No cigar!

Castro’s dictatorship has failed the people of Cuba

Though I grew up in a United States that vilified Communism, was aware of the Bay of Pigs fiasco, and worked with architects who had fought alongside the guerrillas (and subsequently escaped to the U.S.), I have remained blithely ambivalent about leader Fidel Castro’s role and impact.   After a recent trip to Havana. I am no longer ambivalent.

In the last fifty years, Cuba has achieved near-universal literacy.  Ballet and music receive intensive support.  The government has driven several world-class sustainability initiatives.  Bio-medical research is an important sector.  And Cuba’s educational meritocracy and emphasis on higher learning have resulted in a well-educated management and professorial class.

But even though Castro has been responsible for some real gifts to his people, the net social and economic result is negative.

Havana is a city of 2.3 million.  It is densely built up, and, especially in its original colonial areas, is full of wonderful civic structures, parks and urban vistas.  Yet there are, throughout the city, millions of square feet of abandoned and nearly-abandoned buildings.  These buildings were once fully occupied and maintained, and the decline from an earlier state of vitality and health is unavoidable.   (There are, by Cuba’s own admission, 40,000 people “living in sub-human conditions,” but the impression one receives walking the streets is that the number is substantially higher.) This intense urban poverty is a significant indicator of Cuba’s underlying condition.

The U.S. embargo is often blamed for Cuba’s increased poverty.  However, a closer look at business and social life in Havana suggests that there is more behind Cuba’s current economic state than the U.S. embargo.

Before arriving in Cuba, I asked several friends who had visited Havana why there were only 1950s-era U.S.-made cars in the country even though the rest of the world was still trading with Cuba.  I never received a knowledgeable answer, so I was surprised to see that the famous old cars make up only a small proportion of Havana’s automobiles, and the streets are full of recent-model Asian and European cars and trucks.  The rest of the world – and has been for 50 years – exchanging goods with Cuba.

Cuba has a thriving (mostly government-run) hotel and hospitality industry.  The well-dressed, impeccably-trained staff arrive from their modest homes and are paid $20 per month to smile and be gracious to tourists from Europe, Canada, Asia, and from the wealthier parts of South and Central America.  Outside the tourist and transportation industries, the lack of business development is startling. (The Havana telephone directory is the size one would expect for two million people; while the yellow pages directory is about the size of a Harlequin romance novel.)

Cuba was robbed of a large and vibrant middle class in 1959, when Castro took control of the country.  Those who operated small- and mid-scale businesses were seen by the revolutionaries as basically selfish and destructive, and their evil was equated with that of the Mob and of Batista and of “Big Sugar”.  Their properties were taken, some were executed – and many fled to Miami, where their knowledge, abilities and ambition have driven the economic re-birth of south Florida.

Without an ambitious and knowledgeable business class, and with governmental discouragement of creative business development. Cuba has been effectively strangled as an economic engine by its own internal policies for 50 years.  During this time profits available from government sale of sugar and oil have been used to support a relatively primitive economy.  This top-down provision of cash and material has also been immensely subsidized by the former Soviet Union, by Communist China and, more recently, by Venezuela. Somewhat ironically, government largesse is fuelled today by the money that arrives from wealthy capitalist tourists.

Economies of the world grow through invention, risk, exchange and profit.  This profit becomes a resource for subsequent cycles of invention, risk, exchange and profit.  There are clearly dangers and abuse in these cycles of business, and protections against these problems are constantly evolving in the developed world.  Castro and the Cuban government chose to protect against the abuses and dangers of capital growth by prohibiting it and by permitting only the most primitive form of barter economy.  It is this prohibition, and the missing (exiled) middle class, which has caused Cuba’s lack of exchange and local economic vitality.  The U.S. embargo has been incidental. Trade within Cuba and between Cuba and Europe, Asia and Canada could have easily counterbalanced the U.S. embargo if Cubans had been able to pursue personal and financial enrichment.

Old Havana was named a UNESCO World Heritage Site in 1982.  With this recognition – and thanks to the efforts of many of Havana’s architects and historians – Cuba and the international community have been pursuing for the past decade an aggressive policy of rebuilding key colonial structures and plazas (literally from the ruins) in the old city.  The results of these efforts are wonderful, and the re-built districts are as delicious as any urban environments I know.  Yet they are miniscule in face of the thousands of buildings and hundreds of streets which have fallen into a state not far from a Mad Max movie set.  Top-down improvements, even at 10 times the speed of the current program, will not make a visible dent in the texture of abandonment which remains.  Only bottom-up economically-driven improvements from thousands of individual initiatives will be able to heal this unfortunate place.

It is clear that Cuba had problems in the 1950s: the Mob had inordinate influence; the gap between rich and poor was immense; educational levels were low and illiteracy high; Batista ran a tyrannical state; and U.S.-owned corporations dictated economic and governmental policy.  All of these had to be addressed, and perhaps a revolution was a necessary first step.  A dictatorial top-down Soviet-style bureaucracy, however, was not the only way to have achieved social justice, economic well-being and cultural enrichment.  The propaganda-rich environment of Cuba appears to have been more successful in infantilizing an entire population than in making a just and thriving society.

A laissez-faire solution is, and clearly would have been, problematic.  The solution was not to have imitated Mexico, where graft, dishonest governance and a chasm between haves and have-nots run counter to the underlying principles of the revolutionary socialists.  An interesting solution, though, may be on the horizon: Hugo Chávez, the purportedly socialist president of Venezuela, claims to consider Castro his hero and model.  Yet Chávez – according to televised advertisements we saw in Havana on Venezuelan television – is offering business development loans to the citizens of Venezuela for all levels of enterprise.  Business loans are the selling to others of the right to use money for their own future profit and well-being.  Capitalism, too, at its heart, is the selling to others of the right to use money for their own future profit and well-being.  Chávez’s loan initiative may represent a chink in the armour of dictatorial anti-capitalist socialism.

The thriving cultures and economies of Scandinavia have realized the goals of socialism yet maintained a thriving middle class, all within a democratic, transparent and capitalist state. Fidel and Raul Castro and their successors should perhaps take a closer look – though after three generations of central planning re-creation of an entrepreneurial class may prove difficult.

Originally published in Winnipeg Free Press, Thursday, March 29, 2007

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