Neoliberalism in conceptualization?

HAVANA – If what was approved in the “Conceptualization of the Cuban Economic and Social Model of Socialist Development” [by the 7th Congress of the PCC – Cuban Communist Party] should be viewed with caution because it foretells the germs of a neoliberal destiny that almost nobody wants, then there is no other choice but to surrender, or better yet, rise up in its defense.

To envision the dangers that each of the necessary transformations to implement entails is to act with committed judgment. But to suggest that the institutionalization of the small Cuban private sector — among other things — can be associated with the market fundamentalism canonized by John Williamson is, at the very least, foolish.

Austerity and discipline as the main objective of fiscal policy; liberalization of interest rates and exchange rates; tariff deregulation; extreme openness to foreign investment; liberalization of financial capital flows; the massive privatization of strategic companies; the transfer to private hands of public services; and the commodification of every aspect of social reproduction, do not figure among the policies approved by the Cuban authorities and do not nest in the theses of most persons involved.

It is true that despite spending several years between specialists and officials and approval by the PCC congress and its structures at all levels, the document in question was less thorough in some important parts of the projected puzzle. But, in the definition of the system of forms of property that is important today, it leaves very little room for interpretation. It does imply a break with the strict belief on which the socialist transition in Cuba has been historically modeled, which still suffers from a chronic narrowness in its conception of heterogeneity.

Forms of property in the Conceptualization

The first novelty that one perceives when examining this document is that the different forms of property are conceived as a system on which, aware of risks and potential contradictions, the State would act in pursuit of the development of the productive forces.

Among the recognized forms of property there are three that stand out for their importance:

• The people’s socialist property is considered “the backbone of the system of property relations,” based on its predominance over the “fundamental means of production,” which were stated in a primary reference list. 
• A cooperative property “sustained by the collective work of its members” is conceived with the idea of turning it into an “object of special attention among non-state forms.” 
• And private property is incorporated with the explicit mandate of “contributing to the identification and exploitation of productive potentials and well-being, for the socioeconomic development of the country.” As part of this last category, it is specified that Cuban natural persons, in addition to activities on their own account, could constitute “private companies of medium, small and micro scales (…), which are recognized as legal entities.”

The recognition of these forms [of property] was presented by the Party as a necessary response “to the insufficient development of the productive forces” in the country and “to the level of socialization achieved by social property.” While trusting that this diversification contributes “to the objectives of the construction of socialism by contributing to mobilize human resources as well as national, foreign, material and financial resources.” Among its attributes it “enable[s] the State and the Government to concentrate on the complex tasks that are their own, pay tribute to the integral efficiency of the economy, generate productive jobs, deploy initiatives, boost the productive forces, increase income going to the State budget, and contribute to well-being based on the objectives of socialist development.” This was approved in July 2017.

The underlying threat

Therefore the recognition and promotion of small and medium-sized businesses in Cuba is very far from having the capacity to resolve all the economy’s ills. It is a necessity. It will bring the dynamics of incremental innovation, generate jobs, open opportunities for professional achievement, cover important supply segments, take on small tasks in strategic productions, and help to undermine the blockade of the United States. But it is not the main measure.

However, it has been the breaking point of the consensus on reform, or perhaps the smoke screen that has led to its immobilization. The fundamental transformation, which remains stuck in the face of incomprehensible resistance, is the one that must be undertaken by ‘management’ as Oskar Lange described last century. The state sector is at the center of the problem.

More ruthless challenges hang over the management model of state property without triggering alarms.

• The control by a single company of a market whose economic nature, political implications or social effects do not absolutely justify a monopoly structure, generates the most perverse distortions for the well-being of society. Wherever this occurs, the monopoly must be dissolved to allow concurrence of other state companies, and – depending on the activity – also of private actors.

2. The implausible – and not so well-known – discretion in the application of a regulatory framework that allows some business conglomerates to operate as quasi-independent managers of the central mechanisms of the plan, must be corrected. If the benefits of this model have demonstrated effectiveness in the corporations to which it is applied, it is not understandable that much more restrictive regulations are maintained in the rest. The rules facing the universe of companies must be homogeneous and not selective.As the aforementioned document proposes, “all business entities interact for the benefit of economic and social development, operate under similar conditions in the markets and are subject to compliance with the regulatory and control framework defined by law.” The company law that should have come out in 2017, cannot wait until 2022, and not only because of the small and medium sized businesses (PYMES).

3. Beyond the well-known need for autonomy for companies, the total absence of the workers’ protagonism —even though they may not agree— perpetuates the vulnerabilities of a socialism from above disabled by nature to advance the realization of social property. The call to “the application of participatory methods of management and control devoid of formalities that involves workers in order to encourage collective and individual interest (…), as well as the values shared by the organization and society” could be taken as a starting point.

4. The immeasurable power that some companies, groups and supra-groups have been acquiring, deployed in the most dissimilar activities, requires exposure to the deepest public scrutiny. At this point lies one of the most important policies that guarantees a healthy development of the reform process: Implementation of formulas that make state management transparent allowing effective social control.The MEP (Ministry of Economy and Planning) Resolution, number 570 of 2012, resolved with an example the public bidding requirement for the leasing concession of state premises to non-agricultural cooperatives. This writer has not found references, at least in provincial or national media, to the calls for bidding processes and their results for any of the spaces already granted, all of them socialist property belonging to all the people. As a consequence, the public does not know to whom these premises were leased, how the process took place, and to what are the parties committed to. The Conceptualization makes its position on this issue explicit when it maintains that “truthful and timely information constitutes citizen rights and public goods” and must be “primarily at the service of participation, (to) promote citizen debate around public affairs.”

The commitment to a greater presence of the private sector seeking to boost economic performance in the short term, will certainly have implications for social relations. However, persisting with a model based on hyperbolized statism, disabled to solve several of the objective needs of reproduction, convalescent of forced monopolies and discretion, and urged by a revolution in citizen participation, entails the reversion to a more dangerous and higher systemic risk, that should govern the current debate.

Socialism in the USSR does not seem to have been destroyed by the autonomous private sector that emerged from the first changes of perestroika. It was not those self-employed who became millionaires, or their small companies that hijacked the political arena. The United States government, through its programs of financing the constructed or authentic opposition, has demonstrated a limited capacity to undermine the bases of political power in Cuba and jeopardize its continuity. Allow persons to pursue initiatives that are not socially harmful, and focus efforts on censoring those fierce dangers that inhabit us in the shadows.