Editor's Note: Carlos Slim, the Mexican son of Arab immigrants, surpassed Bill Gates in becoming the world's richest man. The story of how a Mexican is the wealthiest man on Earth is the story of how NAFTA's (North American Free Trade Agreement) limitations distort income distribution in both Mexico and the United States, says NAM contributor Louis Nevaer.

Mexico City – Which country could give the son of a poor immigrant from an impoverished faraway land so many opportunities as to make him the world's richest man? Mexico.

It is NAFTA's most ironic of unintended consequences that Carlos Slim, the Mexican son of Arab immigrants, surpassed this month Bill Gates to become the world's richest man.

When the Dow Jones closed above the 14,000 mark for the first time on July 19, 2007 Slim's net worth was estimated to have exceeded $69.3 billion. By comparison, according to Forbes Magazine, Bill Gates is worth $59 billion and Warren Buffet a mere $52 billion. (Earlier this spring Forbes Magazine reported that Slim had replaced Buffet as the second-richest man, and believed he would surpass Gates within "a year." This year's bull market has given Slim a 28 percent surge in price of the stocks he owns.)

The story of how a Mexican is the wealthiest man on Earth is the story of how NAFTA's limitations distort income distribution in both Mexico and the United States. In the early 1990s, when negotiations for NAFTA were underway, the United States and Mexico decided to exclude certain things for negotiation. Presidents Bill Clinton and Carlos Salinas both knew that their nation's congresses would oppose the treaty if certain areas were included in the trade deal. Clinton said, as the first President Bush had before him, that ending subsidies to American farmers was impossible to entertain. Salinas said that opening up Mexico's oil and electrical industries to American companies was not in the cards. Both agreed that increasing taxes on their nations' wealthiest, and enacting proactive regulation to level the playing field, would result in corporate lobbyists on both sides of the border opposing the treaty.

Almost a decade and a half into NAFTA the result is that unlike the continental integration meticulously underway in Europe, market imperfections are producing stunning market failures in both the United States and Mexico:

• Without an end to American subsidies to its farmers, below-market products have flooded Mexico, bankrupting millions of rural farmers, and sending several million undocumented workers into the United States, exacerbating an immigration crisis that is infuriating the American electorate;
• Without the restructuring of Mexico's oil and electrical industries, current Mexican President Felipe Calderon is confronting a looming energy crisis; only the sharp rise in the price of oil has buffeted Mexico's antiquated oil and electrical industries, both of which remain government-owned, and are at the limits of their production capacities,
• Without higher taxes on the most privileged, and through the systematic failure to create level playing fields through regulation – the repeal of the Glass-Steagall Act in the United States has resulted in the emergence of oligopolies the size of which the robber barons of the Gilded Age could not have dreamed, and the failure of the Mexican Congress to pass market reforms continues to stifle Mexican entrepreneurship – we are witnessing the concentration of wealth unprecedented in history.

These limitations created the conditions for Carlos Slim – and Bill Gates and Warren Buffet – to amass fortunes of such size they are obscene. Gates and Buffet, for instance, have pledged to give away most of their fortunes, since their sheer magnitude no one person can manage.

Carlos Slim struggles about what to do with so much money. His wealth derives primarily from telecommunications, Telefonos de Mexico, or Telmex, the Mexican phone company, and América Móvil, Latin America's leading cellular phone provider and he now confronts the stunning reality that he is worth more than the poorest 45 million of his compatriots combined.

To be sure, there is nothing shameful, or wrong, in how Slim acquired his wealth. He has not staged a coup, launched a war, profited through fraud or deception upon consumers around the world. He has played by the rules, acquiring Telmex when it was privatized, and he has pioneered providing the public with cell phones to chat away endlessly from Alaska to Argentina. He has reinvested his profits wisely, acquiring business interests in everything from construction companies to restaurant chains. Not bad for the son of a poor immigrant who opened a dry goods store, La Estrella del Oriente (Star of the Orient) in 1911.

One can criticize the political conditions that continue to give him an unfair competitive advantage – many telephone companies complain that Telmex is so big it should be broken up – but the root of the problem is the systemic failure of the United
States and Mexico to work closer together. President Bush's failure to reform the agricultural subsidies that give American farmers an unfair advantage, or to lobby successfully for a more sensible immigration policy, is mirrored by President Calderon's failure to end the oligopolies that characterize and stifle Mexican entrepreneurship. Neither Bush nor Calderon have shown much interest in a more equitable distribution of their nations' wealth, unlike the European Union, where state policy is to provide every European with a decent, middle-class life.

As the world's wealth is concentrated in fewer and fewer hands, the social contract is shifting under our feet.

Isn't there something odd when Bill Gates holds a news conference to announce he will personally end malaria? Wherefore government?

Carlos Slim has remained silent, content to have underwritten the revitalization of Mexico City's historic neighborhood of Alameda, a short stroll from the Presidential Palace. He is, however, aware that Mexicans are now looking to him to announce the divestment of his fortune through philanthropies, as Gates and Buffet have done.

"As he has said many times himself, he is not in any competition," Arturo Elias Ayub, Slim's spokesman, said when asked to comment. Perhaps the greater irony that it is precisely a lack of competition that got Mr. Slim to where he is escapes those around him.

Originally by Louis Nevaer from on July 27, 2007, 4:00pm


The following should appear at the end of every post:

According to the IRS, "Know the law: Avoid political campaign intervention":

Tax-exempt section 501(c)(3) organizations like churches, universities, and hospitals must follow the law regarding political campaigns. Unfortunately, some don't know the law.

Under the Internal Revenue Code, all section 501(c)(3) organizations are prohibited from participating in any political campaign on behalf of (or in opposition to) any candidate for elective public office. The prohibition applies to campaigns at the federal, state and local level.

Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes. Section 501(c)(3) private foundations are subject to additional restrictions.

Political Campaign Intervention

Political campaign intervention includes any activities that favor or oppose one or more candidates for public office. The prohibition extends beyond candidate endorsements.

Contributions to political campaign funds, public statements of support or opposition (verbal or written) made by or on behalf of an organization, and the distribution of materials prepared by others that support or oppose any candidate for public office all violate the prohibition on political campaign intervention.

Factors in determining whether a communication results in political campaign intervention include the following:

  • Whether the statement identifies one or more candidates for a given public office
  • Whether the statement expresses approval or disapproval of one or more candidates' positions and/or actions
  • Whether the statement is delivered close in time to the election
  • Whether the statement makes reference to voting or an election
  • Whether the issue addressed distinguishes candidates for a given office

Many religious organizations believe, as we do, that the above constitutes a violation of the First Amendment of the US Constitution.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

That said, we make the following absolutely clear here:

  • The Real Liberal Christian Church and Christian Commons Project not only do not endorse any candidate for any secular office, we say that Christianity forbids voting in such elections.
  • Furthermore, when we discuss any public-office holder's position, policy, action or inaction, we definitely are not encouraging anyone to vote for that office holder's position.
  • We are not trying to influence secular elections but rather want people to come out from that entire fallen system.
  • When we analyze or discuss what is termed "public policy," we do it entirely from a theological standpoint with an eye to educating professing Christians and those to whom we are openly always proselytizing to convert to authentic Christianity.
  • It is impossible for us to fully evangelize and proselytize without directly discussing the pros and cons of public policy and the positions of secular-office holders, hence the unconstitutionality of the IRS code on the matter.
  • We are not rich and wouldn't be looking for a fight regardless. What we cannot do is compromise our faith (which seeks to harm nobody, quite the contrary).
  • We render unto Caesar what is Caesar's. We render unto God what is God's.
  • When Caesar says to us that unless we shut up about the unrighteousness of Caesar's policies and practices, we will lose the ability of people who donate to us to declare their donations as deductions on their federal and state income-tax returns, we say to Caesar that we cannot shut up while exercising our religion in a very reasonable way.
  • We consider the IRS code on this matter as deliberate economic duress (a form of coercion) and a direct attempt by the federal government to censor dissenting, free political and religious speech.
  • It's not freedom of religion if they tax it.

And when they were come to Capernaum, they that received tribute money came to Peter, and said, Doth not your master pay tribute? He saith, Yes. And when he was come into the house, Jesus prevented him, saying, What thinkest thou, Simon? of whom do the kings of the earth take custom or tribute? of their own children, or of strangers? Peter saith unto him, Of strangers. Jesus saith unto him, Then are the children free. (Matthew 17:24-26)

  • Subscribe

  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
    This entry was posted in Uncategorized. Bookmark the permalink.