Articles

The election of Javier Milei as president of Argentina has generated emotional and diverse reactions. From rejoicing to see a libertarian stop the Peronist faction of Kirchnerism, to concern about the rise to power of another form of populism with extremist overtones. What has happened in Argentina is not surprising in view of the country's trajectory over the last century and should serve as a lesson for us, particularly for Puerto Ricans.

That, in a nutshell, is the story of the collapse of what was until a few decades ago the most prosperous nation in Latin America. In this story, we can replace the proper names and tell the same story of several nations in the region. Ecuador, in particular, can look in that mirror considering that we have also suffered the maddening effects of the oil bonanzas. Before the rise and fall of Venezuela, we saw the rise and fall of Argentina. After the Venezuelan story, we have seen in recent years what seems to be the beginning of the decline in Chile.

Economic freedom matters to economic development. Indeed, a wide body of empirical literature points to limited government, secure property rights, free trade, low regulations, and sound monetary policies as being generally associated with faster economic growth and higher income levels.

Capitalism may be defined, as Carl Marx did, by its labor system, where the workers do not own their own means of production. It may also be defined by the metaphorical ‘market’ where the buying and selling takes place, or by private ownership of the means of production rather than government ownership. But my interest here is to describe capitalism as an attitude. That is, as a mental state connecting a person to a proposition.

In Latin America, capital flight to the US financial system has long been the standard reaction to high taxes and fiscal profligacy, especially when governments add a penchant for monetizing the debt, devaluing local currencies and expropriating private property. Official dollarization, meanwhile, eliminates the option of devaluation, imposes a hard budget constraint on politicians, and introduces a strong rule‐of‐law element to the monetary sphere, as Professor Steve Hanke has argued.

Poverty in Puerto Rico continues to be an issue that has received little public attention and lacks public policies to address it. Perhaps the abundance of state and federal aid has created the false perception that this social evil has been eradicated on the island.

In Puerto Rico, we must change the current view of some that capitalism is wrong for the island. To those that say so; in my opinion, view socialism as the equal sharing of resources, when in fact, it is the equal sharing of hunger, dependency, unemployment, inequality and misery as you will read below.

Latin America has it all. Abundant and cheap renewable energy. Land and possibilities to be one of the world's food reserves. It is a relatively peaceful place compared to other regions of the world. Close to the United States and in a privileged position to send merchandise to China. So says the columnist for the prestigious Financial Times, Michael Stott, who comes to a sad conclusion: even so, the continent wastes all those privileges.

Marc Joffe shows how Puerto Rico's municipal inventory tax puts the island's businesses at an economic disadvantage and recommends, to address the financial impact of its elimination, that municipalities consolidate, and that the central government provide income tax credits, successfully demonstrated in other jurisdictions. Photo: El Nuevo Día Puerto Rico municipios levy an unusual tax

Representatives of the private sector recently organized a Political Action Committee (PAC) under the name "Democracy is Prosperity". The organization seeks to support political candidates who embrace free market and business values aligned with a vision of economic development away from government intervention and populism. The entry of the private sector into the political arena