Reforming the national economy has been a sort of Holy Grail for the country’s leadership. In spite of that, the term reform is not commonly used in the official discourse. According to the sociologist and political expert Juan Valdés Paz: ‘In the history of real socialism, the scarce reforms or reform policies have responded to economic crisis or to changes in the strategies of the “socialist transition”, as has happened in the Cuban experience.’
Without it being called a reform, the ‘Process of rectification of errors and negative trends’ was announced thirty-four years ago, with Fidel at the helm. Thirteen years ago, this time with Raúl in charge, the ‘Process of updating of the Cuban economy’ was declared. Having seen the fate of those endeavors, it’s about time we think that something’s being done wrong. The question to be clarified is: what has failed?
The economic measures announced by the president are far from being new.
Several generations of compatriots saw similar measures in the tough 1990s. In any case, the main change is in the environment, with another set of added complications. Beyond the cards for purchases in dollars —a sort of financial corralito, whose dangerous social impact is already being felt—, I remember that after the fall of European socialism, the changes here were applied more quickly. The slogan ‘Without haste, but without pause’ had not been declared yet, which has proven to be a do-nothing policy wearing make-up.
Economist Juan Triana Cordoví in his article: ‘Marches and countermarches: the comings and goings of economic policy. If we all agree, why what should happen isn’t happening?’ keenly analyzes the source of the contradictions between the professed wish to advance and the regressions:
‘With the existence of political and ideological cultures that resist “updating”, with even personal behaviors marked by previous learning, with prejudices, with legislations that are often obsolete, yet still in force, with gray areas that enable “personal interpretations” and that condition, obstruct and delay the best intentions a country may have and make it extraordinarily difficult to reach the desired coherence and with established personal interests that are hard to give up.’
Several countries of the former European socialist bloc attempted reform processes that were ultimately unable to avoid the collapse of the system. That must have left us some experience. I’ve long been haunted by this question: Can one reform the economy of a socialist country without also proposing political reforms? When the Cuban-Dutch journalist Sergio Acosta asked me to contribute a question for the conversation he would have with economist Janos Kornai [1], that’s the one I gave him.
Kornai answered: ‘You sure can, but it wouldn’t be successful […] If you ask about whether it could work, I can tell you that we had the same debate in Hungary at one time. It depends on what you mean when you say “functionality”.
Sergio Acosta: Viability?
Kornai: Exactly, viability. It can work, but it doesn’t work well […]’
My concern grew. The New Economic Policy (NEP), a process of reforms applied in the USSR between 1921 and 1927, had unquestionable successes in liberalizing domestic trade, accepting the creation of small private enterprises and the collaboration with foreign capital through joint forms of property, applying the system of company self-management to fight against bureaucratism and the authoritarian tendencies of the administration, and recognizing the personal interest in labor results. Despite its positive effects, the gradual strengthening of Stalin against the Party after Lenin’s death would have a decisive influence on the end of these reforms.
In 1928, during a meeting, the Secretary General of the Party said: ‘Let’s chuck the NEP the hell away’, something that, in fact, the CPSU had decided to do a few months earlier in its 15th Congress (December 1927), by passing the guidelines of the First Five-Year Plan. Thus began the so-called Stalinist economic model, which was strictly centralizing.
Six years of reforms collapsed under the will of one person.
It so happens that the NEP itself carried the seed of its own destruction. An interesting debate supplied me with other elements for judging it. It occurred between professor, historian, and researcher Samuel Farber, born in Cuba and residing from a very young age in the US, and John Marot, professor at the History department of Riverside University in California. [2]
Farber holds that the NEP should have been protected by a political opening that would have allowed the independent organization of workers and farmers to oppose Stalinism: ‘[…] the adoption of the NEP should have been accompanied by what I called a New Political Policy (NPP). Essentially, by the freedom of peaceful political organization for all those groups willing to respect the original form of Soviet democracy that came to power in October 1917.’
Lenin, in the same measure he had advocated for the economic concessions of the NEP, defended the restriction of political freedoms: total elimination of parties and opposition groups, control of workers’ and farmers’ unions within the limits established by the Party and a monopoly on the media.
As a consequence, the Party turned into an increasingly bureaucratized and anti-democratic organization, while the rest of society became an obedient collectivity, unable to organize and press for changes. The same happened in all the countries that applied the model of bureaucratized socialism. It would be like that until the implosion of socialism, which nobody defended because they hadn’t been called to do it.
As Kornai says, an exclusively economic process of reform ‘doesn’t work well’. I believe that one of the reasons for its unviability is the risk that, even as it develops successfully in appearance, it can be dismantled thanks to an authoritative government decision.
When the citizens aren’t actively involved as controllers of the direction, results, and pace of the economic transformations, these run the risk of being dismantled, as it happened in the USSR. But not just there, in Cuba, we also ‘chucked the hell away’ a reform process that started in the 1990s and that —though it didn’t have a proper name or an official baptism— was the government’s response to the scene after the crumbling of European socialism.
Especially in the second half of that decade, an improvement was felt thanks to the relative decentralization of the economy, a greater weight of the market, the permission granted for private initiative, and the diversification of trade partners. However, after the approach to Chávez’s Venezuela, certain flexibility policies in the economy were abandoned.
The approach to Venezuela made Cuba go back to its old centralizing ways.
The private initiative would be slowed down, though it didn’t disappear. Cuba quickly moved away from the relative pragmatism that shortly emerged in the last five years of the 20th century and which would generate incipient indexes of economic reactivation and confidence in finding our own way out.
One great unresolved conflict wherever bureaucratic socialism is enthroned is one of turning state property into truly social property. This aspiration has been a utopia due to the lack of democratization, the mistakes of citizen participation in economic decisions, and the fact that unions cease to be organizations that defend the interests of workers.
Cuba hasn’t been an exception. The bureaucracy among us has become a ‘class for itself’ and it hinders changes and reforms which, though accepted in the discourse, it slows down in practice to the detriment of the majority. The economic reforms devised twelve years ago have not proven their effectiveness, since most of what was wanted hasn’t even been implemented. And this signals an uncertain future for a process of changes that rested on the idea of an economy open to the influx of foreign capital. This capital, which was reluctant since before the pandemic, will now be even more so.
Alicia Bárcena, executive secretary of ECLAC, pointed out that the effects of the pandemic ‘will generate the greatest recession in the region since 1930 (the Great Depression) and since 1914, with the First World War’. The ECLAC also considers that the way out of the crisis will depend on the economic strength of each country, its set-up productive capacity, its access to financing from international bodies (IMF, World Bank) and the forcefulness of its economic response, in which fiscal policy will play a fundamental role.
For Cuba, a -8% decrease in GDP is announced, which is very drastic in terms of an already depressed small economy. There will be no other choice but to set in motion the reforms once and for all if we don’t want to subject Cubans to a period of hardship in the style of the one suffered in the 1990s, or much worse.
The Cuban Constitution of 2019 is much more flexible in economic matters and forms of property than its predecessor, but much more rigid politically. The Party is not only declared the leading force, as it already was, but it’s now also described as superior with respect to society and the State.
This arrogant attitude by the Party belonged to a political model that failed.
In February 1989, the Soviet magazine Sputnik devoted an issue to the stagnation that characterized the period under Leonid Brezhnev’s leadership. In it they asked these questions: ‘Should the Party leadership become a special body of power, sitting above the other bodies? If the Central Committee is a special body of power, how can it be controlled? Can its decisions be challenged for being unconstitutional? Who answers in case a decreed measure fails? If this superior body actually runs the country, shouldn’t the entire people be able to elect its members?’
In this political model the Party is selective, ‘a vanguard’, and not a popular party open to everyone. Then, if it declares itself a force superior to society, it also sets itself above the people. For that not to be the case, the people should be able to elect the Party leadership, and that doesn’t happen. If it sits above all, and it’s not ‘an electoral party’, it’s beyond popular control.
In the Constitution of 2019, the number of appointed positions grew, and the bureaucracy was shielded from the citizens by deeming any contents pertaining to the political system monolithic or immutable. That, together with a relative opening regarding the forms of property, and the possibility that some forms may turn into others, grants a dangerous status to political leaders, whether they belong to the so-called historical generation or not. Thus, they have strengthened a political class which conditions changes to the possibility of seeing their own privileges affected.
Faced with the disruption that the visibility of citizens’ opinions in digital media means for this model and for the political class established by it —something that weakens its monopoly of the media—, the response has been repressive (Decree 370), though unsuccessful. Now we can have an influence on political decisions and become a significant factor in the progress of reforms.
A process of reforms is not a goal without an expiry date.
Those who lead the reforms must show competence and effectiveness to carry out what has been agreed upon. Time limits must be established to reach the goals and, above all, it must be possible to remove those who do not show real commitment to the transformations from their positions. But none of that is possible in a political model like the one we have.
They have tried to convince us for a long time that giving up this political model means opening up the door to capitalism. It’s about time we become aware that what this model has actually achieved is closing the door to socialism by keeping the system from reforming itself and becoming truly participatory and prosperous.
Contact the author: alinabarbara65@gmail.com
[1] Relevant 93-year-old Hungarian economist. Emeritus professor at Corvinus University in Budapest and at Harvard University, where he taught for nearly fifteen years. He is the author of texts such as Economics of Shortage (1988) and The Socialist System: The Political Economy of Communism (1988). In the latter, he argues that the control economy of a communist party leads to the predominance of a bureaucratic administration of state-owned companies, with centralized planning and the fixing of prices to eliminate the effects of the market, which brings about the economics of shortage. He was the main expert consulted by China for its reforms in the 1980s.
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