This is a rather interesting story from Business Week about American and other foreign companies continuing to invest in northern Mexico, despite the cartel violence:
The Other Mexico: A Wave of Investment - Who says it's a "failed state"? Ignoring the drug wars, multinationals are pumping in billions to set up factories (http://www.kdbc.com/Global/story.asp?S=10163575 - broken link)
Quote:
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Even as American TV anchors report on "the war on our border," the city's [Ciudad Juárez] 285 maquiladoras-factories making goods for export-are not fleeing... The 41% drop in the peso against the dollar since August has made Mexico an even cheaper place to manufacture: Factory workers in Juárez can be hired for $1.50 an hour.
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This raises a bit of an interesting "free market capitalism" question. The fact that all these Mexican operations are thriving despite the cartel violence shows just how robust capitalism is, and how the profit motive is a powerful engine under adverse circumstances.
However, this leads right into a tricky policy area that splits the normal political lines, with protectionist conservatives lining up with unionist liberals against free-market conservatives and neoliberal free traders.
But in the end, should we even worry about trade policy? Or should we just assume that business will get what business wants?
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