The Cuban People are Moving their Country towards Free Market Capitalism

Posted by PITHOCRATES - July 28th, 2012

Week in Review

Cuba’s National Assembly is meeting to discuss Raul Castro’s economic reforms.  And people within and without Cuba are watching anxiously.  To see if Cuba will throw off their socialist/communist shackles.  So the Cuban people can breathe liberty and enjoy prosperity.  Where all Cubans can live the good life.  Not just the inner party members (see Cuban parliament meets on Raul Castro’s economic reforms, budget, tax system by Peter Orsi, Associated Press, posted 7/23/2012 on The Washington Post).

Islanders and Cuba-watchers will be seeing if the assembly takes any action on long-promised measures such as the easing of travel restrictions, increased private farming of state-controlled land or the approval of cooperative businesses…

And last week the island’s burgeoning small business class was dealt a blow with the low-key announcement of new, stiff tariffs on imported goods.

The entrepreneurs say that without access to wholesale markets, the only way they can supply their businesses is through “mules” who transit between Cuba and places such as Miami, Ecuador and Panama with their bags stuffed with food, spices, clothing, electronics, diapers and other items tough to come by on the island…

It made no mention of the small businesses, however, and insisted that the measures were necessary because excess baggage is slowing down service at the airport, making it resemble a cargo terminal.

By 2015, Cuban officials are gunning to have removed 1 million workers from bloated state employment rolls and have transferred more than 40 percent of the economy into private hands, compared with about 15 percent today.

Import tariffs don’t protect domestic business.  They hurt domestic business.  By raising their costs.  Which forces businesses to raise their prices.  Which hurts their sales because people buy less when prices are high.  So they find ways around paying those high tariffs.  So they can keep their prices low so people can afford to buy their wares.  And the Cuban small business owners turn to “mules” to bring in what the command economy of Cuba can’t.  Goods at free market prices.

The command economy of socialism/communism doesn’t work.  Free market capitalism works.  Free trade works.  As proven by the Cuban black market.  People were jamming their bags so much with the goods that are in demand that it was turning the airport into a “cargo terminal.”  The government may not know how to supply businesses in a free market.  But entrepreneurs do.  And the Cubans are ready, willing and able to advance Cuba into the 21st century.  All they need is for the government to let them.

The Obama administration could take a lesson from the Cubans.  In what works.  And what doesn’t work.  The Cubans are trying to move towards free market capitalism.  While President Obama is moving America in the other direction.  The Cubans want less government in their economy.  Because it clearly doesn’t work.  And they have the scars (economic and physical) to prove it.  While the Obama administration is trying to put more government into the economy despite this not working anywhere it has ever been tried.  Even our one-time Cold War nemesis is admitting this.  And when they do perhaps it’s time for our president to do likewise.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , ,

Comments are closed.

Blog Home