Postscript

Capitalism did not introduce equity to an inequitable society, and it may even have made Mexican society more inequitable.

Therefore, one might say that the Mexicans of the Revolution displayed extraordinary genius in not falling into the abyss of rigid state socialism. They could still count on new industrial growth, within malleable parameters, to provide for a rapidly growing population, even if it failed to distribute the benefits of growth equitably throughout its still diverse population. But postrevolutionary industrial growth did not come in the oil industry, a condition that added new, significantly different elements to the story.

Up to 1920, there had been little in Mexico's oil history to suggest that the ultimate nationalization of the oil industry was inevitable. The conditions that led to expropriation were products of the subsequent history of foreign oil companies in Mexico. Nineteen twenty was a watershed year. Not only did Carranza fall, but petroleum prices began to break and production also commenced to decline. President Obregón consolidated political control of the state to a degree not enjoyed by a Mexican president since Díaz, allowing him and his successor, President Calles, to impose new taxes and regulations upon the industry. But in reality, there was much less to tax in the mid-1920s. Production had declined by a factor of four-fifths. The companies, still endeavoring to remain competitive in international markets, laid off thousands of workers in 1921 and 1922. When the oil economy once again reached an equilibrium, the workers responded to the widespread social dislocation by organizing larger unions and fashioning a durable alliance with the state. Wage increases, improved benefits, and collective contracts followed in due course during the economic recovery from 1923 to 1925. The concentration of ownership in the industry preserved a measure of the companies' former autonomy, although British oilmen often broke with their American counterparts on labor and governmental issues.

Yet in the 1920s, the Mexican petroleum industry was but a shell of its former robust self. The companies retreated before the exhaustion of the oil fields, international competition, growing domestic demand, the resurgent Mexican state, and continuing labor militancy. Private foreign capital was forced to concede some of its exclusive property rights and to yield to workers' demands for more security and reward. The companies' exclusive command of the Mexican oil industry was further constrained. Although the depression and political turmoil of the early 1930s rendered labor and the state unable to capitalize on the industry's weaknesses, these precedents remained to be acted upon later.

In 1934, Mexico and the oil companies entered a new age, strengthening one and weakening the other. Both labor and the state renewed the centralization begun in the early 1920s but now in ways even more mutually reinforcing. The Mexican oil industry became increasingly marginalized in the international market, as the foreign companies raised their production in Colombia, Peru, and especially Venezuela. An early Mexican rebound from worldwide depression enhanced the domestic market for petroleum products and multiplied the mechanisms by which labor and the state could make new impositions. For all of this, it remains difficult to state that the oil companies were doomed in Mexico. No one could have predicted the oil expropriation.

The formation of the national petroleum union in 1936 brought great pressure on the companies. The refinery unions from Tampico and Minatitlán brought together some twenty-one separate unions representing seventeen different foreign interests to form the Sindicato de Trabajadores Petroleros de la República Mexicana (STPRM). The new petroleum workers union joined the newly formed Confederación de Trabajo de México, which had wrested power from the CROM in the early 1930s. The STPRM subsequently presented the companies a lengthy collective contract that would have equalized pay and benefits across the industry, bringing workers of smaller companies up to the standard of those of the bigger concerns. Most importantly, the companies would lose many of their managers and supervisors to the union. Employers were gradually losing control over the workplace. Many foreign workers had been laid off during the 1920s and 1930s and not replaced. At the same time that Mexicans were gaining ascendency in the workplace, the union itself was extending its control over the workers. By January 1938, only three thousand of the eighteen thousand laborers in the industry remained outside the STPRM.

More than anything, the demands of organized petroleum workers brought an end to the operations of the private foreign oil companies in Mexico. Having suffered severely for their proletarianization in the 1922 and 1930 layoffs, workers willingly conferred enormous power on their leaders in exchange for security. In fact, when the oil companies bristled at the idea of union control of personnel matters and resisted all government mediation, the union leaders demanded that the state expropriate the industry. The companies wanted to force President Cárdenas to intervene and discipline the oil workers. Moreover, Jersey Standard and other American executives did not want Mexico to establish a precedent that other countries would be tempted to emulate.

These considerations prompted the companies to repudiate the Supreme Court decision of 1 March 1938, which favored labor. Moreover, the foreign executives did not believe the Mexicans were capable of running their own oil industry.

These actions placed the companies on a collision course with labor and the state. The British and Dutch managers of El Aguila wished to reach a last-minute compromise but failed. Days before Cárdenas decreed the oil expropriation, the oil workers had begun to seize control of the oil installations. Under the circumstances, given the uncompromising attitude of both the companies and the labor unions, Cárdenas had no choice but to expropriate. He did so during a dramatic nation-wide broadcast on 18 March 1938, a date many Mexicans associate with the economic independence of Mexico. The foreign oilmen were stunned. They had not believed that the state would move so decisively just to reestablish the equilibrium between capital and labor. But the Mexican state resolved that it was in the interests of the nation's social welfare to operate this basic industry directly rather than to allow the resistance of the oil proletariat from threatening the economic health of a nation that since 1880 had grown to depend on petroleum energy. In a manner of speaking, the expropriation culminated a long process by which Mexico absorbed this modern economic function, the production of petroleum products, while at the same time preserving the fragile domestic social and political peace.

The process continues today. Notwithstanding the fact that the state in Mexico and throughout much of Latin America now seeks to solve the problems of economic stagnation and social unrest by inviting in the private interests (as did the Porfirians in the 1880s), this economic restructuring neither reverses nor invalidates the lessons learned in Mexico's historical experiences with the foreign oil companies. Significantly, the politicos have for now ruled out the return of Pemex to private capital. Labor apparently will support — or at least not oppose — the selling of other parastate industries to private foreign and domestic interests as long as it does not injure their interests in worker security. Mexican workers will also welcome new private industries. But a faltering of the process might once again bring forth the economic nationalists and union militants. As in everything, time will tell.