Less Repression and More Freedom: The Solution to Lower Prices in Cuba

Food prices in Cuban markets and establishments have only risen in the last two years. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 27 February 2023 — Does anyone believe that the regime’s shakeup in Cienfuegos against those who raise their sales prices are conducted to improve food for the people? Not in the least. For too many years we’ve seen the same harassment practices and knocking down those who attempt something so legitimate and normal as earning money, end similarly: lack of food, scarcity and rationing. And now, since the reordering task, uncontrollable prices.

The communists repress freedom, policies and economies. Everything that is separate from the official collectivist and obedience paradigm must be extinguished from the root. The fines and sanctions applied to vendors for what the regime describes as abusive food prices are an instrument of repression so that no one can profit. They’ve even confiscated goods, as if this were 1968.

We are facing practices that try to identify crimes where they don’t exist. The regime’s repressive behavior only serves to dwell on the problem, rather than reaching a solution. While it is true that the state security apparatus dedicated to these tasks must be given their daily assignments, but up to a certain point.

When the communists begin harshly repressing those who they call “illegal agriculture vendors, price distorters, hoarders and others who assault the correct development of social dynamics,” they do nothing more than eliminate a good portion of the informal economy that exists on the Island, basically because the formal economy, organized under the communist model, simply does not function. It is no good.

It is not easy to find a country in the world with a payroll so loaded with inspectors, comptrollers, vigilantes, police officers, informants, snitches, and others in charge of repressing the people. The regime calls them “specialists in the struggle against crime,” but considering their modus operandi, and the results of their activities, there is little specialization and much totalitarian attitude.

Furthermore, we can observe that as control and persecution grow, the size of informal economy — which struggles to create space within the regime’s rocky interventionist system — increases. Such that all these semi police teams charged with confronting that which the regime refers to as “illegalities at the points of greatest commercial interest” end up doing as they wish under the astonished gaze of the citizens. Hunger is generalized and does not discriminate in that every-man-for-himself that has become of Cuba’s communist economy.

The accusations described by the teams of repressors are not crimes, because all vendors have their papers and permits in order. The crime is selling agricultural products at prices higher than those set by the provincial governor. As if the governor really knew what the costs of the products were and at what price they must be sold. This bureaucrat, sitting in his comfortable, air conditioned office, is empowered by the communist regime to decide on supply and demand, on freedom of choice and on decisions of purchase and consumption.

In a free market economy it is so much easier. Without the need for useless bureaucrats, consumers visit different establishments or navigate online until they find the product and price they are most interested in. There is neither coercion, nor repression, and everything is easier. Simply, people don’t purchase from those who sell at a high price. That is the punishment for those who are inefficient. When in Cuba people buy from vendors at high prices, it’s for a reason. Does the regime have an answer for that?

No. It neither has one, nor is it searching for one. When vendors or consumers do not obey, the regime turns to fining and sanctioning, and if the accused protests or returns to selling at a high price, additional, harsher measures are put in place, including forced sales or confiscation.

Cubans are surprised by the high prices for basic products. A dozen eggs for 500 pesos, tomatoes for more than 100 pesos. And so on. Faced with these prices, bureaucrats try, with resolutions and official orders, to fix prices at lower levels, to save themselves and unleash repressive actions. The result of all of that is that products disappear from the market and later they can’t be purchased, even at double the price. This process by the authorities goes against economic rationale and the public interest.

So, what is the solution, if there is one? Well of course there is, and it is very easy. What they need to do is increase supply so that those who aspire to sell at high prices find themselves in a market that does not accept those prices. Supply and demand, if functioning freely, ensures that adjustment. Cuba’s problem is that, its economic model does not produce enough because it is in the hands of an inefficient state, unconcerned about profitability. Authorities, which fully desire greater prosperity and economic production, manage to do just the opposite: repress producers and vendors, converting legal actions into illicit, persecuting and repressing behaviors that are not criminal, but rather caused by the regime itself.

At some point, communists must realize that the only thing capped, fixed and centralized prices generate is an informal economy searching for room to grow and develop. What the communists refer to as violations and crimes are nothing more than rational and efficient behavior reacting to the regime’s aggresive environment which blocks people’s decisions. Rather than betting on being more energetic and preventing people from acting with impunity, that is, instead of repressing and suffocating freedoms, the regime must incentivize production and give producers and vendors freedom to access markets without restriction or threats. There is no other way.

Translated by: Silvia Suárez


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