Fidel Castro says his economic system is failing



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Fidel Castro says his economic system is failing

Former Cuban president says state-run model 'doesn't even work for us' in offhand remark to US journalist Jeffrey Goldberg.



  • Rory Carroll, Latin America correspondent

  • The Guardian, Thursday 9 September 2010 12.31 EDT

former cuban leader fidel castro

Fidel Castro, pictured earlier this month, criticised Cuba's state-dominated system. Photograph: Desmond Boylan/Reuters

It was a casual remark over a lunch of salad, fish and red wine but future historians are likely to parse and ponder every word: "The Cuban model doesn't even work for us any more."

Fidel Castro's nine-word confession, dropped into conversation with a visiting US journalist and policy analyst, undercuts half a century of thundering revolutionary certitude about Cuban socialism.

That the island's economy is a disaster is hardly news but that the micro-managing "maximum leader" would so breezily acknowledge it has astonished observers.

Towards the end of a long, relaxed lunch in Havana, Jeffrey Goldberg, a national correspondent for the Atlantic magazine, asked Castro if Cuba's economic system was still worth exporting. The reply left him dumbfounded. "Did the leader of the revolution just say, in essence, 'Never mind'?" Goldberg wrote on his blog.

The 84-year-old retired president did not elaborate but the implication, according to Julia Sweig, a Cuba expert from the Council on Foreign Relations who also attended the lunch, was that the state had too big a role in the economy.

Raúl Castro has been saying the same thing in public and private since succeeding his older brother two years ago. With infrastructure crumbling, food shortages acute and an average monthly salary of just $25 (£16), it has become apparent that near-total state control of the economy does not work.

But for Fidel to acknowledge the fact could be compared to Napoleon musing that the march on Moscow was not, on reflection, a great success.

"Frankly, I have been somewhat amazed by Fidel's new frankness," said Stephen Wilkinson, a Cuba expert at the London Metropolitan University. "This is the latest of a series of recent utterances that strike me as being indicative of a change in the old man's character."

The remark should not, however, be interpreted as a condemnation of socialism, added Wilkinson. "That is clearly not what he means, but it is an acknowledgement that the way in which the Cuban system is organised has to change. It is an implicit indication also that he has abdicated governing entirely to Raúl, who has argued this position for some time. We can now expect a lot more changes and perhaps more rapid changes as a consequence."

Raúl has said Cuba cannot blame the decades-old US embargo for all its economic ills and that serious reforms are needed. Fidel's statement could bolster the president's behind-the-scenes tussle with apparatchiks resisting change, said Sweig.

Agriculture has been a big disappointment. The lush Caribbean island of 11 million people could be a major food exporter but central planning and state-run co-operatives have produced chronic shortages, prompting an old, bitter joke that the revolution's three biggest failures are breakfast, lunch and dinner. Raúl's reforms are not going well: food production fell 7.5% in the first half of the year.

Once propped up by the Soviet Union, Cuba's lifeline is now cheap oil from Venezuela, where President Hugo Chávez considers Fidel a mentor.

Chávez swiftly followed another surprise statement of Castro's – accusing Iranian president Mahmoud Ahmadinejad of antisemitism – with an announcement that he would meet Venezuelan Jewish leaders. The move was "a direct result of Fidel's statement", according to Goldberg.

• This article was amended on 10 September. Headings on the original characterised Fidel Castro as saying that communism does not work. This has been corrected.



Marxist reforms?

The remarks about Cuban economic policy are not the only surprise statements made recently by the former Cuban leader. Others include:

• He feels responsible for the "great injustice" of the persecution of Cuban homosexuals in the 1970s.

• He laments Jewish suffering over the centuries, defends Israel's right to exist and accuses Iran's president Mahmoud Ahmadinejad of antisemitism.

• He appears to regret urging the Soviet Union to nuke the US during the 1962 missile crisis. "After I've seen what I've seen, and knowing what I know now, it wasn't worth it all."

http://www.theguardian.com/world/2010/sep/09/fidel-castro-cuba-economic-model

CUBA – DOES COMMUNISM REALLY WORK HERE?

October 11th, 2012



enterprising cuban farmer sells rides on his steer for 1 cuc ($1)

Wages are very low in Cuba, about $15 to $20 per month.  However, as a Communist nation, almost all services are free, i.e. housing, transportation, basic foods, education and books.  The universities and art schools, which are free to Cubans, do allow some paying foreigners to enroll.

Every adult works and has a ration book which entitles him/her to a certain monthly quantity of eight basic foods, including rice, beans, oil and flour.  Children also receive their own food ration.

Fresh fruits and vegetables are purchased at the local markets, and the papaya, guayaba, pineapple, coconut and avocados were excellent.  We saw meat being sold at small store counters in unrefrigerated conditions in the heat of downtown Havana.  Although there are a few supermarkets, they are not large and carry some canned goods that would be too expensive for the average Cuban.

Cuban cigars are a big part of the economy, and the leaves are hand wrapped by a work force of men and women sitting side by side at work stations in several small rooms at the factory.  Each person has a certain daily quota to produce, which does not appear difficult to maintain.

In the countryside near the cigar factory we toured, we were also able to visit a tobacco plantation, talk to the owner, see tobacco leaves being dried, and  sample his cigars.



http://gobonvoyagetravel.com/wp-content/uploads/2012/10/cuban-cigar-grower.jpghttp://gobonvoyagetravel.com/wp-content/uploads/2012/10/tobacco-hut.jpg

The thatched hut where the tobacco leaves are dried must also be carefully maintained.    Most of the owner’s production goes to the state, but he is allowed to keep a small amount for himself.  He lives modestly but contentedly in the country.

There are also some enterprising individuals, such as the farmer above who sold rides on his steer for $1, looking to augment their low income.

Although most businesses and restaurants are owned by the state, which employs all of the workers on its wage scale, the government has recently allowed private restaurants known as paladars to open in former residences.  This is a first initiative for private enterprise, but the new restaurants seem to be developing a following.  As with all new ventures, they are still learning how to accommodate groups of people, but are strongly motivated by being able to run their own businesses.

We were shocked to learn one dramatic economic fact.  The medical system in Cuba is considered very good, and there is an abundance of doctors in the country.  However, contrary to what a doctor earns in the U.S., our guide told us that the income he receives from working with one foreign tour group is equal to a doctor’s salary for 10 years.  It is hard for us to imagine someone willing to spend so many years of his/her life studying for a career with such low financial compensation, since we are more likely to embrace the idea of additional work being rewarded with higher pay.

As far as maintaining a financially and socially equal society, Communist Cuba seems to have succeeded, at least on the surface.  No one seems to have very much, and yet all seem to have enough to survive.  We saw several children with toys, which their parents would not have been able to afford, and assumed that money was being sent back to Cuba from family members who had emigrated to other countries.  A lottery exists that allows a limited number of Cubans to emigrate permanently to the United States and still travel back to Cuba for occasional family visits.

Cuba is an interesting country to visit at the moment and will continue to evolve economically, as their political situation changes in the next few years.  I just hope they will continue to keep their fabulous old cars!

blue car in havana

http://gobonvoyagetravel.com/cuba-does-communism-really-work-here/

The Myth of Communist China

Saturday, 12 September 2009 06:54

On one forum I visit frequently, there are more and more threads started about "Communist China", "Red China", and of course, Rush Limbaugh's favorite term, "ChiComs" (short for Chinese Communists).  When most conservatives learn that I - a radically right-wing conservative - live and work half my life in "that hell-hole of Communism" they are shocked.  And when I state "I like it" well, let's just say the floor has many different jawlines imprinted.

But the capper is when I tell them, in fact, China is not Communist, the look of confusion, the assumption that I must be insane is quite obvious.  No, my friends, I have not been brainwashed by Maoists, I do not wear my grey uniform, practice Tai Chi at 6 AM, and salute the red flag!  However, I do live in Shanghai, travel extensively within this country, and have learned a thing or two (and yes, I love the you tiao for breakfast, and the food in general - it's quite good!)

First and foremost, we must define what is Communism.  Communism is, in the best explanation I've found:

a family of economic and political ideas and social movements related to the establishment of an egalitarian, classless and stateless society based on common ownership and control of the means of production and property in general, as well as the name given to such a society.  The term "Communism", usually spelled with the capital letter C, is however often used to refer to a form of government in which the state operates under a one-party system and declares allegiance to Marxism-Leninism or a derivative thereof, even if the party does not actually claim that the society has already reached communism.

In practical terms, it can be summarized by Marx's statement:



From each according to his ability, to each according to his need

Essentially, what you produce is given to the State; what you have, the State gives to you.  Your house, car, job, clothes, food, health care, all are appoprtioned by the State for you.  You live to serve and "feed" the State, and the State - in its "beneficence" returns back what you need.  Of course, if you and your neighbors don't produce enough, or the State doesn't really recognize your real need, we have a problem.

Probably the best example of Communism on Earth was the old USSR, or China before ~1983.  In each case, the State decided what your job would be.  Where you would live.  How much you would be paid.  When and where you can see the doctor.  How much food you get, what clothes you can have, and basically everything about your life.  In exchange for becoming an automaton, the State promised to let you at least live (provided there were enough resources to meet your needs, and you didn't speak up or develop an identity of your own).

Now, we all know that the USSR collapsed in 1989, and since then has broken into dozens of independent nations.  The Western States are free, and joining the EU; the Southern nations are going their own way, thriving off their oil reserves.  And mighty Russia is still drinking itself to death with vodka.

What about China, though?  It has not crumbled; on the contrary, China has gained territory!  Macau and Hong Kong are now Chinese owned, their Portuguese and British masters fled to the comfort of "the Continent".  And China is flexing her muscles regularly in regards to North Korea, Taiwan, and Vietnam.  Clearly things have not fallen apart, they must still be Communist, right?

Well, actually, wrong.  You see, Deng Xiaopeng started something 25 years ago, a movement towards capitalism.  Yes, that evil scourge of socialists and communists alike, the bane of human existence, the "free market".  Twenty years after Mao's Great Leap Forward, China was still a virtual 3rd world nation, with nary an asset save fields, rice patties, and some inefficient, ineffective State heavy industries.  Little progress, little hope.

Deng changed that when he opened up China to foreign investment.  Suddenly money started flooding in.  China's three natural resources - people, coal, and land - were in high demand as capitalists with a need to build product, and Chinese laborers tired of the farms or steel mills decided they could work together and make a buck (or RMB) to share.  And thus it began.

What is China now, is it not still Communist?  Doesn't the CCP - the Chinese Communist Party - still run things?  Well of course the CCP still controls the Government, and as a result much of China.  But Communist?  Let's look down the list:

- China does not guarantee you a job; if you can't find work on your own, tough - you don't work
- China does not guarantee you a home; if you can't afford a house or apartment, then the street is your bed
- China does not guarantee you food; no job, or lost your money?  Time to starve or pick through the trash
- China does not guarantee you health care; broke your arm?  Well, pay your copay first and then the doctor will see you

And so on.  In fact, most of what we in the US take for granted, or assume that the Government will give us (or in the case of health insurance, should give us) is not guaranteed for the average Chinese "Communist". 

In the US, if you lose your job, you get unemployment insurance and the Government will retrain you; in China, you go find your own and learn your own skills, no coddling here.

In the US, if you lose your house or cannot afford one then there's always section 8 housing for you; in China, better find a friend or family member to take you in or you're out on your own.

In the US, if you cannot afford food, we give you food stamps and Government cheese; in China, it's the grace of friends and family or you're eating grass.

In the US, if you need medical treatment, walk in to any hospital and you get treated, even if you cannot afford it; in China, they'll gladly see you right after you pay the cashier your initial copay to see the doctor.

In the US, if you risk your funds and it pays off, the Government demands a share of the profits via the capital gains tax (of course, they didn't take any risk in the investment initially); in China, you get to keep the profits of your wise investments.

And so on.  In fact, much of what one would think of as a Communist nation doesn't exist in China.  You get the house you can afford, you get the car you can afford, you get the food you can afford.  If you make dirt, you live in squalor; if you make millions, you live like a king.  And everywhere in between.

Now, it is true that the CCP still runs things politically; however, they are less a "Communist" group than a fascist oligarchy.  Fascist in that the CCP still maintains a lot of control over several industries (health care, banking, heavy manufacturing like cars - sound familiar?) and the party loves the grand, miliaristic television productions; an oligarchy in that it's the same small group of families and friends who have run things for the last 50 years.(again, sound familiar with the long-term political families in the US?).  Communist?  No,. Democracy?  No.  Fascist oligarchy?  Yes.

In terms of dissent, you still need to be careful in China; if you try dissenting or demonstrating without first acquiring the proper permits, you will end up in jail for 48 hours and fined 1000-2000 RMB (about $150 to $300).  That's the extent of it.  You read in the newspapers - both in Chinese and English - editorials critical of the Government's policy in one way or another.  But at least the media is generally free to do what it wants, and all pretty much have the same access (unlike the Obama Administration's approach to Fox News).

Here is where it gets interesting...  Above I made some comparisons between the US and China, with regards to jobs, housing, food, medicine.  What we see is that the US is further along the scale of "freedom - to - communism" than China!  And it's not just in those areas. 

Consider business.  In China, you can just set up a shop and start - no license needed if you don't plan on hiring someone else, or don't sell to another business (where your transaction would be B2B, and taxed).  Buskers, no problem.  Street vendors - have at it.  Good luck trying that in the US!

How about taxation?  China taxes you nominally on your income, with a high "standard deduction"; but it is on salary only.  It is NOT on all forms of income!  If most of your income is in bonuses - even monthly - then you pay no income tax.  No capital gains tax for gains made outside of China.  Heck, if you earn a lot for another company, then that company must withhold for you, and you don't even have to file tax forms.

China makes most of its taxation on the VAT/Business-to-business tax.  It's 17% on reported invoices between businesses.  I say reported, because there isn't really any enforcement here in China.  You don't have to report your sales; of course, that means the purchaser doesn't receive an "official" (reported) invoice, so they cannot use it for tax deduction purposes.  But if that's OK with both sides of the transaction, it goes "free" - not reported.

For exports, China sets the B2B tax rate at 6%, thereby encouraging companies to export, since they can make 11% more on the same product sales.  And people wonder why the Chinese are so fixated on exporting - it's a "free" 11% additional income for them!

Overall, China's not the Communist hell-hole most Americans think.  In many ways, it's much more capitalistic and free-market and libertarian than the US!  In other ways, it is still pretty controlled.  Big industries are still dominated by the Government; of course, with the US Government controlling GM, Chrysler, and half a dozen of the biggest banks, that's not so different now, is it?  China doesn't have the prosperity of the US yet, but they have learned from our past, and are rapidly correcting their mistakes.

Unfortunately, it seems we in the US did not learn from their past, and are rushing headlong to repeat their mistakes. 

http://www.simplyshrug.com/index.php?option=com_content&view=article&id=64:the-myth-of-communist-china&catid=31:general&Itemid=50

How Communist Can China Be With All Those Billionaires?


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