[BRIEF NOTE] On the immiseration of Cuba under Communism
Late in December of 2015, I wrote an answer in Quora to a question wondering if Cuba proves that Communism worked. Could it stand as an example for the Third World? It could not, I argued, mainly because Cuba before Castro was an advanced society with high levels of human and economic development, and because Cuba after Castro simply coasted.
PBS’ synopsis notes the fatal flaw in Cuba’s prosperity, which was distributed very unevenly and helped to create a pre-revolutionary situation.
Cuba’s capital, Havana, was a glittering and dynamic city. In the early part of the century the country’s economy, fueled by the sale of sugar to the United States, had grown dynamically. Cuba ranked fifth in the hemisphere in per capita income, third in life expectancy, second in per capita ownership of automobiles and telephones, first in the number of television sets per inhabitant. The literacy rate, 76%, was the fourth highest in Latin America. Cuba ranked 11th in the world in the number of doctors per capita. Many private clinics and hospitals provided services for the poor. Cuba’s income distribution compared favorably with that of other Latin American societies. A thriving middle class held the promise of prosperity and social mobility.
There were, however, profound inequalities in Cuban society — between city and countryside and between whites and blacks. In the countryside, some Cubans lived in abysmal poverty. Sugar production was seasonal, and the macheteros — sugarcane cutters who only worked four months out of the year — were an army of unemployed, perpetually in debt and living on the margins of survival. Many poor peasants were seriously malnourished and hungry. Neither health care nor education reached those rural Cubans at the bottom of society. Illiteracy was widespread, and those lucky enough to attend school seldom made it past the first or second grades. Clusters of graveyards dotted the main highway along the foothills of the Sierra Maestra, marking the spots where people died waiting for transportation to the nearest hospitals and clinics in Santiago de Cuba.
This 1966 New York Review of Books exchange of letters on the Cuban revolution makes Cuba’s relative advancement clear: “[I]n 1953, not a particularly good year for the Cuban economy, Cuba’s per-capita income of $325 was higher than that of Italy ($307), Austria ($290), Spain ($242), Portugal ($220), Turkey ($221), Mexico ($200), Yugoslavia ($200), and Japan ($197)”.
Ward and Devereux’s 2010 study “The Road not taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective” (PDF format) makes more detailed claims: “On the eve of the revolution, incomes were 50 to 60 percent of European levels. They were among the highest in Latin America at about 30 percent of the United States. In relative terms, Cuba was richer earlier on. Income per capita during the 1920s was in striking distance of Western Europe and the Southern United States. After the revolution, Cuba slipped down the world income distribution. Current levels of income per capita appear below their pre-revolutionary peaks.” Notwithstanding criticism of these figures–Ward and Devereux do seem to account for price levels, contrary to Louis Proyect’s claims–they seem valid. Cuba on the eve of the revolution was a high-income Latin American society, fully bearing comparison with the Southern Cone and Venezuela, even much of Europe.
What does this mean about the success of Cuba under socialism? Probably the most noteworthy element of Cuba’s post-revolutionary history is that of economic stagnation and relative decline. Cuba has fallen behind spectacularly, not just behind its western European peers but behind Latin America as well. Latin America’s high-income countries have had a chequered growth history, but even these, Cuba’s peers, have done better: Wages and living standards in Argentina, Uruguay, and Chile are substantially higher. Even in the context of the Caribbean, Cuba’s geographic peers, Cuba’s performance has been patchy, with the Dominican Republic making lasting gains.
What happened? One counterfactual analysis suggests that Cuba’s economy began underperforming badly in 1959, the moment of the revolution. Ward and Devereux suggest, ironically enough, that it is only by the late 1950s that the Cuban economy had completed its long, slow recovery from the devastating impact of US sugar tariffs imposed in the early 1930s. (Cuba, they suggest, may have seen little net economic growth since the 1920s!) Of all the economies in the world to be transformed into autarkic socialist states, Cuba’s highly-export dependent economy may have been among the least suited.
There may well have been gains to general Cuban living standards from the redistribution of wealth and resources. These gains were limited: The positive effects of the revolution, including increased investment in human development, may have been swamped by the negative effects including the collapse of Cuba’s previous trade networks and the costs of converting an economy to Communism. Cuba may simply have coasted on its pre-revolutionary achievements, expanding access to pre-existing institutions.
In the end, Cuba has been left as vulnerable as any other post-Communist countries by the failure of its political model, perhaps even more exposed and vulnerable than before the introduction of Communism. Castro and his communism did not improve Cuba’s position relative to the outside world. In this, Cuba bears comparison not so much with the countries of the Third World as it does with the countries of central Europe, similarly semiperipheral countries with similar problems of inequality which did not see much benefit in the long run from Communism.