Freedom to Choose (III & final)

Dmitri Prieto

The Future Is Ours. Photo by Kate Forrester.

If we review the case of Cuban education, primary and secondary schools usually offer the same standard programs.

In the “pre’s” (pre-university senior high schools) of the past, most students had to study in “boarding schools in the countryside,” though now the decision has been made to set up facilities closer to the students’ families.

In terms of choice, youth today are offered —according to their abilities— “conventional” pre-university high schools, vocational education or the exact sciences, and technical training.

In the case of banking services, there are hardly any alternatives.  Each check, for example, must be cashed at the same branch that issued it, in the majority of cases.  That has been my experience at least along with the huge lines.

This stems from the fact that at one time the postal network performed certain banking functions, though this is not the situation today.  It would be best to eliminate the apparent monopoly in that sphere and to facilitate choice among clients (institutions and individuals) in selecting the bank they prefer.

I should note though that in several areas in recent years, the State has increased the possibility of choosing.  Because of this, Cuban TV (completely state-owned and operated) now has more channels, including one (Multivision) that is free of political propaganda.  Likewise, several territories (provinces and municipalities) are attempting to provide their own programming in their specific localities.

Recent experiments in the leasing of State-owned barber shops and hairdressers to their workers led to a diverse range of services being created.  On the other hand, Cuba has experienced the elimination of the different companies of State-owned taxis and tourist transportation, and the subsequent reestablishment of a monopoly.  Today all State taxis, for example, belong to the same company.  Only a few years ago this wasn’t the situation – alternatives existed.  Today “you get what you get.”

The situation of cellphones, where also only a single company monopolizes the entire market, makes one consider the experience of the steady fall in prices experienced for that service in other countries where there are wide selections.

What comes to mind is the “glorious past of liberalism [free-market capitalism] of the 20th century” and the German miracle of Chancellor Ludwig Erhard in the 1950s.  But Cuba is not Germany.  We need to re-accumulate capital in a de-capitalized country.  That was not the case of Germany in the postwar period, when the factories laid in ruins but there were those who knew how to rebuild them back in operation.

The current pitch for hyper-competition

Liberals always repeat that competition leads to development.  Meanwhile, some of their more fateful experiences of the 1990s (such as the privatization of the telephone system in Argentina) reinforced monopoly inefficiency by creating a company in each territory.  There was no freedom to choose; it only privatized the profits.  Let’s not forget that capitalism always functions as a monopoly: the monopoly of ownership in the hands of the capitalist class.

I’m not for the hyper-competition that the current yuppie pitch is trying to sell us, but nor do I like monopolies…

In the case of software —the commodity par excellence of the 21st century— one of the products competing most sharply with the Microsoft empire is the Linux system, the result of the voluntary labor of thousands of people around the planet.  And it does not operate under free-market concepts.

The market is without a doubt one of the great inventions of human beings, and I agree with the pragmatism of those who believe that it will be with us for a long time to come.  But we should seek variety.  Even when taking into account ideas that are always controversial, like those of Che Guevara, I believe that practice demonstrates that the totalitarianism of the State leads to disaster just as much as that of the market.

What worries me most in the case of Cuba is that the recently announced government proposal speaks in favor of small private companies and not those of collectives of workers forming cooperatives.

Even when one can accept a sort of “mixed” or “joint venture” company (a term that defines very little since it tells us nothing of the proportions of the “mixture,”), in the case of authorizing small private companies based on wage labor, an integrally socialist position would be to also allow citizens who want to create companies that encourage worker solidarity and that do not have capital-labor relationships to do so.

In China, for the bureaucracy to save itself it had to re-invent a bourgeoisie – a class that didn’t exist.

In 19th century England, workers created the first cooperatives under the Rochdale Principles.  They had to adapt these to the capitalist forms of organization because there were no specific laws for those companies.  But their initial effort led to a different type of production that over time was reinforced with a legal framework because the members of the cooperative pressed for it.

The freedom to choose that we lack most is between the wage-labor and the distributive cooperative economy.  I would prefer cooperatives, which means not being paid a wage from anybody but to have the opportunity to work in a micro-firm with people who think the same as me – even if it was a risk.

Dimitri Prieto-Samsonov

Dmitri Prieto-Samsonov: I define myself as being either Cuban-Russian or Russian-Cuban, indiscriminately. I was born in Moscow in 1972 of a Russian mother and a Cuban father. I lived in the USSR until I was 13, although I was already familiar with Cuba-- where we would take our vacation almost every year. I currently live on the fifth floor of an apartment building in Santa Cruz del Norte, near the sea. I’ve studied biochemistry and law in Havana and anthropology in London. I’ve written about molecular biology, philosophy and anarchism, although I enjoy reading more than writing. I am currently teaching in the Agrarian University of Havana. I believe in God and in the possibility of a free society. Together with other people, that’s what we’re into: breaking down walls and routines.


19 thoughts on “Freedom to Choose (III & final)

  • November 16, 2010 at 1:08 pm
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    “Capitalism is a gamble people take every day”

    Julio, what I cannot understand is why you cannot see that in this ‘game of chance’ of capitalism only a few win, while the vast majority lose.

    You also stand for a dogma: the neo-liberal one. For you only socialists are ‘blinded’ by ideology. You also are.

  • September 2, 2010 at 2:36 am
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    George, take a look at this video is from Ted talks is a wonderful ted talk talking about statistics and predictions for the future and how the poorest countries of africa are catching up to the most develop ones

    http://www.ted.com/talks/hans_rosling_reveals_new_insights_on_poverty.html

    this goes to show that poverty can be reduce by many means and many people are helping.
    He mentioned that africa in the last 50 years has gone from a medieval status to a much better economic status so the improvement for them has been fenomenal when one looks into the data with that perspective.
    It took europeans more than 500 years to get where they are. The access to hight technology and not having to repeat all the little detours that western civilization took shorten their path to where they are now.

  • August 26, 2010 at 4:05 pm
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    Just in case I was not clear enough.

    I have nothing against capital accumulation. In fact it may be needed for some bigger projects that will not be feasible if there is not sufficient capital. Also got nothing against competition.
    I only pointed at those things because I thought you were a leftist. 🙂
    My only objection for now is about not having the freedom to choose!

  • August 26, 2010 at 3:04 pm
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    Some how I overlook and did not answer this part “Arguing about the virtues of capitalism aside though, what really interests me is what you have against the idea that all independent associations of labour be co-operatives. Ironically the arguments you have given are actually those that other Marxists would give, i.e. that there would still be competition and accumulation of capital. But these are the very things you seem to insist are necessary for an economy to work, so what gives as they say? What are your objections to mandatory co-operatives?”

    I am not against cooperative. I already explained it may also be a good idea. Neither I am oppose to some accumulation of capital. Still the way to have less disparity is not by eliminating the rich and making everyone poor. But by allowing more people to become wealthy.
    My objections against mandatory co-operatives is that then we will loose the freedom to change the system exactly the same as Cuba. People should be able to have economic freedoms to pick and choose the way they like to earn a living. It should not be dictated by a state. Assuming that the co-operative work then that will happen naturally. If they do not work and they can not compete with what we have now then they may not be as great as an idea.
    I think diversity is good. There is not one shoe fits all here.
    To make an analogy with nature. We can see that organism in nature are very diverse. The reason why this happen is because there is usually many solutions to a problem. Even there could be multiple optimal solutions to a given problem. Is not a good idea to restrict the space of solution to just one type.
    None of us should place a limit as strong as saying such and such economical methods should not be use. Let us let them compete on the market and see what comes out first. I do believe the market has the wisest intelligence of all. The right decisions are taken by the global human mind as a whole. I do not think that imposing and dictating works. I know exactly what I am talking about.

    We all should have the freedom to choose.

    Now like wise I will like to know.
    Why you and Grady think that the only economic model that should be allow is the co-operative economic model and nothing else?

  • August 26, 2010 at 12:54 pm
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    George

    There is things that poor countries can do to attract international capital to their countries. Some of them are to have stability and educated people with little or minimal corruption and many other things that make it safe to invest.
    You probably know about business incubators

    http://en.wikipedia.org/wiki/Business_incubator

    all these things could be done to promote businesses even in poor places.
    You are correct, capital does tent to accumulate. That means that those that had the head start are at an advantage but are they?

    For example as you know Apple was the first company to produce and market a personal computer. Later came IBM with the PC and went ahead of Apple. Microsoft used to be during all this period one of the dominant forces in this market. Until very recently. Apple overtook microsoft!
    How about the Internet? It looks like microsoft was in the right place to be able to exploit the internet but they really made some bad turns! and here is Google! started as small little company on some one’s garage.
    So you see, even people with lots of money make bad decisions and people with very bright ideas can over take them.
    What I am trying to say is that even the ones that are late starters will be able to catch up by making the right decisions. That can happen by chance or it may happen because they have someone with the vision.

    There are many industries that required very little investment. For example software creation is one. But it requires people with lots of knowledge.

  • August 26, 2010 at 2:30 am
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    George
    You make it sound all like having money is a sin.
    I am sure you know that when someone goes into a business and invest capital in it there is no way to really know in advance if it will be successful or not. So from that point you can say Capitalism is a gamble people take every day. The bet is on being successful. Yet for every successful business many will perish and would have loss the money they invested. This is part of the competitive nature of capitalism. And also that some ideas are not as good maybe some others are better. It is all decided in the marketplace by the people. So even economically you could say is a democracy. That is the demand and offer at work.

    I have said before that capitalism is not perfect.
    But we have the freedom to tweak the system and make it better.

    Unlike socialism that can not get out of the dogma. The quasi-religious path drawn from Karl Marx scriptures.

    Let me give you one example of something that will be coming in the next 10 or 20 years. As you know Oil is a limited resource. It will eventually be depleted. Many governments on industrialized nations are already searching for energy replacements. That will be the next economic boom market of the future. Energy and the production of energy in the many forms. Probably the sustainable storage and creation of energy. By converting solar and wind power and been able to stored it. Or maybe someone will discover better ways. It is an open universe there to research and innovate.

    Countries like Venezuela, or the arab countries that produce oil will no longer have the source of income. Some arab countries have been very smart since they know that what they have now would not last too much longer and are trying to change their economies. People do need to think about the future. It is hard to really know exactly what will really happen but one can get some general ideas.

    With regards to creating wealth. In reality very little is needed. Given the right idea.

    I can make a list here that includes some of the best ideas.Telephone, Radio,Television, Computers, Electricity, Airplanes, Rockets, Internet, Books, and on and on.

    Every one of those things started with simple ideas and the combination of simple ideas into the shape of what we have today. Incidentally all of it was created by people working on capitalist countries. I guess you could say that capital was needed to do this things. But I think more than capital was to have the necessary knowledge and freedom and the incentive to create this things! Those things are lacking in many societies around the world.

    Going back to the example of Cuba it seems that if Fidel Castro did not have the idea or did not approve of the idea it will not be done.

    With regards to the inequalities in the world I think they will be softening more and more in the future. Because all is really needed is for people to learn, to learn to create, and in the future that will be coming soon it will be easier to do with the access to information. See for example iTunes University where the best universities around the world are placing many of the classes in video lectures.
    You will be able to take lectures in Lineal Algebra, Calculus, Differential equations or many other topics and all that is free.
    You can see the materials they use in great universities like Harvard,Oxford,MIT,Stanford, and on and on. Many people should be able to use this to learn. These are the same courses that are taken by the best people here and amazingly they are FREE for all!

  • August 25, 2010 at 11:35 pm
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    Hi Julio,

    Since your quoting wikipedia: http://en.wikipedia.org/wiki/Wealth
    With regards to income distribution the article says the following: “1% of adults are estimated to hold 40% of world wealth, a number which falls to 32% when adjusted for purchasing power parity.” Purchasing power parity is where you make the adjustment for the relative cost of living, so even with life being cheaper in India say, 1% of the world’s adult population still holds 32% of the relative wealth.

    Wealth creation is another matter. Yes wealth is created all the time, new resources are found, new uses for resources are found, availability of labour increases through increases in population. The question really is does wealth creation mitigate concentration of capital in capitalism. I think the evidence shows that this is not the case. All the trends show that capital concentrates more and more over time. I guess this is largely to do with the fact that it is capital that facilitates wealth creation, in other words those with the most capital are those who are best able to create wealth.

    Surely you don’t think the 75% of the world’s population who live on less than $1500 a year are just lazy or so unimaginative that they cannot create wealth for themselves. The are trapped. You cannot create wealth out of thin air. Without significant capital at their disposal their ability to create wealth is severely restricted. And we haven’t even started talking about exploitation of their labour yet. This is the reality of capitalism.

    Arguing about the virtues of capitalism aside though, what really interests me is what you have against the idea that all independent associations of labour be co-operatives. Ironically the arguments you have given are actually those that other Marxists would give, i.e. that there would still be competition and accumulation of capital. But these are the very things you seem to insist are necessary for an economy to work, so what gives as they say? What are your objections to mandatory co-operatives?

  • August 25, 2010 at 1:23 pm
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    Dmitri
    I understand what you are saying but there needs to be owner ship by the individual workers otherwise you are again back to the same thing you already have and as I was explaining before there is no reason why capital would not accumulate again even on your model.

  • August 25, 2010 at 1:19 pm
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    George,
    I should point out also that people in Maryland maybe the top income earners but they also end up paying more for a home and for many other things that in other places is less expensive.
    Iam sure a Home in Bangladesh or India will not cost the same as a home here in Maryland.
    I was also thinking about the map of the US income distribution and the biggest concentration of wealth usually happen also in the places with highest concentrations of people.
    There is also this other idea.

    The amount of wealth in the world is not a constant amount that gets distributed between everyone.

    If that was the case then you will be right. Because it will be what in game theory is called a zero sum game. In other words one has to loose so that other may win.
    What really happen is that new wealth can be created all the time.
    What I am trying to say is that we could all be wealthy. So the problem is that people need to find new ways of creating new wealth.

    Also the competitive nature of capitalism makes companies produce things that cost less and less.
    For example a computer.
    As you probably know you most likely are sitting in front of a personal computer than just a few years ago was only possible to be afford by a government of very well to do corporations. So thinking of it, capitalism is democratizing itself. Many people 20 or 30 years ago would have never thought we will have what used to be supercomputers in our hands. Furthermore there are efforts made in the US like the one laptop per child of making this technology accesible to the great majority of people around the world by reducing the cost.
    Also there is efforts like that of Mohamed Younis to help the very poor and bootstrap them out of poverty.
    This is something that we can help but people have to do on their own. If we just give out money it will soon be worthless.
    It is not on the interest of anyone to concentrate wealth. I think the US, Europe, Japan and all other wealthy places would be better if other countries could afford to buy what they produce and vise versa.

    Let’s compare for example two countries that are probably the best way to show the failure of Communism/socialism.
    North Korea Vs South Korea.
    Would you agree that the difference between both places is huge?
    The south Koreans did not loot wealth from any place. They created the wealth. Working hard and making things happen. While the north? what can we say?
    Totalitarian regime with cult to a person like it was a God.
    Is that fair to those millions of people?
    So we can see a pattern emerging. The places where freedom is restricted things do not go so well.

    Going back to the topic of Cuba.
    They originally were thinking they will make Cuba wealthy in 5 to 10 years.
    But we all know the end result.

    You can even see in some of the other post here how the few in power want to still keep that power concentrated on their hands or their family. They try at all cost to keep happy those that keep them in power.
    So you see? It is greed again. But this is a worst kind of greed. Since this people refuse to let anyone else be part of that select club on the top that constitutes the Cuban elite class.
    Is that your better kind of system?

  • August 25, 2010 at 1:08 pm
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    Julio:

    “Let’s not forget that capitalism always functions as a monopoly: the monopoly of ownership in the hands of the capitalist class.”

    You wrote: The average Joe in the US can actually be part owner of a corporation… etc.

    Julio: what I mean is that any stockholder basically follows a capitalist –market- logic. Capitalist class doesn’t include only millionaires, etc. Capital flows. Any stockholder wants to maximize profits just because s/he is a stockholder (it could be a bank, a pension fund, a worker under a stock option program…). Capitalist logic. Period. So, when 75%+ (to be conservative) are in the hands of ‘profit maximizers’, you’ll get a monopoly of capitalist ownership.

    When workers/communities DEMOCRATICALLY control the conditions of their work/production/resource allocation by means of workers’/consumers’/community ownership, the overall LOGIC is supposed to be different.

  • August 25, 2010 at 2:33 am
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    George,
    I agree that I may not have a fully global perspective to tell why capitalism has failed in other countries. Maybe because the government there allowed the concentration of capital in the hands of very few and this few also also concentrated all the power. That us just a guess.
    But one thing to me is clear.
    The “solution” as what they have in Cuba is not a solution but a dead end.

    “The concentration of wealth in the U.S. that allowed for Bill Gates to make his fortune came about through slavery and looting of the rest of the world at the point of a gun.”

    I do not agree with the above quote. It is simply not true. Bill Gates was lucky to have started when he did and to have come into contact with the people he did. He did not loot anyone to become wealthy.

    “He is not just saying that independent co-operatives should be allowed but rather that it be mandatory that any independent association of labour be of co-operative form.”

    also I do not agree with the cooperative to be the only economic form that should be allow.

    What makes you think that greed will just disappear and that people will just be magically stop from being selfish?

    How about the problem of cooperative companies that compete on the same area?
    How would that work? They need to be able to compete with each other otherwise you are back to monopoly.
    The state in the US does have a significant control of companies. Each have to pay taxes and even individuals have to also pay taxes on their income. That money is used by the government in all the social programs and many other things.

    In a capitalist society like the US. If you do work hard and try to improve yourself it is very likely you will be successful. Now for a person that is lazy this is not a good system or for a person that does not have the drive to be successful. I know of a Cuban that will love to return back to Cuba because he did not have to work that hard over there.
    The thing is that the system in Cuba make people lean on the others and sooner or later very few are really productive.

    Let me point also that people on different occupations will have different incomes assuming for example Grady’s model.
    So for example let us say a couple of friends and I create a software cooperative and produce this iphone app that produces income of 1 million dollars a year. Would we not be distancing ourselves from the rest of the workers in the other cooperatives? and concentrating money again?

    Think with the following analogy. Starting as little dust particles and by natural gravity this particles ten to concentrate to form the planets and the stars.
    The gravity in our case is the greed or the desired to be better or do best.
    So I think in the case of Grady’s model concentration of capital will still occur.
    There is way to soften this concentration of capital. By having incremental income taxes. So those in the high income bracket pay more taxes on their income. But still you can not punish them for been successful and for contributing to humanity’s well being.
    I do believe that people that contribute to the whole of society do deserve that extra income.

    They earned it.

  • August 25, 2010 at 1:31 am
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    Julio, thanks for taking time to reply. I am sorry to say this again but what you are missing in all this analysis is both the global perspective and the historical one.

    “Just imagine going to work and not being able to even pay for the food you eat with the salary they pay you!”
    Why do you think this is confined to Cuba? It happens all over the world, under the capitalist system.

    “The concentration of huge power in the hands of a few is even worst than the concentration of money in the hand of a few.”
    Why do you think power isn’t concentrated in hands of the few in capitalism? What does it mean when a security council made up of the five most powerful countries decides upon the fate of the remaining hundred or so countries. Indeed even this is a sham, the decisions being made by the capitalist elites of world. What do you think of the military power of the U.S., this is just for fun? The concentration of wealth in the U.S. that allowed for Bill Gates to make his fortune came about through slavery and looting of the rest of the world at the point of a gun.

    “Since you still have power to be generally independent from money in capitalism.”
    Again I’m sorry to say this simply isn’t true for the vast majority of people on the planet.

    A figure that may shock you, if you earn $1500 per year you are in the top 25% of the wealthiest people on the planet.

    “Should Raul allow independent cooperative of workers to form?
    Similar to the Mondragon project that Grady talks about. I think so too.”
    This is where it gets more interesting. Grady is still actually talking about socialism. He is not just saying that independent co-operatives should be allowed but rather that it be mandatory that any inpendent association of labour be of co-operative form. Indeed as he has explained it to me, instead of paying taxes, he is also sugesting that the state should have significant non-voting stocks in all of the co-operatives.
    In other words he is still trying to figure out a way to move away from capitalism but without all the problems you mention.

    Julio, the difficulty I have with your perspective is not the criticisms of the Cuban model, it is the defence of the capitalist model.

    Grady share’s your criticisms, but he in no way defends capitalism.

    I only wish you would do the same, criticise the Cuban system as much as you like, but do not be blinded by the life you are living now into thinking that this in some way has something to do with capitalism being beneficial for everyone.

  • August 24, 2010 at 11:06 pm
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    George, you do raise some good points.

    I checked on the information here http://en.wikipedia.org/wiki/Income_quintiles
    based on the census information and yes, Maryland is on the top of income distribution of all the US states and yes, I will be considered on the top 10 percent income of the US. So you are also correct there.

    Now I will let you know that I did not just land at that income when I arrived here fresh from Cuba. I spoke some English more or less when I came and I was highly educated. But could not get a job on my field since I would have had to get again a degree here or re-validate my education.

    I started earning $6.50 per hour so I was very close to the minimum wage and thru dedication at work and the free education provided by a company I worked for I was able to raise myself and I will continue to do so. Now those same opportunities I had it is my believe they are the same opportunities that many here have. I just do not believe that I am so lucky or that smart. It is a matter of working hard for a goal and lots of perseverance. My same story I have seen with others in my family and with friends even in other countries.

    Furthermore I can give you better examples than me.
    For example Bill Gates (Microsoft) and Steve Jobs (Apple) both with little education started companies and became the super rich you talk about.

    Do they deserve it?

    My answer is Yes.

    If they had not done what they did we would not have today the personal computers that we have today, that used to be the domain of only really very wealthy governments.
    Looking for example at Bill Gates.
    He has dedicated his time and economic resources to help people in the US and around the world thru the Gates Foundation. Helping on Education and Health. Is interesting to notice that Fidel Castro have dedicate resources in Cuba also for Education and Heath but by equalizing everyone to be very poor. Originally at the beginning of the revolution he acted like Robin Hood stealing from the rich to give to the poor. Now that he got no more rich. So he steals from the poor!

    Could a Microsoft or Apple be possible in the US if we had a system like Cuba’s.
    I think not. Because their system is not conducive to innovation. There is no sufficient stimulus even for people to do what they are suppose to do. Just imagine going to work and not being able to even pay for the food you eat with the salary they pay you!

    Cuba did not used to be that way.

    We can talk about doctors or engineers or professionals in Cuba now making between 15 to 20 dollars per month. We know those salaries are slave salaries. Other people that did not study that hard in Cuba as this people are making just about the same salary in Cuba.

    Do you think is fair for them to be paid so little?

    Do you see the difference? That type of society does not stimulate people to improve themselves unless they really want to and that explains why Raul Castro has to ask or command people to improve productivity so that he can increase salaries! It looks like they are going on a downward spiral.

    Let me go back then to Adam Smith. One of his basic ideas was that individuals pursuing their own self-interest, indirectly promote the good of society. This can happen because we all seem to want the best for ourselves and love ones. We can call that the intrinsic greed of humans. It is natural. No amount of socialism or brainwashing will make people refuse to have the best for themselves. It could also be called the survival instinct or survival of the fittest if one is to parallel with evolutionary theories.

    So even in societies like Cuba that try to equalize income level. People’s greed can never be eliminated. You probably know about how many even in the highest positions on the Cuban government are corrupt. This happen as I have explained before because of this natural instinct of greed or self preservation. And because the only thing that the regime has done is to redistribute power. Power and Money are very related. The concentration of huge power in the hands of a few is even worst than the concentration of money in the hand of a few. Since you still have power to be generally independent from money in capitalism.

    One of the central questions from Dmitri is

    Should Raul allow independent cooperative of workers to form?
    Similar to the Mondragon project that Grady talks about. I think so too.
    My point is that people should have the freedom to associate in any economic form they like to. This freedom we have here in the US not just a political one but also economical.
    Nobody prohibits Grady from forming his cooperative here. As he has pointed out. There is already such projects in California.

    I know the situation in Haiti is bad and I know little about why that is.

    Socialism did seem for a while like a good solution in theory. But in practice it had been shown not to work.
    It produces a stagnant and parasitic economy. In the case of Cuba for example their economy is highly parasitical since they live of mainly the money remittance by Cubans outside Cuba and of the income they get from tourist from capitalist countries.

  • August 24, 2010 at 4:03 pm
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    Julio, I think you are still struggling to understand capitalism and are somewhat blinded by the good life you are experiencing in the United States. I do not begrudge you this at all, but when it comes to discussing how to move forward it is important that we see things clearly.

    Dmitri is correct when he says “Let’s not forget that capitalism always functions as a monopoly: the monopoly of ownership in the hands of the capitalist class.”

    So you can buy stocks in public companies. Sure, but you can only do this if you have capital. Further, as you point out, your voting rights depend on how much capital you invest. Thus your control over the company is only really there if you have enough capital to buy enough votes. In other words it is those with capital who own the public companies. If you add to this the fact that the real capitalist class, as opposed to the petty bourgeiosie, have enough capital to influence and control the stock market, you begin to see that the whole economy is basically in the hands of those with the most capital.

    We are not talking about millionaires here, but people with tens of billion dollars, and that is only personal wealth. Financiers in the capitalist class have access to even more, which although not strictly speaking their money, they have control over. Fidel has recently talked about the Bilderberg Club. As he says, it is a fantastic story, we cannot really be sure of what they do and what they don’t do because of the secrecy that surrounds their operations, but it is not a conspiracy theory, it is the natural order of capitalism.

    Julio, I know that you are impressed by your new life in the U.S. But as I’ve mentioned to you before, you are living in the richest part of the global capitalist system. You would not be so enamoured with capitalism if you had to live in Haiti. Indeed I think even if you lived in Mexico you would be more critical.

    As a U.S. citizen you are probably in the top 10% of wealth. To be in that bracket you only need to earn $25,400 per year. If you earn $47,500 per year or more you are in the top 1% of the world’s population. And yet even then you are not part of the capitalist class. As I said, we are talking about people with control of billions of dollars.

    So let’s not confuse games for the Average Joe, as you put it, where they can lose everything at the whim of those with the most capital, with the real power which in capitalism is most definitely in the monoply hands of the capitalist class.

    Indeed as I’ve pointed out, the Average Joe is not that average. Most people in the world do not even have enough capital to play these games at all.

  • August 24, 2010 at 1:54 am
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    The problem as I see it in Cuba is that the socialist leadership does not realize that the Marxian stipulation they rely on to define “real” socialism is in truth “monopoly” socialism. This allows this leadership to believe the present system is a just and necessary, while not understanding its retrograde monopolistic essence.

    The first step in unraveling the knot (are you listening, Fidel and Raul?) is to look the next-to-the-last page of the second chapter of the Communist Manifesto in the eye–where it stipulates “concentration of all the instruments of production in the hands of the state”–and understand that this can only mean “state monopoly socialism.”

    It is not “real” socialism. It is “state monopoly” socialism.

    This retrograde monopolistic essence is what is undermining and perhaps destroying the socialist state power won by the historic leadership.

    When all the instruments of production are concentrated in the hands of the socialist state, the historically evolved institutions of private productive property rights and the price-fluctuating trading market are disallowed. Without private property markets cannot be utilized for the building of socialism. The only way to run the economy therefore is massive economic bureaucracy and one-party political/social absolutism.

    What is needed is not neo-capitalism or the Chinese/Vietnamese rebuilding of a capitalist class to relieve the constipation of the state monopoly formula. It is retention of state power by the PCC but reintroduction of private productive property rights and the price-fluctuating, socialist-conditioned trading market.

    Cooperatives on the Mondragon model–now made possible by the existence of private property rights–with significant but non-controlling state co-ownership with the “employee associates” would relive the constipation of the incorrect model of state monopoly socialism, yet not reconstitute a capitalist class.

    Dmitri, I’m surprised you did not mention the Mondragon cooperative experiment in Spain. Once again let me say: Go to video.google.com and review “The Mondragon Experiment,” a 50-minute BBC film from 1980 that relates the basic story. Cheers.

  • August 23, 2010 at 9:38 pm
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    Dmitri, this is not correct

    “Let’s not forget that capitalism always functions as a monopoly: the monopoly of ownership in the hands of the capitalist class.”

    The average Joe in the US can actually be part owner of a corporation. Many corporations are publicly owned by the stock holders. The great majority of people own either stocks on public companies or thru their retirement plants called 401k here in the US in what they called mutual funds (These are collections of company stocks sold in a block)

    Just in case you do not know what a stock is. And I am not trying to be patronizing here. Imagine you and I go into business. We decide to create an Ice cream parlor. Now let us assume the cost to create such a place in Cuba will be of 10,000.00 dollars in equipment and rent of the place or buying the small local. Now let’s assume we have 5000.00 dollars ourselves. to put towards the business we still need 5000.00 we can get that from friends and other people we convince of the business we want to create. Let us assume we sell each unit of the company to be of 10 dollar value. So if we find a wealthy guy by cuban standard that could invest the full 5000 dollars then the 3 of us will be owners but in most cases people do not have that kind of money so we could just sell units of 10 dollars each of our business. The place to sell it is a stock market. and each unit is a stock.
    So now instead of having two owners (You an me) our company is now public property. We are the majority share holders since we own 50 percent of the company so we have a big say into all the decisions of the company. The others can vote also on the decisions we make. After we produce profit then we have to split it between all the stock holders. The more stocks you own the more you get.
    That is a public corporation and a stock market in a nutshell! 🙂 There is a lot more to it but as you can see you can not really talk about monopoly of ownership in that case. It is correct to called it a publicly owned corporation.
    Most of the big big corporations in the US are publicly owned. Examples IBM, Microsoft, Apple, ATT, Oracle , Disney, and on and on.. and they have millions an millions of owners from all over the world!

    So nobody can really monopolize the ownership of a corporation unless it is a privately owned corporation and that is possible too, it is interesting to notice that there is not that many privately owned corporations. But monopoly of ownership in that case does not make it a monopoly.

    The monopoly word is really used for a different meaning.

    Monopoly is when one economic entity or corporation is able to control a resource.
    For example the American Bell Telephone Company systems that used to control telephone communications for a while was a monopoly eventually the government broke the company down and allow many others to compete on the same turf.
    Monopoly is obviously a bad thing for us the individuals, you actually have experienced monopoly,
    Is exactly what you have in Cuba.
    The Cuban state is a state monopoly.
    It is the worst kind of monopoly because it controls everything.

    Why is that so bad?
    Competition usually drives prices down, and also produces innovation. While without competition you get a price fixed by the state that generally does not reflect the real value of things. That is why there is so much discrepancy between the different prices and the two different currencies in Cuba.

    Let me know if you like to discuss more about this.

  • August 23, 2010 at 1:15 am
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    Dmitri, this is a great article.

    The problem we have at the moment is that the argument about Cuba’s economic future is framed as between the existing socialism and the use of markets, as if the two are mutually exclusive. Those who argue for the existing socialism cite all the social advances that have been made during the Revolution whilst those arguing for markets cite the economic failures. Personally I am undecided about the use of markets. But what I am certain of is we need to move the debate to be between the existing socialism and the co-operative use of markets.

    I am not going to question the decisions China made in the past. The historical circumstances facing the Chinese Revolution were very different from those in Cuba. However what is clear is that the Chinese model has allowed for the creation of a new capitalist class, and worse still this capitalist class is making inroads into control of the Chinese Communist Party.

    There may be some within the Cuban bureaucracy who are shamelessly advocating the use of markets with the ambition of becoming capitalists.

    But let us assume that many of those who advocate the use of markets merely want to see an improvement in the economic situation.

    It is these people that we need to insist build the co-operative model into their arguments.

    We need to cut the Chinese model out of the picture.

    The problem is we are so caught up arguing between whether or not to use markets that we are missing the essential component of the nature of businesses in a market situation.

    Those people who are against markets are not insisting that any use of markets should be done so with the use of co-operatives because they are so caught up in defending the existing model. Whilst those who are arguing for markets are also not insisting that any use of markets should be done so with the use of co-operatives because they are so caught up in promoting the use of markets.

    This is what we urgently need to address. It is not a question of resolving the argument on the use of markets, but rather making sure that both sides are debating the use of co-operatives in a market setting.

    As an outsider it is difficult to know how to assist with changing the parameters of this debate. I only hope that yourself and others can make it happen.

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