El Milagro Mexicano Essay

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As we all know Mexico had an economical Golden Age from Lázaro Cárdenas to José López Portillo. This Boom developed thanks to the cunning decision of Cárdenas to internalize all externalities. These externalities were the so-called “syndicates” being the CTM the most notorious one. So began the era called “El Milagro Mexicano”, which as we all no ended in a terrible crisis whose aftermath we are still living. I consider this period of the Mexican History very interesting, not only in a historical background, but in an economical one too. Therefore I’m going to write an essay explaining, with my economic knowledge, the crisis during the López Portillo’s presidential years (1976-1982). As I already mention, Mexico was having a great development, even in the first years of López Portillo. The Mexican Economy had an average annual economic growth of 6%, which had not repeated itself. This growth was possible thanks to a protectionism implied by the government on the economy. This…show more content…
Huge extensions of land, which were owned by one man before the Mexican Revolution, were now owned by the people. So during Portillo’s presidential years, private property was not secured, you could not own an “Ejido”. With these restraints, foreign industries were not interested on investing in Mexico. The “Ejidos” in Mexico were, from my point of view, a huge government failure. They did give land to the farmers, but they gave worthless arid lands, with no irrigation system or water supply. Most important of all, as land was a public good, people lost a key incentive. It did not matter whether you work hard or not, you gain exactly the same. So there was no point in working hard to try to be more successful, in the end it was not your land. The first thing you have to assure as an economy is private property. Therefore with no incentives, terrible land, and poor education, poor people almost lost
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