Huge 7.4 quake. Third World country. And incredibly, nobody dies. While that makes it “not news” to the TV cameras, in reality, it is news — a very big story about what embracing markets does for places like Mexico.

The major earthquake that rocked southern Mexico Tuesday, including the capital of Mexico City, caused houses to “bounce like trampolines,” according to Reuters. But 24 hours into the news cycle, it looks to be little more than a one-day story.

As it’s said in the news business, if it doesn’t bleed, it doesn’t lead.

Too bad, because what happened in Mexico Tuesday is in fact a remarkable testimony to the power of free markets to create wealth, foster institutions, and yes, save lives in earthquakes. It deserves a closer look.

In 1985, Mexico City lost at least 10,000 people in an 8.0 earthquake that leveled the city. High-rises pancaked and whole sections of the capital were utterly destroyed, all due to nature’s awesome destructive power.

Twenty-seven years later, Mexico suffered a comparable quake and didn’t lose anyone. Only a few hundred buildings in a city of 10 million were damaged.

Experts will say that the imposition of “Mexico City” building standards to strengthen buildings there is responsible for the radically different outcome.

But we’d argue the critical factor isn’t the standards — which even Haiti had when it was hit by a quake in 2010 — but that they had the ability to put them in place.

Although Mexico is mainly reported in the news as a land of drug lords and illegal aliens, the market reforms it’s been slowly enacting have made it the 13th-largest economy in the world.

Its per-capita income is now $16,000, a huge rise since 1994, when NAFTA went into effect. Fiscal discipline has given it an investment-grade credit rating from Standard & Poor’s. Its stock market has risen 600% in 18 years — not bad.

These numbers aren’t mere abstractions. They mean that Mexico has enough wealth to comply with the global standards and enough acceptance of the rule of law to ensure enforcement of the standards is widespread.

Could the lack of damage have been a fluke? Well, Mexicali had nearly the same result when it was hit by a 7.2 quake on Easter Sunday in 2010.

The fact is, rich countries and states can withstand big quakes, as Mexico, Chile and even California show.

Yes, Mexico’s political system continues to need deep reforms to be worthy of its free-market economy.

Even so, there’s no doubt that it was capitalism, free markets and the economic muscle they created that saved lives when Mother Nature struck.

Source: Investors.com