NAHUN CAPEN

Mexico was in a chaotic state with the central government not able to control the countries, especially in the North. There were numerous American proposals like this one. See {596921}.

The United States was desirous of providing assistance to the Benito Juarez Republican government of Mexico. Both governments were desirous of American foreign investment in Mexico. However, the Juarez government was not in real control of Mexico. State and local government, many corrupt, seized foreign owned business property, reneged on agreements. Others tried to regulate some of the abusive labor employment practices that some American firms had practiced. But little of this, both reasonable and not, was with the consent and even knowledge of the Mexican national government. Capen’s basic observation, so relevant to economic development in modern times was prescient and fundamental to the development of the third world and even the former Soviet Union. If there is insufficient government protection for business, then the high risk will drive out investors who would take reasonable returns. The only investors would then require very high returns, which themselves would inhibit the very growth and development that we want to stimulate.

Mexico was in a chaotic state with the central government not able to control the countries, especially in the North. There were numerous American proposals like this one. See {596921}.

The United States was desirous of providing assistance to the Benito Juarez Republican government of Mexico. Both governments were desirous of American foreign investment in Mexico. However, the Juarez government was not in real control of Mexico. State and local government, many corrupt, seized foreign owned business property, reneged on agreements. Others tried to regulate some of the abusive labor employment practices that some American firms had practiced. But little of this, both reasonable and not, was with the consent and even knowledge of the Mexican national government. Capen’s basic observation, so relevant to economic development in modern times was prescient and fundamental to the development of the third world and even the former Soviet Union. If there is insufficient government protection for business, then the high risk will drive out investors who would take reasonable returns. The only investors would then require very high returns, which themselves would inhibit the very growth and development that we want to stimulate.