Cuba's alternative to privatisation

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

By Marce Cameron

March 11, 2012 -- Green Left Weekly/Links International Journal of Socialist Renewal -- Cuban President Raul Castro has urged the Caribbean nation's citizens to contribute to a free and frank debate on the future of Cuba’s socialist project.

For the Cuban Communist Party (PCC), the aim of this debate is twofold: to strive for consensus on a new Cuban model of socialist development and to empower Cuba’s working people to implement what has been decided.

In other words, to advance a socialist renewal process in the face of entrenched opposition from within the administrative apparatus.

It is first and foremost a debate about the economy. A draft policy document, the Economic and Social Policy Guidelines, was submitted to a national debate for three months before to its adoption by the Sixth PCC Congress in April last year.

The core principles and objectives of the draft were conserved, but the final version of the Guidelines was substantially modified on the basis of this public debate.

The PCC said total attendance at the 163,000 local debates held in workplaces, study centres and neighbourhoods was about 8.9 million, with many people attending more than one.

More than three million interventions were noted and grouped into 781,000 opinions, about half of which were reflected in the final document. A summary detailing each modification and its motivation, and the number of interventions in favour, was published after the congress.

The Guidelines are not a theoretical document. The government commission responsible for overseeing its implementation has been charged with drafting, as Castro put it, “the integral theoretical conceptualisation of the Cuban socialist economy”.

Rather, the Guidelines is a set of principles and objectives that point to a new Cuban socialist-oriented economic model.

Yet implicit in them is a reconception of the socialist-oriented society in Cuba’s conditions.

Transitional society

The ultimate objective of the socialist revolution is a global classless society in which technology enables minimal human labour to produce goods and services, allowing these to be freely distributed to satisfy people’s rational needs.

Socially owned, this system of production would free everyone from the compulsion to work for others. It would allow a flowering of the human personality that is stunted by capitalist exploitation and alienation, both of which are embodied in the capitalist market.

What blocks this transition is not a lack of technology, but private ownership of most productive wealth and the class rule of the corporate rich over society.

The transition from capitalism to socialism is marked by tension between planning and the market. Democratic planning to meet social needs first becomes increasingly dominant, then ultimately the sole determinant of economic activity.

Without revolutions in advanced industrialised societies, socialist revolutions in industrially underdeveloped countries such as Cuba — inheriting economies stunted by centuries of plunder — are confined to the beginnings of the socialist transition.

This implies a mixed economy with various forms of ownership and management. The only absolute requirement is that the “commanding heights” of the economy are owned by the socialist state — described by Karl Marx and Friedrich Engels in the Communist Manifesto as “the proletariat organised as the ruling class”.

A caveat must be added in light of Soviet bureaucratic “socialism”: socialist state ownership has no automatic bias towards socialism. There must also be socialist democracy.

Nowhere did Marx, Engels or Russian revolutionary V.I. Lenin argue that self-employment and small-scale private and cooperative enterprise are incompatible with progress towards socialism.

For Lenin, in his 1923 article “On Cooperation”, assuming socialist state ownership of large industry, the socialist-oriented society is “the system of civilised cooperativists”.

The notion that building socialism requires state ownership and management of almost the entire economy was born of Stalinist totalitarianism. Far from beginning to wither away as anticipated by Marx, the Soviet state from Stalin to Gorbachev assumed monstrous proportions.

Revolutionary offensive

In March 1968, Cuba’s socialist state expropriated nearly all urban small businesses in an episode known as the “Revolutionary Offensive”.

This was justified at the time by the need to combat hoarding and speculation by petty proprietors. The US economic blockade, the emigration of skilled workers and revolutionary inexperience had led to shortages of consumer goods.

It was also aimed at depriving US-sponsored counter-revolutionaries of points of support among urban small traders and business people.

Yet it was also seen as a step towards a classless society. As it turned out, it was a premature step and therefore counterproductive.

A great deal of planning goes on in big capitalist enterprises. The socialisation of the labour process embodied in large-scale industry is the basis for social ownership and democratic planning in the socialist-oriented society.

Yet even in developed capitalist societies there are economic sectors in which labour is not socialised on a scale that would allow for rational planning.

Rather than seeking to “outgrow” the market in step with the objective socialisation of labour arising from economic development, Cuba’s Revolutionary Offensive abolished the market at a stroke.

In recent years this has been the subject of much public debate in Cuba.

Since early 2008, the PCC daily Granma has opened its pages to criticisms, proposals and debate contributions from readers. There is an ongoing debate on state ownership and management of small productive and service entities, such as cafes and bicycle repair workshops.


As one reader argued in a December 9, 2009 Granma letter: “Following their nationalisation by the Cuban state in 1968, small businesses and retail firms were converted, little by little, into a source of illicit profit, the robbery of the state, inefficiency and maltreatment ...

“Arguably socialism, by definition, necessitates social ownership of the fundamental means of production, and this is not at odds with personal, family or cooperative property in some means of production or services.

“The state must free itself from the yoke of these entities which, far from being social property, have become a means for the enrichment of a minority that exploits [the majority] to the detriment of the satisfaction of the needs of the client, that is, the people.”

In other words, these entities have undergone de-facto privatisation at the hands of corrupt administrators who pay no taxes on their illicit earnings.

The opposing view is that expanding the scope of cooperatives and other small-scale private enterprise is unnecessary and unwise. The solutions proposed lie on the subjective plane — replacing corrupt administrators with honest ones, for example.

Such solutions don’t address the material roots of the problem: the inability of the socialist state to centrally manage such entities with quality and efficiency, and average state wages that don’t cover all basic living expenses in Cuba’s post-Soviet Special Period.

Widespread petty theft from the socialist state is an inevitable consequence of the latter.

The Guidelines rule out privatisation and the concentration of productive property ownership in the hands of a new Cuban capitalist class.

At the same time, they give the green light to an expanded small-scale private and cooperative sector that is projected to embrace almost half the workforce by 2015.

How can these two objectives be reconciled?

Avoiding privatisation

The idea is to lease small productive and service entities, from bakeries to beauticians, to self-employed individuals, small private businesses and cooperatives. At the same time, social ownership of these premises would be retained, which belong to the municipal People’s Power governments.

These governments and the socialist state will regulate leased entities to ensure that they fulfill certain social objectives.

Responsibility for running these enterprises, however, passes from the state to their workers, who operate them in a competitive environment where prices are set by the market rather than central planning.

In agriculture, the government is promoting a large-scale “return to the land”, leasing farmland rent-free on a long-term basis — an arrangement known as usufruct — to individual farmers, cooperatives and state farms.

This puts farmers, rather than Havana-based administrators, in the driver’s seat while avoiding a concentration of land ownership.

Castro summed up Cuba’s alternative to privatisation in the Main Report to the Sixth PCC Congress: “The growth of the non-public sector of the economy, far from an alleged privatisation of social property as some theoreticians would have us believe, is to become an active element facilitating the construction of socialism in Cuba.

“It will allow the state to focus on raising the efficiency of the basic means of production, which are the property of the entire people, while relieving itself from those managerial activities that are not strategic for the country.”

[Marce Cameron runs the Cuba's Socialist Renewal blog.]

From GLW issue 914

Castro is being disingenuous. The fact of the matter is that he is legalising the hiring of wage labour, albeit only for small companies. But we know that there are those in Cuba who are also advocating extending this to medium sized companies. Then what? Let us recall that socialism with Chinese characteristics quickly became capitalism with fascist characteristics.
Of course we should not be blinded by legal fetishism, but what Cuba needs is genuine democracy at the grass roots. A place to start would be with small cooperatives on democratic lines where the peculiar capitalist relationship would at least be attenuated. There is nothing that a capitalist small company can do that a cooperative cannot, except extend the working day from 8 to 14 hours a day, as in China. It really bothers me to hear Raul praise the Chinese reforms, but then I do not suppose any of the Cuban leaders' families will be doing much labouring.