Cuba -- A Failed Experiment

Cuba -- A Failed Experiment
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If you ever wondered what a country would look like after 50 years of total government economic controls, you need only to make a trip to Cuba, which I did last week. The history of Cuba is a story with endless political ramifications, both for those who stayed and those who left.

That's not my area of expertise. But the economic consequences of a 50-year, totalitarian, socialistic experiment in government are obvious today. Cuba is a beautiful country filled with many friendly people, who have lived in poverty and deprivation for decades. Socialism in its purest form simply didn't work there.

I was immediately reminded of that old saying: "Capitalism is the unequal distribution of wealth - but socialism is the equal distribution of poverty."

Once-magnificent buildings are literally crumbling, plaster falling and walls and stairways falling apart, as there are no ownership incentives to maintain them - or profit potential to incent their preservation. The populace is dependent on government for everything - education, health, food, and employment. But the economy is a mass of bureaucratic controls and permissions, stifling most economic growth in Cuba.

Tourism, until recently mostly from Europeans and Canadians, brings in some revenue, but not enough to run the country, or maintain its historic beauty. Yet the will of the people is evident as many do their best to grow small businesses and better their circumstances.

What Works, What Doesn't

The few things that shine in Havana are the many pre-1959 Chevrolets and Fords, lovingly maintained and used as money-making taxis by those "mini-capitalists" who own them. They are kept running by ingenuity, engine parts from other brands - and the pride of ownership, plus and the income they brings: as much as 30 CuCs per hour for a tourist ride.

(CuCs are the Cuban currency used by tourists which trade at a fixed exchange rate of 87 Cucs to 100 U.S. dollars, with the 13 percent discount collected by the government as a tax at government approved currency exchanges.)

Most people -- 70 percent of the population - including doctors and lawyers - work for the government, in guaranteed jobs. Cuba is well-known for its medical training system, and actually "exports" physicians to countries like Venezuela. Those jobs come after two years of compulsory national service (three for women), and for men, two years of military service.

One of the best jobs is in a cigar factory. Those workers earn more than most doctors and lawyers, who may earn about 60 CuCs per month. The cigar-makers earn about the same, but they also get to take home 5 cigars per day - and they work shorter hours, and get two months of vacation instead of the standard one month.

The "Revolucion" brought free education, free medical care, and jobs for all. But at what cost to the country?

Every Cuban gets a ration book and an assigned "bodega" in which to purchase the low-cost, subsidized food. The one I visited looked like an empty warehouse, with little on the shelves. If the rice, beans, eggs, and cooking oil are not in stock, the shopper must return the following week. Allowed five eggs per month, the basics barely cover a starvation existence. Their remaining small incomes are spent at produce markets where they buy additional meat and vegetables when available.

Hope for the Future

Yet, the spirit of entrepreneurship survives. The best places to eat are the restaurants in private homes, known as "paladars". There, in buildings that also house three generations of family (no one can afford to move out), the parlors and dining rooms have been turned into creative dining experiences. The proprietors source their food from the same local markets, so menus change daily depending on what is available. But the three course meals are delicious.

You are welcomed with a daiquiri or a mojito made with Cuban rum - and leave with their wishes that you will post a good rating on TripAdvisor! Though cellular access is expensive, you see a lot of smart phones - a strange contrast in cultures.

(Full disclosure: I traveled to Cuba with a gastronomic group led by the "Hungry Hound" - restaurant critic Steve Dolinsky (, who arranged the restaurant visits. And since I have spoken Spanish since childhood I was able to communicate with business owners and cab drivers - all who fear government repercussions.)

The "Revolucion"

The bloody 1959 "Revolucion" expropriated the assets of American companies and wealthy Cuban citizens. It threw out the Mafia-connected leader, Fulgencio Batista, who presided over corruption and gaming, allowing the wealthy to live privileged lives. American foreign and economic policy has never forgiven the brutal actions of Fidel Castro, his brother Raoul, and Che Guevara - heroes of the Revolution.

Leave it to history to decide whether their intentions were the best for their people - but the economic results of their 50-year rule have been abysmal. Cuba became a protectorate of the old Soviet Union (remember the Cuban missile crisis) -and that worked until the early 1990s, when the USSR fell apart.

No longer receiving aid from its protector, Cuba entered a long period now remembered as "the special times" - when Cubans were literally starving, when there was electricity only two hours per day, and people turned any patch of dirt into a garden to survive. Cubans bear the scars of that terrible time, and for many the current situation is still not that much better.

Only recently, under President Raoul Castro (who will retire in 2018), have Cubans been allowed to own their own apartments (at a price set and taxed by government). But although the residents may own the apartments, the government is responsible for the structure, plumbing and electrical systems. There is little money and less incentive for repairs to these systems.

So that's what Cuba looks like today. Many are hoping that better relations with the US will help their economy. They cheer news that US cruise ships are making application to stop in the port of Havana.

But there is still the American blockade. It means Cuba must import its main staple - rice - from Vietnam.

The irony is rich. The United States fought a war in Vietnam that cost the lives of so many young men in my generation. Today Vietnam is a thriving economy, an exporter to the US of clothing and other goods, and a tourist generation. But Cuba is still paying for the sins of its revolution.

My economic belief has long been that America's best economic (and foreign) policy is trade, fair trade, which not only enriches both sides of the transaction, but creates economic growth and a growing middle class in the countries with which we trade. We've managed to do that with previous enemies - ranging from Japan, to Vietnam, and even Russia and Iran. It's about time to end the embargo on Cuba. That's the Savage Truth.

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