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Castro’s Abandonment of Socialist Principle

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Forty years ago, Fidel Castro began his quest to convert Cuba into a socialist paradise. Nationalizing the means of production, the Cuban government became the sole employer, and everyone was required to become a loyal employee of the state. Today, Cuba’s socialist system is much like those old, dilapidated cars from the 1950s on Cuban roads – all patched up but just barely clugging along.

In the beginning, the Cuban authorities had a jolly good time, using the hundreds of millions of dollars in money and properties that they had seized to give the Cuban people “free” everything – education, health care, housing, food, and the like. “Equality” was the clarion call, as money and property were seized in the name of “the people.” What Castro and his socialist comrades failed to recognize, however, was that by gorging themselves on the base of private capital that had been created over a period of many decades, they were ultimately dooming the Cuban people to impoverishment. For the only way for people’s standard of living to rise in a society is through the long-term accumulation of capital. With capital, people produce more, and more production means higher wages and more wealth.

Today, the Cuban people, most of whom are barely surviving, are paying the price for what Castro did forty years ago. The average monthly pay, which the state pays in Cuban pesos, is about $10.

For decades, Castro used welfare from the Soviet Union to convince the Cuban people that Cuban socialism was an economic success. The end of the Soviet Union’s subsidies in 1990, however, openly exposed the failure of Castro’s socialist experiment. Standing on its own, Cuban socialism meant that the Cuban people were faced with the prospect of starvation.

Castro’s answer was to “reform” socialism. The dollar was made legal, creating a dual monetary standard in the country. Also, people were permitted, on the issuance of a state license, to rent bedrooms and sell meals in their homes to tourists. Booksellers, craftsmen, and a few others could secure a license to sell their goods in designated “fairs.” Farm cooperatives were legalized, enabling farmers to sell part of their crops at market.

Of course, all these “reforms” have enabled some in Cuban society to earn more than others. In the socialist land of equality, some are obviously more equal than others.

To generate revenues to fund the entire (state-owned) system, the Cuban government also entered the tourism business, seeking to earn profits in that sector to fund the other sectors. Recognizing, however, that government enterprises can never effectively compete against private ones, the Cuban government decided to enter into joint ventures with foreign companies that enable the foreign countries to run hotels that are owned by the Cuban government.

The Cuban government uses its share of the “profits” on the deal to pay the standard monthly survival salary to Cuban hotel workers, who are legally required to remain loyal employees of the Cuban government. In other words, in this Marxian paradise, the state makes a “profit” and “exploits” the worker by “stealing” most of the value of his labor!

Much like the old tale of the emperor’s new clothes, no Cuban is permitted to state the obvious – that these “reforms” are not reforms at all. Instead, they are an abandonment of principle – socialist principle – and an open admission that socialism is inherently incapable of working.

Of course, Fidel Castro has blamed the desparate plight of the Cuban people on the U.S. embargo rather than Cuban socialism. If it weren’t for the embargo, Castro has repeatedly argued, Cuban socialism would finally succeed.

But isn’t this itself is an admission that socialism cannot succeed independently of societies in which there is a greater extent of economic liberty? That is, if every society in the world had an economic system like Cuba’s, everyone would be desperately poor and thus unable to help out the other socialist societies. In other words, in order to preserve the Cuban government’s control over the Cuban people’s economic activities, Castro has continually placed himself in the embarrassing position of openly pleading that the U.S. government relinquish its economic controls on the American people.

Every ideologue knows that principles cannot be compromised; they can only be abandoned. Once principles are abandoned, what good is served by clinging to a paradigm that is inherently incapable of working and that obviously causes so much misery and poverty for people?

Mr. Hornberger recently returned from a trip to Cuba where he conducted an informal study of Cuba’s economic system.

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    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.