Are Cooperatives Dangerous for Cuba?

Fernando Ravsberg

HAVANA TIMES — A few days ago, I saw a report by Telesur, Latin America’s left-wing broadcaster, which praised the creation of cooperatives in Mexico and stressed that these had helped prevent the closure of companies and unemployment in other Latin American countries.

Socialist sectors are precisely those that impel cooperatives as a means of production that offers an alternative to “capitalist individualism.” In some cases, these yield good results in areas such as the food, construction, housing or transportation industries.

If the economic essence of socialism is that “the means of production are in the hands of the people,” no company structure would represent that system better than a cooperative. We could say it is the “socialist people’s company” par excellence.

Cooperatives, in fact, fit perfectly into the society Jose Marti dreamt of: “A nation with many small owners is rich. A nation is rich not when a handful of people are rich, but when everyone has some wealth.”

Opening a cooperative in Cuba, however, is an arduous task: the paperwork takes years, you need approval from the municipal government, authorization from the pertinent ministry and permission from the Commission for the Implementation of the Communist Party Guidelines – and the very Council of Ministers has the last word anyways.

None of these permits, authorizations and years of waiting are justified when the members of the cooperatives are simply going to repair air conditioning units or old television sets. It’s really not a question of deciding whether this work is of “strategic” importance for the nation’s economy.

It seems that they fear, not the work per se, but the cooperative as a company structure as such. Self-employed persons (setting up small and mid-sized private enterprises) are given the licenses denied members of cooperatives in a mere 15 days.

The explanations as to this wariness with respect to cooperatives are varied. Some say they fear these could become the breeding ground for corruption, but, in that case, they would have to start by shutting down all State companies, where the greatest scams have been hatched.

This is not mere journalistic speculation: there are hundreds of executives from the telephone, nickel, importing, garbage collection, slaughterhouse, food industry, airline and even customs sector that have already been imprisoned.

Barber shops were the first experiment involving cooperatives formed on the basis of State companies and they have worked fairly well. Photo: Raquel Perez Diaz

Others claim that the development of cooperatives would leave the country’s ministries without “sources of financing.” The problem lies in the fact that much of the “extra” money that circulates among corrupt officials comes precisely from companies “administered” by ministries.

They may fear losing control. Cooperatives are legal entities, something self-employed persons are not. They are a legally incorporated company, with the obligations but also de the rights that State companies have, even in terms of importing.

There are also those who believe that the development of socialism in a given country is measured by the number of State-controlled industries in it. In 1968, this led Cuba to launch its so-called “Revolutionary Offensive,” which placed even street kiosks in State hands.

These are the teachings offered by Soviet manuals, based on the Stalinist model – manuals that “forgot” to mention that Marx recommended the nationalization only of the “fundamental means of production” and that Lenin impelled self-employment and cooperatives in the land of the Soviets.

We could speculate forever, especially since no one can explain the bureaucratic sluggishness of this process. In one ministry, they appointed a single official to review applications for cooperatives coming from all of the country’s municipalities and, when this official got sick, work was put on standby for months.

Many find it incomprehensible that they should have slammed on the break on economic reforms developed by the Communist Party itself, debated and supported by millions of Cubans and ratified by parliament. What further support is needed to implement them?

A few days ago, President Raul Castro said that “the field cannot be handed over to defeatists.” Certainly, for an economy to work, a degree of optimism is needed: those who set up businesses must believe they’re going to prosper, those who invest money must feel sure of their decision and common folk must believe that their lives will improve through work.

What’s happening in Cuba today is that those who set up businesses are thinking of earning whatever they can “for as long as these measures are in place,” those who invest fear they will not get their money back and many average Cubans believe that the only way they will be able to maintain their families with regular wages is to leave the country.

The government is partially responsible for that pessimism that grips people today. If Cuban leaders don’t lay all their bets on the new economic model, the one they themselves developed and the people approved, they can’t expect others to have any confidence in the future.