Abstract
Cuba can best be conceptualized as a precursor socialist social formation that has not necessarily begun a transition to capitalism. A case study of nonagricultural cooperatives demonstrates that the current reform process in Cuba has included features that could be foundational with respect to a new socialist formation characterized by participatory planning.
Idealmente, Cuba se puede conceptualizar como una formación socialista precursora que no ha comenzado necesariamente una transición al capitalismo. Un estudio de caso de las cooperativas no-agropecuarias demuestra que el actual proceso de reforma en Cuba abarca características que podrían ser fundamentales a una nueva formación socialista caracterizada por la planificación participativa.
The capitalist media and even many among the left seem to have concluded that Cuba is undergoing a transition to capitalism (e.g., Feinberg, 2014; Martínez, 2011; Reid, 2012; Wall Street Journal, 2010). For those who agree with this idea, the restoration of diplomatic relations with the United States will only fuel this process. This essay has two main objectives: to assess the claim that Cuba is in transition to capitalism and to demonstrate that the new cooperative movement could be foundational with respect to a new socialist formation characterized by participatory planning.
From 2007 to 2010, a national debate took place regarding the future of the Cuban model. Public meetings were held to discuss the first draft of the Communist Party’s Economic and Social Policy Guidelines. This process, in which 8.9 million Cubans participated, produced over 780,000 opinions, of which 46.5 percent resulted in adding elements to the Guidelines, 4.9 percent in eliminating aspects, and 1.8 percent in modifying aspects (García, 2012: 9). The approval of the Guidelines marked the official initiation of the “updating” (actualización) of the Cuban economic model. According to Ludlam (2012: 49), the choice of the word “updating” is deliberate, the word “reform”’ being avoided because of its association with the collapse of socialism elsewhere. The introduction to the Guidelines states that their objective is to “ensure the continuity and irreversibility of socialism.” It explains: “In the updating of the economic model, planning will prevail, not the market. The centralized planning of the economy and systematic control the State, government, and its institutions must practice will ensure the efficient functioning of our systems” (Partido Comunista de Cuba, 2011).
Transition to Capitalism or Updating Precursor Socialism?
In the apparent consensus that Cuba is in transition to capitalism, there is a tendency to equate (or “identify”) private firms, regardless of their internal character, with capitalism. If capitalism is equated with private enterprises operating in a market economy, then even a market economy composed of worker-owned and self-managed cooperatives, with the complete absence of exploitation, would be considered a capitalist social formation. The existence or predominance of private property or market allocation clearly does not suffice to characterize a social formation as capitalist. The presence of foreign capital does represent capitalist processes within Cuba, but these would make Cuba a capitalist social formation only if they were the predominant form of production. Employing a theory of socialist transition that emphasizes the dynamic character of the transition process, this essay will argue that Cuba can best be conceptualized as a precursor socialist social formation that has not necessarily begun a transition to capitalism.
Socialism is the transitional stage between capitalism and communism (see Albert and Hahnel, 1992; Laibman, 2013; Lenin, 1918; Mandel, 1968; Marx, 1875; Nove, 1991; and Wright, 2010). Communism is an economic form in which the means of production belong to society as a whole, surplus produced by direct producers is not appropriated by another class (i.e., there is no exploitation of labor), and decisions regarding the allocation of this surplus throughout society include the participation of all citizens, including those who are not necessarily direct producers. Communism is a system in which political and economic institutions have matured and obtained a substantial degree of stability and legitimacy. Socialism, precisely because it is a transitional stage, will require the active involvement of the state in the continuous design and implementation of new political and economic institutions. Furthermore, it will most likely inherit various processes from capitalism that will undermine it, and this means that the state will be important in ensuring the move toward communism. When no distinct class appropriates the surplus produced by direct producers, the economy can be considered socialist. What distinguishes it from communism, as explained above, is the degree of maturity, stability, and legitimacy of its institutions.
This paper builds upon the categories of precursor and mature socialism developed by Laibman (2013). In the following analysis, precursor socialism is understood as the first substage within the socialist stage, occurring immediately after the political transition from capitalism. In it democratic control over the means of production and decision making regarding the allocation of the surplus throughout society are characterized by rudimentary and inefficient institutions. Some types of private ownership may persist. Market forces may still be utilized as an allocation mechanism, and the system will be highly dependent on the state as a vehicle of systemic reproduction. Mature socialism is the substage in which most of these inefficiencies have been worked out, some form of democratic planning has become the main allocation mechanism, and institutions are consistently improving in regard to maturity, stability, and legitimacy. The transition to participatory planning will take place within the transition from precursor to mature socialism. This transition could theoretically be in the distant future, since conditions may favor the use of market forces for an extended period, and the opposite holds as well. The evolution of institutional arrangements in early socialism can be expected to vary greatly depending on concrete historical conditions.
The New Cuban Cooperative Movement in Theory
Cuban cooperativism was limited to agriculture for most of the revolutionary period, and it remained relatively stagnant until the 1990s. During the Special Period crisis, a new agricultural cooperative form, the unidad básica de producción cooperativa (basic unit of cooperative production—UBPC), which attempted to combine aspects of cooperatives and state firms, was established. UBPCs are not part of a state agency or state enterprise, have legal ownership of most of their means of production, own their production and surplus, and are democratically managed by their workers. At the same time, they are created on the initiative of the state, and ownership of their key means of production, land, belongs to the state. They enjoy economic aid for a given amount of time, allowing them to work with losses, and receive guidelines for production, technology, and investment. Their leaders are often proposed or replaced from the outside, and they may be called to account as if they were units of a state enterprise (Rodríguez and López, 2013: 306).
UBPCs in theory reflect a concept of enterprise in which each enterprise cedes a certain amount of decision-making power to the network’s “center” and has extensive management autonomy. The “center” makes strategic decisions and conducts operations in the chain that do not create value or that are convenient to conduct centrally, while enterprises make their own operational decisions and conduct all other operations in the chain (see Rodríguez and López, 2013). Nevertheless, in practice there have been significant problems in the UBPC model. The state enterprise hinders the work of its associated UBPCs because it holds decision-making power, does not identify with them, and views itself as being above them. Furthermore, it exercises control over them, deciding on production levels and variety, soil and water use, crops’ health, distribution of resources, and compliance with legislation, as well as selling material resources and supplying a wide variety of services (Rodríguez and López, 2013: 308).
Despite these deficiencies, the case of the UBPCs is instructive because it consists of a redesign of state property that combines productive units administered under a management model close to cooperativism with a state enterprise as the decision-making center of the network (Piñeiro, 2013: 16). Despite the shortcomings of agricultural cooperatives, Cuban economists such as Camila Piñeiro Harnecker (2013: 17) have defended the need to expand cooperatives to other sectors, acknowledging the necessity of making sure that mistakes are not repeated. In late 2012 it was announced in Granma (December, 11, 2012), the official newspaper of the Partido Comunista de Cuba (Communist Party of Cuba— PCC), that 200 nonagricultural cooperatives were to be established in sectors such as transport, the food industry, domestic and personal services, recycling, and production and services associated with construction. These cooperatives began operations between July and October 2013.
Two main views of cooperatives can be identified in Cuba. The first places emphasis on socializing state property and understands cooperatives as temporary experiments that will disappear under mature socialism. The second, while it does not deny the fundamental importance of transforming state property, also places emphasis on utilizing cooperatives in nonstrategic sectors not as temporary but as constitutive elements of mature socialism. It is in the context of these debates that the new nonagricultural cooperatives were announced. The updating of the Cuban model has among its objectives promoting greater efficiency in the use of state resources. Nonagricultural cooperatives and self-employment are expected to play a key role. One of the examples most often cited in Cuba is that of state-run barbershops, many of which consisted of a single barber in a small shop. The need to focus on controlling and supporting them drained significant attention and resources from a state in a very complicated fiscal situation. According to Jesús Cruz Reyes, a professor of political economy at the University of Havana, there seems to be consensus among Cuban policy makers that it is clearly more efficient to allow barbers and similar workers to engage in self-employment and simply impose a tax on their activities (interview, Havana, July 2014).
Another example is the overdiversification within large state firms, leading to redundancy in many operations. For example, many state firms assign resources to transport, while it would be more efficient to have another firm specialized in this auxiliary activity providing service to various state firms. These secondary activities are precisely the ones that the state wishes to transfer to the nonstate sector. In other words, cooperatives will be a way to transfer activities that are not fundamental (i.e., not necessarily central to the economy or the safety of the Cuban people) from the state to another mode of management. Camila Piñeiro Harnecker (interview, Havana, July 2014) emphasizes that in state-induced cooperatives what is being transferred is management, not property, because the means of production remain in hands of the state. Thus cooperatives emerge as a more socialized alternative (relative to self-employment or small private firms) to take over these activities.
The New Cuban Cooperative Movement in Practice
Background
Decree Laws 305, 306, and 309 of 2012 established as an experiment the regulations regarding the creation and operations of nonagricultural cooperatives (Ministerio de Justicia, 2012). Nonagricultural cooperatives are identified as private entities constituted voluntarily by their members, and although they are subject to regulations related to the activities they participate in they are not directly subordinated to any state entity. The decision-making power within them resides in their worker general assemblies, in which each worker has one vote. The assembly also elects the cooperative’s president and other administrative bodies. Administrative bodies are intended to facilitate decision making for the general assembly and will correspond to the complexity of the particular economic activity and to the number of worker-members. An auditing commission will submit to the assembly legal and accounting reports drafted by its members or by technical experts it has hired.
These cooperatives will be allowed to set their own prices on the goods and services they sell unless the price of a particular product is state-regulated. In practice, most Cubans speak of two types of nonagricultural cooperatives, “induced” (those created on the initiative of the state, transforming state firms or workshops into cooperatives) and “noninduced” (those emerging from the initiative of individuals, creating entirely new firms). More than 80 percent of the nonagricultural cooperatives were induced by the state (Camila Piñeiro Harnecker, interview, Havana, July 2014). Since one of the objectives is that everyone who works in a cooperative be a member, the hiring of labor from nonmembers is limited to 10 percent of “shift-members” (jornadas-socios), computed by multiplying the number of worker-members by working time in any given fiscal period. Furthermore, no nonmember hiring contract may exceed three months in duration.
As of May 2015, there were 351 registered nonagricultural cooperatives (Oficina Nacional de Estadísticas e Información, 2015). Most of them (53.8 percent) are retail firms that sell food, beverages, and tobacco or restaurants, cafes, and diners; 25.4 percent are manufacturing or construction firms and the rest associated with various services. Geographically, most are concentrated in the Province of Havana (50.1 percent), followed by the Province of Artemisa (18.8 percent) and the Province of Matanzas (5.7 percent). Within Havana, most (54.4 percent) are located in the municipalities of Plaza de la Revolución, Playa, Boyeros, Diez de Octubre, and Cerro (in that order) (Oficina Nacional de Estadísticas e Información, 2015).
Assessing the Nonagricultural Cooperatives
In the course of my field research in Cuba, I visited three cooperatives, all belonging to the first batch of experimental cooperatives. The Centro de Estudios de la Economía Cubana (Center for the Study of the Cuban Economy—CEEC) of the University of Havana, jointly with the Asociación Nacional de Economistas Cubanos (National Association of Cuban Economists), has been conducting field interviews in nonagricultural cooperatives in different municipalities in the province of Havana, where approximately 60 percent of the cooperatives actually operating (and not simply registered) are located (Ojeda, 2014). They have published their results only for three state-induced nonagricultural cooperatives and four noninduced ones located in the municipalities of Centro Habana and Habana Vieja (Ojeda, 2014). The three state-induced cooperatives I visited were in three other municipalities in Havana: Cerro, Plaza, and Marianao. The questions asked by the researchers were very similar to those I asked, so the results may be compared to begin to identify similarities and differences across municipalities. My findings will also be compared with the CEEC researchers’ assessments of their unpublished findings in other municipalities, as well as other unpublished evaluations of nonagricultural cooperatives such as those of Jesús Cruz Reyes, who has been conducting independent research.
The assessment will certainly be preliminary, since more research with a broader sample is required for a more conclusive evaluation. Nevertheless, it already demonstrates that the brief experiment with nonagricultural cooperatives can provide insight into the way existing structures can be transformed into institutions that may become foundational for a socialist social formation characterized by participatory planning.
The Sample Cooperatives
The first cooperative visited was a textile cooperative in Marianao, which was originally one of the many workshops of a larger state firm dedicated to textile manufacturing. It was among the first state workshops to be transformed into a cooperative and officially began operating as such in October 2013. The key means of production (the building and machines) belong to the state and are rented by the cooperative. However, workers have the right to remodel the factory according to their needs and preferences. They decided not to take out any loans but instead began operations by having each worker-member contribute 200 pesos (approximately US$8) for a total start-up capital of 10,000 pesos (approximately US$400). There are 51 worker-members, most of them women (there are only 7 men) and most being between 40 and 50 years of age. When the cooperative was a state firm, production was limited to uniforms, while as a cooperative it has expanded to include other types of garments and fabrics on demand (pants, shirts, sheets, towels, etc.)
The second cooperative is a vehicle reconstruction firm in Cerro. It was one of the largest workshops of a state firm dedicated to automotive services and was also among the first batch of cooperatives transformed from state workshops. During its first year of operation as a cooperative, it had already gone from 48 to 60 worker-members, with possibly 20 more under way. The cooperative reconstructs deteriorated vehicles, focusing on bodywork, paint, and upholstery, and repairs body damage to newer cars. Each worker-member contributed 1,000 pesos (approximately US$25) for a total start-up capital of 48,000 pesos (approximately US$1,920). As in the textile cooperative in Marianao, the key means of production (the workshop and machines) belong to the state and are rented by the cooperative. Most workers are between 28 and 30 years of age, and most are men (there are only 5 women worker-members). The cooperative is fundamental in maintaining vehicles for three state firms: ETECSA, Cuba’s main telecommunications firm, REX, a state-owned luxury car rental service for tourists, and Cubataxi, the state-owned taxi service.
Finally, the Karabalí Cooperative in Vedado is distinctive in its size and service. Karabalí is a “nocturnal center,” one of the network of state-owned nightclubs. Similar to the other two cooperatives, it was among the first induced cooperatives in late 2013. It has 21 worker-members (14 men and 7 women), mostly between 30 and 40 years of age. It is located in one of the most frequented areas in Havana, on Calle 23, popularly known as La Rampa. Thousands of Cubans walk by it, coming and going to and from Cuba’s Malecón, its famous walkway and seawall, and the city center. Despite being surrounded by hotels filled with tourists, the cooperative caters mainly to Cubans between 30 and 50 years of age.
Income, Efficiency, and Nonalienating Labor in the Cooperatives
The following commonalities were present in the cooperatives visited: (1) worker’s incomes have increased substantially (twofold or threefold); (2) the state has seen a net increase in revenues from transferring these workshops to the workers and taxing them; (3) workers have shifted from an alienating labor process to a nonalienating one; and (4) there is enthusiasm regarding the role cooperatives may play in the Cuban economy. These findings coincide with what Jesús Cruz Reyes (interview, Havana, July, 2014) has found in most of the new cooperatives, and according to the CEEC report workers argue that their lives have improved, they have higher incomes, and they enjoy a good-natured work environment characterized by happiness and solidarity (Ojeda, 2014). Despite some deficiencies, the results are clearly positive not only for the workers but also for the general population, which now has access to their products or services. In some textile cooperatives, where most workers are women, husbands have taken over household work because the women have become the main providers and get home late (Jesús Cruz Reyes, interview, Havana, July 2014).
A key aspect of their success is efficiency (broadly defined as optimal use of the firm’s resources). Jesús Cruz Reyes (interview, Havana, July 2014) quotes workers as saying, “We need to save on water and electricity. We used to squander them.” The fact that their income increases in proportion to how much they save on utilities, how many resources they recycle, and how much they avoid waste has led to significant improvements in efficiency in these firms. The efficiency gains are also closely related to worker alienation and theft in the state firms. All of the cooperative presidents interviewed agreed that in state firms the workers stole a significant amount of resources, and two of the three said that this had happened in their own firms when they were state workshops. In Cuba, slowdowns and theft are direct manifestations of the estrangement of workers from their work. All three of the presidents emphasized a sense of belonging once the firm was organized as a cooperative and related it directly to the fact that resources are no longer stolen from any of the cooperatives. The vehicle reconstruction cooperative’s president, Marcelo González (interview, Havana, July 2014), argued,
People see their cooperative as theirs; they have a monthly advance [on the periodic distribution of profits] of US$500 every month. That is three times the salary they earned before. People take care of resources. If there is a can of painter’s putty and there is some left after finishing a car, they use it on another car instead of stealing it. Young people in our cooperative, around 30 years of age, used to want to leave Cuba. Now they don’t want to. They don’t want to work in a black market workshop; they want to work here in the cooperative. It is a socialist model that works. We have to take advantage of it, especially in socialism. With cooperativism, people have higher quality of life in socialism. People live OK. They don’t want to leave the country. They earn an income. Our young people can aim high, and it is socialist. There is no concentration of wealth. There is no multiparty capitalist politics. No one tells you what to do, and people can decide about their destinies.
Cooperatives have also seen improvements in working conditions. In the Marianao textile firm, the condition of the lunchroom area was a significant concern for workers, and it was only when transformed into a cooperative that they had the autonomy and resources to fix it. They were also in the process of improving lighting/visibility problems in the workshop and repairing the floor and old machinery to avoid accidents. Other types of improvements notable in fostering a sense of belonging were the establishment of gifts or emergency funds to be provided individuals when they needed to incur significant expenses. All three cooperative presidents mentioned explicitly the importance of helping fellow workers cover expenses in situations such as a daughter’s quinceañera (coming-of-age fifteenth birthday party), while in the vehicle reconstruction cooperative one worker had already benefited from an emergency fund when his house burned. These factors lead to a general feeling of satisfaction and enthusiasm about the possibilities for Cuban cooperativism. For example, the president of the Marianao textile cooperative, Exiquio Ramírez (interview, Havana, July 2014), stated: “What gets closest to socialism is the cooperative. Anyone who is given the opportunity to build a cooperative and does not take advantage of that opportunity is lost in this country.”
Similarly, while not reporting specific numbers, all the presidents were emphatic that worker incomes have risen significantly between their transformation into a cooperative in late 2013 and July 2014. By law, cooperatives are required to set aside contingency reserves, pay a 10 percent tax on sales and a 20 percent tax on nonmember labor contracts, and contribute to the social security fund of each worker. Yet, even after transfer payments to the state, many workers are reported to have double or tripled their monthly incomes. The cooperative’s higher revenues have been distributed more or less equally among the workers, with no particular subset of workers having earnings substantially different from the collective average.
Many cooperatives have been able to offer services directly to the population, something they were not allowed to do when they were state workshops if it was not specified in their assigned plan. As Exiquio Ramírez (interview, Havana, July 2014) emphasized, this is also beneficial to the population, which previously might not have been able to acquire these goods or services or not at the desired quality: “Before, when we were part of a state firm, no one could come here. It was producing what we were told, and that was it. Now it’s different.” Similarly, Marcelo González (interview, Havana, July 2014) reported that the state firms for which they provide services now prefer to go directly to the cooperative instead of their usual state-run shops because there are notable differences in speed and quality. While there are insufficient data to estimate how much revenue the state has generated through transferring activities to cooperatives, it is clear that there has been a net increase in state revenues, for the state no longer has to budget any funds for these firms and is receiving income from taxes.
In Karabalí, when it was a state firm, central allocations had no direct link to what consumers were purchasing from the cooperative. Thus, the firm would constantly find itself overstocked, full of goods local consumers had no interest in purchasing. As a cooperative, by focusing on what actually sells and buying that on a daily basis, the workers at Karabalí were able to remodel and make their inventory area smaller, thus providing more space for clients. Similarly, their autonomy has allowed them to adjust to shortages or repairs more efficiently than state firms.
Embryonic Participatory Planning
A useful way to conceive participatory planning is as figuring out the enormous maze of human activities that exists at the firm level and at the center with the creative, critical, rational involvement and participation of all people—a process referred to by David Laibman (2013: 502–503) as “multilevel democratic iterative coordination.” Worker democracy in Cuban cooperatives is providing concrete examples of how multilevel democratic iterative coordination could actually take place, for that is what the relation between their internal firm-level plans and ministry-level plans is. Many cooperatives have seen the development of a democratic decision-making culture never witnessed before in Cuban firms while becoming successfully integrated into Cuba’s planning process. The vehicle reconstruction cooperative and the Marianao textile cooperative emphasized their links to the Cuban planning process. Both firms purchase their inputs from predetermined state firms, and therefore they are not simply reporting what they are producing to the state for accounting purposes. On the contrary, the state has to respond accordingly by allocating the required inputs. By engaging in democratic planning at the firm level and then integrating these firm-level plans with the associated ministries’ plans, they are in practice engaging in multilevel coordination. If this were to be generalized and an iterative element introduced for dealing with conflicting plans, the Cuban model would be moving toward or laying the foundations for a new form of participatory socialism. However, it should be noted these experiences are not necessarily representative of all nonagricultural cooperatives. For example, Karabalí does not purchase goods and services from its assigned state firms, which are typically understocked or provide services with substantial delay. Preferring to buy goods at retail prices in other state shops and purchase services from private self-employed workers, it is not as linked as the other cooperatives to the state planning process. Camila Piñeiro Harnecker (interview, Havana, July 2014) explains:
The state discourse is that cooperatives will be inserted into the planned economy, but that is not yet in sight. . . . The idea is that cooperatives, including those that are not induced by the state, can request goods or inputs to state suppliers so that these can include it in their plan . . . but that has not materialized. In practice, institutional rigidities and state bureaucracy have hindered this process.
Institutional Rigidities: Clashes With State Socialism
The state firms that used to supply inputs to the induced cooperatives when they were state workshops have the obligation to continue to do so until an alternative source is found. In many cases they have not done this or have done so only partially (Ojeda, 2014: 54; Camila Piñeiro Harnecker, interview, Havana, July 2014). While the Marianao textile cooperative has continued to receive its inputs from the state, it is clear that if the supplies were to stop it would be difficult for the workers to continue operations.
Whereas in theory cooperatives should be integrated into planning by engaging in contracts with state firms, which will then include these in their own plans, in practice cooperatives have confronted significant resistance to establishing contracts for the services provided when they were state workshops and even more resistance to doing so for new activities (Ojeda, 2014: 54; Camila Piñeiro Harnecker, interview, Havana, July 2014). As Marcelo González (interview, Havana, July 2014) explained, “Sometimes [state institutions say] cooperatives cannot buy here, cannot buy there. They treat us like ghosts, close our accounts at the bank. . . . If those barriers are there, then the updating of the Cuban model will be a failure.” Similarly, the president of Karabalí, Hector García (interview, Havana, July 2014), said,
Right now, we are trying to get a number of things we need from state firms. I go to some state employee, and he simply says, “I don’t know anything about cooperatives.” They are not interested in doing business with me, in increasing revenue in the state firm. And it isn’t the director; it’s always someone below. They are not interested, but we are, because we are earning from what we actually do. That is stalling development not only for the cooperative but also for the country. . . . Or people would say, “No, that’s with this minister. No, that’s with this other ministry. No, we don’t know anything about selling to cooperatives.”
Camila Piñeiro Harnecker (interview, Havana, July 2014) argued that “many cooperatives cannot establish contracts with state firms because these, being accustomed to being told everything they have to do, will not enter into relations with the cooperatives if they do not have explicit instructions to do so.” Most nonagricultural cooperatives report that state firms say that they cannot establish contracts because it is not in their annual plan or because they simply do not know what the procedure is (Ojeda, 2014). In practice, few firms, including both cooperatives and state enterprises, are aware that the former have the right to request additional contracts with the latter. Thus, if it is not communicated to state firms that they have to supply cooperatives and the steps they have to take to do so, this problem will obviously continue. Another problem cooperatives are facing is lack of goods or inputs in the state firms they are assigned as suppliers. Worker cooperatives are to be granted a 20 percent discount when purchasing inputs at state firms. In Karabalí the state firm assigned to sell to it has such an inadequate inventory that the cooperative has decided to purchase goods at market prices in state retail stores.
An Embryonic Capitalist Class?
In theory, if there were no restrictions on the hiring of outside labor power cooperatives could easily engage in capitalist relations, with, for example, three worker-members hiring outside labor power and appropriating their surplus. However, the law ensures that this cannot take place. The vehicle reconstruction cooperative and the Marianao textile cooperative have contracted outside labor and are fully aware of the need to either terminate contracts after three months or turn these workers into worker-members. However, current legislation has overlooked that even among worker-members “on paper” it is possible that exploitation may emerge. One or more worker-members could be appropriating and distributing the surplus produced by the worker-members as a whole. For example, in a large cooperative, control over revenues could easily be monopolized by a subset of workers in charge of management tasks. This minority of managers could withhold information, appeal to their superior technical knowledge, and through these and/or other means transform the workers’ assembly into an institution with de jure but not de facto power. Even in small cooperatives, a charismatic and/or authoritarian resident could transform the workers’ assembly into a “rubber stamp.” Thus, if the Cuban government’s objective is to avoid the growth and development of a domestic capitalist class, supervision over cooperatives is fundamental, and so far it seems to be insufficient.
In most countries there is an entity in charge of supervising, supporting, and fostering cooperatives. In Cuba, this task was assigned to the ministries that oversee the particular goods or services the cooperatives are producing. Camila Piñeiro Harnecker (interview, Havana, July 2014) argues that this decision may have been made in order to avoid further bureaucracy, but in practice it has resulted in a lack of supervision over the cooperatives’ operations. She explained, “There is one ministry with only 11 cooperatives, and it argues it does not have the resources to supervise them. Imagine the ministries that have many more. In reality, they are not being supervised. Some have not taken any measures to see if the cooperatives are functioning properly, organizing their worker assembly, etc.”
For this reason, proper training and education are equally fundamental. If all worker-members have an in-depth understanding of their rights, it is less likely that they will allow a small group of worker-members to exploit them. As in the case of supervision, the level of education and training provided has been insufficient. Most of the nonagricultural cooperatives that have been created on the initiative of individuals have received no training or education (Camila Piñeiro Harnecker, interview, Havana, July 2014). In state-induced cooperatives, most education and training offered is related to legal aspects, and worker-members show limited understanding of the ideological aspects associated with cooperativism (Ojeda, 2014).
In Karabalí, at least semantically there was still a distinction between boss and workers. However, in the vehicle reconstruction cooperative and the textile cooperative, the cooperative presidents consistently referred to themselves as “we the worker-members.” In their expressions there was awareness of the fact that they were not bosses. The distinction could be simply semantic, out of habit, and the cooperative could be operating in a truly democratic and participatory manner. Nevertheless, this highlights the importance of developing a new conception of association and democracy in these firms, which in some cases might not necessarily arise organically from the transformation from a state firm into a cooperative on paper.
For Jesús Cruz Reyes (interview, Havana, July 2014), an additional mechanism that could hinder capitalist relations within cooperatives lies in the relation they have to the community. He gives the example of agricultural cooperatives, where there is a conflation of community and firm that he believes hinders the development of a capitalist class. Yet, most local governments have not promoted cooperatives as tools in resolving their communities’ needs, and most noninduced cooperatives are not emerging with a focus on what problems they can resolve. The fact that cooperatives are autonomous private enterprises that can set prices according to supply and demand and pay fewer taxes leads many Cubans to see this as simply a way to increase their incomes rather than as a vehicle for meeting the community’s needs (Camila Piñeiro Harnecker, interview, Havana, July 2014). Nevertheless, while Piñeiro Harnecker believes it would be naive for policy makers to ignore the possibility of cooperatives’ becoming capitalistic institutions, she argued that “the important thing is not limiting the growth of cooperatives but guiding their activities toward social goals instead of individual interests. To the extent that cooperatives are guided to social needs and function democratically, [the development of a domestic capitalist class will be obstructed].”
The Future of the Cuban Model
The benefits that have emerged from the transformation of these state workshops into cooperatives are not a result of the fact they are now private cooperatives but a result of the new democratic management structures, autonomy, and flexibility they now possess. The Marianao textile firm, for example, could have simply been restructured as a self-managed state workshop and given the autonomy to sell to third parties and to use a substantial part of its revenues as the workers wished (e.g., for improving working conditions within the factory). In other words, the improvements seen so far might have been achieved by promoting worker democracy and autonomy in state firms. Thus, cooperatives could be understood as an unnecessary risk, providing an opportunity for the development of capitalist relations only to fulfill objectives that could have been accomplished through other means.
Yet, when asked if they thought all the improvements they have seen would have been possible by promoting worker self-management and autonomy within state firms, the cooperative presidents were skeptical. They did not express aversion or contempt for the state firms. On the contrary, they consistently said that the state firm was “where they came from” and emphasized that the cooperative’s achievements were possible only because of the precedent it had set. Nevertheless, they insisted that these achievements would have never been possible if they had remained state workshops. The predominant reasons they mentioned were bureaucracy and the “statist mindset” of making decisions from above, far from the workers and from “what is actually going on.” In other words, the institutional rigidities discussed may mean that in some cases a model focused on worker-managed state firms may need to go through a first stage of cooperativization, while in other cases it may be best to avoid cooperativization and instead emphasize democratizing the state firm. For Jesús Cruz Reyes (interview, Havana, July 2014), this is precisely the current challenge. He explained that the feasibility of transforming the state firm depended on whether the ministers and other leaders in the country understood that “cooperative principles can be applied to the state sector. In National Assembly sessions voices have appeared that point in that direction. It remains to be seen if what is occurring in cooperatives can be applied in the state or how we can apply it.”
Even though in state firms workers are supposedly owners and supposedly can work with a plan and exercise control over the labor process, ultimately none of this occurs. While in a state firm higher level of participation could theoretically be achieved, it would have to be inserted in a system that enables it. For example, Camila Piñeiro Harnecker (interview, Havana, July 2014) explained:
In Cuba’s planned economy there are state firms that want workers to participate, but ultimately they cannot, or it is merely something symbolic because workers decide one thing, management supports them, but then the ministry decides something else. That is why autonomy is important. I’m not saying a state firm cannot demand greater autonomy, but the way it is being implemented now makes it difficult to achieve those levels of participation.
Thus she agreed with Cruz Reyes that cooperatives can serve as examples to reform the state firm and push for participatory planning in the state sector as well: “That is what they are doing implicitly, providing an example of alternative management models, that hopefully the state firm will take into account in its own redesign.”
The new nonagricultural cooperatives and the state workshops are facing different sides of the coin of the same fundamental problem: achieving multilevel democratic coordination. In the cooperatives internal decision making is democratic but problems have emerged in linking these decisions to the center’s coordination process. In the state workshops they are effectively linked to the center but to such a degree that internal decision making is nullified. For this reason, the original conceptualization of the basic unit of agricultural production points toward a strategic way of overcoming this problem. Workers could make short-term, firm-level operational decisions democratically, while long-term and strategic decisions could be made by the center. As we have seen, in practice this did not occur in the basic units of agricultural production because, as with state firms that attempt to provide an opportunity for worker participation, the center tends to dominate and nullify the democratic aspect at the firm level. Thus, this is one of the key challenges of the Cuban reform process and the insight of the new cooperative experiment. The new cooperatives have successfully engaged in internal democratic coordination and at least partially linked it with coordination at the center. By combining insight from the state workshops and the new nonagricultural cooperatives and the deficiencies of the basic units of agricultural production, the Cuban government could potentially develop a new form of socialist enterprise that could be the constitutive unit of a new participatory socialist formation.
In sum, I have argued that if (1) the institutional barriers (e.g., resistance of state firms to establishing new contracts with cooperatives) currently obstructing cooperatives are corrected, (2) proper education, training, and support are offered to both state-induced and noninduced cooperatives before, during, and after their establishment, (3) cooperatives are adequately supervised, and (4) state firms are transformed to achieve similar results regarding worker democracy, efficiency, and nonalienating labor, Cuba could potentially move toward a socialist model closer to participatory socialism. If none of these conditions is met and/or less socialized forms such as the new “own-account” workers and foreign capital are the predominant forms in the new nonstate sector of the economy, Cuba could potentially be beginning a process of transition to capitalism. The Cuban government could learn from the experience with the new nonagricultural cooperatives to begin experimenting with democratic planning in select state enterprises. The challenge for the Cuban Revolution will consist of ensuring that these new processes become the predominant ones. If the experiment were successful it would be a substantial step toward strengthening the transition to mature socialism.
Concluding Remarks
The cooperative presidents I interviewed perceived the updating process as completing tasks that most people have deemed necessary for years. Exiquio Ramírez (interview, Havana, July 2014) explained: “Every time the Cuban state announces a new policy, most people say, ‘About time!’ People see the progress. The Communist Party’s Sixth Congress was clear: the country has to change!” Similarly, Marcelo González (interview, Havana, July 2014) argued:
On one hand the external blockade imposed by the United States and on the other the self-imposed ideological blockade imposed by pure state socialism formulas are what made the system go backwards. Now, I think Cuba is heading for a great formula, and there is a willingness to go there in the country’s leadership. And it isn’t doing it haphazardly. It’s analyzing appropriately, monitoring this experiment. We have to have patience. What was not achieved in 40 years isn’t going to happen in 3 or 5 years.
However, Camila Piñeiro Harnecker considered the absence of a clearly defined model one of the main deficiencies of the updating process: “For me the problem is that we started to make changes without a vision of the forest. We started to plant trees, without planning ahead, or at least thinking about how the forest was going to be. There are many points of view, and these are complicated questions” (interview, Havana, July 2014). Regarding participatory planning models such as those developed by economists such as Albert and Hahnel (1992), she said, “There is talk of participation, there is work within Cuba that talks about participation in planning, but it seems to me that in the circles where decisions are made these [participatory planning models] are not seen as a real possibility. If they happen to know of them, they see them as an academic proposal.” Although the Cuban government may not be explicitly aspiring to build a participatory planning model, its current updating process is laying the foundations of a new socialist form and is already creating instances in which new socialist dynamics have emerged. While it would be naive to ignore the possibility of the transition to socialism’s being reversed in Cuba, it should also be noted that the capitalist media’s assertion that the country is already in a transition to capitalism is certainly premature. For Piñeiro Harnecker what the Cuban people are doing is revolutionary in the sense that they have decided not to follow China’s path. They are quite aware that China has achieved impressive growth rates but have consistently rejected that model. Instead, they have decided to create their own model. Regardless of its outcome, Cuba’s ongoing experiment will have profound and long-lasting implications for anticapitalist movements across the world.
Footnotes
Ricardo R. Fuentes-Ramírez obtained his Ph.D. in economics at the University of Massachusetts–Amherst and is an associate professor in the Department of Economics at the University of Puerto Rico–Mayagüez.