U.S. territory Puerto Rico recently voted in favor of becoming a U.S. state for the fifth time. As with the past four times, this proposition is not legally binding and probably won’t receive a serious consideration.
Lawmakers in Washington aren’t particularly motivated to reduce their own power by adding additional congressmen and senators. Furthermore, the Republicans who control Congress at the moment are even less interested in adding another solid blue state into the mix. Nonetheless, that reality shouldn’t be considered a loss.
Here’s one reason why Puerto Rico should want to become an independent country instead of either a U.S. state or a territory: The Merchant Marine Act of 1920.
The curse of the Jones Act
Informally known as the Jones Act, the legislation mandates that all trade between two U.S. ports must be conducted by a U.S. built, U.S. owned, and U.S. flagged ship crewed by U.S. citizens or permanent residents. It is one of many lesser known pieces of protectionist legislation that has created a substantial cottage industry.
The Jones Act protects the U.S. shipbuilding industry as well as the Merchant Marines. Representing tens of thousands of high paying American jobs, those unions have easily stymied any and all efforts to repeal the legislation.
As territory – or if it were to be a state – Puerto Rico falls under the discretion of the Jones Act. Therefore, all trade between the U.S. proper and Puerto Rico must abide by those expensive restrictions. Almost everything has to first go through a U.S. port on the mainland and then be shipped to Puerto Rico separately. As a result, consumer goods are substantially more expensive than they would be otherwise. Cars cost about 40 percent more in Puerto Rico than on the mainland. The Jones Act would still apply even if it were to become a state, and these prices would still remain high.
Blessings from independence
It would be a different story, however, if Puerto Rico pursued independence. As an independent country, Puerto Rico would no longer be subject to the Merchant Marine Act of 1920. They would be free to trade directly with the U.S. and avoid the high costs imposed by U.S. shipping.
While prices for most goods would likely always be higher because Puerto Rico is an island nation, many goods would become much more affordable. The public would benefit greatly from such savings. While getting out from under the Jones Act would do nothing for Puerto Rico’s debt, it could help provide a need boost to the stagnate economy.
Of course, the current government of Puerto Rico doesn’t support independence either, and for a very good reason. The island is currently more than $70 billion in debt and the governor wants to become a state to offload that debt onto the U.S. taxpayer.
Statehood is only a solution for statists
As a state, Puerto Rico could apply for far more federal funds and bankruptcy protections than they are currently eligible to receive. Politicians see statehood as an easy way out of the financial problems caused by decades of big government spending. It might be a solution for the government, But average Puerto Ricans wouldn’t benefit from U.S. statehood nearly as much.
Independence may be the best and only option. Puerto Rico has attempted to become a U.S. state for decades. They’d have better luck if they accepted the political disincentives toward statehood, and shifted their attention towards independence.
Republicans in Congress and the administration might be more willing to sign off on that approach. From the GOP’s perspective, permanently eliminating the possibility of upsetting the electoral college by adding another blue state would offer some narrow political benefits. And, as an independent country, Puerto Rican citizens and their economy as a whole would benefit greatly from the reduction in prices of consumer goods.