Puerto Ricans pessimistic about the economy

A survey by the Institute for Economic Liberty reveals that people on the island favor a free-market economic system and an interest in placing limits on government activity.
Puerto Ricans pessimistic about the economy

A survey by the Puerto Rico Free Market Institute revealed that Puerto Ricans favor the free market as a system for creating jobs and combating poverty, but also believe that the government is also responsible for promoting progress and protecting the environment and should have "a limited role" in certain areas. (Archive)

Most Puerto Ricans agree that, in an ideal model of development, people should have the economic freedom to do for themselves, that is, to enter into transactions, establish businesses and create alliances without major government intervention.

This premise emanates from the results of a survey about the free market in Puerto Rico, an exercise that also revealed that those interviewed show little optimism when it comes to the island's economic future.

The survey and its analysis were conducted by economists Ángel Carrión Tavárez, Luz N. Fernández López and Juan Lara, and were carried out earlier in the year at the behest of the Institute for Economic Liberty (ILE), an organization aimed at promoting free enterprise principles on the island.

According to the survey results, although participants are divided on their current economic situation, the majority have a negative perception of the direction of the economy in Puerto Rico while showing interest in the tenets of economic freedom, specifically to trade and create a cooperative system among businesses.

Specifically, eight out of 10 respondents agreed that the free market is the most successful economic system known in the history of mankind and that it promotes "more employment, less poverty and better quality of life.

However, in the survey results, the researchers found "a significant current of opinion that identifies a collaborative role of the free market and government in promoting economic development".

According to the survey results, 58% of those interviewed expressed that their current economic situation is stable and secure, while 42% indicated that it is unstable and insecure.

However, when it came to analyzing the current direction of Puerto Rico's economy, 92% -or 9 out of 10 respondents- thought it was "bad or very bad".

"Participants broadly support the free market system and consider that it does not have the weight it should have in the Puerto Rican economy. Almost the totality of the sample affirms that people should have the freedom to make decisions in the pursuit of their own well-being," the study reads. "A similar number express that these should be able to earn an honest living at whatever they wish, unhindered by the government."

The objective of the ILE

The Free Market Survey is one of several projects that the ILE has launched with the objective of studying and analyzing business and individual dynamics in Puerto Rico and the relationship between these and the governmental apparatus. The organization's goal is to have empirical data close to the island to serve as a reference when adopting economic public policies and to encourage self-management and the creation of value from the private sector. ILE is a recently created organization, founded by Puerto Rican engineer Jorge L. Rodriguez, also creator of the multinational systems validation company PACIV.

In addition to the survey in which 550 people, mostly college graduates, participated last year, the ILE conducted a study on the complexity of obtaining a license to practice a trade in Puerto Rico, such as hairstyling, mechanics or electricity. In that study, the results of which were revealed last February, the ILE found that the permits and requirements established on the island for these trades are more costly and complex than in other U.S. states.

Another conclusion of the survey is that the interviewees give greater weight to individual responsibility and personal effort in order to achieve personal aspirations.

The free market, as the study explains, is an "economic system based on supply and demand, with minimal or no government intervention. This system is guided by principles of free competition, where the market dictates prices. The theory is based on the fact that this market freedom creates economic growth under the principles of individual freedom, the prevalence of existing laws and the right to private property.

ILE conducted the survey virtually, using Google Forms, between January and April 2022. The researchers received a total of 550 responses, about 50 more than expected.

Limits to government

According to the survey, respondents felt that government actions - under a functioning free market model - should be limited to "a few key areas".

"And that the government is not as nimble as the private sector, in terms of driving economic development," the study indicates.

However, the study found something of a contradiction here.

Eighty percent of respondents felt that government intervention should be minimal and that it should be limited to guaranteeing the security, property and rights of citizens, but 19% disagreed with that statement.

According to the survey results, although respondents were interested in or in favor of an economic system with little government intervention, six out of 10 (58%) felt that the government is the sector with the most weight in the local economy, and another 18% felt that the government and the free market together have the most weight.

The role of government and the market

On the other hand, and to our knowledge, this is the first time that a survey seeks to know the roles or responsibilities that citizens assign to the government and the private sector in an economy.

According to the survey, practically half of those interviewed understand that in matters such as job creation, income and wealth distribution, technological innovations, as well as prices and wages, the free market is the main responsible party.

At the same time, approximately one in three respondents, between 32% and 34%, believe that education and health are the primary responsibility of the government.

Meanwhile, university education (50%), environmental protection (66%) and the progress of Puerto Rico (67%) are responsibilities shared between the state and free market actors.

This news article was originally published in Spanish by El Nuevo Día.

Scroll to Top