Comrades and Investors: The Uncertain Transition in Cuba

Cuba’s economic reform leans toward the restoration of capitalism, though in the name of socialism and administered by the Communist Party. But the tendency is not inexorable; there are alternatives to reverse it.

Haroldo Dilla Alfonso

Much to the delight of technocrats and businesspeople, the Cuban government has made what it calls economic reform its immediate priority. It was not as if it had very many choices. The disintegration of the Eastern bloc economies and later of the Soviet Union was a serious blow to the Cuban economy. Between 1986 and 1989 it had been virtually stagnant, and the brutal decline that began in 1990 meant that by 1993 the accumulated contraction of the GDP had come close to 40%. The situation of the external sector was even more complex; suddenly, the country lost 85% of its traditional (and often preferential) markets, almost all its long- and medium-term lines of credit and its main sources of technology. Its capacity for imports fell by nearly two thirds.

In this situation, the customary hostility of Cuba’s political leadership to the market gave way to a pragmatic acceptance of a series of linked realities. Cuba had to enter the capitalist world market on a strictly competitive basis, and for that to happen it would have no choice but to restructure many of its most basic economic and social organizations. In a memorable speech on July 26th 1993, Cuban President Fidel Castro recognized the limits of the immediate program of action: to preserve the gains of the revolution in anticipation of better times, when socialist construction could resume its course.

Economic adjustments at a surprising pace

Despite the bureaucratic obstacles placed in its way, and the frequent setbacks, the economic liberalization and adjustment process has been surprisingly rapid. The opening to foreign investment began in 1987; in 1995, a specific regulatory law gave investors broad legal protection. In 1992, a sweeping constitutional amendment was approved that recognized the right to private ownership of the means of production and opened the door to the decentralization of state enterprises by abolishing the state monopoly over foreign trade. One year later, amid a dramatic collapse in the GDP, ordinary Cubans were given permission to hold dollars and other strong hard currencies, which could be spent in a chain of shops that until then were only accessible to resident foreigners, tourists and a small local elite. During the same period, a significant proportion of state lands passed to cooperatives or, in a smaller number of cases, to small farmers. Self-employment in the service sector was also encouraged by the passage of favorable legislation.

In 1994 the budget was adjusted, prices were increased and taxes began to be imposed, all to reduce a vastly excessive liquidity. In the second half of the same year, the state authorized a free market in food, although official discourse had repeatedly denounced the very notion during the "rectification process" launched in 1986. Just as the subsidized basic market basket was gradually being reduced, a substantial proportion of popular consumption was taking place in a free dollar market unrelated to the wages earned by workers. Steps taken through 1996 and 1997 served to consolidate the processes already underway by successive changes in legislation and transformations of economic institutions: free trade zones were authorized in four areas of the country, the customs law was modified, the banking system was reorganized, etc.

Toward capitalist restoration:
not an inexorable trend

The Cuban political leadership has repeatedly proclaimed the achievements of its policy of opening to the market throughout this tough period. The economy was rescued from collapse and after 1995 began to register significant rates of growth. And it must be acknowledged that this closed one option to which the US extreme right and its associates in Miami aspired—a great march on a revolution in full economic collapse. Considering that these results have been achieved in the midst of a confrontation with the United States, whose economic blockade and interventionist policy have been the catalyst for the crisis, they clearly merit recognition as having a historic national and international significance.
The official line is that the recovery was possible without turning to orthodox neoliberal measures, without sacrificing public health, education or social security programs, whose budgets have remained stable or actually increased (they represent 60% of public spending), and preserving a clear and distinct role for the state. Undoubtedly this recognizable achievement confirms the social commitment embedded in the program of the revolution.

A number of questions remain, however, for any observer on the political left who is convinced of the historical value of Cuba’s revolutionary heritage. Cuba’s liberalization and economic adjustment process differs from other similar processes elsewhere in Latin America not only for the reasons above, but because what has happened in Cuba is not simply an adjustment to an existing standard capitalist mode of operation but a radical restructuring of the political economy, the forms of social regulation and the cultural-ideological production. Because it is so radical, this restructuring is a profoundly significant qualitative transformation: the gradual commercial colonizing of spheres of social action has posed challenges at many levels to the most central of all political questions—the distribution of power. If we take as axiomatic that a combination of militant anti-imperialism and the provision of free social services does not amount to socialism, we are left with a question as to the real depth of these systemic changes: at the social (and more specifically social class) level and at the level of the total rearticulation of political life.

It is central to this writer’s thinking that the reforms are producing a recomposition of social classes as an outgrowth of the emergence of a technocratic-entrepreneurial bloc to the detriment of the popular classes. This tendency towards the restoration of capitalism in the country, albeit in the name of socialism and under the direction of the Communist Party, is not inevitable. Therefore a second central idea informing this essay is that alternative paths exist that would permit the maintenance of socialism, and that they are inseparable from the articulation of the Cuban revolutionary agenda with an alternative left project at the international level. This would imply a very substantial renovation of the political system in the direction of genuine popular power.

Thirty years of social
leveling and social mobility

The dynamics of Cuban society between 1959 and 1989 were dominated by two contradictory tendencies: social leveling and social mobility. The first prevailed through the early years and grew out of the radical reality of the revolution. It led to the virtual liquidation of the bourgeoisie and a significant proportion of the middle class, who either emigrated or underwent a proletarianizing process. Gradually, the society came to be organized around social and state ownership of the means of production. This social leveling was accompanied by the rising social mobility of the majority of the people, particularly by the mid-seventies, through state programs that provided jobs and social services. By way of illustration, in 1953 57% of the population lived in urban areas, around 25% were illiterate and only 11% had intermediate or higher education qualifications. By 1989, the last year in which annual statistics were published, 73% of a population of 10.5 million were living in urban areas, some 38% in cities with populations of over 100,000 (1). Illiteracy was by then a distant memory; over half the population had gone beyond sixth grade and there were around half a million technicians and professionals. Over 140,000 people were enrolled in higher education.

This intense social mobility, while leading to an objective differentiation between social subjects, did not have corresponding effects on the self-identification of social sectors; their identity was determined by other factors, including the tendency to emphasize the concept of el pueblo (the people) as the sociopolitical subject of social transformation and national defense. The political system acknowledged this through its adoption of the Leninist model of sectional organization that act as "transmission belts" between the people and the "vanguard" organized in the Communist Party (2). The inevitable result was a high concentration of political authority, given the quasi-monopoly of the revolutionary political class in the regulation of social life, in at least three senses.

Subsidized utopia and a secure ideology

First, the power to assign resources through a single, centralized and directive planning mechanism was reinforced by Cuba’s entry into the Soviet economic bloc at the beginning of the seventies (from then until 1987 the Cuban Comeconomy experienced extensive growth with relatively abundant resources within the framework of a political economy characterized by undemanding production targets, equitable distribution and subsidized consumption). Second, the Leninist model of political organization, lubricated by a high level of political consensus, became a powerful social control mechanism, not only to repress counterrevolutionary tendencies (which were insignificant in real terms after the early sixties) but above all in relation to popular mobilizations and to the socialization of values and political behavior.

Third, and no less significant, was the political leadership’s capacity to produce a credible legitimating ideology, which functioned as a kind of teleological paradigm in relation to both internal and external factors. This ideology exhibited a certainty that left little possibility for doubt about the actual, the possible and the best. It was coherent, given the close interrelation between the perceptions of daily reality emanating from the social structure and the official discourse; and it was accessible to the ordinary citizen insofar as it shared the values at the heart of national political culture, emphasizing ethical principles like patriotism, internationalism and social justice and the like. Capitalism and all its organic components—bourgeoisie, consumerism, inequality, the market, etc.—were fiercely anathematized and regarded as part of a past that would not be given a second opportunity.

History revealed its limits and the market did the rest

Yet this structure contained within it serious contradictions between the declared goal of the socialization of power and the gradual appropriation of that power by a bureaucratic strata that first emerged during the sixties and whose power was definitively consolidated in the subsequent decade through the so-called "institutionalization" process. In systemic terms, the establishment of this bureaucratic layer could only be achieved by extending clientelistic relations, slowing down the socialization of power and consequently paralyzing the socialist development project itself.

History has exposed both the virtues and the drawbacks of this way of regulating social and political life. Such a political regulation system could function effectively in a society with a low level of what Giddens has called "universalization and social reflexivity." (3). Among other things, it made possible a successful confrontation with the very real aggression from the North, facilitated the mobilization and equitable distribution of available resources and promoted a culture of political solidarity and a vast network of social participation and political mobilization mechanisms. But its own achievements implied its approaching obsolescence, especially as people’s mobility and high skills began to clash with the rigid mechanisms of socio-political control, producing dysfunctions like apathy and anomie. Economic reforms have dealt with the rest. The market, a discreet actor in earlier decades, began to play an increasingly important role in resource allocation and distribution of the meager surplus—and consequently in reshaping the relations of power. Ordinary Cubans began to realize to their astonishment that the future was nothing like as certain as the official discourse had suggested for so long.

The walls fell down and the debate went up

It has been one of the constants of official Cuban discourse that the political structures should be periodically renewed. This, however, has been limited by a number of other factors, ranging from the inviolability of certain precepts, like the single party, to a refusal to countenance any changes induced by external pressures—an understandable refusal, of course, given the US commitment to changing Cuba’s political system to the point where it could resume its role as a decisive actor in the country’s internal affairs.

In the dynamics of political renewal, 1990 was a crucial year, albeit not exactly a good year; since 1987 the economy had shown a stubborn tendency to decline that could not be reversed even by the "rectification" proclaimed by the political leadership. The ideological constructions around the irreversible nature of socialist progress had sustained some heavy blows due first to the effects of perestroika and second to the less than edifying spectacle of the collapse of the Berlin Wall. Then, in the latter half of 1989, Cuban society was shaken by a public exposé of corruption among high officials of the armed forces and security services as well as civilian agencies.
The need to recover consensus and reaffirm the regime’s legitimacy was recognized as urgent by the political class on the eve of the Fourth Congress of the Cuban Communist Party, scheduled for 1991 (4). The Party therefore called for a public debate whose purpose would be to "…make possible a consensus based on recognition of the diversity of views existing within the population and strengthened by democratic discussions within the Party and the Revolution, above all in the search for solutions, the examination of the means for achieving our socioeconomic objectives, and in general the perfection of our society." For several months, Cuba experienced the freest and most democratic public debate in its history. Millions of people in thousands of settings (schools, labor halls, community centers) exercised their right to criticize, to propose solutions or simply to offer opinions on questions ranging from daily life to public policy. The results of these debates were never published, but the various reports and comments reflected a demand for profound renewal of the system within the framework of an enduring commitment to social objectives and national independence. The Cuban political class had access to more than enough information to judge the state of mind, aspirations and opinions of the majority of the Cuban people.

Weak echoes of an historic debate

The political changes that occurred in the two subsequent years tried to take these demands into account, but rarely managed to be more than a pale reflection of the intensity of the earlier debates. In the first place, a substantial constitutional reform was enacted, which modified some 60% of the original document. Although most of these changes referred to the economic sphere (the system of property ownership, decentralization of foreign trade, etc.), others, at least theoretically, touched on what Azcuy has called the "hard core" of the 1976 Constitution (5): the declaration of the non-denominational character of the state and prohibition of any discrimination against religious believers; the removal of all references to democratic centralism and unity of power; the removal of the strictly class-based definition of the state’s social base; the organization of direct parliamentary elections; etc. A subsequent Electoral Law reaffirmed the latter provision. It had the virtue of reaffirming that the Communist Party would not intervene in candidate selection or the elections themselves and reinforcing the role of the social and mass organizations in these areas, but it limited its democratic impact by placing restrictions on the principle of competition, which had been the cornerstone of the much-vaunted local elections. At the same time, new sub-municipal structures—the popular councils (consejos populares)—were created; they came to play an important role in mobilizing local resources, in local decision-making and in some cases in drawing up community projects with a strong element of participation and self-management.

But what some sectors had envisaged as the auspicious beginning of the construction of a pluralist, participatory democracy, a political response to questions about socialist continuity under new social conditions, proved to be a series of changes on matters of detail that had more to do with good government than with democracy. In other words, if politics is not only, or even principally, a question of norms or institutions but, above all, according to Held, a question of the interaction of actors and subjects through the control of resource and value allocation mechanisms, we can state that politics in Cuba began to suffer a slow decline with the imposition of a new model of accumulation whose most crucial expression was the reorganization of the social networks of power (6). Thus, the formal changes that can be carried out today will be very different from those that may be realized in the future, when the correlation of forces has changed significantly. A brief analysis of the social reconfiguration process will show a dual tendency: the strengthening of a technocratic-entrepreneurial bloc that benefits from its links to the market and has real possibilities of becoming the hegemonic social layer and the simultaneous fragmentation and weakening of the popular sectors. A note of caution, however: since 1989 no systematic social statistics have been published in Cuba, so all of the analysis that follows is based on partial studies, data and observations that are always open to an element of doubt.

Recycling the elite

From this perspective, the most obvious result of the process of the opening and reform has been the creation of an incipient new social bloc—which we shall call "technocratic-entrepreneurial." Within this bloc three basic components can be identified.

Foreign Investors. The first is located within the foreign investment sphere. According to available statistics, there were only twenty or so foreign investors in 1990. By 1994, there were 176 joint foreign enterprises, with investments of about US$1.5 billion. These involved 36 countries and 26 areas of economic activity. At the same time, 400 commercial companies were functioning inside Cuba. The high-level political official who opened the 12th Havana International Fair at which these figures were presented assured the assembled business people that "we can offer you an orderly country, a coherent and irreversible policy of openness to capital investment and a cohesive and extensive economic infrastructure. Our productive sector is developing in the direction of efficiency; our workers are industrious and self-sacrificing, as well as highly educated and technically skilled. Our society suffers from neither terrorism nor drugs. We can therefore offer you a sovereign nation with an honorable and incorruptible government." (7)
By the end of 1996, the number of foreign investors had risen to 260, some of which were beginning to establish themselves in the newly created free-trade zones. In the same year, 800 foreign firms were represented in Cuba (8). As these are normally joint enterprises with the state, they are closely tied to a stratum of local entrepreneurs and managers who share experiences, lifestyles and aspirations with the foreign entrepreneurs and managers that differ substantially from those of the rest of the population.
Local Managers. The second component of this emerging bloc is formed by directors of state enterprises who have found advantageous niches in the world market and consequently achieved considerable autonomy. Their new functions are incompatible with the traditional image of a public administrator within a centralized planned economy locked into the tragic triad of know nothing, do nothing and want nothing. In his or her place a new type of local entrepreneur is arising in Cuba who is more concerned with maximizing profits than with other policy considerations. The number of firms within that layer will also increase as the reform process continues.

Black market speculators. A third, still potential, component of this bloc is represented by those well-off peasants, trade intermediaries, service providers and the like who have accumulated large sums of money and other property through speculation on the black market, frequently at the expense of state resources. Given that most of these fortunes were illegally acquired, it is impossible to quantify their economic potential, but we can make an estimate by analyzing current bank accounts, where approximately 60% of the liquid cash is deposited and which in recent years have demonstrated a disquieting tendency towards concentration. According to figures of the Cuban National Bank and other official agencies, 41.1% of the accounts in late 1994 contained 77.8% of the total savings. A year later, 13.1% of the accounts contained 83.7% of the savings and by 1996 the concentration had reached the point that 12.8% of the total accounts (some 600,000) represented 84.7% of the total savings, some 6.6 billion pesos, while the 4,500 personal bank accounts in hard currency contained some US$9.5 million (9). Perhaps more significant is the fact that in the same year 2.7% of accounts contained 43.8% of all savings.

With the liberalization of markets in agricultural and industrial products and the extension of self-employment, this sector has not only grown and "laundered" its fortunes, but also has established increasing control over the circuits of circulation and realization in the domestic market. In a not too distant future this sector will start having a role as investors in small and medium enterprises and as contractors to the formal sector of the economy, which will in turn expand its accumulation potential.

It should come as no surprise that the social origin of these groups, particularly the first two, is the traditional civilian and military bureaucracy and their families, as well as young technocrats bolstered by the economic policies in effect. Even the third group reveals close connections between the most prosperous private enterprises—restaurants and tourist accommodations—and retired top bureaucrats or their families, for both these activities require comfortable, centrally located housing of the type the state usually assigns to this social layer.

The fragmentation of the popular sectors

Wage earners. Before 1989, the Cuban working classes were a relatively homogeneous sector. In that year, some 3.5 million people, 94% of the workforce employed in the civil sector, consisted of wage earners in the state economy, the majority of organized into trade unions supported by a very paternalistic labor code. Self-employed workers numbered just a few thousand in total, and the peasantry, independent or in cooperatives, was numerically small and shrinking. The crisis and the adjustment and liberalization processes have substantially changed that picture. The wage earning sectors and laborers in particular have suffered an absolute reduction in their numbers as a result of the opening of new and more lucrative employment opportunities in the private or cooperative sector and the process of reducing the number of supernumeraries in state enterprises themselves. In 1996, the wage-earning sector absorbed 78% of the economically active population (EAP), 16% less than eight years earlier (10).

No less significant has been their loss of economic power through the dollarizing of the prices of a substantial number of consumer goods and economic services and the continuation of wage levels designed for subsidized consumption. In this sense, state sector wages have been subject to a regime of superexploitation to the point where the price of labor is lower than the cost of its reproduction. According to unofficial calculations, to guarantee a minimum consumption of food, hygiene products and commercial services for a Cuban family of four in which at least two people are working and receive an average wage would require doubling their earned income.

In real life, this situation is assuaged in various ways. Around 20% of wage earners working in areas favored by the new economic dynamic (tourism, advanced technology, export industries) receive incomes in cash or in kind in addition to their official wage; the effect is that international capital is virtually restructuring the working class and the wage earning sector in general. In other cases, these same workers have developed areas of self-employed activity, whether formally (for example, 26% of the licenses issued in 1996 went to state employees) or informally. But such people also frequently have recourse to other expedients, not linked to work, which in turn generates a growing social anomie. One such expedient is economic help from relatives abroad and another, no less relevant one is corruption. There is no need to go further into the ethical and ideological implications of these modes of survival. Another significant social tendency is the proliferation of non-waged individual and cooperative modes of production.

Peasants and small farmers. The first level that should be underscored is that of the small peasants and agricultural producers in cooperatives who for one reason or another have not gotten good advisory services. As noted earlier, these sectors underwent a gradual and absolute shrinkage from the 1959 triumph of the revolution onwards, so that by 1970 they represented 11% of employees in the civil sector, falling to only 5% in 1989 (11). With the 1993 creation of Basic Units of Cooperative Production (UBPC), this situation underwent a dramatic reversal; while there are no official figures, it is estimated that some 300,000 joined the ranks of the agricultural cooperatives and now work 30% of the land. Another 50,000 received individual land titles.

Urban self-employed. The self-employed sector in the cities grew to a similar degree. These activities had expanded earlier, through the seventies, but their growth was cut off between 1986 and 1989 during the so-called rectification period, when such pursuits were considered incompatible with socialist aims. In the summer of 1993, self-employment was officially rehabilitated as a means of generating employment and limiting the reach of the black market. Although the "self-employed sector" hides several real fortunes accumulated by those who have won their niche and successfully coped with the government’s rising tax demands, the vast majority of operations covered by this law are small individual or family units whose net incomes, though higher than the earnings of most formal sector workers, do not allow for any capital accumulation.
In February 1994, there were 142,000 legally self-employed people in Cuba; by June the figure had reached 160,000 and by January 1996 it was at 208,346, though in 1997, it was reported that the number had shrunk by around 160,000. Yet none of these figures truly reflect the dynamics of the process. By 1997, 401,847 applications for self-employment licenses had been received while close to 160,000 people had abandoned the activity—an indicator of profound instability. Only 0.9% of the latter total worked in the most lucrative sector, the private restaurants; 27% ran small food or non-alcoholic drink vending stands. At that time 26% of self-employed people still worked simultaneously in the formal sector, while 30% were unemployed, 18% were housewives (a euphemism often used to cover over female unemployment) and the rest were retired. Of the license-holders, 73% were men, which leads to the assumption that women are playing a subordinate role in support of the family economy. It is interesting to note that 80% of those holding licenses had over a ninth grade education (12). (Statistics on the number of self-employed should be treated with care. As usual in this segment of the labor market, behind every legally registered worker paying tax a number of others are contributing their labor more or less continuously to private enterprise. This could multiply the real figure of people whose principal income derives from self-employment.)
Finally, Cuban society is now beginning to move from a situation of full employment (legitimately considered a major achievement of the revolution even if its price was notorious economic inefficiency) to one in which unemployment is a structural feature. In 1994 open unemployment reached 8.4% of the EAP and in 1997 it was 7% (13), which some analysts have interpreted as a positive indicator. But it does not suggest an irreversible downward move, since official unemployment statistics are always lower than the real levels. They refer to people seeking work through the official agencies, while only part of the jobless population looks for work that way. On the other hand, there are no data for underemployment. Unemployment has particularly affected young people under 30 (60% of the total) and women.

The state has been able to administer unemployment by only gradually applying, or even postponing, the rationalization of the numbers of workers in state enterprises. Against that, the labor market has started to provide new employment options, particularly in the emerging private sector. It is calculated that 70% of the decline in state employment has been absorbed by the self-employed sector; and it is likely that the future authorization of small and medium businesses will open new escape valves from the same sector. But the supply of jobs will not be unlimited, for the number of unemployed will continue to increase even if the economy maintains a reasonable level of growth, precisely because a precondition of economic reproduction in the new model of accumulation is that supernumeraries be expelled from the workforce.

Rethinking the future from the left

Rethinking the future from a leftwing perspective is a necessity that goes far beyond Cuba’s national frontiers. The Cuban people’s resistance, their struggle for national independence and their defense of the social gains they have made has won them the admiration of the whole world and motivated a solidarity movement of enormous moral and political significance. The intransigent anti-imperialism of its leadership is equally worthy of recognition.
All of this is important, but not sufficient, for Cuba offers another opportunity to constitute a component of an anti-capitalist project in formation that, even if it may have different concrete expressions in each national situation, will only be viable on an international scale. If that is to happen, however, Cuba must not only safeguard both its independence and its social advances, but must also continue to develop new concepts of development and of politics and create genuine democratic and pluralist popular power. Cuban society has ample reserves in this respect: a strong network of popular participation, a political culture permeated by a sense of solidarity and cooperation, a social subject both educated and committed to values that are essential to socialist objectives, and a political class important segments of which have a sense of responsibility and a high level of social sensitivity.

On the other hand, there is no shortage of obstacles. The most significant of these are precisely those conditions the country is facing that make it particularly hard to achieve economic recovery, and its asymmetrical relationship with the capitalist world market, all exacerbated by the effects of an immoral US blockade that functions at both the economic and political level. Given the proven non-viability of autarchy, Cuba’s insertion into the world capitalist market is an inescapable condition of its national survival, but this does not imply fatalistic acceptance of either the rules of the globalization game, or the impossibility of finding alternative paths that will substantially modify the currently dominant scenarios.

A realistic judgment, however, cannot avoid the fact that, whatever measures are adopted, this insertion will dramatically alter the relations of power and the state’s operating code. This leads to the conclusion that there is a pressing need for a policy redesign, governed by three contradictory but not mutually exclusive essential principles. First, policy should guarantee the unity of the nation in face of imperialist intervention. Second, it should strengthen the subject called ‘the people’ and their organizations and acknowledge its increasing complexity. Third, it should respond to social diversity based on popular hegemony and negotiated subordination of the emerging sectors that do not fall within that rubric. In summary, it would be a paradigm of a socialist politics that recognizes the existence of contradictions and conflicts in a complex society and provides mechanisms for resolving them in a democratic manner to the benefit of popular hegemony and national independence.

Strengthening the organizations of ‘the people’ The strengthening of the popular subject automatically assumes the autonomy of its organizations. The transmission belt model was a positive contribution to revolutionary ends in historical conditions that no longer exist. In the new situation, the popular organizations will tend to occupy contradictory spaces, even in relation to the policies handed down by the state.
At one level, existing sectional organizations would need to be stimulated. The Federation of Cuban Women (FMC), for example, has had a prominent role to play in women’s social mobilization; it should now take up its role, based on a feminist perspective, of challenging the structures of gender oppression that permeate Cuban society. These structures could easily be reinforced by the exigencies of a model of accumulation one of whose pivots is the degradation of the female workforce through prostitution, maquilas (assembly plants), etc.

Something similar could happen with the trade unions. As long as they were operating in a subsidized economy and were protected by a paternalistic labor code, the unions could maintain their legitimacy even while playing a quite discreet role in the labor process. As the new model of accumulation imposes intensified labor exploitation and raises the costs of its reproduction, the site of labor will again become a place of alienation and contradictions where representation can only be effectively sustained by militant trade unions with the legal capacity to use all types of pressure, including the strike.

All this has a cost. Let us admit, for example, that trade unions that are more belligerent could cause reservations on the part of unsophisticated foreign investors seeking to maximize profits in the shortest possible time. But this is an inescapable cost, and in any case, this is not necessarily the type of capital that will take an interest in a country with more sophisticated economic "attractions" than a cheap and docile work force. An anecdote, by way of illustration: when the Melia chain opened its first hotel in Cuba, the Spanish management refused to accept a trade union. According to one Cuban assistant manager, the Spaniards finally accepted it on the grounds that "a well structured union could smooth activity." (14) While such consensus is disturbing, it must be recognized that the unions are the sectoral organizations that have demonstrated the most courage and highest level of organization in the face of the structural adjustments and reforms (15).

The potential for the popular organizations in contemporary Cuba is not solely to be found in the traditional social and mass organizations. In the last five years, Cuban society has seen the emergence of a range of "associations," some with strong public involvement, whose common denominators have been their commitments to national independence and to a renewed socialism. They include civic associations, NGOs, academic organizations and community movements. As a whole, they have generated interesting debates around a new vision of development that embraces issues such as the environment, gender, popular participation, local culture, etc. In particular, the community movements have attempted in practice to offer an alternative form of development and coexistence based in the community, thus overcoming the traditional division between market and state that has absorbed public discussion in Cuba for so many years (16).

Paradoxically, the bureaucracy has boycotted all these movements, to the point where the top party echelons issued a document in 1996 declaring their intention to administer the dynamic of these associations in the framework of a "socialist civil society" whose parameters of inclusion and exclusion were never been defined, thus leaving them at the mercy of whatever arbitrary criteria bureaucratic organs produced (17). The official justification for this and other restrictive actions and attitudes toward organizational autonomy was that the interventionist policies of the United States included utilizing civil society in Cuba to undermine the system, repeating the formula it used in some eastern European countries.

It is certainly true that an interventionist strategy has been a constant since 1980, as made explicit by both the Torricelli (1992) and Helms-Burton (1996) laws, which envisaged a second track of operations aimed at coopting specific social and political sectors including (though not exclusively) the components of civil society. And this was certainly more than a declaration of intent. Since the early nineties, several rightwing US foundations have tried to organize a common front against Cuba, though it must be recognized that they were concerned not only with intervening in civil society but also influencing other sectors, including civil servants, the military and the security forces (18).

It is thus perfectly understandable that the Cuban state would attempt to protect national sovereignty from the subversive attentions of the United States, and would create preventive bureaucratic "filters" and hurdles to that end. But it seems absurd that it should do so on organizations that expressed in their declarations and in their practice the same total rejection as the state of all US attempts at intervention and subversion (19). Perhaps the state’s reaction against "civil society" is not expressing only the political class’ patriotic zeal or the bureaucracy’s traditional reticence to share its competence in matters of social control; it may also relate to its disposition to present to international capital a "country in good order," which is incompatible with combative autonomous organizations.

Finally, strengthening the popular subject cannot be limited to revitalizing existing organizations, but must also extend to the emergence of associations organic to the new actors that are subordinated in the current accumulation process. A first paradigmatic case is that of the thousands of self-employed workers, whose intermediate position in the emerging social structure objectively conditions their political ambivalence towards the continuity of socialism. As suggested previously, the majority of these workers depend basically on their own labor power and even while the anomalous economic moment ensures them relatively high earnings, they have no capacity for accumulation. The quality of their life continues to depend largely on the provision of social services and the state’s commitment to social welfare. But at the same time, increasingly educated and shaped by individual action, they tend to limit their worldview to the wretched little world of personal gain from what are objectively their "business activities." They thus see certain social obligations—paying taxes for example—as unjustified demands that are obstacles to their enrichment. The refusal of the last Communist Party Congress (1997) to allow the formation of small and medium businesses in fact blocked on what might have been an incentive to organize cooperatives and other associations of service providers.

A similar case with respect to its possible political implications is that of workers in the agricultural cooperatives, above all those established in the UBPCs, which, as mentioned above, were created in 1993 as a state response to the need to achieve better agricultural yields through decentralizing (20). The nearly 20% of state land ceded to these groups of workers represented the most audacious step towards socialization taken by the Cuban revolution in recent years. It has to be recognized, however, that the creation of the UBPCs lacked from the outset any clear political vision, with the result that they still have a pragmatic and utilitarian cast. The UBPCs were founded with bureaucratic constraints that prevented their free access to the market and tied them to the bureaucratic structures of the state enterprises. From late 1994, access to the market became possible, which has somewhat stimulated these institutions. But without other political actions, that dynamism in the UBPCs could take a specific course detrimental to their role as areas of socialist property and to their levels of internal democracy. Avoiding these effects will not depend on economic success of these cooperatives (though this is indispensable), but on the general political model into which they are inserted.
Independent workers, whether self-employed, cooperative or linked in the future to small and medium enterprise, thus represent a challenge for a political class accustomed to centralized top-down control. Current policies have tended to insert these workers into existing trade unions, which is obviously dysfunctional for the unions as well as for the self-employed and cooperative workers, and has yielded very limited effects. Everything suggests that it would be better to stimulate the organization of these sectors into organizations of their own that can represent their specific interests within the system, even where that implies a new way of thinking and of doing politics.

Only on the basis of empowering people in the various social spheres will it be possible to design an alternative economic model combining forms of popular economy (21) with co-management and self-management mechanisms based on a decentralized model—whether in the framework of state, private or mixed property. Such a model should also embrace consumer organizations which, supported by the relevant legislation, could counter the market’s predatory effect on the population’s consumption levels (independent of whether that market is privately controlled or under state control).

Subordinate the emerging techno-managers. The same policy design should address the needed but subordinate role of the technocratic-managerial sectors. The importance of these emerging sectors is not an issue of quantity; in fact they probably number no more than a few thousand people occupying still unstable slots on the social scale, lacking their own organizations and without a coherent sectoral consciousness. Their ascendance is a qualitative consideration, based on their positioning in the most dynamic areas of the economy, which provides them with "exchangeable political goods" vis-à-vis the political class and the traditional bureaucracy. It is a complementary bipartite relationship, though one not without its contradictions, in which the emerging economic sectors provide the traditional elite with the economic surpluses needed to reproduce their political project, while this same elite guarantees the social peace indispensable for the new model of accumulation. In the final analysis, we cannot forget that the new technocrats and entrepreneurs come from the very heart of this traditional bureaucracy or have been formed by its current politics, which places them within a very selective network of personal relations and gives them access to informational, material and other resources.

Their qualitative relevance can also be seen in their possession of a high capacity for ideological and cultural production, for which they need only present themselves before society as symbols of personal success in relation to the market. This has already had an impact on the attitudes and behavior of significant popular sectors, who once saw influence-peddling, corruption or marginality as deviations from the norm and now evaluate them as signs of success or simply as a legitimate form of resistance for survival purposes. Its paradigm could be nothing more than a sugar-coated Chinese model, speaking volumes about economic and consumerist successes but silent about its depressing consequences in social, political, cultural and ecological terms.
Here, rather than among the insignificant dissident groups—which the system has been able to accommodate with no major problems—is to be found the real social base for a Cuban thermidor, and for what could be a greater problem in the future: the roots of a tropical mafia that is already beginning to acquire influence.

The principal limits to its evolution into a hegemonic bloc are to be found in the persistence of an alliance between the popular classes and the political elite that emerged from the revolution. As noted earlier, the signs of caution the political leadership (particularly those who represent its historic direction) is manifesting regarding the advance of the market and the reform process, whatever technical value they may merit, express the enduring character of this basic social commitment. And it is not open for negotiation given the need to maintain national unity in the face of US hostility. The result is that there is still a strong compartmentalization of economic activities and a fragmentation of markets at the present stage of the Cuban reform process, which makes horizontal relations between the different components difficult even within each sector. It is not hard to see, however, that these structural conditions will be diluted by the force of the market if each popular bloc does not undergo renewal, see itself as an autonomous force and develop its own political positions. In formal terms, that would imply institutional, normative and procedural changes, none of which have anything to do with US demands for a liberal democratization of the system.

The construction of democratic institutions

The first link in the chain would be a more efficient and more participatory municipal subsystem, the first space for a concert of interests and political negotiation (22). Cuba’s local spaces have ceased to be simple vectors of centrally planned, balanced regional development. In their stead, these spaces have begun to experience uneven development related to their position within the network of economic imperatives set out by the world market. Tourist areas, mining zones and free trade zones are new variables fragmenting the national space and diversifying localities. Local societies themselves are being transformed with the appearance of economic and social agents that generate new power relations. In this context there is little room left for the traditional ways of feeding democratic decision-making into the central planning process: aggregating the people’s demands and transmitting them along vertical tracks. In a setting of negotiations, the future planning process must be indicative, decentralized and pluralist. This local space should become the first site of democratic planning.

At the macro level, a redefinition is being forced on the way in which representative government bodies are constituted. Until now the system has functioned based only on a popular vote organized by territories in the case of national and provincial assemblies that do not admit competitive elections. This has meant that groups of workers temporarily located in the territories are not represented in local government and that marginalized groups like women are under represented. It has also eroded the deliberative capacities of the representative institutions and led to legal fictions in an attempt to ensure representation where it is necessary.

A new design would suggest basing the composition of these institutions on different criteria that would satisfy the demand for territorial, sectoral and interest group representation. Of course, that would also involve the real validation of a legal precept that confers major state powers in each territory on these representative bodies. Until now such bodies have had little involvement in legislation, few meetings—rarely more than four days a year—and a disquietingly unanimous vote on every issue they discuss.

Equally relevant is the clear establishment in law of civil liberties, rights and duties that are institutionally supported. Cuban revolutionary society has been prodigal in drafting lists of social and economic rights that "magic of the market" may not dilute and they must be defended as real advances of the revolution. At the same time, however, declarations of civil and political rights have been rare, vague and dependent on implementation by the state. This has produced disgracefully arbitrary decisions to the detriment of individual and collective rights and of public debate and ideas that dissent from the monolithic desires of the political class. We should recall here how classical Marxism described the society that could replace capitalism: "...an association in which the free development of each is the condition for the free development of all." (23)

The Party must lead the transformation

The Cuban Communist Party should not stand apart from this transformation; in fact, it must be its protagonist. Only the Communist party, the political system’s central organization, with over half a million members educated politically into a fundamental commitment to socialism, can set in motion the changes that are indispensable with a minimum risk of disruption and in the process consolidate a genuine popular power.

But that would in turn imply a transformation of the party itself. A new form of organization and a new function would have to evolve which corresponded more closely to the range of different interests that would already have been acknowledged in the social and political field. In an optimum scenario, the result would be a more democratic party, one more open to debate and permitting internal tendencies within the framework of unity around strategic propositions. It is not too dangerous to suggest that this could lead to a multiparty system, particularly if the Communist Party ceased to play a vanguard role. In this sense, a displacement of the political system in the direction suggested could assist the emergence and development of other parties responsible and loyal to the continuity of the system.

For nearly forty years the Cuban people have paid dearly for the sin of wishing to put in place an alternative project of national independence and socialism in what the United States has always considered to be its backyard. For many years, it has had to pay a price for the undeniable advantages of Soviet support. Today it is bearing a double cost for persisting in its objectives, thus returning with singular brutality to the historic tragedy of socialism in one country. The continuity of socialism, of a socialism at once renewed and rooted in a global anti-capitalist strategy is not entirely impossible. But neither is it guaranteed by what used to be referred to as the "general laws of history."
Cuba could certainly face a restoration of capitalism, in which case we would have to view the costs of the past forty years as an investment in the future rebirth of a left alternative. Above all we would have to continue advancing, as Don Quixote enjoined his squire, even if it provokes howls of protest from ex-bureaucrats turned entrepreneurs, ex-dogmatists turned liberals or simply from those who imagine that we really are arriving at the oft-predicted end of history.
NOTES
1 Figures derived from the Annual report of the National Committee of Statistics (1989) and from the Report on the results of the 1981 Census of Population and Accommodation (Havana, August 1983).

2 I have discussed this specific form of societal organization in "Cuba—cuál es la democracia deseable" in H. Dilla (ed), La democracia en Cuba y el diferendo con los Estados Unidos, (1996) Havana, Centro de Estudios sobre América.

3 Anthony Giddens Más allá de la izquierda y la derecha, (1996) Madrid, Ed. Cátedra.

4 "Llamamiento al IV Congreso del Partido" in Cuadernos de Nuestra América, Havana, July-December 1990.

5 Hugo Azcuy "La reforma de la constitución socialista de 1976" in H. Dilla (ed), La democracia en Cuba y el diferendo con los Estados Unidos, (1996) Havana, Centro de Estudios sobre América.

6 David Held, Modelos de democracia, (1992) Mexico, Alianza Editorial.

7 Cuba Foreign Trade, Havana, July-December 1994.

8 Granma, December 14, 1996.

9 See Alejandro Beruf, "Las finanzas internas de Cuba" in CEEC Balance de la economía cubana (mimeo) (1997), Havana.

10 Vivian Togoros "Enfoque social del desempeño de la economía cubana en 1996" in CEEC Balance de la economía cubana (mimeo), (1997), Havana.

11 Juan Valdés, Procesos agrarios en Cuba, (1997) Havana, Editorial de Ciencias Sociales.

12 For an extremely suggestive critical analysis of these phenomena, see Tania García "Cuentapropismo o economía popular?" a paper presented to the workshop on "Municipios Economía local y Economía Popular" at CEA, March 7-8, 1996.

13 Granma, November 26, 1997, quoted in V. Togoros, op.cit.
14 Granma, 10th April 1991
15 I have partially analyzed their role in "Comunidad, participación y socialismo: reinterpretando el socialismo cubano" in H. Dilla (ed) La participación en Cuba y los retos del futuro (1996) Havana, CEA.

16 Cf. H. Dilla, A., Fernández and M. Castro, Movimientos barriales en Cuba, (1997) San Salvador.

17 Granma, March 27, 1996.

18 For an analysis, see Hugo Azcuy, "Estado y sociedad civil en Cuba" in Temas, Havana, no. 4, October-December 1995.

19 CEE, Conclusion of the workshops "Las ONGs en el mundo," Havana 1995.

20 For an empirically based analysis of the UBPC, see Niurka Pérez and Cary Torres, "UBPC: hacia un nuevo proyecto de participación" in H. Dilla (ed), La participación en Cuba y los retos del futuro, (1996) Havana, CEA.

21 For purely functional purposes I define popular economy here as the combination of productive or service activities carried out by individual or collective agents who depend (fundamentally) on their own labor power for the continuation of their activities and whose defining feature is self-regulation based on principles of solidarity and association. See José Luis Corraggio, "De la economía informal a la economía popular" in Nueva Sociedad, no. 131, May-June 1994.

22 Cf. H. Dilla, "Municipios y construcción democrática en Cuba" in FLACSO, Perfiles latinoamericanos, (1996) Mexico, Flacso.

23 K. Marx and F. Engels, Manifiesto del Partido Comunista, (1976) Moscow, Editorial Progreso

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