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We have many interesting ideas floating around about how capitalism works and its benefits. I would like to focus on just one small aspect of capitalism with regards to how it is implemented in the world and how it applies to difference classes.

One economic fact that escapes many proponents of the ‘free market’ is that for an country’s economy to grow strong, high tariffs and decidedly protectionist measures are required to protect sovereign industry from competition. State intervention in the economy is necessary for the economy to prosper an grow. The pattern has been repeated several times in recent history.

Starting with Britain and her industrialization and capitalization of her economy. To foster the domestic cotton industry, that in the beginning had no hope of competing with a superior product from India, Britain raised tariffs on Indian products and well, brutally conquered India, kicking there textile industry back into the stone age. Imperial solutions for economic problems were easier back then as we could take the role of ‘bringers of civilization’ to the unruly barbaric masses.

Flash forward to today; the economic imperatives remain the same. Protectionism for us and free market discipline for the rest of world. The mailed fist is still omnipresent, but not so blatant as public opinion of the generally benevolent masses must not be stirred from their slumber to protest the injustices being wrought in their name. One of notoriously sublime moves our business classes made in North America was the North American Free Trade Act, which more aptly should be called the North American Free Investing Act giving enormous power to private business and severely curtailing the power of the states involved to intervene in their economies. Mexico, being the weakest signatory to NAFTA, has suffered the most.

Unable to control the flow of goods into the Mexican domestic economy, Mexico’s society has steadily been devolving under the weight of cheap imported products, especially foodstuffs, that have undercut and essentially destroyed the local economy. What has replaced industry in Mexico is the narcotics industry, given the huge market in the US for drugs, narcotics trade and trafficking has become the new Mexican domestic economy.

The Mexican state, not strong to being with, can do little to quell the illegal drug industry, as people have to work and eat. However, the resulting narco-state is not particularly stable or safe as recent headlines have illustrated.

“The bodies of 15 young men, 14 of them headless, were found Saturday outside a shopping centre in the Mexican resort of Acapulco, police said.

Police believe the victims, all appearing to be in their 20s, were killed and their bodies stuffed into five vehicles by drug cartel members.  Investigators say handwritten signs were left with the bodies, a common calling card for the country’s cartels.

This was the largest single group of decapitation victims since Mexican President Felipe Calderon launched an offensive against cartels more than four years ago.”

Not exactly something you want to put in your tourism brochures.

So Mexico is currently embracing the free market and devolving (has devolved?) into a narco-state to feed demand in the US and Canada.   Thanks NAFTA.

If we were to apply the same free market prescriptions the IMF and the World Bank do to other countries to ourselves,  we might get a small taste of why we and our trumpeted economic system are not welcomed with flowers and open arms.