Cuba: The Insipid Brew of the Market

Rogelio Manuel Diaz Moreno

Havana market stand. Photo: Juan Suarez

HAVANA TIMES — These days, Cubans are running into a problem that seems to be cause for surprise. The announced recovery in agricultural and livestock production has not resulted in lower product prices. The sacrosanct offer and demand law ought to have worked to the benefit of lower income people, but, after some time of hearing about the benefits of the market broth, the cups served aren’t as tasty as expected.

Government apologists are wracking their brains and blaming intermediaries, hoarders, the blockade, drought and floods. The opposition blames the government, while the farmers blame what is left of the State organization known as “Acopio” and the high prices of agricultural supplies and workforce they rely on. It is undoubtedly a serious problem that warrants a closer look.

The debate ought to be tackled using the methodological tools afforded us by political economy, Adam Smith and Marx included. Unfortunately, and as usual, the people capable of undertaking such a critical, profound and scientific analysis are playing dumb. It is up to us, lay people, to demand that the issue be addressed the only way through which we can assess its true dimensions, putting aside idealism, voluntarism and demagogy.

The reforms implemented by the Cuban government stem from pressures aimed towards the adoption of a market economy applied from abroad and within the country. The idea defended by the reformers is that the ills that afflict our economy arise from the fact the State, and not the market, is calling the shots, and that, if this equation is inverted, offer and demand, economic rationalization, increased competition and other factors will create the best possible world for the greatest number of people.

Regrettably, so many years of hacking at our brains have had the effect of convincing us of the soundness of these “capitalist” ideas. In Cuba, an apparently contradictory and allegedly socialist discourse reigned for decades, but it was so artificial and superficial – and so much at odds with the everyday reality of people – that its main effect has been to reaffirm the popularity of capitalist notions.

Neither here nor elsewhere, however, can such capitalist remedies put an end to the crisis that has been unleashed, the wave of layoffs and cutbacks and the affront on the labor rights of individuals. The social consequences of general impoverishment, the loss of jobs, homes and life projects, are growing in step with the intensification of capitalist contradictions between the elite classes and the remaining majority of people. In our particular case, the consequences of liberal reforms have been making the unavowed contradictions of that ideology evident for quite some time.

The reasons for this are evident and clear to the very economists and philosophers who defend capitalism (something they do not advertise). On the basis of market relations, capitalist business initiative can increase production and create efficient supply mechanisms, true, but it can only come to supply a solvent market. Solvency is the key word here. The best-oiled and productive mechanisms begin to fail, in fact, when the demand from the wealthier sectors decreases. Very few entrepreneurs are in the business of charity or concern themselves with low-income, poverty-stricken people in a market economy.

This platitude, in my view, helps explain the reality of the present and what we will be seeing in the near future. Cuba’s emerging and growing social sectors, such as the corporate government class, new small and mid-sized capitalist entrepreneurs and others, are experiencing a certain degree of success, true. Any rise in agricultural and livestock production, or production of any sort, since it is impelled by a market logic, is destined to that solvent sector and its economic activities. Working people or employees of the State or new capitalists, the lowest-income sectors of the population, don’t get a slice of the pie just yet, to say nothing of people who have already retired.

The way politicians and journalists read the liberal script about the prosperity created on this basis is therefore shameful. It is even sadder to see so many working people of humble means candidly believe that these market reforms are their ticket out of a life full of frustration and sacrifice, and then later run into the ugly truth of impossible food prices, inflation of all prices and essential and other services.

The products and potential services that do not find a buyer with fat pockets either rot in the countryside or cease being offered, quite simply because that’s the way the market works. Producers and sellers do not profit from lower prices, because these result in the much-feared losses that spell their extinction in that arena known as the market. In the best of cases, their profits go down and, in a context that encourages egotism, also the road to extinction.

The visible manifestations of this phenomenon are expanding, developing and becoming more complicated, like a tumor that grows in conjunction with other problems. This happens in any system where social relations are based on exploitation, be it economic, of the use value of the proletariat or of a political nature.

The wealthy elites take advantage of their status to establish alliances and power networks. They infiltrate and take control over commercial and administrative mechanisms and hijack production and distribution processes. Through another process that is also gaining ground over here, they encourage and steer consumption in accordance with their interest through publicity campaigns, ignorant of the ideals of healthy living, ecological balance and empathy.

This situation cannot be remedied with recipes such as the desperate are calling for, by imposing price ceilings and similar restrictions. These have been tried a fair number of times already and have resulted in shortages and the growth of the black market. The solutions are to be sought in authentically revolutionary measures, such as the democratic empowerment of workers and communities throughout the production and distribution processes. But that would not be convenient for politicians or unscrupulous businesspeople, so it can only be accomplished by working peoples themselves.

To sum up, this is the brew many people long for over here. After so many years of studying and trying different philosophies, it seems scandalous that so few of us should actually understand what’s behind this new recipe.

One thought on “Cuba: The Insipid Brew of the Market

  • Avoid falling for the false choice. The state, has the power to regulate the terms of commerce and to redistribute via tax policy and other means the spoils of the market to those less fortunate so as to ensure the greater fairness.

    We are better off with more production and a problem of how to share the increased goods. A society can not consume more than it produces over the long run. All sorts of rent seekers jump in to profit from the movement of goods from production to consumers. The state sets the rules. Look to the state to set in place check and balances that prevent unhealthy rent collecting by middle men. Price controls tend not to work. What does work are opening up space for interprunial challenges to status qou distributors. Unleash the individual, control the size, including Government agencies, of those that profit from constraining production and distribution of goods and services.

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