Behind the new economic measures in Cuba

[For more analysis and discussion on the economic changes in Cuba, click HERE.]

By Ike Nahem, Cuba Solidarity New York

Marxism is the concrete analysis of a concrete situation — Lenin

October 27, 2010 -- On September 13, 2010 the Confederation of Cuban Workers (CTC) – the mass trade-union organisation that is a central component and pillar of the Cuban workers’ state and the revolutionary government headed by Raul Castro – issued an announcement which codified and specified new measures and significant changes in economic, financial and commercial policies that will be implemented in Cuba over the coming months and years. These new economic policies have been long-debated and broadly discussed inside Cuba from local grassroots mass organisations and work places to the highest levels of government and state. They come as a surprise to no one in Cuba.

We can expect these measures to be implemented prudently, deliberately, transparently and over time without the slightest sense of panic, extremism or adventurism. Their purpose is to develop, modernise technologically and industrialise Cuba’s economy and bolster its finances in order to preserve and strengthen Cuba’s workers’ state and socialist revolution in the concrete objective domestic and international situation it faces. They signal that correcting Cuba’s economic weaknesses, imbalances, inefficiencies and low labour productivity can be put off no longer. At the centre of the measures is a radical reduction in the number of Cubans employed in state and government bureaucracies, some 500,000 in the coming months and year.

Propaganda campaign against socialism

The Cuban announcement sparked a one-note campaign in the US and internationally presenting these measures as “capitalist” and “free market” and more confirmation of the “failure” of “socialism” in general and “Cuban socialism” in particular. (It should be added that this bourgeois propaganda campaign has been pathetically complemented by a layer of ultra-left sectarians, most of whom were already hostile to the Cuban Revolution and its historic leadership, who assert these measures are a “sellout” or “capitulation” to “capitalism.”)

It would certainly be a boon for capitalist propaganda if the revolutionary government of Cuba were indeed throwing in the towel, particularly at a time when the world capitalist system is at the opening stages of its greatest structural crisis since the so-called “Great Depression” of the 1930s. But the opposite is the truth.

The measures announced in Cuba were presented in the international big-business press as analogous to the harsh austerity measures that are being carried out – at varying paces and degrees and with mounting working-class resistance – in the advanced capitalist countries by conservative, liberal and social-democratic governments. Under the guise of resolving government “deficits” these include large-scale layoffs in the “public sector” complementing mass unemployment in the “private sector;” cuts in social services and benefits in health care, education, child and family support; and attacks on pensions and unemployment benefits.

None of this has anything in common with the new policies unfolding in Cuba. There will be in Cuba no growth of mass unemployment – or as Marx put it a “reserve army of labour” that suppresses the cost of labour power for capitalist employers – and the subsequent growth of poverty and destitution as is now becoming the norm in all of the advanced capitalist economies not to speak of dependent “Third World” capitalist economies. Individuals let go from redundant, unproductive state and government positions will be able to return to university or technical schools for specialised training, with wage support, for new jobs in addition to those choosing to be self-employed, or join newly established co-operatives. Savings from the reductions in state expenses and budgets will go to preserve social services, modernise and improve free medical care and education and so on. Cuba’s advances in implementing these measures and confronting its serious economic weaknesses is deeply in the interests of the world working class and is in reality a great aid in the developing struggles against capitalist austerity worldwide.

Washington’s 50-year-old economic and political war to subvert and overturn the Cuban Revolution continues under the Barack Obama US administration. Cuba needs time and space to continue to hold out until new revolutionary triumphs of workers and peasants, new socialist revolutions occur out of the mounting long-term world capitalist depression that first burst into the open in 2008. To do so and not be swamped and drowned under the weight of economic stagnation and obstacles, Cuba must raise its level of labour productivity which also means it must increase the size of the agricultural and industrial proletariat. Cuba needs more industrial workers and farmers and less government officials and bureaucrats. The Cuban workers state needs to reduce the size of its government bureaucracy. Entrenched privileged state and government bureaucracy is also the main source and mass base of any potential capitalist restoration in a workers’ state, not particularly the small layers of “proprietors” that are likely to emerge in Cuba in the coming years.

What the revolutionary government in Cuba is attempting to consciously and deliberately implement is a process that will lead to the numerical growth, social expansion, growing political weight of industrial workers, agricultural workers and working farmers – private-family and cooperative . This will be greater than the inevitable rise in petty-bourgeois layers involved in retail services, brokerage and speculation. These class demographic changes will emerge out of the accompanying decline (a good thing!) in the numbers of bureaucrats in state institutions and enterprises whose official jobs breed demoralisation insofar as they register nonproductive activity which, in the framework of scarcity and economic pressure, can foster corruption and thievery.

The concomitant growth of petty bourgeois layers will undoubtedly foster relative social inequality, but, of course, this has been happening and reproducing anyway in the form of the so-called “black market” and illegal economic activity unregulated by the workers’ state. And if labour productivity and the social surplus product increases, within the framework of the workers state, the material basis (and also the political basis) for advancing social equality will also advance. Increases in labour productivity and a radical expansion in agricultural output will allow for large savings in foreign exchange currency that can then be used for industrialisation and the “light industry” production of consumers products and quality services.

Cuba is a workers’ state

Cuba’s political economy will continue to be guided by rational, economic planning to which commodity and exchange “markets” will be strictly subordinate and which will be mediated and creatively guided by increasingly democratic mass participation, most importantly by the expanding Cuban working class organised in the CTC and less by rigid bureaucratic “models.” It is no accident that it was the CTC that made the initial announcement about the scale and scope of the slashing of government functionaries and the restructuring goals and policies.

Cuba’s banks will continue to be the property of the workers’ state. Cuba’s international trade will continue to be solely mediated by organs and institutions of the workers’ state. There will thus be a state monopoly of foreign trade, one of the fundamental characteristics and criteria in the origins and character of a workers’ state. (Others include the destruction of the previous capitalist state’s police, military and juridical institutions; the nationalisation of the major industrial means of production and finance; the establishment of new social and economic relations that obviates the existence and reproduction of a modern bourgeoisie or capitalist class; and the primacy of conscious planning and cooperation for human needs within the new state over the profit-seeking dynamics and mechanism of the capitalist market and competition.)

The foreign trade monopoly is of decisive importance, or as stated by V.I. Lenin, the central leader of the 1917 Russian Revolution, “in the present epoch of imperialism the only system of protection worthy of consideration is the monopoly of foreign trade.”[1]

While private foreign capitalists will be able to invest capital and make a profit in partnership with Cuban state firms, they will be subject to Cuban social relations that have been forged by fifty years of socialist revolution and which are dominated by the interests and political weight of workers and farmers. The problem at hand, however, is not the solidarity of Cuba’s marvelous social relations compared to the atomised, every-man-for-himself fostering of privilege and submission in capitalist societies but increasing labour productivity, industrialisation and modernisation. Clearly bureaucratism, waste, corruption and theft of social property are in Cuba today the greatest threat to the social relations forged out of the Cuban Revolution.

Lenin put it like this in the last year of his active political life as he struggled to reorient and rebuild the economy and finances of the young Soviet republic after the devastation and ruin of the 1918-1921 civil war and imperialist interventions. This included strong efforts to attract foreign capital and business deals with capitalist firms and states. “The capitalists are operating alongside us,” Lenin spoke. “They are operating like robbers; they make profit; but they know how to do things. But you – you are trying to do it in a new way; you make no profit, your principles are communist; your ideals are splendid; they are written out so beautifully that you seem to be saints, that you should go to heaven while you are still alive. But can you get things done?”[2]

The challenge for Cuban “business people” – the agents of the workers’ state – will be to negotiate the deals and contracts that are mutually beneficial to the Cuban economy and the representatives of foreign capital. This requires cadre with particular revolutionary qualities, including a steel disposition, political consciousness and diplomatic personality skills to carry out such tasks and remain uncorrupted.

As Fidel Castro put it in the November 2005 speech:

Some of our businessmen make million dollar deals and the fine art of corruption as it is practiced in capitalist circles is as subtle as a serpent and worse than a rat. They will anesthetise you while you are being ‘bitten’ and it can rip off a hunk of flesh in the middle of the night. This was the way the Revolution was being put to sleep so that a piece of flesh could then be ripped away. In a few cases, corruption was out in the open. Many knew about its existence, or they suspected it, when they observed the life-style changes the new car, the house being redecorated, adding little decorative touches here and there because of pure vanity. We have heard such stories time and time again and measures must be taken even though it will not be resolved easily.

In no way will the proposed restructuring foster the formation of a Cuban national capitalist bourgeoisie, although it is certain and inevitable that there will be an expansion of petty-bourgeois layers in Cuban society which may coagulate into a political opposition to the socialist Cuban government with a real social base inside the country, as opposed to the pathetic current gang of so-called “dissidents” that are appendages of the US government. But this is by no means certain or inevitable. It depends on many national and especially international, political factors, first and foremost the coming big developments in world politics – depression, war and revolution. In any case, this is a risk that must be accepted and struggled against consciously and intelligently.

The expansion of `self-employment'

Clearly the revolutionary government has concluded that traditional “services” such as shoe repairers, barbers and beauticians, plumbers and myriad other small scale operations are not now – if they ever were – most productive and efficient as a category of central economic planning. Such essentially retail functions which are voluminous but atomised in society become a burden and an obstacle to increasing labour productivity and may be more useful as a category of self-employment or co-operative arrangements autonomous or independent from central government planning and direction and subject to taxation. The logic of this measure is underlined when the existence of the extant and widespread “black market” in Cuba – by definition private, unregulated, untaxed and having a parasitical relation to a “state property” – is recognised. It is better for this reality – which objective material conditions do not allow to be transcended – to be legal, transparent, above board and revenue-producing, that is, taxable for the workers’ state and the social needs of Cuban society.

Expansion of retail operations, small merchants and peddlers and self-employed services are not the same thing as capitalist commodity production. Any expansion of small-scale private retail consumer goods sales and services will not be supplied directly by capitalist manufacturing but by enterprises owned or controlled by the Cuban workers’ state. Any such private “businesses” will not be able to transition their monetary wealth into private ownership and financing of means of production. The Cuban State Bank is, as part of the new economic policies, studying and discussing, with the purpose of formulating rules, policies for loans to the small businesses that are going to be established.

The main question and problem for the still-underdeveloped, still far from adequately industrialised Cuban workers’ state – literally an island of the dictatorship of the proletariat in an ocean of the dictatorship of the imperialist bourgeoisie – is not the individual, family, or co-operative that repairs your shoe, cuts your hair, fixes your leaking roof, or paints your house. On the contrary, it is producing in factories with financing, raw materials, modern machinery and a skilled, trained industrial working class that can actually make the shoes, utensils, roofing materials and paint in the first place.

Attractive restaurants with good food are fine (and I’ve been to quite a few very nice ones, both family-run and “public” in Havana) and nothing in Marxist theory or revolutionary practice mandates the “nationalisation” of small businesses, private professional services or retail operation in principle.

It should also be pointed out that, under conditions of monopoly capitalism in the United States and other advanced capitalist societies, more and more of these small “family service businesses” are subsumed by large-scale corporate chains. “Mom and Pop” retail operations may start to flourish in “communist” Cuba even as giant chains and national brands make them, under monopoly capitalism, a dying breed in the United States.

From the point of view of the political power of the working class, these petty bourgeois, normally capitalist-aspiring layers can be won as potential allies to a regime where industrial and agricultural producers dominate. Like the overwhelming majority of Cubans, many incorporating these layers that will expand are imbued with a patriotic and anti-imperialist consciousness and the understanding that it was Cuba’s socialist revolution that conquered and has defended genuine national independence and social dignity for the Cuban people. But this is a political question and – again – for a Marxist must be viewed concretely.

The real question here is whether the Cuban workers’ state is better off with bloated government payrolls stacked with people doing no productive labour and of very little use or value to anyone, or by releasing those layers into production and service where they can learn skills, even if working in a joint venture or private business that can raise the productivity of labour in Cuba. Is it better for the workers’ state to have workers engaged in productive labour — that is, engineering, constructing, manufacturing and transporting means of production, infrastructure, items for consumption, or retail services to meet the pent-up needs and demands of the Cuban working people — or to retain government officials whose “jobs” are increasingly parasitic (and thereby demoralising to the people involved) even if this means working in a joint venture with foreign capital or even a private enterprise?

Is it better to have more employed, productive workers and less government officials and bureaucrats even if it means having a larger layer of “proprietors” and other petty-bourgeois elements? Who is more useful, who contributes more to the Cuban workers’ state and Cuban society: a new family farmer, self-employed plumber, or member of a barber’s cooperative on the one hand, or the Assistant to the Assistant in Charge of Blah-Blah-Blah in the Ministry of God-Knows-What on the other? Cuban working-class public opinion is fed up with a reality where work needs to be done and, despite scarcity of resources, can be done, but is bottled up by bureaucracy, waste and the theft of state resources.

In any case and again contrary to the spin in capitalist media outlets, public or state property in industry will not be weakened but strengthened and the controls of the Cuban workers’ state and Cuba’s highly progressive labour laws, will be fully applicable to any “joint” enterprises established in negotiations with private capital. What is most useful and progressive socially for Cuba is to create more machinists, millwrights, lathe operators, steelworkers, railroad workers, carpenters and so on.

The absorption of the projected 500,000-person reduction in state bureaucracy will not be – as implied by all the nonsense being written – primarily via the category of self-employment; that is, in retail sales and exchange of goods and services. Certainly there will be space opened up –- and there is nothing “wrong” with this from the standpoint of state power firmly in the hands of the working class and peasantry –- of small business owners, primarily in retail sales and services. But it should be emphasised that many of these operations and services will have forms other than family businesses, mainly co-operatives.

The key mode here for the foreseeable future will be the management by the Cuban government, unions and farmers’ organisations of a process that will necessarily involve both centralisation on the so-called macro scale and decentralisation on a so-called micro scale.

The `revolutionary offensive' of 1968

Most private retail operations and private professional services were “nationalised” in Cuba in 1968 under the so-called “revolutionary offensive” The context for the “revolutionary offensive” was the defeat of Ernesto Che Guevara’s attempts, carrying out the strategic line of the Cuban Revolution and government, to organise a continental revolutionary battleground and army in Latin America and the developing rout of the revolutionary guerrilla forces in other countries. Cuba was thoroughly isolated in Latin America and the Caribbean; only Mexico maintained diplomatic relations with it. Reactionary oligarchic regimes backed to the hilt by Washington dominated the continent and would for more than a generation.

Economic problems on the island were mounting. An effort to lessen dependence on the Soviet Union led to a huge effort to produce 10 million tons of sugar. The labour mobilisations involved cause severe disruptions in other economic sectors and the effort eventually fell short by nearly 2 million tons. In this context the revolutionary government was clearly worried about the existence of points of support for US-backed counter-revolutionary forces and aggression.

There is in 2010 a very different objective and subjective reality. US imperialism is much weaker politically and no longer able to dictate and control politics and economics in its Latin American “backyard.” Cuba has normal, good, or excellent relations and growing economic ties, with virtually every Latin American and Caribbean country.

Genesis of the Cuban economic crisis

It is certainly no secret that revolutionary Cuba has been in a permanent structural economic and financial crisis within which concrete advances and setbacks have unfolded since the late 1980s and early 1990s. The onset of this crisis – known in Cuba as the “Special Period” – was catalyzed by the collapse of the ruling governments in the former Soviet Union and its allied Eastern European states from 1989 to 1991.

Insofar as Cuba had carried out some 85% of its economic exchange with these regimes, the so-called “socialist camp,” the impact of what was, in effect, an overnight amputation of the overwhelming majority of its previous economic relationships was drastic and devastating for the Cuban economy and population. Almost instantly a dynamic of severe economic retraction unfolded that reached around 35%, perhaps over double that of what is referred to as the Great Depression in the United States. At one point the Cuban currency was so debased that the US dollar was the functional currency for the country.

It was taken for granted by Cuba’s powerful enemies in Washington, its former ruling classes exiled in Miami and the US, the Latin American reactionary oligarchies and even many sympathisers and friends of Cuba that the revolutionary government could not possibly survive such overwhelming material blows. Washington, of course, moved in for the kill. Under the first George Bush and then expanded under the Democratic William Clinton Administration, the US economic and political war against the island was intensified. The passage of the notorious Torricelli and Helms-Burton legislation attempted to implement a de facto international economic blockade against the Cuban workers’ state.

Under these concrete conditions Cuba and its revolutionary government had no choice but to develop and forge economic and commercial relations and exchange within world capital markets and legal mechanisms utterly dominated by the advanced capitalist countries and with capitalist states, private firms and enterprises, pursuing whatever openings it could in the face of US hostility.

Fidel Castro described what Cuba faced with the Special Period in a landmark speech at the University of Havana in November 2005, a speech which was the template for the extensive debates and discussions in Cuban society that culminated in the new economic policies now being implemented:

[We] had been left without oil overnight, with no raw materials, no food, no cleaning products, nothing…the country suffered a shattering blow when overnight [the Soviet Union] fell and we were left alone, all on our own and we lost all the markets on which to sell our sugar and we stopped getting supplies, fuel, even the wood with which to give a Christian burial to our dead. And everyone thought: ‘This will fall apart’ and the idiots still believe that it is all going to fall apart here and that if it doesn’t fall apart now it will fall apart later.

The Cuban working people, defending the revolution and social relations deeply rooted in their unity and consciousness, clawed their way to survival and a certain stability and progress through wrenching adaptations and flexibility. Most amazingly this was done without in the slightest compromising on fundamental revolutionary principles and in particular maintaining a revolutionary internationalist foreign policy based on solidarity.

Among the measures adopted by the Cuban government, then led by Fidel Castro, at the origins of the Special Period, were great efforts to find and secure capital to rebuild the tourism industry and other economic projects, which were done in partnership with various foreign capitalist firms. This large expansion of tourism – which involved huge investment in the construction and fitting of hotels and other accompanying tourism infrastructure – was successfully carried out and soon began to bring in significant amounts of so-called hard currencies; that is, the foreign exchange that was used to maintain, among other priorities, Cuba’s excellent – and free – health care and education systems. Some private commercial activity, particularly in the sales of agricultural output, including through brokeraging, became legal and contributed to relative agricultural advances from a deep depression marked by a great scarcity of farm implements, machinery, fertiliser and chemicals.

All of these necessary measures increased social inequality, speculation and street hustling and were never idealised by the Cuban government. Previously eradicated social problems, such as prostitution, reappeared, not in the traditional pre-revolution large-scale business of organised crime, with pimps, brothels and a flourishing commercial sex industry, but individual Cuban women catering to tourists to get cash.

Nevertheless the measures prevented a total economic collapse and the social dislocation – the goal of Washington’s blockade policies – including famine, which would have created the conditions for direct US military aggression and the final, violent destruction of the Revolution.

By the mid-1990s the Cuban economy as a whole began to revive as new economic partnerships developed. Among the most important were with China. Further crucial advances occurred as a result of Cuba’s political and diplomatic campaigns in Latin America and the growing atmosphere of solidarity that made possible increased economic ties with Latin American and Caribbean countries. In particular, the election of Hugo Chavez in Venezuela, registering a growing class-conscious militancy among Venezuelan working people, led to strong and growing economic ties between Cuba and Venezuela.

Following the mass mobilisations in Venezuela that defeated pro-imperialist coup attempts in 2002 and 2003, large numbers of Cuban doctors, other medical workers and teachers volunteered for work in Venezuela leading to great advances in access to medical care and education for working people there. Venezuelan oil and energy exports and expertise were expanded to Cuba at favourable prices, a central factor in the stabilisation of the Cuban economy and finances.

The University of Havana speech

As mentioned above on November 5, 2005, eight months before his near-fatal medical emergency and surgery that led to removing himself from his formal leadership posts in the government and state, Fidel Castro gave a remarkable, sweeping speech at the University of Havana (To read the entire speech, which I strongly recommend to understand the current developments) which laid out the framework for the economic and social crisis facing Cuban socialism and the general line of march on how to move forward. It is a good starting point to understand the origins of the new economic policies that are now being concretely formulated and codified.

The speech was brutally frank, nothing less than a tour de force revealing, explaining and attacking – with facts, humour, anger, sarcasm and real passionate humanity – examples of corruption, inefficiency, bureaucratism and the administrative mentality that had to be addressed and transformed for the viability of the socialist revolution and its survival. “This country can self-destruct; this Revolution can destroy itself, but they can never destroy us; we can destroy ourselves and it would be our fault.”

At a time when Cuba was producing less than one-and-a-half million tons of sugar a year, Fidel, to cite just one example, said to the gathered students, “You will be amazed when I tell you that, according to its inventory, the Ministry of Sugar has 2000 to 3000 more trucks than it had when it was producing 8 million tons of sugar. It’s tough, but I’m going to tell it like it is.”

At the time of Fidel’s November 2005 speech the Cuban economy and finances had been steadily advancing, with several years of regular and in some years strong, economic growth. Economic ties with Latin America and China had increased significantly. Revenues from tourism were high and growing. And it was in this framework, ascendant from the miserable depths of the Special Period, that Fidel addressed head-on the structural and systemic problems, the new contradictions that were accumulating.

New blows

Within a few years, however, the revolutionary government now led by Raul Castro was grappling with the same problems as laid out by Fidel in 2005 but now magnified many times over by a number of concrete national and international developments. First and foremost was the extensive material devastation caused by the 2008 Hurricane season, particularly the effects of Hurricanes Gustav and especially Ike (no relation to the author of this essay). In the hurricane damage over 320,000 houses were destroyed or severely damaged with over 2 million Cubans displaced. In the agricultural province of Villa Clara over 70% of agricultural production was destroyed. Over 3300 tobacco houses were destroyed. And so on. The United Nations Office for the Coordination of Humanitarian Affairs estimated damages at nearly $4 billion.

What truly marked the beginning of an unfavourable new dynamic in the Cuban economic reality was the world-historical concrete new fact of the 2007-08 world capitalist financial crash. Among other direct consequences of this for Cuba was a radical drop in the world market price of nickel, a major Cuban-produced raw material commodity essential in many modern manufacturing processes. (Of course, the modernisation of Cuban nickel-mining operation was a result of a Cuban partnership with foreign capitalist firms – those with the capital – most notably the Canadian Sherritt International Corporation.) There was also a significant drop in the revenues brought in by tourism as the effect of the world capitalist crisis and retraction hit consumer spending in the advanced capitalist countries where much of the vacation travel to Cuba comes from.

Acquiring capital for the Cuban workers’ state

Given the paucity of capital in Cuba – that is, the monetised savings in hard currency for investing in agricultural and industrial machinery, factories, rolling stock for railroads and other industrial infrastructure and so on – it is inevitable that, for the foreseeable future, what the revolutionary government must do, will necessarily involve co-operative and contract agreements with private or “state” firms in capitalist countries. These firms will invest, of course, not out of the goodness of their hearts but in order to generate profits. (Although some individual “investors” may harbor sentimental feelings or affection for Cuba. Good if that’s the case, but even those will want and need to make money.) In that sense they will be allowed to siphon off a portion of the surplus value created by the labour output of the Cuban industrial workers employed in these enterprises.

Cuba, of course, has much to offer to firms willing to invest in Cuban means of production; in particular, a highly educated and healthy population. Cuba also has a number of products and services from its already existing industries such as biotechnology that with further development and market access will have high demand on world markets

Within the borders of Cuba, the capitalist market is no longer dominant but Cuba functions in a world economic framework where private capital — that is, a handful of giant capitalist firms operating through a handful of advanced capitalist states — utterly dominate world production and exchange. Cuba must trade in hard currency (that is, the currency of advanced imperialist countries) which it can obtain only with great difficulty due to the US attempts to blockade it.

Developing Cuba’s oil fields

Perhaps the most crucial economic project being undertaken now in Cuba involves the extraction of apparently large oil deposits discovered in Cuban territorial waters. This will involve deep-sea drilling from massive platforms. Years of searching, chartering, mapping, discovery, and preparation are now finally giving way to actually building the platforms and extracting the oil. These fields, once they start producing, will be a tremendous boost to the Cuban economy. But Cuba is nowhere near having the capital, technology, or management expertise to undertake this huge task without the assistance of foreign capital and either foreign private capitalist monopoly enterprises or state-owned firms from capitalist countries.

After these firms take their slice – and it will have to be enough to make it worth their while – then the remaining surplus value created will go to workers wages, plant maintenance and the Cuban workers’ state to bolster, among other things, free medical care and education. Not a dime will line the pockets of a private bourgeoisie in Cuba.

(Washington, which waived safety rules and regulations and turned a blind eye to the recklessness of BP leading to the 2010 Gulf oil spill disaster, has tried to stoke fears about the Cuban project.)

The legacy of Che

Cuba needs capital in the form of advanced technology and the financing of means of production in order to industrialise, digitalise, build and rebuild its railroads, bridges, aqueducts, water systems, electrical grid and other infrastructure and also create myriad light industrial projects that can produce quality consumer items for the Cuban people and for the tourism industry. Cuba also needs to modernise and render more rigorous and transparent its accounting methods, which suffer especially from bureaucratism as Fidel Castro stressed in his University of Havana speech. This was a central theme in the economic writings and methods of Che Guevara in the early years of the Cuban Revolution.

Central to the development of the Cuban economic and financial system as it developed under siege from US imperialism has been political and moral appeals to working people and revolutionary-minded intellectuals to defend their revolution and state power. This is particularly identified with the figure of Che Guevara and his writings on the “new socialist man and women,” moral and material incentives, voluntary labour and revolutionary internationalism. One example of this precious legacy is in the Cuban medical and educational internationalist missions around the world and the Latin American School of Medicine in Havana.

This will continue within the new orientation and the new drive to raise productivity, living standards, technological advances in the modes of production, industrialisation and increased production of materials for housing and other pressing needs. But appeals to working-class and revolutionary consciousness can turn into clichéd phrase-mongering if bureaucracy, inefficiency and deteriorating work habits due to scarcity and corrupt mismanagement come to dominate the process of work and production.

Moral incentives, as formulated and practiced by Che Guevara, were always promoted as part and parcel of hard work, raising productivity, strict control and accounting of resources, application of the most modern technology, absolutely minimum bureaucratism and integrity, honesty and personal sacrifice at the center of everything.

No change in Cuban socialist internationalism

If the new economic policies announced in Cuba indicated a subjective embrace of the capitalist market and capitalist methods on the part of Cuba’s communist leadership, then this would be reflected in a shift toward renunciation of revolutionary struggle and accommodation with imperialism; that is, the movement of Cuban foreign policy to the right. There is, of course, no evidence of this whatsoever. Neither is there any signal whatsoever that Washington, under the Obama Administration, has any perspective of ending US sanctions and normalising relations with the island. Washington continues its goal of subverting and eliminating the socialist revolution and workers’ state in Cuba.

The revolutionary government of Cuba continues to expect, look for, and, above all, politically be in active solidarity and promotion of new upsurges and victories of workers’ and peasants’ power anywhere in the world. It is a government, true to the legacy of Fidel Castro and Che Guevara, which has tied its fate ultimately to the oppressed and exploited overwhelming majority of humanity.

[Ike Nahem is the coordinator of Cuba Solidarity New York, a member of the National Network on Cuba. Nahem is an Amtrak locomotive engineer and member of the Brotherhood of Locomotive Engineers and Trainmen, a division of the Teamsters Union. These are his personal political opinions.]


[1] Lenin’s Final Fight, Pathfinder Press, p. 207.

[2] Lenin’s Final Fight, p. 58.


Raúl reaffirms the Revolution's confidence in the trade union movement

November 1, 2010 -- PRESIDENT Raúl Castro Ruz participated in the closing ceremonies of the 86th plenary session of the Central Organization of Cuban Workers (CTC) National Council, where he reiterated the Revolution's confidence in the labor movement, which is playing a leading role in current efforts to reform Cuba's economic model.

Vice President Marino Murillo Jorge
Vice-President Marino Murillo Jorge
 presented the 202 participants attending
 the expanded plenary with detailed
 information about the current economic
 situation in Cuba.

"The only way to break through dogma, bad habits and taboos is to promote massive participation with the working class in the lead, since along with campesinos and the people, it is the most revolutionary class," Raúl affirmed. Later on, he emphasized the need for trade union leaders to understand the principles which govern the economy, given that that is paramount to the functioning of any revolution.

Raúl continued, "It is up to you, from the CTC Secretariat to the most modest leader, to take on the same role played, in his day, by Lázaro Peña who, in the historic 13th Congress of the CTC in 1973, proposed, with wisdom and experience, to revoke certain victories won from the bourgeoisie, given that the situation had changed and the workers were the owners of the means of production. For example, he proposed repealing the law – well intentioned but wrong, economically unsustainable – which allowed for retirement at 100% of one's wages for those who had made exemplary contributions during their working lives."

"In order to defend and explain the measures, however, the working class must be knowledgeable and be convinced of their importance to the survival of the Revolution; if not we are on the verge of ruin," he added.

Raúl reiterated the need to be demanding of CTC cadres, to root out the pernicious tendency to hide shortcomings, and to learn from mistakes, "Errors should at least give us useful experience, [allowing us] to avoid repeating them."

The president commented that, in terms of the current economic reform, Cuba is not copying any other country, that it is an autonomous process, adapted to the nation's unique characteristics and in no way whatsoever renouncing the construction of a socialist society.

Marino Murillo Jorge, vice president of the Council of Ministers, presented the 202 participants attending the expanded plenary with detailed information about the current economic situation in Cuba and the measures being adopted. Among other issues, he clarified details of the investment planning process, which is currently operating inefficiently, creating the underutilization of much capital. He reported the decision to include within the plan only those investments which had been thoroughly formulated.

At the same time, he mentioned the imbalanced relationship between average wages and labor productivity, which translates "into a society which distributes consumer goods faster than it produces them." He reported that there are more workers currently employed in the service sector than in manufacturing, "a structure that does not allow for a well-functioning economy anywhere."

Consequently, Marino Murillo said, the new measures are directed towards ending unwarranted guarantees and excessive subsidies; withdrawing the state from activities beyond its domain; reducing inflated staff rosters and increasing labor productivity. All of this should allow for the needed changes in wages and pensions.

The economic leader described how the adjustments to inflated workforces must be implemented, requiring, in the first place, the redesigning of workplace staffing patterns, the development of a staff reduction process based on the principle of demonstrated suitability for a given position and the implementation of labor and salary policies for displaced workers which eliminate paternalistic approaches. He also detailed the expansion of self-employment opportunities and the redesign of the tax system.

Closing the expanded plenary session, Salvador Valdés Mesa, CTC general secretary, reaffirmed that workers will support these labor reorganization measures which will strengthen discipline, increase productivity and create a producers' mentality.

Valdés Mesa emphasized that the strengthening of workplace organization will be necessary, as well as better performances by cadres who must assume their work with more commitment, thoroughness, responsibility and planning so that the working class can participate even more in the economic development of the country.

The trade union movement has a critical role to play in this current historic juncture and in future prospects, he concluded, "During 50 years of Revolution the working class has never failed the Revolution, since that would be failing ourselves."

Leaders of the Communist Party of Cuba, other state and government leaders also participated in the event.

Translated by Granma International