A service of the

Download article as PDF

Considerable effort -already resulting in partial success- is being spent by the Eastern bloc on ridding itself from the heritage of long years of rigidly centralised economic management and from its inevitable result of consistent material failure. But in Cuba, the economic tragedy of Stalinism appears to be re-enacted without reservation. A start was made when Dr Castro and his bearded revolutionaries began, in 1959, to liquidate the one-sided economy, which had been based on a single crop, that of sugar, which was dependent on the US-market. The utopian leaders of the revolution expected that throwing off the shackles of monopoly capitalism would automatically endow their island, not only with national independence, but with a flourishing economy. At the same time force-fed industrialisation was to create economic equilibrium. However, Dr Castro and his entourage were soon taught the bitter lesson that even their partners in the socialist countries, notwithstanding all Marxist solidarity, were not willing to supply factories and raw materials as free gifts. These socialist friends threatened to dun the Cuban for payment, and the only form of payment available was first and foremost only the income from sugar exports. This was the end of Ernesto „Ché“ Guevara‘s fond dreams of building up a heavy industry-Cuba‘s economic policy had to be brusquely reoriented, and economic planning had to be based exclusively on sugar can planting. The remaining sectors of the island‘s economy sank back into minor significance, and today, sugar growing has become the only important foundation of Cuba‘s economic life to an extent it had never reached before. Cuba‘s dependence on foreign powers, especially the USSR, has transgressed any previous degree.

Another performance of the tragedy has just ended with the curtain coming down on the economic actors‘ performance: the finale was highly dramatic, but in spite of an all-time high of 8.5 mn tons of raw sugar brought in, the „sugar battle“ of 1970 has been lost. Since all the energies of the country were spent on boosting sugar production, other sectors of farming and of industry are wilting. The question arises: is this the end of the „Stalinist“ form of running the economy, or will Cuba have to go through another period of planning exercises with total rationing of inescapable shortages?

As things look now, it appears that the economic reformers who would like to emulate Eastern European economic practice had to yield pride of place to the forces of extreme planning. Whilst in Prague, East Berlin, Budapest, and Sofia, serious attempts are being made to use values and prices as economic regulators, Havana insists on ignoring them. The Cuban economy remains indifferent to operational needs, the workers must not be tempted by material incentives, and rigid centralisation remains paramount in the fields of finance, planning, and investment. The often emphasised „scientific“ character of planning is not only doubted by the West because of the absence of statistical returns and of systematic recording of economic facts. Castro‘s economists do not publish any statistical findings-probably not so much because statistics are a „state secret“ but because Caribbean „people‘s democracy“ is the equivalent of economic chaos, resulting in foreign debts to the tune of about DM 12,000 mn, thus nearing financial desaster.

It remains to be seen whether Dr Castro is able to enact an economic „New Deal“, by which he promises to come out victorious „within the foreseeable future“ with his communist principles of production and distribution. Some observers are of the opinion that the birth pangs through which the East European planned economy has gone on the vast territory on which it has been enacted might be completed more rapidly in the smaller framework of the sugar island. This would mean that economic revisionism might come to the forefront in the near future. But this assumption is purely hypothetical.

Download as PDF

Economic literature at EconBiz

Find relevant publications quickly. EconBiz offers orientation and help in the search for articles, working papers, e-books and more.