The essence of the Cuban socialist economy
The essence of the Cuban socialist economy
An economy under the direction of the people’s political will
On January 9, 2023, Agustín Lage Dávila delivered an address to the Economic Society of Friends of the Country, a Cuban association. Lage was invited by the Board of Directors of the Society to speak on the occasion of its 230th anniversary.
Lage is a well-known Cuban scientist, who for twenty-five years was the Director of the Center of Molecular Immunology of Havana. He is advisor to the President of BioCubaFarma, a Cuban complex of companies that manufactures and exports vaccines and new medicines for the treatment of principal health problems, including cancer; diabetes; autoimmune, infectious and cerebrovascular diseases; and COVID-19. The complex is 100% financed by the Cuban state, and it consists of forty-six companies with more than 19,000 workers. Lage also has served several terms as a deputy in the National Assembly of People’s Power.
It is worthy of note that Lage, a research scientist, would be invited to address a society of economists on economic questions. I have discovered in my sojourn in Latin America that, different from the custom in the United States, Latin American doctors, scientists, professionals, businesspersons, and politicians are widely read and are able to speak with knowledge and authority on political, social, economic, and philosophical questions. This tendency is especially marked in Cuba, where it is further stimulated by the Revolution. Research scientists and other professionals often view their work as a contribution to the Revolution, and it is normal for them to extend their contribution to other areas of citizenship, which includes an obligation to develop an informed understanding of challenges that the Revolution confronts.
Lage’s address is entitled, “Construir consenso en la manera de apreciar los peligros y los principios” [Constructing consensus in a form that appreciates dangers and principles]. It appeared in the Cuban Website Cubadebate, where it stimulated 81 commentaries, overwhelmingly favorable, with some tendency to develop the ideas further.
Lage maintains that to be the master of its destiny, Cuba must forge a consensus with respect to its economy, a consensus that is rooted in an understanding of the particular conditions of Cuba. These conditions include the fact that Cuba is a small country, and like all small economies, its economic system is very much affected by what happens beyond its national borders. In addition, Cuba is geographically located near the United States, which is the world center of the capitalist economy and of a neoliberal ideology that does not accept alternatives, with a government that has an explicit policy of hostility toward a non-capitalist alternative. We must have, in essence, an economic theory that enables us to manage challenges as a small and underdeveloped country, which is in addition blockaded; an economic theory that is rooted in the grasping of the characteristics of Cuba. These are challenges that we must confront with consensus from the vantage point of socialism.
When we began this project in the 1960s, Lage recalled, many of us had a reductionist vision of socialism. We believed that an economic system—in which private property was substituted with state ownership of the means of production, and in which the market was substituted by some form of integral planning that intended to cover necessities and not to maximize private benefits—would be sufficient to construct social justice, material prosperity, and the elevation of culture. It is a vision that had its historic role and enabled us to advance. However, sixty years later, it is insufficient to manage the complexities of the technological and globalized economy of the twenty-first century.
In a similar form, Lage notes, the vision of CEPAL (UN Economic Commission for Latin America and the Caribbean) of import-substitution industrialization, which emerged in Latin American economic thought in that era, is insufficient for the current moment. There have been numerous changes in the world economy during the last sixty years, including: the disintegration of the USSR and the European socialist camp; the new technologies of the fourth industrial revolution; the acceleration of the globalization of the economy; the predominance of the finance economy over the real economy; demographic changes in the labor force; and the accelerated deterioration of the environment.
In this challenging situation, there are two dangers that we must avoid, Lage declares. The first is the influence of persons who either openly or covertly want to push us in the direction of our real enemies, toward a reconstruction of dependent capitalism, which is the road toward the abandonment of social justice and national sovereignty. These ideas—which are not really ideas, but rationalizations driven by the interests of the privileged—are found principally in the social media.
The second danger emerges from revolutionary comrades who are looking for solutions to our urgent economic problems, who frequently are not able to distinguish economic laws from the reasonable policies of a socialist political economy. They generate confusion and put forth ideas that can be damaging to the economy.
Success before this situation requires not economic theory in and of itself, Lage maintains, but a consensual political will with respect to the economy, a political will that appreciates the dangers as well as the fundamental principles that ought to guide the development of the economy.
Such ample consensus with respect to the essential principles has been established in the Cuban constitution, Lage maintains. The Cuban Constitution of 2019 affirms:
“In the Republic of Cuba, there reigns a socialist economic system based in the ownership of all the people over the fundamental means of production as the principal form of property; and the planned direction of the economy that regulates and controls the market in function of the interests of the society.
“The socialist state enterprise is the principal subject in the national economy. It possesses autonomy in its administration and management; it plays the principal role in the production of goods and services and complies with its social responsibilities.
“The concentration of property in non-state natural persons and legal entities is regulated by the state, which ensures an increasingly just redistribution of wealth with the end of maintaining limits in accordance with the socialist values of equity and social justice.”
Cuban socialism, therefore, is guided by a consensual political will. It is characterized by a constitutional mandate for space for private property in the economy, with state-owned enterprises being the predominant sector, and with the economy controlled and regulated by a people’s state in accordance with the needs of the society.
The Cuban Constitution has not been imposed on the people. It was initially proposed by the Party, and it was developed on the base of a constitutional assembly formed by the entire people, plus a series of commissions in the National Assembly of People’s Power and a final referendum of the people in 2019. See “Participatory democracy in Cuba: The 2018 constitutional assembly formed by an entire people,” September 10, 2021.
On the foundation of the political will defined by the Cuban Constitution, the Cuban government and the Party have put forth and are implementing at the present time a plan that gives priority to increasing agricultural and industrial production for both domestic consumption and exportation, in accordance with principles formulated by the Cuban Constitution. See “Realist pragmatism in socialist Cuba: Cuba’s socialist-oriented mixed economy under state direction,” July 29, 2022.
Lage maintains that Cuban leaders and intellectuals must continue to seek to understand the geopolitical restrictions placed on the Cuban economy, while at the same time, continuing to creatively seek understanding of the unique opportunities for Cuba to construct an economy of social justice and prosperity connected to the world economy. They must continue to elaborate and conceptualize alternatives that transcend capitalism and that have practical possibilities for functioning in the current context of a world economy that is still capitalist.
This process, I would note, is illustrated by BioCubaFarma, a dynamic state enterprise that seeks to find markets for pharmaceutical products developed by Cuban socialist research and health institutions, marketing them in a capitalist world-economy that is increasingly evolving to pluripolarity.
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