Book Review: Che Guevara: The Economics of Revolution

By Kamran Nayeri, Journal of the History of Economic Thought, March 2012

Helen Yaffe’s Che Guevara: The Economics of Revolution is an excellent addition to the literature on the Cuban revolution and the contribution of its chief theorist to the theory and practice of transition to socialism.(1) 

1. Historical context

The revolution of 1959 was unique because the leadership organized by Fidel Castro grew out of the Cuban and Latin American revolutionary heritage and outside the influence of world Stalinism, represented in Cuba by the Popular Socialist Party (PSP). Parties schooled in Stalinism were dominant in the post-World War II anti-capitalist overturns in eastern Europe and revolutions in Yugoslavia, China, North Korea, and (northern) Vietnam. The term ‘‘Stalinism’’ refers to the ideology and practice of the conservative ruling elite that came to power in the Soviet Union after the Russian working class was driven out of political life by a combination of devastating counter-revolutionary civil and imperialist wars, Russian socio-economic backwardness, and the isolation of the socialist revolution after the defeat of the revolutionary upsurge of the European working classes in the aftermath of World War I. As the chief arbitrator for the bureaucracy in the party and state, Joseph Stalin presided over mass terror of workers and peasants, and physical elimination of the Bolshevik leadership. The Marxian concept of world socialist revolution was replaced by the official doctrine of ‘‘socialism in one country’’ and proletarian internationalism with peaceful co-existence with capitalist powers and parties. Communist parties around the world were purged from revolutionary currents that opposed these reversals in the late 1920s and early 1930s. 

Critical of existing ‘‘socialisms,’’ Guevara returned to Karl Marx’s central idea that socialism is human emancipation from conditions of alienation, and that the transition to socialism requires withering away of the law of value, the central enforcer of alienation in the capitalist society. These gave Guevara certain theoretical advantage over the prominent theoreticians of transition to socialism in the Russian revolution: Nikolai Bukharin, Vladimir Illich Lenin, Yevgeni Preobrazhensky, and Leon Trotsky. Marx’s key writings on the problem of alienation were unknown to these theorists, and there was less attention to the law of value as the regulator of the capitalist economy and society, due to the general acceptance of Rudolf Hilferding’s claim in Finance Capital (1910) that it was no longer applicable to the ‘‘monopoly stage’’ of capitalism. Developing his theory as a leader of an ongoing socialist revolution also gave Guevara an advantage in relation to the Western Marxists critical of Stalinism—he formulated a theory that was driven by practical needs of an actual revolution.

2. Sources and Methods 

Yaffe’s discussion of Guevara’s theory of transition to socialism is focused on his economic management system, the Budgetary Financing System (BFS), through a detailed study of his leadership role in the Ministry of Industries (MININD) charged with the rapid industrialization of Cuba. Through practical necessity and with experience gained in his political, military, and economic functions, as well as insight from Marx’s writings, Guevara began to devise the BFS in response to practical needs of Cuba and to facilitate the transition to socialism. 

Yaffe’s sources and methods include archival material such as manuals, annual reports, personal assessments, management board reports, factory inspections, economic perspective documents, and, most importantly, transcripts of bimonthly Ministry of Industries meetings. She also interviewed ‘‘nearly 50’’ of Guevara’s closest collaborators. Yaffe’s writing is alive with many personal recollections by Guevara’s collaborators, offering the reader a sense of the man as a revolutionary and a human being. 

3. The structure of the book

Chapter 1 offers an introduction to the book, its scope, sources, and methods, and a concise account of the Cuban economy in the 1950s. Chapter 2 provides an account of the revolutionary consolidation and the emergence of the BFS. 

Chapter 3 summarizes the Great Debate, extensively documented in Bertram Silverman’s book (1971) of the same title. The July 26th Movement (M26J) led the revolutionary war that culminated in the 1959 revolution following a revolutionary national democratic program (Castro 1953). After coming to power, Fidel Castro and his closest comrades in the M26J realized that to carry through their program, the revolution would have to undertake anti-capitalist measures that would lay the ground for a socialist revolution. Thus, they began a process of unification of the socialist current in M26J with like-minded forces in PSP and Revolutionary Directorate (a revolutionary student group). This unification process eventually led to the formation of the Communist Party of Cuba on October 3, 1965. While this process was certainly necessary for the stability of the revolutionary process besieged by internal counter-revolution and imperialism, it also brought together currents with different traditions and theoretical perspectives. Leaders of the PSP who had looked to Moscow for political and theoretical guidance assumed leadership positions in the new party and state apparatuses. Their influence guided the National Institute for Agrarian Reform and Ministry of Foreign Trade, both following the Auto-Financing System (AFS), an economic management system copied from the Soviet Union. The AFS used market categories to motivate and enable enterprises to achieve efficiency within a broadly defined, centrally conceived, economic plan. 

In Guevara’s view, the AFS paved the way for capitalist restoration because it relied ultimately on market categories such as profitability and sectional interests. He suggested that the Cuban economy industry could be modeled instead like a capitalist conglomerate that uses administrated prices instead of market prices with the goal of the overall success of the economy, as opposed to the success of each of its units. While the AFS was based on the presumption that the law of value could be used to build socialism, Guevara’s BFS was organized to progressively limit the sphere of operation of the law of value with a permanent campaign to raise socialist consciousness. 

While the debate was conducted openly and democratically, it did not involve the ranks of the Cuban communists or the Cuban workers. And, it was not conclusive—the Communist Party essentially allowed the two sides to practice their preferred economic management system in their respective economic domains. 

Chapters 4 to 8 deal in some detail with Guevara’s ideas and their practical implementation in several important functions of the MININD: promotion of education and training; establishment of accounting, investment, and supervision systems; development of organizational forms for workers’ input in management’s decisions; laying the foundation for research and development institutes to apply science and technology to production; and formulation of policies to raise consciousness and commitment to the revolution, and to use psychology as a tool in the process. 

Chapter 9 is quite interesting as it reveals Guevara’s highly critical views of the Soviet Manual of Political Economy. Guevara left these in the form of extensive notes for Fidel Castro upon leaving for his faithful Bolivian campaign that ended with his death on October 9, 1967. Yaffe tells us that this document, still not widely available to the public, was kept under ‘‘lock and key’’ to ensure it would not disrupt Cuba’s special relationship with the Soviet Union. 

In Chapter 10, Yaffe attempts to deal with the difficult question of Guevara’s legacy in Cuba. She tries to trace how Guevara’s ideas were in and out of favor during four decades of recent Cuban history and succeeds less here than anywhere else in her book. There is no clear explanation of why even Fidel Castro’s public appeal for a return to Guevara’s ideas (Castro 1987) has not been heeded. 

4. Limitations 

In Chapter 1, Yaffe delineates the scope of her study and some limits of her methodology. She states that her ‘‘intention is not to provide a definitive account or to answer all the theoretical questions it throws up. Rather, it is to offer a new starting point for further debate’’ (p. 3). However, given Yaffe’s own scope, her treatment involves some significant problems. Due to space limitations, I can note only the most important of them here. 

First, Yaffe’s account of Guevara’s theory of socialist transition is incomplete or even distorted due to the exclusive focus on the MININD. To the reader less familiar with Guevara, it appears as if he favored autarkic development (fashionable in the 1960s) or, worse, socialism in one country (preached by Stalinism). There is no attempt to link the Minister of Industries with Guevara the internationalist, who unceasingly tried to foster world revolution. 

Second, although, like Yaffe, I am sympathetic to Guevara’s overall position, I find Yaffe’s treatment too uncritical. For example, how does one square Guevara’s single-minded push to undermine the law of value with his lack of serious discussion of workers’ management and socialist democracy? 

Third, Yaffe does not draw the reader’s attention to broad differences in thought between Guevara and earlier key Marxian theorists. Guevara’s theory of transition to socialism relied on the cadre assembled mostly during the guerrilla war. This is in sharp contrast with Marx, who believed that emancipation of the working class is the task of workers themselves, and with Lenin’s theory in 1917 that relied on the Soviets (councils) of workers, peasants, and soldiers, or with his theory of a vanguard working-class cadre to lead the process. Similarly, Yaffe does not tell her readers that Guevara’s criticism of Lenin’s views on the New Economic Policy or dismissal of Trotsky’s theoretical contributions, including about transition to socialism, is misplaced, and she does not wonder why Guevara remained disinterested in the root causes of non-Marxian theories spawned by the Soviet Union and other existing ‘‘socialisms.’’

Still, Yaffe has added significantly to the earlier important account of Guevara’s theoretical contributions provided by Carlos Tablada (1989). Her book should be read by anyone interested in the Cuban socialist experience and theories of transition to socialism. 

Endnotes:

1.  Some writers use the term ‘‘socialism’’ to refer to the society and economy, beginning with the process of socialist transformation. This is true of Ernesto Che Guevara. Yaffe uses the same terminology. Like Marx, I use the term ‘‘socialism’’ as the lower stage of communism, the society that emerges from the transition period. 

References

Castro Ruiz, Fidel. [1953] 1987. ‘‘History Will Absolve Me’’ In Martha Harnecker, Fidel Castro’s Political Strategy: From Moncada to Victory. Pathfinder: New York. 

Castro Ruiz, Fidel. 1989. ‘‘Che’s Ideas Are Absolutely Relevant Today.’’ In Carlos Tablada, Che Guevara: Economics and Politics in the Transition to Socialism. Pathfinder: New York. 

Hilferding, Rudolf. [1910] 1981. Finance Capital: A Study of the Latest Phase of Capitalist Development, edited by Tom Bottomore. London: Routhledge & Kegan Paul. 

Silverman, Bertram. 1971. Man and Socialism in Cuba: The Great Debate. New York: Atheneum. Tablada, Carlos. 1989. Che Guevara: Economics and Politics in the Transition to Socialism. Pathfinder: 

New York. 

Kamran Nayeri is Political Economist (emeritus) Survey Research Center University of California, Berkeley.