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Rational Nationalism. López Mateos' main problem in keeping the Mexican boom going is that of any nation with mixed-capital enterprise. Which comes first—enterprise or the welfare state? An example is Pemex, Mexico's government oil company. Subsidized Pemex proudly proclaims itself "in the service of the nation," fulfills the proclamation by keeping prices of its products artificially low and supporting a welter of government social services. As a result, it makes little profit to plow back into development and into the establishment of a much-needed petrochemical industry.
Lately, many Mexicans have been demanding that Pemex be run as a business, with normal profits for reinvestment in development. But López Mateos is almost forced by his natural nationalistic inclination to keep the state paramount and Pemex its old, slow-moving self. He might also be inclined to:
¶ Insist on strict adherence to the letter of the law, now largely ignored, that ownership of companies in many sectors of the economy be at least 51% Mexican.
¶ Overemphasize the role of Nacional Financiera to the point where it dominates rather than facilitates industry.
¶ Embark on a program of nationalization of such industries as sulphur, using the clause in the constitution giving the state control over subsoil resources.
A fortnight ago, relaxing in his book-lined library overlooking the swimming pool, López Mateos summed up the problem as he sees it: "Mexico must create national wealth from capital to make jobs for an additional 1,000,000 Mexicans a year. Mexican capital alone—private and government—has not been able to develop our potential. With the help of outside capital, perhaps this can be achieved.
"But," he added sharply, "Mexico must scrutinize any new private capital investment with care, supervising it closely. Foreign capital must be aware of and recognize its responsibilities and not merely provide a vehicle for the extraction of profits. The human factors involved—that is, whether the worker gets enough to eat and whether his malaria is cured—are the responsibilities of modern capitalism."
To give López Mateos' 1,000,000 new Mexicans houses and food, to raise the nation's standards of living, to lift members of the lower class into a better life at the same rate as recent years, Mexico must create 1,650 new jobs every day. In this task Adolfo López Mateos will probably cut close to the pattern of welfare-state capitalism that has given his country its great splurge of growth.