Informacion economica sobre Cuba

Analysis: Adjusting the (socialist) model, part 1

By José Manuel Pallí, Esq.

In 2011, about this same time of the year, the expectation about

impending changes in the way Cuba regulated property rights was in

crescendo. I was invited to participate in a panel at the Association

for the Study of the Cuban Economy (ASCE) conference in early August to

discuss those changes, which, we all assumed, would be "revealed" by the

time the conference took place. They were not, and I ended up writing

(in Spanish, sorry) and discussing the topic of property rights in Cuba

from a historical perspective, since all I could say about the coming

"changes" was little more than speculation.

As it turned out, the "changes" — when they did come in October 2011 —

were lesser than our over-built expectations led us to foretell they

would be. They entailed no more than an adjustment to Cuba's socialist

model, specifically to that part of the model that regulates how Cuba's

citizens' constitutionally guaranteed rights to housing are implemented.

Today, a similar effervescence is noticeable about two "coming" changes.

Maybe this time around we should tone down our expectations, beginning

by calling them "adjustments", for once following Cuba's cue- on two

other legal institutions: The type of business organizations we call

cooperatives (cooperativas) and "superficiary" rights (derechos de


Not surprisingly, both these legal concepts, cooperatives and

"superficie" rights, are a wise choice for someone bent on preserving —

even if adjusting — a socio-economic model like the one Cuba has had for

the past 50-some years. But before we greet those "changes," if and when

they happen, with the usual Miamian emotional dismissive reaction ("they

are not changes at all", or "they are not enough", or "they are just

more of the same communist claptrap"), maybe we should try to learn a

little more about them.

A true production cooperative association (cooperativa de producción) is

an entity that gives its workers or members a real input in the

productive process and an ownership interest in the benefits realized

and accumulated by the entity. A cooperative association presumes a

level of independence — from the government, but also from the pressures

of unfair competitors, and it is the government's task to preserve such

fairness in many cases — that many of us may doubt will ever be

available under Cuba's present rulers.

In fact, ownership by the workers/members may not presently be in the

cards for Cuba, where the government may opt for a system whereby

today's state-owned businesses will remain so and be rented out to

cooperatives formed by Cuban workers/members. We simply do not know yet.

But even in this last scenario, this "adjustment" may prove valuable in

the long term, if we can visualize the impact it may have in the Cuba of

the future (can we?).

In a society where the capitalist market model rules, anything a

business does that is not directly or indirectly aimed at maximizing

profits seems illogical, even senseless. A cooperative association

grounded on motives and/or goals aimed at cooperating with others, not

just for the sake of profits but in pursuit of solidarity as well, by

people who see the cooperative as a means to simply improve the

participants quality of life, not to get as rich as they can get, sounds

illogical to us in the United States, but it could make sense to, and be

found attractive by, many among the 11 million Cubans in the island.

Even if most of these Cubans in the island — or all of them, as some of

my neighbors seem to think — may be sick and tired of a Revolution that

has outlived its shelf life, that does not necessarily mean that they

will be ready to swear by the Austrian School of Economics gospel, as

some people Stateside seem to believe they will. Chances are that many

Cubans will look at what "the World according to Hayek" has done to

health services, housing and education, three daily life concerns for us

but which Cubans have, for years now, been able to take for granted —

even if with ups and downs in quality —, and which are becoming

inaccessible for an ever growing number of us citizens of the free

world, whether we live in Spain, in France or in the United States.

For instance, Cubans, faced with the possibility of paying high rental

prices for housing units such as some depicted in a Miami Herald series

(the units look no better than those in Cuba pictured often in the same

newspaper as evidence of the hell-holes Cubans must endure) may simply

say "no way." And I, for one, do not believe the contention that what

Miami renters pay monthly for their hell-holes ($800 and more) is

justified by "the market" will sway Cubans from their natural rejection.

Or take education. I recently asked a very bright young lawyer trained

in Cuba what he had to pay to become a lawyer (zippo), and how it

compares with the level of indebtedness he needs to incur for his

education and accreditation as a lawyer in the United States, something

he is now boldly striving to accomplish.

Another young and accomplished lawyer, this one from Argentina, who

recently obtained an LLM from a law school in Miami, tells me that, if

health care and its costs back home in Buenos Aires were to be handled

the way they are among us in the United States, people would be rioting

in the streets.

An economic system based on diverse types of cooperative associations

may be a viable alternative for Cubans to explore in order to fulfill

those three other daily life concerns we in Miami often amusedly say the

Cuban Revolution lacks an answer for: breakfast, lunch and dinner.

My next entries in this column will try to identify the key elements in

cooperatives and "superficie" rights we may realistically expect to see

in Cuba's coming adjustments to those legal institutions.

José Manuel Pallí is a Cuban-born member of the Florida Bar, originally

trained as a lawyer in Argentina. He is president of Miami-based World

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