Down in Cuba, Raul Castro made two announcements.
First, he said “adios” to the minister of the economy. For the record, the Cuban minister of the economy is nothing but a figurehead who does whatever the Castro brothers tell him to do. And;
Second, he reminded Cubans that the troubles in Venezuela will bring more hard economic times.
Raul said this about the hard times ahead:
“Rumors and forecasts of an imminent collapse of our economy with a return to the acute phase of the Special Period … have started to appear,”Castro said according to a copy of his speech provided by the country’s official news agency Prensa Latina.Foreign journalists are barred from the assembly.He was referring to the years after Cuba’s biggest benefactor, the Soviet Union, collapsed. During that time, in the early 1990s, Cubans had to cope with widespread power outages and food shortages.“We cannot deny there will be some impact, including worse than currently, but we are prepared and in better conditions than then to revert it.”
In many ways, this is reminiscent of perestroika in the late 1980s, or Mr Gorbachev’s efforts to revive the USSR economy. In other words, talking reform is not reform, unless you are willing to make structural changes in a communist system,
This is how Peter Boettke, Professor of Economics and Philosophy at George Mason University, explained thefailure of perestroika:
One of the main reasons perestroika failed was because it wasn’t tried.During his six years in power, Gorbachev introduced at least 10 programs for the “radical restructuring” of the Soviet economy, not a one of which was implemented.Instead, economic reform was limited to inconsistent and incoherent half-measures.The law on individual economic activity, the law on state enterprises, and the various price-reform proposals, for example, amounted to nothing more than half-measures incapable of producing the desired economic results even if they were implemented in an ideal environment.Conceptually, economic reform is a fairly simple matter.Private property in resources must be established and protected by a rule of law; consumer and producer subsidies must be eliminated; prices must be freed to adjust to the forces of supply and demand; responsible fiscal policy should be pursued that keeps taxation to a minimum and reins in deficit financing; and a sound currency must be established.Introducing such reforms — even within Western economies — is anything but simple.And the major problem is not just a conceptual one of designing the appropriate sequence or plan of reform.
In other words, communist economic systems cannot be reformed. They have to thrown into the garbage and replaced with real free markets, the rule of law and a respect for private property. Gorbachev did not do that in the USSR and Castro is not doing it in Cuba.
Why is Castro not allowing full market reforms in Cuba? The answer is simple greed. The Cuban economy, and the Castro family’s ownership of it, has turned these two bearded revolutionaries into filthy rich men. Add to this the billions stolen from U.S. citizens (estimated today’s value is US$ 7 billion) and Cubans and this is a racket of unprecedented proportions 90 miles south of Florida!
Reforms mean that the Castro family would have to share its wealth with Cubans. Sorry — that’s not going to happen no matter how many times President Obama and Raul Castro do the wave in Cuba.
How do you say perestroika in Spanish? Same as in Russian!
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