The Soapbox View: Pulling Rug From Under Small Entrepreneur, Cuban Capitalism Pretends Protectionism Isn’t Big Business Disguised As Big Government All Over Again

The New York Times headline Cuba Hits Wall in 2-Year Push to Expand the Private Sector, as written By VICTORIA BURNETT from HAVANA, describes how nearly two years into the Cuban government’s economic overhaul by slashing public payrolls and bolstering private enterprise, reforms have slowed so much that many Cuban entrepreneurs and intellectuals question aging leadership’s ability or will to reshape one of the world’s last Communist systems by supposedly shifting nearly half of the island’s output into private hands.

Those waiting for any good news received the opposite last week as a little-advertised government decision spread that steep customs duties would be charged on informal imports, from Miami and elsewhere, that have been the lifeblood of many young businesses. Emilio Morales, president of the Miami-based Havana Consulting Group, said, “This could have a huge impact” as state-owned shops in Cuba were losing business to street vendors. “It shows the state isn’t ready to compete with the private sector.”

Nor should the Cuban government bother appearing to have held out this long trying to not completely betray why the revolution was fought for in the first place, if the country can only proceed as if owned by big business as the United States, Russia and China have by propping up huge business confederates while the small entrepreneur is left with nothing to stand on. Have New Yorkers ridden in owner operated taxi cabs in decades? (Ta da. 2017) It’s possible to even picture Mayor Bloomberg himself laughing about being realistic as to what capitalism has become. And really, he’s quite possibly the nicest guy you’d ever not meet. But do the underpaid Chinese really hope to run their own small shops as the small entrepreneurs of Cuba have tried to do? If in Cuba real grass-roots capitalism is driving state-run business out of business, then let it go. No, a country of citizens’ leverage and independence is what Americans don’t realize they’re no longer fighting for themselves, emulating the whining of some of exclusive corporate America that defines work as the ability to manipulate rather than share.

So in late 2010 after the Cuban government began allowing people to open businesses, nearly a quarter of a million opted to work for themselves over the past 20 months by opening restaurants, snack bars and makeshift shops. Driving taxis and fixing cellphones. Along with those who took advantage of an earlier experiment with privatization in the 1990s, about 387,000 Cubans, out of a population of about 11 million, are now self-employed. Cubans are also buying and selling homes and cars among themselves for the first time in 50 years. A head start on Miami’s Cuban automotive entrepreneurs who’re still waiting to take over the island before any reliable mass transportation system can take root because an obviously lazy backward government is too comfortable behind their desks to raise a hand and pitch in themselves.

But as the private sector has grown, so has the deluge of goods brought to Cuba each day in suitcases and duffel bags, principally from Panama, Ecuador, the United States and Spain because there’s no access to a wholesale market. Cubans turn to friends, relatives and so-called mules for everything from food to trinkets to iPhones. This, The Times refers to as “parallel trade” that has ballooned to more than $1 billion per year, Mr. Morales estimates, since the Obama administration began loosening restrictions on travel and remittances in 2009.

Yunilka Barrios said, “Things seem to be tightening up.” She sells sunglasses, hairbands, nail polish and glittery bra straps from a grimy, narrow doorway, and she was alarmed by the prospect of a 100 percent tax on informal imports that the government indicated go into effect in September.

Just as big government sanctioned business everywhere limits competition from small entrepreneurs, economists, businesspeople and diplomats believe President Raúl Castro is treading carefully because of resistance from midlevel functionaries reluctant to lose their perks, and conservative officials nervous about the social and political impact of economic enfranchisement.

As the face of the revolution, the Cuban leader, Raúl Castro has sworn off the “shock therapies” that ruptured the Soviet Union. Saying in a December speech that the government would proceed “without hurry or improvisation, working to overcome the old dogmatic mind-set and correcting any mistakes in a timely fashion.” Instead of realizing perhaps that there’s probably no one to trust so just let it go before big capital corners the country and small business never has a chance though it theoretically has had a two-year head-start. Because the pace of change has been too slow for people like Yelena López de la Paz, who went bust because of competition, lack of experience and low margins. Her snack bar opened on her block last July, and made about $100 profit the first month, selling pizzas, juice from her mother’s homegrown mangos and chewing gum sent by her grandmother in Miami. Then three snack bars nearby opened and by the time she closed in November, Ms. de la Paz was taking home a dollar a day. She said in frustration, “I was investing a lot of money and time and earning nothing.” Just wait until a Wal-Martishist institution starts selling cars to an island that could probably just as efficiently do without that saturation of their economy as the United States allowed to happen when streetcar transit was on the verge before Detroit replaced an already efficient mass-transit system with the overly large vehicle, bus. But that’s okay too as other sources of fuel have been found to economically run over how many more of the world’s innocent?

Experts say given Cuba’s lack of progress, the government’s pledge in April to move about 40 percent of the country’s output to the citizen sector in five years is less and less plausible. Carmelo Mesa-Lago, a Cuban-born professor emeritus at the University of Pittsburgh, said, “At the rate they are going, there is no way they will reach that figure.”

But with the National Assembly set to meet next Monday, Cubans are anticipating an expansion of the number of co-ops beyond the existing agricultural ones. Separately, the government is turning small, state businesses, including cafes and watch repair shops, over to employees in some provinces. It has lifted a $4 ceiling on the value of contracts between state entities and individuals and is subcontracting work, such as construction, to independent operators. “This is the first time since the 1970s or 1980s that the country has a plan, and this is the first time that there is discipline in implementing the strategy,” said Rafael Betancourt, an economist based in Havana.

Some who see change slow, remain confident it will happen. “It may be a little frustrating for a spectator,” said Philip Peters, a Cuba expert at theLexington Institute in Virginia, “but it’s not a five-alarm fire.”

But caution is at odds with Cubans’ urgent needs as Orlando Márquez Hidalgo, editor of the Catholic magazine Palabra Nueva, said recently that if workers laid off by the public sector failed to find other jobs, their “discontent and frustration” would grow, as would “the number of those who dissent or wish to leave. Time is vital,” he said.

Still the government claims to aim to trim state payrolls by 170,000 this year and add 240,000 private-sector jobs, which is a tough goal considering just 24,000 Cubans took out licenses for self-employment in the first five months of the year. A vice-president of the Council of State, Esteban Lazo Hernández, said in April that private-sector output would grow to between 40 percent and 45 percent of the gross national product in five years, from about 5 percent now.

And, of course, not all entrepreneurs are struggling. Some restaurants and taxi services are making profits. Carlos Saladrigas, a Cuban-American businessman, said during a Havana visit in March that he knew of people “making a lot of money, even by American standards.”

In interviews with the Times, a dozen Cuban entrepreneurs said they were making much more than they were in the public sector. However, supplies at state retail stores were expensive and unreliable and they often used the black market to cut their overhead.

The unidentified owner of a snack bar, describing illegal activity, said hamburger rolls are bought out of the back door of a state-run bakery and meat patties come from a friend who filched ground beef from his employer. One man selling hardware said most came from “Roberto,” a Cuban euphemism for stolen goods. Surely the well-tuned Cuban police and military apparatus is prepared to enter the criminal enterprise system themselves and skim profits from the top and bottom as it has the last fifty years of Cuban government independence from the people.

For Amarilis Albite Cabezas, a 23-year-old accounting student who runs a busy snack bar in her home in a Havana suburb, the restrictions stem from a continued distrust of individual wealth. That age-old distaste that was used to prevent small capitalism from getting an early foothold in the old Soviet Union. “They just haven’t gotten things organized,” said Ms. Albite, who gave up on a bank loan for a $700 refrigerator because she had to provide two guarantors, each of whom would have had to leave the full amount in escrow until her loan was repaid. She added, “They opened these businesses so that people could survive and so that they, too, would survive. But I don’t think anybody is getting rich. That would be, I don’t know, capitalism.” The farce of resentment of capitalism used to blame the poor for lack of opportunity and laziness. Strike up the violins.

For the moment, Ms. Barrios is happy in her doorway, taking home $10 to $15 on a good day, after she pays $2 to the neighbor who shares the entrance. She has cut prices to compete and frets about rumors the government may crack down on stalls in passages and entranceways. Cuban elitism that has more in common with big elitist finance all over the world than either sets of leveraged manipulators would ever willingly, publicly admit. As Ms. Barrios fished for change in a pouch at her waist, she said, “I just want to keep this going.”

Mail Online also documents a survey of Cuban progress while failing to have a contrived possible interview with Fidel Castro himself. Who unfortunately never woke up enough to share America’s partial fault for organized crime’s revenge for losing their elitist economic grip on the island.

As elitism’s pretending to genuinely care for the masses continues.

Boo!

7/17/2012

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Pulling Rug From Under Small Entrepreneur, Cuban Capitalism Pretends Protectionism Isn’t Big Business Diguised As Big Government All Over Again

7/17/2012 : As elitism’s pretending to genuinely care for the masses continues.

Boo!

December 27, 2017 - January 18, 2018

What The?

"Elitism’s pretending to genuinely care for the masses" is the most, theoretically, reactionary, leftish statement I've written. What compelled that statement, was the essay's theme of stifled lower-caste entrepreneurialism. Not exactly just Cuba's problem of their own making. Political positions just seem to be, un-relinquishable, cornered ones breeding an undiluted reactionary-ism all over the world. Convoluted but true.

Five-and-a-half years since Pulling Rug ... All Over Again, The Economist, September 30, 2017, headlined Clueless on Cuba economy. The communist regime can no longer rely on the generosity of its allies. It has no idea what to do. Still, the starting point's something?

It's possible that by trying to not be overwhelmed by other big business, the cracks are too huge for Cuba's political-economic elite not to fall through. Without framework to grasp, there's no big global story about reviving the Cuban Economy.

Presumably, the problem's about exact ownership. The gist that everything owned together is more equitable, is brilliant when working. Just as economic activity is preferable to planned privilege. But, still, yet again, questioning leadership's inability to adapt's a cliché. So common, The New York Times even frustratingly covered that aspect of international relations with the Crispin Sartwell political satire, History Totally Destroyed.

The Economist Cuba account, (The government “fights wealth, not poverty”, laments one entrepreneur.), includes ration books and poverty level salaries. By supposedly avoiding a ruthless economic transition, poverty's enforced, not faced. Unfulfilled socialism's regulating the economy at stifling proportions to maintain equal status. Unable to spread out everyone's "taste," to everyone's satisfaction, the government's sitting on their hands preventing economic-civil war AND facilitating stagnation. But, please don't give up and abandon the island to asphalted ecosystem destruction. Because phenomenal potential exists. Si?

Cuba doesn't have systematic agriculture, importing 80% of their food. If ever there were fertile soil for a New Economic Policy? NEP-istas should have Farmers' Markets. There's debt that's unsolvable till pushed to accepting bailouts from the competition. Of course, similar to North Korea's playing the socialist card, anti-communism shrouds the deliberations between the countries and economies. Pandering to embellished public perspective got us this far. Yet getting out of the quagmires, is the test.
The Economist piece ends conjecturing about Raul Castro's possible successor, who, while addressing the Communist Party, stated their biggest fear is U.S. domination. The world and U.S. can do better than that. Come on Cuba. Circulate money among yourselves.
To repeat: Either economic system, capitalism and socialism, fulfills the other's purpose, or each are wrong in that other way. Capitalism working is socialism. Socialism working, is capitalism. Takes a bunch of geniuses to pretend the riddle's not just nonsense? No, it shouldn't. Just requires the whole world's maturing. Not just one prima donna, though that fantasy exists, unfortunately.

Taking another poke at it, here, in the darkened light. It's holding off on the temporary tonic of asphalting the entire island so commerce can fluctuate that's holding Cuba back? The convenient shortcut's ready for implementation. China's step. How could Cuba be faulted for petroleum dependence? We are only three, two, one, generations away from what, poisoning the atmosphere a little too long? Anticipating unknown variables is preferred to depending on them. Perfecting the car's not really needing ourselves anymore? Anyway, the American President, no doubt, already holds this carrot in readiness.

Because the car's always meant economic growth? Especially since Cuba has no substantial fund for mass transportation. People are prone to over-inflating accomplishments. But look at Moscow's subways? That happened whole generations ago, when the yoke of an exploiting class was modified but reinstated as capitalism for some and duty for others. Free reality, Cuba. Make money before giving yourselves pay raises, just like America's Congress.

Getting there quicker in cars made sense. As was getting around whatever impediment's in the way. Even in the way of worshipping autos today? The only alternative, taxing them to the moon so the mobile thrones are properly paid for, when over-taxation is never good? But because people have been stuck seeing their mobile thrones, for generations, as their taste of the good life, piece of the pie.

What do you mean dangerous traffic isn't normal? Especially since smart cars will organize our lives? History's echoes reverberate. There's more to making fools of ourselves than settling the predicaments of our daily lives. Case Closed, most unfortunately.

Cuba, breathe.