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Generational Dynamics Web Log for 16-Jul-2018
16-Jul-18 World View -- Socialist Cuba moves to Capitalism, while Socialist Venezuela moves to self-destruction

Web Log - July, 2018

16-Jul-18 World View -- Socialist Cuba moves to Capitalism, while Socialist Venezuela moves to self-destruction

Private property ownership allowed under Cuba's new constitution

by John J. Xenakis

This morning's key headlines from GenerationalDynamics.com

Cuba's new constitution builds on ending of socialism in 2011
Private property ownership allowed under Cuba's new constitution
Mario Díaz-Canel imposes harsh regulations on the private sector

Cuba's new constitution builds on ending of socialism in 2011

Homes and cars in Cuba are stuck in the 1950s, thanks to Socialism (Getty)

Homes and cars in Cuba are stuck in the 1950s, thanks to Socialism (Getty)

Cuba's new constitution will recognize private property for the first time since the fanatical Fidel Castro abolished private property after the Cuban Communist Revolution of 1959. Cuba's current constitution, adopted in 1976, recognizes four forms of property: state, cooperative, farmer, personal and joint-venture property. The new category of private property will permit Cubans to own business-related property.

Despite the insistence that Cuba is still a full-fledged, glorious Socialist state, ever since Fidel Castro stepped down in 2008, the two new leaders that replaced him have been moving Cuba in the direction of capitalism. This is in contrast to Venezuela and North Korea, whose Socialist leaders continue to move their countries toward self-destruction.

In 2010, when Cuba's economy was in shambles, and president Raúl Castro announced the end of the Socialist economy. The government would lay off 500,000 government workers (Socialist bureaucrats) and privatize many businesses.

In particular, Marx's Socialist Principle Of Distribution ("From each according to abilities, to each according to needs") was abandoned at the time, with the announcement: We must reinvigorate the socialist principle of distribution, to pay to each according to the quantity and quality of work provided."

Within two years of the 2010 announcement, the size of the state payroll had been reduced by 20%, and more than 200,000 people had moved into private enterprise. For the first time, Havana was population with street stalls selling everything from pirate DVDs to kitchen implements. The problem, however, was these self-employed small business owners were not permitted to own the street stalls that they had set up. The same was true of other entrepreneurs as well. Guardian (London, 6-Nov-2011) and Granma (Cuba, 20-Apr)

Private property ownership allowed under Cuba's new constitution

Since 2010, the number of self-employed people in areas like tourism and transport has nearly quadrupled to more than 591,000, around 13% of Cuba’s overall workforce.

In April of this year, Raúl Castro stepped down, and Miguel Mario Díaz-Canel Bermúdez became president. In a speech in April, Castro previewed the changes that Díaz-Canel was about to implement:

"We will continue to expand self-employed work – as I have mentioned in different speeches before this parliament – which represents an alternative source of employment within the framework of current law, and far from signifying a process of neoliberal privatization of social property, will allow the state to free itself of managing activities of a non-strategic nature to the country’s development. The experiment with non-agricultural cooperatives will also continue.
Significant results have been achieved in both areas, but also revealed are mistakes in management, control and monitoring, which have led to the emergence of various forms of indiscipline such as tax evasion, in a country where, before these measures were applied, hardly anyone paid taxes; criminal acts and regulatory violations, with the aim of getting rich quick, a problem which was not addressed in a timely manner and resulted in the need to modify various regulations linked to this sector."

This was a preview of the new constitution that was announced by president Mario Díaz-Canel on Saturday. Here is part of the announcement:

"The economic system that it reflects maintains as essential principles the socialist property of all the people on the fundamental means of production and planning as the main component of management, to which is added the recognition of the role of the market and of new forms of ownership, between they are private, in correspondence with the Conceptualization of the Cuban Economic and Social Socialist Development Model and the Guidelines of the Economic and Social Policy of the Party and the Revolution, as a result of the consultation with broad sectors of society. ...
Regarding private property on the land, a special regime is maintained, with limitations on its transmission and the preferential right of the State to its acquisition through its fair price."

So the new constitution allows entrepreneurs to keep their commercial property, but the last clause means that the dictators in the government can still confiscate property at any time. The Conversation (18-Apr) and Granma (Cuba) (Trans) and TelesurTV

Mario Díaz-Canel imposes harsh regulations on the private sector

Castro's speech in April referred to "mistakes in management, control and monitoring." The fear of a quickly growing private marketplace that might threaten the power of the dictatorship has motivated harsh restrictions and regulations. The government froze issuing licenses for some popular business categories last year, and new regulations forbid a single person from holding more than one business license. This has already discouraged badly needed investment in businesses, and has even forced some business owners to close businesses because business licenses had to be returned.

Investment is the reason why the economic changes are being made in the first place. Cuba has decaying road infrastructure, a national housing deficit, food shortages, and public transport problems.

Under the fanatical Fidel Castro, Cuba's economy was a continuing disaster, first propped up by the Soviet Union, and later by Venezuela. Now that Venezuela is an economic disaster, the payments are getting smaller, and Cuba needs money.

Cuban officials want international investors, but no one is willing to invest money in Cuba unless they believe that they can make a profit and take the money out. So really, Cuba's new regulations restricting business may may actually cancel out the advantages of owning private property.

It's also good to remember that returning Cuba to capitalism does not make it a democracy. I've written about many countries that illustrate this. Nazi Germany was a capitalist dictatorship. China today resembles a capitalist dictatorship. For example, Cameroon has a capitalist economy, but the Francophone government still commits daily atrocities on the Anglophone community, including extrajudicial jailings, mass slaughter, rape, torture, and burning down entire villages. Syria has a capitalist economy, but the government of Shia/Alawite president Bashar al-Assad continues full-scale genocide and ethnic cleaning of hated Sunni populations.

Still, Cuba and Venezuela are a study in contrasts. Venezuela is pushing forward with full-scale Socialism, destroying the country, turning it into a military fascist state, starving the population, and driving millions of families into neighboring countries as refugees. Venezuela has become a worldwide poster child for what a disaster Socialism always is, 100% of the time.

Perhaps because Venezuela is such a disaster, Cuba is taking a different path, looking for a way to maintain the dictatorship, but at the same time opening up the economy by abandoning Socialism in order to encourage foreign investments. A dictatorship without Socialism, as in the case of Cuba, isn't as disastrous as a dictatorship with Socialism, as in the case of Venezuela, so at least Cuba is choosing the lesser of two evils. Reuters and Havana Times and AFP

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(Comments: For reader comments, questions and discussion, see the 16-Jul-18 World View -- Socialist Cuba moves to Capitalism, while Socialist Venezuela moves to self-destruction thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Jul-2018) Permanent Link
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Generational Dynamics Web Log for 16-Jul-2018 16-Jul-18 World View -- Socialist Cuba moves to Capitalism, while Socialist Venezuela moves to self-destruction

Cuba's new constitution builds on ending of socialism in 2011

Private property ownership allowed under Cuba's new constitution

Mario Díaz-Canel imposes harsh regulations on the private sector

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Generational Dynamics Web Log for 16-Jul-2018
16-Jul-18 World View -- Socialist Cuba moves to Capitalism, while Socialist Venezuela moves to self-destruction