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Perestroika Cubana Raj M Both were driven by a cult of personality cal history, instead of governing through that becomes difficult to extend beyond modest guidance and the presumption the life of the person. And the sweeping that human beings are quite capable of repression so central to both dictator- determining their own lives. n ships depends on an image of invincibility that is often undermined by the death of Irving Louis Horowitz is the Hannah Arendt dis- the leader. The reliance on foreign allies tinguished university professor of sociology generally makes the dictatorship less ten- and political science at Rutgers University. able and the dependence on a command He has published eleven editions of Cuban economy becomes unsustainable, particu- Communism (Transaction Publishers) and larly in the current Cuban context. the Bacardi Lectures on Cuban Politics and The expected death of Castroism be- Culture in an American Context, The Con- comes the ultimate irony and penalty of science of Worms and the Cowardice of Lions. He foisting upon a decent people a truncated is currently at work on a volume of essays, Marxism-Stalinism, making endless ap- The Theory and Practice of Cuban Communism: peals to personal sacrifice and metaphysi- 1959–2007. Perestroika Cubana Raj M. Desai & Itzhak Goldberg N April 21, 2007, Granma, vestment and durable goods, and buys the official newspaper of the its sugar and nickel—Cuba has avoided O Cuban Communist Party the regime change that occurred when released photos of a convalescing Fidel East European socialist states faced simi- Castro meeting with a senior member lar economic crises in the late 1980s. In of the Politburo of the Chinese Com- Cuba, housing shortages, mounting debt munist Party. The photos underscored and deteriorating public services have how tightly Cuba has hitched itself to produced no mass protests, no general the Chinese economic wagon, and how strikes, no throngs taking to the Plaza much both Fidel and his brother Raúl de la Revolución to demand multiparty have warmed to a country whose former elections or an end to central planning. leader, Deng Xiaoping, Fidel once de- Indeed, it now seems possible that Cuba scribed as a mentecato (“numbskull”). may follow the “Chinese model” of re- After Cuba lost its main benefactor, form, whereby Communist Party control the Soviet Union, its economy shrank by is maintained alongside a gradual estab- over 35 percent. But Cuba has recovered, lishment of free-market incentives. and more recently, with a little help from But can Cuba continue along this its new friends Venezuela and China— path? Venezuela subsidizes Cuba’s oil consump- Let us assume, for the moment, that tion while China provides Cuba with in- the Cuban regime finds itself—in some 6 The National Interest––Sep./Oct. 2007 not-too-distant future—without the Cas- nutshell, the argument is that, in contrast tro brothers and newly headed by reform- to the post-Soviet and East European ers from within the Communist Party, as recessions in the 1990s, China succeeded did the Soviet Union in 1985 when Gor- not only in growing rapidly, but in creat- bachev became the leader of the USSR. ing a vibrant, non-state-owned enterprise The question that Cuba will face then, sector at the same time. as did the USSR in 1985, is: What kind of But there are three well-known (and reform is possible? fundamental) flaws with the comparison Chinese advisors—already in place— of China and the economies of Eastern will tell the Cuban government to avoid Europe and the former Soviet Union. drastic changes to their enterprises. The First, a vibrant private sector emerged in Chinese will remind Cuba what the So- China because, prior to 1978, China was viet republics went through—hyperinfla- a peasant, agricultural society in which tion, skyrocketing unemployment, wide- the migration of workers from low-wage, spread corruption and asset theft, widen- low-productivity agricultural sectors to ing inequality, banking crises, currency higher-productivity industry was rela- collapse and massive social disruption. tively smooth.1 In 1978, over 85 percent They will explain that, instead, it is bet- of the Chinese workforce was employed ter to do what China did: To “grow” its in agriculture. Although that proportion way out of the problem by combining has shrunk by half in the intervening 29 some price and trade liberalization, an years, surplus agricultural labor continues environment for new businesses to flour- to flow to jobs in the steadily growing ish and strict public control over state Chinese economy. By contrast, Soviet enterprises. But they will be giving the labor was primarily employed in heavy Cubans a false choice. It was not China’s industry, restricting the availability of “gradualism”, but rather its unique eco- surplus labor flows into a “new” private nomic structure that allowed China to re- sector. form without suffering economic disloca- Second, because of the economic tions. Likewise, it was not Russia’s reform structure of the post-socialist European speed, but its over-industrialization that economies, radical reform was a neces- led to its economic collapse. sity, not a free choice. One forgets that Cuba’s economy—which resembles Hungary and Poland both tried to avoid that of the smaller East European coun- a harsh break with their socialist past tries at the outset of their transitions far through their own versions of gradual more than it does China—is a poor can- reform in the 1980s, to little avail. In didate for Chinese-style gradualism. Ul- both countries throughout the 1980s, the timately, Cuban prosperity must come “non-state” sector expanded significantly, from the revival its private sector through yet job creation and economic growth rapid reform. did not follow. Instead, these partial re- forms became little more than a way for or almost a decade, the managers and employees to strip their China–post-Soviet contrast companies bare. Finally, it should also be F has been misleadingly used to remembered that governments in Bulgar- demonstrate the supposed advantages of ia, Romania, Slovakia and Ukraine all at- incremental reform—“crossing the river while feeling the stones” in Deng’s mem- 1Jeffrey Sachs and Wing Thye Woo, “Understand- orable phrase—over economic “shock ing the Reform Experiences of China, Eastern therapy” or the “big-bang” approaches Europe and Russia”, Journal of Comparative used in Eastern Europe and Russia. In a Economics, Vol. 18, No. 3 (1994), pp. 74–88.. Rocky Shoals of Reform 7 tempted their own versions of gradualism It is notoriously difficult to lure work- after 1990 that, in all cases, pushed these ers, capital and productive inputs from countries deeper into economic crisis. the state sector to the private sector, as Finally, Chinese reformers did not long as the former remain heavily subsi- choose gradualism purely because it was dized. State-enterprise employees in cen- an optimal reform strategy. Rather, a trally planned economies, of course, ben- series of stalemates between hardliners efit from a whole host of “social assets” and pragmatists following Mao’s death, that are funneled through their work- combined with the Chinese Commu- places, such as health clinics. Cuban state nist Party’s ideological commitment to enterprises continue to offer job security, public ownership, restricted the range guaranteed income, health care and hous- of choices available to reformers.2 To as- ing through their places of employment, sume that reformers everywhere are free creating strong disincentives for reloca- to choose a reform path based purely on tion to the private sector. sound economic and technical judgments So, unlike in China, where large completely ignores the political realities numbers of peasants left agricultural col- that reformers face, including the inter- lectives that did not provide that level of nal power struggles in which they are social protection to work in the emerging involved, the need to compromise and private sector, it is highly unlikely that the need to secure a minimum degree of Cuba will be able to rely on the type of public support. workforce flows from subsistence agricul- And Cuba shares much more in com- ture that have been the source of China’s mon with the smaller East European long expansion. countries in 1990 than with China in A post-Castro government may find 1978. it tempting to maintain state ownership As of 2005, just 20 percent of the in order to avoid unemployment or so- Cuban workforce is employed in agricul- cial unrest. But Cuba will not be able to ture. That compares closely to the situa- rely on the good graces of state-enter- tions in Ukraine (22 percent), Poland (23 prise managers, particularly if the Cuban percent), Bulgaria (25 percent) and Lith- party–state apparatus begins to fray. In- uania (20 percent) almost two decades deed, there is evidence that some spon- ago. Cuba’s share of labor in industry taneous privatization has already been (22 percent) also compares to Ukraine’s underway since Cuba’s main benefactor, (26 percent), Moldova’s (20 percent) and the Soviet Union, collapsed. Lithuania’s (29 percent). In the 1990s Cuba experimented with The service sector in Cuba is domi- various private-sector reforms, in particu- nated by tourism. Since these workers lar, the establishment of joint ventures already receive certain benefits—wages with foreign investors, the conversion of paid in dollars or in convertible pesos state enterprises into joint-stock corpora- along with additional, unofficial in- tions (sociedades anónimas) and a reduc- come—they will stay tied to that sector. tion in budgetary subsidies.3 Many of the This leaves laborers in industrial state en- corporations created out of these private- terprises to fill the labor-force void—pre- sector reforms, for example, have be- cisely the same “available” workers that forced smaller East European nations to 2Barry J.
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