Cuban Economists on the Cuban Economy

Introduction: Finding a New Road (Again) to a Socialist Economy and Economic Well-Being in Cuba

Introduction Finding a New Road (Again) to a Socialist Economy and Economic Well-Being in Cuba Al Campbell Since Cuba announced to the world on April 16, 1961, that it was embarking on the construction of a socialist state, the history of its economic policies has been one of constant change within continuity. Its evolving economic policies can be divided into a somewhat standard periodization as follows: 1961–65, theGreatDebate;1966–70,theRevolutionaryOffensive;1 1971–75,transition to a modified Soviet economy; 1976–85, modified Soviet economy; 1986–89, Rectification Process; and 1990–present, the Special Period (see chapters 1 and 2 for somewhat different variants on this periodization). Sometimes the transition from one period to the next involved fundamentally different reconceptualizations of what was actually central to socialism. In all cases, the policies of successive periods implemented significant changes in emphasis to achieve what was necessary at that moment to promote a socialist economy in Cuba. The continuity through all the changes has been exactly that commitment to building a socialist economy, even though discussions have never ceased in Cuba about exactly what that means and how best to do it. This continuous commitment to creating a socialist society has guided Cuba ’s choices in building its economy, and its importance must not be underestimated . The dominant (though not exclusive) premise taught to economists in capitalist countries is that there is only one “real economic problem”: to make the “pie” (the GDP) grow as fast as possible.2 Conservative-leaning economists consider the distribution of the social product to be automatically just, because they hold that the market returns to “factors of production” (which includes working people) what those factors contribute to production. More liberal economists recognize that the government could always step in and redistribute the market’s resources in accordance with any desired results; therefore, in 2 Al Campbell their view social redistribution is a political issue, not an economic one with which they should concern themselves. Hence, both conservative and liberal capitalist economists in general find distribution of wealth to be an inappropriate issue for economic consideration. In contrast, as the chapter authors will note repeatedly, a socialist economy has a different goal: it directly targets the well-being of the population. Societal well-being is a much more difficult concept to measure than GDP, a topic addressed in chapter 5. It is, however, essential to understand that Cuba’s economic policies have this fundamental goal in order to consider its economic performance in any meaningful way. Of course, Cuban policymakers hold that GDP growth and improved economic efficiency are necessary for improved societal well-being. But the important difference is that for them economic growth alone is not sufficient and is not identical with workers’ well-being. Certain means of improving efficiency or GDP can be harmful to the wellbeing of the majority of the population. This different goal clearly has the potential to cause Cuban policymakers to act differently than their capitalist counterparts would. Economists who cling to the beliefs that all economic policies are based on GDP growth, and that Cuba’s declarations of socialism are either irrelevant or harmful to good growth policies,3 will necessarily fail to understand why Cuba’s economic policies have been what they are. When in the 1990s Cuba entered its worst economic downturn since the triumph of the Revolution, it acted in ways counter to capitalist economic policies. It chose to borrow as heavily as it could despite the negative consequences to its debt and credit rating. It chose to allow an excessive buildup of domestic liquidity by keeping people on payrolls to prevent widespread unemployment , even when factories did not have the inputs to carry out production. As almost all the contributing authors note, Cuba did this to defend, to the maximum extent its problematic economic situation allowed, the important gains in human well-being it had achieved in terms of health care, education, and the elimination of poverty and clinical hunger. These steps are directly opposite to the adjustment programs that the International Monetary Fund (IMF) has imposed on many third-world countries since the 1980s in the name of (restoring) economic growth and long-term efficiency . Most of the IMF austerity programs failed to restore healthy growth, but that is not the issue here. Rather, the important point is that Cuba ruled out severe austerity measures precisely because its basic economic goal was human well-being, not GDP growth. Cuban leaders understood that...