The vision of catastrophic independence for Puerto Rico

Chilean doctor Alex Kaiser caused a stir when he pronounced that independence for Puerto Rico would be catastrophic. His approach does not focus on the reduction of federal transfers, although he considers them a dangerous dependency for the island. His argument is that the politicians in Puerto Rico who oppose economic freedom and the people who elect them would lead the country into a devastating scenario.

This argument, although clearly controversial, is not without some validity. Notice that Kaiser opens the door for an independent Puerto Rico to be, in theory, an economic power like Singapore or Norway. The argument is a practical one of economic freedom. We are not going to be Singapore or Norway because we are not going to have the economic freedom they enjoy.

As Exhibit 1, Kaiser mentions the bankruptcy of the Puerto Rican government. He argues that in Latin America we are champions of blaming others for our ills and not taking responsibility for our own. While thundering against the anti-democratic Fiscal Oversight Board, the fact is that we have had few politicians or civil society groups condemn the policies that led to the Board's existence.

Economic freedom consists of promoting the market to determine the actions of individuals and companies. It is about minimizing government intervention in the economy, writes Vicente Feliciano. (Shutterstock)

Economic freedom consists of promoting the market to determine the actions of individuals and companies. It is about minimizing government intervention in the economy. And it is about ensuring that government interventions are consistent with the laws of the market.

Thus, a health care system such as the one that existed in Puerto Rico before 1990 was contrary to economic freedom because it condemned the poorest groups to receive care in government facilities while the wealthiest groups chose among the various private facilities. Since the 1990s, the vast majority of Puerto Rico's residents have the freedom to choose among the same health care facilities, and those facilities compete with each other.

While throughout the world it is common for political parties to be ideological on economic issues, in Puerto Rico the ideology of the major parties on economic freedom is unclear.

As an example, we can take the probable positions of the different parties regarding two compulsory insurance policies in Puerto Rico. On the one hand, there is the automobile public liability insurance that everyone who owns a motor vehicle must purchase. On the other hand, there is the insurance issued by the State Insurance Fund Corporation (CFSE) that every employer must purchase.

One would expect Proyecto Dignidad to favor monitoring that the companies offering auto insurance deliver what they promise, leaving pricing and profit issues to the market. Meanwhile, they would oppose the state monopoly that is the CFSE.

The opposite could be expected from the PIP and Victoria Ciudadana, favoring the CFSE monopoly while wishing to control the prices and profits of the firms that provide automobile public liability insurance.

In the case of the major parties, NPP and PDP, since they do not have a well-defined ideological position on economic freedom, it is difficult to elucidate the position they might take on these two compulsory insurances.

Clear positions on economic freedom would help voters better determine their future.

This article was originally published in Spanish in El Nuevo Dia.

Scroll to Top