The first quarter of 2014 has witnessed battles between “autodefensas,” or self-defense vigilante groups, and the Knights Templar drug cartel in the central western Mexican state of Michoacán, destabilizing the region.

The Knights Templar cartel is the successor to La Familia Michoacana. Like the current self-defense groups, La Familia began in the 1980’s as a vigilante group, with the stated purpose of bringing order to Michoacán, countering kidnappers and drug dealers. It emphasized help and protection for the poor.

However, in the late 1990’s La Familia morphed into a paramilitary group which the Gulf (of Mexico) Cartel employed to seize control of the illegal drug trade in Michoacán from rival drug cartels. In 2006, the group splintered off into an independent drug trafficking operation, specializing in methamphetamine manufacturing and exportation.

La Familia adhered to a bizarre quasi-religious ideology. Its leaders referred to their assassinations and beheadings as “divine justice.” Its original boss, Nazario Moreno González, published his own “bible,” a brew of evangelical-style self-help mixed with insurgent peasant slogans. La Familia emphasized religion and family values during recruitment, claiming it did not tolerate substance abuse or exploitation of women and children.

The cartel even loaned money to farmers, businesses, schools and churches in an attempt to build a popular base, and undertook public works projects. But like the notoriously brutal Zetas Cartel, La Familia employed extreme violence, resorting to widespread murder and torture. Small businessmen down to street level vendors were “taxed.” Those who resisted were shut down, kidnapped or subjected to threats of or actual violence.

La Familia murdered many local politicians and bought off others. It moved from smuggling and selling drugs into a much more ambitious criminal organization, which ultimately acted as a parallel state in the western half of Michoacán, centered in a valley known as the Tierra Caliente or hot lands, where limes, avocados, mangos—and marijuana—are grown.

As in other states like Sinaloa, the portion of Chihuahua near the US border, and the northeast state of Tamaulipas, the Mexican government lost its monopoly on violence.

In July 2009, La Familia attacked federal police installations throughout Michoacán, and notoriously, tortured and murdered 12 federal police agents, dumping their bodies along the side of a mountain highway.

Ex-President Felipe Calderón, who had already unleashed a war against the cartels by the military that led to 80,000 deaths and widespread human rights abuses, responded by dispatching an additional 1,000 federal police officers to the area.

This angered Michoacán Governor Leonel Godoy Rangel, who called it “an occupation.” The governor’s half-brother was soon thereafter accused of being a top-ranking La Familia member. The latter was impeached in December 2010 from his seat in the lower house of Congress.

In December 2010, the government claimed to have killed La Familia’s founder Moreno González in a shootout, but his body was not recovered. At that time, a large part of La Familia’s original leadership left and formed the Knights Templar.

The head of the remnants of La Familia was captured in June 2011 by Mexican police; the federal government declared the cartel disbanded. In the US. multi-state federal operations in 2009 and 2011 shut down the cartel’s distribution channels, resulting in more than 1,500 arrests.

The Knights Templar took over La Familia’s criminal operations in Michoacán and Guerrero, the neighboring state to the south. While urging its ranks to “fight and die” for “social justice,” the Knights Templar continued its predecessor’s extortion and violence.

The current Mexican president, Enrique Peña Nieto of the Institutional Revolutionary Party (PRI), came into office in December 2012, saying he would downsize the role of the military in the drug war. However, that pledge was tested in 2013 by the activities of the Knights Templar in the Tierra Caliente. In May and July of last year, Templar forces mounted violent attacks on federal authorities, so Pena Nieto sent in some federal troops.

In October, the Templars attacked electrical plants. In November, they assassinated a naval vice admiral traveling in the state. In response, Peña Nieto sent the military to clear the Templars out of the port of Lázaro Cárdenas, the largest on Mexico’s Pacific Coast, which the Templars had controlled and exploited.

It was through Lázaro Cárdenas that La Familia and the Templars imported from China the chemical precursors for the manufacture of methamphetamine. Over the last three years, the Templars have sold to Chinese exporters hundreds of thousands of tons of iron ore, with an estimated value in excess of $1 billion.

In the last five years the port has also become vital for imports to Mexico’s main manufacturing belt to the north of Michoacán, the Bajio, an area which includes the central states of Jalisco, Aguascalientes, Guanajuato and Querétero. It is also increasingly seen as a critical transportation hub for shipments to American markets in Houston, Kansas City and Chicago. So the federal government had substantial interests in securing the port.

Last year saw the rise of the armed autodefensas, or “community police,” in the Tierra Caliente. By January of this year, these forces numbered 20,000. They rapidly took over smaller towns and by late January, they drove the Templars out of the city of Nueva Italia.

In February, the vigilantes set their sights on the Templar stronghold in Apatzingán, a city of 115,000. At that point, Peña Nieto sent in thousands of military personnel.

At first, federal officials called on the autodefensa groups to disarm, saying that armed vigilantes without law enforcement training or accountability would inflame the already volatile situation in Michoacán. Rumors were also floated that the groups’ arms were in part financed by Guadalajara’s Nueva Generación drug cartel, a rival of the Templars.

When the vigilantes refused to disarm, federal troops moved to disarm them. This initially led to blockades by protestors and armed clashes with the federal forces, with three local residents killed. The government was widely chastised for going after the very citizens it had failed to protect in the first place.

The military and the autodefensas then entered into a shaky alliance to drive the Templars out of Apatzingán. The government announced that the vigilantes were to be incorporated into so-called rural defense forces, which have a long history back to the 19th century of terrorizing peasants at the behest of large landowners.

Peña Nieto also appointed a special federal commissioner for Michoacán, Alfredo Castillo, with broader jurisdiction than that of the state’s governor, to oversee security affairs and a $3.4 billion development program for the state.

Soon, however, after Castillo was photographed at a meeting with vigilantes, the government identified a man in the photo as a major drug trafficker. Dissension then wracked the vigilantes after accusations against one of their leaders, Juan José Farías Álvarez, known as the Grandfather, for supposed connections to the Guadalajara drug cartel.

On March 9, state police arrested a top vigilante leader, Hipolito Mora Chávez, charging him with the murder of two members of a rival vigilante faction.

Peña Nieto’s decision not to disarm the vigilantes drew mounting criticism. Javier Lozano, a member of Mexico’s ultra-conservative National Action Party said “First we coddle the autodefensa groups. Then we put leader Hipolito Mora in jail. We’ll see how this schizophrenia ends.”

On March 15, the Associated Press quoted an unnamed federal official as saying that the government was “putting the ‘stop sign’ to the vigilantes” because of their fighting over the spoils of property abandoned by fleeing cartel members. According to AP the “turning point” was the arrest of Mora for murder.

The situation in Michoacán remains very uncertain. The Templars have vowed to retake the territory from which they have been ousted. Relations between the vigilantes and the government continue to deteriorate.

Meanwhile, in neighboring Guerrero the state to the south, the situation is moving toward an explosion. In late February the Los Angeles Times ran a front-page piece entitled “Guerrero state sliding into chaos.” According to the Times half of the 81 municipalities in Guerrero, a state of 3.5 million, have autodefensa groups.

In February these groups were poised on the outskirts of Chilpancingo, Guerrero’s capital city on the road from Mexico City to the Pacific resort of Acapulco, threatening to take it. Accusations were made that Chilpancingo’s PRI mayor was in league with a spinoff of the now defunct Beltrán-Leyva cartel called Los Rojos, which has engaged in extortions and kidnapping activity like the Templars.

After the state’s governor from the opposition center-“left” Party of the Democratic Revolution (PRD) promised to add 500 state police to patrol the area, Chilpancingo businessmen asked the autodefensas not to move in, fearing that the movement could get out of hand. A leading businessman and former PRD congressman said “If a social movement arms itself…we don’t know when they’ll put them down or at what cost.”

Since the 1960’s, Guerrero has seen a series of armed guerrilla groups in the countryside claiming to be revolutionary, including a new one that announced itself in December, the Revolutionary Armed Forces-Liberation of the People.

These clashes reveal much about the contradictions driving social and political developments in Mexico. The Mexican ruling class likes to think it has arrived on the world stage economically and politically. Peña Nieto and the Mexican bourgeoisie began to see Calderon’s violent war on the cartels as a diversion from their program to further enrich themselves by opening up the economy to global capital.

But the recent developments in Michoacán and Guerrero, and especially the popular and armed nature of the self-defense movements, represent the highest levels of instability in Mexico since the aftermath of the Mexican Revolution. This instability poses a real threat to the economic overhaul launched by the Mexican ruling class with the presidency of Pena Nieto.

Its concern is the effect this can have on foreign capital’s confidence in investing in Mexico, as well as its potential interference with projects critical to opening up Mexico to investment, such as improving railroad and highway links to the port at Lázaro Cárdenas. At this point, the Mexican state is forced to intervene.

Meanwhile the vast majority of Mexicans continue to face a daily struggle to survive and a chronic lack of meaningful employment opportunities. Their government is largely absent when it comes to provision of basic social services and remains hugely corrupt to boot.

Poverty in rural Mexican states like Guerrero and Michoacán has driven waves of young men to seek jobs in the US. These same conditions are breeding grounds for the drug gangs, as well as the self-defense groups, whose members are mostly agricultural laborers and small farmers.

Only an independent revolutionary socialist program can channel mass discontent in a manner that provides a way forward for the Mexican masses. Only in that way can an end be put to the depredations of both the Mexican bourgeoisie and the drug cartels.