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Promoting state companies in Cuba, to take them over as soon as they can

Generals and colonels do not want state-owned companies to disappear because they are already maneuvering to appropriate the least obsolete ones for themselves.

Los Ángeles
A state-owned company in Cuba.
A state-owned company in Cuba. Trabajadores

The appeal going out from the Communist Party of Cuba (PCC) and the government bureaucracy to boost the efficiency of state-owned companies might be considered a kind of cynical joke. Unfortunately, it is not. Rather, it is a well-crafted plan.

The dictatorship needs Cubans to depend on the state and, inevitably, the poorer they are, the more dependent they will be. Generals and colonels do not want state-owned companies to disappear because they are already preparing to seize the least obsolete ones for themselves.

This is what they plan to do when Castro II, Machado Ventura and the remaining commanders of the "historical" old guard step off the stage.
But it is one thing to prevent state companies from collapsing, and then turn them into private companies, and another is to tell Cubans that state companies are the key to economic development.

Thus arises the brutal paradox that while the centerpiece of the regime's Tarea Ordenamiento legislation is a kind of harsh "neoliberal" shock therapy, at the same time it constitutes a huge leap back in time, to the 1960s, when Fidel Castro and "Che" Guevara, after Sovietizing the economy and creating the Stalinist "consolidated companies, claimed that "the future belongs entirely to socialism."

Today, entering the third decade of the 21st century, Marino Murillo, in charge of administering this shock therapy, makes the same plea: "more responsibility is demanded from the state business sector to seek efficiency", as under the latest directives they are "called upon to be more competitive and creative." Has he no shame?

This demand is exactly the same as the one made by the Argentine commander as Minister of Industry when he bitterly scolded those heading up the companies under that super-ministry (encompassing all the country's industries). I was an eyewitness to this scolding, in 1964, at a large meeting at the MININD with Minister Guevara, which I attended on behalf of Cubatex, under the Ministry of Foreign Trade.

Except for North Korea, with its Communist monarchy, Cuba is the only other country among the 35 constituting "real socialism" in the 20th century that maintains the state-owned company as "the cornerstone of the national economy", as proclaimed by the current Constitution and is reiterated in the Tarea Ordenamiento. In China and Vietnam the Communist parties that remain in power today got rid of economic statism.

Raul's regime, in contrast, insists on doing the same thing over and over again, holding out hope for different results, something Einstein called the best definition of insanity.

Even Lenin realized that statism was disastrous

The architect of the world's first Communist state realized that what was starving millions of people in Russia was land collectivization, and that the shortage of consumer goods was due to the nationalization of industry. Thus, in March 1921 he launched his New Economic Policy (NEP), authorizing free production and trade by peasants. Thousands of private companies were created in every economic branch, even heavy industry, such as steel, oil, coal, etc.

Famine and scarcity quickly disappeared. The Bolshevik leader had planned for the NEP to be provisional, but it took firm root in the Russian economy until Stalin seized power and ripped it out. State companies were restored as absolute monopolies in every sector of the economy, and peasants were re-enslaved by the state. As a result, in just nine years (until 1937) 12 million people died of hunger, according to historians.

Returning to Cuba in 2021, Havana calls the economic adjustment measures in the world's democratic countries "savage capitalism," while the PCC insists that the state-owned company is the panacea, ensuring abundance in Cuba. It does not make any sense.

It does not add up because, in reality, no one in the dictatorial leadership really believes in the state-owned company. Proof of this is that the military, the true powerholders on the island, are now successful businesspeople controlling a massive capitalist corporation. In other words, when it comes to doing business and acquiring foreign money, the traditional Communist state enterprise is considered useless, a nuisance.

The generals, colonels and "historic" commanders and their relatives have already privatized and seized those sectors that are economically viable and generate cash for them (tourism, retail trade, foreign trade, banking and finance, biotechnology, mining, the Port of Mariel, beaches, civil aeronautics and airports, merchant shipping, etc.)

To the civil bureaucracy they left nothing but the scraps: obsolete state industrial plants, and then instructed it to feed, clothe and provide transport for everyday Cubans with them. It is a peculiar kind of socialism under which the military comprises a capitalist mafia that seizes the money entering the country and does not even stand accountable to the government or the PCC. The bank accounts of these "Marxist revolutionaries" in Switzerland, Panama and New Zealand, hidden by fronts, are bursting.

On top of all this, these millionaire military men, their children and grandchildren own thriving  private businesses abroad, and also in Cuba. They are organically grouped into GAESA, a giant capitalist corporation that is as transnational and "imperialistic" as General Electric, Nestle, Volkswagen, Sony Corporation, or any other of the corporations that appear on Fortune magazine's annual list.

How can this cadre of affluent elites have the nerve to tell Cubans today that the socialist state enterprise is the best in the world if they know full well that it is unworkable, and, in fact, downright disastrous?

The official insistence on statism is, in fact, not ideological or socialist at all. Rather, its objective is to prevent the growth of a thriving private sector in Cuba that might compete with the military's corner on corporate capitalism. They want to get richer and richer, and enjoy lives including annual vacations in Europe.

No autonomy for "Che" Guevara’s state-owned companies

When, commissioned by Castro I, "Che" Guevara —a self-confessed admirer of Stalin and Mao— set up the Communist economic model, he did not apply the system of economic calculation that had existed in the Soviet Union after the death of Stalin, but rather the Stalinist budgetary system  based on a strict state monopoly in every economic branch and centralized control of all economic activity across the country.

"Che" rejected the Soviets' reform of economic calculation, which he considered a disguised expression of capitalism because, among other things, it granted state companies a degree of autonomy. They decided on the ranges to produce, and the investments to be made, and obtained a percentage of the profits. For Guevara, this was a betrayal of Communism.

Six decades later, Castro II continues to refuse to give state companies true autonomy. Even the former economy minister, José Luis Rodríguez, states today, without blushing, that the autonomy of state businesses was one of the factors that brought down the Soviet Union.
A leader of a state company in Holguín (who asked to remain anonymous) asked an independent journalist: "How are you supposed to produce more with equipment that is increasingly obsolete, when you can't even change it or consume more energy?"

The interviewee added: "We in management cannot decide practically anything, despite what they say. We only have autonomy on paper," explaining that any kind of new equipment or type of production that is necessary cannot be acquired or adopted because it is out of their hands. Everything is rigorously controlled and centralized by the State.

It is an insult to Cubans that the PCC continues to portray the state company as the solution to the country's development. The corpse of socialism was buried in the Kremlin's walls by its own architects. We have heard enough lies from those scheming to get even richer when Cuba's state companies are finally all theirs.

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