It's All About Control (Not Reform)

January 11, 2011

By Dr. Jose Azel in The Wall Street Journal:

So Much For Cuban Economic Reform

The Communist Party affirms that 'central planning and not the market will be supreme.'

With his characteristic intellectual wit, Cuban writer Carlos Alberto Montaner defines communism as "the time countries waste between capitalism and capitalism." By this account, the Cuban government is now in its 52nd year of wasted time waiting for prosperity.

Much has been made of economic reforms promised by Raúl Castro, including by the Cuban president himself. "We can either rectify the situation," Gen. Castro recently stated, "or we will run out of time walking on the edge of the abyss, and we will sink." But one look at the economic platform for the VI Congress of the Communist Party of Cuba, now scheduled for April 2011, and it's clear nothing much will change.

The "Draft Guidelines for Economic and Social Policy"—a 32-page document that proposes to chart Cuba's economic future—affirms that "the new economic policy will correspond with the principle that only socialism [i.e., Cuban communism] is capable of conquering the difficulties."

The document persistently emphasizes Gen. Castro's militaristic themes of increased efficiency, discipline and control. It insists, for example, on setting prices according to the dictates of central planning. It also insists that any new "nonstate" (private sector) economic activities not be allowed to lead to the "concentration of property" (that is, the accumulation of wealth). There is no interest in introducing the market socialism of a Deng Xiaoping, who famously told China's people in 1984 that "to get rich is glorious."

It is not surprising that Raúl and his fellow generals are more comfortable with the chain of command of a centrally planned economy than with the vicissitudes of a market economy. More baffling is their failure to understand core principles of economic development.

After much debate and with trepidation, the Cuban economic "reformers" have decided to permit the 500,000 to 1,300,000 Cubans being fired from state jobs to solicit permits to become self-employed in certain activities. It is instructive to examine a handful of the 178 trades and professions that are supposed to help rescue the economy.

Trade No. 23 will be the purchase and sale of used books. Trade 29 is an attendant of public bathrooms (presumably for tips); 34 is a palm-tree pruner (apparently other trees will still be pruned by the state). Trade 49 is covering buttons with fabric; 61 is shining shoes; 62 is cleaning spark plugs; 69 is a typist; 110 is the repair of box springs (not to be confused with 116, the repair of mattresses). Trade 124 is umbrella repairs; 125 is refilling of disposable cigarette lighters; 150 is fortune-telling with tarot cards; 156 is being a dandy (technical definition unknown, maybe a male escort?); 158 is peeling natural fruit (separate from 142, selling fruit in kiosks).

This bizarre list of permitted private-sector activities will not drive economic development. But it does reveal the regime's totalitarian mindset. Here Cuban technocrats foreshadow the degree of control they intend to impose by listing the legal activities with specificity. These are not reforms to unleash the market's "invisible hand" but to reaffirm the Castros' clenched fist. One does not have to be an economist to appreciate that the refilling of disposable cigarette lighters, for example, will not contribute in any measure to economic development.

In his economic dream land of surrealist juxtapositions, Raúl believes that improved state management is the way to save the communist system. The desire for control by the military and the Communist Party of every aspect of Cuban life is antithetical to the individual liberty and empowerment necessary to bring about an economic renaissance.