The virtue of political indifference

Tell me what you pay attention to, and I will tell you who you are.

(José Ortega y Gasset)

My beloved Latin America is home to many ills. Polarizing, passionate, and sometimes even violent politics are one of them. A pretty exciting illness, to be honest.

The norm in the region has politics tied to business. Of course, this makes sense since businessmen have a lot at stake when taxes, regulations, and trade policies directly impact them all in the name of the “common good”. This proximity is often cause for corruption and favoritism, but sometimes, it is not the case. I have previously written about the danger of being indifferent to politics¹. I have also written a case study about the Dominican Republic² as a country that progresses despite its general indifference to politics.

Talking politics recently with a Peruvian friend (hi Fernando!), we brushed on the subject of the unstable Peruvian political scene. All living Peruvian ex-presidents are in jail or facing trial. The last president to step down after completing his term was Ollanta Humala back in 2016; he is also now in jail. Despite this, we both agreed that Peru has maintained a moderate path of growth, and economic indicators are favorable.

How could this be? Peru is a country where political leaders have single-handedly shaped the economic landscape. The multiple dictatorships in the 20th century, the Fujimori decade, and the rise, fall, and comeback of Alan García are all famous and distinctive periods of political economy. Yet now, Peruvian business elites and political elites are each doing their own thing.

Is this a sign of development? Having a country where those that generate jobs and bring in capital are focused strictly on this, while those that write out regulations and ensure social stability are focused strictly on that? I'm convinced it is.

Swiss precision

The Argentinian master of letters and advocate of personal freedom, Jorge Luis Borges, used to say that Switzerland was the most perfect country because no one knows who the president is, and politicians are not public figures. This sounds nearly impossible in Latin America since the executive branch is endowed with Bonapartist absolutism. However, two countries have gained the nickname of “Switzerland” for their alpine peace and stability. Costa Rica and Uruguay are deemed the “Switzerlands” of Central America and South America, respectively.

Costa Rica is a fascinating case study since it is a country with a high standard of living, whereas Central America is not precisely considered paradise on Earth. The region is marked by drug violence, despotism, and high-migration rates. Costa Rica has high education rates, high incomes (so high that its minimum wage is almost three times the average for Latin America), and is peaceful. Unlike the eternally armed yet neutral Swiss, Costa Rica has not had a standing army for over 75 years. Looking now at their political elites, we see that the last three presidents of Costa Rica have all been a mix of career technocrats, politicians, and international civil servants. Not businessmen, military strongmen, nor sneaky former bankers, but essentially professionals of the public sector. A fascinating correlation with development metrics.

Uruguay presents a different case. It is a tiny country that has lived through multiple dictatorships and only recently started becoming more “politically indifferent”. Since they returned to democracy 40 years ago, the mix of presidents has included professors, doctors, former guerrilla fighters, and non-practicing lawyers. Some of these have been from families that have been in politics for over a century. A couple of last names are repeated in the presidential timeline, like Batlle or, most recently, Lacalle. What they all have in common is that they have all had pre- and post-presidential careers in academia or public service. No businessmen, no magnates, no entrepreneurs, just people who feel a gravitational pull to working in government.

Oddly enough, Uruguay shares a random trait with the faraway Tunisia. In both countries, it is said that everyone has a civil servant family member. Mind you, Tunisia has almost four times the population of Uruguay in roughly the same territory. So if that neighborly sense of cohesion and duty exists in a significantly less crammed country, that is saying a lot. And what does Uruguay offer its citizens? Well, easily the highest standards of living in Latin America, security, banking privacy à la Suisse, high salaries, minimal corruption. The entire region, and also Tunisia, for that matter, has a lot to learn from Uruguay.

Why could this be? Maybe because the decisions taken by these governments don’t influence the lives of people. Their constitutions don’t design the State to be omnipotent and omnipresent. People are expected to go about their daily lives, not to say anything about their business, without government meddling. Therefore, clientelistic political machines and corrupt mercantilist schemes are not an issue like in the daily scandals of the rest of the region.

Adjusting to scale

One could argue that Costa Rica and Uruguay are not large and diversified enough to serve as models for the rest of the region. Fair point. Let’s look at how this model works in the most complete economy of Latin America, Mexico.

When was the last time we saw a Mexican magnate in a scandal for bribing judges? Kickback schemes? Begging for political favors? Of course, there is street-level and low-level corruption, and yes, the drug lords do hold a lot of power in some states close to the US border. Yet the Mexican political class remains completely separated from the business class.

The last president, López Obrador, held the value of the peso towards the dollar stable in his center-left term. No one cared about the behind-the-scenes politicking to get his allies lined up in good positions. His handpicked successor, Claudia Sheinbaum, got elected, and the levels of not caring by the Mexican business class have gone through the roof.

Simply put, Mexican businessmen don't even look at politicians, and vice versa. This is a product of the 71-year-long PRI era. The big tent party thrived on institutional corruption and local political machines. Their apparatus was so big that there was practically no need to ever approach businessmen for money or to exchange favors. Dirty and all, they both stayed in their lanes. Their system is ample enough to accommodate both of them.

Just like Uruguay with their famous Batlle family and Costa Rica with Ministers of the Arias cabinet, Mexico has developed political dynasties that run parallel to economic dynasties. Career politicians and civil servants, likewise, establish networks – family or not – to maintain their grasp on a piece of the public budget. The Atlacomulco Group (essentially a WhatsApp group chat of state-level politicians) produced multiple governors and senators as well as one president, Enrique Peña Nieto. If you google what López Obrador’s son is up to now or what the son of the historic Vasconcelos and Alemán Valdés does for a living, you won't believe it. They all found ways to live off the budget. I'm not criticizing them, that’s just what they learned at home.

Similarly, the families that own the holdings with most of the muscle of Mexican industry do not meddle in politics. Mexican billionaires Carlos Slim, Germán Larrea, or María Aramburuzabala rarely make a public appearance. If anything, they are speakers at intellectual events like the World Economic Forum. Other than that, their profile is very low. Rich Mexicans would say about politics “eso es naco”, that is tacky.

Elitist or not, this pattern was identified decades ago by Nobel-winning writer and social critic Octavio Paz in his book The Philanthropic Ogre. The massive expansion of the size of the State with do-gooder intentions (philanthropic component) gave rise to a new social class of bureaucrats with ever-expanding and permanent intentions (ogre component). At the start of 2025, the percentage of the Mexican workforce employed directly by the public sector is an astounding 60 percent. How is this sustainable? No idea, but Mexico is still one of the most diversified and dynamic economies.

A recipe for stability

Could having the private sector as unengaged as possible in public affairs be a recipe for success? It would certainly lower cronyism. It could potentially increase corruption, as is the case in Mexico. The best way to have a serious force of civil servants is to be very selective and demanding, like in France, where the top students of grad schools are offered public jobs to keep the brightest minds at the helm of the State. Perhaps the French are not as efficient as the Swiss, but you get the idea. Everyone wants a cozy government job, but not everyone is willing to commit to a grad-degree level education.

Competitive requirements and competitive demands could be the secret formula to have more “Switzerlands” across Latin America. It would guarantee modern policies and clear regulations for the private sector to feel confident in investing in these countries. Think about it, countries with the capacity of Mexico or Brazil and with the professionalism of Costa Rica or Uruguay. Sounds nice.