Friday, May 27, 2016

Creeping Cuban Capitalism

“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both” ― Milton Friedman

As it happens, I think that Friedman's famous dictum has more the character of a "great truth" in Bohr's sense* than of an ordinary truth, but to the extent that it's true Cuba is moving slowly toward freedom. In this respect it is following in the footsteps of many formerly or in some cases, still officially Communist countries like Vietnam, China, and others.

From Henry Graybar's Slate story, entitled Bartenders are winning, but Doctors are losing:

The growth of the Cuban private sector over the past two decades has created some serious imbalances between skills and pay: A bartender with some generous foreign customers could make more in tips in a weekend than a doctor, each of whom is employed by the Cuban government, does in a month.

A new reform could exacerbate that issue. Cuba will soon legalize small- and medium-size private businesses, according to an economic development plan approved by the Cuban Communist Party Congress last month. The 32-page document hit newsstands in Havana on Tuesday, according to the Associated Press, and offers the first glimpse of the reforms approved at April’s five-year CCP meeting. It comes on the heels of President Obama’s historic trip to Cuba in March, and the relaxing of the U.S. embargo.

The CCP hasn’t released many details, but the plans have been the works for some time, says Richard Feinberg, a professor at the University of California–San Diego and the author of Open for Business: Building the New Cuban Economy. It will soon be possible for Cuba’s self-employed, known as cuentapropistas, to incorporate their operations, easing the way toward working with Cuban banks, foreign investors, and state-owned companies. Small businesses will be the vanguard of the market economy in Cuba, while bigger industries remain under state control.

*The opposite of an ordinary truth is a falsehood. The opposite of a great truth is another great truth.