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Almost a decade and a half into NAFTA the result is that unlike the continental integration meticulously underway in Europe, market imperfections are producing stunning market failures in both the United States and Mexico:
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Without an end to American subsidies to its farmers, below-market products have flooded Mexico, bankrupting millions of rural farmers, and sending several million undocumented workers into the United States, exacerbating an immigration crisis that is infuriating the American electorate;
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Without the restructuring of Mexico's oil and electrical industries, current Mexican President Felipe Calderon is confronting a looming energy crisis; only the sharp rise in the price of oil has buffeted Mexico's antiquated oil and electrical industries, both of which remain government-owned, and are at the limits of their production capacities,
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Without higher taxes on the most privileged, and through the systematic failure to create level playing fields through regulation -- the repeal of the Glass-Steagall Act in the United States has resulted in the emergence of oligopolies the size of which the robber barons of the Gilded Age could not have dreamed, and the failure of the Mexican Congress to pass market reforms continues to stifle Mexican enterpreneurship -- we are witnessing the concentration of wealth unprecedented in history.
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These limitations created the conditions for Carlos Slim -- and Bill Gates and Warren Buffet -- to amass fortunes of such size they are obscene. Gates and Buffet, for instance, have pledged to give away most of their fortunes, since their sheer magnitude no one person can manage.
Carlos Slim struggles about what to do with so much money. His wealth derives primarily from telecommunications, Telefonos de Mexico, or Telmex, the Mexican phone company, and America Movil, Latin America's leading cellular phone provider and he now confronts the stunning reality that he is worth more than the poorest 45 million of his compatriots combined.
To be sure, there is nothing shameful, or wrong, in how Slim acquired his wealth. He has not staged a coup, launched a war, profited through fraud or deception upon consumers around the world. He has played by the rules, acquiring Telmex when it was privatized, and he has pioneered providing the public with cell phones to chat away endlessly from Alaska to Argentina. He has reinvested his profits wisely, acquiring business interests in everything from construction companies to restaurant chains. Not bad for the son of a poor immigrant who opened a dry goods store, La Estrella del Oriente (Star of the Orient) in 1911.
One can criticize the political conditions that continue to give him an unfair competitive advantage -- many telephone companies complain that Telmex is so big it should be broken up -- but the root of the problem is the systemic failure of the United
States and Mexico to work closer together. President Bush's failure to reform the agricultural subsidies that give American farmers an unfair advantage, or to lobby successfully for a more sensible immigration policy, is mirrored by President Calderon's failure to end the oligopolies that characterize and stifle Mexican enterpreneurship. Neither Bush nor Calderon have shown much interest in a more equitable distribution of their nations' wealth, unlike the European Union, where state policy is to provide every European with a decent, middle-class life.
As the world's wealth is concentrated in fewer and fewer hands, the social contract is shifting under our feet.
Isn't there something odd when Bill Gates holds a news conference to announce he will personally end malaria? Wherefore government?
Carlos Slim has remained silent, content to have underwritten the revitalization of Mexico City's historic neighborhood of Alameda, a short stroll from the Presidential Palace. He is, however, aware that Mexicans are now looking to him to announce the divestment of his fortune through philanthropies, as Gates and Buffet have done.
"As he has said many times himself, he is not in any competition," Arturo Elias Ayub, Slim's spokesman, said when asked to comment. Perhaps the greater irony that it is precisely a lack of competition that got Mr. Slim to where he is escapes those around him.
Comments? Send a letter to the editor.Albion Monitor July
30, 2007 (http://www.albionmonitor.com) All Rights Reserved. Contact rights@monitor.net for permission to use in any format. |