Cuba abandons equal pay

[spartan]

Cuba to abandon salary equality

http://newsimg.bbc.co.uk/media/images/44739000/jpg/_44739286_pesos_226.jpg
The average salary in Cuba is about $20 (£10) a month

Cuba is to abolish its system of equal pay for all and allow workers and managers to earn performance bonuses, a senior official has announced.
Vice-Minister for Labour Carlos Mateu said the current system - in place since the communist revolution in 1959 - was no longer "convenient".

He said wage differentiation should improve production and services.

President Raul Castro has introduced a series of reforms since succeeding his ailing brother Fidel in February.

Writing in the communist party newspaper Granma Mr Mateu said workers would receive a minimum 5% bonus for meeting targets but with no ceiling on salaries.

Managers could earn a 30% bonus if the team working under them increased production, he said.

The minister pointed out that the current wage system sapped employees' incentives to excel since everyone earned the same regardless of performance.

"It's harmful to give a worker less than he deserves, it's also harmful to give him what he doesn't deserve," the newspaper article said.

Challenging Marxist orthodoxy
But the impact in terms of purchasing power will be limited, the BBC's Michael Voss in Havana says.

http://newsimg.bbc.co.uk/media/images/44609000/jpg/_44609467_castro_ap226b.jpg
Raul Castro has brought in a series of gradual social reforms

The average wage in Cuba for everyone - from doctors to farm labourers - is about $20 (£10) a month.

Even before the recent sharp rise in oil and food prices Cuba was spending billions of dollars on imports, and that bill is likely to rise sharply, our correspondent says.

So far most of the reforms announced since Raul Castro took over the presidency have involved lifting restrictions such as the bans on mobile phones and computers.

The latest change is a more fundamental challenge to Marxist economic orthodoxy, our correspondent adds.
http://news.bbc.co.uk/1/hi/world/americas/7449776.stm

[Prairie Fire]

The final collapse of Cuban revisionism is well on it's way, I see.

[dirtycommiebastard]

I don't think this is a meaningful attack on socialism, more than it is a confused Castro, trying to help his country. Obviously his position is wrong.
I believe strongly that they think allowing bonuses is the solution to low production.

Then again, what do you expect, the bureaucracy aren't Marxists.


:)

[Sam_b]

It can't be an attack on Marxism as Cuba has never been Marxist. A state created on nationalist tendencies that then decides its 'socialist' to get in bed with the Soviet Union can never be.

And that equality of wages never affected any of the government, did it :rolleyes:

[Die Neue Zeit]

What is so Marxist about absolute "equal pay for all"? That's FRENCH SOCIALISM, not Marxism (let alone revolutionary Marxism):

http://www.revleft.com/vb/social-proletocracy-marx-t80882/index.html

[dirtycommiebastard]

Jacob I think you are missing the point?

The point is what this means for Cuba.

[Die Neue Zeit]

^^^ Not at all. I know the point some posters are trying to make here (notwithstanding potential problems on their part in regards to not being more critical of French socialism). On the other hand, I'm completely with Sam_b on this one.

[dirtycommiebastard]

^^^ Not at all. I know the point some posters are trying to make here (notwithstanding potential problems on their part in regards to not being more critical of French socialism). On the other hand, I'm completely with Sam_b on this one.

No you are absolutely right about that. I agree as well.

[Nothing Human Is Alien]

This may very well be a necessary step in Cuba right now. But in order to move forward in building socialism and progressing towards communism, material incentives eventually need to be replaced with moral incentives, as a part of a change of the whole material basis of society and consciousness of people. This debates goes back to the beginning of the Cuban Revolution.

For anyone interested, I'd recommend reading the pieces around the Budgetary Finance System. Specifically, I'd recommend "Apuntes criticos a la economia politica," "On the Budgetary Finance System," & "Socialism and Man in Cuba" all by Che.

[Davie zepeda]

Can i ask what dose this mean . I mean it is suppose to be the worker how ever hard the worker works shouldn't he be able to get the fruit of his labor right?

Plus i think Cuba is gonna do the Vietnam,china,Venezuelan way to work with capitalism to move socialism forward but it's dangerous waters to treed .

Can it work?

[BobKKKindle$]

The final collapse of Cuban revisionism is well on it's way, I see.

If Cuba's decision to adopt unequal wages is revisionist or indicative of revisionism, then, by this criterion, the Soviet Union was also "revisionist" prior to the alleged revisionist seizure of power following Stalin's death, because during Stalin's term of office unequal wages were also present in the Soviet Union - workers who were able to produce more units of output than specified under the quota system were given material privileges, such as access to special stores which were reserved for state officials, and medals awarded by the state. It's possible to debate whether stakhanovism was beneficial, but the existence of wage differentials cannot by itself be used as evidence of revisionism unless pre-Khrushchev Soviet Union was also revisionist, a position which most anti-revisionists would reject.

[Devrim]

because during Stalin's term of office unequal wages were also present in the Soviet Union - workers who were able to produce more units of output than specified under the quota system were given material privileges, such as access to special stores which were reserved for state officials, and medals awarded by the state.

Under Lenin they just paid them more. Piece rates were introduced by the Bolsheviks in early 1918:


April 3
The Central Council of Trade Unions issued its first detailed pronouncement on the function of the trade unions in relation to 'labour discipline' and 'incentives'.
The trade unions should "apply all their efforts to raise the productivity of labour and consistently to create in factories and workshops the indispensable foundations of labour discipline".
Every union should establish a commission "to fix norms of productivity for every trade and category of workers". The use of piece rates "to raise the productivity of labour" was conceded. It was claimed that "bonuses for increased productivity above the established norm may within certain limits be a useful measure for raising productivity without exhausting the worker". Finally if "individual groups of workers" refused to submit to union discipline, they could in the last resort be expelled from the union "with all the consequences that flow there from".43

(43) Narodnoye Khozyaisto No.2, 1918, p.38

Devrim

[gla22]

What is so Marxist about absolute "equal pay for all"? That's FRENCH SOCIALISM, not Marxism (let alone revolutionary Marxism):

http://www.revleft.com/vb/social-proletocracy-marx-t80882/index.html

I agree, Marx said people would earn different amounts of money depending on the nature and quality of their labor. What is wrong is the managers getting a bigger bonus.

[Nothing Human Is Alien]

Under socialism it's from each according to ability, to each according to his/her contribution.

[Kwisatz Haderach]

I wasn't aware that Cuba had "equal pay for all" in the first place. Certainly I know the Soviet Union didn't. Does anyone know more about this?

[Nothing Human Is Alien]

It wasn't exactly and uniformly equal, but the highest pay wasn't very much more than the lowest pay. Of course the USSR was a different case.

[TC]

There is nothing wrong with providing incentives in a socialist economy provided the system of collectivized ownership remains intact. What this represents is merely incentives for performance within the framework of democratically run workplaces in order to discourage freeloading; not bonuses based on profit.

To see this as somehow some kind of retreat from socialism is only possible if you have a very limited understanding of socialist and marxian economics. Marxist socialism is not levelerism and its not abstract salary equality (something possible by the way, in capitalism); it is the collective ownership of the means of production; state and economic power held by workers/popular councils and democratic unions.

Salary differentials like armies and police are in the abstract merely tools to motivate people to follow certain courses of action; it is only in the context of a capitalist state that they (respectively) motivate people to produce profit for private capital and to refrain from appropriating that capital; they motivate people towards other aims in other systems.



A mistake many people on the left make whether 'anti-revisionists' or 'trotskyists' in criticizing Cuba and for that matter the Soviet Union is in thinking that their failure to be communist societies means they are/were not socialist societies, when they never claim to have achieved communism only to be in the process of building socialism. Marx and Lenin did not conflate socialism and other early workers states with communism, the most advanced social system only theoretically possible in a post-scarcity post-class society following the consolidated global victory of the working class. (Similarly the Trots who dismiss the concept of 'socialism in one country' as somehow absurd by definition are likewise conflating socialism with communism; communism is materially impossible in one country, socialism entails a far less advanced social system which does not meet such stringent requirements).

[Wanted Man]

Well said, I couldn't think of anything else to add. It's almost as if some people here want to see capitalism restored in Cuba, just in order to confirm their particular set of theories in their own minds. In that sense, socialist Cuba is a thorn in the backside of not only the imperialists, but also of the ultra-leftists, whose ideal communist blueprint has no room for socialist Cuba. Even the most ardently 'orthodox' thinkers (no matter if trotskyist, left communist or anti-revisionist) are more than happy to toss away basic Marx just to make it all fit.

[Herman]

Well said, I couldn't think of anything else to add. It's almost as if some people here want to see capitalism restored in Cuba, just in order to confirm their particular set of theories in their own minds. In that sense, socialist Cuba is a thorn in the backside of not only the imperialists, but also of the ultra-leftists, whose ideal communist blueprint has no room for socialist Cuba. Even the most ardently 'orthodox' thinkers (no matter if trotskyist, left communist or anti-revisionist) are more than happy to toss away basic Marx just to make it all fit.

I've always been afraid of capitalist restoration in Cuba, but this merely reflects that they're on the right path.

The problem is that when some people see "abolish" and "equal" in the same sentence, they scream in outrage because it must mean "anti-socialism".

[BIG BROTHER]

It can't be an attack on Marxism as Cuba has never been Marxist. A state created on nationalist tendencies that then decides its 'socialist' to get in bed with the Soviet Union can never be.

And that equality of wages never affected any of the government, did it :rolleyes:

your damm right!

[Noah]

I think most of agree that an increased financial incentive may well improve production in Cuba and for the short term this is a good method of developing the Cuban economy. This is not an attack on socialism (if you consider it so), I think this is a good way of motivating workers but then again this is a short term solution to the inefficiency in Cuba...there needs to be a long term plan and a long term vision for Cuba and the main challenge is steering Cuba into equality in all aspects rather than 'capitalism wrapped in a red flag'...And yet many of the 'socialist' countries failed to do this. I am warey of Raul though, I really do think he may steer it into a China style system (although, it would be slightly naive to think Fidel didn't get a say in this) - it's too short to say though.

[More Fire for the People]

This is a complete setback. Rewarding pay according to productivity—read accumulation of capital—is a set up for privatization. Workers should be remunerated according to their needs & their degree of service to the community.

[Dust Bunnies]

This is very dangerous for Cuba...

[DancingLarry]

If the goals of socialism are a supremely powerful state executive and bigger bonuses for management, why go to all the trouble of having a revolution when you can just vote Republican and get the same result?

[chebol]

This is not a setback, by any means. It is a recognition of a dangerous situation which already exists, and is a part of a strategy to fix it (or be fixed, quite frankly).

The dual currency system in Cuba is a major problem, and combined with the shortages caused by the special period and the Blockade provides the material basis for reaction.

Then there is a layer of - especially young - Cubans who are relatively wealthy because they receive remittances from family members in the US, and who are fairly malcontent in their politics and activity.

On top of this, there are other Cubans who want those few consumer goods that Cuba can get, can se some people buying them, but can't afford them themselves, and you're beginning to have a problem.

None of this is Cuba's fault precisely - they needed to encourage tourism, and remittances, in order to get the hard cash to buy things on the international market (credit being off-limits thanks to the Blockade).

However, there is now a need for a series of controlled corrections to bring average Cuban spending power (and standard of living) upwards, by increasing the value of the peso nacional until it is more or less equal with the cuc or the US dollar, and thereby breaking the financial power of a developing layer of malcontents and corrupt bureaucrats.

At the same time, Cuba now has the money to increase the supply of items such as mobile phones, DVD players and computers, which simply weren't as available before, and there is a focus on getting as many as possible on the cheap.

The theory of it is quite sound (and there has never been wage-parity in Cuba, for a number of good reasons. However, the ratio was usually kept to about 1 in 4). The practice will be another thing entirely, as there is a layer in Cuba who are keen to follow the Chinese road. Raul is not one of them, but many of the financial advisers and economists in the government are.

At the moment, however, there is going to have to be a little temporary bending of the stick, which is risky - and will look risky too. There is no guarantee it will work. But the alternative is actually worse.

The Cuban economy has been booming recently, but that is relative to it's shrunken size during the 90s. Many Cuban economists are actually worried that the economy is slowing, and the government is keen to consolidate the political and social gains of the growth over the past few years, and undermine the bureaucrats and corrupt layers.

Not acting now would be a much greater disaster, as it would allow the relative inequality that has already crept into the Cuban system to entrench itself.

[Die Neue Zeit]

There is nothing wrong with providing incentives in a socialist economy provided the system of collectivized ownership remains intact. What this represents is merely incentives for performance within the framework of democratically run workplaces in order to discourage freeloading; not bonuses based on profit.

To see this as somehow some kind of retreat from socialism is only possible if you have a very limited understanding of socialist and marxian economics. Marxist socialism is not levelerism and its not abstract salary equality (something possible by the way, in capitalism); it is the collective ownership of the means of production; state and economic power held by workers/popular councils and democratic unions.

Unfortunately, you also forgot to add the absence of wage slavery through the replacement of money by a more restrictive means of exchange (Critique of the Gotha Programme) - as noted in my "Social Proletocracy" link above. :(

Now, in terms of compensation differentials:

http://www.revleft.com/vb/trots-and-others-t72296/index.html

[Colonello Buendia]

this is an interesting development, I think that Raul is trying to distance himself from the fidelista brand of "socialism" or whatever it may be. by introducing reforms however he may cause the west to sense victory. I also fail to see why so many people are getting worked up about abolition of equal pay. There'll still be a base rate but the workers will be payed along the Marxist line. any pro Cuba types should welcome this not think that Raul is playing the capitalist game. also, technically this is revisionist, I mean Raul IS revising the old system. this is revisionism, not necessarily bad but it is revisionist by definition

[Holden Caulfield]

equal pay is fair, for a society to work it needs all of it constituent parts no one part deserves more pay than others, as some become richer some will enevitable become poorer and then an elite will develop,

it is a bad step but not catastrophic if kept in check

[Davie zepeda]

After looking on the web i see that more and more foreign investor are coming into Cuba is it the end of the revolution or is it only trying to survive the situation it's been placed in with this 2.7 growth each year.

The wealth of Cuba is increasing and now the leadership doesn't know what to do with it.

[spartan]

The wealth of Cuba is increasing and now the leadership doesn't know what to do with it.

They could do that oh so Socialist of things and distribute it equally to the people who's work created that wealth. Or they could at least use it to fund public services used by the working class.

The fact that they arent suggests to me that Cuba is now on it's way to ditching at the least Fidel's variant of Socialism.

If Cuba is to leave Socialism behind then the best that we can hope for is that instead of becoming some free market US pleasure island because of these reforms, Cuba instead transforms itself into a nice stable Social Democratic welfare state with most major industries still nationalised.

Perhaps they will go the Chinese and Vietnamese route and have a Socialist market economy?

[BobKKKindle$]

Socialism is not based on paying everyone the same wage and so moving away from this principle should not be see as an attack on socialism. If a worker is able to work for a longer period of time, or produce a greater quantity of output, they should be payed more, because they have done more work. This principle of distribution ("from each according to his contribution") was explained by Marx in Critique of the Gotha Program in response to Ferdinand Lassalle, who advocated an egalitarian distribution of the proceeds of labour:


What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges.

Distribution according to need is only possible in a communist society, when the ideological influences of capitalism has ceased to exist and the productive apparatus has developed to a level where controlled distribution is no longer necessary.

[BobKKKindle$]

Moreover, the introduction of pay differentials would not allow for the emergence of a privileged stratum of workers, or a bourgeoisie in Cuba, because the differences in pay would actually be fairly small. Workers will gain a bonus of five percent of salary if they meet the production quota, and will be able to gain a further bonus if they exceed the quota. This means that even if pay differences are allowed, Cuba will be able to retain an equal distribution of income, and the bonuses should act as an incentive for people to work hard, especially now that consumer goods have become available for purchase, whereas previously they were restricted.

[Led Zeppelin]

Similarly the Trots who dismiss the concept of 'socialism in one country' as somehow absurd by definition are likewise conflating socialism with communism; communism is materially impossible in one country, socialism entails a far less advanced social system which does not meet such stringent requirements.

Actually no they're not, you just don't understand the Marxist position on the matter.

Socialism does not "entail a far less advanced social system" than communism, rather, it entails the process of building up the social system to the level of development required for communism, so both the US and Cuba could be in the process of building socialism, the former would be much closer to it however.

The difference between the concept of "socialism in one country" and the Marxist concept is that we understand the fact that no single nation - or even a group of nations - could by itself build up the social system to the level required for a fully socialist, let alone communist, society.

There are some nuances in that of course. If those group of nations happen to be the most advanced nations on earth, so for example Western-Europe and the US, they would automatically drag the rest of the world into the new social system by the very nature of the globalized capitalist system, which has made the worlds nations interdependent.

If there's anything the USSR experience proved, it's that.

They didn't even come close to the most advanced capitalist nations economically, how did you expect them to tackle the problem of scarcity when they couldn't even reach the stage of development of the most advanced capitalist society?

So yes, to us Marxists the concept of "socialism in one country" is absurd.

That does not mean that a backward nation cannot be in the process of building socialism, it only means that it cannot build it by itself.

[chebol]

Here's a rather good take on the move from Joaquin Bustelo, on the Marxmail list:
************************

I found the adoption of these measures, assuming this has
been done realistically, to be very encouraging. It is an indication
that the economy is making sufficient progress where, in the judgment
of the leadership, material incentives make sense. When there is
barely enough for subsistence consumption by the bulk of the
population, such incentives don't make sense and can't work because
the additional income is essentially worthless, with either nothing to
buy or with non-monetary rationing of the formally unrationed (and
even rationed) goods.

Cuba learned some very costly lessons in this regard with the
"revolutionary offensive" of the late 1960's. What was discovered was
that a typical husband-and- wife family was better off by NOT having
both work -- so that one was able to immediately get in the cue for
whatever product had become available. There was also the famous
experiment of not charging for the amount of water used in a part of
Havana. Consumption tripled showing, as Fidel said at the time, that
Cubans were not ready for Communist distribution, although the flip
side of that is simply that Cuba's production of potable water wasn't
yet sufficient for Communist distribution.

In many ways, Cuba HAD to return to policies similar to the
"revolutionary offensive" in the 90's. This wasn't an advance, it was
a retreat imposed on the revolution. Greater egalitarianism was
necessary for all to survive. Now that the economy is beginning to
allow significantly more than subsistence, it is entirely appropriate
to use material incentives as a lever to spur further economic
progress.

This is not an abandonment of Che's economic ideas; Che insisted that
material incentives in and of themselves were not sufficient, and that
improperly applied they could/would undercut the development of
political consciousness, replacing the common good with "looking out
for number one." But this doesn't mean material incentives have no
role. On the contrary, if slacking off has no material consequences
then this becomes a material dis-incentive.

Cuba has also had extensive experience pulling back from
overly-egalitarian economic policies, in the 1970's and early 1980's.
One of the mistakes made then was that incentives were greatest for
workers engaged in actual production. What this meant was that it was
very hard to get people to accept management positions: you could make
more as a production worker.

I mention this specifically because the incentives for managers have
been singled out here. Part of the "rectification of errors" of the
mid-1980s was not just downgrading an undue emphasis and in quite a
few cases the exaggerated size of material incentives that had grown
up over the previous 15 years, but also dealing with the management
incentives issues. Unfortunately, the growing crisis in the USSR,
which led to the collapse of East European "really existing"
(bureaucratic) socialism, stopped Cuba from further pursuing an even
handed correction and instead forced the adoption of what's now being
overcome, the "special period," essentially an extremely constrained
war-time-like economy.

The most significant and dangerous retreat of the special period was
the legalization of the dollar, and the dollarization of significant
parts of the economy. This was a step back that created huge social
inequality. Remittances especially favored urban, white middle-class
families. If the current drive towards material incentives and
revalorization of the peso progress, it will result in an undermining
of the scale (purchasing power) and therefore corrupting influence of
the remittances.

Eventually the goal has to be that a layer of Cubans can live as well
or better from a locally earned salary in pesos than from getting a
couple of hundred dollars from abroad each month, without undercutting
the ability of most of the population to a modestly decorous standard
of living.

Yes, this will bring its own problems, and if this stage of policy is
successful, probably the next will have to be, some years hence,
another "rectification of errors" where greater stress is placed on
raising the living standard of the bulk of the population and almost
certainly unjustified privileges and abuses which will grow out of
this policy will have to be dealt with.

While in SOME aspects this policy is formally a "retreat," if the
objective of revalorizing the Cuban peso and Cuban salaries in pesos
is successful, then OVERALL it will not have been a retreat, but
rather an advance in the building of socialism by reducing to a
relatively small material magnitude the privileges that come with
receiving dollars from abroad. It is much, much better for relatively
privileged layers to have obtained those privileges in connection with
their contribution to the Cuban economy than from having family ties
to Miami.

Joaquin

ORIGINALLY POSTED:
http://lists. econ.utah. edu/pipermail/ marxism/2008- June/029880. html (http://lists.econ.utah.edu/pipermail/marxism/2008-June/029880.html)