Ivan Garcia, 23 March 2018 — On March 15, 1968, two days after the autocrat Fidel Castro finally confiscated the last 55,636 micro-businesses still operating in Cuba, Eusebio, 85, remembers walking with his father and two carpentry assistants to the family business in the Havana’s Santos Suárez neighborhood.
“Two blocks before we got to the carpentry shop, some neighbors told us that the police and the inspectors had shown up armed to teeth. As if it was the business of a drug dealer, they broke the lock, and when I arrived, they were already arranging the work tools and the wood to load them on a truck. Everything was fast. I signed some documents that authorized the transfer of the premises to the State and I returned home. The only thing that they left us was the orders that we had not yet delivered,” says Eusebio and adds:
“The team proposed that we would continue working in carpentry. To my father that seemed a proposal of incredible cynicism. They take away your business and then they want to hire you as a salaried employee. The old man got sick. The family business had been his whole life. Any carpentry work in the area was done by us. Ten years after the dispossession, in 1978, my father died.”
Bárbaro, an old man now who waits for death in a shabby state asylum in La Víbora, sits in a faded chair recalls his time in the Jacksonville bar, located at the corner of Luz Caballero and Milagros, in Santos Suarez.
“Apart from the bar, there was an inn that made the best ‘ropa vieja’ (shredded beef) in Havana. The owner, who has long since left for the United States, had three workers. Two people cooked, one delivered the food and I was the bartender. Santos Suarez was a pleasant area of the capital. Middle class people lived there and there were also poor people, but they were all very educated. In the morning, retired people used to go for drinks. In the afternoon, people arrived from work. On weekends, it became a club where we talked about politics, business and sports. Meanwhile, they listened to the victrola,” says Bárbaro, closing his eyes, as if trying to trap his memories.
Before Fidel spoke on March 13, 1968, Granma newspaper and Bohemia magazine began a campaign against small businesses, particularly against bars. “They accused us of being nests of drunks, marijuana growers and individuals who did not support the Revolution. I heard that speech on a radio I had at the bar. It was very long and he announced the closing of all private businesses, including fried food stalls. He said that bar owners earned a lot of money.
“It was not true. I earned enough to live. These businesses were family-run. The owner was like my second father. Besides me, my father and an uncle worked there. I earned 300 pesos a month, a fortune then, in addition to the tips. After they took the bar, I started working in a state bar on Heredia Street, where to earn four pesos you have to put water in the run and screw the customer,” explained Bárbaro.
Guillermo, an economist, believes that private enterprise is the antithesis of Marxism. “In all the communist societies of Europe, China and Vietnam, before starting their market economy model, large foreign and local companies and small businesses were nationalized. But those who took the confiscations to the point of confiscating micro-enterprises were the former USSR and Cuba. Other Eastern European nations did not go that far. Of course it was counterproductive. The State could not replace the private workes in food services and other services. It was a huge absurdity that assume that the government could competently manage a shoe stores.”
But communist governments are the only animal that stumbles twice on the same stone. Let’s make history. The deadly thrust against small private businesses was on March 13, 1968. But the crusade against free enterprise began in January 1959. In October 1960, the regime practically nationalized all the industry that had more than 25 workers. With the two agrarian reform laws (1959 and 1963), a greater volume of land was concentrated in the State than that of the large estates.
In Cuba before the Castros, microenterprises of one to 10 employees predominated, along with the small ones (from 10 to 49) and the medium ones from 50 to 250. Out of 2,300 industrial establishments, half were micro-enterprises, which shows how predominate they were. Although in the 1950s the transnational companies came to represent a third of the total investments, micro-enterprises constituted 45% of the business fabric and it is estimated that small businesses constituted 36%.
Most of these businesses were run by honest, visionary and entrepreneurial people. They paid their taxes and competed to earn market share through the quality of what they offered.
For every corrupt businessman, like the dictator Fulgencio Batista, who owned nine sugar mills, two refineries and other businesses, in addition to collecting a juicy benefit from the US mafia located in Havana through Meyer Lansky, there were hundreds of virtuous companies.
The pretext under which Fidel Castro initiated his campaigns was to crucify the owners of large, medium and small businesses as white-collar criminals and greedy capitalists who extorted money from the people.
The ineffectiveness of the unproductive socialist system has shown how terrible Castro’s strategy was. The current production statistics of plants, factories and state industries are lower than during the era of private businesses.
The autocracy itself, almost 60 years later, begs for more foreign investment to catapult the rickety Cuban economy. There is a convincing reality: today the State is a monopoly administered by a military junta that operates like the worst African capitalism.
Just like five decades ago, when Fidel Castro launched his Revolutionary Offensive against wineries, carpenters, bars and fried food stands, among others, the regime now sharpens the fiscal blade and oils its legal machinery to prevent the self-employed from accumulating riches.
It is a strategy of containment that the dictatorship applies cyclically. No matter whether it is October 1960, March 1968 or April 2018. In the gene of communism, a private business will always be an enemy. No more no less.