Economy Cleanup before Statehood?

One of the responses to the plebiscite vote that we’re seeing a lot in the media is something like this: “Puerto Rico can’t be a state until they clean up their economy.”

The idea that a territory has to have their house in order before they can become a state seems to make sense to a lot of observers. Actually, it’s not only contrary to historical precedent, it is also illogical.

Here’s what’s wrong with this idea.

Territories aren’t usually prosperous.

Being a territory is bad for the economy. Both Alaska and Hawaii were struggling before they became states. Time magazine says of the results of statehood, “Hawaii underwent immediate and radical change, largely in the form of unprecedented economic growth.”

It wasn’t a mysterious or magical transformation. It was the result of an enormous increase in commercial jet service, a phenomenal rise in industry, and diversification in agriculture. Essentially, statehood gave Hawaii the stability needed for investors to take a chance. The investments paid off for the investors and for the now-prosperous state of Hawaii.

The New York Herald Tribune printed this editorial comment about Alaska while it was a territory:”The possession of this Russian territory can give us neither honor, wealth nor power, but will always be a source of weakness and expense, without any adequate return.”

Alaska’s net production is now $40 billion a year, and Alaska is among the most prosperous states in the union.

Similar results can be seen throughout U.S. history. Statehood is consistently better for the economy than being a territory.

Long-range economic plans can’t be status-agnostic.

What’s good for a state isn’t necessarily good for a territory. And it sure isn’t good for an independent nation. It is ludicrous to think that a single plan for economic growth can be developed for all three of Puerto Rico’s possible status options.

Will Puerto Rico be a state? Then it will have billions more in federal support, as well as the historically proven benefits of statehood. Ideas like reducing the minimum wage, selling off public assets to Chinese investors, or cutting back on services till the entire population moves away — all real prospects for the territory — would be ludicrous.

As an independent nation, Puerto Rico could negotiate some assistance from the United States, but economic growth will be the job of the new government of the Republic of Puerto Rico. If Puerto Rico became a Free Associated State, history suggests that economic growth would be meager.

There is no reason to think that the U.S. Congress will force independence on Puerto Rico, and equally no reason to think that Puerto Rico wants independence.

So any plans for economic growth must be based either on the poverty of the territory status or the proven economic benefits of statehood. No plan would make sense for both situations. Telling Puerto Rico to wait until it can afford to become a state is absurd.

One Comment

Alvin A. Almodóvar

CONSTITUTION OF THE UNITED STATES

ARTICLE IV

SECTION 3. New States may be admitted by the Congress into this Union; but no new States shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.

The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.

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