Thursday, July 5, 2012

The Economist: wishful thinking on "transition"

This was written for Australia's Green Left Weekly

Cuba: Corporate press wishful thinking on 'transition'

Green Left Weekly, Sunday, July 1, 2012

By Marce Cameron

“Under Raul Castro, Cuba has begun the journey towards capitalism. But it will take a decade and a big political battle to complete, writes Michael Reid”. So began the lead article of the London Economist magazine’s March 24 special issue on Cuba, under the heading “Revolution in retreat”.

It's a familiar refrain, but how much truth is there to it? Unfortunately for the credibility of The Economist, authoritative mouthpiece of the Anglo-imperialist ruling class, it’s a dog’s breakfast of factual errors, illogical arguments and wishful thinking.

“When on July 31st 2006 Cuban state television broadcast a terse statement from Fidel Castro to say that he had to undergo emergency surgery and was temporarily handing over to his brother, Raul, it felt like the end of an era,” Reid observed.

“In the event Fidel survived, and nothing appeared to change. Even so, that July evening marked the start of a slow but irreversible dismantling of communism (officially, ‘socialism’) in one of the tiny handful of countries in which it survived into the 21st century.”

Had Reid read Marx, he would understand that communism has never existed, let alone in a small number of countries. According to Marx, it could only be achieved on a world scale on the basis of socialist revolutions in the most developed capitalist societies.

So whatever is being dismantled in Cuba, it isn’t communism. Or even socialism, if this is understood to mean the consolidation of a first stage in the transition to a classless society. Even this would require socialist revolutions to take hold in developed capitalist countries.

For Reid’s argument to hold water he would have to demonstrate that Cuba is abandoning its socialist orientation and gradually restoring capitalism, or that the economic reforms that have been implemented and decided on will inevitably lead to capitalist restoration.


Since Cuba’s socialist state is the owner and manager of the bulk of the Caribbean island nation’s economic resources, the restoration of capitalism, however gradual, would require the transfer of ownership to individuals of large swathes of productive property that belong to Cuba’s working people. In a word, privatisation.

Reid seemed to imply that this is what’s happening in Cuba today: “Raul Castro, who formally took over as Cuba’s president in February 2008 and as first secretary of the Communist Party [PCC] in April 2011, is trying to revive the island’s moribund economy by transferring a substantial chunk of it from state to private hands, with profound social and political implications.”

Here, Reid should have clarified that what is being transferred to “private hands” ― that is, to the self-employed, small private businesses and cooperatives ― is not ownership, but the management of socially owned productive property.

The distinction is crucial, yet Reid glossed over it.

“The leadership shuns the word ‘reform’, let alone ‘transition’,” Reid said. “Those terms are contaminated by the collapse of the Soviet Union, an event that still traumatises Cuba’s leaders.

“Officially, the changes are described as an ‘updating’, in which ‘non-state actors’ and ‘cooperatives’ will be promoted. But whatever the language, this means an emerging private sector.”

Perhaps, but this is not the kind of Cuban “private sector” that those who dream of capitalist restoration would like to see. Take, for example, barber shops and beautician’s salons with one to three chairs.

Until recently, these were centrally managed by Cuba’s 169 Peoples Power municipal governments following the nationalisation of retail trade and services in 1968.

Today, they are being leased to their workers, who purchase their own supplies, set their own prices, maintain the premises and pay income taxes and retirement contributions to the socialist state. Public ownership of the premises is retained and leases specify how they are to be used in the public interest: a barber shop is for hair cuts, not handicrafts.

The Economic and Social Policy Guidelines, adopted by the Sixth PCC Congress in April last year after an extensive public debate, made it clear the privatisation of social property and the emergence of a new Cuban capitalist class is not on the agenda.

Guideline No. 3 is explicit: “In the non-state forms of management [of socially-owned productive property] the concentration of property [ownership] by juridical and natural persons [that is, by enterprises and individuals] shall not be permitted”.

Other than joint ventures between the socialist state and foreign investors, the scope for private capital accumulation in Cuba will be limited to what can be achieved on the basis of the management under lease ― rather than ownership ― of small and medium-sized economic entities by individuals, small businesses and cooperatives.

And such arrangements will occur where they are considered economically viable and socially desirable.

In the main report to the PCC Congress, Raul Castro said: “Some opinions were not included [in the final version of the Guidelines] … because they openly contradicted the essence of socialism, as for example 45 proposals advocating the concentration of [private] property [ownership].

In the same speech, Castro said: “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 of those managerial activities that are not strategic for the country.”

Reid acknowledged: “The new president often says his aim is to ‘make socialism sustainable and irreversible’. The economy will continue to be based on planning, not the market, and ‘the concentration of property’ will be prohibited, Raul Castro insisted in a speech to the National Assembly in December 2010.”

Yet Reid doesn’t acknowledge that what has been implemented to date, and what has been projected in the guidelines, is consistent with what Raul Castro said then ― and that the PCC leadership’s words and deeds refute his own baseless assertion that Cuba “has begun the journey towards capitalism.”

Clutching at straws

Instead, Reid insinuated that Raul Castro’s speeches were aimed not at the Cuban people but at placating Fidel: “He is careful not to contradict his elder brother openly: his every speech contains several reverential quotes from Fidel, who despite his semi-retirement is consulted about big decisions …

“Fidel’s frail and ghostly presence … doubtless checks the speed of reform.”

Doubtless. And if Fidel Castro is consulted on strategic decisions, doesn’t this suggest that he endorses the PCC’s reform agenda, a course that Reid describes as the “irreversible dismantling of communism”? In this surreal light, Fidel appears as Cuba’s reclusive Deng Xiaoping, a reluctant convert to Deng’s best-known contribution to “communist” ideology: “To get rich is glorious”.

Just in case readers were not persuaded that the PCC leadership under Raul Castro (with or without Fidel’s approval) is intentionally setting in motion a process of capitalist restoration, while feigning socialist continuity, The Economist fell back on the hope that capitalism will inevitably return to Cuba no matter what anyone does.

Capitalism, you see, is the natural order of things, and the odds are stacked against Cuba’s socialist project. “Whatever the intentions of Cuba’s Communist leaders, they will find it impossible to prevent their island from moving to some form of capitalism”, said Reid.

“What is harder to predict is whether they will remain in control of the process of change, or whether it will lead to democracy.” In other words, the only question for The Economist is whether Cuba will adopt Chinese-style “market socialism” or evolve into a typical Third World capitalist “democracy”.

Reid notes that capitalist ideologues such as himself have predicted the end of the Cuban Revolution before, and got it wrong. “When the Soviet Union collapsed in 1991,” Reid pointed out, “many outsiders believed that communism in Cuba was doomed”.

Today, however, there can be no doubt: “This time, Raul has insisted, there will be no turning back: the reforms will happen sin prisa, pero sin pausa (slowly but steadily)”.

So, when Raul Castro insists the economic reform agenda adopted by the PCC’s sixth Congress will be implemented, The Economist takes his word for it. But when he says that the reforms will strengthen Cuba’s socialist project, rather than lead to capitalist restoration, it dismisses this without offering either facts or arguments to refute it.