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Puerto Rico: Blame and the Debt of "the Other"

posted by Bob Lawless

Recently, I have been spending a lot of time thinking about the psychology of other people's indebtedness. I see parallels from this work and the way we think about Puerto Rican government debt. This thinking then tends to stand in the way of solutions.

An example is the psychological idea of the fundamental attribution error. This heuristic means we over-attribute other people's behavior to their personality rather than their circumstance. The guy speeding past me on the highway is a jerk instead of late for a meeting. Our neighbor who has filed bankruptcy is irresponsible rather than the victim of a job layoff. It is not that some people aren't jerks or irresponsible. Rather, we over-attribute behavior to personality rather than circumstance. If you don't see my point, there is probably something wrong with you. (Get it?)

I don't want to oversell the point because Puerto Rico is obviously not an individual person, and thus the fundamental attribution error is not directly applicable. Still, there seems to be in the zeitgeist the sense that Puerto Rico is largely to blame for its own financial situation, and therefore there is less of a moral imperative for the rest of the nation to act. As we consider what should be done, the lesson of the fundamental attribution error -- that you are usually wrong when you blame other people's character -- should serve as a cautionary principle about how Puerto Rico has come to this situation.

A second point has to do with the debt of the "other." A number of years ago, my colleagues and I did a study where we found differences in attitudes toward hypothetical African American and white debtors based on how they purported to handle their overindebtedness. To grossly oversimplify but to state succinctly, we found African American debtors were "less forgiven" for their debt problems. We have been following up on this work to study how people think about debts owed by "the other" -- that is, less privileged groups in society. We have been doing this work both in the U.S. and in other countries. It is still early days in our research, and our previous research was about resolution plans for debt. Thus, I cannot claim that our work speaks directly to the Puerto Rican debt problem. Still, it is not far-fetched to think that what we saw in our earlier work will generalize to other groups and across different sorts of indebtedness. Given the historical facts about the place of Puerto Rico and its people in the U.S. polity, we need to be careful that opposition to Puerto Rican debt relief is not simply a manifestation of hostility to debts of the "other."

As I read back over what I have written, I see that I have done it again. In her call for this mini-symposium, Melissa suggested we think about solutions. I have offered some potential hurdles that may be standing in the way of a constructive dialogue that moves us forward on the Puerto Rican debt crisis. The only solution I can offer to these hurdles is humility, to recognize that to think in the ways I have outlined is only human. But, it is also human to aspire to overcome them.


Agree wholeheartedly we cannot lose sight of this dimension. A troubling history here, ending w/ a poverty rate nearly doubling that of Mississippi:


What a thoughtful addition, Bob. I've always been fascinated by the plight of the other, the abject, and the spectacle of exclusion. Do we define the conventional and the responsible by ostracizing and shaming the unconventional and the irresponsible?

I undoubtedly think this heuristic bias plagues Congress in determining how to address PR's dilemma. I appreciate your call for humility and empathy as a solution--to be sure, not a tangible quick fix--but a shift in perspective may help spurn constructive action.

There's also a subtext at work here: The assumption that the consequences of behavior of the Other whom we don't know (or at least not well enough) are intentional or at least narcissistically malign. To slightly extend the traffic example, it's not just that the guy speeding past us is a jerk; it's that he intended to cause a (hopefully near-miss) collision, because He's Important and the priority of his meeting is consciously and conspicuously greater than any potential traffic consequences to anyone else.* We're more likely to accept a debtor's claim of changed circumstances if we've actually watched the general community go through hard times; comparing public reaction to the Detroit bankruptcy ("everybody knows" Detroit has had financial problems for years) to, say, Chicago's potential for one (if you don't live in Illinois and aren't a news junkie, you just don't know how shaky things have been for the last decade) is instructive.

But we're normally less inclined to attribute a less-than-honorable intention if we sufficiently know that Other. Continuing with the traffic analogy, the identical behavior from a police car or other government vehicle — even when not using a siren or flashers — will be much more easily dismissed or excused as a "mere exigency" or "accidental byproduct." Turning again to debt, if one knows that a major employer has withdrawn from an area (for whatever reason), one is more likely to accept that a resident of that area is blameless — instead of being a "taker" or "freeloader" or "welfare king/queen" — in being unemployed and unable to repay existing debts, especially residential (whether mortgages or rent).

I submit that English-speaking Americans — and even a majority of Spanish-speaking Americans — don't know Puerto Rico well enough to move from the first paragraph above to the second one. I don't, and I AM a news junkie; all I can do is try to be conscious of the difficulty.

* A few years of driving in DC sort of validate this for traffic, but I don't think it translates well to debt!

I also think there's a curious bleeding over of corporate and consumer bankruptcy attitudes here. For humans, there is a kind of political divide (crassly) between conservatives who worry about sparing the rod to spoil the child and liberals who want to want redemption and absolution. But in corporate insolvency, we are usually cool-minded pragmatists who want to facilitate commerce, etc. Much of the narrative on PR focuses on blame, as if "it" were an irresponsible child, but why don't we talk/think that way about the Sports Authority? Surely it's not run by robots but humans there, too?

Good point, not only because of the factor of "the other", but because in this case, we would have to go back to, argh!, history, which most people tend to hate. Economics and finances are not even really the issue here. Too much of the US's international strategy rides on Puerto Rico's "classification" under the US Constitution (or, really, outside of it). For those who would like some historical context, this is a wonderful book on the political origins of today's conundrum:


Bob, thank you for this post. I would like to specifically agree with and elaborate on your first point.

In addition to there being an attribution error, I think there is an oversimplification error. Every sovereign debt crisis is its own world, and I think it is a common error to group them all together, particularly with emerging markets.

Puerto Rico is particularly unique. Because Puerto Rico is not a sovereign, they are subject to some laws from the United States as well as their own domestic laws. A similar comparison can be made to Greece and the EU, but the United States' influence over Puerto Rico is stronger then that of the EU over Greece.

Chalking up Puerto Rico's financial situation to fiscal irresponsibility is overly simplistic. US policies that have been forced onto Puerto Rico have had a significant impact on Puerto Rico's economic problems, which has led to the current debt crisis. Some of these policies include minimum wage laws, trade restrictions, elimination of tax breaks for the private sector, and the exemption of Puerto Rico's debt from US taxes in the Jones-Shaforth Act.

Take the minimum wage laws for example. While I'm not necessarily saying that minimum wage laws are always bad for an economy, applying United States economic standards to Puerto Rico was nonsensical. The equivalent of a $7.25 minimum wage in Puerto Rico would be over $13 in the US.

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