By Mario Valdés Navia
The rise of salaries and retirement pensions in the State-budgeted sector, announced by the President, has multiplied debate on Cuban political economy. While the majority is pleased by the measure, some question its appropriateness and effectiveness, or even dismiss it as demagogy. Since I’ve written about the subject and its urgency for years, it only remains for me to congratulate the Government for its brave decision to take the bull by the horns. Not doing it would be something like a “damned if you do, damned if you don’t” situation.
When Keynes suggested, in the middle of the crisis of the 1930s, the need for the US Government to inject money into circulation in order to promote immediate growth, the ghost of inflation stood before him. The Englishman answered: “It’s true. It’s an inflationary model, but by the time inflation comes, we will all be dead”. In the Cuba of today, the significance of such a measure also goes far beyond its admittedly inflationary nature.
First of all, the President tackled the issue of inflation right from the start, and he suggested some of the measures which must be implemented in order to raise supply and better balance the depressed domestic market. He required the responsible ministries to implement a combination of increased production and services with capped prices. This guideline is meant to enhance the effectiveness of the measure.
If the guideline is followed, producers of all kinds will stand to benefit from an increased effective demand, with a greater supply of goods and services, and not with the rise of the already exorbitant and monopolistic prices. For a long time, government-run companies, cooperatives and private businesses have preferred destroying products or keeping them shelved to lowering prices. It is time to put a stop to the irrational predominance of sellers over buyers in a domestic market dominated by never-ending shortages and nearly negligible levels of competition.
In a workers’ society it is not possible to perpetuate rampant theft, undue privileges and shady dealings as the main sources of income. For years the educational and ethical function of salary has been underestimated and the consequences have been terrible, to the point of acting as a centrifugal force which has cast thousands of Cuban workers all over the world in search for better salaries. This calamitous situation has lasted long enough.
To my mind, the President’s approach to it as part of a package of measures, not as an isolated act, is as important as the announcement of the salary rise itself. In Cuba, these terms have been erroneously identified with the application of neoliberal policies, as if the economy didn’t have a systemic nature everywhere and any element of it could be changed without affecting –or receiving the effect of– every other element in the system.
With this decision, along with the salary increases –previous and upcoming– in the business sector, money payments for the labor force devoted to this very significant sector with gain weight as the main source for the satisfaction of needs. Thus, the salary will be perceived as something to be prized, not underestimated, even though it has been stated that these are only temporary raises in order to alleviate the problem and pave the way for an upcoming general reform of salaries, state pensions and retirement pensions.
Elements are yet to be known so as to discuss the package in its entirety, but in this first approach the fact that the salaries and pensions of two-and-a-half million Cubans and their families are being substantially raised, that measures are being introduced to appraise the contracted domestic market and allow the rise in nominal salary to be reflected in the real salary, along with the acknowledgment of the need to apply a package of socialist measures in order to reactivate the domestic economy, provide enough elements to support and defend such a decision.
If the less fortunate begin to glimpse the possibility that income as a result of work may come to be the main source of prosperity and social justice, we all stand to gain. There will be all-round benefits, from the results of State-budgeted companies and institutions and macroeconomic indicators, to national security. I am not saying that the pyramid will be set straight, for I have never believed that myth. What will begin to be set straight is the ideal of a fairer and more rational socialist society in the minds and aspirations of thousands of Cuban men and women.
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 “Rousseau, Marx y Braudel en la Actualización económica de Cuba” (“Rousseau, Marx and Braudel in the Economic Updating of Cuba”), Temas 87-88, July-December 2016.
(Translated from the original)