Naomi Klein, The Intercept:
Just off the main square, a large, pink colonial-style house had light shining through every window. It glowed like a beacon in the terrifying darkness.
The pink house was Casa Pueblo, a community and ecology center with deep roots in this part of the island. Twenty years ago, its founders, a family of scientists and engineers, installed solar panels on the center’s roof, a move that seemed rather hippy-dippy at the time. Somehow, those panels (upgraded over the years) managed to survive Maria’s hurricane-force winds and falling debris. Which meant that in a sea of post-storm darkness, Casa Pueblo had the only sustained power for miles around.
And like moths to a flame, people from all over the hills of Adjuntas made their way to the warm and welcoming light.
Settling into a wooden rocking chair, Massol-Deyá said that Maria had changed his sense of what’s possible on the island. For years, he explained, he had pushed for the archipelago to get far more of its power from renewables. He had long warned of the risks associated with Puerto Rico’s overwhelming dependence on imported fossil fuels and centralized power generation: One big storm, he had cautioned, could knock out the whole grid — especially after decades of laying off skilled electrical workers and letting maintenance lapse.
Now everyone whose homes went dark understood those risks, just as the people in Adjuntas could all look to a brightly lit Casa Pueblo and immediately grasp the advantages of solar energy, produced right where it is consumed. As Massol-Deyá put it: “Our quality of life was good before, because we were running with solar power. And after the hurricane, our quality of life is good as well. … This was an energy oasis for the community.”
It’s hard to imagine an energy system more vulnerable to climate change-amplified shocks than Puerto Rico’s. The island gets an astonishing 98 percent of its electricity from fossil fuels. But since it has no domestic supply of oil, gas, or coal, all of these fuels are imported by ship. They are then transported to a handful of hulking power plants by truck and pipeline. Next, the electricity those plants generate is transmitted across huge distances through above-ground wires and an underwater cable that connects the island of Vieques to the main island. The whole behemoth is monstrously expensive, resulting in electricity prices that are nearly twice the U.S. average.
This broad collapse, Massol-Deyá explained, was now helping him make the case for a sweeping and rapid shift to renewable energy. Because in a future that is sure to include more weather shocks, getting energy from sources that don’t require sprawling transportation networks is just common sense. And Puerto Rico, though poor in fossil fuels, is drenched in sun, lashed by wind, and surrounded by waves.
Several Puerto Ricans I spoke with casually referred to Maria as “our teacher.” Because amid the storm’s convulsions, people didn’t just discover what didn’t work (pretty much everything). They also learned very quickly about a few things that worked surprisingly well. Up in Adjuntas, it was solar power. Elsewhere, it was small organic farms that used traditional farming methods that were better able to stand up to the floods and wind. And in every case, deep community relationships, as well as strong ties to the Puerto Rican diaspora, successfully delivered lifesaving aid when the government failed and failed again.
If Maria is a teacher, this emerging movement argues, the storm’s overarching lesson is that now is not the moment for reconstruction of what was, but rather for transformation into what could be. “Everything we consume comes from abroad and our profits are exported,” said Massol-González, his hair now white after decades of struggle. It’s a system that leaves debt and austerity behind, both of which made Puerto Rico exponentially more vulnerable to Maria’s blows.
But, he said with a mischievous smile, “we look at crisis as an opportunity to change.”
There is also another, very different version of how Puerto Rico should be radically remade after the storm, and it is being aggressively advanced by Gov. Ricardo Rosselló in meetings with bankers, real estate developers, cryptocurrency traders, and, of course, the Financial Oversight and Management Board, an unelected seven-member body that exerts ultimate control over Puerto Rico’s economy.
For this powerful group, the lesson that Maria carried was not about the perils of economic dependency or austerity in times of climate disruption. The real problem, they argue, was the public ownership of Puerto Rico’s infrastructure, which lacked the proper free-market incentives. Rather than transforming that infrastructure so that it truly serves the public interest, they argue for selling it off at fire-sale prices to private players.
This is just one part of a sweeping vision that sees Puerto Rico transforming itself into a “visitor economy,” one with a radically downsized state and many fewer Puerto Ricans living on the island. In their place would be tens of thousands of “high-net-worth individuals” from Europe, Asia, and the U.S. mainland, lured to permanently relocate by a cornucopia of tax breaks and the promise of living a five-star resort lifestyle inside fully privatized enclaves, year-round.
In a sense, both are utopian projects — the vision of Puerto Rico in which the wealth of the island is carefully and democratically managed by its people, and the libertarian project some are calling “Puertopia” that is being conjured up in the ballrooms of luxury hotels in San Juan and New York City. One dream is grounded in a desire for people to exercise collective sovereignty over their land, energy, food, and water; the other in a desire for a small elite to secede from the reach of government altogether, liberated to accumulate unlimited private profit.
At the core of this battle is a very simple question: Who is Puerto Rico for? Is it for Puerto Ricans, or is it for outsiders? And after a collective trauma like Hurricane Maria, who has a right to decide?
Earlier this month, in San Juan’s ornate Condado Vanderbilt Hotel, the dream of Puerto Rico as a for-profit utopia was on full display. From March 14 to 16, the hotel played host to Puerto Crypto, a three-day “immersive” pitch for blockchain and cryptocurrencies with a special focus on why Puerto Rico will “be the epicenter of this multitrillion-dollar market.”
Among the speakers was Yaron Brook, chair of the Ayn Rand Institute, who presented on “How Deregulation and Blockchain Can Make Puerto Rico the Hong Kong of the Caribbean.” Last year, Brook announced that he had personally relocated from California to Puerto Rico, where he claims he went from paying 55 percent of his income in taxes to less than 4 percent.
Elsewhere on the island, hundreds of thousands of Puerto Ricans were still living by flashlight, many were still dependent on FEMA for food aid, and the island’s main mental health hotline was still overwhelmed with callers. But inside the sold-out Vanderbilt conference, there was little space for that kind of downer news. Instead, the 800 attendees — fresh from a choice between “sunrise yoga and meditation” and “morning surf” — heard from top officials like Department of Economic Development and Commerce Secretary Manuel Laboy Rivera about all the things Puerto Rico is doing to turn itself into the ultimate playground for newly minted cryptocurrency millionaires and billionaires.
It’s a pitch the Puerto Rican government has been making to the private jet set for a few years now, though until recently it was geared mainly to the financial sector, Silicon Valley, and others capable of working wherever they can access data. The pitch goes like this: You don’t have to relinquish your U.S. citizenship or even technically leave the United States to escape its tax laws, regulations, or the cold Wall Street winters. You just have to move your company’s address to Puerto Rico and enjoy a stunningly low 4 percent corporate tax rate — a fraction of what corporations pay even after Donald Trump’s recent tax cut. Any dividends paid by a Puerto Rico-based company to Puerto Rican residents are also tax-free, thanks to a law passed in 2012 called Act 20.
Conference attendees also learned that if they move their own residency to Puerto Rico, they will not only be able to surf every single morning, but also win vast personal tax advantages. Thanks to a clause in the federal tax code, U.S. citizens who move to Puerto Rico can avoid paying federal income tax on any income earned in Puerto Rico. And thanks to another local law, Act 22, they can also cash in on a slew of tax breaks and total tax waivers that includes paying zero capital gains tax and zero tax on interest and dividends sourced to Puerto Rico. And much more — all part of a desperate bid to attract capital to an island that is functionally bankrupt.
With just a 3 1/2-hour commute from New York City to San Juan (or less, depending on the private jet), all it takes to get in on this scheme is agreeing to spend 183 days of the year in Puerto Rico — in other words, winter. Puerto Rican residents, it’s worth noting, are not only excluded from these programs, but they also pay very high local taxes.
Mining cryptocurrencies is one of the fastest growing sources of greenhouse gas emissions on the planet, with the industry’s energy consumption rising by the week. Bitcoin alone currently consumes roughly the same amount of energy per year as Israel, according to the Bitcoin Energy Consumption Index. The city of Plattsburgh, New York, recently adopted a temporary ban on cryptocurrency mining after local electricity rates suddenly soared. Many of the crypto companies currently relocating to Puerto Rico would presumably do their currency mining elsewhere. Still, the idea of turning an island that cannot keep the lights on for its own people into “the epicenter of this multitrillion-dollar market” rooted in the most wasteful possible use of energy is a bizarre one and is raising mounting concerns of “crypto-colonialism.”
In part to allay these fears, Puerto Crypto made a last-minute name change to the less imperial “Blockchain Unbound,” though it didn’t stick.
Post-Maria, with land selling for even cheaper, public assets being auctioned at fire-sale prices, and billions in federal disaster funds flowing to contractors, some distinctly more grandiose dreams for the island have begun to surface. Now rather than simply shopping for mansions in resort communities, the Puertopians are looking to buy a piece of land large enough to start their very own city — complete with airport, yacht port, and passports, all run on virtual currencies.
The conviction that taxation is a form of theft is not a novel one among men who imagine themselves to be self-made. Still, there is something about rapidly becoming rich from money that you literally created — or “mined” — yourself that lends an especially large dose of self-righteousness to the decision to give nothing back. As Reeve Collins, a 42-year-old Puertopian, told the New York Times, “This is the first time in human history anyone other than kings or governments or gods can create their own money.” So who is the government to take any of it from them?
As a breed, the Puertopians, in their flip-flops and surfer shorts, are a sort of slacker cousin to the Seasteaders, a movement of wealthy libertarians who have been plotting for years to escape the government’s grip by starting their own city-states on artificial islands. Anybody who doesn’t like being taxed or regulated will simply be able to, as the Seasteading manifesto states, “vote with your boat.”
For those harboring these Randian secessionist fantasies, Puerto Rico is a much lighter lift. When it comes to taxing and regulating the wealthy, its current government has surrendered with unmatched enthusiasm. And there’s no need to go to the trouble of building your own islands on elaborate floating platforms — as one Puerto Crypto session put it, Puerto Rico is poised to be transformed into a “crypto-island.”
Sure, unlike the empty city-states Seasteaders fantasize about, real-world Puerto Rico is densely habited with living, breathing Puerto Ricans. But FEMA and the governor’s office have been doing their best to take care of that too.
The Puertopians know all this has been hard on locals, but they insist that their presence will be a blessing for the devastated island. Brock Pierce argues (without offering any specifics), that crypto-money is going to help finance Puerto Rican reconstruction and entrepreneurship, including in local agriculture and energy. The enormous brain drain currently flowing out of Puerto Rico, he says, is now being offset with a “brain gain,” thanks to him and his tax-dodging friends.
The dream of the blank canvas, a safe place to test one’s boldest ideas, has a long and bitter history in Puerto Rico. Throughout its long colonial history, the archipelago has continuously served as a living laboratory for prototypes that would later be exported around the globe. There were the notorious experiments in population control that, by the mid-1960s, resulted in the coercive sterilization of more than one-third of Puerto Rican women. Many dangerous drugs have been tested in Puerto Rico over the years, including a high-risk version of the birth control pill containing a dosage of hormones four times greater than the version that ultimately entered the U.S. market.
Vieques — more than two-thirds of which used to be a U.S. Navy facility where Marines practiced ground warfare and completed their gun training — was a testing ground for everything from Agent Orange to depleted uranium to napalm. To this day, agribusiness giants like Monsanto and Syngenta use the southern coast of Puerto Rico as a sprawling testing ground for thousands of trials of genetically modified seeds, mostly corn and soy.
The appeal of Puerto Rico for these experiments was a combination of the geographical control offered by an island and straight-up racism. Juan E. Rosario, a longtime community organizer and environmentalist who told me that his own mother was a Thalidomide test subject, put it like this: “It’s an island, isolated, with a lot of nonvaluable people. Expendable people. For many years, we have been used as guinea pigs for U.S. experiments.”
Colonialism itself is a social experiment, a multilayered system of explicit and implicit controls designed to strip colonized peoples of their culture, confidence, and power. With tools ranging from the brute military and police aggression used to put down strikes and rebellions, to a law that once banned the Puerto Rican flag, to the dictates handed down today by the unelected fiscal control board, residents of these islands have been living under that web of controls for centuries.
…Rosario spoke passionately about the psychological impact of this unending experiment. He said that at such a high-stakes moment — when so many outsiders are descending wielding their own plans and their own big dreams — “we need to know where are we heading. We need to know where is our ultimate goal. We need to know what paradise looks like.” And not the kind of paradise that “performs” for currency traders with a surfing hobby, but that actually works for the majority of Puerto Ricans.