Revolution and Economic Development in Cuba

When the Cuban revolution triumphed at the beginning of 1959, a majority of Cuba’s population—about 53 per cent—lived in the urban areas. Yet the Cuban economy was dominated by rural, agricultural activity. Agriculture, particularly sugar, determined the ups and downs of the nation’s business, and the problems and conflicts of the rural areas were at the centre of Cuba’s economic life.

The structure of land holdings is pre-1959 Cuba was typical of much of Latin America. The great majority of the land was held in large estates. Small operators—peasant owners, sharecroppers, tenants and squatters—shared the remainder of the agricultural territory (see Table 6.1 for a detailed quantitative description of the distribution of land holdings prior to the revolutic.n). The most important agricultural acti­vities, sugar and cattle, were most thoroughly dominated by the large estates. Small farmers who did operate in sugar were dependent on contract relations with the mills. In cattle raising, where small operators played a significant role in breeding and raising calves, market power was in the hands of the large holders. The small farmers did play the main role in the production of food crops and secondary cash crops—tobacco and coffee. But the dynamic of Cuban agriculture was determined primarily by the activities of the large landowners.

The stagnation of Cuban agriculture, and of the Cuban economy generally, was an important factor giving rise to revolutionary move­ment within Cuban society. Without economic growth, there was no way the conflicting material demands of various social groups could be met. Moreover, in addition to stagnation, Cuba’s heavy dependence on sugar created considerable instability, both on an annual basis and over the longer run. And economic instability piled insecurity on top of the economic deprivation of the Cuban masses.

When the revolutionary government took power in Cuba, breaking the domination of imperialism and undertaking agrarian reform were high on its list of priorities. In particular, transforming the economic and social structure of rural Cuba was seen as an essential step in overcoming the stagnation of rural production. Also, rural transformation was seen as a basic factor in solving the country’s unemployment problem, in developing income equality, and in beginning to wrest control of the economy from foreign interests.

In May of 1959, less than five months after its seizure of power, the revolutionary government promulgated its first agrarian-reform law. The leadership of the revolution had made numerous statements as to its intentions, but, as one high official, Blas Roca, wrote in 1965:

... the agrarian reform law was the first step revealing the true social and economic content of the revolution and the class character of the revolutionary government ... it would not be confined to political changes alone, but would go ahead with a far reaching reconstruction of the socioeconomic structure of the country.

From the initiation of the 1959 agrarian reform, the revolutionary government instructed INRA to avoid breaking up the large agricul­tural production units. INRA was charged with the the task of maintaining the estates as single production units and creating cooper­atives whenever possible.

The creation of an important state sector, with the associated problems of production on the state farms, was one part of the story of Cuba’s first agrarian reform. In addition, while the state sector was being created, the private sector was being transformed. Tables 6.1 and 6.2 have provided a picture of both aspects of the reform’s impact.

The immense transformation of the land-tenure structure in agriculture presented the Cuban government with a high degree of control over production decisions. On the state farms, INRA’s control of production was direct. Control of production in the private sector could be implemented through credit and pricing policies.

Cuba’s agricultural problems of the early 1960s were but one aspect of the nation’s change, conflict and crisis during the years following the triumph of the revolution. Both internal and external events were carrying Cuba towards a more radical political stance and a more thorough restructuring of its economic affairs.

The radical alteration of the structure of land holdings in Cuba was one—but only one—aspect of establishing the context for the develop­ment of a socialist agriculture. Another important accomplishment of the early years of the Cuban revolution was the establishment of extensive social programmes in the countryside. Building up medical programmes and educational facilities for the rural population, taking steps to change the position of women, and in general providing the services of modern society to the countryside were also part of the process of transforming Cuban agriculture. In addition, various special production campaigns were organized during the ‘big push’ of the 1960s. While these will be discussed below, Chapter 15, it should be noted here that they served some of the same ends as the social programmes.

In the period following the triumph of the Cuban revolution, a major redistribution of income took place. Not only was the redistribution of great magnitude, it was also extremely rapid, coming in most part as a consequence of the reforms implemented by the revolutionary govern­ment during its first years in power. Consequently the redistribution of income became a central factor influencing the course of the economy and the formulation of economic policy in subsequent years.

In the period immediately following the triumph of the revolution, the Cuban government did not have a development strategy. The govern?ment had a set of goals regarding social reform, and it put into effect a number of programmes to implement those reforms.

The decision to place agriculture at the centre of the Cuban plan had involved relatively little controversy once the errors of the initial period had become apparent. On the other hand, considerable debate, both within Cuba and internationally, surrounded the questions of how the plan would be organised, how economic affairs would be coordinated, and how labour would be motivated. The debate received wide attention because of its focus on fundamental theoretical problems of socialist economic organisations such as: the role of the law of value in the transition to socialism; the relation between the transformation of productive forces and the transformation of social relations; and the question of incentives in a socialist society.

In addition to the basic role of agriculture and the stress given to reshaping work incentives, Cuba’s economic development strategy for the 1960s incorporated a third defining element, a very high rate of investment. The highly centralised planning system, whatever its other merits or shortcomings, would give the government far-reaching control over the nation’s economic surplus and would allow the direction of that surplus towards capital accumulation.

Cuba’s agriculture-based development strategy of the 1960s ran into difficulties early on. Except for the first year of the new strategy’s implementation, 1965, the targets for sugar production were not attained (see Table 16.1). Indeed, 1966 and 1969 were poor sugar-production years by historical standards, let alone the standards of the plan. The 1970 harvest was in fact a record harvest of 8.5 million tons—18 per cent higher than the previous peak—but it was far short of the targeted 10 million.

The poor performance of the Cuban economy during the 1960s has given impetus to a wide set of explanations and serious criticisms of the Cuban strategy, its theory and practice. Some analysts have taken the experience of those years as evidence for the impossibility of combining economic growth and economic equality. From this perspective, the Cuban leaders are viewed as being too idealistic and unrealistic in their attempt to achieve economic expansion through an emphasis on moral incentives. Other critics explain the poor performance in the 1960s as a consequence of bureaucratic control and argue that the Cuban leadership had been remiss in centralising authority so thoroughly. This argument sees the labour mobilisations, the role of the army in production campaigns and the general military or campaign atmosphere of the late 1960s as the vain efforts to overcome the deficiencies of bureaucratic misorganisation.

One of the major achievements of the Cuban planning authorities in the 1960s was their success in mobilising the nation’s economic surplus to attain high rates of investment. The large investments, however, do not appear to have been effective, at least in the short run, in leading to a growth of output. Some examples from the period will indicate the ways in which the ineffectiveness of investment was tied to organisational deficiencies.

In designing and implementing their development strategy for the 1960s, the Cuban leaders operated as though a high level of investment, especially investment in modern equipment, was the key to economic expansion. This view of the development process probably had origins in a limited diagnosis of Cuba’s failure to develop in the capitalist era, a diagnosis which confused manifestations with causes. Cuba’s subordination within the imperialist system was, to be sure, the central factor in the diagnosis. But, in particular, the diagnosis focused on the fact that domination of Cuban society by imperialism had meant an alienation of the country’s economic surplus and, consequently, low rates of investment. Moreover, the structures imposed by imperialism had also led to high rates of unemployment and relatively limited use of modern technology.

Running the sugar harvests of the late 1960s as national campaigns was in part a response to the continuing deficits in the plan. But the Cuban leaders also saw the campaign atmosphere as being a positive component in the process of creating moral incentives. By treating the economic struggle as comparable to a military struggle, the leadership hoped to create the kind of national élan, solidarity, and effort that usually is associated only with wartime.

The failure of the Cuban government to move more positively in the 1960s towards reorganising economic structures reflected political weaknesses. The construction of economic structures to replace the market might have been accomplished by the development of more active participation of the Cuban people in political affairs. Yet in the 1960s forms of mass political participation were being weakened rather than strengthened.

The failure to harvest 10 million tons of sugar in 1970 and the numerous economic maladies of the late 1960s led to a general re-evaluation of development strategy. The situation was similar to that of the early 1960s when, out of the production crisis of 1962–4, the agriculture-based strategy had been formed. As in the earlier period, economic crisis forced a re-examination of sectoral priorities, the role of incentives, and the structure of planning.

The economic changes of the 1970s resulted in part from the accumulated experience attained in programmes which had been pursued since the triumph of the revolution. But it had taken time for that accumulated experience to reach sufficient proportions to have an impact on the way the economy operated. In particular, the growth of the educational system and the continual importance placed on special programmes can be seen as contributing to the organisational development of Cuban workers. (The organisational impacts of formal education and special programmes were probably inhibited in the 1960s because of the particular economic and political context of those years. The political and planning reforms of the 1970s—see below Chapters 24 and 25—probably allowed education and special programmes to have their full impact on participation and organisation in the 1970s.)

In Chapter 17, it was argued that the nature of the political process is closely related to the socialisation of the work process. And further, the weakness of the organised role of the working class in social decision-making was a basic factor accounting for the organisational weakness, and hence the economic weakness, of the Cuban economy in the late 1960s. Of course, the Cuban working class was not totally denied a role in decision-making processes, but its role was very limited and deteriorating. Consequently it is of special significance that the roles of the mass organisations in Cuba have been re-emphasized in the 1970s and new political forms have been developed which involve the Cuban working class in decision-making.

During the 1960s, the Cuban economy suffered from over-centralisation of planning and an ineffective system of incentives. These problems did not arise, however, simply from erroneous decisions about economic structure. As pointed out in Chapter 14, the Cubans were pushed along the route of centralisation and moral incentives by the circumstances and contradictions operating in the early 1960s. The process of destroying old structures and instituting social reforms created labour shortages and general economic disruption. Only by abandoning the socialist goals of the revolution could these problems have been eliminated by a reintroduction of market relations and traditional incentive structures. And in the absence of a functioning market, there appeared to be little alternative to centralisation, since at that time the political structures did not provide a viable basis for an alternative approach. Moreover, with the general disruption of the revolutionary process, centralisation probably provided the only avenue of control open to the government: other routes might have led to greater instability.

The restructuring of planning in Cuba and the political changes on which it is based apply to the operations of all sectors of the economy: agriculture as well as non-agriculture. State farms are treated in the same manner as industrial production units, and the new forms of operation should have similar impacts on all such units. The private operators in agriculture are, of course, separate entities. But they, too, as will be discussed below, are being affected by the planning changes.

The 1st Congress of the Communist Party of Cuba in December 1975 provided the occasion for a political celebration of the economic success attained in the preceding years. It also provided an opportunity to consolidate—or at least clearly articulate—the policy changes of the early 1970s and set the directions for Cuban development in the subsequent period.

In these words from his famous 1953 speech ‘History Will Above Me’, Fidel Castro expressed a part of his indictment of the capitalist system which dominated Cuba at that time. Capitalism, he maintained, kept the rural areas impoverished and prevented industrialisation; only a revolution could change all that.