Castro’s Brand of Capitalism

It is now twenty years since the hated Cuban dictator Batista went into exile. As he did so the small army led by Fidel Castro finally took control of Havana, the capital city, after years of rural guerrilla warfare. This event, coupled with a series of economic and social reforms, is widely regarded as a revolution; it was no such thing. The new rulers nationalised much of the economy, set-up a one-party system, established diplomatic, economic and military ties with the Soviet bloc and to an increasing extent adapted their radical nationalism to a tropical version of Bolshevism. Not only was it described as a ‘communist state’ by the horrified defenders of United States’ imperial interests, but also by young leftists elated by an initially unbureaucratic, indeed light-hearted and popular, new system that contrasted favourably with the familiar Soviet pattern. What really happened and why the misrepresentation?

Cuba remained a Spanish colony 73 years after mainland Latin America had won its independence. When her ‘liberation’ was finally achieved in 1898, it was largely the result of United States military intervention. A short period of US administration was followed by the setting up of an ‘independent’ constitution in 1902 which nevertheless embodied the ‘Platt Amendment’ restrictions on its authority, enabling the US to intervene in Cuban affairs when deemed necessary. Having displaced Spanish political power, the United States proceeded to supplant local and European economic interests. The value of US exports to Cuba rose from $27m in 1897 to $200m in 1914. By 1929 78 per cent of Cuba’s sugar cane was milled by foreign (mainly North American) owned companies and 25 per cent of the cane plantations were owned by 4 United States firms The US, by means of trade agreements, was the major market for Cuban sugar, and using a preferential rate of exchange sold cheap items of manufacture which strangled embryonic Cuban industry.

By 1955, 40 per cent of raw sugar production, 23 per cent of non-sugar industry, 90 per cent of telephone and electrical services and 50 per cent of the railway network were American owned. This domination gave rise to resentment, especially among students, and the nationalism which had inspired the struggle against Spa in now took the form of Anti-Americanism.

Cuba’s economy depended on sugar (55 per cent of its arable land was devoted to growing cane) yet from 1925 onwards this section of the economy ceased to expand, causing general stagnation. Indeed, many countries began producing sugar from home-grown beet, resulting in a conflict of interests between American domestic producers and those upholding the sugar agreement with Cuba.

The subservience to Washington of Cuba’s governing circles and the fragmented character of social groupings militated against positive moves towards greater economic development and independence. Neither the rich nor the poor effectively coordinated their activities. The politicians were far more interested in the spoils of office than in advancing national development and corruption was virtually unchecked. As for a radical capitalist solution, the best organised body of people that might bring this about, the Communist Party, was seriously compromised by its record of deals with repressive regimes for the sake of real or illusory increases in its power and influence over the working class movement. Their alliance with Batista in 1938, helped him into power, played a significant part in alienating many young radicals from the political process. They had witnessed one leader after another promise radical changes for the better, only to be disappointed. They had seen the Communist Party prostitute itself to dictator after dictator in the crude quest for power (through the first Batista regime they had received control of the CTC, the Cuban Trade Union organisation, as well as obtaining two cabinet seats). These radicals were well aware of the political chaos Cuba was in and of its social and technological backwardness and in desperation they turned to violence. During the Forties many students took part in ‘Action Groups’, small units carrying out terrorist activities but with little or no political success. From this hope of a regenerated Cuba a new movement arose under the leadership and powerful oratory of Eddy Chibas. But just when it seemed on the point of a break-through, Batista led a second coup d’état and re-installed himself as dictator in 1952. This event marked a turning point in the struggle for reform had been undertaken by the ‘Orthodoxo’ movement. Many of its former adherents became convinced of the need for the violent overthrow of the existing system. On the 26 July 1953 Castro led an unsuccessful attack on the Moncada Barracks but later the movement which took its name from the occasion was to gain support. Starting with twelve survivors of a landing party, in 1956 an army was built with the aid of the peasants of the Sierra Maestra. After a period of struggle the Fidelistas took complete control and the new regime was established in January 1959.

Having gained political power, what was Castro to do with it? He had no efficient political organisation and, apart from his radical nationalism, no real programme. Breaking the US domination of the Cuban economy and being seen to be conducting a foreign policy independent of the USA were a vital requirement for Castro if he was to keep power.. However, in the conditions of the ‘Cold War’ a foreign policy independent of Washington, especially from a country only 90 miles from the US coast, could only be construed by the American Government and ‘public opinion’ as pro-Soviet. Further, the nationalisation of many American firms (prompted by the need to further concentrate and plan the investment of capital) led to the cutting off of all aid. The shortage of spare parts, new machinery and above all technicians and administrators led Cuba to seek increasing aid from the USSR and it was ultimately that country which replaced America as the major purchaser of Cuban sugar.

The re-organisation of the Cuban economy and state required a political movement to ensure its success. Castro, by taking the Communist Party ready made and merging it with his own organisation, was merely creating the necessary instrument for his purposes. His claims of a long-standing adherence to ‘Marxism-Leninism’ provided a justification for union, with the CP, the introduction of a ‘one-party state’ and the establishment of his own rule. In pre-Castro Cuba the dominant social relationship was that of wage labour and capital. All that the Castro regime achieved on gaining power was the nationalisation of much of the economy (state capitalism) and a number of social reforms — not the abolition of capitalism.

Brian Phillips

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