The Demise of the Cuban Economy

This is the role model that the left looks up to and the now we have Government inspired incentives to encourage workers . From the Economist:

THIS month staff at four government ministries in Havana had to make new arrangements for lunch. The ministries’ free canteens were shut down and workers given a wage increase of 15 pesos ($0.60) a day in compensation. Since that raises their salaries by more than half in return for losing an often poor-quality lunch, on this occasion Granma, the daily newspaper of the ruling Communist Party, may have got it right when it headlined the news, “Giving, more than taking away”.

Small though the change is, it is of huge symbolic import. It is the first step in a wider, albeit stealthy, abandonment of Fidel Castro’s half-century effort to forge a “new man” in Cuba by limiting individual reward in favour of all-embracing social provision, with the state imposing its choice of consumption as well as of production. Granma said that after the plan was “perfected” some 3.5m Cubans could expect their 24,700 workplace canteens to close too, and would get a similar wage increase.

Their is an old story about the Soviet Union, an American new reporter was stunned to see workers painting a newly laid cement, when he pointed out it might peal the paint the workers responded "No One Owns it So no One Cares". Socialism is fatally flawed, oh you might be able to put a few staple products on the table for a couple decades, but unless you give people an individual incentive, very little will get accomplished.

Raúl is cautiously decentralising the economy, giving state companies more autonomy and leasing idle state land to private farmers. Officials at the Ministry of Economy and Planning are mulling over whether to introduce greater flexibility to other activities, by using co-operatives, say. Some local economists want to encourage family-owned restaurants and takeaway businesses, such as Menierva’s, to fill the lunch gap.

Although Fidel Castro has withdrawn from day-to-day decision-making since an abdominal operation in 2006, big changes still require his consent. He continues to abhor markets. After the collapse of the Soviet Union and its generous subsidies to Cuba, Fidel allowed limited foreign investment and self-employment. When the economy briefly recovered, he cracked down: only 200,000 Cubans now have licences allowing them to run micro-businesses, such as restaurants or hairdressers, down from a peak of 350,000.

The government said state-run restaurants will now provide more lunches. That is a recipe for appalling food and service. Some farmers complain of the state’s continuing monopoly over inputs and sales. Bumper crops of tomatoes and rice were partly wasted because of transport and processing problems.

What nobody is saying publicly is that Raúl is tossing into the dustbin of Cuban history the idea espoused by Ernesto “Che” Guevara, at the start of the revolution that Cuba’s communist economy should be based on “moral incentives”, rather than material ones, and that this process would create a “new man”. Through various zigzags Fidel never wholly relinquished that idea. When opponents criticise Cubans’ derisory wages (averaging $20 per month), officials always point to the additional “social wage” of free housing, health, education, transport and food rations.

Social wage, as in Government can take this away unless you shut up. The leasing of private land is a start, of course if they sold the land Raul might be able to begin copying the Chinese model. In the 1970 the now deceased Deng Xiang Ping encouraged the peasants to own the land and sell the produce, it was one of the first steps towards the economic explosion that is still with us till today.