Revolution in Cuba: Free Markets

Market anarchism — as the very term implies — advocates the sum total dissolution of political governments in favor of unrestricted free markets. Disadvocates, recant. Perhaps nowhere can the inevitable victory of market forces be so roundly demonstrated at the moment than in communist Cuba.

In a recent CNN piece by David Ariosto titled “Cuba’s Quiet Revolution,” we see that an entirely different kind of revolution is now taking place:

At a privately run farm west of Havana, Cuban farmer Jesus Rodriguez is looking for some changes.

Private farmers like Rodriguez would commonly wait for their supplies to be allocated by the state, often leaving their farms short of much needed materials that would routinely compel them to look elsewhere.

“Sometimes in order to get seeds we need it would take up to two months,” he said standing amid a thatch of corn he planted a few months earlier. “The seeds just wouldn’t get here in time.”

The country’s fledgling agricultural sector and massive distribution machine have been a source of concern for many of the country’s private farms and cooperatives.

“We’ve used substitutions for the necessary supplies that we seldom receive from the government because of the economic situation,” he explained while taking shade beneath the crop’s thick, green stalks.

Such is the constant product of socialism and central planning — a fact at last, if grudgingly, being recognized by Cuban bureaucrats:

In May the Economy Minister, Marino Murillo, heeded farmers’ calls for more autonomy and announced that private farms will be permitted to purchase goods directly from suppliers.

“It looks like [Cuba] is going to try to take apart this big bureaucracy that’s in charge of distribution and purchasing of food from the farmers,” said Phil Peters, Cuba analyst at the Lexington Institute in Washington D.C.

“[That would] allow farmers to have a more direct connection with consumers of all kinds.”

And hence — most importantly — this is what will allow them to survive, and ultimately, thrive. But there’s a transitional process that must be gone through.

A similar initiative in 2008 permitted some farmers to purchase supplies.

But the cash-strapped island nation faces mounting debt and routine shortages, leaving the questions of where to buy supplies, how to acquire credit, and how to improve transport to market largely unanswered.

Still, analysts praised Cuba’s economic potential.

“That potential can be realized if their government gets out of the way,” Peters said. “And they don’t have to abandon the socialist model. They can adapt it and use more market mechanisms in a lot of ways.”

This is true … however, the engagement of farmer to customer will be much more rapid, robust, and efficient if and when the “socialist model” Peters speaks of above is abandoned outright. To the extent that this is so, the market will perform all of the necessary corrections, given time and the chance to do so. But there’s more: it will do so in a non-violent, non-coercive manner — unlike the heavy-handed totalitarianism of the Cuban state.

The country’s association of roughly 350,000 private farmers has been central to recent reforms and often the focus of President Raul Castro’s attempts to address chronic food shortages on the island.

Necessity is indeed the mother of invention.

Cuba’s private farmers and cooperatives use only about 40 percent of the nation’s farmland, but produce roughly 70 percent of the food grown on the island.

“I think the reason [for the high productivity among private farmers] is the sense of property that the person has,” one farmer explained who declined to provide his name.

“Because where you work you have the feeling that it belongs to you and you fight and defend it because it’s your own.”

Eureka! This farmer, whoever he is, wins the kewpie doll and an all-expenses paid pass to reality.

Raul Castro assumed power from his ailing brother and former president Fidel Castro in 2006, at first temporarily then permanently in 2008, and has long considered food security integral to national security.

Murillo’s recent announcement also comes on the heels of a series of small liberalization measures aimed at improving production, while attempting to maintain the communist nation’s egalitarian doctrine.

An attempt, mind you, that will in the due course of time, fail miserably. The pre-eminent economic lesson anyone anywhere can learn is that in the end, markets always win. Period. As witness the additional following concessions made under pressure by the Cuban government tyrants:

Tourism Minister Manuel Marrero in May announced plans to open up real estate on tourism-related projects, laying out plans for new hotels across the country.

And Cuba instituted a pilot program in April that turned over hundreds of state-run barbershops and beauty salons to employees.

“I think both Fidel Castro and Raul Castro have both recognized problems in the economy,” explained analyst Peters. “But Fidel Castro’s prescription was always for people to work harder and for the government to enforce the law.”

And — big surprise! — this only produced the opposite result. Fidel needs to go have a talk with that aforementioned awakening farmer.

President Raul Castro “is looking at incentives,” he said. “He’s looking to fix the model.”

Whether this latest move is a part of broader market reforms or a narrow effort to make farms more productive is not clear. But for now Cuba still imports a majority of its food.

Given that this is an untenable situation (the importation of food in a failing still largely socialist economy) long term, my prediction is the former proposed scenario. Once markets begin to liberalize — as with China — the process becomes endemic, especially as prosperity begins to openly contrast itself in a tangible manner with past results. The problem Cuba is likely to face (again, look to China) is this transmogrification clashing with the insatiable desire for those controlling the state apparatus to remain in power. This is apt to create the most pain for the Cuban people.

But here’s where anarchism comes in. As freedom arises piecemeal from the increased flow of capital, Cubans especially should recall the old hollow promises of communism; to wit that ultimately, with the success of socialism, goverment would disappear. Reverse that: with the victory of free markets and enterprise, government becomes exposed for what it is — a blight, a nemesis, and a shameful con game. This is and should be the new and real Cuban revolution. And why limit this to Cuba?

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