The Rationale of Capitalism in Terms of Utility Maximization.
Gross Domestic Product (GDP) in purchasing power parity (PPP) in 2006 was estimated at US $1.134 trillion, and GDP per capita in PPP at US $10,600. The service sector is the largest component of GDP at 70.5%, followed by the industrial sector at 25.7% (2006). Agriculture represents only 3.9% of GDP (2006). Mexican labor force is estimated at 38 million of which 18% is occupied in agriculture, 24% in the industry sector and 58% in the service sector (200).
Agriculture as a percentage of total GDP has been steadily declining, and now resembles that of developed nations in that it plays a smaller role in the economy. In 2006, agriculture accounted for 3.9% of GDP, down from 7% in 1990, and 25% in 1970. Given the historic structure of ejidos, it employs a considerably high percentage of the work force: 18% in 2003, mostly of which grows basic crops for subsistence, compared to 2–5% in developed nations in which production is highly mechanized.
Crops:
In spite of being a staple in the Mexican diet, Mexico's comparative advantage in agriculture is not in corn, but in horticulture, tropical fruits, and vegetables. Negotiators of NAFTA expected that through liberalization and mechanization of agriculture two-thirds of Mexican corn producers would naturally shift from corn production to horticultural and other labor-intensive crops such as fruits, nuts, vegetables, coffee and sugar cane. While horticultural trade has drastically increased due to NAFTA, it has not absorbed displaced workers from corn production (estimated at around 600,000). Corn production has remained stable (at 20 million metric tons), arguably, as a result of income support to farmers, or a reluctance to abandon a millenarian tradition in Mexico: not only have peasants grown corn for millennia, corn originated in Mexico. Mexico is the fourth largest corn producer in the world. From this, we could see that Mexican have their own freedom of choice where they can decide whether to shift to other labor-intensive crops or stay with corn production. People can also consume their own crops or sell it to sellers. Both give satisfaction to farmers and decrease the rate of poverty.
Industry:
The industrial sector as a whole has benefited from trade liberalization; in 2000 it accounted for almost 50% of all export earnings. Among the most important industrial manufacturers in Mexico is the automotive industry, whose standards of quality are internationally recognized. The automobile sector in Mexico differs from that in other Latin American countries and developing nations in that it does not function as a mere assembly manufacturer. The industry produces technologically complex components and engages in some research and development activities, an example of that is the new Volkswagen Jetta model with up to 70% of parts designed in Mexico. The "Big Three" (General Motors, Ford and Chrysler) have been operating in Mexico since the 1930s, while Volkswagen and Nissan built their plants in the 1960s. Later, Toyota, Honda, BMW, and Mercedes-Benz joined in. Given the high requirements of North American components in the industry, many European and Asian parts suppliers have also moved to Mexico: in Puebla alone, 70 industrial part-makers cluster around Volkswagen. Capitalism