Slash-and-Burn Capitalism

In Combating Globalization we define slash-and-burn capitalism as the practice of transnational corporations whereby they set up a factory in a cheap labor market, extract as much surplus value as possible from that operation, and then abandon the plant when it is no longer profitable.

We also point out that slash-and-burn capitalism leaves disrupted communities and environmental ruin in its wake.

This is happening all over Mexico today as a result of the global meltdown of transnational capitalism

The small town of Los Rodriguez in central Mexico offers a prime example of slash-and-burn. 

After the adoption of NAFTA, GM built a plant in Los Rodriguez to produce Chevy Suburbans, GMC Yukons, and Cadillac Escalades primarily for the US market.  More than 15,000 workers Mexican workers found employment in the assembly plant and the 70 satellite plants that supplied it.  

Now the jobs are gone and the workers are out on the dusty streets of Los Rodriquez with no prospects of local employment and opportunities for jobs in other parts of Mexico or across the international border in the US rapidly fading. 

This small Mexican town is actually in a worse situation that it was before  it became a boom town–the idle GM complex occupies the fields where Los Rodriguez’s farmers had traditionally grazed their livestock and planted their corn and bean crops.  Not even subsistence agriculture is possible now.

While GM might reopen the Los Rodriguez plant, there are indications that it is planning to invest the bail-out money that it hopes to receive in its Eastern European and Far East Asian operations where labor is even cheaper than it is in Mexico.

NAFTA was a classic neoliberal free trade policy that promised prosperity for workers on both side on the international border. 

As the full impact of NAFTA becomes clear so does the imperative to renegotiate the treaty with labor rights and environmental protection as central concerns.

The fight over NAFTA is a major skirmish in the battle against transnational capitalism that pits the workers of  different countries against each other.

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