Cuba to abandon salary equality

BBC
12 June 2008

Cuba is to abolish its system of equal pay for all and allow workers and managers to earn performance bonuses, a senior official has announced.

Vice-Minister for Labour Carlos Mateu said the current system - in place since the communist revolution in 1959 - was no longer "convenient".

He said wage differentiation should improve production and services.

President Raul Castro has introduced a series of reforms since succeeding his ailing brother Fidel in February.

Writing in the communist party newspaper Granma Mr Mateu said workers would receive a minimum 5% bonus for meeting targets but with no ceiling on salaries.

Managers could earn a 30% bonus if the team working under them increased production, he said.

The minister pointed out that the current wage system sapped employees' incentives to excel since everyone earned the same regardless of performance.

"It's harmful to give a worker less than he deserves, it's also harmful to give him what he doesn't deserve," the newspaper article said.

Challenging Marxist orthodoxy
But the impact in terms of purchasing power will be limited, the BBC's Michael Voss in Havana says. Raul Castro has brought in a series of gradual social reforms The average wage in Cuba for everyone - from doctors to farm labourers - is about $20 (�10) a month.

Even before the recent sharp rise in oil and food prices Cuba was spending billions of dollars on imports, and that bill is likely to rise sharply, our correspondent says.

So far most of the reforms announced since Raul Castro took over the presidency have involved lifting restrictions such as the bans on mobile phones and computers.

The latest change is a more fundamental challenge to Marxist economic orthodoxy, our correspondent adds.

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Comments:

1)

Simon McGuinnes

CubaNews list

12 Jun 2008.

This is part of a carefully orchestrated plan aimed at eliminating the dual currency and restoring the strength of the National currency. The dual currency has been identified by the Government, through its 3-year national consultation process with the population, as the source of greatest income disparity within Cuba. The CUC is pegged to the US dollar, the recent weakness of which has dragged down the value of the CUC, greatly assisting the Cuban government in that process.

The effects of the plan are already being felt on the ground where the value of the Pesos has risen against the CUC and people are converting their CUC savings into the national currency in anticipation of it rising further. Those who receive CUC from remittances are quick to change the currency for pesos for fear of being left with a devaluing currency.

This is a complete reversal of the situation that pertained in Cuba in the 1990s. Far from increasing income disparity, it is part of a suite of policy changes which will reduce it by the gradual elimination the greater distorting effects of the dual currency economy.

That suite of measures also includes stimulation of local production (especially food production) to ensure that privately produced goods flow back into the pesos markets. The sectors of the economy where these production bonus payments will be applied are likely to be strictly regulated to ensure maximum public benefit. The removal of the income ceiling means that Cubans will also be encouraged to work harder. Quite where this is in conflict with the socialist motto of "From each according to his ability, to each according to his work" is difficult to tell, but it is likely to be the media spin that the story attracts in the west.

These measures are likely to be popular with Cubans, strengthening the position of the government and increasing its ability to cope with international developments like the rise in oil and food import prices.

Meanwhile, European governments struggle with blockades by truck drivers, farmers and fishermen facing bankruptcy as a result of the 40% rise in diesel fuel prices. They are lucky, they pay for their fuel in Euro, an appreciating currency, unlike their dollar touting US counter parts.

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2)

Micheal A. Lebowitz

13 Jun 2008

Just a quick passing shot:

1. Marx did not distinguish between a socialist society and a communist society; rather, he referred to a single society in the process of 'becoming'-- moving from a point where it relies upon historical premises which it itself has not produced, through a process of 'subordinating all elements of society to itself, or in creating out of it the organs which it still lacks', to the point where it produces its own premises (i.e., rests upon its own foundations).

2. Distribution in accordance with contribution was for Marx the result of a 'defect'-- an inherited historical premise, the continuation of bourgeois right (in this case the treatment of one's own labour-power, 'the personal condition of production', as your property. Nowhere does Marx advocate 'building upon defects' (cf. my note with this title in the October 2007 Science& Society for the barebones argument). In fact, it is essential to struggle to subordinate this defect--- something that Che clearly understood.

3. It was Lenin who said there were two 'stages', and that there was the 'socialist principle' of to each according to her contribution. Stalin and many others have followed. In fact, my note referred to above was originally presented in May 2006 in Havana at the Marx Conference and was directed (not openly-- but the Cubans all knew what I was talking about) against this very argument already emerging in Cuba (and most explicitly in the December 2005 speech of Soberon, president of the Cuban Central Bank).

in solidarity,

Michael

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3)

S. Artesian

13 Jun 2008

More than that-- there are quite simply errors of fact. Neither, China, Brazil, nor India and let's not leave out the R in the BRIC, Russia, is anything approaching an "economic powerhouse."

An economic powerhouse would have productivity levels far above those of the BRIC, would have the portion of the population tied to agriculture at much lower levels-- and that's just for starters.

But it is this faux erudition, this faux realpolitik, which says, in justification of steps backward, or steps not even analyzed-- 'it's a different world, than the one of such and such an era.' Sounds like Bernstein, Kautsky, etc to me.

Nobody has denounced Cuba for these steps, but we need to recognize them for what they are, and what their origin is-- the isolation of the Cuban Revolution, the collapse of the Soviet Union, the development of capitalism, internationally financed, locally administered capitalism in China and Vietnam, the defeat of the revolutionary impulse in South Africa....

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4)

S. Artesian

13 Jun 2008

But fundamental to socialism is that the tasks of management be shared by all. I think Lenin said something like "Every cook can govern." I don't think he was kidding.

So if expertise is to be rewarded, than the reward should be distributed socially not individually, as should the expertise. And all must have the opportunity, and obligation, to "manage." That's not going to happen under a bonus plan.

What will happen is that a professional caste of managers will be created, who will achieve their bonuses not through their own labors, but through the labors of others-- and that becomes a point of differentiation along class lines.

A professional caste of managers will then populate itself by selecting others who subscribe to further differentiation from workers; the professional managers will inevitably, as managers, exercise political power based on their status, rather than the soundness of their proposals for advancing the "unhelpful" egalitarian basis for society.

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5)

S. Artesian

Fri, 13 Jun 2008

To Ruthless: I read the article. I know that both workers and managers will get the bonus. Changes nothing.

In answer to "guava tree" I am also aware that these changes have been seeping through the Cuban society for some time, particularly since the withdrawal of Soviet support and the turn to tourism as the single greatest source for foreign exchange. Which means that this is not a case of the current leadership "straying from the true path of Fidel."

Nevertheless the Cuban economy and society has been organized with a remarkable, and sustained, degree of egalitarian commitment.

Certainly, petty favoritism, and individual abuse can exist. But petty favoritism is not the issue-- what is the issue in Cuba as in China, as in the former Soviet Union before, is what class relations are being engendered by this policy? What property relations will be strengthened by this?

So we need to ask: How are these rewards to be generated? And the answer is: they will be generated by the world markets-- and that means production not for need, or use, of all, but for need or use of exchange. Look for example at tourism.

Despite the US embargo, Cuba is in no way or shape isolated from the world market-- no more than the former Soviet Union was, or Poland was before it in 1980. The penetration of the market into the economy is certainly less, but, tourism is the largest foreign exchange earner, and tourism has created tremendous income differentials in the work force, and serious inequalities in production and distribution of services-- such as electricity, varied foodstuffs, etc. In addition, the ecological footprint of tourism is pretty destructive.

I don't know how the system can be changed in a different way without a resurgence of international revolution. But we need to know what is driving this process in reverse, a reversal that echoes in these inroads against egalitarianism.