Friday, December 31, 2010

Translation: Economy of commands or earnings? (2)

Here is part two of the Juventud Rebelde interview with one of Cuba's leading economists, Joaquin Infante. Part 1 is here. You've got to admire the character of this revolutionary economist who has seen it all:
I don't regret anything, because life is a theatre performance with a single act and no rehearsals. I'm an optimist, at least I feel happy that before I leave this world, we're going to take the right path.

Economy of commands or earnings? (Part 2)      

Capitalism is an old chameleon, with centuries of experience, that looks for ways to emerge from its many relapses and sustain itself. Socialism, with such noble ideals, is too young and inexperienced. It must pay a high price to achieve economic efficiency...

These are complex matters that transcend generations. We used to think that we could change everything in a short time-frame. In 1967, when we stopped accounting for [economic] costs and ignored many economic laws, we thought we were going to create the New Man. Yet man with small letters must be stimulated [materially] to work. We forgot about the socialist law of distribution [i.e., of the transition period between capitalism and communism: "to each according to their work" — translator's note]. Socialism is equality of rights and opportunities, not egalitarianism. This standardisation [of incomes] causes loss of [work] motivation and breeds mediocrity.

There are leftist theoreticians who believe they're seeing the end of socialism in Cuba, and characterise the process of updating [of Cuba's economic model] as pure "economism". How would you respond?

These theoreticians, who have spent 70 years discussing how to build socialism without having done anything for this system, are dangerous. Now they begin theorising that we're deviating ... blah, blah, blah. It's one thing to play the guitar and another the violin. It's very easy to express an opinion and not put it into practice in a country with a critical financial situation, blockaded by the greatest power in the midst of a global economic crisis. Is it about talking, or is it about resolving the concrete problems of a country? I'm a practical theorist. Nobody has managed to construct an ideal socialism. Here we do things in our own style, for more socialism. And chico, what is socialism, if not to give wellbeing to the people and redistribute the resources in the best way possible?

What is the difference between a socialist [state] enterprise and a capitalist enterprise? Both must produce profitably and be cost-effective, self-financing. But in the capitalist firm the riches end up in the pockets of the owners, while in the socialist enterprise they are the property of the country and the people. Moreover, for the latter to be efficient, we must eliminate many unnecessary restrictions.

One example of these restrictions is the excessive centralisation in which the socialist enterprise functions
— or barely functions: all its earnings end up in the state coffers. And while in the end the fruits of production are redistributed globally, this hardly motivates the work collectives and the enterprise management's hands are tied when it comes to stimulating the workers.

It's very clear in the [Draft Economic and Social Policy] Guidelines that the state enterprises must be overhauled. The workers must receive incomes linked to their results. And the enterprise, after having complied with its commitments to the country, must be able to set aside part of its earnings for investments and worker incentives, including hard currency given that we have not achieved convertibility with the [regular] peso.

There is much talk about the sense of ownership. Because a very serious problem, with fatal ideological connotations, is that the worker does not feel as if he's the owner [of the enterprise].

If in the work collectives the incomes depend on the results (of the individual, the work collective and the enterprise as a whole) then everything will work towards this, because in the end they will receive a part of the earnings. For this, the workers need to be able to discuss and participate in decision-making. The plan must be discussed down there with the worker.

And the problems of accounting, of costs, incomes and payments; when the enterprises have the power and we remove their straightjacket, they're going to solve these problems, because now you're struggling for efficiency. The firms with losses will go bankrupt, and this will affect everyone: workers and [managerial] cadres. This means things must function, even if they're not going to be perfect. But in this way we'll advance, improve.       

The much-discussed decentralisation also applies to the territories, [granting them] the necessary horizontality. How can the potential of the municipalities be unleashed?

We're moving towards another kind of relationship between the state enterprise and the municipality in which it is located, such that the enterprise, with its earnings, will sprinkle the municipality with its [tax] contributions. The municipalities will be able to take many initiatives, including the establishment of industries with local resources. And this will resolve many problems there at the base; this is going to give a lot of life to the municipality.

Also very important is the separation of state and enterprise functions. If you're the government, you don't administer. The government regulates, it doesn't administer. The enterprise is the enterprise. The government regulates, establishes norms and supervises; but it cannot administer the economy.

With all these changes which are coming, do you believe that the choke of bureaucratism will be cornered?

When you put an end to administrative tutelage, and you are ruled by economic-financial results, you will be cornering bureaucratism. The priority is to change our conception of the economy, for more and better socialism. Planning to take precedence over the market, but spaces for the market. The fundamental resources managed and assigned according to the plan. But, having complied with the plan in the peasant agricultural sector with a list of certain products, for example, mechanisms of supply and demand will take over.

Of all these planned transformations, which in your opinion is going to be the most complicated?

The implementation of each one. And in particular the elimination of currency duality. Note that we have one type of one-to-one exchange for the enterprise sector, and another of 25:1 for the population. This peso in the enterprise sector is currently overvalued, and undervalued in the population sector. Because of this we must begin with the enterprise sector, so that we help it to boost the economy and strive for efficiency; and then, little by little, raise the value of the [non-convertible] peso to benefit the population.

When you look back on your life, don't you feel annoyed that many thing in which you've participated have been abandoned?

Yes, I feel nostalgia for the things we've tried to do and later were not achieved. I remember everything that Carlos Rafael Rodriguez did in the National Institute of Agrarian Reform, when I was director of Finances and Prices. We managed to make this institute cost-effective in 1965. So many things that were begun and later made no sense, that we've had to go back and rectify. But I don't regret anything, because life is a theatre performance with a single act and no rehearsals. I'm an optimist, at least I feel happy that, before I leave this world, we're going to take the right path. What I have left to live will be for this.   

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