Worthless Money for Work = Corruption

Pedro Campos

Rural Cuba Photo by Caridad

HAVANA TIMES, March 16 — A friend, who works in a farm cooperative making her money honestly and living decently, told me she was concerned about constant pejorative criticisms alluding to “farmers who make money speculating with the people’s food.”

In her opinion, the monopoly that the State has always sought over the commercialization of food products —which is justified as being the need for the State to struggle against speculation so as to achieve equitable distribution at affordable prices for everyone— has as its main aim not so much the prevention of “farmers from becoming millionaires” as the guarantee that all money amassed from this commercialization remains in the hands of the State for the benefit of its bureaucratic apparatus.

Who does it benefit when many tons of agricultural products, paid for at low wholesale prices, rot before getting to the consumer and turn into liquid feed for pigs?  “I imagine those who have pork breeding businesses in combination with the State,” she said, “though no one knows exactly if these are the businesses of bureaucrats or private pork breeders, or people who are both.”

She also asked, “What’s wrong with us campesinos wanting to get paid well for our products…to have money to buy what we need?”  She added, “Anything we buy in the hard currency market will cost us 25 pesos for one CUC, but the State pays us in regular pesos (MN), not in CUCs.  We campesinos don’t produce money, we produce food; but the State is the one that determines even the price it pays us and the price of money.  It should be a situation where the campesinos price their own commodities and where the value of products determines the price of money.”

In all fairness, each producer should decide the price in agreement with the buyer.

Lessons from a farmer

She then asserted, “Farmers are not corrupt simply because they want to earn money in exchange for their work; the corrupt ones are the individuals who don’t produce anything yet live better than many campesinos who work the land and receive next to no money from the State for their crops.”  In her opinion, “It’s the State that is acting corruptly when it pays using the valueless money that it prints, in exchange for agricultural products that do indeed have value.”

Rural Cuba photo by Caridad

“Have you studied political economics?” I asked her.

“No, but thanks to the Revolution I finished pre-university high school. I read a good bit and I listen to the radio and watch television.  These inform me about many things related to agriculture and the economy, though some of these have nothing to do with what I’ve learned from furrows, the rain and oxen,” she replied.

She told me all this roughly in the same words, some of which I prefer not to include in this account.  Later I thought how valuable these opinions of a simple woman of the land were.  In fact, I believe she should write them down and try to explain them to me better and share them with the readers.

Indeed, while there exists money as a means to obtain the necessary resources for subsistence, people have to earn it.  Therefore, those who produce the means of subsistence with their work (agricultural and industry products and services) will logically want their labor and their output to be paid for accordingly and in a manner that allows them to obtain the necessary goods for living (be it food, household goods, transportation, books, televisions, computers, telephones and other articles characteristic of modern life), since we don’t live in the age of cave dwellers but in the 21st century – the period of the greatest technological revolution ever.

The true source of corruption

Corruption then doesn’t exist in merely wanting to have the money necessary to live, but in the manner in which one obtains that money: whether it’s through one’s own labor and effort or through exploiting other people.

There are many ways of exploiting, extorting and stealing from other people.  The most visible forms are robbery, burglary, cheating with weighing scales or altering prices, etc.  However, there are more sophisticated forms of robbery.  The most classical of capitalism is that of the appropriation of surplus value by the bourgeoisie.

Another form of robbery —or corruption, as the farmer pointed out— is when a State uses devalued paper money that it prints for payment and appropriates the labor value of those who produce with their sweat and intelligence.

This is seen and very easily understood when we analyze the US economy and its government. Everyone understands it.  Economists and government leaders have explained it quite clearly. The US government prints up dollars, without backing, to produce weapons, pay for its wars, buy off entire governments with their complete economies and their bureaucracies, and maintain high a US standard of living and “security” for its bureaucrats, leaders, senators, representatives, etc., for example.

When we will analyze our economy, it occurs to few people to think that here the government prints up hard currency (CUCs) and Cuban national pesos (MN), which have a function similar to US dollars, as well as to the currencies of all countries.

What’s wrong with us campesinos wanting to get paid well for their products so they can meet their needs.

Here, like the cooperative member said, the State is the entity that establishes the price of money and that monopolistically determines the value of the work of a campesino or the wages of a manual or intellectual worker.

But what does the State produce in addition to money? – because those who produce the means of subsistence are manual workers, intellectuals and campesinos.

And where does the State get its resources except from exchanging paper money (which it prints) for the productive labor of workers and campesinos, who are the ones that create and added “value,” the content in products and services.  The State then sells these in exchange for hard currency to foreigners (within and outside Cuba) in order to satisfy its needs and those of its enormous bureaucratic apparatuses and to implement its social programs.

In this way (with printed money that is also without backing) the State pays for the work of Cuban producers at price it decides; buys the agricultural produce of campesinos at prices it establishes and then sells these at sums it determines; and sells goods necessary for consumption in its hard currency stores at prices it imposes monopolistically.

With this level of decision-making authority held by the all-powerful and all-possessing State, it can of course set prices on everything – from a pound of beans to the work of a professional or purchases and sales that it controls through its trade monopoly.

This monopoly is what ultimately allows it to offer two of the relatively best services in the world: universal health care and education.  However, this is also what facilitates it having —all in relative terms— one of the largest government bureaucracies in the world, one of the largest political apparatuses in the world, one of the largest publicity structures in the world, one of the most extended diplomatic systems in the world, one of the largest armies in the world, as well as several security agencies that are also among the largest on the planet.

Revolution Square Havana. Photo: Caridad

This apparatus is made up of hundreds of thousands of people, perhaps more than a million (almost a fourth of the Cuban work force), who are productive, well trained, young, strong and healthy people occupying those functions and living off the work of others – with many enjoying privileges unobtainable for those who directly produce wealth.

In fact with the money this structure prints, and by paying exceptionally low wages to its employees, the Cuban State buys almost all the labor power —manual and intellectual— of the Cuban people.  The goods and services produced by these workers are then sold by the State in the domestic market at a price it decides and in the international market where it can.

A too large, too expensive, untenable State

This is the natural consequence of the application of the concept called “State or real socialism,” which up to now has not resulted in socialism anywhere.  Inherited from the times of Stalinism, though metamorphosed and “tropicalized,” its essence continues in force in Cuba as what Lenin described as “state monopoly capitalism” (with a sole owner, employer, buyer and vendor, except for isolated instances).  In this lies the fundamental cause of all our current problems.

This is not forgetting that imperialism shares the blame with this aberrant “model,” not only for its criminal blockade, which we’ve always managed to sidestep in a myriad of ways, but especially for its threats and aggression, which have stimulated the spirit of a besieged citadel of confrontation and Manichaean, bureaucratic, militaristic and authoritarian tendencies.  The blockade has engendered a kind of a vicious circle of cause-effect within the paranoiac, closed and uncompromising system.  Some call it a double blockade.

The State? Yes, it will have to exist for a time, but as a new type: the most democratic, the most human, the most decentralized form possible and performing only what is indispensable; with general, methodological and integrating functions; guaranteeing the execution of participative municipal and national budgeting, the development of communications, transportation and the general service infrastructure, and part of the defense, foreign service and other such functions.

Havana, home of Cuba's centralized economy. Photo: Caridad

Part of the leadership has realized —once again— that we have a too large, too expensive and untenable State, which is why it is seeking to make other significant reductions in the bureaucratic apparatus and its expenses.  However, what corresponds to this requirement is for it to decentralize and to now begin the turnover of most of its current administrative functions directly to companies and their collectives of workers.  Through this, the bureaucracy would indeed appreciably diminish.

There should be collectives of workers who democratically determine the reductions, not a bureaucratic State apparatus disconnected from the realities of the rank and file.  The companies would be left with certain freedoms (which they don’t have now) to discover themselves through their own initiatives (new jobs for their workers in marginal production lines, for example).

Why not establish that all bureaucrats be subjected to ongoing worker’s scrutiny —by the people and a free socialist press— earning the same amount as producers, not enjoying special privileges and taking public transportation, as was taught by the communards of Paris?  In this way, anyone who assumes such a responsibility would do so to serve people and not to suck the honey of power.

Havana workers. Photo: Caridad

Let’s remember that many other times, in previous years, readjustments in personnel were made, as well as bureaucratic reductions, the sending home of thousands of “laid off” workers,  budgetary cutbacks, the elimination of gasoline quotas, etc., etc., etc.

An alternative direction

If there is no change in the Statist concept of socialism now in force, the cycle of the reproduction of bureaucracy will be reinitiated shortly, returning us to the same situation.  What is bad is not the existence of bureaucrats, but the system that engenders them.  If we don’t put an end to the centralized administrative system that cultivates them, we’ll never put an end to bureaucrats and the bureaucracy.

“State socialism,” this non-socialism, has demonstrated its failure everywhere and more than once in Cuba.  State power, which rules by brute force, is still not convinced of the need to change itself.  But is there perhaps another alternative?  The power of people, the true power, the one that beats in the hearts of the majority, a while ago decided this is not the road, and nor is it the one wanted by the enemies of the Revolution.

We want another form of socialism: one that doesn’t attempt to violate economic laws, that doesn’t criminalize political differences, where the important decisions that affect all are made by all, that respects the value of the labor force, that respects those who earn money thanks to their labor, and where workers’ own efforts are not questioned; indeed, what would be questioned is anything that might allow capitalists, the corrupt and bureaucrats to appropriate the work of the people.

A Havana Times translation with permission from the author.

6 thoughts on “Worthless Money for Work = Corruption

  • I’ve said a lot already, but please allow me to say a few words more on this subject.

    The more I re-read Pedro’s article, the more I stand in awe of it. His last paragraph must break any noble heart. It reached out for a Cuba that is so needed and so near at hand, if only the PCC leaders could see it and grasp it.

    How can they be helped to see?

    Consider hypothetically that a revolutionary socialist government comes to power in Spain. What would the leadership party then do with the hundreds of worker-owned industrial cooperatives in the Basque region? Would the cooperative property of the workers be expropriated and taken by the new Spanish socialist state? Would this state now bring in state administrators to manage these highly productive enterprises, and reduce the workers to wage workers–as under capitalism?

    Cuba should do now what would be done in such a Spain: convert industry to coop corporations with partial ownership by the socialist state.

  • @ George March

    George appears to have left out a central component of a “horizontal,” cooperative form of socialist republic: reintroduction of the institution of private property rights, an institution wrongly denounced as anathema to socialism and discarded by every party that has tried to build socialism using a statist formula.

    Markets are necessary, but they can’t function property in a socialist economy unless private property rights are also reintroduced and the workers own and operate their own enterprises.

    The solution is not the use of digital or cyber technology to reinvent socialism. It is to place actual socialism on the bedrock of private property rights and the trading market. Only this can save Cuban socialism, and in the process re-orient and re-invigorate the worldwide socialist movement.

    This reintroduction would also bring the small bourgeoisie into the socialist transformation project–where they should have been all along.

  • Like the last article by Pedro Campos printed by HT, this one is stunning and brilliant. There is a difference, however: this one is even more stunning and more brilliant! It can provide a starting point for profound discussions on a concrete, comprehensive reform program.

    Is there anything our socialist US cooperative republic movement can add? Let us try–not for criticism but for productive discussion:

    1) Pedro has not pointed out that the form of socialism in existence in Cuba–i.e. the state owning everything, printing the money, absorbing all the surplus value produced by working people, etc.–does not originate with Stalin. It originates in the 2nd chptr of the Communist Manifesto. Pedro’s very valid criticism therefore goes directly to the heart of the Marxist economic formula.

    2) He has not pointed out that, when a statist, Marxian form of socialistm gets rid of the market and private property rights, only massive bureaucracy can run the economy.

  • Part 3: What I am suggesting is that the entire State’s budget be networked and available for each individual to edit following the input-output model of Wassily Leontief, the final budget being the resulting average. This would give everyone democratic ownership of prices and wages, whilst the input-output model would ensure that any changes made by an individual would have to balance, in other words if they increased prices or wages in one part of the matrix then they would have to balance them elsewhere. Such horizontal decision making would promote solidarity between workers and shared responsibility in a manner that market socialism would not. Such a system is completely untried, but is certainly feasible with todays technology.

  • Part 2: If prices could be horizontally set by a unified State/People, then I think this would be a much better option than the re-introduction of markets. The question is whether this is realistically possible. Certainly in the past it would not have been, but with modern cybernetics perhaps it is. We have seen how the internet has allowed for decentralised flows of information, Havana Times is a perfect example of this. We have also seen how social networking sites like Facebook are both hugely popular and able to network huge numbers of people. Could economic decisions be made in a similar way? I would love to see Cuba experiment with setting prices through a participatory cyber network, before jumping headlong into market socialism. If such an idea still doesn’t work then perhaps I would concede that markets are the only option, but it would be a shame not to leave a genuinely new approach untried.

  • Part 1: When we talk about decentralisation we are really talking about horizontal desicion making as opposed to hierarchical. Capitalism with its markets seems more horizontal, as the likes of the Austrian School of Economists would argue, but in reality it is not since it is biased in favour of those with the most capital. The idea of State ownership was supposed to mean an end to this bias on the assumption that the State was the People, but this can only happen if the State is horizontal. Thus I do not think the problem is State ownership, but rather, that, by being hierarchical in nature, the State has become something distinct from the People. If the State operated horizontally on the will of the People, there would not be a problem.
    The question therefore is how a unified State/People comprised of 9 million can horizontally make decisions.

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