Figure 1.--This evocative 1961 image shows a Cuban boy in the early days of the Revolution teaching an edlerly man to read. The man holdes a booklet ebtitled 'Venceremos' (We will win)--a propaganda publication. The boys holds a book entitled 'Alfabetismos'--a reading instruction booklet. Castro and his acolytes had high hopes after they seized power. Despite some laudable efforts at social justice like this, however, the Revolution has failed to provide a decent standard of life for the average Cuban. In fact, living standards in Cuba declined and have never recovered. Despite the fast the Soviet, Eastern Ruropean, Chinese, North Korean, and Vietnamese experience has demostrated how Communist planned economies are inherently inefficent, the Cubans cling to Socialist orthodoxy.

Cuba before the Revolution had been one of the most affluent Latin American countries, albeit with great social inquities. Castro and the Revolution suceeded in narrowing the inequities in Cuban society, but tragically for the Cuban people, he did it by empoverishing the entire country. Castro announced that he was a Communist and proceeded to recreate a Soviet planned economy in the Caribbean. Private enterprises were nationalized without compensation. It is widely believed that Castro's conversion to Communism was a largely tactical decesion to obtain Soviet backing. At the time, many in the third world were impressed with the Soviet Union and saw Socialism and economic planning as the way of rapidly developing their countries. Castro had no knowledge of economics, but appears to have blithely assumed this was the path to the future. It also had the advantage as perceived by other dictaors og giving him the mechanism of completely controlling Cuban life. The Revolution in fairness did address social inquities, but in the process made Cuba one of the poorest countries in the region. Revolutionary Cuba developed close relations with the Soviet Union and in exchange the Soviets provided billions of dollars in military and economic assitance. (Much of this assistance was in the form of loans that Russia has made futile efforts to collect.) Communist economics and mismanagemnt combined with Castro's erratic management style that the Soviet assistance meant to help Cuba develop has left it pooer than it had been before the Revolutuon. Private businesses nationalized by the state were put in the hands of political supporters who had no idea of how to run businesses. No attention was paid to production costs and acoounting. To Castro's suprise, productivity plummeted. And rather than allowing gradual improvement, Cuba remains one of the poorest countries in the region. Cuba's socialist economy is unable to fully provide even basic necesities like soap. No one goes hungry in modern Cuba, but because of an inefficent economic system, basic consumer goods are unavailble to the average Cuban.

Pre-Revolutionary Comparison

Cuba before the Revolution had been one of the most affluent Latin American countries, albeit with great social inquities. Cuna had a very substantial middle class. And percapita income was high in relative terms. The gap between the middle class and poor in Cuba may have been relativly high in Cuba because the middle-clas was more substantial than in many other Latin American countries. Like other Latin American countries, the rural labor force was poor, but not especially poor in regional terms. Tourism in the 20th century became an important industry, creating a degree of diversification. Cuba has a largely agrculatural economy based on sugar and to a lesser extet tobacco. these were the major export products. There was also a strong sector supplying the domestic market. Until the Revolution there were no shortages of milk, meat, and other products. There also was some mining, esoecially nickle. The Revolution in fairness has addressed social inquities, but in the process made Cuba one of the poorest countries in the region. The Communists have put a flooe under just how poor people can be, but at the cost of making the entire popultion poor. Ordiary workers make about $25 per month and professional like dentists may make as much as $50 a month. There is no doubt that the Revolutin's investment un education has trained quite a number of qualified professionals. What has not done is established an econmy that has created jobs and opportunity for the Cuban people or even the most basic foods and consumer goods needed let alone desired by the Cuban people.

Revolutionary Economy

Castro and the Revolution suceeded in narrowing the inequities in Cuban society, but tragically for the Cuban people, he did it by empoverishing the entire country. Castro announced that he was a Communist and proceeded to recreate a Soviet planned economy in the Caribbean. Private enterprises were nationalized without compensation. It is widely believed that Castro's conversion to Communism was a largely tactical decesion to obtain Soviet backing. At the time, many in the third world were impressed with the Soviet Union and saw Socialism and economic planning as the way of rapidly developing their countries. Castro had no knowledge of economics, but appears to have blithely assumed this was the path to the future.

Dictatorship

It also had the advantage as perceived by other dictaors of giving him the mechanism of completely controlling Cuban life.

Soviet Economic Aid

Revolutionary Cuba developed close relations with the Soviet Union anxious to prove the superority of their economic system ovr market capitalism as part of the Cold war Struggle with th United States. The Soviets did not engineer Castro's successful revolution nor were Communists the main support. But Castro's turn to the Communists promoted by his brother Raúl and Ernesto 'Che' Guevara was a propaganda bonanza. At the time many around the world still believed that Socialism and Communism were a superior economic and political system and Cuba provided the Soviet Union a perfevt show case to demostrate the superority of their system. And to make sure that that their show case suceeded, they not only provided massive military aid, but even more extensive economiv assistance. This effort began under Primier Khrushchev who makes it very clear in his menoirs that he saw it his duty as a devouted Communist. As a result, the Soviets provided billions of dollars in military and economic assitance. (Much of this assistance was in the form of loans that Russia has made futile efforts to collect.)

Sugar

Fisheries

Castro in the 1960s decided to also follow the Soviet example in fisheries. It is unclear why he was excited anout fisheries. We suspect that he decided that increased fisheries production could compensate for the failure of his agricultural prigrams and the decling production, especially of meat. He authorized major investments in highsea fisheries ordering expensive ditant-water trawlers in Spain. Vessels of this type and size were not designed to be in Cuban waters or anywhere else in the Caribbean. War Caribbean waters only support relative small boats. This meant that the Cubans had to find dstant-water grounds in northern waters like the Soviets. The only thing is that this is the same time that coastal countries began climing extended jurisdictios leading to the Law of the Seas Treaty and 200-mile Exclusive Economic Zones. So the Cubans had increaing problens finding grounds where they could deploy their trawlers. The end result was that Castro decided to use very subsantial anounts of foreign exchange to buy expensive distant-water trawlers for which they were unable to find grounds on which they could be adequately deployed. And if this was not enough, the ships bought by the Cubans used large quantities of diesel fuel. Cuba produces no oil and had no foreign currency to produce it. And unlike the seafood produced in Cuba waters (snapper, shimp, and lobster), the distant-water catch had virtually no export value. The Soviets provided Cuba's oil. But Cuba's distant-water fisheries actually cost the country money to conduct, a net loss to the economy. As is often the case in Communist countries, the value of the inputs (capital, material, and labor) exceeded the value of the product produced. The distnt-water fishery destroyed rather than created value. The Soviet-provided fuel consumed by the distant-water fishery could have been sold in export markets. One more economic failure for Castro and the Revolution.

Shortages

Rationing

Accounting

Impact

Communist economics and mismanagemnt combined with Castro's erratic management style that the Soviet assistance meant to help Cuba develop has left it pooer than it had been before the Revolutuon. Private businesses nationalized by the state were put in the hands of political supporters who had no idea of how to run businesses. No attention was paid to production costs and acoounting. To Castro's suprise, productivity plummeted. And rather than allowing gradual improvement, Cuba remains one of the poorest countries in the region. Cuba's socialist economy is unable to fully provide even basic necesities like soap. No one goes hungry in modern Cuba, but because of an inefficent economic system, basic consumer goods are unavailble to the average Cunan.

Market Reforms

Created: 2:50 AM 5/9/2011
Last updated: 11:52 PM 11/19/2016