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> I don't believe this is completely true. How does an economic disparity happen?

Colonialism, originally, then maintained due to the geopolitical interests of the wealthier power.

I mean, sure "material factors or cultural, ideological, or philosophical factors" play a part in there somewhere. But the main cultural factor is that New Spain was set up as a colony of extraction for the Spanish empire, with the majority of the population as "conquered" indigenous people. The U.S. was a colony of settlement, populated by mostly Englishmen who were by far the first to obtain any sort of citizenship rights in the U.S. This gave rise to dramatically different political and legal institutions, that after independence gave quite a leg up to the U.S. vis a vis Mexico. The U.S. leveraged that leg up to: annex one third of the Mexican territory (including some of its currently richer areas, like California), intervene in Mexican politics (see. Monroe Doctrine, and Cold-War Era support for single party rule).

Sure, the crony politicians and cartels are Mexican, but the U.S. also had clientelism and Mafia just about a hundred years ago, and is not like the cartels' weapons and the government logistic support doesn't come from up north (not to mention the market for drugs...). What the U.S. didn't have to go through, in the same period: Conquest (unless you are Native American), Encomienda/Exploitation (unless you are African American), Dictatorship, Two foreign interventions, 70 years of single party rule...

I notice this about a lot of Latin America. I'm not a historian, but my understanding is despite being a small minority, Creole (whites born in Latin america) people still dominate the political and economic spheres.

The wave of revolutions in Latin America were mostly led by them because they stood to benefit most in the new order and that continues today. From my travels, I've found that Latin America is just a little bit more colonial in nature with private citizens/corporations having more power than here in the US. For instance, the idea of a private, unregulated paramilitary/militia group being allowed to operate is an anathema. It's also slightly more misogynistic.

I'm painting with a very broad brush. For instance, I find countries like Bolivia to be very progressive with regards to their drug policy and courageous for standing up to the US, asserting their rights and traditions vis a vis Coca leaf production. American drug policy is so schizophrenic as it is willing to take drastic measures to ensure compliance while also being far and away the world largest consumer of narcotics.

Yes, I just finished bringing on Narcos

terms of t

> I'll give you a hint: it's not because of resources or good land or good people

This is a bold claim which you don't really back up. If they can't put together a functioning state where the economy can prosper then they most certainly have their fair share of bad people too, many of them in powerful positions in the state, offsetting all of the good ones.

Just look at the disappearances of people and kids in the country which the state was complicit with. This and other lawlessness destroyed tourism in Acapulco which used to be a primary tourist destination there: https://en.wikipedia.org/wiki/2014_Iguala_mass_kidnapping

Or the foreigner-owned hotels taken over by armed thugs and corrupt judges: http://www.nytimes.com/2016/08/17/world/americas/mexico-tulu...

Or entire towns being taken over by vigilantes because of police corruption: http://www.naturalnews.com/039808_vigilantes_Mexico_armed_ci...

Their all-out war with the cartels hasn't done much to reduce the flow of drugs either, it mostly created a series of power vacuums for the next round of poor kids to take over. The failures in enforcement makes the police/army v cartels comes off as two parties with a very thin line of morality separating them. That's not helping the situation and the opposite of leading by example.

These are just some recent examples. In this environment it's no wonder they haven't developed a thriving (legal) economy. Maybe they should focus on letting the good people run things and take a good hard look at the people they are letting hold power...

There seems to be a culture of turning a blind eye to people in power not following the laws and this is only something they can solve internally by holding up their representatives to a higher standard.

I read the "foreigner owned notes taken over by thugs" article and it seems that these foreigner owners had pretended there was no competing claim to the land they bought, and lost out in court. So it seems this is a case of an individual who rolled the dice and lost, not that "thugs stole his hotel":

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Yet he soon learned that a family from the distant northern state of Nuevo León claimed to have a title to part of the ejido land, a conflict that had percolated for years.

Mr. Jacquet did not let it deter him. “I looked at everyone else, and we weren’t worried because nobody had lost their land,” he said.

By the late 2000s, though, Tulum had taken off as a vacation destination. Room rates soared, making beachfront properties more attractive as takeover targets.

One of the first significant warning signs for business owners came on Nov. 30, 2009.

That morning, two dozen police officers and a judge descended on Ocho Tulum, a hotel belonging to Mr. Wolf, the American entrepreneur. It sat on beachfront land that he had rented since 2005 under a 30-year lease. In 2006, before he started building, he had learned there was a competing claim to part of the land, but decided to move ahead with the project.

“I heard that it would probably not amount to anything,” he said. “I never thought that I was at risk of losing it.”

He challenged his loss in court, but was defeated after years of litigation.

> If they can't put together a functioning state where the economy can prosper then they most certainly have their fair share of bad people too, many of them in powerful positions in the state, offsetting all of the good ones.

It's not about the goodness or evilness of people, I believe. It's more about the economic disparities that force people to act more desperately. Hence, corruption, escalating violence, etc.

> In this environment it's no wonder they haven't developed a thriving (legal) economy.

Our democracy was really born 16 years ago. And our economy really got stable about 20 years ago. Sure, the dollar is right now at an all-time high ($1 USD = $19 MXN). However, this has been a gradual decline with a few spikes. It's not ideal, but it's nothing compared to the crises of the past.

For instance, during the 2008-2009 financial crisis, we barely got a hit. If this had happened a couple of decades before, the country would've collapsed. So yeah, while we're still far from having the economy that we could have, I believe that overall it's improving and more stable than it has ever been.

> Maybe they should focus on letting the good people run things and take a good hard look at the people they are letting hold power...

It's not as simple as that.

> There seems to be a culture of turning a blind eye to people in power not following the laws and this is only something they can solve internally by holding up their representatives to a higher standard.

We need systematic changes that include: starting by diminishing the power that political parties hold, enforcing laws, improving education, among many other things.

Well, land does have a lot to do with it, historically. Or rather, the people who controlled the land vs. the people who didn't control the land is the source of a lot of the historical instability in Mexico, which really ought to be a warning to people who argue that inequality and dispossession are perfectly fine and expected consequences of a good system.

> which really ought to be a warning to people who argue that inequality and dispossession are perfectly fine and expected consequences of a good system.

A "good system" doesn't just mean rewarding the top contributors with more but also implies the existence a strong and fair legal system where human, business, and property rights are respected and criminal law is enforced. That is almost always a necessary prerequisite for capitalism to function (even Adam Smith wrote about this quite a bit in the 1700s) but capitalism usually gets faulted regardless - even when market economies are pigeonholed on top of a) purposefully neglectful authoritarian states or b) places with under-developed legal systems.

There have been plenty of cases in Mexico where rightful owners of land were 'dispossessed' and this didn't happen as a result of a functioning free-market system (which is what I believe you were taking a swipe at).

Whether the land rights were fairly distributed or respected post-colonization is also not a cause/effect result of a market economy but a result of the functions of the state/legal system. It certainly won't help either when responsibility is post-defacto shifted onto markets where the powerless poor will have even less authority than in courts or government.

Stealing a bunch of stuff then shifting previously centralized authority/responsibility over to markets is a sadly common tactic in underdeveloped regions, not surprising there was such hostility towards capitalism in South/Central America in the past 60 yrs where it was rushed in without addressing underlying systemic issues (see also: Russia and parts of eastern europe in 80/90s).

this didn't happen as a result of a functioning free-market system

Sure it did. It's just that you haven't yet figured out that "free-market system" is a label that ranks up there with "creation science" in terms of deceptiveness about what it actually labels.

OK. What does it actually label?

No. To suggest that Mexico's problems are free market problem is not at all true.

long but good article on why land/natural resources probably does play a major role in the economic disparity: https://www.stratfor.com/analysis/geopolitics-united-states-...

> it's not because of resources or good land or good people: all of which it has in plenty.

Land-wise, Mexico's got real issues. Its core territory is limited, encircled by mountains, the country has massive desert and jungle areas that make imposing central leadership difficult, and it offers very little in the way of internal or external defenses. Mexico City is shockingly easy to invade via Veracruz, and the US Navy is about the only entity preventing anyone from blockading their primary port.

Mexico's geography isn't awesome.

A lot of their economic limitations are self-imposed, e.g., the 1917 constitutional nationalization of the country's mineral resources killed foreign capital investments of exploration and production.

Oil revenues fund government programs instead of funding Pemex's growth. The state needs its oil revenue to function, which is a major limiting factor.

> Mexico should be booming due to NAFTA.

Despite all the above, it is: http://assets.bwbx.io/images/users/iqjWHBFdfxIU/iDpyf7X2wzkM...

And that's just the on-books economy, which excludes a significant amount of cashflow coming both from remittances, and the narcotics industry which funnels a massive amount of cash into the Mexican economy. The most conservative estimates are staggeringly big: it's a significant percentage of their cash economy.

It's the world's 11th-largest economy. It was 13th just a few years ago.

Their exports are skyrocketing: https://www.stratfor.com/sites/default/files/styles/stratfor...

Foreign direct investment, while obviously highly driven by fluctuations in the US economy, is on balance far higher than they've ever been: https://www.stratfor.com/sites/default/files/styles/stratfor...

> So much of this development we now see in East Asia could have very easily gone right across the border if it had a working political system.

East Asia saw such an influx of investment precisely because their wages were relatively low, thanks largely to their poverty.

You can't have it both ways: either the economy gets to be stable and robust with a functioning government that can control crime, or it gets to have low labor costs, which is what drove the investment in East Asia: relatively lower labor costs.

The narco trade is the one thing probably suppressing wages in Mexico the most, and is, in a very unusual way, driving the shift of manufacturing from East Asia to Mexico. (As is automation.)

But I agree that building a city on the border won't change much (if anything).

Those stats are very interesting. Do you do research in the area?

Only informally.