Monday, May 19, 2014

The Last Communist City

A trip to Cuba. From City-Journal:
Outside its small tourist sector, the rest of the city looks as though it suffered a catastrophe on the scale of Hurricane Katrina or the Indonesian tsunami. Roofs have collapsed. Walls are splitting apart. Window glass is missing. Paint has long vanished. It’s eerily dark at night, almost entirely free of automobile traffic. I walked for miles through an enormous swath of destruction without seeing a single tourist. Most foreigners don’t know that this other Havana exists, though it makes up most of the city—tourist buses avoid it, as do taxis arriving from the airport. It is filled with people struggling to eke out a life in the ruins.

Marxists have ruled Cuba for more than a half-century now. Fidel Castro, Argentine guerrilla Che Guevara, and their 26th of July Movement forced Fulgencio Batista from power in 1959 and replaced his standard-issue authoritarian regime with a Communist one. The revolutionaries promised liberal democracy, but Castro secured absolute power and flattened the country with a Marxist-Leninist battering ram. The objectives were total equality and the abolition of money; the methods were total surveillance and political prisons. The state slogan, then and now, is “socialism or death.”

Cuba was one of the world’s richest countries before Castro destroyed it—and the wealth wasn’t just in the hands of a tiny elite. “Contrary to the myth spread by the revolution,” wrote Alfred Cuzan, a professor of political science at the University of West Florida, “Cuba’s wealth before 1959 was not the purview of a privileged few. . . . Cuban society was as much of a middle-class society as Argentina and Chile.” In 1958, Cuba had a higher per-capita income than much of Europe. “More Americans lived in Cuba prior to Castro than Cubans lived in the United States,” Cuban exile Humberto Fontova, author of a series of books about Castro and Guevara, tells me. “This was at a time when Cubans were perfectly free to leave the country with all their property. In the 1940s and 1950s, my parents could get a visa for the United States just by asking. They visited the United States and voluntarily returned to Cuba. More Cubans vacationed in the U.S. in 1955 than Americans vacationed in Cuba. Americans considered Cuba a tourist playground, but even more Cubans considered the U.S. a tourist playground.” Havana was home to a lot of that prosperity, as is evident in the extraordinary classical European architecture that still fills the city. Poor nations do not—cannot—build such grand or elegant cities.

But rather than raise the poor up, Castro and Guevara shoved the rich and the middle class down. The result was collapse. “Between 1960 and 1976,” Cuzan says, “Cuba’s per capita GNP in constant dollars declined at an average annual rate of almost half a percent. The country thus has the tragic distinction of being the only one in Latin America to have experienced a drop in living standards over the period.”

Communism destroyed Cuba’s prosperity, but the country experienced unprecedented pain and deprivation when Moscow cut off its subsidies after the fall of the Soviet Union. Journalist and longtime Cuba resident Mark Frank writes vividly about this period in his book Cuban Revelations. “The lights were off more than they were on, and so too was the water. . . . Food was scarce and other consumer goods almost nonexistent. . . . Doctors set broken bones without anesthesia. . . . Worm dung was the only fertilizer.” He quotes a nurse who tells him that Cubans “used to make hamburgers out of grapefruit rinds and banana peels; we cleaned with lime and bitter orange and used the black powder in batteries for hair dye and makeup.” “It was a haunting time,” Frank wrote, “that still sends shivers down Cubans’ collective spines.”

By the 1990s, Cuba needed economic reform as much as a gunshot victim needs an ambulance. Castro wasn’t about to reform himself and his ideology out of existence, but he had to open up at least a small piece of the country to the global economy. So the Soviet subsidy was replaced by vacationers, mostly from Europe and Latin America, who brought in much-needed hard currency. Arriving foreigners weren’t going to tolerate receiving ration cards for food—as the locals do—so the island also needed some restaurants. The regime thus allowed paladars—restaurants inside private homes—to open, though no one from outside the family could work in them. (That would be “exploitative.”) Around the same time, government-run “dollar stores” began selling imported and relatively luxurious goods to non-Cubans. Thus was Cuba’s quasi-capitalist bubble created.

When the ailing Fidel Castro ceded power to his less doctrinaire younger brother Raúl in 2008, the quasi-capitalist bubble expanded, but the economy remains heavily socialist. In the United States, we have a minimum wage; Cuba has a maximum wage—$20 a month for almost every job in the country. (Professionals such as doctors and lawyers can make a whopping $10 extra a month.) Sure, Cubans get “free” health care and education, but as Cuban exile and Yale historian Carlos Eire says, “All slave owners need to keep their slaves healthy and ensure that they have the skills to perform their tasks.”

Even employees inside the quasi-capitalist bubble don’t get paid more. The government contracts with Spanish companies such as Meliá International to manage Havana’s hotels. Before accepting its contract, Meliá said that it wanted to pay workers a decent wage. The Cuban government said fine, so the company pays $8–$10 an hour. But Meliá doesn’t pay its employees directly. Instead, the firm gives the compensation to the government, which then pays the workers—but only after pocketing most of the money. I asked several Cubans in my hotel if that arrangement is really true. All confirmed that it is. The workers don’t get $8–$10 an hour; they get 67 cents a day—a child’s allowance. (Read more.)

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