Mexico had always been a country of entrepreneurs. From Aztec tianguis to marketplaces in the middle of the Periférico traffic loop, the instinct of the Mexican has always been to own and manage a small business. The totality of businesses, large and small, generated great benefits: wealth was created; the population viewed the future with optimism, and knew that their future depended on their own effort. For centuries, all types of governments and circumstances ─some good, others very bad─ found the way to make it possible for entrepreneurship to thrive and bear fruit. But over the past decades, beginning in 1970, the country has become so bureaucratized that it has undermined not only existing businesses, but also the entire entrepreneurial spirit found in its natural state in the Mexican.
From a country of born entrepreneurs, we became a country of entitlements and claimants, and this applies to the most modest peasant as well as to the most encumbered magnate. From being a country of business and company owners, we became one of employees and dependents on protection and subsidies; from a country devoted to economic growth, we became a country of rights, but no obligations. All of this has weakened the main function of the economy and lies at the heart of our problem of growth.
Mexico’s problem is one of wealth generation, not of employment, poverty, oil, or taxes. That is, Mexico’s problem is that it does not generate sufficient wealth, and this is the function of businesses. However, the whole country is focused the other way around: on extracting taxes, subsidizing poverty, permanently bureaucratizing oil. Instead of promoting entrepreneurial activity ─the generation of wealth─ our governments endeavor to erect obstacles in the form of regulations, norms, laws, and all types of trammels, which not only complicate the life of the business person, but in addition simultaneously generate a climate of uncertainty for investment. All bets are placed on what already exists, and not on a much better future.
Empirical research demonstrates that when there is trust in the permanence of the rules, low taxes, public safety, and patrimonial and macroeconomic stability, entrepreneurs emerge who engender wealth and contribute decisively to the generation of employment and the diminution of poverty. The logic is pure and quite simple, but in Mexico, it has been overturned and perverted.
If one observes the past, before there existed a series of conditions that fashioned an environment that augured well for entrepreneurial development. Before, there was none of the acute bureaucratitis that today is the natural characteristic of the government: public officials did not live in fear of making decisions, and this allowed them to act. Before, the government went out of its way to preserve the rules of the game and avoid sudden changes. Now, the rules change every day: when new regulations are not being installed, a novel tax conundrum, in the form of a yearly miscellany, and frequent tax memoranda, appear on the scene.
Another change, and not a lesser one, has been the transformation of the presidency. Before, the word of the President was law; today, no one pays attention to what the President says or decides. In a country of weak institutions, the strength that the presidential utterance would confer ─whether a yes or a no─ created a climate, at least once every six years, of clarity for which there was no substitute. It is evident that a modern country cannot live by the word of an individual; thus, democracy has been such an important allure. However, we have been unable to move from an absolute presidency to strong institutional conditions that bestow certainty upon the citizenry in general and upon businesspeople and investors in particular. We abide in the bureaucratic jungle, and worse: not only is no one able to say yes now, but there is also an infinity of interests capable of mobilizing themselves to halt anything.
In contrast to Asian countries, there never has been a true strategy of business development in Mexico. The most successful nations in Asia created developmental, pro capitalistic alliances that fomented the development of enterprises at the same time that they forced these to compete in open world markets. In our case, there was neither competition nor alliance nor capitalistic legitimacy. The government acted under a corporativist concept that permitted the functioning of enterprises because it perceived them to be something necessary: the generation of wealth. However, from the 1970s, this concept changed, and the entire business scenario deteriorated. The Manichaeism of former President Echeverría undermined the little that did work, and what, to date, has not been restored. Rather than backing Galileos, the governmental strategy came to promote Inquisitors.
The consequence of what we have lived through since 1970 is that the weight and interference of the government has been greater and greater in the functioning of businesses, but the public officials who decide are more and more removed from the dynamic that affects the enterprises. Young people no longer view business activity as a promising or desirable career, preferring instead to be employees, and in the case of many of these, public employees who want to be positioned “where the money is.” Before, companies tended to be family institutions in which all members participated in the process actively; this is no longer the norm, except perhaps for the informal economy and the smallest businesses. Although many companies are owned by one family, the families are less and less involved, opting for consumption and for propinquity with the bureaucracy as a normal modus vivendi. In a word, we have fallen into a world in which there is more profit in awaiting for a handout than generating the wealth behind it.
Nations such China and Brazil illustrate something as critical for the generation of wealth as for the development of viable enterprises: neither of these nations has been able to achieve a consolidated rule of law that approximates that which exists in Switzerland or the U.K. What they indeed have achieved, and what constitutes a dramatic contrast with today’s Mexico, comprises the conferral of certainty on entrepreneurs and investors. We had that until the 1960s, but it evaporated and has not been able to reconstitute itself.
On a visit some years ago to Mexico, the scholar Michael Novak said that in Mexico there are many books on poverty and underdevelopment, but no matter now important to understand this, what is truly transcendental is to understand the geneses of wealth, because that is what we lack. Our economic model is wrong side up and requires a radical redefinition. Manichean rhetoric furnishes the opposite: what is imperative is a decided drive for the promotion of a competitive entrepreneur who competes.