Michael
Totten reporting…
Many
tourists return home convinced that the Cuban model succeeds where the Soviet
model failed. But that’s because they never left Cuba’s Elysium.
I had
to lie to get into the country. Customs and immigration officials at Havana’s
tiny, dreary José Martà International Airport would have evicted me had they
known I was a journalist. But not even a total-surveillance police state can
keep track of everything and everyone all the time, so I slipped through. It
felt like a victory. Havana, the capital, is clean and safe, but there’s
nothing to buy. It feels less natural and organic than any city I’ve ever
visited. Initially, I found Havana pleasant, partly because I wasn’t supposed
to be there and partly because I felt as though I had journeyed backward in
time. But the city wasn’t pleasant for long, and it certainly isn’t pleasant
for the people living there. It hasn’t been so for decades.
Outside
its small tourist sector, the rest of the city looks as though it suffered a
catastrophe on the scale of Hurricane Katrina or the Indonesian tsunami. Roofs
have collapsed. Walls are splitting apart. Window glass is missing. Paint has
long vanished. It’s eerily dark at night, almost entirely free of automobile
traffic. I walked for miles through an enormous swath of destruction without
seeing a single tourist. Most foreigners don’t know that this other Havana
exists, though it makes up most of the city—tourist buses avoid it, as do taxis
arriving from the airport. It is filled with people struggling to eke out a
life in the ruins.
Marxists
have ruled Cuba for more than a half-century now. Fidel Castro, Argentine
guerrilla Che Guevara, and their 26th of July Movement forced Fulgencio Batista
from power in 1959 and replaced his standard-issue authoritarian regime with a
Communist one. The revolutionaries promised liberal democracy, but Castro
secured absolute power and flattened the country with a Marxist-Leninist
battering ram. The objectives were total equality and the abolition of money;
the methods were total surveillance and political prisons. The state slogan,
then and now, is “socialism or death.”
…
By the
1990s, Cuba needed economic reform as much as a gunshot victim needs an
ambulance. Castro wasn’t about to reform himself and his ideology out of
existence, but he had to open up at least a small piece of the country to the
global economy. So the Soviet subsidy was replaced by vacationers, mostly from
Europe and Latin America, who brought in much-needed hard currency. Arriving
foreigners weren’t going to tolerate receiving ration cards for food—as the
locals do—so the island also needed some restaurants. The regime thus allowed
paladars—restaurants inside private homes—to open, though no one from outside
the family could work in them. (That would be “exploitative.”) Around the same
time, government-run “dollar stores” began selling imported and relatively
luxurious goods to non-Cubans. Thus was Cuba’s quasi-capitalist bubble created.
When
the ailing Fidel Castro ceded power to his less doctrinaire younger brother
Raúl in 2008, the quasi-capitalist bubble expanded, but the economy remains
heavily socialist. In the United States, we have a minimum wage; Cuba has a
maximum wage—$20 a month for almost every job in the country. (Professionals
such as doctors and lawyers can make a whopping $10 extra a month.) Sure,
Cubans get “free” health care and education, but as Cuban exile and Yale
historian Carlos Eire says, “All slave owners need to keep their slaves healthy
and ensure that they have the skills to perform their tasks.”
Even
employees inside the quasi-capitalist bubble don’t get paid more. The
government contracts with Spanish companies such as Meliá International to
manage Havana’s hotels. Before accepting its contract, Meliá said that it
wanted to pay workers a decent wage. The Cuban government said fine, so the
company pays $8–$10 an hour. But Meliá doesn’t pay its employees directly.
Instead, the firm gives the compensation to the government, which then pays the
workers—but only after pocketing most of the money. I asked several Cubans in
my hotel if that arrangement is really true. All confirmed that it is. The
workers don’t get $8–$10 an hour; they get 67 cents a day—a child’s allowance.
And,
Sean Davis:
I want
to believe the free trade rhetoric. I want to believe that any type of
relaxation of the embargo would benefit the Cuban people. I really do. But I
don’t, and here’s why.
Cuba’s
economy is not normal by any stretch of the imagination. In fact, it actually
has two economies: the dollar economy, and the peso economy. Americans who are
allowed to visit get to participate in the dollar economy, and only the dollar
economy. Cubans who live there are required to participate in the peso economy,
and only the peso economy. The markets are completely segregated.
So,
when an American goes down there, he buys things with either the dollar, or the
Cuban version of the dollar (CUC), which generally has a 1:1 conversion ratio.
Cubans are forced to use only the peso (CUP), which has roughly a 25:1
conversion ratio to the dollar (for every 25 CUP, you get one dollar; or for every
1 CUP, you get about $0.04). That rate is set by the Cuban government. That
leaves Cuban vendors who accept dollars with only two ways of using those
dollars to get the things they need to survive: 1) purchase them on the black
market using dollars, a risky proposition for obvious reasons, or 2) exchange
the dollars for CUP.
There’s
no trading the CUP on the open currency market. Apart from sentimental souvenir
value, it’s worthless everywhere else in the world. Whenever a Cuban gets his
hand on a dollar, he either has to put himself at risk by using it on the black
market, or he has to turn the dollar into the government in order to receive a
pittance which he can use to buy food for his family.
The
Cuban government, in turn, has two ways of screwing its people out of their
hard-earned money: 1) it can either tax them to death, or 2) it can just
manipulate its exchange rate, a way to effectively tax them to death. Different
means, same ends. Cuba’s communist, after all, and communism is not a system that
has ever put the welfare of its people ahead of the welfare of its rulers.
The
result of the Cuban two-currency economy — one of which is forbidden to its
people — is that every dollar will eventually find its way into the hands of
the Cuban government. Since their internal currency, the CUP, is worthless,
it’s not like they can just exchange it for dollars on the open market, like
most other countries do. No, if the Cuban government wants dollars and the
wealth that comes with them, it has to import them. And more dollars don’t mean
more prosperity for the people of Cuba; more dollars means more wealth and
power concentrated in the hands of Cuba’s communist regime.
I’m a
big fan of free trade, in the real sense of the term. Free markets, free
people, and free flow of capital benefit everyone. But you can’t have ‘free
trade’ if you don’t have each of those components. Sure, more dollars may now
flow into Cuba, but that won’t result in freer people, freer markets, or freer
capital, because the current communist regime has no interest in allowing any
of those to happen.
If Cuba
truly wants free trade, then it needs to free its people, free its markets, and
free its currency. Until then, any changes to the trade embargo are just going
to be free money for corrupt Cuban communists.
Now, It's Time To Boycott #JimCrowCuba
A Revolutionary Betrayed: The Story of William Alexander Morgan
Fidel Castro: 'The Cuban Model Doesn’t Even Work For Us Anymore.'
http://tinyurl.com/q5d5or2
