Following from Part One, Jorge Martin looks at how Cuba resisted the pressures to follow the capitalist road as happened in the Soviet Union and China, undergoing a serious crisis in the process. Now, however, there are growing pressures also inside Cuba to adopt the so-called “Chinese model”, i.e. changes that would eventually lead to the re-establishment of capitalism in Cuba. There are also those who resist this idea and are seeking ways of building socialism on the island.
Cuba resists the fall of the USSR
However, despite this process of Stalinisation, the Cuban revolution was not dead, and her vitality and roots amongst the masses came back to the surface at the end of the 1980s with the collapse of the USSR. For nearly two decades, the Cuban economy, blockaded by the US, had become completely linked to that of the USSR and the Eastern European countries. It could even be discussed whether this integration did not take place in a distorted manner, stalling the development of an industrial base in Cuba, something which Che had defended. What is clear is that the impact of the collapse of Stalinism was catastrophic from the economic point of view.
The USSR used to buy Cuban sugar at prices higher than those of the world market1 and sold Cuba all sorts of products (from machinery and spare parts to food and fuel) at prices below those of the world market, as well as offering loans with very favourable conditions, which then Cuba could use to buy products on the world market. 63% of Cuba's imports of food came from the USSR, as well as 80% of imports of machinery. 80% of Cuba's trade took place with the USSR and the Eastern European Block.
All of this vanished overnight. Between 1989 and 1992, the import capacity of the Cuban economy fell by 70%. Not only was Cuba deprived of trade on extremely favourable terms, but her access to finance in order to purchase products on the world market was cut off. This led to a collapse of Cuban GDP by 2.9% in 1990, 10% in 1991, 11.62% in 1992 and a further 14.9% in 19932. Between 1989 and 1993 the accumulated fall of GDP was 35% (comparable to the 1929 crash in the US), the fall in exports was 79%, the fall in imports 75% and the fall in gross investment was 61%3.
These economic figures give us only a superficial idea of the massive human cost of the collapse of the economy: problems of lack of food, lack of vitamins, almost complete lack of transport, lack of fuel for power generation (with the accompanying black outs), etc. To all this we must add the political impact, the overwhelming ideological campaign of the ruling class worldwide to the effect that “socialism had failed”, the collapse of a system which had been a point of reference for Cuba for 20 years, and of which no serious criticism had been made. And yet, despite everything, Cuba survived what became known as the “special period in peace time”.
In the USSR, the leadership of the misnamed Communist Party, led and organised the restoration of capitalism, with the aim of becoming capitalists themselves, through the theft, looting and plundering of the state property. In Cuba, the revolution resisted and rejected the restoration of capitalism, despite all the hardships. It was a time in which the spirit of struggle of the Cuban revolution was reborn. We saw the will of a people who had conquered freedom not to be enslaved again. Despite the enormous difficulties and suffering, the Cuban Revolution overcame that period and did it for political reasons.
The Cuban economy in the world market
At the same time, a series of measures were introduced (already since 1988) which meant important concessions to capitalism, on the need to participate in the world market. These could not be avoided, but at the same time they became the source of contradictions and dangers for the planned economy in Cuba. Among those measures was the opening to foreign investment, the promotion of tourism as a source of hard currency (with all the contradictions it brings), the legalisation of the dollar, the decentralisation of foreign trade, the opening of free agricultural markets and the setting up of small peasant cooperatives, the (controlled) legalisation of self-employment and some small businesses, etc.
These measures, determined by the immediate need to survive, entailed big dangers. The participation of Cuba in the world market was taking place on extremely unequal terms. The Cuban economy was based mainly on raw materials and services, and needed to import all sorts of manufactured goods. The economic measures that were taken at the time ‑ even if we had been in the context of a strong planned economy, able to produce machinery, with a strong industrial sector able to compete in the world market ‑ involved penetration from the world market. This was 100 times more so in the case of the weak and underdeveloped Cuban economy.
The changes that were being introduced threatened to unleash an unstoppable movement towards capitalism. However, since 2003 the Cuban government made a turn towards re-centralisation of the economy. The circulation of the dollar was banned (though this was replaced by the Convertible Peso, CUC, which is firmly under the control of the state), foreign trade was again brought under central control, concessions to self-employed and small businesses were limited, and foreign investment and joint ventures were also limited.
The decisive factor is the weakness of the Cuban economy, which is currently based on income from tourism, the export of services (mainly Cuban doctors in Venezuela and other countries) and the export of nickel. The role of industry in the Cuban economy is extremely weak and mainly oriented to service the tourist sector.
All of this generated contradictions and unevenness in Cuban society. The dependency on tourism means on the one hand that a large part of the limited agricultural production has to be channelled towards this sector, to the detriment of the needs of the Cuban population in general. On the other hand, all those who are in contact with the tourist industry have access to convertible pesos (CUC) with which to buy products to supplement their monthly budget. What a taxi driver, a hotel doorman or someone renting a room out can get in one day, might be as much as the monthly wage of a building worker, or a teacher or a doctor. This reduces the value of wages, generates a deficit of doctors and teachers, and creates a situation in which a large section of the population lives through lucharla, that is, using semi-legal or openly illegal methods to get income (stealing from work, the theft of public resources, legal or illegal self-employment, etc). The most dangerous aspect of these phenomena is that they promote the idea of an individual solution to problems as opposed to a collective one.
The export of medical services (which according to some figures represents already 50% of the total value of the exports of goods and services, almost double the amount of income from tourism), means that if there are some 25,000 Cuban doctors abroad, this has a negative impact on healthcare in Cuba, one of the most important conquests of the revolution.
The remittances of Cubans abroad, which are worth 1,100 million dollars4, are also a source of further contradictions, since they do not reach all sections of the population equally, thus increasing social inequality and contributing to reduce the status of wages as a main source of income.
Finally, exports of nickel are subject to the volatility of the market for minerals in the current crisis of capitalism. The average price of nickel in 2008 was 41% below that of 2007, and 80% down from its peak in 2007.
At the same time, the Cuban economy is heavily dependant on these sources of hard currency income in order to purchase on the world market all the goods it needs (from food to buses for public transport) and which it does not produce. The need for hard currency has been increased by the hurricanes which battered the island in 2008, causing damage worth 10 billion dollars (20% of GDP), destroying crops, infrastructure and houses.
The world revolution, the only solution to the problems of the Cuban revolution
All these economic factors only reinforce the idea that, in the last instance, the only real solution for the Cuban economy is to be found in the spreading of the revolution to other countries. This is precisely the second part of Trotsky’s equation in “Revolution Betrayed”:
“The completion of the socialist revolution within national limits is unthinkable. One of the basic reasons for the crisis in bourgeois society is the fact that the productive forces created by it can no longer be reconciled with the framework of the national state. (…) The socialist revolution begins on the national arena, it unfolds on the international arena, and is completed on the world arena. Thus, the socialist revolution becomes a permanent revolution in a newer and broader sense of the word; it attains completion, only in the final victory of the new society on our entire planet. (…)The world division of labour, the dependence of Soviet industry upon foreign technology, the dependence of the productive forces of the advanced countries of Europe upon Asiatic raw materials, etc., etc., make the construction of an independent socialist society in any single country in the world impossible.”5
This was true in the 1930s, when the Russian revolutionary put in writing the theoretical conclusions of the experience of the October revolution, but it is even truer today, when the interpenetration of the world economy has reached an extreme degree.
At the same time, revolutionary conditions in the whole of Latin America are today much more advanced than they were in 1989 when Cuba became completely isolated. The development of the Venezuelan revolution has already created a point of support for the Cuban revolution both economically (through the exchange of doctors for oil at advantageous terms for example) and politically. This confirms the need to spread the revolution internationally as the only way out for the Cuban revolution. This is despite the fact that in Venezuela capitalism has not yet been abolished. And if it is not, the Venezuelan revolution will be defeated, which would be a severe blow to the Cuban revolution.
For this reason, the foreign policy of the Cuban revolution must be firmly based on proletarian internationalism. The lessons of the Cuban revolution for Venezuela, Bolivia, Ecuador, etc, are clear: only though the expropriation of imperialists, landlords, and capitalists is it possible to start to address and solve of the most immediate needs of the masses of workers and peasants.
The struggle against bureaucracy and corruption
However, not all the problems which the Cuban revolution faces arise directly from her isolation or are external to her. In a very important speech which Fidel gave at the Havana University on November 17, 20056, the Cuban leader already warned that the revolution ran the risk of self-destruction and pointed at bureaucracy, corruption and the new rich as key problems.
It is inevitable that in any society with limited resources, bureaucracy and corruption will arise, but the only way to fight against these phenomena, which are gangrene to the planned economy, is through workers’ democracy, through the detailed control by the workers of the economy and the administration of the state. If the workers, in a collective way, do not feel that they are the masters and owners of the country, of the means of production, do not feel that they are involved in taking decisions (particularly the most difficult ones, regarding the distribution of scarce resources), then the seeds of demoralisation and scepticism are sown. As Cuban communist Frank Josué Solar Cabrales pointed out: “The only solution for Cuba is, on the one hand, to give incentives, to deepen the mechanisms of workers' control, that at certain times have been but interim solutions, and to make them systematic, institutionalise them in the economy and politics of Cuba”7
The replacement of Fidel by Raul Castro, raised great expectations of change in Cuba. A discussion on the main problems that affect the country was opened at all levels. Hundreds of thousands of Cubans participated in it and reaffirmed their majority support for socialism, while at the same time they pointed out the problems that the revolution is facing and the problems that Cubans face on a daily basis.
Arising from this debate, however, only limited and secondary changes were introduced (such as the liberalisation of mobile phone ownership, of the sale of some electrical goods, the possibility to stay in hotels), which in reality only benefit those sections which have more direct access to CUCs, and therefore only increase social inequality. Further to these, measures have been taken promoting “material incentives”, like the elimination of the maximum amount of money that can be received as productivity bonus, a measure which also increases social differentiation.
Cuba - towards the Chinese way?
In the debate that has opened up in Cuba it is clear that there is a strong tendency to emphasise solutions which are supposedly “practical”, administrative and related to efficiency, as opposed to political measures. The international capitalist media have speculated about whether Raul Castro is a proponent of a “Chinese way” for Cuba, that is, the progressive introduction of market measures that ultimately would lead to the restoration of capitalism. Obviously this would be the preferred option for the capitalists internationally. In official Cuban media there is an insistence that Cuba is different from China, that conditions are different and models cannot be copied. However, at the same time Cuban economists are proposing exactly the same kinds of market reforms which in China led to the restoration of capitalism.
For instance, Omar Everleny, sub-director of the influential Centre for the Study of the Cuban Economy (CEEC) at the Havana University, in an interview published in the Mexican newspaper La Jornada, speaks of the need to promote foreign investment, of the need to develop private small and medium sized enterprises, the decentralisation of the economic activity and the role of the market in the economy. Talking of Vietnam as an example, Everleny points out that: “In a country and an economy, even if it socialist, the market has to be an important component. We should discuss in what proportions, but I think that a quota of market is vital for the process of development in the conditions of Cuba. Vietnam has managed to introduce the market and it is an economy with high rates of growth, with a growing welfare, and today plays a key role in the export of basic products worldwide”.8
The same Omar Everleny repeats the same ideas in a recent article: “The Cuban economy needs urgently a deep structural transformation emphasising decentralisation. In such a strategy it is necessary to include, the design of non-state forms of property, not only in agriculture but also in the manufacturing and service sectors. The State should keep for itself the role of regulator and concentrate its energy on the strategic sectors. The 50 years of Cuban socialism show, with some exceptions, that re-centralisation and policies oriented at pushing the market away have provoked economic recessions and adverse situations. This is not the road that should be followed in the future. The State should go from having a role of general administrator to one of general regulator, without changing the socialist project that the Cubans have decided upon. There is no doubt, and time will show, that this reform of the economic system must include the role of the market, the state regulation of the forms of property and business organisation.”9
It seems clear what Everleny is proposing: to open up manufacturing and services to private property, to reject policies which move away from the market, and that the State, far from planning the economy, simply should “regulate” it. Even though Everleny maintains that this would not mean a change in “the socialist project”, the kind of socialism he proposes is very similar to so-called “market socialism with Chinese characteristics”, that is, capitalism. It is not by chance that his article has been published by the Nueva Sociedad magazine of the F. Ebert Foundation of the German Social Democracy, the friendly face of capitalist counter-revolution.
Armando Nova, also from the CEEC, insists on the need to give full autonomy to companies (cooperatives of different kinds) in the agricultural sector, so that they “have the autonomy that they need to be able to decide on how to combine the productive factors in an efficient way, the acquiring of productive resources, to have control and decide over their final product, economic profits, in summary, to make real the feeling of ownership”10
In a recently published and very interesting study on the current state of the Cuban economy, Jorge Martio Sánchez Egozcue, from the Centre for the Study of the United States at the Havana University, and Juan Triana Cordoví, of the CEEC, emphasise the same proposals: the recovery of agriculture (which according to them would require private foreign investment), the promotion of small and medium sized enterprises (as private companies, either cooperative or not, with the aim of “generating a business fabric which would contribute to increasing the efficiency of the system as a whole”), and to promote foreign investment (spreading it to new sectors, and promoting it with “transformations in the legal framework”)11.
These measures that are being proposed, taken as a whole, can be called the “Chinese way” or any other name, but in practice they are the same measures that were introduced originally in China with the aim of developing the economy and which ended up with the restoration of capitalism. In the Cuban case, the adoption and furthering of these kinds of measures would not only entail the risk of leading to the restoration of capitalism, but would not even achieve any of the economic results of China, precisely because the conditions are very different. Among other things, Cuba does not have a massive reserve of cheap labour, or the capacity of the state to create infrastructures for the export industry. Furthermore, the world economic recession has destroyed the export markets from which China benefited originally.
The introduction of some of these measures has already started, particularly in relation to agriculture, the decentralisation of decision making in the economy and the link between wages and productivity.
As part of this debate on the renewal of Cuban socialism, some have proposed the idea of self-management as a way forward. Pedro Campos and others have signed a document in which they raise 13 programmatic measures as part of the debate towards the IV Party Congress that will take place later on this year12. Without doubt, the document raises a number of interesting proposals, including the formation of “workers’ councils in all workplaces”. It is clear that Pedro Campos is deeply worried about the problems the Cuban economy is facing and is trying to find solutions which imply the full participation of the workers in the management of the economy and the decision making process at all levels. On this, we agree.
However, we think that the main idea of the document is not only wrong but also very dangerous. Basically, it proposes that in small and medium-sized enterprises “the property over the means of production would be given directly to workers in full, either through sale, paid up front or on credit, or transferred by the State”, and that the “companies of national or strategic interest” would be “co-managed between the State and the Workers’ Collective, where ownership and administration could or could not be shared by the relevant State body, handed over partially or completely as a lease or in usufruct to the workers”. In all these companies, “the form of payment of wages” would be replaced by “the equitable sharing out of part of the profits”.
This means that ownership of companies would be handed over to the workers who work in them and they, instead of receiving wages would share out any profits. This system which is being proposed is very similar to the “socialist self-management” which was implemented in Yugoslavia and which led to the economic collapse of that country and later on to its break up. This type of ownership and sharing out of profits inevitably generates an outlook which is not a collective one, but rather individual of each group of workers in each company. If there were, for instance, two transport companies in the same city, the workers in each one of them would be pushed to compete with the workers in the other in order to get higher profits to share out (this is exactly what happened in Yugoslavia).
Furthermore, this system of individual material incentives in each company leaves to one side the problem of how to manage public services, that is, companies which do not necessarily generate profits but which deliver a useful service to society, for instance public transportation, healthcare, education. What profits would companies in these sectors generate for workers to share out? Self-management would also create extreme inequality between workers in different sectors of the economy with different profit rates. For instance, if the price of nickel on the world market collapses dramatically, the workers in this sector would have to share out losses, while the workers in the biotechnology sector, for instance, would have substantial profits to share. The sharing out of profits in this case would not depend at all on the quality and intensity of labour of these groups of workers but on factors completely alien to them. This would generate an exodus of workers from the less profitable or even loss-making sectors of the economy (healthcare, education, public transport, or nickel for instance) to those which are more profitable (tourism, biotechnology), thus replicating the same problems that we face now and which these measures were supposed to address.
The fact that workers’ wages would be linked to profits would reproduce all the problems that co-operatives face in a capitalist economy. The workers would be forced to exploit themselves further in order to get enough profits to share out, or in order to get more profits than the workers in other companies they compete with, through longer hours, higher intensity of labour, leaving to one side health and safety considerations, etc. We understand that in the system proposed by Campos there would be competition since he says that: “the state monopoly controls in the domestic market which currently exist, would have to disappear and give way to commercial activity”.
In reality, self-management with a market, inevitably leads to capitalism, and it is not very different from the proposals of those who are pushing for market measures, material incentives and the privatisation of small and medium sized enterprises, which we have analysed earlier. Far from liberating the workers, this programme would turn them into capitalists.
Camila Piñeiro Harnecker has criticised both those who defend market mechanisms to stimulate production, and those who, like Pedro Campos, propose that the workers should be the direct owners of the companies in which they work. In an interesting article published in Temas magazine, Camila Piñeiro argues that: “the participation of the workers in the management of the companies would not only contribute to their full development, but also would be an important source of motivation”.13
In his brilliant analysis of the Stalinist degeneration of the USSR, Leon Trotsky insisted that, “the planned economy needs workers’ democracy as much as the human body needs oxygen”. The workers should be and should really feel themselves as owners of the means of production and the state, and participate directly and in an efficient manner in the running of the economy and the administration of public affairs. But the programme which more faithfully reflects these needs is the programme of workers’ democracy and democratic planning of the means of production, the programme of Lenin and Trotsky.
Ideological rearming of the Cuban revolution
In Cuba there is also a current which is looking for a left-wing solution to the problems the revolution is facing. During the Havana Book Fair in 2008, in a forum for debates and discussion, the Cuban writer Desiderio Navarro, expressed himself in the following way: “Recent history has proven that socialism without criticism and without collective participation is doomed to end up in the worst of capitalisms”, and he added that he was against both “the perestroika-type experiments, as well as the games of Chinese shadows”.
The experience of the Bolshevik Workshop14, a series of meetings and debates about the history of the USSR and Cuba from a “socialist critical” point of view, which ended in a meeting of more than 500 youth in commemoration of the Russian Revolution in 200715, is an indication of the ferment of discussion and ideas which exists. That meeting, called by rank and file means and which openly claimed the revolutionary character of Marxism and the suppressed inheritance of the October Revolution (including that of Trotsky) was also proof that it is possible to interest the Cuban youth in the defence of the revolution if one adopts a clearly anti-capitalist standpoint. This debate is mainly concentrated amongst intellectuals and university youth and it is not free from difficulties. Within the state apparatus there are Stalinist or pro-capitalist sections that feel threatened by this debate and try to prevent it from taking place.
The discussion of ideas is crucial, and the ideological rearming of the Cuban revolution is necessary for it to be strengthened. However, not all ideas are equal. There are those who defend reformist ideas, who say that it is possible to have “socialism” but with the market, and that what is needed is more “democracy” (when what they really advocate is bourgeois democracy). Revolutionary Marxists in this debate advance two main ideas: for us the defence of the Cuban revolution can only be successful if it is based on international socialism and genuine workers’ democracy.
Without any doubt, the Cuban revolution, in its 50th anniversary, is at the crossroads. It is faced with economic and political difficulties, subject to a brutal imperialist blockade, facing the more treacherous attacks of those sections of world capitalism which want an “opening” as a way to restore capitalism. It is also threatened by those within the island who defend a “Chinese way” which in fact leads to capitalism. And there are those who defend the status quo of the bureaucracy which at the end of the day would lead to the collapse of the revolution.
The international context is favourable to the revolution, from the point of view of the class struggle. The revolution is spreading throughout Latin America. The crisis of capitalism (which will also lead to the crisis of the “Chinese model”) discredits the capitalist system in the eyes of millions of workers around the world, and in Cuba itself to those who could have some illusions in it.
In this situation, the enormous political and social reservoir of support the revolution has, if linked to the defence of proletarian internationalism and workers’ democracy, could become a powerful factor in the struggle to defend and spread the conquests of the planned economy and to open a socialist future in Latin America and the world.
Today, more than ever:
Long live the Cuban Revolution!
Long live the world socialist revolution!
1 In the period 1975-1989, the USSR paid 36.4 cents per pound of sugar, when the world market price in the same period was 11.49 (J.L. Rodríguez, El desarrollo económico y social de Cuba, 1990, p. 292).
2Quoted in Richard Gott, Cuba. A new history. Yale University Press, 2004
3Anicia García, CEEC Universidad de La Habana, 2007
4 According to estimates from the Latin American Economic Commission CEPAL, and the Cuban Office of National Statistics for 2004
6 Speech delivered by Dr. Fidel Castro Ruz, President of the Republic of Cuba, at the Commemoration of the 60th Anniversary of his admission to the University of Havana, in the Aula Magna of the University of Havana, on November 17, 2005. Speech delivered by Dr. Fidel Castro Ruz
7 Frank Josué Solar Cabrales, Cuba at the Crossroads – Cuba and the debate about Socialism of the 21st Century, January 29, 2008, In Defence of Marxism.
8 Cuba requiere “soltar todas las fuerzas productivas”. La Jornada, 16 de marzo, 2008.
9 Omar Everleny. La economía en Cuba: un balance necesario y algunas propuestas de cambio. NUEVA SOCIEDAD No 216, julio-agosto de 2008.
11 Jorge Mario Sánchez Egozcue and Juan Triana Cordoví. An Overview of the Cuban Economy, the Transformations Underway and the Prospective Challenges it Face. DT Nº 31/2008 - 26/06/2008. Real Instituto Elcano
12 Pedro Campos y varios compañeros. Cuba necesita un socialismo participativo y democrático. Propuestas programáticas. 17 agosto, 2008.
13 Camila Piñeiro Harnecker. El socialismo requiere la solidaridad, y ésta no se construye apelando al egoísmo. Revista Temas #52 (octubre-diciembre 2007)