's on. The relatively small contribu-

tion to capital formation made by the bourgeoisie has fur-

ther strengthened the role of investments initiated by the

government or provided by foreign sources. The external

dependence thus appears not only as a condition imposed

from outside but at the same time as an internal condi-

tion consciously and willingly accepted by the bourgeoi-

sie itself, whose cooperation with a national autonomous

solution to the problem of underdevelopment has been mini-


2.3. Enlargement of Scale in the Economy

This tendency has appeared increasingly in the

Mexican economy as concentration (growth in absolute size)

of capital, leading to centralization (growth in relative

size) of capital. The economic "boom" of the 1960's led

to a considerable increase in total investment and in eco-

nomic productivity. Yet the general capital labor ratios

have remained low and the gap separating Mexico from the

industrialized nations has not been closed. A great pro-

portion of the capital invested in the various sectors of

the economy is in the hands of a small minority of Mexican

and foreign interests. This situation is very pronounced

in the manufacturing industry where at the height of the

"boom" (1966), 1.5 percent of the total number of enter-

prises accounted for 77.2 percent of the total sum of in-

vested capital. Among this total number of 136,000 units,

no more than 400 enterprises dominated the scene, one third

7. In terms of A. Gunder Frank they should be character-
ized as a "lumpen bourgeoisie" (Gunder Frank, 1970).

of them companies directly or indirectly controlled by

foreign interests (Aguilar, 1970a: 59). In commerce,

4.4 percent and in services, 2.9 percent of the total num-

ber of units represented 84.4 percent and 77.2 percent re-

spectively, of the total sum of invested capital in those

sectors (Aguilar, 1970a: 51). We have already mentioned

earlier the tendency towards concentration in the sector

of agriculture. Here a limited number of families (probably

no more than 500) dominate the sector by owning the best
lands, having access to irrigation, credit and technology.

The sectors of industry, commerce and services to-

gether counted 630,195 units (1965). Among them, the top

8,000 (1.2 percent) represented 70.9 percent of the total

sum of invested capital in the three sectors (Aguilar,

1970a: 52). Within the category of large to very large

companies also a considerable concentration has taken place

(Ibid.). Among the 500 largest companies in the Mexican

economy, 37 represented 45.1 percent of the total sum of

capital invested in all of them (1968). Singer (1969:

157) analyzes this same trend and indicates that around

18 percent of the G.N.P. was produced by the 400 largest


8. Aguilar (1970a: 54) mentions 160 of the most impor-
tant families by name.

The concentration and centralization of capital has

been accompanied by the increasingly monopolistic organi-

zation of the economy (Singer, 1969: 158). This applies

especially to the commercial sector, although also in manu-

facturing at the time already almost two-thirds of the in-

dustries had a monopolistic market structure (1965).

Aguilar (1970a: 57 ff), whose analyses on the subject have

provided insightful reading, shows that these processes

of enlargement of scale in the economy have resulted in

the emergence of a small economic elite of approximately

1,000 families, directly or indirectly controlling the

economic sector by owning the nation's capital or by serv-

ing as intermediaries for foreign investment. Within this

rather small sized economic elite, controlling the nation's

lands, mines, factories, commercial enterprises, banks (the

"Big Nine," cf. Singer, 1959: 158), insurance companies,

mass communication media, etc. approximately 100 families

operate on a national level. Among them no more than 25

are real business tycoons of Mexico. The group of magnates

operating primarily on the state and regional levels counts

approximately 300 families. The other 600 families have

investments of lesser importance in and around Mexico City

or on the state and local levels.

The great concentration of the riches of the nation

in a few hands has taken place in the last three decades

(cf. Carmona, 1970b: 86 ff). Some capitalists have roots in

the period of postrevolutionary reconstruction during the

Calles government (1925-1928) or were owned by Porfiristas

who accommodated to changing conditions, but most of them

date from the period of economic expansion during the Sec-

ond World War. The combination of low wages, high profits

and low taxes made rapid accumulation possible, a process

speeded up even further by the dynamics of development it-

self, the growing possibility for speculative gains, es-

pecially in real estate (urbanization), the impact of

foreign investment and the effects of the substantial in-

flation Mexico has known; this all further facilitated by

a political and legal framework that permitted an unhin-

dered course of these processes.

2.4. Economic Growth in Dependence

The process of economic growth has received a

great impulse through the activities of foreign companies.

Their interests have taken on a considerable magnitude and

they have assumed key positions in various sectors of the

economy. Among the direct foreign investments, 80 per-

cent consist of U.S. capital (De Rossi, 1971: 70). They

have been directed mainly towards the sectors of industry

(74.2 percent) and commerce (14.8 percent). This repre-

sents a considerable change from foreign investment poli-

cies in the past which concentrated on mining, the energy

sector and on communication and transport. In 1970, the

Table 4: Foreign investment in Mexico, 1941-1969
(millions of dollars at current prices)

administrations foreign investments
direct(a) indirect(b) total aennua

(1941-1946) 131 56 187 31
(1947-1952) 251 207 458 76
Ruiz Cortines
(1953-1958) 486 432 918 153
Lopez Mateos
(1959-1964) 511 2,414 2,925 488
Diaz Ordaz
(1965-1969) 606 3,268 3,874 775

Source: Carmona, 1970b: 71
(a) does not include reinvestments, only new investments
that were officially published.
(b) long term credits to state organizations and enter-
prises dependent on them; short term credits (for less
than one year) are not included.

direct U.S. investments made in that year, equalled 6 per-

cent of the Mexican G.N.P. (Durand Ponte, 1972: 274).

Foreign private investment has been channeled more and

more through the multinational corporations. The presence

Table 5: Sectoral distribution of total private foreign
investment in Mexico 1911-1968 (percentages)

Ss private foreign investments
economic sectors 1911 1940 1950 1960 1968

agriculture 7.0 1.9 0.7 1.8 0.7
mining 28.0 23.9 19.8 15.6 6.0
oil 4.0 0.3 2.1 2.0 1.8
manufacturing 4.0 7.0 26.0 55.8 74.2
electric energy 8.0 31.5 24.2 1.4
commerce 10.0 3.5 12.4 18.1 14.8
and transport 39.0 31.6 13.3 2.8
other services 0.3 1.5 2.5 2.5
total 100.0 100.0 100.0 100.0 100.0
Source: Wionczek, 1971: 205

of these units has recently become a subject of debate,

provoked by the impact of their present scope and rapid

expansion on the economic policies of developing nations.

The negotiating position of these nations was radically al-

tered and the possibilities of defining an independent

economic policy were severely limited, facing corporations

with a volume of sales often approximating the nation's

G.N.P., with complex administrative and accounting pro-

cedures that escaped from local control, with an influx

of capital, technology and administrative know-how that

usurped local resources. Mexico did not escape from this

pattern (Wionczek, 1971: 184 ff). From the end of the

1950's on, the presence of U.S. corporations in Mexico has

expanded through the formation of subsidiaries or the ac-

quisition of existing local companies. The situation has

arisen where from the 187 biggest U.S. multinational cor-

porations, responsible for more than 70 percent of total

direct U.S. investment abroad, 172 are represented in

Mexico through a total of 412 local subsidiaries (1976).9

With this number of local subsidiaries, Mexico occupies

the first place in Latin America and the fifth in the world

after Canada, Great Britain, France and Germany. Among all

9. According to an investigation of Harvard Graduate School
of Business Administration, published in 1969 and cited
by Wionczek (1971: 213).

subsidiaries, 56 percent had 100 percent U.S. capital, 19

percent had a majority U.S. investment and another 19 per-

cent had a minority U.S. investment. The degree of control

over 6 percent of the subsidiaries was unknown.

The industrial sector has been favored by U.S.

capital. Within this sector the investments concentrated

on the manufacturing of chemicals, pharmaceuticals-cosmet-

ics, processed foods-drinks and household equipment-elec-

tronics. Together these accounted for 71 percent (31.4,

20.6, 10.8, and 8.2 percent respectively) of all U.S. in-

vestments in manufacturing in the period 1946-1967 (Wionczek,

1971: 217). Most of the U.S. controlled industries (82

percent) are located in the area around Mexico City (De

Rossi, 1971: 71). Their production has been directed main-

ly towards the internal market. All companies, except two

automobile assembly plants, did not export more than 3 per-

cent of their total sales. Most of the foreign investments

in the manufacturing sector have taken place in accordance

with the Mexican policy of industrialization through im-

port substitution. This policy had as its primary objec-

tive, the reduction of the dependence on foreign imports

through the promotion of local industrialization. The

paradoxical result was a sharp increase in the dependence

of the economy on foreign suppliers although the structure

of the imports changed from an emphasis on consumption goods

to raw stuffs, half-products, spare parts and machinery for

the newly established industries (Wionczek, 1971: 153).