Cooperatives Could Save Cuban Socialism

Vicente Morin Aguado interviews non-Marxist US socialist Grady Ross Daugherty

Grady Ross Daugherty
Grady Ross Daugherty

HAVANA TIMES — Over several weeks of difficult back and forth emails (it’s hard to imagine the slow speed and high cost of Internet in Cuban hotels), I attempted to clarify the thinking of Grady Ross Daugherty, the leader and founder of the “modern cooperative socialist movement” in the United States and who is a regular reader of HT.

HT: What place do you see for cooperatives in the current reform process taking place within Cuba’s socialist experiment?

Grady Ross Daugherty: Thanks for characterizing Cuba’s half-century post-capitalist period as an “experiment.” An experiment is a way of testing a reasonable hypothesis. If we look at the Cuban model as an experiment, as a modifiable work in progress, its performance can be altered to achieve greater prosperity and progress.

In our discussion, we need to keep in mind that most types of cooperatives require a certain basis of legal private ownership, assuming we want them to be functional. For example, agricultural cooperatives require the ownership of cultivated land and the families homes — not usufruct rights — if we hope them to be effective and make Cuba self-sufficient in production.

HT: Regarding the issue of ownership, I began to understand your non-Marxist position prior to our exchange. It may seem like a digression, but it’s good to point out something as controversial as your self-declared non-Marxist yet socialist position.

GRD:  Since its origins in the nineteenth century, the socialist movement was mutual and cooperative. This was something notable in France and England, where workers and farmers were eager to own land and the instruments of production as their property. They didn’t want ownership in the hands of private capitalists or government officials.

I think that if Cuba’s political leaders can clear their minds about the theory of state monopoly and its consequent personality cult, typical of the founders of Marxism during the nineteenth century, Cuba will be a socialist country in the long term.

Marx and Engels instilled prejudice against private property, pointing to it as a cause of society’s ills and as something antithetical to their aim of “scientific” socialism. Nevertheless, for cooperatives to be real they require ownership, which supposedly would be “capitalist” – as opposed to state-run or scientific forms like “socialist” ones.

Despite this, harsh reality has led Cuban politicians to take a fresh look at cooperatives. They’re beginning to look at socialism as an ongoing experiment.

HT: Of course Marx criticized Proudhon, the father of French cooperative and mutualist socialism, considering him petty bourgeois for all his vacillation and wavering, which is typical of his social class.

GRD:  Correct, Marx criticized Proudhon as being petty bourgeois, but Proudhon was a manual worker with calloused hands, while Marx was nothing like that.

The essential fact is that all workers — women, men, blacks and whites — have an intrinsic desire to control their workplace and direct their own productive lives. Marx and Engels couldn’t accept that idea. Marx was a bookworm, from a privileged bourgeois family. Engels was an office clerk in the textile business of his father, who offered prospects of eventually leaving the younger Engels a hefty inheritance.

If workers directly own the means of production under socialism, they won’t need capitalists, nor will they need bourgeois communist “friends” whose desire is to arrogantly stay on top and always be the stars of the show.

The Mondragon cooperative complex.

GRD: Cooperative enterprises are often thought of as small and basic, but look at the example of the Mondragon cooperative experiment in northern Spain. There, the worker-owned factories are very large, automated and competitive – similar to other factories in advanced capitalist countries.

A derivative of Mondragon is the workers grocery chain Eroski, which constitutes the largest company of its kind in the country. So, as we can see, cooperatives come in all shapes and sizes.

HT: Is a cooperative political republic actually the third option between capitalism and socialism, or is it a limited an oscillating concept of the petty bourgeoisie?

GRD: That’s an excellent question. It would be more accurate to say it’s a third way between capitalism, on the one hand, and Marxism as a socialist state monopoly on the other – which is so familiar to Cubans.

From a distance, it seems that Marxists couldn’t shake their philosophy as a religion, a holy truth, therefore they couldn’t get their arms around the idea of workers possessing their workplaces directly under socialist state power.

HT: In the failed experiment in the USSR, cooperatives under perestroika ended up being a bridge to capitalist enterprises when the communists lost political power.

GRD: A reasonable theory would be to understand that — if workers must possess productive property directly and cooperatively in a socialist country led by a vanguard party that does the macroeconomic planning and coordination (be it a restaurant, hotel, factory, bus company, etc.) — these companies would then be socialist.

HT: Have you ever been to Cuba? What are the bases of your suggestions?

GRD: I haven’t been to Cuba yet, mainly because I’m a retired worker without much money to travel. But what I recommend for Cuba is largely the same as for my country. From this angle, my observations may be better than those of others who’ve been fortunate enough to visit the land of the valiant Marti.

If workers directly own the means of production under socialism, they won’t need capitalists, nor will they need bourgeois communist “friends” whose desire is to arrogantly stay on top and always be the stars of the show.

HT: They say that sometimes those sitting outside a game of dominoes can see the plays better than those playing. What do you see?

GRD: The traditional management system in Cuba is the necessary byproduct of 100 percent government ownership. In other words, what’s needed is a new system of ownership. Many Cubans, including the highest political leadership, don’t understand that associated labor, just like a company, is a “private” form of the socialist enterprise. What’s more, without this form of private cooperatives in Cuba it would be a repetition of the Yugoslav experience and therefore doomed to failure.

HT: Along the path we’re pursuing, based on the idea of cooperativism, how do you see the future of my country, either with or without socialism?

GRD: No one can predict the future, of course, but I think that if Cuba’s political leaders can clear their minds about the theory of state monopoly and its consequent personality cult, typical of the founders of Marxism during the nineteenth century, Cuba will be a socialist country in the long term. On the other hand, if the same mentality retains its paralyzing grip, then we can consider the socialist state as being endangered, with brutal imperialism waiting in the wings to reassert itself.

To contact Vincent Morin Aguado, write: [email protected]

66 thoughts on “Cooperatives Could Save Cuban Socialism

  • Your twist or misquote everything I have said or believe. Your game is to try and discredit modern cooperative, state co-ownership form of socialism. You will not succeed, Griffin, and history will forget you.

  • Good thinking, John. I’m thinking that a general, one-third share might prove workable, for lots of reasons; but, the gov’t share needs to be variable through the years. This means that this conceptual, one-third share might be more of a point around which the variable share would flutuate.

    Also, each enterprise might negotiate gov’t vs. working associates share sizes separately.

    One consideration might be with an enterprise just starting up, whether a workers’ coop corp or and independently owned concern (restaurant, etc.). I should think that, until the new enterprise is functioning, serving society and achieving profitability, there ought to be no, or little distributions to the gov’t stock shares. The new gov’t would be trying to assist all enterprises needed to serve the people, and new start-ups are a special case.

    There’s something that is not so evident with this question of the size of the gov’t share. Because a coop republic would eliminate or lower many of the living costs of citizens, it would be found–we believe–that a dollar would go a lot further than it does under a capitalist regime/system.

    What we believe might then be more of a problem is that the general populace might, all at once, begin to have too much purchasing power, and this would have many negative implications.

    One way to moderate and manage this “too much, too soon” increase in buying power would be to have the initial gov’t share start out with more like 50%, then cut it down, year by year, quarter by quarter, as the economy adjusts to the new economic system.

    What is most important, for those of us who aspire to a post-capitalist society, is that we can promise our nation a “new deal” in which taxes, tax bureaucracies and tax prosecutions with have been eliminated within a year or two–or maybe five.

    The last tax to go–excepting so-called “sin taxes,” which might remain for many year, or decades–might be a steadily diminishing federal sales tax, charged at the point of sale and requiring no collection bureaucracy.

    These are all questions to be worked out by the party’s future “Program Institute.” The step by step abolition of tax-based gov’t must be designed by the “PI,” just as reform of the banking system, dismantling of the military-industrial complex, environmental clean-up and protection, end of homelessness and unemployment, etc., etc., must be designed.

    Would you like to help develop the maximum program of the movement? If so, please get in touch.

  • Cort, how the heck does one get a red star beside one’s comments?

  • I don’t hurl names and insults, I call things as I see them. Perhaps my contribution to the discussion is a little too meaningful for you?

  • I am not in the least bit pissed, Grady. Are you projecting? I have found that utopians, leftists and anarchists tend to do that quite a bit.

  • In the UK, the political system had multiple political parties, and a free press. PEople could express their disagreements and vote for other parties and different policies. The system Grady proposed is to be controlled “under a vanguard party” (his words). He also declared that most enterprises, with the exception of farms, would be subject to partial state ownership and politically controlled to behave in “patriotic” manner. That would mean in practice, no free press.

    So you gave the example of the UK, or other liberal democracies where very limited amounts of private property are expropriated to build a railroad, or an airport. In such a case, the vast majority of similar properties are not expropriated and therefore a fair prse can be determined. What Grady is proposing is the wholesale expropriation of 25% to 50% of all property. Some businesses would be deliberately “ruined” (again, his words) to effect the structural changes he wants. Under such conditions, no fair price could or would be determined.

    Another example of mass expropriations of private property occurred in the Russia, and the property owners did indeed end up in front of firing squads or tossed into prison. The Ukrainian farmers were subjected to a deliberate mass famine when the State decided to take their land. Yes, I know Grady has not proposed expropriation of farms, but… with a vanguard socialist party in control, no free press and a growing civil service growing fat from the recent expropriations of factories and shops, who’s to stop them?

    You see, that is the fundamental problem of all utopian ideologies. Directed by a vanguard party, the State assumes absolute power to implement their uncompromising vision on the people. No dissent is tolerated. Only an evil person would resist utopia, right?

    Of course, that’s the attitude. Grady has already called me as much, and we’re just talking hypothetically here. In his brave new world, the rulers would not allow me to speak, or even live.

  • Grady, you wrote: “workers must possess productive property directly and cooperatively in a socialist country led by a vanguard party”

    That sounds to me like a single party state. Am I wrong? Would your brave new world permit a free democratic system with free and independent political parties? If no, then yours is a totalitarian system.

    While declaring private property would be legal, you turn around and impose a wide range of limitations and restrictions on the way in which property is owned, and the types of property that can be owned. For example:

    “you would be prevented from enterprise that is detrimental to society or goes against certain salutary guidelines”

    “The new gov’t would, over a period of perhaps a decade or two, “ruin” the rental market by making domestic and small business property owned by those who have paid for it.”

    On top of that, the State would automatically own from 1/4 to 50% of a most enterprises (in your words). Again, this would be done without the agreement of the original business or property owner. That does not sound like free enterprise or protection of private property would exist in your society.

    But you are quite correct: the point of my criticism is to discredit your proposed ideology. It is clear by your comments, your scheme is nothing more than a confused and vaguely thought out utopian fantasy. The economic contradictions are enough to consign your scheme to failure. The ominous authoritarian attitude behind your solutions to troubling obstacles is enough to warn any sensible person away from what is yet another utopian nightmare.

  • You wrote it, Grady. Whether you meant it or not I can’t say.

  • Cort, good to hear from you. You are probably right about Proudhon’s personal failings. Like Engels and Marx–who referred to Ferdinand Lassalle, as I recall, as “that dirty Jew of negro blood,” many people of those times had many such failings. Proudhon was probably more rotten in this regard than Engels, Marx and many others, given his upbringing and down-trodden mode of life.

    Proudhon was a printer and a worker, and it would seem natural for him to have been anti-Jewish. The monopoly European banks of the time were often owned by Jews; and these banks had torpedoed his “Bank of the People,” which sought to extend capital credit without interest to worker-owned mutual enterprise.

    I repudiate any and all of those racist and misogynist attributes of Proudhon. We advocate a world network of socialist cooperative republics which will end both the evil of bank usury, and all forms and sentiments of racism, sexism and exploitative class-ism.

    I have a chapter in the first part of my book “Hope for the Future” that focuses on what we perceive as the theoretical advances of Proudhon’s political thought.

    But we are not Proudhon-ists, Cort. We try to build a movement and party based on correct programmatic principles, not on affection for some dead leader of the past.

    Proudhon opposed the conversion of the socialist movement into the state monopoly-ism of Engels and Marx, and we appreciate his stand in this area. Unfortunately, he died in 1865 and his followers had to carry on the struggle for a non-state monopoly form of socialism without him.

    Let’s try to get out of the habit of basing how we feel politically by tapping into this dead individual, or that one. You may admire Trotsky, who never had a good word to say about worker-owned coops; and who was a state monopoly socialist like Marx, Lenin, Stalin, Mao, Ho, Fidel and Raul. But what you, I and the whole socialist Left should do, I would argue, is stick with a discussion of maximum and minimum program, and see if we can regroup around a new understanding of the nature of real socialism, and win the masses.

  • I think you are mainly pissed, Griffin, because our cooperative socialism discards Marxism; and Marxism, by perverting the socialist program as state monopoly ownership, is the main ideology that disorients the socialist vanguard and keeps it from ending monopoly capitalism.

  • Point of clarification: Engels and Marx wrote very specifically about “socialism.” To review it, go to the last two pages of the second chapter of the Communist Manifesto. The little poison pill that has caused most of the trouble however is on the next-to-last page.

    Also, taxes are essentially a redistribution of wealth, as you say. In contrast to how it’s done under capitalism, a coop republic would accomplish this redistribution through partial, silent co-ownership of most significant industry and commerce, thereby obviating most taxes and all tax bureaucracies.

    Point of agreement: Your last paragraph is a fairly good general concept of a socialist cooperative, state co-ownership republic.

  • I never said or meant any of that, and you ought to be ashamed for saying so.

  • Then, I withdraw my invitation; and ask you not to read my books.

    You do not participate in a meaningful discussion. You falsify our proposal for a new form of socialism, then turn around and hurl names and insults at the false creature you have created.

  • I repeat, your solution to the world’s problems is to maintain the status quo, i.e., world monopoly capitalism. You can deny it all you wish, but that is the truth.

  • I did not state “very clearly that private enterprise would be illegal under your system and that the so-called private ownership of co-operatives would be so extensively limited and constrained as to make it meaningless.” Where did you get that falsehood?

    The reason my “system” is not “authoritarian and totalitarian” is because we will have redefined socialism as valuing and utilizing that one power in society that is strong enough to prevent authoritarianism and totalitarianism: private property.

    We argue that the socialist state does not need to own all productive property, but can own most significant property partially and silently, and make socialism a working collaboration between the industrial and commercial workers, small business community and intelligentsia, all without taxes and tax bureaucracies.

    Griffin, I cannot answer you if you make false statements as to what I’ve said, or regarding what our movement advocates. Every person who reads your comments therefore should be aware that you are trying to discredit the concept of a socialist cooperative, state co-ownership republic–whether in Cuba, Canada or the US–through falsification.

  • Compulsory purchase is acceptable and happens all the time. If the government wants to build a road through your land it will do exactly that. Compulsory purchase happened when the large estates were broken up in the UK and also when the railways and coal mines were nationalized after the war. Nobody was gulaged. You don’t have absolute property rights and the people who work for the business have rights to the profit they created. If you don’t agree you campaign to change the law.

    A fair price can be weighted in favour of either the buyer or the seller it simply depends on the formula that is implemented.

  • Given that the ‘accused’ appeared here at HT at the exact same time and are always the ‘first guys’ on every single post spewing the same old venom, I wouldn’t be surprised. Their God’s puppet regime tortured even babies (!) here in Brazil – nobody sane would defend tooth and nail Uncle Sam’s interests by their own will.

  • First you had suggested these countries are “socialist”. Now you say they are monarchies?

    I am well aware of the fact the UK, Netherlands and Canada are technically defined as constitutional monarchies. But you miss the point that the monarchies are figurehead institutions and that the democratically elected parliaments hold the power of the State.

    You wrote,

    “Arguably, the best form of government is a mixed economy where the market rules for the most part, but the government plays an important regulation role on it and implements sound social policies, while representing the will of their citizens and of course, respecting individual freedoms.”

    Agreed. That sounds for the most part like my country, Canada.

  • Now you call me “juvenile” and insult my ability to think and feel. You really can’t stomach criticism of your utopia, can you?

    These phrases of yours are revealing:

    “the US cooperative republic, if led by our movement/party”

    “The new society would seek social cohesion”

    “the tasks of building a new society.”

    “the new gov’t would “ruin” the rental market by making domestic and small business property owned by those who have paid for it.”

    “The Cooperative Republic doesn’t threaten anyone, not their lives, their freedoms, nor their property.”

    That last sentence is contradicted by the preceding 4 sentences. There’s the “tell”: your system is as totalitarian as all the other utopian socialist fantasies.

    By the way, I assume your new government would take over all the privately owned newspapers, TV & radio stations, taking a controlling interest by the government too? Well, there goes the freedom of the press! No watchdog to observe and report on the powerful. No means by which the public can communicate criticism, raise complaints or advocate for alternative ideas. Given your demonstrated inability to stomach even the mild criticism I have written here, just imagine how the ruling class in your “new society” would deal with real dissidents.

    Thank you for you invitation to read your book, but I have already read enough to get the general idea, as well as the classics of utopian literature: Orwell’s “1984”, Zamyatin’s “We”, Huxley’s “Brave New World” & etc. They always end the same way don’t they?

  • Grady, you make one statement and then when I offer a critique, you move the goal posts and suggest other arrangements might be possible. It sounds like you’re making this up as you go along.

    And now that I have effectively critiqued your whole system and pointed out some of the contradictions and underlying anti-democratic authoritarianism inherent in it, you respond with personal attacks, calling me “mean spirited”. Classic.

    I reject the assumption that there is any perfectible solution to the world’s problems. I insist that any attempt to enforce a utopian vision will compound the problems while introducing even worse problems. In that respect, your proposal is little different than all the other tried and failed utopian socialist tragedies.

  • Show me where I am wrong. You stated very clearly that private enterprise would be illegal under your system and that the so-called private ownership of co-operatives would be so extensively limited and constrained as to make it meaningless. Your stated solution to any alternative activity is to ban it. Your system is as authoritarian and totalitarian as any other socialist utopian system.

  • Marx talked about communism, he never said a single thing about socialism. And you are wrong regarding the form of government, Netherlands, Canada and UK are technically constitutional monarchies, not democracies.

    Capitalism is about trusting self interest to generate wealth, while socialism is about the redistribution of wealth in fair way. As I mentioned before, both systems use the EXACT SAME mechanism to produce wealth, the divergences between the eastern block implementation is that they had a bias against monetarist principles.

    How you redistribute wealth is not important. Capitalist countries tax their citizens to divert money for tasks that usually the citizens won’t pay themselves, like army forces, police services, law enforcement, fire extinction services, public libraries, road maintenance, government, etc.

    Redistribution of wealth is necessary precisely because the market is not interested in provide said services in a cost effective matter, so the government takes the responsibility for the task and charge all citizens to provide the service in the form of tax, Tax is essentially redistribution of wealth, and regardless of how and where you spend those resources, said redistribution is precisely what socialism is about.

    When you look at things from this angle, neither capitalism nor socialism has been ever implemented in its pure form and the reason is that both are equally destructive.

    Arguably, the best form of government is a mixed economy where the market rules for the most part, but the government plays an important regulation role on it and implements sound social policies, while representing the will of their citizens and of course, respecting individual freedoms.

  • Utter nonsense, Griffin. If you had read my book Hope for the Future–which you can get on Kindle, Nook or iBooks–you would know that the US cooperative republic, if led by our movement/party, would guarantee the equity of all business persons.

    This would even include landlords of any size, and here is the reason why. The new society would seek social cohesion, and would try to refocus the energies of landlords and all sophisticated citizens on the tasks of building a new society.

    The new gov’t would, over a period of perhaps a decade or two, “ruin” the rental market by making domestic and small business property owned by those who have paid for it. To achieve the cooperation of landlords, many of whom are highly able, patriotic individuals and families, the new republic would compensate any and all loses of rental property equity.

    Private property is, in a very real sense, almost sacred to us, and this would be protected in all cases.

    The Cooperative Republic doesn’t threaten anyone, not their lives, their freedoms, nor their property.

    “dani” put forward a good idea, thinking in constructive terms. You shot it down in an almost juvenile way. So much for your ability to do creative thinking. Thank God that cooperative socialism does not depend upon your brain and heart.

  • Your have falsified everything, Griffin.

    The percentage share held by socialist government would vary according to various factors, and would be completely re-adjustable and re-negotiable. Most likely it would range between a quarter and a third, but the percentage might reach up to 50%, for various reasons.

    If any enterprise–whether private-independent or associate-cooperative–should wish to pay taxes in lieu of allowing a percentage of silent ownership share to gov’t, that might be arranged; but that enterprise would then have to pay approximately the same, and would also have to bear the extra expense of gov’t tax enforcement.

    But I think farmers and ranchers should not have the gov’t take a part-ownership share, or pay any sort of production taxes. They do primary production of use-values, and all their costs must be passed down the line to end consumers–who are always the working, consuming public. Also, they produce our nation’s food and care for their lands and the surrounding lands and environment. Plus they support the local culture and communities, and whatever stays in their pockets goes into local communities, by one route or another.

    You are lashing out with all sorts of suppositions and mean spirited accusations that are completely wrong. I think you simply feel you must discredit the idea of a democratic, cooperative, state co-ownership republic, no matter how nonsensical your misconceptions might be.

    Your solution to the world’s problems is a continuation of the present domination of the monopoly banks and bourgeoisie. I’ll compare my cooperative socialism to your anti-human, earth-destroying monopoly capitalism, any time.

  • What you say is completely and utterly wrong.

    As for monopoly capitalism, with all its brutality and blood-sucking, no thanks. Keep it for yourself.

  • The countries you mentioned might be called “mixed” but in fact are essentially capitalist liberal democracies with limited social programs and a few state owned corporations. It would be an exaggeration to call them “socialist”. Certainly not at all in the Marxist sense of the word. Currently, the governments of Switzerland, Canada, the UK and Netherlands are all led by conservative to centre-right parties.
    Social programs do not equal socialism.
    I’m well aware of the multi-dimensional political compass systems, with seperate axis for economics and political components. That metric describes how China kept the totalitarian political control of the Communist Party, while opening up some degree of economic liberalization, if under the political domination of the single party state.

  • That, I don’t know. But the ability to carry long term strategic goals is certainly there and requires centralized planning and patient to execute it.

    And you are wrong on your assumptions. Socialism and market economy are not mutually exclusive. Highly developed countries like Netherlands and Switzerland and to a lesser extent UK and Canada ARE socialists.

    The political spectrum is not linear, left and right are useless terms because conflate individual freedoms with economical policies in a single denomination. To better understand my point, take a quick look at the political compass explanation:

    Is very short and you can even take a test to see where you fall and compare yourself to several world leaders.

  • Exactly as I described it above: the erosion of private property rights. Suppose I didn’t want to sell my business? Who is going to force me? What will they do to me & my property if I refuse? What you propose is a system in which the gov’t has the power to take away an individuals rights when it suits them.

    A fair price cannot be determined in a system where the owner is being forced to sell against his will. The gov’t will set a price it likes, and as Grady described above, the gov’t will take a 50% share, that fair price will favour the buyers, not the sellers.

    And if I refuse to sell my business, then it’s to the gulag for me.

  • Your thinking is very incisive, ac. A person like you is vitally needed in our future Program Institute. Please become a socialist cooperative republican. Read my books.

  • I’d just like to tell everyone that Vincent Morin received about ten times more copy from me, in response to his many questions, than is published in this interview.

    His editing, while generally very good, also has allowed a few creative, unintentional inaccuracies. In addition to thanking him, and all who read this interview for your participation, may I also ask that you recognize something important. What I am quoted as saying in the article is perhaps but 98% accurate. If you have questions, please give me the opportunity to respond and perhaps clarify.

    Thanks to you once again, Vincent, for this interview; and to the noble Circles Robinson for its publication.

  • China does not have an accurate overview of their whole economy. No government ministry in any sort of economy does. Certainly not in a country with such massive institutionalized corruption as exists in China.

    Also, China does not have a socialist economy. They have a capitalist economy, with a mixed private and state ownership sector and a single party political dictatorship. Nobody knows how well they can manage their economy because they govern in secret, control the media and suppress the free speech. It’s a given that the economic statistics released by the Chinese gov’t are invented for domestic and foreign consumption.

  • How about this.

    Put a law in place that any company that employs more than say 5 people every 5 years has to give its employees a vote as to whether they wish to take over the company as a cooperative. If they vote yes, they buy the company from the current owner according to a formula ie reimbursing plus whatever is fair. On the other hand it might be taking over existing debt.

    The original owner then has a choice either to stay on as manager as long as the cooperative members are agreed, apply to become a manager of another cooperative or company, freelance as a consultant or even start another business.

    So Griffin no Gulag, just a vote. And if you would rather have money-grabbing Moses rake in the profit it would be your choice.

  • Hopefully you are not advocating Proudhon as a non Marxist socialist to follow or even his style of so called co-optism, he is well known as one of the most thoroughgoing authoritarians in the history of radicalism and as the “Father of Anarchism” and he hated trade unions, the working class and supported breaking of strikes by them, he said “The Jew is the enemy of humankind. It is necessary to send this race back to Asia, or exterminate it…” and his racism in general as he thought it was right for the South to keep American Negroes in slavery, since they were the lowest of inferior races and the slave owners private property as were his thoughts on women.

    George Lichtheim, in his book The Origins of Socialism, has written quite
    accurately that

    It is difficult to name a single author, alive or dead, of whom Proudhon
    ever found anything good to say. His other crochets included antisemitism,
    Anglophobia, tolerance for slavery (he publicly sided with the South
    during the American civil war), dislike of Germans, Italians,
    Poles–indeed of all non-French nationalities–and a firmly patriarchal
    view of family life … After this it comes as no surprise that he
    believed in inherent inequalities among the races or that he regarded
    women as inferior beings.

    Give me Marx any day and Cuba would had been better off following him rather than a degenerated Stalinism.

  • There is a simple rationale to the dual currency with an arbitrary conversion rate: to milk as much as possible the money sent to Cuba from abroad, while keeping the costs of the Cuban labor in mixed enterprises at a minimum possible.

    What they missed completely is that by doing so, they artificially make the Cuban labor less competitive in the world market, effectively undercutting their own goal of move towards a service economy.

    Sectors like information technologies can produce a sustained net growth in a country like Cuba (where education is free and widely available) with a minimum inversion, but the fear of losing control still keeps IT professionals out of the self-employment professions and an absurd monopoly of international contracts where Cuba receives the full payment for the work in hard currency while paying their professionals in CUP at a 1:1 ratio.

    The result is that instead of a new India in the Caribbean with a booming IT sector, they have a painful drain of IT and CS professionals while losing billions in missing opportunities.

  • It is remarkable how readily, even happily, you declare your willingness to use the brute force of the State to crush anybody who does not conform to your economic & political system.

    You wrote that the State would automatically take a 50% share of any and all businesses, a limiting condition in private ownership by definition.

    You wrote that private businesses not operating on a co-op model would not be allowed. Therefore, I would have a choice of either working for a co-op, or starving to death, given there would be no other legal field of work or enterprise. Your system is simply another version of totalitarian socialism.

    Suppose I were to go out and start my own business anyway, hiring employees and paying incentives for good work. I could out-compete your co-operatives and my business would grow. But your State would come by and shut me down. I would refuse to stop my business and your police arrest me, seize my property and toss me in jail. So much for freedom and human rights in your utopia.

    Your fanciful Co-operative Socialism has now become Grady’s Gulag.

  • Your comment is funny because both communism and capitalism are based in the exact same model, the only difference is the name of one single variable in a single equation (plus-value for capitalism and plus-product for communism).

    The problem with the form of socialism implemented in the countries of the Warsaw pact and Cuba is the psychological dislike of money as a measurement of value. Since monetarism was anathema, they tried to predict the material flow in the economy, which by itself is very hard to do and wasted enormous resources trying to micromanage things that were of no importance whatsoever and all of that without even having computing tools at hand.

    But the thing is, socialism is exclusively about the redistribution of wealth, there is nothing implicit to in the word that prevents a socialist regime to switch to a monetary system to control and plan their economy, and since they have an accurate overview of the whole economic activity, they can plan and successfully execute strategic policies more effectively that capitalist countries. Take a look at China as an example of the above.

  • Tyrone, please see my comment below, to “Moses, John and everyone,” regarding accusations of people being “agents provocateurs.”

  • I can’t answer all you’ve said, ac, but the financial system of any modern society, capitalist or post-capitalist, is the functional heart of that system. How money is created is of paramount importance.

    Here is an example. Let’s say there is a skilled iron-worker in one province. He or she can work either rebuilding a bridge that has been destroyed by a hurricane, or constructing a high-rise office building. He or she can’t do both, at the same time. How is the work assignment to be made?

    Whether under a capitalist or a socialist republic, in order to shift this worker from the less-needed high-rise office building, to the more-needed bridge, the financial capital (the “paycheck money”) must dry up at the office building work-site, and re-emerge at the bridge work-site.

    This would mean that funding would be suspende at the office building site, construction would be suspended, and the iron-worker would be laid off. At the same time, he or she would be offered a job on the bridge construction project.

    This shifting of workers around, to what is thought to be needed, can best be done through a fractional reserve credit/money system. The “though to be needed” process would be fundamentally different under capitalism or socialism, but the financial mechanism by which this worker shifting occurs, would be about the same–with specific peculiarities, of course.

    Fractional reserve credit horrifies the Libertarians and the Marxists, alike; but the truth is, it is one of the great inventions of civilization. What is needed is a social system that understands it and utilizes it to make post-capitalism work.

    The dual-currency system in Cuba makes no sense to me; but then neither does the state monopoly ownership system, stipulated on the next-to-last page of the second chapter of the Communist Manifesto!

  • You are a very creative thinker. You zero in on the problems at hand. We may not agree as to how money is, or needs to be created under socialism, but everything you say is food for thought.

    One thing is certain in my mind, and that is that the dual-currency is a bad idea, and may even have been promoted within the PCC by elements whose motivations are in question. I mean, what the fuck? You come to Cuba from any country, and you exchange your currency into Cuban currency! Nothing could be more logical or more simple.

    The points you raise, ac, with how the dual-currency screws up planning, etc., seem well taken.

    Perhaps there’s something I’m missing, but . . .

  • To both Moses, John and everyone, we have learned, through long and hard historical experience, that agent provocateurs come into the progressive movement, trade unions, etc., and sow dissension by making accusations of people being “agent provocateurs.” For this reason, we need to take everyone at their word, and stay focused on the arguments presented.

  • Thank you for your detailed response to my questions. It seems clear that the system you espouse has two fundamental problems.

    1. It is authoritarian structure and function, denying people their fundamental human rights. In that sense it is little better than the Marxian dictatorships that have plagued the world for almost a century now.

    2. It is yet another utopian delusion which proposes to re-invent human society along some ideological lines into which humanity, with all its variety and individuality, must be forced to fit.

    No thanks.

    The railroad to utopia leads straight to the Gulag, to the Holomodor, to the Killing Fields, to the UMAP Camps, to Auschwitz, to the Great Leap Forward, and to all the other totalitarian nightmares of the 20th Century.

  • Excellent points, John. Great minds think alike. ha!

    Please see, in my response to Griffin above, the bit about P-J Proudon, and the “state versus private property” idea.

    Proudon’s thinking evolved through the living laboratory of both working life and first-hand revolutionary experience. He did not live long enough however to come up with the idea for cooperative, state co-ownership, to avoid a tax-based state.

    I’m enormously impressed by what you’ve written. You seem really to “get it.” Kudos!

  • You are jumping to an unwarranted and erroneous conclusion, my dear Moses.

    Under cooperative, state co-ownership socialism, ownership of the “preferred” stock shares held by government would be legal shares that would–as under capitalism–be paid dividends first, before the workers’ could distribute quarterly dividends to themselves.

    (By “workers” is meant all members of productive enterprise, from top to bottom.)

    The state’s share–and by “state” I mean “government” at all levels, b/c cities, counties, states the central gov’t would receive revenue primarily in this manner–which would serve the same function as does taxes (i.e., shifting an adequate share of the use-values produced by society’s workers to government, to make possible all those many things that gov’t can and must do), but this share would not be “taxes.”

    A cooperative republic means the historic end of income, business and property taxes, and the parasitical, wasteful, arrogant tax bureaucracies needed to enforce them.

    A token national sales tax, paid at all points of sale, would probably remain in place, but not as a significant garner of state revenue, but as a way to collect economy date, for macro planning and various data-based economic science.

    Certain “sin taxes,” especially at the “point of sale,” might remain for a long time, as needed to help manage certain unhealthy activity.

    By shifting gov’t revenues to partial, silent co-ownership, not only would taxes and their inevitable bureaucracies be obviated, but those who do the productive primary production of an economy would have more meaningful, more enjoyable, more creative working lives. Why? Because they would be, as direct owners of the work enterprise, in control of their own free destinies.

    Entrepreneurial leaders could still be comparatively wealthy, but they would not suffer the alienation of being exploiters, making off with an unjust share of social produce, as under monopoly capitalism. Yet, they would not pay, or be annoyed by, income or capital gains taxes, no matter how much they might make; nor would their real or other properties be taxed. They would simply play their leadership role, be duly compensated, and feel a part of the national and international family of hmanity.

    Instead of attacking cooperative republicanism, Moses, you would be much happier by getting on board, and helping to bring such republics into being, in Cuba, the US, and in all countries, before monopoly capitalism destroys us all.

  • Uh, Griffin, you are misinterpreting. I apologize for not making myself clear–there is so little time and space in this comments section.

    People in a cooperative republic would have complete freedom to join or not to join a coop. “Voluntary membership,” as you may or may not know, is one on the cardinal principles of the international cooperative movement, and has been for more than 1 and 3/4 centuries–since the 1844 founding of the Rochdale consumer coops.

    Also, they would have the freedom to create new enterprise, within normal law. But consumers would have the right to vote with their dollars, and the entrepreneur would most likely choose a coop structure for a newly created enterprise, for all the advantages it would offer–especially augmentation of the entrepreneur’s larger share of profits.

    A coop republic simply would return private property rights to socialist society, and eliminate the dictat of the Marxian, state monopoly deviation.

    You see, Griffin, P-J Proudhon came to believe, esp. after the experience of the 1848 revolutions, that the state is necessary under any sort of workers’ republic; but that there needed to be some force in society to keep it from becoming tyrannical.

    That force, he believed, is private property, for it is the only force strong enough to counter-balance the raw power of the state.

    Bourgeois thinkers had already came to the same conclusion regarding private property versus the state power. Proudhon argued however for that private property to be in the hands of those who actually do society’s work, the rural producers on the land through private plot/enterprise ownership, and coop workers of industry and commerce through mutuals and coops of all sorts.

    Proudhon also called for, and tried to establish, a bank of the people to extend credit without the evil parasitism of usury (interest). It is no wonder therefore that the bankers knew he had to go, and Engels and Marx came in and struggled to do the job.

  • Theory is not reality. They may think they had control of it, but they did not. Each individual human being is an economic element. It is impossible to know all the information in a national economy, therefore it is impossible to analyze the data, and therefore it is impossible to implement optimal policies. Add to that the distortions introduced by absurd and arbitrary political diktats (10 Million Tonne Harvest…) and the situation becomes farcical.

    Furthermore, socialism is based on erroneous and faulty economic models.

    This is worse than “garbage in = garbage out”. In a socialist centrally planned economy, the process is “unknown garbage into a garbage model = unknown garbage out”. The result has consistently been economic failure. It has never worked, whatever the variations or tweaking.

    Three Economic Arguments Against Centrally-Planned Economies

    “There is by definition no private property in the means of production. Hence, there will be no market in same and no prices can be established. Without prices, economic decisions will be made by planners on bases other than the supply and demand for capital goods. There is no way to know if production processes are efficient at all, or if it is suspected that they are not, how they could be made better. There is no calculation, there is only continuous shooting in the dark at every step of production from raw resources to finished goods. Thus, a purely socialist economy could never exist. The attempts by various communist regimes at perfect socialism necessarily could never reach their aim, and historically never did. But it did not stop them from steamrolling their own populations trying.”

  • The thing is, Cuba made a transition -in some aspects incomplete- from a product based metrics to a finance based one. And since they didn’t want any capitalist influence in the process, they tried to reinvent the wheel with disastrous results.

    The problem for the Cuban government is not the money supply -they can print as much as they want like everyone else. The problem they have is they HAVE to control the inflation no matter what or they WILL face a catastrophic collapse,

    As for the source of capital, the first and most important feature of capitalism is trust. You MUST trust that the money borrowed will be returned with the interests paid, but as I explain in my response to Moses below, Cubans dont have any reason to trust almost any individual and institutions are made of individuals.

    If you allow an individual to borrow money from the central bank, nothing will prevent him to sell all his or her assets, convert everything in hard currency an leave the country for greener pastures, effectively creating a deficit that won’t be payed never.

    Cubans needs a lot of work before coming to that, as I mentioned, first remove the dual currency to be able to actually understand the economic processes in place and invest were it makes more sense, second increase the value of the Cuban wages and third remove all forms of corruption as accepted sources of personal income.

    Whatever the new currency is going to be, the conversion ratio should be in favor of the CUP. I estimate it between 10:1 and 15:1 ratio. If it where in my hands, immediately after that I’ll start by making transparent all economic flows within the government payroll currently hidden, including the taxation of personal income, retirement funds and so on to make them compatible to the rules applied to self employment and finally I’ll create a controlled inflationary process by increasing the wages to the critical sectors are proportionate to their economical and social importance and create an incentive for people to actually work there.

    As for the corruption and black market, I think they should do what the rest of the world already does: move towards electronic transfers by making widespread use of personal debit and credit cards. That way the central banks will have a better understanding of how and where the money flows and can start making actual financial policies.

  • In that you are wrong. In the past they had absolute control of all economic actors, so they knew the individual requirements for each and were able to plan accordingly. See the input-output model to have an idea of how it should work:

  • Good point, the black market and illegal activity in general is what kept the economy at float in the dark days of the “special period” and even today serves to keep the economy in equilibrium.

    In general, to move the economy forwards there are three things that need to be resolved, and all of them ironically depend in good planning:

    1. The removal of the dual currency nightmare. As I mentioned before, there is no way to objectively measure performance with two currencies operating at different exchange rates based on arbitrary rules the 6 identifiable markets existing in today’s Cuba economy. Everything else you can do to fix the Cuban economy must start here. And yes, there is a very visible and painful political cost, and that cost is the acceptance that indeed, Cubans work for peanuts. In the current situation they can argue that an average citizen earns more than the equivalent $20 USD because the state subsidizes a lot of products in the ration book, and services are free, so is not possible to use a direct conversion using the 25:1 conversion rate to measure acquisition power, but it’s been already 20 years in the same situation, is about time they stop hiding the head in the sand and accept the truth,

    2. Restoring the value of the work. The special period devastated the value of the CUP, while salaries kept frozen or grew very little and with the plummeting of the value of salary, the incentive to work became zero. This creates a negative feedback that halts any economical growth. Basically it created a collective mentality that “If my work is worth nothing, I’ll either
    a) try to move to a position where I’ll be paid in hard currency
    b) I’ll put my dirty hands in something of value I can sell in the black market to make a living
    c) I’ll take things easily and work as little as possible.

    3. Linked to point 2, there is a widespread issue of corruption affecting every economic venue and leeching any profit they may have. Theft of public property became an acceptable way of living and even got their own set of euphemisms to differentiate from stealing from individuals. Cubans don’t steal from the government they are “en la lucha”. I don’t have hard numbers for this phenomena and I doubt anyone could measure exactly how much is costing to the economy, but depending of the industry and the steps from the consumer it can get as large as the 30% of the production, because people steal raw materials, people reduce the quality by substituting raw materials for low grade equivalent or simply water it down if possible, people steal final products at the factory, while transporting, in the warehouses and even in the stores. Then since the demand is always greater than the offer, people buy all of it from the shelves and resell it for 20-50% of profit margin in the black market. And thorough the whole ordeal, the directors steal in industrial quantities, the security guards get bribed to allow the extraction of the stolen goods and since is so widespread, the police is to busy to make anything at respect.

    The three points above are the core of the Cuba issue and the idea is resolve the situation without blowing the country to pieces. And this is the reason I supported Raul as the candidate for the first term and his reelection this week, he is a very pragmatic person, and not an “I know better about everything” like the brother, also he has not been exposed to the corruption except for squashing it whenever he finds it (believe it or not, the military industry was the only one that kept a semblance of order while the rest of the country sunk into chaos, to the point that made them self sufficient and an active economic powerhouse that sustains and complement key aspects of the country and pretty much the only leadership trusted to not be already corrupt) .

    Add to that that he accepted the position because of duty and not personal ambition (he loathes being in the public eye not to mention public speeches, is used to command, not convince and in general there is no personal benefit for the position he didn’t already had as commander of the army and second secretary of the party), the fact that he is not an ideologue like the brother and actually delegates responsibilities and demands results and is not hard to understand why I think he is the right man for the position under the current circumstances.

    Also, to put it bluntly I don’t think any of the others (including Diaz-Canel) have both the balls and the political clout to make the changes that needs to be done in order to leave the crisis behind. And as I mentioned before, the opposition is completely clueless about current Cuban issues and lacks a workable plan about how to solve them without selling the country to the lowest bidder or letting the vulnerable sectors of society rot and die in misery.

  • Sad. Very Sad. Wish I could say more, but gotta earn my beans. They don’t pay me to make comments. (Close your mouth, You busted bro.)

  • The only reason the ‘chaos’ of the currency system has not imploded is because 99.9% of Cuba participates in extralegal activities to make ends meet. Otherwise, if the only money available to transact life’s needs had to met with money generated by legitimate trade, the Castros would have long been exiled to their Venezuelan villas. As it is, Cubans would trade in buttons if they were accepted in exchange for food and services.

  • If government, as a silent non-working member of the coop, receives remuneration, isn’t that a tax by a different name? Who decides the amount of payment to the government? What happens if the coop votes to not pay the government? If it walks, quacks, and craps like a tax, it must be a tax.

  • Thanks for the back-handed complement. If it would not surprise you that I am on somebody’s payroll to do this (categorically am not), it must mean I write well enough to get the job.

  • Wow? I had not heard about that. Do you mean what I am doing for free I could get Uncle Sam to pay me to do? Seriously, if this is true, so what? As long as the blogger, while sharing their biased views continues to tell the truth, no harm no foul. You, as the reader, can then make up your own mind to believe it or not. The Cuban government certainly does not have a problem doing the same thing to serve their interests. Go to the wikipedia site for Cuban dissident Eliecer Avila (I’m too lazy to get the link right now). His former job for the Castros was to troll Cuba-themed websites and spew canned venom. I know someone who currently does the same thing. (what’s ironic is that he sells illegal internet access to make extra money) As mentioned by Griffin, their SOP is to attack the credibility of the blogger by name-calling or by deflecting. If the criticism is that there is no toilet paper in the stores in Havana, they respond by criticizing the US involvement in Vietnam. They never deny or dispute the criticisms, and certainly never admit when the criticism is true.

  • To say nothing of the ‘mercado negro’ or black market that exists and thrives in Cuba. It largely fed through the theft of government-purchased or produced goods with a sliver coming into the country by tourists legally and illegally. This market as it relates to clothes, electronics, entertainment and legal and illegal drugs is widely believed to be larger in dollar value than the comparable legal market.

  • You probably know more about the Cuban economy, and the two-currency phenomenon that has developed than I do. As near as I can determine, the state control of the credit/money/banking system simply cannot generate either capital or consumer credit in sufficient or “correct” amounts, and this seems to exacerbate the chronic constipation of the bureaucratically handicapped production and distribution process.

    I tend to critique the Cuban financial system by looking at how our capitalist financial system creates the money supply. This helps me understand how an authentic cooperative republic would need to create money, both consumer and capital. And so, let me take a stab at suggesting how Cuba’s dual system might be rectified.

    First, money needs to be created under authentic socialism, in part, by how it’s created under capitalism–by a fractional reserve credit system. Differences would be (1) that community and commercial banks would be owned cooperatively, by both depositors and bank workers, not by private capitalists; and (2) money would be created by extending credit to qualified borrowers, thereby “poofing” demand deposits, but not charging time-based interest (usury).

    In such a tweaked Cuban system, coop banks would charge a lucrative-enough, one-time-only credit generation fee, but never interest. Usury, that is, time-based interest on credit debt, would be abolished constitutionally.

    The central bank might be owned by the central government, but even this might better be co-owned by the state and the coop banks. Otherwise, loan officers might be civil servants, and this would almost guarantee inefficiency, corruption and gold-bricking.

    I hope this addresses some of your questions, ac. Your comments are very interesting, and I feel as though I’ve not done a very good job. In any case, thanks and best wishes.

  • Economic democracy seems to be at the center of your cooperative economy and this is what is needed for long-term equity and success.

    I think the part-ownership by the government is a superb idea as long as it is a minority share and the workers maintain control given that any government long enough in full control ultimately becomes self-preserving, corrupt and totalitarian as the Cuban government has.
    ( an anarchist core belief)

    Capitalism is openly totalitarian at its base and totalitarian thought needs to be relegated to history’s trash heap and something like Kropotkin’s “Mutual Aid” society be reintroduced as the way forward for humanity .
    Your cooperative society would seem to fit into this thinking.

    Capitalism’s undemocratic and immorally inequitable means of distribution of essential goods and services simply does not fit into a societally-evolving and morally advanced humanity’s future

  • Wow, Griffin, to answer all that in a short space, I would have to have supernatural powers. Don’t expect every, or even most ideas or points to be addressed.

    It’s not whether Engels and Marx were bourgeois–they unquestionably were, as Proudon was unquestionably a worker/intellectual. It’s a point of clarification that they accused Proudhon of being precisely what they were, in order to try and destroy his credibility before the industrial workers.

    In order to commandeer leadership of the socialist movement and bend it toward a non-charismatic and non-functional core principle of state monopoly, they needed to attack the main proponent of a form of socialism which retained private property rights, but made that property owned directly by both workers and peasants. It took them thirty years of struggle to accomplish this, but they finally did. Too bad for authentic, workable socialism!

    To understand primary worker cooperative ownership, we need only look at the Mondragon model. A worker owns 1 share, and this share can only be purchased and held by her or him. Capital share would increase through the years, if the coop were successful, but a worker’s share could not be sold off to anyone not working there, and occupying that certain slot. All this has been perfected, and we need not, and cannot spend too much time on it.

    And yes, the workers can get rid of a co-worker who is not performing, and this, as I understand it, is done occasionally. It’s somewhat rare however, because coop property owners usually take of their jobs, and take care of production responsibilities.

    I think your third paragraph makes valid points. How, indeed! But these points are not the main reason 100% state monopoly is retrograde. The primary reason is that workers need to have a sense of ownership, in order to run production enjoyably and patriotically; and their weekly paychecks and quarterly dividend must be a reflection of how well their enterprise functions.

    State monopoly converts the workforce into wage and salary serfs, in a way that, ultimately, is even more corrosive to the spirit than is done within capitalist enterprise. Only sectarians cannot see or understand this simple truth, as historical experience seems to indicate.

    As to your fifth paragraph, yes, you could indeed be a private entrepreneur in a cooperative republic, but you would be prevented from enterprise that is detrimental to society or goes against certain salutary guidelines. Also, it’s unlikely that you would find many workers who would submit to a work environment that would make you a billionaire, while they live day to day, paycheck to paycheck.

    You should remember as well that authentic socialism would do away with involuntary unemployment, and so getting citizens to work for you would not be a easy as it often is under a capitalist regime, under which there is always a reserve army of unemployed and marginally employed.

    As for your last paragraph, we have the beginnings of a movement. Most of the Left cadre are cocooned by Marxism, Anarchism and Anarcho-sindicalism. The Cooperative Republican Movement is numerically insignificant at present. But we are optimistic.

  • Given that the U.S. has been waging a terrorist, biological warfare and now and economic war on the people of Cuba for over 50 years, it would hardly be surprising if the ubiquitous Moses and a few other pro-capitalist posters were paid to put up posts that denigrated the Cuban Revolution.

    It is no secret that Granma is a pro-government rag and hardly worth reading .
    It has been my experience over ten years or so at several websites where I comment that the counter-revolutionary elements have the greater tendency to make unsubstantiated accusations against Fidel and the state socialist system than do supporters .

  • You descrie a system where people don’t have a choice whether they want to live and work for co-operatives. Suppose I don’t want to live like that? What will the government do? Force me against my will? Toss me in jail? Liquidate me? Those have been the solutions of all the other utopian systems thus far tried. Why would yours be any different?

  • You make a good point about the chaos of the two currency system. However, the Cuban government still pretend they have a centrally planned economy. Understand, that at no point did they ever actually plan the whole economy. It’s not possible to do so. There has always been a gap between policy and quotas on the one hand and reality on the other.

  • If that’s true, where do I apply? I’d love to get some of that gov’t money. Nothing would be easier than writing bad new about a failed leftist octogenarian oligarchy.

    But seriously, “Tyrone”… it is well known that the Cuban gov’t pays staff to write comments on Cuba related websites & blogs like this. Their comments tend to avoid debating actual issues ( a losing proposition) and instead focus on personal attacking critics of the Cuban system.

  • I’m on my lunch hour, Moses. I’ll have to respond to you, Griffin and possibly others later this evening, but thank you for opening a well-reasoned dialogue.

    First thing to “perfect” is how this modern form of socialism can best be described. It is the modern cooperative, state co-ownership form.

    This means that there would be pluralism with regard to ownership of the means of production. Many enterprises would be privately owned, with deeds and all the sort of thing; but much of significant enterprise would be owned primarily by the working associates, on the Mondragon coop corporation model.

    But here’s the kicker: the socialist state would take partial, silent ownership of most enterprise, and get its necessary revenues quarterly through declared dividends, similar the way capitalist investors get their dividends.

    A good proportion of enterprise would be owned by government at every level of course, and civil service employment might even occupy a quarter or third of the workforce.

    A cooperative republic therefore would mean the historic end to both taxes and tax laws and bureaucracies, on the one hand; and 100% state monopoly ownership, on the other, for government revenues.

    The socialist state, and the people through their government, would decide all sorts of questions as you raise about education, healthcare, environmental protection and cleanup.

    The trading market under such a republic would now actually be a “free” market, freed from both corporate taxes and the competitive destruction of monopoly enterprise, whether by capitalist corporations, or a one-big-corporation socialist state trying to employ everyone and manage everything.

    Gotta run for now, but perhaps a start has been made in answer to your comment.

  • Grady, there is not central planned economy in Cuba at least since 1994. With the introduction of the CUC in 1994, every bit of sanity went down the drain and planing is a joke that only the politicians take seriously. I dare to say that thanks to the market segmentation introduced by the dual currency, Cuba has the most complex economy in the civilized word and their leaders are completely clueless about how it works and the only planning you see is educated guesswork based on the inertia of large numbers.

    To put it simple, the two currencies circulating in Cuba are not traded by some kind of common interchange rate as it happen with any other currency, instead they are linked to different market segment and each have different conversion rates based on specific rules. So, for common people the CUC to CUP ratio is 1:25, but between public enterprises is either 1:1 or 1:25 depending of several factors and the rates between government and is even more disparate when a government enterprise interact with individuals or cooperatives.

    As result, what you get is a maze of madness that renders impossible any kind of inference abut whether a specific economic sector is profitable or not, much less planning of any kind.

    Allow me to explain myself by using the sugar production as a case study. To produce sugar, the factory buys sugar cane from the cooperatives at a fixed rate that is a mix of CUP and CUC and all industrial implements from different industries at a 1:1 rate conversion but it pays their workers exclusively in CUP and who knows what it pays for transportation and storage, but it finally sells the sugar in the international market at 7 cents USD the pound.

    The question is, how much was the cost (in USD) to produce that pound of sugar? The answer is “I don’t know”. And that is going to be the answer regardless of who you ask the question. Multiply that to every economic activity to have an idea of how distorted is the Cuban economy.

    The annual economy plan is hogwash interpolation of the raw production of the previous year, the target growth set arbitrarily by political leaders minus a correction bias based on climate forecast for the year. In short, rudimentary numbers that are a mix of arbitrary goals and wishful thinking estimated by an experienced bureaucrat and that won’t even a mathematical model no more complex that the rule of thirds.

    Thats not central economy planing by any sane definition of the word.

  • I’ve read that USAID funds FULL TIME bloggers to push their conservative lines on Cuba websites, flooding the sites with their black-op “insights.”

    Any truth to this?

  • An interesting discussion. Grady mentioned how Marx & Engels were not workers, but were in fact from the bourgeois class. The same could be said of the sons of a prosperous Cuban plantation owner, who were sent to the best schools on the island and one of whom became a lawyer. The intellectuals of the bourgeois class are always fascinated with perfect schemes and utopian ideologies, with no firm basis in economic and social reality.

    Grady, when you say the co-operatives must be owned by the workers, how exactly does that work? Does an individual own a share in a co-op? Can she sell her share to somebody else, or to a fellow co-op member? If so, how is the price of such a share set? What powers does the co-op have to set working conditions and to deal with members who refuse to work? Can an uncooperative fellow be expelled from the co-op?

    It has become well understood that one of the chief causes of the failure of the Marxist/Castro system followed by Cuba is the inefficiency of the centrally planned economy. It is simply impossible for a government ministry to collect enough data, to have enough time and resources to fully analyze & understand the data, and to formulate policies and plans to adequately organize the complex interrelationships of production, distribution & consumption of resources in a national economy. It is not possible to know everything in order to plan everything.

    So how does the co-operative model deal with this problem? What degree of autonomy does the co-operative have to make their own economic decisions? What about the channels of resources, supplies, advertisement and product distribution? If the co-operatives must exist under a socialist political monopoly, what freedom do they have to make their own economic decisions? The Mondragon Co-operative has been successful, but it exists within an overall pluralist free-market capitalist economy, the EU. Would the co-operative be as successful without the interactions with private corporations, businesses, customers and professionals and as an economic community?

    So what about private enterprise? Would privately owned and operated businesses be allowed in your co-operative socialist republic? Suppose I didn’t want to join a co-op and accept the decisions of a committee on how to run my life & work? Can I open my own privately owned business and hire workers? Or could I accept a job offer from Moses to go work in his private firm as a salaried employee? If not, who has the authority and power to say no? Do I not have the right to decide for myself how I am going to use my mind, my capital and my labour?

    Finally I ask, how is this movement you say you founded, the modern co-operative socialist movement, not another scheme to prefect society, a utopian ideology? And when you describe yourself as the “founder” of a “movement”, roughly how many people are in your movement, how do they join and what is your relationship to the members of this movement? When I googled your name I came up with a few pages of self-promotion and your two books at Amazon. The books rank as #1,170,428th and #6,349,213 place as sellers. Not very popular titles, really. But there is no trace of a “modern socialist co-operative movement” of which somebody named Grady Ross Daugherty is a founder. So what gives? Does your movement actually exist outside the covers of your two books?

  • Thank you for what seems to be a thoughtful analysis. Where does technological innovation fit in your “modern cooperative socialist movement”? How would entertainment companies that produce $100 million blockbuster movies find funding? Who decides how much to spend on scientific research for breast cancer or childhood diabetes? The point of my questions is without a free market and without the possibility of huge rewards associated with huge investment risks, how do the great advances or simple joys in society come about?

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