Castro, Obama & Irrationality of Statism

Member Group : Reflections

At least for a few moments last week, we had the strange spectacle of President Obama sounding more like a collectivist than Fidel Castro.

With the federal payroll in the United States up by 200,000 positions and the private sector down by 7.8 million jobs since the current recession began, Mr. Obama continues to aggressively push a statist agenda of higher taxes and more regulations on the nation’s key job creators in the private sector.

Meanwhile in Cuba, retired dictator Fidel Castro dropped an anti-statist, anti-communist bomb during an interview with Jeffrey Goldberg, national correspondent for The Atlantic.

Asked by Mr. Goldberg if he believed the Cuban model was still something worth exporting, Fidel replied, "The Cuban model doesn’t even work for us anymore."
Mr. Castro also apologized during the interview for his regime’s treatment of gays, stated that Iran’s madcap president Mahmoud Ahmadinejad should "stop slandering the Jews," and expressed regret about trying to convince Khruschev to nuke the United States.

A few days later, amid a worldwide flare-up about his about-face on communism, Castro said he was quoted correctly but misinterpreted.

"In reality, my answer meant exactly the opposite of what both American journalists interpreted regarding the Cuban model," Castro claimed in a full switcheroo. "My idea, as the whole world knows, is that the capitalist system no longer works for the United States or the world. How could such a system work for a socialist country like Cuba?"

In other words, "The Cuban model doesn’t even work for us anymore" really means "The capitalist system no longer works for the United States." That’s nuts, but it’s the type of bold untruth that a dictator thinks he can get away with after spending a lifetime silencing dissent by way of bullets and dungeons.
Accustomed to a population of bobble heads that’s afraid to do anything but nod in submission, Fidel might well also claim that what he really said in the Goldberg interview was that Ahmadinejad loves Jews, Cuba was always nice to gays, and, in fact, that his best friends are fully uncloseted gays, and that he should’ve pushed Khruschev harder to nuke the United States.

He might add that Cubans are doing better economically than ever. Why switch now when the average Cuban is making 67 cents a day?

In any case, events on the ground show that Fidel was telling the truth the first time around when he said that his island’s pinko economic model isn’t working.

Weighing in last month on the failure of Cuban socialism, Raul Castro, Fidel’s brother and Cuba’s current despot, said, "We have to erase forever the notion that Cuba is the only country in the world where one can live without working."
For starters, more than half a million state workers will be cut from government payrolls over next six months, Raul declared, and be sent off to find work as best they can in newly semi-legal and newly semi-encouraged private companies that are currently non-existent.

Over 85 percent of Cuba’s 5.5 million workers are on the state payroll. Raul Castro says that a million of those state employees, over 20 percent of the payroll, are in excess.

The country’s only authorized labor union obediently chimed in, saying "Our state can’t keep maintaining bloated payrolls."

In last Tuesday’s New York Times, John Kavulich, a senior advisor for the U.S.-Cuba Trade and Economic Council, a private group that provides information to American businesses regarding Cuba’s commercial environment, asked a good question about Cuba’s shift from official anti-capitalism to a somewhat pro-entrepreneurship stance: "The Cuban government is going to allow and by definition encourage people to go into private sector opportunities. What happens when some people get rich?"

To make sure no one gets too rich except the Castro brothers (Forbes magazine in 2006 listed Fidel Castro among the world’s richest people, with an estimated net worth of $900 million, up from $550 in 2005), the Cuban regime has put a very tight lid on the amount of economic freedom that will be permitted in Cuba’s private sector.

Along with the plan to fire 500,000 public employees, and another 500,000 at a later date, another measure will order "the denationalization of beauty parlors and barber shops, if they have no more than three chairs," explains George Will. "With four or more, they remain government enterprises."

There in its purest form is a clear demonstration of the irrationality of central planning. A million people will be fired from their government make-work jobs and told to find real work in a private sector where it’s illegal to have four chairs in a barber shop.

Ralph R. Reiland, a columnist with the Pittsburgh Tribune-Review and the owner of Amel’s Restaurant, is an associate professor of economics at Robert Morris University in Pittsburgh.

Ralph R. Reiland
E-mail: [email protected]
Phone: 412-527-2199