The Cuban Economic Crisis

Thousands of Cubans took to the streets across the island nation on 11 July and subsequent days to protest chronic shortages of basic goods, curbs on civil liberties and the government's handling of a worsening coronavirus outbreak, marking the most significant unrest in decades. Although it is difficult to get a clear picture of the extent of the protests, videos on social media provide evidence that the events quickly spread to major cities such as Havana, Santiago de Cuba, Santa Clara, Matanzas, Cienfuegos and Holguín, and many smaller towns of the nation of 11 million inhabitants. As ever, right wing Cuban-Americans, like Mario Rubio, falsely claim to speak for all Cuban exiles, and crow about the imminent collapse of “communism”, whilst around the world Stalinists of all stripes peddle the lies of the regime that these protests (which turned quite violent for a while and hundreds were arrested) are simply the work of the US. There was no doubt that outside interference was attempted, but only after a spontaneous explosion on part of the island that is usually a bedrock of support for the regime. How little influence the social media “influencers” in Miami had on the unrest can be seen in the way their calls for demonstrators to assemble on the Malecon (sea front boulevard of Havana), as they had done in 1994, were ignored, as the demonstrations’ target was the Capitol in Old Havana. This was an undeniably a spontaneous class rising by a population driven mad by shortages, including electricity blackouts of 12 hours at a time in a heatwave.

Beyond the familiar rhetoric which seeks to pin all of Cuba’s woes specifically on its political system, a materialist analysis shows that what is happening in Cuba is simply one example of the global situation where the working class has seen decades of erosion of its conditions. Even before the Covid-19 outbreak, capitalism the world over was showing increasing signs of a new downturn and that has only been magnified as Covid-19 took its toll. The Colombian state for example has already been forced to withdraw proposed tax increases in the face of a virtual insurrection which not even extraordinary police brutality could subdue. In Cuba, the recent fall has been particularly severe: Cuba's Gross Domestic Product decreased by 11% in 2020 due to the strong contraction of foreign trade, the reduction of international tourism and foreign currency income, due to the effects of Covid-19 and the reinforcing of Washington's blockade on the island. The Covid-19 crisis has gutted tourism, thus eliminating a major source of income for Cubans who work in the industry and a significant source of US dollars for the Cuban government. Another source of US dollars, remittances, a lifeline for struggling Cuban families and estimated to total $2bn to $3bn per year, was reduced by US President Donald Trump tightening restrictions on Cuban Americans sending money back to the island. The pandemic has only further stifled the flow of those remittances.

In the immediate run up to the current crop of protests, a prime factor has been the global inflation in prices of many basic commodities, including food, a pressure felt globally which is driving manifestation of discontent in a variety of geographical locations - the last straw that breaks the social peace. Several commentators have pointed at the gargantuan “money printing” programmes of the advanced capitalist metropoles, particularly the USA (its national debt now stands at $27.5 trillion and is rising rapidly), as a major driver of this inflation in commodity prices, with investors who regard the inflationary trend as more than superficial and transient talking in terms of a commodity super cycle in anticipation of profiteering as the prices rise. In Cuba, the inflationary trend has been further exacerbated by the devaluation of the local currency, the peso. For decades, Cuba had been operating a dual currency model. Since 1979 possession of the dollar had been forbidden. Fidel Castro cited the inequalities that arose due to certain sectors having access to remittances from the USA which exacerbated class and racial differences. However, black market use of the dollar made the prohibition unworkable. In 1994, the Cuban government introduced a “convertible” Cuban peso (CUC) as a substitute for the US dollar for use in Cuba at an exchange rate of one to one, printed and controlled by the Cuban Central Bank. In 2004 the US dollar was removed from legal tender. The dual currency split the economy into two parts. Which branch any Cuban operated within depended on whether their income was exclusively from a state salary paid in pesos, or if they had access to dollars or CUC. Those with access to dollars could buy subsidised peso goods for a fraction of their market price and consume additional goods from dollar shops. Those dependent on peso incomes could not afford non-subsidised markets. This generated negative effects – state workers, including the most highly skilled, earned the lowest incomes. Many highly qualified Cubans left their professions for jobs with access to CUCs that provided them with a higher level of consumption, such as tourism and taxi driving. The Cuban authorities recognised the problem but delayed until January of this year the elimination of the dual currency model. All Cuban state enterprises now operate with an exchange rate of $1 = 24 CUP, a devaluation of 2,300% from the one-to-one rate.

From One Imperialist Camp to Another – The Adoption of the USSR’s Stalinist Model

Beyond the immediate causes behind the groundswell of protest, the Cuban masses have been battered for decades as its economy, in its diverse phases since the 1959 coming to power of Castro, has never been anything but a continuation of a capitalist economy where the role of the capitalist class has largely been assumed by a state bureaucracy. Whether we refer to the reliance on sugar in the 1960s to sell mainly to the USSR (at three times the world price), or the current focus on biotechnology and tourism, the essence has not changed. The state-owned sector, the private sector, joint ventures with foreign capital, all remain variations on the same capitalist theme – surplus value is extracted from the working class for reinvestment in commodity production for the world market. Despite the outward trappings, the revolutionary mythology, the speeches and the rhetoric, the regime did not arise from a proletarian revolution. Its leaders came to power as bourgeois nationalists and only later, when already in power, was there any declaration to the contrary. Castro, a trained lawyer, had been a candidate of the nationalist Ortodoxo Party in the 1952 elections which were rigged by the dictator Fulgencio Batista. He came to power after leading a successful armed struggle against Batista, regarded by the USA as an ally.

At the beginning of 1959 United States companies owned about 40 percent of the Cuban sugar lands—almost all the cattle ranches—90 percent of the mines and mineral concessions—80 percent of the utilities—practically all the oil industry—and supplied two-thirds of Cuba's imports

remarks of Senator John F. Kennedy at a Democratic dinner, Cincinnati, Ohio, October 6, 1960

By January 1961, the United States had severed diplomatic relations with Cuba. In April, the Bay of Pigs invasion took place, when hundreds of rebels, armed and trained by the United States, tried to overthrow the Castro government. This culminated in a dismal military defeat for the rebels and embarrassment for the United States. Having antagonised one superpower, Castro threw his lot in with the other, the USSR - yet another illustration of the impossibility of national extrication from the imperialist nexus. In 1961, during a televised address on 2 December, Castro declared, “I am a Marxist-Leninist and shall be one until the end of my life.” He went on to state that, “Marxism or scientific socialism has become the revolutionary movement of the working class.” Castro held power until late July 2006, officially stepping down in February 2008. He died on 25 November 2016, at 90.

So, there was no proletarian revolution, nothing to compare to the unique events of 1917 where the working class created its own organs of power and toppled the bourgeois regime in Russia. The Cuban workers have remained wage labourers, and as the global capitalist crisis devastated its supporters and allies, Cuba has been steadily abandoning the state ownership model which is the essence of Stalinism and embracing market solutions. Famously in 2010 Jeffrey Goldberg, a national correspondent for the Atlantic magazine, asked whether Cuba’s economic system was still worth exporting to other countries. Castro replied: “The Cuban model doesn’t even work for us any more”. And of course, now there is a real possibility of turmoil, possibly a bloodbath on the island nation, because the reality is that neither the Stalinist version of capitalism – one where the ruling class carry out their exploitation of a powerless working class through a state which ultimately lies in the hands of a separate minority – or a liberal regime, as pursued by the right wing waving placards of “Patria y Vida”, offer anything better. The simple reality, and the kernel which defines the ICT and authentic communism, is that the precondition for creating a post-capitalist society is the power of the working class, unadulterated, not playing second fiddle to bureaucrats who have the last word. Our solution remains that which animated the Bolsheviks and the events of 1917-18. In rejecting bourgeois democracy, in rejecting the party dictatorship which emerged from the failure of the Russian Revolution which has become a model for Stalinists, we embrace the concept of the empowerment of the vast majority. The task of the revolutionary organisation is to realise that empowerment of the majority, the power of the non-exploiting masses. In contrast to the limited version of “democracy of the moneybags” to echo Lenin, we advocate proletarian democracy whose essence can be distilled to almost a line of print – “All officials, without exception, elected and subject to recall at any time.” Only the globalisation of a genuine proletarian power based on its own organs of mass participation, can end capitalism of all stripes.

Cuba is the latest illustration of the failure of the Stalinist recipe of party dictatorship behind national borders, which palms off socialism as the development of the productive forces within a money based economy whilst every capitalist category, from wage labour to commodity production, from surplus value extraction to the concentration of privilege at one pole, is retained. Stalinist state capitalism is simply one variant of a capitalist totality which has no future bar worse to offer humanity. What is happening in Cuba is part of the devastation of a capitalism unable to attain sufficient profitability to conduct its valorisation process without turning on its human base, the working class, reducing its conditions of life. In Cuba, as everywhere, the solution is not some fantasy project to restore a pristine capitalism. There are no capitalist models which do not suffer the same defects, the same reliance on an unsustainable process of accumulation and profiteering. In Cuba, as everywhere, the solution is the global abolition of capitalism, not its national management by state bureaucrats or the turning over of the economy to the oligarchs and billionaires, perhaps to better finance their trips to space or whatever takes their fancy. In attempting to propagate this revolutionary perspective to the extent that we can, the following address has been produced. It only circulates in social media but given that millions of Cubans now own smart phones, it is one way to present a revolutionary alternative:

Appeal to the Exploited in Struggle Inside Cuba
"We are not afraid!", This is the beautiful battle cry that has frightened the dictatorship and its beneficiaries. It is a simple motto, but it perfectly encapsulates the situation of workers and peasants in Cuba: subjected to ruthless exploitation, deprived of all autonomy, overseen at all times. Faced with this battle cry and the rage of the unconquerable mass that accompanies it, the dictatorship trembles in abject horror, faced with the reality of losing its power and privileges.
The events of 11 July in Cuba show that the dictatorship is not insurmountable; we exploited can fight and gain ground, putting those in power on the defensive. This was exactly what happened: the police, a front-line repressive apparatus, were crushed by the mass of countless exploited, all exhausted to the limit of their living conditions. For its part, the bureaucracy made its fear more than evident by broadcasting by all means a "combat order" addressed to its henchmen and other beneficiaries so that they would attack the protesters in order to get them off the streets.
The dictatorship is carrying out a disinformation campaign to hide or minimise the scale of the protests. They want to blame the US government and the non-state Cuban press for inciting the demonstrations against the dictatorship. But the exploited, tired of being subjected to so much misery and humiliation, know the truth: neither the US government nor the Miami celebrity press are responsible for the ruling leadership and the state bureaucracy living at the expense of those who work, or that the government spends hundreds of millions of dollars to build hotels for tourists and to obtain weapons for the same security forces that they then deploy against the population, while ordinary people go hungry, suffer from shortages, and live in unsanitary conditions in buildings that are collapsing.
What is the next step forward? The exploited in Cuba need to organise massively to advance their interests as a social class. Its strength resides above all in its collective organisation. All existing and future obstacles are reduced to nothing before it. The collective organisations of the exploited in struggle are the workers’ councils: mass assemblies made up of democratically elected and instantly revocable delegates. However, if the exploited do not organize as a class, or if they allow themselves to be mobilised by opportunist elements such as the “people” or the “nation” —which is nothing other than the sacred union between the exploiter and the exploited — they will be repressed by this regime, and all others to come.

Those of us watching these events from afar in the mainstream media are being treated to a discourse which concentrates on the here and now, specific Cuban issues, alongside a general condemnation of what they regard as “communism” in its entirety. For example:

President Joe Biden said on Thursday that Cuba is a "failed state" and called communism a "failed system" as protests play out against the Caribbean nation's repressive regime.

However, for those of us who have learnt to question the dominant narrative to find perspectives which coincide with reality – these events are simply part of a wider process which poses essentially the same question to us all. Capitalism in all its variants, regardless of the degree of state intervention in the economy, even outright ownership of some or all the means of production, only offers worse, then worse again. Socialism or barbarism, revolution or ruin, an increasingly overdue struggle for a future or what is increasingly looking like generalised societal collapse should we continue on the current trajectory. Cuba’s protests are just the latest evidence of the dead end of Stalinism, itself one aspect of the dead end of global capitalism.

Ant

20 July 2021

Photo from: youtube.com

Further Reading:

Sugarcane Stalinism

Fidel Castro’s Death Leaves the Path of History Unchanged

Cuba: Another Revolution?