Tuesday, May 3, 2011

Comment: A cascade of consequences

Continuing with the theme of the previous post, Cuba's socialist renewal embodies a reconception of socialism, of the socialist-oriented society, that is essentially a return to classical Marxism's conception of the transition from capitalism to socialism in the concrete conditions of Cuba today. 

The Cuban Communist Party (PCC) leadership recognises that the Cuban Revolution has not implemented, consistently and with sufficient rigour, the cardinal principle of the transition period, "to each according to their work", and that this must be rectified as soon as possible. There is no justice or rationality in the fact that a Cuban waiter in a tourist hotel may earn more in tips in a good week than a heart surgeon's monthly salary. Or that someone whose "work" involves selling counterfeit or stolen cigars on the black market receives the same monthly quota of highly subsidised chicken as a grandmother who fought at the Bay of Pigs, and who struggles to make ends meet on her tiny pension.   

Starting from the need to reassert this principle, a cascade of consequences inevitably follow for what could be called "the Cuban model of socialism". By this I mean a relatively stable configuration of the Revolution's concepts, structures, methods and mentalities. It's true that these have been continually evolving over the past five decades and that the Cuban Revolution is exceptionally resilient and adaptable, demonstrating a capacity to reinvent itself at critical junctures. 

Because of this some would argue that there's no such thing as a Cuban model of socialism. Yet there are concepts, structures, methods and mentalities that haven't changed much in four or five decades that are now viewed by Cuba's revolutionaries as misguided or obsolete, and which are now being modified or substituted in an integral transformation. So far-reaching are the changes that are now underway that, if carried through as projected in the Draft Economic and Social Policy Guidelines, it seems legitimate to talk about the "old" Cuban socialist model and the new Cuban model that is emerging. 

The PCC leadership has asked: what must be done to reassert the principle "to each according to their work"? The starting point is that wages, salaries and pensions must recover their role as the chief means of allocating access to goods and services other than those guaranteed to all citizens in Cuba's socialist constitution, above all free health care and education. Secondly, wages, salaries and pensions must be sufficient to cover the costs of all basic necessities so that most Cubans are no longer obliged to turn to the black market to make ends meet. Thirdly, incomes must be better linked to productivity in those economic sectors where this is applicable. 

Since the money needed to increase wages according to output must come from somewhere, universal subsidies must be gradually withdrawn and the socialist state must stop subsidising the inefficiency of loss-making state enterprises. To survive, let alone thrive in a capitalist world, Cuban exports must be competitive in the world market. Cuba has the advantage of a highly skilled and educated workforce and can count on the solidarity of Venezuela's Bolivarian socialist revolution. But labour productivity lags far behind that of the advanced capitalist countries. Only by closing this gap somewhat can Cuba pull itself out of the Special Period and renew its socialist project. Wages can only rise if there is a corresponding increase in labour productivity, yet low wages act as a material disincentive to productive efficiency. Somehow, this Gordian Knot must be cut. 

To even begin to do this the Revolution must face up to an inconvenient truth. For decades, nominal full employment has been achieved by the state sector, which employs around 85% of the workforce, hiring many more workers than necessary. In a typical case, five workers might be employed to do the work of three or four. This might make for a very relaxed workplace culture — one shop assistant paints her nails while the other one takes her time to serve customers — but it's not in the interests of the working people as a whole because it represents a squandering of the labour force. Worse still, it undermines the morale of workers who may feel that they're not really needed, a perception reinforced by wages that seem pitiful and which could be increased if fewer people worked a bit harder and more conscientiously. This would do much to restore the dignity of work.

A rationalisation of the state-sector workforce, then, in the literal rather than the euphemistic sense employed by capitalist politicians, is unavoidable. Decades of experience have demonstrated that the socialist state in a small, blockaded, Third World post-capitalist society cannot employ, say, four fifths of the workforce productively. It can only do so at the cost of entrenching chronically low labour productivity, which in the long run is unsustainable. In the past, Cuba's trade relations with the Soviet bloc shielded it somewhat from having to face up to this reality. 

This then poses the question: what to do with all these surplus workers which number between one and two million, according to various estimates, out of Cuba's total workforce of around 5.2 million? Some can be rehired elsewhere in the state sector where there are labour shortages, such as teachers, or in growth sectors such as biotechnology. But most will have to be absorbed by an expanded non-state sector: self-employment, small businesses and cooperatives. Not only must the socialist state allow this sector to expand, it must actively promote and facilitate its expansion. Small private businesses operating illegally on the black market will be encouraged, if their activities are permitted, to opt for legality. The establishment of a wholesale market supplying legal entities will be an added incentive. 

To recap: starting with the need to reassert the principle "to each according to their work", a cascade of consequences avalanche through the Cuban model of socialism, necessitating nothing less than an integral transformation of many of the Revolution's concepts, structures, methods and mentalities. In other words, a new Cuban model of socialist development. Starting with the recovery of the role of wages to "revalue" work in society, universal subsidies (other than for health care, education, culture and sports) must be gradually withdrawn; the state must stop subsidising loss-making socialist state enterprises; a large-scale rationalisation of the state-sector workforce is unavoidable; and the socialist state must facilitate the expansion of the small-scale private and cooperative sectors.

It does not end there, but I'll explore some of the other consequences in another blog post. I've focused here on the economic aspects of this transformation, but no less important are the changes in conceptions, perceptions and mentalities that all this implies. For example, the stigma attached to self-employment and dogmatic opposition to small-scale private enterprise must give way to an understanding that the socialist project cannot do without them this side of communism and revolutionaries had better get used to it. 

Temas magazine editor Rafael Hernandez summed up the Sixth PCC Congress nicely when he commented to the Financial Times: “There have been other congresses … but this one endorsed for the first time a fundamental change in the political and economic model.

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