Is it THE BOSS that’s wrong with business?

RALPH ALLEN January 27 1962

Is it THE BOSS that’s wrong with business?

RALPH ALLEN January 27 1962

What a decent government can do in Latin America

Puerto Rico has too many people and almost no natural resources. By all the rides of life in Latin America her people should be ignorant, diseased and impoverished. They are, instead, probably the best-paid, best-housed and best-educated of the Latin American peoples. They did it with a remarkable program called Operation Bootstrap



THE COMMONWEALTH of Puerto Rico, a U. S. possession in the Caribbean 1,600 miles southeast of New York City and 500 miles north of Caracas, Venezuela, should by all the accepted rules be povertystricken, miserable and diseaseridden.

In the first place it is Latin American, having been colonized and for centuries ruled by Spain. This is like having two strikes against it, for in most of Latin America the predominant heritage from Spanish days, apart from language, is an alliance of big landowners, thieving politicians and gangster military officers — an alliance that keeps the rich very rich and the poor very poor and perpetuates feudalism and ignorance.

In the second place it is critically overcrowded. Just 105 miles long and thirty-five wide, it has 2,350,000 inhabitants. It is only half again the size of Prince Edward Island, the Canadian province with the highest ratio of people to the square mile, but has twenty-three times the population.

In the third place it has no natural resources worth mentioning — no oil, coal, no important commercial fishery. Unlike P.E.I., nearly all of which is fertile farm land, Puerto Rico is a mass of rocky hills and mountains, and less than a third of its total area is suitable for agriculture. While it exports a few things like sugar and pineapples it can’t fill its own food requirements and has to import much of what it eats.

Yet in spite of its Spanish background. its chronic problem of hav-

ing more humans than it knows what to do with, its lack of minerals and arable soil, Puerto Rico is happier, healthier, more progressive and more literate than Latin American countries that are not overpopulated and have immense resources.

It is, at least to me, an illustration of what some of the more backward and benighted nations in the western hemisphere might be able to do if they kicked the crooks out of public office, found a way to put military mobsters under a firm civilian thumb, and elected leaders who would institute land and other reforms, would compel the wealthy to bear a reasonable share of the tax burden, and would not empty the treasury into their own pockets.


It can be argued, of course, that Puerto Rico couldn’t have accomplished what it has without the free access to the U. S. market that it enjoys as a fragment of U. S. territory, and that it has benefited from being entitled to participate in certain Washington programs like vocational education and social security and highway construction. Up to a point this is true.

But — while Puerto Rico gets some federal aid—it is self-governing in its domestic affairs and largely self-financing. Its residents pay stiff Puerto Rican taxes but are not taxed by Washington. And Puerto Rico — unlike some of its Latin American neighbors — gets no special foreign aid handouts from Washington. Puerto Ricans tell me, and they obviously believe it, that the real reason their island is overcoming its handicaps is that it has what is the rarity of rarities in Latin

America: a wise and honest administration.

You can’t visit Puerto Rico even briefly without being impressed by the achievements of this administration:

► The life expectancy of a Puerto Rican, forty-six years in 1940, is now sixty-eight years. It has increased by an average of more than a year for each of the last twentyone years.

► Puerto Rico’s per capita income, $122 in 1940, is up to $600. By Latin American standards this is tremendously high. Haiti, which has natural resources roughly comparable to Puerto Rico's, has a per capita income of $75.

► Less than half and perhaps no more than a third of all Latin Americans can read and write, but the rate of literacy in Puerto Rico is eighty-five percent and still rising.

► Most of the worst slums in Puerto Rico have been erased, although there are notable exceptions like the appallingly filthy section incongruously named La Perla — the pearl — in San Juan, the capital. The denizens of La Perla, although under siege from slum clearance agencies for years, have defied all attempts to uproot them. The majority of poor in San Juan and other cities have shelter that is neat and clean, if not much else, and there have been innumerable low-cost apartment projects for workers. Outside the cities, under a government-sponsored arrangement, a Puerto Rican can build a concrete bungalow, complete with plumbing, for $350 or $400 and pay off a twenty-year mortgage at $1.50 or $2 a month. This is a do-it-yourself venture. The government furnishes the materials plus an experienced

supervisor. The supervisor directs operations while, with an assist from your neighbors, you construct your own dwelling.

► In most Latin American countries the water is a dangerous sort of bacterial broth but Puerto Rico has set up a publicly owned corporation that pipes clean, safe, chemically treated water from mountain sources to the cities and towns and to scores of farming districts.

► Another publicly owned corporation has harnessed Puerto Rico’s hydro power and there is now an abundant supply of cheap electricity. Farmers, among them the hundreds of thousands t5f~~fibaros or hill peasants, arc offered free electricity for a trial period to introduce them to its advantages, and industrialists who agree to erect and operate plants in parts of the island where the economy has lagged can obtain extraordinarily generous power concessions.

► Puerto Rico, once purely agricultural, now has 90,000 factory jobs.

► In the Latin American pattern. Puerto Rico used to have two classes, upper and lower. Today it has a substantial and rapidly growing middle class.

The movement that has brought about these and other near-miracles is called, in Spanish, Fomento. In English it is called Operation Bootstrap. It was conceived in 1940. when the governor of Puerto Rico was still appointed by the president of the United States, rather than elected by Puerto Rican voters. Bootstrap was a slow starter, due to the war, and not much happened until 1948. That was the year in which Luis Muñoz Marín became the first elected governor under an

act of congress signed by President Truman. Muñoz, a stubby, swarthy, quick, articulate man with a thick mustache, has been the governor — and the man behind Bootstrap — ever since. He’s so much an idealist that when the Puerto Rican legislature voted him a $9,400-a-year boost in salary he refused it. The $10,600 a year that is all he will accept is $4,400 less than the salary of his secretary of state and $3,400 less than is drawn by his other cabinet ministers.

He has a deep love for his island, a patriotism inherited from his father, Luis Muñoz Rivera, a famous patriot who secured a form of autonomy for Puerto Rico from the Spanish crown before Spain ceded the colony to the U. S. at the close of the Spanish-American War. Muñoz Marín was educated at Georgetown University in Washington and, in his youth, spent several months in Greenwich Village, where he earned a meagre living as a journalist and wrote avant-garde verse. In those days he thought that Puerto Rico should struggle to gain full independence but he gradually changed his mind and decided that it should, instead, be a self-governing U. S. commonwealth. This was the policy he persuaded the United States to accept after he entered politics. In 1952, the year in which he was re-elected governor for a second four-year term, a Puerto Rican constitution similar to that of the U. S. was ratified at Washington.

Meanwhile, under Muñoz, Bootstrap was humming. His engineers were damming rivers, laying sewers, installing power stations, and piping sparkling mountain water to communities that, until then, had suffered from water-borne diseases. His health authorities were inoculating children against preventable diseases, teaching tens of thousands of jibaros the fundamentals of sanitation, trying to improve the diet of the poor, stamping out malaria, which had been a major killer, and striving to control hookworms and other



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How do you get the sons of hill peasants into the schools? With free lunches and 50-cent shoes

parasites that shorten life in the subtropics and tropics.

Under an old law that had been ignored, a corporation was prohibited from owning more than 500 acres of agricultural land. Now Muñoz’ land authorities were enforcing the law, expropriating excess corporation land, and either parceling it out in plots of an acre or two each to landless farm laborers or turning it into proportional-profit farms or co-operatives.

His education authorities were tossing up new schools everywhere. How do you induce the offspring of illiterate hill peasants to go to school? Muñoz, the Greenwich village poet, knew the appeal of a nourishing free lunch. And, so that the kids would have shoes to wear, he added an offer of two pairs of shoes a year for each pupil, at fifty cents a pair. In 1950, just sixty percent of the Puerto Ricans of school age were in school. The current figure is upward of ninety percent, which proves what free lunches and fifty-cent shoes can do.

With hydro power and clean water, and with housing, health, education and highways undergoing a swift and almost incredible improvement, Muñoz was in a

position to encourage U. S. industrialists to establish plants in Puerto Rico. Without natural resources, he couldn't attract industries like steel mills, pulp and paper mills and oil refineries, but he could and did attract assembly industries — close to 850 of them to date, with a capital investment of more than $500.000.000. He capitalized on the fact that Puerto Rico has a stable government, adequate transportation facilities, and a pool of willing, increasingly skilled, reasonably priced labor. He also capitalized on the fact that Puerto Ricans are wonderfully dextrous. This was a decisive inducement for manufacturers of items like electronic tubes, ballpoint pens and women's foundation garments, who require agile fingers for their production lines. Sylvania. Sunbeam and Maidenform are among the concerns with Puerto Rican branches. They and the other firms ship the bulk of their output to the U. S. mainland.

Recently, Canadian manufacturers have also shown interest in the special advantages of operating in Puerto Rico. They’re finding that Canadian subsidiaries there pay no taxes for the first ten to thirteen years, can transfer dividends back to Canada taxfree. and can sell to the U. S. market without paying duties or tariffs.

To further his drive for factories. Muñoz bought advertising in U. S. publications and hired a Washington and New York public relations company to distribute information about Puerto Rico to newspapers, magazines, television and radio.

At the same time he recognized the economic potentials of Puerto Rico’s magnificent climate, its scenic beauty (palms, white beaches, green mountains, flowering

trees, blue sea) and its history (Columbus discovered it in 1493). He went after tourists as well as factories. He got them, too: fine hotels and more than 300,000 well-heeled tourists a year. The luxurious Hilton hotel in San Juan is reputed to be one of the most profitable in the entire Hilton chain.

Hut I’m not suggesting for a second

that everything is now great in Puerto Rico. Everything isn’t great.

Tens of thousands of Puerto Ricans migrate to the United States annually because there aren’t enough opportunities at home. There are 700.000 of them in New York alone. Notwithstanding the exodus, Puerto Rico remains frighteningly overpopulated.

Muñoz espouses birth control as one solution and for a while there were government birth control clinics. These are now run by private organizations, although government doctors may encourage and advise them. It was through these clinics that Puerto Rican women participated in the first large-scale tests of birth control pills.

Muñoz’ championship of birth control was the principal reason why the Roman Catholic hierarchy told Puerto Ricans, ninety-five percent of whom are Catholics, that it would be a serious sin to vote for Muñoz in the 1960 election.

The result was a defeat not for Muñoz but for the clergy. Muñoz, who had been re-elected for a third term in 1956, was re-elected for his fourth term by a whopping majority in 1960.

The friends with whom Muñoz discusses Puerto Rico's future include Mrs. Felisa Rincón de Gautier, who in Latin America.

where women are not often tolerated in politics, has had a notable political career. She’s the mayor of San Juan, Puerto Rico's metropolis.

Muñoz confidantes also include Pablo Casals, the brilliant and internationally famous Spanish cellist, who left Spain when Franco won power and who lives in Puerto Rico because, of all Spanishlanguage countries, it is. to him, the most liberal and democratic.

Muñoz hopes w'ithin the next decade to bring Puerto Rico's per capita income to $1,200. If he does, Puerto Ricans will live

very well indeed, for they need no warm clothing, no furnace, and no glass in their windows, and can pick coconuts, oranges, plantains, breadfruit and coffee from trees in their own rain forest. Even if Muñoz' hopes don't materialize, the 2,350.000 Puerto Ricans so densely concentrated on a little island so lacking in natural resources will still be better off than Latin Americans in countries with vast fertile plains, mountains of minerals, underground oceans of oil.

That's the difference a decent government can make. ★