Beginning of the end for communism in Cuba

Wednesday, November 09, 2011

CUBA seems to have started on the slippery slope of a transition from communism to capitalism, having granted its citizens the right to buy and sell houses used as residences.

This profound dispensation is the most far-reaching in a series of reforms initiated by President Raul Castro in an attempt to reorganise the economy of Cuba. Some of the measures implemented have been driven by expediency, eg reducing or eliminating some subsidies and reducing the staff of loss-making state enterprises.

Other measures have been aimed at spurring production and employment through a very gradual release of entrepreneurship and private initiatives in small scale enterprises.

But private ownership of houses and a market for real estate could be an irreversible step. In our view, it could portend other steps such as sales to foreign owners, transformation of houses into small businesses and rental of privately owned houses.

Cuba has had a communist style economy in which the State owns and controls the means of production and private property is largely confined to items of personal use. It has operated this type of economic system since the 1960s. When the Soviet Union imploded and aid was reduced Fidel Castro allowed limited foreign investment in the tourist sector. The advent of Raul Castro has ushered in a new economic pragmatism undoubtedly also motivated by the spectacular economic success of China. The new economic policy has allowed more personal consumer items such as cellular phones.

The introduction of private ownership of houses has reintroduced private property which is not confined to consumption because a house/building can also be a means of production, that could lead to either Market-Leninism such as in China or to a transition to capitalism such as what happened in Eastern Europe after the collapse of the Soviet Union. Market-Leninism is a system in which there is a mixed economy, ie state and private enterprise with a single political party which is communist. Capitalism of a sort can exist without democracy, hence Cuba's economy could mutate quickly into a capitalist economy.

Private property, as Marx explained, is at the heart of capitalism because it involves private ownership of the means of production and that in turn gives rise to relations of production which are manifested as classes. Marxists and communists suggest that classes are in an inevitable antagonistic dialectic or worker versus capitalist/owner which breeds class conflict.

Owning transferable title will create immediate significant differences in wealth among Cubans with a few wealthy property owners and a vast number of people renting dilapidated apartments. The contrast between well maintained private houses side by side with buildings that have had minimum maintenance over 50 years is certain to arouse social animosities not seen in Cuba since the pre-revolutionary days.

Private sale of houses in the short run may be beneficial in generating badly needed tax revenue from the eight per cent sales tax and could stimulate a substantial inflow of remittances and capital from overseas Cuban-Americans trying to help their relatives in Cuba.

In the medium to long run it could be the beginning of the end of communism in Cuba because the private property in housing is the end of the beginning of capitalism.

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COMMENTS (7)

andrew Bennett
11/14/2011

The will of the populace will always prevail in the end. If peopl have a free will to choose, they would never choose communism. Communism promotes the control of wealth by a few and the deprivation of the majority. In Jamaica, the JLP is the closest thing we have to communism, as they are busy selling off all the state properties to uptown people so that all the wealth can be kept in a small circle

nervous investor
11/10/2011

Communism is nothing more or less than Slavery with a Politburo and its Insider Circle of Comrades as Masters of All that they Survey. Central Planning / Control has always resulted in uniform poverty / deprivation for the people and unbridled wealth / privilege for the Insider Circle of Comrades. China is now (in relative terms) beginning a march to economic improvement by slowly loosening the bondage of Communism. There is a wealth of evidence to be seen if we open our eyes and brains.

howie J
11/9/2011

People like Republican Abraham Lincoln of the US who fought the civil war which eventually freed the slaves, Mao of China and Castro of Cuba ran for the shelter of communism and communist ideologies to protect their people from unbridled capitalism and all the negative externalities which come with it. In his first speech as a state legislator, Abraham Lincoln, said, “These capitalists generally act harmoniously in concert, to fleece the people…” Mao said the capitalist treated his people like dogs and used his people on plantation. And Castro had no less sentiment for the U.S. backed Cuban dictator Batista.
The best economic system is somewhere between unbridled capitalism and communism.

Meat Head
11/9/2011

Not surprised Cuba is making this move. As you said it, liberalizing markets revolutionized the Chinese economy. This leaves N. Korea as one of the last of the Marxist countries, and a smattering with socialist economies, e.g., Venezuela and Bolivia. Will be interesting to see what they look like in a few years.

Anancy Bedward
11/9/2011

Here is some food for thought on this issue observer.
http://shadow.foreignpolicy.com/posts/2011/11/07/cubas_smoke_and_mirror_reforms

howie J
11/9/2011

Since no space was provided for “X6 murder trial takes dramatic twist” please allow me space here to comment.
When the news of the BMW shooting was first reported in Since no space was provided for “X6 murder trial takes dramatic twist” please allow me space here to comment.
When the news of the BMW shooting was first reported in this paper; my blog which anticipated the behavior of the BMW driver was not posted. I predicted 2 things: that the driver would flee the island and maybe he would try to change the color of his vehicle. Within a week or so we heard that he had fled the island and according to today’s report he did went to a garage to do minor paint work to hide the crime.
One way to predict future events is to understand the environment in which we operate.

Roman Bones
11/9/2011

hmmmmm was cumunism ever a good thing in terms of governance??

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Beginning of the end for communism in Cuba