Socialist Action on Cuba’s economic reforms — a contradictory and confused political statement

What will be the result of the 6th PCC Congress?
What will be the result of the 6th PCC Congress?

intro:  This is not, and does not pretend to be, an exhaustive history of the Cuban Revolution or a final answer on the meaning of the reforms in Cuba.  As the Clash once said, the future is unwritten.

Socialist Action on Cuba’s economic reforms  — a contradictory and confused political statement

Published earlier this year in Socialist Action newspaper, there is a document on Cuba’s “reforms”  passed at their last convention.   Several years ago, at a previous national convention, I was stunned to hear a national leader of SA say that “nothing has changed in Cuba.”   I left SA last year, shortly after co-authoring a document  on Cuba.  (link)

The SA document talks about the controversy over the projected layoffs in 2010 of 500,000 from the state sector with  additional layoff of 500,000 over the next two years. It also points out the legalization of 178 areas of self employment and says that “hundreds of thousands of Cuban workers are already ‘employed’ in tiny ‘business’ ventures, trying to make ends meet, while they simultaneously receive subsistence wages from the state.”

on the nature of the reforms, the  SA document says:

  • the government of Cuba is “far from turning workers into the street to fend for themselves…”

  • “the number of workers in private concerns rose 23 percent” in 2012. The government cut 228,000 public jobs in 2012 on top of 137,000 cuts in 2011.

  • “Over 1.2 million hectares of land (2,946,000 acres) has been distributed to more than 132,000 beneficiaries. Land remains the property of the state and profits will be taxed. New farmers can sell their produce on the open market to directly to the hotel industries and private restaurants. Agricultural production remained flat in 2010 and 2011.

  • Bureaucratic abuse has been and remains widespread, including government and military personnel using state-owned trucks to steal and otherwise sequester food products from state and cooperative farms for sale on the black market.”

  • “We should emphasize the openly discussed bureaucratic mismanagement and corruption that permeate Cuban society under conditions of perpetual shortages is qualitatively subordinate to…the illegal imperialist embargo.”

  • “…the reforms have produced no layers of capitalists that have any influence over heights of the Cuban economy.

  • under the reforms Cubans can now buy and sell homes. No Cuban can own more than two homes- one a primary residence and the second a summer home. This ability to sell homes for a profit “hardly… constitutes the foundation of a new class of entrepreneurs.”

  • “It appears that no one has been thrown into the streets in Cuba, not to mention the fact that laid-off workers are entitled to remain on government payrolls for several months, or longer, until they find employment. And further, we have seen no evidence that these barbers or street vendors or small restaurant owners, usually operating out of their own homes and family run, are combining with the small farmers to form a new capitalist class in Cuba!

There is no doubt that Cuba’s economy is in crisis. This is driven by the general crisis of the world economy, by the long-term effects of the US imperialist embargo of Cuba and by the destructive effects of bureaucratism and corruption. While the US blockade bears much responsibility for the continued underdevelopment of the Cuban economy, it’s also apparent that paternalistic policies of the USSR and bureaucratism at home are also to blame.

what does capitalist restoration look like?

While the SA document notes the destructive role of the black market and corruption, it fails to understand the relationship between the second economy and the formation of a petty bourgeois layer — both inside and outside of the party/state. Rather than speaking dismissively of barbers, restaurant owners and small farmers as the “new capitalist class,” SA should be looking at the bureaucrats, enterprise managers, military officers and Party members who are involved in “widespread” theft and black market activity and who play key roles in the official economy.

As we noted before, in our previous document,

“In both China and the USSR, black market activity played a dual role.  It undermined the planned economy and created the basis for a new bourgeoisie. The black market or “second economy” is a reality in Cuba.. A great many Cubans are engaged in some sort of economic activity outside of the legal channels because it’s necessary in order to eat. As Brezhnev said in the old USSR, “No one lives by wages alone.”

“In the book, Socialism Betrayed: Behind the Collapse of the Soviet Union, authors Keeran and Kenny describe the size and scope of the second economy.

        “Illegal activity eventually assumed an astounding array of forms, eventually penetrating all aspects of Soviet life…The most common form of criminal activity took the form of stealing from the state, that is, from workplaces and public organizations. Grossman said, ‘The peasant steals fodder from the kolkhoz to maintain his animals, the worker steals materials and tools with which to ply his trade ‘on the side, the physician medicines, the driver steals gasoline….Private production even took the form of full-blown capitalists in the full sense of the word. — investing capital, organizing production on a large scale, hiring and exploiting workers and selling commodities on the black market.” Socialism Betrayed: Behind the Collapse of the Soviet Union

What the legalization of small business employment categories does is legalize part of the black market, while leaving other sections of the second economy untouched.

The truth is that the layoffs of workers in the state sector is proceeding at a slower pace, but this is coupled with reductions in unemployment compensation, reduction of the ration card (with the goal of eliminating it) and  scaling back of educational opportunities for Cubans.  There are also reductions in the health service.

What are more fundamental to the reforms than the erosion of the gains,  are the introduction of piecework, the linking of productivity to pay, the legalization of hiring non-family members as employees by small enterprises and the move to make state sector  enterprise managers more autonomous in their decision making. These steps directly undermine the functioning of the state sector. and exacerbate social inequality, which is already on the rise.

Social inequality for the Afro-Cuban population is magnified by the reforms.  Already almost entirely locked out of the tourism industry, Black Cubans have traditionally been relegated to lower skilled jobs.  This lack of opportunity, a hold-over from pre-revolutionary times, was ameliorated in the early years of the revolution, but returned during the special period. The recent layoffs in the state sector appear to have disproportionately affected Black Cubans. In a letter to the union federation, The CTC, the Black social organization, CONEG,  referred to the layoffs as “ethnic cleansing.”

Afro-Cubans are disproportionately represented in the prison population.  According to Sam Farber, “Blacks have particularly been victimized by the article in the penal code criminalizing “social dangerousness”…(in) the 1979 Penal Code, individuals who demonstrate “a special proclivity” toward committing crimes can be punished with jail terms without even having committed criminal acts and without a formal trial.”  Black and mixed-race Cubans have been the main targets of the law on social dangerousness.

The reforms put in place by the Cuban state are eroding the very gains of the revolution that Socialist Action claims they were enacted to protect.  If these measures were being taken in any other country, SA would rightly call them austerity.

The state sector remains, but planning mechanisms have been weakened, with enterprise managers making economic decisions.  The military remains in control of part of the state sector. It should be noted that foreign investment in state enterprises is increasing.

Insofar as the “open” discussion of bureaucratic mismanagement goes; Esteban Morales was expelled from the PCC for writing this: “Without a doubt, it is becoming evident that there are people in positions of government and state who are girding themselves financially for when the Revolution falls, and others may have everything almost ready to transfer state-owned assets to private hands, as happened in the old USSR…”

Another recent development is the soon-to-open Special Development Zone at the port city of Mariel. The Havana Times says the new  “development zone will operate under a special Customs arrangement that will permit the importation and exportation of products, as well as the production and sale of value-added merchandise for the national and foreign markets. It will begin operations in the next several weeks as a free-trade industrial zone, the first of its kind in Cuba…The purpose and progressive materialization of this ambitious plan is one of the major joint ventures assumed by Cuba and Brazil. From Brazil come some of the $900 million that the works will cost; they include processing industries and a container park, as well as the dredging and land-filling of the Mariel Bay.”  HT April 11, 2013  (bold my emphasis)

I am not claiming that capitalism has been restored or that a new capitalist class has been formed.  In my opinion, the foundations of a workers state (state monopoly of foreign trade, nationalization of the core of the economy, and planning)  remain, but bureaucratic rule and the introduction of capitalist methods constitute a grave danger to the future of the Cuban revolution.

on the nature of the Cuban regime:

The Socialist Action document, attempting to adhere to Trotskyist tradition, characterizes Cuba as a workers state.  Cuba,we are told, lacks the organs of workers democracy. The PCC, in reality, calls all of the shots.

The PCC, however, consults with the people, through their mass organizations.  According to SA, “Consultation and input are fundamentally distinct from the exercise of power by the working class itself. Workers’ democracy, as we define it and as the Bolsheviks under Lenin and Trotsky lived it, was the cornerstone of the revolutionary state set up in 1917, where the workers’ councils ruled, and not the Bolshevik Party, although the latter was the leading force in the original multi-party workers’ government.”

So, in  Cuba workers exercise no real power, while bureaucracy and corruption are rampant. However, SA “rejects any designation of Cuba as Stalinist—that is, a state in which the bureaucracy has become a crystallized parasitic and counterrevolutionary caste, whose interests are counterposed to those of the masses—which can only be maintained by resorting to mass repression and terror.”  The Cuban leaders, we are told, are “revolutionaries of action.”

Illusions about the exemplary nature of the Cuban leadership leads SA in the direction of a semi-Barnesite adaptation to Castroism.  By claiming that the Cuban Party/state is neither fish nor fowl; not Stalinist, but not fully democratic in the sense of the Russian Revolution of 1917, they attempt to ride two horses at once.  Adaptation to the paternalism and top-down bureaucratism of the Castroist regime, leads away from a Marxist and Trotskyist analysis and towards disorientation of the worst sort. Socialist Action’s position on Cuba is similar in some ways to the Deutscherite notion that Stalinist bureaucracies can self-reform.

Trotsky on the USSR (for reference)

“The Soviet Union is a contradictory society halfway between capitalism and socialism, in which: (a) the productive forces are still far from adequate to give the state property a socialist character; (b) the tendency toward primitive accumulation created by want breaks out through innumerable pores of the planned economy; (c) norms of distribution preserving a bourgeois character lie at the basis of a new differentiation of society; (d) the economic growth, while slowly bettering the situation of the toilers, promotes a swift formation of privileged strata; (e) exploiting the social antagonisms, a bureaucracy has converted itself into an uncontrolled caste alien to socialism; (f) the social revolution, betrayed by the ruling party, still exists in property relations and in the consciousness of the toiling masses; (g) a further development of the accumulating contradictions can as well lead to socialism as back to capitalism; (h) on the road to capitalism the counterrevolution would have to break the resistance of the workers; (i) on the road to socialism the workers would have to overthrow the bureaucracy. In the last analysis, the question will be decided by a struggle of living social forces, both on the national and the world arena.”

It is true that the PCC has not resorted to mass repression on the scale of the Chinese CP or the ruling caste in the USSR; though in the early years of the revolution, Fidel Castro admitted that the state held 20,000 political prisoners.  That said, bureaucratic rule and the lack of institutions of socialist democracy constitute a brake on the further development of the Cuban Revolution.  Participation without real decision-making by the Cuban masses has led to alienation from the party and state and a high level of cynicism about the Cuban road to socialism.  Mass support for the PCC and the revolution is being eroded.

Raul Castro consolidates his power

When Fidel stepped down from power, his brother, Raul, took the reins of the Cuban state. The past few years have seen the consolidation of Raul’s control over the party and state apparatus. The reforms, which were first instituted in the military-run enterprises of the state sector, are an attempt to stave off the collapse of the Cuban economy while keeping the ruling caste in power. Speaking to the National Assembly of People’s Power (ANPP), he said plainly, “Either we rectify or the time to continue teetering on the edge of the precipice is over and we will fall.”

Raul Castro is an open admirer of the Chinese capitalist restorationist road to development.  In 2005, during a visit to China, Raul said, “some people…are preoccupied with China’s development; however, we feel happy and reassured, because you have confirmed…that a better world is possible.”  More recently, these sentiments were echoed by Ricardo Alarcon, President of the ANPP, when he said, “Cuba is prepared to take advantage of the development experience of China’s reform and opening.”‘

The Sixth Party Congress elected a new leadership. The composition of the new leadership offers some insights into the possible direction of the Cuban state. The new Central Committee of the PCC was reduced in size from 125 members to 115.  Of these, 25 are drawn from the ranks of the military  — either active or retired.  Raul Castro’s son-in-law, the head of GAESA (the armed forces business enterprises), was elected to the CC.  The new Political Bureau was also reduced in size from 24 to 15 members.  Of these, eight are either active or retired military. It should also be noted that the composition of the PB is also very much white and male. Only one woman and 3 Black or mixed-race members were elected to the PB.  The CC is 42 percent women and 31 percent Black or mixed-race, much closer in composition to Cuban society as a whole.

what lies ahead? conclusions

It is dangerous to draw conclusions without all of the evidence. That said, it appears that Cuba is in the opening stages of a process that can only weaken the foundations of the workers’ state and usher in a process of capitalist restoration.

In my opinion, what we are seeing is a transition to a Chinese-style hybrid state- a capitalist economy grafted onto a weakened planned economy with a militarized one-party state in charge.

Of course, none of these conclusions negate the responsibility of revolutionary socialists to defend the Cuban people against US imperialist attacks.  This includes an uncompromising call for an end to the embargo and defense of the gains of the revolution. .

“The workers’ state must be taken as it has emerged from the merciless laboratory of history and not as it is imagined by a “socialist” professor, reflectively exploring his nose with his finger. It is the duty of revolutionists to defend every conquest of the working class even though it may be distorted by the pressure of hostile forces. Those who cannot defend old positions will never conquer new ones.”  Trotsky, In Defense of Marxism

The only rescue possible for the Cuban masses is purging the party and state of capitalist restorationist forces and implementing a democratic form of socialist democracy based on workers councils. This should include allowing the formation of political tendencies in the PCC.

This, however, cannot happen in a vacuum. This has to take place in a context of international revolution. The only way to truly break Cuba’s isolation is the spread of socialist revolution of other parts of Latin America and the world.

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