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Something peculiar is taking place in the world’s economy. The crisis of the last years, the so-called “Great Recession”, has altered growth patterns, reduced income for a good part of humanity and put governments, countries and economic actors of the entire orb in checkmate. Within this context, it is ironic that despite the depth of the crisis, no serious politician in the world disputes the continuity of capitalism. In another era, something similar led to the rise of fascism. Today, however, voters in one nation after another have been consistent in electing centrist governors devoted to steadying the ship to a greater extent than changing it. What is strange is that that constancy among voters has not been accompanied by an appreciation of the generators of wealth in the society. Thomas Sowell sums up this circumstance as follows: “One of the sad signs of our time is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain”.

Critics of capitalism are legendary. Much prior to Marx inaugurating the era of “scientific” analysis, the New Testament teamed with critics of diverse aspects of the functioning of the markets. In recent years, scholars and activists have published tomes and manifestos convoking the dismantling of that economic system. Picketty, who enjoys the curious merit of being the author of one of the most sold but least read books in history (Amazon measures this through its electronic reader), started the trend, to which now a ponderous volume has been added by Paul Mason entitled Postcapitalism, anticipating the end of capitalism given globalization and the Internet. In spite of this, the market economy continues to advance without surcease.

In Mexico the creativity evidenced by informal businesspeople is an unmistakable sign of the vitality of the efforts of this entrepreneurial community in the country. The number of persons devoted to creative activities on their own increases unstoppably. While they don’t call themselves entrepreneurs, but that is what they do: buy, sell, create, add value. What is of greatest impact about the informal market in Mexico is its capacity for adapting, the versatility of its responses and the services that change from day to day, precisely what one would expect from a dynamic market. In similar fashion, thousands of Mexicans are active participants in the digital revolution of Silicon Valley and many more aspire to be so. Each in his world, these actors are transforming the economic life in Mexico and in the world. Why then the meager popularity of entrepreneurship?

The fact that thousands or millions of entrepreneurs refuse to call themselves this is significant. In Mexico, the designation of “empresario” is associated with a group of rich people and not with creative and dynamic individuals who satisfy the needs of the population. Part of the reason for this has to do with the perception that many business persons are not the product of their skill or capacity for satisfying the market but rather of governmental favors, concessions or other like means. Many calling themselves entrepreneurs do not do what one would expect from the entrepreneur: adapting, assuming risks and seeking new ways to respond to consumer demand. In addition, the gaps in wealth that characterize many of the most prominent entrepreneurs with respect to the ordinary citizen in the street are so great that it is easy to associate entrepreneur with wealth and not with creativity. Perhaps that explains the rejection of the use of the term in a sector as extraordinarily dynamic as that of the informal economy.

Independently of the veracity or falsity of the perceptions regarding the origin of the wealth of many of the most visible entrepreneurs, it is  evident that inasmuch as there are fortunes emanating not from the market but instead from abuse, protection and governmental favors, the solidity and credibility of capitalism is ending up severely undermined. Many fortunes have been built in the shelter of politics and many politicians employ straw-men to utilize their post to get rich. The circle is boundless and in no way favorable for the development of a healthy economy that requires, according to many of the most earnest scholars on the subject, that the entrepreneurial function be appreciated and recognized as socially relevant. Without this there will not be the conditions for there to be investments, for taking risks and for generating a vital environment of economic creativity.

At the end of the day, economic success cannot depend on the creativity of the informal sector because, despite all of its dynamism, there are limits to its potential. The vitality of the Mexican economy is going to depend on the existence of rules of the game that favor entrepreneurship, developing competitive markets, formalizing the informals to let them take flight and, with this, conditions will be created not only for the economy, wealth and employment to grow, but also the burgeoning of high regard for the entrepreneurial function.

The development of an economy requires trust between governors and the governed and this does not come out of thin air. A researcher at the University of California who has undertaken the task of interviewing migrants deported from the U.S. found one of these who explained that he had decided to start a business but that he ended up failing in this because in Mexico “there are no rules”. It is not by chance that many Mexicans of modest origin who triumph in the US fail in Mexico: over there indeed there are rules and that is the basis of trust in the institutions and of the esteem in which entrepreneurs are held.



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Luis Rubio

Luis Rubio

He is a contributing editor of Reforma and his analyses and opinions often appear in major newspapers and journals in Mexico, the US and Europe (New York Times, Wall Street Journal, Financial Times, International Herald Tribune, Los Angeles Times, Washington Post, National Public Radio).