By Grady Daugherty
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.