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The Reform of the Cuban Economy, 1976–86: Organisation, Incentives and Patterns of Behaviour
Published online by Cambridge University Press: 05 February 2009
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‘As far as salaries go, there is chaos all over the country’, Fidel Castro exclaimed in 1986,1 and as he and other revolutionary leaders made clear throughout that year more than salaries was involved. Prices, credit, employment practices, administrative procedures and many other important aspects of the economy could be characterised as ‘chaotic’. It would be wrong, however, to take such characterisations at face value. For underlying this ‘chaos’ was a certain order: patterns of behaviour that this article will seek to disclose and explain.
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References
1 Castro, Fidel, ‘Let the Spirit of Militancy Be the Main Thing We Get Out of This (3rd Committees for the Defense of the Revolution – CDR) Congress’, Granma Weekly Review (5 10 1986), p. 9.Google Scholar
2 See Fitzgerald, Frank T., ‘Politics and Social Struture in Revolutionary Cuba: From the Demise of the Old Middle Class to the Rise of the New Professionals’, PhD diss., State University of New York, 1985, ch. 4.Google Scholar
3 Ibid., chs. 6 and 9.
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6 Through further education, of course, old cadres can transform themselves into new professionals. In fact, in 1975 the First Party Congress promulgated a policy to encourage such transformations. Although many old cadres have become new professionals since 1970, there is much evidence, which unfortunately cannot be reviewed here, to suggest that many other old cadres have resisted transforming themselves, even as they have attempted to cling to positions in the administrative apparatus. See Fitzgerald, ‘Politics and Social Structure’, ch. 10.
7 See, for example, Castro, Fidel, ‘Main Report to the Third Congress of the Communist Party of Cuba’, Granma Weekly Review (16 02 1986).Google Scholar Although the focus here is the economy, bureaucratic centralism has been evident throughout the Cuban system, including the OPP. The most detailed and best available outside scholarly analysis of it generally agrees that the OPP, while opening up the Cuban political system to more extensive and stable popular participation, remains riddled with limitations and problems, many of a bureaucratic centralist nature. See Benglesdorf, Carolee, ‘Between Vision and Reality: Democracy in Socialist Theory and Practice’, PhD diss., Massachusetts Institute of Technology, 1985.Google Scholar
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11 Quoted in Ibid., p. 172.
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24 Of course, some enterprise members did get upset, like Silvia Marjorie Spence – now famous in Cuba – who was fired from her construction work centre for complaining about rampant corruption, in this case contracts for non-existent jobs and incredibly high monthly salaries by Cuban standards: one of 1,246 pesos, one of 1,013 pesos, four of over 900, and four of over 800. See ‘Fidel Castro's Analysis of the Economic Situation and the Essential Measures to be Taken’, Granma Weekly Review, (11 01 1987), p. 4.Google Scholar She was reinstated over two years later, but only after having taken her case to the national level. She has now been promoted to the status of a hero, while her former superiors have been demoted to the shop floor. See ‘New Hero: Whistle-Blower Silvia Marjorie Spence’, Cuba Update, nos. 1–2 (Spring 1987), p. 7.Google Scholar
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25 Ríos, Armengol and Hernández, D'Angelo, ‘Aspectos de los procesos de comunicación’, pp. 156–79Google Scholar; Fuller, Linda, The Politics of Workers' Control in Cuba, 1959–1983: The Work Center and the National Arena, PhD, diss., University of California, Berkeley, 1986Google Scholar; Fuller, Linda, ‘Changes in the Relationship Among the Unions, Administration, and the Party at the Cuban Workplace’, Latin American Perspectives, vol. 13, no. 2 (Spring 1986), pp. 6–32CrossRefGoogle Scholar; Harnecker, Marta, Cuba: Dictatorship or Democracy (Westport, Connecticut, 1980)Google Scholar; Herrara, Antonio José and Rosenkranz, Hernán, ‘Political Consciousness in Cuba’, in Griffiths, John and Griffiths, Peter (eds.), Cuba: The Second Decade (London, 1979)Google Scholar; Pérez-Stable, Marifeli, ‘Institutionalization and Workers' Response’, Cuban Studies/ Estudios Cubanos, vol. 6, no. 2 (07 1976), pp. 31–54Google Scholar; Pérez-Stable, Marifeli, ‘Politics and Conciencia in Revolutionary Cuba, 1959–1984’, PhD diss., State University of New York, 1985Google Scholar; and Zimbalist, Andrew, ‘Workers’ Participation in Cuba’, Challenge (11–12 1975), pp. 45–54.Google Scholar
26 Second Congress of the Communist Party of Cuba, Documents and Speeches (Havana, 1981), p. 387.Google Scholar In addition, see Castro, Hector Anala, ‘Transformation de propiedad en el período 1964–1980’, Economía y Desarrollo, no. 68 (05–06 1982), pp. 23–4Google Scholar; and Vázquez, Díaz, ‘La aplicación’, pp. 92–3.Google Scholar
27 Castro, Fidel, ‘Main Report’, p. 7.Google Scholar
28 Calling the Cuban labour market ’tight’ docs not imply that there is an absolute labour shortage in Cuba. First, as Kornai, , Economics, pp. 30–6 and 254–7Google Scholar, has fully explained, a tight labour market goes hand in hand with a labour surplus within enterprises, or what is sometimes called ‘unemployment on the job’. Secondly, while there is a relative labour shortage in most of Cuba, according to Fidel Castro, there is ‘a certain labour surplus’ in the East. See ‘Fidel Castro's Analysis of the Economic Situation’, p. 4. Interestingly enough, he had complained several months before about the difficulties of a new textile mill in Santiago, that is, in the labour-surplus East, in attracting workers, because it did not have the housing, recreational, educational and other facilities that workers demanded. See ‘Fidel Castro's Speech on the 25th Anniversary of the Proclamation’, pp. 10–11. In between these two statements, Castro explained that many workers on temporary lay-off were reluctant to go elsewhere for work, because they were receiving 70 percent of their salary while not working. See ‘Cuban Television Broadcasts Key Parts of Fidel's Remarks at 2nd Central Committee Plenum’, Granma Weekly Review (3 08 1986), p. 5.Google Scholar Together, these statements suggest that in Cuba the labour market remained tight, even where a labour surplus existed, because of the high level at which the state guaranteed the livelihood of workers.
29 Castro, Fidel, ‘Closing Speech at the Close of the Deferred Session of the Third Congress of the Communist Party of Cuba’, Granma Weekly Review (4 12 1986), p. 12.Google Scholar
30 It is notable that, in the mind of one party member, the managerial behaviour that is about to be discussed stemmed from the fact that ‘people in authority do not want problems and some are afraid of workers’. See the remarks of Marsilli, Reinaldo, as reported in ‘Debates on Rectification’, p. 3.Google Scholar It is perhaps also notable that the workers interviewed by Fuller, , The Politics, pp. 423–5Google Scholar, felt they had the power to have work centre managers removed, if necessary.
31 See Fidel Castro's remark about ‘the increase in the ambition for money, the spirit of profit that was invading our working class’. ‘ Fidel Castro's Speech at the Meeting to Analyze Enterprise Management’, p. 2.
32 As Fidel Castro, Ibid., p. 3, admitted in 1986: ‘We abused the principle [of pay according to work] by paying for work not done.’
33 Jiménez, Alexis Codina, ‘Los estímulos materiales y morales en el socialismo’, Eonomia y Desarrollo, no. 56 (03–04 1980), pp. 60–1.Google Scholar
34 According to one economist, technical norms ‘are not limited to passively reflecting the costs of work and the results that should be expected from each post of work, brigade, etc., but should exercise an active influence in the transformation of the general conditions and organization of work’. See Ibid., p. 61.
35 In addition to the resistance of managers and workers, there are other reasons that account for the fact that work norms in Cuba have been elemental and low. While in 1986 there were about 3 million work norms and about 20 thousand norm setters – that is, about 150 norms per norm setter – these latter often lacked proper training or experience, or often did other work (perhaps as directed by work centre managers). See the remarks of the President of the State Committee for Labour and Social Security, Linares, Francisco, ‘Debates on Rectification’, p. 2.Google Scholar Of course, even with thoroughly trained and cooperative personnel, establishing and keeping this many norms up to date in the face of a complex division of labour and changing technology, work organisation, and worker performance is an enormous task. In this regard, the Cuban problem with norms is not unique, but has existed throughout the socialist, as well as the capitalist world, whenever work norms have been used. Unfortunately, the myriad technical problems involved in setting norms for work cannot be discussed here.
36 As early as 1972, the then Minister of Labour Jorge Risquet announced that elemental norming would be complete by the end of 197) and massive technical norming would commence. See ‘Primer encuentro nacional de organización y normación del trabajo’, Economía y Desarrollo, no. 11 (05–06 1972), p. 200.Google Scholar But in 1981 almost 28% of the appropriate work posts remained without norms of any kind. See Casamayor, Barbara Flores, ‘Breve análisis del sistema salarial, en los marcos de la Reforma General de Salarios’, Economía y Desarrollo (01–02 1984), p. 119.Google Scholar In 1982, 77% of all existing norms remained elemental, 23% were somewhat in between, and practically none were technical. See Grau, María Díaz Corral y Xionmara Vásquez, ‘Algunas consideraciones para la aplicación de reglamento de normación del trabajo’, Economía y Desarrollo, no. 85 (03–04 1985), p. 227.Google Scholar This situation had not substantially improved by 1986. See the remarks of Castro, Fidel, ‘Main Report’, p. 6.Google Scholar
37 Castro, Raül, ‘Three Speeches Against Bureaucracy’, in Taber, Michael (ed.), Fidel Castro Speeches, Volume II: Our Power Belongs to the Working People (New York, 1983), pp. 295–6.Google Scholar For a report of similar manipulations, see ‘Debates on Rectification,’ p. 3.
38 See ‘Fidel Castro's Speech on Administrative Irregularities’, p. 9. One study of 85 enterprises in the province of Ciego de Avila discovered 2,442 workers being overpaid and attributed this to the low norm found in 32 enterprises, in 28 of which workers were producing at the rate of more than 130 percent of their norms. See ‘Aporta importantes elementos en normas y salarios inspectión a 85 empresas avilenas,’ Granma Weekly Review (8 08 1986), p. 1.Google Scholar
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41 ‘Report on the Meeting to Analyze Enterprise Management’, p. 2.
42 Peláez, García, Untitled speech, pp. 202, 207–208Google Scholar; and Pérez, Humberto, ‘La obtención de la mayor eficiencia posible en el uso de nuestros recursos’, Economía y Dcsarrollo, no. 46 (03–04 1978), p. 188.Google Scholar
43 ‘Debates on Rectification’, p. 3.
44 Although there is a vast literature on socialist economies which deals with the types of problems analysed in this article, I find Kornai's work most useful because, in my opinion, it presents the most impressive and systematic model of the operation of socialist economies that is available. The analysis of this article, however, differs from Kornai's in several respects. First, for the reason explained earlier in the text, this analysis uses the term ‘bureaucratic centralism’ to refer to what Kornai calls ‘paternalism’. Second, this analysis distinguishes between ‘malign’ and ‘benign’ paternalism or bureaucratic centralism, whereas Kornai's work does not distinguish the two, and in fact deals almost solely with the benign type Third, this analysis uses the terms ‘systemic’ and ‘socio-historical’ factors to refer respectively to what Kornai, Economics, pp. 62–3, calls ‘general’ and ‘special’ factors. Kornai's terminology creates confusion, because it can easily be seen that the special factors that he alludes to and the socio-historical ones that I invoke here have existed ‘generally’, that is, in most, perhaps all, existing socialist economies at one time or another, even though they have not arisen systemically from the structure or operation of these economies. Fourth, and most important, this analysis differs from Kornai's in its level of abstraction. Kornai theorises primarily at a higher level of abstraction suitable to his overriding purpose of comparing capitalist and socialist economies, the essential difference between which he locates in the relationship, typically paternalist in socialist economies and typically nonpaternalist in capitalist economies, between the state and the enterprise. Although his theoretical project is obviously moving in this direction, in his writings so far he has been only minimally interested in comparing the degree of paternalism or bureaucratic centralism in different socialist economies, at different points in time, and among different categories of economic actors. His theory in this respect is still incomplete and in flux. In his Economics, chap. 22, he theorises that the degree of paternalism or bureaucratic centralism will be higher in pre-reform than in post-reform socialist economies. Yet he later offers counterfactual evidence in his Contradictions, pp. 81–123, where he suggests that the very extensive reforms in Hungary have not appreciably reduced paternalism or bureaucratic centralism in that country's economy. In treating the particular case of Cuba between 1976 and 1986, the analysis of this article necessarily operates at a much lower level of abstraction, which accounts for its central difference from Kornai's analysis. Obviously, at the lower level of abstraction where a particular case is being analysed, special or socio-historical factors, such as the peculiarities of the different categories of economic actors invoked in this analysis, have to be called upon. In addition, I would suggest that, if Kornai is to develop fully a theory of degrees of parternalism or bureaucratic centralism in different existing socialist economies and among different types of economic actors at different times, he will have to take into consideration not just general or systemic, but also special or socio-historical factors.
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46 Kornai, , Economics, p. 62.Google Scholar In Kornai's view, this is an important general systemic factor behind bureaucratic centralism, but, unlike state ownership of the major means of production, it extends in its generality to ‘every [that is, capitalist and socialist] modern, achievement-oriented society’. See his Contradictions, p. 70.
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48 The full range of evidence supporting this analysis of socio-historical factors is too extensive and complex to present here.
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62 ‘Fidel Castro's Closing Remarks at the Meeting of the Provincial Committee’, p. 2.
63 ‘Fidel Castro's Closing Remarks at the 53rd Plenary’, p. 2.
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66 ‘Fidel Castro's Closing Remarks at the 53rd Plenary’, p. 4.
67 Ibid., p. 2.
68 ‘Fidel Castro's Closing Remarks at the Meeting of the Provincial Committee’, p. 4.
69 ‘Fidel Castro's Closing Remarks at the 53rd Plenary’, p. 4.
70 Ibid., p. 2.
71 Castro, Fidel, ‘Speech to the 3rd Congress’, p. 4Google Scholar; and ‘Fidel Castro's Analysis of the Economic Situation’, p. 4.
72 ‘Fidel Castro's Closing Remarks at the Meeting of the Provincial Committee’, p. 2.
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74 Granma Weekly Review (6 07 1986), p. 2.Google Scholar
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83 ‘Debates on Rectification’, pp. 8–9.
84 See Fitzgerald, Politics and Social Structure, ch. 10.
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86 Ibid.
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88 Castro, Fidel, ‘Speech on the 3 5 th Anniversary of the Attack on the Moncada’, Granma Weekly Review (7 08 1988), p. 4.Google Scholar
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