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The Trouble with Cuban Socialism

Last July 26, on the day that marked the eleventh anniversary of the Cuban revolution, addressing hundreds of thousands of citizens on the same rostrum from which he was accustomed to hail his victories, Fidel analyzed in detail the failure of the great ten-million-ton harvest. 1 To critical observers who followed from within or looked on from the outside the struggles and stresses that marked the attempt to lay the economic foundations of a new socialist society, this failure had not come as a surprise when it was first announced on May 11. What must have been surprising to those accustomed to the ways of politicians, on the right as well as on the left, was the resounding candor of the speech.

Under conditions normally prevailing in a free-enterprise economy like our own, the failure of one of the major industries to reach an anticipated output level, even by as much as 15 percent, would hardly be considered a national tragedy. In a centrally guided (socialist) economy, the failure to reach a production target which has been officially proclaimed the national goal must, indeed, be interpreted as a sign of a major breakdown.

Whatever its weaknesses may be—and as we shall see presently there are many—a strong socialist regime should be capable of concentrating ruthlessly all the economic and spiritual resources it commands on that single goal. The fact that, despite such capability and the obvious determination to make the greatest possible sacrifices, Cuba nevertheless harvested fewer than ten million tons of sugar leads one to conclude that these sacrifices must have been pushed to the extreme. If a driver is known to be determined to reach a speed of one hundred mph, but is seen to be going only ninety mph, one can be pretty certain that he has pushed the accelerator to the floor; had he actually reached the one hundred mph speed one could not be so sure.

Indeed, the list of subsidiary failures—subsidiary, that is, to the ten-million-ton sugar harvest—itemized in Castro’s speech is distressingly impressive. Milk production fell 25 percent in one year, delivery of steel 38 percent, the output of cement 23 percent, and so on, and so on. The proportion of normal working time spent by thousands of highly trained technicians away from their real jobs, and the portion of the normal school year which both students and teachers devoted to swinging the machete and loading the cut cane, must have, in many instances, approached 100 percent.

The poor performance by industry, agriculture, transportation, and distribution predicted by all of Fidel’s hostile as well as many of his friendly critics is now confirmed by the official figures. If before July 26 two different interpretations of the state of the Cuban economy were possible, a distressing unanimity now prevails: the high hopes for rapid growth have been disappointed; the situation is desperate, although, one must hasten to add, still far from hopeless. It is not surprising, however, that in the explanation of how all this came about, no such unanimity exists.

Though one is tempted to ask what “the cause” of the debacle was, to yield to this temptation would be to oversimplify the issue. A national economy, even the national economy of a small country like Cuba, is a complicated system. Fidel is, of course, the big wheel in it. He would be, however, the first to admit that his effectiveness depends to a great extent on a large number of other wheels and gears.

Whenever many different experts set out to explain a development as complex as the economic difficulties in Cuba, the dispute about its true cause can safely be assumed to reflect a disagreement about appropriate remedies. It is as though one observer might say that someone’s headache had been caused by his failure to take aspirin, while another might insist that it was rather the reluctance to take anacin, and a third that the headache was due to lack of sleep. Any one of these observers may be right, but in what sense can the three experts be said to have offered three different explanations of the headache?

The economic difficulties confronting Cuba are fundamentally the same as those that plagued the Soviet Union and other socialist countries after the overthrow of their capitalist semifeudal regimes. In the Cuban case there was, of course, no physical devastation from a prolonged civil war such as accompanied the Russian revolution, although the blockade imposed by the United States, in cutting off the flow of indispensable replacement parts for American machinery unobtainable from any other source, caused great and lasting damage to the economy. On the other hand, Cuba received extensive economic aid from the Soviet Union as well as modest, but not negligible, trade credits from other parts of eastern and western Europe and from China.

In the same July 26 speech, Fidel blames the plight in which his country finds itself on bad planning. All available evidence seems to indicate that the low and apparently steadily falling efficiency of labor is another, probably more important, factor responsible for this trouble. It is my contention that the second problem—the characteristically low productivity of labor, rooted in the basic difference between a socialistic and an individualistic society—will moreover prove to be particularly difficult, perhaps even impossible, to overcome.

The first two years after the overthrow of the old regime were a glorious revolutionary honeymoon. The immediate political and social objectives of the victorious popular movement were attained. The standard of living of large masses of the population shot up. This increased rate of consumption was, however, maintained only through the depletion of existing stocks. The sharp rise in the per capita meat consumption, for example, was sustained by the abnormally high rate of animal slaughter, which always in all countries accompanies the nationalization of private herds. After all, the social upheaval at the outset could only have had a negative effect on the organization of production and, consequently, on the flow of current output.

By 1962 reserves were used up, shortages began to be felt, and rationing of food and clothing was inaugurated. In 1959 the National Agrarian Reform Institute had been organized to carry out agrarian reforms; and in 1960 the Central Planning Office—the Juceplan—was established to guide the over-all economic growth. Edward Boorstein, who was not only a close observer but a participant in the first serious attempts at central planning of the operations and the growth of the socialist economy, gives a very full and graphic account of it in his book, The Economic Transformation of Cuba.2

The original idea of transforming the predominantly agricultural economy into an industrial one was given up after two frustrating years. The decision to base plans for further economic growth on a diversified agriculture with particular emphasis on sugar production and cattle raising appears to have been quite sound, since next to rich deposits of nickel and a few other minerals the main natural resources of the island are its agricultural land and propitious climate. Another aspect of Cuban economic strategy—the exceptionally high rate of saving and investment—is characteristic of all modern socialist countries. In this, Marxist practice is in keeping with the precepts of orthodox economic thought that are preached, but not practiced to the same extent, by capitalist societies.

Long-run projections of economic growth exist now in all countries, even in the United States. In France, for example, these projections take the form of prospective plans that are intended to serve as over-all guidelines for the economic policies of the government as well as for the major investment decisions made by large private firms. The efficacy of this and other similar attempts at over-all planning within the social and economic framework of the private enterprise system is, however, highly problematic. Except in the very special case of Japan, where the government, working hand in hand with representatives of well-organized industries, wields considerable economic power, it seems to do little good, though it does not do great harm.

In a socialist country where the government takes over the responsibility for all the large and small decisions involved in the operations of the national economy, the function of a plan or rather the responsibilities of the central planning organs are very great and very grave indeed.

Since Lenin inaugurated the first socialist five-year plan nearly half a century ago, problems of central planning have become a favorite subject of theoretical analysis both in the East and in the West; originally, in fact, more in the West than in the East. In the Soviet Union by now several scientific institutes with literally thousands of economists, mathematicians, and statisticians on their staffs are working on these problems. The organizations responsible for the actual management of the economy do try to make practical use of the results of this research; however, they do so very cautiously and very slowly. A careful inquiry would likely show that managers of large American corporations make, at the present time, greater and more effective use of modern programming and planning techniques than the planning organs of socialist countries.

With one or two exceptions the revolutionary leaders who found themselves responsible for managing all the nationalist branches of the Cuban economy were even less well prepared for their task than the men who came to power in Russia in 1917. The economy which Fidel took over in 1959 was, of course, as I observed earlier, in a much better state than the Russian economy of 1917, which was exhausted by four years of war. While apprehensive of possible foreign intervention, Cuba was spared the trials of a prolonged civil strife. This, in addition to the fact that a Caribbean island does not have to withstand the assault of harsh northern winters, explains, at least in part, why the Cuban revolution was and still is a relatively happy one, in contrast with the grim Russian revolution.

In reading the detailed account of successive reorganizations of the economic administrative organs in Havana, one cannot help but see a repetition of the early history of Soviet planning. So far as purely economic matters are concerned, because of their inexorable internal logic the problems facing the two socialist societies have more similarities than one would expect in view of the differences in time and place.

The so-called market, or free-enterprise, economy, as it exists in most Western countries and as it existed before the revolution in Cuba, operates like a gigantic automatic computing machine. In the absence of any central guidance, the production and consumption of thousands of various goods and services, the introduction of new technologies, the contraction or even liquidation of old industries, and the creation of new ones—all are regulated by the proverbial invisible hand that operates, as Karl Marx would have said, “behind the consciousness of men.” This machine is responsible for the unprecedented prosperity of the Western world, but it functions anything but smoothly: it often, for example, brings about unemployment and generates pollution. Most damaging of all, it tolerates an unequal distribution of income and, as a result of this, an even more unequal distribution of political power. Under the impact of a radical social upheaval, such as the Cuban revolution, the functioning of this crude but nevertheless delicate regulating mechanism simply comes to a stop.

  1. 1

    A translation of the complete text appeared in NYR, September 24, 1970.

  2. 2

    Monthly Review Press, 1968.

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