More Great news from Cuba!

[Red Guard]

http://news.yahoo.com/news?tmpl=story&u=/n...capitalism_dc_1 (http://news.yahoo.com/news?tmpl=story&u=/nm/20040413/lf_nm/cuba_capitalism_dc_1)

Communist Cuba Reins in Capitalist Enterprise
Tue Apr 13, 8:05 AM ET

By Marc Frank

HAVANA (Reuters) - Managers of Cuba's state enterprises have been told to hand over their expensive cars like Toyotas and Mitsubishis and stick to the more proletarian Russian-made Ladas or smaller vehicles.


Nor can they drive cars with decorations or air-conditioning, which has set them apart from ordinary Cubans in the sweltering heat of tropical summer.


It's part of President Fidel Castro (news - web sites)'s campaign to roll back the market-oriented reforms that gave rise to social differences in an officially classless, communist-run society. The most recent clampdown has targeted executives of state companies, whose perks are under fire.


A decade ago, Cuba sowed the seeds of capitalism when it reluctantly legalized the U.S. dollar and permitted some private enterprise as it battled to survive a post-Soviet meltdown of its centrally planned economy.


State corporations, particularly those involved in tourism, the Caribbean island's main hard currency earner, adopted modern business practices. With that came the perks and status symbols of capitalist society that are now being wrung out of the economy.


But inspectors have begun fanning out this month to make sure executives are complying with a Transport Ministry circular specifying what cars they can use. Anything bigger than a Lada will be handed over to the ministries and state protocol service, according to the document seen by Reuters.


"Cuban officials feel they have weathered the crisis and it's time for the state to take an even more central role in the economy," said Phil Peters, an exert on Cuba at Washington's Lexington Institute think tank.


HAVES AND HAVE NOTS


"They are opting for equality over growth," he said. Orthodox socialists who held their noses over the reforms following the loss of Soviet aid are running policy again, Peters said.


Increased circulation of the U.S. currency brought division between haves and have nots -- Cubans with dollars and those with no access to dollars who remained stuck in the peso economy.


In a country where monthly salaries average $15 and a taxi driver can earn more from tourists in a day than a brain surgeon earns in a month, small capitalists known as "cuentapropistas" multiplied fast.


To cover a dramatic shortage of services, the government licensed many Cubans over the last decade to have small businesses, from plumbers to taxi drivers. For a year, Cuban regulators have been chasing unauthorized private entrepreneurs and heavily taxing licensed businesses like room rentals for tourists and small family restaurants called "paladars." Red tape has forced many out of business.


Western diplomats said Cuba is retrenching economically as well as politically. They point to a crackdown on dissent last year and increased regulation of foreign companies too.


"The number of joint ventures fell by 70 last year, and will decline by a similar number this year. Tens of thousands of small independent business have folded in recent years under government pressure and small foreign trading companies are packing their bags," a European commercial attache said.


CASTRO SEES THREAT


In the state sector, which accounts for 90 percent of the economy, a re-centralization is underway, as the government takes back decision-making power that had gone from ministries to state companies.


Local analysts say Castro views state business managers as a potentially corrupting force that played a role in bringing down East European communism. He would like to end private Cuban businesses and do away with the dollar, the currency of his arch-enemy the United States, they said.


In recent speeches, Castro has criticized costly imports by too many state companies and justified centralized control over dollar reserves that cash-strapped Cuba badly needs to pay for essential food and oil imports.

"The decentralization of hard currency has gone further than planned and begun to cover unnecessary expenses," Economy Minister Rodriguez told the National Assembly in December.

Cuba's Caribbean beaches attract thousands of European and Canadian sun seekers that bring in hard currency, while remittances to Cubans from U.S. relatives is a key source of dollars.

State corporations that branched out into a myriad of dollar-earning services trying to be financially self-sufficient -- from shops to restaurants -- have been told to concentrate on their core business, according to a circular sent out by Economy Minister Jose Luis Rodriguez. A document seen by Reuters lists 87 services that can no longer be charged in dollars.

Havana allowed the dollar to circulate freely alongside the peso in 1993 and it quickly became the currency of choice since the local currency buys little Cubans want.

Last August, the Central Bank introduced exchange controls and banned state companies from using dollars in most operations, requiring usage of the convertible peso, a locally printed currency equal to the dollar but with no value outside Cuba.

Dozens of executives of the two largest corporations, Cimex and Cubanacan, were removed over alleged mishandling of dollars, charging of commissions and the use of foreign bank accounts.

The government also ended the freedom most state companies had gained to import goods.

"It's a double blow. First the dollars were taken away, and now the right to trade and make independent decisions," a Cuban economist said. "We are going back to the 1980s when everything was centralized."

[antieverything]

Wow...economic inefficiency out the ass, what great news!

[toastedmonkey]

got to be all good

[redstar2000]

I think they are positive steps, but I'm unsure that they will deal with the central problem.

As long as some (many?) Cubans have access to hard currencies and others (many?) do not, there remains a "two-tier" economy with grim effects on the political consciousness of both tiers.

Consider those who actually have access to hard currencies, whether from tourism or from family remittances. They are able to purchase scarce consumer items in special "hard currency" shops that accept only American or Canadian dollars or Euros. As a consequence, how can they be expected to view the end of Cuban socialism and the return of U.S. imperialist domination? Favorably, of course...it will mean even more hard currency flowing into their hands. (The fact that they might be wrong about such "sugar-plum visions" is irrelevant.)

Now consider poor Cubans with no access to foreign currency. They look about them and see how much better the lives are of those who do have such access. Is it really unreasonable for them to think "Maybe if the yanquis return, I will get some of that real money."?

Some way must be found to ensure that every Cuban gets a share of the goodies in the hard-currency shops. Perhaps a special tax on hard currency earnings might work, say 50% or higher. Or, prices in the hard currency shops could be doubled; the additional revenue being used to ensure that for every consumer goodie purchased, some poor Cuban without access to hard currency gets one too.

If a solution to this dilemma is not found, and fairly soon at that, we will ultimately see the mass of Cubans actually cheering the return of American imperialism...in the mistaken but sincere impression that things will "get better".


Wow...economic inefficiency out the ass, what great news!

One of the lamentable shortcomings of my miserable understanding of economics: I never was able to grasp just how unnecessary luxuries for managers "contributed" to economic efficiency.

Was Enron "efficient"?

:redstar2000:

The Redstar2000 Papers (http://www.redstar2000papers.vze.com)
A site about communist ideas

[Fidel Castro]

It is reassuring to see that the Cuban government is not willing to simply let the matter of economic division and the onset of capitalism be swept under the carpet, and that they show determination to deal with these issues.

Limited liberalisation and adoption of the dollar were regrettable but neccessary in order to ensure the survival of socialist Cuba. If the Cuban regime feels that now is the right time to begin reversing what was put in place in the early 90s then that is surely a good sign.

[antieverything]

One of the lamentable shortcomings of my miserable understanding of economics: I never was able to grasp just how unnecessary luxuries for managers "contributed" to economic efficiency.
The luxuries for managers only made up the first part of the article, and for the record, I support those reforms. But I fail to see the utility of preventing citizens from providing needed goods and services that the government can't or won't provide. Family-owned and operated businesses are no threat to socialism and should be encouraged, not taxed into bankruptcy!

[Severian]

Originally posted by [email protected] 13 2004, 07:41 PM
Some way must be found to ensure that every Cuban gets a share of the goodies in the hard-currency shops. Perhaps a special tax on hard currency earnings might work, say 50% or higher. Or, prices in the hard currency shops could be doubled; the additional revenue being used to ensure that for every consumer goodie purchased, some poor Cuban without access to hard currency gets one too.
Cuba does, in fact, have a number of policies aimed at recapturing dollar income so the state can use it for purposes benefiting all Cubans. They don't gain enough money to buy huge amounts of consumer goods, though - buying rice, beans, fuel and medicines eats up most of it. And I'm not sure how you would propose collecting a 50% tax on tips and on money sent back from relatives in the United States - two of the main sources of dollar income. Both seem difficult to monitor and tax.

There is, for example, a campaign to encourage tourism workers to contribute part of their tips to a fund for importing scarce medicines. And of course the state gets income from part ownership of the tourism joint ventures, and from the dollar stores.

I certainly agree these inequalities are dangerous and need to be combatted. I think this article shows the central leaders of the Cuban Communist Party think so too.

Another danger that needs to be combatted: racial discrimination in hiring by the joint-venture tourist hotels. They don't hire many Black Cubans for jobs that involve direct contact with the tourists, which are also the jobs with the most opportunity for tips.

[redstar2000]

I think hard-currency remittances sent to Cubans by their families in the U.S. and elsewhere could easily be taxed by intercepting their mail.

They'd squawk, of course, but so what?

As to distribution, perhaps a small percentage of all Cuban salaries (for people without access to hard currency) could be paid in hard currency.

But I'm not "wedded" to these ideas; I think we both agree that something must be done about the two-tier economy or the whole Cuban experiment will end in ruin.

I'm a little surprised about the racism angle...perhaps I shouldn't be. I wonder if it began in an effort to cater to the presumed racism of European and American tourists and has since become "institutionalized".

Whatever the cause, it's more bad news.

:redstar2000:

The Redstar2000 Papers (http://www.redstar2000papers.vze.com)
A site about communist ideas

[perception]

Originally posted by [email protected] 14 2004, 07:46 PM
I think hard-currency remittances sent to Cubans by their families in the U.S. and elsewhere could easily be taxed by intercepting their mail.

Fuck you.

Intercept their mail and take money out? Are you kidding?

You know everything they buy with their dollars eventually makes its way back to the rest of Cuba. Just raise the prices in the dollar stores.

[guerrillaradio]

I don't understand why dollars are legal tender in Cuba in the first place.

[toastedmonkey]

Their economy collapsed when the USSR imploded, it needed to convert to the dollar to survive as a socialist country

[redstar2000]

Originally posted by perception+Apr 14 2004, 07:58 PM--> (perception @ Apr 14 2004, 07:58 PM)
[email protected] 14 2004, 07:46 PM
I think hard-currency remittances sent to Cubans by their families in the U.S. and elsewhere could easily be taxed by intercepting their mail.

Fuck you.

Intercept their mail and take money out? Are you kidding?

You know everything they buy with their dollars eventually makes its way back to the rest of Cuba. Just raise the prices in the dollar stores. [/b]
No, I'm not "kidding".

Yes, it's true that the hard currency sent to Cubans from families living in other countries is injected into the economy (and not hidden in a mattress, for example).

But consider: a Cuban gets US$500 in the mail from his relatives in Miami. He takes it to a hard-currency shop and buys a new air-conditioner. He takes it home, plugs it in, and now lives more comfortably through Cuba's hot summers than perhaps 80% or more of his fellow Cubans.

The Cuban Government had to pay for that air-conditioner, of course. Perhaps it cost E250 from a wholesaler in Madrid. So there is a profit...which can be spent on things to help other Cubans who don't have relatives in Miami. One of the things it will be spent on is imported oil to run Cuba's electric power grid...which has just had additional demand placed on it by this guy's new air conditioner.

Now, suppose this guy's mail is intercepted and the Cuban Government takes $250 of that $500 "off the top". The guy has to wait for another $500 from Miami before he can buy that air-conditioner (don't worry, they'll send it to him). Meanwhile, the Cuban Government has $250 up front to spend on Cubans who don't have relatives in Miami.

In writing this, another measure occurred to me. How about those Cubans who run private taxis for tourists and earn a lot of hard currency? Why shouldn't they pay for their gasoline in dollars or Euros rather than Cuban pesos?

You get the idea.

:redstar2000:

The Redstar2000 Papers (http://www.redstar2000papers.vze.com)
A site about communist ideas

[antieverything]

All that would do is discourage people from sending US dollars to Cuba at all.

[TC]

Excellent. Cuba introduced some market reforms in order to protect its revolution and got rid of them when the revolution was once again secure. Its good to know that the Cuban Communist Party knows what its doing.

[Hasta Siempre Comandante]

I applaud Castro and the Cuban revolution because despite all the embargos and sanctions, Cuba is much better off today than it was under batista or any other cuban leader. The important thing is that the reforms were made but they were not permanent. Imagine what Cuba would be like without the embargos- Castro has stuck to his guns and remained loyal to his promises.

[dark fairy]

castro is a good man... his brother may have a bit of an attitude...but it&#39;s for the better...like I saw people always want to feel special... and have more than other people and shit <_<

[redstar2000]

Originally posted by [email protected] 15 2004, 02:11 PM
All that would do is discourage people from sending US dollars to Cuba at all.
Don&#39;t be silly...this is family bragging rights we&#39;re talking about here.

In Miami, the gusanos "take pride" in how much money they send to their relatives in Cuba.

Of course, they&#39;ll squawk...they squawk anyway.

I think it&#39;s a winning idea, myself.


It&#39;s good to know that the Cuban Communist Party knows what it&#39;s doing.

Well, maybe. There&#39;s still that "two-tier" economy problem and it&#39;s not going to "go away" by itself.

:redstar2000:

The Redstar2000 Papers (http://www.redstar2000papers.vze.com)
A site about communist ideas

[Yazman]

dark fairy, people only want that when there is inequality.

Personally I have never needed to "feel special" and have more than others.

[Hate Is Art]

It&#39;s good to see the Communist Party is taking steps forward instead of backwards, I personaly don&#39;t see the problem with small family run businesses. Is owning a small plumbers or builders merchant going to brng down capitilism?

If you tax them enough then you can maintain equality while adding valuable services and trained tradesman to Cuban society.

[toastedmonkey]

The following words arent mine, they are a friends, and i totally agree :-

"it would be great if Cuba could make a moneyless society"

That would further show how well socialism is, and it would be difficult to class the people as poor

[antieverything]

...well, they could do that but since moneyless economies are completely and totally unrealistic, I don&#39;t see that happening any time soon.

[perception]

redstar, if you double the price of an airconditioner with 100% tax you&#39;ll get the same results, without having to invade anybody&#39;s privacy by INTERCEPTING PERSONAL MAIL.

[antieverything]

...so, nobody gets an air conditioner, no money goes back to the government, and somehow everyone is better off?

[toastedmonkey]

Originally posted by [email protected] 16 2004, 05:36 PM
...well, they could do that but since moneyless economies are completely and totally unrealistic
that is the end of state of communism you know?

people only take what they need, there would be no need for money

[antieverything]

...of course I know that. That&#39;s one of the reasons I think such ideals are utopian pipe-dreams&#33;

[DaCuBaN]

ahhhhh a realist. An uncommon element :)

We live in a world where things never quite work out as they should. Dreaming of Utopia, and trying to attain Utopia is not a bad calling - if we aim high we&#39;ll end up somewhere better

I certainly don&#39;t think a moneyless society is impossible.... it&#39;s just a step in the trading process.


We are children of our environment

Listen to the man, he talks the truth :)
Money is merely the link between services - and within a true socialist society no man is better than another, and thus the work of a brain surgeon is as important as that of a plumber. As such each would &#39;earn&#39; an equivelant amount and this could be paid in a generic (perhaps electronic) credit that would entitle them to anything (as everything costs the same)

This way everyone takes what they need, when they need it. The key is keeping the books balanced on the government side - something that would have to be done as everything that isn&#39;t produced internally WOULD have a value.

A moneyless state isn&#39;t possible, but a moneyless global society isn&#39;t that preposterous...

Am I making sense ? :P :D

[shyguywannadie]

Originally posted by [email protected] 16 2004, 04:08 PM
The following words arent mine, they are a friends, and i totally agree :-

"it would be great if Cuba could make a moneyless society"

That would further show how well socialism is, and it would be difficult to class the people as poor
In communism money doesnt exist. Its what we should be aiming for among other things.

[toastedmonkey]

i kinda said that in my last post, but yeah

it was meant in the context, as in the next few years

before communism is achived there, whilst castro is still alive

[revolutionary soldier]

i think this is all wrong

i like to think of this moneyless societly dream and think communisms has some good aspects but taking away peoples cars because ther too big and they&#39;re not allowed shit in them that&#39;s not fair. I hate it when people say abolish luxury. If we abolished luxury we&#39;d all end up the same person. I call a book luxury and the internet and the chance to pick up a guitar and play it. Maggie thatcher made sanitary towels and tampons a luxury which is why we pay tax on them so we wouldn&#39;t have them girls.

Just look at the world around you. You wouldn&#39;t be able to survive without your CD player and picture mobile. In our society today we would find it so difficult to live how they live in Cuba. Why deny yourself something that&#39;s a little better than what you&#39;ve already got. A little luxury never hurt anyone. It&#39;s when you become greedy and lazy that the problem arises.

[Hasta Siempre Comandante]

First of all, I think you could survive without your CD player- it&#39;s not BREAD, it&#39;s entertainment. Although I do understand what you&#39;re saying about life being different here than it is in Cuba- that doesn&#39;t mean you need luxury to live a happy life. You say a little luxury never hurt anyone- well that&#39;s not true. Everything we do and everything we buy has an effect on society. The only reason why things like mobile phones are perceived as being necessary items is because people buy into what they see in advertisements and shit like that. Capitalism is a machine and the more you feed the machine the stronger the machine gets.

[perception]

Originally posted by [email protected] 16 2004, 11:44 AM
...so, nobody gets an air conditioner, no money goes back to the government, and somehow everyone is better off?
They have to spend it on something. If you tax consumption instead of income there&#39;s no way to &#39;hide&#39; money.

[Severian]

Originally posted by [email protected] 13 2004, 10:47 PM

One of the lamentable shortcomings of my miserable understanding of economics: I never was able to grasp just how unnecessary luxuries for managers "contributed" to economic efficiency.
The luxuries for managers only made up the first part of the article, and for the record, I support those reforms. But I fail to see the utility of preventing citizens from providing needed goods and services that the government can&#39;t or won&#39;t provide. Family-owned and operated businesses are no threat to socialism and should be encouraged, not taxed into bankruptcy&#33;
One of the laws of the market is that many small businesses tend to become a few large ones. So it&#39;s necessary to regulate and tax the self-employed in order to assure they don&#39;t become small-scale exploiters of labor, and eventually large-scale exploiters. It&#39;s to be expected that an article written from a pro-capitalist perspective would oppose this. If the goal of the Cuban government was to do away with self-employment, they would simply do ban it. They haven&#39;t, so I don&#39;t think that&#39;s their goal.

If the luxuries for managers were bonuses tied to the efficiency of the enterprise, they might, arguably, add to economic efficiency under some circumstances. Probably this is why they were implemented. But I&#39;m not sorry to see &#39;em go.

Redstar, the gasoline idea sounds more enforceable, at least if there are gasoline ration cards for all car owners, which there might be already for all I know. Opening mail and directly taking remittances, besides being a pain in the ass for both state and citizens, would also strengthen those in the U.S. who favor limiting how much money can be sent back...or banning it altogether. IIRC there are some limits already.

BTW, another recent, major change in Cuban economic policy: drastic reductions in sugarcane. Land and labor is freed up for growing other crops. Laid-off sugar workers are guaranteed their former wages, or higher, for life, whether they take other jobs or go back to school. Two articles on this: link (http://www.themilitant.com/2004/6805/680550.html) link (http://www.themilitant.com/2004/6806/680650.html)

[BloodyPigSlayer]

my yayt is parked on a reef out in cuba, i am smoking pig meat and drinking your capitalist blood, kiss me your greedy pigs :)

[Yazman]

"Just look at the world around you. You wouldn&#39;t be able to survive without your CD player and picture mobile. In our society today we would find it so difficult to live how they live in Cuba. Why deny yourself something that&#39;s a little better than what you&#39;ve already got. A little luxury never hurt anyone. It&#39;s when you become greedy and lazy that the problem arises."

I disagree ENTIRELY. I do not have a "picture mobile", and by "picture mobile" I am assuming you meant mobile phone. I do not have one of these, and I am not planning on getting one. I can live without many luxuries, and I have previously, so your point is entirely irrelevant.

[Som]

Originally posted by [email protected] 16 2004, 04:38 PM
redstar, if you double the price of an airconditioner with 100% tax you&#39;ll get the same results, without having to invade anybody&#39;s privacy by INTERCEPTING PERSONAL MAIL.
You do realize that that would completely cut off those on pesos?

Those without access to dollars have enough trouble getting consumer goods like that as it is, doubling the price would go and make it completely impossible.

So while the government may get a slight boost in dollar income, the inequality would only increase, leaving the few that pull to the capitalist economy at an even great advantage over those with pesos.

I think the best solution, and what the article said the government is already starting to do, is gradually phase out the necesity of the dollar, and return to an economy where the dollar has to be converted.

Decentralization and a local socialization of some of the black market buisness would probably be far better than either pretending they don&#39;t exist or trying to squelch them.

[antieverything]

Agreed.

[perception]

Originally posted by Som+Apr 17 2004, 02:32 PM--> (Som @ Apr 17 2004, 02:32 PM)
[email protected] 16 2004, 04:38 PM
redstar, if you double the price of an airconditioner with 100% tax you&#39;ll get the same results, without having to invade anybody&#39;s privacy by INTERCEPTING PERSONAL MAIL.
You do realize that that would completely cut off those on pesos?

Those without access to dollars have enough trouble getting consumer goods like that as it is, doubling the price would go and make it completely impossible.

So while the government may get a slight boost in dollar income, the inequality would only increase, leaving the few that pull to the capitalist economy at an even great advantage over those with pesos.

I think the best solution, and what the article said the government is already starting to do, is gradually phase out the necesity of the dollar, and return to an economy where the dollar has to be converted.

Decentralization and a local socialization of some of the black market buisness would probably be far better than either pretending they don&#39;t exist or trying to squelch them. [/b]
Those on pesos can&#39;t get consumer goods at all. period. nada. the only people buying consumer goods are buying them with dollars. tax all dollar goods and use the profits to subsidize the peso earning population.

[Som]

Those on pesos can&#39;t get consumer goods at all. period. nada. the only people buying consumer goods are buying them with dollars. tax all dollar goods and use the profits to subsidize the peso earning population.

I think those on pesos can convert them to dollars. They can&#39;t buy much, but a pair of pants and a couple pineapples each month is still a lot better than nothing.

[perception]

Originally posted by [email protected] 18 2004, 07:24 PM

Those on pesos can&#39;t get consumer goods at all. period. nada. the only people buying consumer goods are buying them with dollars. tax all dollar goods and use the profits to subsidize the peso earning population.

I think those on pesos can convert them to dollars. They can&#39;t buy much, but a pair of pants and a couple pineapples each month is still a lot better than nothing.
In theory, but that&#39;s not what happens. With what they make in pesos they could buy maybe one pair of jeans with their entire monthly paycheck. Point blank, pesos are not used to buy &#39;consumer&#39; goods, except in peso stores.

[antieverything]

...and peso stores are largely a joke. Often their shelves are empty&#33;

[FriedFrog]

weird. i was thinking the same&#33; However, it would only work if the rest of the world was moneyless as well, otherwise they would have absolutely no power. it would be good though...

[revolutionary soldier]

Originally posted by [email protected] 17 2004, 07:38 AM
"Just look at the world around you. You wouldn&#39;t be able to survive without your CD player and picture mobile. In our society today we would find it so difficult to live how they live in Cuba. Why deny yourself something that&#39;s a little better than what you&#39;ve already got. A little luxury never hurt anyone. It&#39;s when you become greedy and lazy that the problem arises."

I disagree ENTIRELY. I do not have a "picture mobile", and by "picture mobile" I am assuming you meant mobile phone. I do not have one of these, and I am not planning on getting one. I can live without many luxuries, and I have previously, so your point is entirely irrelevant.
i also do not own a picture mobile and do not feel i need one, but surely your computer is a luxury? Ever thought about trying to give that up for a month? Ever thought of giving up your mobile for month? ever thought about giving up music of any kind up for a month? driving? that means not even any public transport? your bed? sleep on the floor? surely a matress is luxury? look at pictures of street kids in Africa. live like that. its hell. having to sleep stood up when its raining. just try it. thats no luxury and you would not be able to survive it.

[bunk]

Originally posted by revolutionary [email protected] 22 2004, 09:26 PM
i also do not own a picture mobile and do not feel i need one, but surely your computer is a luxury? Ever thought about trying to give that up for a month? Ever thought of giving up your mobile for month? ever thought about giving up music of any kind up for a month? driving? that means not even any public transport? your bed? sleep on the floor? surely a matress is luxury? look at pictures of street kids in Africa. live like that. its hell. having to sleep stood up when its raining. just try it. thats no luxury and you would not be able to survive it.
A computer is not essential there are communal one&#39;s as well.
I don&#39;t really use my mobile anyway.
There is still instruments and music people can make from anything, you don&#39;t need a surround sound system to sing or drum some beats.
Why would there not be any public transport? The country might not have it because of a U.S embargo.
.............................