The United States, Cuba and the Economic Crisis
By Tamara Hansen
“This is a decisive moment for the global economy. In the wake of the financial crisis voices from the left and right are equating the free enterprise system with greed, exploitation, and failure. It is true that this crisis included failures by lenders and borrowers, by financial firms, by governments and independent regulators. But the crisis was not a failure of the free market system.”
“The benefits of free market capitalism have been proven across time, geography, and culture. Around the world free market capitalism has allowed once impoverished nations to develop large and prosperous economies. And here at home, free market capitalism is what transformed America from a rugged frontier to the greatest economic power in history.”
– Former US President George W. Bush, November 14th 2008
“It is not possible to re-found the capitalist system; it would be like trying to re-float the Titanic when it’s lying on the ocean floor.”
- Hugo Chávez, President of Venezuela
In September 2008, after Hurricane Ike hit Cuba, devastating the island with its force, Fidel Castro, leader of the Cuban revolution, wrote an interesting metaphor about the “Financial Ike” that is currently hitting the world. Today everyone has heard of the world economic crisis. The “Financial Ike” is a part of our daily life.
So far the majority in North America has not felt the major winds and destruction of the storm, but there is a definite chill and anticipation in the air. There are few who believe they are protected from this hurricane. It is more a question of how deep and how much this catastrophe will demolish. With so many cuts, privatization, lay offs, social problems and many other factors it is very difficult to believe that governments in Canada, the US, and other “developed” countries will shelter working people from the storm.
To prove to George W. Bush that this crisis does indeed mark the failure of the free market capitalist system and the inhumanity of this system, we are going to compare and contrast the United States’ free market capitalist system and Cuba’s socialist system. What is their treatment of and understanding of humanity? How do they protect working people, first from the metaphorical financial hurricanes, but also from real ones such as Katrina and Ike?
Both Cuba and the United States have experienced economic crises in the past. Although they stemmed from different economic factors, the Special Period in Cuba and the Great Depression in the United States both had huge effects on each country’s economy. Most interestingly, both countries had a wholly different approach to solving their crisis.
The US and the Great Depression
First let’s look a bit at the Great Depression in the United States. The US Gross Domestic Product (GDP) fell about 24 percent during the Great Depression of 1929-33. For working people in the United States this meant total devastation. According to the Encyclopaedia Britannica, “by 1932, US manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force.”
How did the US ruling class solve the problem of the Great Depression? If you visit the Franklin D. Roosevelt Library online it explains, “New Deal programs created during the First Hundred Days and afterwards moved the economy towards recovery and helped to lessen the Depression’s impact on citizens, but the effects of the Great Depression stubbornly held on into the early 1940’s. When the United States became involved in World War II, the drafting of young men into the armed services and the creation of millions of new civilian jobs in the defense and war industries finally brought the Great Depression to an end.”
It is a generally accepted fact that it was with war that the US brought its economy out of crisis. This is very interesting when we look at the United States’ economic crisis today, the US involvement in the weapons industry and of course, the occupations of Iraq and Afghanistan.
Cuba and the Special Period
Between 1990 and 1993, Cuba suffered an even larger drop in its GDP than the United States during the great depression. After the Soviet Union collapsed, Cuba lost 85% of its foreign trade overnight. Cuba’s GDP dropped 35%, and Cuba went into what became known as the “Special Period”. In an interview with George Carriazo, the director of Cuba’s Centre for the Investigation of the Global Economy, he said, “Suddenly eight billion dollars in trade with the Soviet Bloc vanished. You can imagine the crisis we faced.” By 1993 Cuba’s economic activity had been cut almost in half.
The Special Period has been very difficult on all aspects of life in Cuba. Food shortages, deterioration of housing, corrosion of public transportation, blackouts of electricity, and many other problems became a daily occurrence. However, in spite of this huge economic crisis the revolutionary Cuban government had its priorities set, and not one hospital or school was closed. The unemployment rate in Cuba has remained low, considering Cuba is a “third world” country and the economic devastation they faced. According to “Trade Unions in Cuba”, published by the Cuba Solidarity Campaign of Britain, “since the Special Period there has been some unemployment in Cuba. In 1995 this rose to 8.1 percent of the work force, but by 2003 the figure had fallen back to 2.3 percent. In the context of Latin America to become unemployed usually means a descent into destitution and marginalisation as individuals or families gravitate to the shanty towns around large cities with the hope of finding some kind of work, usually in the precarious informal sector. In Cuba the unemployed are given special support: in addition to receiving state benefits, they are provided with help in finding new employment and the opportunity to attend vocational courses with a view to re-training.”
Look at Living Standards Today: US versus Cuba
Looking at some of statistics about the US and Cuba today, we can understand more about where the priorities of these two governments stand. Here are a few quotes from the Encyclopaedia Britannica, about “health & welfare” in both countries.
“With total health-care spending significantly exceeding $1 trillion annually [in the United States], the provision of medical and health care is one of the largest industries in the United States. There are, nevertheless, many inadequacies in medical services, particularly in rural and poor areas.” Britannica elaborates on the crisis of the United States healthcare system: “Approximately one-sixth of the population is not covered by any form of health insurance. Though the United States spends a larger proportion of its gross domestic product (GDP) on health care than any other major industrialized country, it is the only such country that does not guarantee health-care coverage for all its citizens.” How can you not cover your people’s healthcare needs if you are, as George Bush said, “the greatest economic power in history”?
Now, what Encyclopaedia Britannica has to say about Cuba: “Cuba has one of the more successful health care programs in the developing world. Health care is state-operated through the Ministry of Public Health and is available free, or at nominal cost, to the entire population. The availability of hospital beds and physicians has greatly increased since the 1960s, when most physicians left the country, and infant mortality and mortality rates overall have declined. Social security (old age, disability, and survivor pensions, and other monetary benefits) covers the vast majority of the labour force. The government controls (and rations) the distribution and pricing of foodstuffs, medicines, and other goods, although there are some independently operated markets (especially farmers’ markets) and state-operated stores where merchandise can be obtained using hard currency.”
These two quotes provide a good look at where the priorities of these two governments lie. For the capitalist United States, the health of its people always comes after the market economy and making profit. How can healthcare be one of the largest industries in the US, while according to a July 2008 New York Times article approximately 75 million people lack adequate health insurance or are uninsured completely? Compare this to Cuba, where health always comes first. In 2007 the Prensa Latina news agency reported that in Cuba, “Education and health services will receive 22.6 per cent of Cuba’s Gross Domestic Product (GDP) […] that is four times more than the average destined by any country in Latin America, according to 2007 budget figures.”
In 2007 UNICEF (United Nations Children’s Fund) released a report: “An Overview of Child Well-Being in Rich Countries”. Out of the top 21 countries rated by this overview, the United States came in at number 20. As the wealthiest country in the world, its care for children was rated 18/21 for “material well-being of children” and 17/21 for “educational well-being of children”. The Encyclopaedia Britannica also states that today, in the early 21st century, more than one in ten people in America live in poverty - and one in six children in America live in poverty. These are some of the great “triumphs” of free market capitalism in the United States.
In Cuba there is a saying: “each day in the world 200 million children sleep in the streets. Not one of them is Cuban.” Cuba’s care for children shows in the recognition it has earned around the world. For example, in the UNICEF statistics on each country and their treatment of children Cuba is surpassing the United States in many places. In terms of the mortality rate of children under the age of five, in 2006 the US had eight deaths per 1,000 births, Cuba had only seven. For infant mortality in 2006, the US had six deaths per 1,000 births, Cuba had only five. Life expectancy at birth in 2006 was 78 in both countries. Primary school net enrolment/attendance was 92% in the US and 97% in Cuba.
US and Hurricane Katrina versus Cuba and Hurricane Ike
In 2005, when Katrina hit the United States as a Category 3 hurricane, it killed 1,500 people and caused $80 billion damage across the US Gulf coast, according to the International Herald Tribune. Along with this, the relief and reconstruction efforts after Katrina were a monumental failure. An article in the New York Daily News published in August 2008 recalled, “Of the nearly 1,000 Louisiana residents who died in Hurricane Katrina, half were 75 or older,” again one of the great human victories from the “greatest economic power in history”.
Compare this briefly to this year in Cuba, which has been hit by three major hurricanes. Gustav was a Category 4, Ike a Category 3, and Paloma a Category 4. The devastation from these hurricanes will cost Cuba over $10 billion to rebuild, but because of the amazing work of Cuba’s civil defence, only seven lives were lost (all during Hurricane Ike).
US Imperialism versus Cuba’s Internationalism
Who makes war in order to solve their economic crisis? The United States. The invasion of Afghanistan, the war on Iraq - these are two ways the United States, Canada and other imperialist countries thought they could avoid their impending economic crisis, a permanent crisis cycle. Obviously, this did not work, as the heroic people of Afghanistan and Iraq have decided to fight back against the imperialist quest for hegemony and new markets to protect their own economies.
In the midst of the current global economic crisis, Cuba is not making war with any country. Indeed, Cuba is committed to spreading health and ideas, not war and occupation. According to a November 2008 article from Granma International, “Cuban medical cooperation, in a variety of modes, is currently being offered in 73 countries. […] There are currently 38,544 Cuban healthcare workers on a variety of missions throughout the world, of which 17,697 are doctors.”
These are not just examples of some things the Unites States government does and some things the Cuban government does. All of the factors we have examined in this article reflect two competing ways forward for humanity. One is free market capitalism and the other is socialism. One is threatening to take humanity back to the dark ages, the other wishes to build a better world based on equality, dignity and humanity, one is imperialism and other one is internationalism.
Who do You Trust?
So in times of economic crisis who should you trust? In an interview with Larry King, comedian Chris Rock was speaking about the presidential elections. He made a joke about why he trusts Barack Obama over John McCain: “The choice is, you got a guy that’s worth $150 million dollars with 12 houses, against a guy who’s worth $1 million with one house. The guy with one house really cares about losing a house, cause he’s homeless. The other guy can lose five houses and he’s still got a bunch of houses. [...] John McCain could lose half his houses, and sleep well!”
Regardless what Chris Rock’s logic and belief is, Obama is a millionaire. According to research published in the World Wealth Report 2006, there are about 2,669,000 millionaires in the United States, or about 0.9% of the population. So although Barack Obama may become “homeless”! if he loses one house, he still represents the less than 1% of Americans who are millionaires. He still represents the same economic system as George Bush, the system of capitalist market.
In Cuba, nobody needs to have or to raise 1 million or 500 million dollars to run for any government job. In fact, in Cuba you don’t need any money to run for any position. Cuba has prioritized all its resources for the well being of its people. Cuba is fighting for the right of its people to live with dignity. Cuba is working to keep everyone alive when hurricanes strike, either physical ones, or financial ones. Cuba is building better care for its children than the wealthiest country in the world. Cuba is developing a country with healthcare that is accessible to all. Cuba is fighting for full employment for its people. Cuba is not fighting wars for domination of empire. Cuba is fighting for a better world that has manifested itself in the battle of ideas described by Fidel Castro.
The United States may be the “greatest economic power in history”, but what use is that if it works against the progress of humanity and acts against the dignity of working and oppressed people?
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