Why Don’t Things Work in Cuba? / Somos+, Kaned Garrido

Somos+, Kaned Garrido, 30 June 2015 — In Cuba it is quite natural for there to be lines everywhere. For some reason there are always shortages. Prices are high and salaries are very low. And with each step they take, Cubans have to deal with excessive red tape.

What is the problem and what is the solution?

Since Adam Smith first discussed the value of goods and services, it has been accepted wisdom that the basic principle of economics is the law of supply and demand. When we want something and offer money in return, what we pay depends on the scarcity of the item and how much we want it. This essential rule of the marketplace has been around as long as there has been commerce. continue reading

But not everyone always has the money to buy food. The market does not create boundless wealth; it only balances supply and demand. This is where socialism failed at solving the problems of humanity. Intentions may have been good but the issue was that it attacked the very mechanism that allows an economy to function: the marketplace.

The crushing machinery of socialism does not allow for a basic analysis of supply and demand. It manipulates prices, directs production and controls commerce. A group of people decides what must be produced and what must be consumed. This is why Cuba distributes cigars to those who do not smoke and hands out clothing without regard to the size of the person wearing it.

With centralization came the tedious apparatus of bureaucracy. Since the earliest days of the Revolution, bureaucracy has been singled out as the cause of the problem. But bureaucracy is essential to centralization. Without bureaucracy there would be no socialism. Without all the paperwork how would prices, business transactions and production be controlled?

It amounts to an attempt to manipulate the economy through government policy. Who could  believe that forcibly reducing prices would put more food on store shelves? If that were the case, there would be no hunger.

The reality is that prices are a reflection of supply and demand. If we want to end hunger, we should provide subsidies and improve access to food. But controlling prices will not put more bread on the table. In order to reduce prices, production must be increased, something Cuban factories have been trying to do for years. But that leads to the following question: Why don’t Cuban businesses produce enough?

In the first place, they are not even geared towards consumer demand. Everything is planned based on what managers believe will be needed. In the second place, they are operated without concern for profit, the very thing and drives the economy. They operate according to political guidelines, which ultimately leads to corruption.

Lifting the embargo might alleviate shortages a little but it will not do away with them. As long as the economy is centrally planned, low salaries, short supplies and an oppressive bureaucracy will persist.

Technology Rationed in a Technophobic Country / Somos+, Javier Cabrera

A Cuban ration book for basic foodstuffs

Somos+, 2 July 2015 — The coming of WiFi to Cuba is very good news. Better still is the reduction in prices from 4.25 CUC to 2.00 CUC, although that is still a very high barrier for connection to the Internet. [Roughly 2 days wages for one hour. -ed.] From here I want to congratulate the promoters, Cubans or otherwise, because it has been clearly and unquestionably a step that benefits the citizenry.

However, all the data indicates that there is excess capacity to go faster, and too much hesitancy to accept the help offered by companies in the United States and other countries. We clearly have a technophobic government that is trying to deal with a problem outside its scope and trying to “reinvent” the technology as a part of a useless and expensive process, redesigning and adapting; but more than anything, delaying its adoption in time. continue reading

The security of information and the lack of a technological culture continue to be the preferred pretexts to validate the slowness of a process that can’t wait any longer. Nothing is said about how to attack these supposed problems, which, by the way, exist all over the world and have a huge number of solutions. Increasing training in technology on a large scale is the only alternative, and for this there is only one method: “You learn to dance by dancing.”

We are in a process of technological literacy, why don’t we send thousands of literacy specialists to every corner of the island with laptops and connections, because we are standing in line for 21st century literacy?

Many of us question the secrecty of the technology strategy, the silence about the agreements… if there are any, and the news about companies wanting to help that only comes out in the foreign press. It is annoying that our technophones, who undertake these efforts on our behalf, supported by our effort, our GDP and our remittances, are not capable of explaining why in 2020 the number of those connected will be 50% and not 90%, or how and at what cost we are going to be connected.

If security is so critical, if the agreements are not suitable, if filling the country with antennas is too expensive, or if what Twitter, Google and the rest are offering is bad, we want to offer our opinions.

We voted to adopt technology, which exists and works, in a normal and above all very quick way. We voted en masse to liberalize access and to declare it a right. How did you vote?