Cuba’s New Investment Law Does Not Promote Socialism

What do the wage exploitation of workers by foreign capital and the State, usufruct contracts for foreign capitalists and the lack of any support for the development of socialist forms of production have to do with socialism?

Pedro Campos

Kiosk selling magazines in Havana. Photo: Juan Suarez

HAVANA TIMES — The new foreign investment law that seeks to attract foreign capital in order to “develop the country’s economy” is the Cuban government’s most recent effort to gather “water and coal” for the process of “updating” a “State socialism” that everyone considers a failure.

In its desperate attempts to maintain bureaucratic control over Cuban society – a society that is slipping away from the government’s hands more and more –, Cuba’s political and military elite has gone as far as looking for allies among its traditional enemies and urge the United States to lift its blockade/embargo, so that foreign millionaires can generously pour their dollars over the country in the form of tourism and business.

So that no one will think the socialist objectives avowed for more than fifty years are being betrayed here, the elite is promoting the Chinese and entirely non-Marxist premise that “socialism will come with abundance.”

The magic formula is as follows: more capitalism under the control of the “communists”, in order to arrive at socialism. Carlos Alberto Montaner and his liberals must be having a blast.

These “trinket socialists” (people who believe socialism is about an abundance of trinkets and whose ideas, lacking a scientific basis, are as cheap as trinkets), do not know or perhaps try to ignore the fact that socialism is a system, not of distribution, but of production, a system based on free forms of labor that gradually prevail over and replace the forms of salaried exploitation that characterize capitalism.

Such a system could not be imposed on people by decree, violent expropriations, force or, much less, the continuation of salaried exploitation by the State, as the neo-Stalinists-turned-reformers have already tried to do. It would come about as forms of production based on freely associated labor – proving to be more humane, democratic, free, non-exploitative and productive – began to spread gradually and naturally.

If that is to be the road to socialism, if the poorly-scripted, badly-rehearsed and failed Stalinist socialism based on State ownership and the continuation of salaried labor is to be put behind us, then those interested in making progress towards that new society would need to encourage free production associations.

These would be cooperatives, companies managed by employees, co-management by the workers and the State or by the workers and other production organizations, mutualistic productive organizations, family enterprises and self-employment, all of which characterize the forms of self-managed production characteristic of socialism not to be confused with autarchy (1).

Cuba’s new foreign investment law, however, isn’t heading in this direction, but is designed to encourage direct capitalist investment (the direct exploitation of Cuban wage workers, that is) or partnerships with the State, to perpetuate and perfect the joint exploitation of workers by the State and international capital – a relationship in which foreign capital exploits the wage laborer and the State “settles for” 70 % of the salaries paid to the doubly-exploited subordinates.

Quite simply, this law leaves no space for the creation of banking institutions that can offer micro-credits that could benefit the self-employed and cooperatives. Nor does it allow for the free import and export of the products by associations or any kind of mutually beneficiary partnership with foreign capital. In short, it does not promote socialist forms of production.

The law does not promote socialism in Cuba – it promotes capitalism.

It remains to be seen whether, after the publication of this article and following the comments made by Cuban economist Omar Everleny, we will be seeing new regulations specifying that “entities” such as cooperatives can also enter into some kind of mutually beneficiary agreement with foreign capital. Everything is possible when it comes to discrediting the socialist and democratic Left!

Any capitalist law that allows for the development of free, associated or individual labor, that provides credits and import and export facilities for such associations, is a thousand times more socialist than this foreign investment law.

The government vociferates that it is not selling the country to foreign capital, but a quick glance at the legislation suggests otherwise, that Raul Castro’s government doesn’t lose sleep over selling the Cuban workforce – the work, effort, sacrifice, knowledge and training of Cuban workers and professionals, what they call “human capital” – to the best bidder.

They are selling the most valuable of all capitals, the only one capable of creating new riches, for all of the investment in the world, all of the technology, money and resources mean nothing if one does not have a workforce capable of making these produce something.

If the wage exploitation of workers by the Cuban State and foreign capital is extended, if ownership over the means of production continues to be in the hands of the State and usufruct contracts can have terms as long as 100 years, to the benefit of foreign capitalists (something which recalls the Platt Amendment, coal mines and the Guantanamo naval base -, if the law does not favor socialist forms of production, if no democratization of the country’s economy and politics is in sight, then, what does any of this have to do with socialism?

Marx and Engels must be rolling in their graves.

(1) On hearing talk about self-management, many confuse the phenomenon with autarchy. Self-management is the management of a business, company or other association by its members. It does not exclude but rather relies on cooperation and exchange. Autarchy is something quite different: it is a kind of self-sufficiency that has no need of cooperation or exchange with anyone.
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14 thoughts on “Cuba’s New Investment Law Does Not Promote Socialism

  • May 4, 2014 at 5:10 pm

    Suppose it is true that the state “confiscates” 70% of the wages negotiated for the workers it supplies while maintaining a controlling interest in state ventures. So what? That’s a win, win for the state. The only thing that is espoused here is a general assumption that that 70% is somehow expropriated by corrupt individuals & not used to fund expenses incurred by state operations. That’s how things are done within a totalitarian socialist state. Where is the proof that the moneys are ending up in bank accounts in Bahamas or away from the people the state is supposed to serve? Socialism is a group effort, not an individual one & therefore the value of productive effort comes out in the general wash for the benefit of all.

  • May 1, 2014 at 8:09 pm

    Very well done

  • May 1, 2014 at 9:06 am

    Your definition of fascism is contradicted by the many theorists and historians cited in the references I posted above. Consider your own words,

    “Fascism is when the government makes partnerships with the private sector instead of doing its job of representing the public.”

    Is that not exactly what the new foreign investment laws do? The aim is to form partnerships with foreign investors, selling cheap Cuban labour through a Cuban government agency, while excluding the Cuban people from participation in free enterprise.

    Historically, to the extent that the Cuban Revolution was Marxist, it was not fascist, as those two ideologies oppose one another. But don’t forget: fascism also opposes capitalism and liberal democracy (see above). Fascism will form an alliance of convenience with capitalists, when it suits the rulers, but they will not allow the capitalists the upper hand, nor will they ever accept any degree of liberal democracy.

    What I am arguing is that today, because of the economic reforms Raul Castro has introduced, along with the steady expansion of the FAR into monopoly control of the Cuban economy through holding companies such as GAESA, and together with the increasing level of political repression, the system Cuba is headed towards very much resembles Fascism.

  • May 1, 2014 at 8:52 am

    …and my point is that Raul Castro’s very limited economic reforms are not designed to transform Cuba into a capitalist society, but to preserve the regime. He said so himself.

    It’s not clear what your last sentence is supposed to mean. Are you saying that Pedro Campos wrote his essay “as if capitalists haven’t been trying to annex Cuba”?

    Or are you saying the Cuban government is desperately trying to reach capitalism, “as if capitalists haven’t been trying to annex Cuba”?

  • April 30, 2014 at 4:24 pm

    The article and your understanding of the situation reads like a cognitive dissonance campaign written by capitalists in the USA. All for what. This article is designed to picture Cuba flailing about desparately reaching to capitalism as if capitalists haven’t been trying to annex Cuba since the sugarcane fields were taken back by Cubans in 1959.

  • April 30, 2014 at 4:08 pm

    Fascism is capitalism. Fascism is when banks control the government like they do in the USA. Fascism is when the wealthy control the government. Fascism is when the government makes partnerships with the private sector instead of doing its job of representing the public. Cuba has consistently been the exact opposite of that until capitalism started to creep in.

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