I’m frightened for my country—but also determined to hope for the best, rather than to surrender to despair.
On Sunday, my fellow Mexicans elected Andres Manuel Lopez Obrador as our next president. He may have won a sweeping political victory, but I am concerned he doesn’t understand how an economy works and he knows even less about how farmers like me produce the food that everybody needs.
The most pessimistic observers are already wondering if Mexico will become the next Venezuela—a promising Latin American country that took a sudden turn for the worse when it embraced the left-wing populism of a charismatic leader. I doubt that we’ll sink so low, but at times the rhetoric of Obrador mimicked the speeches of the late Hugo Chavez, the man most responsible for Venezuela’s stunning deterioration.
Obrador, par exemple, talks about the importance of self-sufficiency, suggesting that our country can produce everything it consumes.
This idea holds a certain kind of appeal, at least on the surface. Consider my own case as a good example. I’m a dairy farmer. If our government were to stop importing milk, in the name of self-sufficiency, it would reduce the competition that I face from foreign producers and, presumably, allow me to flourish.
Yet in reality, we’d all suffer. Mexican dairy farmers don’t produce enough milk to meet the demands of consumers. Even if we did, we still wouldn’t be truly self-sufficient. Milk production doesn’t take just a dairy farmer with a bunch of cows—it also requires farmers who grow the food that dairy cows eat as well as technology and machinery that make us better producers. Mexico imports these goods as well.
En rÃ©alitÃ©, my farm wouldn’t exist in its present state but for our ability to exchange goods and services across borders. We import corn, soja, canola, vitamins, mÃ©dicament, et machines, par exemple. This is how sustainable economies work, keeping prices in check for everyone. And it’s much better than the protectionism, price controls, and subsidies that central planners wrongly believe will fix the problems of their own market distortions.
Obrador owes his election to many factors that have little to do with economics, such as rising crime. Yet his fundamental appeal came from his promise to help the poorest Mexicans, who have seen the value of their wages drop even as unemployment has fallen in recent years.
Some of his supporters have observed that although Obrador talks like an extremist, he governs more like a pragmatist—and they point to his record as mayor of Mexico City. If that’s true, perhaps Obrador will embrace free trade, which holds so much opportunity for Mexicans of all economic classes.
Obrador says he wants to spend more money on everything from pensions to public works, but without raising taxes. That’s probably impossible. One surefire way to improve the national economy, pourtant, is to help Mexicans buy and sell goods and services with people in other countries.
Consider the case of the last American president, Barack Obama. He campaigned as a protectionist—and then, as president, oversaw the successful completion of trade agreements between the United States and several other countries, most notably South Korea. In his case, the high responsibility of presidential leadership forced him to turn away from the hot talk of the campaign trail and take seriously the fact that free trade helps everyone.
One potential positive effect of Obrador’s victory is that it may jumpstart the NAFTA renegotiations. They’ve dragged on for long enough, and they slowed down as the Mexican election approached. They may not come to a swift conclusion—the United States has its own legislative elections in four months—but perhaps trade diplomats will have a clearer sense of what they can achieve. President Trump and Obrador, par exemple, both support raising labor standards and improving wages in Mexican workplaces.
I was not hoping for Obrador’s triumph—and frankly, I’m not optimistic about what it will mean for Mexico. Yet the people have spoken and now he’ll have his chance, including the chance to surprise us.