Cuba in the 1960s:

Bureaucrats head to 'communism' without the workers

by Mark, Detroit, in CV #17, April 20, 1998


One of the major controversies among left-wing activists today is what attitude to take to the Castro regime and the type of society it built in Cuba. Undoubtedly, the 1959 overthrow of the brutal, U.S.-backed Batista regime was a great victory for the Cuban masses. In the wake of this triumph, a series of social reforms benefiting the downtrodden were carried out by the new regime. Within a couple of years, the new government nationalized U.S. and other foreign capitalist companies as well as the large businesses of the Cuban bourgeoisie. Castro, who had come to power under the banner of merely reforming Cuban capitalism, suddenly announced he was taking Cuba on the road to communism.

Since then, many left-wing trends have considered support for the Castro regime an article of faith. They see the last four decades as basically a continuation of the revolutionary process in Cuba. With the collapse of the Soviet Union and the degeneration of China into open tyranny and market capitalism, there are those who cling to Cuba as the genuine model of socialism which has avoided the pitfalls of the other allegedly "communist" countries. Others criticize Castro policies in varying degrees, but hold on to the view that Cuba is still a "workers' state" of some kind or at least "anti-imperialist". Among those who hold this sort of position are the pseudo-Marxist trends who traditionally identified with the Soviet revisionist system and nearly all the Trotskyist groups.(1)

But however comforting it may be to think that the flame of revolution still burns brightly in Cuba or that Cuba has found the way to the communist future, this analysis will not stand scrutiny. In a series of articles, Communist Voice has detailed how the Cuban revolution died long ago.(2) In its wake, a new sort of class tyranny was erected in which the existence of state property did not signify the building of socialism but state-capitalism. The new ruling class was not the private owners of the past, but the top party and state bureaucrats. The main means of production were controlled by this new elite while the masses had no say in how the system operated. While state property dominated, real accounting and control by the working people was never established. Thus beneath the veneer of a planned economy, the anarchy of production typical of capitalism reigned. Private interest reasserted itself in the state sector as each enterprises' success depended on its own financial health instead of how well it served a social plan. As the enterprise managers and the party/state leaders were de facto owners of the economy, it followed that they should see fit to help themselves to a relatively luxurious lifestyle by appropriating a portion of the wealth created by the toilers.

Far from breaking the mold of the corrupt revisionist (phony Marxist) path that led to the debacles in the Soviet Union and Eastern Europe, Cuba too has seen its revolution evolve into state-capitalism, and its state-capitalism evolve toward private capitalism. This process was accelerated by the collapse of Soviet "socialism" which long ago had established its state capitalist system which largely provided the model for the Cuban system and on whose aid and economic ties Cuba had been dependent. More and more, Cuban enterprises are evolving into the more standard capitalist forms, e.g., the creation of corporations legally controlled by small groups of the elite, a major influx of foreign capitalist corporations and the ability of them to buy up Cuban enterprises, and increasing room for the creation of small private businesses.

What attitude one takes toward the so-called Cuban "communist" path is an important matter for all those who are sincerely interested in the fate of the Cuban workers. Their revolutionary future can only proceed through a struggle against the Castroite rulers and the re-establishment of a genuine Marxist-Leninist trend. But the importance of this critique extends beyond the situation in Cuba. Examining how the Cuban revisionist economy and social structure functioned helps uncover the basic patterns common to revisionist state-capitalism in the Soviet Union (since Stalin's reign), China, and elsewhere. The general issue at stake is what does and does not constitute a Marxist conception of the transition period from the revolutionary overthrow of capitalism to the attainment of classless, communist society. Thus, the question of whether Cuba is state-capitalist or really a revolutionary society is not a minor quibble, but a important dividing line between genuine communism and its counterfeit.

I: How was production organized

Petty-bourgeois revolutionary leaders nationalize much of the economy

In previous articles we have chronicled how in the 1970s, the Castro regime built up a state-capitalist order based in large part on the type of capitalist market reforms that were being pushed by the Soviet revisionists at that time. This system has been the basis for the evolution of Cuban state-capitalism toward private capitalism that is still ongoing. Here we will look at some of the major features of how the Cuban system developed in the period leading up to the 70s.

The program that carried Castro and the July 26 Movement which he led to power at the end of the 1950s did not go beyond capitalism. It aimed at such things as turning more land over to small farmers, providing certain social programs, ending Batista-style tyranny and corruption, diversifying from sugar dependence and fostering domestic Cuban business, and getting a better deal in relations with the U.S. Initially it had the support of some sections of the Cuban bourgeoisie, and even the U.S. government had hopes that it might reach an accommodation with it. In its social content this was a bourgeois-democratic revolution and its main leadership was a radical section of the petty-bourgeoisie.

The nature of the revolution as described by Castro in his April 24, 1959 speech in New York City's Central Park included the following points:

Despite the non-socialist nature of this program, it was carried out in a resolute manner that stepped on the toes of U.S. interests and incurred the wrath of a large sections of the Cuban bourgeoisie, including those bourgeois who were previously in an alliance with Castro. In the course of this conflict, the new, young Cuban regime wound up nationalizing the imperialist enterprises operating in Cuba as well as the larger Cuban industrial facilities and farms. Thus within a couple of years the Castro regime had created a very large state-economic sector. For its part, U.S. imperialism attempted to bully Cuba through an economic embargo and topple the regime with the infamous Bay of Pigs invasion.

The imperialist efforts to strangle Cuba caused many problems for the new regime. But as we shall see, various of the ills that have beset Cuba for the last four decades cannot simply be attributed to the U.S. embargo. The policy of the Castro regime must also be exposed. Supporters of the Castro regime often try to portray criticism of the regime as simply U.S. government or right-wing "gusano" propaganda. But in fact this article relies a good deal on information from sources who have been generally sympathetic to the regime and even the views of top Cuban leaders.

Having nationalized the larger capitalist businesses and having initiated strong economic ties with the Soviet and Eastern European revisionist regimes, by 1961 Castro claimed that he was really a "Marxist-Leninist" and Cuba was going to be a communist country. However, in reality the Cuban regime's sudden transformation was not ushering in socialism, but amounted to the grafting of the theory and practice of Soviet state-capitalism onto the previous petty-bourgeois radicalism. Indeed, it was typical of the petty-bourgeois attitude toward the masses that the regime could announce it was socialist without bothering to have first let the masses in on this little secret! For the Castroite rulers, their allegedly socialist society was something that they could build even if the workers had not really been prepared for it or had any say in the matter.

How did production in the state economy operate?

Though the Cuban leadership had nationalized much of the means of production, this does not prove that it was on the road to socialism. True, Marxism holds that to achieve socialism, the former capitalist property must stepwise become state property. But Marxism also holds that the existence of state property in and of itself does not mean that society as a whole directs production, and it is just such social control of production which is the basis of socialism. In light of this, and the history of four decades since the revolution, it is clear that the nationalization carried out by the Castro regime proved not to be a component of a transition to socialism. One must look beyond the mere fact of nationalization and see how the state sector actually operated.

In the 1960s, there was a strong tendency among the new Cuban rulers to imagine that within a few years the country would be at the doorstep of classless communist society. The idea that Cuba was on the verge of communism became the official banner of the Castro government particularly in the late 60s. One of the factors that apparently gave rise to this idea was that in form, large numbers of individual workplaces were considered to be mere departments of one huge enterprise. This was part of what became known as the budgetary-finance system. But despite government decrees that gave the appearance of societal control of production, something else was going on. The budgetary-finance system was not the product of the step-by-step development of conscious control of the enterprises and the central bodies by the masses. Rather, it was initially established as the regime's response to suddenly finding itself in control of a lot of nationalized enterprises, many of which lacked funds of their own and/or any competent managers. The emergency measures may have been necessary, but the regime's painting of this as something approaching communism was creating an illusion.

What was actually going on in the economy was a million miles from communism. Overall planning was largely a fiction despite the existence of central economic bodies apparently in control of everything. Enterprises that were supposed to be behaving as parts of a single firm commonly acted as if they hardly knew each other.

One example of this is that individual firms tended to "max out" their budgets with little regard for how this would affect the central financing institution which supplied all the funds for their production and that of all the other enterprises covered by the budgetary finance system (all funds acquired by the firm for its goods/services were deposited in the central fund). Production targets might be reached by some firms, but such inefficient use of resources was bound to sap the ability of the economy to increase or even maintain its output of goods and services. According to the president of the National Bank at the time, "In 1961, 1962 and 1963, the State budget was in deficit. During the same three years, the budgetary enterprises stopped contributing substantial amounts to the budget. . . ."(4)

Compounding the problems of replenishing the central fund was that the managements often never bothered to pay or collect in transactions between their firms. Presumably, firms that did not pay could accumulate more funds for themselves. Meanwhile, the unpaid firm was still guaranteed its financing from the central funds. This problem was so rampant that special legislation (Law 1007) was passed to punish offenders. It apparently had little effect however as the National Bank president reported "an average of 20 thousand infractions per week for a value of $20 million [pesos]."(5) The Bank president was part of a section of the Cuban leadership that became disgruntled with the budget-finance system and contended that if only enterprises were self-financing, such problems wouldn't exist. The "self-finance" system was sanctioned for the agricultural and foreign trade sectors in 1962. But the Bank president had to concede that the initial results showed that the self-financing enterprises had an even worse record of violating Law 1007 than the budgetary finance system. In fact, since the 1970s the self-financing system has been dominant in Cuba. But as has been chronicled in previous articles in CV, far from overcoming economic anarchy it has led to ever-greater strength of private interests and anarchy of production.

The problems that arose under the budget-finance system do not mean the idea of having the economy operate as a single entity is wrong as its accomplishment is necessary for a fully socialist economy. Nor can it be precluded that the concessions to capitalist methods inherent in a "self-financing"-type system could be a temporary phase in a transition to socialism. What the failure of both systems in Cuba indicates is that if the workers are not actually developing their ability to run and control the economy, no form of economic organization will convert state property into really socialized property.

Another widespread problem was the accumulation of unused raw materials and machinery as well as unpurchased consumer goods. For instance, Cuban President Dorticos complained in 1966 about the "enormous quantity of iron that waits for the Greek calends in warehouses that cost foreign exchange but have no use to our economy . . ." The phenomenon of unused industrial resources was taking place in a situation where generally there was a problem of shortages of material and machinery for industry. In June, 1964 a Cuban official reported that the "excess capacity" in light industries producing consumer goods had reached over $84 million per year. Part of the problem was that the enterprises were trying to meet quantity and cost goals by producing shoddy goods. In one case the production cost of shoes was reduced by skimping on materials to the point that their average life was reduced from a year to three months. Such practices led to consumers refusing to buy them, leading to the growing inventories.(6)

The examples of economic chaos mentioned above were symptomatic of a general inability to establish economic accounting and control in the 60s. An author sympathetic to the Cuban revolution describes the situation as follows:

"Yet, effective planning and economic controls are particularly weak in Cuba. The virtual elimination of financial controls having increased reliance on record-keeping and centralized decision-making, planning depends heavily on accurate information and on managers capable of translating this information into rational decisions. But managers make little use of the data they collect and frequently know little about the financial operation of their enterprise. . . . The fragile planning system is further undermined by 'overcommitment' of resources and the uncertainty of foreign supplies. The inevitable has occurred: First, shortages and bottlenecks have reduced industrial capacity and worker productivity; second, the decision-making process has been plagued by bureaucracy, so much so that a parallel planning apparatus that bypasses the existing bureaucratic structure has been created to ensure the fulfillment of urgent strategic goals (this special apparatus is under Fidel's personal direction). . . ."(7)

It's notable in this description that Fidel Castro's idea of dealing with the economic anarchy was to set up his own personal power structure to carry out some emergency measures. This did nothing to solve the underlying problems however. Indeed, what the quote above politely calls Fidel's efforts "to ensure the fulfillment of urgent strategic goals" in the 60s were themselves a fiasco which accelerated the anarchic tendencies. By 1970 Fidel had to confess the failure of his measures in the late 60s. We shall look more at these measures soon, but for our purposes here it is enough to note that the need for Castro's special apparatus was another indicator of the rampant disorder in the economy.

Stagnation of production

The disorganization in the economy naturally had a big negative effect on production. In the first two or three years after the Castro regime took power, there was a dramatic improvement in the conditions of the masses. This was possible not only because there was redistribution of the wealth from the old society that was used to reduce the gross inequities of the past but because there was an increase in material production due to the use of formerly idle farm land, the employment of large numbers of formerly idle workers and other reasons. But the rest of the decade basically saw economic stagnation. The last half of the 60s saw hardly any growth in total Gross Domestic Production, and the per capita GDP in 1970 apparently dipped below what it was in 1960.(8) Writers familiar with the situation at the time report major declines in output per worker in the first part of the 60s.(9) This problem persisted in the later 60s as well. The chronic shortages of consumer goods led to the flourishing of the black market, with all its attendant profiteering.

Sudden expropriation of petty businesses

 Despite the great problems encountered in organizing the larger enterprises into the state sector, in 1968 the Castro regime suddenly decided to expropriate about 55,000 tiny businesses such as food sellers, restaurants, artisans and various services. The transition to socialism involves overcoming petty production. But in this case, the state was in no position to provide suitable replacements for the goods and services they provided. Moreover, a genuine Marxist-Leninist policy toward these small businesspeople would not consider them en masse as enemies, but seek to find various ways to encourage them to combine their resources in cooperatives which would eventually prepare them for a transition to state property.

Reliance on sugar exports, Soviet state-capitalism and the world market

The Castro regime's decision to give up on breaking Cuba's dependence on sugar exports also played havoc with the economy. Reliance on the ups and downs of the world sugar market had been one of the major features of Cuba before the revolution, and its overwhelming dependence on sugar exports was a major factor cementing the domination of U.S. imperialism. The U.S. not only owned a good deal of the sugar facilities in Cuba, but Cuba relied on being able to export to the U.S. market and relied heavily on U.S. imports for everything else.

The original goals of the revolution included more diversification of the Cuban economy and less dependence on the U.S., and when the U.S. businesses were expropriated and the U.S.imposed its embargo on Cuba in the early 60s, the issue of dependence on the U.S.ended. This of course did not mean that U.S. imperialism ceased to have an impact on Cuba. The U.S.embargo created a lot of difficulties for the Cuban economy, which had relied on U.S. trade and equipment for industry. The U.S. embargo also made trade harder with other countries. In the first couple of years in the 60s there was an attempt to develop domestic industries to produce a number of goods that used to be imported. As well, the regime sought more diversity in agriculture and less emphasis on sugar.

This path was abandoned in 1963 however. The Castro regime had been banking on the phony "socialist" countries of the Soviet Union and Eastern Europe to supply it with oil, equipment and plants. They imagined that within a few years these imports would allow them to carry out a big leap in industrial development. These countries were not operating on the basis of revolutionary solidarity, however, and there was a heavy price to pay for economic cooperation with them. The Soviet revisionists demanded repayment in sugar, and they used their economic leverage to push their own economic prescriptions on Cuba and subordinate its foreign policy to their own ambitions to undermine the "threat" of revolutions so as to reach accommodation with Western capitalism. Castro and Che periodically expressed irritation with the Soviet revisionists, but never broke with the policy of reliance on them. Thus, the U.S. imperialist domination was swept out but was replaced by imperialist pressure of a new type. And thus Castro and co. began to place ever-greater emphasis on sugar.

Meanwhile, Cuba's still extensive trade with the Western capitalist countries (excluding the U.S.) continued to be overwhelmingly based on sugar exports. Before the revolution, a downturn in sugar prices could set the economy into a tailspin. Under Castro, Cuba remained at the mercy of the world sugar market. Nevertheless, Castro ignored the peril and threw more and more resources into the efforts to reach a huge increase in sugar production, the famous goal of the 10 million-ton sugar harvest in 1970. In fact the 1970 harvest fell well short of this goal despite enormous amounts of labor and resources thrown into the effort. As well, world sugar prices collapsed, plunging below the cost or production in 1968 and "rebounding" in 1970 to only less than half of what they had been in 1963.10

Castro's scheme was a disaster. Not only did the windfall of funds from sugar sales fail to materialize, but orienting everything toward producing sugar took a heavy toll on other sectors of the economy. This resulted in exacerbating the shortages of basic necessities for the masses. For example, the increased planting of sugar and other export crops was at the expense of needed food crops for the Cuban population.

This scheme also played havoc with whatever planning existed in the economy. As one after another emergency measure was pushed to see the big sugar drive through, planning, record-keeping and any open discussion of economic policy went by the wayside.

II: Beneath the appearance of "communist distribution"

Did communist distribution exist?

By the late 60s, the Cuban party and state officials adopted a number of policies which they portrayed as "communist", distinguishing them from the lower stage of communism often called "socialism." The Castro regime's policies only bore a superficial resemblance to "communism" however. Such was the case with the diminishing role of money economy, so-called "voluntary labor" and communist methods of distribution of societal production. Given the state of anarchy in production and the inability to overcome general scarcity, there was no way that distribution could actually proceed along communist lines.

A system of communist distribution means that everyone works to their ability for the good of society without concern for direct compensation while everyone is free to draw from social production whatever they need. In such a system, work is voluntary because an individual's living conditions have nothing to do with the amount of work they contribute, as they still must in the socialist stage. But such a distribution system can not be imposed without proper conditions. It requires such things as that society is able to produce in great abundance and that its members have freed themselves from the habit that was imposed upon them under capitalism of expecting compensation for every minute worked. Such conditions did not exist in Cuba.

True, even in a society that is still early on in the transition to a fully socialist economy, there will be instances of workers spontaneously working gratis for the good of society, and these instances of working in a communist way should be encouraged. Undoubtedly many Cubans and foreign activists who came to Cuba in the 60s to participate in production brigades were inspired by revolutionary motives. But the "voluntary labor" in Cuba soon became largely compulsory measures or was basically compensated civilian or military labor shifted from their former employment to some emergency project, mainly the ill-fated attempt to achieve the giant sugar harvest. At the same time as the masses were coerced into accepting longer working hours and more deprivations, such "moral incentives" didn't apply to the bureaucratic elite who lived in relative splendor.(11) Insofar as there was equality in distribution, it manifested itself only in a ration system of meager consumer goods for the workers. The workers wound up subverting the "voluntary labor" of the late 60s, hastening its collapse.

Thus, the problem was not merely that non-communist measures were painted in communist colors. Nor was it that a better policy would have been able to reach the higher stage of communism in short order. The problem was that the allegedly "communist" policies of the time widened the antagonism between the new elite and the working people. As has been documented in other CV articles, although the regime retreated from these policies in the 70s, they never overcame this antagonism and their reforms cemented a system of state-capitalism.

Pseudo-"voluntary" labor

The Cuban regime painted a false picture of what was going on under the banner of "voluntary labor." For instance, in 1968 the ruling party newspaper Granma reported that some 170,061 workers had renounced overtime pay and therefore had elevated themselves to the status of "communist workers". But the same article also reports that in return for eliminating overtime pay the regime offered social security payments of 100 percent of wages, a considerable material incentive.(12) In the earlier 60s (about 1962-1966) various "emulation" campaigns were organized that, according to the Cuban officialdom, reflected voluntary labor and rejected "private gain" in favor of "emulation for the sake of increasing the output of the community."(13) Actually, however, coercion was often used in getting workers to "volunteer", and there were material rewards that involved such things as individual and production unit level cash awards, vacations and the possibility of procuring scarce consumer goods.(14) After 1966 the regime laid less emphasis on cash bonuses in favor of consumer goods. Thus, such labor was not "voluntary", but a way for certain workers to get a bit more than was possible through the paltry rations system.

A good deal of the mobilization from urban areas for the sugar harvests of the late 60s does not really seem to have much in common with working in a communist way. According to Rene Dumont, "when these city dwellers spend several weeks going from place to place, they retain their regular salary, which is significantly higher than that of the agricultural workers." Dumont and others point to the low productivity of these "volunteer" cane cutters as also casting doubt as to their voluntary nature.(15) The generally low productivity of what was called volunteer labor presents a problem. Part of working in a communist way involves achieving high levels of productivity. But much of the labor in the "voluntary" sugar harvests was not very productive and tended to be a drain on economic development.

Dumont also personally examined the "Isle of Youth", a large-scale colony to develop the Isle of Pines off the southeast coast as a citrus fruit and cattle-producing area. This project was highly-touted by the Cuban government as "the first vanguard of communism in Cuba." But actually, Dumont describes a situation where the permanent labor force is party soldiers assigned there whose work was notably unenthusiastic and civilian workers who worked like "a very average civil servant" devoid of revolutionary consciousness.

Workers subvert the regime's policy

While the masses were exhorted to work ever harder, the regime's promises of relief from austere rations never materialized. There was no starvation, but by the end of the 1960s food shortages were as bad as in 1962. Waiting in long lines for basic consumer goods that arrived in short supply was a chronic problem. The shortages fed the creation of an extensive black market where distribution was along naked capitalist lines, i.e., according to who had the most money. Scarcity greatly impacted work habits, too. Once workers had put in enough hours to pay for their allotment of rations, there was nothing for their wages to purchase, save for the black market whose items were often too-high priced for these workers to afford. This discouraged workers from exerting themselves beyond what was necessary to get the basic rations. Besides low productivity, absenteeism became a widescale method of subversion of the government's policy. In 1970 daily absentee rates hit 20-29% in several regions and reached over 50% in August 1970 in Oriente province. In 1969, Jorge Risquet, Cuban Minister of Labor confirmed this revolt of the workers, complaining that "undisciplined work, absenteeism and negligence in working are increasing phenomena. . . ."(16)

The military substitutes for "voluntary labor"

In order to deal with the fact that the "voluntary labor" plans just weren't working, Castro decided that it was necessary to bring in the military to carry out his production plans. There's nothing necessarily amiss about the army taking part in production in a society moving toward socialism. But here we're talking about the military running key economic sectors and the forced militarization of labor. Certainly such a policy has nothing in common with voluntary labor, and the increasing reliance on it toward the end of the 60s reflects the failure of government production plans, including those dependent on voluntary labor at the time. Indeed, recourse to the army betrayed a lack of faith in developing worker control and accounting in general. Not only were military brigades assigned to push the work through, but by the end of the 60s, the army officers actually replaced the civilian management structure. Thus, agricultural workers were sort of unofficially inducted into the army to see that discipline was enforced. This emergency measure did not solve the problem of agricultural efficiency however. The military proved to be inept in agricultural matters. Nor could they stop the growing disdain of the workers for the whole state of affairs.

In 1970, Castro confessed to the failure of the policies of the late 60s. An economic program borrowing heavily from the market socialism then in vogue in the Soviet Union was then promoted by the ruling bureaucracy.

III: "Socialism" without revolutionary working-class organization

The brief look at the economy above brings out the fact that the construction of a socialist order is impossible without the revolutionary initiative of the workers asserting itself in running the society and organizing the new economic system. But Castro and the Cuban leadership were not oriented toward building a revolutionary workers trend either before or after taking power. Undoubtedly the regime carried out any number of measures that the workers liked and established extensive social programs that prevented the extremes of poverty commonly seen in capitalist countries. But deprived of their own proletarian class organization, the workers were only mobilized to follow the orders from the new elite, not take matters into their own hands. To this day, the institutions of power in Cuba have never facilitated the ability of the workers to run society. Castro has declared himself a Marxist-Leninist a million times since taking power, but there can be no Marxist society if there is no workers' state, and there can be no workers' state if there are no means for the workers' will to manifest itself.

The history of the Cuban leadership from the period of the struggle to topple Batista through the 1960s confirms that they never saw the working class in the role of masters of the new society, but as mere recipients of whatever plans the new petty-bourgeois elite had in mind. As mentioned earlier, the program under which the July 26 Movement came to power did not go beyond a reformed capitalism carried out through revolutionary means. It had no socialist perspective although it did envision significant state intervention in the economy, which however, did not distinguish it from many bourgeois development plans in the third world at the time. Nor did the July 26 Movement see any particular significance to establishing itself among the workers. The July 26 Movement did eventually establish something of a base among a section of the peasantry, although the program on which it established itself among the peasants prior to taking power was not that radical. The idea of organizing guerrilla bands in the countryside was not because the July 26th Movement had deep roots in the peasant movement or had a strategy of a massive peasant uprising, but because it was thought to be advantageous from a military standpoint.

The urban movement that was linked to Castro's guerrillas in the mountains had its activist base among the students and other elements of the middle strata. These students had some links with the urban workers but their idea of mobilizing the workers went no farther than the needs of the moment of the petty-bourgeois leadership. The urban movement connected to the July 26 Movement was by no means orienting the workers to think beyond the reforms its program offered; its program was tailored to court a section of the reformist bourgeoisie that was part of the July 26 coalition.

Meanwhile, the state of class organization of the workers was not strong enough to challenge the petty-bourgeois leadership. The rural workforce that was at least partially employed as wage labor was very large in Cuba and was sympathetic to the revolution, but did not exhibit a particularly high level of mobilization. The urban workers participated in the 1957 general strike and were generally sympathetic to the struggle. But their movement was not strong enough to give rise to their own revolutionary class organizations. The PSP, the supposedly communist party, was under Soviet revisionist influence. They had strong ties to the workers but had a class collaborationist policy including a sordid history of wheeling and dealing with the hated Batista. The PSP at first stood against the revolutionary struggle although it eventually joined in towards the end. The orientation of the July 26 Movement plus the lack of a powerful independent revolutionary workers' trend meant that the workers' movement would be subordinated to the wishes of the petty-bourgeoisie in the Cuban revolution.

After coming to power, the Castroite leadership decided supposedly to embark on the road to socialism. But they retained their petty-bourgeois attitude toward the workers. Castro boasted of how clever it was to not tell the world that he (allegedly) all along planned to establish socialism in Cuba. Such an outlook is only possible if one imagines that socialism is something bequeathed to the masses like a royal proclamation rather than the product of the revolutionary initiative and organization of a particular class.

Part of the Castroite leadership's posture as Marxism-Leninists involved a several-years-long process of setting up the Communist Party of Cuba, which was founded in 1965. Unlike a real communist party, this party was not the voice and organizer of a revolutionary workers' movement. Its main purpose was merging together, under the domination of Castro's faction, the Revolutionary Directorate (the urban-based organization linked to the July 26th Movement), the PSP and Castro's July 26th Movement. Thus, the so-called workers' party was fashioned by the cobbling together of various petty-bourgeois trends. Mass organizations were founded, but as they were under the control of this phony "communist" party, there was no chance for them to be a real voice of the masses.(17) The lack of democracy for the workers was also reflected in the lack of power of the rank-and-file members of the Communist Party. One manifestation of this was the fact that the first party congress was not held until 17 years after the Castroite leaders came to power.

Some may argue that it's possible for non-Marxist radical trends to shed their former views and become real communists. That's possible, but it's not what happened in this case. Indeed, the founding of the Cuban Communist Party comes at a time when Castro, Che and other Cuban leaders were spreading a series of theories internationally belittling the need for workers' revolutionary organization in general, and communist parties in particular. While the Cuban leaders now justified their measures with Marxist-sounding phrases, they did not take Marxist theory seriously. They produced fanciful tales about the alleged "proletarian ideology" of the July 26 guerrilla bands and even disparaged the theoretical struggle in general.(18) The Cuban leaders reconciled the apparent contradiction between founding their own communist party and belittling the party concept by pretending that all the functions of a communist party could by achieved by the guerrilla military organization. This is not a Marxist theory, but it does shed light on what actually happened in Cuba where the petty-bourgeois leadership of a guerrilla organization took on the trappings of a workers' political party.

Despite adopting certain Marxist-looking appearances, the Castroite leaders had no more a notion of developing worker control of society after they took power than when Castro was openly disavowing communism. The 60s was notable for the regime's supposed concern with relying on the consciousness of the workers. But in practice, they tried to impose their schemes without regard for the level of consciousness of the workers and without much concern over the fact that the state institutions and mass organizations were not subject to the workers' will. The problem wasn't simply that the Cuban leadership made some mistakes. The building of a new revolutionary society is inevitably accompanied by errors. But here we have a case where the general orientation of the leadership was an obstacle to workers' rule and the rectification of mistakes.

IV: Che and the mid-60s debates

What were the debates about?

The policy pursued by the Castro regime took place amidst the well-known theoretical debates of the mid-60s. Though Castro himself basically abstained from this public debate it included many top Cuban leaders along with some prominent foreign leftists like Charles Bettelheim and Ernst Mandel. One side, led by Che Guevara, used supposedly Marxist arguments to justify the economic measures the regime took under the "budget-finance" system. The other side advanced pseudo-communist theories to show that the "self-finance" measures operating in the agricultural and foreign trade sectors were needed. As shown above and in previous CV articles on the subject, in practice the policies carried out under both systems were not moving Cuba toward socialism.

Nevertheless, these days a whole mythology has developed around the stand of Che in these debates. Since the 1970s, Cuba has generally followed the "self-finance" model which Che opposed. But that hasn't stopped the Castro regime from mounting a major campaign since the mid-80s to promote Che's views as the antidote to whatever ails the society he has ruled. In 1987, for instance, Cuban economist Carlos Tablada wrote a book entitled Che Guevara: Economics and Politics in the Transition to Socialism which touts Che's views as a mighty advance of communist theory in order to claim that Castro is adopting this true "communist" course of Che. The cynical nature of this campaign (which is still on) is shown by the fact that the more the talk of the allegedly communist views of Che, the more Castro has converted state property to private capitalist forms, the more the economy is banking on imperialist investment, and the more the privileged elite demand austerity for the masses.

But what about what Che actually said? Do his theories really offer a Marxist alternative to the problems that have plagued Cuba and other countries where state-capitalism has masqueraded under a socialist signboard? Che, like his opponents, could throw around communist-sounding phrases. As well, the framework of his opponents certainly deserved to be attacked as it was heavily influenced by the anti-Marxist views in fashion in the Soviet Union at the time. Che's opponents painted a false picture of the state-capitalist methods of the Soviet Union of the time as socialist. Under the pretense that in the transition to socialism it is not possible to immediately dispense with all the economic methods of capitalism, they pictured socialism as government limitations on a capitalist economy. But in reply Che failed to come to grips with the fact that although in appearances the measures he advocated looked socialist, the economy was not really operating in this manner. He expressed concern about the dangers that may arise from capitalist-type measures, but didn't take into account that certain conditions must be created before such measures can be dispensed with. This approach led him to insist that his policies were correct no matter how far the actual results of these policies diverged from what they were supposed to accomplish. In expressing this in theoretical terms, Che wound up with the idealist argument that if a measure he favored existed, then reality would, of necessity, conform to the goals of such measures.

Ignoring harsh realities

For instance, in Che's budget-finance system all the production units in the state sector were supposed to soon act as one centralized socialist enterprise. But when it was clear that this was not taking place, Che theorized that, by definition, this must be what was taking place, albeit with numerous difficulties.

Any real communist would agree with the goal of bringing the economy under centralized social control where commodity exchange and money cease to exist. But if the actual situation in the economy showed that the policies Che backed were not bringing this about and that instead crisis and economic anarchy were dominating the scene, then this is evidence that these policies are wrong. A correct communist policy is not merely stating high-minded goals, but finding the means to reach those goals. Che was hindered in doing this by his overall idealist and volunteerist approach. We have discussed in a previous article how this outlook manifested itself in Che's failed "focoist" strategy for creating revolutions.(19) This approach also appears in Che's theorizing on how the economy should be set up.

Che failed to seriously judge his budget-finance policies by how well they were achieving their proclaimed goals. Rather, he defended them with bogus general theories that stood the Marxist understanding of the relationship of ideas and the material conditions on their head. For example, in responding to the charge that policies supported by Che did not take into account the conditions then existing in Cuba, Che replies, "To think that legal ownership or, more properly, the superstructure of a particular State at a given time has been imposed despite the realities of the relationships of production is to deny precisely the determination on which he [Charles Bettelheim -- Mk.] relied."(20) Che argues that since the economic base determines the superstructure (which includes government policy and the ideas of leaders such as Che), he must have a correct appraisal of the economic conditions. In contrast, Marxism holds that ideas are correct in so far as they conform to the material conditions. Che converts this into the view that it is impossible for a government policy to not be based on economic reality. Marxism holds that government policies are not accidents, but rather can be explained by economic conditions. But even though one could find an explanation for Che's policies (and his opponents) in certain material conditions, this by no means proves Che understood the material conditions or that his policies were bound to achieve their proclaimed goals.

Time and again Che argued that since budget-finance measures he liked existed, that fact itself proved they were helping the Cuban economy advance to socialism. Thus Che chastised an opponent that questioning Che's policy was the same as denying that in general the state of the productive forces determines the relations of production. As Che put it: "To say that the consolidated enterprise [under which Che's budget-finance system grouped different production facilities and considered them as one entity -- Mk.] is an aberration is just about equivalent to saying that the Cuban Revolution is an aberration" and "that our present relationships of production do not correspond to the development of the productive forces, for which reason he [Charles Bettelheim -- Mk.] anticipates significant setbacks."(21) Here once again Che does not defend his preferred policies by demonstrating how they were achieving what they were supposed to, i.e., how well they took into account conditions, but by arguing that government policies he likes are necessarily in line with objective conditions. Of course, in some parts of the economy the opposition's "self-finance" system was operating. Yet somehow Che doesn't consider that this was proof of that system's viability.

Che's efforts to settle the issues of economic forms by such arguments are especially striking considering his own description of the economy. Che himself acknowledged the extensive nature of anarchic behavior going on underneath the legal designation of state enterprises as operating as one entity. He notes that a production facility "can never count on receiving supplies when they are needed" and "often receives raw materials for a different production process" which "leads to technological changes that increase direct costs, labor requirements, and, sometimes, investment needs." As well, "we have neither sufficient analytical capacity nor the capacity needed to collect data," "there is a scarcity of really qualified cadres at all levels" and "we can also cite the lack of a central planning body that would operate consistently." Thus, "the entire plan is often disrupted and may require frequent adjustments."(22)

Can capitalism arise from within the budget-finance system?

But despite Che's frankness, he sought to blow off the uncomfortable facts by insisting that since in his view the state sector should be one big enterprise, it was not possible for capitalist methods to arise there. For instance, Che could write that "we agree that, as yet, the State sector in no way constitutes a single large enterprise." Yet at the same time he held that the law of value and commodity exchange could not possibly arise within the state sector as long as legally all the enterprises were considered as one.

His reasoning was, did not Marx say that "In order to be a commodity, the product has to pass into the hands of a second party . . ."?(23) True, commodity exchange was forbidden by law in the budgetary finance system and thus the law of value "outlawed." But since in fact the production facilities did not operate anything like one entity, each production facility had to fend for itself. Thus, rather than acting in harmony, enterprises grabbed all the resources they could, failed to fulfill obligations toward each other, saved resources by cutting corners on quality, etc. Separate interests were banned, but separate interests arose anyway. So it seems there were all sorts of "second parties" within the state sector. Since scarcity and overall disorganization forced enterprises to fend for themselves, the legalities restricting the enterprise from so doing were becoming an empty signboard about to crumble altogether. In other words, the anarchy under the banner of "one enterprise" was creating conditions for the establishment of unplanned allocations and output of goods between enterprises in the state sector and between the state sector and the mass of individual consumers. If competing enterprises produce goods in conditions of anarchy, they will eventually be bound by the law of value and revive commodity exchange.

Che's arguments against material incentives

Che has also become well-known for arguing against mainly using material incentives as the workers' motive for producing and for relying primarily on uncompensated voluntary labor. He rightly pointed out that compensation according to work was a feature of capitalist distribution. But once again, while Che could proclaim a worthy goal of Marxism, he ignored the conditions necessary to achieve this goal. Marx taught that in order for voluntary labor to predominate, there would have to be a very high level of the development of the productive forces and social control of production. Marx noted that until such material conditions could be created, distribution according to the amount of work performed was inevitable.

Che himself acknowledged the state of disorder and weakness of the Cuban economy. But this didn't keep him from insisting that in the Cuba of the mid-60s, non-material incentives should be the main type used. His attitude toward material incentives was "we are unwilling to use them as the primary instrument of motivation" because "the predominance of material incentives . . .would retard the development of socialist morality."(24) It is no doubt true that in so far as direct material rewards are necessary, communist consciousness will be limited. But what Che ignored is that real social control of production and developing the productive forces creates the necessary conditions for ending distribution according to work. Under these conditions, the need for direct compensation will be undermined as more and more goods and services can be provided without regard for the amount of work each individual supplies to society. Che failed to see that recognizing the conditions necessary for communist methods of work and distribution to become dominant would not "retard" socialist morality. By the same token, attempting to impose measures on the workers without regard for the state of the economy and the level of the workers' consciousness definitely would retard the achievement of the goals that Che talked about.

Che advocated that revolutionary consciousness would allow Cuban society to base itself on non-material incentives. But the consciousness he was talking about was not the actual consciousness that existed, but the consciousness that Che wished existed. As we have seen, the masses were not willing to work in a highly productive manner while there was no relief from austerity. Thus, the more the Castro regime pushed "voluntary labor," the more they had to rely on coercion, eventually ending up with semi-military regimentation of labor. This doesn't mean that the masses were devoid of revolutionary sentiment. However as Marx pointed out, even when the workers are conscious enough to carry out a socialist revolution, this does not mean that they are ready to jettison all the habits acquired under capitalism, or that the new society will quickly create all the material prerequisites to establish all the features of the higher stage of communism.

In the Cuban revolution, the workers never even ascended to power. For all Che's talk about relying on the workers' consciousness, Che, like the Castroite leadership in general, disregarded it. They came to power without any declared perspective of socialism and without paying attention to organizing a revolutionary workers' trend. They were little concerned with providing any real power to the workers after the revolution either. Che did not concern himself with such retarding of the workers' consciousness.

. While Che lashed out at those who would rely on material incentives, as a top minister running the Cuban economy, he did not do away with material incentives. In fact, a strong case can be made that he relied on them. He supported a variety of material penalties to workers who didn't make quotas. Meanwhile some of his measures that were lumped under the banner of voluntary labor were in fact coerced. As well, while some so-called "voluntary labor" did not involve direct material rewards to individuals, they did involve material group rewards for various production facilities or brigades. Today, some Castroites have claimed that this shows that really Che had a clear Marxist approach on this issue. Actually, it's another example of Che's theorizing clashing with certain realities even he was forced to reckon with.

Che's illusions in Soviet revisionism

Che's ideas on developing the Cuban economy also rested on unrealistic expectations about the aid that would be provided by the Soviet Union and its East European allies. Though Che did not like various features of these countries, he felt they were socialist, and that therefore they were obligated to sacrifice their own interests so as to help build up Cuban industry. He held that the Soviet bloc should "develop trade formulas that permit the financing of industrial investments in developing countries even though this contravenes the price system prevailing in the capitalist world market. This would allow the entire socialist camp to progress more evenly . . ."(25) But Che's hopes that this aid would be based on revolutionary solidarity quickly showed themselves to be false. For a few years, the Soviet Union exported more to Cuba than it got back in return, presumably as Che would have wanted it. But then the Soviet Union's tolerance for a burgeoning trade deficit ended. As chronicled earlier in this article, the Soviet Union not only wanted to be compensated for its "aid", it pressured the Cuban leaders away from their plans for diversifying the economy and back into Cuba's traditional lopsided reliance on sugar exports.

Che periodically complained about economic relations with the Soviet Union, but he never gave up his illusions in it. For example, in his February 1964 article "On the budgetary finance system", Che moaned about the general state of trade relations with the Soviet Union but also held that a new trade agreement between Cuba and the USSR was "in the spirit of proletarian internationalism."(26)

Che's unrealistic hopes in Soviet aid were connected to his confusion of the Soviet Union with a country building socialism. He saw some things going on in the Soviet Union which he did not like, but he did not grasp that the system developed by Stalin and the Soviet leaders that followed him was actually state-capitalism. He did not grasp that the Soviet revisionists were not interested in proletarian internationalism and that it was not an aberration that the Soviet foreign policy sacrificed the revolutionary struggles for the sake of big power wheeling and dealing with the Western imperialists. Indeed, while Che often used bitter words against others in the Cuban leadership who considered the 1960s economic system of the Soviet revisionists as a model to be followed, other times he denied that there was really any differences of principle between them because his rival's system "has proved that it yields practical results, and based on similar principles, both systems seek the same ends."(27) He had a similar attitude toward other revisionist systems. Che considered Yugoslavia under Tito a type of socialist system too, despite his objections to the pronounced capitalist-type methods employed in its so-called "self-administration socialism." He also considered the Maoist path in China to be socialist.

Guevarism: the left-sounding wing of Cuban revisionism

In what relation then, do Che's views on economic policy stand toward the course taken by the Castroite leadership as a whole? Che resigned his post as head of Cuban industrial development in 1965 and left Cuba for unsuccessful attempts at developing guerrilla struggles in the Congo and Bolivia, where in 1967 he met a tragic death. The circumstances and reasons of his departure from Cuba are the subject of much debate, but they do not change the fact that the theoretical legacy of Che represents no fundamental departure from Castro. True, Che cannot be blamed for each disastrous measure taken by Castro in the late 60s and later when Che was out of the picture. But Che's strong volunteerist tendencies helped create the climate for those measures. Che shared Castro's general faith in Soviet revisionism. They both had illusions about Soviet revisionist aid and considered the oppressive state-capitalist order there as socialism. Nor did Che challenge Castro's bureaucratic rule and denial of workers' democracy. Rather he was an enthusiastic supporter of Castro's methods. Che's theoretical legacy does not represent a Marxist alternative to the revisionist path taken in the former Soviet Union, but an admixture of petty-bourgeois radicalism and theories borrowed from the revisionist states. <>


(1)A number of Maoist groups consider Cuba to be "state-capitalist." But their defense of the model established in the Soviet Union from the 1930s until the rise of Khrushchov limits and undercuts this as Stalinist economic and political policy is at odds with Marxism-Leninism, and, in its essentials, not that different from Cuban revisionism. The section of Trotskyism that allied with Tony Cliff and the SWP of Britain also call Cuba, the Soviet Union, China, etc. state-capitalist. But Cliff's analysis that Stalinist state-capitalism overcame anarchy of production, succeeded in overall social planning, and that the continued existence of the profit-motive was only due to Russia's transactions in the external capitalist world does not accurately describe Soviet reality and paints it in near socialist colors. There are also some semi-anarchist ("Left communism," e.g.) and anarchist trends that consider Cuba state-capitalist by denying the necessity for a more or less lengthy period of transitional measures for new revolutionary society to establish real social control over production and eliminate the vestiges of the old capitalist society that continue to exist for a time.

(2)See listing following the end of this article on p.21.

(3)The Castro quotes are cited in the book Rene Dumont's book Is Cuba Socialist?, p. 15;Viking Press; 1974 edition.

(4)Silverman, Bertram Man and socialism in Cuba: the great debate; p.293; Atheneum; 1971.

(5)Ibid., p.292.

(6)Bernardo, Robert M.; The theory of moral incentives in Cuba; pp.111-112; University of Alabama Press; 1971.

(7)Silverman, p.22.

(8)Eckstein, Susan Eva; Back from the future: Cuba under Castro;, p.220; Princeton University Press; 1994.

(9)Bertram Silverman concluded from an interview in Cuba that "worker productivity may have declined by as much as 30 percent between 1962 and 1965." (See Man and Socialism in Cuba, p.8.) Rene Dumont, a French agricultural expert who traveled to Cuba several times as an advisor, reported that "productivity of an agricultural work day had decreased by about one-half" from 1958 to 1963. (See Is Cuba Socialist?, p.29.

(10)Eckstein, pp.39-40.

(11)Besides various other perks for high officials, various sources report official wage scales where the top bureaucrats make as much as eight to ten times as the large numbers of lower-paid workers during the 1960s. See, for instance, Robert M. Bernardo's The theory of moral incentives in Cuba, p.71 or Rene Dumont's Is Cuba Socialist?, p.58.

(12)Bernardo, p.78. It should be noted that Bernardo apparently considers this an example of "moral stimulation." Apparently, that's because for Bernardo, voluntary labor is defined in such a way as to become meaningless. He thinks it's voluntary labor even if "sanctions are used too, as part of that mechanism [of compliance for "voluntary labor" -- Mk.], such as the myriad difficulties of all kinds that the non-volunteer may encounter in the future. . . ." (p. 26) As well, he considers the mere fact that deprivations are suffered by the workers to show they do so "voluntarily". Also, he admits that what's often called "voluntary labor" in Cuba is hard to distinguish from simply being assigned to certain work by the authorities. (pp. 48-9)

(13)Bernardo, p.57.

(14)Bernardo, pp.62-63.

(15)Dumont, pp.68-69. Dumont does not expect that even the most highly-motivated city dwellers would attain the productivity of experienced cane cutters. But he points out that a good deal of city dwellers produce at a third of the rate or less than the section he considers real volunteers do.

(16)Dumont, p.113. Emphasis as in the original.

(17)For example, the top leadership of the Cuban trade unions were appointees of the Castro regime. At the local level there were elected representatives but they could not challenge the basic policy set at the top. Workers used the opportunity of the local elections to express their displeasure with their lot, throwing out three-quarters of the local leaders in 1966. See Eckstein's Back from the future, p.35.

(18)See the article "Che, the armed struggle, and revolutionary politics" in Communist Voice, vol.3, #3, Aug. 10, 1997.


(20)Silverman, p.104.

(21)Ibid., p.102.

(22)Ibid., pp.150-151.

(23)This and the previous quote are from Silverman, p.237.

(24)Silverman, pp.134-135.

(25)Ibid., p.143.

(26)Ibid., p.143.

(27)Ibid., pp.131-132.

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