Tyler Cowen has more thoughts on poverty in Cuba:
I found the most evident signs of Cuban poverty to be the unceasing supply of articulate and sometimes weakly sobbing mendicants, none of whom sounded like con men, all of whom needed money to buy food and clothes for their families. The most shocking part is what small sums of money they would ask for or be made happy by. Or the numerous women -- and I mean ordinary women in the streets -- who would offer their bodies to a stranger (handsome though I am) for a mere pittance. Yes in Cuba there is good access to doctors but anesthesia is in short supply and the health care system stopped improving long ago.
If you want to understand northern Mexico, get out of the Tijuana tourist strip and visit Hermosillo. Count the number of new housing developments, and then count how many of them are inhabited by fairly dark-skinned, previously dirt poor, Mexican mestizos. Put that number over the number of buildings in Havana that do not have serious maintenance problems and see if you can divide by zero.
It's quite possible that a lower middle class Mexican eats better food than you do, but there is no chance of that for anyone in Cuba except the top elite. Powdered milk is a luxury there.
Viva La Revolución.
I'll never understand the great desire for conservative bloggers to prove points that no one is disputing. How many times do we have to read this identical post? Yes, it's true, Cuba is not a socialist paradise. Stop the presses! What a scoop! An impoverished island nation was unable to sustain an economic model that is dependent on a preexisting affluent capitalist infrastructure. I'm just blown away. Tomorrow McArdle will approvingly link to Cowen's insightful post, "Could alcohol facilitate casual sex?"
Sorry Freddie,
You know that's not true. There are some folks on the Left who continue to speak positively about elements of the Cuban system, including its health care. For example, Michael Moore in his latest documentary. You can probably also do a quick YouTube search and find some adulation of Fidel Castro in the Mainstream Media as recently as his retirement decision. The Left is usually silent about Cuba's political prisoners, racial discrimination, etc. Being ostentatiously anti-American gets you a lot of slack from Leftists around the world.
Hmmm well you're right, Fred, that there are some people who like Cuba as a whole, although they aren't what I would call people of great influence. Even The Nation has recently taken pains to denounce the Cuban regime. But you're right, I was being hyperbolic.
Here's the thing. As I always have to point out around here, I'm not a Marxist or a communist or a socialist. But I am often disappointed in the way that those things are discussed by libertarians or other enthusiastic capitalists. Here's my problem regarding your recent discussions of Cuba's poverty. The conclusion that always seems to be reached from this kind of evidence (and I don't dispute that Cuba is in deep poverty) is to say, see, communist country X is poor, therefore communism/Marxism/socialism doesn't work.
But the problem is, the identical standard of evidence is never applied to the other side. If I point out that ostensibly capitalist countries (like, say, many central African counties) are also dirt poor and essentially failed states, no one says "See? Evidence that capitalism doesn't work." The example of Russia I find very funny, because people point out that the USSR was such a failure. They fail to note that capitalism in Russia has also been a miserable failure! And yet they don't see that as being disqualifying evidence for capitalism.
The standard rejoinder for those things is, well, those aren't really capitalist countries yet, and the reason they aren't successful is because they aren't unfettered free markets. But again, that's an argument identical to the one the socialist kids always make to me-- there's never been a real communist country, the rulers have never actually done the right things, the conditions have never been what Marx said was necessary.... That attitude is always dismissed as frivolous by the capitalists I know. So why isn't it frivolous from the other direction?
I just think the statement "Communism doesn't work" is more true than false. At the same time, I think it assumes the statement "Capitalism works." And to that I always have to say, it depends. For the people in Greenwich county, it works very well. For any reasonably secure Americans like myself, it works well. For the people of inner city Detroit, not so much. For the people of impoverished failing state X, not well at all.
The accusation against socialists is that they're all idealists living a fantasy who don't know the way the "real world works." But I find just as much fantastic and religious faith on the part of capitalists, who think that, someday, our wonderful capitalist enterprise is going to get things perfectly right and everyone will be rich. I think that's beyond naive. I would just like to see the same kind of scrutiny and doubt applied equally to American capitalism as to Cuban communism.
How much Cuban poverty could be eliminated by getting rid of economic sanctions? Would their economy grow as fast as China's?
Arrow,
Probably so because it's been stagnant for so long. I imagine factories and sweatshops would be setup overnight. The incentive to do business just a few hundred miles off shore at the same labor prices as China would be huge.
But make no mistake. China's economy is propped up by capitalism. When they didn't have the rest of the world hiring them to do their bidding China was at the bottom of the heap, much like Cuba is now.
Freddie:
The problem is not that communist country X is poor, or poorer than it was, or an economic basket case. It is that every communist country has been an economic failure. (If you think Cuba is a success compared to Haiti, check the figures from 50 years ago: Haiti is still way behind on most measures of economic success, but it has been gaining on Cuba, which was much further ahead under Batista.) If some capitalist countries are failures, that doesn't affect the point. Capitalism usually (or at least sometimes) works. Communism never does. That's what you have to refute, and pointint to failed capitalist economies doesn't do it.
In addition, it is not enough that a country calls itself capitalist. There are a lot of kleptocracies that call themselves capitalists.
The key issue is this- is private property respected and protected by a working, relatively non-corrupt system of law? If not, then you don't a capitalist economy. Most poor,non-communist countries in world lack this this fundamental element.
capitalism in Russia has also been a miserable failure!
As someone who lived in Russia until 1994 -- which, incidentally, covers the transitional period from socialism to capitalism -- I call bullshit. The improvements during early Eltsin years (with Gaidar running the government) were quite palpable. Yes, they PO-d a whole lot of people, and eventually Russia "turned around" (steep rise in oil prices certainly helped the central government re-consolidate the power). But what they have right now is lightyears ahead of what they had in the early eighties -- even in more remote areas, not just in Moscow. Overall rate of human progress has nothing to do with it either: butter was definitely not invented in the last 20 years.
"They fail to note that capitalism in Russia has also been a miserable failure!"
No, anarchy in Russia has been a miserable failure. They haven't tried an economic model that any serious economist has been advocating, or one of the many models that has worked around the world. They tried a corrupt free-for-all.
As Dr. Weevil pointed out, no communist country has worked well, and that's not surprising, because of the many contradictions and inefficiencies. It doesn't use markets, it doesn't use incentives, it's focused only on taking and redistributing wealth, not on creating it. Logically, how can it possibly work well for long?
There have been no communist countries that have prospered and lifted many people out of poverty (except perhaps at the beginning, when they take existing wealth and party until it runs out). But there have been many, many capitalist countries that have prospered and created wealth and helped many poor people. China is a good example, going from mass starvation and brutality to a high growth rate (granted, from a small wealth base, but wealth is being created rather than destroyed for a change). There's also South Korea, Taiwan, Singapore, Hong Kong, Malaysia, Indonesia, Thailand - have you considered just how many people have been lifted out of poverty by capitalism?
The bottom line is that yes, capitalism can be poorly implemented. Rampant corruption or other manifestations of bad government can lead to problems in any system. But although capitalism can be done badly, it's virtually impossible for communism to be done well.
Communism doesn't work because people in power, and people in general, do bad things. When it fails, supporters say, well, the leaders weren't real communists. But communism, in waiting for a group of people to voluntarily get together - and stay together - in such a system, will never 'get a fair shake' because the necessary people WILL NEVER EXIST.
Capitalism works because it assumes people will do bad things - be selfish, grasp for more power. Where it fails it does so because there isn't enough of a framework to adequately fend these impulses off. But the posture toward what there is to work with (real people) is still correct, whcih is why it does work more often and better than anything else.
Freddie: Communist economics (central planning, that is) is demonstrably deficient (disastrously so) at the theoretical level; that all attempts at Communist economics have failed is a reflection of that.
(That, as you say, "capitalism has failed in Russia" suggests that you don't know what free marketers believe is "capitalism". Russia has, effectively, no rule of law in economic matters, and an invasive state.
That is not capitalism.)
I think perhaps you're confused by the way people don't bother to spell it out; perhaps because the Conservatives and Libertarians are so familiar with it they don't think it needs to be said (or, equally, others are unfamiliar with the elaboration, and sense it only dimly and reflexively).
If you're unfamiliar with it, both Hayek (in The Road to Serfdom, etc.) and Mises (in Human Action, etc.) discuss in detail the impossibility of effective central planning due to the insoluble lack of sufficient information.
Without the market setting prices, it's impossible for a central planner to efficiently decide what to plan, even if a central planner could be flexible enough to deal with rapid changes in demand and supply. (The latter is not theoretically insoluble; the former is.)
If the state "sets prices", that doesn't provide the information that prices set by demand provide, thus rendering the economic calculations involved meaningless. Garbage in, garbage out, as they say.
Communism doesn't work because people in power, and people in general, do bad things. When it fails, supporters say, well, the leaders weren't real communists. But communism, in waiting for a group of people to voluntarily get together - and stay together - will never 'get a fair shake' because the necessary people WILL NEVER EXIST.
Capitalism works because it assumes people will do bad things - be selfish, grasp for more power. Where it fails it does so because there isn't enough of a framework to adequately fend these impulses off. But the posture toward what there is to work with (real people) is still correct, which is why it does work more often and better than anything else.
(See, for example, Mises in Socialism, Chapter 6, for further, exceedingly detailed elaboration of the issue of economic calculation under Socialist conditions.)
"The standard rejoinder for those things is, well, those aren't really capitalist countries yet, and the reason they aren't successful is because they aren't unfettered free markets."
Capitalism doesn't mean 'unfettered free markets', it means well-regulated markets. Basically, capitalism means that everyone is working on commission - if you create wealth, then you're allowed to keep a proportion of what you create, while a proportion is also taken by the government (as opposed to communism, where the government takes everything and then gives you back something that's generally unrelated to your contribution).
This system works well if the way that people can get wealth is by creating it somehow. It doesn't work as well if some people are able to simply steal wealth instead, which is often possible with corrupt or otherwise bad governments, but even then the solution isn't to have the government steal all of the wealth.
The solution is to work on better property rights and more efficient regulation, so that more people are forced to genuinely create wealth if they want more of it (although there will still be some that get lucky, perhaps by being born to the right parents, and some that are lucky in being more capable of contributing). This can, of course, be combined with a social safety net, but the key is that, when people want more, they have to find a way to contribute.
"See? Evidence that capitalism doesn't work." Freddie
Bare in mind I'm not as pro-capitalist as some here. Still the examples you gave to me show it is insufficient in itself, not that it fails to work. The more capitalist central African countries, or Russia, were highly corrupt with a poorly functioning legal system. In less corrupt African nations, like Botswana, development did rise. (Well until HIV/AIDS put the kibosh on that)
A good legal system and limited corruption might be more important than whether the nation is a social democracy or more laissez-faire capitalist. However outright Communist nations don't seem to perform well even if they have a good legal system and limited corruption. A Cuba free of corruption with a well-ran court system most likely would be nearly unchanged compared to today's Cuba.
"If you think Cuba is a success compared to Haiti, check the figures from 50 years ago: Haiti is still way behind on most measures of economic success, but it has been gaining on Cuba, which was much further ahead under Batista" Dr. Weevil
However I'm skeptical of this. Even if it were true it just says something about how bad the Duvalliers were. Unless the Duvalliers were Communists they should've been gaining ground under them as well, but I don't think so. Haiti is highly corrupt and disordered. Capitalism doesn't magically solve that.
"See? Evidence that capitalism doesn't work." Freddie
As I think is clear, I was saying that as a counterpoint to the other kinds of evidence; I don't mean that in a flat way.