Why is Mexico not a pure market economy?  

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pohnpei397 eNotes educator| Certified Educator

Mexico is not a pure market economy because there is no country in the world that is a pure market economy.  In a pure market economy, the government would not be involved at all in deciding the three fundamental economic questions (what is produced, how it is produced, and for whom it is produced).  This would bring about results that would be hard to imagine in a modern country.  For example, the government would not pay people to build and maintain roads.  Instead, private companies would do this, charging people to use the roads and making money that way.  The government would not ban things like drug dealing or prostitution.  Instead, the market would determine what goods and services would be created and sold.  Essentially no country would accept such things, meaning that no country has a pure market economy.

What are some specific ways in which Mexico’s economy falls short of being a pure market economy?  Let us look at two such ways.  First, Mexico’s government provides schools for its children.  This means that the government decides that education will be produced and it decides how this will happen and who will receive the education.  This is not how a pure market economy works.  Second, the oil industry in Mexico is dominated by Pemex, a company that is owned by the Mexican government.  In a pure market economy, the oil industry would consist of private companies.  Thus, Mexico is not a pure market economies in ways (like public schools) that are common to practically all countries and also in ways (like Pemex) that make Mexico less of a market economy than countries like the United States.