State Resistance To Global Is at Ion in Cuba

Contents
Preface vii
1. Introduction 1
Cuba as an Exception 2
Neo-liberal Globalisation, Socialism and Anti-Imperialist
State Resistance 5
Implications for the State 13
Social Consequences of the Global Trends 14
Socialism in a Sea of Capitalism 16
Marxist Socialism 17
State Capitalism 21
Implications for Studying Cuba 24
The Party/State Apparatus 34
2. Conceptualising Cuban Socialism: The Pillars of the
Revolution 41
The Causes of a Tardy Independence 42
Roots of Nation-state Formation 43
US Intervention and Neo-colonialism 48
The First Labour Movement 50
A Workers’ Revolutionary Attempt 52
An Alternative to the Workers’ Movement 60
‘Cuba Socialista’ 69
Economic Integration into the Soviet Bloc 79
Unity, Continuity, State Supremacy and Popular
Participation 81
3. The Causes and Impact of Cuba’s Crisis in the 1990s 86
The Background to the Crisis 89
The Effects of Integration 90
The Campaign to Rectify Errors and Negative Tendencies 92
The Demise of the CMEA 94
Cuba and the Fall of the Soviet Union 97
The US Economic Embargo 109
The State’s Response and the Impact upon Cuba’s
Political System 117
Foreign Direct Investment 133
Signs of Slow Recovery 139
vi State Resistance to Globalisation in Cuba
4. Structural Adjustments and Social Forces in Cuba:

How Cuba’s Economic Model was Shaped by
Global Trends 152
Demonstrated Economic Growth 153
Causes for Economic Growth 155
Social Growth 158
World Bank Development Reports and Other
International Sources 162
Cuba’s Most Radical Change – Sistema de Perfeccionamiento
Empresarial 164
Cuentapropismo: The New Self-employment in Cuba 184
New Structures 195
New Structures and Social Bloc Formations 206
Structural Changes and the Revolution’s Identity 216
5. Conclusions and Considerations 223

Shaky Pillars? 226
Possible Future Scenarios 231
A Disintegration of the Party/State Apparatus? 233
Maintaining Cuban Socialism 235
Bibliography 240
Index 257
1
Introduction
Throughout the past decade, the idea of establishing or maintaining

what was understood as revolutionary or state socialism has been
somewhat lost to historical discourse. The collapse of the socialist
bloc in Eastern Europe, the demise of its international trading system
(the Council of Mutual Economic Assistance) and the disintegration
of the central state socialist stronghold (the USSR), all played an
essential role in reducing communist and socialist movements to
ghostly levels of existence. The economic, political and ideological
breakdown that occurred towards the end of the 1980s and the start
of the 1990s affected not only those living in Eastern Europe during
the popular uprisings against state leadership. The fall of political
and economic structures dominated by communist parties also created
a crisis of theory; left-wing radicals and broader movements searching
for alternatives to Western capitalism became paralysed throughout
the entire globe. Guerrilla movements, communist and socialist
parties of the West and non-industrialised, post-colonial countries
of the Southern Hemisphere – all formerly aligned on a real, inter-
national alternative force in the face of capitalist expansion – were
thrown into disarray. In Western Europe, political parties of the social
democratic tradition abandoned their allegiance to the interests of
the working class and clearly began a process of recanting their
demands for increasing social spending. Meanwhile, those forces
historically antagonistic towards socialism and national liberation
movements and in favour of free-market capitalism, stepped up their
efforts to consolidate a global system based on free trade favourable
only to a small minority of transnational entrepreneurs and political
leaders that protected their expansionist interests. Out of this
condition arose what would become known as the process of neo-
liberal globalisation.
In this era, governments in most countries experience a shift of
power in their traditional spheres of influence. The essential result
is a move from public, national dominance of the means of production
and social activity towards the hegemony of multinational
corporations supported by an elite community of technologically
1
2 State Resistance to Globalisation in Cuba
advanced countries and global financial institutions that adhere to

the principles set out by the aforementioned conservative forces.
Among the most important of these principles have been the
privatisation of national enterprises and a reduction by the state in
social spending. Although in recent years there has been demonstrated
grassroots resistance to the post-Cold War ‘new world order’, few
state leaders have actually contested the status quo and in many cases
they have found themselves forced to accept a world without
alternatives. Alongside this reality there is the idea that develops into
a rule: that those resistant to the current state of affairs and longing
for socialism or any other alternative, will fail, dissolve or pass into
history. But for every rule there is an exception.
CUBA AS AN EXCEPTION
When it comes to conforming to the status quo, employing

fashionable trends in ‘neo-liberal globalisation’, ‘structural adjustment
programmes’, ‘market orthodoxy’, ‘transitional’ or ‘post-Socialist’
regimes, Cuba and its state leaders are often considered to be the
exception to the rule. Despite the countless efforts of extra-national
forces to destabilise the 43-year-old regime headed by Fidel Castro
and the Communist Party of Cuba (PCC), the Cuban leadership
remains firm in adhering to the principles that distinguish it from
those that have accepted the structures currently dominating the
global political economy. More surprisingly, while actually contra-
dicting neo-liberal theories and practices, Cuban state enterprises
have been able to experience economic growth and acquire new
technologies that are used to generate capital. At the same time, the
institution of the Communist Party, as the motor of so-called socialist
society in Cuba, has ensured that even during the worst years of
economic turmoil, investment in social welfare continued to grow.
Recognising that the process of neo-liberal globalisation replaces
the influence of domestic political and economic structures with
trends and ideas fostered by transnational corporations, financial
institutions and the will of economically advanced countries, Cuban
government propaganda often focuses on the imperialist character
of the new world order. In this light, in Castro’s lengthy speeches and
in PCC documents, Cuban socialism is depicted as being more than
just an option of political and economic structure within one country.
Today, the Revolution – as the state is often referred to in Cuba – is
also, and essentially, a counter-imperialist structure that defends the
Introduction 3
sovereignty and independence of the Cuban government and

maintains public ownership of most of the means of production and
social–economic activity. Along with this anti-imperialist character,
Cuban political discourse is often centred on making a critical analysis
of the leading role played by the US government in the era of neo-
liberal globalisation. This can be explained firstly by pointing out
that since the socialist bloc ceased to exist, the United States has gone
unchallenged as the world’s military, economic and political state-
hegemonic power; and secondly, because the United States – only 90
miles away from Cuban shores and possessing a military base on
Cuban national territory – continues to impose a very unpopular
economic trade embargo against the Republic of Cuba. After the Soviet
Union ceased to exist, this embargo was only enhanced in 1992 and
1996 to punish other countries and non-American companies for
conducting trade with Cuban state corporations.
For a period of five years, between 1990 and 1995, many scholars
who specialised in Cuban studies dedicated the bulk of their work to
contemplating a ‘post-socialist’ Cuban society based on the decon-
struction of revolutionary politics or the imminent death of the
commander-in-chief of the Revolution, Fidel Castro. Evidently these
writers based their predictions on the idea that socialist Cuba was
dependent on the socialist bloc in Europe and particularly on Russia’s
geopolitical interests. Dependent, in this context, meant economically,
militarily and ideologically. To their surprise and that of other
observers, Fidel Castro was not overthrown, nor was the hegemony
of the PCC over Cuban society ever seriously challenged. To the
dismay of counter-revolutionaries, although Fidel Castro must
inevitably die sooner or later, opinion studies and political analysis
indicate that he will most probably pass away as a popular historical
hero for the people of his country and much of the world (August,
1999; Kapcia, 2000).
Other studies that considered the eventual death of socialism in
Cuba concentrated on the economic hardships that the Cuban people
have had to endure after the country lost over 70 per cent of its
purchasing power due to the fall of the subsidised trading system
within the Council for Mutual Economic Assistance (CMEA). Since
this breakdown did not result in the expected total economic collapse,
other analysts, between 1995 and 2000, focused upon the new
measures that were implemented – by Cuban state leaders – to help
the economy recuperate and to adjust to the new global economic
conditions. It was thought that just as the so-called socialist states
in Eastern Europe had implemented economic reforms that led to a

disintegration of productive forces within each national case study,
Cuba too would experience a similar process of deterioration in state
control of economic and production relations. These tendencies to
link the experience of two distinct cases (one being the Soviet Union
and Eastern Europe, the other being Cuba) into a uniform, historical
trajectory were based on economic theories developed by Eastern
European economists and North American scholars. Those that held
these theories were convinced that Fidel Castro and the PCC were
on their way out, forced by the ‘natural’ economic processes that
take place after socialist systems begin to adjust their economies to
new global market structures (Oppenheimer, 1992).
All social formations change dialectically. A prolonged disintegra-
tion of the social, economic and political forces that currently lead
the Cuban Revolution may very well happen. But for now, neither
political revolt nor economic disintegration has caused a change in
the anti-imperialist and socialist Cuban leadership. Nevertheless, the
leadership’s success in surviving global pressures to privatise state
corporations did not happen without real structural changes in Cuban
society and the production system. Although Fidel Castro and the
PCC leadership contend that the structural changes experienced in
Cuba’s political economy during the last decade have nothing to do
with neo-liberalism, scant attention has been given to the striking
similarities between the outcome of market-like reforms on the island
and the typical trends and ‘modes of production’ found elsewhere.
The central question that this book aims to address is two-fold:
Firstly, why, after such a radical change in the global political economy
and the triumph of the process of neo-liberal globalisation among states,
does the Cuban Communist Party/state apparatus continue to exist?
Secondly, to what extent is the process of social, political and productive
restructuring in Cuba shaped by global trends and pressures?
In order to accomplish the tasks that the central question entails,
it is necessary to outline some basic thoughts generated by research.
At the top of the priority list, there is the need to lay out the structures
and ideas dominating the current global political economy. This
entails delineating the parameters and implications that define the
process of neo-liberal globalisation and the most important charac-
teristics or trends in national economies. Secondly, there is the need
to define the project of creating or maintaining the revolutionary
dream of what has been called by some Marxists ‘state socialism’ and
evaluate its existence in a world that is hostile to it. The uncontested
Introduction 5
Communist Party dominance of the state in Cuba, the discourse that

is often deemed as Marxist and the combination of nationalist or
anti-imperialist tendencies is what motivates analysts to marvel at
the peculiarity of Cuban socialism today.
NEO-LIBERAL GLOBALISATION, SOCIALISM

AND ANTI-IMPERIALIST STATE RESISTANCE
No estamos en contra de la globalización, no se puede estar, es una

ley de historia; estamos contra la globalización neoliberal, la quieren
imponer al mundo y que será insostenible, se derrumbará, y hay
que ayudar a derrumbarla, y para ayudar hace falta conciencia que
se ha llevado a cabo de la Revolución. (Fidel Castro, 20 July 1998)
There appears to be a number of ‘truths’ or ideas that dominate

contemporary political and economic thinking. One of them is that
socialism is dead. This is often sustained by the experience of the
demise of the Soviet bloc in Eastern Europe and the collapse of other
so-called socialist states during the early 1990s. The other ‘truth’ is
that neo-liberalism, the tendency of states to reduce their intervention
in economic, financial and social planning, is the uncontested and
most widely accepted and practised economic ideology for bringing
the world towards economic prosperity. Finally, a synthesis of the
last two, that because Western capitalism rose triumphant over state
socialism, there are no alternatives to the process of neo-liberal glob-
alisation, and thus it is inevitable. While these ‘truths’ or ideas have
been widely challenged by a variety of global social movements
stemming from grassroots organisations in civil society and non-
mainstream political activists, few states or state leaders have
contested the hegemony of neo-liberal ideology in the current phase
of globalisation.1 Here Cuba is at the crux of the matter.
1. Throughout the 1990s, grassroots movements have evolved into greater

struggles for democratic rights of indigenous peoples, economic equality
through fair trade, peace, the elimination of poverty, concern for the
environment and alternatives to capitalist development. Though pluralistic
in the issues they tackle, year by year, these tendencies have drawn closer
together and appear to be forming one global movement for socio-economic
justice, or, in short, the global justice movement. Some scholar–activists
have dedicated the bulk of their work to analysing and supporting these
movements, among them Susan George, Alex Callinicos, Mike Gonzalez,
Ronnie Hall and Barry Coates. In a publication entitled Anti-Capitalism:
Neo-liberalism as a hegemonic ideology

According to the political economist Arthur MacEwan: ‘The essence
of the neo-liberal position on international commerce is the
proposition that economic growth will be most rapid when the
movement of goods, services and capital is unimpeded by government
regulations’ (MacEwan, 1999:31). Its name comes from the experience
of nineteenth-century liberalism, which was thought to have brought
wealth and power to English and other northern European societies,
and the suffix neo, meaning new or revised by contemporary
condition. To elaborate, neo-liberalism is a political and economic
ideology that represents the interests of market leaders (i.e., big
business and finance) in their tendency to expand globally.
Governmental rules and practices that prevent or hinder expanding
markets are thought to be the enemy.
The term neo-liberalism can be misleading in that the suffix neo
is often interpreted as meaning something new. However, the only
thing new about this ideology and political, economic practice is the
dominance it seems to have had throughout the last decade. Some
point to the Reagan–Thatcher era (early 1980s) as the beginning of
neo-liberalism and the fall of the Berlin Wall (1989) as the start of
its global consolidation among states and international financial
institutions. The truth is that, in the words of Susan George: ‘The
victory of neo-liberalism is the result of 50 years of intellectual work,
now widely reflected in the media, politics, and the programmes of
international organisations’ (George, 1997). George points to the
A Guide to the Movement (2001), these writers together with other analysts
argue for an alternative to neo-liberal globalisation. They also highlight
those areas where the global movements have demonstrated their
willingness to form common agendas. References are often made to Seattle,
Washington 1999 where 70,000 demonstrators took to the streets to protest
against the World Trade Organisation (WTO) and Genoa, Italy in July
2001, when 300,000 people demonstrated against the G8 Summit. In
recent times, the media have erroneously tended to classify the struggles
of those that challenge the present world order as belonging to the ‘anti-
globalist’ movement. Contrarily, analysts like those mentioned above have
emphasised that those who manifest their disenchantment with current
global structures are not against globalisation. Rather, they are against
neo-liberal or corporate-led globalisation and are attempting to construct
a globalisation of justice from below. Interestingly enough, Fidel Castro
has been the only state leader worldwide to openly support this movement
of socio-economic justice and express his solidarity with those that struggle
for an alternative form of globalisation (Castro, 1999a).
Introduction 7
establishment of think-tanks in the United States and the United

Kingdom during the 1940s, when liberalism was a marginal ideology
in politics. Through the institutions, wealthy conservatives poured
millions of dollars into research and materials for the development
of anti-New Deal plans geared towards political leaders of the right.
In turn, these politicians and capitalists formed an alliance to
dismantle the ‘transformation’ that Polanyi wrote about (Polanyi,
1944). The intellectual roots of neo-liberal economics can be found
during the same period with individuals like Richard Weaver and
Friedrich von Hayek, who both studied economy and business at the
University of Chicago and started a trend of producing literature that
discredited the ‘transformation’ from free-market capitalism to state-
controlled economy (George, 1997). The production of literature and
ideology that fortified conservative forces eventually laid the basis
for the ‘conservative revolution’ against Keynesian economics. Today,
neo-liberal ideology, as a doctrine, is reflected in the practices and
formulas that are often promoted by international financial
institutions when dealing with the question of development in the
countries of the South (George and Sabelli, 1994). The eventual global
acceptance of this ideology by state leaders and international organ-
isations is what makes neo-liberalism a hegemonic ideology in the
process of globalisation.
Hegemony, coming from the Greek word hegemon meaning leader,
is a concept that was developed early last century by the Italian
Marxist Antonio Gramsci. While most Marxists during the 1920s
explained global as well as state-centred phenomena by using a strictly
economic interpretation of history, Gramsci added an intellectual/
cultural element, which concluded that social classes could establish
domination over others through promoting their ideology and culture
at social and political levels (Gramsci, 1971). If there is any truth in
this, the experience of the ‘conservative revolution’, which relied
upon the production of liberal, economic literature, makes it evident.
Susan George goes so far as to say that because the progressive forces
did not promote intellectual production, were complacent and did
not mobilise a front based on substantial professional thinking, the
conservative forces were able to step in and make their project
hegemonic. But most social scientists, including George, would agree
that ideological hegemony does not amount to permanency, far less
does it mean there are no alternatives.
Even though most countries, both in the technologically advanced
North and the developing South, and global structures fall under the
umbrella of neo-liberal ideology today, there are always political

moments when social forces gather enough strength to resist and
counter the dominating mind frame. Robert Cox calls this counter-
hegemony (Cox, 1987). In short, counter-hegemony can be thought
of as a successful movement of resistance against the dominating
structures of reality. Throughout the twentieth century, resistance
can be found in states or alliances but also in grassroots movements
that are currently taking shape.
What is important to emphasise here is that the framework of this
study is dependent on the notion that the Cuban government and
people are now at a political moment where they are found to have
been developing on a domestic scale counter-hegemonic tendencies
that contradict the neo-liberal practice. Cuban discourse, as will be
demonstrated in the chapters to come, is often centred on criticising
the globalisation of neo-liberal ideas and placing the market and
profits before the interests of people. Fidel Castro and the PCC promote
an alternative form of globalisation, one that is based on the co-
operation of states in material development and fair trade among
the nations instead of competition (Castro, 1999a). Whether or not
they are successful is a question to be dealt with later.
Neo-liberal practice
But what exactly does neo-liberalism consist of in practice? As its
ideology dictates, neo-liberal practice is comprised of the implemen-
tation of a number of tactics or policies that result in diminishing
the authority of the state or public sector in society, especially in the
market, and placing large, private corporations at the top of organised
society. This implies, firstly, that corporate leaders make a pact with
certain political figures and/or organisations in governmental and
international bodies, in order to lay the legal basis for this movement
or transition. Therefore neo-liberalism can only be applied to societies
in which legal frameworks allow room for private corporations to
take on a leadership role in public affairs. Secondly, the practice must
be undemocratic in that public dominance over a productive or
service sector is usually rendered to those who have the capital to
develop markets from this sphere of influence, instead of those func-
tionaries of public institutions who serve elected officials or
governmental offices.
The most effective way to render power to corporations is to
privatise publicly owned enterprises and services. A service like trans-
portation, for instance, will go from being a public and local patrimony
Introduction 9
funded by taxes to being a private business that will profit from the
consumers of the provided service. In a democratic setting, a political
party, usually funded by leading entrepreneurs, would encourage
voters and legislative bodies to support the project of privatisation
in return for a number of advantages. Often these have included the
reduction of income tax for common workers. Other neo-liberal
politicians might argue that a service or public industry would become
more efficient if it were free from governmental bureaucracy. These
myths have been widely contested by people who have actually
experienced the privatisation of industry or services, as efficiency
issues after privatisation are often neglected. But the essential problem
with privatisation is that, in most cases, decisions to privatise
companies are not made democratically; in most cases they are made
from above without a public-based consensus. In this sense, the
opponents of neo-liberalism argue, privatisation equals thievery from
the wealth of society in order to subsidise private capitalists in their
mission to expand (Petras and Veltmeyer, 2001). This is not to say
that all public ownership of production and services is necessarily
democratic. However, the privatisation of publicly owned enterprises
does exclude the chance of democratic governance.
Privatisation might be attractive to politicians who are in the
position of solving state indebtedness or government bankruptcy.
By selling off national industries or public services, governmental
bodies are believed to be relieved from debt and responsibility over
social concerns. Those politicians interested in making governmental
bodies smaller will use privatisation as a means of doing so in addition
to fundraising for the government. The problem comes to the fore
when non-governmental groups lobby for state monitoring over the
transition to privatisation, either in defence of the environment, in
the interests of workers or to deter corruption. Furthermore,
fundraising arguments fall by the wayside when one realises that
privatisation is not a sustainable means of government income;
companies can only be privatised once. The practice of privatisation
becomes even more anti-democratic and much more controversial
when international governing bodies and institutions pressurise
poorer countries to privatise production domestically.
From the business point of view, neo-liberal practice entails freeing
the market from rules that hinder economic growth and profit. For
instance, politicians that represent the interests of private capital
might campaign against a hike in the minimum wage for workers,
in order to keep profits rising. Another example can be found when
private companies are given the right to ignore the demands of labour
unions, hire and fire as they want, and move from one region where
legal wages are high to places that offer a surplus of workers willing
to produce for a lower and less secure income. But privatisation is
but one of the many practices. Neo-liberalists might also pressure
local or national governments to relax environmental laws in order
to allow private companies to produce more cheaply rather than
under ‘eco-friendly’ frameworks, which often require businesses to
employ ‘costly’ production methods that crunch profits. Like-minded
politicians argue that unemployment rates will automatically drop
when these policies are adopted, because the private company, after
profit rates increase and wages decrease, will be able to employ more
workers. The result of these ideas when they are put into practice is
that more workers are employed either on a part-time or temporary
basis, and with less job security. When it comes to environmental
quality, the risks of air and water pollution become more pronounced.
The examples mentioned above are best demonstrated in real
national case studies. However, neo-liberalism, an international
project, goes beyond state structures and specific instances and is
applied globally. That is, not only are neo-liberal practices
implemented by domestic politicians but also by international
financial institutions that often pretend to aid countries in need of
development. After the demise of the so-called socialist regimes in
Eastern Europe and the fall of authoritarian political structures in
Latin America during the late 1980s, neo-liberal policies were followed
by new governments in reaction to years of state dominance in the
economy. Critical political economists have noted that international
financial institutions, in the hands of neo-liberal thinkers, actually
forced many of the state-dominated economies to be dismantled
(Bello et al., 1994). This was done by denying international bank
loans and credits to countries that refused to privatise or to cut state
subsidies in domestic agricultural, industrial or service sectors.
Evidently, the purpose was to allow large transnational corporations
(TNCs) to compete successfully against or buy up small domestic
businesses – whether private or public. The result has been the selling
out or disintegration of national economies and, in their place,
allowing the TNCs to dominate almost every aspect of life. This is
seen more clearly when state companies and public services – from
telecommunications to water and energy sectors – in small underde-
veloped countries are sold to large corporations, usually based in the
technologically advanced North. The international institutions that
Introduction 11
are most known to promote these policies of privatisation are the

International Monetary Fund (IMF), the World Bank and the World
Trade Organisation (WTO).
For some time now, the World Bank has been the architect of the
liberalisation of developing economies by overseeing privatisation
programmes and implementing what are called Structural Adjustment
Programmes (SAPs). SAPs are packages that are offered to heavily
indebted countries that either have experienced a sharp transition
from state-dominated to private corporate-led economies, or to those
very poor nation-states that were or are in the condition of economic
and political bankruptcy. In offering these troubled countries loans,
the World Bank demands that recipient countries meet certain
conditions. The conditions for receiving loans for infrastructure or
any other kind of development are set by Structural Adjustment
Programmes. Looking at the political aspect, once again, the
government then responds to foreign lenders and investors and not
to its citizens. This pushes the neo-liberal project to its global extreme.
In 1999 and 2000, member states of the WTO held a number of
negotiation summits that laid the basis for implementing agreements
on trade in services; this was called the General Agreement on Trade
in Services, or, GATS2000. The negotiations are focused on liberalising
trade that affects all service sectors, from investment banking to the
energy sectors, and reducing domestic subsidies for national services.
Once again, the political – if not the moral – issue comes to the fore
when looking at the anti-democratic practices that are employed in
these negotiations and agreements. Rich and powerful TNCs are
known to lobby successfully during the negotiation rounds, whereas
groups from civil society, like labour organisations, are not invited
to give their input and represent their interests (Wesselius, 2001).
What happens in this process of neo-liberal globalisation is the
forming of alliances between top government officials and big
businesses, and the alienation of public interests in the organisation
of present day society. Neo-liberal politicians and political organisa-
tions, which promise their constituents in poorer countries more
development by employing free-trade policies and SAPs, are concerned
with making their country attractive to foreign investors and
technology. They argue that privatisation, the relaxation of environ-
mental and labour laws and the reduction in state subsidies to domestic
producers and service sectors are all necessary for efficiency, in the
interest of the common good and the advancement of their societies.
Consequently, local or domestic governments in developing countries

render up most of their power to foreign private corporations.
From the discussion above and the reading of works on the topic
of neo-liberal globalisation, neo-liberal practice worldwide can be
summarised by highlighting what the global trends are among states
today:
1. Privatisation of state corporations to eliminate inefficiency and

government expenditure. But privatisation is also known as a
fundraiser for the state during the process of restructuring and
repayment of debts.
2. Fiscal reform for reducing budget deficits. This reduces the chance
that the state will intervene with subsidiaries to supply industries
and social programmes. It is also geared towards creating
independent national banks. The purpose is to reduce
governmental costs and increase government income.
3. Flexible labour markets, providing more autonomy for employers
in deciding wages and benefits, with trade unions stripped of their
powers to negotiate. This is flexibility with the purpose of reducing
social security contributions that employers have to make. The
lower wage earners are subject to more elusive hiring and firing
policies.
4. Trade reform, making the private sector of the national economies
more competitive internationally and more orientated towards
the export market, with updated technologies in production.
Certainly this has reduced tariffs on imports; but it encourages
that production be geared to foreign markets.
5. The opening of financial markets, reducing government
intervention and aiming for the operation of free markets, in
which national enterprises and the economies as a whole become
heavily influenced by international or foreign financial
institutions. The advantage of this is an increase in the flow of
capital and the modernisation of industries.
These five global trends will be considered, especially in Chapter

4, when the influence that neo-liberal globalisation has had upon the
Cuban model will be assessed. From the Cuban experience, there
emanates an alternative in development and economic practice,
especially on the topic of privatisation. Cuba, which is not a recipient
of IMF/World Bank loans, is seemingly exempt from the pressures to
privatise. In this light, neo-liberal globalisation is not seen as an
Introduction 13
inevitable process. Rather, neo-liberal globalisation can be understood

as the implementation of global trends. However, and in parallel to
this, it will be demonstrated that though the Cuban leadership has
made an enormous and unprecedented effort in challenging global
trends that are widely accepted by most states, especially in the area
of privatisation, some policies that have recently been implemented
in Cuba do resemble the outcomes of neo-liberalism in practice. For
instance, in Chapter 4, the Cuban party/state apparatus is found to
employ some policies that appear to make labour more flexible. This
should indicate that the process of neo-liberal globalisation really does
have an affect on countries, even when the intention is to resist it.
IMPLICATIONS FOR THE STATE
One of the major contemporary debates in global political economy

concerns the power of leaders in developing countries to choose neo-
liberal ideology and practice or reject it (Palan et al., 2000). Does the
state still have the sovereignty to decide whether or not neo-liberal
development should be practised? Or is neo-liberal practice imposed
upon weak states? Many (social) scientists will agree that neo-liberal
policies are not implemented uniformly across the globe (Gwynne
and Kay, 2000). Therefore the issue is not so much one of choosing
neo-liberalism or deciding to reject it. The question is: To what degree
are neo-liberal practices implemented? Whatever the case, it suffices
to say that countries that are dependent on foreign aid and the
workings of international financial institutions have little choice in
the matter. But what do the experiences of neo-liberal globalisation
imply about the pressures that global structures and fashionable
measures exert upon states?
What implications does the process of neo-liberal globalisation
have upon the state? Some speak of the retreat of the state, the collapse
of states; some even go so far as to claim that the state is no longer
relevant. Though many will argue that the role of the state has
changed, few would argue that the state in the era of neo-liberal
globalisation has ceased to exist. Susan Strange points out that there
are fundamental changes:
The shift away from states and towards markets is probably the
biggest change in the international political economy to take place
in the last half of the twentieth century. It is most marked in matters
of production, trade, investment and finance – in what I would
call the production and financial structures. These are the ones
which have most impact on people’s daily lives. I … argue that
one of the major shifts resulting from structural change has been
the increased power and influence of the multinationals – more
properly called Transnational Corporations (TNCs) – and the
networks they set up and operate. (Strange, 1996:40)
Strange makes the argument not that the state is disappearing, rather,
that due to the integration of the global economy – through inter-
national production – the balance of power has shifted away from
states and towards the market. Additionally, this shift is seen as causing
a transfer of power from territorial states to non-territorial TNCs and
the creation of gaps of power where authority of any kind is seemingly
absent, i.e., the informal economy and underground markets like
drugs, prostitution and the Mafia. TNCs are seen as political actors,
having political relations in civil society, determining the role of
employers, and the employed, they are producers as well as sellers,
and they are also consumers of goods and services. The technical
innovations and where research funding is allocated are often
determined by the TNCs. Strange comes to the conclusion that power
was handed over to the TNCs ‘on a plate’, and that it was not
accidental. This coincides with the idea that, as Susan George has
revealed, conservative forces were preparing for this change some
time ago.
SOCIAL CONSEQUENCES OF THE GLOBAL TRENDS
For the past decade, many critical social scientists have dedicated a
large portion of their work to analysing the social implications of the
current global trends. While some have been apologetic to certain
aspects of neo-liberal globalisation and the opening of markets, most
have concluded that neo-liberal practice is destructive and not
sustainable. The same can be said of the neo-liberal experience in
Latin America:
• Companies which find it difficult to compete in the new and

vulnerable international market, have started laying off workers
more easily and there has been little resistance on behalf of the
weakened labour movements; the term, introduced from the
US corporate world, is ‘downsizing’. Additionally, the
government, in trying to reduce spending, has also done a
Introduction 15
considerable amount of downsizing of its army of civil servants.

A more recent trend is to keep a reserve of civil servants and
private sector workers temporarily employed by creating short-
term contracts through temporary employment agencies.
Workers and civil servants are now hired to produce or serve
on production or planning projects, rather than as permanent
functionaries in the service of the public.
• Real wages have decreased. While the top two deciles of income
earners experience a substantial increase in their salaries, most
income earners have experienced a decreased or stagnant rate.
• Additionally, there has occurred an increase in what is known
as the informal sectors; i.e. an increase in the number of urban
workers dedicating their workday to unwritten contracts, illegal
activity (such as the sale of drugs, prostitution and theft), and
other unregulated trade creating low levels of income.
• Nevertheless, with the state reduction in funding social services
and investment in public infrastructure, it is the poor that suffer
the most. Latin America’s 30–50 per cent poor suffer from poor
health and high infant morality rates. There seems to exist,
generally in the minds of intellectuals, artists, and the
overwhelming majority of members of civil society, including
the Church, a core concern with the poor in the region. While
public foreign debt has been paid, the public debt to the working
poor has not. The result has been outbreaks of epidemics and
an increase in violent crimes. Even international financial
institutions are recognising this, as did the Inter-American
Development Bank in 1996. Hence, social inequality has become
a serious problem, creating contradictions between the neo-
liberal idea and reality. (Gwynne and Kay, 2000)
Resistance
Historically, especially in Latin America, the popularisation of neo-
liberal ideology was accompanied by the transition of dictatorial
regimes in the region, like Pinochet’s Chile, towards multi-party
democracies. During the dictatorships, the tradition of movements
resisting certain economic practices had been lost, as was the faith
in the existence of real alternatives. The weakened political movements
of the left were pushed further away from the path of resistance,
when it became clear that the countries under the former socialist
bloc were also moving in the same direction. The political leaders of
the traditional left in Latin America seemingly rested satisfied with
the new democratic laws that were given to the general population
and saw their historical mission as being completed after the dictator-
ships were abolished. The exceptions to this would be left-wing
factions of the Workers’ Party (PT) in Brazil and the Zapatista liberation
movement in southern Mexico. These movements, linked to other
progressive forces, like those concerned with human rights and the
environment, started to challenge many of the myths surrounding
the new global trends. The resistance to neo-liberalism was primarily
based on the unfavourable social consequences that resulted from
its practice.
During the second half of the 1990s it became more and more
evident that these neo-liberal policies were not wholly acceptable.
In Venezuela, popular resistance and disenchantment with corruption
and a deteriorating infrastructure led to a political slide to the left to
control or reduce neo-liberal policies; this resulted in the election of
nationalist leader Hugo Chavez in 1999, who vowed to reduce lib-
eralisation and resist external pressures to privatise. Throughout Latin
America as a whole, between 2000 and 2001, there have been at least
ten demonstrations or general strikes with more than 10,000
participants. These actions were centred on challenging the trends
of neo-liberal globalisation, especially privatisation, but also unfair
trade and currency devaluation (Charlton and Bircham, 2001:341).
More and more intellectuals and social activists have been arguing
for alternative forms of globalisation. Inspired by the works of
historical authors like Polanyi, social scientists of the left reject market-
centred or corporate-led globalisation and instead consider the
globalisation of participatory democracy, human rights and fair trade
(George, 1997; MacEwan, 1999; Coates, 2001). Again, these ideas
have often been generated by new social movements or intellectu-
als, but not by state leaders. As exceptions, Fidel Castro and the PCC
have been arguing for alternative forms of globalisation ever since
the term took off in popular discourse during the early 1990s (Castro,
1999a; 1999b). But what does resistance to neo-liberal globalisation
in the state form entail?
SOCIALISM IN A SEA OF CAPITALISM
The existence of ‘socialist’ states in a world of capitalism continues

to pose a dilemma of interpretation for the study of the global political
economy as well as for the many contributors to the broad and rich
Marxist tradition. By the end of the Cold War, the theme of revolu-
Introduction 17
tionary socialism was seemingly abandoned, neglected or ignored;

then, it was often considered a failed project, especially after the
demise of the so-called ‘socialist bloc’ in Eastern Europe and the dis-
memberment of the Union of Soviet Socialist Republics. An exception
might be considered in the work of James Petras and Henry Veltmeyer
in their book Globalisation Unmasked: Imperialism in the Twenty-First
Century (2001), where they argue for the possibility of socialism as
an overthrow project against modern-day structures, more specifically
against neo-liberal globalisation. Nevertheless, the socialist project
was never clearly defined and to this day scholars as well as politicians
continue to disagree over a number of questions concerning the
possibility of socialism.
MARXIST SOCIALISM
Traditionally, political Marxism views socialism as a real transition

from capitalist society to communism. This is a society of material
abundance, in which the needs of the population are met through
consensual, self-rule planning and where the production of goods
and services is based on need and not profit. It is a system of worker
and popular councils, the original meaning of the word ‘soviet’ under
the later defeated Bolshevik Revolution of 1917 (Mandel, 1978). This
most revolutionary – yet often abandoned – idea is based on
Marxist–Leninist principles whereby a vanguard of disciplined revo-
lutionaries would lead the working class into acquiring state power
and creating this society of abundance. In socialism, centralised
workers’ councils make decisions about the allocation of resources,
money incomes and pricing policies, the quantity of production, the
priorities of production, etc. ‘Self-managed production units’ would
scientifically calculate the ‘technical average’ according to the highest
prevailing level of technology. Less efficient units of production would
be dismantled as new and innovative, indeed more efficient, ways
of producing for the needs of workers would be provided. Alternative
employment for those displaced workers would be found and, of
course, the workload of each individual would be lessened.
Conferences from representatives elected directly from the consumers
(workers) would signal the type of improvements needed in products
and services, indicating how much more of what and when. Public
services for the population, like transportation, the media and
education would be run in a similar fashion and be accessible to all.
Self-rule of workers, autonomy or emancipation of workers, would
actually be the transitional stage to the highest attainable level for

human emancipation, not much different from what Marx
envisioned, only technically detailed. Small businesses would be
based on voluntary consensus or co-operatives; whereas no one would
be forced to join private enterprise because all the needs of the
population would be satisfied due to guaranteed consumption. Labour
would certainly be free and the term ‘free contract’ would have a
new meaning. Indeed, socialism was meant to entail a new mode of
production (Mandel, 1977; 1978).
Since the first Marxists, including Marx himself, understood that
capitalism was an ever-expanding world system, the original concept
of socialist revolution was also to be implemented internationally.
Hence the purpose was to move from one mode of production that
was growing internationally to another form, from one stage of
human development to another. Global capitalism enlisted all ethnic,
linguistic, cultural, racial, and national groups, to the war of class
struggle on a transnational scale. The achievement of a new order is
completely dependent on the invariable that socialism, taking off
from capitalism, must be international.
In his (Lenin’s) eyes the Russian Revolution was a mere preliminary

to a greater revolution which would establish international socialism
… Lenin did not invent the iron curtain. On the contrary, it was
invented against him by the anti-revolutionary Powers of Europe.
Then it was called the cordon sanitaire … Trotsky said on 8 November
1917: ‘Either the Russian Revolution will create a revolutionary
movement in Europe, or the European powers will crush the Russian
Revolution’. Neither happened. Lenin, like all other Bolsheviks,
including at that time Stalin, believed that socialism was impossible
in a single country. (Taylor, 1964)
This is sustained by Marx himself when, in the preface to the 1882

Russian edition of The Communist Manifesto, he said that a revolution
in Russia could serve only as a signal or complement to a proletarian
revolution in Germany or England. Luke gives a brief description of
the backwardness of Russian agricultural–feudal society and the
minuteness of industry inherited from Tsarist rule, in which he
recognises that only 2 per cent of the population could be considered
‘urban proletarians’ (Luke 1985:162–75). This group often had con-
tradicting interests with the majority of peasants and hence led the
entire country to a civil war that lasted from 1917 until 1921. The
Introduction 19
Bolshevik party sought to create hegemony within the state; in other

words, they attempted to seize control of production and all power.
It promoted the ideas of international socialism while at the same
time it defended their experiment against belligerent capitalist states
that surrounded Russia. But, the Bolshevik Revolution did not spread
and therefore the priorities of the new government were altered.
Lenin’s New Economic Policy allowed capitalist measures to be
taken up in order to permit the growth of capital accumulation and
thus to restore and even further Russia’s industrial capacity. The need
for industrialisation was spurred on by the fact that the Soviet state
was increasingly isolated from the world system. Among the many
characteristics of the New Economic Policy was the opening to foreign
investment by Western capitalists in the form of joint ventures
(Mommen, 1993). After Stalin took over in the late 1920s, the
leadership sought to industrialise the country even further in the
name of raising the workers’ standard of living. Through five-year
plans, the objective of industrialising the country and improving the
life of urbanites was successful, but at a very high human cost. Millions
of peasants were starved through the process of primitive
accumulation, whereby the state exploited the rural agricultural
workers in order to sell domestically and abroad for profit; this also
ended up in the programmes of forced collectivisation of farms.
During this time, Stalin pursued his own interests in obtaining
hegemony over the Communist Party in the Soviet Union and the
workers’ movement around the world. This resulted in systematic
purges of the Party and the execution of the original Bolsheviks who
criticised many of the policies that Stalin put forth.
However, the Stalinist model of economic development was not
autarkic, or detached from the rest of the world. The Soviet Union
depended on foreign technology and the developments of Western
sciences. After the Second World War, when the Soviet Union had
allied itself with the United States in order to crush Nazi Germany,
Russia acquired industrial plants from parts of Germany and also
Manchuria, which had been captured from the Japanese (Luke,
1985:340–3). Additionally, after the war, the Red Army took over
much of Eastern Europe, which supplied Russia with more natural
and industrial resources. This outcome created a scenario for the
Soviet Union, whereby it became a leading superpower dominating
by military force a considerable amount of the world’s resources.
Politically, this meant that while the United States was fostering so-
called democratic models in West Germany, Italy and Japan, Stalin

set up Communist Party-led regimes in Eastern Europe that were
heavily dependent on Moscow. It is at this point that Marxists differ
on their view of the Soviet Union and the collective of Communist
Party-dominated states. They were thought of as either a real
alternative world system with a different mode of production than
that of the United States and the West, or as just another military
superpower (alliance) participating in the inter-state game of economic
competition, i.e. still part of the singular capitalist world system (Gill
and Law, 1988:302–31).
This discussion is relevant to the Cuban case for two reasons. First,
it has set the framework for understanding ‘socialism in one country’
as the Cuban leadership continues to view itself, its characteristics
and how they differ from the original idea of Marxist socialism.
Second, because throughout this book, especially in Chapter 3, the
Cuban economic model(s) is seen as one previously pertaining to an
alternative market system, i.e., the Soviet-inspired COMECON or
CMEA. This belonging shaped Cuba’s economic, social and political
development for two decades of the Revolution’s existence as well
as partially explaining Cuba’s economic crisis during the 1990s.
Some scholars and social scientists have dedicated a large part of
their research to understanding the concept of ‘socialism in one
country’. I agree with many of the specialists, who concur on two
fundamental points. Firstly, the Stalinist mode of production cannot
be considered socialist and secondly, Soviet capital accumulation is
essentially the same as those in (other capitalist) societies. The term
given to describe modes of production during the 1930s and thereafter
is state capitalism. The study of state capitalism became increasingly
important when social scientists from around the world recognised
that the production, distribution and financial power in the most
industrialised countries experienced a real transformation from
competitive private capitalism to monopoly or state organised
capitalism (Horkheimer, 1940:95–117). Each country developed its
own model but all had many characteristics in common. The theory
of state capitalism became just as important for those states that
demonstrated an interest in industrialising their economies or
‘catching up’ with economically advanced countries, especially after
the Second World War, when a large number of colonised regions in
the South sought independence.
Introduction 21
STATE CAPITALISM
State capitalism is a concept that for many years was conceived as

the highest form of capitalist development. The term is not new and
has been used and discussed in various schools of thought, both
academic and political, in relation to the state management of the
market. State capitalism theory has been used both by the writers of
the Frankfurt Institute of Social Research (Frankfurt School), as well
as by revolutionary socialists who opposed the Soviet model during
its existence; among these, the Trotskyites and the International
Socialist Tendency founded by Tony Cliff (Cliff, 1948; Arato and
Gebhart, 1997).
Friedrich Pollock declared that: ‘terms like “state organised private-
property”, “monopoly capitalism”, “managerial society”, “admini-
strative capitalism”, “bureaucratic collectivism”, “totalitarian state
economy”, “status capitalism”, “neo-mercantilism”, “economy of
force”, and “state socialism” are a very incomplete set of labels used
to identify the same phenomenon’ (1941:71). He concluded that
state capitalism is the successor of private and then monopoly
capitalism and that it was a mode of production in which profit
interests still played an important role. In state capitalism there is
no longer self-managing or the private control of production and
distribution. The system would have become controlled by planning
and direct, conscientious command by the state, whatever the nature
or origins of the state; where enterprise and labour as two separate
entities are fused under governmental control, where there is a partial
negation of ‘free’ economic laws. Full employment of all resources,
including labour, is claimed to be the main achievement or goal in
the economic field, where pseudo-markets can be created in order to
expand production and increase profits.
State capitalism in the Frankfurt School was conceived as a result
of the decline of the market system, which had become inadequate
for using all available resources. The decline of free-market private
capitalism could be attributed to a crisis in the liberal era where private
monopoly succeeded competitive capitalism and where government
had to interfere in the economic crisis due to monopolistic structures
and the destructive consequences and disruptive conflicts which
emanated from them. This was especially true for the most developed
countries of Western Europe and then the United States. ‘The
symptoms of declining market economies,’ says Pollock, ‘was what
became characteristic of all industrial countries after the First World
War’, as exemplified in the New Deal, and continued after the Second
World War (Pollock, 1941:72). There was concentration of businesses
into gigantic enterprises, which thereby created a system of rigid
prices, self-financing and concentration, government control of the
banking systems, the monopolistic character of trade unions, large-
scale unemployment and enormous governmental spending on the
poor. State capitalism gives direction for production, consumption,
savings and reinvestment. As a planned economy, what is produced,
how and how much is not left to the crazy, indeed anarchical and
wasteful, dictates of the economy; rather, is controlled directly and
intentionally by the government. This was the transformation that
Polanyi described.
Not much was changed, says Pollock:
Prices and goods are paid for in money, single prices may rise and
fall. But the relation between supply and demand on one side and
prices and the cost of production on the other becomes somewhat
disconnected in those where they tend to interfere with general
societal planning. (Pollock, 1941)
The market becomes a closely controlled tool in material development

and the state is considered to be the repository of the means of
production. However, Pollock envisioned only two forms of state
capitalism: authoritarian and democratic. According to this train of
thought, he observed state capitalist history in the most important
historical examples: Nazi Germany and Stalin’s Russia.
In totalitarian state capitalism or monopoly state capitalism the

state under the control of an alliance among the most powerful
vested interest groups in industry and technology, the higher
classes of society including ruling elites and especially the military,
the party bureaucracy and everyone who is not included in this
group is then dominated by the prior. Under democratic state
capitalism, the state has the same function but is thence controlled
by the masses. It is based on institutions which prevent
bureaucracy from transforming administration into a mere
instrument of power whereby leaving room for trans-shaping
democracy into totalitarianism. (Pollock, 1941: 84)
Pollock saw democratic state capitalism, therefore, not as a form

of socialism but as a transition period whereby workers, or the majority
Introduction 23
of the people, could participate directly in governing the state that

controls the means of production.
Bureaucratic state capitalism

But Tony Cliff (1948: 162), and before him Lenin and Bukharin,
explained state capitalism as a form different to that of the workers’
state or what is generally identified as socialism, the ‘dictatorship of
the proletariat’. Thinkers from the Frankfurt School, especially Pollock,
described state capitalism as an emerging form and inevitable
descendant of private or monopoly capitalism. Cliff saw Nazi Germany
and Stalin’s Russia as forms of state capitalism, but defined them
differently; respectively, one was monopoly state capitalism in a
wartime economy and the other was considered to be bureaucratic
state capitalism where the leaders of the bureaucracies are conceived
to be those who run or own the means of production. Both definitions
of state capitalism agree that it is not socialism, but that it is a move
towards it. Both schools of thought think of socialism – or workers’
control – as an international phenomenon that is the ultimate
expression of human emancipation and democracy. State capitalism
and how it is distinguished from socialism can be understood from
Marx’s law of value, which explained the relations of production in
capitalism. More specifically, it was the process of appropriation of
surplus value from one group to another.
In Stalinist Russia, the appropriation of surplus value meant the
extraction of profits from the workers by bureaucracy. Wage labour
continued its antagonism to capital, surplus value continued to be
produced, and continued to be reconverted into capital. Cliff saw
the Soviet bureaucracy as rising above the workers and playing the
role of the private capitalist. Taking a so-called socialist economy in
a vacuum, appropriation of surplus value is thought of as suppressed
since most production is held under state control. But the picture is
entirely different when the ‘socialist state’ is viewed as a competitor
with other countries and capitalist enterprises that act internation-
ally. It is precisely this illumination that led radicals like Cliff to
defend Lenin’s and Marx’s requisite that socialism needs to be a global
system. Even Marxist economists recognise that in a world system
where every state is dependent on international trade and is itself a
competing and capital accumulating entity, the law of value is not
abolished but only partially suppressed (Dumont, 1974).
Outside of the state capitalist theory, other social scientists place
emphasis on the fact that in a so-called socialist society, private
property is abolished and that market mechanisms are controlled by

state planning. In this sense, they might understand production
relations to be distinct from capitalist economies. Nevertheless,
economic planning can be found in large private corporations since
a certain amount of products must be available to supply markets
within a certain time-frame. Furthermore, even though private
property is abolished, workers still cannot control what is produced,
for whom and how much. Whether state or private, centralised or
not, state-capitalist production relations do not differ that much from
that which is found in capitalist societies. In this sense, Polanyi’s
‘great transformation’ was not so great after all.
Cliff based his theory of state capitalism on the real experience of
Stalin’s Russia, i.e. the defeat of the original Bolshevik project to make
socialism international. According to Cliff, the Stalinist bureaucracy
that evolved out of the New Economic Policy fulfilled the task of the
capitalist class, and by doing so the bureaucracy transformed itself
into a class. Although different from the capitalist class, it is at the
same time the nearest to its historical essence. Stalinist bureaucracy,
in Cliff’s view, was an alternative to the traditional capitalist class;
at the same time it was the truest personification of the ‘historical
mission’ of this class (Cliff 1948: 162). Accordingly, to call it a
bureaucratic/state class, known as the Party, and stop at that is to
circumvent the cardinal issue, which is the appropriation of surplus
value from one class by another. Hence, to say that Stalinist political
economy was state capitalist is correct, but not sufficient for Cliff; it
was also necessary to point out the differences in the juridical relations
between the ruling class under Stalinism and that in a state capitalism
that evolved gradually from monopoly capitalism. From here, Cliff
created a formula for describing Stalin’s Russia and calls it bureaucratic
state capitalism. This can be justified by looking at appropriation of
capital and accumulation by top-ranking leaders in the Communist
Party. So-called socialist countries can be seen, thus, as one big factory
or business that competes with other international corporations. But
what does this tell us about socialist Cuba?
IMPLICATIONS FOR STUDYING CUBA
The followers of the International Socialist Tendency continue to

use Cliff’s theory of bureaucratic state capitalism as a means of under-
standing all states that claim(ed) to be socialist, including Cuba. I
would argue that though Cliff’s and the Frankfurt School’s discussion
Introduction 25
of state capitalism offers insight into the importance of the law of

value and production relations as the determining difference between
socialism and state capitalism, their historical analysis does not hold
when taking the Cuban experience into consideration. For Cliff and
also for the Frankfurt School writers, (bureaucratic) state capitalism
was essentially an economic model that was centralised by
government authority. Few Marxists anticipated the decentralisation
of national industries under still state-controlled economies. The
experience that will be delivered in the following chapters, especially
Chapter 3 concerning Cuba’s new enterprise system, totally negates
the notion that the economy is centralised under the auspices of a
central bureaucracy. There is a new development that emanated from
the economic crisis that Cuba experienced during the early 1990s.
Going even further than that, I will demonstrate that state-run
economies are capable of surviving global pressures to return or
transit to private competitive capitalism by adjusting their own lines
of production in order for them to resemble those of private
companies, thereby making themselves more competitive. This
includes making labour slightly more flexible and linking wages and
incentives with productivity in the global market. Finally, Cuban
leaders continue to apply anti-capitalist and anti-imperialist language
in their discourse with firm credence in searching for alternatives.
Though they often shy away from critiquing their own production
relations, most Party documents and initiatives are dedicated to
understanding the international division of labour and the condition
of the capitalist world system.
To find a suitable name for the Cuban economic model, as Cliff
did for Stalinist Russia, is in my opinion difficult. If one insists that
every country’s political economy should be categorised under a
certain economic form, then I would accept Cliff’s argument that
since production relations are essentially the same and the law of
value continues to exist, Cuba’s mode of production in many aspects
resembles bureaucratic state capitalism; possibly it is a decentralised
bureaucratic state capitalism. Still, this imagined category does not
sufficiently describe what is going on in Cuba; but names never do.
For more than two decades Cuba has had changing state policies
determining the permitted level of foreign investments – from laws
on joint ventures dating back to 1982 (Economic Intelligence Unit
(hereafter EIU), 1990:19) to the legalisation of foreign direct
investment in 1995. Foreign investment, especially in the tourist
industry, now plays an important role in the Cuban economy by
building infrastructure, providing jobs, inserting new technology

and pumping foreign spending into the country. To say that the
Cuban state bureaucracy replaces the private capitalist class found
in other countries, and to leave it at that, is to ignore the importance
of foreign capitalists and their dealings with public (state) institutions.
Sornarajanah, an economist, wrote extensively on the opening up
to foreign investment in state-led economies and called it the ‘middle
path’; whereas both extreme nationalism and protectionism, and a
‘free market’ with an indiscriminate welcome to foreign enterprises,
were tendencies that were neglected by developing and newly indus-
trialised countries during the second half of the last century
(Sornarajanah, 1994). Likewise, other legislative acts that were passed
during Cuba’s economic crisis after the fall of the Soviet bloc in
Eastern Europe allowed for other market activity to take place. For
instance, social relations among Cuban citizens have changed as
income disparity increased after the legalisation of the possession of
hard currency. Another example is the opening up to self-employment
services as a legitimate means for certain individuals to generate
income. Finally, Cuba’s economy has increasingly been geared towards
the tourist service sector as opposed to manufacture and the export
of raw materials. This will all be analysed in Chapter 3.
What is important to understand from what has been reviewed so
far is that production relations and modes of production should not
be thought of as very different in countries that claim to be socialist
or capitalist. For this reason, I would follow the framework that was
developed by Immanuel Wallerstein in his world system theory
(Wallerstein, 1974). There were never two separate worlds or systems.
Due to the external relations with ‘non-socialist’ economies and also
to its own capitalist mode of production, the Soviet bloc was just
another hegemonic realm that took part in the global, competitive
capitalist market. The differences must be discovered outside the
realm of mode of production.
National development and imperialism

There are other aspects of ‘socialism in one country’ that should be
considered. Among them, and more pertinent to this study, are the
causes for states to adopt a certain ideology in their discourse; another
is the construction of national political economies.
Continuing with Wallerstein, dependency or world system theory,
both national development and the choices for economic models,
have been essentially shaped by the history of the world system
Introduction 27
during the twentieth century. In After Liberalism, Wallerstein wrote

an Elegy and Requiem to the Concept of National Development, covering
the theme from a global perspective in the time-frame 1917–89. Of
course coming from his own world-system theory, the theme of
national development starts off from European thinkers like Lenin
and Woodrow Wilson (not European but indeed Western) though
he claims that it was since the sixteenth century that ‘European
thinkers have been discussing how to augment the wealth of the
realm …’ Adam Smith wrote The Wealth of Nations in 1776; in this
Bible for liberals, Wallerstein points out, ‘he [Adam Smith] ... preached
the notion that maximising the ability of individual entrepreneurs
to act as they deemed wisest in the world market would in fact result
in an optimal enhancement of the wealth of nations’ (Wallerstein et
al., 1996:108). But the central theme of this historical work was that
every state could reach the maximum in development and wealth
by adopting certain policies. By the turn of the nineteenth century
it became clear that a group of countries had indeed become wealthy,
or at least ‘developed’, through liberal capitalism. However, the boat
that left for the sea never picked up any more passengers and
development through liberal capitalism ceased to exist.
Wallerstein points to 1917 as a turning point in history, when the
foundations of capitalism at the core of the world economy were
shaken. The world economic leaders turned to war and led their
nations into battle in order to preserve their interests and to maintain
stability in the world system that was continually developing. But
Wallerstein does not stop there. He argues that the ideas brought to
the international stage, like Lenin’s call to world revolution by the
proletariat and Wilson’s bourgeois ‘world safe for democracy’ in his
famous 14 Points, were not the underlying themes of the First World
War and the resulting push for decolonisation. Rather, it was an effort
to integrate what Wallerstein calls the periphery – referring to the
underdeveloped parts of the globe – into the world system in order
to create new stable markets. Now, whether or not we agree that
Lenin’s intention was to include the poorer regions of the Earth on
the ‘development’ bandwagon, it remains clear that Lenin did envision
an international socialism. And whether or not we agree that Stalin
was Lenin’s rightful successor, it also remains clear that the USSR did
depend on other countries for its own development in the form of
import/export and industrialisation. That is, industrialisation in the
former Soviet Union would have been slower without some
connection to the world market. Both great powers (the United States
and the USSR) naturally sought the expansion of their economic

power and enhancement of development by integrating what is now
called the Third World, countries of the South or the periphery, into
the world system.
Wilson sought to spread the ‘good news’ of liberal ideology, that
the natural expression of each individual was rational self-interest.
In this light, reformist policies and rational, peaceful and legal means
to accomplish development and human progress were called to order.
Lenin had his own idea of self-determination and started from the
premise of the rise of proletarian internationalism and the end of
imposing certain national structures upon other groups of people –
anti-imperialism – in order to move the whole of humanity into a
singular working class (Lenin, 1939). In accordance with Marxian
principles, the concept of nations and peoples would be a temporary
passing in the history of humanity; but in the meantime the struggle
for national liberation became an essential part of the struggle for
world revolution. This was manifested in the early part of forming
the Soviet Union and the voluntary federation of Soviet Republics –
in the end the Union of Soviet Socialist Republics. The idea in Lenin’s
mind was that the revolution would spread to the West. He expected
German workers to revolt against their masters and eventually join
in on this newly founded order. The expected worldwide workers’
revolution did not come to pass, socialism country by country (one
by one) was established; so then the central theme was changed.
Writes Wallerstein:
Marxism-Leninism in effect was moving from its origins as a theory

of proletariat insurrection against the bourgeoisie to a new role as
a theory of anti-imperialism. This shift of emphasis would only
grow with time. In the decades to come, it is probable that more
people read Lenin’s Imperialism: The Last Stage of Capitalism than
the Manifesto. (Wallerstein et al., 1996:110)
But the link between the two doctrines of self-determination/anti-

imperialism and national development has not yet been sufficiently
analysed. Wallerstein points out the similarities between the two
doctrines, from the list of countries and peoples that urgently needed
to be decolonised to the manner in which the nations should establish
independence, to who should be the leaders of these countries. He
warns that the differences should not be exaggerated. Under the
Wilsonian paradigm, the natural leaders of the newly independent
Introduction 29
nation should be the educated bourgeoisie, who conveniently had

links to their core-based counterparts; whereas the Leninists looked
for leadership in a singular movement modelled after the Bolshevik
Party – later the Communist Party of the Soviet Union (CPSU) – even
if the communists or self-proclaimed socialists were not the majority
in those countries, or even if the leaders of the party were not
necessarily working class. In most cases, the party leaders had their
origins in the petit-bourgeoisie/intellectual class, more commonly
the children of the bourgeoisie and petit-bourgeoisie. This theme will
be developed in Chapter 2, concerning the history of the revolution-
ary forces in Cuba. But Wallerstein goes so far as to say that these
leaders were the same people under two different camps, at least
relatives or cousins. In the case of the countries that opted for violent
insurrection against colonial masters, combining the singular
Communist Party with the state and creating the party/state political
structure, the policies did not always emanate identically to that of
the Soviet Union. Rather, the primary concern was the incorpora-
tion of these newly founded states into the world system of capitalist
production.
After the Second World War, the scramble for allies and markets
became fiercer. The globe was divided into a bipolar system, as the
newly independent states in Eastern and Central Europe leaned
politically towards either the USSR or the United States. This was
seen as the essence of the Cold War. Of course there were exceptions,
such as the Non-Aligned Movement. But when push came to shove,
both camps prompted propaganda in order to gain more ground,
especially in the United Nations General Assembly. In the end, most
of these newly founded states were not much different from one
another. They were, almost always, one-party states or military dic-
tatorships. Even when a multi-party system was implemented it was
always one party that dominated domestic politics. Additionally, the
economic policies did not differ much. Economic development was
led, again almost always, by state enterprises. Foreign investment of
course was a must, and many theories concerning this flourished
throughout the century. But economic development in the case of
foreign investment was not conducted solely by private corporations.
Rather, it was through joint ventures between foreign private
companies and the state. When foreign investment through joint
ventures was not enough, newly independent states sought aid in
the form of grants or loans. This is true for both ‘pro-Western’
developing countries as well as some newly founded ‘socialist
countries’, or countries that participated in the worldwide Soviet-led

progressive movement. Aid from the OECD countries and especially
the Northern countries was used to fortify military dictatorships and
foster ‘national economic development’: that is, building up infra-
structure in the cities, constructing highways, buying and
implementing technology from the core countries; in one word,
‘catching up’, or acquiring the major achievements that advanced
capitalism has bought humanity in the core. Wallerstein emphasises
that an illusion in the minds of the leaders was born, that development
was possible given that the right economic policies were implemented.
The options for developmental politics were various, and so
institutions were built and theoretical schools formed around the
globe. Regionalism sprouted up and the United Nations sponsored
institutional projects like the Economic Council on Latin America
(ECLA). Development theories like dependency theory and moderni-
sation theory – and a bunch of other theories in between – flourished
throughout academia for the purpose of persuading governments to
follow up with state plans. What all programmes had in common,
however, was the objective of creating wealth for the community:
development. Wallerstein restates the obvious point that it was
common to believe that any kind of development was more easily
done by further integration into the world market system; countries
that were excluded or isolated from the world market struggled hard
to regain entrance into the community of wealth-seeking nations.
This was the essence of the push for self-determination under the
Wilsonian/Leninist paradigm.
The USSR was where this idea of development was first tested
outside the core. Wallerstein explains:
When Lenin launched the slogan ‘Communism equals the Soviets

plus electricity’, he was putting forward national (economic)
development as the prime objective of state policy. And when
Khrushchev, decades later, said that the Soviet Union would ‘bury’
the United States by the year 2000, he was venting supreme
optimism about ‘catching up’. (Wallerstein et al., 1996:115)
It was after the Second World War, following the rapid reconstruc-
tion of Japan and Western Europe, that ideas on the possibility of
development were emphasised. Third World countries and even
underdeveloped regions of the core like southern Italy, Spain and
southern parts of the United States went on rampages searching for
Introduction 31
the best model of development. At the top of the agenda of all

politicians and political programmes had been, and to a certain extent
remains today in the minds of many, economic development.
What Wallerstein’s study leaves us with is a sense of how
contemporary national liberation movements came to order and how
economic development has been a major theme, for both the
promoters of self-determination and the receivers of the same
(Wallerstein, 1984). Furthermore, detailing the road that many
countries took for development from the time of independence brings
us to realise that beyond socialism or liberalism, beyond the proletariat
or the citizen, a party/state paradigm of state-controlled enterprises
is what most peripheral countries had in common. This was even
true of the newly industrialised countries of East Asia after the Second
World War. Sornarajanah states:
Developing countries generally view the success of the newly indus-

trialized states of Hong Kong, Singapore and South Korea as models
to follow. Though the Classical economists may believe that these
achieved success by following free market economics and permitting
full-scope for non-indigenous capital and technology, this does
not present an accurate picture. There was considerable state
regulation and intervention which accompanies the process of
industrialisation of these states. (Sornarajanah, 1994:56)
Cuban state-led economy

The theoretical illusion of further economic or national development
by opening up to the uncertain forces of the world market with little
or no state intervention seemed to phase out after a number of studies
were conducted on the newly industrialised countries (Broad and
Cavanagh, 1998). In its place came state-led industrialisation and
actual state corporations. The idea of setting up state enterprises for
the purpose of generating capital to develop the underdeveloped
country is better understood through the idea of state capitalism in
its different forms and the project of Keynsian economics. In this
sense, Cuba, as having a one-party/state apparatus, a socialist name
in its discourse and a state-led economic model, was not all that
unique among countries of the developing world. In many regards,
the Cuban government can be conceived of as having been typical
of all states in the periphery of the world system that searched for
development. What makes this case different is that since the Cuban
Revolution’s existence, state leaders in Cuba never recognised classical
liberal policies as those that result in national development; this has

remained true even during the time that neo-liberalism has returned
to fashion. If anything, Fidel Castro and the Cuban Communist Party
reject (neo-)liberal economic policies to this very day. It was, as I will
expose in Chapter 4, precisely the call to anti-imperialism and the
opposition to interventionism by foreign entities and global financial
institutions that was thought of as – and is still believed to be – the
key to national development in Cuba. If there is a slight clue as to
what Cuban socialism entails, it would certainly – and possibly solely
– be found in the leadership’s active resistance to state reductionism
in order to maintain national or democratic sovereignty.
I have found that Wallerstein’s – or the world-system – approach
is good but not sufficient when trying to understand the character
of Cuba’s state-led economic model. The first clue to flaws or weak
points was found in the logic that followed in the section concerning
the issue of using anti-imperialism as the driving force to state-led
economic development. Wallerstein traces the concept of anti-
imperialism to Lenin’s call to worldwide revolution and Wilson’s 14
Points when, in fact, Cuban government discourse against imperialism
and foreign intervention does not base itself on either of these sources.
In Cuba, the call for cleansing the island of external impinging forces
has its origins prior to the Cuban, Spanish and American War of 1898.
By that time, many Cuban intellectuals had read the Communist
Manifesto, but Lenin’s Imperialism: The Last Stage of Capitalism did
not exist. Rather, Cuban discourse depended on the country’s own
intellectuals, most notably José Martí, to shape the ideology which
produced both anti-foreign intervention and a state-led economic
model (August, 1999). It was neither the Soviet-controlled PSP (Cuba’s
Communist Party prior to the 1959 Revolution) nor the CIA that
inspired or even contributed to the Cuban Revolution. On the
contrary, the movement of social change and the disposal of the
Batista dictatorship was essentially an autochthonous struggle that
was hindered by Stalinist politics. Therefore, world system theory
has a problem of interpretation when regarding national liberation
movements.
Wallerstein’s contribution can be accused of carrying with it two
particular faults. First is that of being Eurocentric. This should come
as no surprise as Wallerstein chose to develop his study of the modern
world system by basing it on studies of agricultural capitalism in
fifteenth-century Europe, and how that structure spread through
colonialism and the practice of mercantilism and primitive
Introduction 33
accumulation within European empires. An alternative approach

would rely not so much on the need for capital to expand outside of
Europe but on the weaknesses of peripheral societies that allowed
European colonial powers to penetrate all the regions of the Earth.
Though this theory has yet to be developed in all the social sciences,
the history, possibilities and limitations of world capitalism are not
as yet fully explored. The consequence of Eurocentric models is the
overlooking of important developments within the periphery. Petras
and Veltmeyer have noted: ‘the initiation and success of all 20th
century revolutions had less to do with the presence of the Soviet
bloc and more to do with the development of class and anti-imperialist
struggle and international solidarity within the country’ (Petras and
Veltmeyer, 2001:160–1). But this can be found even before the
twentieth century; the prime example was provided above when
considering the link between national development and anti-
imperialism in Cuba prior to the ascent of the Soviet Union.
Another flaw in the world system theory is that which reflects its
general vision of the inter-state system. Though Wallerstein finally
agrees that within the core there are peripheral areas, and vice versa,
his point of departure in explaining national liberation movements
is the state, the ‘state’ that was given liberty to practise self-determi-
nation. Though I agree with the conclusion that newly independent
states in the twentieth century actually served the interests of rising
or potential hegemonies and their economies by providing new
markets, I disagree or am dissatisfied with the way the state on the
periphery is portrayed. In some sense, Wallerstein’s views on the
peripheral state and its behaviour resemble what is called the realist
perspective in international relations. Though world system theory,
through its origin in Latin American dependency theories, tries to
define the global political economy as one whole structure that
employs capitalism (an economic system that penetrates beyond
national boundaries), it still does not get away from the idea that the
leaders of states are independently looking for economic models that
promote development. I would argue that when it comes to the
treatment of the state, world system theory is not dependentista
enough; it does not look to the structures that are global and penetrate
or shape national movements. National liberation movements are
not led by ‘socialists’ or ‘liberals’ because their leaders randomly chose
one ideology over another. These movements and eventual
independent states evolved from a long history and struggle of social
and intellectual forces that can be found internal to the state as well
as globally. These forces, which in each country developed differently,

cannot be considered independently of each other but as related and
interacting. The same can be said of state strategies and policies in
the choice of whether to comply with global trends of neo-liberal
ideology or to reject them.
THE PARTY/STATE APPARATUS
Both global (external) historical forces and domestic (internal)

historical forces create state strategies. On another note, one can
conclude that external factors set the limits to the options available
to a country but – in the words of Susan Eva Eckstein – ‘Third World
Governments, if skilful, can mediate the impact of global political
and economic forces’ (Eckstein, 1994:6). In other words, not only do
world market and political forces impinge certain structures upon
the state but domestic actors, when forming alliances inside the state,
can create new structures impinging upon outcomes as well. This
negates the position taken up by many political scientists that fall
into either the ‘realist’ or ‘superstructuralist’ categories that ignore
historical and structural conditioning in the first instance and
domestic alliances or social forces in the latter.
I agree with Nico Poulantzas who, in 1978, made the argument
that policies are moulded by interests within a domestic entity and
also by the struggles among the interests. So the unit of analysis is
shifted from the hardly defined animal called the ‘state’ to the
strategies taken up by the social construction – which I identify in
Cuba as the party/state apparatus – in response to the global
environment. In this discussion the state is not ignored but it is
conceived in a relational manner, related to the domestic forces and
historical basis upon which it was built (see also Cerny, 1989). The
state, according to this line of thinking, can no longer be viewed as
a concrete entity; it must be viewed as a social relationship. For this
reason I prefer to use the term ‘party/state apparatus’ when referring
to Cuba, because the one-party, anti-imperialist state-led economy
that exists in Cuba is better served by describing it according to the
most important actors in that entity – the Cuban Communist Party
(PCC), the collective of institutions and productive sources are all
embodied in an apparatus which constitutes national power.
Furthermore, this view also deters social scientists from thinking of
a state as ‘socialist’, ‘capitalist’ or ‘neo-liberal’. This makes it difficult
to categorise the countries according to the ideologies and forces the
Introduction 35
social scientist, as s/he should be doing, to look for state strategies

that imply the (im-)mobility of social forces that influence policy-
making. In other words, and once again, there are no ‘socialist states’,
there are only state-led economies run by socialists that might opt
for certain market measures, depending on which way the domestic
social forces are mobilised and how they are manipulated by global
restrictions. Some of these market measures might entail dismantling
the entire party/state apparatus, as experienced in Eastern Europe.
Though this last experience was seemingly the most popular option
during the late 1980s, it was, as demonstrated in other cases, such as
Cuba, not the only one.
What happened in Eastern Europe is a perfect example of the
internal struggle of interests that was implied by Poulantzas’ work.
The culmination of conflicting interests was, nonetheless, inspired
by an economic crisis that slowed Soviet production and technolog-
ical innovation during the 1970s, but it was not until the 1980s that
Eastern European economists were allowed to open publicly the
debates on the causes of economic stagnation. Some, like Aganbegyan
(1988), pointed mostly to the general structural problems that a
centrally planned economy entailed. Others, like the Hungarian Janus
Kornai, made specific claims about the causes of the decline of Soviet
bloc economies. His main theses were: (a) that a shift in world market
price proportions changed the terms of trade to the disadvantage of
Eastern Europe; (b) that a recession in Western capitalist countries
coupled with new protectionist measures made export more difficult
for these countries; finally, (c) that during the decades when economic
growth seemed constant, infrastructure was ignored by following
investment-intensive as opposed to extensive programmes (Kornai,
1980). The countries of the CMEA in Eastern Europe were integrating
their economies further into the West and because of their dependency
became vulnerable to shocks in prices and products (Lawniczak,
1992:99–106).
Some pointed out that the series of reforms that Gorbachev
introduced in his perestroika and glasnost just accelerated the process
of integration of Eastern European markets with the countries of the
West (Kornai, 1992). The conclusions were that once the process of
so-called democratisation and market liberalisation began rolling,
popular forces antagonistic towards state leaders would gain
momentum and eventually bring down the bureaucracy that appeared
to impede progress. But the movement towards resistance was not
new, nor had it developed in the late 1980s. Since hardline Stalinist
models of socialist states had been imposed upon the countries of

Eastern Europe after the Second World War, the popular base of
legitimacy was never present in those countries. This caused a large
political vacuum between elites in the Communist Parties’ leadership
and the ordinary Eastern European citizen. Additionally, due to the
market openings to international financial institutions other than
those provided by the Soviet Union, infiltration of antagonistic forces
towards Stalinist models of development started to rise within Party
bureaucratic circles. These ‘anti-statists’ and agents of Western
capitalism formed interest groups that came into conflict with the
so-called ‘hardliners’, while at the same time filling the political gap
that had been exposed between the leaderships and the people.
This was not the case in Cuba for a number of reasons. One of the
underlying tenets of the Cuban Revolution – what I call pillars – is
that of popular participation (see Chapter 2). This at first might seem
as an apology for Communist Party propaganda. But what it entails
is a connection between Cuba’s party/state apparatus and the popular
masses. Whether the vehicles of expression can be considered
democratic or not, or whether the relation with the leadership is
imposed or simply justified, is another question. Nevertheless, there
is a revealed, strong link between leaders in government and businesses
and the popular masses that was somehow absent in Eastern Europe
and the USSR. There was never a gap between popular forces, like
the Federation of Cuban Women and the united Cuban Trade Union,
and the members of the PCC. In Cuba, bureaucratic despotism was
rarely an important factor in the political life of its citizens.
Furthermore, since Fidel Castro’s ascension to power, at no time did
any country – including the Soviet Union – impose its military might
against the popularly supported regime. Cuba was never a Soviet
satellite in the Americas. As historical reference will demonstrate,
Cuban and Soviet foreign policies often clashed. There are other
factors that should be considered when asking why the Soviet bloc
disappeared; however, since this is not a comparative study, there is
no room for them here.
Concentrating on the Cuban case, it is necessary to look more
deeply into the theoretical foundations that allow for what I identify
as the party/state apparatus to adopt certain positions, strategies and
measures that may be consistent with the global political economy
or, possibly, quite the opposite of what most state leaders employ. At
this point it is necessary to move beyond the state and look at the
general environment in which the Cuban party/state apparatus has
Introduction 37
existed and exists today. Analysing Cuba’s domestic political economy

entails taking into consideration the domestic and global forces and
changes that impinge upon it.
Chapter 2 of this book will provide a historical framework for
understanding the party/state apparatus in Cuba, i.e., what is known
as the Revolution. Though the events that led up to the 1959
Revolution and the social consequences that followed have been
written about time and time again, few analysts look at the social
forces that evolved in Cuban history and shaped or consolidated the
project of national liberation and emancipation of the country’s
working class. It is my contention that without careful consideration
of Cuba’s political and economic history, the present day leadership
of the party/state apparatus cannot be understood. This is partly
because some of the current key leaders are products of the struggle
for national liberation during the Batista dictatorship; namely Fidel
Castro and his brother Raul. Additionally, it was the fusion of various
revolutionary tendencies prior to 1959 that made the PCC what it is
today. In this historical review, I suggest that the Cuban Revolution
rests upon certain pillars and foundations that have allowed the
party/state apparatus to persevere through this recent era of neo-
liberal globalisation. A brief look at how the values of unity, continuity,
state supremacy and popular participation were transmitted to the minds
of the Cuban people will conclude this part.
Chapter 3 is dedicated to understanding the recent global changes
that forced Cuban society to restructure many of the economic,
political and social policies that were thought of as traditional or
even essential to the Revolution. It reflects upon the causes and
consequences of the economic crisis that the Cuban people and
party/state apparatus endured between 1991 and 1996. As Chapter
3 will show, the Revolution was transformed from a social system
that concentrated on reproducing itself to a mutated social, political
and economic project that is struggling to survive. The economic
crisis, caused not by a sudden disappearance of a sponsoring
superpower but by the slow disintegration of a real working parallel
market system based on moderately fair trade (CMEA), should never
be underestimated. The paralysis of over 70 per cent of Cuba’s
purchasing power and the consequences that this caused for
production and capital accumulation on the island led the country’s
leaders to embark upon new formulas for maintaining state control.
In this experience, often referred to as the Special Period, new ideas
emerged that would have been unimaginable only a couple of years
prior to 1991. Among these ideas and policies are: the legalisation of
citizens’ use of hard currency for the purchase of import products;
the building of a tourism industry as the country’s main source of
income; the opening up to foreign direct investment and up to 100
per cent foreign ownership in new fields of economic exploitation,
and the formalisation of a self-employment system (cuentapropismo)
that in many ways relieved the state’s responsibility for a percentage
of Cuban workers. Nevertheless, all of these measures were taken in
the name of safeguarding what is often referred to as the ‘triumphs
of the Revolution’. As will be demonstrated, the reforms were not
inspired by global financial institutions like the World Bank or the
International Monetary Fund. Rather, the economic restructuring
that took place in Cuba during the 1990s proved to be the collective
work of Cuban political economists and the implementation of ideas
that are autochthonous to the island. However, none of the changes
happened in an international vacuum. The Cuban leadership foresaw
the global opportunities that were open to the party/state apparatus.
Foreign investors were willing to contribute to Cuba’s alternative
model and create partnerships with state enterprises in ventures such
as petroleum explorations. Other countries and corporations avoided
the twice-enhanced economic embargo. All of these factors will be
given brief consideration.
Chapter 4 will deal with the period 1996–2000, when social and
economic indicators revealed that Cuba was on its way to a slow,
stable economic recovery. The aim of this chapter is not only to
emphasise the Revolution’s success in resisting global pressures to
fall to neo-liberal practices and the will of counter-revolutionaries in
the United States. Rather, the purpose is to discover how global
pressures, together with domestic policies, shaped Cuba’s current
political economy. At this point the similarities between new policies
in production and capital accumulation and some of the trends most
typical of neo-liberal globalisation will be revealed. Attention will be
given to the self-employed sector (cuentapropismo), the number of
participants, which has steadily decreased throughout the last five
years, and the restructuring process of state enterprises – called el
sistema de perfeccionamiento empresarial – endorsed by documents
produced in the fifth PCC Congress (1997). Lastly, the implications
of these recent changes for Cuban society will be highlighted, whereby
internal economic structures and shifts in productive power will be
clearly explained. Throughout Chapter 4 I will argue that specific
social forces have been repositioned in order to accommodate Cuba
Introduction 39
into the global political economy, while preserving the foundations

and pillars of the Revolution.
The fifth and final chapter of this study will reassess the central
questions and restate their relevance to the subject of global political
economy and alternatives to neo-liberal globalisation. It will outline
theoretical as well as practical consequences for considering the
Cuban Revolution and the historical relevance of revolutionary
resistance to the ‘new world order’. Brief consideration will be given
to the possible future scenarios that the Cuban party/state apparatus
might encounter.
Besides secondary sources and findings, much of the work in this
book is based on my five trips to Cuba between 1996 and 2000.
Interviews were held with Communist Party members, leaders of
socialist civil society groups like the Federación de Mujeres Cubanas
(FMC), the national trade federation (CTC), students, political
economists, anonymous opponents of the Revolution, participants
in the ‘black market’ and the self-employed.
In February 1998, I interviewed 179 self-employed/informal
workers, using a questionnaire found in the dissertation version of
this document; I also interviewed state inspectors, tax collectors, and
individuals participating in illicit activities like prostitution. The
purpose was to find evidence of an emerging social or economic class
– viewed differently from state workers – among the self-employed,
and to identify the ideas carried by this group of people. This project
was not intended to be a scientific survey that pulls out numbers for
the mere purpose of categorising those interviewed. Rather, it is a
sampling to provide some insight into dividing lines that are being
developed or possibly revealed during this time of social restructur-
ing in Cuba. The topics of self-employment and the informal sector
were chosen because of their recent development in Cuban society
and their implication for labour relations in the country. Additionally,
very little research has been dedicated to this field. The services and
small products that are sold by the cuentapropistas supplement the
daily needs of the majority of the population. Cuentapropismo was a
potential force that was in the hands of the population and was
unleashed by government leaders during the economic crisis of the
1990s. The government uses the term cuentapropistas to describe those
self-employed individuals who pay their monthly taxes and adhere
to the terms set in Decree-Law No. 141. Decree-Law No. 141 does
not consider workers in the black market or those conducting illegal
activities.
Thanks to Cuba’s excellent health-care system and the country’s

general care for the elderly, I was fortunate enough to interview many
senior citizens during the advent of the Revolution’s 40th anniversary
(1997–99); these individuals were able to offer a comprehensive and
long-term testimony concerning the social trajectory of the
Revolution. In 1999 and 2000, over 100 Cuban workers in the tourism
industry and the health and education sectors were interviewed
randomly on their views about recent economic and political
developments on the island. These interviews and testimonies are
documented in my Ph.D. dissertation.
Index
Compiled by Auriol Griffith-Jones
Agricultural and Industrial Bank 138 Brazil 16, 197, 239

agriculture 73, 130, 140, 154, see also Brezhnev, Leonid 98
sugar British Empire 47
ANAP (National Small Peasants Brooke, General John Rutter 48
Association) 65, 77 Brutents, Karen 98
anarchists 50–1 Bulgaria 95
Andropov, Yuri 98 business management: decentralisa-
Angola 80, 100 tion of 129–30; organisational
ANPP (legislative body) 120, 121, 130 changes 124–5, 165–8, see also SPE
anti-colonialism 43–5 business practices, monitoring of 188
anti-imperialism 28, 32, 236; as
foundation of Revolution 42, 82, CADECA SA. 138
218–19; risk to 227, 230–1 Campaign to Rectify Errors and
Argentina 197, 239 Negative Tendencies (1986) 92–4,
Army 64, 100, 167–8, see also FAR 99–100, 166; contradictions in
Artex (SA) 129 93–4; moral aspects of 92, 93, 188
Assemblies of Popular Power 121 Canada 68, 134, 140–1
Association of Caribbean States 236–7 CANF (Cuban-American Foundation)
Authenticos (Partido Revolucionario 111, 112
Cubano Autentico) 53, 56, 57–8 capital accumulation, and income
disparity 144–5
Bacardi Rum 113 Cardenas, President of Mexico 56
Baires, El Grito de 46–7 CARICOM 236
Baker, James 103 Castro, Fidel 3, 37, 60, 232; and 26
Baliño, Carlos 50; and URC 52 July Movement 61–6; and collapse
Banco Central de Cuba 138 of USSR 99–100, 225; conversion to
Banco International de Comercio Marxist-Leninism 69–72; exile in
(BCI) 137 Mexico 62–4; and Gorbachev 101;
Banco Nacional 125, 137, 144–5 ideology of 1959 Revolution 67–9;
Banco Popular de Ahorros 137 llamamiento at 4th PCC Congress
banking reforms 137–8 120; named as Prime Minister 66;
banks: foreign and private 138, 203, popular support for 67, 117, 236;
204; lending 154; technological and ‘push to communism’ 70–3;
infrastructure 138, 154 rejection of neo-liberal economics
Batista, Fulgencio 53; and communist 32, 197–8, 199; resistance to global-
movement 54–6; populism 55–6; as isation 2, 6n, 8, 197, 218–19; state
President (1952-59) 59–61; radical transformation (1959) 66–9
opposition to 60–1 Castro, Raúl 37, 63, 66; and SPE
Bay of Pigs (1961) 69, 77 166–7, 168, 175, 183, 212
black market 131, 146, 187; and CDR (Committees for Defence of the
corruption 92, 93; and economic Revolution) 75, 77
reforms 124, 126, see also self- CECE (State Committee for Foreign
employment Economic Cooperation) 121
Blas Roca 54; Fundamentos del Centre for Labour Studies 187
Socialismo en Cuba 69 Cespedes, Carlos Manuel 53
Bolshevik Revolution (1917) 17, 19, Chavez, Hugh 16
51 Chibás, Eduardo 58, 60
bourgeoisie, as leaders 29 Chile 15
Brascuba, joint venture 157–8, 209, China 68, 96, 107
231 CIA 32
257
CIMEX, SA, state corporation 171–3 future scenarios 231–3; present

civil society 15, 77–8, 201; and WTO contradictions in 195, 231–6; ‘push
6n, 11, see also OPP to communism’ 70–3, 201;
class see social bloc formation relations with US 117, 234, 235–6,
Cliff, Tony 21, 23–4 238; relations with USSR 36, 79,
Clinton, Bill 111, 113 80–1, 97–9, 100–3; ‘retreat to
Club of Socialist Propaganda 50 socialism’ (1970s) 89, 201; state-led
CMEA or COMECON (Council of economy 31–4, 73–5, 82–3, 86;
Mutual Economic Assistance) 1, 3, structural changes 195–222; as
20, 35; Cuba’s membership of Third World superpower 80, 86; US
(1972-91) 79–81, 82; demise of military occupation (1898-1902)
94–7, 224 48–9; withdrawal of Soviet troops
Commonwealth of Independent 103, see also economic crisis
States 104 (1990s); economy; party/state
communist movement: and 1959 apparatus
Revolution 65, 69–70; Batista and Cubalse, state-owned corporation 130,
54–6; and Cuban nationalism 53–4, 168–71
69 Cuban Committee for Democracy 112
Communist Party of Cuba (URC) 52 Cuban Democracy Act (Torricelli Act)
Communist Party of the Soviet Union (US, 1992) 111, 114, 117; effect on
(CPSU) 29 Cuban health care 116
competition 124, 126 Cuban Revolution (1959) 63–7;
Consejos Populares 122, 129, 220 ideology of 67–9, 81–3, 224–5; new
Constitution of 1940 55, 56–7 model reconciled with 217–22;
Constitution of the Republic of Cuba pillars of 41–2, 83–5, 181–4, 196,
(1976) 75–6; reforms (1992) 120–1, 216–22, 226–31; popular participa-
214 tion 36, 64–5, 67
constitutions 43–4, 47; (1902) and Cuban, Spanish and American War
Platt Amendment 42, 48–9 (1898) 32, 47–8
continuity: and new structures Cuban Trade Union 36
218–19; as pillar of Revolution 41, Cubanacan (tourism SA) 93, 129–30,
83, 183–4; risk to 227–8, see also 135, 137
anti-imperialism Cubanet Independiente, Miami
corruption 58, 59, 93–4; police 210; newsgroup 184
potential for 178, 209 cuentapropismo see self-employment
Council of Mutual Economic currency: exchange rates 125–6;
Assistance (CMEA or COMECON), legalisation of US dollar 124–9;
disintegration 37 need for hard currency income 38,
Creoles, white elite 43, 44, 48 90, 115; value of peso 127
CSC (Credit and Services Co- Czechoslovakia 95, 96, 100
operatives) 130
CTC (Cuban Workers’ Central) 55 and decentralisation 25, 73, 129–30; of
n, 59, 68, 70, 75, 77; reform foreign trade 124; of state
programmes 74–5; role reduced enterprises 183, 204
221; and self-employment 133, Decree-Laws: No.77 (New Law of
189–90; and SPE 182 Foreign Investment) 133–4, 171,
Cuba 2–5, 43; aid from USSR 100; 237; No.84 (banking reform) 137;
decentralised bureaucratic state No.140 (legalisation of dollar) 125;
capitalism 25–6; economic recovery No.141 (legalisation of self-
(1996-2000) 13, 38, 127–9; effects employment) 39, 132–3; No.187/98
of US embargo on 114–17, 206; 168
expected fall of socialism in 3–4, dependency theory 30
110–11, 224–5; human development theories 26–7, 30–1;
development standards 162–4; dependency theory 30; modernisa-
independence (1898) 47–8; tion theory 30
independence movement 42–8; Díaz Suárez, Adolfo 157, 209
political isolation 117–18; possible Dilla, Haraldo 208–9, 227
Index 259
diplotiendas see dollar markets elites: party/state 211–13, 215; white

Directorio Universitario 65, 67 Creole 43, 44, 48, see also social
dissidents, as election candidates bloc
121–2 emigration: 1993-4 crisis 111–12; of
dollar markets (diplotiendas) 128–9, gusanos 69; Mariel exodus (1980)
145–6, 169 112
dollar-earners, as social bloc 210 employment: offers of 179–80;
downsizing 179, 204 temporary agencies 174, 204; in
drug trafficking 100, 148 tourism 135–6, 160–1
energy use 156, 162
Eastern Europe: collapse 1, 5, 10, 86, environment, and privatisation 9, 10
103; and failure of socialism 17, ESCD (Enterprise for Service for the
35–6; trade imports from 94–5; Diplomatic Corps) 169
transition 96, 196, 199–200 Ethiopia 80, 86, 99
Eastern Liberation Army 43
Economic Council on Latin America FAR (Revolutionary Armed Forces) 75,
(ECLA) 30 167, 168; power of 212–13; role in
economic crisis (1990s) 20, 37, 86–9, SPE 182, 200, 212, see also SPE
139–40, 206–7; background to FE (Familia en el Exterior) (relatives
89–90; effect of collapse of USSR abroad) 145, 147, 189, 195
105–6, 108; effect of US embargo FEZs (Free Economic Zones) 138–9,
on 109–17; effects of integration 172, 205
90–2; energy shortages 106–7; financial markets 12, 205–6
social strategies 142; state budget First War of Independence (1868-78)
deficit (1992) 108; zero option 43–4
period 104–8, see also Campaign to fiscal reform 12, 203–4
Rectify Errors; Special Period FMC (Federation of Cuban Women)
economic development 29–30, 31; 36, 75, 77
Leninist model 19, 24; in Special FONU (Workers’ Front for National
Period 123–5; Stalinist 19, 20 Unity) 65
economic growth 2, 153–8, 224; 1970s Food and Beverage Company 170
89–90 food consumption 161
economic planning 73, 74, 75, 121; food distribution 72, 130; crisis (1992)
five-year plans 94, 96, 115, 123–4 107; guaranteed minimum basket
economic transition 199–201 146, 158, 180; rationing 73, 87, 92
economy: availability of US goods foreign debt 90, 106
114–15; and dollar markets 128–9, foreign direct investment (FDI) 25–6,
145–6; inherent weaknesses 140; 38, 201; contribution to economic
integration into Soviet Bloc 79–81, growth 157–8; and employment of
82; liquidity rates 141–2; blacks 149; Foreign Investment
productivity 91–2, 105, 141–2; Code (1982) 89–90; Helms-Burton
recovery (1996-2000) 38, 127–9, Law (1995) 112–14; joint venture
138–9, 140–2; state management of arrangements 92–3, 134, 157–8,
31–4, 73–5, 82–3, 86; state 172, 205, 231; legalised (1995) 25,
subsidies 165, 203–4, see also living 125, 133–9, 171, 237; in newly
standards; sugar independent states 29–30; and oil
education 134, 158, 159–60, 214; and gas extraction 156–7; and
public expenditure on 143, 163 profit ratio 133–4; revisions 122; in
egalitarianism 70, 142, 151; and new tourism 135–7
social structures 196, 208–13 foreign policy: independence of 68,
Egypt 68, 81 80–1, 99; Latin America 80, 99;
Eisenhower, Dwight, US President 68 regional links 236–7; relations with
El Salvador 80, 98 USSR 36, 80–1, see also trade
elections 121; 1952 (annulled) 61; FORMATUR, tourist sector training
(1944) 57–8; (1992-93) 121–2; school 136
popular participation in 85, 121 France, FDI in Cuba 134, 158
Frankfurt Institute of Social Research Industria Militar 167

(Frankfurt School) 21, 23, 24–5 infant mortality rate 80, 116, 143, 163
Free Trade Agreement of the Americas informal economy 14, 15; Cuba 39,
239 186–7, see also black market; self-
employment
Gaviota (SA) 129 Institute of Agrarian Reform (INRA) 65
George, Susan 6–7 institutional transformation 200,
Germany, reunification 96 201–2, 216; and social bloc
globalisation, alternatives to 8 formation 208
Gorbachev, Mikhail 35, 99, 101, 103 Inter-American Development Bank 15
Gramsci, Antonio 7, 224 international financial institutions
Granma, rebels’ boat from Mexico 63 (IFIs) 10, 205–6
grassroots movements 5–6n, 8; International Monetary Fund (IMF) 11
growing influence of 239 International Socialist Tendency 21,
Grau San Martín, Dr 53–4, 56, 57–9 24
Grenada 86 International Sugar Council 68
Guatemala 63n INTUR (State Institute of Tourism) 121
Guevara, Ernesto ‘Che’ 63 and n, 70, Italy, FDI in Cuba 134
92, 188, 228 Izquierda, Ala 53
Guiterras, Rafael 50
gusanos, mass emigration of 69 jabita incentives 136, 146, 178
Jamaica 86
Haiti 43 Japan 30, 68
Havana, bus drivers’ strike 53 jineterismo 150, 192
Havana Golf Club 170 John Paul II, Pope, visit (1992) 117,
Havantur 172 198
Hay, John, US Secretary of State 48 JUCEPLAN (Central Board of
Hayek, Friedrich von 7 Economic Planning) 75, 121
health care 80, 158, 214; effect of US
embargo on 116, 143; public Karl Marx Club 50
expenditures 143, 160, 163–4 Kennedy, John F., US President 68
Helms-Burton Law (1995) 112–14, 116 Keynesian economics 7, 31
Hermanos al Rescate 113 Kornai, Janos 35
Hong Kong 31
housewives, as cuentapropistas 194 labour: contractual rules 179, 204;
housing 159, 161 effect of privatisation on 9–10;
Hungary 95, 100 productivity 91–2, 105
labour force, education and skills 134,
ILO (International Labour 159–60
Organisation) 187 labour market flexibility 12, 174, 204
IMF (International Monetary Fund) labour movement: Castro and 68–9,
11, 163, 239; Cuba’s refusal to deal 71; and neo-liberal globalisation
with 12, 83, 111, 206, 230 14; under Machado 52, see also
import substitution 66–7 CTC
incentives for workers 74, 178, 209, labour organisation: reforms 74–5,
227–8; potential for corruption 124, see also self-employment; SPE
178, 209; and self-employment Lage, Carlos 159, 182
188, see also jabita land reform 60, 71, 72, 73
income disparity 132, 144–6, 226, Latin America 10, 99, 109; neo-liberal
227; cuentapropistas 147; and those globalisation in 14–16
with family abroad (FE) 145–6 Lenin, V.I. 18, 19, 24
independence movements 20, 28–9, liberation movements 31, 33–4
33–4; Cuban 42–8; newly Liga de Instrucción, La 46
independent states 29–30 literacy 70, 80, 163
Index for Gender Development 162
Index of Human Poverty 162 Maceo, Antonio 42, 43, 44, 64
India 81 MacEwan, Arthur 6
Index 261
Machado, President Gerardo 52, 53 structures 216–17; global trends 12,

Mandela, Nelson 135 197, 203, 206; hegemony of 6–8;
Maradona, Diego 135 possibility of collapse of 238–9; in
Marinello, Juan 56 practice 8–13; resistance to 5, 8,
market economy, domestic 128–9 164, 197, 224–5, 230–1; social
Martí, José 32, 42, 45–6, 47; influence consequences of 14–16
of 51, 61, 69–70; and US influence neo-liberalism 6–7, 239
48 newly independent states 29–30
Marx, Karl 18 Nicaragua 80, 86, 98, 99
Marxism 50–2 nickel 91, 95, 105, 106, 134; industry
Marxism-Leninism, and anti- growth 140–1, 156
imperialism 28 Non-Aligned Movement 29, 81, 86
Marxist socialism 17–20
mass organisation see OPP Ochoa, General Arnaldo 100
Matanzas province 71 OECD (Organisation for Economic
medical schools 81, 116, 143 Cooperation and Development) 79
Meléndez, Ernesto 96 oil refining industry 79, 90, 93, 205;
Mexico 16, 63–4, 134, 205 reduction in Soviet deliveries 101,
middle class, lacking in Cuba 42–3, 60 105
military-industrial complex 166–7 oil reserves 156
Ministry of Basic Industry 181 ONAT (Office of Tributary Collections)
Ministry of Economy and Planning 191, 211
121 OPP (Organs of Popular Power) 75;
Ministry of Finance and Prices 121, membership of 77, 78–9; and
180, 191
Popular Councils 122, see also
Ministry of Foreign Investment and
ANAP; CDR; CTC; FMC; UJC
Economic Co-operation 121, 139
Ortodoxos (Partido del Pueblo
Ministry of Labour and Social Security
Cubano Orthodoxo) 58, 60; and 26
121, 173; registration of self-
July Movement 61
employed 187, 191; and SPE
process 174
Palma, Tomas Estrada 48
MINTUR (Ministry of Tourism) 121,
Paris Club, debt rescheduling (1986)
135
Moa Nickel Company 140–1, 156 92
modernisation theory 30 Paris, Treaty of (1898) 48
modes of production: military 167; in Partido Obrero Socialista 50–1
state and private capitalism 20–1, party/state apparatus 29, 31, 34–40,
26, 181, 216 86, 150–1; and market practices
Moncada military barracks, attack on 119, 173–4, 183–4, 206–7; and
(26 July 1953) 61–2 pillars of Revolution 218, 219–20,
Monroe Doctrine 42 225, 231; possibility of future
Municipal Assemblies 121, 122 collapse of 233–4; theoretical
foundations (Cuba) 36–7, 198, see
National Bank of Cuba 125, 137, also PCC
144–5 PCC (Communist Party of Cuba) 2,
National Confederation of Cuban 34, 70; constitutional position of
Workers 52–3 75, 76; continuing strength of
national development theory 26–7, 33 150–1; and global economy 197,
nationalisation 60, 71–2 201–2; and institutional transfor-
nationalism, and communism 53–4 mation 201–3, 218; and pillar of
nationality, development of Cuban unity 218, 226–7; Statement of
44–5 Social Policy 158–9
natural gas 156, 158 PCC Congresses 88; 1st (1975) 73; 3rd
NEC (Nueva Empresa Cubana) 168, (1986) 91–2, 99–100; 4th (1991) 87,
176, 216 105–6, 120–1; 5th (1997) 38, 165,
neo-liberal globalisation 1, 5, 223; 167
compared with new Cuban Peña, Lazaro, CTC 55, 59
Pérez, Colonel Armando Betancourt rural workers, and 1959 Revolution

168, 175, 183, 212 64–5, 71
perfeccionamiento 166 Russian Federation 104, 199, 200
peripheral states, in world systems RVE (agency for recovery of state
theory 33 assets) 169
petit-bourgeoisie: as leaders 29; and
‘push to communism’ 72 Santiago de Cuba, Rebel Army in 64
Petras, James and Henry Veltmeyer, SAs (Sociedades Anonimas) 93, 129, see
Globalisation Unmasked 17, 33 also SPE
pharmaceuticals 93, 116, 236 Schools of Revolutionary Instruction
Platt, Senator Oliver 49 69
Poland 100; Solidarnosc 133, 235 SDPE (System of Economic
police force: control of black market Management and Planning) 73, 74,
125, 131, 134; corruption 210; 121, 169
repression 192, 210; to control Second War of Independence (1895)
cuentapropismo 187, 188, 190, 192, 46–7
210; and tourism 136, 192 Second World War 19, 56
Pollock, Friedrich 21–3 see also PCC
Popular Councils 122, 129, 220 self-determination, national 28–9, 30
popular participation 239; in Cuban self-employment system (cuen-
Revolution 36, 64–5, 67; lacking in tapropismo) 38, 39, 124, 130–3,
USSR and Eastern Europe 35–6; and 184–95; decline in 185–6, 185, 193;
new structures 220–2; as pillar of defined 186–8; disproportionately
Revolution 41, 84–5, 183; risks to white 148, 190; dollar earnings
229–30, see also OPP 210; eligibility for 191; and income
poverty, Latin America 15 disparity 147, 188–9; and
PRC (Cuban Revolutionary Party) 46, perception of state 195; problems
50 of 187–90; and representation in
prices: and wages 180; world market CTC 133, 189–90, 211; as small-
124 scale capitalism 184; social
Prío, Carlos, President 59 diversity within 209, 210–11; state
private corporations: power of 8, control of 186, 190–3, 194–5;
230–1, see also TNCs taxation of 132–3, 186, 189, 191–2;
privatisation 2, 8–11, 12, 14–15, 203 and unemployment rate 143–4,
property: private 71, 122; rights for 193–5
foreign investors 133 service sector 153, 155
prostitution 192–3; and tourism 148, Sheritt Company, Canada 140
149–50 Shmeliov, Nikolai 100
PSP (Cuban Communist Party) 32, 57, Singapore 31
59, 67 slavery 43, 44
Puerto Rico 46 Smith, Adam 27
PURS (United Party of Socialist social bloc formations 206–13, 225;
Revolution) 70, see also PCC cuentapropistas 209, 210–11, 215;
‘push to communism’ 70–3 and future of Cuba 234; Military-
Civil Bureaucratic 211, 215;
racism 147–8, 149, 227 party/state elite 212–13, 215; and
Reagan, Ronald 98 popular participation 220–2; state
Rebel Army, formed in Cuba 63–4 business leaders 208, 209; state
Reciprocal Trade Agreement (1934) service professionals 213; state
59–60 service workers 213–16;
referendum, on constitution (1975) technocratic-entrepreneurial 208–9,
75–6 211–12; workers under SPE 214–15
regionalism 30 social development, international
Revolutionary Offensive 70, 72 reports 162–4
revolutionary socialism 16–17 social expenditure 142–3, 203;
Rodríguez, Carlos Rafael 96 reductions in 2, 93–4
Index 263
social indicators 142–4, 220, 235; and structural adjustment programmes

commitment to social growth (SAPs) 11
158–62 student organisations 53, 57, 65
social justice 42, 159, 227 sugar 43; continued dependency on
social welfare: continuing 49, 60, 66, 72; deals with USSR 56,
commitment to 144, 158, 235; 68, 72–3; and economic crisis
unemployment benefits 179 (1992) 107; productivity 72–3, 154;
socialism: and state capitalism 23–4; strikes (1933) 52–3
as transitional phase 17 sugar prices 73, 89, 90–1
socialism in one country 18, 20
Sofia, Bulgaria, CMEA meeting (1990) taxes 9; collection of 188, 191; personal
95–6 income tax regime 132–3
Sol Melía Group 158 technocratic-entrepreneurial social
South Africa 236, 237 bloc 208–9; links with elites 211–12
South Korea 31 technology: access to 174; bank infra-
Spain 43, 48, 50–1, 134, 158 structure 138, 154
SPE (sistema de perfeccionamiento Teran, Carmen Martinez 155
empresarial) 166–8, 216; terrorism, US war against 230, 238
applications to join scheme 180–1; TNCs (transnational corporations)
company management 176–9, 204, 10–11, 14, 231, 237
209–10; conformity to pillars of tobacco production 60, see also
revolution 181–4, 202; Directorship Brascuba
Committee 175, 176, 178, 182, Torricelli, Senator Robert 111
209, 220–1; Executive Committee Total-Elf 158, 172
for 174, 175, 183, 211–12; process tourism 26, 38, 60, 93; dependence on
of 174–5 155–6; and dollar markets 128–9;
Special Period (1991-96) 37–8, 87, employment in 135–6, 146–7; FDI
106; political reforms 118–20, and 135–7; incomes from 132, 146;
164–5, 201–3, 207; response to new industry growth 141, 146–7, 155;
world order 119, 152, 225, see also and social problems 136, 148–50;
economic crisis to produce hard currency 125
Stalin, Josef 18, 19, 20 trade: Cuba and world markets 31–4,
Stalinism 51 66, 89–90, 92; debt 90, 91, 95;
standard of living: 1950s 65; during effect of collapse of communism
CMEA years 80, 86; recent 86–7, 94–7, 105–6; reforms 12,
improvements 161–2 205–6; regional 236–7; with
state 34; and neo-liberal globalisation Russian Federation 104; with US
13–14, 198, 238–9; shift of power 109, 111; US embargo 3, 89,
from 1–2, 8, 12, 198–9, 238 109–17, 206, 235–7; with West 89,
state business leaders 208, 209 205, see also CMEA; oil; sugar
state capitalism 20, 21–4, 31, 182, trade unions 204, see also CTC
223; bureaucratic 23–4; decen- transition states 96, 196, 199–200
tralised bureaucratic (Cuba) 25–6; transport, crisis (1992) 107
democratic 22–3; totalitarian 22 Trotsky, Leon 18
state institutions 89; reformed 121–2, Trotskyites 21, 51
123–4, 164–5, 201 26 July Movement 61–6, 67–8
state service workers 213–16, 221
state socialism 1, 16–17 UBPCs (Basic Units of Co-operative
state supremacy: and means of Production) 130, 138, 140, see also
production 122; and new structures economy
219–20, 225; as pillar of Revolution UJC (Union of Young Communists)
41, 84, 183; risk to 228–9, see also 68, 75, 77, 136
party/state structure unemployment 107, 143–4, 179;
state-owned corporations 38, 168–74, cuentapropismo and 143–4, 193–5;
see also SPE options 179–80, 193; reduced 160–1
Strange, Susan 13–14 Uniones Agropecuaria Militar 167
strikes 52–3, 61 United Kingdom 158
United Nations 30, 68, 236; General Vanguard Peasant and Worker
Assembly 29; and illegality of US Movement 71
embargo 114 Vega, Juan José 137
United Nations Human Development Veloz, Augustín Martín 50
Report (UNDP) 162 Venezuela 16, 134, 158
United States 3, 19–20, 49, 109; and
Bay of Pigs 69; Cuban Democracy wages 15, 161; linked to national
Act (Torricelli Act) 111, 114, 116, productivity 74, 178, 182; and
117; and Cuban independence prices 180; SPE salaries 177–8
(1898) 47–8; and Cuban Revolution Wallerstein, Immanuel: and
67–8; embargo on Cuba 3, 89, development theory 30–1;
109–17, 206, 235–7; expectation of Eurocentricity 32–3; world system
fall of Cuban socialism 110–11; and theory 26–7, 29, 33
future of Cuba 234, 235–6, 238; Weaver, Richard 7
hegemonic position of 102, 219; Wilson, Woodrow, 14 Points 27, 32
Helms-Burton Law (1995) 112–14, women: employment 161; FMC 36,
116; migration policies 111–12; 75, 77
military occupation of Cuba (1898- Workers’ League of Oriente 50
1902) 48–9; ‘New War Against Workers’ Party, Brazil 16
Terrorism’ 230, 238; Reciprocal working class 49, 60; movements 46,
Trade Agreement (1934) 59–60 50–2
unity: and new structures 217–18; as World Bank 11, 164; Cuba’s refusal to
pillar of Revolution 41, 83–4, 183; deal with 12, 83, 111, 206, 230;
risks to 226–7, see also party/state praise for Cuba 164, 195
structure World Conference Against Racism
urban workers 64, 71 (Durban 2001) 236
URC (Union Revolucionaria world markets 27–8, 30; Cuba’s
Comunista) (Communist Party of relations with 31–4, 66, 89–90, 92,
Cuba) 52, 54–6, see also PSP 123–9; Eastern Europe and 35–6;
US dollar 91; legalisation 125; role in effect on future of Cuba 236–8; and
economic reforms 124–9, 145 trade deals with Russian Federation
USSR 56; disintegration of 1, 3, 17, 36, 104
86–7, 96–109; dismantling of world system theory 26–7, 29, 33
103–4, 199, 200; economic models World Trade Organisation (WTO) 6n,
19–20; and end of Cold War 98–100, 11; General Agreement on Trade in
102–3; military aid from 80, 99, Services 11
100; perestroika and glasnost 35–6;
relations with US 98–9; sugar deals Yeltsin, Boris 96
with Cuba 56, 68, 72–3; trade with
Cuba 79, 90, 95, 105, see also CMEA; Zanjón, Pact of 44
Russian Federation Zapatista movement, Mexico 16

State Resistance To Global Is at Ion in Cuba

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4. Structural Adjustments and Social Forces in Cuba:

5. Conclusions and Considerations 223

Throughout the past decade, the idea of establishing or maintaining

advanced countries and global financial institutions that adhere to

When it comes to conforming to the status quo, employing

sovereignty and independence of the Cuban government and

in Eastern Europe had implemented economic reforms that led to a

Communist Party dominance of the state in Cuba, the discourse that

NEO-LIBERAL GLOBALISATION, SOCIALISM

No estamos en contra de la globalización, no se puede estar, es una

There appears to be a number of ‘truths’ or ideas that dominate

1. Throughout the 1990s, grassroots movements have evolved into greater

Neo-liberalism as a hegemonic ideology

establishment of think-tanks in the United States and the United

umbrella of neo-liberal ideology today, there are always political

are most known to promote these policies of privatisation are the

Consequently, local or domestic governments in developing countries

1. Privatisation of state corporations to eliminate inefficiency and

These five global trends will be considered, especially in Chapter

inevitable process. Rather, neo-liberal globalisation can be understood

IMPLICATIONS FOR THE STATE

One of the major contemporary debates in global political economy

SOCIAL CONSEQUENCES OF THE GLOBAL TRENDS

• Companies which find it difficult to compete in the new and

considerable amount of downsizing of its army of civil servants.

SOCIALISM IN A SEA OF CAPITALISM

The existence of ‘socialist’ states in a world of capitalism continues

tionary socialism was seemingly abandoned, neglected or ignored;

Traditionally, political Marxism views socialism as a real transition

actually be the transitional stage to the highest attainable level for

In his (Lenin’s) eyes the Russian Revolution was a mere preliminary

This is sustained by Marx himself when, in the preface to the 1882

Bolshevik party sought to create hegemony within the state; in other

called democratic models in West Germany, Italy and Japan, Stalin

State capitalism is a concept that for many years was conceived as

The market becomes a closely controlled tool in material development

In totalitarian state capitalism or monopoly state capitalism the

Pollock saw democratic state capitalism, therefore, not as a form

of the people, could participate directly in governing the state that

Bureaucratic state capitalism

property is abolished and that market mechanisms are controlled by

IMPLICATIONS FOR STUDYING CUBA

The followers of the International Socialist Tendency continue to

of state capitalism offers insight into the importance of the law of

building infrastructure, providing jobs, inserting new technology

National development and imperialism

during the twentieth century. In After Liberalism, Wallerstein wrote

and the USSR) naturally sought the expansion of their economic

Marxism-Leninism in effect was moving from its origins as a theory

But the link between the two doctrines of self-determination/anti-

nation should be the educated bourgeoisie, who conveniently had

countries’, or countries that participated in the worldwide Soviet-led

When Lenin launched the slogan ‘Communism equals the Soviets

the best model of development. At the top of the agenda of all

Developing countries generally view the success of the newly indus-

Cuban state-led economy

liberal policies as those that result in national development; this has

accumulation within European empires. An alternative approach

as globally. These forces, which in each country developed differently,

THE PARTY/STATE APPARATUS

Both global (external) historical forces and domestic (internal)