Systemic Crisis of the Cuban Economy and Society

By Kamran Nayeri, August 11, 2024

Photo: Otmaro Rodríguez

Editor's Note: The following is a free translation of an essay published in the Critique of Political Economy (نقد اقتصاد سیاسی) online socialist journal in Farsi edited and published by Parviz Sedaghat in Iran.  The essay is part of a series of articles published there that focus on my evolving understanding of the Cuban revolution. As a supporter of the Cuban revolution since the 1970s, I visited the island ten times from 1994 to 2006 for solidarlity as well is learning about the Cuban economy and society. I have been publishing articles in scholarly journals and political magazines and newpapers  about the Cuban revolution in English, Farsi, and Spanish, about the gains made by the revolution. This new series meant to be published as a book, offers a critical overview of the Cuban society, economy, and politics. KN

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Corruption in Cuba

From my first visit to Cuba in June 1994, I faced various forms of corruption. The first night I was in Cuba with a solidarity group, I was propositioned by a young Cuban woman to have a good time for money. Later, I learned that young women from across the island came to Havana to work in sex tourism to make ends meet. On another trip, when I was in line to get a ticket to Eliades Ochoa's concert at La Casa de Musica in Havana, in a conversation with a middle-aged American teacher, I learned she was buying tickets for herself and a Cuban man she met. As it turned out, she was from the same Oakland, California as I was. She volunteered that her favorite vacation time is to visit Cuba, where she can "meet" men she likes. I realized that the sex tourism in Cuba works in many ways.  In some instances, it is a Cuban "meeting" a tourist just for the fun of it and that the tourist pays for everything beyond the means of a Cuban. One night, in the lobby of Hotel Havana Libre, I met a young woman who propositioned me. When I asked if she worried about the police mam outside or the hotel guard, she told me she pays them off. The sex industry involves some who are not involved in any aspect of sex work itself. On my first trip, I was surprised to face Cubans selling expensive Cuban cigars.  Of course, some were fake cigars. But many were not. I wondered how so many expensive cigars could be taken from the factory and sold openly in the street without anyone getting into trouble with the law. 

In November 2003, when I went to Cuba to give a seminar to Cuban government IT professionals, I stayed in a casa particular which I found online before traveling to Cuba. The government gave qualifying households a license to establish a bed and breakfast for international tourists to generate much-needed extra income. Staying in a good casa particular is much cheaper than in a hotel and much more pleasant as one feels living with a Cuban family. Sandra, a young woman who managed the casa particulare, was the older daughter of, Ramon and Maria, and her younger sister, a medical student, also lived with them. They apartment was on the thirteenth floor of a high-rise on Avenida de los Presidentes (Calle G), which is a beautiful boulevard. I was given a room near the entry to the apartment. There was only one apartment per floor of the high rise. When I inquired about Internet use, Sandra gave me the address to buy an Internet card. She also asked me if I would buy a card for her. When I bought the cards, I had to show my passport as a tourist, and they registered the cards in my name. 

Later, I learned that Sandra despised the Cuban government, especially Fidel Castro, and that she belonged to a liker-minded student group organized by a professor as a study group. Sandra adored George W. Bush, who had recently invaded Afghanistan and Iraq. I soon found out that she used the Internet to communicate with her anti-revolutionary group in Havana without being tracked. Her sister and her sister's boyfriend were also in the same group. Sandra was constantly in search of a way to leave Cuba. 

I became friends with Ramon, who was a little older than me. He well educated and knew English and German. I began taking Spanish lessons from him. When I asked Ramon about Sandra's political views, he said his daughters had not seen Cuba before the revolution to appreciate what it had done for them. He and Maria supported the revolution, he affirmed. 

Still, Ramon and Maria were involved in illegal activities themselves. They had hired an Afro-Cuban woman a housekeeper who visited their apartment daily except Sunday. At the time, almost all employment was through the Cuban government. One day, Ramon asked me to go for a walk with him. In a busy street, he asked me to stay put while he ran across the street as it turned out to "interview" another Afro-Cuban woman as a housekeeper. The current housekeeper was quitting because she had to take three buses each way to get to her job. 

There was a narrow balcony facing the boulevard with a picturesque view of Havana. Across the street was a beautiful large building that turned out to be a school. One afternoon, I noticed a man put something heavy in a wheelbarrow in the school and traveled across the boulevard towards the tower we lived in. Soon, he came into the apartment with a bag of cement. It was clear that he stole the cement from the school he worked in and sold it to Ramon, who wanted to renovate their bathroom. Construction materials were scarce in Cuba.  Once I took a toilet seat with me to Havana for a friend of mine in Havana who needed one and couldn’t get it.

On the second day of my stay, I realized two thousand dollars cash in the one hundred dollar bills I hid in my suitcase was gone. I kept $500 in my wallet but did not want to carry all my money on me when I went out. Because of the U.S. embargo, U.S. credit cards and bank cards did not work in Cuba; we had to bring our anticipated expenses in cash. I immediately reported that to Ramon, adding that I would have to report this to the authorities unless the money is returned to me by the day's end.  

When I returned to my room in the evening, Ramon took me to a corner and handed me $1500. He said he was embarrassed and sorry, but that's all he could recover from my money. He asked me if I would accept that money as payment for my stay in their apartment. Of course, $500 was more than I was supposed to pay to stay in that apartment. However, I accepted. I took Ramon for a three-day visit to Vinales, where he had family. I suspected that Sandra and her sister might have been responsible for the theft of my money, putting their old parents in a tight spot. 

The Context for and Growth of Corruption in Cuba

Of course, I could not generalize my observations about instances of corruption in Cuba and whether they were growing over time. Hope Bastian's (2018) Everyday Adjustments in Havana: Economic Reforms, Mobility, and Emerging Inequalities helped me to clarify my doubts. Bastian, a professor of anthropology at Wheaton College in Massachusetts, became fascinated with the Cuban revolution as a sixteen-year-old through reading about it. She decided to center her doctoral dissertation research on inequalities in Cuba. When she was in Havana, she fell in love with a Cuban woman and moved in with her and her family.  She immersed herself in everyday life in Havana. She read the Granma, the organ of the Cuban Communist Party, daily and watched the TV news and Mesa Redonda, which is a political analysis roundtable. She participated in shopping for their daily needs and went to church services, cultural events, parties, and academic meetings. Her academic colleagues and friends helped her in literature search and to find interview subjects for her study about inequalities in Cuba. She also taught at the University of Havana.

However, she still needed to get formal permission to conduct interviews for her research, which she tried but couldn't (see endnote 1). Thus, she used a "snowballing" methodology to find subjects to interview. That is, she asked her interview subject for others who might want to participate. Of course, she kept her subjects' identities private as required in the research protocol. This method of finding interview subjects can undermine the necessary randomness of the research sample. That is because interviewees tend to recommend someone in their circle and that would tend to homogenize the sample. However, her research supervisors still found her results valid. 

Ideological Oscillations in the Cuban Revolution 

Bastian identifies socialism with equality, thus her focus on inequality aligns with her interest to help with policy decisions to maintain socialism in Cuba. She considers three historical period focusing on this question. In the pre-revolutionary period of the1950s, Cuban society was a highly unequal society. In 1953, 40 percent of the lower-income Cubans held only 6.5% of all earned income.

During the first three decades after the 1959 revolution, inequality in Cuba decreased significantly. In 1986, 40% of the poorest Cubans had 26% of all earned income (Brundenius and Zimbalist 1989, p. 167). Of course, this significant positive change was due to governmental policies until the mid-1980s. I will discuss the role played by subsidies from the Soviet Union below. With the collapse of the Soviet Union and COMECON, Cuba was engulfed in an economic depression. COMECON was the trading bloc initiated by Moscow in 1949 to regulate trade with Eastern Europe, which Cuba joined in 1972.  In response to the server economic crisis, and the government began a series of market reforms that were institutionalized during Raul Castro presidency in what is known as "market socialism." (see endnote 2)

The government economic survival strategy required rapid expansion of international tourism to bring in badly needed foreign exchange to import essentials for the Cuban economy, including oil. The dollar was legalized, and Cubans were allowed to received remittances from their family members abroad, licenses were issued for casa particulares and family-restaurants catering to international tourists.  tourists in their home. Private restaurants were allowed. State farms were turned into Units of Cooperative Production (UBPC--see endnote 3), cooperatives run by agricultural working people on the land and equipment leased to them by the government. Farmers markets were set up to allow farmers to sell excess production to the public after they sold their allotted share to the government at set prices.  Artisans and artists shops were set up to generate income. In 1994, banking regulations were changed to allow for wealth accumulation. The Cuban Constitution was amended to provide a private labor market previously banned as labor exploitation. Today, half of the Cuban labor force workers are self-employed or work for private employers. 

While these economic reforms have enhanced economic activity, they have also increased economic and social inequalities in Cuba.

Bastian explains how the ideology of the Cuban revolution also chnaged. In the first three decades after the 1959 revolution, the Communist Party and the Cuban state aimed to replace "citizen" with "companero" or "companera" in the public discourse. The attempt was to replace bourgeois individualist attitude with socialist collectivist consciousness. Working for the state was the hallmark of a revolutionary. Working for oneself was frowned upon. 

In the conditions of scarcity, Cubans interpreted the meaning of a collectivist state and socialism in a way that justified taking from state (public) property for personal use or to earn extra income to get by. As this pattern of behavior, illegal but necessary, was institutionalized, even the government accepted it. Some of Bastian interviewees argued taking from the state is not stealing but "borrowing" because the state belonged to the people. 

Bastin (2028, p. 20) affirms that a constant feature of Cuban society after the collapse of the Soviet Union is that everything changed constantly without a warning. In a society with planned economy, it was impossible for ordinary Cubans to plan their individual lives. Citing Cuban research, Bastin argues wages in Cuba have never been sufficient. However, in the first three decades after the revolution, Soviet Union subsidies which I will discuss later and rationing of essential goods helped ordinary Cubans improve their lives. After the collapse of the Soviet Union all this changed because of economic liberalization policies. 

Pierre Bourdieu

Because of her focus on inequalities in Cuba, Bastian found Pierre Bourdieu's Form of Capital (1986) helpful. Of course, Bourdieu's notion of capital differs from Marx's. A post-Marxist thinker, Bourdieu views capital as power to mobilize economic resources by an individual or a social group for their end. Bourdieu discusses three forms of capital: economic capital that can readily converted to money and is constituted in property rights; cultural capital, such as academic or artistic attainments that can be monetized; and social capital or a network of powerful connections that can make access to consumer goods easier and can be turned into economic capital. 

Bastian discusses three forms of capital since the 1959 revolution. The first is the revolutionary cultural capital that arose from the revolutionary power and became the source of socioeconomic relocations in the 1960s. As such, material incentives were added to the moral incentive of becoming Fidelista and joining the Communist Party founded in 1965. Of course, Bastian is not denying Cubans joining the revolutionary struggle to improve Cuban society. She found evidence of material and moral incentives for joining the revolutionary movement in her interviews. There are examples of individuals who, despite many years of selfless revolutionary service, refused to use their prestige to find much-needed resources in the 1990s. However, with time, fewer such individuals were found. At any rate, in Bastian's telling, the 1960s was when a new socioeconomic stratification, a more equitable one, took shape. 

This new social configuration, which provided access to power, consumption, and resources, was changed with the economic crisis of the 1990s. The importance of revolutionary cultural capital decreased while those of economic capital and social capital(access to network of well-connected individuals) increased. 

 To appreciate the significance of these change, let's recall that in the 1960s, half of the education personnel, 20,000 out of 85,000 professionals and technocrats, half of the 6000 physicians, and 700 out of 2000 dentists left Cuba. Thanks to the literacy campaign, expansion of free access to education on all levels, and egalitarian policies of the revolutionary government, colored Cubans and women occupied many of these positions. 

Another path for socioeconomic progress for the working people was to join revolutionary organizations like the Federation of Cuban Women (FMC) and the Armed Forces (FAR). In just one year, 800,000 people joined the Committees in Defense of the Revolution (CDRs). All Cubans received military training, and 300,000 joined the people's militia. Small farmers and peasants organized Asociacion Nacional de Agricultures Pequenos (Association of Small Farmers). In the 1960s, consumer goods were distributed by the Communist Party and the trade unions according to revolutionary credentials. In the 1970s, following the Soviet Union example, durable consumer goods like televisions, refrigerators, washing machines, bicycles, and motorcycles were distributed in workplaces to more productive workers. 

Therefore, a new social stratification in Cuba took shape. 

In the 1990s, a new social stratification emerged. Bastian cited Amalia Weinreb (2009) to give a sense of how Cubans view social hierarchy in the recent period. According to Weinreb, at the top of the socioeconomic pyramid is the "red bourgeoisie," which has access to consumer goods but not to money and wealth. Below it, there are well-known athletes, artists, and musicians who travel abroad because of their profession. They have access to luxury foreign commodities such as new foreign cars legally. Below them are the "dollar dogs," small merchants legally owning economic assets and consumer goods inaccessible to ordinary Cubans. Finally, a large section of society is classified as "dissatisfied consumer citizens" and below them are the "peso poor" section of the population. These groups rely their social connections to acquire much-needed consumer goods. The difference between the two groups is in the power of their respective social networks. Bastian recalls a joke that what there is in Cuba is not "socialism" but "Sociolismo," that is social connections. 

Bastian argues that the trend towards more socioeconomic equality in the revolution's first three decades after the 1959 revolution has been replaced with a trend of increasing inequality since 1990. For example, although in Cuba, everyone can go to public schools that follow the same curriculum, differences in quality of schools have change dramatically. From 1970-2009, the quality of Havana public schools gradually changed as the more affluent neighborhoods have better schools compared with neighborhoods populated by the poor. of poor. During this period, school segregation developed as the more affluent parents got exemptions for their children not to be send to schools in poor neighborhoods. As a result, in schools in affluent neighborhoods students have full uniforms, transportation services, experienced teachers, better lunches, and more prepared to enter the university (Bastina 2018, pp. 42-43). In vocational schools, the children whose parents have revolutionary cultural or economic capital have access to sports, music, and arts education that are unavailable in other schools. Even though these schools are public, they had better buildings, teachers, and equipment.

Other factors intervened as well. In the 1970s and 1980s, admission to the university depended on high school grade point average and participation in "revolutionary activities." The Federation of University Students in 1987 decided to add a test in mathematics and a test of knowledge of materials in the chosen field of study as criteria for university admission. T this decision favored children whose parents were professionals or were in leadership positions and were white. In the school year 2004-2005, 79 percent of students admitted into universities had professional parents. However, in 2019, only half the adult population had university degrees; that is, children of half the adult population with no university degree were at a disadvantage in getting into the universities. Thus, inequalities due to educational attainment increased. 

In the 1990s, the number of admissions to universities was severely curtailed by 43. Access to education, especially higher education, was necessary for the upward mobility of low-income and disadvantaged Cubans in the earlier decades. Thus, post-1990 changes have contributed to less access education for disadvantaged Cubans and increased income inequality. 

In recent years, the number of Cubans who have acquired citizenship of other countries has increased. Some of them send their children to private foreign schools in Havana, like the Spanish School, French School, Russian School, and the International School that only admit students with foreign passports. The minimum tuition for these schools ranges from $12,000 to $14,000 a year.

To appreciate the depth of income inequality in Cuba today, we must remember that the monthly minimum wage in Cuba is 2,100 pesos, the average salary is 4,000 pesos, and the maximum monthly pension is 1548 pesos. Converting these figures to dollars using the exchange rate at the time of this writing, the monthly minimum wage is $88, the average monthly salary is $168, and the maximum monthly pension is $64. Cubans who send their children to private foreign schools in Havana and the bulk of Cuban people belong to different social classes. 

Of course, wages and salaries have always been low in Cuba when converted to U.S. dollars. The right-wing critics of the Cuban revolution have always pointed to such low income to claim the revolution has increased poverty in Cuba. The supporters of the Cuban revolution have drawn attention to social wages in Cuba; the fact that these low incomes were supplemented a subsidized basket of essential goods provided to every Cuban through the Libreta, the rationing system established early in the revolution to ensure more equality. In addition, Cubans had free access to health care, education, and art and culture. For those who did not have a house or apartment  and rented one from the state, by law limited the rent to no more than10 percent of their income. However, after 1990, the Libreta has provided fewer essnetial consumption items, and Cubans have been forced to find financial resources to acquire their necessities in the market at much higher price levels. 

In November 2011, the Cuban state established the housing market. For five decades, there was no formal housing market in Cuba. Cubans who had to relocate for any purpose used an informal housing market in which buyers and sellers could agree on a price and, or when possible, exchange their home with cash payment for any price difference. The establishment of the housing market changed this awkward situation overnight. In the process two groups secured high financial gain: the Cubans who left Cuba after the revolution but managed to keep their houses and  revolutionaries who took over vacant houses.

In health care, a similar development has taken place. Some medical services that are elective have been commodified, such as plastic surgery. In these cases, the patient and the physician agree on a price for the service in question which is carried out in government-run hospitals and clinics using public materials. In 2006, Professor Candido Lopez of Havana University and I conducted informal interviews for a research project for which I had received funds in the United States (Nayeri and Lopez 2008). In our interviews, a few people told me about the scarcity of medicine and medical supplies, including sheets for hospital beds. Patients and their relatives had to provide these from outside sources, including, the black market. Of course, we could not have reported this hearsay as "information" which required additional research beyond our means. Like Bastian, I was unable to secure formal permission to conduct interviews. 

When teaching a comparative healthcare system seminar in the 1980s and 1990s, I always included the Cuban healthcare system. I discussed Cuban internationalist health care mission to needy nations and regions as humanitarian action consistent with socialist solidarity. Bastian (2018, p. 117) writes: "Today, going on international missions allows health professionals to earn higher salaries working abroad without leaving their field." In the 1990s, some healthcare professionals left their professions to work in the international tourism industry for higher income. Going on international missions also adds to their professional experience. During 1998-2011, more than 41,000 Cuban healthcare professionals worked in 68 countries worldwide. 

Bastian writes that the Cuban government now focuses on economic benefits instead of political or social incentives in conducting international medical missions. In 2009, physicians who participated in the program received $150-$375 monthly income (ibid. P. 118). Physicians participating in international missions receive also $50 monthly and every month, $200 is deposited in their bank account in Cuba, which they can withdraw when they return to Cuba. If a physician signs up for a second round of international missions, the $50 monthly incentive will increase to $100 monthly.  Meanwhile, the Cuban government received $4200 a month for every Cuban physician serving in the host country. 

Bastian stresses that female health care workers who are mothers have little opportunity to participate in this lucrative program. 

The Spread of the Private Sector

In 2024, about a million and a half people, or half the Cuban workforce, will work in self-employment jobs, cooperatives, or as wage workers in the private sector. This shows a 30 percent growth since 2021. In the 1980s, the Cuban government was almost the sole employer. It now competes with family self-employment, cooperatives, local development projects with a mix of government and private investment, and private Cuban and international firms (Adams 2024). 

Cubans who work in the private sector often lack union protection. Small private firms often hire workers for a six-week training period without pay. Many of these workers are not hired after the training period ends, robbing them of six-weeks’ pay.

A discussion of many consequences of the economic liberalization policies in Cuba is outside the scope of this essay. However, even supporters of the Cuban revolution criticize some aspects of these reforms. In 2000, I interviewed (Nayeri 2000) the Havana University professor of philosophy and history Sonia Enjamio Exposito. A lifelong member of the Federation of Cuban Women (FMC), she explained how the Cuban revolution provided the space for the rise of the women's movement. Still, she remarked there was a long way to go. In the eleventh Congress of the FMC in Havana, which opened on March 8, 2024, as Granma, the organ of the Communist Party, reported, six decades into the revolution, there are still no reliable statistics about violence against women in Cuba. Officials cite laws passed in support of women as evidence of the lack of violence against women. Granma writes: "It is also necessary to rescue the work at the grassroots: the blocks and neighborhoods are the first line of combat against the manifestations of gender violence and the traditional vision that places women in vulnerable strata (Cabrera Manzon and Maturell Senon March 8, 2024)." 

African Cubans still face discrimination, as Esteban Morales (2012) who demand preferential treatment for colored Cubans explains. 

The economic liberalization policies pursued by the Communist Party and the Cuban government workw against the interests of women and colored Cubans. 

As I have discussed in earlier installments of this extended essay, the Cuban Communist Party established in 1965 came under the influence of Stalinism of the leaders and cadres of the Popular Socialist Party, because while at Havana University, Fidel decided they represent "Marxism-Leninism." Thus, in the Great Debate between Che Guevara, a critic of the PSP and the Soviet Union, and the Stalinists, Castro, while silent. 

The influence of Stalinism in the PCC and the Cuban government was to such a degree that Guevara's critical notes written on manual of Political Economy (Economic Institute of Academy of Sciences of USSR 1954) in Tanzania and Czechoslovakia after he left Cuba in 1965 had to be smuggled into Cuba by his wife and kept secret for decades. 

In 2006, Fidel Castro, in his autobiography, still considered the Soviet Union as socialist despite some criticism (Nayeri, 2024). For the same, reason, the Cuban Communist Party never had an open discussion about the collapse of the Soviet Union.

As I explained in an earlier essay (Nayeri May 1, 2024), when Celia Hart, daughter of Armando Hart, a historical leader of the Cuban revolution, asked him why, when studying in Germany, she had seen a vile cult of personality and political repression, he gave her a copy of The Revolution Betrayed (Trotsky 1936) and Issac Deutscher's biography of Trotsky to read. 

Celia Hart, who became a sympathizer of Trotskyism, resigned from the Communist Party without an explanation. Was she forced to resign, or was she disillusioned with it? Tragically, Celia and her older brother Able were killed in a traffic accident in Havana on September 7, 2008. Before her death, Celia shared a critique of Stalin that Armando Hart (2005) with Trotskyists abroad. The International Viewpoint, the organ of the Fourth International, published it. Hart's article, which was published with the title "Josef Stalin," was never published in Cuba. Still, it, in essence, argues something similar to the 1956 Khrushchev's speech at the Tench Congress of the Communist Party of the Soviet Union. While Khrushchev blamed Stalin's cult of personality for the crime of Stalin, Hart blames Stalin's lack of understanding of Marxism-Leninism!  It has nothing to do with Trotsky's analysis on the objective basis for the degeneration of the Russian socialist revolution.  

Thus, the legacy of Stalinism in Cuba remains, hindering an open and honest discussion of the history of socialism in the twentieth century and PCC's own course for the past six decades.

Cuba Today

The Cuban government asserts that the ongoing economic crisis is caused by the U.S. embargo, which the Cubans a blockade to underline its severity. True enough, the embargo has targeted all aspects of the Cuban economy. However, differing estimates of its economic costs exist. 

For example, the U.S. Hands Off Cuba Committee (2024) without citing any source claims that the embargo has cost Cuban economy $15 million every day and in the past 64 years $144 billion. It is likely that a Cuban spokesperson reported these figures to the solidarity group. I have heard similar claims during various trips to Cuba. Still, solidarity activists never question such figures reported to them during these trips perhaps because they profess complete trust in Cuban reports without trying to find independent sources for confirmation. 

Pepper (2009), a leftist U.S. economist who conducted her own estimates, concluded that although the embargo hurts the Cuban people, the damage it does to the U.S. economy is more substantial. For these reasons, she argues the embargo should be lifted. 

A government report by the U.S. Commission on International Trade (2001) concluded that the embargo did little to hurt the Cuban economy while the Soviet Union provided Cuba with subsidies totaling $60 billion in three decades. However, after the embargo substantially damage the Cuban economy after the collapse of the Soviet Union. 

Mesa-Largo (2024), the well-regarded economist who was born in Cuba and left the island at age 23 in 1961 for Spain specializes on the Cuban and Latin American economies. In his recent interview at age 90, in response to the question about the best and the worst years for the Cuban economy, he responded that the 1980s were the best years and the current period is the worst. His calculations using official Cuban statistics show that the Cuban economy in 2019-2023 shrank by 2 percent annually and in 2022 inflation in Cuba was 1000 percent, second after Venezuela.  These figures help explain why in 2022-2023, slightly fewer than 425,000 Cubans were seeking entry into the U.S., according to Customs and Border Protection, most apprehended at the U.S. border with Mexico, a marked increase compared to previous waves of migration (Bazail-Eimil, 2023).

Mesa-Largo attributes the relative prosperity of the 1980s to about $65 billion cumulative Soviet Union subsidies over three decades.  According to his calculations; the Soviet Union purchased Cuban nickel 50 percent above the world price and sugar at seven times the world price. It sold oil to Cuba cheaper than the world price. Thus, when the Soviet Union collapsed, the Cuban economy went into a depression. 

After Hugo Chavez became the president in 1999, Venezuela filled in the role the Soviet Union had played for a while. Chavez exported oil to Cuba to be refined in the Cienfuegos refinery, which Venezuela helped technically and financially to complete. Cuba returned some refined oil to Venezuela and used or sold the rest at the world market. Another way Chavez helped subsidize the Cuban economy was through hiring Cuban medical personnel to help expand access to health care in Venezuela to the poor. 

In Mesa-Largo's calculations, the Cuban economy grew rapidly from 2000 to 2006. However, Venezuela experienced a recession from 2009 to 3013. Madura, who replaced Chavez, cut these subsidies. 

In Mesa-Largo's suggests the fundamental cause of the ongoing Cuban economic crisis is the higher value of imports compared to the value of exports, hence a current account deficit due to lower productivity of labor in Cuba. 

The PCC and the Cuban government maintain that Cuba is a society in transition to socialism while in struggle with U.S. imperialism. Bastian’s account defies such statements. She offers a lengthy quotation from the Cuban satirist Eduardo del Llano that provide a more realistic view of the Cuban society today:

"In the period of transition to socialism, the working class exercises its power  over the remnants of the bourgeoisie until they achieve a more just society, in which we are all equal and each receives what they need. This is what they told us, more or less, in what I copied in tons of notebooks during my years as a student. The dominant class is the owner of the means of production, and the relations of production are what determine the superstructure of a society. That's what historic [sic] materialism was about.  

"Does this seem to describe the contemporary Cuban society to anyone? Is the working class the owner of the means of production? That there's no bourgeoisie, and that if they are they languish under the power of the proletariat? 

"It's been a while since I have mixed with Marxist theorists—or with theorists in general—but I suppose that it must not be easy for them to define social stratification in Cuba today. To begin, the national proletariat is not overwhelmed with class consciousness, nor feels part of a group destined to change anything; the only consciousness that it has of itself and its family is how to survive, and it is not rare for them to se their coworkers or neighbors as rival. Or worse, someone to screw over. They don't feel reflected in the parliament, and they do feel crushed by the state…

"The well-off, the local middle class, are they really a true bourgeoisie? Or at least a true middle class? The guy that sells bootleg DVDs is the owner, perhaps, of a couple of computers which he uses to manufacture his merchandise. Does that mean he classified himself as a bourgeois, even if it's a very petty bourgeoisie? The botero that converts his old car into a taxi, or the guy who has started a small restaurant or a cafeteria in his house and lives closed in by taxes. Did they transform into an exploiting class during a full moon, or are they merely entrepreneurial proletarians? The manager of a corporation is not the owner of the hotel or the company, but his daughter dresses and acts like a bourgeoisie, is he not? Or someone with another nationality, or who is married to a foreigner, and talks like he is from Madrid or Mexico. The nouveau riche does not own large companies—because he is not allowed to-but has a ton of money in the bank. Is he part of a special class, or just a plain old bourgeoisie?  If it is green and has spines, guanabana…(see endnote 4)

"Or is it about aristocracy? Many leaders and functionaries think they are indestructible, and their children enjoy a lifestyle that is as far removed from that of an everyday worker as the 18th century king from the rank-and-file bourgeoisie. They are not completely dedicated to leisure, like aristocrats, but they do plan marriages to polish bloodlines and consolidate alliances and fortunes...Does Marxism still work to define such a society? Or any other?  Without Soviet tutelage, the local Marxists stopped thinking, and the government stopped listening to them.

"What about the present? What classes are these? Where does an intellectual who doesn't have the least intention of standing up in the vanguard of the working class belong? Or the labor leader who doesn't represent anyone and who can't do anything, or the student who only wants to finish their degree and leave? What does a farmer who had never had any intention of aligning himself with the proletariat and is not the owner of his own cattle? 

"Will they tell us that what does not fit the theory doesn't exist? What are we? Bourgeoise? Aristocrats? Proletariat? Slave? (Quoted in Bastian 2018, pp. 55-56).

The Roots of the Crisis in Cuba

Modern society's production and reproduction can be organized in three ways; through the working of the market, by the state, and by organizing a democratic system of cooperation within and between producers and consumers. All existing societies use various combinations of these methods. In my essay "Economic and Political Thoughts of Ernesto Che Guevara" (Nayeri May 3, 2024), I briefly discussed in relation to the theory of transition to socialism.  

All socialist currents agree that the socialist revolution must replace the "invisible hand" of the capitalist market with some form of economic planning reflecting the will of the working people. However, all revolutions in the twentieth century that have been called "socialist" have resulted in a one-party system, which claims to act in the interest of the working people. It is also the case that there has been a universal tendency to emulate explicitly or in fact, the Stalinist market socialism model used in the Soviet Union (Stalin 1951). 

Revolutionary socialists have thoroughly criticized this idea (for a methodological critique of market socialism see, Nayeri 2004). In the Great Debate (1962-1965), Ernesto Che Guevara started with a criticism of market socialism in general and the Soviet Union's "socialism" in particular (Nayeri May 3, 2024). Significantly, Fidel Castro, the undisputed leader of the Cuban revolution, kept silent in that debate. While the political thought of Fidel Castro has been the subject of some controversy, we now know from his autobiography (Ramonet and Castro 2006; Nayeri April 19, 2024)), that Castro was won over to the idea that the pro-Moscow Popular Socialist Party in Cuba represented Marxism-Leninism and that the Soviet Union was the leading socialist country. Che Guevara’s theory of transition to socialism was never accepted in the newly founded Communist Party that was established in 1965, the same year that Guevara left Cuba for joining the struggle for liberation in Africa. We also know that while in Tanzania and in Czechoslovakia, Guevara wrote a critique of the Manual of Political Economy (1954) which was smuggled into Cuba by his wife and remained under lock and key for decades. Why did not Guevara remain in Cuba to write his critique of the Soviet Union’s bible for political economy of socialism and why did he not send it to Fidel Castro instead? These facts show the power of Stalinism in Cuba even in the 1960s. 

Gradually, Stalinism was institutionalized in Cuba. From the 1960s, Soviet and Eastern European advisors were brought in to help found new institutions in Cuba and reform the existing ones and serve as key advisors in governmental ministries. In 1972, Cuba joined COMECON, and the first five-year plan using the Soviet Union model was implemented by the decision of the first Congress of the Cuban Communist Party in 1975. In the third Congress of the party in 1986, Castro admitted that the model Cuba followed had resulted in corruption and demoralization of workers. He called the Cuban system built on the Soviet Union model "worse than capitalism." The same Congress called for a return to Guevara's theory of transition to socialism, but nothing came of it. By 1991, the Soviet Union had collapsed. However, the Communist Party of Cuba never held a public discussion of this world event that led Cuba into an economic depression.  

While to be sure like all revolutions, the Cuban revolution faced imperialism, in particular the U.S. embargo which has contributed to the crisis of the Cuban economy, from a socialist perspective, the underlying cause has low productivity of labor due to the lack of socialist incentive among Cuban working people because of a lack of socialist as Trotsky (1936) explained in the case of the Soviet Union in the 1930s. The difference is that the Russian 1917 revolutions resulted in a genuine self-organized and self-mobilized movement of the working people as the soviets of workers’, peasants’, and soldiers’ deputies and Cuba never experienced this. In the Soviet Russia a bureaucratic counterrevolution violently wrested political powers from the working people and destroyed the Bolshevik Party heritage. In Cuba, the Communist Party established in 1965 was dominated by the Stalinists of the Popular Socialist Party who Fidel Castro looked up to as Marxist-Leninists.  

The influence of Stalinism in the labor and socialist movements have been immense. Even Che Guevara’s theory of transition to socialism lacked any attention to socialist democracy, which is the bedrock of Marx's theory of socialism. Ernest Mandel, who was invited by Guevara to Cuba and held a four-hour meeting with him discussing the question of transition to socialism, urged him to consider it, but Guevara was never convinced.  Instead, Guevara's Budgetary Finance System was limited in its scope to replacing the market (law of value) with state regulation of the economy in such a way to minimize monetary transactions among and between firms, but never included active intervention of the working people. Guevara, instead, opted for some consultation mechanisms with the Cuban masses by the vanguard party headed by Castro, who Guevara believed had a gift of holding a dialogue during people during mass meetings.  This "consultive" view of a one-party system was adopted by the Communist Party of Cuba. However, it is no replacement for socialist democracy, as Lenin explained in The State and Revolution (1917). 

Thus, the Cuban society and economy have lacked both capitalist incentives as dictated by the dynamics of the labor market and socialist incentives as explained by Marx and, to a lesser extent, Lenin and Trotsky. 

In the next and last installment in this extended series to better understand the Cuban revolution, I will discuss the character of revolutions in the periphery of world capitalism that have been called “socialist.” 

Endnotes: 

1.  When in 2006, I wanted to conduct interviews for a research project in healthcare, I could not get permission from the Ministry of Public Health.  They urged me to conduct informal interviews. 

2.  Cuba specialists discuss various aspects of post-1990 economic policy decisions and evaluate them in macroeconomic terms. My interest is in their general characteristics and how these policy accord with the notion of transition to socialism. 

3. Unidad Básica de Producción Cooperativa

4. A tropical fruit

References:

Economics Institute of the Academy of Sciences of USSR. Political Economy. 1954. 

Hart, Armando. "Josef Stalin." Interational Viewpoint. May/June 2005.

Lenin, V.I. The State and Revolution: The Marxist Theory of the State & the Tasks of the Proletariat in the Revolution. 1917.

Nayeri, Kamran. “Socialism and the Market: Methodological Issues in Economic Calculations Debate.” Critique. December 2004. 

____________. “The Political Thoughts of Fidel Castro.” April 19, 2024. 

____________. “The Economic and Political Thoughts of Ernesto Che Guevara.” Our Place in the World: A Journal of Ecosocialism. May 3, 2024. 

Ramonet, Ignacio and Fidel Castro Ruz. Fidel Castro: My Life: A Spoken Autobiography. 2006.

Stalin, Joseph. Economic Problems of Socialism in the USSR. 1951. 

Trotsky, Leon. The Revolution Betrayed: What Is the Soviet Union and Where It Is Going? 1936.

Weinren, Amelia Rosenberg. Cuba in the Shadow of Change: Daily Life in the Twilight of the Revolution, Contemporary Cuba. 2009.