Response to Raul Castro’s Last Speech

By Grady Daugherty

Raul Castro addresses the National Assembly. Photo:

HAVANA TIMES — The July 23, 2012 speech by Cuban President Raul Castro, at the Havana Convention Center, reveals a serious misconception in the theoretical foundation of the government’s economic policies.

If not altered, it is likely to doom perfection of the Cuban model of socialism, and possibly even lead to loss of state power. It is appropriate therefore to discuss this flaw in a comradely manner.

I am speaking of the incorrect understanding of what constitutes “socialist property.” If this sort of property is misconstrued, the entire edifice of socialist construction will be built on unreliable ground.

Raul states that there has been approval of “a policy for the experimental creation of cooperatives in non-agricultural activities, in accordance with Guideline No. 25.” This is very good news. No reference was made to the critical need for the cooperative entrepreneur, but the need for non-agricultural coops has been recognized.

In addition, as he states, authorization was also given for renting facilities for such enterprises as restaurants, with staffs up to five, “in a manner similar to that used, at one point, with other personal service providers such as barbers, hairdressers and shoe repairmen, to cite only a few.”

The decision for such changes, he goes on to say, “will allow the state to withdraw from the administration of a number of productive and service activities of a secondary nature, in order to concentrate on perfecting the management of the fundamental means of production, maintained as socialist state enterprises, which, as expressed in Guideline No. 2, are the principal elements of the national economy.”

In other words, the socialist state doesn’t wish to expend valuable cadre time and labor administering smaller enterprise, but wishes instead to focus on administration of larger enterprise, the “principal elements of the national economy.” (These would include such as sugar, nickel and tourism.)

These are encouraging words. The historic split of the small entrepreneurial class from the proletariat, which began in 1848, after the Communist Manifesto had promised nationalization of “all” productive forces by any future socialist state, might now be significantly healed in modern Cuba.

This of course would be a thunderclap unto all the peoples of the world. Socialism might now become what it ought to have been all along, a strategic alliance between the proletariat, small bourgeoisie and intelligentsia, under socialist state power, for construction and crossing of the socialist bridge to at classless society.

But there is a dark and ominous lining to the silver cloud.

Raul betrays by his words the fact that he and the PCC still consider socialist property to be that, and only that which is state-owned. This is a profound theoretical error. It will lead to continued reliance on bureaucratic administration of such enterprise, and this will guarantee non-dynamism of the socialist economy.

If the Cuban transformationary party continues to misconceive socialist property as only state-owned property, drawing thereby a conceptual line between state and individually owned enterprises, the historically proven stagnation and even corruption of principal elements of the economy is bound to continue, and possibly deepen.

No amount of criticism or self-criticism in the future would delete the negative effects of monolithic, state monopoly ownership. The working associates of these state-owned entities would still not have the production incentives, or job satisfaction, that would come from cooperative ownership on the highly successful Mondragon cooperative corporation structure.

The answer to this problem is fairly simple. Not only should smaller enterprise be owned privately, by individuals and families and, often times, by cooperative working associates, but the “principal elements of the economy” should also be owned in such a manner, that is, not primarily by the state, but primarily by cooperative working associates.

This would allow even larger enterprise to benefit from the proven, highly efficient Mondragon model, and ensure enormous job satisfaction to several million workers of larger enterprise.

Surely, there are some sectors and some enterprises that ought to remain 100% state owned.

Most industry and commerce however should go over to a hybrid form of working associate and state co-ownership. Such sectors as sugar, nickel and tourism should be broken down into smaller, worker-associate coop units, under contract with the state and in accordance with the National Plan, in order to guarantee efficiency and maximum productivity.

There may seem, at first glance, to be a problem with this sort of socialist redesign. If individuals and working associates are the primary owners of most productive property, how would the socialist state get the significant revenue needed to fund its many responsibilities, such as government administration, national defense, education, healthcare, legal services, and the myriad other needs of the people that only the state can and should supply?

The answer is for the socialist state to take a sufficient, silent, non-controlling ownership share of most industry and commerce. This would relieve it of administrative functions all across the board, but allow it to receive quarterly profit distributions as the same time as individuals and cooperative associates distribute profits to themselves.

Enterprise could and would still be monitored and regulated by the state, but micro-management would rest with the primary owners—those who do the work and must benefit or suffer the results of their productive activities.

This would mean, of course, that the ruling party would be able to condition and utilize the natural forces of the trading market for socialist construction.

This sort of arrangement would enable the state to discard most tax laws and all expensive tax-gathering bureaucracies. (A national sales tax, collected simply and automatically at the points of sale, might be kept in place for both revenue and the gathering of economic and social data.)

In order to make such a model possible, Raul, Fidel and the PCC would have to reexamine and change their idea as to what constitutes “socialist” productive property. The old idea that only state-owned property is socialist would have to be reconsidered.

A new, more truly socialist concept would have to be embraced that: All productive property under socialist state power is socialist, if it plays a productive role in the macro-plan and does not contradict socialist values or national and international objectives.

Such a redefinition would change everything.

The old prejudice against “material incentives” should also be reconsidered. Socialists are not bourgeois, Utopian moralists. Full respect should be given to the salutary combination of material and moral incentives. Profits are not immoral in and of themselves; they are only immoral if appropriated unjustly by the capitalists.

Historical experience has shown us that the principle of full state monopoly ownership is, in scientific terms: false, but partially true. The problem at hand for perfection of the model in Cuba is to redesign the economic mechanism—proceeding carefully and experimentally, of course—so as to keep the enormous gains made under the state monopoly design, yet getting rid of the many negative aspects experienced.

When, over one or two generations under a cooperative, state co-ownership model the economic, social and cultural difference between classes have diminished through an economic and cultural merging process, it might then be possible to say that classes have been minimized or completely eliminated during the Cuban socialist bridge period, and that a classless society, at long last, is in sight.

The cherry on top of this sort of perfection strategy is that, if successful, the peoples of the world will have been shown a highly-visible model for workable socialism, and rapid transformation of the nations would follow.

12 thoughts on “Response to Raul Castro’s Last Speech

  • Okasis, I apologize for allowing our exchanges to reach such a low level. It was my fault for arrogantly standing up for what I sincerely believe, not realizing that you would be so offended.

    The bottom line is, you apparently believe that private property rights ought to be abolished during the socialist bridge to a classless society, by the socialist state owning all the instruments of production, per Engels and Marx. In other words, you are a state monopoly ownership socialist.

    I believe, in contrast, that such rights need to exist during the socialist bridge period, in order that actual private property might evolve away naturally, as economic and cultural levels equalize. In other words, I am a modern cooperative, state co-ownership socialist.

    Your version of socialism has allowed world imperialism to bring civilization to the brink of destruction. Mine is a new version trying to germinate and give civilization one, final chance for survival and human justice.

  • Grady,
    Sorry to disappoint you, but my ‘peronal sense of honor’ vanishes when I am lectured by a pompous, arrogant, and self-annointed, superior being.

    As for an apology for whatever insult you think I handed you, Do Not Hold Your Breath!

    FYI, it seems ironic to refer to ‘juvenile sarcasm’ in this context, but I’ll take it as a complement. At least I am not suffering from hardening of the arteries.

  • Okasis,
    Your remark about the NSA is inappropriate, and is unworthy of you. I expect an apology–if you should come back to a personal sense of honor. If HT blogs should descend into those sorts of inferences, honest discussion would be seriously degraded. You should know better, especially at 75.

    Also, juvenile sarcasm will get you nowhere. To poise such a an “elected” question is silly. Please stick to the arguments presented, or say nothing. It is often better to remain silent and be thought an idiot, than to speak up and remove all doubt.

  • Grady,
    Obviously we disagree on Marxism, and Socialism, and Capitalism. That does not make my opinion “Incorrect”.

    I apparently missed the meeting where you were elected Judge of other people’s opinions. Is this part of the NSA’s program to collate everyones communications and assign those who are “Incorrect” to Political Rehabilitation Camps?

    If so, you’ll have to get in line: People have been complaining about my Political Incorrectness and Attitude for over 60 years, and I am only 75…

  • Okasis,

    You apparently see capitalism as where private productive property legal rights are in place, and such property might be owned by individuals or cooperative worker groups. At the same time, you apparently see socialism as where a central state owns everything productive, per the classic Marxian stipulation. All this is understandable, but nonetheless it is incorrect.

    Socialism is where a central political state is in place pursuing a transformationary social and economic plan, for conversion to a post-capitalist society, and movement over time toward a classless, stateless society. What you–and many others–have not yet grasped is that such a society can retain private productive property legal rights, plus a socialist-conditioned trading market, and achieve the dramatic transformation toward a society that, so far under the Marxian state monopoly stipulation, has eluded all socialist experiments.

    Working associate-owned cooperative corporations are business enterprises, and this would be true under both a capitalist state power and a socialist state power. Under capitalism, workers may very well behave like business owners–which they are–and sell out to regular capitalists for short-term material gains. This does not mean however that there is no potential therein, under socialist state power and a transformationary national and international plan, to discard capitalism, its values, and its insane drive to destroy the planet and climate for short-term profits.

    What I am talking about–and what our nascent movement is talking about–is a new economic hypothesis for workable socialism. In place of the Marxian hypothesis of 100% state monopoly ownership, we advocate the new hypothesis of partial, silent, cooperative state co-ownership, with plenty of ownership of small enterprise by individuals and families.

  • Grady,
    I re-read your article. Then I looked up Mondragon Corporations, so I would have a better understanding of your thoughts, and the direction you are suggesting for the future.

    I still have difficulty combining private ownership, and socialism. Then the Mondragon Corp. Ownership Model includes both the profit motive, and the standard business model of continual growth to ensure success. Toss in coops operating in both banking and insurance industries, and I have difficulty separating them from Capitalistic methods and motivations.

    I seem to recall that UPS started out as a ‘Worker Owned and Operated Company. Then they decided to ‘go public’, the worker-owners sold out, and cut a fat hog. For the original Worker-Owners, it was very profitable Now UPS is just another Corporation facing boycotts because of poor working conditions,,,

    In a nutshell, that is what is wrong with private ownership, as opposed to State or Community ownership.

    To me, Capitalism is defined by Private Ownership, and Profit Motives. Socialism depends on State or Community Ownership, and is motivated by benefiting the whole Community. As for which part of the State should own and Control which industry or utility, I think control should reside in the smallest Government unit that can run the Public Corporation efficiently. The State cannot ensure that local streets get repaired efficiently, any more than a small town could easily run the National Telephone Service.

    But, I am not trying to convert anyone to my view. I am simply putting ideas on the table in hopes that people can start thinking of what might be possible, not whether or not it fits some sacred pigeon hole.

  • It seems, Okasis, that you feel I’m advocating “privatization” as a return to capitalism. First of all, I’m not advocating that; and second, if you think I am, you have misunderstood the entire article, and our entire point of view and movement.

    You may be under the illusion that private productive property rights equal capitalism. If so, go in to the back yard and give yourself a good shaking. What matters is “who” owns the private property, capitalists or working associates. There is plenty of room under authentic socialism for small business persons, and they are vitally needed, but the dominate form of enterprise should be cooperative ownership by working associates, with silent, partial ownership by the socialist state.

    Up in the San Francisco Bay Area there are several hundred worker-owned cooperatives. Most are small, but one at least, Alvarado Bakery, is large and is of great financial benefit to the workers. (A recent quarterly dividend check was around $8,000 to each worker-owner.) This is “privatization,” Okasis, but it is not socialist privatization yet, because the US is still under a monopoly capitalist government.

    The Cuban people have socialist state power, led by the PCC. Under this state the “privatizations” of cooperative state co-ownership socialism would be dominant in the economy. This would not be capitalism; it would be genuine, workable socialism.

    With regard to Venezuela, I’m all for worker-self-management; but if the working associates are not the legal owners of the places self-managed, it is not a displacement of the capitalist class–and the country therefore is still capitalist. If this is the case, the Chavez government would be administering a social-democratic, i.e., a capitalist, state.

  • …so the question is whose grandkids would be worse for Cuba? Fidel’s or Batista’s?

  • I don’t think you quite understand, Moses, what is being proposed. It is the cooperative republican theory as to how classes might reasonably be diminished and ultimately eliminate under a socialist transformationary government. It would mean the PCC projecting a new hypothesis for the socialist project.

    The Marxist theory was that the socialist state, by nationalizing all productive property and thereby abolishing both private property rights and the price-fluctuating trading market, would “teach” the masses, more and more, to be communal in spirit. What this incorrect theory of social transformation has done is destroy productive incentives among working people, split the rural and urban small bourgeoisie from the workers and the socialist leadership, and force onto society an unnatural and ultimately self-destructive caricature of real socialism.

    What is proposed in the article–or, better said, what is alluded to, due to lack of space–is a different, and hopefully correct theory as to how classes can be diminished and perhaps, far in the future, eliminated. It would be through broad, direct, democratic ownership of the instruments of production by those who do the work, alongside silent, cooperative state co-ownership of the mainly cooperative means of production, and an economic and cultural merging of all productive citizens and families.

  • Grady, you said I had given you the idea to write this, in a comment I posted referring to Raul’s speech. I wish you had also taken my suggestion to check our the effectiveness of worker managed/state owned businesses – both large and small in Venezuela.

    One of the lengthy recent reports concerning Worker Managed and Organized Companies and Coops in that thriving Socialist Country. The referenced link should alleviate some of your concerns about the impossibility of such enterprises without strangling in the bureaucracy. It is possible, and it can work.

    Of course the Government and the Workers have to be on the same page and have the same goals, or all the old problems will simply re-emerge at a later date. It probably did a great deal for morale when Chavez announced “I am with the Workers…” when the local power structure tried to force them out.

    Check out this link:

    It is long, but detailed and contains a wealth of information.

    IMO, Privatization is neither ‘reform’, nor the answer. Rather, it is a sell out of all the struggles and hardships suffered by Cubans in the past 110 years… I am certain the US will be happy to move in with the IMF and World Bank to introduce 21st Century Wage Slavery to a Privatized Cuban Economy. Hell, the Grandkids of Batista’s thugs probably have their bags packed and waiting.

    Think about it…

  • Grady states “This would relieve it of administrative functions all across the board, but allow it to receive quarterly profit distributions as the same time as individuals and cooperative associates distribute profits to themselves.” A tax is a tax is a tax. He further states,”When, over one or two generations under a cooperative, state co-ownership model the economic, social and cultural difference between classes have diminished through an economic and cultural merging process, it might then be possible to say that classes have been minimized or completely eliminated…” As long as most white Cubans continue to work in those jobs which avail them to CUC and black Cubans work at jobs involving mostly CUP, there will be at least two classes. Grady’s model does nothing to address the inherent inequity in a society which uses two currencies. Remittances from families outside of Cuba only exacerbate this inequality. Nonetheless, a good start.

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