Cuba’s New Private Sector Employees Reveal Where the Reform Process is Heading

Rogelio Manuel Diaz Moreno

Marino Murillo is Raul Castro’s point man on the Cuban economic reforms. Photo:

HAVANA TIMES — The Cuban government’s reforms continue to make slow, somewhat erratic progress and to evince a series of unique characteristics and tendencies that are food for thought.

Let us recall, first, that Cuban politicians like to refer to this process as the “updating of Cuba’s economic system.” This past Friday, Cuba’s official newspaper, Granma, proudly informed readers about one of the sectors now at the forefront of the process, the food industry.

Reading the article, one immediately senses that its author, journalist Lorena Sanchez, suffers from the deeply-rooted shyness that characterizes government propagandists, those who refuse to call the private sector by its name and use the euphemism “non-State” in its place. Perhaps she merely transcribed the message from the Vice-Minister for Domestic Trade Ada Chavez Oviedo: in short, that private or “non-State” forms of ownership will prevail in the sector once it has been fully “modernized.”

In her report, we find out that 68 % of the country’s better known food establishments are still under State management. Over a thousand have been passed on to the self-employed and cooperatives (mostly the former). Here, we run into a fact that is alarming for left-wing forces. If the process of de-nationalization was planned by an allegedly socialist government, why weren’t cooperatives prioritized? Will the same tendency characterize the de-nationalization of the establishments that have yet to be “updated”?

Agriculture and the food industry have experienced the most visible changes, perhaps because they were facing the most severe crises. Farms, cafes and restaurants have been the paradigms of bad and inefficient State management. In both cases, the main solution has been to place the means of production in private hands.

In effect, we are now witnessing substantial changes in the activities conducted in these sectors, prosperous fields and quality services where before there was nothing but marabou brush and flies. One cannot help but wonder, however, about the actual potential of these reforms, which are more liberal than anything else, and about who is reaping the actual profits of this.

Fighting solves everything.  Photo: Juan Suarez

Another article published by Granma a few days before reported that the largest number of self-employed workers aren’t exactly “self-employed”, but rather the employees of someone else – small or mid-scale private entrepreneurs. In fact, the number of such employees in the country isn’t larger because of how small most businesses are. This data can prove useful for a study of the changes our society is experiencing.

Champions of capitalism say that the market economy and privatizations are good because they increase the number of property owners, of prosperous individuals. Our government’s spokespeople praise the “updating” process, based on liberal and market reforms, because it will lead to prosperity, or so they claim.

I invite readers to go out for a stroll around Cuba’s cities and talk with the people who stand behind the counters of private restaurants and food stands owned by others, to ask these employees whether their working hours abide by the limits established in the recently-approved Labor Code, how many vacation days the owners grant them, and, if they are women of reproductive age, whether they believe that they can have a child and keep their jobs.

If you do, don’t ask them whether they can ask for a raise – you wouldn’t want to get them fired on the spot. The owner, see, is sacrosanct, and Cuba’s blessed Labor Code gives them the authority to do just that. We are simply to accept that they’re being generous enough by paying more than the State. Afterwards, take a trip to the countryside and ask the farmhands employed on the ranches of the more fortunate farmers – those with both land and connections – the same questions.

The liberalization of the food industry and other sectors, given the “successes” the government boasts of, is probably representative of what is to come. Both the facts and history suggest that the Cuban State will continue to fail at most of its economic endeavors. Unable to solve these itself, it will have two alternatives: dismantle such production and service centers, or hand them over to the self-employed or cooperatives.

The more liberal option has been the most common implemented to date. With every step taken in this direction, with the expansion of the means of production involved, the exploitation of workers by private entrepreneurs, owners or managers of such means of production, will invariably increase. It is also true that, till now, State exploitation had been the norm.

A private Havana café. Photo: Juan Suarez

Will we improve as a society following the privatizations that are presumably to come? It is not an easy question to answer, for we aren’t doing well at all right now. What’s certain is that the path ahead of us is a 180 degree turn from the road towards legitimate socialism, and that, in other parts of the world, this road has led to severe and irreparable damage to the so-called middle classes, to the concentration of property in a handful of individuals and to the extreme polarization of society between wealth and power and poverty and despair.

In short, the path traced by the “updating of Cuba’s economic model” is strewn with contradictions. One day, the authorities create more possibilities for private initiative. A short while later, they restrict these same spaces. They want for the private sector to absorb all who have been laid off or will be by the State sector, but they curtail the basic conditions needed for the development of the sector, such as the opening of wholesale markets and imports through different channels. They want to open the entire country to foreign investment, but they do not allow foreign investors to deal directly with the work force, setting up an onerous and profitable State mechanism that acts as intermediary.

The government also has its ways of dealing with the ideologically restless. One day, the papers expound on philosophical hesitations with pronouncements such as “no one knows for certain how socialism is built.” The next day, they reveal that the Council of Ministers has traced a development plan for the economy, society and politics for 2030 and beyond. The only problem is that they don’t tell you what those plans are. Some time later, they tell us they are going to save socialism through a battle in the field of ideas and culture, ignoring the vital space of society’s material reproduction.

What one discerns from below following a simple class-conscious analysis is a tendency towards the kind of capitalism that the opposition wants – but with the current governing class, the one that speaks of “updating socialism”, at the top, and without opposition. The government and opposition, thus, will continue to quarrel, and each will thwart the concrete progress of the reforms with the same objective that unites them and rifts them apart.

5 thoughts on “Cuba’s New Private Sector Employees Reveal Where the Reform Process is Heading

  • I fail to see why there even needs to be a wholesale market as any product or service offered should be a value-added commodity. In other words, even the product you offer has a service or convenience component, otherwise you are just duplicating what the state already does. Anyway, many black market items end-up being lower than the official price -figure that one out (real slowly for me)! I would like to say that I am one who thinks otherwise, or at least alternatively, that not only :
    ” Freedom for society at large is anathema to socialists. Its all about power and control. ”
    I believe that Freedom is also cursed by monopolists of the most ferrel pursuasion.

  • Yet more regurgitation of the same old, same old. Chewing poor old Chomsky to death. It reminds one of a cow chewing its cud. We who know Cuba or we who knew the USSR know the reality of Socialism. The purpose of socialism is to make the State the controlling authority for the whole of life. Freedom for society at large is anathema to socialists. Its all about power and control. Anybody who thinks otherwise is either inane or the subject of brain washing.
    I favour freedom, opportunity, family, enterprise and ownership.
    Freedom of choice is opposed by socialists, because if the people are given choice they may not choose socialism. Dictatorship goes hand in hand with it
    Socialists want the State to take more and yet more of the decisions which affect society. Society comprises individuals, not puppets!

  • As necessary…..
    Just so we understand what socialism is and isn’t:
    “One can debate the meaning of the term socialism” ,
    Noam Chomsky noted in the wake of the collapse of the Soviet Union, ” but if it means anything it MEANS CONTROL OF PRODUCTION BY THE WORKERS themselves , not owners and managers who rule them and control all decisions , whether in capitalist enterprises or an absolutist state.”
    Bearing that consideration ( true to Marx) in mind and adding in the question of who controls the economic surplus, the U.S. Marxist economist, Richard Wolff reasonably describes the Soviet experiment as a form of STATE CAPITALISM .
    Under the Soviet model, “hired workers ” produced surpluses that were appropriated and distributed by state officials who functioned as employers
    Thus Soviet (AND CUBAN ) industry was (is) an example of STATE CAPITALISM in its class structure .” end quote
    From a piece by Paul Street at ZNet.
    A move from the Soviet economic model to the capitalist economic model is a move from one totalitarian economic system where a state official is your all-powerful boss to the private (capitalist) system where an individual or a small group is your all-powerful boss.
    It is not a move toward democracy but then, U.S. foreign policy never had much to do with democracy and to this end , the preponderance of Americans hold a totalitarian mindset which precludes a liking for anything democratic.
    I will not respond to replies.
    This post rejects the advice given in :
    Matthew 7:6
    Proverbs 23:9
    the system

  • I submit that the reforms are designed to move Cuba from a Stalinist socialist system toward a Fascist system. The Cuban State is increasingly controlled by the military, and the Cuba economy is dominated by the military. Alliances between foreign corporations and the Cuban military owned monopoly corporations exploit cheap Cuban labour. Meanwhile, the authoritarian political process remains frozen under the monopoly of the single-party state. That’s as near to fascism as anything seen since Mussolini.

  • Yes, the call is for foreign investors to come to Cuba where we the State will provide the labour if you pay us the State, $9,000 per annum per employee. We will then pay the employee $300 per year. Don’t dare meddle with this arrangement or we will put you on trial (no media or public present) for corruption.
    its our business not yours, to exploit the labour of our Cuban citizens. Don’t raise the subjects of freedom or human rights. We the State are against both. Who do we answer to?
    Well certainly not to the people of Cuba who are our subjects, but rather to the benevolent Castro family dictatorship who are our masters.

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