CUBA: The Socialist vs. Capitalist debate

In the past weeks and months people have been trying to work out how far exactly Raúl Castro has been willing to push through reforms. Since he officially took over from his older brother Fidel, certain parts of the economy have been relaxed as to allow Cubans to purchase a whole host of consumer goods along with other small economic liberalizing steps (see "More reforms in Cuba")

Anyway does all this account to the “death knell” of socialist Cuba as we know it and the emergence of a new capitalist state, or rather as rational steps to perfect Cuba’s statist economy. This is the debate that’s been played out in a number of opinion pieces I’ve stumbled across in the British Press of late.

• Rory Carroll, “Cuban Workers to get bonuses for extra effort”, The Guardian, June 13, 2008


• Dr. Helen Yaffe, “Cuba’s wage changes have nothing to do with a return to capitalism”, The Guardian, June 20, 2008


• Marc Frank, “Cuba determined to perfect statist economy”, The Financial Times, June 23, 2008
  

Rory Carroll in his piece highlights the recent abandonment of Cuba’s egalitarian wage system - the idea that a taxi driver should in theory earn as much as say a doctor, or as Marx’s famous maxim goes, “from each according to his ability, to each according to his need.” In the future pay rewards will be based on productivity and efficiency – from each according to his ability to each according to his work - thus curbing the inherent inertia of the Cuban economy. By emphasising continual poverty on the island seeing the Cuban economy as moribund he hints at the dire need of some form rejuvenation of the economy through liberalisation; something he likes to call “perestroikita” in reference to the liberalizing reforms undertaken by Gorbachev in the USSR

Dr. Helen Yeffe is quick to rebuke the perceived notion that Cuba is somehow on the long but inevitable path towards full-flung capitalism. The idea that everyone in Cuba has been paid the same is a myth, with pay rewards and wages dependent on your skills having been in place for decades. She then takes to task the idea that the Cuban economy is in some form of dire straits, showing off various statistics that highlight the impressive growth the Cuban economy has witnessed in the last few years. Of course this is then followed by the age-old pro-Castro argument that stresses the country’s impressive health, education and equality levels as to counteract the poverty levels in Cuba. The new salary incentives have little to with rejuvenating the economy but more as a means to reduce their vulnerability to the global food price crisis.

Finally the Financial Times comes with its own interpretation of recent reforms. All the reforms come under the banner of what is being coined perfeccionamiento empresarial – perfecting the state company system.

Perfeccionamiento empresarial is based on adopting modern management and accounting practices, often gleaned from the study of private corporations, for state-run companies. It grants management more authority over day-to-day decisions and imposes more discipline on workers while also increasing their participation in decisions and incentives for labour.

What this means in practice is hard to glean, but as far as the FT is concerned the debate as to whether Cuba is eschewing socialism in favour of capitalism has been decided.

A debate fostered by Raúl Castro has for now been settled in favour of those who want to improve one of the world’s most statist economies – not dismantle it.

And why should they abandon in a single sweep the foundations of modern day economy. Especially when the FT confirms that the Cuban economy is in such a healthy state.

Foreign exchange earnings are relatively strong due to the export of medical and other professional services – mainly to Venezuela – as well as tourism, high nickel prices and soft Chinese loans.

However we may wish to coin the policy directions of the Cuban economy, and trumpet them as evidence of socialism or capitalism surely this must be secondary to realizing that there never needs to be a one-size-fits-all solution to everything. In reality it is of little importance whether Cuba clings onto socialism, incorporates capitalism or finds some other middle way; as long as it works. I don't know to be quite honest, I just find it increasingly unproducutve for people to always to pigeon-hole things, be it socialism vs capitalism, left-wing vs. right-wing, or other such false dichtomies. Latin America has been awash with the by-products of this, be it Guatemala under Arbenz, Chile under Allende, and now the rise of the 'new Left' throughout much of Latin America. Why waste blood (literally), sweat and tears over labelling such governments one way or the other?