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Why Billions of Mexican Pesos Should Be Redistributed

Wealthy Mexicans might realize that doing good can be pleasurable and tax deductible

FORBES magazine published the news this past summer that Mexico has 24 individuals (or families) who have accumulated assets worth more than a billion US dollars. Of all the countries in the world, only the United States, Germany, and Japan have more billionaires than Mexico.

The initial statements from the administration of President Carlos Salinas de Gortari boasted of the increased wealth generated by its policies. But embarrassment soon followed when the combined worth of the ``Forbes 24'' was shown to be equal with the total wealth of the 25 million least affluent Mexicans. Now, bewilderment has set in. What should be done about such disproportionate wealth distribution - which, according to a source at Forbes, will only worsen this year with approximately 10 more names to be added to the list?

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As anyone who has taken Political Science 101 knows, democracies do not flourish in countries where there is a class of the very wealthy, but the majority of the people are poor. Democracies need a basic national consensus on values and goals. Quite naturally, the rich and the poor are usually at odds with each other on such basics. Democracies work best in countries where wealth is more evenly distributed - such as in the US, Canada, Australia, and the nations of Western Europe. The irony is that those who govern Mexico are well aware that a redistribution of wealth is necessary if democracy is to be the goal. Nothing is ever done to remedy the situation, however, because the ruling Institutional Revolutionary Party (PRI) depends on the support of the rich to stay in power.

It is easily understood why the wealthy in Mexico might be terrified of a true democracy where the majority, the poor, could elect their own representatives. The PRI/government/Televisa (TV monopoly) conspiracy understands this only too well. That is why the opposition was never allowed a fair chance in the August elections, and why there is now a violent reaction by old guard PRI-istas against the announced democratic reform intentions of President-elect Ernesto Zedillo Ponce de Leon.

Mr. Zedillo, however, insists that reform will continue with true democracy as the result. Then, obviously, there needs to be a redistribution of wealth. But it has to be just, fair, and consensual. It can't be confiscatory or the country will experience a capital flight that would rival Cuba's after Fidel Castro Ruz's takeover in 1959.

Enforcement of current antimonopoly laws would be a great start. Too many big companies in Mexico have been allowed to corner their markets and concentrate wealth. ``Trust-busting'' is what they called it after the Sherman Anti-Trust Act of 1890 took effect in the US. Anticompetitive practices, now common in Mexico, would be outlawed, and monopolies would be broken up through forced sell-offs to enliven competitiveness. The positive long-term effects of continual antitrust enforcement can't be overemphasized.

But short-term redistribution still has to be faced for democracy to take root. Needed is 19th-century moralism in a 20th-century philanthropic foundation.

Many consider the huge Mexican fortunes now being amassed as obscene in light of the general poverty of the country. With a tiny fraction of their wealth, the billionaires could be financially secure for generations. Just as a ``social gospel'' urged Andrew Carnegie, John D. Rockefeller Sr., and others to meet their obligations to society in the late 19th Century, moral forces in Mexico today should push for the voluntary formation of large private foundations.

What better way to redistribute private wealth, prove patriotism, secure the prestige of a family name for posterity, and contribute to the well-being of society than by means of a charitable foundation? Not to mention the acquisition of a good night's sleep for those who are now prime targets for kidnappers.

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FOUNDATIONS have distributed private fortunes for innumerable public purposes. Here in Mexico, they could promote education at all levels - agricultural modernization, research and statistical analysis, health and welfare, a myriad of social programs - or whatever beneficial objectives might suit donors' interests.

Mexican charitable foundations are rare (though another one was recently announced). The philanthropic organizations that do exist are small. Mexico may be fourth on the list of countries with the most billionaires. But it doesn't come close to the leaders in charitable giving. It is time for those who have gained so much from Mexico to realize that doing good can be downright pleasurable - in addition to being tax deductible.

Speaking of taxes: If the wealthy don't give voluntarily, the government should consider enacting estate or inheritance taxes (now nonexistent in Mexico) comparable to those in the US. Painful as they might be, they can be an effective way to officially redistribute wealth.

Mexicans don't have to be bewildered about how to redistribute wealth. They just have to have the goodwill - or the political will - to do it.

The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.

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