The Mexican Economy

Figure 1.--Millions of Mexicans have crossed the American border illegally. The reason is not complicated, it is jobs. Mexican workers can earn ten times in America what they can in Mexico. This raises the question as to why the Mexican economy can not create decent playing jobs. Large numbers of Mexican subsist in the grey economy such as hawking goods on the street like this teenager in 1970. What is discouraging is that there seems to be little discussion as to why jobs can not be created in Mexico beyond steril socialist political polemic.

Mexico is one of the three principal countries of North America. It has developed a sustantial economy. The ramking varies froim year to year, but is usually ranked about the 20th largest world economy. Even so, it is by par the poorest of the three North ASnerican countries. And while percapita income is substantially below that of America and Canada, it has the highest per capita income in Latin Anerica. This raises a variety of historical and economic questions. Left wing popularism has a considerable following in Latin America, including Mexico. Yet left-wing rulers like Castro in Cuba and Chavez in Venezuela have trouble explaining why, Mecico which is the Latin Ameican country most integrated with the United States, is the most prosperous. Still the question of desparity between America/Canda and Mexico remains. And here the siffering historical/ecomomic experience surely is the principal reason. Nexico was the heart of the Spanish Empire until independence in the 1880s. Unlike America which had aong historical experience with both democracy and capitalism, Mexico became independent with an almpst feudal economy. America art the time began to enter the modern economy with capitalist inctitutions and individuals who began important industrial innovations. Even in the 18th century, people like Benjamin Franlkin (lighting rods and stoves) and Ely Witney (cotton gin) patentened important devices. And this only increased in the 19th century. Nothing like this occurred in Mexico. This is not only the result of the feudal ecomomy, but also the Inquisiton which deterred free thought in southern Europe and Latin America. After the French were expelled (1860s), Porfirio Díaz and the Cientificos furing the Porfiriato sought to modernize Mexico. Here they accomplished a great deal in terns of industry and infrastructure, but failed to address the summering social inequities. This led to the Mexican Recolution. Unfortunately for Mexico, the Revolution occurred a a time with Socialist thought was gaining currency and the Mexican leasers following the Revolution adopted many statist socialist policies which proved to be a huge drag on the Mexican economy. One reform was to create ejidos to protect the land holdings of Native Americans. But the ejido sydtem resulted in the Native Americans be denied access to capital and thus their agricultural operations continued to be highly inefficent resulting in very low incomes. What is discouraging is that there seems to be little discussion as to why jobs can not be created in Mexico beyond steril socialist political polemic.


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Created: 10:48 PM 12/25/2009
Last updated: 10:48 PM 12/25/2009