Cuban Socialism-Total Control–Low Standard of Living

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    If the proof of the pudding is in the eating, the proof of a totalitarian political system must be in the standard of living of the people under its control.

Michael J. Totten: An eyewitness account of Cuba’s shocking wretchedness

Neill Blomkamp’s 2013 science-fiction film Elysium, starring Matt Damon and Jodie Foster, takes place in Los Angeles, circa 2154. The wealthy have moved into an orbiting luxury satellite — the Elysium of the title — while the wretched majority of humans remain in squalor on Earth. The film works passably as an allegory for its director’s native South Africa, where racial apartheid was enforced for nearly 50 years, but it’s a rather cartoonish vision of the American future. Some critics panned the film for pushing a socialist message. Elysium’s dystopian world, however, is a near-perfect metaphor for an actually existing socialist nation just 90 miles from Florida.

I’ve always wanted to visit Cuba — not because I’m nostalgic for a botched utopian fantasy, but because I wanted to experience Communism firsthand. When I finally got my chance several months ago, I was startled to discover how much the Cuban reality lines up with Blomkamp’s dystopia. In Cuba, as in Elysium, a small group of economic and political elites live in a rarefied world high above the impoverished masses. 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.

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    The rarefied air of the tourist. Everything is provided, but the difference between the tourist and the citizen is stark. The Soviets would set up a Potemkin Village, the idealized version of what the Socialist Westerners wanted to see to show that Communism was working. All was well, they were assured, look at the happy workers. Beyond the facade, there was nothing.

I had to lie to get into the country. Customs and immigration officials at Havana’s tiny, dreary José Martí 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. 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.”

Cuba was one of the world’s richest countries before Castro destroyed it — and the wealth wasn’t just in the hands of a tiny elite. “Contrary to the myth spread by the revolution,” wrote Alfred Cuzan, a professor of political science at the University of West Florida, “Cuba’s wealth before 1959 was not the purview of a privileged few … Cuban society was as much of a middle-class society as Argentina and Chile.”


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     Communism doesn’t destroy classes, it ensures there are two. The privileged and the not privileged.

More Cubans vacationed in the U.S. in 1955 than Americans vacationed in Cuba. Americans considered Cuba a tourist playground, but even more Cubans considered the U.S. a tourist playground.” Havana was home to a lot of that prosperity, as is evident in the extraordinary classical European architecture that still fills the city. Poor nations do not — cannot — build such grand or elegant cities.

    Communism destroyed Cuba’s prosperity, but the country experienced unprecedented pain and deprivation when Moscow cut off its subsidies

But rather than raise the poor up, Castro and Guevara shoved the rich and the middle class down. The result was collapse. “Between 1960 and 1976,” Cuzan says, “Cuba’s per capita GNP in constant dollars declined at an average annual rate of almost half a percent. The country thus has the tragic distinction of being the only one in Latin America to have experienced a drop in living standards over the period.”

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    This is why Western intellectuals love socialism. It doesn’t work and they don’t care as long as the theory is sound.

Communism destroyed Cuba’s prosperity, but the country experienced unprecedented pain and deprivation when Moscow cut off its subsidies after the fall of the Soviet Union. Journalist and longtime Cuba resident Mark Frank writes vividly about this period in his book Cuban Revelations. He quotes a nurse who tells him that Cubans “used to make hamburgers out of grapefruit rinds and banana peels.”

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.

    A one-way ticket to the other side of the island costs several months’ pay; a round-trip costs almost an annual salary

The maximum wage is just the beginning. Not only are most Cubans not allowed to have money; they’re hardly allowed to have things. The police expend extraordinary manpower ensuring that everyone required to live miserably at the bottom actually does live miserably at the bottom. Dissident blogger and author Yoani Sánchez describes the harassment sarcastically in her book Havana Real: “Buses are stopped in the middle of the street and bags inspected to see if we are carrying some cheese, a lobster, or some dangerous shrimp hidden among our personal belongings.”

Perhaps the saddest symptom of Cuba’s state-enforced poverty is the prostitution epidemic — a problem the government officially denies and even forbids foreign journalists based in Havana to mention. Some Cuban prostitutes are professionals, but many are average women — wives, girlfriends, sisters, mothers — who solicit johns once or twice a year for a little extra money to make ends meet.

A one-way ticket to the other side of the island costs several months’ pay; a round-trip costs almost an annual salary. As for the free health care, patients have to bring their own medicine, their own bedsheets, and even their own iodine to the hospital. Most of these items are available only on the illegal black market, moreover, and must be paid for in hard currency — and sometimes they’re not available at all. Cuba has sent so many doctors abroad — especially to Venezuela, in exchange for oil — that the island is now facing a personnel shortage.

Housing is free, too, but so what? Americans can get houses in abandoned parts of Detroit for only $500 — which makes them practically free — but no one wants to live in a crumbling house in a gone-to-the-weeds neighborhood. I saw adequate housing in the Cuban countryside, but almost everyone in Havana lives in a Detroit-style wreck, with caved-in roofs, peeling paint, and doors hanging on their hinges at odd angles.

Cuba is short of everything but air and sunshine. In her book, Sánchez describes an astonishing appearance by Raúl Castro on television, during which he boasted that the economy was doing so well now that everyone could drink milk. And yet Raúl’s promise of milk for all was deleted from the transcription of the speech in Granma, the Communist Party newspaper. He went too far: there was not enough milk to ensure that everyone got some.

Cuba has two economies now: the national Communist economy for the majority; and a quasi-capitalist one for foreigners and the elite. Each has its own currency: the Communist economy uses the Cuban peso, and the capitalist bubble uses the convertible peso. Cuban pesos are worth nothing. They can’t be converted to dollars or euros. Foreigners can’t even spend them in Cuba. The convertible pesos are pegged to the U.S. dollar, but banks and hotels pay only 87 Cuban cents for each one — the government takes 13 percent off the top. The rigged exchange rate is an easy way to shake down foreigners without most noticing. It also enables the state to drain Cuban exiles.

Castro created the convertible peso mainly to seal off Cuba’s little capitalist bubble from the ragged majority in the Communist economy. Until a few years ago, ordinary Cubans weren’t allowed even to set foot inside hotels or restaurants unless they worked there, lest they find themselves exposed to the seductive lifestyles of the decadent bourgeoisie from capitalist nations. A few years ago, the government stopped physically blocking Cubans from hotels and restaurants, partly because Raúl is a little more relaxed about these things than Fidel but also because most Cubans can’t afford to go to these places, anyway.

A single restaurant meal in Havana costs an entire month’s salary. One night in a hotel costs five months’ salary. A middle-class tourist from abroad can easily spend more in one day than most Cubans make in a year. I had dinner with four Americans at one of the paladars. The only Cubans in the restaurant were the cooks and the waiters. The bill for the five of us came to about $100. That’s five months’ salary.

Leftists often talk about “food deserts” in Western cities, where the poor supposedly lack options to buy affordable and nutritious food. If they want to see a real food desert, they should come to Havana. I went to a grocery store across the street from the exclusive Meliá Cohiba Hotel, where the lucky few with access to hard currency shop to supplement their meager state rations. The store was in what passes for a mall in Havana — a cluttered concrete box, shabby compared even with malls I’ve visited in Iraq. It carried rice, beans, frozen chicken, milk, bottled water, booze, a small bit of cheese, minuscule amounts of rancid-looking meat, some low-end cookies and chips from Brazil — and that’s it. No produce, cereal, no cans of soup, no pasta. A 7-11 has a far better selection, and this is a place for Cuba’s “rich” to shop. (I heard, but cannot confirm, that potatoes would not be available anywhere in Cuba for another four months.)

An advertisement in my hotel claimed that the Sierra Maestra restaurant on the top floor is “probably” the best in Havana. I had saved the Sierra Maestra for my last night and rode the elevator up to the 25th floor. I had my first and only steak on the island and washed it down with Chilean red wine. The tiny bill set me back no more than having a pizza delivered at home would, but the total nevertheless exceeded an entire month’s local salary. Not surprisingly, I ate alone. Every other table was empty. The staff waited on me as if I were the president of some faraway minor republic.

I stared at the city below out the window as I sipped my red wine. Havana looked like a glittering metropolis in the dark. Night washed away the rot and the grime and revealed nothing but city lights. It occurred to me that Havana will look mostly the same — at night, anyway — after it is liberated from the tyrannical imbeciles who govern it now. I tried to pretend that I was looking out on a Cuba that was already free and that the tables around me were occupied — by local people, not foreigners — but the fantasy faded fast.

I was all alone at the top of Cuba’s Elysium and yearning for home — where capitalism’s inequalities are not so jagged and stark.

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   People who love Socialist Paradises should have to live in one.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

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