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RESIDENTS in Mexico City tumbled from their beds early one morning just before last Christmas to find windows rattling, candelabra swaying and curtains streaming before an imperceptible wind. It was the beginning of a series of grave earthquakes. An American friend, long resident in Mexico, said to me at the time: "This is nothing to the other earthquake which is coming. You outsiders can't be expected to perceive the premonitory tremors under the political and economic crust. But we older residents do. We know that we are sitting on a perch far more dangerous than Popocatepetl; for Popo's extinct, whereas Mexican polity and economy are very shortly going through the roof."
Since then, something very like a major political and economic earthquake has indeed rocked Mexico, and brought that country into the forefront of world affairs. It is not simply that sixteen foreign-owned Mexican oil corporations have suddenly been expropriated and taken over by the Mexican Government; nor that Mexico's second largest industry -- the production of oil -- stands paralyzed before a grim future; nor that in consequence her largest industry -- the mining of precious and non-ferrous metals -- faces serious losses; nor that the United States Treasury has countered the abrupt collapse in the Mexican peso by discontinuing its agreement of last December to buy newly-mined Mexican silver; nor, finally, that the Mexican Government has broken diplomatic relations with Great Britain. It is rather that during the last four or five years Mexican politics and economics have been steadily approaching one of those periodic crises which, at periods roughly a generation apart ever since the secession from Spain nearly 120 years ago, have regularly racked the country. The texture of the Republic's history is shot through with the violent hues of revolution, civil war, military dictatorship, xenophobic explosions (generally ending in military defeat and loss of Mexican territory), internecine party feuds, domestic corruption in the grand manner, and the perversion of administration and law by men with overweening personal ambitions. Maybe it is not for nothing that the best and most highly colored sarapes in Mexico are woven at Santa Anna, a village which bears the name of the most colorful personality in the history of the Mexican Republic -- president, dictator, general in the field, rebel, exile, and all of them twice and thrice over.
In my opinion, therefore, it is erroneous to consider current events in Mexico as manifestations merely of xenophobia, or of party politics or of conflicting personal ambitions. In fact, an epoch is coming to an end in Mexico, and another beginning -- as, indeed, seems to be the case elsewhere. It is now a generation since Porfírio Diaz, the dictator who ruled longest over the Republic (from 1884 to 1910), was unseated by Anno Domini and the new, younger national revolutionary group.
The Diaz régime developed Mexico. Of this there is no doubt; though in the process both Diaz and his creatures waxed fat at the country's expense, and foreign concerns profited handsomely from the exploitation of Mexican resources, both mineral and human. Undoubtedly also, it was an unhealthy political development that the profitability of these foreign concerns necessarily came to be identified with the continuance of the Diaz régime. For this meant that when the dictator was thrown out by Anno Domini or revolution, the exploiting foreigner would have to go too -- which, in view of the great economic benefits conferred on Mexico by foreign capital and skill, was equivalent to throwing the baby out with the bath water.
The National Revolutionary Party, whose founders overthrew Diaz in 1910, looked not to the past but to the future. To them, Diaz's long and corrupt rule was a black page in Mexico's annals. On the new page which they had just turned over were inscribed: national regeneration, ejection of foreign influence and interests, expropriation of the big estates and their redistribution to small village commonwealths (ejidos), an end to corruption in politics and civil administration, real electoral suffrage, no reëlections of presidents, a curb on the social and political activity of the Catholic Church, free public education, and -- significant in that it was probably the first foreshadowing of National Socialism in the world -- a nationalistic left-wing Socialism.
But this leftward program was never more than fractionally executed; for internal warfare lasted from 1910 to 1919. Victoriano Huerta supplanted Madero; Carranza supplanted Huerta; and in 1920 Obregón supplanted Carranza. Between then and the end of 1923, when manœuvres began for the presidential election of 1924, no real progress with reforms had been made. The nominee of Obregón was Calles; but in December 1923, a military revolt lead by Adolfo de la Huerta broke out in eleven states. It was then that President Coolidge prohibited the export of arms to the rebels, and actively assisted Obregón. Calles was duly elected in 1924; but again the reforms made no headway despite more settled conditions, since the Government and its adherents virtually abandoned the partition of large estates and began a new program of collaboration with foreign capital, especially with American concerns after the appointment of Dwight Morrow as United States Ambassador to Mexico. Calles became in due course a president-maker and so retained his rule until November 1934, when his erstwhile adjutant, General Lázaro Cárdenas, after securing the support of the workers' trade unions (sindicatos) and after stumping the country in order to come in direct contact with the peasant and industrial population, was elected President by the unfailing efficiency of the Calles-controlled National Revolutionary Party machine.
The old struggle between the Diaz-Calles mentality and the revolutionary Cárdenas outlook flared up in June 1935. President Cárdenas had the support of youth, of all the chief sindicatos and of the Confederation of Workers and Peasants; whereas Calles was favored by the big industrialists and traders, as well as by foreign concerns. A general strike against the "possible inauguration of Fascism" was threatened; and President Cárdenas dismissed the Cabinet, which had pledged its allegiance to the president-maker. He then promulgated his own program in opposition to that of Calles. The latter, seeing the big guns and big battalions on the side of his own protégee, gracefully retired from public life and shortly after from Mexico. President Cárdenas was supreme.
But before we proceed to discuss the Cárdenas administration we must first trace the development of two important factors in Mexican politics: first, the movement against the exploitation of Mexican economic resources by foreign concerns; and second, the political organization of Mexican labor.
Article 27 of Carranza's 1917 constitution proclaimed the principle that both the land and the economic resources beneath it could be nationalized, leaving the question of current leases to be settled by negotiation. In 1917 and 1918 protests were lodged by several foreign Powers on behalf of oil companies in which their nationals were interested; and in January 1920, the companies' threats to suspend production constrained Carranza to reserve his government's rights, though he allowed the companies to go on producing as if the confiscatory decrees did not exist. The United States had not formally recognized any Mexican Government since Huerta himself had severed diplomatic relations with Washington on April 22, 1914.
However, on August 31, 1923, formal recognition was accorded to President Obregón as the outcome of extremely important agreements concluded early in 1923 by an informal Mexican-American Commission. As an earnest of goodwill, Obregón had in April 1923 decreed that all oil concessions made prior to May 1, 1917, were to be valid, if within the following three years the concessionaires revalidated their titles by proving that they were either working or intending to work them. A harder nut to crack was the question of compensation for big landed estates formerly belonging to Americans. (Obregón had agreed to raise the minimum size of estate subject to exemption, so that only the biggest were to be expropriated.) Before the revolution, the position had been that compensation should be paid before expropriation; whereas Obregón could only give bonds dating from expropriation. On August 15, 1923, the Commission agreed that subsoil mineral concessions granted before May 1, 1917, should be recognized. In addition, a Special Claims Commission (to handle American claims created after 1910) and a General Claims Commission (to handle both Mexican and American claims created after 1868) were set up.
But the value of this settlement, which received the approval of Presidents Coolidge and Obregón, was greatly reduced by the refusal of Obregón's successor, Calles, to consider it as more than "an exchange of views." Accordingly, neither Calles, nor his successors Obregón and Rodríguez and Cárdenas, lived up to the letter or spirit of the Commission's agreement. For some time bonds were issued in compensation, and claims were heard before the two Claims Commissions. But after August 30, 1927, no agrarian claims could be filed with the General Commission; in 1934 a Protocol was signed by which agrarian claims were to be handled only by informal discussion between the two Governments. Since 1928 Mexico's foreign debt has been in complete default, and since 1933 she has not paid the service on the few bonds issued, nor has she issued new bonds. In January 1937, a kind of unilateral composition of the agrarian compensation debt was decreed, whereby 40-year internal bonds were to be given in exchange for old agrarian bonds; but the service of the internal bonds fell immediately into arrears, and, despite promises of new budget allocations for the compensation bonds and their service, no payments have been made. In short, since 1917 all kinds of agrarian expropriation have occurred in Mexico without any effective compensation; and for expropriations since 1927 there is no machinery to secure compensation, even on paper.
The organization of Mexican labor has been a rapid process. From 1920 to 1925 the workers were mainly organized under the Confederación Regional Obrera Mexicana (CROM) led by Luis Morones. But several big strikes, especially on the railroads, had been undertaken without authority. In the early part of 1925 Calles began to intervene. He federalized the railroad service, declared illegal a strike by the Tampico Federation of Labor Unions (because it arose out of differences between the unions themselves), and firmly prevented a general strike. In a dispute between the banks and the Bank Servants' Union in May 1925 over some extravagant demands by the workers, Morones and the CROM refused to back the workers. In the same month, Morones and his Labor Party still further showed their moderation by breaking with the Agrarian Party on the ground that the latter's program was too extreme, uneconomic, and detrimental to both industry and the industrial workers. By 1928, when Calles retired in favor of Obregón, the CROM under Morones was in a very strong position. But Obregón tilted the balance once again towards the Agrarians, and the CROM began to lose ground. In 1934 and 1935 there were sporadic strikes, which led up to the glassworks lockout at Monterey in February 1936, during which President Cárdenas enunciated his famous Labor Charter, or Fourteen Points. This reasonable pronouncement -- in which occurred the assurance that workers' demands would always be considered "within the margin offered by the economic possibilities of the companies" was immediately followed by a labor conference at which the Confederación de Trabajadores de Méjico was organized, embracing railroad workers, miners, electrical workers, and some former CROM unions. It is this new CTM which is at once the strength and the weakness of President Cárdenas: the strength, because it supports him with its 750,000 members (out of a total industrial proletariat of only 2,000,000); the weakness, because its Marxist leader, Vicente Lombardo Toledano, can at any time crack a nasty whip over the President's head. It is a movement pledged to Socialism and gives only conditional support to the President.
On the other hand, the old and moderate CROM was strengthened in April 1937 by the return of Morones from the exile into which he and Calles had been sent a year earlier. There were voices in Mexico which hinted that Cárdenas had allowed Morones to return in order to provide a counterweight to the growth of Lombardo Toledano's power with the workers. The CROM still holds the finer craft unions, the élite of the laboring class; while beyond the purview of either CTM or CROM lie the agrarians and the unorganized trades. The sindicato of the petroleum workers, however, is affiliated to the CTM; and Lombardo Toledano is generally credited with having both inspired its extreme demands -- which precipitated the present discontents in Mexico -- and conducted its campaign against and its negotiations with the foreign-owned oil companies. To these events we can now turn.
In November 1936 a law was promulgated which empowered the Mexican state to expropriate private property on compensation, in order to secure "a more suitable distribution of wealth." At about the same time a strike in the oilfields was called by the Petroleum Workers' Syndicate, some 20,000 strong, because the foreign-owned companies rejected its demands. President Cárdenas secured postponement of the strike pending negotiations with the companies. The President's intervention was really unfavorable to the workers, since it led to the very delay which the companies wanted in order to examine the workers' extensive demands for improved wages and conditions. These demands may be gauged from the following: if any man were discharged he was to be given 90 days' wages, plus pay for a further 25 days for each year of service; free medical services for workers, pension-naires, and their dependents, irrespective of the cause of their ailments; compensation for death was to be equivalent to wages for 1460 days as opposed to the law's requirements of 612 days and the companies' practice of 730 to 1095 days; pensions for workers incapacitated after ten years of service to be figured at 60 percent of their wage, rising by 2 percent per annum for each year of service thereafter: 18 obligatory days holiday every year on full pay; and a complicated system of bonuses, payable at the termination of the worker's service, on his death, or on his voluntary resignation after ten years of work. These demands could not be met in full by the companies, who submitted counter-proposals. These in turn were rejected by the syndicate. Accordingly, the scheduled strike broke out on May 27, 1937.
Once again the President intervened, and on June 9 the strike was called off on his promise that a special commission, nominated by the Federal Board of Conciliation and Arbitration, would inquire into the companies' capacity to pay increased benefits. On August 4 the commission reported that the companies could pay an extra 26,000,000 pesos per annum, plus a sum sufficient to make the new wages retroactive to May 1937. On December 18 the decision of the Federal Board of Conciliation and Arbitration itself was published. It went even farther in favor of the workers than did the commission, for it said that the companies should pay in annual benefits an extra 26,000,000 pesos, which the companies declared would in fact amount to 40,000,000 pesos, plus an additional sum in the first year to carry the extra wages back to the time of the strike in May. Under the terms of this judgment (laudo), the sixteen companies involved would have had forthwith to pay out 20,000,000 pesos for back wages during and after the strike.
The dispute over the method of calculating the increased costs which this judgment imposed upon the companies is important, for it decided their attitude from December 18, 1937, onwards. The companies, their auditors and their actuarial advisers adopted the comprehensible attitude that, if schedules were now to be granted to workers whose claims would only fall due at some future date (e.g. pensions, retirement and discharge compensation, bonuses for length of service, etc.), the companies' balance-sheets should forthwith (i.e. in the current year) be debited with such actuarially-calculated sums as, year by year, would be available to defray the increased and vesting benefits. This point, one of sound accountancy, the Federal Board completely ignored. Accordingly, its decision that the companies would only have to defray an additional 26,332,756 pesos per annum was countered by the companies' contention that, to save them from gradually eating up their capital, this sum should read 39,698,320 pesos. (Both calculations exclude the extra sum necessary for carrying the back-wage payments.) On December 29, therefore, the sixteen companies presented to the Mexican Supreme Court their demand for a stay of execution (amparo) against the Board's judgment, and accordingly paid into the court a large sum as bond money. In the first week of March 1938, the Supreme Court rejected the companies' appeal, after the latter, during February and March, had further raised their own offers to the workers from 22,500,000 to 26,000,000 pesos. In theory, the Supreme Court could take no account of these offers; but it is significant that the companies, in seeking to secure agreement that 26,000,000 pesos per annum should be the upper limit of their concessions, were forced to demand fuller administrative control over their operations by their own technicians. If they had not done so, the replacement of the latter by Mexicans, as demanded by the workers, would have prevented the 26,000,000 pesos from being paid and still leave a margin for the shareholders. Even so, the offer was rejected. The Supreme Court consequently fixed a time limit of only a few days. The companies thereupon took a common stand and affirmed their inability to remain solvent under the Labor Board's award. On March 18, after the Court's days of grace had expired, Cárdenas decreed the expropriation of all the sixteen companies on the ground that they had refused to comply with the Board's requirements.
It only remains to be observed that President Cárdenas and the workers' sindicatos, led by Lombardo Toledano, never expected the four American and the twelve independent, mainly British and Dutch, companies to stand solidly together. Moreover, the following facts should be noted. The State Petroleum Commission found that the average wage of oilworkers was 7.66 pesos per day. The next best paid workers are those on the railroads and in the mines, whose wages average from 4.25 to 4.80 pesos a day. Moreover, since 1934 the oilworker's average wage has risen 62 percent. At the time of the May strike in 1937, Mexican oilworkers were receiving almost as high a real wage as those in the United States, with the peso at 3.60 to a dollar and with the great difference in living costs. Furthermore, the sickness, accident and holiday payments being made by the oil companies before the strike were higher than those laid down by Mexican law. It is, therefore, scarcely justifiable to state, as eminent Mexican governmental authorities have stated, that the foreign-owned oil companies pay "scanty wages," indulge in "anti-social tendencies," or that they maintain their workers in conditions of "squalor and lack of sanitation." Finally, from November 1936 onwards, it was continuously rumored in Mexico City that the Government intended to subordinate all oil concerns to a National Oil Corporation, to which all oil lands then leased to companies would revert on the expiration of the leases. Thus, it is hard to resist the conclusion that during the last year or more the Mexican Government and its administrative organs have combined with the forces of the CTM to manœuvre the foreign-owned oil companies into a dilemma wherein either alternative meant effective expropriation.
At the end of December 1937, the Mexican Treasury was strained to the utmost: the peso had been weakening, and the agreement with the United States Treasury, by which the latter bought Mexico's newly-mined silver, was terminating after two years' duration. During 1937 alone the National Bank of Mexico had lost 33⅓ percent of its metallic reserve and 25 percent of its silver held against the issue of silver certificates; and its published reserve ratio had fallen from 65.5 to 40.6 percent. The Mexican Finance Minister, Señor Eduardo Suárez, flew to Washington and New York on December 9 to arrange a renewal of the silver purchase agreement; and it was renewed on a monthly basis by the United States Treasury despite the current oil dispute.
The output of Mexican silver, more than half of which is from American-owned mines, was more than a third of world production in 1937. Under the silver purchase agreement, the United States Treasury had been taking the overwhelming bulk of Mexico's production at a rate of 5,000,000 ounces a month and at the favorable price of 45 cents per ounce. On March 27 it was announced that the monthly purchase agreement of last December would be discontinued by the United States Treasury on April 1. Immediately, the price of silver fell in London from 20½d. per fine ounce to 19½d.; and during the next few days to 18½d., at which it has since remained. In 1937, the United States exported $49,300,000 more merchandise to Mexico than it imported from that country; but it made a net import from Mexico of $38,500,000 of gold and $30,200,000 of silver. These enormous imports of precious metals from Mexico explain why the United States handles three-quarters of Mexico's entire foreign trade; for the large dollar proceeds of Mexico's total exports to the United States (i.e. including bullion and specie) are used by Mexico to defray the cost of her imports from almost all other countries.
Now consider the Mexican oil position in its relation to the world oil industry. In ten years, from 1927 to 1937, world production of crude petroleum rose from 174,746,000 to 278,700,000 metric tons. But Mexico's production in that period fell from 9,728,000 metric tons (5.1 percent of the total) to 6,827,000 (2.5 percent). About one-half of her production is exported, but that proportion has been falling in the last two years. Of the tankers transporting oil, over four-fifths are in the hands of oil companies; and the other fifth is owned by private shipping concerns in Norway, Japan, Italy, Germany, etc. In 1935, 1936 and 1937 the Mexican Government obtained a steady 14¾ percent of its total federal revenue from taxes on the oil industry, which amounted to 65,000,000 pesos last year. Mexican oil constitutes only 12.5 percent of the United States' very small imports, only 5 percent of the United Kingdom's large imports, only 8 percent of Germany's, and less than one percent of France's or Italy's. The element of transport cost is decisive, and if Mexico is to find markets for state-produced oil, she will have to compete with American, Venezuelan, Iranian, Russian, Rumanian and 'Iraqi oil; moreover, in the Far East she will have to compete with Dutch oil located almost on the spot. Thus, even if Mexico can obtain tankerage, her government, and the National Petroleum Board under which the expropriated fields are now trying to operate, must envisage reductions in the price of Mexican oil in order to sell it. In that case, the state will be competing with the world's oil industry at a time when stocks have mounted to such levels that reductions in costs and output are everywhere being arranged by the leading oil concerns of the world.
Finally, the collapse of the peso immediately after the expropriation decree on March 18, 1938 -- it fell from the ratio of 3.60 to the dollar, at which it had been stable since the latter was devalued in 1934, to as low as 5.50, a depreciation to about 22 percent of its 1929 value -- cannot alone maintain Mexico's foreign trade position; for Mexico's import bill has in the past been defrayed from the proceeds of silver exports to the United States, and already Mexico's tariffs have been raised in order to reduce the import bill. Moreover, even if Mexico could sell oil to the only countries which might gladly take it -- Japan, Italy and Germany -- their economic systems, especially their exchange controls, would require that Mexico completely reorganize her foreign trade in such a way as to equalize her imports from and her oil exports to each of those countries. As long as about three-quarters of her imports are paid for by the dollar proceeds of her precious and non-ferrous metal exports to the United States, this is an impossibility.
Finally, let us consider the possibility of compensation for the expropriated concerns. President Cárdenas has announced that the workers, whether in the oil industry or not, must be prepared to make sacrifices in order to enable the state to cut production costs and in order to raise the wherewithal for floating an internal loan to pay the compensation. But the state has to face a loss in tax revenue from the companies; the budget is already strained; the allocations to the Army, police, education and social welfare must be maintained to prevent social discontent. There is really only one way to maintain the oilworkers' promised benefits, viz., to proceed along the same path and expropriate all other foreign-owned enterprises in Mexico. Among these the mining companies are the outstanding. They have concluded an agreement with their workers which, since last August, has worked fairly well; but there is no ignoring the writing on the wall. As they produce all the silver and gold, and most of the cadmium, antimony, molybdenum, copper, lead, zinc, tungsten and mercury -- and the greater part of each of these minerals is exported -- the dilemma before President Cárdenas is acute. Even if he hopes, as he has announced, to pay compensation to the oil companies over ten years, it is hard to see how Mexico can be run as a going concern for even the first of the ten years.
It is possible, of course, that the United States Government may resume the purchase of Mexican silver. It resumed buying foreign silver at the end of April 1938, and this may be so worked as to allow the purchase of Mexican silver via London. But, though this might keep Mexico's foreign-owned silver mines barely in operation, it would not solve her complex economic problems. In fact, the continuance of the American silver-buying policy up to April 1938 was necessary to maintain the world silver price, which in turn was affected by the American Government's entire silver-valorization program adopted after the World Economic Conference of 1933. Now, it is not so certain that the American silver program requires the maintenance of any particular world price, especially since China has adopted the gold standard and since Far Eastern trade has become paralyzed.
Relations between Mexico and Great Britain have now been broken, while those with the United States are seriously threatened. The United States has demanded further and better particulars about the compensation offered the oil companies but only about $125,000,000 of the $350,000,000 of capital represented by the foreign-owned oil concerns in Mexico is American. The rest, mainly British and Dutch, is chiefly centered in the famous Mexican Eagle Company (Aguila). The British Government, presumably after consultation with the Dutch, presented two very strong notes to the Mexican Government, demanding outright reinstatement of the Eagle Company in its property. The Mexican Government rejected these demands, asserting that, despite the overwhelming majority of British shareholders in the Eagle Company, these British citizens had waived their right to protection by their government by virtue of the special waiver clause contained in the legal documents by which ownership of the shares in this Mexican company can alone be secured. It is a fine point; for, though the shareholders may under Mexican law have debarred themselves from asking protection, no such contract can debar another government, not a party to the contracts, from voluntarily giving it.
Thus, despite the solidarity among the sixteen companies, there is the possibility of a separate American settlement with Mexico, which would be true to American practice during the last two decades. On the other hand, Mexico would then need new capital badly; and it is hard to see how the interests of American investors elsewhere in Latin America would be helped by a settlement with Mexico which first expropriated American concerns on dubious compensatory promises, and then pumped fresh liquid capital into Mexico without any American control over its utilization. It is not too much to say that the attitude of Venezuela and Argentina in respect to foreign investments and foreign concerns in their territories will be dictated by the outcome of the current dispute with Mexico.
The rupture in Mexican-British relations over the payment of a mere $175,000 was viewed in London as regrettable, since by such action Washington became directly involved. Mexico had the best of the exchange of notes that immediately preceded the break, for as a result of them Britain was estopped from any act which might bring the Monroe Doctrine into operation. Britain, therefore, had no locus standi over the real dispute, which was oil. However, when Mexico tried to play off the United States against Britain by paying the American installment punctually, she may have been less wise than she thought; for, while it might be regretted that London did not at the outset wait for Washington's lead over the oil question, it is now clear that the United States has the invidious onus of deciding the future of both internal and external developments in Mexico -- which in reality it has always had. The United States will have to assume, willy-nilly, a direct interest in, and responsibility for, whatever political and economic events ensued inside Mexico. It is quite untrue that British and Dutch interests have fomented plots against Cárdenas; but it is true that there is German and Italian support for such movements. Henceforth, both Cárdenas and his opponents must therefore flirt with Japan, Germany and Italy -- and this is of very direct concern to Washington.
President Cárdenas has on his left to face Señor Lombardo Toledano and the CTM, and on his right Mexican industrialists and merchants, as well as at least two ambitious generals. Economic sacrifices during the next few months may swing the volatile Mexican laborers against the President, who after all may not always be able to control the National Revolutionary Party single-handed; and without the Party there is today no political apparatus of state in Mexico. Within six weeks of the expropriation decree, economic conditions in Mexico were approaching general paralysis: prices were soaring and the Treasury was empty. The state of world trade in primary products and metals, the level of world prices and its probable trend, are not such as to simplify President Cárdenas' self-imposed task. Quite the contrary!
In this whole situation, some foreign observers have talked airily of President Cárdenas' consistency to his "Latin American Communism." (Sometimes the words Socialism and Fascism are used.) But the true measure of Mexico's current problems is the legitimate aspiration of the Mexican -- whether he belong to the third of the population which is mestizo or to the two-thirds which are Indian -- for self-government, for a responsible share in a nationally organized polity and economy which shall have done with foreign exploitation and which shall actively shape a fuller and better life for its members. Unfortunately, the famous Plan Sexenal, the Six Year Plan of Calles for the fulfilment of all the unkept promises of the Glorious Revolution of 1910, cannot by its scope and nature be achieved at a pace as hot as that set during the last four years. Instead of attaining a fuller life, it looks as if the Mexican were going to suffer, proudly and perhaps with satisfaction, great economic sacrifices. Surveying his national economy and his standard of living, he may have to say: "A poore thing, but mine owne!" Others in Europe and the Far East have had to do that. But they have done it as Fascist states. Any tendency in that direction has been stoutly denied by Cárdenas. It remains to be seen whether the process he has set in motion will surprisingly fail to force him, or a successor, into a system of national economic control which, because it cannot admit of modification at the behest of the laboring masses, turns out to be a right-wing, instead of a left-wing, totalitarianism.
Today such a development is more than a mere possibility. A victory by Fascist-minded forces is, in my opinion, more probable -- whether Cárdenas retains power or not -- than the imposition of a Mexican Socialist or Communist régime founded upon the direct initiative of the laboring masses. If it should take place, the internal convulsions in Mexico and the reorientation of her foreign relations, would constitute the gravest of problems for her great "good neighbor" to the north.