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Fidel Castro and American Statism

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Cuba’s president Fidel Castro is surely making American liberals extremely nervous. Mugged by reality, Castro is moving his country in a direction away from socialism, at the very same time that American liberals are trying their best to move the United States further in the direction of socialism.

Castro has a much firmer grip on reality than American liberals. Castro fully understands that Cuba has a socialist economic system, and he is starting to understand that it is that socialist system that is the principal cause of Cuba’s economic woes. American statists, on the other hand, think that the United States has a free-enterprise system and that that system is the cause of America’s economic woes. Thus, it makes sense that while Castro is moving away from socialism, American statists are moving toward it.

Consider the following statement of fact about the situation in Cuba from an article in the New York Times, among the paragons of liberal media in America: “Cubans have access to free health care, education and subsidized food and housing.” The article should have also mentioned that Cubans have long had a comprehensive system of social security.

Now, everyone acknowledges that Cuba has a socialist economic system, right? No one disputes that.

But I’ll bet that when some Americans read that statement from the New York Times, their immediate reaction is, “Why, I’ll be darned. Cuba has a free-enterprise economic system, not a socialist one.”

Why do I say that?

Because those programs are ones that are inherent to America’s economic system, one that every school kid in America is taught is a free-enterprise system. Thus, given that such things as free health care (i.e., Medicare and Medicaid), education (i.e., public schooling), subsidized food and housing (i.e., agricultural subsidies and food stamps; FHA), and Social Security are core elements of America’s “free-enterprise” system, the fact that they are also core elements of Cuba’s economic system must mean, in the minds of some Americans, that Cuba’s economic system must be “free-enterprise” also.

Not so, as we libertarians have been pointing out for decades. These are all socialist programs. Therefore, it’s not surprising that they have been the pride and joy of Fidel Castro and other Cuban statists. The programs also show how far Americans have traveled down the road to socialism and away from a genuine free-market system.

In Cuba almost everyone works for the government. Why? Because this gives people a sense of security. The government is providing for them, taking care of them, ensuring that they don’t face the risk of being laid off. There’s no risk of capitalist exploitation.

Isn’t that how American statists view the federal government — as their provider and protector — as their daddy or their mommy? Don’t they look to the federal government to take care of them and protect them from the vicissitudes and hardships of life? Don’t American statists believe in the equalization of wealth, taking from the rich to give to the poor? Cuba simply carried these principles to their logical conclusion, taking everything from the rich and letting most everyone work for the state.

There’s one big problem, however, with socialism — massive poverty. The state doesn’t produce wealth. Instead, it survives by extracting wealth from the private sector, much as a parasite does to a host. The reason there is mass poverty in Cuba is because the percentage of people permitted to be in the private sector is extremely small — only 5 percent of the population. That small private sector of 5 percent is insufficient to sustain the 95 percent parasitic sector.

Isn’t that the problem facing the United States today? Doesn’t the parasitic sector, including both the welfare state and the warfare state, continue growing bigger and bigger, while the private sector teeters under the weight of it all?

Castro has finally realized the nature of the problem. So, he just announced a layoff of half-a-million public-sector employees, with the aim of providing a bigger private-sector base to sustain the parasitic sector.

Isn’t this in principle what American statists hope to do with their stimulus plans — get more people hired in the private sector to prevent layoffs in the public sector?

Not surprisingly, Castro is keeping a tight leash on these newly discharged workers. He’s making them get government licenses as a condition to run private-sector businesses.

In other words, like American statists Castro views economic activity as a privilege bestowed by the state, one that the state can license, control, and regulate. Like American statists, he does not view economic liberty as a fundamental, natural, God-given right with which no government can legitimately interfere.

What is happening in Cuba provides valuable lessons for Americans. First, it causes them to confront the real nature of such socialist programs as Social Security, Medicare, Medicaid, public schooling, subsidies, welfare, and occupational licensure, thereby providing them with a clue as to why the United States is mired in economic difficulty.

Second, and more important, it helps them to understand and appreciate the wise words of the great German thinker Johann von Goethe: “None are more hopelessly enslaved than those who falsely believe they are free.”

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.