Cuba USA
Cuba's Granma newspaper reported on May 21 that as of the end of April, around 310,000 Cubans were registered as self-employed, some 222,000 of them having obtained licences for the first time in the period since October when restrictions on self-employment were relaxed and a new tax system introduced. Nearly 40,000 of these licenses have been issued for workers employed by small private businesses.
Curiously, in official discourse both the self-employed and those who employ others to work for them are considered cuentapropistas — "self-employed" — when in reality those who employ others are, in Marxist terms, petit-bourgeois. Small businesses must be profitable. Unlike cooperatives, in which the distribution of the earnings is decided by the members of the cooperative or by its elected and accountable management, in Cuba's emerging legal small business sector (as elsewhere in the world) the profits belong to the business owner.
As Karl Marx demonstrated in the 19th century, the source of capitalist profit, whatever the scale of the capitalist enterprise, is the exploitation of labour. A self-employed person's business activities must also generate net earnings otherwise they can't earn a living, but nobody can exploit themselves. Exploitation is an unequal social relation in which one person, or some people, exploit others. It's unclear why this important sociological and ideological distinction is being fudged in the official discourse. In practice the distinction is clear: those who employ others have certain legal obligations that the self-employed do not have, such as having to pay a payroll tax that rises steeply according to the number of employees — an indirect way of limiting the size of legal private businesses.
One possible reason for the lack of sociological and terminological clarity is that Cuba's socialist constitution states: "ARTICLE 14. In the Republic of Cuba rules the socialist system of economy based on the people’s socialist ownership of the fundamental means of production and on the abolition of the exploitation of man by man [my italics]."
The abolition of the exploitation of man by man is a noble objective. But the reality is that black-market businesses provide many of the services that the socialist state has proved incapable of providing. For example, if you want your toilet fixed you can call the local People's Power administration and ask them to send someone, which may take months or even years. Or you can hire a plumber operating in the shadows of the legal economy, in all likelihood a plumber employed by the state who does "a little bit extra" on the side. He visits that same evening and fixes the problem. He does a good job and charges the equivalent of a month's wages in convertible pesos ... and pays not one centavo in taxes.
The legalisation of existing small private businesses whose activities are legitimate and the expansion of this sector (as well as cooperatives and self-employment) with the state's encouragement and assistance faces up to this reality. The following paragraph of Article 14 states: "Also in effect is the principle of socialist distribution: 'from each according to his ability, to each according to his work.' The law stipulates the regulations which guarantee the effective fulfilment of this principle." In reality the socialist distribution principle is hardly "in effect" in Cuba today, as Raul Castro and others have pointed out on numerous occasions.
- Translation: Guidelines Debate 8, Exchange Policy
Here is Part 8 of my translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document that has been published together with the final version of...
- Translation: Guidelines Debate 7, Monetary Policy
Here is Part 7 of my translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document that has been published together with the final version...
- Translation: Guidelines Debate 3, Enterprises
Cuba's Granma newspaper reported on March 17 the decision of the Council of Ministers to allow the self-employed to hire workers in all 178 permitted categories of self-employment. Since October, when self-employment was broadened and a new tax...
- Translation: Guidelines Debate 2, Economic Model
Here is my translation of the first section of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, that discusses changes to the Guidelines (numbered 1 to 10) regarding...
- Translation: Economy Minister On Economic Reforms
During the December meeting of Cuba's National Assembly of People's Power, several days were devoted to detailed discussion of the Draft Economic and Social Policy Guidelines. Marino Murillo, Minister for Economy and Planning, responded...
Cuba USA
Translation: Guidelines debate 5, Budgeted sector
Cuba's Granma newspaper reported on May 21 that as of the end of April, around 310,000 Cubans were registered as self-employed, some 222,000 of them having obtained licences for the first time in the period since October when restrictions on self-employment were relaxed and a new tax system introduced. Nearly 40,000 of these licenses have been issued for workers employed by small private businesses.
Curiously, in official discourse both the self-employed and those who employ others to work for them are considered cuentapropistas — "self-employed" — when in reality those who employ others are, in Marxist terms, petit-bourgeois. Small businesses must be profitable. Unlike cooperatives, in which the distribution of the earnings is decided by the members of the cooperative or by its elected and accountable management, in Cuba's emerging legal small business sector (as elsewhere in the world) the profits belong to the business owner.
As Karl Marx demonstrated in the 19th century, the source of capitalist profit, whatever the scale of the capitalist enterprise, is the exploitation of labour. A self-employed person's business activities must also generate net earnings otherwise they can't earn a living, but nobody can exploit themselves. Exploitation is an unequal social relation in which one person, or some people, exploit others. It's unclear why this important sociological and ideological distinction is being fudged in the official discourse. In practice the distinction is clear: those who employ others have certain legal obligations that the self-employed do not have, such as having to pay a payroll tax that rises steeply according to the number of employees — an indirect way of limiting the size of legal private businesses.
One possible reason for the lack of sociological and terminological clarity is that Cuba's socialist constitution states: "ARTICLE 14. In the Republic of Cuba rules the socialist system of economy based on the people’s socialist ownership of the fundamental means of production and on the abolition of the exploitation of man by man [my italics]."
The abolition of the exploitation of man by man is a noble objective. But the reality is that black-market businesses provide many of the services that the socialist state has proved incapable of providing. For example, if you want your toilet fixed you can call the local People's Power administration and ask them to send someone, which may take months or even years. Or you can hire a plumber operating in the shadows of the legal economy, in all likelihood a plumber employed by the state who does "a little bit extra" on the side. He visits that same evening and fixes the problem. He does a good job and charges the equivalent of a month's wages in convertible pesos ... and pays not one centavo in taxes.
The legalisation of existing small private businesses whose activities are legitimate and the expansion of this sector (as well as cooperatives and self-employment) with the state's encouragement and assistance faces up to this reality. The following paragraph of Article 14 states: "Also in effect is the principle of socialist distribution: 'from each according to his ability, to each according to his work.' The law stipulates the regulations which guarantee the effective fulfilment of this principle." In reality the socialist distribution principle is hardly "in effect" in Cuba today, as Raul Castro and others have pointed out on numerous occasions.
At the heart of the socialist renewal process now underway is the reassertion of this principle. It's undeniable that capitalist exploitation, whether by large or small private businesses, violates this principle. Yet in a dialectical twist, the expansion and consolidation of legal small private businesses, cooperatives and self-employment will allow the socialist distribution principle to be applied more rigorously across the economy as a whole by soaking up surplus workers in the state sector. This, in turn, will allow wages and salaries to recover their role as a means to allocate access to goods and services other than those, such as free health care and education, that are guaranteed to all citizens.
Article 14 upholds two principles only one of which is compatible with the epoch of transition from capitalism to communism: "To each according to their work". The other principle, "the abolition of the exploitation of man by man", is only realisable in a fully communist, global society in which social classes and the state have withered away. Little Cuba, blockaded and defiant, is light years away from this remote objective.
Even if the socialist state employed 100% of the Cuban workforce, an economic absurdity, "the abolition of the exploitation of man by man" could not be realised since Cuba is a socialist-oriented archipelago in a capitalist world. Cuban products and services must be sold in the capitalist world market. This means that Cuba's working people as a whole are exploited by the transnational corporations based in developed capitalist societies.
Sooner or later Cuba's socialist constitution will have to be brought into line with reality. In the meantime, actions speak louder than words. Cuba is moving towards a socialist-oriented society with a mixed economy in which socialist state enterprises continue to be the dominant property form. Social planning will prevail over the market, but there will be more scope for market mechanisms to mediate the complex horizontal relations among the non-state forms of ownership and management, and the relations between these and the dominant state sector.
Here is Part 5 of the translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document that has been published together with the final version of the Guidelines adopted by the Cuban Communist Party (PCC) Congress in April. Thanks to a fellow translator, who prefers to remain anonymous, for translating the following guidelines on the budgetary sector.
The format is as follows: number and text of the draft guideline, followed by the text and number of the corresponding guideline approved by the Communist Party Congress, followed by the drafting commission's explanation for the change. You'll find it easiest to read on my blog where the amended guidelines are in bold.
Budgetary system
30. Budgetary departments carry out state and government functions and the provision of health care and education services. They do not define entity objectives, but obligations and responsibilities.
The budgetary departments carry out state and government functions and the provision of health care, education and other services. They define missions, functions, obligations and responsibilities. (30)
It is clarified here that they can provide other services, according to 198 opinions in 15 provinces. The concept of “entity objectives” is replaced by “missions and functions.”
31. The number of budgetary departments will be reduced to the minimum number needed to guarantee the execution of assigned functions. The key criterion will be maximising savings in terms of personnel and state budget expenditure on material and financial resources.
The number of budgetary departments will be reduced to the minimum number needed to guarantee the execution of the assigned functions. The key criterion will be maximising savings in terms of state budget expenditure on material and financial resources, while guaranteeing an efficient and quality service. (31)
“Guaranteeing an efficient and quality service” was added since it related to 469 opinions nationwide and the discussion at the Congress.
Article 14 upholds two principles only one of which is compatible with the epoch of transition from capitalism to communism: "To each according to their work". The other principle, "the abolition of the exploitation of man by man", is only realisable in a fully communist, global society in which social classes and the state have withered away. Little Cuba, blockaded and defiant, is light years away from this remote objective.
Even if the socialist state employed 100% of the Cuban workforce, an economic absurdity, "the abolition of the exploitation of man by man" could not be realised since Cuba is a socialist-oriented archipelago in a capitalist world. Cuban products and services must be sold in the capitalist world market. This means that Cuba's working people as a whole are exploited by the transnational corporations based in developed capitalist societies.
Sooner or later Cuba's socialist constitution will have to be brought into line with reality. In the meantime, actions speak louder than words. Cuba is moving towards a socialist-oriented society with a mixed economy in which socialist state enterprises continue to be the dominant property form. Social planning will prevail over the market, but there will be more scope for market mechanisms to mediate the complex horizontal relations among the non-state forms of ownership and management, and the relations between these and the dominant state sector.
Here is Part 5 of the translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document that has been published together with the final version of the Guidelines adopted by the Cuban Communist Party (PCC) Congress in April. Thanks to a fellow translator, who prefers to remain anonymous, for translating the following guidelines on the budgetary sector.
The format is as follows: number and text of the draft guideline, followed by the text and number of the corresponding guideline approved by the Communist Party Congress, followed by the drafting commission's explanation for the change. You'll find it easiest to read on my blog where the amended guidelines are in bold.
Budgetary system
30. Budgetary departments carry out state and government functions and the provision of health care and education services. They do not define entity objectives, but obligations and responsibilities.
The budgetary departments carry out state and government functions and the provision of health care, education and other services. They define missions, functions, obligations and responsibilities. (30)
It is clarified here that they can provide other services, according to 198 opinions in 15 provinces. The concept of “entity objectives” is replaced by “missions and functions.”
31. The number of budgetary departments will be reduced to the minimum number needed to guarantee the execution of assigned functions. The key criterion will be maximising savings in terms of personnel and state budget expenditure on material and financial resources.
The number of budgetary departments will be reduced to the minimum number needed to guarantee the execution of the assigned functions. The key criterion will be maximising savings in terms of state budget expenditure on material and financial resources, while guaranteeing an efficient and quality service. (31)
“Guaranteeing an efficient and quality service” was added since it related to 469 opinions nationwide and the discussion at the Congress.
32. Budgetary departments will not be created to carry out productive services or the production of goods. Budgetary departments that are able to finance their expenses with their revenues and generate surpluses will become self-financing units, without ceasing to carry out their assigned functions and responsibilities, or they will become enterprises.
Budgetary departments will not be created to carry out productive services or the production of goods. Budgetary departments that are able to finance their expenses with their revenues and generate surpluses will become self-financing units, without ceasing to carry out their assigned functions and responsibilities, or they will be able to adopt — with prior approval — the structures of enterprises. (32)
The wording is improved.
33. Budgetary departments that are only able to a cover part of their expenses with their revenues will be given approval for that part of their expenses that will be financed by the state budget.
Budgetary departments that are only able to cover part of their expenses with their revenues will be given approval for that part of their expenses that will be financed by the state budget. (33)
Budgetary departments will not be created to carry out productive services or the production of goods. Budgetary departments that are able to finance their expenses with their revenues and generate surpluses will become self-financing units, without ceasing to carry out their assigned functions and responsibilities, or they will be able to adopt — with prior approval — the structures of enterprises. (32)
The wording is improved.
33. Budgetary departments that are only able to a cover part of their expenses with their revenues will be given approval for that part of their expenses that will be financed by the state budget.
Budgetary departments that are only able to cover part of their expenses with their revenues will be given approval for that part of their expenses that will be financed by the state budget. (33)
The wording is improved [in the Spanish text; the translation is identical].
34. A managerial system will be designed that will govern the organisational and economic operation and auditing of the budgetary departments, simplifying their accounting. (Maintained)
34. A managerial system will be designed that will govern the organisational and economic operation and auditing of the budgetary departments, simplifying their accounting. (Maintained)
- Translation: Guidelines Debate 8, Exchange Policy
Here is Part 8 of my translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document that has been published together with the final version of...
- Translation: Guidelines Debate 7, Monetary Policy
Here is Part 7 of my translation of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, an explanatory document that has been published together with the final version...
- Translation: Guidelines Debate 3, Enterprises
Cuba's Granma newspaper reported on March 17 the decision of the Council of Ministers to allow the self-employed to hire workers in all 178 permitted categories of self-employment. Since October, when self-employment was broadened and a new tax...
- Translation: Guidelines Debate 2, Economic Model
Here is my translation of the first section of the booklet Information on the results of the Debate on the Economic and Social Policy Guidelines for the Party and the Revolution, that discusses changes to the Guidelines (numbered 1 to 10) regarding...
- Translation: Economy Minister On Economic Reforms
During the December meeting of Cuba's National Assembly of People's Power, several days were devoted to detailed discussion of the Draft Economic and Social Policy Guidelines. Marino Murillo, Minister for Economy and Planning, responded...