Sinister Cultural Marxist
20th January 2016, 19:27
I had a bit of an epiphany responding to Reviscom's threat about Cuba, where I suggested that Cuba was in fact not seeking China style liberalization but was going down its own path.
Basically, China under Deng liberalized through attracting trade with and investment from large scale Western capitalist firms who sought to exploit China's large population as a labor source. This gave an opportunity for new partnerships for China's massive state-owned firms to grow exponentially, adding new productive capacity while at the same time enriching top layers of the bureaucracy and the most skilled members of the Chinese working class.
Vietnam liberalized along similar lines, though to a lesser degree, hoping to exploit its population which was not as large as China's 1.2 billion, but was still significant at 50 billion in the 80s, and growing rapidly. Unlike China, it was a medium sized nation, but its leaders knew its population was growing rapidly (and still is), and that these people could, like Chinese workers, become the basis for a rapidly growing industrial economy.
Cuba, with a population of a little more than 10 million, few natural resources (aside from nickel and rumored oil deposits), a huge supply in very old but very beautiful buildings, and a mostly agrarian economy, needs to look somewhere else to build a functioning liberal capitalist economy. Instead of using its huge population as an industrial labor army for private Western capital, it has instead sought (1) to draw in more tourists, and then (2) to built a large petit bourgeois small business community to provide goods and services to these tourists. As such, instead of massive manufacturing plants, Cuba has focused largely on encouraging homeowners and landlords to convert property into small businesses such as BnBs, small diners, milkshake stands, tour companies and so on. This is why they have focused on liberalizing their small business sector first, and why most workers are still on the government payroll (last I saw 80% of the workforce is employed by the state). A steel factory is of no interest to a tourist, and a state-owned icecream shop is nice, but perhaps not the most expeditious way to extract wealth from European and American consumers. However, a small Cuban food diner or BnB might be ideally suited to attracting such customers.
That said, Cuba is not shying away entirely from large scale industrial investment, say with the port of Mariel (http://www.latimes.com/world/brazil/la-fg-ff-cuba-mariel-20150217-story.html) and its associated SEZ, but nonetheless the character of Cuban liberalization seems to be fundamentally different from that in China. It's also unclear who or what will actually end up investing in it, and the extent to which such investment will extend to the rest of the island the way large scale capital expanded from Shenzen in China.
Thoughts? Should we stop seeing all liberalization in "post-really-existing-socialist" economies through the lens either of the Soviet model of sudden collapse, or the Chinese model of authoritarian industrialization?
Basically, China under Deng liberalized through attracting trade with and investment from large scale Western capitalist firms who sought to exploit China's large population as a labor source. This gave an opportunity for new partnerships for China's massive state-owned firms to grow exponentially, adding new productive capacity while at the same time enriching top layers of the bureaucracy and the most skilled members of the Chinese working class.
Vietnam liberalized along similar lines, though to a lesser degree, hoping to exploit its population which was not as large as China's 1.2 billion, but was still significant at 50 billion in the 80s, and growing rapidly. Unlike China, it was a medium sized nation, but its leaders knew its population was growing rapidly (and still is), and that these people could, like Chinese workers, become the basis for a rapidly growing industrial economy.
Cuba, with a population of a little more than 10 million, few natural resources (aside from nickel and rumored oil deposits), a huge supply in very old but very beautiful buildings, and a mostly agrarian economy, needs to look somewhere else to build a functioning liberal capitalist economy. Instead of using its huge population as an industrial labor army for private Western capital, it has instead sought (1) to draw in more tourists, and then (2) to built a large petit bourgeois small business community to provide goods and services to these tourists. As such, instead of massive manufacturing plants, Cuba has focused largely on encouraging homeowners and landlords to convert property into small businesses such as BnBs, small diners, milkshake stands, tour companies and so on. This is why they have focused on liberalizing their small business sector first, and why most workers are still on the government payroll (last I saw 80% of the workforce is employed by the state). A steel factory is of no interest to a tourist, and a state-owned icecream shop is nice, but perhaps not the most expeditious way to extract wealth from European and American consumers. However, a small Cuban food diner or BnB might be ideally suited to attracting such customers.
That said, Cuba is not shying away entirely from large scale industrial investment, say with the port of Mariel (http://www.latimes.com/world/brazil/la-fg-ff-cuba-mariel-20150217-story.html) and its associated SEZ, but nonetheless the character of Cuban liberalization seems to be fundamentally different from that in China. It's also unclear who or what will actually end up investing in it, and the extent to which such investment will extend to the rest of the island the way large scale capital expanded from Shenzen in China.
Thoughts? Should we stop seeing all liberalization in "post-really-existing-socialist" economies through the lens either of the Soviet model of sudden collapse, or the Chinese model of authoritarian industrialization?