Article | Journal of Economic History | September 2011

The Empire Struck Back: Sanctions and Compensation in the Mexican Oil Expropriation of 1938

by Noel Maurer

Abstract

The Mexican expropriation of 1938 was the first large-scale non-Communist expropriation of foreign-owned natural resource assets. The literature makes three assertions: the U.S. did not fully back the companies, Mexico did not fully compensate them for the value of their assets, and the oil workers benefited from the expropriation. This paper finds that none of those assertions hold. The companies devised political strategies that maneuvered a reluctant President Roosevelt into supporting their interests, and the Mexican government more than fully compensated them as a result. Neither wages for oil workers nor Mexican government oil revenue rose after the expropriation.

Keywords: Natural Environment; Assets; Value; Motivation and Incentives; Government and Politics; Strategy; Interests; Revenue; Non-Renewable Energy; Energy Industry; Mexico; United States;

Citation:

Maurer, Noel. "The Empire Struck Back: Sanctions and Compensation in the Mexican Oil Expropriation of 1938." Journal of Economic History 71, no. 3 (September 2011): 590 – 615.