Who Benefits From the US Trade Embargo of Cuba?

In theory, government exists to protect those whom it “serves” — to defend their rights at home, and to guard against invasion by the armies of other governments which (once again, in theory) would violate those rights rather than merely becoming the new monopoly provider for their defense.

In practice, however, government policy tends toward the opposite. At home, the defense of — or even minimal respect for — rights is routinely sacrificed on the altar of “defense” against foreign enemies; abroad, governments work together to coordinate in support of each others’ rights violations.

If two governments are seen cooperating, it’s a good bet that they’re negotiating a treaty to regulate away your right to trade across borders (which themselves are nothing more than imaginary lines on the ground, drawn by politicians to make this kind of thing “necessary”).

If two governments are seen at loggerheads, you can safely bet that the rights and welfare of their respective subjects have little or nothing to do with the argument, and that in fact those rights and that welfare will be the first items on the chopping block when as the argument escalates to sanctions, sabre-rattling and possibly war.

Case in point: The US trade embargo on Cuba. For going on 50 years now, the rights and welfare of both Cubans and Americans have taken second place to the alleged desire of the US government to topple Fidel Castro’s communist regime.

I say “alleged,” because the real purpose of the embargo from the US standpoint certainly isn’t to “protect” the US from Cuba, which hasn’t represented a significant military threat since the Soviet Union blinked first in the “missile crisis” of the early 1960s. Nor is it to bring down Castro, whose regime has benefited immensely from it. Rather, its real purpose is to pump anti-Castro Cuban-Americans in Florida — held in sway by an “anti-Castro dissident industry” whose principals are far more interested in amassing wealth and influence in the US than in actually liberating Cuba — and subsidy-seeking sugar producers (who don’t want to have to compete with Cuban sugar imports) for campaign money and November votes.

And while Castro’s regime and that of his successor, his brother Raul, have always talked a good anti-embargo game, they’re Johnny on the spot and ready to escalate tensions with the US any time it looks like the matter is up for serious reconsideration. From their standpoint, El Bloqueo may be the single best guarantee of their continued hold on power. It gives them a ready-made foreign enemy — an enemy to blame for the failure of Castro’s socialist revolution and an enemy to wave at its subjects as a military threat against which those subjects must stand united.

What would be the result of an end to the embargo — assuming, as it is never safe to do, that both governments were actually willing to drop it into the wastebasket of history?

On the economic side, consumers and non-rent-seeking producers in both countries would benefit. Sugar in particular would get cheaper in the US as American producers were forced to compete in an open market instead of being “protected” from Cuban cane. Goods of all types would get cheaper in Cuba as American imports which only have to be shipped across 90 miles of ocean arrive to compete with their European equivalents. Producers in both countries would have new markets opened to them, and capital from both countries would have new, competitive places to flow to.

On the political side, citizens of both countries would regain at least some freedoms their governments have denied them. Freedom to travel. Freedom to trade. Freedom to engage with each other. Only the two regimes would lose, and the things they’d lose — opportunities to indulge in control and corruption — are things they were never rightfully entitled to in the first place.

The beneficiaries of the embargo are the politicians of both governments and their rent-seeking paymasters. The rest of us take it right on the chin. To understand any government policy, ask the question the Romans asked when looking into lesser criminal matters: “cui bono” (“who benefits”). The actions of the ruling class are seldom undertaken for the benefit of the ruled.

Translations for this article:

Free Markets & Capitalism?
Markets Not Capitalism
Organization Theory
Conscience of an Anarchist