On July 4, 1976, as norteamericanos were celebrating the two hundredth anniversary of the Declaration of Independence, Mexican voters went to the polls to elect a new President. The outcome was a foregone conclusion. Jose Lopez Portillo, hand picked candidate of outgoing President Echeverria, was elected by anoverwhelming margin, winning ninety four percent of votes cast.1 The new President's sexenio, running from 1976 till 1982, would bring the culmination of the crisis already developing in Mexico's oil industry.
To some degree, the crisis was inevitable. Throughout the world wide petroleum sector, the 1970s and 1980s were a period of boom followed by bust. This was due, most fundamentally, to market forces. The dramatic increase in oil prices in the 1970s produced at once new incentives for producers to produce more oil, and for consumers to consume less. Supply and demand thus fell out of balance, and the balance could be restored only by a dramatic increase in demand or by a dramatic decrease in price. There was little reason for oil demand to grow faster than the world economy, and much reason (the high price itself, and a "conservation ethic" promoted partly by the price and partly by environmental concerns) for demand to grow more slowly than the world economy. Thus, supply demand imbalance could in practice be corrected only by a drop in price. This was precisely what took place in the middle 1980s. But it was an outcome which as inevitable as it seems now, in retrospect very few anticipated in the late 1970s.
1Kenneth F. Johnson, Mexico's Democracy: A Critical View, 2nd ed. (New York: Praeger, 1984), 107. Thus, Mexico was likely even under the best of circumstances to have faced a difficult oil sector "crunch" in the 1980s. In the event, however, the situation was even worse. Pervasive corruption, extending to the highest levels of PEMEX, and from there to the immediate fami...