Behind Cuba’s Centralized Economy

By Repatriado*

Photo: Juan Suarez

HAVANA TIMES — If at any time, leaders of the Communist Party/Government honestly believed that a centralized and planned economy was going to be more efficient than the market economy, they couldn’t honorably uphold this position after the disastrous Special Period which it led us to and which we still haven’t left behind.

If the Party/Government has ever upheld this economic Stalinism out of ideological convictions, they couldn’t honorably uphold this position once their Chinese and Vietnamese counterparts adopted a market economy while still holding onto Communist ideology.

Given the fact that centralism and the State’s planned economy have been proved to be incompetent, as well as the fact that Orthodox Communism can be superimposed on a market economy, why is the Cuban Communist Party/Government stubbornly insisting on having a centrally planned economy?

Maybe the answer lies outside both the economy and ideology. Let’s take a look:

Every Cuba lives in and off of the underground economy or “black market”, be it by actively taking products and services away from the sole owner of everything, the State, or passively, consuming these goods or services which are either inexistent or available for out-of-reach prices at state-run establishments, which are the only ones legally authorized to sell these.

Cubans don’t adopt this illegal lifestyle because they want to or because of criminal genes, they do this because they have no other choice: you either buy things on the black market or you don’t have clothes, food, you can’t fix up your house and you can’t run your car (if you have one).

The black market has become a distribution agent, possibly the largest supplier of goods and services in the country, overtaking the goods and services the State officially offers.

So, if nearly everything that is being sold illegally comes from the State, the logical conclusion we can draw from this is that there are goods and services to be distributed, not many but definitely enough, but there isn’t a functional economy to distribute it reasonably.

Eating cheap pizzas.  Photo: Juan Suarez


Because only a decentralized economy and a framework of autonomous companies can ensure this distribution and this is something that the State Council’s economists know, something I know and something every other government in the world knows (except for the Cuban and North Korean governments).

Why don’t they do this then?

It might well be that the Party/Government isn’t interested in the economy or ideology as anything else but as tools of social control, using the people’s obligation to resolve their day-to-day needs on the illegal market as an almost perfect way to control them socially.

If you become a pain-in-the neck politically speaking, they don’t arrest you for doing this, but they can prosecute you for a long list of accumulated “illegal activities” that its police can easily draw up without needing to invent anything. That doesn’t mean to say that they don’t invent common crimes for their political opponents when they want to, but it isn’t commonplace. Why are they going to make things up when just living in Cuba and not having pigmentary retinal dystrophy or scurvy clearly involves doing something illegal?

Therefore, you might think that Cuba’s leaders have consciously chosen to keep the Cuban people surviving outside the law, constantly violating the law so as to be able to coerce them via the blackmail of knowing they are guilty, knowing that any half-thriving financial stability is based on their active or passive participation in the illegal economy and therefore is fragile and you can be “blown up” at any moment when they decide to target you.

Thus, the answer to why they stubbornly insist on having a centrally planned economy seems to lie outside economic practice or ideological theory, it seems to lie in their need to control society and manipulate its citizens.

If social control is essentially the main foundation of the Cuban economic model, then it would be wrong to expect serious and profound reforms to take place, which are meant to improve society’s quality of life, because this isn’t a priority on the current Party/Government’s agenda, it rather seems that all they really want is for all of us Cubans to be criminals.

10 thoughts on “Behind Cuba’s Centralized Economy

  • King T, in theory I can accept what you argue, respect is always good, respect for the self-determination of countries is essential for international peace, but what happends when the population inside a country can´t change an oppressive regime? Is that regime to be respected by the rest of the countries? I can not respect repression, manipulation, the use of force, many kinds of force, to keep power.

    Are women happy in Saudi Arabia? Possibly some, even maybe the majority can believe they are happy, but would they be happy once they known that there are other countries where women are treated as human beings? I don’t think so.

    Is the government of North Korea something you should respect? I don’t think so, when governments steal their people’s freedom and capacity to improve themselves there is nothing to be respected.

    That does not justify the use of force as America did in Irak, or the use of force to remove Castros after 60 years in power, no, but at least they should be criticized and internationality isolated.

  • To call me an idiot is a good answer from a “socialist worker”. I just wonder how do you know so much about Walmart or Amazon living in Noth Korea, I mean, you live in Nort Korea right?, because if you are a socialist worker I guess you are in a socialist country. If not you are a capitalist worker with socialist ideas.

    I actually would like to see the video, but I do live in a socialist country and my socialist government control economic as well as internet, so I have nor access to download videos.

    My post is not a defence of non-regulated economic, that do not exist, capitalism function under a set of rules, it is regulated, there are difference in regulations among countries and of course, there are bad people doing bad things and turning the arm to the system, big companies normally bend or brake the rules, remember what VW did shitting the world.

    My post is about how my “socialist” government use economy to control population and keep them down, thinking in how to buy chicken leg without being trapped by a police or an inspector instead that thinking about rights.

    In Cuba there is private property, or do you think that here everything belongs to everyone?, in my socialist island everything belongs to a few, property is much more concentrated here that in any other country, except North Korea where I assume you live, because dictator own their countries, the have the law, they do can twist the arms to the law so they can do whatever they one, whatever.

    Sorry for my idiotic English

  • Try and argue against me instead of being an idiot. Centralization can clearly be seen in distribution by WalMart and Amazon. These companies clearly have the ability to twist the arms of small to medium manufactures wanting to sell their products. Behind Walmart Stores are huge distristribution warehouses. Behind Amazon is the big shipping companies. Now I’m posting a video about how international air shipping and specifically shipping in the US works you will that it is mostly but not always centralized.

  • No system of market, be that private or controlled is perfect. The west has problems with poverty . USA and Canada both have an abundance of poverty where some individuals get left behind economically. Both systems have “secret economies” that are harming the overall countries economies. Wouldn’t it be nice to have both systems work? The freedom in the USA has lead to the injustice of political medalling by the Soviets. Not good. Every country should be to govern themselves in what ever political system they determine works for their country. Other nations/people should respect the others systems of governance. A nation should work towards bettering their own governance and economic systems to strive for perfection for there own people. Perfection meaning a system that works to rid poverty and predigest and entitle happiness to each child.
    Just my thoughts !

  • It is an interesting hypothesis. It is difficult otherwise to understand how Cuba stays with what is clearly a dysfunctional system.

  • try and find a socialist worker in the socialist cuba

  • maeby you are right, maeby you are wrong, I am not a comunist so I can accept your oppinion and think about it. By the way, it is a personal analysis, not scientific study.

  • Your analysis is not scientific. It is just plain wrong, totally skewed.

  • Interesting article.

  • The only thing your going to get with a return to private property is a new and legal secret economy where centralization is hidden by law as private business information and the development of the country is determined by people who’s basic goal is making themselves rich by skimming profits for themselves. The US will also end its crippling embargo at the price of national humiliation.The US laid out its goal “to wreak havoc on the island.” In its so called “Cuban Democracy Act.” The US Democratic Party has been complaining about “Russian Interference” in their election so maybe they need International Observers for their next election?

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