Private businesses are successfully competing with state-run companies in two aspects: quality of their services and the wages they offer
By Pedro Campos
HAVANA TIMES – The 1968 “Revolutionary Offensive” nationalized all the small businesses that remained after the Revolution triumphed in 1959. According to figures from Granma newspaper itself, 55,636 small businesses were seized back then:11,878 grocery stores, 3130 butchers, 3198 bars, 8101 food selling establishments, 6653 launderettes, 3643 barber shops, 1188 shoe repairmen, 4544 car repair workshops, 1598 craft businesses and 3345 carpentry workshops.
Fidel Castro allowed an opening in the economy to free, private and associated modes of labor in the 1990s, with ups and downs, for the failures of the socialist system since Stalin and the collapse of the USSR. The policy was extended a little with the arrival of his brother as president. In spite of high taxes, multiple obstacles, regulations, fines and the absence of a wholesale market, free labor has grown and created thousands of paid jobs in small capitalist businesses. According to different calculations, which are always questionable here in Cuba because there isn’t any transparency, this sector employs about 10% of the country’s total workforce.
However, the most important point is: these businesses are now strong competition for state-run companies in two aspects: quality of their services and the wages they offer. That’s why many customers prefer these services and thousands of qualified workers have left the State to work in these small businesses, some of which have become famous, which have created a prosperous business sector and have improved the standard of living within these groups which stings bureaucrats.
For government extremists, this opening up of the economy means the appearance of a well-to-do class which is independent to the bureaucracy and could take on its own political interests. They claim that this is what Obama was after with empowering entrepreneurs, which Trump also seems to have understood. Enough to consider them “strategic monsters”, “Trojan horses” of imperialism against socialism.
The new phase of the “(counter) revolutionary offensive” announced in Granma recently with the definitive and indefinite suspension of different kinds of licenses, comes after “softening” the terraign which began with Fidel’s famous “welcome” to former US President “Brother Obama” comments. It’s modelled on fear for some and other associate it with Trump’s last measures against the Cuban Army’s economic apparatus to monopolize business, GAESA, as if entrepreneurs made up part of the “imperialist enemy”.
These opinions have logic; but both “offensives” lie in the fact that the State’s Monopoly Capitalism which is hidden behind state-socialism, is hesitant for there to exist free, private or associated forms of labor to develop and independent capitalism too, out of principle, because it is incapable of withstanding economic competition outside of its monopoly. Its inevitable self-destruction is sped up by these “external agents”, insofar as they eat away at the system’s economic base: salaried state workers.
This is why private labor has never been allowed to expand, why cooperatives have been very limited by quasi-public companies and why foreign capital is tied down by a never-ending list of laws and regulations and is only allowed within the framework of the State’s “business portfolio” and is banned from entering into free deals.
Nobody is batting an eyelid after this “indefinite” suspension of new licenses or that open and covert movements by “inspections” will come, where other seizure options will be applied, in a new cycle of economic violence.
“Economists” who favor state socialism will never understand that salaried work for the State is innately inefficient. Then, in the face of systemic crisis, they thought they could allow self-employed laborers, cooperative members and small capitalists to work freely, under State control, tied down by regulations and caught in the web of the State’s monopoly market.
They never knew that free, private or associated labor and private capital not only needs a free market, but that they create it so they can survive, because it’s their modus vivendi and that’s why they have moved away from all of these frameworks and have searched for and found alternative supply channels and even a market within and outside the country, with stable supply and exchange channels which the State was never able to set up by itself.
This new cycle of the Revolutionary Offensive is another display of Stalinist socialism and its failed system based on salaried workers working for the government. And just like the government does in politics, repressing the opposition and socialist dissidence, they are only capable of surviving by attacking and oppressing non-governmental modes of production.
It is no coincidence that political and economic repression is being openly seen today. It’s a sign of the system’s terminal crisis. Those in the government who are more convinced about the need for change could find a space for dialogue and a search for a negotiated solution, both political and democratic, in this situation, where we all have a place, so as to avoid greater evils that are currently wreaking havoc in Venezuela. But, this demands the old government and party guards to step down.