Are Cooperatives Dangerous for Cuba?

December 24, 2015 | Print Print |

Fernando Ravsberg

Photo: Raquel Perez Diaz

Photo: Raquel Perez Diaz

HAVANA TIMES — A few days ago, I saw a report by Telesur, Latin America’s left-wing broadcaster, which praised the creation of cooperatives in Mexico and stressed that these had helped prevent the closure of companies and unemployment in other Latin American countries.

Socialist sectors are precisely those that impel cooperatives as a means of production that offers an alternative to “capitalist individualism.” In some cases, these yield good results in areas such as the food, construction, housing or transportation industries.

If the economic essence of socialism is that “the means of production are in the hands of the people,” no company structure would represent that system better than a cooperative. We could say it is the “socialist people’s company” par excellence.

Cooperatives, in fact, fit perfectly into the society Jose Marti dreamt of: “A nation with many small owners is rich. A nation is rich not when a handful of people are rich, but when everyone has some wealth.”

Progress in the establishment of cooperatives is being made in the urban transportation sector, but these cooperatives still depend heavily on the State. Photo: Raquel Perez Diaz

Progress in the establishment of cooperatives is being made in the urban transportation sector, but these cooperatives still depend heavily on the State. Photo: Raquel Perez Diaz

Opening a cooperative in Cuba, however, is an arduous task: the paperwork takes years, you need approval from the municipal government, authorization from the pertinent ministry and permission from the Commission for the Implementation of the Communist Party Guidelines – and the very Council of Ministers has the last word anyways.

None of these permits, authorizations and years of waiting are justified when the members of the cooperatives are simply going to repair air conditioning units or old television sets. It’s really not a question of deciding whether this work is of “strategic” importance for the nation’s economy.

It seems that they fear, not the work per se, but the cooperative as a company structure as such. Self-employed persons (setting up small and mid-sized private enterprises) are given the licenses denied members of cooperatives in a mere 15 days.

The explanations as to this wariness with respect to cooperatives are varied. Some say they fear these could become the breeding ground for corruption, but, in that case, they would have to start by shutting down all State companies, where the greatest scams have been hatched.

Barber shops were the first experiment involving cooperatives formed on the basis of State companies and they have worked fairly well. Photo: Raquel Perez Diaz

Barber shops were the first experiment involving cooperatives formed on the basis of State companies and they have worked fairly well. Photo: Raquel Perez Diaz

This is not mere journalistic speculation: there are hundreds of executives from the telephone, nickel, importing, garbage collection, slaughterhouse, food industry, airline and even customs sector that have already been imprisoned.

Barber shops were the first experiment involving cooperatives formed on the basis of State companies and they have worked fairly well. Photo: Raquel Perez Diaz

Others claim that the development of cooperatives would leave the country’s ministries without “sources of financing.” The problem lies in the fact that much of the “extra” money that circulates among corrupt officials comes precisely from companies “administered” by ministries.

They may fear losing control. Cooperatives are legal entities, something self-employed persons are not. They are a legally incorporated company, with the obligations but also de the rights that State companies have, even in terms of importing.

There are also those who believe that the development of socialism in a given country is measured by the number of State-controlled industries in it. In 1968, this led Cuba to launch its so-called “Revolutionary Offensive,” which placed even street kiosks in State hands.

These are the teachings offered by Soviet manuals, based on the Stalinist model – manuals that “forgot” to mention that Marx recommended the nationalization only of the “fundamental means of production” and that Lenin impelled self-employment and cooperatives in the land of the Soviets.

Most of Cuba’s existing cooperatives have not been newly established but are restructured State companies. Photo: Raquel Perez Diaz

Most of Cuba’s existing cooperatives have not been newly established but are restructured State companies. Photo: Raquel Perez Diaz

We could speculate forever, especially since no one can explain the bureaucratic sluggishness of this process. In one ministry, they appointed a single official to review applications for cooperatives coming from all of the country’s municipalities and, when this official got sick, work was put on standby for months.

Many find it incomprehensible that they should have slammed on the break on economic reforms developed by the Communist Party itself, debated and supported by millions of Cubans and ratified by parliament. What further support is needed to implement them?

A few days ago, President Raul Castro said that “the field cannot be handed over to defeatists.” Certainly, for an economy to work, a degree of optimism is needed: those who set up businesses must believe they’re going to prosper, those who invest money must feel sure of their decision and common folk must believe that their lives will improve through work.

What’s happening in Cuba today is that those who set up businesses are thinking of earning whatever they can “for as long as these measures are in place,” those who invest fear they will not get their money back and many average Cubans believe that the only way they will be able to maintain their families with regular wages is to leave the country.

The government is partially responsible for that pessimism that grips people today. If Cuban leaders don’t lay all their bets on the new economic model, the one they themselves developed and the people approved, they can’t expect others to have any confidence in the future.


What's your opinion?

  • John Goodrich

    Any economic system without the democratic base such as exists in cooperatives and which are run from the top down will ultimately be corrupted and become totalitarian much as has free enterprise capitalism and Cuban-style state capitalism .
    Likewise, in anarchist doctrine, any government like the Leninist from-the-top Cuban form long enough in power and no matter how noble the intentions at the start become self-preserving, corrupt and totalitarian.
    AFTER the embargo is dropped we will see if the Cuban government follows this path or follows through to true ( democratic) socialism as the PCC’s name implies it should.

    • Fez Fernandez

      It sounds like the dictatorship’s ineptitude and violations of human and constitution’s rights is due the Embargo???? Geez

      • John Goodrich

        The dictatorship’s ineptitude in what ? the economy ?
        Cuba has been under economic attack by the world’s most powerful nation for 54 years .
        The U.S.G. is still keeping the embargo on because it works to impoverish the entire nation .
        Have you been living alone in a cave that you don’t know this ?
        It must be difficult for someone like you, lacking essential and basic historical knowledge and facts, to understand what is going on and why.
        Which explains your post.

        • Fez Fernandez

          American grown food is delicious and I ate it in Cuba. My mom bought it at the CUC Market. Cuba imports 90% of what cubans consume, explain that you ignorant foreigner.

          • John Goodrich

            Can you please supply a reliable source of information that shows that Cuba imports 90% of its consumer goods ?
            And how does that or the actual percentage compare to other developing countries with similar economic circumstances and resources ?
            Thank you

          • Fez Fernandez

            Here you have my good friend https://www.wfp.org/countries/cuba It’s very easy if you were cuban, you would have known that there is no industry (factories) in Cuba other than Rum and Tobacco production, therefore if you can’t do a research yourself at least use logic, if there is no production infrastructure inside, where do all goods (technology, clothes, tools, food, cars) come from? Cuba imports almost everything cubans consume, even the main ingredients for our national beverages are being imported from Europe (http://eagri.cz/public/web/file/261010/Ex_mltoh_kuba_spo.pdf) This is a first time thing in our entire history. Why does this happen? Because the dictatorship has been getting billions of dollars in credits (from every one but the US), and they are robbing it at high speed, by expending way too much on low quality products and then reselling it in Cuba not for 11 million cubans but for that 1% of cubans that have relatives living abroad and have been sending remittances since forever. This is not trashing my country, Cuba is not the dictatorship, that’s not my government, it never was it will never be. So long! Happy new year!

          • Griffin

            I have read reports which cite statistics showing Cuba imports from 70% to 94% of their food. The numbers vary over the years. Certainly, as a rough guide, we can assume Cuba imports approximately 80% of it’s food.

            http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/latin-america-and-the-caribbean/agri-food-past-present-and-future-report-cuba/?id=1410083148776

            By way of comparison, the Dominican Republic imports about 13% of it’s food.

            http://www.tradingeconomics.com/dominican-republic/food-imports-percent-of-merchandise-imports-wb-data.html

        • Informed Consent

          Why insult Fez when he has first hand experience living your lie in Cuba and you so not! John, you live on your own private eco chamber repeating your misconceptions about CUBA over and over. It is you, based on your comments, who has little understanding about Cuban history and the Cuban Revolution of the late 1950’s Those, like Fez, who have lived under the Castro tirany have an infinitely better understanding of the Cuban reality than you ever will.

          • John Goodrich

            I am a student of U.S. foreign policy and have been for about 40 years .
            Fez may know more about day-to-day life in Cuba but I have the benefit of 40 years of study in how the empire works its ways on countries that oppose it.
            There is that big picture that began 100 years ago; that perspective, that Fez is not taken into consideration .
            In this he is much like most of the U.S. population who have no idea of what the USG does in their name.
            Most of us in the U.S. however, can access the “Killing Hope” website and learn all one needs to get started knowing about U.S. imperial foreign policy by reading the INTRODUCTION to the book .
            My bet is you will be unable to finish reading just the introduction because it’s information you will have enormous difficulty learning is the truth of things.

          • informed Consent

            You really must broaden your literary horizons John. You are stuck on just two or three goofy books

        • Griffin

          How has the US embargo impoverished Cuba? For 3 decades the USSR bought all the Cuban sugar that the US used to buy. They also invested billions in Cuba, much of it on the military and Ministry of Interior.

          Cuba has received billions in subsidized cheap oil from Venezuela. Cuba is free to sell their products around the world to everywhere but the US. Foreign firms have invested in Cuban industry, telecom & tourism. And yet, despite all this trade, investment & subsidy, Cuba remains bankrupt. It’s not because of the meaningless embargo. It’s because the corrupt state socialist system (or whatever the hell you prefer to call it) does not work. Economically, socially, humanly, spiritually & politically the system imposed on Cuba by Fidel & Raul Castro has been an utter failure.

  • Raven

    Co-operatives are very strong in Western Canada. They cover a wide range of enterprise including grocery and hardware stores, farm chemicals and supplies, insurance and travel agencies. They are owned by their members and make a good contribution to the economies of their neighbourhoods.

  • Doug1943

    The fatal flaw of the top-down command economy is that it cannot respond to changes in consumer demand with the flexibility that a market economy can. Nor can it make rational decisions about how much to charge for what it produces. This problem becomes more and more acute as economies become more complex and diverse. Everyone who has lived in a command-economy knows this.

    And yet socialism appeals to those who find the operations of the pure market unpalatable, especially the great inequality between those who own capital, and those who only own their labor-power. Socialism does bring a great degree of economic equality, albeit the equality of near-pauperism.

    Co operatives appear to offer the best of both worlds. And yet, with some notable exceptions, they have only a marginal presence in capitalist countries.

    Perhaps there are profound reasons for this, or perhaps not.

    In any case, anyone interested in the co operative movement should look a the following links:

    http://www.pri.org/stories/2015-02-25/cuban-cooperatives-present-new-economic-model

    http://www.dsausa.org/worker_co_ops_gain_traction

    [http://www.dsausa.org/a_new_era_for_worker_ownership_5_years_in_the_making]

    http://www.solidarityeconomy.net/about-solidarityeconomynet/

    https://usworker.coop/

    • bjmack

      Good comment Doug! Totally agree! it is for Fernando and his fellow Cubans to figure how to change this but I think it’s rather simple to understand. Interesting, I was watching a video of Fidel Castro taken a few years back and I have to state when ever he walked into a classroom or event the overwhelming response was total and amazing adoration. Please, we know the propaganda etc but I still think if elections were held in Cuba the present system would come close to winning. A very complex situation that again is for Cuba to decide.

      • Doug1943

        BJMack: I write as someone with very profound ignorance about the state of public opinion in Cuba, but my uninformed guess would be that those Cubans who really, deeply, angrily oppose the entire Cuban system and hate its leaders are mainly in Florida, and that the ‘modal mood’ in Cuba regarding its current system could best be described as ‘exasperation’, shading into ‘resignation’.

        If the Castro regime would now begin both to liberalize the economy and to liberalize the political process, even at a slow (but steady) pace, the Castros would undoubtedly go down in history as among the most enlightened leaders in the world. Look how much was forgiven — or never even raised against — their capitalist analogue, Lee Kuan Yew of Singapore, where the government is far less tolerant of dissenting bloggers than the Cuban. (See http://edition.cnn.com/2015/09/14/asia/singapore-amos-yee/) But Lee lifted the masses of Singapore out of poverty, permitted a limited opposition (which sometimes wins local elections against the ruling party), and so he is seen as a great man.

        • bjmack

          Have yet to visit Cuba Doug but know quite a few who left the Island years ago and now, we welcome three children into our family who’s grandfather was born and raised in Cuba. They are truly some of the nicest most sincere folk I’ve ever known and many will never, ever visit their homeland until Castro dies. That’s how much hatred they have for the man. It’s a very tough situation but I do think there are glimmers of hope and pray often that there will be reconciliation. As an Irish citizen, who never thought I would see peace in Ireland, miracles do happen!

        • Moses Patterson

          There is a sizable community of Castro-haters who have remained in Cuba. Some remain because they genuinely believe that the best way to fight Castro tyranny is from within. Others, quite simply, are stuck in Cuba for lack of money to leave. It is difficult to estimate how large the number of counter-revolutionaries is because the price of exposure is severe. But given the level of corruption and passive-aggressive resistance to Castro government operations, it is fair to guess the number is into the millions. This would rival if not exceed what you believe exist in Miami. Please don’t misunderstand. Being anti-CASTRO does not mean anti-Cuba or even anti-socialist. There remains huge support for the social programs that the Castros have created.

    • John Goodrich

      Can you tell me which country has ever had a socialist ( democratic) economy ?
      Or.. by socialism do you mean the state capitalism practiced by all countries run by a Communist Party ?
      Socialism necessarily centers on a bottom-up democratically-run workplace which has never existed .
      When the government owns and operates the workplaces, that is called state capitalism and cannot -because of its top-down TOTALITARIAN nature – be termed socialism
      You can get the definitive word on what socialism is and isn’t by going to You-Tube and requesting ” Chomsky on socialism”

  • Fez Fernandez

    “Is everything dangerous to Castro?” Fixed it