guns and flea markets

8/8/2019 Guns and Flea Markets

http://slidepdf.com/reader/full/guns-and-flea-markets 1/3

GUNS AND FLEA MARKETS

By Gil C. SchmidtSpecial ReportThe Latin American Herald-Tribune MagazineNovember 14, 2010

Back in 2006, Puerto Rico enacted its first sales tax. Predictably, government economistssupported it, independent economists thought it was either premature or unnecessary and oneobserver--yours truly--predicted it would result in lower government revenue and the "perfection"of the Island's notoriously large underground economy.

Here we are, gathering our things to close out 2010 and Puerto Rico's undergroundeconomy is hitting fifth gear (see my previous "The Rise of Puerto Rico's UndergroundEconomy") and--in part due to the worldwide recession--the government's coffers are looking21% emptier.

In retrospect, it seems painfully obvious that the sales tax didn't (as was predicted bymany government economists) "tap into" the underground economy. It did the opposite, forcing

the "gray market" into an efficiency it never had before. Thus the rise of flea markets that nowboast shopping mall hours (including very extended Sunday hours), security, 3-hour businesssetups (with financing!) and a rising trend of professional services ranging from computer repair to (gasp) tax preparation.

What wasn't obvious was the recession/depression, for although it was visible in PuertoRico's economy in 2005-2006, the Island's federal safety net had usually kicked in to smooth thechoppy waters. With the U.S. taking a severe tumble, Puerto Rico's downward spiral accelerated.

Tack onto this the fact that Puerto Rico's economy ranks below that of any State in termsof income per capita and you have an island where income inequality--real and perceived--isenormous. And as so many sociological studies have shown, it is income inequality and notpoverty that drives crime rates.

So where is Puerto Rico now? Jobs disappearing (even from government, the sinecure of sinecures), incomes dropping, crime rising and an underground economy becoming enormously

accessible to everyone. The past confidence in government (for there always has been a strongfeeling of "they will solve it") has eroded and more and more people are taking matters into their own hands. Some leave the island. Others set up unreported home-based businesses, streetcarts or rent a stall at a flea market. And still others, with their eyes on the crime rate, are turningto guns.

Detour: The incidents involving police brutality in Puerto Rico have increased every year since 2003. The number of police men and women using their assigned weapons to commit amurder (usually as part of a domestic abuse situation) has increased every year since 2002. Thepolice force's street-effective (non-salary and related benefits) budget has decreased every year,in real dollars, since 2006.

Back on track with a question: would you expect gun sales to rise or fall in this scenario?Gun sales and applications for gun licenses have risen significantly in the past year, as reportedby sevreral armory and gun shop owners around Puerto Rico. In some cases, applications have

nearly tripled over levels in 2007-2008. Nearly every gun shop reported that sales have remainedstable or increased slightly month by month, despite the fact that bullets, guns and accessorieshave increased in price, in some cases by as much as 250%.

But most disturbing are two noticed trends:

1) Reports of gun thefts have gone from 2-3 a month to 2-3 a week, according togun shop owners, who are often called before the police to help frantic theft

victims deal with the legal requirements of their situation.

2) Air gun stalls in flea markets, a very common site in almost all of them, often



sell more items "from the truck" than from the stall, which begs the question: whatare they selling from the truck that they can't sell openly from the stall?

First, the legal side. Puerto Rico has probably the most restrictive gunownership/licensing laws in all of the U.S. In summary, getting a permit to shoot guns as sport or for practice will cost about $1,400, involve a lengthy background check, a hearing in Court andtake about 3-6 months. It's pretty much the same to get a gun carrying permit. Under the currentgovernment's "raise funds from anywhere" mentality, pending legislation would increase the costof licenses and permits as well as the fees for their requests. And to top it off, other pendinglegislation seeks to limit shooters to 500 bullets a year as part of some "curb violence" movement.As dozens of gun owners said, they shoot 200-300 bullets in a weekend for practice and heavenknows criminals don't count bullets in order to stop at 500 a year.

What this legal and future-legal system creates is a climate that makes gun ownership anextremely restrictive practice, on an island where gun-related crime--by citizens and police--isincreasingly visible. The climate of insecurity, if not outright fear, eases the resistance to having agun at hand or, in that curiously human way, makes having a gun a "good" thing in a newrationalized way. That local legislators feel they can curtail or dampen this mood by pretendingthat a 500-bullet limit makes sense is like tossing alcohol on a fire: the hottest reaction is almostinvisible to the eye.

The almost invisible part is happening where everything else seems to be happening in

Puerto Rico: the underground economy. Its rise is in direct response to the restrictions of the"legal" economy, where launching your own business can take 6-12 months, financing is almostimpossible to get (for small to medium-sized businesses) and where the near-endlessbureaucracy and petty procedures are seen as "an obstacle course for bribes."

Once again, the underground economy provides. It did so to create product-based smallbusinesses, to help channel fresh produce to consumers bypassing profit-killing middlemen, toexpand business services, to lower operational costs and yes, it can be used to fence stolengoods. But the success of the flea market-based underground economy is directly-related to theoverwhelming percentage of obstacles it legally removes and the overwhelming number of solutions it legally supports. However, market pressures and a growing sense of discomfort anddistrust are pushing the emergence of a more open market for guns not necessarily legally-acquired. Sadly, a conclusion of that trend is that the emergence of this gun market will spell thehollowing-out of the current underground economy.

The scenario looks something like this: The current underground economy is built on alarge-scale, informal, shared trust/shared need system. The vast majority of the transactions in itare legal (or quasi-legal, as in the case of cash transactions that go unreported in taxes) and thebulk of illegal activity is piracy (very visible in all flea markets) of CDs and DVDs. But guns are awhole 'nother ballgame. With guns, you have a product that is never capable of being sold legallyin a local flea market annd the presence of illegal guns changes the fundamental environment of this informal economy from "creating solutions" to "creating problems."

Guns are expensive and illegal guns more so. With higher expenses and higher demandcomes higher profits, which attracts a different element to the business environment: the profiteer.Flea markets are almost entirely made up of entrepreneurs, folks who invest their businesses withwith their life's energy. A profiteer invests his money for more money, cares nothing aboutpreserving or building anything except profit and deals with competition not by improving service,product selection or advertising, but by simply eliminating the competition. Once that happens,

the large-scale, informal, shared trust/shared need system becomes fragmented, hollowed, asthe less-tolerant and more fearful business owners leave flea markets to set up shop elsewhere,reducing the solutions pool available now and thus reducing the overall appeal of the current fleamarkets.

Is this inevitable? As Pablo Ortíz, owner of West Shooting Supplies in my hometown of Cabo Rojo, said "Illegal guns are more expensive and that means fewer people can afford them,"but conceded that faced with increasing red tape to legally own a gun, "people who want a gunare going to get one any way they can, because they feel they need it and they feel they have aright to have one."

Guns inspire fear and awe, excitement and dread, and this mixed bag of emotions is



bound to buckle or even smash the trust the underground economy of flea markets is built on. Butthe needs and wants flea markets currently serve will not disappear as easily. So what will rise upand take their place once guns--as expected--break the current system? To answer that question,we'll need to play a game...

Catch Mr. Schmidt's next Special Report: From Monopoly to "Monopoly" in December's LAHT Magazine.

guns and flea markets

Documents