Luis Rubio

How we Mexicans conduct ourselves has always caught my attention, such as blocking traffic by double parking, a political party advocating absurd and counterproductive bills, or a hotel entrepreneur destroying a wilderness area to add more rooms for guests. Why are Mexicans so endowed with behaviors that openly appear to be irresponsible, harmful to everyone, except to the immediate person engaging in them?

The essence of human freedom lies in each deciding according to his or her individual interest, whenever this does not affect third parties.  Among the thousands of examples of irresponsible behavior or those patently injurious to the collective interests that can be observed daily in the country, the big problem is how to define that collective interest and who decides it. ln a society where the rules of the game are perfectly delineated and establish what is fair and what is not, the third-party interest is plain; however, in a society in which those rules of the game are not clear or are styled so that there are no possible definitions, the collective interest is always diffuse. The key question is why Mexico does not have that unmistakable statement of meaning of the statutes or, expressed another way, what is it that drives and facilitates the adoption of irresponsible postures.

Another manner of posing this query is: What is it that renders it possible for no one to have to be responsible for their actions? It seems to me that there are two ways to respond to this, one generic and the other specific. On the generic side, there is no doubt that the country had changed a great deal in the last four decades: in that period there have been innumerable structural reforms, liberalizations, treaties, political pacts, electoral reforms and negotiations of all types that have transformed the economic, political and social panorama. Some approve of these changes, others decry them, but the change is real.

What is interesting from my perspective is that, despite all of those changes and transformations, the basic paradigm of the country’s governance has varied little. Allow me to explain: many of the changes undergone have modified the structure of power through the electoral system and altered the economic system through the liberalization of imports. Notwithstanding this, the criterion that incited all of those reforms, and that continues to orient decisions to date, is up-to-down vertical control. Regardless of the fact that many hard-fought elections are held, the form of governing continues to be that of imposition; the economy has been liberalized, but not for all things.  An example speaks more than a thousand words: the Free Trade Agreement (FTA), the main engine of the Mexican economy, constitutes an exceptional regime in the country because it is perfectly regimented in terms of the Rule of Law, but it only applies to companies that comply with certain criteria. All the rest of us Mexicans live under a regime of changing occurrences according to who is in power.

With regard to the specific, but derived from the logic of control, the system of government was designed from the beginning in the thirties of the past century so that only the individual in control would be responsible. That is, the government that emanated from the PRIist system was in charge of security, economic progress, social order and the future. Thus, the government was (is?) responsible for the country’s entirety.  That responsibility was derived from the nearly absolute exercise of power that characterized the Calles-Cárdenas system; power and responsibility go hand in hand: the greater the concentration of power, the greater the responsibility of the government. No wonder Ayotzinapa fell on the president’s lap.

Seen from the other side of the fence, the Mexican has no reason to be responsible. The government orders, the government imposes and changes the rules: therefore, no one outside the government is responsible and everyone is free to do what he likes.  And, furthermore, does.

The case of Ayotzinapa is the consummate case-in-point; had it happened during the Fox presidential term, the affair would have stayed in its place, where it belongs: in the municipality of Iguala. Fox did not attempt to control everything, thus he washed his hands of all responsibility. The present government attempts to control everything, which makes everything end up being its responsibility.

It is obvious that in this era no one can control everything, the reason why the mere pretension is preposterous. The sole possible solution lies in a paradigm shift.

The recent change of view in the matter of drugs unleashes a rare opportunity because it entails a new paradigm that can extend itself to the whole governmental system. When something is prohibited, the responsibility for compliance with the law falls to the government; when it is permitted, each person is responsible. In the case of drugs, from now on parents will be have to be responsible for their own lives and for those of their children: for educating the latter and for showing them the costs and risks of drug addiction. This implies that, at least in the issue of drugs, individuals will have to take charge of their acts and respond to the consequences of these.

Well orchestrated, this novel outlook could become the beginning of a new political paradigm, one that sets out from the principle that each is responsible, in politics as well as in the economy and the society; that each has to pay the price of their excesses and that the authority is there to institute clear rules and enforce their adherence. An enormous opportunity.

www.cidac.org

@lrubiof

 Luis Rubio

Life is always a balance between the half-full and the half-empty glass. Attitude with regard to life, work and the economy is basic not only for the development of countries, but also for political stability. Keynes spoke of animal spirits as the source of the conduct of economic agents and the manner in which these are moved by instinct, attitudes and perceptions. That observation from the thirties has done nothing other than erupt in importance in the era of ubiquitous communications that generate uncontainable expectations.

In recent dates, great debate has ensued with respect to the pessimism that appears to determine the country’s collective attitudes. How is it possible, some argue, that consumption is growing at the speed that it has during the last months (consumption being, at the end of the day, the objective of economic activity) and, however, people continue to view everything through lenses of pessimism? The entrepreneurs themselves, say government officials, affirm that their companies (excluding the oil sector) are going well and, yet, it would be difficult for their perceptions to be more negative.

The big question is whether things have gotten better or worse. The ills and the problems that Mexicans suffer from are obvious and there is no doubt that the incapacity to deal with some of them generates profound frustration and emboldens the pessimistic view. How can one explain, for example, that Mexico has for nearly a quarter century experienced abductions, extortions and homicides and that there is not yet even consensus with respect to the diagnosis of the problem, not even to mention a solution? How can one explain the incapacity of a succession of governments during these decades to see to the most elemental problems in terms of services, infrastructure, the now famous “permitology”, that is, the process of acquiring permits (for construction, opening a business, etcetera), or education? Each and every one of the problems has an explanation, often a logical one, but in conjunction, they furnish a poorly advisable legacy for the local and national governments of the three political parties. There’s no possible excuse.

And, notwithstanding this, an objective measurement of the reality shows enormous improvements in the last decades. The real price, after inflation, of innumerable basic goods has diminished; the number of families with their own home has grown dramatically; individual freedoms are incomparably superior to those that existed some decades ago; the quality of the goods and services that we consume and employ is superior beyond comparison. With all of the avatars, improvement in life levels is tangible.

In his extraordinary reflection on his father, and on himself, Federico Reyes-Heroles (Orfandad) recalls that on Sundays, he would accompany his father to a grocery store that sometimes stocked foreign goods to “see what there was to be found”, that is, to see what the shop had gotten in or imported that week. Today’s young people have no idea of what a closed economy means or of the inexistence of a certain article: everything today is available and at once.

If the objective reality has improved indisputably, why the reigning pessimism? Everyone has a theory but I believe that there are two immediate factors and one preponderant and absolute one that allow us to understand the phenomenon.

One without doubt is the corruption, associated with the perception that this has escalated in dimension.  Another is the absence of governmental leadership and, simultaneously, the nearly visceral rejection of any exercise of governmental leadership. These elements are interconnected.

The reforms that began in the eighties required tremendous exercise of leadership, without which that first great effort would have been impossible,  but the crisis of 1994-95 and its poor political management put an end to credibility in the reformist project. The “entrance of democracy” in 2000 stirred up the fire because of its inability to solve problems and the dreadful leadership that accompanied it. The current government promised to govern effectively, only to find itself without the magic wand that would have permitted it to achieve this.

The second great issue is doubtlessly that of corruption, which has exacerbated citizen ire. I do not know whether, in volume, corruption is now greater or lesser, but it is obvious that the citizenry’s perception is that it has exploded. Part is the mere fact that it is increasingly visible and that evidence of it is disseminated instantaneously. Another part is that, in the past, politicians were not as crass in their manner of engaging in acts of corruption: they took care with appearances because they knew that the matter had become explosive. At present there is no restraint in the least.

The absolute factor that has changed is the instantaneous information that generates unstoppable expectations. Formerly, information was controlled vertically and flowed according to governmental preferences from the top down. Today, information is ubiquitous and horizontal: it is generated and disseminated everywhere and no one controls it. Although there is evident capacity of manipulation, no one has the monopoly on it.

In his acceptance speech for the American Film Institute’s Lifetime Achievement Award, Sean Connery noted that his childhood was not promising but “I did not know we lacked anything because we had nothing to compare it to. And there is some freedom in that”. The big problem of governing in today’s world is that, as David Konzevik says, “The poor of today are rich in information and are millionaires in expectations”. Under these circumstances, “the art of governing is the art of managing expectations”. The country has improved, but with respect to the management of expectations our governments over the last decades have been appaling.

www.cidac.org

@lrubiof

ENFOQUE – April 2016

Luis Rubio

Mexicans live in the hope that someone will come to save them, a hope that is renewed every 6 years. This has to do with the obverse of the PRIist authoritarianism of old: a vast system of political control that curtailed the population’s capacity of action, obliging it to wait for a change from above. While the old system collapsed, its forms and its culture remain, even after two PAN administrations, a party that was created in reaction to PRI abuse. This circumstance gives rise to two parallel and in a certain manner paradoxical realities: on the one hand, Mexican society cries out but does not rebel; on the other, the country changes a great deal, and much more rapidly than it appears to.

The world seems difficult when one looks ahead and sees the challenges that Mexico faces and the apparently meager capacity to surmount them. However, when one looks back, it is impacting that so much has changed with regard to the country’s reality. Today Mexico is a manufacturing power, the population is at liberty to express itself as it wishes and quality of life levels have improved discernibly. Of course, none of that lessens the lacks that characterize the country, but it does put them in perspective.

The contrast in perspectives is revealing in terms of how Mexico has evolved over the last decades. Up to the end of the sixties, the economy grew with celerity and the authoritarian political system (that enjoyed enormous legitimacy) brought about an environment of order and peace. The federal government dominated all national life and took care of security with the methods of the epoch. That idyllic world began to crumble because it did not generate escape valves in the political sphere and because its economic sustenance (essentially the export of grains to defray the costs of importing capital goods) stopped functioning, generating a growth crisis.

From the beginning of the seventies, one government after another has developed responses to the growth problem. Some led the country to the brink of bankruptcy (1970–1982); others built permanent structures, such as the North American Free Trade Agreement (NAFTA), which contributed to the transformation of the industrial plant. However, similarly to what occurred in the political ambit, that process of economic change has remained truncated due to the presence of power factors that benefit from the status quo. In contrast to transformative processes in other nations, in Mexico there has existed the spirit of change but not the inclination or competence to modify the power structure (both economic as well as political).

The political transition that the country has undergone manifests this in unmistakable fashion. Despite there being an initial agreement (1996) with respect to reforming the electoral rules in order to guarantee electoral equity, there was never an agreement on the point of departure and even less so on the objective to be achieved. In this manner, national politics continues to be as contentious as before and parties recognize the election result only when it is favorable to them. That is, an election is democratic if I win, but not if I lose. Thus, while there is no way to deny the professionalism of the electoral organs and the transparency of the election processes, nearly 35% of the population thinks that what is relevant is not the process but rather the result.

It is within this context that the arrival of President Peña-Nieto into the government and his incapacity for advancing his agenda should be understood. Having been a successful state governor, Peña-Nieto promised efficacy as his calling card. As soon as he assumed the presidency, he launched a legislative whirlwind. In only a few months, the Mexican Constitution had been transformed with respect to its main articles. The agenda for change was not new: all of what was reformed had been discussed for decades; what was impressive was the political skill displayed to achieve the conversion of the reforms into law. The President exhibited a great ability for negotiation, but the key factor, the only one that his PANist predecessors were unable to administrate, consisted of controlling the army of PRIist partisans. For historical reasons, the PRIists, the power holders for decades throughout the XX Century, are also the beneficiaries of the status quo. Their opposition to previous reform proposals was the product of their desire to preserve their poaching rights. Peña’s success resided in controlling those groups and avoiding their blockage of the legislative process. However, as soon as that was accomplished, those same interests returned to what they had always done: ignoring the reforms and continuing to engage in their time-honored métiers.

In addition to the legislative marasmus, the new government ensconced itself above the society and reinvented old mechanisms of control upon the society, the governors, the media, the unions, and the entrepreneurs. This manner of acting responded to a quintessential consideration: the government set out from the premise that the country required a restoration of order and the best model was that of the PRI golden era: the sixties. Though it is obvious that the old political system and the economic strategy of yesteryear did not crumple due to the will of the then-governors, the Peña government turned a blind eye to the changes that have taken place in Mexico as well as in the world during these decades and focused on   carrying out its own agenda of transformation –and its own reality.

The population encountered the advent of Peña-Nieto and his assertiveness with a mixture of amazement and expectancy. Like the great Tlatoani, the Aztec leader, Peña came onto the scene to save Mexico. In a daze, Mexicans saw how the economic performance of the administration went from bad to worse, tax increases affected the consumption of the most impoverished population and the ire of those affected by the insertion of controls was accumulating. As soon as the first crisis presented, –the straw that broke the camel’s back- the entire country turned against the President. Beyond the deaths of the 43 students in Iguala a year ago, its political significance was clear: it became an excuse for the whole population, in collective anonymity, to voice its dissent.

The extraordinary part is not the anger or the upset, both observable and predictable, but instead the absolute incapacity of the government to respond. Efficiency was forsaken, now replaced by a fearful and paralyzed government. The reality of the power in Mexico had won: in the end it was evident that the government did not intend to alter the power structure but only to merely incorporate a certain efficiency into some sectors or activities exhibiting potential, all of this without undermining interests already reaping benefits from the system.

What the experience of President Peña demonstrated is that Mexico has a serious power problem: there is no elemental set of game rules that enjoy full legitimacy among all of the political actors, so there are no rules at all. The governor possesses enormous powers that allow acting arbitrarily at any time, the reason being that investment –and credibility- is limited to a sexennial time frame and everything revolves around the confidence inspired by the president in turn. That is to say, Mexico’s great problem is that it lacks institutions that confer permanence and legitimacy on the system of government and assurances of soundness on Mexicans.

Therefore, Mexico is suffering through permanent schizophrenia:  great changes and few achievements; regions that are thriving and great poverty in others; a government pledging efficiency but only a little. Mexico is trapped between the old system of controls that persist and an increasingly prepared, increasingly demanding society. As in the old times, that permits apparent stability but guarantees permanent illegitimacy. Until the next president emerges with newly minted avowals.

www.cidac.org

@lrubiof

Luis Rubio

The world formerly functioned vertically because everything was concentrated: information, control of the factories, labor relations. The decisions were centralized and the society knew what the power structures would permit. The world of today is increasingly horizontal, one in which information has a multiplicity of sources (that are autonomous, such as the social networks, and feed onto themselves); in the economy value is added along the process of production over which no centralized authority has control; and the unions have lost their capacity to control downwards and sell the service to the powers that be. This, what takes place in political ambits, is not distinct from what is observed in schools, families and governments. The monopoly of power disappeared, or at least became dramatically weakened, because it is incompatible with a modern economy and a society with the means to develop itself.

The phenomenon is universal and no one can be exempt, except if one opts for impoverishment on abstracting oneself from the exterior world, as occurs with some reclusive systems. Although, of course, each country has its own characteristics that emanate from its history and circumstances, many of the challenges that Mexico faces are not, at least in concept, radically different from those of other nations.

What follows is an evaluation of China* that, were I to remove the name, would appear to be absolutely Mexican:

• “Contemporary authoritarian regimes, lacking popular legitimacy endowed by a competitive political process, have essentially three means to hold on to their power. One is bribing their populations with material benefits, a second one is to repress them with violence and fear, and a third is to appeal to their nationalist sentiments.  [The government] has employed all three instruments, but it has depended mainly in economic performance and has resorted to (selective) repression and nationalism only as a secondary means of rule.”
• “Autocracies forced to strike a Faustian bargain with performance-based legitimacy are destined to lose the wager because the socioeconomic changes resulting from economic growth strengthen the autonomous capabilities of urban-based social forces, such as private entrepreneurs, intellectuals, professionals, religious believers, and ordinary workers through higher levels of literacy,  greater access to information, accumulation of private wealth, and improved capacity to organize collective action.”
• “If the [country’s] long-term economic woes are purely structural, the country’s prospects are not necessarily dire. Effective reforms could reallocate resources more efficiently to make the economy more productive.”
• “To be sure, the economic reforms… have changed the country beyond recognition. However, the [system] has yet to shed its predatory instincts and institutions.”
• “The [government’s] rejection of any meaningful limits in its power implies, in practical terms, that [China] cannot have truly independent judicial systems or regulatory agencies capable of enforcing laws and the rules.”
• “As long as the party places itself above the law, real pro-market economic reforms are impossible”.
• “What is holding the Chinese economy back is not its dynamic private sector, but its inefficient state-owned enterprises which continue to receive subsidies and waste precious capital.”
• “Genuine and complete economic reforms, if actually adopted, will threaten to destroy such foundations.”
• “The continuation… of predatory and extractive institutions precludes successful, radical, and complete market reforms… (making impossible) the task of constructing a genuine market economy supported by the Rule of Law. The notion is that wealth is positively correlated with democracy. A closer look at the data, however, shows that nearly all the wealthy countries ruled by dictatorships are oil-producing states, where the ruling elites have the capacity to bribe their people into accepting autocratic rule.”
• “As the era of rapid growth produced by partial reforms and one-off favorable factors or events ends, sustaining [the country’s] economic growth requires a radical overhaul of its economic and political institutions in order to achieve greater efficiency. But since this fateful step will destroy the economic foundations of [the system’s] rule it is hard to imagine that the party will commit economic, and hence political, suicide.”
• “Those unconvinced by such reasoning should count the number of dictatorships in history that willingly gave up their privileges and control over the economy in order to ensure long-term national prosperity.”
• “The most important source of change in authoritarian regimes is the collapse of the unity of the ruling elites… This development is caused principally by the intensification of conflict among the ruling elites over the strategies of regime survival and distribution of power and patronage… Experience from democratic transitions since the mid-1970s shows that, as autocracies confront challenges from social forces demanding political change, the most divisive issue among ruling elites is whether to repress such forces through escalating violence or to accommodate them through liberalization.”

The politico-economic dynamics of Mexico and of China are radically distinct, but the challenge is highly similar.

*Pei, Minxin, Twilight of the CPP? The American Interest, Spring 2016

www.cidac.org

@lrubiof

a quick-translation of this article can be found at www.cidac.org

The Catalyst,  The North American Century,

Spring 2016  – Luis Rubio

http://www.bushcenter.org/catalyst/north-american-century/education-essays.html#rubio

The transition from the agricultural era to the Industrial Revolution was traumatic for many around the world, but the digital era constitutes a nearly absolute divide. In this new era, education is the crucial differentiating factor. Creativity makes a person successful and advances the economy and larger society.

Luis Rubio

No perfect model exists for the relationship between Mexico and the U.S. because there is no other relationship like it. There are many nations that share lengthy borders, but none in which such great differences of development and incomes intersect. There are many nations that exchange inordinate volumes of goods and border crossings, but none is as active as that shared by these two North American nations. Certainly, there are numerous duos of European countries, Canada-US and some in Asia that experience similar processes of industrial integration, but none resembles ours in terms of the combination and dimensions of border entries and exits, commercial interchanges and populations living at close range on the other side of the mutual frontier.

The U.S. electoral contest has evidenced that Mexico is an important and inevitable actor, a circumstance that can lead to two conclusions: one, that we should shut our eyes and trust that the Americans will know how to act in the most responsible manner; the other, that we should respond in determined fashion. The first alternative is absurd because that is not the way to conduct the affairs of a sovereign and proud nation like Mexico. The second would be apt only in that it implies not confronting but, simply, developing a strategy that curtails our vulnerability and renders the internal political process irrelevant regarding the functionality of the things important to us.

As Octavio Paz illustrated myriad times in his marvelous prose, our border is exceptional because of the clash of cultures, histories, and civilizations that it represents. Nor is the relationship similar to that frequently mentioned as a model one, that of the U.S. and Israel, because the factors that vitalize the U.S. Jewish community have nothing to do with Mexican communities in the U.S., starting with the fact that U.S. Jews do not originate from that country. The supposed similarities are not such.

A Mexican ambassador in Washington in the eighties summed up the traditional view of a style that is revealing of a whole era: “neighbors now, partners now, friends never”. That form of conceiving of the relationship has led us to where we are now: lacking a strategy, abandoning our interests and ceding the initiative and all of the spaces to our detractors: unions, ecologists and anti-immigrant groups. Instead of acting within the natural and permissible fabric of the U.S. environment and Washington politics, we have remained marginalized -dauntless- before the spectacle of the destruction of the name of our country and our compatriots.

After years of ignoring Mexicans who had migrated north, present-day Mexican politics is nearly exclusively concentrated on these very individuals. This is natural and logical, but it is insufficient. Clearly, the Mexican Government retains the obligation of attending to the compatriots, to solve their affairs and to protect them. But it is crucial to understand that Mexican-Americans are not there to help Mexico or to become tools of the Mexican Government. Rather, it is the Mexican Government that must assist them, trusting in a long-term reconciliation that, far from being utilitarian, would be the product of mutual recognition and respect.

On the other hand, the abandoned component of the relationship is that relating to the Americans themselves. In contrast to the dearth of historical memory in many of their matters of foreign affairs, memory with respect to who their friends are and who are not is legendary. Although we generated an exceptional presence when NAFTA was negotiated at the initiation of the nineties, we never faced the consequences when adverse moments presented (such as the assassinations of 1994, the devaluation of that year and, above all, the pathetic response to the events of September 11), in addition to the devastated expectations of the failed Fox regime as well as the inefficacy of the present government. We proceeded from hyperactivity to total absence, creating an unfavorable if not hostile ambience on the part of our main commercial ally. The key is not to be leading characters but to face the music.

The relationship with the U.S. requires attention to two realities that are very distinct, but not mutually exclusive, and that should never be contradictory. We cannot pretend to influence their internal affairs and simultaneously take on the stance of neutral partners. This is about the principal bilateral relationship that we possess and that will always be central due to geographic, economic and geopolitical reasons. None of that impedes us from engaging in active relations with the rest of the world, but this one has to be, in the political argot, “of State, wholly non-partisan. It appertains to a relationship that can be limiting if we do not develop it, but one that can also be a source of infinite opportunities if we cultivate it properly. Our objective should be that of safeguarding and advancing our interests, while concomitantly making possible a workable and mutually satisfactory coexistence.

In 1992 the government erred on wagering on a candidate, who lost.  Our logic should never embrace choosing candidates or attempting to manipulate results. Strictly speaking, it is critical to never again return to a situation like the current one in which we are a major part of the U.S. internal debate without the instruments or the possibility to act. We should project an active presence, but a discrete one that, paradoxically, makes us invisible: allow no one have any incentive to attack Mexico and Mexicans. Precisely the reverse of where we find ourselves today.

www.cidac.org

@lrubiof

Luis Rubio

“Solving poverty without addressing the problem of inequality of opportunity,” says  Gonzalo Hernández Licona de Coneval, “could imply that the relevant participants [in the society] would be same ones as always”. In effect: it is impossible to deny the fact of inequality. But there are two pertinent questions: first, what should we do while the problem of inequality is solved, the latter presumably more complex than that of poverty? And, second, how is the inequality to be confronted? The answers are anything but obvious and require more than insults and worn-out clichés to address and mitigate these problems at their core.

Some weeks ago I wrote proposing that the problem is the poverty because it is lacerating, impedes social mobility and, above all, could be attacked with relative celerity. That text generated widespread polemics. I would like to explain my perspective on the dynamic between poverty and inequality.

Before anything else, inequality is an inherent part of human society, but there are two clearly differentiated sources of inequality: on the one hand, the inequality that is the product of human creativity and that is the source of the growth of the economy. The technological development of the last decades illustrates this to perfection: a few technological ventures have revolutionized the world, in addition to producing a wealthy cast never before imaginable. The same occurs with great artists, sports figures and actors who, maximizing their skills, have differentiated themselves from the income of the common mortal. Clearly, these people have succeeded because they were born with their main needs satisfied. This source of inequality should be applauded because it is the product of open competition, inventiveness and innovation. Those pretending to combat (or regulate and annihilate with excessive taxes) this source of inequality would be killing the hen that lays the golden eggs.

The other source of inequality is more difficult to solve, but it is that to which Hernández Licona refers: the inequality that is the product of monopolies, social practices, corruption, subsidies, concessions and, above all, absence of competition. This source of inequality is the result of political and bureaucratic decisions that, historically, skew income, protect the favorites, safeguard poaching preserves and, mainly, hinder the access of ordinary folks to social mobility, even when these are born with their basic needs satisfied. This source of inequality has been that which has marked Mexico since the Colony, giving rise to a nation of poor people, polarized in their social classes with an accentuated racism and an absence of opportunities for the immense majority of the population.

The true problem is how to confront this challenge. The easy, and frequent, proposed solution is a combination of regulatory measures and tax increases for high incomes (those who always find ways to pay less) in order to distribute these later among the poor. It sounds obvious, but it doesn’t cease to amaze me that this proposal entails that the very politicians and bureaucrats who caused the problem –and who preserve it- would be those who would now engage in solving it. That is, just as an example, it would mean that our diligent state governors, those who waste the resources, who pocket the Public Treasury monies without any consequence and leave multimillion debts at the end of their mandates, would now devote themselves to redistributing the income in favor of the poor. Not likely.

To really transform the country, generate conditions for the economy to grow rapidly and eliminate the second source of inequality, we would have to carry out an integral change of the sociopolitical regime. Unfortunately, many politicians and candidates –and their advisors- promise to eradicate inequality in no time at all when their sole proposal is to reach power.

If one accepts that inequality is the product of a series of biases that give rise to and preserve it, the only way to get rid of it is to eliminate those biases and that is a political matter: it implies modifying the social, political and economic structures that prejudice the benefits in favor of one part of society and discriminate against the rest.

From my perspective, only a liberal system of government could achieve this. A liberal system sets out under the principle that everyone should possess the same access to opportunities: the laws are designed so that everyone has the same rights; a system of justice that effectively engenders conditions so that all Mexicans, beginning with the most modest of these, have access to justice under equitable conditions; and the function of the government is that of, on the one hand, ensuring that everyone has equal possibility of access (enter here the fight for combating poverty but oriented toward eliminating barriers to equality of opportunity) and, on the other hand, establishing a set of game rules that everyone knows beforehand and that the government enforces compliance with.

In sum, confronting inequality is not a matter of regulations or taxes but rather a distinct sociopolitical regime. Because I see that a change in that direction is very scarcely probable, it seems to me that combating poverty, aiming at equalization of access to opportunities (above all education and health), is the only way that we could and could proceed, at least for now. Beyond actions on this front, only rapid economic growth could permit the significant reduction of poverty and that requires a change of focus in economic policy.

What should not be done it to confuse causes with results and pretend that matters of this transcendence are merely technical and not subject to exploitative electioneering or ideological preference.

www.cidac.org

@lrubiof

                                                                                                       Luis Rubio

No Mexican can be pleased when facing Donald Trump’s interminable diatribes with respect to Mexico and Mexicans with which the likely Republican presidential candidate has captivated part of the U.S. electorate. But that’s no reason for Mexico to precipitate its response or react without evaluating the potential consequences of this.

The Mexican component of the Trump discourse is not the product of chance. Rather, it is the result of a strange combination of careless abandon on our part and bad luck. Both factors have coalesced to convert Mexico into the cause of all the woes of our neighbors to the immediate North. Thus, it is imperative to understand the dynamic in which we find ourselves prior to responding.

When negotiations for the North American Free Trade Agreement (FTA) began in 1990, the government mounted a multifaceted public relations strategy in the U.S. On the one hand, it organized an action plan oriented toward that country’s legislative branch to generate support for the moment at which the agreement would be presented for approval;  on the other hand, a broad strategy was articulated of means designed to attract the attention of U.S. denizens toward things Mexican. For this it presented the extraordinary exhibit entitled “Mexico: Splendors of Thirty Centuries” in New York and at many museums in the rest of that country; seminars, conferences and film festivals were organized and events were sponsored in all corners of U.S. geography. In the best tradition of successful countries in Washington, Mexico achieved exceptional presence and recognition. It captivated the American public.

The problem is that, à la Mexicaine, as soon as NAFTA was ratified, the strategy was forsaken and an enormous vacuum was created. That vacuum was rapidly filled by all of the groups that had been opposed to the trade agreement and that, from then on, procured its undermining, if not its annulment. The three most prominent sectors in this ambit were the unions, the environmentalists and the anti-immigrant groups. Some of those sectors (which, except for the unions, are not usually homogeneous) entertain specific motives for opposing it, others trace their anger to ideological factors and yet others are merely ignorant; rightly or wrongly, at least two of the sources of greatest stridence with respect to Mexico –immigration and drugs- are simple economic elements: there is demand, ergo, supply. One thing cannot be explained without the other.

The cost of the withdrawal of a strategy of Mexico’s positive presence in the U.S. has been tremendously steep. Still, it is also true that in these twenty years the world changed and it was our bad luck that many of those changes were attributed to Mexico, regardless of whether both things were independent of each other. During those twenty years, globalization transformed the method of production worldwide; technology  (above all that of robotics) drastically reduced the need for manpower in industrial production; and the digital revolution rendered a huge segment of the traditional labor supply irrelevant because it does not have the necessary skills to be successful in that new world.

Our misfortune was that NAFTA entered into operation precisely when all of this was taking place: when the Mexican presence was growing in all ambits (above all in the form of exports and migrants), all of this without there being a protective parapet in the guise of a good public relations campaign that would safeguard the country and engender for it a good name. It is obvious that Mexico is not to blame for all the calamities that Trump and his retinue ascribe to it, but it is indispensable to recognize that we –our absence- contributed to creating the propitious breeding grounds for this to occur.

Other things also happened. An example says more than a thousand words: when I was studying in Boston in the seventies, the Mexican Consulate there dedicated itself essentially to the U.S. community. That is, it was a mini-Embassy devoted to promoting Mexican affairs in that city. The same occurred at the other forty-odd Mexican consulates in the U.S. at that time. Today, the consulates seem like municipal delegations given over to resolving formalities for Mexican migrants.   During these forty years, migratory growth changed everything with respect to the presence of Mexico in the U.S. and today’s consulates reflect this. The effect of that is that we relinquished a vital presence in U.S. communities.

Trump is harvesting the economic avatars of the past two decades, particularly the loss of manufacturing jobs (product of technological change, not of Mexico) and the growth of migration (product of the demand for jobs above all in agriculture and services). It is possible that, on having maintained an active public presence, some of the negative impact concerning Mexico could have been neutralized, but at this stage nothing can be done in this regard for the purposes of this year’s elections.

This said, a colossal risk exists: the boorish attempt to affect the result of the election by means of a rush to compel Mexicans in the US to naturalize as citizens can turn out well if Trump loses or very badly if he wins. Trump is not irrational: his strategy is absolutely logical, clearly reflective of a careful reading of the polls and of what is bothering his fellow Americans.  It appears rash -and very dangerous- to me to try to skew the result in such a crass and vulgar manner. Involved here is not any inconsequential enterprise; at stake is the  viability of the country, whose economy depends, only a cool 100% of it, on exports to that country and on remittances materializing from there.

www.cidac.org

@lrubiof

 Luis Rubio

The daily life of Mexicans intersects with innumerable suppliers of goods and services and governmental entities, very few of which materialize for the citizen and consumer, respectively, as their raison d’être. A patrimonial vision persists and endures in which the citizen is at once the subject and captive consumer, both of these the property of those who should be the furnishers of competitive services. Instead of anticipating future competition and conceiving of the consumer as informed and responsible, they hazard a bet on continuity. They mirror Orwell’s words when he, on addressing the language, affirmed that: “The political language is designed for making lies seem truthful and murder respectable….”.

The country has for decades been engulfed in mediocrity, faithfully reflected in the growth rate of the economy. However many attempts are engaged in by the authority, the evidence is resounding: the Mexican economy functions to the degree that the engine that exports and remittances represent operates; that is, we live because of the U.S. economy. The internal engines do not work for the same reason that they have not worked since 1970: because key issues have not been attended to. The core problem is political, in that concentration of power leads to the abuse perpetrated against the citizen and consumer, which in turn inexorably generates mistrust that inhibits investment and saving. The result should surprise no one. Some allusive examples:

• The government of Mexico City is delighted for having rid itself of the Federal District (the D.F.) because it will now serve, and with no qualms, its interest groups. The constituent process comprises only insiders. The new traffic regulations are designed to impose discipline by means of arbitrariness: their rationale seems more like tax collecting than like creating a space of civilized coexistence. Rather than currying citizen favor for his future candidacy, the Head of the City Government is experiencing the collapse of his popularity. Perfectly predictable.
• The Rule of Law is inconceivable without order and discipline, but the question is where to start. Miguel Ángel Mancera began by imposing fines in wholesale fashion, with all of the abuse that the latter can provide; Arne aus den Ruthen, in Mexico City’s Miguel Hidalgo Delegation, opted for the path of confrontation. Order is necessary; the question is whether arbitrariness is a model of civilization. Subjection of bodyguards is one way of combating arbitrariness and impunity, but without crushing it because making a great ado does not guarantee results. Arbitrariness does not end impunity and, in contrast, can propitiate it.
• Presently in the making, The Constitution of the Federal District is an illustrative case. No matter how hard a long list of notables has involved themselves,  the greater part of the citizenry is not aware of this nor is it represented. Is this a private process, only for those currently in office? Some months ago, the U.S. Securities and Exchange Commission (SEC), the U.S. equivalent of the Mexican National Securities Commission (CNV), proposed a modification in the respective law. The first thing it did was to publish the proposal so that all the interested parties would be informed, comment on it, and petition changes or greater precision, a process that would take  over a year: the objective is better regulation, not a boorish candidacy. The point is to facilitate public discussion that permits all of interested parties the opportunity of analyzing and evaluating its implications in order to recommend corrections as well as of adopting the pertinent modifications and mechanisms in order for it to possess, when finally implemented, full validity and credibility. The process in Mexico City (the new Ciudad de México [CDMX]) is absolutely arbitrary: the SEC process is absolutely predictable, thus zero arbitrary.
• Private companies are not far behind. Banamex cancels accounts of more than 30 years if they have not been used in the past twelve months, as if it were the holy government.  The worst is that it is that the interested party who must prove that the bank is in error and not the opposite. When the light go out, the response of the Federal Electricity Commission (CFE) is “… but we’re not billing when there’s no electricity”, as if a modern economy would be able to function not only with that degree of arbitrariness, but also above all with that inability of understanding the importance of the flow of electricity. Aeromexico flights depart at times different from those advertized and then changes reserved seats as it pleases. Who does it work for? The company registering the greatest number of complaints at the Prosecutor for the Consumer (Profeco) is TelMex. Where does the consumer stand in all this?

What’s paradoxical about Mexico with an open economy is that, while it has drastically increased the availability of goods and services, consumer dealings continue to be authoritarian and arbitrary. I ask myself what will happen when true when options really exist…

Arbitrariness is the norm and one of the obvious causes of the lack of trust, which has translated into the extremely low rates of economic growth and also into the most superlative levels of contempt for authority. Arbitrariness feeds on impunity and this generates cynicism. There’s no worse vicious circle.

The mediocrity overwhelming the country is the product of the indisposition to take the great step forward to construct an ordered and civilized nation. Of course it is necessary to discipline, but the latter requires its achievement with the legitimacy of governmental as well as entrepreneurial action. Without that we we’ll do nothing but go on digging the hole of justificatory language and poor results. There is no way of disguising overwhelming evidence such as these.

www.cidac.org

@lrubiof

 Luis Rubio

In today’s world there is no more divisive and politicized issue than inequality.  Inequality has supplied interminable rhetorical fuel to politicians and activists, turning Thomas Piketty into an international celebrity and triggering innumerable “occupation” protest movements worldwide. What is not obvious is that emphasis on inequality solves anything.

No one can dispute the fact that inequality exists but the essential problem is poverty, not inequality. “The poor suffer because they don’t have enough, not because others have more, and some far too much”, says Harry Frankfurt.  Why then do we not worry more about the poor than about the rich?

William Watson* argues that “focusing on inequality is both an error and a trap. It is an error because much inequality is ‘good’, the reward for thrift, industry and invention. It is a trap because it leads us to fixate on the top end of income distribution, rather than on those at the bottom who need help most.” In other words, combating inequality –therefore, capitalism- would lead to generalized impoverishment without ever diminishing inequality.

Inequality is the effect of an economic system that rewards and compensates creativity and innovation, inevitably generating differences in income in the process. The problem in countries like Mexico is that there are other elements that impact the result and that differentiate us from societies that, although manifesting high inequality levels, do not have poverty. For example, political use of the educative system (created to teach to a lesser degree than to control the population) has had the consequence of biasing the result, producing a majority population with little capacity for developing itself in the modern economy and a minority that possesses infinite possibilities of seizing upon opportunities. The same can be said for governmental concessions that favor concentration over competition or systems of permits (such as those for imports) which are an endless source of corruption. If we add to this total impunity, the ingredients of poverty and inequality are in the end uncontainable.

If one only wishes to observe the inequality and stops there, the solution becomes evident. Like the proverbial example of the man who, because he had a hammer in hand believed that all there was to do was to drive nails into the wall,  those obsessed with inequality in truth have a more relevant and profound agenda,  which is to undermine capitalism and stockpile more funds for the use of the bureaucracy.

In the discussion on inequality what is crucial is to define whether one is addressing a problem or an instrument. Inequality as a rhetorical instrument is highly useful for driving political careers, but does not lead to a solution of the problem and could even render it more difficult; inequality as governmental and social action objective obliges one to define priorities that should be seen to by public policy.

If one observes the distinct moments of the poverty-fighting programs that, from the seventies, have been the emblem of successive governments, the tension is plain between these two forms of understanding poverty as well as governmental action. In this manner, programs ranging from IMSS-Coplamar to Solidaridad, and more recently Prospera, follow a political logic that, while doubtlessly procuring the watering-down of poverty, have an unmistakable, patronage-oriented rationale with electoral and political control aims. On their part, programs like Progresa and Oportunidades obeyed a technical logic without electoral or patronage benefit. The question becomes apparent: political tool or problem to be solved?

Inequality, above all the so widely imputed inequality in Mexico, embodies a complex origin and cannot be resolved merely with fiscal policy. In fact, the notion of raising the taxes of some to redistribute them to others has always entailed the result of diminishing growth (because it de-incentivizes investment) without benefiting the poorest, because the bureaucracy is not efficient in distributing those benefits and, perhaps more importantly, given that there is an entire institutional framework that actuality promotes poverty. The example of the fiscal reform of two years ago is more than eloquent: it affected the consumption of the poor and decreased the investment of the rich.

Attacking poverty is the country’s great challenge and there are not many ways to do it. The most obvious one is achieving high economic growth rates within the context of much greater competition to that to which we are accustomed, in addition to a radical change of course in public policies that are key for the poor, particularly education. For this to be attained we must advance in a nearly opposite direction from that which has characterized the country: we have to liberalize more, make the tax system competitive, generate conditions that make productive investment attractive (beginning with the absence of the counterweights to political power) and eliminate the biases that favor certain persons, officialdoms, companies and groups over others. A recipe like this might preserve the inequality but would have the effect of drastically reducing poverty, not with hand-outs but with real opportunities for productive employment.

Of course, it’s very easy to market inequality as a political project, but that doesn’t solve anything.

*The Inequality Trap

www.cidac.org

@lrubiof