We have been reflecting in seven posts since January 9 on the new Cuban constitution, which will be submitted for popular referendum on February 24 (“Constitutional Democracy in Cuba” 1/9/2019; “People’s Constitutional Assembly in Cuba” 1/11/2019; “The Cuban people speak” 1/18/2019; “Cuban Constitutional Commission Reports” 1/21/2019; “The Cuban National Assembly debates” 1/24/2018; “The new Cuban Constitution: Continuity” 1/28/2019; “A more inclusive Cuban Revolution” 2/1/2019). We turn now to economic issues that are reflected in the changes being made in the new constitution.
Following the collapse of the Soviet Union and the socialist bloc, combined with a strengthening of the economic sanctions against Cuba by the United States, the Cuban economy suffered a collapse in the early 1990s, and there was a significant decline in the standard of living. The government adopted intelligent adjustment strategies, designed to preserve and protect the social and economic gains since 1959. During the next fifteen years, there was a slow but steady recovery, and universal, free health care and education were maintained, as were subsidies for food and utilities. However, the people endured great sacrifices, and there was a continually growing feeling of dissatisfaction among the people with respect to the material standing of living, which did not involve a desire to abandon the socialist road. In response to the growing popular inquietude, the Party began to analyze possibilities for strengthening the productive capacity of the nation, which culminated in a new social and economic model, approved by the National Assembly, following an extensive popular consultation, in 2012. In essence, the new model expands space for self-employment, small-scale private property, cooperatives, and foreign investment, while maintaining state ownership as the principal form of property; it preserves the role of the state as manager and regulator of the economy.
The new model did not emerge from a sector within Cuban society that would benefit economically from the changes, nor was it developed to satisfy the interests of international capital. The new model was developed by the revolutionary leadership in response to the dissatisfaction that had emerged among the people, a dissatisfaction that implied an erosion of popular support for the Revolution in comparison to the era of the 1960s through the 1980s. Even though the popular dissatisfaction did not express itself in the form of counterrevolutionary thought and behavior, it was a matter of concern, especially with respect to its long-term implications.
The new social and economic model of 2012, therefore, was developed autonomously by the leadership of a sovereign socialist nation, forged by its vanguard party with the participation and full support of the elected deputies of the people. Its goal is to increase capacity for the production and distribution of goods and services, in order that the needs and desires of the people will be more fully satisfied, so that they will be kept on board in the socialist project in the long term. It intends to facilitate the construction of a more “prosperous” socialism.
The National Assembly, in accordance with its constitutional authority, interpreted the new economic measures as constitutional. Nevertheless, there was a belief within the Party that the new economic measures had created the need for a constitutional re-foundation. As a result, it is not surprising that the section on “economic fundamentals” of the new constitution includes important changes from the 1976 Constitution. Said changes, however, do constitute rupture; rather, they reflect a continuous evolution, based on continuing theoretical reflection by the vanguard on revolutionary practice, on national social dynamics, and on the evolving political-economy of the world-system.
Both the 1976 and new constitutions dictate that the Cuban economy is a socialist economy that is directed and regulated by the State in accordance with its plan for social and economic development (Articles 14 and 16 in the 1976 Constitution; Articles 18 and 19 in the new Constitution). However, there is a difference between the two constitutions with respect to the various forms of property. The 1976 Constitution establishes state ownership of agricultural land, sugar processing plants, factories, mines, banks, and natural resources; and it recognizes other forms of property as exceptions to state property. These exceptions include the agricultural property of small farmers and cooperatives, joint ventures of state and private capital, self-employment in transportation, and the property of mass, social, and political organizations (Article 15). In contrast, the new Constitution recognizes various forms of property, including socialist property of the people, in which the state acts a representative of the people; cooperatives; joint ventures; the property of mass, political, and social organizations; and private property (Article 22). These are not exceptions to state property, as in 1976; rather, they are forms of property that exist alongside state property. Moreover, in the new formulation, cooperatives are legitimated beyond agriculture. In addition, private property is explicitly recognized as a form of property in the socialist economy, although the state regulates to ensure that concentration of private property is limited, in accordance with socialist values of equity and social justice (Article 30). Furthermore, foreign investment has its role: “The State promotes and guarantees foreign investment as an important element for the economic development of the country, over the base of the protection and reasonable use of natural and human resources as well as respect for national sovereignty and national independence” (Article 28).
Such recognition of various forms of property, including private and foreign property, is in accordance with what I have elsewhere called “pragmatic socialism” (see “Pragmatic socialism: The necessary road” 5/14/2018 in the category Revolution), which is the form of socialism being developed in theory and in practice in China, Vietnam, and Cuba. In this concept of pragmatic socialism, state ownership is the principal form of property, but other forms of property have a role, formulated by the state development plan and regulated by the state. Moreover, the state plays a primary role in formulating a development plan and in directing and regulating the various forms of property. The central role of the state as principal property holder, planner, and regulator is clear in the new Cuban constitution. It affirms that Cuba has a “socialist economy based on the property of all the people over the fundamental means of production, as the principal form of property, and based on the planned direction of the economy, which regulates and controls the market in accordance with the interests of the society” (Article 18). “The State directs, regulates, and controls economic activity, reconciling national, territorial, collective, and individuals interests in benefit of the society” (Article 19). “The State socialist company is the principle subject of the national economy. It has at its disposal autonomy in administration and management, and it plays the principal role in the production of goods and services” (Article 27).
Pragmatic socialism is the necessary road. In the present conditions in the nations constructing socialism, and in the present international conditions, the total elimination of private property and foreign capitalist investment is not possible. The nations constructing socialism have to develop productive capacity in order to satisfy the needs of the people, and in their present productive, commercial, and financial situation, they cannot do so without private property and foreign investment, assigning them a role in the national economic development plan. In addition to such objective factors, there are subjective conditions: the aspirations of the people are influenced by the consumer societies of the core nations and the dissemination of their “values,” which really are anti-values. The political reality is that concessions must be made to the aspirations of the people, in order to keep them with the socialist project.
Accordingly, there are both objective and subjective conditions that establish and limit possibilities, and socialist revolutions in power must intelligently respond and adjust. It is possible that, in the future, property will be almost entirely state property and workers’ cooperatives, or entirely workers’ cooperatives; we cannot yet know, experience will teach us. But under present conditions, the elimination of private property and foreign investment is not possible.
In their efforts to construct socialism and a more just, democratic, and sustainable world-system, the nations moving toward socialism must confront the aggressions of the imperialist powers, which continue to seek to preserve their structural advantages in the neocolonial world-system. At the present time, for example, the declining hegemonic core power is threatening a trade war with China; is strengthening the long-standing economic, commercial, and financial blockade of Cuba; and is imposing economic sanctions, intervening politically, and threatening military action against Venezuela. These actions, of course, are new manifestations of the longstanding imperialist policies that were central to the transition from colonialism to neocolonialism, in which the sovereignty of nations is pretended but not real. In this situation of continuing imperialist aggression, all of the nations that seek an autonomous road, different from that assigned to them by the neocolonial world-system, must economically and diplomatically cooperate with one another, as they are doing.
In the struggle between the established unsustainable neocolonial world-system and the more just, democratic, and sustainable world-system in development, the role of ideas is central. Unfortunately, many intellectuals and activists of the Left in the nations of the North have a limited understanding, as a result of the weakness of socialist movements in their lands. Influenced by utopian conceptions of what socialist governments ought to do, they believe that the pragmatic socialist nations have lost the socialist road. They cannot see that the nations constructing socialism they are leading the way in the forging of a socialist world-system.
Following the collapse of the Soviet Union and the socialist bloc, combined with a strengthening of the economic sanctions against Cuba by the United States, the Cuban economy suffered a collapse in the early 1990s, and there was a significant decline in the standard of living. The government adopted intelligent adjustment strategies, designed to preserve and protect the social and economic gains since 1959. During the next fifteen years, there was a slow but steady recovery, and universal, free health care and education were maintained, as were subsidies for food and utilities. However, the people endured great sacrifices, and there was a continually growing feeling of dissatisfaction among the people with respect to the material standing of living, which did not involve a desire to abandon the socialist road. In response to the growing popular inquietude, the Party began to analyze possibilities for strengthening the productive capacity of the nation, which culminated in a new social and economic model, approved by the National Assembly, following an extensive popular consultation, in 2012. In essence, the new model expands space for self-employment, small-scale private property, cooperatives, and foreign investment, while maintaining state ownership as the principal form of property; it preserves the role of the state as manager and regulator of the economy.
The new model did not emerge from a sector within Cuban society that would benefit economically from the changes, nor was it developed to satisfy the interests of international capital. The new model was developed by the revolutionary leadership in response to the dissatisfaction that had emerged among the people, a dissatisfaction that implied an erosion of popular support for the Revolution in comparison to the era of the 1960s through the 1980s. Even though the popular dissatisfaction did not express itself in the form of counterrevolutionary thought and behavior, it was a matter of concern, especially with respect to its long-term implications.
The new social and economic model of 2012, therefore, was developed autonomously by the leadership of a sovereign socialist nation, forged by its vanguard party with the participation and full support of the elected deputies of the people. Its goal is to increase capacity for the production and distribution of goods and services, in order that the needs and desires of the people will be more fully satisfied, so that they will be kept on board in the socialist project in the long term. It intends to facilitate the construction of a more “prosperous” socialism.
The National Assembly, in accordance with its constitutional authority, interpreted the new economic measures as constitutional. Nevertheless, there was a belief within the Party that the new economic measures had created the need for a constitutional re-foundation. As a result, it is not surprising that the section on “economic fundamentals” of the new constitution includes important changes from the 1976 Constitution. Said changes, however, do constitute rupture; rather, they reflect a continuous evolution, based on continuing theoretical reflection by the vanguard on revolutionary practice, on national social dynamics, and on the evolving political-economy of the world-system.
Both the 1976 and new constitutions dictate that the Cuban economy is a socialist economy that is directed and regulated by the State in accordance with its plan for social and economic development (Articles 14 and 16 in the 1976 Constitution; Articles 18 and 19 in the new Constitution). However, there is a difference between the two constitutions with respect to the various forms of property. The 1976 Constitution establishes state ownership of agricultural land, sugar processing plants, factories, mines, banks, and natural resources; and it recognizes other forms of property as exceptions to state property. These exceptions include the agricultural property of small farmers and cooperatives, joint ventures of state and private capital, self-employment in transportation, and the property of mass, social, and political organizations (Article 15). In contrast, the new Constitution recognizes various forms of property, including socialist property of the people, in which the state acts a representative of the people; cooperatives; joint ventures; the property of mass, political, and social organizations; and private property (Article 22). These are not exceptions to state property, as in 1976; rather, they are forms of property that exist alongside state property. Moreover, in the new formulation, cooperatives are legitimated beyond agriculture. In addition, private property is explicitly recognized as a form of property in the socialist economy, although the state regulates to ensure that concentration of private property is limited, in accordance with socialist values of equity and social justice (Article 30). Furthermore, foreign investment has its role: “The State promotes and guarantees foreign investment as an important element for the economic development of the country, over the base of the protection and reasonable use of natural and human resources as well as respect for national sovereignty and national independence” (Article 28).
Such recognition of various forms of property, including private and foreign property, is in accordance with what I have elsewhere called “pragmatic socialism” (see “Pragmatic socialism: The necessary road” 5/14/2018 in the category Revolution), which is the form of socialism being developed in theory and in practice in China, Vietnam, and Cuba. In this concept of pragmatic socialism, state ownership is the principal form of property, but other forms of property have a role, formulated by the state development plan and regulated by the state. Moreover, the state plays a primary role in formulating a development plan and in directing and regulating the various forms of property. The central role of the state as principal property holder, planner, and regulator is clear in the new Cuban constitution. It affirms that Cuba has a “socialist economy based on the property of all the people over the fundamental means of production, as the principal form of property, and based on the planned direction of the economy, which regulates and controls the market in accordance with the interests of the society” (Article 18). “The State directs, regulates, and controls economic activity, reconciling national, territorial, collective, and individuals interests in benefit of the society” (Article 19). “The State socialist company is the principle subject of the national economy. It has at its disposal autonomy in administration and management, and it plays the principal role in the production of goods and services” (Article 27).
Pragmatic socialism is the necessary road. In the present conditions in the nations constructing socialism, and in the present international conditions, the total elimination of private property and foreign capitalist investment is not possible. The nations constructing socialism have to develop productive capacity in order to satisfy the needs of the people, and in their present productive, commercial, and financial situation, they cannot do so without private property and foreign investment, assigning them a role in the national economic development plan. In addition to such objective factors, there are subjective conditions: the aspirations of the people are influenced by the consumer societies of the core nations and the dissemination of their “values,” which really are anti-values. The political reality is that concessions must be made to the aspirations of the people, in order to keep them with the socialist project.
Accordingly, there are both objective and subjective conditions that establish and limit possibilities, and socialist revolutions in power must intelligently respond and adjust. It is possible that, in the future, property will be almost entirely state property and workers’ cooperatives, or entirely workers’ cooperatives; we cannot yet know, experience will teach us. But under present conditions, the elimination of private property and foreign investment is not possible.
In their efforts to construct socialism and a more just, democratic, and sustainable world-system, the nations moving toward socialism must confront the aggressions of the imperialist powers, which continue to seek to preserve their structural advantages in the neocolonial world-system. At the present time, for example, the declining hegemonic core power is threatening a trade war with China; is strengthening the long-standing economic, commercial, and financial blockade of Cuba; and is imposing economic sanctions, intervening politically, and threatening military action against Venezuela. These actions, of course, are new manifestations of the longstanding imperialist policies that were central to the transition from colonialism to neocolonialism, in which the sovereignty of nations is pretended but not real. In this situation of continuing imperialist aggression, all of the nations that seek an autonomous road, different from that assigned to them by the neocolonial world-system, must economically and diplomatically cooperate with one another, as they are doing.
In the struggle between the established unsustainable neocolonial world-system and the more just, democratic, and sustainable world-system in development, the role of ideas is central. Unfortunately, many intellectuals and activists of the Left in the nations of the North have a limited understanding, as a result of the weakness of socialist movements in their lands. Influenced by utopian conceptions of what socialist governments ought to do, they believe that the pragmatic socialist nations have lost the socialist road. They cannot see that the nations constructing socialism they are leading the way in the forging of a socialist world-system.
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