The Next 100 Years

Gulf of
Gulf of
Mexico
Mexico
CENTRAL
CENTRAL
AMERICA
AMERICA
Gulf of
Mexico
PACIFIC
PACIFIC
OCEAN
OCEAN
CENTRAL
AMERICA
UNITED STATES
PACIFIC
OCEAN
Advanced Industrial
Mid-level Industrial
Undeveloped Industrial
Mexican Social and Economic Development
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dominated bootlegging used that money to move into legitimate business, 
until, at a certain point, the original money had been merged into the gen­
eral flow of capital such that its origin in criminality was no longer relevant. 
When this happens inside a country, it stimulates growth. When the trans­
fer is between two countries, it really stimulates growth. The key is that the 
cost of the product is artificially inflated by its illegality. This encourages the 
emergence of cartels that suppress competition, maintain high prices, and 
facilitate the transfer of funds. 
In the case of the contemporary drug trade, the sale of drugs at artifi­
cially high prices to American drug consumers creates huge pools of money 
available for investment in Mexico. The amount of money is so large that it 
must be invested. Complex money- laundering operations are designed to 
allocate the funds legally. The next generation becomes heir to a fairly legit­
imate pool of money. The third generation becomes economic aristocrats. 
This obviously oversimplifies the situation. It also neglects the fact that 
in many cases, dealers located in Mexico will not repatriate the money to 
Mexico but will instead invest it in the United States or elsewhere. But if 
Mexico is becoming increasingly productive, and if the government can be 
corrupted to provide a degree of protection while the money is being laun­
dered, then reinvesting drug money in Mexico makes a great deal of sense. 
Listen closely: the giant sucking sound you hear is investment capital leav­
ing the United States and going to Mexico via the drug cartels. 
The problem with this process is that it is politically destabilizing. Be­
cause the authorities are complicit in the process, and the courts and police 
ineffective, the situation creates instability from the street to the highest 
reaches of government. A society can rip itself apart when this much money 
is involved. Yet societies that are sufficiently large and complex, and in 
which the amount of money represents a relatively small fraction of avail­
able capital, can eventually stabilize themselves. The United States, where 
organized crime has played a critical role since the 1920s and did destabilize 
entire regions, ultimately rechanneled criminal money into legal activities. 
It is my view that this is the most likely path for Mexico and that this activ­
ity will ultimately contribute to Mexican economic growth. 
This is not to say that there will not be a fearsome period of instability in 
Mexico. During the coming years, the ability of the state to control the car­

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tels will be challenged and Mexico will face extensive internal crises. But 
in the long term, viewed in terms of the century, Mexico will both weather 
the crises and benefit from the massive inflows of money from the United 
States. 
Finally, when we look at Mexico’s population, we see not only continued 
growth during a time when labor will be needed to fuel it but also a soft 
landing in population growth by mid- century, indicating social stabilization 
as well as easing demographic pressures on society. The population pattern 
also allows for increased migration to the United States during the 2030s, 
resulting in increased remittances and therefore enhanced capital formation 
without the burden of the overpopulation within Mexico’s boundaries. Al­
though not critical for Mexico’s development, this migration will certainly 
be something that supports it. 
Thus, we can see Mexico, which has joined Europe in some measures of 
its standard of living, passing through an inevitable period of turbulence 
and growth on the way to order and stability. Then, around the middle of 
the twenty- first century, while the world is at war, Mexico will emerge as a 
mature, balanced economy with a stable population—and will rank among 
the top six or seven economic powers in the world, with a growing military 
power to boot. Mexico will be the leading economic power of Latin Amer­
ica and, perhaps allied loosely with Brazil, will pose a challenge to U.S. 
domination of North America.