Lunes, 24 de Octubre de 2016
00:10 CEST.

Exodus, 'revision' and doublespeak

The unstoppable wave of Cubans leaving the island, the largest migratory stampede since the Mariel Boatlift in 1980, is the most vivid illustration of the failure of the "revision of the socialist economic model," dramatically discrediting those who praise Raúl Castro's reform measures.

A total of 43,159 Cubans, according to official figures, emigrated to the United States in the last fiscal year, ending September 30, up 77% compared with the preceding period (24,278), surpassing the 1994 exodus during the Boatlift (32,362). There is currently a humanitarian crisis, with almost 2,000 Cubans trapped in Costa Rican territory because the pro-Castro regime in Nicaragua will not allow them to continue on to the US.

All those who have reached the US recently report the same thing: they had to leave Cuba because nothing has really changed there, nor will it so long as the Castro family and its generals are in power. 

How can Cuba be benefitting from reform when the desire to emigrate by any means possible is only growing? Some argue that fears that the Cuban Adjustment Act will be repealed have triggered the stampede. This may be a factor, but frankly this many people do not abandon their country, family and friends, customs, historical environment and culture if they have any hope of a better life in their homeland.

It seems that Cuba is the only country in the world where the government is not measured by the results it achieves, but rather the (empty) promises its political leaders make. This peculiar style of government was introduced by Fidel Castro in January of 1959. Back then he promised elections for the President of the Republic, and several weeks later asked: "Elections? What for?"  

After replacing Fidel at the head of the government, Raúl Castro promised a daily glass of milk for all Cubans, and announced profound structural changes because workers' wages were insufficient to cover basic needs. Today even less milk is produced than back in 2007, and the salary (24 dollars) is half that in Haiti (59 dollars) and the lowest in the West. And the structural reforms? 

With preparations underway for the Seventh Communist Party Congress (PCC), scheduled for next April, Castro's leadership does not even mention the economic "Guidelines" issued by the Sixth Congress (2011), which constituted their latest litany of promises. In a threatening tone (his style) the new dictator announced the restructuring of the State's economic apparatus to augment industrial production, deliver services of the quality "that the people deserve," and to support the self-employed engaged in authorized trades (exclusively for the rendering of precarious services typical of medieval times). 

Raúl’s gatopardismo

It was all a lie. General Castro and his military regime practice doublespeak, or gatopardismo, a term used in political life stemming from the novel El gatopardo (The Leopard), by the Italian Giuseppe di Lampedusa (1896-1957), in which the author presents the paradox of making changes, but in such a way that everything remains exactly the same.

Raúl’s gatopardismo was summed up Colonel Marino Murillo, Deputy Prime Minister, at a meeting with the National Association of Economists in October of 2013: "The revision must be understood as a modernization of management that makes state ownership more efficient and facilitates the extensive development of our productive forces, but this should not be understood as a change to the structure, based on state ownership. This should be made clear. "

In other words, the PCC ordered a reshuffling of the bureaucracy, but no real freedom for workers. None of the economists on hand pointed out to the Vice-President that state ownership is precisely what prevents the Cuban people from producing wealth.

Moreover, there is nothing modern at all about this  "modernization." It's an old formula, applied in the Soviet Union after Stalin's death, termed "socialist economic calculation" - an absurd contradiction according to Ludwig von Mises, Friedrich Hayek and the whole Austrian school of Economics, who showed that this is not possible in an economy that suppresses the market and private property.

Soviet businesses had more autonomy. They received a percentage of profits, and their workers could double or triple their income if they surpassed centrally-set goals. The same was done in all of Eastern Europe, with even more daring versions in Hungary, Poland, Romania, and especially in Germany, with its industrial combines. But these stopgap solutions did not prevent European socialism from crashing down. 

In Cuba half a century ago a "revision" could have been viable; that is, Soviet economic calculation. But it was blocked by the visceral opposition of Che Guevara, supported by his pupil, Fidel Castro, as they clung to their shared Stalinist principles. What was established was a fully centralized budgetary system, typical of the Stalin era, despite the recommendations of Carlos Rafael Rodríguez, the only competent economist in Castro's leadership at the time, and a proponent of economic calculation.

Of course, Rodriguez threw in the towel when he saw the Castro-Guevara (who knew nothing of economics) duo describe material incentives (money) as a "betrayal of socialism,” instead giving them "little flags" and moral incentives in the Socialist Emulation to form the "Communist consciousness of the new man."

Since April 2014, half a century late, the post-Stalinist Soviet revision is being implemented on the island. It is one of Raúls "achievements" that Cuban state companies are now doing what they could have begun doing 54 years ago: sell certain surplus production at prices dictated by the market, take half the revenues, and establish higher wages for their employees if there are profits. The central government decides what is produced and how much.

But, as Von Mises noted,  economic calculation cannot be totally applied in Cuba (neither was it possible in the USSR) in the pursuit of efficiency, which is impossible under socialism, due to its intrinsic inefficiency. Above all, the astronomical costs of production must be reduced, for which the excessive number of State workers must be reduced. This is unworkable if there are no private capitalist forces to employ this painfully squandered productive force.

The regime estimates that redundant workers represent over 40% of the total workforce at State companies, or about 4.2 million employees. In a hypothetical private sector, if each of the 1.6 million state workers who do practically nothing produced $25,000 a year in value, the country's Gross Domestic Product could be virtually doubled.

Clearly, there is no reform underway in Cuba. The chronic economic crisis will continue to degenerate if the country's productive forces are not unleashed and a vibrant private sector does not emerge in the areas of industry, trade, agriculture, and throughout its economic activity. The PCC is far from what Lenin did in 1921 when he launched his New Economic Policy (NEP), the capitalistic reform measure that ended a terrible famine devastating Russia.

The migratory drain, taking its toll on the most valuable asset of any economy, its human capital, is a historic crime of doublespeak, perpetrated by the dictator and his military junta.