PETER: In the spirit of NAFTA, we begin the show today with a trade story. It ends with a major shift in Mexican economic policy, but it starts with an American scientist on a quest.
ED: Here’s to setup. In the early 20th century, hormone therapy was the next big thing in US medical research. Hormones were marketed as cure-alls for everything from diabetes to eczema to psychosis.
BRIAN: But hormones were hard to come by. So scientists who wanted to do research had to get creative.
GABRIELA SOTO LAVEAGA: They knew that in male urine you could find minute quantities of testosterone. So they said, where can we find a lot of male urine?
PETER: That’s Gabriela Soto Laveaga, historian at UC Santa Barbara.
GABRIELA SOTO LAVEAGA: They set up these huge vats outside of bars, where men would urinate. And then they would take these vats to pharmaceutical companies, where they extract these very small amounts of hormones.
ED: An American chemist named Russell Marker wanted to find a better way. He knew that plants like yams and yucas naturally created a molecule similar to another key hormone, progesterone. He figured that if he could find a plant with just the right chemical qualities, he could guarantee a supply progesterone.
BRIAN: So in the 1930s, Marker set out on a quest to find that perfect plant. He traveled across the US, visiting state after state after state. But nothing quite worked. Laveaga says that, eventually, Marker just lost hope.
GABRIELA SOTO LAVEAGA: And he gives up in Texas. And he’s staying at the home of a botanist. And he picks up this random book, and in it is a picture of a giant Mexican yam. So he continues this rather wild goose chase– this is 1941, in the midst of the war– and takes a train down to Mexico City– not speaking Spanish, not knowing where we Vera Cruz, the Southeastern Mexican state where this root was found, where that was located– and somehow, makes it to the state of Vera Cruz.
BRIAN: Doesn’t sound promising. What happens?
GABRIELA SOTO LAVEAGA: He manages to very astutely– he goes to the local little Five & Dime shop owner. And he says that he’s looking for these gigantic yams that are grown somewhere around there. The shop owner, not speaking English, but tells him that he understands, and for him to come back the next day.
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GABRIELA SOTO LAVEAGA: And Russell Marker goes back the next day, and sure enough, this shop owner has two samples of these giant yams waiting for him.
BRIAN: Just, by the way, how big are these yams?
GABRIELA SOTO LAVEAGA: About 125 pounds.
BRIAN: Oh, my goodness!
GABRIELA SOTO LAVEAGA: Yeah, so he takes them back to a makeshift laboratory, and he manages to synthesize more progesterone than had ever been discovered up until that point in humankind’s history.
BRIAN: Wow!
GABRIELA SOTO LAVEAGA: So he’s in Mexico City and he flips open the phone book and he says– I didn’t know Spanish, but I knew the word laboratory and I knew the word hormone. So I was looking for both of those words. And he finds a laboratory called Laboratorios Hormona, which fortunately for Marker was hormone laboratory. And he takes his discovery there. And they are astounded.
BRIAN: So what kind of deal did he cut with this laboratory?
GABRIELA SOTO LAVEAGA: The business end of the laboratory, a man named Emerico Somlo, and the chemist, whose name was Dr. Lehmann, they immediately recognized that there’s a lot of profit to be made. And just in terms, not only profit, but just the scientific advancement that can happen with Russell Markers discovery is immense.
So they say, why don’t you three of us, Somlo, Lehmann, and Marker, begin a company? And we’ll call it Syntex. And Syntex is emerging a synthesis in Mexico. And Syntex would eventually become one of the most profitable, if not the most profitable, transnational pharmaceutical company of the Western hemisphere.
BRIAN: OK. Let’s pause here and recap what happens over the next 20 years. In 1951, scientists working for Syntex, in Mexico City, made an amazing discovery. They created the very first oral contraceptive, the birth control pill. After that, hormones became an even bigger business. All fueled by those amazing Mexican yams.
PETER: Over the next few decades, lots of other companies got into the game. Many were based in the US. They would buy barbasco from Mexican peasants, export it, and synthesize their drugs in American labs. It seemed like a stable set up.
BRIAN: Until, in 1970, a populist named Luis Echeverria was elected President of Mexico. Echeverria had big plans to improve the country’s health and education systems. But to put those plans into action, his government needed money. And that took the form of foreign aid. And that’s where Laveaga picks up the story.
GABRIELA SOTO LAVEAGA: And Mexico, at the time, turns to the World Bank. And the World Bank says, well one of the problems that you have in your country is over population. And this is where the Mexican government steps in. And one of the adviser said, well, you know, we should, as a nation, look into developing a Mexican oral contraceptive pill. So the Presidential advising team goes and they start to do research. And lo and behold, not only do they have it, but Mexico was the first one to bring it to market.
BRIAN: So let me just try to keep track, here.
GABRIELA SOTO LAVEAGA: Sure.
BRIAN: Mexico is being pressured to reduce its population. It says, all right, we’ll do a study on population control. And as a result of that, discovers that birth control pills really originate in Mexico from the barbasco yam?
GABRIELA SOTO LAVEAGA: Yes.
BRIAN: So what does Echeverria do about this?
GABRIELA SOTO LAVEAGA: So he realizes that those who are picking the yams are hundreds of thousands of Mexican peasants. So he realizes the voting potential. And he also realizes the amount of money that could come into the Mexican state’s coffers if they could control the steroid/hormone industry trade. And he decides to create a company called Proquivemex.
And basically, it will be the negotiator between transnational pharmaceutical companies and peasants, in order to increase what is being paid to peasants. And at the same time, be producing patent medications. The problem is that transnational pharmaceutical companies were quite savvy when they established themselves in Mexico. And Echevarria falsely calculated that their hands were tied. And I say falsely calculated, because had this happened in the 1950s, when by barbasco was the only known source of steroid hormones, then maybe transnational pharmaceutical companies would have yielded.
But by the 1970s, transnational pharmaceutical companies have started to look to other natural raw material, such as soy and heniken, because they know that the political winds are changing in Mexico. And as any savvy business person will do, you don’t put all your eggs in one basket. And Echeverria doesn’t understand this. He’s come late to the barbasco game.
BRIAN: So explain to me how the Proquivemex story fit into the larger context of Mexico’s economy in the 1970s.
GABRIELA SOTO LAVEAGA: So in the 1970s, Echeverria’s policies were really devoted for redistributing Mexico’s wealth. And to do that the government thought that it needed to create a series of Mexican companies that covered everything from bicycle production, rubber production, and, of course, Proquivemex. There were over 1,000 of these companies.
And the idea was that this was a solution. This was the way that the Mexican government would become independent, would industrialized in a Mexican way. But as you consume, when you’re investing a lot of money but many of these companies are like Proquivemex facing, really, insurmountable obstacles, when it comes to business, they’re floundering. And the government is spending more and more money on them.
So in 1982, Mexico will have an economic crisis. And in part, it is because of this overspending. But also this borrowing to cover all this spending. And this forces the administration to really rethink their economic outlook. And a lot of this is to begin to privatize many of these government owned companies. It sells off petrochemicals and other raw materials, some basic goods, into private sector companies. Whereas, before they were part of the public sector.
BRIAN: So that the Proquivemex story was really symbolic of a much larger trend, in Mexico?
GABRIELA SOTO LAVEAGA: Absolutely. Absolutely.
BRIAN: Do you see this period in the 1980s as a prelude to what eventually will become NAFTA?
GABRIELA SOTO LAVEAGA: Yeah. I think that Mexico’s protectionist strategies, up until that point, had been about protecting raw material, had been about protecting Mexican industry. And there’s a real shift that we see in the 1980s. And we really see that with Proquivemex, an industry that just a mere decade earlier had been touted as this really important industry that was going to develop Mexico and move it into the modern economic world. And 10 years later, it’s being dismantled, because those economic practices did not work. And something new has to be tried.
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BRIAN: Gabriela Soto Laveaga is a historian at the University of California, Santa Barbara. She’s the author of Jungle Laboratories: Mexican Peasants, National Projects, and the Making of the Pill.