Mexico 2002: Free-market Economy

Mexico 2002

Photos

Stories, Observations, and Miscellany

Free-Market Economy

We Americans pride ourselves on our capitalist system and the opportunities it gives people to show some entrepeneurial spirit. But our everyday experience of capitalism expresses a certain tension between the ideal and the real. Sure, we live in a free-market country, but most of our transactions are cut and dried, in which we buy items in carefully designed, prepackaged quantities whose prices are clearly marked and electronically tracked. As for showing some entrepeneurial chutzpah, if your enterprise is any larger than a lemonade stand, you'll want to gird yourself to do battle with everything from the licensing to the inspection to the regulation that is a part of doing business in the U.S.

A visit to Mexico is an experience in rendering the "invisible hand" quite a bit more visible. Naturally, Mexico has its supermarkets and shopping malls and Wal-Marts, and while the experience of going to those can sometimes be quite different — a stroll through the produce section of a Mexican supermarket makes it abundantly clear that you're not in Kansas any more, Dorothy — those particular stores represent more than anything solid evidence of the globalization of (primarily American) culture, for better or worse. But the smaller-scale economy thrives in Mexico in a way that we find practically nostalgic in the U.S., and to which we even have to afford protected status, witness the effort several decades ago to save Seattle's historic Pike Place Market. But every neighborhood in Mexico has a traditional mercado, whether as a permanent fixture or as a mercado sobre ruedas ("market on wheels") that is set up weekly on blocked-off streets. (As an aside, Erica and I walked from Margot's house to the mercado of San Angel, retracing the steps that my Oma and I used to take when I was six years old. Not much has changed in those 40-odd years, and probably since substantially before then, either.)

These mercados are the last link in the economic chain, where the consumer finally lays hands on the vast array of goods we need for everyday living. At any mercado you can buy fruits and vegetables, coffee, beans, and rice; you can buy pork and beef and fish; you can buy scrub brushes and plastic buckets; you can buy healing herbs (and advice on how to use them), t-shirts, dresses, hats, CDs, goldfish, votive candles with pictures of Our Lady of Guadalupe, mylar balloons of licensed characters, and a whole lot more. Needless to say, the items are not shrink-wrapped and pre-priced. They are hung from rods (dresses and plucked chickens) or perhaps displayed in open 50-kilo bags (beans and oranges). The motto of the Seattle Pike Place Market is "Meet the Producer," a mild fiction suggesting that you're buying from the person who picked the peach or (more probably) made those earrings. In a Mexican market, you can often be somewhat surer that you're meeting the producer, because said producer might still be cutting up the side of pork from which you're about to buy some chops. In fact, not only can you meet the producer, but you might meet the product himself, everything from the chops to the chitlins to the whole hog head leering out at you from the refrigerated display case. If you feel should out of touch with where meat comes from, visit the butcher aisle at a mercado some day.

When you want something, you start by asking how much it is. All of us understand, of course, that this is Economics 101 and that the price might vary according to many factors, not least of which is probably what the gringo market is willing to bear. In the current world economic climate, the prices of local goods to us 'Mericans are astonishing low. At one point when we were wandering through a mercado we assembled a lunch out of hard rolls and avocados, which we calculated cost us 40 cents American for the two of us. (In contrast, our observation in the supermarkets, where prices are marked, is that if you recognize a brand name such as Kleenex or Tide, the price is the same as in the U.S., meaning that as a percentage of income those items are extremely expensive.)

Which brings up the issue of bargaining, an experience that is integral to the free-market aspects of Mexico, and which many visitors find to be either exhilirating or frightening. Outside of the supermarkets, malls, and restaurants, prices aren't posted and bargaining is still the rule, even if the upscale tourist shops post discreet signs saying Precios fijos (Fixed prices), a rule that is probably subject to some bending. Our rule was: no bargaining. We paid the asking price every time, fully understanding that the price might have been grossly inflated for our particular benefit. But a high price is relative, and even if the locals might have snickered at how much they took us for, we never found any price so outrageous that we even much hesitated. Certain items were not cheap, notably the beautiful rugs we saw in Oaxaca, which went anywhere from fifteen dollars for small ones directly from the weavers to over a thousand dollars for large ones in the tourist shops. But it was obvious that the rugs had taken hours to create, perhaps hundreds of hours, and there was no reason to begrudge what we still considered a fair price. (We didn't actually buy one, for what it's worth.)

Not everyone shared our philosophy. In Oaxaca I watched some French tourists haggling with a vendor about some cheap necklaces and bracelets. At about a buck each, they didn't seem overly expensive to me, but apparently the French couple found them a little rich. The most notable moment occurred when I overheard an American woman haggling with a Zapotec lady about the price of some trinket or other. The price was five for ten pesos, or about 20 cents American each. The tourist woman was trying to bargain this price down. I had to restrain myself from going over to the American woman, shaking her by the shoulders, and shouting at her "You're arguing with this peasant woman about a quarter, you moron!" A quarter that meant essentially nothing to the American woman and who knows how much to the poor local woman trying to make the sale.

Admittedly, we were in the best economic position of everyone we met. For some reason we ran into a lot of Canadians, and they quickly pointed out that while things were cheap in American dollars, they were not nearly such a bargain in Canadian dollars. One couple was touring Mexico in their RV, and they told is that gasoline worked out to about two dollars American per gallon. Even though Mexico is swimming in petroleum, it's heavily taxed and apparently a major source of government revenue. Oscar noted to us that with a weak Euro, tourism from Europe had fallen off precipitously. So perhaps it was not unreasonable for non-Americans to want to get better prices, but I still maintain that for an American to try to bargain down prices is ridiculous.

But it isn't just the bargaining that makes Mexico seem like a free-wheeling economic circus. Many Mexicans — as is true everywhere on the globe, I suppose — are businessmen at heart, and the barriers to entry for being an entrepeneur are pretty dang low. The most direct illustration might have been the low-tech high-tech businesses we saw in Oaxaca. It seemed to us that every block in Oaxaca had two or three places that advertised photocopies, even if the business consisted of no more than a copy machine and just enough space to hold it. We must also have seen a dozen Internet cafes, where you could be online for about a dollar an hour.

Corner shop in Oaxaca

Oscar explained to us that unlike American businesses, Mexican businesses would not necessarily have their own copy machines or computers, so there is in fact a thriving local demand for these appliances. (Although I'm sure the Internet cafes rely a lot on the tourist trade — hey, gotta check my email! — the ones we visited had plenty of locals hunched over the machines.) But even so, we had the distinct impression that if somehow you managed to lay hands on a copy machine, for instance, not only could you make copies for yourself, but hey! You hung a sign and were instantly in the copy-shop business. And why not?

But for pure, unadulterated salesmanship there are the vendors. Everywhere. On every street, in every park, wandering through every restaurant there are people offering something for sale. As you sit in the zocalo in Oaxaca, every few minutes someone walks up with something: flowers, gum, woven goods, pens, toys, balloons, or any combination. A common practice was to have a basket with candy bars, gum, and packs of cigarettes, or in the case of one ambitious fellow, an open pack of cigarettes from which he was apparently willing to sell individual units. Many of the vendors are children. As we learned from our nightly visits to the zocalo, families work together, the mom and the youngsters spreading out through the plaza to offer their wares. We came to realize that the three different kids wanting to sell us bookmarks, for example, might all be siblings hitting us at different times of the evening. You never know when one of them might make the sale. (One evening we watched as the mom got a stern lecture from an official-looking gentleman. We caught enough of the conversation to catch that she was not supposed to be sending her kids out to be selling, or perhaps not on a school night.)

The kids were especially fun to watch. One boy was maybe seven or eight years old and had the swagger of a person twice his age. We saw him several evenings, each time trying something different. One evening he might be selling trinkets; the next he might just be asking for money. At times he tried standing next to a table and singing (none too well) and then asking for donations. Not a shy kid.

Our last evening in Oaxaca we witnessed a sales scene sure to be remembered even today among the vendors. We sat down in a restaurant and a few tables over, at what we came to call the "magic table," were a couple of American ladies were concluding a sizable deal: they had each bought about 10 silk scarves from a woman who probably couldn't believe her luck. So pleased were they with their scarves that they turned around and talked them up to people at the adjoining table, who proceed to buy one or two more. Word must have gotten around, because the ladies soon had a steady array of vendors visiting them. And the astonishing thing was that they bought at least something from every vendor. Our young friend, the swaggering boy, showed up with a mostly empty box of chiclets. While he waited for them to finish with whatever they were doing, he sat down at an empty place at their table and made himself comfortable, gnawing on an ear of roasted corn. The ladies bought his remaining stock of gum, and within minutes he was back with another full box, which they also bought. Good Lord. Eventually they must have gotten tired, or run out of money, because they packed up their big pile of goods and after asking us whether we were interested in taking some gum off their hands, staggered off into the evening.

The ladies were replaced with a group of Brazilians. As we sat and watched, vendors showed up. We expected them to be dismissed handily, which is the usual fate, but no; the Brazilians must have been enchanted in the same way, and soon they, too, were buying from various vendors. It made us wonder about the people doing the selling. Surely they just eke out a profit from day to day for their many hours of work. A night like that of the magic table must be a good night's work. And it must give them the faith to go to the next table and ask whether the people there, too, might not like one of these lovely scarves.