Cuba in the Worst Business Sense

Haroldo Dilla Alfonso*

Is there any kind of financial logic at work in hoping to sell such expensive cars to people who already have some other means of purchasing a vehicle?

HAVANA TIMES — When looking at Raul Castro’s “reform process”, you get the sense that it is slow and limited. At times, however, one cannot help but feel it is advancing in the direction that Cuba’s political elite wants it to, be it because this elite seeks to preserve stability in the short term (the only term most people can lay their bets on) or because they want to guarantee the prosperity of their families in the long run.

Cuba’s migratory reform, for instance, may be criticized in many ways (as I have done), but we cannot neglect the fact it is ultimately functional from the point of view of well-known political interests, and many of its limitations can be chalked up to the form of government that the Cuban leadership knows and wishes to maintain. That’s what politics is like.

There are moments, however, when everything seems out of place and one can’t find any logic to the situation. The ludicrous, sky-high prices of automobiles are one case in point.

The one laudable reason one could imagine to be behind these prices would be of the environmentalist kind, a strategy aimed at preventing a flood of vehicles on the island, which would be more than the roads in the country – and Havana in particular – could handle.

It seems highly unlikely, though, for Cuban high officials have always looked on automobiles as a source of prestige, as the mark of superiority, we could say. And they have never forsaken their relatives whenever there have been cars to go around.

In any event, I am not among those who believe owning a car is a virtue and believe that the only effective way of reducing car ownership is to create a comfortable and cheap public transportation system (which would simply make cars superfluous). This is precisely what the Cuban leadership has been unable to do in over fifty years, while other cities around the continent have achieved it.

Having eliminated the altruistic motive as a possibility, I am left only with financial motives to look into. I have to ask myself, however, whether there is actually any kind of financial logic at work in hoping to sell such expensive cars to people who already have some other means of purchasing a vehicle, a logic other than ripping off the unwary, I mean.

How many idiotic buyers with no shortage of money to spend, willing to buy a car at such exorbitant prices, could one actually find in Havana? How many rich relatives in Miami would be willing to spend 100 thousand dollars to buy someone a car which, in fact, is worth only one fifth that amount?

This has nothing to do with economies of scale or stable tax and commercial revenues. It doesn’t even suggest the most elementary understanding of how markets work.

Finally, I have to ask myself when the Cuban leadership will understand that some money does not belong to it and that it cannot continue to dispossess people in such vulgar ways and in the name of lofty ideals it tramples every day.

The result of these price policies has been to upset the population in general, even those sectors of the population that do not have – and probably will never have – the money to buy a car.

If we follow the logic of what the Cuban leadership vaguely refers to as a “model” – an authoritarian capitalist system, deployed in the name of socialism – it is reasonable to assume the government must prioritize consumption by the emerging class of the nouveaux riches, quite simply because they are the social foundations of the “reform process” and the social actor that is being called upon to make the pro-market reform process more dynamic.

This includes managers and professionals in the commercial sectors of the economy, the managers of large companies, émigrés who maintain close ties with the government, docile “moneybags”, heirs to family fortunes (including the kids of the Castro Clan) and artists and sportspeople integrated into a society that is increasingly becoming a showbiz mecca.

Offending people’s intelligence is quite clearly not the way to go about things. If they want to restore capitalism, and I think that, in effect, they want to, the first thing they need to do is to seriously think the matter through.

At times, it seems they’re not even willing to do that. Hence, we will continue to see these misguided policies which entail every imaginable inconvenience and the occasional, anxious dupe who buys a Hyundai Sedan – last year’s car, that is to say – at 100 thousand dollars.

26 thoughts on “Cuba in the Worst Business Sense

  • January 21, 2014 at 7:27 am

    The topic being discussed was whether it was fair to complain of elites and people in power or their families owning paladares when in the society you advocate for Cuba this would be multiplied by 10 along with corruption and inequality. I think you should read the Helms Burton act again. It makes no mention of Soviet military as it was enacted in 1996 and the Soviet Union didn’t exist anymore though it does mention assistance from former Soviet states. Also Section 206 point 3 says that Cuba remains embargoed until “is substantially moving toward a market-oriented economic system based on the right to own and enjoy property”. This isn’t incidental – it has to be implemented even before elections. Finally, I think I contribute positively on a wide range of subjects if I think I have something interesting or original to say.

  • January 20, 2014 at 9:47 am

    I am discussing the issue. You are the one who consistently veers off topic. There is nothing in the article about the Helms-Burton Act or Donald Rumsfeld (he’s retired now, did you know?). FOr some reason, no mater the subject of the article, you can’t help but intervene with something about the USA. It’s a kind of neo-Plattist attitude you exhibit in which no mention of Cuba can be allowed to pass without you inserting the USA into the conversation.

    The ACT calls for free and fair elections, compensation for seized US property and no Raul or Fidel Castro in the Cuban government. There are a few other incidental conditions, several of which are now irrelevant, like the removal of Soviet military from Cuba, but there is nothing in Helms-Burton which imposes a market economy on Cuba.

    Again, if you truly support the right of the Cuban people for self-determination, then you should be calling for free and fair democratic elections. You should not be defending those who deny the Cuban people their rights and freedoms.

    By the way, it is the Castro regime who vehemently opposes Samuel Farber’s proposals.

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