A blast from the past: A column The Jenius wrote the week of May 6th, 2002. The original title is preserved, and the column has only minor edits for clarity.
“The greatest cause (for industrial stagnation) however, was probably Puerto Rico’s decision to turn away from world markets and protect domestic industries. Without foreign markets and the stimulus of worldwide competition, Puerto Rico’s public companies grew to rely on state spending, saddling the economy with a large and overmanned public sector, while private industry had to contend with some of the most complex bureaucratic regulations in the world.” (Emphasis Mine.)
That quote is almost from a book written in 1992-1993 by historian Paul Kennedy, titled Preparing for the Twenty-First Century. Kennedy is the author of The Rise and Fall of Great Powers, and Preparing is a deeper elaboration of the same “Great Economic Powers” theme in the then-current world situation.
Why is the quote "almost" from his book? Because, obviously, Puerto Rico is not now nor was it back a decade ago a “Great Economic Power”. Please substitute “India” for “Puerto Rico” and you will have the exact quote.
And yet notice how eerily appropriate the quote is: Puerto Rico is a country with a badly-stagnated industrial economy, it has protected domestic industries to an absurd extent (cement being the most notorious example), it is saddled more than a Pony Express nag with enough government-esconced vegetables to feed 43% of Sub-Saharan Africa (a horrible metaphor with grotesque cannibalistic overtones; My apologies to vegetables everywhere…) and the barriers written in half-wit legalese that slow down private industry are triumphs of stupidity over rationality.
Re-read the quote above and replace the first “Puerto Rico” with the rightful culprit: “the United States.” No matter how you slice it, the U.S. is the primary and often sole decision-maker concerning Puerto Rico’s economic policies. At a time when Puerto Rico’s industrial growth was the envy of the developing world (the 1950s and 1960s), when the Island’s industrialization was establishing a model that would later be emulated by Singapore (now a world economic growth leader) and to lesser extents by South Korea and Malaysia, the U.S. could have decided to open Puerto Rico’s economy to the world, as an adjunct arm of the mainland economy. As such, it could have been an engine of growth in a manner somewhat similar to what Hong Kong offers China: a laboratory to attack and open new markets.
Business leaders prodded political leaders into seeing Puerto Rico’s rising level of per capita income as the basis for consumers, rather than as the launching pad of producers. Why? Because this was and is consistent with recent (roughly 1970-present) overall U.S. economic policy, seeing itself more as a market (as THE market, in fact) rather than as a market-maker.
Now you know The Jenius is not an economist, so where’s My proof? Count the shopping centers, fast-food places, chain stores and franchises dotting Puerto Rico… Then tell Me: Is that the map of a policy geared to create and encourage producers or one geared to creating and even exploiting consumers?
The Jenius Has Quoted Himself.