Cancel the Debt!

U.S. Colonialism Chokes Puerto Rico

For the Right of Independence!

After declaring Puerto Rico to be in a “death spiral” of unpayable debt totaling $72 billion, Governor Alejandro García Padilla on September 9 unveiled a five-year economic plan that amounts to more misery and crippling austerity for the Puerto Rican masses. Already this year, Puerto Ricans have been hit with a sales tax increase (from 7 to 11.5 percent), strict water rationing, school closures and rising costs for gas and utilities, while the profit-hungry U.S. creditors and bankers demanded interest payments on their loans in full. Like a nail in the coffin, Padilla’s “Fiscal and Economic Growth Plan” is an all-sided assault on health care, education, union rights and the overall standard of living.

Puerto Rico’s current debt crisis is a direct consequence of U.S. colonial domination. For the last 117 years, the U.S. rulers have pillaged and exploited the island’s land and labor—from the early sugar barons who did away with the coffee, tobacco and fruit harvests in order to use the colony as an oversized plantation, to the post-World War II capitalists who transformed it into a cheap-labor manufacturing base for American corporations. For the last several decades, U.S. businesses have benefited from a litany of tax breaks, while Puerto Rico was forced to borrow from speculators to build local infrastructure and cover the costs of pensions and social services. By the time of the global financial crisis that began in 2007-08, Puerto Rico was already in a deep recession, and the government was unable to repay the bonds it had issued. Wall Street predators and hedge fund vultures soon swooped in to buy up the devalued bonds on the cheap and cash in on Puerto Rican debt.

With an economy tied to the U.S. dollar and the island governed by laws dictated by the U.S. Congress, Puerto Rico has virtually no room to maneuver around the junta of bankers and colonialists who call the shots. The American overlords control the territory’s currency, foreign relations, banks, communications, trade relations and shipping. There have been a number of protests against the threatened austerity measures, including on September 11 when WV and Espartaco salesmen attended a rally in San Juan of thousands of public-sector workers and others against Padilla’s plan. Workers in the U.S., squeezed and exploited by the same capitalist ruling class that is choking the Puerto Rican masses, have a clear interest as well in opposing the debt peonage of America’s largest colony. What is needed is joint class struggle by workers on the mainland and the island to halt the rulers’ vicious attacks, beginning with the demand: Cancel the debt!

With talk of a looming default, bourgeois politicians have been debating what legal framework to set up in order to renegotiate the debt while forcing austerity down the throats of the Puerto Rican masses. When the Puerto Rican government attempted to enact a bankruptcy law for the island, U.S. federal courts declared the proposal unconstitutional. New York governor Andrew Cuomo and others have called to extend Chapter 9 bankruptcy law to Puerto Rico’s municipalities. To see what that would mean, just look at bankrupted Detroit. Under that city’s financial restructuring plan, backed by the Obama administration, municipal workers’ pensions were looted and social services slashed. Meanwhile, under Governor Padilla’s September 9 plan, a financial control board would oversee the implementation of draconian measures resembling those in the infamous Krueger report issued in June by former International Monetary Fund officials.

Padilla’s plan includes restricting minimum-wage increases for workers under 25, tightening welfare eligibility, gutting job protections like seniority, cutting paid vacation days for public-sector workers and issuing a freeze on new hiring and collective bargaining. Subsidies for the University of Puerto Rico are being slashed while the collapsing health care system is facing more cuts. Public transportation is slated to be privatized and the island’s electrical utility, PREPA, could be deregulated.

Puerto Ricans already suffer from impoverishment: at least 45 percent of the population lives below the poverty line, and the per capita income is around $15,000, less than half that of the poorest state, Mississippi. At the same time, workers and the unemployed are saddled with high costs for consumer goods, in no small part due to a shakedown provision of the Jones Act. Enacted almost a century ago, this protectionist legislation mandates that every product that enters or leaves Puerto Rico must be carried on a U.S. ship, or face high tariffs and fees that are then passed on to the Puerto Rican population. The tiny Caribbean island—which relies heavily on imports, including 85 percent of its food—is a dumping ground for U.S. products.

Enduring the weight of national oppression and colonial repression, Puerto Ricans have formal citizenship but are treated by the U.S. rulers with racist contempt as second-class citizens. Residents of the island are used as cannon fodder in U.S. imperialist wars, though they cannot vote in federal elections and have no voting representation in Congress. With few natural resources and now skeletal industry in the colony, the main employer is the government. As jobs and opportunities dry up, a growing emigration from the island threatens to leave an aging and vulnerable population behind. As many as half a million Puerto Ricans have left in the last decade. Today, the total number of Puerto Ricans living in the U.S. far exceeds the island’s 3.5 million inhabitants.

While there is deep resentment over Puerto Rico’s status as a U.S. commonwealth, this anger is contradictory and does not translate into broad support for independence. The majority of Puerto Ricans fear that independence would come at a painful cost—specifically, that they would relinquish the benefits of U.S. citizenship, such as the right to live and work on the mainland. Under capitalist rule, an independent Puerto Rico would continue to be dominated economically by U.S. imperialism, while being forced to compete on the world capitalist market with other small, resource-poor Caribbean islands. Meanwhile, statehood, or direct annexation to the U.S., would aggravate racist nativist hostility toward Puerto Ricans. It would also accelerate the tendency of English to replace Spanish on the island, ultimately threatening the national identity of the Puerto Rican people.

As forthright opponents of U.S. imperialism, we would favor the independence of Puerto Rico in order to take a stand against American colonial domination and fight against chauvinism in the U.S. Likewise, we seek to undercut the nationalist leaders of the Puerto Rican working class, who preach class collaboration with the island’s capitalists in the name of national unity. Ending Puerto Rico’s formal subjugation would help move beyond the question of the island’s status vis-à-vis the American behemoth and could clear the road for revolutionary internationalist class struggle. However, the wishes of the population are an important factor for Marxists in determining how to get the national question off the agenda, and we are against forcing annexation or independence upon the island’s population. Therefore, we champion the right of independence for Puerto Rico.

National Oppression and Colonial Subjugation

Since the 1823 Monroe Doctrine, the U.S. rulers have claimed the Americas and the Caribbean as their own fiefdom. With the advent of the imperialist epoch, the American bourgeoisie grabbed Puerto Rico—along with other Spanish colonies Cuba, Guam and the Philippines—during the 1898 Spanish-American War. During the Cold War, Puerto Rico was a staging ground for U.S. aggression in the Caribbean—from the Bay of Pigs invasion of Cuba in 1961 to the Dominican Republic in 1965 and Grenada in 1983. While the two largest military bases, Vieques and Roosevelt Roads, have closed, the Coast Guard, National Guard and other U.S. troops still remain on the island.

For decades, U.S. forces carried out brutal state repression and crackdowns against Puerto Rican trade unionists, nationalists and others deemed dissidents. The island’s 1948 Gag Law, widely used against the independence movement, was modeled on the federal Smith Act of 1940 that made it a criminal offense to advocate the revolutionary overthrow of the government. Using the island as a testing ground for carrying out infiltration, disruption and provocation, federal agents have viciously targeted Puerto Rican independentistas for imprisonment and political assassination. We demand freedom for Puerto Rican independence activists like Oscar López Rivera who are imprisoned in the U.S. All U.S. troops and federal agents out of Puerto Rico now!

Starting in the late 1940s, Puerto Rico’s status became a thorn in the side of the U.S. ruling class. In colonies across the globe, independence struggles were being waged to shake off their respective yokes. The subjugation of Puerto Rico was, along with Jim Crow segregation in the South, a source of embarrassment to the American rulers, who postured as defenders of “democracy” against their Cold War rival, the Soviet Union. To provide the illusion of Puerto Rican self-government, Washington in 1952 labeled the island a “commonwealth”—also termed a Free Associated State (Estado Libre Asociado), as local elections and a constitution were introduced. Puerto Rico, it was claimed, was no longer a colony, even as the U.S. Congress continued to exercise complete authority over the territory.

Under this new form of U.S. colonial rule, a fresh layer of local henchmen and middlemen loyal to U.S. capital came to the fore, including Puerto Rico’s first elected governor, Luis Muñoz Marín. His Popular Democratic Party (PPD), today led by Governor Padilla, continues to support commonwealth status. Muñoz Marín promoted the federal government’s Operation Bootstrap, a postwar industrialization plan to entice U.S. businesses through tax exemptions and cheap labor (including for a period by waiving federal minimum-wage requirements).

With the 1959 Cuban Revolution, U.S. imperialism tried to prop up Puerto Rico as a free-market miracle and bulwark against Communism in the Caribbean. The Cuban Revolution led to the expropriation of the U.S. and Cuban capitalists and the creation of a deformed workers state. Despite the rule of a bureaucratic caste led by Fidel Castro, the Cuban Revolution, with crucial Soviet military and economic aid, resulted in enormous gains for the country’s working masses, including guaranteed housing, free health care and education. Following the revolution, a substantial number of gusano Cuban capitalists fled to Puerto Rico, soon becoming a reactionary tool for the local establishment’s promotion of American anti-Communist interests.

By the early 1990s, with the counterrevolutionary destruction of the Soviet Union, the American ruling class no longer saw an interest in providing indirect subsidies to the businesses used to showcase Puerto Rico’s economic development—mainly in electronics and pharmaceuticals. In the course of phasing out Section 936 tax incentives, there was an exodus of U.S. operations, with the number of manufacturing jobs falling by almost half since 1996. The outflow of capital worsened conditions of poverty and unemployment, making Puerto Ricans even more dependent on federal programs and benefits.

Today, the Obama administration’s easing of relations with Cuba has Governor Padilla and other bourgeois politicians in Puerto Rico bemoaning the possibility of losing out in the competition for U.S. investment and tourism dollars. At the same time, Puerto Rican entrepreneurs have been working alongside the White House to help foster American influence in the Cuban workers state.

Increased commercial and financial ties to U.S. corporations pose the very real danger of strengthening the internal forces for capitalist counterrevolution within Cuba. Nonetheless, from our standpoint as revolutionary Marxists, Cuba has the right to enter into diplomatic and economic relations with any capitalist country it chooses, not least to try to overcome its very real economic isolation. We demand an end to the U.S. economic embargo that aims to starve the small island, and we call for U.S. out of Guantánamo.

As Trotskyists, we stand for the unconditional military defense of the Cuban workers state against the threat of domestic counterrevolution and imperialist attack. Yet the necessary defense of Cuba against the imperialists is undermined by the nationalist program of the ruling Havana bureaucracy, which embraces the false Stalinist dogma of building “socialism in one country.” The ultimate answer to Cuba’s economic backwardness is proletarian revolution across the globe—not least in the imperialist U.S.—that integrates the island into an internationally planned economy. We fight for proletarian political revolution to oust the Stalinist bureaucracy and establish a regime based on workers democracy and committed to this fight for world socialism.

A Revolutionary, Working-Class Perspective

The struggle for the liberation of Puerto Rico must be waged along the axis of proletarian internationalism. In the U.S., we fight to mobilize the multiracial working class against the racist chauvinism fomented by the American bourgeoisie and echoed by the trade-union leaders, which pits sectors of workers against one another. Much of the social power of the Puerto Rican working class is found in the U.S., in heavy metropolitan concentrations in the Northeast and South, and represented in hospital, transit and other unions. These Puerto Rican workers, along with Dominicans, Haitians and others from the region now residing in the U.S., can form a living link to the class struggle of the proletariat in the Caribbean.

In Puerto Rico, the working class has shown the will and interest to fight back against the recent onslaught of attacks, including through work stoppages and strikes by teachers and transit workers. Back in 2010, a two-month student strike at the University of Puerto Rico (UPR) against budget cuts and tuition hikes was supported by key sectors of the working class. That strike, along with subsequent struggles at the UPR, electrified the island and demonstrated the link between the right to education and the fight against job layoffs.

Puerto Rican workers must reject the perspective offered up by the trade-union bureaucracy, which counsels workers to make sacrifices in the so-called national interest. Addressing the debt crisis, an August 22 assembly of leaders and delegates from various trade unions representing teachers, public-sector workers and others adopted a resolution demanding “unity of all sectors of society” to renegotiate the debt. Outlining an entirely legalistic strategy, the resolution declared a commitment “to contribute to solving the problems of Puerto Rico” and recommended measures such as reorganizing the Treasury Department and amending the tax code.

In Puerto Rico, the union leadership’s main mechanism for class collaboration is through nationalist ideology, which means chaining the exploited and oppressed to the local capitalist rulers, largely through the bourgeois PPD. Many workers view this party, which is connected to the Democratic Party in the U.S., as the “lesser evil” to the right-wing, pro-statehood New Progressive Party (PNP). In 2012, PPD governor Padilla was elected on just such a basis after the prior PNP government headed by Luis Fortuño became widely despised for its corrupt mismanagement and massive austerity, including the firing of tens of thousands of public employees, union-busting attacks and a drive to privatize public services. Right after coming into office, Padilla proved his allegiance to Wall Street by promoting new tax incentives to attract private investment. Now he is the ringleader for the next round of vicious austerity.

Puerto Rico is a vivid confirmation of the need for a program that centers on proletarian class independence from all wings of the capitalists. This requires a political break from nationalist bourgeois and petty-bourgeois forces. In the economically backward countries, the bourgeoisies are too weak, corrupt and dependent on the imperialists to resolve essential tasks such as breaking the stranglehold of imperialism. Only through the proletarian seizure of power can there be liberation from imperialist domination and the basis laid to eradicate poverty.

A victorious workers revolution in the U.S., in which class-conscious Puerto Rican workers can play a vanguard role, would immediately grant Puerto Rico independence and massive amounts of economic aid, establishing relations on the basis of its freedom to exercise national self-determination. But the spark of revolution could also come from the colonial or neocolonial countries. Workers struggle in Puerto Rico against U.S. colonial domination could inspire the multiracial working class on the mainland in the revolutionary overthrow of U.S. imperialism.

Only a socialist federation (or federations) of the Caribbean, in the context of world socialist revolution making possible international collectivized planning, can open the road to qualitative economic development for Puerto Rico and neighboring countries that today are under the imperialist boot. For this perspective to become a reality, Trotskyist parties must be built in Puerto Rico and the U.S. as part of a reforged Fourth International, the world party of socialist revolution.