Will Mexico ever prosper? Sí. Mexicans won’t have any choice. Four factors make their prosperity inevitable.
Development is not a choice. Rich nations today did not sit down in the past and decide to prosper. When nations planned to prosper, they failed—except Taiwan (below). When nations did unintentionally develop, what actually happened was other events converged. But now the entire Third World can choose to prosper. How is known.
Believing they control themselves, humans rate politics the most influential. Actually, it comes in last. Three other factors are more potent.
1 Environment. Climate is the oldest factor and nature bats last. A mini ice age expanded Scandinavian conquest—too cold for Vikings to stay home. Centuries later, another one contracted Scandinavian colonies—pity Greenland and Iceland.
Parts of Mexico are drying up. Farmers feel desperate, and desperate people take actions they’ve never tried before. Countryfolk are moving elsewhere. Refugees become receptive to policy change. Some will push for it. Some will demand a knee-jerk policy that does not work, others will be open to policy that has worked in the past.
2 Demographics. Population pressure—both resettlements and births—demands solutions. The Mexican state uses America as a safety value to let off steam. But territorialists still make crossing the border and resettling harder.
3 Technology. Memes and stories spread faster and broader than ever. Some news—whether fake or not—induces hysteria. Happily, good ideas spread, too. Better informed people demand more than crumbs but defense of basic human rights, like a right to a share of earth and a share of her worth. A right to life is meaningless without a right to somewhere to live.
4 Politics. Power politics occurs not in elections but behind the throne. In a developed country, power rests with Big Business, Big Banks, and Big Owners of Land and Natural Resources, especially oil, the lifeblood of the mechanized world. In Mexico, the powerful Non Governmental Organization is not an activist group but Big Cartels. Drug cartels are becoming a deep state that supplants the surface government.
The nature of institutions is to keep growing, like a shark. Of course, being alive, both sharks and organizations eventually die, but before then they seem unstoppable. Religions, empires, bureaucracies, businesses, mafias all expand.
In the third world, governments—politicians and bureaucrats—must turn to corruption to fatten their income. But traffickers, already corrupt, must turn to government and business. They don’t just bribe officials. They also take over lucrative enterprises like avocados.
The leader of the apex cartel, who’ll have subsumed all the others, will have demonstrated smarts and vision. That top dog drug lord will serve his self interest when he serves his society’s interest; i.e., delivering development. Materially, a miserable society constrains his gains. In a prosperous society, there are fatter pigeons to pluck. Emotionally, in a poor society he can play Robin Hood but in a wealthy one he’d be a national hero.
The coming Caesar has his egotistical needs. Once he amasses wealth and power, then he wants acceptance—achieved via popular welfare programs. After that comes respectability, similar to a tycoon buying a title.
Last century, a mafia pulled a government’s strings, Cuba’s, to gorge on gambling. Later in Taiwan, Chiang Kai-shek, leader of the Nationalists and Mao Tse-tung’s brother-in-law, arrived. Having lost the Chinese mainland, he and his army retreated to the island formerly called Formosa. Further east lay nothing but open ocean. To avoid losing everything, the Nationalists had to do their occupation right. And they did. In 20 years, Taiwan went from hunger to the fastest growing economy on the planet.
The Cuban experience shows that a criminal group can take over an economy. The Taiwanese experience shows that a dictator can implement measures that work. Mexico is about to combine both precedents. Its soon-to-be ruling cartel will impose measures that’ll develop the economy and spread prosperity. Reality will offer that godfather a deal he can not refuse.
While the American Left defends relocation—unsympathetic to people uprooting themselves from their homes to take a perilous journey with no pot of gold at the end of the rainbow—after five hundred years of the same-ol’ subjugation, poverty, and ecological ruin, a critical mass of Mexicans are becoming fed up with these dire conditions that cause emigration and teenage pregnancy. They’re receptive to solutions.
Furthermore, the ruling don will be under the same pressures as the government—loss of arable land, people bottled up by the border and desperate from their birth rate and few opportunities, nobody in the dark, everybody on their phones sharing stories.
Fortunately, bold and coherent proselytizers from a small niche of economists cognizant of what works—little known outside their tight circle—will debate and publish that proven recipe. Thus informed, the last cartel standing will be willing and able to force government to develop the economy. Unlike elected officials, the top capo won’t have to kowtow to the usual domestic opponents of reform—large landowners, big businessmen, or privileged bankers—only a foreign one.
North of Mexico’s border, the rulers of the US won’t be happy. They prefer others to be poor, weak, corrupt—and manageable. Hence the US arms dictators and negotiates trade treaties that don’t foster widespread prosperity. When the Iron Curtain fell, Russian idealists tried to guide their transition to a democracy with a market economy and join the West. They invited American economists knowledgeable about revenue policy to visit and consult. The US State Department invited the economists to stay home; all of them did. The US might interfere again—that’s the unknown.
The policy that so alarms America’s rulers by delivering prosperity basically is to:
A Replace regulations with deposits and insurance and enforcement not of picayune rules but of basic human rights.
B Replace taxes on efforts—on buildings, sales, and earnings—with land dues (or taxes), leases for use of public assets, and auctions of emission permits and fines for polluting.
C Set the amount of all these fiscal tools at full market value.
D With the revenue, fund the basic minimum of government services such as unbiased law enforcement.
E With the surplus—which would be huge—pay citizens a dividend.
F To counter corruption, put the budget on the ballot, as do some towns in Brazil, to let citizens decide what to spend public dollars on (in broad strokes).
Call this policy package “geonomics”. To a degree, all these components—public recovery of the socially generated value of land, locations, and natural resources, while de-taxing people’s adding value, coupled with disbursing the raised revenue to citizens—are in use somewhere. And wherever tried, they have all worked wonders.
A century and half ago, an older version was immensely popular, promoted by Henry George—the third most popular American behind Edison and Twain, and Twain sold tickets at George’s lectures—as the Single Tax. But Americans don’t know much history in general, except for some surface political facts, and next to nothing about … the land politics of union organizer Samuel Gompers, of Emma Lazarus who inscribed the Statue of Liberty, of Cuban liberator José Martí, of Martin Luther King, et al, and nothing about California, Australia, New Zealand taxing land and all port districts leasing land. To moderns, the existence of land comes as a surprise, despite FIRE—mostly mortgages—being the biggest sector of the GDP.
Having a lineage is more important in an older society than a younger one. As important as are fads, fashions, and slang to a critical mass of Americans, so do traditions matter to a critical mass of Mexicans. Dynamic societies change with every generation, for better or worse, while static societies … not so fast. That attachment to tradition, a reformist cartel can turn to its advantage. Mexico has a land reform tradition.
At the border with California, Mexicali shifted its property tax off improvements, onto locations. Mexico’s first democratic president, Francisco Madero, tried to tax land but the army—the faction then receiving US military aid—executed him. During their Civil War bloodbath, popular general Emiliano Zapata claimed that land belongs to those who work her. A fair and efficient way to share earth is to share her worth.
The counterweight to public recovery of land value is to de-tax private efforts, to repeal taxes on structures, commerce, and income. Mexico does have a small town—one of their many San Franciscos, this one north of Mexico City—where residents are tax exempt. And once the government made La Paz a free port; the city boomed, attracted land speculators ... who ruined the experiment.
Older than George’s Single Tax is physiocracy’s l’impot unique, an immensely popular idea conjured during the Era of Enlightenment that spread from France, a Romance nation. The French Republic for a while—until they sought more revenue for waging war—funded 80% of their budget from ground rent. Also in the 1790s, Denmark taxed land, which spurred owners of feudal fiefdoms to sell their excess, which turned Denmark into a land of small farmers, which paved the way for public schooling and industrialization (think Maersk Line).
Argentina’s first president, the popular Bernardino Rivadavia, tried to tax land; the military put a stop to that. Other South American countries taxed land to finance road construction. Among Stalin’s victims in Barcelona were the local physiocrats.
Executing land reformers is an ancient Latin tradition, going back to the Roman Republic. The Gracchi brothers tried to halt the land aggrandizement of rich, pompous senators and were murdered. So was Julius Caesar. Moderns blind to land believe it was just his conceit that got him killed and leave out that Caesar was insisting that the law be followed and that his soldiers be paid with land they were promised, public land that the Senate was stealing for themselves.
Mexican physiocrats or geonomists have tradition on their side. Plus the proof in the pudding— real world success, such as Taiwan. Last century, the “George Washington of China”, Sun Yat-sen, advocated the single tax on land which had developed Tsing-tao (also Kiaochow and other spellings) rapidly and thoroughly. Sun’s admirer, the newly arrived dictator Chiang, required Taiwan’s plantation owners to pay land dues, so owners sold off their excess at prices peasants could afford. Working their own land, farmers produced efficiently. Their children could find jobs in cities, and the nation began flourishing and has yet to quit. Even today their economy remains covid-proof.
When will this happen in Mexico? The tipping points are a few years away. At the rate cartels are conquering Mexican territory, military, and politicians, the top capo will become the power-behind-the-throne by 2024. At the rate the four factors are driving change—desertification, population growth, phones connecting more people, stories in social media provoking hysteria—that unofficially crowned ruler will be open to new ideas. Plus, America will be starting its next recession so that safety valve will be closed. And tradition can welcome innovation.
You needn’t be an optimist to imagine that the most likely outcome is that de facto ruler will almost immediately adopt geonomics, uplifting the most humble. By 2033, everyone will be materially comfortable forever. So ends Mexico’s 500 years of subjugation, poverty, and ecological ruin. The drug lord responsible will go down in history as a titan, as a savior.
Mexico will be a First World nation, on par with the rest of North America. Mexicans can be tourists, not refugees. If America keeps backsliding, Mexico will become the model for the world. If anybody builds a border wall, it’ll be them, but they're more likely to build bridges.
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JEFFERY J. SMITH published The Geonomist, which won a California GreenLight Award, has appeared in both the popular press (e.g.,TruthOut) and academic journals (e.g., USC's “Planning and Markets”), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland's mass transit agency), and recruited activists and academics to Progress.org. A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at Progress.org.