Freeman

ARTICLE

La Lucha: The Human Cost of Economic Repression in Cuba

Cubans Struggle to Make Ends Meet as They Wait for Change

MAY 01, 2000 by PATRICIA LINDERMAN

Filed Under : Poverty, Communism, Taxation

Patricia Linderman is a writer and translator currently living in Leipzig, Germany.

As I opened the gate of the high security fence around my yard in Havana, a black woman in her 30s glanced left and right and quickly wheeled her rusty Chinese bicycle inside. Her name was Marta, and she was wearing a pair of my shorts, which I had once traded her for a small watermelon. This time she had pineapples in the plastic milk crate attached behind the seat of her bike. I handed her a dollar for two pineapples, then poked my head out into the street to make sure the coast was clear before Marta pedaled away.

Luckily, there were no police officers stationed on the corner of my street that day. Although farmers and gardeners have been permitted since 1994 to sell excess produce, they must do so personally, in an approved market stall, paying high license fees and taxes. Marta’s little enterprise, buying and reselling fruit, vegetables, and used clothing, put her into one of the Cuban government’s most reviled categories: she was a “speculator.” If caught, she would be charged a huge fine, maybe even sentenced to jail. Furthermore, the Cuban Ministry of Finance could confiscate everything she owned, without a hearing, for the crime of “profiteering.”

Surely Marta’s visits to my door had not escaped the notice of the neighborhood watch, the local Committee for the Defense of the Revolution. A few subtle gifts of clothing or scarce vegetables probably kept my neighbors quiet. But if Marta offended them in any way, or if they thought she was getting too rich or too friendly with foreigners like me, they could simply do their duty and turn her in. They had her, in fact, right where they wanted her.

I lived in Havana from 1995 to 1998, when my husband, a Foreign Service officer, was assigned to the U.S. Interests Section there. Since Cuba and the United States do not have formal diplomatic relations, the Interests Section is officially part of the Swiss Embassy. Yet it has its own large building on Havana’s waterfront and carries out most of the usual functions of an embassy, including processing the 20,000 Cuban immigrants the United States takes in each year.

Political repression in Cuba is the subject of much international attention. Cuban elections are neither free nor fair. The media are controlled by the state and permit no alternative views; antennas and satellite dishes to bring in U.S. television are banned (although foreigners and tourist hotels may use them). Dissidents are regularly jailed on vague charges such as “dangerousness.”

Yet during my time there, I found the Cubans’ lack of economic freedom to be even more injurious to their dignity and aspirations than the denial of their political rights. The Cubans I knew were little preoccupied with obtaining forbidden reading material or joining dissident groups. Instead, economic restrictions forced them to spend each day scrounging to provide a level of subsistence for themselves and their families, often by illicit or illegal means. La lucha, the struggle, they called it—not a revolutionary or even counterrevolutionary struggle, but simply a struggle for survival.

It was all supposed to turn out differently, of course. After the 1959 Cuban Revolution, businesses and farms were nationalized, and housing, utilities, basic foods, and even entertainment were highly subsidized. Education and medical care were free. Salaries were low and their ranges narrow; workers were rewarded with better housing or a new Soviet-made car, rather than a raise. Eventually, material rewards would not be necessary at all, according to the Revolution’s political philosopher, Che Guevara.

Yet this economic system was a house of cards, kept upright through generous trade arrangements with the Soviet Union amounting to a subsidy of some $6 billion per year. It collapsed when its patron did: Cuba’s gross domestic product dropped by 35 percent between 1989 and 1993. The government declared a “Special Period in Peacetime,” an economic state of emergency.

Power outages became more frequent. The government touted the island’s “eco-consciousness” as gasoline supplies dwindled and bicycles replaced cars. Schools remained open, but without paper or pencils (students shouted back lessons recited by the teacher). Health care remained free, but medicine and supplies were scarce: hospital patients had to bring their own sheets, towels, soap, and food. As Havana residents scrambled to produce their own food, the plaintive crowing of roosters became a common sound in the city. “Why do they crow in the middle of the night?” I once complained to a local friend. “They’re hungry,” she explained.

Reina, a tiny woman hugely pregnant with her first baby, worked in a plant nursery. As I picked out some red hibiscus potted in rusty cans, she explained that expectant mothers received a voucher for cloth diapers, which were otherwise unavailable. The voucher could only be redeemed after the eighth month of pregnancy. Reina complained that her doctor was predicting a premature delivery, but the compañeros wouldn’t give her the diapers, since she hadn’t yet completed her eighth month.

The rationing system, which had covered about a quarter of family consumption before 1990, was expanded to nearly all basic goods. Cubans’ ration books, or libretas, now promised them a few pounds of rice and dry beans a month, along with a few other foodstuffs and personal necessities that might or might not be available. Shoes, for example, were supposed to be rationed, but none arrived. Children were entitled to powdered milk only up to the age of seven. The elderly were given Cerelac, a concoction of dried milk and ground soybeans.

As the economy floundered, Cuba desperately needed new sources of hard currency. The promotion of tourism was stepped up, and hard-currency hotels, shops, and restaurants for foreign tourists began to appear. With their bright signs, fresh paint, and well-stocked shelves, they contrasted strikingly with the drab and barren facilities accepting Cuban pesos. Traveling throughout the island, one could apply this simple rule: if it looks good, it’s not for Cubans. The Cuban Revolution had aimed for paradise and achieved, finally, paradox.

Trying to retain control over the flow of money, the government issued colorful “convertible peso” notes, worth exactly one U.S. dollar. Yet the greenback itself quickly became the currency of choice. In 1993, Cuban citizens were granted the right to hold dollars and shop in the tourist stores. The government hoped to gather black-market money into its own pockets and encourage the inflow of cash from family members in the United States. In fact, the latter has been estimated to be Cuba’s single greatest source of hard currency, at more than $600 million a year. A government wall slogan reads: “Hay que tener FE”—“You’ve got to have FAITH.” Cubans quip that FE really means “Familia en el Exterior,” family abroad.

Yet unfortunately for most Cubans, only some 15 percent of the population received dollars from abroad, and very few could earn hard currency in the course of their regular jobs. The vast majority were officially shut out of the expanding dollar economy.

A Cuban professional with a normal salary could not afford a cup of coffee at the Hotel Nacional, Havana’s towering 1930s landmark. “It must be difficult,” I once remarked lamely to a well-educated Cuban. “No,” he said with sadness and disgust, “it is not difficult. It is inconceivable.”

Meanwhile, the government resisted giving up its monopoly on employment, which it saw not only as an instrument of social leveling but as an effective means of control. In 1990, 95 percent of employed Cubans worked for the state; some 80 percent still do. The rest depend on the government as well, for their ration books, their housing, their children’s educations, and even their right to stay out of prison—since nearly all Cubans are breaking the law in some way as they seek to provide for their families.

As the tourist industry and joint ventures with foreign companies flourished, direct hiring of Cuban workers remained forbidden. Labor contracts are handled by a government agency, which charges an average of $400 a month for each worker. In turn, the workers receive some 250 Cuban pesos monthly, or about $12.50, for an effective tax rate of nearly 97 percent.

In spite of the low salary, workers in tourist hotels and joint venture enterprises at least had the chance to receive dollar tips, extra payments under the table, or “bonus” baskets of scarce consumer goods. The country’s incentive scale gradually turned upside down, with hotel maids and valets earning more than doctors, professors, and scientists. Unsurprisingly, university enrollment in Cuba has dropped by half since 1989.

After a prominent pediatrician treated my son at Havana’s leading children’s hospital, he invited me to follow his rattling little car to his nearby home, so I would know where to find him in case of an emergency. His apartment was in a four-story concrete-block building with open stairways and laundry fluttering outside glassless windows. He didn’t even have his own phone; the number he gave me was that of a neighbor down the hall.

A Cuban acquaintance of ours estimated that each person needed about $30 a month, in addition to a peso salary, to procure basic necessities such as soap, toothpaste, and shoes. For many, the black market was the only answer. Cigars were stolen from factories and sold to tourists on the street. Bold black-marketeers rang my doorbell every day, trying to sell stolen bags of coffee or even industrial-sized rolls of lunch meat spirited out of a hotel kitchen.

Even worse, young Cubans quickly discovered the rewards of companionship with tourists. Around five each evening, women and girls start to line up along Havana’s main roads in tight, colorful clothes. Many are daughters of professionals, or even professionals themselves. They see themselves not as prostitutes but simply women on the make, hoping for a decent dinner, a new outfit from a hotel shop, or perhaps, if they are lucky, the greatest prize of all: marriage to a foreigner and a ticket off the island.

On a hot afternoon, I went for a swim at the Hotel Comodoro. Tourists from Europe, Latin America, and Canada lounged by the sparkling pool. A can of Coca-Cola, imported through Mexico in defiance of the U.S. embargo, cost $1.50 at the pool bar. In front of me, an elderly foreign man bobbed in the water, smiling. Two Cuban girls, about 15 years old, floated beside him, whispering in his ears and kissing his sinewy neck.

In September 1993, the Cuban government reluctantly authorized self-employment in more than a hundred occupations, such as taxi driver, electrician, and artist. However, strict rules governed these new professions. The self-employed are strictly forbidden to hire others; only close relatives can assist them. University-educated professionals cannot sell services in their area of training. High monthly license fees are charged, whether or not the enterprise makes any money. The state also takes a large cut of any income received.

Tiny in-home restaurants, called paladares, were authorized by the new rules, yet they can seat only 12 patrons at a time, may use only family members as cooks and waiters, and are forbidden to serve shrimp and lobster, which remain a government monopoly. Many quickly surpassed the state-run tourist restaurants in quality and value. Yet the closure rate remains high, since profits often don’t cover the license fees, and crackdowns are common on those trying to get around the confining rules.

A Cuban-born colleague put us in touch with his uncle who still lived on the island. We invited the uncle, a professional actor, to a gathering at a paladar. We were served a simple but satisfying meal of red snapper, rice, black beans, fried ripe plantains, and salad, finishing up with coconut flan and coffee. After talking animatedly over a beer, our guest polished off his dinner in silence. As we pulled out $50 to pay the bill for five people, amazement and embarrassment showed on his face. “This is like a dream, a dream of the old days,” he said, tears shining in his eyes.

The regime makes no secret of its reluctant toleration and suspicion of self-employment. Fidel Castro has likened it to “a cancer devouring the revolutionary spirit.” In 1996, a sudden 300 percent jump in license costs and a 650 percent increase in fees led many to relinquish their permits; the total of registered self-employed dropped from over 200,000 to 170,000.

In 1994, however, the Cuban leadership realized that food shortages were threatening the regime’s survival. By June, vegetables had practically disappeared from Havana’s official markets, and the first open demonstrations and riots were taking place. The government announced that surplus agricultural products could be sold at farmers’ markets, under highly controlled conditions, of course.

I stepped under the corrugated roof of the market in my neighborhood. Today there were shriveled green peppers, small onions, and a few piles of seasonal fruit. Off to one side, flies buzzed and circled over a worn wooden counter. Men in dirty aprons stood behind it, each with a single pig carcass. Farmers were required to sell their wares personally and pay high fees for the privilege. There were few buyers. The pork cost 20 pesos a pound. A sugar cane cutter in Cuba earned 107 pesos a month, a doctor about 400. I paid for five green peppers with a ten-peso note, the back of which depicted a sea of uplifted fists clutching machine guns. Tiny background lettering repeated “Patria o Muerte” (Fatherland or Death). The woman selling the peppers would also happily accept U.S. dollars.

For ideological reasons, Cuba refuses to implement further reforms that would unleash the economic vigor of its people. After a strongly worded address by Armed Forces leader and heir apparent Rafil Castro, the Fifth Communist Party Congress in 1997 rejected further liberalization. In a speech to the National Assembly in July 1998, Fidel Castro maintained: “The more contact I have with capitalism, the more revulsion it causes me.”

Meanwhile, Cuba is again becoming a playground for foreign tourists, yet there are no wealthy or even middle-class Cubans this time around. There are simply the poor, who struggle to make ends meet and wait for things to change. After 41 years, many who dream of a better life can only imagine achieving it somewhere else.

As I left the market, I passed a man selling garlic. A four-foot strand of neatly braided bulbs was 20 pesos, or one dollar. “Where are you from?” grinned the gap-toothed, gray-whiskered vendor as I handed him a green back. “United States,” I answered warily, smiling in return. His grin widened. “Will you marry me?” he asked.

ASSOCIATED ISSUE

May 2000

comments powered by Disqus

EMAIL UPDATES

* indicates required

CURRENT ISSUE

December 2014

Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION

Essential Works from FEE

Economics in One Lesson (full text)

By HENRY HAZLITT

The full text of Hazlitt's famed primer on economic principles: read this first!


By FREDERIC BASTIAT

Frederic Bastiat's timeless defense of liberty for all. Once read and understood, nothing ever looks the same.


By F. A. HAYEK

There can be little doubt that man owes some of his greatest suc­cesses in the past to the fact that he has not been able to control so­cial life.


By JEFFREY A. TUCKER

Leonard Read took the lessons of entrepreneurship with him when he started his ideological venture.


By LEONARD E. READ

No one knows how to make a pencil: Leonard Read's classic (Audio, HTML, and PDF)