Cuba’s Flourishing Private Capitalism

Pedro Campos

Foto: Caridad

HAVANA TIMES, Dec 23 — Under the “updating” reforms being instituted in Cuba we are witnessing a broad flowering of private capitalism.

This is taking place with the systematic increase in the exploitation of wage labor by business operations that are being protected by a law that allows for “self-employed contracted labor.”

I have already attempted to clarify that self-employment is one thing (someone working for themself), while the exploitation of other people’s labor is something altogether different.

However, the government apparently doesn’t care that it is actively promoting private capitalism.

The goal is to stimulate production and increase tax collections – how they achieve this doesn’t matter. It’s like the old Chinese fable about the cat: “What counts is catching mice.”

The exploitation of contracted laborers is booming in the countryside, on the “haciendas” of already wealthy landowners, those who the state is now willing to cede more land given their “productivity.”

This is violating the sacred right of “the land belongs to those who till it”; instead, we are seeing the benefits going to those who have money to exploit it. Loans are even being extended so they can pay their wage laborers.

The same is seen with rental cars that belong to owners who pay wages to their drivers. The situation also exists in many cafes and restaurants, where not only is wage labor being fully exploited, but owners are even opening cafes in the names of front people becoming true chains that belong to the same wealthy person.

With the mansions that once belonged to the dethroned bourgeoisie and now belong to former authorities or active senior officials, we’re witnessing a repeat of the same: a large number of salaried employees are now working for “revolutionary” owners who rent rooms or apartments to foreigners.

Abysmally growing social differences

I don’t know how these capitalists manage to pay taxes on these business that bring in thousands of pesos a day. The current law requires payment of 60 percent of annual income over 60,000 Cuban pesos ($2,400 USD), which some of these people are collecting in 15 days or less.

Foto: Caridad

Given all of this, we have to ask what is being done or can be done by ONAT (the National Auditing Office and its inspectors).

The supporters of Participatory and Democratic Socialism were among the first to support the full authorization of self-employment, which is yet to be fully implemented since there is still a ban on private practices for many professions. We have also supported all measures that tend towards the de-nationalization and de-bureaucratization of the economy.

But it is something very different to promote, almost without any restrictions, the exploitation of wage labor. That is exploitation; it is capitalism – clear, plain and rampant. That is not socialism, nor can it lead to society without exploiters or the exploited.
Where does this leave the socialist revolution, the one of the poor, the one we were promised in 1960-61 and for which millions of us have dedicated our lives? What is the status of the revolution for which we contributed to the literacy campaign, in the trenches, going into battle and volunteering for international missions?

What’s worst and most dangerous is all this flowering of private, corrupt and corrupting capitalism, without a truly socialist law over business operations.

This is not the situation in which workers’ councils decide on the direction, management or distribution of profits. There is no cooperative law regarding industry and services that enables and promotes the comprehensive development of freely associated labor, inherent in true socialist relations of production.

There is no law that forces these budding capitalists to equitably distribute a portion of their proceeds among and between their workers, as was brandished in the Moncada Program, or to give them ownership of the business, which would tend towards forms of socialist types of self-administered and co-managed cooperatives.

In short, we are in a situation without measures that are themselves socialists. This is the principal danger.

Can anyone scientifically explain how we can build socialism using wage-labor methods of production, using capitalist methods.

The undermining of cooperatives

The president just announced (at the last meeting of the Council of Ministers, according to the December 2 edition of the Granma newspaper), that the UBPCs (The Basic Units of Cooperative Production) will function as true agricultural cooperatives, while noting that cooperatives that are not profitable will be dissolved.

Foto: Caridad

What this means is that they will continue dismembering the UBPCs and redistributing their land. To accomplish this, they are proposing to disband “cooperatives” that were never truly cooperatives, which were never able to function as such; which were never been free to produce, sell or make purchases; which were never empowered to choose their own leaders or distribute profits among their members.

What’s more, how can the government dissolve cooperatives — if they are indeed such entities — that can only be dissolved by their members, in accordance with any cooperative law that is respected?

There is a cooperative law for agriculture, which led to the CPA (Agricultural Production Cooperatives) and to the CCS (Credit and Service Cooperative), but which is very limited in its scope, full of statist embers and where the tutelary practice of the government is what has prevailed up until now. Will this change?

Will the way in which private lands have been distributed continue the same way? Will this continue to be based on the decisions of an all-powerful lord named by the state in each municipality, without the participation of local bodies of People’s Power and without the opinions of the citizens?

In the official discourse around the “updating” [reforms], brimming with authoritarianism, they speak of the “bosses” of state enterprises. Bosses under socialism? Shouldn’t there be collective leadership? And shouldn’t the only “boss” be the work collective at a company or the social collective in a village or a town anywhere in the country

We are continuing to perceive a great deal of confusion which are not simple lexical gaps in language or missteps in the actions of the state in terms of relations of production and life under socialism.

There is no clarity as to why or how or what should be encouraged, or not, to promote socialism. There is uncertainty as to what is self-employment, private capitalism and a cooperative. The only thing that stands out is vulgar pragmatism aiming to “increase production and revenue for the state,” without carefully analyzing how to do this or what will be the social and strategic costs.

The emergence of a new elite

Of course “troubled waters benefit the fishermen,” who in this case are all those who are the emerging elite and hold much of the domestic wealth, mixed with the sweat of others and with the juicy businesses of the state or with the state, whose profits go into the pockets of bureaucrats and their protégés.  A good example was the 13 million pesos (over a half million USD) in false billings for garlic, mentioned by Raul Castro; or the millions of dollars in fees and services obtained by some representatives of the state in major international businesses transactions consummated in the name of the Cuban government.

Foto: Caridad

It still hasn’t been announced publicly what happened to the government’s exclusive negotiator with US companies that sold billions of dollars in food to Cuba. Pedro Alvarez, who was under investigation, “escaped” from the jails of Cuban State Security and fled “underground” to the United States.

Can anyone say what investigation was conducted, what it uncovered, how much was embezzled, how he managed to escape, where he went, who helped him or what sanctions were imposed on the perpetrators and their accomplices?

How long will official corruption enjoy impunity while much of the police force chases after poor blacks and mestizos supposedly “harassing tourists,” as if the main and true siege on tourists doesn’t come from the owner-state, the Lord and appropriator of all or nearly all?

But no. The wealthy don’t worry; they are willing to accept the current state of affairs. They can invest their millions of pesos in several repaired rental almendrones (taxis), in veritable haciendas that remind us of the semi-feudal past, in restaurants or in mansions for renting to foreigners.

What is being protected is official government corruption, the only one able to exist in Cuba since the state has been the master of everything and has created and fostered this bureaucratic mess, whereby all officials are appointed based on a top-down, stratified nomenclature with well-defined levels.

In a play on words on the slogan of a Cuban television program, does this ensure the “passage to the known”?

Has the piñata fiesta already begun?

Will the people of Cuba and the true and honest revolutionaries left in the party, the armed forces, the Interior Ministry and other institutions of power allow the revolution that has cost us so much to end this way?

Will we soon be the witnesses of a historic tragedy?



11 thoughts on “Cuba’s Flourishing Private Capitalism

  • Mike, you didn’t understand the article if it reads like a cold war battle. He’s talking about what the reforms mean in terms of positives and negatives for average Cubans, and is critiquing both the free market reforms and the centralized planning state.
    Also Mike you don’t seem to understand the constraints on free speech in Cuba– you think you can just do “an anonymous poll” to be quantified? Pedro Campos is not a journalist, he’s an Cuban commenting on the changes taking place.

  • “As we’ve done in the US”– yes, greedy individualist americans. private property yummy. stfu please. enough of the same mumbo jumbo.

  • The old ideas and divisions between “capitalism” and “socialism/communism” are dead. This article reads like it’s still fighting the cold war that ended 22 years ago. I would much prefer to read an article about facts and what people prefer, rather than the same old ideological battle. Instead of labeling people and actions as socialist or capitalist, why don’t you try to explain why or why not people benefit? Calculate and quantify the so-called costs and benefits, and arrive at a more reasonable conclusion? That would require difficult work, I understand, but real journalism and research is difficult. How about some anonymous polls of what people’s opinion of the matter is? That would tell me much more than what I learned from this article.

  • I can’t address the many questions in comrade Pedro’s article, but I would like to respond to his challenge “Can anyone scientifically explain how we can build socialism using wage-labor methods of production, using capitalist methods.”

    When a socialist state nationalizes all the instruments of production–per Engels and Marx in the Communist Manifesto, and per the model all socialist states have fashioned a socialist economy using this core principle–the workers do not own their workplaces or business enterprises directly. They own them–in theory–through the agency of the state. We might say that the workers own everything productive, but put the state in charge of planning and administering their property.

    But when the state becomes the employer/manager of everyone, it must resort to weekly, bi-weekly or monthly compensation of work performed. This has always been wage and salary compensation.

    And so, we can all see that a socialist economy in which the state monopolizes ownership of all the instruments of production can only be based on wage and salary labor. This does not mean that it is a capitalistic system, but it does mean that the socialist bridge to a classless society is being built using an erroneous blueprint.

    Our newborn movement in the US believes that state monopoly socialism therefore is a form of socialism only because the state power is socialist-minded. It’s mode of production is not capitalist, but it is only a baby step away from becoming capitalist. History shows us that, when the inherently dysfunctional state monopoly socialist mode of production finally proves itself dysfunctional and the economy and society sputters to an impasse, the socialist state power collapses, and a capitalist state power takes its place. The economy then takes that baby step openly, and a full-blown capitalist mode of production is restored.

    What is needed in Cuba is for comrades like Pedro Campos to re-define the core principle of a truly socialist mode of production, and to jettison the whole concept of the state being the owner of all the instruments of production.

    It is not enough for these brave comrades to demand of the state and Party bureaucracy that they give workers cooperatives in which self-management is a bureaucratic gift. The legal institution of private productive property rights must be re-embraced theoretically–as we’ve done in the US–and workable socialism might then become a reality.

  • Luis as you may have seem in my prior comments I also do not agree with the US embargo. I believe in contact , communication and connecting with people. I believe we all can understand each other no matter how dip the differences. Still the embargo can not be blamed for their failure.

  • Well, Costa Rica isn’t asfixiated by any kind of trade embargo. That may make a difference, doesn’t it? Also, Costa Rica *is* a richer country than Cuba. It’s GNI per capita is about $11,300 dollars PPP. More than double of Cuba’s

  • How much do you think they pay in Cuba for a pound of chicken or meat or tooth paste or cooking oil?

  • Luis I do know about modern day slavery I was one back in Cuba.

    I do not think it works the way you put it. These people are really struggling. I know.
    I also know of other places like Costa Rica where the salary is about the 300 dollars you quoted for Cuba and the living conditions are much better than Cuba.

  • I admire everything that the Cuban People have done.
    I will be 83 in March. I pray I will be able to see Cuba legally before I die.
    Robert Cowdery
    Spokane, WA-USA

  • Julio, it’s amazing that every time you talk about wages in Cuba you forget – be it bad faith or just plain ignorance – the PPP. The wages in Cuba may be low, but the cost of living is also low. Why do you think that Cuba maintains a high place in the HDI table?

    Let us see – the GNI per capita PPP of Cuba averages $4,500 a year. This gives us $375 per month. Which sounds reasonable for a poor country like Cuba.

    About slavery, you know NOTHING about modern slavery – this is one example of modern slavery.

  • Pedro,
    Just one question
    Why did you not question the state monopoly capitalism or socialist state when it was and it is exploiting each of the people that work for it?
    Let me see
    a doctor in Cuba makes about 25 dollars a month. Would you call that exploitation or slavery?
    Why don’t you defend them with the same fervor?

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