Freakonomics Podcast Asks – Should the US Merge with Mexico?

Commentary by Doug Donahue

Of course the very question the popular podcast Freakonomics recently posed is, on its face, absurd. The United States and Mexico will not merge into one country. And no one interviewed for the 55-minute podcast is really advocating for such a merger or actually thinks it has a chance of happening. But you have to admit, there are a lot of upsides to a US/Mexico merger.

>>>Listen: In the mood for more podcasts on Mexico?

For starters, a joint US/Mexico market (Freakonomics refers to it as Amexico) would have a population of nearly half a billion people. A merger, whether the act of two countries coming together (unlikely) or a closer economic union of two separate countries (such as a NAFTA expansion or re-imagination, which many advocate), would have some beneficial aspects for both countries, such as reinforcing the complementary strengths of the two nations and enhanced free trade benefits.

An Unlikely Pairing

Freakonomics host Stephen Dubner interviewed some heavy hitters for his tongue-in-cheek podcast, including former Mexican president Vicente Fox, Mad Money host Jim Cramer and former White House chief economist Austan Goolsbee.

Of the three, Cramer (who owns a Mexican restaurant in Brooklyn as well as property in San Miguel de Allende, in the state of Guanajuato) is certainly the most bullish about the prospects of Amexico, describing the Mexican auto business as “on fire” and adding that the economy is in better shape than almost every country on earth. He also calls the Mexican workforce “remarkable.” Statistics back up Cramer, with authorities like Boston Consulting Group calling Mexico’s labor force among the most productive in the world and even more affordable than that in China, when productivity is accounted for.

For his part, former Mexican President Fox is more keen to see NAFTA expanded beyond a trade partnership into a true union. He certainly doesn’t favor an actual merger of the two countries which carries with it big downsides, like merging into a single currency and cultural dissonance. He points to better wage equality following NAFTA, a more stable Mexican economy and the abundance of Mexican workers to perform jobs (and there are many of them in a manufacturing context) that most Americans either are no longer doing themselves or lack the skills to perform.

It’s clear Amexico isn’t going to happen. But an even closer economic union between the world’s largest economy and the 11th-largest (based on IMF data for GDP at current prices) would have a lot of positive aspects going for it.

Source: Freakonomics

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