Why Isn't the Whole World Developed?

The American Spectator ^ | 20 June 2006 | Tom Bethell

[wouldntbprudent]

What's especially perplexing is the fact that we were told that NAFTA was going to result in all the jobs going to Mexico. Whatever happened to that?

This seems to be the author's point. All the trade agreements, foreign aid, job programs, etc. won't mean squat if people don't have private property rights, because this is the only way to create, accumulate and transfer wealth.

[wouldntbprudent]

The ruling clique has title to most of the land in Mexico

Interesting fact in light of the author's observations.

I also have often thought the only answer to Mexico's problems is annexation or at least a new constitution---something to create private property rights. Not only is the lack of private property rights a barrier to a functioning economy, it's a barrier to foreign investment.

[wouldntbprudent]

Excellent post; thanks. I especially liked this: "protected by a red-blooded culture."

Kudos.

[wouldntbprudent]

I agree that the Protestant ethic is key to our historic success. But what are your thoughts on how that relates to the author's observations on the fundamental role of private property rights?

Can private property rights even be established in a culture that does not have the characteristics inherent in the whole Protestant view of government by men?

Stated another way, are Christian values a prerequisite to the successful implementation of a private property system?

[Toskrin]

An excellent book on this subject is The Birth of Plenty by William Bernstein. He states that four qualities are necessary and sufficient for economic prosperity:

1. Property Rights (included in this is the rule of law)

2. Scientific Rationalism

3. Capital Markets

4. Efficient Transportation and Communication

He then shows how the Western world developed all of these around 1820 or so. He also shows the failures in Latin America and due to a lack of 1 and 3, and the failures in the Arab world are due to a lack of 1 and 2. Most parts of Africa fail on all four counts. Of course, China is growing at a rapid pace mainly because they have nailed down property rights and capital markets as they swing from a Communist state to a Fascist state.

[wouldntbprudent]

But how can the rule of law take hold without the "social contract" of individuals committing to doing right because it's right?

[hinckley buzzard]

De Soto's book The Mystery of Capital comes as close as one person probably can get to the core of the problem. It is a powerful book based on the real world, and every freeper will be rewarded to read it.

He even goes back to ascertain how the US got to be the way it is, ie why capitalism works so well here but so poorly in so many other countries. No simple sound bite answers, but you can read this book and take a lesson in critical thinking about the real world.

[ckilmer]

The deep question is how do make Mexico a first class country. This is something that Vincente Fox has brought up frequently recently.

The trouble is that no one quite sees that the very best thing we could do for Mexico is to send their now well trained citizens home.

Suddenly Mexico would have a skilled workforce who knew something about how a world class country worked.

Think these folk would propel a great leap forward for Mexico?

I do.

Basically the ruling class in Mexico is preditory to its own detriment and will not change of its own volition--even if those changes were in its own interest. But it can be forced to change.

The Mexicans in the USA have had the picture of what a well run country looks like tatooed on the back of their eyeballs. And they'll have an idea of how to get there. Send them back to Mexico and they'll get a revolution in Mexico that'll do that country some good.

The shock troops for that would be the 12 million repatriated Mexican citizens. Having seen what a well run country looks like they would not want to be stuffed back in the old wineskin.

There's something more.

I follow water desalination research pretty closely. While water desalination costs have dropped to about a third of what they were 15 years ago--the rate at which prices will drop over the next seven years will accelerate considerably. imo in even the next five years we will see desalination costs drop to 1/10th of today's costs. Or even faster than the fall the 3/4 fall that the LLNL researchers suggest.
http://www.physorg.com/news67262683.html
Basically, the foundations are being laid today to make it economically feasable to to turn all the world's deserts green. (The proper way to look at this is to recall that cars, tv's and computers were at first rich men's toys but when prices came down they changed the world. Desalinised water is still relatively speaking -- a rich man's toy. But when the price drops sufficiently--desalinised water will change the world--because most deserts are right beside the ocean. Pumping the water 1000 miles inland will require that the scientists collapse the cost cracking out hydrogen from water. I think that this nut will be cracked sooner than desalination.)

imho cheap desalinised water will do for the republicans (if they can get this on their agenda or even the democrats if the pubbies drop the ball) what the great dam building projects & the tva of the 1930's & 40's did for democrats because 1/3 of the US is deserts. We would increase the habitable size of the USA by 1/3.

Dirt cheap desalinised water will also do things like make it possible to double the habitable size of Mexico. Cheap water is no magic bullet but it will give the Mexican Nationalists a way to dream while the Mexican people do the real work.

And desalinated water in tandem with repatriation of now skilled Mexican citizens would propel Mexico into being a world class country.

Oh and one last thing. Mexico will need a stronger dose of of the Peruvian Hernando Desoto ideas. Basically DeSoto asked the question why are some countries poor and some questions rich. His answers are being implimented successfully in countries around the world. http://www.ild.org.pe/home.htm

[ckilmer]

Hernando de Soto's organization was invited to Mexico and did some work on the question. He says that only 6 percent of Mexican enterprises are legal, the rest are informal. If you want yours legalized, it will take you four years with no certainty in the outcome.

[The_Reader_David]

Simple solution to the immigration problem: conqueror Mexico.

I'm almost serious, and if the Mexicans in the southwest, both legal and illegal pull any stuff about "Azatlan" comparable to what the Albanians, both legal and illegal pulled in Kosovo, I'll turn serious.

[dfwgator]

One word: Socialism!

[sageb1]

"So,to finish, I'm agreeing with what you said: If Mexico were to begin a path to formal, legal property rights, and then enforce it, Mexicans would be perfectly happy to stay in Mexico."

I'm glad you followed and stated my line of thinking. (It's a tough job, but somebody has to do it:)

[Amelia]

Remember the Bell curve in school? Somebody somewhere is at the wrong side of the bell. You can look it up. Those poor slobs anchor down the development dilemma.

You should also read "Guns, Germs, and Steel" by Jared Diamond. Really interesting.

[dennisw]

Best article I've read in awhile. Unique information and insights

[GeorgefromGeorgia]

The rule of law certainly has more credibility if the people support the government open to pluralistic liberties. Crucial to the rule of law having credibility is that "no one is above the law." The Ancient Athenian Republic and Roman Republic thrived on the rule of law. The Roman Republic eventually died when it could not control the vast empire that it had created. Even under the Empire, the rule of law prevailed, except of course when Emperors became the law. Countries like Mexico and other third world countries still thrive on corruption despite a structure based on an apparent rule of law.
The beauty of the English (and American system) is that the legal traditions of the common law evolved over the centuries, even during periods with strong monarchs, that the rule of law provided inherent rights of its citizens.

[dennisw]

..and Mexicans are in denial. Few will admit Mexico is a corrupt nightmare because of cultural "pride".

You couldn't be more right but what can you expect from these pea brains?

[BaBaStooey]

Finally, someone who attempts to understand the "demand" side of the immigration debate.

Too many people only want to address the "supply" side, trying to limit it by building a giant wall. Problem is, if the demand remains high, I feel that even a giant wall will not stop people from trying to get here.

You cannot solve this problem without helping to give Mexicans a good reason to stay in Mexico. People talk all the time about trying to break the communist grip on China by opening up trade and trying to turn the ChiComs capitalist. If we can have so much influence on an economy an entire ocean away, why can't we do what we can to pick up an economy right in our backyard?

In a perfect world, Mexico would have it nearly as good as we do and people wouldn't be risking their lives to try to get here. There's a reason why Canadians aren't trying to swim across the Detroit River.

[Tolik]

Tom Bethell explains his own and Hernando de Soto's conclusion that poor countries remain poor because of their lack of legal system and tradition that guards private property and (extremely important!) titles on it. The ability to transfer titles on the property is a "stairwell" to prosperity that transforms an "informal" economy operating outside of the legal system into the normal market economy.

Very Interesting!

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[Constitutionalist Conservative]

BTTT

[GeorgefromGeorgia]

I worked overseas with a wealth Mexican that was going back to Mexico City with a ton of $$$. He said the first thing he was going to do besides buying a home with a 12ft wall and barbed wire on top, was to go to the local police station and work out the "mordida" or bribe for the police to "protect" him and his family. This was going to involve monthly payments. He said if he didn't do this it was likely that the police would be the ones that would kidnap and or rob him.