Co-operativism and Local Development in Cuba: An Agenda for Democratic Social Change 9789004361720, 9789004348783, 9004361723

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Co-operativism and Local Development in Cuba

Studies in Critical Social Sciences Series Editor David Fasenfest (Wayne State University) Editorial Board Eduardo Bonilla-Silva (Duke University) Chris Chase-Dunn (University of California-Riverside) William Carroll (University of Victoria) Raewyn Connell (University of Sydney) Kimberle W. Crenshaw (University of California, la, and Columbia University) Raju Das (York University) Heidi Gottfried (Wayne State University) Karin Gottschall (University of Bremen) Alfredo Saad-Filho (University of London) Chizuko Ueno (University of Tokyo) Sylvia Walby (Lancaster University)

volume 121

The titles published in this series are listed at brill.com/scss

Co-operativism and Local Development in Cuba An Agenda for Democratic Social Change Edited by

Sonja Novković Henry Veltmeyer

leiden | boston

Cover illustration: A workers co-operative in Havana; K.G. Bloquin co-op ­producing construction materials. Photograph P2190107, with kind permission by Michel Séguin. Library of Congress Cataloging-in-Publication Data Names: Novkovic, Sonja, editor. | Veltmeyer, Henry, editor. Title: Co-operativism and local development in Cuba : an agenda for democratic social change / edited by Sonja Novkovic, Henry Veltmeyer. Description: Boston : Brill, [2018] | Series: Studies in critical social sciences ; 121 | Includes bibliographical references and index. Identifiers: LCCN 2018025816 (print) | LCCN 2018028348 (ebook) | ISBN 9789004361720 (ebook) | ISBN 9789004348783 (hardback : alk. paper) Subjects: LCSH: Cooperative societies--Cuba. | Agriculture, Cooperative--Cuba. | Cuba--Economic conditions--21st century. | Cuba--Economic policy--21st century. | Cuba--Social policy--21st century. | Social change--Cuba. Classification: LCC HD3461.A4 (ebook) | LCC HD3461.A4 .C66 2018 (print) | DDC 334.097291--dc23 lc record available at https://lccn.loc.gov/2018025816

Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill-typeface. issn 1573-4234 isbn 978-90-04-34878-3 (hardback) isbn 978-90-04-36172-0 (e-book) Copyright 2018 by Koninklijke Brill nv, Leiden, The Netherlands. Koninklijke Brill nv incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi, Brill Sense, Hotei Publishing, mentis Verlag, Verlag Ferdinand Schöningh and Wilhelm Fink Verlag. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill nv provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, ma 01923, usa. Fees are subject to change. This book is printed on acid-free paper and produced in a sustainable manner.

Raúl Castro on Co-operatives What is a state, especially a socialist state, doing administering a barbershop with one chair, or two or three, and with one administrator for a certain number of small barbershops—not many. I mention this example because it was one of the first steps we took. We decided to establish co-operatives; we tried some, and immediately threw ourselves into creating dozens of c­ onstruction ­co-operatives. Has no one analyzed the consequences this brought and the problems that this haste created? To mention just one case. And like this one, there are quite a few. This is what I want to say in simple, modest ­language. Whose errors are these? Mainly, ours, we leaders who developed this policy, ­although in consultation with the people, with the approval of Parliament, of the last Congress, of the last meeting we held here this past month, to approve all the documents I mentioned at the beginning of my remarks. This is the ­reality. Let’s not try to block the sun with a finger. Mistakes are mistakes. And they are our mistakes, and if we are going to consider hierarchies among us, in the first place, they are mine, because I was part of this decision. This is the reality. Raúl Castro (Granma, 17 July 2017)

Contents List of Illustrations  ix Notes on Contributors  x Introduction: Updating the Cuban Model  1 1

Building Alternatives Beyond Capital  16 Julio C. Gambina and Gabriela Roffinelli

2

The Social and Solidarity Economy in Latin America  29 Henry Veltmeyer

3

New Co-operativism in Latin America: Implications for Cuba  51 Marcelo Vieta

4

The New Guidelines: Economic Changes and Its Political and Social Impact  82 Olga Fernández Ríos

5

Co-operatives in Socialist Construction  100 Cliff DuRand

6

Co-operativism in Cuba Prior to 2012  110 Grizel Donéstevez Sánchez

7

Agricultural Production Co-operatives in Cuba: Toward Sustainability  128 Frederick S. Royce

8

Cuba’s Co-operative Sector and the Project of Deep Reforms  160 Al Campbell

9

Co-operatives in Cuba’s New Socio-economic Model: What Has Been Done and What Could Be Done?  179 Camila Piñeiro Harnecker

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Contents

10

The Role of Co-operatives in Transforming Cuba’s Economy  197 Sonja Novković

11

Supporting Co-operative Development in Cuba: Getting the Local Institutions Right  219 Milford Bateman, Dayrelis Ojeda Suris and Dean Sinković Conclusion  244 Index  255

Illustrations Figures 6.1 7.1 7.2 7.3 7.4 7.5 7.6 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8

The socialist socializing of production in Cuba’s agrarian economy  116 Production co-operatives and membership: 1959–2001  135 ‘Amistad Cuba Laos’ cpa organisational diagram, 1996  139 ‘9 de Abril’ ubpc organisational diagram, 2003  139 Total valencia orange production, ubpc ‘30 de Noviembre’  144 Selected food crops per cent of 1990 base production  153 Selected export crops per cent of 1990 base production  154 Number of agricultural co-operatives, March 2016  182 Percentage of land worked by agricultural co-operatives, 2007, 2011, 2014  183 Percentage participation of agricultural co-operatives in total production, 2015  184 Agricultural co-operatives members, 1981–July 2014  185 Number of agricultural co-operatives, 1977–2015  185 Approved co-operative proposals, different activities  188 Constituted co-operatives, June 2013–March 2016  189 Co-operatives and social responsibility  193

Tables 0.1 7.1 7.2 7.3 7.4 7.5

Conditions of human development, 2013  7 Cultivated land area by management, December 2000  133 Farmer demographics by organisation, 2000  134 Number of profitable agricultural production co-operatives, 2001  141 Per member income equivalent in Pesos, July 1994–June 1995  142 Effects of structural and functional characteristics of farms on managerial autonomy and worker participation  148

Notes on Contributors Milford Bateman is an independent researcher on issues of local development, a Visiting Professor of Economics at Juraj Dobrila University of Pula in Croatia, and an ­Adjunct Professor of Development Studies at Saint Mary’s University in Halifax, Canada. He is highly regarded as a development consultant, with recent assignments with the United Nations Conference on Trade and Development (unctad) and the United Nations Development Programme (undp). He is also widely recognised as one of the world’s leading academic experts and critics in the field of microfinance and its contribution to local development. His numerous publications include Why Doesn’t Microfinance Work? The ­Destructive Rise of Local Neoliberalism (Zed Books, 2010) and most recently an edited v­ olume, coedited with Kate Maclean, Seduced and Betrayed: Exposing the Contemporary Microfinance Phenomenon (University of New Mexico Press, 2017). Al Campbell is Professor Emeritus in economics at the University of Utah. He is a prolific writer on issues related to socialism, co-operativism and Cuba. Recent writings include ‘Updating Cuba’s Economic and Social Model: Where is it G ­ oing?’ ­Dimensions, March 2014; Cuban Economists and the Cuban Economy (editor and introductory chapter) (University Press of Florida, 2013); ­‘Socialism, Communism and Revolution,’ in The Edgar Companion to Marxist Economics, edited by Ben Fine and Alfredo Saad-Filho (­Elgar, 2012), ‘Cuba: A Project to build Socialism in a Neoliberal World,’ in T ­ rajectories of Globalization: Third World Economies in the Twenty-First Century (­Clarity Press, 2010). Grizel Donéstevez Sánchez is Professor of Local Development at the Universidad de Las Villas, Cuba. She is a specialist in rural development and co-operatives, and a consultant. She also advises the government commission in the province of Villa Clara for local ­development and co-operatives and has been involved for years in ­several international research projects as coordinator of a working group dedicated to ­research and the introduction of co-operative forms of self-­ managed ­production in Cuba, and the design of municipal strategies based on l­ocal  ­development. Her publications include La economia campesina en la transición socialista: el proceso de descomposición-campenización (Editorial Feijóo, 2008).

Notes on Contributors

xi

Cliff DuRand is a founder of and research associate with the Centre for Global Justice in San Miguel de Allende, Mexico. He organises a conference of philosophers and social scientists in Havana, Cuba (since 1990). He has lectured and published extensively on co-operativism and co-operatives in the development process, with particular reference to Cuba. He is the editor of Moving Beyond C ­ apitalism (Routledge, 2016) and Recreating Democracy in a Globalized State (­Clarity Press, 2012) on how corporate-led neoliberal globalisation is transforming nation-states into administrative units serving the interests of transnational capital. Olga Fernández Ríos is a researcher at the Institute of Philosophy of Havana, Cuba, and its Director from 1988 to 1999. She was Professor of Marxist Studies and Sociopolitical Theory at the Central University of Santa Clara and the University of Havana. She has held diplomatic posts in New York, Washington, DC, and Chile. She is a member of the Academy of Science of Cuba. Julio C. Gambina is Professor of Economics at the National University of Rosario (unr), ­Argentina. He serves as President of the Social Research and Policy Foundation (­F ISyP) and the Center for Studies and Training of the Argentine J­ udicial Federation (cefja). He is also a board member of Institute of Studies and ­Training of the Argentine Workers' Central Union (cta), and served as President of ­s epla—Society of Political Economy and Critical Thinking from ­Latin America—from 2016 to 2018. Publications include La crisis capitalista contemporánea y el debate sobre las alternativas (Fundación de Investigaciones ­Sociales y Políticas, 2013). Camila Piñeiro Harnecker is Professor and Researcher in the Center for the Study of the Cuban Economy at the University of Havana, and one of Cuba’s leading academic researchers  on co-operativism and co-operatives. She is the editor and c­ oauthor of ­Cooperatives  and Socialism: A View from Cuba (­Palgrave Macmillan, 2013). This book reflects the most up to date and systematic ­research  into and analysis of the role of co-operativism by Cuban academics. Her body  of work includes primary research of co-operatives and draws t­heoretical implications as well as the policy implications for ‘updating’ the Cuban model.

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Notes on Contributors

Sonja Novković has extensive experience related to workers’ self-management and the role of co-operativism and co-operatives in the economic development process. She is the Academic Director of Saint Mary’s University’s Co-operative Management Education program as well as Chair of the International Cooperative Alliance Research Committee. Her research specialty is workers’ participation,  ­co-operative economic theory, and comparative economic systems. ­Publications include Co-operative Innovations in China and the West (Palgrave MacMillan, 2014), Co-operatives in a Post Growth Era (zed Books, 2014), and Co-operatives for Sustainable Communities (University of Saskatchewan Press, 2015). In 2015, she co-edited a study for the International Cooperative Alliance titled, ­Co-operative Governance Fit to Build Resilience in the Face of Complexity (International Co-operative Alliance, 2015). Dayrelis Ojeda Suris is Assistant Professor of the Cuban Economy and a Management Consultant at the Center for the Study of the Cuban Economy (ceec) at the University of Havana. She is the author of several papers related to finance, knowledge management, internal control and the operations of non-agricultural c­ o-operatives. She is a member of the Cuban Scientific Society of Co-operativism and the Cooperative Network in the University of Havana. Gabriela Roffinelli is Profesor of sociology at the Universidad de Buenos Aires (uba) and teaches at the Universidad Popular Madres de Plaza de Mayo (upmpm). She is a researcher in the Department of Cooperatvism at the Centro Cultural de la ­Cooperación (ccc) and the Instituto Movilizador de Fondos Cooperativos (imfc). Her publications include La teoría del sistema capitalista mundial. Una aproximación al pensamiento de Samir Amin (Editorial de Ciencias ­Sociales, 2006). She has just finished writing a book on the Argentine co-operative movement (Existe una alternativa al neoliberalismo). Frederick S. Royce works as assistant scientist in the Department of Agricultural and Biological Engineering at the University of Florida. He specialises in crop simulation models; co-operative agricultural production systems; on-farm computer ­applications; climate and agriculture. He is also Program Manager for the Co-operative Agreement between the University of Havana and the University of Florida. He is co-editor with Carmen Diana Deere of Rural Social Movements in Latin America: Organizing for Sustainable Livelihoods (University Press of Florida, 2009).

Notes on Contributors

xiii

Dean Sinković is Assistant Professor of Economics, Vice Dean for Research and International Relations and the Managing Editor of the Economic Research Journal at the Faculty of Economics and Tourism ‘Dr. Mijo Mirković,’ Juraj Dobrila University of Pula. He also recently served as an Advisor to the Deputy Prime Minister of the Republic of Croatia for Economy, Finance and EU funds. Dr. Sinkovic holds an MS and phd in Economics from Juraj Dobrila University of Pula and an mba from the University of Illinois at Chicago. Henry Veltmeyer is Professor of Development Studies at the Universidad Autónoma de Zacatecas (uaz) in Mexico and Professor Emeritus in International Development Studies at Saint Mary’s University (Halifax, Canada). He is author, coauthor and editor of over 40 books on issues of Latin American and world development, including Critical Development Studies: Tools for Change (Pluto Press, 2011) and The Cuban Revolution as Socialist Human Development (Brill, 2011). Books co-authored with James Petras include Social Movements in Latin America: Neoliberalism and Popular Resistance (Palgrave Macmillan, 2011). He serves as co-chair of the Critical Development Studies (cds) Network and editor of the Routledge series, Critical Development Studies and The Essential Guide to Critical Development Studies (co-edited with Paul Bowles) (Routledge, 2017). Marcelo Vieta is Assistant Professor in the Program in Adult Education and Community ­Development and co-founder and executive committee member of the ­Centre for Learning, Social Economy & Work at the Ontario Institute for Studies in ­Education of the University of Toronto. Dr. Vieta researches and teaches on workplace and organisational learning and social change; the sociology of work; the social and solidarity economy; economic democracy; the philosophy of technology, and critical theory. Specialising in Latin America, Canada, and Italy, in recent years Dr. Vieta has been publishing on the historical conditions, the political economic contexts, and the lived experiences of co-operative movements in Argentina, Italy, Canada, and Cuba.

Introduction: Updating the Cuban Model Upon the takeover of state power in 1959 the Cuban revolutionaries embarked on a socialist path towards national development based on centralised resource allocation and policies that prioritised the satisfaction of the population’s basic needs. This approach led to a remarkable accumulation of human capital and the achievement of what the undp describes as a very high level of ‘human development’ (undp, 1990). But after the breakup of the Soviet Union in the early 1990s, Cuba experienced an economic crisis that placed its socialist model under enormous pressure, threatening its very survival. However, these adversities produced unexpected comparative advantages in organic and urban agriculture and the social service sectors, particularly medical services. But Cuba’s human development achievements were jeopardised by a seriously weakened economy and internal inefficiencies of its centralised command economic and political systems. This led to a two-decades long process of ‘structural reform’, which were accelerated with the ascent of Raúl Castro to the presidency in 2006. Pressured to open the economy to the so-called ‘forces of economic freedom’ (capitalism, the market, private enterprise), including the release of 500,000 employees from the state sector, the Cuban government opted for (or was forced into) a different path to economic transformation based in part on a more decentralised and democratic form of community-based localised development and a co-operative form of economic organisation. The subsequent Cuban experience with local development and co-operativism has serious implications for both development theory and practice. Since Yugloslavia’s extended (forty years or so) experience with a workers’ selfmanagement model no country has attempted to decentralise its socialist economic system with co-operative enterprise as a leading form of democratic social organisation of production. As discussed in Chapter 1 the call for a new world order in the 1980s in Latin America created various conditions that were highly favourable to the construction of a social economy based on local cooperative development with only limited engagement of the state and the market. One of these conditions was administrative decentralisation, which helped bring government closer to the people, i.e. promote social or popular participation in the development process. However, the policy of decentralisation in the region (see Rondinelli, McCullough & Johnson, 1989) was implemented within the framework of a neoliberal program of macroeconomic ‘structural reforms’ that exposed the multitude of farming and indigenous communities in the region to forces social change (modernisation, capitalist development and globalisation), which undermined their local rural economies and destroyed their ©  koninklijke brill nv, leiden, ���8  |  doi:10.1163/9789004361720_002

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Introduction: Updating the Cuban Model

built-up forces of production, forcing the impoverished peasantry—the rural poor in the development discourse of the World Bank and other agencies of international co-operation—to abandon agriculture and their rural communities (Delgado Wise & Veltmeyer, 2016). 1

From State Employment to ‘Cuentapropismo’

On September 13, 2010, the Cuban government made a stunning announcement: Within the following six months, state payrolls would shed half-a-million state workers. Additionally, the government would allow a great expansion of self-employment—known in Cuba as cuentapropismo (working on one’s own account)—which, it was hoped, would offset the planned layoffs. From the perspective of six years of hindsight the new measures marked a sea change in Cuba. They signalled the end of full employment as a right of citizenship and the arrival of a new relationship of the state to society, including the formation or reconstitution of both a private and social sector within a socialist system. To some extent this undoubtedly meant a turning of the clock back to the 1960s, back to the days prior to the ‘revolutionary offensive’ in which all small, privately-owned business and shops in the local economy were nationalised and statified—even the corner-store shops, family restaurants and the kiosks that dotted the streets in the local economy. On the other hand, it was well understood that there would be no going back—that this reversal of the 1968 ‘revolutionary offensive’ would be another revolutionary offensive in an attempt to restart the engine of economic growth and update the socialist model. Many observers and more than a few critics saw this measure as the first inevitable step in the restoration of capitalism—a road that other socialist states such as China and Vietnam were forced to take as a means of restarting a stalled motor of economic growth. On the other hand, the Cuban leadership insisted that it would not abandon socialism or embrace capitalism. But when the measures were announced, some observers speculated it would mean the end of socialism itself. However, the more compelling question was: how would the Cuban leadership now define socialism? In fact, notwithstanding the collapse of the Soviet socialist regime and system, and the end of what many described as ‘actually existing socialism’ modeled on the Soviet Union there are currently multiple models for socialism throughout the world, from the market reforms of China and Vietnam to the ‘twenty-first century socialism’ described by Hugo Chávez in Venezuela, and the more traditional Stalinist model still in place in North Korea—a model that, as discussed in Chapter 1,

Introduction: Updating the Cuban Model

3

bears little to no resemblance to the Cuban model of socialist development, which is unique in several regards. It was expected many Cubans would embrace the opportunity to engage in legal self-employment. Currently, the clear majority—some 85 per cent—of a total of about five million Cuban workers were employed by the state. About 600,000 worked in the legal private sector, mostly small farmers, and an additional 143,000 Cubans were licensed ‘cuentapropistas’, running tiny bike-repair shops or selling craft goods to tourists. In addition, an unknown number engaged in petty commerce off the books, doing everything from baking birthday cakes for neighbours to running informal taxi services. This was exactly the kind of activity the government hoped to formalise and tax, to resolve pending financial issues. Indeed, the list of activities approved for self-employment licenses were generally restricted to the urban services, such as transportation, the building trades, food services, and housing rentals. The government also hoped that extending the legal private sector would have ripple effects in the economy. For example, the announced changes would allow cuentapropistas to hire employees who are not family members—a major transformation in the Cuban context. Nevertheless, the new measures raised many logistical, organisational and even political questions. One was whether the disbursement of the new cuentapropista licenses would have any relationship to the planned layoffs? Government announcements initially gave the impression that the expansion of the private sector would more or less automatically absorb the jobless. Yet given the vast black market that already existed, it seemed likely that many of the licenses would merely legalise existing small businesses, or go to other Cubans currently informally employed. Meanwhile, others who were laid off from a state job might be unable to procure licenses or start businesses for various reasons—for example, the lack of materials or startup funds, or lack of an entrepreneurial culture. It was in this context that the idea of expanding co-operativism from the agricultural sector, where co-operatives were a major feature, to the urban economy appeared as an eminently sensible and practical solution to these and other problems. A second question was: how exactly would the layoffs be determined? A government document at the time listed the ministries and sectors that would be targetted, noting that the workers laid off should be those with poor attitudes and job performances, a principle open to wide interpretation and corruption as well as a prejudicial judgement regarding the private sector. And would these layoffs be followed by others? President Raúl Castro in his announcement of the new policy in August 2010 noted that state payrolls were swollen with a million unnecessary workers, but that the new measures were designed to shed only half a million. Another more serious

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Introduction: Updating the Cuban Model

question (regarding a fundamental socialist principle) was that if past recessions in Cuba and elsewhere taught policymakers anything, it was that layoffs could be expected to exacerbate social inequity and compromise the commitment to the principle of social equality. For example, the introduction of some market reforms in the 1990s tended to disproportionately favour light-skinned, better-educated Cubans, who managed to maneouvre into highly desirable positions, especially in tourism. In fact, following the announcement of the new measure, an association of black Cubans released an open letter warning of the ‘injustices that could accompany this process’, asking Cuban workers not to passively accept any actions that might be discriminatory. The fact that the government-aligned Confederation of Cuban Workers (ctc) called for workers to react to the new measures with ‘unity’ (read, support) at least implicitly raised the question of whether dismissed workers would have any recourse. Finally, the release of 500,000 workers from the state sector raised a series of questions about the adjustment measures that would be needed, and this included the possibility of business start-up funds or for the government to provide assistance and support services for workers who had no culture of entrepreneurship or absolutely no training or preparation for this adventure into private enterprise. Again, these were questions that turned an increasing number of cuentapropistas and policymakers towards co-operativism, helping to bring the role of co-operatives in the production and economic reform process into sharper focus. The policy dynamics of this process are discussed throughout this volume. 2

The Cuban Model of Socialist Human Development

The notion of human development advanced by the undp, and used to rank countries in its annual flagship publication The Human Development Report (undp, 1990, 2009, 2015), is predicated on capitalism as the operating system, even though no mention is ever made of it. The reason for this is that capitalism is deemed to be uniquely configured around the idea of freedom—the freedom of individuals to pursue their opportunities and advance their own interests in the pursuit of life-enhancing goals or what has been termed ‘human flourishing’ (Deneulin & Shahani, 2009). However, given the propensity of capitalism towards class division and uneven development, the concern of the economists at the undp and other agencies of international co-operation for development was, and still is, to give a human face to a capitalist development process that is anything but humane—to determine the best policy mix and institutional reforms needed to sustain the development process.

Introduction: Updating the Cuban Model

5

2.1 Development as Improvement in Human Welfare According to most scholars, Cuba’s greatest achievement in the first three decades of the revolution was the construction of a system that provides universal free access to education, healthcare and social security—human welfare broadly defined. The workings of this system over the years are reflected in Cuba’s achievement of a relatively high level of ‘human development’, particularly as measured by the undp —in terms of life expectancy and the level of education. In 1990, when the socialist world was collapsing and with the capitalist world order in disarray, Cuba was entering a system-threatening ‘special period’. The undp launched its flagship annual publication, the Human Development Report, designed to measure and rank countries according to their success in achieving ‘human development’. Cuba was ranked 62nd out of 130 countries on its ‘human development index (hdi)’. Two years later, Cuba ranking dropped as low as 81st (61st in the category of ‘developing countries’), a clear reflection of the drastic reduction in the gdp and thus per capita income. In 1993, reflecting both realities in Cuba and possibly methodological irregularities, Cuba was ranked 75th on the hdi vis-à-vis other ‘developing countries’ but 100th overall, while just a year later, Cuba’s ranking returned to 89th and 108th (out of an enlarged group of 173 countries). In terms of the undp’s ‘capability poverty’ measure Cuba ranked 10th out of all developing countries, not nearly as high as one might expect but then the country was at the nadir of a devastating economic crisis. From 1994 to 2000, when Cuba introduced a series of reforms designed to restructure the economy, a slow but persistent trend towards an improvement in socioeconomic conditions could be detected notwithstanding increasing inequalities. This trend was reflected in a steady improvement in the hdi ranking from 88th in 1994 to 58th in 1999, 56th in 2000 and 51st in 2009, placing it in the ‘high human development category’. What is most significant about this achievement at the level of social de­ velopment is that, as in the comparable case of Kerala,1 it was on a relatively low economic base: while Cuba ranks very high at the level of social development, indeed on par with the most advanced capitalist democracies, at the level of economic development it ranks among the low-income countries. i.e. the 1 Kerala is a state in India that has been compared with Cuba as a model of human development, and in regard to having achieved a high level of human development in conditions of relatively low economic growth (Tharamangalam, 2006). And like Cuba ‘Kerala has become a veritable mecca for other low-income nations in social development and health advancement’ (Thresia, 2014).

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Introduction: Updating the Cuban Model

conditions of social development were achieved on a relatively low-growth economic base. An improvement in the social welfare of the population, an essential dimension of human development under both capitalism and socialism, is generally brought about by the agency of the state. It entails the funding of programs designed to extend essential social services to the population, especially education and healthcare, and to ensure that basic human needs of everyone (for food, housing, health, etc.) are met. In the 1970s, this ‘basic needs’ paradigm provided the policy framework and was used to shape the development model of governments within both the capitalist system (the welfare-development state) and the socialist system (Cuba, for one). Within the capitalist system, the ‘welfare’ and the ‘development’ functions of the state require a redistribution of market-generated incomes via progressive taxation, channelling a share of these incomes into social welfare and development programs to build human capital and to ensure a modicum of social welfare. Under a socialist system, the provision of human welfare is a fundamental responsibility of the state and a matter of the highest priority, as reflected in the Constitution of the Cuban state. In this regard, the socialist state can be differentiated from any capitalist state, which in its legal and other institutions is designed first and foremost to provide security to property in the means of production—and to protect the inalienable rights of each individual as well as the freedom to pursue their self-interests. The socialist state in contrast, as in the case of Cuba, attributes these rights and this freedom to the individual but defines them in terms of a collective concern for shared values and beliefs, a culture of solidarity, which give a social form to individual human development. In addition to instituting a system of human welfare provision with universal coverage regarding education, healthcare and social security, the welfare function of the Cuban state was instituted in the form of a ration card that ensured the access of all citizens to affordable food and household needs, workplace comedores and daycare centres, and legislation limiting the cost of housing and rental charges to ten per cent of earned income. In addition to these programs and this social development policy, the government from the outset promulgated legislation designed to bring about a fundamental structural change in the dominant social relations of production and consumption. The first action taken and measures in this regard included land reform legislation designed to resolve the problem of landlessness and rural poverty by redistributing large landholdings among the direct producers and peasant farmers. Other measures included the socialisation and nationalisation of production, and a public system that provided employment and work for all, with a relatively flat or egalitarian payscale that provided for a relatively equitable distribution of earned income. Zimbalist & Brundenuis (1989) calculate that

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Introduction: Updating the Cuban Model

by 1965 the wage differential ratio between the highest and lowest groups of paid workers in the payscale was 4.3 to 1, vs. an estimated ratio of 25 to 1 prior to the revolution. Mesa-Lago calculates that the payscale differential was further reduced from 3.6 to 1 in 1966 to 2.6 to 1 in 1971 (Mesa-Lago, 2002: 225). Given that the income of most Cubans was regulated by means of this payscale (the only source of income at the time), the levelling effect of the government’s push towards a more egalitarian society is evident. Table 0.1 provides a snapshot of the social conditions resulting from these and other such policy measures and achieved after 25 years. The figures in Table 0.1 are averages. However, the universal coverage of the welfare system, and the lack of the fundamental class division in the distribution of wealth and income that is characteristic of other countries in the region and the capitalist world, means that the indicated social conditions are highly generalised. Unlike other countries in the region, there is no poverty and wealth at the extremes of the income distribution in Cuba. A study published in the December 2005 Medicc Review (López Pardo, Márquez and Rojas Ochoa, 2005) shows Cuba at the top of all Latin American countries in providing the greatest opportunities for human development, the elimination of avoidable inequalities considered unjust and a measure of human development (unlike the undp, whose Human Development Index (hdi) does not take into account social inequalities in the human condition). This Medicc Review study is based on statistics and reports by the undp, World Health Organization (who), Food and Agricultural Organization of the United Nations (fao) and related regional organisations in looking at longevity, literacy, access to safe drinking water, the student-teacher ratio, physicians per inhabitant, environmental protection, etc. ‘The combination of free and universal Table 0.1 Conditions of human development, 2013

Life expectancy Infant mortalitya Doctors per capita Literacyb Poverty

Cuba

US

UK

79.4 5.0 7/1000 99.8% 0

80.7 5.9 2.5/1000 95% 12%

79.1 3.9 2.8/1000 100% 17%

a 2013 data (undp, 2015: Table 9). b Adult %, age 15 and older. Source: undp (2009); Save the Children (2010); World Health Organization (2007); one (Cuba’s Office of National Statistics–2006).

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Introduction: Updating the Cuban Model

healthcare and education, public participation, and the willingness by the government to implement policies to maximise equity, has had positive effects on health outcomes’, they wrote in Medicc Review (López Pardo, Márquez and Rojas Ochoa, 2005). One of these outcomes had to do with infant mortality, which the who takes as an important ‘thermometer of social wellbeing’ (who, 2007). This thermometer had Cuba at 5.6 deaths per 1,000 live births compared, for example, to the US, where in 2005 it stood at 6.5. Table 0.1 showed an infant mortality rate of 5.0 per 1000 births for Cuba, while in the US it was 5.6 overall but 14.5 for black babies. In Cuba, it is possible to argue, there is no evident colour distinction in health conditions and healthcare. Other indicators of human development in 2005 were: under-five mortality rate: 7.7 per 1000 (5.0 in 2013), which was better than the average of the ‘most developed’ or ‘advanced’ countries and the best performance of all ‘developing’ countries (89–161); 99 per cent of births attended by professional staff; 5.5 per cent of low-birth weight babies. Also, Cuba has one of the fastest-aging populations (15.4 per cent are over 60 years old) but instead of cutting back on old age benefits, as in so many capitalist ‘democracies’, they were increased. In 2005, the minimum pension was raised by another 50 per cent. 2.2 Socialist Human Development as Equality, Freedom and Solidarity Human development in its social liberal variant, i.e. as predicated on capitalism as the operating system, has three essential dimensions: economic, political and social. The economic relates to, and is measured in terms of, per capita income, access to which is critical in capitalist societies wherein most people must work for and earn a living. The social relates to education and health, both of which allow individuals to live a life that they have reason to value and to realise their full human potential, as well as an equality of opportunity regarding access to resources for self-development and public services. The political relates to Amartya Sen’s conception of ‘development as freedom’, i.e. the ability and freedom of individuals to take advantage of their opportunities for selfadvancement (‘the enlargement of choices and opportunities’)—‘equity’, or ‘equality of opportunity’, as presented in mainstream development discourse (eclac, 1990). In the original conception of human development, as embodied in the undp’s annual Human Development Report, there is no conception or measure of social inequality or of development as a condition given to all. Thus, the Human Development Index, or hdi, measures the social condition of individuals within the population as a whole, as a statistical average. In a class-divided society in which wealth and income tend to be concentrated— with a small group of super-rich, or the top one per cent, appropriating the

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lion’s share of the nation’s wealth (up to 30 per cent in the case of the US today)2—this statistical average has no meaning. In a socialist system, however—at least, in principle or in the case of Cuba— it is entirely different. Each dimension of the human development process (equality, freedom, solidarity) is understood in terms of conditions that are ‘equal for all’, conditions that cut across the ‘intersections of social inequalities’ or ‘multiple sources of disadvantage, such as class, gender, caste, race, ethnicity’—militate against human development (Sen, Iyer & Mukherjee, 2009). Thus, unlike capitalist human development, socialist human development is measured in terms of the degree to which this condition is achieved as well as an equity or fairness in the allocation and distribution of productive resources (Díaz, 1992). 3

A Synopsis of the Book

As discussed above, a defining feature of the Cuban Revolution was the institution of a socialist model of human development. This model was in part based on a commitment to the principle of social solidarity, which is fundamental to co-operativism, but—reflecting its origins in the ideological struggle between a capitalist west and a socialist east—the Cuban model of national development in part also hinged on a state-led and state–centred policy of nationalising the means of social production. At issue here is the Soviet model of socialist development and the legacy of this model as well as the legacy of six decades in the evolution of the world capitalist system (three decades of state-led development and three decades of ‘structural reform’ of macroeconomic policy under the Washington Consensus on the virtues of free market capitalism). The point is that both the road towards socialism taken by the Cuban Revolution, and the 2 Income distribution in many countries over the past three decades of free market capitalism (neoliberalism) has become increasingly skewed, with the top 10 per cent of income earners taking an increasingly larger share of the nation’s wealth. This is particularly the case for the US, where in 2012 the top decile share of total income was 50.4 per cent, the highest since 1917 (Saez, 2013: 121). The share of total income appropriated by the top one per cent is even more obscene. The income of this group from 2009 to 2012, in the wake of the ‘global financial crisis’ in which millions of Americans lost their homes and savings, grew by 31.4 per cent while the total income of the bottom 99 per cent grew by 0.4 per cent and that of the bottom half fell, pushing many into poverty (ibid.: 120). Under the same conditions but in a global context the 85 richest individuals in the world, according to an Oxfam report presented at the World Economic Forum Report in Davos (Brito, 2014), have a combined income of 3.6 billion of the world’s poorest. And, of course, wealth is much more concentrated than income.

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current project of ‘updating’ the economic model used to chart the course of socialist development, should be understood in their specific context. On this point, Julio C. Gambina and Gabriela Roffinelli, in Chapter 1, outline some elements of the current Latin American panorama that provide a useful perspective on the possible role of co-operativism and co-operatives in this updating process, as well as how to build a socialist alternative to the capitalism of the day, or neoliberalism. As they reconstruct it, the political panorama is defined by a widespread disenchantment in the region and outright rejection of the neoliberal model of capitalist development brought about by the activism of the social movements in the popular sector. This activism created conditions for ushering in a progressive cycle in Latin American politics, a cycle characterised by a search for alternatives to both neoliberalism and capitalism, and the emergence of a widespread movement for local development and diverse experiments across Latin America focused on the construction of a social and solidarity economy. Henry Veltmeyer elaborates on the meaning of these experiments involving the evolution of co-operativism in Cuba in Chapter 2. In Chapter 3 Marcelo Vieta elaborates on this social and solidarity economy with specific reference to what in the Cuban context is described as the ‘new co-operativism’. As he sees it, Cuba’s still-emergent economic reforms promise to open the way for an expanded ‘non-agricultural’ co-operative movement to flourish on the island. As discussed by Olga Fernandez in the Chapter 4, these economic reforms began with the ‘Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution’, widely known as Los Nuevos Lineamientos, the new (economic) guidelines of the Sixth Congress of the Communist Party of Cuba, adopted on April 18, 2011. As Vieta shows the development of non-agricultural co-operatives have been spearheaded by new legislation passed by the National Assembly in 2012. Quickly expanding Cuba’s co-operative sector, which to that point was almost entirely in the agricultural sector, by late-2015 there were already almost 500 new non-agricultural co-operatives across the country in sectors such as gastronomy, construction, retail, technical services, maintenance and repair, light manufacturing, and in public services such as transport and waste collection. But, Vieta argues, Cuba is still at a crossroads. While an expanded co-operative economy has the potential to both protect the gains of Cuba’s Revolution and reimagine its socialism as a more inclusive and participatory one, there are also pressures to privatise the economy. Alongside co-operatives and state-run enterprises, the economic reforms also promote foreign direct investments and permit private businesses using wage-labour. As Vieta sees it, this means that some form of competitive market economy will bring tensions to Cuban socialism and its new co-operative sector.

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In Chapter 4 Olga Fernandez elaborates on the new guidelines (los lineamientos) as they relate to both co-operative development in the country and the social and political impacts of the economic reforms introduced over the past eight years with Raúl Castro’s ascension to the presidency. In Chapter 5 Cliff DuRand takes issue with some ideas advanced by several scholars in their understanding of the role of co-operatives in a socialist economy. He conceptualises socialist construction as a process of incremental reclaiming from capital of those resources that can best be held in common so that members of a community can achieve their fuller human development. As he sees it, under democratic rules the community regulates the commons to ensure its accessibility and sustainability. The formation of co-operatives in this context is an instance of the socialisation of the workplace. By bringing workers together into self-governing collectivities, he argues, co-operatives also contribute to the socialisation of workers to a socialist moral order. He further argues that in Cuba a socialised state is fostering the socialisation of civil society through the promotion of co-operatives. In Chapter 6 Grizel Donéstevez Sánchez reviews Cuba’s experience with cooperativism before 2011, while Frederick Royce, in Chapter 7, reconstructs the history of agricultural production co-operatives in Cuba and the role these cooperatives have played in Cuba’s socialist economy over the years. Any comprehensive treatment of co-operatives in Cuba must include the agricultural production co-operatives, particularly the cpas (existing from around 1980) and ubpcs (mostly formed 1993–94). This chapter is based on a paper presented at the Fourteenth Annual Meeting of the Association for the Study of the Cuban Economy. Although written 13 years ago, it remains an excellent guide to the origins, current status and future prospects of Cuba’s ubiquitous co-operative farms. The case study examples still reflect many of the issues confronting these production collectives. Most of the references are to original sources, so they remain valid. Time constraints have prevented updating of other references for which more current data would be useful. The author is currently working on a fully current version, but for now this partially updated paper, including an epilogue with up-to-date information, remains one of the most concise and accessible treatments of the topic. In Chapter 8, Al Campbell analyses the impact of Cuba’s process of structural reforms over the years on Cuba’s co-operative sector. These reforms and adjustments to Cuba’s socialist model have been constant and continuous virtually as of the beginning of the Revolution, but the reforms that marked the ‘Special Period’ (as of August 29, 1990) were deeper and broader than in the earlier years. The deep reforms instituted in the context of the Special Period were designed to adapt the economy and the socialist model to forces of

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change emanating from the global economy, but it was not until 2010 that the government took the first major step in systematising its two decades of experience with finding a new economic and social model for building socialism. The basic principles of this new model were outlined in a document drafted by the Communist Party of Cuba (pcc), what became known simply as Los Lineamientos (The Guidelines). The second step in the government’s updating of the socialist model was taken in the summer of 2016. It took the form of a ‘longterm plan’ that clarified the meaning of socialism in the Cuban context, and outlined the government’s strategy for achieving it. The chapter also discusses the implications of this ‘long-term plan’ for the co-operative sector—how co-operatives might fit in Cuba’s new socioeconomic model and the role that co-operatives are expected to or could possibly play. In Chapter 9 Camila Piñeiro Harnecker elaborates on this model with a systematic analysis of what has been done and what could be done? As she reconstructs it—and documents in detail—since 2011 Cuba has taken several measures to strengthen agricultural co-operatives and has promoted the creation of co-operatives in varied economic sectors beyond agriculture. After the approval by the Cuban people of these Guidelines, beginning in 2012 a series of measures have been taken—even if rushed and insufficient—to overcome existing agricultural co-operatives’ problems, and simultaneously promote cooperative creation in other economic sectors through the establishment of a legal framework for the so-called ‘non-agricultural co-operatives’ approved in December of that same year. This reflects a decision taken in 2011 by the Cuban government—with the approval of the Cuban people—to make co-operatives the most significant business form after the state-managed enterprise, with priority over private businesses. While policies and legislations giving cooperatives preferential treatment over private business have been established in other countries, what is significant in Cuba’s case, Piñeiro points out, is that many of the co-operatives to be created would derive from state enterprises. The transformation of state enterprises into co-operatives represented great challenges for the government, but also opportunities. The chapter examines the role that co-operatives are playing in Cuba’s economy with a critical view, looking at shortcomings and pitfalls. It concludes with some suggestions regarding actions that could be taken for co-operatives to contribute significantly to increasing economic efficiency as well as satisfying basic social needs. In Chapter 10, Sonja Novković reviews Cuba’s experiment with cooperativism within a socialist economic system to draw important lessons for the co-operative movement. Co-operatives, she notes, typically function within capitalist market systems where they face pressures from competition with

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investor-owned businesses and institutions designed to support and protect investors, often encounter barriers in accessing finance, and can succumb to capitalist market logic in their hierarchical governance systems. Co-operatives in capitalism often identify as non-capitalist or anti-capitalist, but rarely as socialist. In fact, little is known about how co-operatives function within socialist systems. The aim of this chapter is to explore the underlying features of socialist co-operatives as well as dissect the role of co-operatives in the Cuban transformation of its socioeconomic model. The particular emphasis is on the ability of co-operatives as an agency of human development, thereby continuing the legacy of the Cuban Revolution. Cuba is currently undergoing an historic transition away from its longstanding but inefficient centrally planned economy model towards a more decentralised, flexible, participative ‘bottom-up’ model of development. Initiating this potentially far-reaching transition began at the historic 6th Party congress in 2011 when the Cuban government announced major changes to the economic system. Among the changes put forward was an important stipulation that the Cuban government wished to put much less emphasis upon state ownership and in its place, build a major co-operative enterprise sector. Following that decision there has been much subsequent discussion among Cuban economists, notably in an important edited volume by Cuban economist Piñeiro-Harnecker, as well as within the wider academic and international development community, as to what practical measures now need to be undertaken to best promote the co-operative sector. The concluding Chapter 11 by Milford Bateman, Dayrelis Ojeda Suris and Dean Sinković is meant as a contribution to this important debate. Much of the debate so far, especially that underway in the US academic and thinktank communities and in US government institutions, argues that the transition would be best facilitated if the Cuban government were to adopt a firmly neoliberal-oriented transition policy package; that is, deregulate and de-statify the economy, allowing for the growth of a vibrant ‘private sector’ and the driving force of entrepreneurship and private enterprise. The authors of this chapter demystify this ideology and turn towards the practical lessons to be learned from the most successful episodes of sustainable and equitable enterprise development in those countries that have undergone a broadly similar transition to the one that Cuba is undergoing today. Of particular relevance in this regard is what they construct as the ‘local developmental state’ model, a local state-driven way of successfully promoting enterprise development ‘from the bottom-up’. The central argument of the chapter is that Cuban local governments need to pay heed to the ‘local developmental state’ model and take the lead in promoting co-operative enterprise development by building a constellation

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of local state-driven promotional, advisory, financial, r&d, public procurement, technology-transferring and regulatory institutions. References Brito, A. (2014). Os 85 mais ricos do mundo têm tanto como a metade mais pobre. Economia. Retrieved from . Accessed 07 July 2016. Delgado Wise, R. and H. Veltmeyer (2016). Agrarian Change, Migration and Development. Halifax: Fenrwood Publications. Deneulin, S. and L. Shahani (eds.) (2009). An Introduction to the Human Development and Capabilities Approach: Freedom and Agency. London: Earthscan / idrc. Díaz Gonzalez, Beatriz (1992). Cuba, modelo de desarrollo con equidad. Sistemas políticos. Poder y sociedad. Estudios de caso en América Latina. Caracas: Nueva Sociedad. eclac—Economic Commission for Latin America and the Caribbean (1990). Productive Transformation with Equity. Santiago: eclac. López Pardo, C., M. Márquez and F. Rojas Ochoa (2005). Human Development and Equity in Latin America and the Caribbean. Medicc Review. November-December.: 21–28. Retrieved from . Accessed 03 September 2016. Mesa-Lago, C. (2002). Models of Development, Social Policy and Reform in Latin America. Geneva: unrisd. one. (2006). Estudio y Datos Sobre La Población Cubana, Publicación No. 35. República de Cuba, Centro de Estudios de Población y Desarrollo. Rondinelli, D.A., J. McCullough and W. Johnson (1989). Analyzing Decentralisation Policies in Developing Countries: A Political Economy Framework. Development and Change, 20(1): 57–87. Saez, E. (2013). Striking it richer: The evolution of top incomes in the United States. Real-World Economics Review, No. 65. Retrieved from . Accessed 16 November 2016. Save the Children (2010). State of the World’s Mothers 2010. Fairfield, CT. Sen, G., A. Iyer and C. Mukherjee (2009). ‘A Methodology to Analyse the Intersections of Social Inequalities in Health’. Journal of Human Development and Capabilities, 10(3): 397–415. Tharamangalam, J., ed. (2006). Kerala: The Paradoxes of Public Action and Development. Hyderabad: Orient Longman. Thresia, C.U. (2014). Social Inequities and Exclusions in Kerala’s ‘Egalitarian’ Development. Monthly Review, 65(9). February.

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undp (1990, 2009, 2015). Human Development Report. New York: Oxford University Press. who—World Health Organization (2007). Core Health Indicators for the Americas. The whosis Database. Geneva: who. Zimbalist, A. and C. Brundenius (1989).The Cuban Economy. Measurement and Analysis of Socialist Performance. Baltimore and London: The Johns Hopkins University Press.

Chapter 1

Building Alternatives Beyond Capital Julio C. Gambina and Gabriela Roffinelli Latin America is on a new course, challenging as it has the ideological ­consensus of the late 20th century as to the virtues of free market capitalism, and rejecting neo-liberalism as an economic doctrine and policy agenda. As the 21st century began, the dynamics of mass mobilisation changed the correlation of force in the class struggle, initiating a progressive cycle in Latin American politics. Popular uprisings (Ecuador 2000, Argentina 2001 and Bolivia 2003) ­exploded in opposition to the neo-liberal policy agenda, gaining enough force to overthrow several governments and induce a process of progressive regime change within the prevailing neoliberal climate. In rejecting the ‘end of history’ doctrine decreed by the ideologists and theorists of imperialism, the uprising and mass mobilisations in the popular sector revived a debate about social emancipation from class and imperialist exploitation, and put socialism back on the political agenda.1 However, the process of transformative social change underway in Latin America is contingent on the convergence of diverse anti-capitalist struggles and a common struggle for socialism. 1

Building a Socialist Alternative to Neoliberalism and Capitalism

The new historical era shaping up in Latin America and the Caribbean as the 21st century gets underway has revived the debate about emancipation and 1 In December 2004, during the First World Meeting of Intellectuals and Artists in Defense of Humanity, held in Caracas, Venezuela’s President Hugo Chávez Frías described the government’s political project as the construction of ‘21st Century Socialism’—to contribute to the path based on solidarity, fraternity, love, liberty and equality. As Chávez outlined this project (of creating ‘a culture that is qualitatively different from bourgeois civilization’), it meant three things: (i) replacing the market economy with an economy of democratically planned value; (ii) replacing the classist State with a public affairs administration at the service of the majority; and (iii) replacing plutocratic democracy with direct democracy. This, he argued, ‘is the New Historical Project of the Majorities in Global Society, which we call “21st Century Socialism” or Participatory Democracy’ (Chávez Frías, ‘21st Century Socialism.’ At: http://www .aporrea.org/actualidad/a12597.html).

©  koninklijke brill nv, leiden, ���8  |  doi:10.1163/9789004361720_003

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new forms of social development. In this context, it is relevant to take a fresh look at economic experiences with aspirations for social transformation, and a fresh look at socialism. At the same time, the ongoing international economic and financial crisis could represent an opportunity for Latin American countries to build the type of integration that benefits the people, and that can initiate a partial disconnection from the world capitalist system. Every country has a formulation for identifying its local process, and with that, we would like to emphasise that the current experience in the region still has a national character, aside from certain initiatives that aspire to global or regional articulation, such as the Bolivarian Alliance for the Americas (Alianza Bolivariana para las Américas, alba) and others promoted by Venezuela in its privileged association with Cuba; but also, others inspired by Brazil for recreating a role of regional leadership. On the institutional level, there is still a long way to go for the articulation of a common proposal under a unified leadership with an emancipatory perspective (Gambina, 2008). Experiences of the 20th century have taught us that it would be a profound error for leftist forces to support a form of Latin American integration that is dominated by big capital in the hopes of giving it an emancipatory content later, perhaps in a second stage. From a class-based perspective, the integration project led by Venezuela, Bolivia, Cuba and Ecuador is largely based on social justice, involving a return to public control over the region’s natural resources and the basic means of production, credit and commercialisation. Likewise, a genuine emancipation process should aim to free society from capitalist domination by supporting ‘forms of property that have a social function: small private property, public property, co-operative property, communal and collective property, etc. Latin American integration implies the establishment of a common financial, legal and political architecture’ (Toussant, 2009). These should be forms of associated property oriented toward the production of use-values. They should radically alter the self-contradictory internal dynamics of the dominant social order, which imposes the brutal subjugation of human needs to the alienating needs of capital’s expansion. 2

Co-operativism as a Solidarity-based Form of Association

In this context of building regional and global alternatives, the co-operative movement and other associative, community and non-profit-based forms can make an important contribution to organising the production of goods and

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services for meeting the needs of the most vulnerable sectors of society. Our hypothesis is that between the co-operative movement and the socialist ideal, something could take place that we call elective affinity, defined by sociologist Michael Löwy as ‘a very particular type of dialectical relationship that is established between two social or cultural configurations, and that cannot be reduced to a direct causal determination or influence in the traditional sense’ (Löwy, 1997: 9). A dialectical relationship exists between socialism and co-operativism that benefits from or is affected by certain social and historic conditions. In fact, this dialectical relationship was never definitively configured. On the contrary, at different times throughout history, we can find examples (we might say they are predominant) of how that relationship practically disappeared, and cooperativism and revolutionary socialism took very different roads. In the early days of co-operativism in 19th century Europe, workers organised co-operatives as a response to the harsh living and working conditions imposed by the Industrial Revolution. Their original sources of ideological inspiration, so-called utopian socialists such as Robert Owen and Charles Fourier, were imbued with profound anti-capitalist sentiments. The social injustice that surrounded them led them to design and put into practice alternative social organisations, which were resounding failures. From the start, these mutual aid and solidarity-based organisations were oriented toward building alternatives with a perspective of socialist change. According to Marx and Engels, these utopian socialists had designed their organisations based on the ‘undeveloped state’ of class struggle, and therefore they did not understand the social antagonisms involved, and hoped ‘to improve the condition of every member of society, even that of the most favoured. Hence, they habitually appeal to society at large, without the distinction of class; nay, by preference, to the ruling class. For how can people, when once they understand their system, fail to see in it the best possible plan of the best possible state of society?’ (Marx & Engels: 1969: 98–137). Marx and Engels harshly criticised the utopians for rejecting political action, especially revolutionary action. ‘…They wish to attain their ends by peaceful means, necessarily doomed to failure, and by the force of example, to pave the way for the new social Gospel’ (ibid.). Nevertheless, Marx emphasised that the great merit of co-operatives during his time was that they demonstrated how the production process does not need to be managed and controlled by capital. ‘The value of these great social experiments [co-operative factories] cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence

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of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolised as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart’ (Marx, 1864). In Capital, Marx described co-operation among many workers as having a heteronomous aspect, that is, it was organised and controlled under the ‘despotic’ management of capital; this is what made the audacity of ‘these social experiments’ important. For Marx, workers who autonomously formed production co-operatives were demonstrating that they could recoup their forces, self-organise and manage their own ability to co-operate for production. In Chapter 13 of Capital, Vol. 1, Marx writes that the coordinated labour of many workers in the same space generates a new type of power, ‘a stimulation of the animal spirits’ that increases each worker’s productive capacity. Each worker thus becomes part of a single combined or collective worker. In planned co-operation with others, workers shed their individual difficulties and develop their abilities as social animals (Marx & Engels, 1867). Co-operation achieves a productive force that is augmented for several reasons, but principally because it increases the mechanical potential of labour, restricts the spatial scope of labour (given that it brings many workers together in the same physical space) and expands the field of action (by economising expenditures and concentrating the means of production). By increasing each worker’s productive capacity, co-operation makes it possible to produce more goods in less time. However, who takes possession of this heightened productivity of the workforce? And who plans production using co-operation? Is it the workers? In the capitalist system of production, the answer obviously is no. It is capital that plans and brings together wage workers. ‘Hence wagelabourers cannot co-operate, unless they are employed simultaneously by the same capital, the same capitalist, and unless therefore their labour-powers are bought simultaneously by him’ (ibid.). Thus, Marx observed that under the capitalist system of production, workers cannot work in co-operation autonomously. They can only do so in heteronomous conditions, under capital’s management, a ‘despotic’ management that seeks to exploit the workers’ co-operative labour for its own benefit. The unity of workers as a ‘single productive body’ comes from the outside, from capital, which brings them together and keeps them united. The capitalist represents an outside will that submits the workers to his own goals. In Capital, Marx indicates and describes the predominant situation in capitalist society, which is co-operation under capitalist management and

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expropriation. However, at the same time, he celebrates the initial attempts of workers to appropriate their own potentials, demonstrating that the despotic management of capital can be replaced successfully by the democratic management of workers themselves. Marx refers to this several times in his work, such as a footnote in Chapter 13 of Capital, where he ironically notes that a British newspaper, The Spectator, ‘finds that the main defect in the Rochdale co-operative experiments is this: ‘They showed that associations of workmen could manage shops, mills, and almost all forms of industry with success, and they immediately improved the condition of the men; but then they did not leave a clear place for masters. Quelle horreur !’’ In his analysis of the events in France in 1871, Marx more openly lays out his ideas about the role co-operation would have in a society that aims to build socialism. Under socialism, social production would be ‘a harmonious and vast system of co-operative work.’ The Paris Commune had decreed that all industry, including manufacturing, would be organised into co-operatives, but did not stop there; it also ordered the creation of a Great Union of these workers’ co-operatives. Both Marx and Engels (Engels, 1891; Marx, 1871) said that if this union had been developed at that time (necessarily assuming the Commune’s victory over its enemies), it would have led obligatorily to communism. Marx, in discussing the civil war in France, wrote: Yes, gentlemen, the Commune intended to abolish that class property which makes the labour of the many the wealth of the few. It aimed at the expropriation of the expropriators. It wanted to make individual property a truth by transforming the means of production, land, and capital, now chiefly the means of enslaving and exploiting labour, into mere instruments of free and associated labour. But this is communism, ‘impossible’ communism! Why, those members of the ruling classes who are intelligent enough to perceive the impossibility of continuing the present system—and they are many—have become the obtrusive and full-mouthed apostles of co-operative production. If co-operative production is not to remain a sham and a snare; if it is to supersede the capitalist system; if united co-operative societies are to regulate national production upon common plan, thus taking it under their own control, and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production—what else, gentlemen, would it be but communism, ‘possible’ communism? marx, 1871

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Therefore, the experience and organisational model of co-operativism can help to make co-operation a valuable tool for the struggle of the toiling classes in capitalist society to overturn the existing order and, at the same time, to build a socialist society. The values and practices of co-operation, such as solidarity, self-management, democratic participation by members, non-discrimination and equality in decision making, become a valid tool for building a more just and egalitarian society. The solidarity-based and democratic social practice promoted by co-operation is oriented toward satisfying human needs and not putting a value on them; therefore, co-operation contributes richly to the social process of building a profoundly humanist society. If we return to the ideals, values and practices of co-operation in the same way that Marx (and subsequently Lenin) did, we can orient ourselves toward building a form of socialism that breaks with the despotic rule of the law of value. It is not a question of building market socialism—as some proposed in view of the crisis of ‘real socialism’ experiments of the 1980s, which resulted in merely centralised, statist, technocratic bureaucracies—where the production of commodity values would continue to prevail. On the contrary, it is a question of organising a production system that takes ‘human needs into account: needs that are real and historically in development, both of society as a whole and of individuals in particular’ (Mészáros, 2008). Consequently, a democratic, participatory, solidarity-based and co-operative society cannot be built by fostering the development of the market as the official distributor of available resources, indirectly, by allocating all the social labour in the different branches of production through the mediation of the universal equivalent and price fluctuations. That monetary and mercantile mediation involves a process that is carried out ‘behind the backs’ of the direct producers, coercing and obliging them to follow the logic imposed by the market. This functioning ‘behind the backs’ of human beings implies their complete lack of control over their living conditions, which, through the power of the market, have taken on a life of their own, and have become irrationally autonomous; an autonomy that is turned against the social producers. In that case, the contact and reciprocal relations among social subjects are limited to the mediation of things, leading to what Marx called commodity fetishism, evidencing that lack of control and autonomy from the producers that is achieved by the market. The logic of co-operation in production and distribution tends to ‘clash’ with the logic of commodification. This will only end when distribution occurs without the mediation of money and without being subject to the hegemony and control of capital. The logic of co-operation will become hegemonic in a society that has advanced toward a transcendent reorganisation, one that

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goes ‘beyond capital’. Such reorganisation would be guided by the well-known Marxist principle of distribution, which holds that in an advanced socialist society people will work according to their abilities and will receive from the general social product according to their needs. Mészáros reminds us that ‘this principle is often interpreted with bureaucratic bias, ignoring the emphasis that Marx placed on the self-determination of individuals, without which working according to their abilities means little’ (Mészáros, 2007: 204). However, the tendency expressed by the logic of co-operation is not necessary or inevitable. The economy does not function on its own. Only when a political force intervenes with a radical perspective of subverting the mercantile order and developing social co-operation, through democratic planning of the distribution of all social labour in all branches of production, will it be possible to overcome the heavy historic burden of the market, its irrationality and the subjective conditions it generates and reproduces. In this sense, Löwy says that: …far from being ‘despotic’ in and of itself, democratic planning is how all of society exercises its own freedom: the freedom of decision, and freedom from the alienated and objectified ‘economic laws’ of the capitalist system, which determine the lives and deaths of individuals, and their confinement to the economic ‘iron cage’ (Max Weber). Planning and the reproduction of labour time are the two decisive steps by humanity toward what Marx called ‘the kingdom of freedom.’ A significant increase in free time is, in fact, a necessary condition for workers’ democratic participation in democratic discussion and in administering the economy and society. löwy, 2007: 3

The only way to ensure equitable and rational distribution of a society’s available resources cannot be mercantile allocation through price fluctuations after exchange. That allocation would be trapped in the alienating structural limitations of the capitalist order, which produces commodities to sell (obtaining their ‘value’) and not use-goods for satisfying human needs, both stomach and of the spirit. Marx says that in the capitalist social order it is only at the point of exchange that: …the products of labour acquire an objectivity of value, socially uniform, separate from their objectivity of use, sensorially diverse. That division of the labour product into use-object and value-object is only effected, in practice, when the exchange has attained sufficient extension and

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relevance so that useful objects are produced for exchange, because in their very production, the character of the value of these objects is taken into account. Therefore, capital’s objective logic in producing values for exchange contradicts the non-capitalist logic of the equitable and rational distribution of society’s available resources. On the contrary, equitable and rational distribution can only be achieved by genuine socialisation before exchange, via democratic planning by freely-associated producers. The rational organisation of production and distribution …must be a task not only for ‘producers’, but also for consumers, and in fact, for all of society, including its productive and ‘unproductive’ population, which includes students, young people, housewives, pensioners, etc. A real ‘association of free human beings (Menschen), who work with the means of production in common (gemeinschaftlichen)’ (ibid.). The socialisation of the economy that occurs through democratic planning serves as a guarantee that co-operation in production can serve as a lever— within a broader socialist project—to eliminate commodification and its consequent irrationality, or ‘lack of control’ by society. In a society without a market and without bureaucratic planning, it is the large majorities who will make the decisions about how much and what is produced, with the goal of meeting the needs of the whole population, which in its turn, will provide the ‘objective bases for the disappearance of the production of commodities and monetary exchange’ (Mandel, Nove & Elson, 1992: 40). As Mészáros has said, it is a question of: …instituting a socioeconomic and cultural order that is non-antagonistic, rational and humanely managed, fully conscious of the fundamental meaning of ‘economy,’ such as the truly serious economisation of resources in the interest of sustainable human satisfaction, within the framework of overall planning led actively by all individuals. mészáros, 2005: xvi

This is part of the unfinished debate in Cuba in the early years of the Revolution led by Ernesto Che Guevara about overcoming the law of value in socialism. It continues to be a pending issue that involves eliminating mercantile relations of exchange, which requires certain resolutions that social practice has not yet resolved.

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Mercantile forms are historic (they emerged before capitalism), and it is appropriate to question the historic prospects of a form of exchange that developed society’s productive forces to unimaginable limits, developing capitalism and the state and institutional forms that explain today’s depredation of nature and society. Is it possible to build alternatives beyond the logic of mercantile exchange and the law of value? In Cuba, this was discussed. Bolivia is now formulating a proposal, which, if achieved, could result in new theoretical syntheses that are based on returning to ancestral practices and values.2 All of this involves more than an assessment of those two countries and processes; it entails the possibility of having a discussion in the present about matters of extreme importance for social development. The Bolivian process is taking place within capitalism; nevertheless, what is being proposed could be considered as revolutionary. As we can see, it is not just a question of discussing the market based on a proposal for different relations of production among producers. The issue at hand is the form of producing, distributing and consuming. Moreover, it is not enough to formulate an alternative. The construction of another social order must be proven in practice. However, let us agree that the relationship of exchange expresses an exchange of equivalents, and that, therefore, the problem is not just the law of value, but also the capacity for exploitation explained in the law of surplus value.3 It is the non-equivalent exchange of labour power for wages that generates the production of surplus and private appropriation of the social product. The problem, then, lies in the conditions of the exchange of labour power for wages, which is the economic basis for building capitalist society. That social relationship of exploitation is what defines the nature of civil society, and upon it rests capital’s overall domination over labour and society.

2 Bolivia’s new Constitution refers to ‘living well’ in social solidarity and harmony with nature (Sumak Kawsay). a contradictory category in the Western (capitalist) paradigm associated with patterns of consumption (asymmetrical among and within countries) and production (including the destruction of the environment). It is a category yet to be defined, linked to a return to forms of conceiving society by some indigenous communities. 3 The law of value explains the exchange of ‘equivalent’ products. According to that law, for example, the price of a commodity equals its ‘value,’ just as wages express the ‘value’ of labour power. On the other hand, the law of surplus value provides evidence of exploitation since a higher value [than total wages] is created in the process of production. This problem can be seen in the three cycles of capital. In the money cycle of capital (m-c) and in the commodity cycle of capital (c’-m’). it is clear that equivalents are exchanged; however, in the production cycle of capital (c-c’). what takes place is the conservation of constant capital and the appreciation of variable capital (which includes workers’ wages).

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In our opinion, association based on workers’ autonomous co-operation is a social practice for the economic organisation of society that involves an alternative strategy to that of domination, which is what takes place in the wage-labour relationship. We view that practice as being within the realm of emancipation, because it is a social practice exercised for freedom from the subordination that signifies the hegemonic mode of producing and reproducing living conditions and life itself. 3

The Transformative Subjectivity of ‘Another Economy’

The autonomous and co-operative organisation of subjects has shown that it is possible to organise the labour process and the fulfillment of common needs (such as housing, credit, public services, etc.) through forms that are based on co-operation, democracy and the active participation of all. On the contrary, in capitalist societies, labour has lost its capacity for being a vital and creative activity for human beings. It creates estrangement, or alienation, among human beings; it alienates workers from the products of their labour and from production as an activity. This is the direct result of a social order that produces wealth socially, wealth that is then appropriated privately and without any rational control, based on the subsequent trial and error process of mercantile exchange. Organising the labour process autonomously, without ‘the despotic management of capital’, produces important results for the attainment of a counterhegemonic collective subjectivity. In Marx’s words: According to the economic laws the estrangement of the worker in his object is expressed thus: the more the worker produces, the less he has to consume; the more values he creates, the more valueless, the more unworthy he becomes; the better formed his product, the more deformed becomes the worker; the more civilised his object, the more barbarous becomes the worker; the more powerful labour becomes, the more powerless becomes the worker; the more ingenious labour becomes, the less ingenious becomes the worker and the more he becomes nature’s slave. marx, 1844

Marx added that this alienation (‘estrangement’) between workers and the product of their labour is also expressed in the form of production. Workers feel like they are external to their labour; that is, they are not reaffirmed in their

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labour, but negated; instead of being happy in their labour, they feel unfortunate. ‘The worker therefore only feels himself outside his work, and in his work feels outside himself’ (ibid.). Many statements by workers who take on the production of goods and services through autonomous co-operation attest to having had that sentiment in the past. Previously, when they worked for a boss or in another relationship of dependence, real life began when the workday was over. From the moment they undertook management and control of the production process, they felt like their relationship to labour changed, and they began to recognise themselves in the fruits of their everyday efforts. Workers who undertake the control and self-organisation of the labour process under democratic and participatory forms begin to break down their alienation from the objects produced by their labour and from capitalist social forms of production. Cases of popular co-operatives entail great symbolic potential, because they show on a daily basis that workers who are associated and who freely co-operate (without an imposed management, or bosses) can develop autonomous social relations. We want to emphasise, above all, the importance of producing signs and symbols (ideology), given that the shaping of a popular imagination that is favourable to an anti-capitalist path can be transformed into a solid basis for thinking about an alternative—even socialist—society. A socialist perspective cannot exist without being viewed as a possibility in the popular imagination and that requires the previous construction of people’s power, and the awareness that socialism is built through that power. Popular organisations like cooperatives also become producers of signs and symbols. They have important symbolic potential. The term ‘another economy’ entails a general and significant change in the current hegemony over social values. Centuries of human exploitation have created a culture subordinated to the logic of surplus value, capitalist domination and the consequent asymmetries in the ownership of the social product (material and immaterial). Fostering alternative forms within capitalism, including attempts to build socialism, counteracts the dynamic of capital’s hegemonic initiative. The problem is transforming that force of resistance into the principal agent of everyday social construction. It is obviously a concrete question, expressed in the reach of ‘another economy’ and its new social relations. However, it also—and especially—involves an acknowledgement by a large number of people that another society is being built, another economy, another system of social relations. The necessary process of transformation includes a conscious materiality, which presents the challenge of building economic initiatives and

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endeavours and, at the same time, working for an awareness of that transformative process. The occupation of factories by Argentine workers following the 2001 crisis was a learning experience in managing production and distribution, where workers with no management experience were faced with the need to administer resources and processes. Strictly speaking, they did not have to face that challenge alone, because they received solidarity and professional assistance from individuals and/or groups of professionals and technicians who were willing to be part of those workers’ self-management experiences. The takeovers and self-management of those factories became a process of the mutual enrichment of workers and professionals involved. This also has been seen in diverse forms of co-operation in various other economic activities. Because of the tendency for a repetition of behaviour and habits that reproduce hegemonic practices, we would like to emphasise the importance of building conscious subjectivities in convergence with economic projects, which we call ‘conscious materiality’. Due to the lack of economic resources and human skills, the usual practice is ‘to do what can be done, however it can be done’, with an emphasis on doing, and making assessments and corrections along the way, building something new in that process of trial and error. Without precluding the encouragement of popular initiatives just as they are, we would like to stress the importance of planning the educational or cultural aspects, to ensure the success of initiatives that are a priori proposals for transformation. Thus, the systematisation of education is an essential part of any proposal for ‘another economy’ that is effective. References Engels, F. (1891). Introduction to The Civil War in France, On the 20th Anniversary of the Paris Commune. Retrieved from . Accessed 7 July 2016. Gambina, J.C. (2008). Los cambios políticos y las perspectivas de ‘otra economía’ par los pueblos. Paper presented at the 10th Conference on Globalization and Problems of Development, Havana, 3–7 March. Löwy, M. (1997). Redención y utopía. El judaísmo libertario en Europa central. Buenos Aires: El Cielo por Asalto. Löwy, M. (2007). Ecosocialismo, democracia y planificación. Viento Sur. Retrieved from . Accessed 24 June 2007. Mandel, E., A. Nove and D. Elson. (1992). La crisis de la economía soviética y el debate mercado/ planificación. Buenos Aires: Imago Mundi.

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Marx, K. (1844). Estranged Labour. Economic and Philosophical Manuscripts of 1844. Retrieved from . Accessed 1 May 2015. Marx, K. (1864). Inaugural Address and Provisional Rules of the International Working Men’s Association, London, 1864, Retrieved from . Accessed 8 February 2016. Marx, K. (1871). The Civil War in France, 1871. Retrieved from . Accessed 13 January 2016. Marx, K. and F. Engels. (1867, 1995, 1999). Capital, Vol. 1. Moscow: Progress Publishers. Retrieved from . Accessed 24 April 2016. Marx, K. and F. Engels. (1969). Selected Works, Vol. i. Moscow: Progress Publishers. Retrieved from . Accessed 1 May 2016. Mészáros, I. (2005). Socialismo o barbarie. La alternativa al orden social del capital. Paradigmas y Utopías. Mexico. Mészáros, I. (2008). El desafío y la carga del tiempo histórico. El socialismo en el siglo xxi. Caracas: Vadell Hermanos Editores & clacso. Mészáros, I. (2007). Socialismo: la única economía viable. Aporrea. Retrieved from . Accessed 15 August 2016. Toussaint, E. (2009). El segundo aliento del Foro Social Mundial. Interview with Pauline Imbach. Retrieved from . Accessed 7 December 2015.

Chapter 2

The Social and Solidarity Economy in Latin America Henry Veltmeyer Many people and groups in Mexico and across Latin America today are ­organising alternative ways of assuring their livelihood and that of their communities. There are numerous examples of people in both urban and rural areas promoting local activities and organising co-operative and markets for local exchanges (through barter or use of local currencies or national monies) within and among communities. But, as David Barkin (2016) has emphasised and documented, in most of Latin America these alternative strategies are emerging predominantly among peasants and indigenous groups, organised collectively in rural areas and forging social economies that reflect a commitment to a variety of models of social solidarity and what Barkin terms ‘ecological economics from below’ (sse).1 The proliferation of these initiatives, he a­ rgues,  reflects a recognition of the importance of human development and the relationship of socioeconomic processes with the environment, a ­relationship that is captured in the indigenous concept of Buen Vivir (or Vivir Bien)—to ‘live well’ in social solidarity and harmony with nature (Gudynas & Acosta, 2011). In all of these diverse collective actions and experiments there are two fundamentally different conceptions of a social and solidarity economy, one advanced as part of a strategy to manage the complex dynamics of urban and rural development, the other as part of a grassroots and social movement strategy for confronting what the Zapatistas term ‘the capitalist hydra’ and finding alternatives that offer more opportunities and a better quality of life than offered by today’s capitalist economy. The idea here is that the various strategies devised by the international organisations and forces involved in the project of international co-operation and development, including a strategy 1 Ecological economics from below, as Barkin has it, is based on principles that are widely agreed upon in the popular social movement and are based on consultations among the organisations and communities that make up this movement. They are: autonomy, solidarity, self-sufficiency, productive diversification, and the sustainable management of regional resources (Barkin, 2005).

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of community-based local development based on the ‘empowerment of the poor’ (mobilising their social capital for self-development, to have them ‘own’ their own development) are designed as mechanisms of adjustment that are functional for the continuation of capitalism. From a leftist perspective, however, this strategy can well be seen as a neo-liberal ploy to defend the system from the forces of resistance and subversion mobilised by the anti-capitalist movement. The argument of the chapter is that the apparent vibrancy of the manifest efforts across the region to construct a social and solidarity economy derives from the fact that a social and solidarity economy is functional for both capitalism and the anti-capitalist movement. In effect, it is not a question of which interpretation is superior, better able to explain the dynamics involved in the construction of a social and solidarity economy. The two theoretical perspectives involved, while seemingly in conflict in fact converge; they are complementary, responding to both the concerns of the guardians of the system and the demands of the anti-capitalist movement. The chapter is organised as follows: First, we briefly reconstruct what we term the neoliberal pivot of the social economy regarding diverse efforts to construct a social economy within the local spaces created by collective actions taken by what are described in development discourse as the ‘rural poor’ and by ­governments in pursuit of a neoliberal policy agenda. Second, we reconstruct the history of co-operativism in the region, relating it to both the capitalist development process and diverse experiences with workers’ self-­management and subsequent efforts to construct a social economy. In the third section we situate the concept and various projects of a social and solidarity economy within a strategy of community-based local development. As we see it there two major theoretical perspectives on this strategy as well as ­diverse practices. We end the chapter with a brief discussion of the project of a social and solidarity economy under construction in Venezuela within the institutional and policy framework of the Bolivarian Revolution. This is not to ­romanticise or laud its achievement (the process is fraught with obstacles) but to show that the project of a social and solidarity economy can be constructed from above as well as below. 1

The Neoliberal Pivot of the Social Economy

The 1980s opened with a conservative counterrevolution, a movement to halt the incremental but steady gains made in earlier decades by the working class under the aegis and within the social liberal reform framework of the

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­development-welfare state.2 At the beginning of the 1980s both the organised labour movement and the struggle for land in the countryside, the latter in the form of diverse armies of national liberation, had been defeated by a combination of state repression and a strategy of integrated rural development designed to turn the rural poor—the masses of dispossessed peasant families forced by the capitalist development of agriculture to abandon their rural livelihoods and communities in the countryside—away from the confrontational politics of the social movements seeking revolutionary change (Delgado Wise & Veltmeyer, 2016). This defeat, together with the dynamics of an accumulated and expanding external debt, created conditions that allowed the World Bank and the imf, the major operating agencies and guardians of the system, to impose on governments in the region a program of structural adjustments to their macroeconomic policies, initiating what David Harvey among others have dubbed the ‘neo-liberal era’. A major aim and the stated goal of the neoliberal policy reform agenda—viz. the privatisation of economic enterprise, deregulation of the markets, the liberalisation of trade and the flow of investment capital, and a decentralisation of government administration—was to liberate the so-called ‘forces of economic freedom’ from the regulatory constraints of the welfare-development state. The immediate outcome of these structural reforms, not to mention an extended process of decapitalisation associated with the obligatory use of export revenues to service the accumulated external debt,3 have been extensively studied: an advance of capital in both the cities and the countryside, resulting in the destruction of productive forces in both agriculture and industry, and a virtual collapse and involution of the labour market, which forced the growing mass of rural migrants to work ‘on their own account’ on the streets rather than exchange their labour against capital for a living wage. Some economists and sociologists at prealc and eclac estimated that in the vortex of these forces up to 80 per cent of new jobs generated in the 1980s were formed in what 2 Throughout what historians have termed ‘the golden age of capitalism’ but that we might well term the ‘age of development’ (roughly from the 1950s to the 1970s). the primary agency for social change was the nation–state via policies of economic development and social reform. Organised labour was another key factor, because it could negotiate collective agreements with capital to improve wages and working conditions. However, in the 1960s and 1970s, military regimes began to emerge in reaction to the political left and the slow but steady gains of the working and producing classes in the development process. 3 Throughout the 1980s Latin America experienced a low level of capital formation, the result of a policy concerted by the World Bank and the imf, which joined forces in 1983 to compel indebted countries—especially Mexico, Brazil and Argentina, but also Chile—to open their economies to the world market and use their export revenues to service the external debt.

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was termed the ‘informal sector’ (Portes & Benton, 1987; Tokman & Klein, 1988; Tokman, 1991). But several theorists and analysts in the development community, i.e. those associated with the project of international co-operation in the war against global poverty, focused their concern and attention not on these structural changes but rather on the deterioration of the social condition of people in the urban centres, many of whom had replaced rural poverty with a new form of poverty (the ‘new poor’ as statisticians named them). The diagnosis of what the turn into the new world order had brought about—a deepening of social inequalities and increased poverty (from 40 to 44 per cent in the 1980s)—was reflected in the phrase: ‘a decade lost to development’. What was almost entirely lost in diverse theoretical reflections on this ­process—the advance of capital and the retreat of the state—was the strategic and political response of the urban poor.4 This response took two forms. One was the formation of soup kitchens and other such collective actions and solidarity organisations to assist the poor in coping with the forces of capitalist development and to survive in the new conditions (Petras & Leiva, 1994). This response, which in some cases led to the formation of a vibrant social economy within the expanding cities of slums on the Latin American periphery—to cite a study by Mike Davis (2006)—was particularly advanced in Chile and Peru, as well as Mexico, where an earthquake measuring 8.0 on the Richter scale ­resulted in at least 10,000 deaths,5 and had a dramatic impact on the proliferation of nongovernmental organisations stepping in the breach of a retreating state and the construction of a social economy based on self-help, mutual ­support and social solidarity.6 4 The responses of the rural poor were different (see Delgado Wise & Veltmeyer, 2016). While many adjusted to the forces of capitalist development (proletarianisation, globalisation, modernisation, urbanisation) by taking the development pathways of migration and labour opened by the development agencies, others took the path of organised collective resistance and yet others turned towards what has turned out to be a social economy based on relations of social solidarity—what a Chilean economist attached to the ilo’s Regional Program on Employment (prealc) conceptualised at the time (the mid-1980s) as a ‘solidarity economy’ (Razeto, 1988, 1993). 5 Reports have numbered the dead anywhere from 5,000 to 30,000 (claimed by various citizens’ groups) to 45,000 claimed by the National Seismological Service (Crisp, 1998: 150). But the most commonly cited figure is around 10,000. While high as an absolute number (Campus, Yunnven, 19 September 2008; snn Mexican National Seismological Centre (in Spanish), Mexico City: Televisa. Archived from the original on 22 September 2008). 6 While the total number of ‘private voluntary associations’ or ngos in the early 1980s at the threshold of the neoliberal era could be numbered in the hundreds, it is estimated that by the mid-1990s, a decade into the neoliberal era, in Latin America they could be numbered

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Construction of a social economy based on relations of social solidarity,7 and the emergence and mushrooming growth of ‘civil society’ based on an associational type of nongovernmental organisation, resulted from a convergence of diverse forces. But this was only one of several responses to these forces and changing conditions. Another was widespread protest and resistance. At first, in the late 1970s and much of the 1980s, these protests and this resistance against the neoliberal reform agenda—in the form of what were then dubbed ‘imf protests’—was spontaneous and unorganised (Walton & Ragin, 1990).8 At the time the primary target of these protests were imf-dictated austerity measures including cuts in government spending and the removal of subsidies on public services and utilities that raised the cost of transportation, fuel, electricity, water, food, etc., beyond the reach of the urban poor.9 However, in the 1990s the resistance, which was increasingly directed against the World Bank’s neoliberal agenda of structural reform rather than the imf’s austerity measures, became more organised. The agency and agents of this resistance were new social movements formed in the countryside by the peasantry, the rural in the tens of thousands. On the dynamics of these ngos vis-à-vis the social movements see Veltmeyer (2007). 7 In theory a social economy, and the accumulation of social capital, can only occur in conditions of a culture of solidarity, which normally only exists in the rural communities, especially those formed by indigenous peasants (Durston, 1998). 8 Although in 1983 they were combined into what became known as the ‘structural adjustment program’ a distinction should be made between the ‘structural reforms’ pushed by the World Bank (privatisation, liberalisation, deregulation, decentralisation) and the austerity measures imposed by the imf as a condition of accessing public capital. In the 1980s the resistance was in response to these imf-prescribed austerity measures, while in the 1990s the central target of the resistance was the Bank’s deeper structural reforms. In the case of the former in ­Venezuela the caracazo, a street protest against these imf reforms in the form of increases in the price of gasoline and transportation, that began on February 27, 1989, resulted in the death of ­hundreds of protesters—thousands by some accounts (Uppsala Conflict Data P ­ rogram ­Conflict Encyclopedia, Venezuela, One-sided Violence, Government of Venezuela—­civilians, http:// www.ucdp.uu.se/gpdatabase/gpcountry.php?id=167®ionSelect=5-Southern_Americas#). The caracazo was probably the reason why the neoliberal reform agenda was not fully implemented, whereas in Peru, Argentina and Brazil—the three major countries that had eluded the neoliberal reform agenda—fully embraced the second generation of structural reforms in the 1990s. 9 In Argentina, imf-prescribed cuts in social spending culminated in strong protests and strikes in the year 2000. In Bolivia, an imf loan conditional on the privatisation of water utilities led to a 200 per cent increase in water prices, provoking widespread protests. In Ecuador, the imf loan approved in 2000 required a cutback in government spending, wage restraint, the removal of subsidies, reforms in the labour market and the oil sector, and privatisation. Thousands of protesters took to the streets in response, and workers went on a general strike against continuing economic reforms demanded by the imf.

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landless or semi-proletarianised workers and the indigenous communities This new wave of organised social movements against the advance of capital and the government’s neoliberal policy agenda began in Ecuador with an uprising in 1990 orchestrated by conaie—a confederation of more than several dozen indigenous nationalities (Petras & Veltmeyer, 2013). With the irruption of conaie and other such peasant and indigenous movements across the region—most notably the ezln (the Zapatista Army of National Liberation)10—the 1990s have been dubbed by some as a ‘golden age’ of resistance, regarding the power of these movements to halt the neoliberal policy reform agenda in its tracks, and place neoliberalism on the defensive— so much so as to bring about its eventual demise. By the end of the decade to all intents and purposes the neoliberal agenda was dead in the waters, leading to a seatide of regime change—the emergence of a progressive cycle in Latin American politics that can be traced back to the activism of the peasant social movements in the 1990s (Petras & Veltmeyer, 2013). 2

The Social Economy and the Co-operative Movement in Latin America

In the Latin American context, the construction of a social economy has been closely associated with the co-operative movement, which can be traced back to the early years of the 20th century, even further back in some cases (Fabra Ribas, 1943),11 although it did not begin to take shape and exercise a positive influence on national life until the early 1930s with the Mexican Revolution. The Mexican Revolution led to a major surge in the co-operative movement as well as unionism, which left its mark on co-operative movement. This history of ­co-operativism and unionism, which took different forms in different ­countries, also includes dynamics of local development and diverse experiments with worker self-management—worker-managed factories based on workers’ councils and factory assemblies that emerged in some countries in the broader context of what might be described as a class struggle.

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In describing itself as an ‘army of national liberation’ the ezln harks back to a period of revolutionary ferment in the 1960s and 1970s when the leading social movements at the time described themselves in these terms. But once the zapatista movement settled down after an initial eruption in 1994 it augured a new way of ‘bringing about change and doing politics’—the ‘first postmodern movement in history’ (Burbach, 1994). Fabra Ribas, Antonio (1943). The cooperative movement in Latin America: its significance in hemisphere solidarity. The University of New Mexico Press.

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Take the case of Chile under the socialist regime of Salvador Allende (1970–73), when over 125 factories came under some system of workers’ self-­ management, about half controlled by public officials or functionaries, representing a parliamentary form of government with its left-centre-right p ­ olitical splits; the other half was run by factory-level commissions of workers organised along the lines of workers’ councils or soviets, much like the Paris ­Commune of mid-19th century France. Then there is Argentina in the context of the 2001–2 crisis when workers occupied and took over more than 200 factories, defending them from closure, protecting workers’ employment and vastly improving the social conditions of work, and most importantly, raising workers’ political consciousness. Most of these factories—erts as some have termed them (Enterprises Recovered by their Workers)—were organised as worker self-managed co-operatives or worker collectives (Petras & Veltmeyer, 2002; Montiel, 2005). We also have the experience of Bolivia in the wake of the 1952 Revolution, and Peru in 1967, when a group of progressive nationalist military officers led by General Velasco Alvarez took power and expropriated several mines/­ factories/plantations, establishing a system of industrial co-operatives (and communities) based on joint decision-making by management and workers. The case of Brazil is very important, although rarely mentioned. Currently more than 200 companies have been recovered by workers, with the first experience at the shoe factory Makerli in 1991. anteag (the National Association of Workers in Self-Managed Companies) was established in 1994 with the aim of coordinating the various projects that materialised in conditions of crisis and near collapse of industry. It has offices in six states in charge of accompanying self-management projects, seeking integration with ngos, state and municipal governments. anteag views self-management as an organisational model that combines collective ownership of the means of production with an autonomy of enterprise decision-making and active participation in democratic management. The important point about these and other such experiments with cooperativism and unionism is that they need to be understood in the broader context of capitalist development—the history of capitalism in the region. Although the history of co-operativism in Latin America is very complex with a different experience in each country and a major surge in the 1930s, it makes sense to begin with the post-war period of capitalist development, the 1950s and ‘60s, when ‘development’ as we understand it today, i.e. as a project of nation-building and international co-operation, was ‘invented’ as a means of preventing countries on the periphery of the world capitalist system that were struggling to liberate themselves from the ties of colonialism and imperialist

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exploitation from taking a socialist path towards national development;12 and also, in the case of Latin America, to turn the ‘rural poor’—the masses of small producers and peasant farmers dispossessed of their land in the transition towards capitalism—away from the revolutionary social movements, to prevent another Cuba. The theoretical solution to these problems—i.e. the resistance to the advance of capital, socialism or communism as an alternative path towards ­national development, and the demand for revolutionary change—was threefold: (1) state-led reform at the level of social programs (health, education, welfare) and land tenure; (2) a program of local or rural community-based integrated development, based on the agency of the state with international ­co-operation and mediated by private voluntary associations—with the participation of what we now understand as ngos or csos financed by the agencies of international co-operation (usaid in particular); and (3) the organisation of co-­operatives. In this context, the US government and several UN agencies commissioned systematic studies of the co-operative movement and different country experiences (although it was not until 1985 that eclac and other agencies incorporated co-operativism into its social development program). Co-operativism emerged as a form of local development although it had a rather short history from the late 60s to the mid-70s (1967–1974). Although co-operatives were established in many countries with different degrees of success and failure—in many cases financed by the US government/usaid— the movement died out because often conditions were simply not conducive to co-operativism and co-operative development, and in addition the value of ­co-operativism was challenged, with some analysts—for example R ­ obert Guimaraes, a Brazilian economist associated with eclac who has made a ­significant contribution to an understanding of alternative development ­dynamics in Latin America—arguing that co-operatives were an ineffective form of organisation for meeting the basic needs of the poor and unsuccessful as agencies for social transformation (Guimaraes, 1989). Based on extensive field research and case studies commissioned by u ­ nrisd and coordinated by Fals Borda, the well known Colombian social action ­theorist, Guimaraes concluded that co-operatives generally were not only an 12

There is an interesting theoretical convergence here between the argument advanced by several proponents of post-development in the mid-1980s (Escobar and Ferguson in Sachs, 1992) and the argument later advanced by Veltmeyer (2005) from a very different Marxist political economy standpoint, regarding ‘development’ as a form of imperialism and a means of political demobilisation.

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­ineffective way of tackling poverty but that they were unsuccessful as an agency of social transformation. The general conclusion reached by the unrisd team, and supported by Guimaraes, can be summed up in four propositions: 1. Co-operatives are not agents for change, producing few benefits for the poorest sectors of the population; indeed, the strengthening of co-­ operatives in most places led to an unexplained increase in income gaps. 2. Co-operatives tend to reproduce the structure of community relations and conditions, rather than transform it. 3. They tend to reinforce, as well as extend and deepen, pre-existing social inequalities, partly because groups and individuals who are accommodated to the power structure are more likely to control the key committees and the administration of co-ops. 4. In the few cases where co-ops were composed of poor peasants and represented their interests, they were manifestly incapable of promoting those interests (Guimaraes, 1989: 285–286). As for the conditions needed or conducive for co-operative development, they include a culture of solidarity, which in the case of many communities was and is arguably absent (Durston, 1998). Veltmeyer and O’Malley (2001), among others found and has argued that with the exception of indigenous communities in Bolivia, Ecuador, Mexico and Guatemala, many rural communities in the region are class divided or subject to forces that have undermined a sense of community and a culture of solidarity. Under these conditions non-indigenous peasants generally want their own plot of land to work with family labour. In addition, the penetration of diverse forces of change (modernisation, private enterprise and capitalism), the promotion of the private sector and the market by the World Bank and other financial institutions and development agencies, and a capitalist culture based on private property, possessive individualism and private enterprise, have all tended to work against co-operativism. Also, most of the well-established or successful co-operatives, even in the agricultural sector, were not producer co-operatives or workers’ collectives, often just farmers marketing groups. In fact—at least in Mexico—according to the laws established at the time by the government to govern co-operatives they could only draw its members from the working class. Production co-ops were ­forbidden to have salaried employees and workers could only form union consumer co-operatives if the co-operative’s general assembly coincided with the union itself. In any case, the dominant development strategy was not to promote local or community-based development, but rather to exploit the unlimited supply of surplus rural labour as a lever of capital accumulation; to encourage the rural poor to adjust to the forces of change by taking a development pathway out of

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rural poverty; and for the governments to incorporate the rural poor into the labour market—to facilitate their labourforce participation.13 This was the dominant strategy until the mid-1990s, when it had become ­evident that the labour market was saturated and the mechanisms of migration and labour as an escape valve had reached or was reaching its inner and outer limits. The destruction of forces of production in both agriculture and industry had led to the formation of a large semi-proletariat of near-landless rural workers and an urban informal sector in which rural migrants had to fend for themselves rather than work for a wage.14 In the mid-1990s the strategy shifted towards the promotion of community-based local development so as to empower the poor to act for themselves in taking advantage of their social capital, the one asset they were deemed to have in abundance (Atria, Siles, ­Arriagada, Robison & Whiteford, 2004; Portes, 1998; Solow, 2000). With the support of an appropriate institutional framework of decentralised governance, a new social policy focused on poverty reduction, international co-operation in the form of micro-finance, and social participation, i.e. the engagement of civil society in the development process, the strategy devised for the rural poor was for them to diversify their source of household income, enabling them to stay in and develop their rural communities. The solution—a survival strategy rather than a local development strategy—was to combine the following sources of household income: agriculture, labour, remittances, micro-development finance and projects, and conditional cash transfers from the government to poor households (Kay, 2008). In this new context were found favourable conditions not only for the growth of co-operativism but for the construction of a social economy that would complement the dominant private sector of small, medium and large corporate enterprises and the public sector of state enterprises: a third sector sustained by solidarity economics and a process of community-based local development based on social capital rather than private enterprise and the state. 13 14

The theory behind this strategy is outlined very clearly by the World Bank in its 2008 World Development Report on ‘Agriculture for Development’. For an elaboration of this point, and an analysis of the formation of this semi-proletariat in conditions of peripheral capitalism, see Delgado Wise & Veltmeyer (2016). The fundamental theory advanced by Marx and Marxists was that the transition towards capitalist agriculture would lead to the disappearance of the peasantry and the formation of an industrial proletariat. Clearly this did not happen in Latin America. What we have instead with the onset of the neoliberal era and invasion of capital in the form of foreign direct investment and the multinational corporation is the persistence of the peasantry and the disappearance of the industrial proletariat—and the formation of a semiproletariat with one foot in the modern urban (and capitalist) economy and the other in peasant agriculture and the rural community.

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This notion of a solidarity economy first emerged in the late 1970s and early ‘80s as an economic model, a means of combatting poverty and inequality and as a vision of social transformation (Razeto, 1988), but in the second half of the 1990s it turned into the ‘new development paradigm’—cbld, or ‘Inclusive and Sustainable Development’—designed to expand a third sector of the economy based on social capital and a culture of social solidarity, supported by a decentralised form of governance and a new social policy oriented towards poverty reduction and empowerment of the poor (Narayan, 2002; Rao, 2002; Rondinelli, McCullough &, Johnson, 1989). Economists at eclac, armed with a socio-centric and neo-structuralist conception of national development based on the agency of the state (with international co-operation and social co-operation), conceptualised the new model alternatively as ‘development within’ (Sunkel, 1993), the ‘new developmentalism’ (Bresser-Pereira, 2007, 2009), and ‘inclusive development’ (­Infante & Sunkel, 2009).15 Others, however, from a local development perspective viewed the ‘social and solidarity economy’ from the perspective of grassroots community-based social organisations as a form of ‘inclusive and ­sustainable development’ (Vieta, 2014). Here reference is made to a concept advanced by Peter Utting (2015), an economist at unrisd and in a reader edited by a team brought together by the Social and Solidarity Economy Academy at Campinas and published by the International Training Centre of the ilo. Both publications, focused on exploring for the conditions for scaling up the ­social and solidarity economy, point to spaces and strategies for capacity building, ­institutional innovation and social change strategies for capacity building, institutional innovation and social change in the context of existing internal constraints or oppositional forces. In addition to these and other such studies that provide a ‘development’ perspective on the social and solidarity economy there are those who view the social and solidarity economy not as an alternative development model but as a social movement or agency of social transformation—a way of confronting the capitalist hydra (ezln, Sexta Comisión, 2015). An exemplar and paradigmatic model of this approach is Zapatismo, or the ezln (the Zapatista Army of National Liberation), which, in the aftermath of the now famous Sixth Declaration of the Lacandona Jungle in 2005, has constructed a vibrant social economy on the margins of the capitalist system and the Mexican state.

15

For an analysis of the connection between neostructuralism and the new developmentalism—the first as the theoretical foundation of the second—see Leiva (2008) and ­Mallorquín (2010).

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To date, a theoretically reconstructed model of this social and solidarity economy is not available, but by various accounts this economy is autonomous and communal in form and constructed from below with significant grassroots participation, relying on neither the market nor the state but the collective and co-operative effort of members of the community.16 The Zapatistas are not alone in this conception; nor are they isolated from a broad Latin Americawide network dedicated to the promulgation of a social and solidarity economy (Coraggio, 2011; Jubeto, Guridi & Fernández Villa, 2014; Pérez de Mendiguren, Etxezarreta & Guridi, 2009; reas—Red de Redes de Economía Alternativa y Solidaria, n.d.). The Zapatista vision—and corresponding practice—of a social and solidarity economy is decidedly anticapitalist and thus outside the mindset and the institutional and policy framework of the economy and society envisioned by the theorists and practitioners in the mainstream and various alternate sidestreams of development.17 The architects and theorists of development at the ilo and other agencies of international development (including unrisd and Brazil’s National Bank for Economic and Social Development) view the social economy or solidarity economics as an agency of poverty reduction, inclusion and social transformation. At least, this is so at the level of discourse. it is basically conceived as an escape valve, a means of relieving the pressures on ­governments for them to reduce and alleviate poverty via the expenditure of 16

17

By several accounts (conversations with activist scholars close to the organisation) the Zapatistas have been very successful in organising autonomous governance, autonomous schools and autonomous healthcare. But their economic situation has been more difficult to study, although they have some advantages from their location in the countryside where they have been able to take over land and establish autonomous territorial governance. As for the actual performance of the economy constructed by the Zapatistas it is hard to assess, given that they have not authorised any such assessment. But more is known about the organisation of what the Zapatistas themselves and several outside observers (David Barkin, Peter Rosset and Sergio Rodriguez Lascano, the editor of Rebelde) view as a social and solidarity economy. It appears that the Zapatistas have divided their territory into five regions which they term Caracoles. Within each Caracol there are several autonomous municipalities. Each municipality is governed by a council made up of community members nominated to serve for two or three years. Each of the Caracoles has a Junta de Buen Gobierno. These councils are comprised of a rotating group of members who come from all of the autonomous municipalities that correspond to a particular Caracol. Municipal representatives serve as a feedback link between communities and the Junta de Bien Gobierno. There is a lot of consensus decision-making and a lot of consultation with the communities before decisions are taken. Community members who serve in the autonomous governing structures are unpaid, and they rotate frequently so that ­governance is a matter of grassroots participation.

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fiscal revenues and pressures on the labour market/business to absorb excess rural labour. As for co-operativism it was—and still is—seen by the agencies of international development as an important form of social organisation to help create a society of small business operators, entrepreneurs and managers, rather than a working class with its attendant demands and problems. 3

Community-based Local Development and the Social Economy

The neoliberal agenda based on the Washington Consensus on the virtues of free-market capitalism was short-lived. By the end of the 1980s, barely six years on, it had already become apparent even to its functionaries that neoliberalism was economically dysfunctional—rather than delivering on the promise of ‘general prosperity’ the outcome included a ‘decade lost to development’— and destabilising, generating as it did massive social protests and political ­resistance (Veltmeyer & Petras, 2000). In response, some architects of the neoliberal agenda and some guardians of the new world order such as the World Bank came together towards the end of the decade to forge a new consensus and construct a new paradigm (World Bank, 2007). The resulting post-Washington Consensus was formed around the need to ‘bring the state back in’ and establish a ‘better balance between the state and the market’— as well as a more ‘inclusive’ and participatory form of development (Infante & Sunkel, 2009). There were various formulations of the new consensus, including ‘structural adjustment with a human face’ (unicef, 1989), ‘growth with equity’ (Guimaraes, 1989), ‘development from within’ (­Sunkel, 1993) and ‘inclusive development’ that were synthesised as ‘the new developmentalism’ (Bresser-Pereira, 2007, 2009). There was no consensus as to the best economic model but a broad agreement on principle regarding the need for: (i) structural reform at the level of macroeconomic policy; (ii) a ‘new social policy’ targeted at poverty reduction; (iii) the formation of human capital via investments in education and health, the basic pillars of social inclusion; (iv) good governance in the form of administrative decentralisation and social (or popular) participation;18 and (v) empowering the poor to enable 18

The call for ‘popular participation’ originated in radical politics, as a rallying cry for revolutionary change, but in the 1970s it became a tenet of liberal reform and soon thereafter a fundamental principle of another development. Participation in this context was viewed as ‘the missing link in the process of productive transformation with equity’ (Boisier, et al., 1992; eclac, 1990). In the context of development programming and the project cycle, participation is viewed as a matter of principle and as such a question of equity.

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them to act for themselves in initiating a process of community-based local development (Veltmeyer, 2007). As noted above there was no consensus as to the best or appropriate model that would serve as a guide to policymakers—to implement this policy agenda. To this purpose, the architects of the post-Washington Consensus who assembled behind closed doors in 1989 to seek a solution turned to Gonzalo Sánchez de Lozada, Bolivia’s minister of Planning at the time and a convinced neoliberal ideologue who would in a few years assume the Presidency. Bolivia was chosen and used by these architects of a more pragmatic form of neoliberalism as an experimental laboratory, to try out the new policy and construct a new model.19 The institutional framework of this model was established by the De Lozada administration in 1994 in the form of the Law of Administrative Decentralisation and the Law of Popular Participation.20 As established in several studies undertaken by Fernanda Wanderley and her associates at cides, this legislation not only provided the institutional framework for a neoliberal policy agenda focused on local development, but it created space for the construction of an alternative social and solidarity economy. But some groups on the Left, particularly those engaged in what was increasingly viewed as the ‘old politics’—the use of the electoral mechanism and other trappings of liberal democracy such as political parties as a pathway to state power—were critical of the regime’s newfound interest in supporting and promoting community-based local development. They saw it naturally as a neoliberal stratagem, as undoubtedly it was. However, others on the Left— those who had turned away from the politics of seeking social change by taking state power21 towards a new development politics—saw it as an opportunity

19

20

21

But for the World Bank it is also seen as a matter of efficiency, a way of improving the productivity of development projects (Blaikie, 1985). Based on information provided by the Danish Association for International Development, the resulting development plan specified three strategic considerations. To advance these considerations, the government’s economic team (headed by Sanchéz de Lozada, Minister of Planning at the time) held a series of high-level meetings with officials from the international financial community (the World Bank, the idb, etc.), the undp, and representatives of the most important overseas development associations operating in Bolivia (such as usaid). These meetings extended from 1986 to 1992, months before Sanchéz de Lozada assumed the presidency. These laws were established with clear reference to a neoliberal policy agenda. However, they were also in part a response to demands for territorial or regional autonomy and access to and control over land and other productive resources by the country’s indigenous peoples and diverse civic associations, as well as calls on the left for popular participation. One theoretical formulation of this new strategy was John Holloway’s conception  of how to ‘change the world without taking state power’, based on his interpretation of Z ­ apatismo, the thinking associated with the Zapatista movement in Chiapas and

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to construct a different economy, and an alternative form of development that is initiated from below via the agency of the grassroots (Wanderley, 2015). On one hand, the new institutional framework created spaces on the local level for political action and for the participation of grassroots social organisations in some decisions about development projects and social development in the community. In this context, was difficult for the Left to oppose this ­policy of decentralisation and popular participation. On the other hand, the policy has not resulted in what the World Bank (Bebbington, et. al., 2006) terms ‘empowerment’ of the poor. In Bolivia, the Law of Popular Participation in p ­ ractice worked to weaken community- and class-based solidarity ­organisations that had the capacity to go beyond the community to challenge ­economic and political power and to effect change at the national level. On this see Veltmeyer (2007). 4

The Social and Solidarity Economy in Venezuela

Apart from the Zapatista project and several experiences in Bolivia (see ­Wanderley, 2015) the most interesting and important experiments in creating a social and solidarity economy can be found in Venezuela, viz. the project of creating the socialism of the 21st century. Although the Bolivarian Constitution of 1999 focused upon the development of human capacity it also retained a support for capitalism. For example, while rejecting neoliberalism and stressing the importance of the state presence in strategic industries, the focus of the government’s 2001–2007 Development Plan was to encourage investment by private capital—both domestic and foreign—by creating an ‘atmosphere of trust’. To this was added the development of a ‘social economy’—conceived as an ‘alternative and complementary road’ to the private sector and the public sector. Co-operativism and co-operatives play a part in this social economy, but what is significant if not somewhat puzzling—as in the case of Cuba’s latest ‘update’ of its model (‘new guidelines’)—is how small a role was assigned to self-managing and co-operative activities. As it was for the development agencies of international co-operation, in Venezuela the development of the social economy seems to be essentially a program for incorporating the informal ­sector into the national economy. It is necessary, the government’s plan argued, ‘to transform the informal workers into small managers’. Accordingly, a­ rticulated by ­Sub-comandante Marcos (Holloway, 2002). For a variation of this interpretation of ­Zapatismo, see Burbach (1994).

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­family, co-operative, and self-managed micro-enterprises were to be encouraged through training and micro-financing (from institutions such as the Women’s Development Bank) and by reducing regulations and tax burdens. Therefore, the social economy was to play the role it plays in Brazil and elsewhere—islands of co-operation nurtured by states, ngos, Grameen-type banks, and church charities that serve as shock absorbers for the economic and political effects of capitalist globalisation. Of course, this would make things better for the unemployed and excluded (the half of the Venezuelan working class in the informal sector), but the point is that the social economy here was not envisioned as an alternative to capitalism (except insofar as survival within the nooks and crannies of global capitalism constitutes an alternative). The goal was not socialism as we understand it but rather a different type of c­ apitalism; i.e. socialism viewed as a different, more human, form of ­capitalism—based on popular or social participation—to ensure the complete development of people, both individual and collective (which is, of course, a socialist ideal and nothing to do with capitalism, the logic of which runs in an entirely different direction). But there is a fundamental difference between ‘development of the social economy’ in the context of the Bolivarian Revolution (as conceived by Hugo Chávez) and the social economy/solidarity economics as understood and promoted by eclac, fao, ilo and the development agencies of International ­Cooperation. For the former, the social economy is a mechanism of adjustment to the forces of capitalist development, a way of creating spaces within the system for poverty reduction based on local sustainable self-development, the social capital of the poor and the empowerment and agency of the poor— and a means of converting the informal sector into a more productive sphere of economic development. For the theorists and architects of the Bolivarian Revolution—see Articles 62 and 70 of the 1999 Constitution—the social economy or solidarity economics is viewed through the lens of what be described as Socialist Human Development’, i.e. ‘self-management, co-management, co-operatives in all forms’ as examples of ‘forms of association guided by the values of mutual co-­ operation and solidarity’. With its emphasis upon a ‘democratic, participatory and ­protagonistic’ society the Bolivarian Constitution contains the seeds of the ‘social economy’ conceived of not as a supplement to the dominant private and public sectors but as nuclei of the socialism for the 21st century, i.e. as a national not just local development model, brought about from below as well as above. Co-operatives and co-operativism plays an important role in this model. Any form of development requires an institutional framework. The framework

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of endogenous socialist human development brought about by the Bolivarian Revolution is based on the institution of the Misiones and the Comuna (or Commune), which are oriented towards and designed to bring about the building of new human capacities both by teaching specific skills and preparing people to adopt new productive relations through courses in co-operation and self-management. The effect of this development program was dramatic: the number of co-operatives increased from under 800 when Chávez was first elected in 1998 to almost 84,000 by August 2005. In January 2005 at the World Social Forum, Chávez explicitly called for the reinventing of socialism—different from what existed in the Soviet Union. ‘We must reclaim socialism as a thesis, a project and a path, but a new type of socialism, a humanist one, which puts humans and not machines or the state ahead of everything’. Six months later, Chávez argued the importance of building a new communal system of production and consumption—in which there is an exchange of activities determined by communal needs and communal purposes … not just what Marx described as the ‘cash nexus’ or the profit motive, the incentive to make money, accumulate capital. ‘We have to help to create it, from the ­popular bases, with the participation of the communities, through the ­community organisations, the co-operatives, self-management and different ways to create this system’. The occasion was the creation of a new institution—the Empresas de Producción Social (eps), which invites comparison with the ‘socially responsible enterprises’ (sres), identified by Betancourt and Sagebien (2013) and others as the key operational units of a social and solidarity economy—and an organisational pathway towards achieving ‘inclusive growth’.22 Drawn from several sources—existing co-operatives pledged to commit themselves to the community rather than only collective self-interest), smaller state enterprises, and private firms anxious to obtain access to state business and favourable credit terms—these new enterprises of social production were to be committed both to serving community needs and incorporating worker participation. 22

The proponents of ‘inclusive growth’ see it as a form of national development, an alternative to ‘inclusive development’ as conceived of within the neostructuralist framework of the post-Washington consensus. The difference between these two ‘models’, one advanced by development economists at eclac and the other by a global network of neoliberal think-tanks and policy forums, is that the one is predicated on ‘inclusionary state activism’ while the other assigns the role of ‘driver’ or the ‘driving force’ of the development process to the private sector. A 2012 report of Canada’s House of Commons Standing Committee on Foreign Affairs and International Development is a paradigmatic formulation of the ‘inclusive growth’ model (Canada, House of Commons 2012).

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On Chávez’s re-election in December 2006, a new building block was added: the communal councils (based upon 200–400 families in existing urban neighbourhoods and 20–50 in the rural areas). These were established to diagnose democratically community needs and priorities. With the shift of resources from municipal levels to the community level, the support of new communal banks for local projects, and a size which permits the general assembly rather than elected representatives to be the supreme decision-making body, the councils were envisioned as a basis not only for the transformation of people through changing circumstances, but also for productive activity based upon communal needs and communal purposes. These new councils were identified as the fundamental cell of Bolivarian socialism and the basis for a new state. ‘All power to the communal councils!’ Chávez declared.23 An ‘explosion in communal power’, designated as the 5th of ‘five motors’ driving the path toward socialism. The logic is one of a profound decentralisation of decision-making and power. 5 Conclusion There are basically two theoretical perspectives on the construction of a social and solidarity economy. One relates to a neoliberal strategy devised in the mid-1990s as a response to a problem generated by the workings of capitalism on the Latin American periphery. In this context, the social and solidarity economy is viewed as a third sector, complementary to the public sector of state enterprises and the private sector, as well as mechanism of poverty reduction via the absorption of surplus rural labour trapped in the informal economy. In effect, it serves as an escape valve, a way for reducing the pressures on both the government and the labour market. A second perspective has its clearest theoretical and practical expression in the social economy created by the Zapatistas in the years since they went to ground for a second time—in the wake of a failed attempt to negotiate an agreement with the Mexican state. From this perspective, the social and solidarity economy is an agency of social transformation, a space for social co-operation and grassroots solidarity action within a broader macroeconomic system, or as a non-, anti- and post-capitalist social movement. Also, there are two major variations on this perspective. In the one co-operativism can be articulated with the institutions of the broader 23

This was an ideological declaration of political intent rather than a programmatic statement. In practice, it seems that the power of local councils is strictly limited to matters of local development. Even so, it appears that these local councils are managing to function even with the macro-economy falling—or actively pushed—into crisis (Teruggi, 2015).

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­capitalist or socialist system and functions as one of several alternative organisational forms of local enterprise within the social economy (co-operatives) and the private sector (‘social responsible enterprises’). However, from a postor anti-capitalist perspective—as for example, articulated by the Zapatistas (ezln, 2015)—the social and solidarity economy is the nucleus of an alternative and emerging post-capitalist form of society. As for the prospects for the development of a social and solidarity economy beyond various enclaves of local and community-based development—and the question as to whether they can be scaled up and coordinated in such a way as to constitute a viable and vibrant alternative form of development, or  even  an  alternative to development—it remains to be seen. The jury is not  out yet  out and the question begs both a much closer look and further study. References Atria, R., M. Siles, M. Arriagada, L. Robison, and A. Whiteford (eds.). (2004). Social Capital and Poverty Reduction in Latin America and the Caribbean: Towards a New Paradigm. Santiago: eclac. Barkin, D. (2005), Reconsiderando las alternativas sociales en México rural: Estrategias campesinas e indígenas. Polis, 5(15): 7. Barkin, D. (2016). Popular Sustainable Development, or Ecological Economics. In H. Veltmeyer and P. Bowles (eds.), Essential guide to Critical Development Studies (pp. 371–382). London: Routledge. Bebbington, A., et al. (2006). The Search for Empowerment: Social Capital as Idea and Practice at the World Bank. Kumarian Press. Betancourt, R. & J. Sagebien (2013). Para un crecimiento inclusivo: empresas no estatales responsables en Cuba. Temas, 75, July–September, 58–65. Blaikie, P. (1985). Why do Policies Usually Fail? In The Political Economy of Soil Erosion in Developing Countries. London: Longman. Bresser-Pereira, L.C. (2007). Estado y mercado en el nuevo desarrollismo. Nueva Sociedad, 210, July-August, 110–125. Bresser-Pereira, L.C. (2009). Developing Brazil: Overcoming the failure of the Washington Consensus. Boulder, CO: Lynne Rienner Publishers. Burbach, R. (1994). Roots of the Postmodern Rebellion in Chiapas. New Left Review, 1(205), 122–134. Canada, House of Commons. (2012). Driving Inclusive Economic Growth: The Role of the Private Sector in International Development. Report of the Standing Committee on Foreign Affairs and International Development, House of Commons. Ottawa: ­Public Works and Government Services Canada.

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Coraggio, J.L. (2011). Economía Social y Solidaria. El trabajo antes que el capital. ­Quito: Ediciones AbyaYala. Retrieved from http://www.coraggioeconomia.org/jlc /archivos%20para%20descargar/economiasocial.pdf. Accessed 14 July 2015. Crisp, B. (1998). Presidential Decree Authority in Venezuela. In John M. Carey and ­Matthew Soberg Shugart (eds.) (1998). Executive Decree Authority. Cambridge ­University Press. Davis, M. (2006). Planet of Slums. London: Verso. Delgado Wise, R. and H. Veltmeyer (2016). Agrarian Change, Migration and Development. Halifax: Fernwood Publications. Durston, J. (1998). Building Social Capital in Rural Communities (Where it Doesn’t ­Exist): Theoretical and Policy Implications of Peasant Empowerment in Chiquimula. ­Guatemala. Santiago: eclac. eclac—Economic commission for Latin America and the Caribbean (1990). Productive Change with Equity. Santiago: United Nations. ezln, Sexta Comisión. (2015). El pensamiento crítico frente a la hidra capitalista. Vol. 1. Retrieved from http://enlacezapatista.ezln.org.mx/2015/07/13/indice-volumen-uno -participaciones-de-la-comision-sexta-del-ezln-en-el-seminario-el-­pensamiento -critico-frente-a-la-hidra-capitalista. Accessed 3 March 2016. Fabra Ribas, A. (1943). The cooperative movement in Latin America: its significance in hemisphere solidarity. The University of New Mexico Press. Gudynas, E. and A. Acosta (2011), ‘El buen vivir más allá del desarrollo’, Revista Qué Hacer 181: 70–81. Guimaraes, R. (1989). Desarrollo con equidad: ¿Un nuevo cuento de hadas para los años de noventa? LC/R. 755. Santiago de Chile: cepal. Holloway, J. (2002). Change the World without Taking Power: The Meaning of Revolution Today. London: Pluto. Infante, B.R. and O. Sunkel (2009). Chile: hacia un desarrollo inclusivo. Revista cepal, 10(97), 135–154. Jubeto, Y., L. Guridi and M. Fernández Villa (eds.) (2014). Diálogos sobre Economía Social y Solidaria en Ecuador: Encuentros y desencuentros con las propuestas para otra economía. Bilbao: Instituto Hegoa, Universidad del País Vasco (Euskal Herriko Unibertsitate). Retrieved from http://publicaciones.hegoa.ehu.es/assets/pdfs/318 /Dialogos_sobre_ESS_en_Ecuador.pdf? 14029%2008778. Kay, C. (2008). Reflections on Latin American Rural Studies in the Neoliberal Globalization Period: A New Rurality? Development and Change, 39(6), 915–943. Leiva, F. (2008). Latin American Neostructuralism. The Contradictions of Post-Neoliberal Development. Minneapolis: University of Minnesota Press. Mallorquín, C. (2010). Latin American Neostructuralism: The Contradictions of PostNeoliberal Development. Canadian Journal of Latin American & Caribbean Studies, 35(70).

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Montiel, J.D. (2005). Empresas recuperadas por los trabajadores en Argentina. ­Retrieved from http://www.gestiopolis.com/empresas-recuperadas-por-los-trabajadores-en -argentina. Accessed 10 February 2015. Narayan, D. (2002). Empowerment and Poverty Reduction: A Sourcebook. Washington DC: World Bank. Pérez de Mendiguren, J.C., E. Etxezarreta, & L. Guridi (2009). Economía Social, Empresa Social y Economía Solidaria: diferentes conceptos para un mismo debate. ­Papeles de Economía Solidaria, No. 1. Retrieved from http://www.economiasolidaria.org/files/ papeles_ES_1_ReasEuskadi.pdf. Accessed 13 August 2016. Petras, J. and F. Leiva (1994). Poverty and Democracy in Chile. Boulder, CO: Westview Press. Petras, J. and H. Veltmeyer (2002). Autogestión de trabajadores en una perspectiva histórica. In Produciendo Realidad. Las Empresas Comunitarias. Enrique Carpintero and Mario Hernandez (eds.). Buenos Aires: Ediciones Topia. Petras, J. and H. Veltmeyer (2013). Social Movements in Latin America: Neoliberalism and Popular Resistance. Basingstoke UK: Palgrave Macmillan. Portes, A. (1998). Social Capital: Its Origins and Applications in Modern Sociology. ­Annual Review of Sociology, 24, 1–24. Portes, A. and L. Benton (1987). Desarrollo industrial y absorción laboural: una reinterpretación. Estudios Sociológicos, 5(13), April. Rao, V. (2002). Community Driven Development: A Brief Review of the Research. Washington, DC: World Bank. Razeto, L. (1988). Economía de solidaridad y mercado democratico, Vol. iii. Santiago: pet, Academia de Humanismo Cristiano. reas Red de Redes de Economía Alternativa y Solidaria: Portal de Economía Solidaria. (n/d). Retrieved from http://www.economiasolidaria.org. Accessed 12 November 2016. Rondinelli, D.A., J. McCullough, and W. Johnson (1989). Analyzing Decentralization Policies in Developing Countries: A Political Economy Framework. Development and Change, 20(1), 57–87. Sachs, W. (ed.) (1992). The Development Dictionary: A Guide to Knowledge and Power. London: Zed Books. Solow, R. (2000). Notes on Social Capital and Economic Performance. In Social Capital: A Multi-Faceted Perspective. edited by Partha Dasgupta and Ismail Serageldin. ­Washington, DC: World Bank. Sunkel, O. (1993). Development from Within: Toward a Neostructuralist Approach for Latin America. Boulder CO: Lynne Rienner. Teruggi, M. (2015). Venezuela. Communes or Nothing? Three years since the change of Direction. Resumen Latinoamericano / The Dawn, 20 October. Tokman, V. (1991). El Enfoque prealc. In V. Tokman (ed.) El Sector Informal en América Latina, dos décadas de análisis. México: Consejo nacional para la cultura y las artes.

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Tokman, V. and E. Klein (1988). Sector Informal: una forma de utilizar el trabajo como consecuencia de la manera de producir y no viceversa. Estudios Sociologicos, 6(16), Abril. unicef. (1989). Participación de los sectores pobres en programas de desarrollo local. Santiago: unicef. United Nations, Department of Economic and Social Affairs. Utting, P. (ed.). (2015). Social and Solidarity Economy: Beyond the Fringe. London: Zed Books. Veltmeyer, H. (2005). Development and Globalization as Imperialism. Canadian Journal of Development Studies, 26(1), 89–106. Veltmeyer, H. (2007). On the Move: The Politics of Social Change in Latin America. ­Toronto: University of Toronto Press. Veltmeyer, H. and A. O’Malley (2001). Transcending Neoliberalism: Community-Based Development in Latin America. West Hartford Conn: Kumarian Press. Veltmeyer, H. and J. Petras (2000). The Dynamics of Social Change in Latin America. London: Macmillan Press. Vieta, Ma. (ed.) (2014). Social and Solidarity Economy: Towards Inclusive and Sustainable Development. itc–ilo. Walton, J. and C. Ragin (1990). Global and National Sources of Political Protest: Third World Responses to the Debt Crisis. American Sociological Review, 55(6), December. Wanderley, F. (ed.) (2015). La economía solidaria en la economía plural: Discursos, prácticas y resultados en Bolivia. La Paz: cides–umsa. World Bank. (2007). Meeting the Challenges of Global Development. Washington, DC: World Bank. October 12. World Bank. (2008). Agriculture for Development. World Development Report. Washington, DC: World Bank.

Chapter 3

New Co-operativism in Latin America: Implications for Cuba Marcelo Vieta Cuba’s still-emergent economic reforms promise to open the way for an expanded ‘non-agricultural’ co-operative movement to flourish on the island. The economic reforms began with the ‘Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution,’ widely known at the time as Los Nuevos Lineamientos, the new (economic) guidelines of the Sixth Congress of the Communist Party of Cuba, adopted on April 18, 2011 (Sixth Congress, 2011). The development of non-agricultural co-operatives were, in turn, spearheaded by its new co-operative legislation, passed by the National Assembly in December 2012 (Gaceta Oficial, 2012; also see DuRand, 2016). Quickly expanding Cuba’s co-operative sector, which had been almost entirely an agricultural one, by late-2015 there were already almost 500 new non-agricultural co-operatives across the country in sectors such as gastronomy, construction, retail, technical services, maintenance and repair, light manufacturing, and in public services such as transport and waste collection. Around 77 per cent of these emerged from conversions of state enterprises, while the rest have been new start-ups from community initiatives (Piñeiro Harnecker, 2016; Ranis, 2016; Vuotto, 2016). But Cuba is still at a crossroads. While an expanded co-operative economy has the potential to both protect the gains of Cuba’s Revolution and reimagine its socialism as a more inclusive and participatory one, there are also pressures to privatise its economy. Alongside co-operatives and state-run enterprises, the economic reforms also promote foreign direct investments and permit private businesses using wage-labour. This means that some form of competitive market economy will bring tensions to Cuban socialism and its new co-operative sector, hastened by foreign capitalist interests encouraged by the end of the US embargo in 2014–2015 and the expansion of Cuba–US trade (Ranis, 2016). In this chapter I explore the possibilities and challenges of Cuba’s economic reforms with a focus on its new co-operatives. I consider what Cuba can draw from the radical roots and historical evolution of co-operatives and, most pertinently, what its emergent co-operative movement can learn from new forms of co-operative organising in Latin America that contest neo-liberalism, and

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at the same time, move beyond it. For the past few years, I have been conceptualising these new forms of solidarity-based co-operative experiments as the new co-operativism (Vieta 2010, 2016). Given the rapid expansion of the new co-operativism and the broader social and solidarity economy throughout the region in recent years, Cuba too—I propose in the following pages—could forge a viable non-state enterprise sector that continues to respect key aspects of its socialist project while also making it more participatory. By identifying its place in the new co-operativism, Cuba could draw inspiration for mutualising (or ‘co-operativising’) its economy while continuing to resist, as much as possible, capitalist encroachments. Via its own community-led path, a new cooperativism for Cuba’s socialism could include a vast expansion of its capacities for co-operative production, co-operative service delivery, co-operative finance, and co-operative exchange. In short, a new co-operativism for Cuba would allow its people to hold on to the social values and collaborative spirit they have been developing throughout its revolutionary history, while contributing to the co-creation of a global, 21st century co-operative socialism. 1

Cuba’s Economic Reforms: Mutualisation or Privatisation?

The major goals of the Communist Party’s economic reforms that began with broad public consultations in 2010–2011 have been threefold: (1) to re-assert the socialist state as the principal economic player, while (2) promoting local empowerment and development through decentralisation of the production and provisioning of non-essential goods and services, and (3) ‘broadening the terms of social ownership associated with the development of more ­co-­operatives and self-employment’ (Fernández Ríos 2016: 179). To make this happen, the Cuban government had proposed increasing the non-state employment sector from 16 per cent of Cuba’s workforce (2010 figures) to 35 per cent of Cuban workers by 2015 (Piñeiro Harnecker 2011). While this figure had not yet been reached as of late-2016, the path to transitioning up to 1.8 million workers to cuentapropistas (the self-employed), trabajadores asalariados (salaried workers), or co-operativistas (co-operators) is in full swing (Piñeiro Harnecker 2016; Ranis 2016).1 So far, two clear paths for reaching these goals are emerging: the mutualisation of greater portions of its economy via new non-agricultural co-operatives, and its privatisation via new private enterprises (Campos Santos 2016; Ranis 2016; Ritter 2016). ‘In the short term,’ reads Section VIII.217 of the Lineamientos, ‘[industrial production] shall be re-oriented to meet the 1 All translations by the author.

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demands from different forms of production (particularly co-­operatives and self-employees)’ (Sixth Congress 2011: 34). But it is also u ­ ndeniable that the reforms, according to Sections I.25–29 of the Lineamientos, leave ample room for the potential mushrooming of the co-operative movement, allowing for a new, non-state, self-provisioning, and self-managed sector which the Cuban state recognises as being amenable to its socialist framework. ‘Grade 1 co-operatives,’ the Lineamientos underline, ‘shall be established as a socialist form of joint ownership in various sectors’ (Sixth Congress 2011: 14, emphasis added).2 Encouragingly, to sustain the gains of Cuban socialism, increase endogenous productive capacity, and promote local development and self-­provisioning, co-operatives are viewed by the Cuban state as the more favourable form of enterprise. In doing so the Cuban State indirectly acknowledges its concerns regarding the risks to socialism in fully privatising its economy. As Camila Piñeiro Harnecker, one of Cuba’s foremost experts on co-operatives, recently explained, the expansion of non-agricultural co-operatives is viewed as: (1) ‘the most socialised way’ to transfer ‘non-fundamental’ economic activity into the non-state sector; (2) a way to permit state enterprises ‘to concentrate on core activities [by] contracting out to co-ops secondary and support activities’; (3) a path ‘to generate more stable and dignified employment’; (4) a method to ‘increase and diversify’ consumer goods and services production and provisioning in a ‘more socially responsible way’; and (5) ‘an example of good business practices for private enterprises’ (Piñeiro Harnecker 2015: 2). To date, however, only a small number of Cuba’s workers have transitioned into the new non-agricultural co-operative sector. Many others have been transitioning to employment in an expanding private sector of cuentapropistas, which will eventually include wholly foreign-owned firms, now permitted in Cuba. Thus, ample room has been left in the economic reforms for a boom in private businesses, as well (Sections I.11–24 of the Lineamientos), together with a continuation of ‘state-funded entities’ (Sections I.30–34). But the promise being placed on the new co-operative sector, and the Cuban state’s preferential treatment of co-operatives (via a broader array of economic activities 2 The Lineamientos go on to define ‘grade 1 co-operatives’ as ‘a business organisation that owns its estate and represents a distinct legal person. Its members are individuals who contribute assets or labour and its purpose is to supply useful goods and services to society and its costs are covered with its own income’ (Sixth Congress 2011: 14). More precisely, the new co-operative law of 2012 defines a co-operative as ‘an organisation with economic and social ends, that is constituted voluntarily on the basis of the contribution of assets and rights and is based on the work of its members, whose overall objective is the production of goods and provision of services through collective management, for the satisfaction of interest and its members’ (Gaceta Oficial 2012: article 2.1).

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­ ermitted in comparison to private firms, easier access to public contracts, p some state-subsidies for production inputs, reduced tax burdens, and accessible soft loans), has also set the stage for the possibility of the first ­co-­operatively based socialist economy to blossom. Certainly, the new interest in co-operatives that the 2011 economic reforms have unleashed extends far beyond the decrees of the Lineamientos. However, while many in Cuba view the mutualisation of its economy as a possible madein-Cuba path to a decentralised and more participative economy (i.e. Campos Santos 2016; Chaguaceda 2015; Piñeiro Harnecker 2016), challenges remain. We can identify at least six major concerns that have been articulated by those that aspire to expand the co-operative sector in Cuba. First, as Cuban co-operative developers and researchers have shared, many Cubans lack experience in applying the co-operative principles and organising. Yes, they underscore, many Cubans do indeed have experience with agricultural co-ops, urban farms (organopónicos), and family businesses, and most have been involved in municipally-based Poder Popular (People’s Power) initiatives, or with community-based committee experiences for some time. But these experiences have been top-down, party-led, and often managed by Cuba’s cadre of party-affiliated administrators (also see Chaguaceda 2015). Also, while the International Co-operative Alliance (ica) principles have guided the development of Cuba’s new co-operative law, Piñeiro Harnecker (2016) points out how there are no provisions for the fifth principle of the ica on education and training, and as yet no second-tier non-state associations, federations, or support organisations for its new, non-agricultural co-operatives that could carry out education and training for new co-operators (see Bateman et al., Chapter 11 in this volume). Second, the economic reforms are ambivalent regarding how a new private sector will unfold in the new Cuban economy, whether it will predominate, or whether Cuba turns primarily to a new social and solidarity economy rooted in co-operativism. The preamble of the Lineamientos, concerning Cuba’s new ‘Economic Management Model,’ leaves interpretive room for both. However, given Cuba’s continuing socialist model, the preamble to the Lineamientos seems to align more easily with an expanding social and solidarity economy made up of co-operatives: The economic system that shall prevail will continue to be based on the people’s socialist ownership over the fundamental means of production, governed by the socialist principle of distribution: ‘from each according to his/her capacity to each according to his/her contribution.’ Sixth Congress, 2011: 6

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Third, some influential Cuban economists have been pushing for a quicker, more intensive project of decentralisation and talk liberally of increasing the space for cuentapropistas (including the self-employed, entrepreneurs, and employers). These more orthodox economists advocate for a Cuban- and ­foreign-owned private sector that would hire employees other than family members (Feinberg 2011, 2013; Peters 2015). Indeed, this is in line with Sections I.11–24 of the Lineamientos. Some of these economists, inspired by the Chinese or Vietnamese models of economic growth within a communist political system, argue that a broader private sector is unavoidable and necessary for increasing productivity and innovation in Cuba to lift it out of its developing country status (Díaz Vazquéz 2012; Gálvez Chiú 2014; Mesa-Lago 2014). What are the main economic indicators being used by these economists? Growth, gdp, investment-to-profit ratios, value of production, and so on. At the same time, the Cuban government continues to expand on its list of permissible ­economic sectors for privatisation. Relying on this straight up neo-classical economic view risks transforming Cuba into one more (former?) socialist country that opens its economy to unbridled markets and foreign capital. Fourth, the size and role that the new market economy will have is still unclear. How will it interact with parts of the economy that will remain under state oversight, for instance? In a related vein, the degree of inter-firm competition that Cuba’s economic reforms could enable is also unclear. And what of the characteristics of a new wage-based labour market that will be needed to supply employees to private firms, where the labour-power of a new class of waged workers would become one of Cuba’s newest commodities, and where out-and-out surplus-value extraction and capital accumulation would be the prime mover for more and more economic sectors? Surprisingly, there is very little mention of such basic socialist concepts and critiques both in the Lineamientos and from some Cuban economists. Fifth, how will new private and co-operative enterprises in a growing nonstate sector invest in production inputs? For instance, some sort of wholesale market will be needed, but it is yet unclear how this will be structured. State quotas have traditionally handled this in Cuba. In a system of open markets, how will the non-state sector adapt to supply and demand constraints? The Cuban government seems to have addressed this partially with its 20 per cent discount subsidy for co-operatives’ production inputs when purchasing from the state (Piñeiro Harnecker 2015). However, this does not completely address new production supply markets. Will new non-state business capitalisation needs be driven and regulated by price-indicators for production inputs, or will state planning still be maintained there? Both scenarios have their downsides for a potential co-operative economy that might need, for instance, to sell in

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national pesos but purchase from private businesses in convertible currency.3 And what of the role of foreign businesses and suppliers? Moreover, the issue of what type of consumer markets will emerge, and what role the libreta ration book will have for meeting the daily needs of Cubans is still undetermined. Finally, pointing to perhaps the greatest risk of the reforms, there is some evidence of growing inequality in Cuba. Given that the Cuban government’s plan is to transition a substantial number of former state-employees to the new ‘non-state’ economic sector, how exactly will this transition continue to unfold to guarantee—as Raúl Castro has repeatedly assured—that ‘no one will be left unprotected’ in the process? This also remains to be seen. There are already some signs that poverty and inequality are growing on the island, while policy changes facilitating foreign remittances could form further class differences between those with families overseas and those without (Ranis 2016: 123–124). While Cuba’s economic reforms promise to free a broad cross-section of its economy from cumbersome and non-participatory state control, without doubt challenges and tensions for its socialist project remain. As commentators from the left, such as Peter Ranis (2016), Armando Chaguaceda (2015), ­Pedro Campos Santos (2016), Piñeiro Harnecker (2011, 2013, 2016), Mirta Vuotto (2016), and others have argued, solutions to some of these challenges might be found in further mutualising rather than privatising its economy, and what is clear is that promising numbers of new co-operatives have been emerging over the past few years. On the other hand, opening Cuba’s economy more and more to straight-up capital–labour relations and free markets at the expense of more participatory forms of socio-economic organising is the most perilous part of the economic reforms. This might very well put Cuba’s many socialist gains (i.e. free health care, excellent public education, relatively low poverty rates, low crime rates, subsidised housing, and so on) at most risk of eventually evaporating into growing inequality grounded in a free market system. Commentators on the left have been arguing that mutualising rather than privatising the economy is essential for both continuing and improving upon Cuba’s socialist project and making it more participatory and inclusive. Most promisingly, from the countless conversations I have had in Cuba with academics, government workers, co-operators, and people on the street, many Cubans are very willing to contemplate and consider the role of a larger co-operative ­sector. The co-operative road to economic reforms, most importantly, could safe-keep the successes of Cuba’s brand of socialism while, at the same time, taking it along the road towards a viable and new 21st century co-operative socialism. 3 While the Cuban government has been planning to create one national currency, the twocurrency national peso–convertible peso model was still in place in Cuba as of late-2016.

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Co-operativism’s Radical Roots

In building a case for dramatically expanding Cuba’s new co-operative sector, I would like to begin by underscoring that Cuba already has a fertile enabling environment for creating a new co-operative socialism. To put it more bluntly, Cuba’s already existing socialist society and the innovative capacities of its people already have in them the dna of the new co-operativism. In this section, I review some of the radical roots of the co-operative movement which still nourish today’s new co-operativism—new forms of community-based co-operation that both contests capitalist crises and neoliberal dispossession and enclosure, and that strives to move beyond them. The soil for today’s new co-operativism, and especially for Cuba’s new co-operatives, could be viewed as having been tilled in this history. While it is true that co-operatives have been amenable to capitalism, co-­ ­ operative history is nevertheless rooted in radical alternatives to it. ­Nineteenth-century socialist thought envisioned co-operatives as central for molding an alternative socio-economic system to capitalism. Co-operatives and co-operation were deeply enmeshed in something akin to Ferdinand Tönnies’ notion of Gemeinschaft—a locally rooted, community-constituted ­socio-economic order where members work together in personal bonds of association rather than as contractually separated individuals in competition with one another (Tönnies 2002). Co-operatives and co-operation also ­interlaced Peter Kropotkin’s conception of communism, informed as it was by historical social relations nurtured by values and practices of mutual aid (Kropotkin 1989). Early socialist thinkers—including the utopian socialists (i.e. Robert Owen, Charles Fourier, and William Thompson), social anarchists (i.e., Pierre-Joseph Proudhon, Mikhail Bakhunin, and Kropotkin), and communists (i.e. Karl Marx, Friedrich Engels, and V.I. Lenin)—also realised that the struggle for self-determination in a capitalist-controlled world was to be first won in the economic realm; liberating it was the prerequisite for winning other social and political freedoms (Vieta 2014a). At its core, this was a struggle to recuperate from capitalist control the trans-historical human capacities for combination and association for meeting the realm of necessity. Socialist reformers and revolutionaries thus viewed member-based associations such as co-operatives and values rooted in co-operation as the ground for establishing a new socio-economic reality that was much less exploitative and much more equitable than what capitalism was proposing (Vieta 2014a). Before the emergence of the actually existing socialist systems of the 20th ­century, their visions and experiments contributed to the start of the world co-­operative movement and what would later be called ‘economic democracy’ (Dahl 1985;

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Macpherson 1985; Malleson 2014; Schweickart 2011). The co-­operativised society would promote the administration of the means of production between all stakeholders, not just by the owners of capital. Anticipating a theme that was to be picked up later by V.I. Lenin’s view of co-operatives (Lenin 1923) and Antonio Gramsci’s considerations workers’ associations (Gramsci 2000), for 19th century socialists co-operatives were also important sites of working-class learning for organising the future society (Vieta 2014a). In addition, especially with the utopian socialists and anarchists, a co-operativised economy would be rooted in an early-modern version of subsidiarity,4 where production, distribution, and consumption would be mostly locally focused and would have the inclusive involvement of producers and consumers in the decision-making and governance of firms. Some, like Owen, still advocated for the private ownership of the means of production but with increased workers’ control, while other more radical thinkers, such as Bakhunin, Kropotkin, and Marx, argued forcefully for both social ownership and social control of the means of production by workers themselves. Indeed, as Canadian co-operative historian Ian MacPherson (2002) has emphasised, the visions of 19th century reformers and revolutionaries are at the heart of the ica’s seventh principle, concern for community, since they viewed co-operatives as one way of securing a community’s wellbeing via the associated production of social wealth for the many rather than the maximisation of profit for a few. Throughout the 20th century, co-operative modes of organising cultural, economic, and productive life continued to be viable alternatives to ­centrally planned or capitalist modes of production, distribution, and consumption. By the late 1960s, co-operative thought merged with broader social and economic demands for self-determination and workers’ control around the concept of autogestión (self-management) (Vieta, 2014a). The 20th century, however, also saw co-operatives increasingly accommodate to capitalism or centrally planned economies, while its practices of self-management and teamwork were gradually assimilated into the global Fordist and post-Fordist systems of production. Nonetheless, new co-operative models, as suggested by J.K. Gibson-Graham, have continued to show resilience for both resisting forms of global capital and foreshadowing new ‘economic imaginaries’ beyond ‘capitalocentrism’5 (­Gibson-Graham, 2006). But with the entrenchment of 4 Economic activity with a strong focus on the local and co-managed by local people. 5 For Gibson-Graham (2006). ‘capitalocentrism’ is one of the predominant worldviews of our epoch. Capitalocentric frameworks understand ‘the economy’ as well as alternative forms of economic practices ‘primarily with reference to capitalism’ (p. 6). Thus, for Gibson-Graham, capitalocentric worldviews infiltrate both capitalist and many anti-capitalist projects and ways of thinking.

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­ eoliberalism over the past four decades, co-operative practices and values n that both challenge the status quo and create alternatives to it have returned with dynamism in recent years. I have termed these experiments the new cooperativism (Vieta 2010, 2016). 3

The New Co-operativism

The new co-operativism is intimately connected to myriad contemporary social movements and experiments against and beyond neoliberal capitalism. It conceptualises a new arrangement for coordinating economic life via associated labour and socially and environmentally just distributive networks. However, rather than being overly preoccupied with formal co-operative organisational structures as such, the new co-operativism is more concerned with envisioning inclusive and solidary socio-economic practices. It is thus as much a rupture from conventional co-operative thinking as it is from capitalist ways of organising the economy. True, whether formally constituted as co-operatives or existing as less-formal collectives, organisations of the new co-operativism do take up some or all of the defining principles and values of the ica, such as autonomy, voluntary association, joint-ownership, democratic control, self-help, equity, solidarity, and concern for community (ica, 2017). But the new co-operativism does not always manifest into formally organised co-operatives as defined by the ica. Rather, the new co-operativism embraces, more broadly, myriad collective forms of organising social, cultural, environmental, and economic practices via shared values that are rooted in, as Kropotkin wrote over a century ago, ‘mutual aid amongst ourselves’ (Kropotkin, 1989: 223–292). Furthermore, it directly addresses the worst effects of globalisation and neoliberal capitalism on working people, and proposes, prefiguratively, the future, non-capitalist world desired by its protagonists. 3.1 Six Features of the New Co-operativism The new co-operativism taking shape throughout the world today constitutes six key features (Vieta, 2010, 2016): (1) It espouses values and practices of subsidiarity and community-led development. It is entrenched deeply within surrounding communities and usually embraces clear objectives for local community development by and for the very people affected. At times without tight links to older co-operative or labour movements, its collective projects issue more from immediate social, cultural, economic, or environmental necessity rather than from pre-existing ideological commitments.

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(2) It directly responds to crises. It tends to emerge as bottom-up solutions by working people and grassroots groups to myriad shared challenges, especially those generated by the neoliberal capitalist model, such as rising precarity and unemployment, local economic depletion, growing marginalisation, and environmental degradation. It also provides proactive, community-led alternatives to the privatisation of public goods and state downloading of social services. (3) It is ethical and sustainable. Its ethico-political commitments emerge not from capital-centric frameworks but from everyday experiences and needs. Further, it is driven by more ethical and sustainable engagements with the other and the planet. (4) It is inclusive. Its protagonists emerge from or engage with broad coalitions of community members, multiple stakeholders, and social justice movements. (5) It is horizontal, democratic, and co-managed. Compared to both capitalist production and to more traditional co-operative experiences, it fosters more horizontalised work processes, more gender-sensitive divisions of labour, more directly democratic decision-making, and shared forms of co-management. (6) It practices collective ownership and equitable distribution of social wealth. Its means of social, cultural, or economic production is owned collectively rather than privately. Moreover, it aims at a more equitable distribution of social wealth and surpluses. The six key features of the new co-operativism have much to offer to Cuba’s new co-operatives. The first three features of the new co-operativism highlight its contexts and deep entrenchment in working peoples’ lived experiences. That is, the new co-operativism is, first and foremost, committed to ethically and sustainably meeting a community’s immediate and future needs. Here we see the new co-operativism paralleling the already existing social innovations and practices of Cuba’s informal economy and its rich social networks of ­gifting and sharing. The new co-operativism also aspires to be free from preconceived doctrines and contrasts with calcified ways of organising in impermeable hierarchies of power. These are also implicit features of the L­ ineamientos’ proposals for decentralising Cuba’s state-based economy while nurturing the self-provisioning potential of its people. And related to this, the second and third features of the new co-operativism underscore how the ethicopolitical commitments of the new co-operativism are grounded in a postcapitalist imaginary, connected to people’s acute awareness of the crises and myriad oppressions that capitalism unleashes. For Cuba, its new co-­operatives promise to also provide endogenous socioeconomic shock absorbers in times

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of ­future crises, similar, for instance, to how it turned to organic agricultural practices during and after ‘the special period.’6 The last three features of the new ­co-­operativism, in turn, highlight how it organises the production of social wealth. Here the new co-operativism speaks also to how Cuba can safeguard its socialist values while adapting it to a 21st century co-operative ­socialism. The fourth feature of the new co-operativisim, for example, describes its inclusivity, which respects the diversity of communities through the participation of multiple actors. The fifth and sixth features concentrate on the organisational design of the new co-operativism, centred implicitly on the notion of autogestión (self-management): horizontal labour processes, direct ­democracy, collective ownership, and equity. Here, the new co-operativism’s practices of autogestión have much to offer Cuba’s new co-operatives while also allowing them to tap into the Cuban people’s capacities and desires for greater self-determination in their everyday lives. In short, the new co-operativism breaks from the capitalocentric framework of older forms of co-operatives that leaves them open to co-optation within the hegemonic capitalist system. Together, the six features of the new ­co-­operativism accentuate an economic model that is, I believe, in tune with protecting Cuban socialism while unleashing the capacities of its working people and deploying the assets already in place in local communities in a manner that re-enforces a participatory economic model. This is because community goals ground the new co-operativism and form the basis for alternative approaches to local development via strong notions of collective self-­ determination and self-provision (Vieta & Lionais, 2015). 4

The New Co-operativism and Critical Community Development

The sustainability of the new co-operativism is anchored in how it inherently espouses a radical and critical approach to community development (i.e., Munck & O’Hearn, 1999; Shragge & Toye, 2006; Veltmeyer, 2011). A critical ­approach to development considers how a community’s betterment should be grounded in local assets and capacities (Lionais & Johnstone, 2010). It draws out the latent skills, cultures, and knowledge of local communities for their own advancement (Noya & Clarence 2009) by aspiring to build on already existing local skills such that al of a community’s people might benefit ‘rather than just some’ (Silver & Loxley, 2007: 5). Most importantly, critical development 6 When the collapse of the ussr and its satellite states stopped the flow of subsidised oil and other commodities to Cuba in the early 1990s, it caused a long-lasting socio-economic crisis.

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a­ pproaches are locally rooted, are framed by subsidiarity, and aim to facilitate a community’s own solutions to its social and economic needs by emboldening ‘product[ion] to meet local needs, purchas[ing] locally, invest[ing] locally and … creat[ing] internal rather than external economic ‘linkages’ (Silver & Loxley 2007: 7).’ Arturo Escobar, from a post-development perspective, has called this ‘defensive localisation’ (Escobar, 2001: 149), whereby a community’s wealth emerges from out of ‘local forms of economic activity, cultural production … and knowledge’ (Böhm, Dinerstein, & Spicer, 2010: 22; also see Shiva, 1989). Community engagement and a critical disposition to bottom-up development is also at the historical core of co-operatives. The new co-operativism of the 21st century is equally committed to localities and community contexts by proposing alternative, post-capitalist ways of organising socioeconomic life. That is, the new co-operativism articulates the ways that people are collectively provisioning for their needs, producing and distributing goods and services otherwise in short supply, or meeting their desires for sustainable communities, as well as (re)imagining a different kind of world where such practices can proliferate. It is this present and future orientation of the new co-operativism that distinguishes it from reform-focused or more accommodative forms of cooperativism that remain caught in capitalo-centric schemas. Moreover, with the new co-operativism, neoliberal conceptualisations and policies of development are contested and sidestepped in favour of local self-provisioning; a broadening of supportive social networks; and a deep concern for the cultural, social, and environmental wellbeing of communities. These are all notions that impel, for instance, the Indigenous Latin American notion and practices of buen vivir (good living, or living well) (Giovannini, 2012; Gudynas, 2011) and myriad other Latin American experiments of the social and solidarity economy (Cattani, 2004; Corragio, 2013). 5

The Rise of the New Co-operativism in Latin America

Latin America over the past two decades has seen a flourishing of the new co-operativism that could serve as a model for a new, 21st century co-operative ­socialism for Cuba. Starting around two decades ago, a two-folded movement of resistance and renewal brought together groups of marginalised people across the region into a multi-hued fabric of counter-proposals to neo-liberalism. This broad movement was initiated by rebellious subjects who had had enough of the corruption, capital flight, and catatonia of the neo-liberal model that led to the socio-political crises plaguing Latin America throughout the years spanning the turn of the millennium. As the cracks in the system ­broadened

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and ­compromised Latin American states’ frayed fabrics of social compromise, ­rebellion and alternative experiments from below contagiously expanded and began to spill through the cracks, offering alternatives to the empty ‘trickle down’ promises of neo-liberalism. In short, Latin America’s experiments in the new co-­operativism have been both actual counter-­offensives by working people to the worst effects of neoliberal enclosure and e­ xperiments in creating new, community-driven socio-economic arrangements. Some ­examples include, among many others: Argentina’s Movimiento de Trabajadores Desocupados (mtd, Movement of Unemployed Workers, also called los piqueteros), neighbourhood assemblies, barter clubs, and worker-­recuperated firms; ­Brazil’s Movimento dos Trabalhadores Sem Terra (mst, Landless Workers’ Movement) and its expansive solidarity economy’s take up of autogestión; Indigenous struggles for identity and the recuperation of traditional lands organised around the notion of buen vivir in Ecuador, Bolivia, and in other parts of Latin America; the socioeconomic organising of the Zapatistas; and countless examples around the region of community-based ­enterprises, dignified housing initiatives, alternative exchange markets, popular education programs, barriobased cultural centres, and community kitchens and free health clinics.7 Latin America’s experiments in the new co-operativism make up the organisational forms falling within what is more commonly known in the region as the social and solidarity economy: a vast array of alternative economic practices and organisations that privilege social objectives and community wellbeing over private gain (see Veltmeyer, Chapter 2 in this volume). Of note, and connecting Cuba’s new co-operative experiments to these broader Latin American experiments, some of them, like the mst and Zapatistas, were inspired in part by the Cuban Revolution. In a form of inspirational reciprocity, Latin America’s new co-operativism of the social and solidarity economy suggests ways that Cuba’s new economy can begin to be conceptualised and organised within its already existing socialism. While protagonists of the social and solidarity economy and its new co-­ operative experiments embrace an intense desire for autonomy,8 some of its protagonists have not shied away from engaging with the state and other institutions. However, there is a deep tension between the expectations of the state to support the social and solidarity economy and the state’s ­propensities 7 For a wide range of examples of new co-operative experiments of the social and solidarity economy in Latin America today, see Buglione and Schlüter (2010), Cattani (2004), Parker et al. (2014), Gibson-Graham (2006), Gibson-Graham, Cameron, & Healy (2013), and Vieta (2010). 8 That is, the ability to speak for oneself and make decisions about one’s socioeconomic destiny.

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to over-regulate it or otherwise impose its capital-centric logics (Giovannini & Vieta, 2017). This echoes the general tension found with traditional co-­operatives between effective state supports and framing legislation and co-operatives’ need, at the same time, to operate autonomously. As Piñeiro Harnecker has underscored, ‘this aspect of co-operatives’ embedded into the ica’s fourth principle of autonomy and independence ‘is one of the most controversial’ (Piñeiro Harnecker, 2013: 36). Correspondingly, and containing valuable lessons for the role of the Cuban state in the development of new co-operatives, we can see two broad tendencies in Latin America: the state’s active support of the social and solidarity economy, as in Venezuela, Brazil, Bolivia, and Ecuador; or the state’s more arms-length or even antagonistic approach to social and solidarity economy initiatives, as in Mexico, Peru, Chile, and Argentina. Both tendencies place tensions on the autonomy of the social and solidarity economy’s new co-operativism as its ideals intermingle with the pragmatic needs of communities and the vagaries of national contexts. For Cuba, understanding these two tendencies are especially pertinent for its new non-agricultural co-ops since the state will continue to be a strong player in its economy and since most of Cuba’s new co-operatives to date have emerged from the conversion of state enterprises. Perhaps the case that could most resemble Cuba’s state-facilitated support of co-operatives is Venezuela. In Venezuela, an extensive ‘popular economy’9 of co-operatives and social enterprises has emerged through strong state intervention, unleashing and accompanying its working people’s desires for more personal wellbeing and participation in their socio-economic decisions (Lebowitz, 2005). Over the past dozen years, the Venezuelan state’s support of the popular economy has seen the creation of tens of thousands of ‘communal councils,’ new co-operatives, and self-managed enterprises of ‘socialist production’ (Azzellini, 2011, 2016; Larrabure, Vieta, & Schgurensky, 2011). While contradictions persist in Bolivarian Venezuela between the popular economy’s ­protagonists’ struggle for autonomy and its state-supported socialism (Larrabure et al. 2011)—tensions that are intensifying due to the new crises encouraged by striking capitalist interests in the post-Chávez era—its new co-­operativism in many ways has shown resilience to crises and continues to protect the socio-economic fabric of many communities (Azzellini, 2016). Part of this is due to the widespread take up of Venezuela’s version of autogestión, re-conceptualised as co-gestión (co-management) (Lebowitz, 2005). Co-gestión underscores a partnership between local communities and the state, homing in on collective autonomy from capital in order to ‘change the purpose 9 What the social and solidarity economy is officially called in Bolivarian Venezuela.

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of ­productive activity’ itself into a more socialised form of production (Lebowitz, 2005: par. 14). Co-gestión is based on the ‘triangle’ of socialism’—social ownership of production, social production organised by workers, and production for social needs. This is purposively conceptualised in sharp contrast to capitalism’s triangle of private property, exploitation, and for-profit production (Larrabure et al. 2011). Other Latin American countries with a social and solidarity economy facilitated by state-sanctioned supports and laws include Bolivia and Ecuador’s constitutional provisions for buen vivir, and the Brazilian state’s myriad supports for the country’s expansive solidarity economy organisations under the recent governments of the Partido dos Trabalhadores (PT) (2002–2016). Brazil’s supportive environment for its solidarity economy has also included partnerships with multiple stakeholders such as community groups, municipalities, unions, federations, and ngos. On the other hand, social and solidarity economy experiments in other Latin American countries have operated more independently from state influence, as with Peru’s rural community-based enterprises (Peredo & Chrisman, 2006) or Chile’s waste recycling collectives (Giovannini & Vieta, 2017). In other countries, states have taken a more contentious posture towards social and solidarity economy initiatives, acting either indifferently to their protagonists’ needs or co-opting them via social assistance policies, such as in Argentina, or even acting in more openly antagonistic ways, as in Mexico. The relationship of the Mexican state with regards to its Indigenous movements serves as a case of the latter. In light of the Mexican state’s sharp turn to neoliberal policies and its mostly unaddressed promises for supporting the social economy and marginalised groups in its constitution and laws, countless Indigenous groups in Michoacan, Chiapas, and Oaxaca, for instance, have gone on to re-claim traditional lands and practices for their own self-development despite the Mexican government’s continuing opposition (Giovannini, 2014; Giovannini & Vieta, 2017). The Zapatistas have adopted the most radically autonomous stance, influencing other Indigenous groups in Mexico and other experiments in the new co-operativism throughout Latin America (Cuninghame & Corona, 1998; Dellacioppa, 2009). The Zapatistas have sidestepped the Mexican state altogether by uniting a broad coalition of Indigenous groups in Chiapas and synchronising their radical libertarian socialist proposals with Indigenous values and practices. Its forms of new co-operativism—including local self-managed councils; alternative justice, health, and educational initiatives; and producer and worker co-operatives rooted in fair trade and fair work practices—have brought local autonomy and control of resources and land to substantial pockets of Chiapas within a parallel federated and Indigenous socio-economic system. At the same time, the Zapatistas are prefiguring the

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future liberated society in their horizontal re-organisation of territorial control through direct democracy and the social inclusion of previously marginalised groups (Giovannini, 2014; Khasnabish, 2008). Another tack taken by a state vis-à-vis marginalised groups and the social and solidarity economy has been Argentina’s use of social assistance plans, such as Plan Argentina Trabaja (Argentina Works Plan) (Vuotto, 2011, 2014). Geared towards curbing unemployment by tagging social assistance to the creation of worker co-operatives, this and other work-for-welfare programs have contributed to a sharp growth in worker co-operatives in Argentina since the early-2000s (Vuotto, 2014). However, these ‘assistentialist’10 policies have also stifled the potential for members of these worker coops to achieve a fuller development of their autonomy and creative capacities. On the one hand, there is no doubt that these state initiatives, overseen by the Ministry of Social Development and the Ministry of Labour over the twelve years of the three Kirchner administrations (2003–2015), have shown the Argentine state to be more committed to eradicating unemployment and poverty when compared to previous administrations (Piqué, 2009; Rivas & Amantini, 2009). On the other hand, these social assistance programs often do not include educational supports for its new co-operators, and have encouraged the institutionalisation of its related co-operatives, effectively de-politicising many of its members and undervaluing the co-operative principle of autonomy and independence. Equally problematic, they have also been used as ways of containing social r­ esistance and protest and co-opting many popular sectors into the kirchnerista faction of the Peronist party (Dinerstein, 2007; Piva, 2015). A more promising experiment in the new co-operativism in Argentina, paralleling in ways the autonomist postures of the Zapatistas and Brazil’s mst, has been its phenomenon of empresas recuperadas por sus trabajadores (erts, worker-recuperated enterprises) (Ranis, 2016; Ruggeri & Vieta, 2015; Vieta, 2012, 2014b). Argentina’s erts began to emerge in the 1990s and 2000s as workers’ responses to neoliberal structural adjustments, business restructurings, and the ultimate failure of Argentina’s political economy. A weakened union movement and an increasingly unresponsive state that had ­become overwhelmed by  growing life precariousness and its eventual loss of legitimacy compelled  workers in insolvent capitalist firms to take matters into their  own hands by occupying and ultimately converting them into worker 10

The term used in Argentina and other parts of Latin America to encompass an array of state-driven policies of social welfare delivery linked to containing social unrest and building a political coalition for the party in power by addressing the demands of popular sectors via co-optive strategies.

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co-operatives. ­Continuing to emerge to this day, erts have become bottom-up initiatives spearheaded by workers themselves for saving jobs and Argentina’s productive entities. They have also proven to be a new form of labour organising linked to the country’ newest social movements that arose during the crisis years spanning the turn of the millennium. In the ensuing years, erts have ­become viable solutions to informal work, stubborn unemployment, and precarity (Vieta, 2014b). As of early-2016, almost 16,000 workers were self-­managing close to 370 erts throughout the urban economy in sectors as ­diverse as printing and publishing, media, metallurgy, foodstuffs, construction, textiles, tourism, education, health provisioning, shipbuilding, and hydrocarbons and fuels (Ruggeri 2016). Argentina’s erts offer particularly useful lessons for Cuba’s new cooperatives, given that most of Cuba’s non-agricultural coops also arise from conversions, albeit from state enterprises rather than capitalist firms. Of particular note for Cuba’s new co-operatives is how Argentina’s ert workers have learned co-operative values and practices collectively, informally, and ‘sobre la marcha,’ or ‘on the path of doing’ co-operation, as many ert workers have reported (Vieta, 2014b). This, as I have analyzed elsewhere, is linked to the informal learning that takes place in what Ian MacPherson has called co-operators’ ‘associative intelligence’ (MacPherson, 2002: 90; also see Vieta, 2014b). ert protagonists have also overcome challenges in transitioning from managed employees to self-managed co-operators by creating, on their own accord, new second- and third-tier self-managed workers’ federations, often in solidarity with university programs and non-ert co-operatives. These selfmanaged workers’ f­ ederations have gone on to assist erts’ capacity building, support its protagonists’ educational needs by articulating and transferring best practices to new erts, and have even lobbied the state successfully to reform bankruptcy and expropriation legislation to make them more amenable to workers seeking to convert failing firms to worker co-operatives (Ranis, 2016; Ruggeri & Vieta, 2015). erts also engage in solidarity initiatives with local communities, further strengthening these co-operatives by entrenching them deeply into their localities. Underscoring the ways that the new co-operativism inspires people to become more socially aware, civically minded, and communitarian in disposition, many erts open their shops to the broader community in a notion that has come to be known as la fábrica abierta (the open factory) (Vieta, 2014b). For example, as both ways of giving back to the communities that supported them during the takeover of the firm, and from the community values its protagonists learn as they engage in autogestión, many erts contribute to the socioeconomic needs of surrounding communities by allowing social and cultural initiatives to operate within the firm, such as cultural

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centres, free health clinics, and bachilleratos populares (popular primary and high schools). And some erts have even invested portions of their surpluses to community economic development and revitalisation, such as assisting with dignified housing initiatives and repairs of local hospitals; sponsoring local cultural events; and supporting other co-operatives and erts by bartering production inputs, sharing marketing and customers, and setting up in some cases co-production initiatives with other erts in the same sector. Overall, erts have extended well beyond their numerical weight in Argentina, instilling ‘new expectations for [social] change’ in the country (Palomino, 2003: 71) while inspiring other ert experiments and initiatives for workplace justice elsewhere (Vieta, 2014b). 6

The Promises of the New Co-operativism for Cuba

As stated earlier, Cuba already embodies many of the same radical roots of the co-operative movement in its existing socialism and in the informal social and solidarity economy practiced everyday by Cubans. These roots in revolution and everyday solidary practices have helped form Cuba’s critical disposition that brought it back in recent years to the front-and-centre of alternative socioeconomic proposals, especially resonating with the global call for ‘another world’ proclaimed by the anti-neoliberal, alter-globalisation movements. Because of its radical history and the solidary disposition of its people, Cuba could be ready for a full transition to co-operative socialism. What promises does the new co-operativism offer Cuba for preserving its revolution’s gains and advancing its socialism? I address this question in the rest of this final section. 7

Informal and Formal Learning and the New Co-operativism

The new co-operativism fosters in its members values and attitudes of mutual aid and respect for the other and the planet. One of the ways it does this is through a strong informal learning dimension rooted in struggling in common for more just socioeconomic arrangements, locally and globally. Together with Cuba’s high literacy rate and Cuban’s long-standing innovative and ­entrepreneurial spirit, the collective and informal learning of the new cooperativism could go some way in filling the gaps left by its new co-operative legislation’s lack of formal provisions for education and training. As with the ways that ­Argentina’s ert protagonists learn co-operativism informally and

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sobre la marcha, Cuba’s new co-operatives can also draw on the associative intelligence that is unleashed when people co-operate to meet their socioeconomic needs. The Cubans I have spoken to and that are involved with or interested in co-operatives were eager to discuss how to co-operatively organise and practically manage themselves bottom-up, how to extend people’s participation in decision-making in enterprises, and how to start teaching each other the ins-and-outs of forming co-operatives ‘from below,’ from out of their own initiatives. In conversations with Cubans throughout the years, I have come to understand that they already possess a deep desire for engaging in ways of self-determining their own socioeconomic destinies. On the one hand, they have been effectively producing and consuming resources otherwise in short supply through their own social and solidarity initiatives in ways that have by-passed government quotas or Party leadership. On the other hand, many Cubans have also been involved for quite some time in participating in local community councils and in aspects of self-management in the state-owned enterprises they have worked in. Moreover, autochthonous research is already discovering that members of Cuba’s new co-operatives are perceiving very favourably the opportunities for self-managed decision-making available within the ­co-operative workplace (Piñeiro Harnecker, 2016: 188). Nevertheless, formal training and educational outlets will need to be created for the long-term sustainability of Cuba’s non-agricultural co-operative sector and for further nurturing co-operative practices and administration in a more pluralistic economy. As several co-operative scholars have already suggested, to achieve this formal education component second- and third-tier cooperative federations will be needed (i.e. Piñeiro Harnecker, 2016; Ranis, 2016; Vuotto, 2016). One already existing made-in-Cuba model for such an organisation is the decades-old Asociación Nacional de Agricultores Pequeños (anap, National Association of Small Farmers). Protagonists of the new co-operative sector could either emulate anap’s educational and administrative support strategies or the Cuban state could assist in extending anap itself into the non-agricultural coop sector. Other promising initiatives contributing to the long-term capacity building of Cuba’s new co-operatives are the collaborative knowledge exchanges that have been developing in the past few years between Cuban co-operators, developers, and researchers and scholars and coop developers from other countries, such as Canada and Scotland (see, for instance: Holm, 2014; Veltmeyer & Novkovic, 2016). 7.1 The Social and Solidarity Economy and the New Co-operativism More explicitly conceiving of Cuba’s new ‘non-state’ sector as part of a social and solidarity economy could prove to be a softer landing for the hundreds of

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thousands of state workers that are becoming co-operativistas and cuentapropistas. This would not require much of a paradigm shift for Cuba. In many ways, as I have been suggesting throughout this chapter, Cubans have already been engaging in a social and solidarity economy in its informal economic practices largely based on local self-provisioning, sharing, and reciprocity. Indeed, in this respect, Cuba already has strong affinities with the values and practices of the new co-operativism. Fully embracing the new co-operativism of the social and solidarity economy could, in effect, further extend local economic imaginaries that would protect Cuba from capital-centrism. Historically, we can think of how Cuba dramatically expanded its agricultural co-operatives shortly after the 1959 revolution, and again revolutionised its agricultural sector during and after the special period, making Cuba the first nation to adopt a predominantly organic farming sector rooted in the notion of subsidiarity (McKibben, 2005; Suzuki, 2006). Certainly, as Peter Ranis (2016) has recently argued, Cuba’s agricultural co-operatives provide important lessons and a rich foundation for the country’s new co-operatives, seeing many of its people already self-managing large portions of the economy via producer, worker, and credit co-operatives11 (Piñeiro Harnecker, 2013, 2015; Nova González, 2013; also see Donestevez Sanchez, Chapter 6 in this volume). Its communitarian socialism of everyday life is another example of Cuba’s already-existing social and solidarity economy. Here, we can think of Cuba’s informal economy and intricate social networks, rooted in the self-determining notion of la lucha (the struggle), where the sharing of scarce commodities and products, do-it-yourself car parts manufacturing and repair shops, and countless examples of neighbourhood and family reciprocity and gifting have been a daily reality for Cubans for decades (Taylor, 2005). Transferring this communitybased initiative and spirit of mutual aid to the new co-operative sector does not require a huge leap. I am reminded of the rich debates I have had with ­Cubans concerning the terms socialised, social, and socialist. Continuing to work through these concepts and practices collectively while also learning from Latin America’s broader experiments with the new co-operativism could be key for helping Cubans decide for themselves how a social and solidarity economy is different or similar to what they have been practicing daily. Most importantly, to work out a new co-operativism for Cuba will require a broad cross-­section of Cuban society to openly discuss and debate how their 11

These include: Cooperativas de Crédito y Servicio (ccss, Credit and Service Co-­ operatives), Co-operativas de Producción Agropecuarias (cpa, Agricultural Production Co-operatives), and Unidades Básicas de Producción Co-operativa (ubpc, Basic Units of Co-operative Production).

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a­ lready-existing ­socialism and innovative temperament can best be transferred into its new co-operatives with the aim of connecting its broader economic reforms with the everyday practices of its people. The participatory nature of the island-wide consultations before the official launch of the Lineamientos could serve as model for how these public discussions can continue to unfold. On the other hand, my conversations with Cubans also made clear that they are acutely aware that they must embrace a fuller notion of autogestión to succeed in transforming into a more non-statist socialist society. Economists and other academics, policymakers, co-operative practitioners, and everyday people have been interested to know more about how to make the autogestión practiced in other parts of Latin America effectively work in a country that has officially relied on a top-down socialism based on rations and a centralised economy. How can a grassroots-driven, non-state, selfmanaged ­co-­operative economy emerge and effectively function in a country that, up until the ­recent economic reforms, has had no real experience with autogestión and c­ o-­operatives outside of agriculture? Some of the Cubans I have spoken to have been inspired, for instance, by the experiences of Argentina’s workers ­taking over failing capitalist firms and converting them to worker ­co-operatives. Some of the challenges faced by Argentina’s converted worker co-operatives—such as formerly managed employees learning to become self-managed c­ o-­operators, securing sufficient returns to reinvest back into the business, learning marketing and accounting skills, and so on—are similar to some of the issues faced by converting Cuba’s state enterprises into ­co-operatives. Again, the efforts of various international solidarity networks already working with Cuban co-operative developers and researchers, the development of second- and third-tier federations of co-operatives and self-­ managed workers along the model of anap, and other educational supports that could be offered by the Cuban state could contribute to tackling these issues while promoting co-operative capacity building. 8

The New Co-operativism as Defence against Crises

The new co-operativism also promises to offer the Cuban economy safeguards in times of crises. Firmly entrenched in local communities and privileging their members’ needs over economic gain, co-operatives have, time and time again, proven to be resilient to crises. Co-operatives’ counter-­cyclical trends, for example, have been witnessed in the sharp uptake of de novo and conversion-based co-operatives in recent years in countries hardest hit by the  Great  Recession of 2008, such as in France, Spain, Italy, and Argentina

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(Birchall & Hammond-Ketilson, 2009; Ruggeri & Vieta, 2015; Sánchez-Bajo & Roelants, 2011; Vieta et al., 2017; Zevi et al., 2011). Co-operatives have also been known to preserve jobs and create new employment opportunities, again especially in times of crises (Pérotin, 2014; Zanotti, 2011). This resilient nature of co-operatives has been called the ‘co-operative advantage’ (Vieta & Lionais, 2015) and is also at the heart of the new co-operativism as witnessed throughout Latin America. An expansion of Cuba’s co-operative sector could similarly offer the island protections against potential future special periods, providing a robust system of ‘defensive localisation’ (Escobar, 2001: 149) that could go a long way in protecting Cuba against fluctuating influences of global financial capital and its recurrent crises. Again, Cuban agricultural co-operatives were central in sustaining the Cuban economy throughout its economic difficulties during the early-1990s, helping to also preserve the gains of its socialist model during a trying time for the world’s remaining communist societies. 9

The New Co-operativism and Co-operative Economics

Finally, the new co-operativism forces one to re-evaluate the hegemonic ­economic assumptions undergirding capitalist logics (Vieta & Lionais, 2015). Thinking about a ‘co-operative economics’ rather than a capitalist-focused one (Novković & Webb, 2014: 1–11) could help Cuba legitimise and strengthen the case for further mutualising rather than privatising its economy. When economists and sociologists take co-operatives seriously, taken-for-granted concepts from mainstream liberal economics—such as efficiency, the utilitarian and rational individual, growth for growth’s sake, labour as mere input and cost of production, and the primacy of the for-profit and capital-owned firm—must be reevaluated (i.e. Birchall, 2012; Zamagni, 2012, 2014). For instance, reconsidering the economy as pluralistic rather than just capitalistic or state-owned opens up analysis of the broader social relations of production and exchange that already exist. An ‘economic pluralism’ takes into a­ ccount myriad economic agents operating through different types of firms that are catalyzed by extrinsic and intrinsic motivators, such as altruism, ­security, social and individual wellbeing, the pleasure of working with others, and so on (Borzaga, Depedri, & Tortia, 2009). It also helps us more clearly assess non-capitalistic firms like co-operatives on their own merits rather than on criteria used to measure the private for-profit corporation (Novkovic & Webb, 2014). In addition, a co-operative-economic mindset shows that the capital-owned, profit-maximising, and autocratic firm is not the nature-given conditio sine qua non from which other firms like co-operatives deviate. ­Rather,

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a ­co-operative-economic mindset shows us that, historically, the investorowned corporation as an organisation of economic activity is the exception, and a relatively new one at that (Malleson, 2014; Zamagni & Zamagni, 2010). Perhaps most importantly for finding the place of the new co-operativism for Cuba’s socialism, a co-operative economics is normatively grounded. This compels us to re-think that most fundamental of orthodox economic concepts: efficiency. As Stefano Zamagni recently put it, the concept of efficiency—that standard measure of success in orthodox economic theory—is not just ‘a positive but a normative category of discourse’ (Zamagni, 2012: 8). Conceptualising efficiency from a normative perspective thus makes us think of production and work differently: it is not only about how firms produce and work more quickly and with less cost but, rather, also (if not primarily) about what type of production and work firms should be reproducing. In this regard, the new cooperativism teaches us that, rather than short-term gain, what really needs to be ‘efficiently’ pursued for a more sustainable world are better working conditions, non-exploitative modes of production, the long-term wellbeing of communities, and care for the environment. This also means respecting differences in skills, experiences, background, and ethnic and gender identities in ways that are not excluding. Moreover, the new co-operativism includes the entire community as stakeholder, rather than just investors, and considers workers as people rather than mere inputs of production. As Zamagni has also written, co-operative work is ‘the most advanced mode of imagining labour as an opportunity for self-realisation and not just a factor of production’ (Zamagni, 2012: 6–7). 10

Concluding Thoughts

The opportunity is ripe in Cuba for its own version of the new co-operativism to proliferate in its new economy. I believe there is a very compelling case to be made for Cuba’s economic reforms taking the path of a new ‘21st century co-operative socialism.’ The spirit of this chapter has been to contribute to this case. Empirically, co-operatives make sense for Cuba. Economists and sociologists have been showing that the co-operative firm is in most cases superior to other types of firms for local economies (i.e., Becchetti, Castriota, & Depedri, 2010; Erdal, 2011; Novkovic & Webb, 2014; Pérotin, 2014; Sanchez Bajo & Roelants, 2011; Webb & Cheney, 2014; Wilkinson & Pickett, 2010). Co-operatives are ideal for coordinating economic activity by and for the people most affected. Co-­operatives underscore how human beings are not, after all, ­inherently

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­ ossessive and competitive individualists, as capitalism has trained us for far p too long, but historically, as Kropotkin reminds us, rather more predisposed to collaboration and co-operation. Co-operatives also make for more robust work organisations when the contexts and supports are in place to make them flourish, as I believe they are in Cuba. Moreover, co-operatives do not necessarily suffer from inefficiencies because of their democratic make-up, as neoclassical economists are wont to argue, but are, rather, very effective at maximising member participation and numerous positive externalities for communities. Co-operatives are also resilient, acting as shock absorbers during socioeconomic downturns and crises. Moreover, research has been bringing to light how workers that co-own and co-manage their places of work are happier and healthier when in control of their working lives, and workers that are in-control of their workplaces are more committed to their jobs and to ­local communities. Co-operatives ultimately make sense for Cuba because they are a good fit with its socialist ideals and its already-existing social and solidarity economy. Indeed, a new co-operativism for Cuba would respect the core values of its transforming socialist project while contributing to the co-creation of a g­ lobal 21st century co-operative socialism. There is no doubt that many Cubans are working hard to make this a reality. My sense is that Cubans know that they have too much to lose to go down the privatised, neoliberal path. The ­co-operative path to economic sustainability would, I think, be a viable alternative development model for Cuba that would keep its social wealth within the country and benefit its people first and foremost. References Azzellini, D. (2011). Workers’ Control Under Venezuela’s Bolivarian Revolution. In I. Ness & D. Azzellini (eds.). Ours to Master and to Own: Workers’ Control from the Commune to the Present (pp. 382–399). Chicago: Haymarket Books. Azzellini, D. (2016). Communes and Workers’ Control in Venezuela: Building 21st Century Socialism from Below. Leiden: Brill. Becchetti, L., S. Castriota, & S. Depedri. (2010). Working in the Profit Versus Non-for -profit Sector: What Difference Does It Make? An Inquiry of Preferences of Voluntary and Involuntary Movers. euricse Working Papers 5|10. Trento, Italy: European Research Institute on Co-operative and Social Enterprises. Birchall, J. (2012). The Potential of Co-operatives During the Current Recession: Theorizing Comparative Advantage. Paper presented at the ‘Promoting the Understanding of Co-operatives for a Better World’ conference organised by the European Research Institute on Co-operative and Social Enterprises, San Servolo, Venice, Italy (March).

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Birchall, J. and L. Hammond-Ketilson (2009). Resilience of the Co-operative Business Model in Times of Crisis. Geneva: International Labour Organisation. Böhm, S., A.C. Dinerstein, & A. Spicer (2010). (Im)possibilities of Autonomy: Social Movements in and Beyond Capital, the State, and Development. Social Movement Studies, 9(1), 17–32. Borzaga, C., S. Depedri & E. Tortia (2009). The role of cooperative and social enterprises: A multifaceted approach for an economic pluralism. Euricse Working Papers 0900. Euricse (European Research Institute on Cooperative and Social Enterprises). Buglione, S. & R. Schlüter (2010). Solidarity-Based and Co-operative Economy and Ethical Business: Trends, Innovations, and Experiences in Europe. Background Paper. Brussels: Rosa Luxembourg Foundation. Campos Santos, P. (2016). Grave error topar los precios: Siete medidas para ayudar a solucionar el problema. Observatorio Crítico Cubano. Retrieved from: . Accessed 05 May 2016. Cattani, D.A. (Ed.). (2004). La otra economía. Buenos Aires: Altamira. Chaguaceda, A. (2015). The Promise Besieged: Participation and Autonomy in Cuba. In P. Brenner, M. Rose Jiménez, J.M. Kirk, & W.M. LeoGrande (Eds.). A Contemporary Cuban Reader: The Revolution Under Raúl Castro (pp. 111–116). Lanham, MD: ­Rowman & Littlefield. Coraggio, J.L. (2013). Tres corrientes de la ess (economía social y solidaria). Temas: Cultura, Ideología, Sociedad, 75, (July–September). Retrieved from . Accessed 02 February 2016. Cuninghame, P. & C.B. Corona (1998). The Rainbow at Midnight: Zapatistas and Autonomy. Capital & Class, 22(3), 12–22. Dahl, R.A. (1985). A Preface to Economic Democracy. Berkley, CA: University of ­California Press. Dellacioppa, K.Z. (2009). This Bridge Called Zapatismo: Building Alternative Political ­Cultures in Mexicy City, Los Angeles, and Beyond. Lanham, MD: Rowman & Littlefield. Díaz Vazquéz, J.A. (2012). Actualizar el modelo económico en Cuba: ¿Patrón chino o vietnamita? Consejo Latinoaméricano de Ciencias Sociales (clacso). Retrieved from: . Accessed 13 December 2015. Dinerstein, A. (2007). Workers’ Factory Takeovers and New State Policies in Argentina: Towards an ‘Institutionalisation’ of Non-Governmental Public Action? Policy & Politics, 35(3), 529–550. DuRand, C. (2016). Co-operative Cuba. In C. DuRand (Ed.). Moving Beyond Capitalism (pp. 36–42). London: Routledge. Erdal, D. (2011). Beyond the Corporation: Humanity Working. Random House. Escobar, A. (2001). Culture Sits in Places: Reflections on Globalism and Subaltern Strategies of Globalization. Political Geography, 20: 139–174.

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Feinberg, R. (2011). Reaching Out: Cuba’s New Economy and the International Response. Latin American Initiative at Brookings (November). Retrieved from . Accessd 11 November 2015. Feinberg, R. (2013). Soft Landing in Cuba: Emerging Entrepreneurs and Middle Classes. Latin American Initiative at Brookings (November). Retrieved from . Accessd 11 November 2015. Fernández Ríos, O. (2016). The Necessary Renovation of Socialist Hegemony in Cuba: Contradictions and Challenges. In C. DuRand (Ed.). Moving Beyond Capitalism (pp. 179–183). London: Routledge. Gaceta Oficial. (2012). Gaceta oficial de la República de Cuba, No. 035, Extraordinaria de 11 diciembre 2012. La Habana: Ministerio de Justicia de la República de Cuba. Gálvez Chiú, K. (2014). La economía cubana: ¿Hacia el modelo chino? Convivencia (September-October). Retrieved from . Accessed 17 October 2015. Gibson-Graham, J.K. (2006). A Postcapitalist Politics. Minneapolis: University of Minnesota Press. Gibson-Graham, J.K, J. Cameron, & S. Healy (2013). Take Back the Economy: An Ethical Guide for Transforming Our Communities. Minneapolis, MS: University of Minnesota Press. Giovannini, M. (2012). Social Enterprises for Development as Buen Vivir. Journal of Enterprising Communities: People and Places in the Global Economy, 6(3): 284–299. Giovannini, M. (2014). Indigenous Community Enterprises in Chiapas: A Vehicle for Bueni Vivir? Community Development Journal, 50(1): 71–87. Giovannini, M. and M. Vieta (2017). Co-operatives in Latin America. In J. Michie, J.  ­Blassi, & C. Borzaga (Eds.). Oxford Handbook of Co-operative and Mutual Businesses (pp. 335–347). Oxford: Oxford University Press. Gramsci, A. (2000). Factory Councils and Socialist Democracy. In D. Forgacs (Ed.). The Antonio Gramsci Reader: Selected Writings, 1916–1935. New York: New York University Press. Gudynas, E. (2011). Buen vivir: Germinando alternativas al desarrrollo. alai (Agencia Latino Americana Informaciones). Retrieved from . Accessed 12 February 2016. Holm, W. (2014). Sustainable Paths to a Just Economy: Co-operatives in the Land of Martí. Proceedings from the International Summit of Co-operatives, Quebec City, Quebec (October). Retrieved from: . Accessed 18 June 2016.

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ica. (2017). Co-operative Identity, Values & Principles. International Co-operative Alliance organisational website. Brussels: International Co-operative Alliance. ­ Retrieved from . Accessed 1 May 2016. Khasnabish, A. (2008). Zapatismo Beyond Borders: New Imaginations of Political P­ ossibility. Toronto: University of Toronto Press. Kropotkin, P. (1989). Mutual Aid: A Factor of Evolution. Montreal: Black Rose Books. Larrabure, M., M. Vieta, & D. Schugurensky (2011). The ‘New Co-operativism’ in Latin America: Worker-Recuperated Enterprises and Socialist Production Units. Studies in the Education of Adults, 43(2): 181–196. Lebowitz, M. (2005). Constructing Co-management in Venezuela: Contradictions Along the Path. Monthly Review (October). Retrieved from . Accessed 9 March 2016. Lenin, V.I. (1923[1965]). On Cooperativism, Pravda, No. 115–116. In Lenin’s Collected Works, Vol. 33, pp. 467–475. Moscow: Progress Publishers. Lionais, D. & H. Johnstone (2010). Building the Social Economy Using the Innovative Potential of Place. In J.J. McMurtry (Ed.). Living Economics: Canadian Perspectives on the Social Economy, Co-operatives, and Community Economic Development (pp. 105–128). Toronto: Edmond Montgomery. Macpherson, C.B. (1985). The Rise and Fall of Economic Justice and Other Essays. Oxford, UK: Oxford University Press. MacPherson, Ian. (2002). Encouraging Associative Intelligence: Co-operatives, Shared Learning and Responsible Citizenship. Journal of Co-operative Studies, 35(2), 86–98. Malleson, T. (2014). After Occupy: Economic Democracy for the 21st Century. Oxford: Oxford University Press. McKibben, B. (2005). The Cuba Diet: What Will You Be Eating When the Revolution Comes? Harper’s Magazine (April). Retrieved from . Accessed 04 July 2015. Mesa-Lago, C. (2014). Institutional Changes of Cuba’s Economic-Social Reforms: State and Market Roles, Progress, Hurdles, Comparisons, Monitoring and Effects. Foreign Policy Latin America Initiative at the Brookings Institute. Retrieved from . Accessed 14 January 2016. Munck, R. & D. O’Hearn (Eds.). (1999). Critical Development Theory: Contributions to a New Paradigm. London: Zed Books. Nova González, A. (2013). Agricultural Co-operatives in Cuba: 1959-Present. In C. Piñeiro Harnecker (Ed.). Co-operatives and Socialism: A View from Cuba (pp. 279–291). Basingstoke, UK: Palgrave Macmillan. Novković, S. and T. Webb (Eds.). (2014). Co-operatives in a Post-Growth Era: Creating Co-operative Economics. London: Zed Books.

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Noya, A., and E. Clarence (2009). Putting Community Capacity Building in Context. In G. Craig, A. Noya, & E. Clarence (Eds.). Community Capacity Building: Creating a Better Future Together (pp. 15–35). Paris: Organization of Economic Co-operation and Development (oecd). Palomino, H. (2003). The Workers’ Movement in Occupied Enterprises: A Survey. Canadian Journal of Latin American and Caribbean Studies, 28(55): 71–96. Parker, M., G. Cheney, V. Fournier and C. Land (Eds.). (2014). The Routledge Companion to Alternative Organization. London: Routledge. Peredo, A.M. and J.J. Chrisman (2006). Toward a Theory of Community-based Enterprise. The Academy of Management Review, 31(2): 309–328. Pérotin, V. (2014). Worker Co-operatives: Good, Sustainable Jobs in the Community. Journal of Entrepreneurial and Organizational Diversity, 2(2): 34–47. Peters, P. (2015). Cuba’s Entrepreneurs. In P. Brenner, M. Rose Jiménez, J.M. Kirk, and W.M. LeoGrande (Eds.). A Contemporary Cuban Reader: The Revolution Under Raúl Castro (pp. 145–152). Lanham, MD: Rowman & Littlefield. Piñeiro Harnecker, C. (2011). Empresas no estatales en la economía cubana: Potencialidades, requerimientos y riesgos. Revista Universidad de la Habana, 272: 45–65. Piñeiro Harnecker, C. (Ed.). (2013). Co-operatives and Socialism: A View from Cuba. ­Basingstoke, UK: Palgrave Macmillan. Piñeiro Harnecker, C. (2015). The Role of Co-operatives in Cuba’s New Economy. Keynote address presented at the ‘Co-operatives and the World of Work’ conference, International Labour Organization (ilo) and International Co-operative Alliance (ica). Antalya, Turkey (November). Retrieved from . Accessed 19 February 2016. Piñeiro Harnecker, C. (2016). Cuba’s Co-operatives: Their Contribution to Cuba’s New Socialism. In C. DuRand (Ed.). Moving Beyond Capitalism (pp. 184–194). London: Routledge. Piqué, M. 2009. Un plan para crear 100 mil puestos de trabajo. Pagina/12 (August 14). Retrieved from . Accessed 5 September 2015. Piva, A. (2015). Economía y política en la Argentina kirchnerista, Buenos Aires: Batalla de Ideas. Ranis, P. (2016). Co-operatives Confront Capitalism: Challenging the Neoliberal Economy. London: Zed Books. Ritter, A. (2016). Alternative Institutional Futures for Cuba’s Mixed Economy. The Cuban Economy/La Economía Cubana (February). Retrieved from . Accessed 04 April 2016.

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Rivas, N. and A. Amantini (2009). Co-operativismo de trabajo y políticas públicas: Perspectivas y límites de una vinculación reciente. Paper presented at the ‘ii Encuentro Internacional de “La Economía de los Trabajadores”: Autogestión y trabajo frente a la crisis global.’ Programa Facultad Abierta, Universidad de Buenos Aires, Buenos Aires, Argentina (August). Ruggeri, A. (Ed.) (2016). Las empresas recuperadas por los trabajadores en los comienzos del gobierno de Mauricio Macri. Buenos Aires: Programa Facultad Abierta, Facultad de Filosofía y Letras, Universidad de Buenos Aires. Ruggeri, A. and M. Vieta (2015). Argentina’s Worker-Recuperated Enterprises, 2010– 2013: A Synthesis of Recent Empirical Findings. Journal of Entrepreneurial and O ­ rganizational Diversity, 4(1), 75–103. Sanchez-Bajo, C. and B. Roelants (2011). Capital and the Debt Trap: Learning from ­Co-operatives in the Global Crisis. Basingstoke, UK: Palgrave Macmillan. Schweickart, D. (2011). After Capitalism. Lanham, MD: Rowman & Littlefield. Shiva, V. (1989). Staying Alive: Women, Ecology, and Development. London: Zed Books. Shragge, E. and M. Toye (Eds.). (2006). Community Economic Development: Building for Social Change. Sydney, NS: Cape Breton University Press. Silver, J. and J. Loxley (2007). Community Economic Development: An Introduction. In J. Loxley, J. Silver, & K. Sexsmith (Eds.). Doing Community Economic Development (pp. 2–13). Halifax, NS: Fernwood Press and Canadian Centre for Policy Alternatives. Sixth Congress of the Communist Party of Cuba. (2011). Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution. La Habana: ­Gobierno de la República de Cuba. Retrieved from . Accessed 4 May 2016. Suzuki, D. (2006). Cuba, the Accidental Revolution: Sustainable Agriculture. The Nature of Things, Toronto: Canadian Broadcasting Corporation. Retrieved from . Accessed 14 June 2016. Taylor, S. (2005). La Lucha. Dissent, Winter, 14–20. Tönnies, F. (2002). Community and Society (Gemeinschaft und Gessellschaft). Mineola, NY: Dover Publications. Veltmeyer, H. (2011). Social Capital and Local Development. in H. Veltmeyer, (ed.), Tools for Change: The Critical Development Studies Handbook. Halifax: Fernwood publications. Veltmeyer, H. and S. Novkovic (2016). Co-operativism and Local Development: An ­Alternative Development Path for Cuba. sshrc Workshop (April). Saint Mary’s University, Halifax, Nova Scotia. Vieta, M. (2010). Editorial: The New Co-operativism. Affinities: A Journal of Radical ­Theory, Culture, and Action, 4(1): 1–11.

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Vieta, M. (2012). From Managed Employees to Self-Managed Workers: The Transformations of Labour at Argentina’s Worker-Recuperated Enterprises. In M. Atzeni (Ed.). Alternative Work Organizations (pp. 129–156). Basingstoke, UK: Palgrave Macmillan. Vieta, M. (2014a). The Stream of Self-Determination and Autogestión: Prefiguring Alternative Economic Realities. Ephemera, 14(4): 781–809. Vieta, M. (2014b). Learning in Struggle: Argentina’s New Worker Cpoperatives as Transformative Learning Organizations. Relations Industrielles/Industrial Relations, 69(1): 186–218. Vieta, M. (2016). Autogestión: Prefiguring a ‘New Co-operativism’ and ‘The Labour Commons.’ In C. DuRand (Ed.). Moving Beyond Capitalism (pp. 55–63). London: Routledge. Vieta, M. and D. Lionais (eds.). (2015). Editorial: The co-operative advantage for community development. Journal of Entrepreneurial and Organizational Diversity, 4(1): 1–10. Vieta, M., S. Depedri, and A. Carrano (2017). Saving Jobs and Businesses in Times of ­Crisis: The Italian Road to Creating Worker Co-operatives from Worker Buyouts. euricse Research Report 015|17. Trento, Italy: European Research Institute on Co-operatives and Social Enterprises. Retrieved from . Accessed 15 January 2017. Vuotto, M. (2011). El co-operativismo de trabajo en la Argentina: Contribuciones para el diálogo social. Geneva: International Labour Organization. Retrieved from . Accessed 28 February 2016. Vuotto, M. (2014). La economía social y las co-operativas en la Argentina. Retrieved from . Accessed 13 March 2016. Vuotto, M. (2016). Las co-operativas no agropecuarias y la transformación económica en Cuba: Políticas, procesos y estrategias. revesco: Revista de Estudios Co-operativos, 120, 149–181. Webb, T. and G. Cheney (2014). Worker-Owned-and-Governed Co-operatives and the Wider Co-Operative Movement. In M. Parker, G. Cheney, V. Fournier, & C. Land (Eds.). The Routledge Companion to Alternative Organization (pp. 64–88). London: Routledge. Wilkinson, R. & K. Pickett (2010). The Spirit Level: Why Equality is Better for Everyone. New York: Penguin Books. Zamagni, S. (2012). Comparing Capitalistic and Co-operative Firms on the Ground of Humanistic Management. Paper presented at the ‘Promoting the Understanding of Co-operatives for a Better World’ conference, European Research Institute on Co-operative and Social Enterprises, San Servolo, Venice, Italy (March).

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Zamagni, S. (2014). Choices, Incentives, and Co-operative Organization. In S. Novković and T. Webb (eds.). Co-operatives in a Post-Growth Era: Creating Co-operative E­ conomics (pp. 157–175). London: Zed Books. Zamagni, S. and V. Zamagni (2010). Co-operative Enterprise: Facing the Challenge of G ­ lobalization. Cheltenham, UK: Edward Elgar. Zanotti, A. (2011). Italy: The strength of an inter-sectoral network. In A. Zevi, A. Zanotti, F. Soulage, & A. Zelaia (Eds.). Beyond theCcrisis: Co-operatives, Work, and Finance: Generating Wealth for the Long Term (pp. 21–100). Brussels: cecop Publications. Zevi, A., A. Zanotti, F. Soulage, and A. Zelaia (2011). Beyond the Crisis: Co-operatives, Work, Finance. Generating Wealth for the Long Term. Brussels: cecop Publications.

Chapter 4

The New Guidelines: Economic Changes and Its Political and Social Impact Olga Fernández Ríos The resolutions approved by the 6th Congress of the Communist Party of Cuba (pcc) in April 2011, especially its ratification of the strategy for socialist development contained in the document Social and Economic Policy Guidelines of the Party and the Revolution (‘los Lineamientos’), initiated a process known as the updating of the economic and social development model, centred on changing property forms by creating an opening for non-state sectors in the economy. The pcc 7th Congress in April 2016 reaffirmed the updating process and made specific proposals and plans for its continuation. The property and economic management model currently in effect recognises the socialist state enterprise as the principal economic form, along with various types of foreign investment as stipulated by law (joint enterprises, international economic association contracts, and others), agricultural and urban co-operatives, small farmers, landholders with usufruct rights, landlords, self-employed workers and small business employees, and other forms that together can contribute to increasing economic efficiency (pcc, 2011). This is a new stage of the socialist transition in Cuba, a complex and contradictory process in an underdeveloped country under siege by the United States. In these conditions, it is essential to set aside the structures and practices of a centralised state model that would require a rectification more profound than any carried out in the country, despite advances made by the Revolution over more than 50 years. This does not in any way deny the achievements of the Cuban Revolution, and we can affirm that structures, sociopolitical mechanisms, and self-critical capacities exist for eliminating the types of bureaucratic deformations that so negatively marked 20th century socialist experiences, and from whose influence Cuba did not escape (Fernández Ríos 2014). The transformation of the economic model brings to light social contradictions and inequalities that could provoke contradictory perceptions of these changes, generating confusion and risks for maintaining a popular consensus in favour of socialism. Hence the importance of counteracting these contradictions and inequalities, and that depends to a large extent on economic development. Efforts to that effect are underway, and it is the goal of the updating

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process, but it will take time. Therefore, in the short term, actions in the field of political and ideological relations will be decisive to a visible re-affirmation of the power that the Cuban people have gained since 1959. It is impossible to completely analyze such a complex process and its consequences in so few pages. We will limit ourselves to addressing aspects that demonstrate the sociopolitical nature of the updating of the development model, which involves and brings tensions to the entire Cuban political system, under the leadership of the pcc, with multi-faceted responsibilities concerning the State and the organised people. Our objective is to contribute to an analysis of the social and political factors that interact with economic change in pursuit of socialism that is sustainable and more prosperous, not just economically but also politically—socialism that is based on ideology that is translated into the motivations, commitments, values, and political culture of the masses. Among the subjects open to analysis we have chosen three: (1) Background to the updating of the economic and social development model; (2) The rectification now underway and principal changes that are being implemented; (3) Political and social impacts and challenges caused by those changes. 1

Background to the Process of the Updating of the Model1

The triumph of the Cuban Revolution on January 1, 1959, profoundly changed society, eliminating to a great extent the social inequalities, ignorance, and legacy of neocolonialism and dependence present throughout the 20th century. From the very start, the Revolution opened up a process of socialist transition and political power was consolidated in the hands of the people, with unprecedented economic, educational, and cultural advances, together with security and dignity. One of the characteristics of the socialist transition in Cuba has been to guarantee social justice as the principal premise of economic progress. To be able to achieve that, for various reasons a development model was implemented that had as its predominant characteristics nationalisation of a large part of the means of production and economic planning, along with the development of a co-operative sector, which was limited to agriculture. This was incorporated into the revolutionary project early on, through the Agrarian Reform Law (May 17, 1959). That law eliminated the large landholdings of US companies and national oligarchies and reaffirmed the rights of those who worked the land by making them its owners. The agrarian reform made 1 Taking into account that we mention this process repeatedly in this chapter, we sometimes refer to it in an abbreviated way as ‘the updating process.’

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it possible to create sugar cane production co-operatives in 1960,2 and since then, various experiences of co-operative agricultural production have been developed.3 In all cases, the political will has existed to sustain and extend the co-­ operative form of ownership and management, which is compatible with the intentions and objectives of socialist transition. At the same time, material support has been provided, along with access to new technologies developed by scientific research at state institutions. Agricultural co-operatives introduced changes to the structure of land ownership and labour relations by massively converting agricultural workers into landowners. They were inserted into the context of predominant state ownership over a large part of the means of production, and they have achieved positive levels of economic efficiency and influence over the development of rural areas and municipalities. These agricultural coops have been shown to be a form of property and economic management compatible with the objectives of socialist transition, and this favoured the creation of urban co-operatives beginning in 2012. We should acknowledge that the centralist state model that predominated in Cuba until 2011 promoted economic, sociopolitical, and cultural development, along with guarantees of employment, health, education and universally accessible social welfare, and a high level of cohesion and solidarity, both internally and toward the rest of the world. But we also recognise that along with important achievements in social justice policies, that model promoted free or low-priced services that were provided by the State as well as subsidies for 100 per cent of the population, regardless of citizens’ contributions to their country’s development. This negatively influenced productivity and mentalities, affecting people’s motivation to work. This is the so-called ‘state paternalism,’ which fostered concepts of homogeneity and social equality based on things such as subsidies for the distribution of consumer goods, and excessive 2 Sugar cane co-operatives were created, without any experience, to promote forms of ­co-operation among small and mid-size farmers, and this was evident in organisational and operational problems that led to the dismantling of these coops in 1962, until favourable conditions were created to promote co-operatives. For further reading see Rodríguez, Carlos Rafael (1983). ‘Cuatro Años de Reforma Agraria,’ in Letra con Filo. Vol ii. Editorial de Ciencias Sociales. Havana. In 1963, a second agrarian reform law increased the number of small farmers and diversified agricultural production, making it possible to later create new agricultural co-operatives. 3 For further reading see Armando Nova (2004). ‘El Co-operativismo línea de desarrollo en la agricultura cubana 1993–2003,’ ceec, University of Havana, and Reynaldo Miguel Jiménez Guethón: ‘Desarrollo local y co-operativas agrícolas en Cuba: logros y desafíos.’ Revista África América Latina N° 46 sodepaz. http://publicaciones.sodepaz.org/images/uploads /documents/revista046/5_desarrollolocal.pdf.

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employment in some areas of state administration. In addition, institutional dysfunction and increased bureaucracy existed, sometimes benefiting the black market and manifestations of corruption. Around 1985, it became evident that we needed socioeconomic adjustments, and that is where we find the closest precedents to the updating process, which we will analyze in the following three sections: The Process of Rectification of Errors and Negative Tendencies Beginning in 1984 In the mid-1980s, the revolutionary leadership headed by Fidel Castro acknowledged that errors and negative tendencies were affecting economic development and cultivating bureaucracy, and this initiated a process of analysis and rectification.4 Unfortunately, that process was interrupted in the 1990s, when we had to confront the negative economic effects of the collapse of socialism in the ussr. Nevertheless, it was an experience and demonstration of political will to eliminate the shortcomings and economic deformations derived from excessive state centralisation of the economy, and to achieve greater economic development based on internal capacities. Therefore, we began strengthening economic sectors favourable for human development, such as science, in the fields of biomedicine, biotechnology, genetic engineering, and the production of medications and vaccines. Progress also was made in agricultural development, in areas such as animal health and feed.

1.1

1.2 The 1990s—the Special Period This was a period marked by the effects of the collapse of Eastern European socialism, the disappearance of the Council for Mutual Economic Assistance— the alliance within which Cuba carried out most of its economic, financial and scientific/technical exchange—and the intensification of US political, economic, and media aggression toward Cuba, through two laws that reinforced the economic and trade blockade: the Torricelli law in 1992 and the HelmsBurton Act in 1997, with its extraterritorial reach.5 4 Tests were initiated for introducing market mechanisms in enterprise management, with some decentralisation of decision-making and other steps, such as the distribution of consumer products through the so-called parallel market, where some products on the ration book also were sold freely (without quantitative limits) at higher prices, and measures and counter-measures were taken with respect to the supply-and-demand farmers’ markets. See Ferriol Muruaga, Ángela: 1998 ‘El Empleo en Cuba (1989–1996).’ In A.F. Muruaga, et al: Cuba: crisis, ajuste y situación social (1990–1996). Havana, Editorial de Ciencias Sociales: 23–26. 5 According to some figures, consumption in 1993 dropped almost 30 per cent compared to 1989, while the underground economy and underemployment grew. That same year, unemployment rose to almost one million people. With the disappearance of the comecon,

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In the early days of the Special Period, a broad national debate took place and the pcc’s 4th Congress (1991) approved an economic opening that required a constitutional amendment in July 1992, which specified that socialist ownership should prevail over the fundamental means of production, not all of them. During that period, the Basic Units of Co-operative Production (ubpc) were created for agricultural activities6 and non-state economic sectors were defined, along with the development of international tourism, foreign investment, and decentralisation of the banking system. To avoid dollarisation of the economy, in 1994 the convertible peso was placed into circulation—along with the Cuban peso (cup)—to substitute the dollar in commercial transactions and in the domestic market. This translated into a dual currency system that still exists.7 During this period, income inequalities began to emerge among the population, and not all citizens had access to hard currency or tourism markets. All of these factors made the social-class structure more complex and  opened up a tendency to its heterogeneity. But the most important aspect was that the Cuban Revolution and its fundamental achievements were preserved. 1.3 During the First Decade of the 21st Century During this decade, important assessments were made of problems and contradictions in Cuban society. One highlight was Fidel Castro’s speech at the University of Havana (November 17, 2005), when he addressed the subject of building socialism, and warned about complexities and vulnerabilities in areas of economic and social development that could threaten the continuity of the Revolution.8 Another highlight was the popular debate sparked by Raúl e­ xports fell by 77 per cent between 1989 and 1993, and imports fell by 75 per cent (Ferriol, op cit., pp. 40–42). 6 ubpc members are owners of the means of production, have an area for collective self-­ consumption, appropriate the surplus, and possess a self-management system within the framework of a state plan. 7 At the same time, markets were opened for farm produce and industrial and artisan goods, with supply-and-demand prices for goods made available after contracts were fulfilled for sales to the State. A system was tested for enterprise self-financing in hard currency and for direct imports and exports. The possession of foreign currency was decriminalised, and ­receiving remittances from abroad was authorised. All of that occurred amidst US intervention projects to promote a so-called ‘democratic transition in Cuba,’ an attempt to return to capitalism. Terrorist actions also were carried out to sabotage Cuba’s international tourism industry. 8 See ‘Discurso pronunciado por Fidel Castro Ruz, Presidente de la República de Cuba, en el acto por el aniversario 60 de su ingreso a la universidad efectuado en el Aula Magna de la Universidad de La Habana,’ November 17, 2005. http://www.cuba.cu/gobierno/discursos/2005 /esp/f171105e.html.

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­ astro’s speech on July 26, 2007, in Camagüey province, when he referred to C deformations in the country’s development, some of them linked to the functioning of institutions and the growth of bureaucracy.9 At the same time, social scientists carried out studies on topics such as popular participation, democracy, agriculture, co-operativism, local development, social in-equalities, race, gender, demographics and manifestations of corruption, demonstrating that scientific studies have accompanied political analysis in evaluating what changes are needed and what decisions should be made.10 2

Principal Changes That are Being Implemented

During the three aforementioned periods, it was evident that the political will existed to deploy new socio-economic conditions that would ensure the country’s development without abandoning socialist objectives. That goal was concretised more comprehensively by the pcc’s 6th Congress in 2011 with the updating of the economic model. It signified the dismantling of centralist state socialism and a model more coherent with the socialist transition in an adverse international situation, which is marked by two negative factors: the impact of the crisis of capitalism on the economies of less-developed countries,

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While still under the effects of the special period, US intervention was confronted, and mass actions were carried out to achieve the return to Cuba of the child Elián González, victim of US policies that encourage illegal immigration that separated him from his father, and to demand freedom for the five anti-terrorists imprisoned in the United States. On Fidel Castro’s initiative, a ‘Battle of Ideas’ was unleashed, involving youth and mass organisations in educational, health and cultural projects, and social workers were trained to serve the most vulnerable sectors. In all, about 150 projects for comprehensive development were part of the ‘Battle of Ideas.’ See Orlando Cruz Capote, Unpublished research report, Institute of Philosophy collection, Havana. Some of these studies have included research on the agricultural and co-operative sector by the flacso Program, the Center for the Study of the Cuban Economy, and the Center for Demographic Studies, in Havana; the Universidad Central Marta Abreu in Las Villas; and the Center for Development of Co-operatives, at the University of Pinar del Rio. Also, studies by the Center for Psychological and Sociological Research, in the area of social class studies and youth studies; race studies by the Cuban Centre for Anthropology; the Institute of Philosophy, theory on socialism, democracy, popular participation and social ownership; the Centre for Local Development, and the Institute of Literature and Linguistics. Other influential analysis has been promoted by the Scientific Pole for Humanities and provincial centres for the social sciences. Academics from various institutions have comprised working groups that advise decision-making bodies.

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and the continuation of the US economic and commercial blockade imposed on Cuba for more than fifty years.11 The updating process takes into account the historical evidence that the State should not directly assume administration of all property; instead, it should be capable of deciding what is essential for socialist objectives and what isn’t. The first involves guaranteeing progress toward social emancipation and the realisation of strategic objectives; the second refers to what can be complementary to socialism, not fundamental. At the same time, the updating process makes it possible for the State to concentrate on guaranteeing socialist objectives. In that sense, the changes that are now being implemented aim to eliminate disproportionate centralisation and state control of practically the entire economic-productive and service sphere, which have distorted the social ownership concept, expanded bureaucracy, and discouraged local initiative. At the same time, paternalistic and egalitarian patterns are being dismantled, patterns that had negative consequences for economic activity, attitudes and motivations about work, and productivity. Ratification of the strategy of socialist development is accompanied by a sense of continuity that does not exclude further adjustments that dialectically complement conjunctural and strategic factors, and unlike what was done in previous periods, the present updating process is transforming different roles of the State. Along with increased forms of ownership and management, state administration offices have been downsized, with a restructuring of the labourforce, greater enterprise autonomy and responsibility, decentralisation of authorities to provinces and municipalities, and improved mechanisms for economic and contractual discipline. The updating process began with an expansion of so-called self-employment, a sector that does not contradict forms of social ownership.12 In the Central 11

12

After the so-called ‘Revolutionary Offensive’ in 1968 in Cuba, state ownership of the means of production was generalised, except for small landowners and the co-operative sector in agriculture. State employment rolls became inflated, and their responsibility fell on administrative and service sectors, which fostered sources for the underground market at the cost of state resources. It is worth noting that Marxist logic recognises the importance of guaranteeing that the principal or fundamental means of production should not be in private hands, but should respond to the interest of the masses. This has to do with qualitative, not quantitative, factors in defining ownership in socialism. Reducing it to the state form distorted the role of the State and unleashed a chain of alterations in different spheres of society. The term ‘self-employment’ (trabajo por cuenta propia) identifies different economic relations, given that it now includes both employers and employees who do not work for the State. It is a necessary sector that covers a niche of mercantile production and services on a small scale with an impact on job creation and increased services for the population,

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Report to the pcc’s 7th Congress, it was recognised that a larger self-employed sector, now authorised to hire workers, has led to the existence of medium, small and micro enterprises that currently operate without proper legal status, and which are governed by a regulatory framework that was designed for natural persons who conduct small businesses, which are run by the worker and his or her family. At the same time, it has been reaffirmed that in non-state forms of management, concentrations of property and wealth will not be permitted, and private enterprise activity will have well-defined limits, constituting a complementary element of the country’s economic fabric.13 As recognition of the importance of co-operatives in agriculture and in the development of rural areas, the updating process is expanding the co-operative sector to urban areas in a diversity of services, including food and beverages, construction, transport, and others, along with the production of commodities of national interest.14 Self-employment and urban co-operativism are spreading at the local level, and are part of a strategy of regional development regulated through policies for income and labour force taxes. While self-employment contributes to the country’s economy, it would be worthwhile to evaluate limits and balances with respect to the nature of work done by employees and contracted workers in this sector, as well as the private appropriation of surplus. In contrast, the co-operative sector has greater potential for developing a concept of a solidarity economy that is much closer to the socialist transition. In fact, conditions should be provided for encouraging the formation of co-operatives in areas where ‘self-employment’ is now expanding.15

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freeing the State of tasks that it oversaw in an excessive way and that were incapable of meeting needs for a very wide variety of goods and services. Today, some 370,000 people are ‘self-employed’ (cuentapropistas). and about eighty per cent of them are members of labour unions organised by production and service industries. Being unionised places them in an important channel of participation with possibilities of influence in subsequent improvement of ‘self-employment,’ and in analyzing the development of Cuban labour. See Central Report to the 7th Congress of the pcc (Informe Central al vii Congreso del pcc). http://www.cubadebate.cu/noticias/2016/04/17/informe-central-al-vii-congreso-del -partido-comunista-cuba/. Today more than 360 urban co-operatives exist in the areas of construction, food and beverage services, other services, and small-scale production of goods. Between November and December of 2012, Decree-Law 305 of the Council of State was passed and other legal regulations were issued for creating non-agricultural c­ o-operatives in every province. Based on these regulations, in 2013 an experimental stage began with 230 new urban co-operatives in a variety of production and service sectors. These co-­operatives have legal status with economic and social objectives; they are created voluntarily by their members and operate by the collective management of all of

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All these different management forms are articulated by updated socialist planning, through which changes in methodology, organisation and control are being made. At the same time, the market should be taken into account. It should be influenced and its characteristics should be considered, to avoid reproducing the previous deformations of bureaucratic centralisation. These measures aim to strengthen an economy that will sustain socialism, while recognising that no space can be made for shock therapies or decisions that would endanger socialist control over the economy and sovereignty over resources. In that respect, Raúl Castro has said that far from signifying the privatisation of social property, a larger non-state sector in the economy should help to build socialism, because it will allow the State to concentrate on making the principal means of production more efficient, and to shed itself of the administration of activities that are not of strategic importance to the country.16 The 7th Party Congress reaffirmed existing policies for that purpose and demonstrated advances made to guarantee their continuity and improvement, including: • Proposing a clearer and more defined projection of the progress of building socialism, which is reflected in two documents submitted to popular debate for their final approval: the conceptualisation of the new model of economic and sociopolitical development, and the economic development plan until 2030. Both acknowledge the state sector’s primary place in the economy and the complementary role of the non-state sector. • Promoting a better understanding of the correlations between economy and politics. • Making a deeper break with old sociopolitical schemas associated with the previous development model, which is now being dismantled. • The updating of the development model is being more clearly conceived, with a systemic concept of society, and recognition is being given to structural, functional and subjective problems that affect the development of the changes and adjustments underway. • A more comprehensive evaluation is being made of changes in people’s behaviour, values, personal life projects, feelings, and attitudes, and, of course, in the dominant ideology.

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their members. Urban co-operatives join agricultural coops and self-employment in compliance with economic guidelines (Los Lineamientos) numbers 25, 26, 27, 28 and 29, approved by the pcc’s 6th Congress. See Communist Party of Cuba, 2011, Lineamientos de la política económica y social del Partido y la Revolución. www.cubaweb.cu /secciones/6to.-congreso-pcc/folleto%lineamientos. Informe Central al vi Congreso del pcc (Central Report to the 6th Congress of the pcc). April 19, 2011, available at www.granma.cubaweb.cu.

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What is certain is that today, analyses and debates are being promoted to help achieve a more open concept of the socialist project and its goals. Complexities of the socialist transition are being analyzed with a systemic vision of society, which encompasses all types of themes, such as those related to social property and labour, social justice, democracy, the correlation between ethics and politics, individuality, public spaces, the role of the mass media, and migration and demographic problems. This also includes the relationship between planning and the market, the need to eliminate state paternalism with an appropriate level of free services and state subsidies, but also maintaining the protection of citizens’ rights in employment, social security, public health, and education. 3

Impacts and Sociopolitical Challenges Produced by the Changes

The updating process is a process of rectification. It goes deeper than previous processes, which failed to alter the concept of a State that freed people from many responsibilities. In contrast, today the stable elements of the relationship between individual and State are changing, and this is affecting all spheres of society. In fact, changes in the economic sphere are causing social and political impacts that are posing challenges that need to be confronted. We would like to highlight these challenges in three important directions: The first involves a necessary perfecting of institutionality in the framework of the political system, which includes the Communist Party, the State and the system of political and mass organisations that strongly influence civil society. This also relates to perfecting leadership methods, finding a balance between centralisation and decentralisation, and confronting bureaucracy. The second has to do with increasing popular participation, and the third with constantly monitoring how these changes affect people’s lives, projects and subjectivities­—their attitudes, values and social justice policies that are part of the foundations of the Cuban Revolution. A permanent awareness is needed to assess how the different measures affect the population and social justice policies. 3.1 Perfecting Institutionality Since 1959, the country’s institutionality has been the object of attention and adjustments.17 But for diverse reasons, confusion was generated regarding the 17

With respect to institutionality, we recall processes carried out since 1959, such as the creation of the Communist Party, with its broad grassroots membership and a vocation based on unifying the teachings of José Martí and Marxism; the approval of our s­ ocialist

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roles of certain institutions, along with bureaucratic deformations and formalism. These are problems that are being analyzed critically for their rectification, and in that respect, the 6th and 7th congresses of the pcc took steps toward achieving greater precision about what roles should be played by the Party, State and organised sectors of civil society. It has always been acknowledged that the Cuban political system’s components can be perfected,18 and that many of the problems and weaknesses that have existed have to do with functioning, or are subjective in nature, such as confusion between government tasks and those of local administration, or between the roles of the Communist Party and local People’s Power assemblies. The pcc’s 6th Congress analyzed these and other problems with the ­urgency goal of solving them, specifying and respecting corresponding roles according to the authority that belongs to each institution, in keeping with the Constitution of the Republic.19 In that respect, the congress passed a ‘Resolution Regarding the Perfecting of the Organs of People’s Power, the Electoral System, and the Political-­ Administrative Division,’ and measures aimed at achieving greater coherence among different spheres of society, the central levels of State and government, and local grassroots communities, and finding a balance between the centralisation and decentralisation of functions and responsibilities. On the one hand, that includes granting greater autonomy to local grassroots communities, municipalities and provinces while developing community projects; and on the other, eliminating direct State administration of ­enterprise, differentiating between matters of state and enterprise.20 This also

18

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Constitution and our political system led by the Party, and the State representing a single power defined as People’s Power, with its own participatory and representative channels. Also, the formation early on of a broad spectrum of grassroots social organisations, along with other civil society bodies that influence the political system and popular participation. Since the establishment of the Organs of People’s Power in 1976, adjustments have been made to achieve more of a connection with the grassroots. In 1992, the electoral system and the Constitution itself were reformed after a broad mass debate; direct democracy was expanded through election of provincial delegates and deputies [to the National Assembly], and adjustments were made according to the country’s development. See articles 5,6,7,8 and 9 of the Constitution of the Republic of Cuba, which specify the functions and duties of the Communist Party of Cuba, the Union of Young Communists, and the State. In addition to approving that revolution, an experiment was carried out in Artemisa and Mayabeque provinces to study a reform of Article 117 of the Constitution of the ­Republic, which separated the responsibilities and attributes of the presidents of the municipal and provincial assemblies of People’s Power and their administrative councils, to ­eradicate malfunctions stemming from those posts being held by the same person. See

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relates to socialist planning, which will continue to be the principal means of conducting the economy, which is why its methodological, organisational and control aspects are being strengthened in new conditions that require taking the market into account, to be able to influence its limits and to prevent its role from becoming distorted in a country with a socialist outlook. In terms of institutionality, diverse imperatives exist with relation to the State, given that changes to the economic and productive structure require better-organised and more efficient state institutions, capable of fulfilling their important responsibilities in moving toward a more open and multilateral property structure, one that will increase different types of ownership, ways of organising production, and services that do not jeopardise socialist objectives.21 Together with that, the legal system is being strengthened, to move forward on reorganising the laws and regulations that the country needs. The institutional improvement process that is being carried out includes a restructuring of the government apparatus, reduction of unnecessary payrolls in the administrative sector, proposals for establishing term limits for public office, legal actions against corruption, and policies for simplifying procedures. Progress is being made on creating a system for appointing, hiring, and promoting officials and public administrators. That is joined by the political will to distinguish the roles of the Communist Party and the State, with an awareness that excessive identification between the two contributes to obstructing the role of the Party and those of state and government organs. At the same time, the goal is to change methods and styles of leadership, to make them more flexible and participatory, an issue that was addressed at the First National Conference of the Communist Party of Cuba, held on Jan. 28, 2012. The struggle against bureaucracy deserves special mention; it is a complex task, comprising objective determinants and subjective factors. It is a problem that is at the center of the national leadership’s attention and very well received by the people. Action has been taken to dismantle the distorted web of regulations and prohibitions that exceed the logical norms needed by society. In the same way, and what is more complex, it is urgently necessary to

21

‘­Sobre la experiencia a desarrollar en las provincias de Artemisa y Mayabeque’ (Granma, August 2, 2011). The strengthening of the State in the socialist transition requires consolidating the political power that represents popular interests in a stage where class contradictions with different nuances still exist. This does not at all contradict the Marxist ideal about the withering away of the State during more advanced stages of socialist society, when contradictions no longer exist or pose threats to the advance of the new society. This key idea of Marxism was distorted under Stalinism, and in the subsequent experience of the ussr, to the extent of reaching extreme state control over social life.

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dismantle the empowerment of bureaucratic sectors that are distant from the grassroots they are supposed to serve. This relates to the selection and promotion of leaders, both elected and appointed, which is why the First National Conference of the pcc passed resolutions aimed at perfecting its leadership cadre policy, including rules for their selection and renewal, establishing time and age limits for holding office and clarifications regarding leadership styles. Along with that are objectives oriented to evaluating leaders and the controls to which they should be periodically subjected.22 3.2 The Necessary Expansion of Popular Participation Along with improving institutionality, another challenge for complying with the objectives of the updating process is increasing popular involvement in decision-making and in control over resources and management. Achieving that requires a permanent connection between the authorities and the people, as well as high levels of popular participation, an activity in which Cuba has notable experiences associated with different ways of promoting democratic practices. On the one hand the system of Organs of People’s Power includes participatory channels, and on the other, civil society has its own, through the system of mass social organisations in which workers, labour unions, farmers, women, students, and neighbors all participate, while at the same time, interaction occurs among these different sectors. That interaction provides the ­conditions for achieving a better quality of democracy if we take into account that citizens hold simultaneous membership in different organisations that function as channels for expressing their opinions and interests (Fernández Ríos, 1995). However, we should also acknowledge that those participatory channels have been underused, and today are in need of renewed energies, in line with society’s new conditions and needs. Obviously, a mass consultation of the people can be reserved for making decisions of a national and strategic scope, but it is possible to increase, in a stable manner, popular participation in local public management, and in the promotion of initiatives and community, labour and sectoral projects. That type of practice helps promote the greater involvement of different social actors in the decentralised innovation of forms of government, as part of, and balancing, public management, and it is an antidote to the top-down ‘logic’ of bureaucracy at all levels. Likewise, popular participation is revitalised when new social actors are strengthened, such as the sector that does not depend on the State but whose 22

See ‘Objetivos de Trabajo del Partido Comunista de Cuba aprobados por la Primera ­ onferencia Nacional del Partido Comunista de Cuba,’ 29 de enero de 2012 www.granma C .cubaweb, Capítulo iii—‘Política de Cuadros,’ Objetivos 76–82.

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inclusion in the collective construction of society is unavoidable. The fact that citizens are members of various social organisations, as is the case in Cuba, multiplies the ways to make popular participation effective by generating spaces for sociality with an influence on decision-making, including decisions that affect people’s everyday lives. This also promotes a balance between what corresponds to institutions and what fosters popular participation, and it has an impact on whether all citizens accept political decisions as their own. This, in turn, helps to bring about a renewal of political consensus in the conditions presented by the new economic and social development model. 3.3 Social Impacts and Challenges in the Area of Social Justice Two elements should be taken into account for the analysis contained in this summary. First, the expansion of property forms contributes to the emergence of social differences deriving from the different sources of income being generated, and from wage differences that have not been adjusted yet. The structure of Cuban society today is more heterogeneous than it has been in previous periods, when most of the population was employed by the State with salary patterns that were quite balanced. That has changed, and class-like manifestations and positions now exist, based on today’s different forms and amounts of income and salaries. Secondly, the updating process is adopting measures to minimise state paternalism and inappropriately free goods and services; neither of those two elements have been exempt from bureaucratic hypertrophy, a mentality of inertia and accommodation, and manifestations of corruption, with the fostering of an underground market. All of that causes damaging ideological and ethical reflections that penetrate the social fabric and affect the productivity and civility needed in a socialist process. These two elements are sensitive, and they require ongoing analysis with all sectors of the population to differentiate paternalism from social justice. Paternalism entails a deforming state protection of the principles of equality and equity, which not only places an unnecessary burden on the State but also fosters distortions that obstruct the advance of socialism. In contrast, social justice is part of the fundamental and humanistic pillars of the Revolution, which has maintained the principle of advancing in economic growth and development without affecting public policies such as social security, food security, and employment security; public health; education; culture; sports; and housing.23 In fact, important state subsidies with universal criteria still exist that benefit the country’s 11 million-plus Cubans, such as support for the basic family basket. 23

In the case of housing it is recognised that new projects and plans are needed in this area.

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What is certain is that social justice policies have been reaffirmed at all times, taking into account the recognition of social—and even class—­differences that persist in the construction of socialism. This must be done by vindicating the concept of work as the principle means of personal realisation and social development, and by recuperating the principle of distribution according to one’s contribution of work. Important challenges are being faced in this area, linked to the development of productive forces and economic efficiency when the correlation between production levels and consumption is imbalanced, and the economic conditions must be created to make adjustments to the wage policy. Efforts are underway to implement measures that will subsidise and protect vulnerable sectors. For this reason, the updating process includes decisions aimed at providing differentiated state subsidies according to the needs of individuals and families, instead of subsidies for the consumption of all citizens. The sixth and seventh pcc congresses reaffirmed that in Cuba no public policies will be eliminated that universally benefit all citizens in health, education, social security and food security. Based on that, we may deduce that two formulas for state subsidies will be combined: universal and differentiated. In both cases, the State will be the principal guarantor, but in the case of differentiated subsidies for low-income individuals and families, the community level should play a defining role, above all with respect to subsidies for building and repairing housing. All of the above is connected with a return to the principle of socialist distribution according to work, and open to higher forms that take into account the needs and recognition of the important role of individuality in socialism. This is a subject that is being closely examined, both for its intrinsic value and to demystify one of the most harmful dogmatic interpretations of socialism, which is that in a socialist society, the individual is subordinated to the social and therefore voided. That concept is being turned on its head as factors are being confronted that conspire against the full realisation of individuality.24 Both social justice and the place of individuality are recognised by the Marxist origins of socialism and by the humanism of the Cuban Revolution. This differs substantially from the capitalist slogan about the equality of opportunities 24

The mass analysis of the draft version of ‘Los Lineamientos’ that guide the updating process shows the interest an attention given to matters that are extremely important for individuals and families, such as the creation of conditions for gradually eliminating the ration book, price policies, transportation, education, the quality of public health services and a single currency system. These were the issues that generated the largest number of proposals by the people. See the Central Report to the 6th Congress of the pcc (Informe Central al vi Congreso del pcc) .

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supposedly provided by that system, which in reality is a fallacy built on the foundation of exacerbated individualism and a self-interested constraint toward the privatisation of state responsibilities, something that will not happen in socialist Cuba. 4 Conclusions The 6th and 7th pcc congresses were part of a single process to transform the model of economic and social development, a legitimate objective based on the common interests of our country, people and government. That process is opening a new stage in the development of the Cuban Revolution with a view to implementing a new way of building socialism with a more integral vision of society. This vision recognises that while socialism cannot exist without developing the productive forces and being able to meet people’s needs, socialism also cannot exist solely on the basis of economic development. From that perspective, it is necessary to strengthen the role played by our political institutions and our social and mass organisations, which bear a lot of responsibility for the quality of popular participation—an indispensable method for legitimising authorities and decisions. These are spheres and actions that directly influence the decision to continue the socialist transition, a goal that is well-defined in the documents approved by the 6th and 7th pcc congresses. To reach that goal, we need to identify the impact of the updating process on our political system, people, and public policies. In all three cases, new challenges are being generated that must be confronted so that we can preserve the achievements of the Revolution and continue the socialist transition in a context that is more complex and contradictory, a society that is more heterogeneous than it was before 2011. We are giving special attention to sensitivity in sounding out the effects of the economic measures on the population and on social justice policies, and in curbing social inequalities through complementary actions in all spheres of society. Those effects must be constantly monitored to continue social justice policies in conditions of economic decentralisation, the presence of social and class inequalities, and recognition of not only state planning, but also a regulated market. Evidently, the updating process will continue to be deepened. Its success depends on many factors, including those related to economic progress and forms of exercising politics, viewed as a system that does not just take into account its institutional bearers, including its temporary leaders. It also organises hierarchically the correlation between ethics and politics, the monitoring

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of individual and collective horizons, and the impact of change on the popular imagination, subjectivities, and values as very weighty factors in the empowerment of the people that socialism requires. Throughout the process, the potential for success will depend to a great extent on popular identification with the strategy charted, and on policies that aim to achieve the predominance of a socialist culture. As was the case in early stages of the Cuban Revolution, we need profound analyses and political and theoretical debates, without formalism but with responsibility, for better orienting the changes to be implemented, and avoiding improvisations and distortions in the construction of socialism. The strategic challenge comprises three determinants that the updating process should guarantee: preserving and expanding the levels of prosperity and human development attained in Cuba; maintaining a political consensus; and permanently renewing socialist hegemony with the pre-dominance of economic, socio-political, cultural, and ideological conditions that will contribute to reproducing socialist relations and values. References Castro Ruz, F. (2005). Discurso pronunciado en el acto por el aniversario 60 de su ingreso a la universidad, efectuado en el Aula Magna de la Universidad de La Habana, el 17 de noviembre de 2005. Retrieved from . Accessed 22 November 2015. Castro Ruz, R. (2011). Informe Central al vi Congreso del PC. Retrieved from . Accessed 19 April 2011. Castro Ruz, R. (2016). Informe Central al vii Congreso del pcc. Retrieved from . Accessed 21 April 2016. Fernández Ríos, O. (1995). Cuba: Participación Popular y Sociedad. En Participación en Cuba y los retos del Futuro. Havana: Ediciones cea, 1995. Fernández Ríos, O. (2014). La transición socialista en Cuba: ajustes económicos y ­desafíos sociopolíticos. In Latin American Perspectives, 4, July. Ferriol Muruaga, Á. (1998). El Empleo en Cuba (1989–1996). In A.F. Muruaga, et al. (ed.) Cuba: crisis, ajuste y situación social (1990–1996). Havana: Editorial de Ciencias Sociales. Jiménez Guethón, R.M. (n.d.). Desarrollo local y co-operativas agrícolas en Cuba: logros  y desafíos. Revista África-América Latina N° 46 sodepaz. Retrieved from . Accessed 2 February 2016.

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Nova, A. (2004). El Co-operativismo línea de desarrollo en la agricultura cubana 1993–2003. Havana: ceec, Universidad de La Habana. Partido Comunista de Cuba (pcc). (n.d.). Lineamientos de la política económica y social del Partido y la Revolución. Retrieved from . Accessed 22 May 2016. Partido Comunista de Cuba (pcc). (2011a). Resolución sobre la experiencia a desarrollar en las provincias de Artemisa y Mayabeque, Granma, 2 August. Partido Comunista de Cuba (pcc). (2011b). Resolución Sobre el Perfeccionamiento de los Órganos del Poder Popular, el Sistema Electoral y la División Político Administrativa, Granma, 2 August. Partido Comunista de Cuba (pcc). (2012). Objetivos de Trabajo del Partido Comunista de Cuba aprobados por la Primera Conferencia Nacional, 29 January. Rodríguez, C.R. (1983). Cuatro Años de Reforma Agraria. In Letra con Filo, Tomo ii. Havana: Editorial de Ciencias Sociales.

Chapter 5

Co-operatives in Socialist Construction Cliff DuRand This chapter conceptualises socialist construction as a process of incremental reclaiming from capital of those resources that can best be held in common so that members of a community can achieve their fuller human development. Under democratic rules the community regulates the commons so as to ensure its accessibility and sustainability. The formation of co-operatives is an ­instance of the socialisation of the workplace. By bringing workers together into self-governing collectivities, co-operatives also contribute to the socialisation of workers to a socialist moral order. In Cuba a socialised state is fostering the socialisation of civil society through the promotion of co-operatives. At the same time, the Cuban state is allowing private businesses as a way to enliven the economy and quickly absorb surplus workers. President Obama’s opening to Cuba sought to assist these entrepreneurs as a nascent capitalist class. Socialist construction requires that the state develop an adequate regulatory regime to contain this part of the non-state sector while also fostering the co-operative sector. The dominant view of socialism in the 20th century was that a revolutionary state would socialise the means of production, expropriating the capitalist expropriators, and, acting as the representative of the working class, would run the economy in a rational, planned way for the benefit of society as a whole. Only state property was considered fully socialist. Socialism was statecentric. While this model had some spectacular successes in developing the forces of production in some societies where capitalism had failed to do so, in the long run it proved to not be sustainable. In addition, it did not lead toward what socialists had aimed for—a society governed by the associated producers. While it paternalistically provided many social benefits, it empowered a bureaucratic state rather than working people. That is why in the 21st century there are efforts to reinvent socialism. These look at socialism not so much as a system, but a process, a process of socialising, of progressive collective empowerment of people over their lives. It is a more participatory, more democratic, more de-centred process. Thus we should not speak of constructing socialism, a manner of speaking that suggests it is a system, a thing. Rather, let us speak of socialist construction, the

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process of s­ ocialising the institutions of society, a directed transition toward a society directed by the associated producers. This is a process in which institutions are built in different spheres and at various levels in society through which communities can democratically manage their common resources so as to promote human development. These communities may be at the level of the workplace, the neighbourhood, the region, or nationally. The term ‘social’ in socialism should be taken seriously. ‘Social’ refers to the interconnectedness of humans, an interconnectedness in which all are mutually constituted in and through relations to one another. It is as members of a community that the humanity of each is enriched. The individual identifies with the community; each shares in a collective identity. I am part of a we. There are resources that contribute to human flourishing, some of which can do so best when held in common. What then does it mean to socialise an institution? Institutions are social when they point to human development through the commons. To socialise an institution means to direct it toward a common good. Similarly, to socialise human beings is to direct them toward a common good with a sense of responsibility to that larger community with which we identify. To use a musical metaphor, it is to tune it to the common good. Or, using a compass as a metaphor, it is to point it toward the common good (Olin Wright, 2010: 110–149). It is instructive to think of the socialising process as a kind of reclaiming of commons. In much of the world today that means reclaiming it from capital (2). a reversal of the process by which capitalism grew through the dispossession of commons, enclosing them, privatising them and commodifying them (Caffentzis, 2016: 64–80). It did this not only in what Marx called primitive accumulation, but continues to do so throughout its history up to the present, as David Harvey (2003: 137–182) has argued. Socialist construction can then be conceived of as a reversal of that capitalising process, as a reclaiming of commons, a socialising of those resources that are useful to human development (Lebowitz, 2010: 146–148). As we know, the commons are shared resources held by a community, ­governed democratically and available for use by members of the community. These shared resources are not only land and public spaces, but also the air we breathe and the water we drink, public health facilities, the internet, accumulated human knowledge and culture, and a host of other resources available to all and that can enrich our lives. Capital seeks to privatise these commons so as to profit from them. Socialising them reclaims them as our common wealth available to all and for the benefit of all. Since a commons is held in common by a community, it is managed by that community so as to assure access and sustainability. Whether the rules by

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which it is governed are customary or are enacted laws and regulations, they issue from a participatory process to which the commoners consent and in that way is democratic. How is the democratic governance of a commons possible? By democracy we understand the possibility of joint decision making for collective action for a common good. Democracy depends on a collective agency and that requires a collective identity (DuRand, 2012: 195–215. That is, the commoners must identify themselves as a community sharing the common resource and thus feel a commitment to its proper governance, i.e. for the common good. This is the foundation of a democratic governance of the commons. Privatisation of a commons breaks it away from the community of commoners and subjects it to the will of a private owner. No longer serving the interest of the community, it serves the interest of its owner. One of the  chief arguments  for such a privatisation was offered by Garrett Hardin in his widely discussed article ‘The Tragedy of the Commons’(Hardin, 1968: 1243–12486). He claimed that a resource such as land that belonged to no one would be ­overused and eventually depleted. But a private owner would have every incentive to properly manage the resource so its value to him would be  sustained. Elinor  Ostrom led the way in pointing out that such an argument  ­applies  to  ­open-­access resources but not to a commons. A commons is regulated by a community of commoners that can prevent such a tragedy ­(Ostrom, 1990). Beyond that, it can be argued that in the era of corporate capitalism, capital often has little interest in sustaining resources it exploits. Unlike an individual owner who may be rooted in a place, corporate capital is mobile. It can extract water from the aquifer until it is depleted and then move on, leaving behind a desert. It can extract minerals from the earth and then leave behind a devastated, poisoned landscape. This is the true tragedy of privatisation. And it applies not only to what we usually think of as extractive industries. It can also apply to the extraction of value from the labour power of wage workers, leaving them exhausted, ill and impoverished—depleted. On the other hand, in a properly managed commons, the resource, whether natural or human, is nurtured so as to be able to continue to provide for a common good. These are precisely the conditions that obtain in a worker co-­operative. There is an awareness of a shared interest in the success of the ­collective project because of the interdependence experienced daily in the workplace. ‘All for one and one for all’ is a lived reality. The institutional structure of the co-operative engenders a social consciousness—a socialist consciousness. Co-operatives are little schools of socialism (Piñeiro Harnecker, 2016: 184–194; Piñeiro Harnecker, 2013)

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The common experience with co-operatives in the U.S. would seem to r­ efute this claim (Ratner, 2016; Marcuse, 2015). While co-op members may tend to be progressive, they are hardly new socialist human beings. Although they learn to co-operate in the workplace with fellow co-op members, that ethic does not always extend to the wider society. But we need to keep in mind that they operate within a competitive capitalist market and have been formed by a highly individualistic culture. Cuban society, on the other hand, is very different. With over a half century of common struggle and a state that nurtured values of social solidarity, the values practiced within the co-operative workplace are reinforced by the larger society. This context gives us reason to expect that co-operatives in socialist Cuba will better nurture the new human beings that will sustain socialism. The governance by commoners can take place on different levels, depending on the scope of a given commons. The commoners in a workplace are the workers who make up the co-operative. The commoners in a neighbourhood are the residents who share a space in the city. The commoners in an urban transportation system are the bus riders, auto drivers, bicycle riders and pedestrians. And as we are becoming increasingly aware of global climate change, the commoners of our planet are all of humanity, both present and future generations. In each case of these nested commons, it is those who share a common resource and whose lives are affected by it who have the right to participate in its governance. In the first instance, this participatory democracy operates at a ­local level, at the level closest as possible to the everyday lives of people. Higher levels of decision-making are to support the lower levels and, where necessary, coordinate them. This is the principle of subsidiarity that guides the relations between commoners at different levels. I emphasise the participatory democratic character of commons because it is through such participation that the commoners are themselves socialised. That is, they develop the social values, attitudes and practices that sustain a full human life together in which all can develop fully. As Marx put it, they realise their species being. In the renovation going on in Cuba today, we see the devolving of state ­power downward to lower levels of government and to co-operatives. This is an application of the principle of subsidiarity that empowers civil society. While the basic means of production continue to be managed by a centralised state as representative of the national community since they affect society as a whole, other resources are coming under the effective control of those who are actually in possession of them (Castillo Sanchez, 2015: 81–93). Ownership and management are distinct functions (Ratner, 2016). In this application of the

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principle of subsidiarity the constituted power of the state is facilitating the constituent power of civil society (DuRand, 2016: 195–199). Under what we might call state socialism, the administrative apparatus of the state undertook to manage the common resources of society. While this was under the direction of policies informed by a representative democratic system, the conductor’s decisions were often so removed from the direct participation of those whose affairs they conducted, that commoners were often unable to see their will reflected in those decisions (Lebowitz, 2012). They experienced themselves as passive recipients of benefits from a nanny state. Beyond that, the state was not able to effectively manage everything. Now it has been realised that it is those who are actually in possession of the means of production who can often better decide how to utilise them. That is what lies behind the devolving of much of the state property to the control of co-operatives (Fernandez Rios, 2016a). Thus we are seeing a reclaiming of commons (from the state) and an empowering of commoners. There is an incremental socialising of the institutions of society, facilitated through the state under the leadership of the Party as custodians of a directed transition from capitalism towards a society governed by the associated producers. The Revolution constituted the power of this leadership and now it is empowering its constituents. Socialisation is the transition to commonism. In June, 2016, a delegation from the Center for Global Justice visited nine of the new urban co-operatives being established in Cuba: a sewing co-op that makes guayabera shirts and dresses, a transportation co-op that operates a fleet of buses, a furniture co-operative, a construction co-operative, several ­co-operative restaurants and even an accounting co-operative. These are among hundreds of new urban co-ops that are opening an important part of the emerging non-state sector of the economy (DuRand, 2013, 2015a) in addition to the small private businesses that seem to be thriving. They offer a socialist alternative to state employment for workers who find that the co-­operative form of management not only offers them democratic participation in running their collective business but also higher incomes, typically three times and as much as seven times higher than in state jobs. Many of these co-ops were converted from state enterprises that now lease the building and other means of production from the state, but manage the business as their own. The state conversions face a challenge in moving away from the familiar hierarchical relations in their workplace to genuinely democratic self-­ governance. For example, in the sewing factory we visited, the head of the co-operative refers to the fellow members as ‘my workers’. While she is no longer

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accountable to higher bureaucrats in the Ministry, one wonders how ­accountable her management is to the collective membership despite the monthly General ­Assembly meetings. The Institute of Philosophy, which hosted our trip, is conducting training there as well as in other places to educate workers about the social relations essential to a genuine co-op. It is easy to fall into habitual patterns. Building a business with a co-operative culture is a process that takes some time. This is easier to do when a group comes together voluntarily to form a new business from scratch, understanding that the shared endeavour is theirs. An example of a self-initiated co-op is scenius, an accounting firm we v­ isited. In this unusual professional co-operative, the members refer to each other as ‘partners’. Similarly, more egalitarian attitudes can be seen in Biky’s ­restaurant. Although it was initiated by a small group who leased the building from the state, as they renovated the facility (using a loan from the bank), others joined them with the knowledge that they were becoming members of a self-­governing enterprise. Now in their first year of operation, they have 120 members. Commons are a domain outside the market. They represent a collective ‘ownership’ that is distinct from private property. There are often those who seek to privatise commons or privatise the benefits afforded by the commons for their own benefit. This may come even from within the commoners. That is especially likely where there is a market and emphatically so where that is a capitalist market driven by the logic of endless accumulation. The problem can be seen in Habana Vieja. The City Historian’s Office has done an exemplary job of restoring both public and private buildings and spaces in the oldest area of the city. The renovated Plaza Vieja is a vibrant public space surrounded by private residences and public commercial buildings. The increased use value that public investment has made possible is now becoming exchange value due to the opening of a real estate market. Private residences are being sold to investors for profitable commercial development. While the commons of the plaza is not itself being privatised, the attendant benefits are in a kind of de facto public-private partnership. And so far, the public is ­unable to capture some of that value. This is an issue that Cuba will have to face as its renovation moves forward. The emerging non-state sector of the economy includes not only co-­operatives, but also private businesses employing wage labour. Private businesses are ­decidedly non-socialist. A petitbourgeoisie is seen as compatible with ­socialism—compatible as long as it is regulated and taxed so it doesn’t become a big bourgeoisie. Great inequalities of income and accumulation of wealth are to be avoided—a cautionary note made in the Guidelines. But it is clear a petty

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bourgeoisie is not socialist; it does not nurture a socialist consciousness, but the narrow mentality of the petty shopkeeper. It does not nurture socialist ­social relations, but individualism. As Raúl Castro pointed out in his Report to the 7th Party Congress ‘petitbourgeois ideology [is] characterised by individualism, selfishness, the pursuit of profit, banality, and the intensifying of consumerism’. A petitbourgeoisie may be compatible with socialism when kept within limits. But it is not socialist. Socialism has to be rooted at the base of society among ordinary people. Its values, its practices and its social relations have to be built into daily life where people live and work. This is the virtue of co-operatives. Co-operatives thus can help make socialism irreversible by rooting it in the daily worklife of people. Co-operatives contribute to socialist hegemony (Fernandez, 2016b: 179–183). If a social order is to be sustainable over the long run, it needs to be rooted in the moral order, in the character of the people. Their values, their sensibilities, their taken-for-granted understandings, their very subjectivity needs to be consonant with its institutions. The socialist transition is a process that needs a people with a socialist character if it is to continue. The social relations of co-operatives help build such a character among the people. To state the current juncture in Cuba’s socialist construction in bold terms, there is a race for the soul of Cuba between the co-operative movement and expanding private businesses. A major thrust of President Obama’s opening to Cuba was support for private businesses. Witness the entrepreneurial conference he held in Havana during his visit in March 2016. His strategy to transform Cuban society more to the liking of US capitalism is to nurture this nascent capitalist class within Cuban civil society. (DuRand, 2015b). Clearly, this is a new challenge for the Cuban Revolution. How can the petitbourgeoisie be limited while still taking advantage of its dynamism? Here are some measures presently available: • Promotion of an ideology of social responsibility for private businesses, perhaps enforced by the local community. • A steeply graduated tax on private business profits. • Steep import duties on imported supplies for private businesses. • Requirement of a minimum salary for their wage workers. • Unionisation of employees and vigorous enforcement of workers ‘rights. • A limit on the number of wage employees allowed in private businesses. Today some paladars have as many as 70 employees! • Requirement that when a private business grows to a certain size, it be converted to a co-operative so all employees can share in the profits and decision-making. Cuba could adapt a kind of Meidner Plan whereby a % of

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profits would go into a worker’s fund representing equity in the business. In a matter of years the workers could thus become owners and the business become a co-operative.1 A regulatory regime needs to be developed for the private sector. The state seems to be slow in developing this and some complain it is a wide-open freefor-all. Others see that as a virtue, pointing to small- and medium-sized private businesses as well as foreign investment as the key to needed economic growth. While promoting co-operatives with one hand, the Cuban state needs to carefully regulate private businesses with the other hand so as to assure that they do not accumulate great wealth. Why is this important? The political power of a class lies not just in its control of political institutions. It also lies in its weight in the economy. If private businesses were to come to dominate the non-state sector of the economy so that prosperity depended significantly on them, the state could find itself compelled to favor this non-socialist form of enterprise. Obama was determined to push Cuba down this slippery sloop toward capitalism. The Cuban Revolution needs to use its smarts to prevent that by containing the private sector while promoting the co-operative sector. That is a major challenge as Cuba seeks a socialist construction of its future. Co-operativisation is the key to the further socialisation of Cuba’s economy and of its people. There are lessons to be learned from this by progressives in the capitalist world. This is especially important in the intensified neoliberalism under the Trump Administration. We are seeing an onslaught of privatisation as more and more of the commons is being brought into the capitalist market. From public schools to health care to physical infrastructure to public lands, every area of social life is being subordinated to the logic of capitalism. This has the effect of fragmenting society and de-socialising individuals who are ‘freed’ from social solidarities and thereby become vulnerable to unregulated corporate forces in the market. If collective democratic governance of a commons nurtures our species being, then its privatisation individualises us. The popular resistance to this neoliberal enclosure of commons provides socialists the opportunity to advance an alternative vision of society—a vision of a society based on solidarity, of collective empowerment, of public ­institutions that nurture the fuller development of all humans. None may call it ­socialism, certainly not communism, but that is the direction such values point, both in the US and in Cuba. The advantage Cuba has in the struggle 1 For a discussion of such a share-levy scheme see Erik Olin Wright (2010: 230–234).

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to advance to a higher civilisation is that it has a socialist state supporting it. Needless to say, we have a long way to go. References Caffentzis, G. (2016). Divisions in the Common. In Moving Beyond Capitalism (pp. 64–80). C. DuRand, ed. London: Routledge. Del Castillo Sanchez, L. (2015). La critica contemporanea al sistema de gestion de las empresas estatales y papel de las co-operativas en la transición socialista. Revista Cubana de Ciencias Sociales, Enero-Junio: 81–93. DuRand, C. (2013). Laboratory for a New Society: Moving toward a co-operative economy. Z Magazine, October. Retrieved from . DuRand, C. (2012). The Possibility of Democratic Politics in a Globalized State. In Recreating Democracy in a Globalized State (pp. 195–215). C. DuRand and S. Martinot, eds. Clarity Press. DuRand, C. (2015a). US Cuba policy: from Regime Change to Systemic Change. Truthout, 8 January. Retrieved from and . DuRand, C. (2015b). Whither Cuba? Truthout, 14 April. Retrieved from . DuRand, C. (2016). The Dialectic of Constituent Power and Constituted Power. In ­Moving Beyond Capitalism (pp. 159–29). London: Routledge. Fernandez Rios, O. (2016a). Dilemas sociopoliticos de la transición socialista en Cuba. Havana: Instituto de Filosofia. Fernandez Rios, O. (2016b). The Necessary Renovation of Socialist Hegemony in Cuba: Contradictions and Challenges. In Moving Beyond Capitalism (pp. 179–183). London: Routledge. Hardin, G. (1968). The Tragedy of the Commons. Science, December 13, pp. 1243–1248. Harvey, D. (2003). Accumulation by Dispossession. In The New Imperialism (pp. 137–182). Oxford: Oxford University Press. Lebowitz, M.A. (2010). The Socialist Alternative: Real Human Development. New York: Monthly Review Press. Lebowitz, M.A. (2012). The Contradictions of Real Socialism: The Conductor and the Conducted. New York: Monthly Review Press. Marcuse, P. (2015). Co-operatives on the Path to Socialism? Monthly Review, 66(9), February.

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Olin Wright, E.O (2010). The Socialist Compass. In Envisioning Real Utopias (pp. 110–149). London: Verso. Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press. Piñeiro Harnecker, C. (2016). Cuba’s Co-operatives: Their Contribution to Cuba’s New Socialism. In Moving Beyond Capitalism (pp. 184–194). London: Routledge. Piñeiro Harnecker, C., ed. (2013). Co-operatives and Socialism: A View from Cuba. ­Palgrave Macmillan. Ratner, C. (2016). The Politics of Co-operation and Co-ops. Nova Science Publications.

Chapter 6

Co-operativism in Cuba Prior to 2012 Grizel Donéstevez Sánchez 1 Introduction The transformation of the socio-economic structure that began in the 1990s broadened Cuba’s socio-economic heterogeneity,1 especially as regards agrarian co-operativism and the mixed economy, which was mainly driven by the investment of foreign capital and the growth of small-scale private individual production (rural and urban). The latter grew in spontaneity and informality. Alongside this transformation of the socio-economic structure there was also the decapitalisation of national industry, a scarcity of liquidity for productive investment and the instability of economic growth. These circumstances were the main conditions that indicated the need for a structural reform and an adjustment to the new circumstances—what has been called ‘updating the Cuban economic and social model’. Among the most important structural changes that the new model e­ nvisages are the extension of co-operativism,2 an expansion of the private sector and the investment of foreign capital, and a greater ephasis on local development. It is now necessary to make a critical assessment of Cuba’s experience with agricultural co-operatives, so that when co-operativism is extended to other sectors it will be possible to overcome the challenges associated with its expansion and to appreciate its implications for local development. The experience of agricultural co-operativism and its role in the development of rural areas of the country cannot be ignored if we want to s­ trengthen 1 In the ‘extraordinary transition to socialism’ the economy is characterised by a diversity of socioeconomic types, forms of ownership and management that condition the diversity of social groups, classes and economic interests that coexist in contradiction. Until that time, the economy was predominantly socialist in form, represented by the ownership of all the people in the form of state enterprises, but it also included peasant co-operatives in the form of Agricultural Production Co-operatives (cpa) and the private sector represented by Credit and Service Co-operatives (ccss) as well as some forms of private work in urban areas. The expansion of heterogeneity was the consequence of the reform process begun in the 1990s, as recognised by the Amendment of the 1976 constitution (articles 20–23). 2 Decree-Law 305 on non-agricultural co-operativism, approved on an experimental basis, in 2012 led to an unprecedented experience with co-operativism (Muñoz et al., 2014).

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the different forms of social economy in the new model. The model gives priority to (i) local development and the decentralisation of decisión-making regarding the use of natural resources and economic resources that are insufficiently exploited; (ii) the expansion of the participation of productive agents; and (iii) the promotion of new forms of production based on co-operation and social participation, which is where where co-operatives come in. One of the challenges of updating the economic model is the incorporation in the localities of new forms of social economy management that correspond to the needs of development based on the values of socialism. In this sense, the co-operative economy occupies a prominent place, being a socialised form of organising economic activity, with proven viability in the Cuban and universal experience. In capitalism, practical experience with the formation of co-operatives ­expresses the need to overcome contradictions and crises. But in the transition towards socialism it is part of the socialisation of production. The c­ onscious steering of this process demands the formation of a culture of co-operation, particularly as relates to small and medium producers. The success of co-­ operativism lies in the place that co-operatives occupy in development programs and the  attention to them provided by the state and the institutions of socialist development. For Cuba to move ahead with updating the model it is imperative that  the State takes into account the economic and social ­activity of co-operatives, even if they do not represent the dominant form of prooduction. The importance of encouraging co-operation in localities across the country is that they give way to more advanced systems of production, those that overcome the isolation that provokes the existence of private work and allow for the exploitation of resources that cannot be exploited on a large scale. As for the producers, the transformation of the productive system turns individual work into social co-operation, transforming it in the process. Finally, changes in social coexistence strengthen a new socialist culture of work in ­local spaces and localities, functioning as a factor of local development. In this regard, the State must protect and create conditions for sustainable co-operative management, to generate a new ethic that brings it closer to the values and principles of socialism. This chapter first distinguishes by stages and periods the evolution and ­characteristics of co-operativism in Cuba. This periodisation is linked to the ­socialisation of production in a process of socialist transition. Second, the chapter discusses the challenges that co-operativism presents for the new model.

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The Periodisation of Cuban Co-operativism

Co-operativism in Cuba has traversed three main stages linked to the need for structural transformation and different stages of socialisation in the search for an economic and social model of transition to socialism under conditions of underdevelopment. The first included developments prior to the Revolution in 1959. The second stage, which included the formation of agricultural ­co-operativism, extended from 1960 to 2012. The third and last stage, which is in progress, is aimed at the consolidation, expansion, and insertion of ­co-operativism in an update of the economic and social development model. Stage One—Before 1959: Small-Scale Peasant and Large Scale Capitalist Agriculture Collective forms of production and marketing had little meaning in the Cuban economy in the first half of the twentieth century. But in the 1950s, ­addressing the need for agricultural diversification and improvements in the social situation in the countryside, the first efforts to create and expand a social sector based on co-operativism were made in the agricultural sector (Donéstevez, 2006). In 19543 there were only 12 rural credit associations,4 a ­co-­operative ­marketing federation in the form of a Distribution and Supply Agency (sac),5 and eight independent associations of agricultural and domestic suppliers in the milk producing area south of Havana.6 Some of these a­ ssociations emerged under the auspices of the Agricultural and Industrial D ­ evelopment Bank (banfaic),7 which promoted agricultural credit and o­ rganised themselves under the Spanish ‘Associations Act’ of 1888, in the a­ bsence of a co-operative law (Lister, 1955). According to a study into the viability of the agricultural co-operatives in Cuba, the main obstacles to the development of co-operativism in the country were: (i) the lack of co-operative education; (ii) the ignorance of the ­benefits 2.1

3 A US commission, led by J. Lister, visited the country to show the ‘viability’ of co-operativism in Cuba. 4 Rural Credit Associations (acrs) are institutions that are authorised to grant long, medium and short-term loans to farmers with reasonable interest rates and market the crops that the borrowing farmers deliver for sale. rtas also purchase the main agricultural supplies needed by borrowing farmers. 5 Distribution Agency and Abasto, sac, sold the harvests in the market of Havana to the merchants and consumers, in addition to serving as purchasing agency of the agricultural supplies for the acr. 6 These associations were organised under the old ‘Law of Association’ of 1888. 7 Autonomous state institution created to grant loans to farmers, agricultural co-operatives and industry to promote and diversify production in Cuba, in order to raise the standard of living of the population.

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that co-operativism would bring to the producers; (iii) the absence of a legal basis; and (iv) the lack of interconnection that would foster sustainability and development between existing partnerships and banfaic (Lister, 1955). The Commission, which studied the existing situation, reported on a body of ­recommendations and a program to boost agricultural co-operativism, which focused on: 1. Actions for co-operative education.8 2. Training co-operative leaders.9 3. Expansion of communication channels as a means for co-operative education.10 4. The organisation of agricultural supplies. The situation in the country presented in the report reaffirmed the thesis regarding the need to ‘boost the agricultural economy’ and mitigate socioeconomic precariousness in the countryside. However, the report represented the interests of the national and foreign landowning bourgeoisie, in that its implementation was not aimed at a fundamental change in property relations or in the existing socioeconomic structure; to the contrary, it favoured the emergence of a regime that would legitimise the process and make it viable. This situation pointed towards a form of co-operativism induced from within an institutional framework that perpetuated the neocolonial agricultural model. This stage is characterised by the absence of co-operativism in a form found in other Latin American countries at the time and the absence of a culture based on co-operative education that propitiated the changes that the country needed, as well as legislative support. Nevertheless, understanding the characteristics of the stage allows us to understand the need for further development of co-operativism in the country, as well as its limitations. Stage Two, 1960–2012. The Emergence and Development of Agricultural Co-operativism The development of co-operativism in this stage is linked to the processes of socialisation and the construction of a socialist sector of the economy. ­Notwithstanding the cyclical form of this development, its most visible results were: (i) the growth of production on the basis of a process of agricultural 2.2

8 9 10

These actions involved an ‘agricultural education program’ as a ‘prior step for the development of co-operatives’, as well as technical advice regarding co-operativism provided free of cost to agricultural producers as an incentive to turn towards co-operativism. Designed to educate future co-operativists in the principles of co-operativism, it included training financed by the North American government and advice based on the experience of co-operativism in Puerto Rico. The program organised meetings with members and contacts in education, official ­bodies, mass media (among others) as a contribution to co-operative development.

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mechanisation and the introduction of new productive systems, (ii) changes in the way of life and production in the peasant economy, and (iii) a general improvement in the quality of life of the rural population, which contributed to social development in the countryside. After the nationalisations of the 1960s, the agricultural economy was shaped by increasing socioeconomic diversity, namely, a state sector represented by the social ownership of all the people (the majority), a peasant economy, and a movement to create co-operatives in their simplest form. These developments corresponded to diverse forms of production and management, economic ­interests and contradictions. At this stage, there were several periods related to the type of co-operatives formed and developed. These are: 1. 1959–75. Socialisation initially privileged the nationalisation of land, though it gave rise to the emergence of Credit and Services Coops (cscs),11 Agricultural associations and societies, and other ephemeral forms of co-operatives (in the sugar cane sector). 2. 1975–93. The start of peasant co-operativisation. cscs are maintained as the simplest form of co-operatives. The process of formation of Agricultural Production Coops (cpas) is initiated, driving changes in the peasant economy. In 1982, for the first time agricultural production co-operative legislation (Law 36) was approved. The cpas decisively transformed the peasant economy, but at the end of the decade its form of management needed an adjustment. 3. 1993–2010. The’solution’ to the agrarian crisis in the form of workers’ cooperatives. Basic Co-operative Production Units (ubpcs) were formed.12 By 1995 the land was given to peasants, strengthening the cscs. These gradually moved to the centre of the co-operative movement. On the other hand, cpas are maintained but with a tendency towards a reduced role and the loss of their initial dynamism. In 2002, Law No. 95 of Agricultural Production Co-operatives (cpa) and Credit and Services Coops (csc) repealed Law 3613 but it did not overcome 11

According to Law-95/2002, ‘ccss are primary collective organisations that allow the common use of irrigation, some facilities, services and other means, as well as the overall processing of their credits, although ownership of each farm, their equipment and the resulting production remain private’. They are the simplest forms of co-operatives in the country. 12 Resolution 394/93 defines the ubpc as ‘a social organisation composed of workers with autonomy in management, receives land in usufruct for an indefinite period and has its own legal personality’. 13 The cpa and ccs resolutions giving legality to the ubpc were proclaimed separately (Figueroa, 2014).

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its ­limitations. The gradual deterioration of the cpa, due to the effects of the agrarian crisis and the transfer of land to individuals and families,14 the need to consolidate the model of co-operative management was accentuaded. The Culture of Co-operative Work and Agricultural Co-operative Budgeting More than a few scholars have paid attention to the cultural dimension of ­co-operativism, especially since the transformation of the individual (private) economy into a co-operative economy implies above all the acquisition of a new culture of work—‘the culture of co-operative work’. From this non-economistic perspective, the new culture of work implies above all learning how to collaborate and co-operate, mutual aid, participation, technical and cultural training, and cultural transformation (creating a ‘new man and woman’) as the main driver of production and agency of social change. The culture of co-operative work in the socialist movement means the birth of social relations based on ethical principles and human values that ­differ from those of capitalism. The new socialist work culture requires time, advanced production systems and management mechanisms that include the best of traditions, spaces of collective participation and knowledge of social organisation. In this process, people should be the centre of the new economic organism (people-centred human development). That is why those who defend co-operativism emphasise that the primary objective and the prime mover of the social organism is not the desire for profit but education for co-operative management. In this process, education for co-operative management prepares the economic s­ ubject in a sociocultural dimension whose ethical foundations are equality, equity and solidarity, converted into social practice in the management of economic activity. The co-operative organises its actions based on the participation of its members in the organisation’s orientation, the exercise of democratic control, the production and distribution of income, according to the participation in the process of creating wealth. As a process of gestation of new relations of production, the co-operative approaches socialism in its ethical dimension. In the agricultural sector, the formation of agricultural co-operatives occurred alongside the transformation of land ownership as part of the socialisation process. In the transition to socialism, co-operativism is destined to ­overcome the economic isolation and the backwardness of the productive forces that provoke territorial property. The tradition and culture of peasant work, its rationality and traditions, exert influence in the gestation of ‘the new culture and discipline of collective

2.3

14

Approval of Decree-Law 259 of 2008 and 300 of 2012.

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Dual Process

De-peasantization

Transformation of the large and small peasant exploitation and rise of the socialist sector

Composition

Peasantization Preservation of small peasant exploitation, which is also subject to change

. Appearance of regional social property: of all the . Individual private property is a complex people or collectively, or by group; management unit; . Appearance of new forms of production management: . Co-operation linkages, labour and social culture, co-operatives and state farms; are broadened through the creation of co-operative . The peasant is transformed into: co-operative member associations; . Social habits change, giving way to a new mode or agricultural worker; . Labour culture, kind and quality of life are transformed. and kind of living.

Peasant family economic unit is transformed. Figure 6.1 The socialist socializing of production in Cuba’s agrarian economy.

work’. The emergent contradictions of the agrarian problem and the forms of socialisation15 in the sector are seen as a contradictory process of constructiondeconstruction of the agrarian regime (See Figure 6.1). 3

The Culture and Discipline of Co-operative Work

The acquisition of the new culture and discipline of co-operative work requires: (i) The transmission, conservation and reproduction of the old agricultural traditions and their synthesis with the new technologies’ intensive, productive potentials and conservation of the rural environment;16 (ii) The 15

16

In Cuba, the development of capitalism in agriculture went through the combination of the plantation economy, erected for export, and the minifundio, fundamentally in a specialisation that also combined the export of tobacco, coffee, among other products and family self-consumption, defining the course of socialisation throughout the entire economic history of the country. In the studies on agricultural co-operatives carried out in the Group of Rural Development and Co-operativism of the ‘Marta Abreu’ Central University of Las Villas, it has been verified that where the co-operative manages to consolidate, the incorporation and participation of the old peasants is an important factor, many of them founders and contributors of land and means, but with the most important contributions: that of peasant culture and tradition of work.

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o­ rganisation of production was approached with a participative, collective and conscious leadership in determining the economic and social destination of the co-opearative. This is premised upon guarantees for the autonomy of the management, the learning of co-operativistas and condition of success.17 In the ‘cultural transformation’ brought about by the Cuban Revolution— the formation of a ‘new man (and woman)’—the habits and attitudes acquired by Cubans in the context of the reality that surrounds and envelops them are transformed.18 The result is the creation of a sense of social solidarity and a powerful feeling of belonging to the collective. This new social condition combines individual wills into an organic community or a whole that is greater than the sum of its parts. And co-operation in this condition is converted into a ­productive force which is configured as a socialist society and a collective labourforce (Figueras, 1999). This complex and prolonged transformation process began with the socialisation and nationalisation of land back in the first year of the Revolution, and in the process the incorporation of workers, agricultural, semi-proletarian and peasant farmers, as members of farms or ­co-operatives.19 The assimilation of new forms of social co-existence transforms the isolated habits and customs characteristic of the peasant economy, marks the beginning of a process of overcoming the differences between the city and the countryside and creates a broader culture of social solidarity (Donéstevez, 2006).20 17

18

19

20

Co-operatives where the peasant tradition is transformed, the culture of work is based on co-operation and new productive systems are achieved, manage to overcome the limits of private peasant property, while preserving ancestral practices. The basis of collective work, based on modern techniques, in terms of social participation, promote participation in decision-making and co-operative management of all its members, including contributing members, making it possible to combine the traditions and new rationality imposed by the co-operative as a special type of company (Fajardo, 1996). Where there have been no substantial changes in the productive system and working conditions remain, the link with the contributing socios (cpa)—whether through aging or death—has been lost, and the formation of a new culture of work co-operative is harmed and ceases to influence the development of localities and society in general. A special case has been the experience with the basic units of co-operative production (ubpcs), whose management has not changed since their original formation. The new productive forms germinate as a result of the transmission of the ‘old peasant culture’ and the acquisition and formation of the new discipline and work culture. As the peasant moves from producer-owner-private to producer-owner-collective, the feeling of collective owner producer allows the exercise of ethical values and co-operative principles. It has been observed in the practice of the agricultural sector that when agricultural cooperatives are created, they have an impact on the way of life and work of peasants and their families. Some of these changes bring greater wealth to the culture of traditional agricultural work, while others, given the scale of production and the industrial approach introduced, provoke a rupture with ‘peasant traditions’, with a negative impact on the

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Education is a fundamental condition of fomenting a revolutionary consciousness and a socialist ethos among individuals and families accustomed to working for others or on their own account, and is part of the new culture of work based on co-operation. This culture is preceded by or formed in a ­process of becoming aware that economic production and work relies on social ­co-operation. And when there is no tradition of co-operative development or culture of co-operation this educational process is essential for the successful development of co-operatives as a form of economic and social organisation. After decades of their existence, the agricultural co-operatives that were formed in a culture of social solidarity and socialist practice are still in need of further development of this underlying and preexisitng co-operative culture. The State has the responsibility and a role to play in fomenting this culture. The Challenges of Agricultural Co-operativism that Transcend Co-operativism The persistence of the agrarian crisis into the first decade of the twenty-first century points toward an unidentified problem with no apparent comprehensive structural solution. This has given way to a massive transfer of land in a process evidently designed to both increase food security and deconstruct the social economy formed in prior stages of economic development. According to official figures from the Statistical Yearbook of Cuba (2013), between 2009 and 2013 there was a decline in the number of agricultural ­co-operatives—a reduction of 972 co-operatives, representing 15 per cent of the total—reflecting conditions of a persisting agricultural crisis and growing food insecurity. This trend included a reduction to 444 ubpcs (a reduction of 20 per cent), 162 cpas (a reduction of 15 per cent), and 530 ccss. This trend continued in 2015 with a reduction to 684 ubpc, 877 cpas, and 2,488 ccss. Nonetheless, agrarian co-operativism as a socioeconomic transformation movement still exists and will continue to be perfected in the new updated economic and social model. By the mid-1980s, a large part of the peasantry had become co-operative partners in the context of the cpas which had grown in number and size. The territorial spread and the growth in the number of cpas implicated a clear 3.1

logic of co-operative development and consolidation of the co-operative form of economic organisation. The research carried out in Cabaiguán in the 1990s, in the province of Sancti Spíritus, showed a greater sense of belonging based on the transmission of a peasant work culture transmitted by the contributing partners via leadership, organisation of work and autonomy in management.

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shift from small-scale private production to a co-operative form of organising agricultural production. This signified a transition from private property to social (collective or group) property. The diversity of economic interests in the agricultural sector was expanded to an unprecedented scale by embracing within it the most complex type of organisation of agricultural co-operatives. Despite the problems and its limitations at the level of management—a lack of autonomy and resources—the cpas have managed to overcome the ­absence of sound policies to prevent their disintegration. The persistence of the cpa as a form of social and economic organisation shows the possibilities that this type of management offers for the development of a different culture of work that bets on changes in the way of producing and living, and ­improving the quality of life. However, it was the ubpc that would become the dominant form of ­social and economic organisation in the agriculturtal sector, a process that did not take into account the fact that in 1993, in the midst of the ‘Special Period’, ­agriculture—especially in the sector of sugar production—was experiencing a production crisis of momentous proportions as well as a crisis in the statist model of economic organisation. This structural crisis in the agricultural sector was transferred to the workers who turned towards a hitherto unknown organisational form of production based on self-management. The management model adopted for the ubpc was taken from the cpas, which had been in crisis since 1989, but needed consolidation and refinement. The cpa needed not land, but more socios, as well as greater autonomy in management and creativity to alleviate the negative consequences of the loss of its socio aportador—the State.21 In the process of consolidating the ubpc as a form of productive organisation, the weakness or absence of a relevant social consciousness among many workers in the agricultural sector had a decisive impact.22 For one thing, the workers who became co-operators did not know how productive resources were managed, or under what principles and values they should be organised. Nor did the consolidation of the ubpc substantially change the working and living conditions of the cooperants. The ‘organismos de referencia’ continued to dispose of the production plans and exercise control over the workers. 21 22

A survey carried out at uclv between 1987–89 on the universe of municipalities in the province and the agricultural co-operatives in Villa Clara showed the need to consolidate the co-operative movement in the existing cpas. On the importance given to the process of awareness in the formation of co-operatives of collective workers see the manual for the constitution of co-operatives constructed by a collective of authors at ‘Marta Abreu’ University of the Villas (Sanchez et al., 2014, Villa Clara, Cuba).

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The agrarian crisis, with all its attributes, was transferred to the workers who became cooperants without a clear awareness of the problems involved and much less of the change in their position and situation. The transformation of ubpc state agricultural workers into cooperants contended with the diversity of economic interests contained in the ubpc and that worked against the consolidation of the organisation. In areas where state production was combined with working private plots of land the economic interests of different clases of producers and workers were shared. But even so, there was an unrecognised contradiction between collective work (farm or state enterprise or basic business unit- ueb) and work on the small farm or conuco (Donéstevez, 2006). Along with the formation of the ubpc, the process of transferring land to private individuals for different purposes continued apace, leaving the cpa ­unprotected and orphaned. This policy favoured the former, while small ­private exploitation on the cpas tends to be profitable only in times of agrarian crisis. The cpas that survived only did so as the result of an ongoing process of ­socialisation and consolidation of its management form. Despite multiple measures and institutional support, the ubpc have not escaped their State-derived halitosis. A lack of autonomy, the lack of resources and decapitalisation and indebtedness continue to mark their consolidation as a co-operative. However, within the ubpc framework it is possible to find co-operatives that are models of effective management combined with a solid collective work culture, which show the untapped potentialities of this type of co-operative. The transformations sought today are aimed at considering them as true co-operatives, with autonomy in management linked to the principles of co-operativism. The main challenge is that when they are taken as agricultural co-operatives they are subject to the existing co-operative law and by a more general legislation that is pending approval. In the current stage of co-operativism in the agricultural sector its dynamic forces of change are concentrated in the peasant sector. It is through co-operation and the co-operative that the contradiction generated by minifundismo (micro-production units) and the isolation increased by the transfer of land to families in the private sector can be overcome. Land transfers since 2008 have made the agrarian structure much more heterogeneous and complex within the peasant economy. The social background of its members, their economic interests and the culture of work and social participation that now characterise the ‘new peasantry’ is very diverse. The land transfers to individuals and families effected through the D–L 300 allowed farm owners to extend their landholdings. Current prices of agricultural products and the intensive exploitation of some crops, together with an

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ongoing social differentiation process and the expansion of production based on both family and wage labour, heavily favours the private sector, leaving the ‘socialist’ (cpa and ubpc) co-operatives lacking in terms of number of members. The peasant economy enters the agricultural labour market, making competition in the payment for labour many times higher than the co-operative income. All of this must be addressed by agricultural co-operativism in the new model, demonstrating its superiority through a better efficiency in the management and improvement of the living conditions of partners and their families. The transfer of land to usufructuaries expanded the size of the ccs by t­ ying it to membership, complicating the consolidation of the co-operative and the acquisition by its affiliates of a sense of belonging. These problems were heightened when affiliation to the ccs was no longer obligatory. The usufructuary is affiliated to one or another type of management organisation—the cpa, ubpc or farms (uebs). In this context (conversión of agricultural w ­ orkers and peasants into usufructaries), there ocurs a two-fold process of social transformation: the labour of the individual producer is socialised and the c­ o-operative farm will require a new form of management practice that talkes account of this socialisation. At the same time, new contradictions emerge. On the one hand, the new peasant may not be interested in affiliation with a c­ o-operative, and the co-operative might not be prepared for changes in the management mechanism that includes the affiliation of new members with different interests and non-collective forms of exploitation.23 The new experience will have to be valued on the basis of the creation of relationships based on legally ­established contracts and inter-co-operation, so as not to coerce autonomy in management and participation in the local environment. The formation of a new type of co-operatives (now called Credit and Strengthened Services Co-operatives—ccsfs), many of which are in fact difficult to strengthen, also raises questions about the growing complexity of social relations in agriculture and the need to foster more flexible forms of management that contribute to a gradual transformation towards a more collective form. In general, there is no doubting the need for social tranformation. For one thing, it is necessary to transform existing rules into a single and flexible 23

Affiliation may not be the most apt word but if it can be understood as such the fact is that they must establish relationships with these productive forms and therefore understand that they are affiliating. Many usufructuaries may not be interested in affiliation with co-operatives or uebs. The transformations must recognise the complexity of the agrarian regime in Cuba. Their treatment must not include separating the productive forms and dictating policies for each without taking into account the impact on the other parties.

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r­ egulatory regime, adjusted to the characteristics of the new economic model. With higher levels of decentralisation and autonomy the business system must consider substantial transformations in marketing and commercial management, taking into account the particularities of the working of the laws of the market in the agricultural sector. 3.2 From 2012 until Today. Towards a General Co-operativism Today we can identify two aspects of the same process. First, the approval of the guidelines of the economic and social policy of the party contributes to the universality of co-operativism with the approval of norms to advance nonagricultural co-operativism24 and ‘strengthen’ agricultural co-operativism. The current stage of co-operative development is supported in the first place ­because of the prior experience with co-operativism and co-operatives. An experience with universal co-operativism and what it represents in times of crisis is not totally unknown in Cuba. The culture implicated in Cuba’s experience with agricultural co-operativism and the prosperity that it brought to the agricultural communities allows us to think that co-operativism can be extended beyond the agricultural sector. Secondly, the changes that were introduced in the national economy with the reform process of the 1990s created a broad social base and a territoriallevel need to address development programs based on the exploitation and development of human and natural resources, especially those that are renewable and that cannot be exploited by large-scale enterprises or are not included in national development programs, all of which suggest that it is feasible to introduce and extend co-operatives in both the production and service sectors. Finally, there is the expressed will of both policy makers and economic actors and social subjects to transform the socioeconomic structure of Cuban society in a direction that is more participatory and inclusive, including those forms that are not socialised by the global economy. The path of ­co-operativism indicates that the way forward is the social economy based on self-management with a real participation of ordinary people in the destiny of society. But what is the global vision on co-operativism and co-operatives that at this stage is presented in current political discourse? The most widespread elements of public discourse related to an understanding of the importance

24

See Decreto Ley 305, ‘Of non-agricultural co-operatives’ (2012). Decreto Ley 309 of the Council of Ministers, Resolution No. 427/12. Ministry of Finance and Prices, Resolution No. 570/12. Ministry of Economy and Planning. In the Official Gazette of the Republic of Cuba. Ministry of Justice. Official Gazette No. 053 Extraordinary of December 11, 2012.

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of extending co-operativism from agriculture to other sectors of the economy and society are as follows: • Co-operatives are self-managed units that imply autonomy and sustain­ ability. • They generate employment in each of the moments of the system of production relations (production, distribution, change and consumption). • They are a source of income to the budget. • Co-operatives contribute to import substitution, increase exports and generate foreign exchange. • They improve income for the workers (cooperants) and distribute profits (surplus income). However, co-operatives are more than just a different form of a capitalist firm. Co-operativism is a dual process. First, as a movement it induces the socialisation of production. In this way, it favours the introduction of technologies that expand interdependence in productive processes, co-operation and the enhancement of productive forces, even if these do not presuppose the technological improvement of the conditions of production. Second, the formation of co-operatives presents new ways of managing production based on social participation. It generates values and principles of equity, solidarity and equality, its concepts spread throughout the community, contributing to development. Interdependence in the process of social production contributes to the development of territories while engendering a new culture of work. As a process and practice, the co-operative presents a management model that involves co-operatives and their beneficiaries in actions that allow the effective combination of existing resources in each of the territories and localities, as well as national economic policies. Co-operatives can be integrated into the productive chains in the territories and, once formalised, contribute to the sectoral inter-co-operation where they do not exist by creating capacities for the introduction of initiatives and technological and social innovations that extend the possibilities of extending the business fabric. Co-operatives are catalysts of development and creators of productive and labour capacities, above all as collective forms that manage the resources with autonomy and economic and social sustainability. The growth of wealth must be for the good of the collective, of the individuals that make it up and of ­society in general. 4

The Challenges of Co-operativism in General

The challenges facing co-operativism at the current stage range from the insufficiency of legal relations for its implementation and updating to the insertion

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of a model of self-management in the non-agricultural sector without proper co-operative culture and awareness. The insertion of this new model, along with other forms of self-management, leads to competition which is not always favourable to co-operation. Finally, there is the problem of how to insert co-operatives and co-operativism into the local socioeconomic structure, with its principles, system of ethical values and implications to the management of government. The limitations of co-operativism in general may be summarised as follows: • The inexistence of an economic model adjusted to the new social base that recognises the various co-operative forms; • The absence of a single legal framework for the entire co-operative movement; • There is no management system for co-operatives that takes up the negative and positive experiences of agricultural co-operatives. The form that the management adopts at the moment generates uncertainty and does not coincide with the changing conditions of the general model which is still under construction. • The organisational model of co-operatives, based on participatory, democratic and flexible systems, which facilitates productive co-operation and specialisation processes for each sector, is not well defined. • There is no co-operative education and awareness program capable of promoting co-operativism against the private alternative. • The experimental nature of the policy on co-operativism declared in the cpc Policy Guidelines and in the approved legal norm, is harmful to the ­co-operative movement and leaves the spontaneity of the different sectors to the determination of policies on co-operativisation. The ‘voluntary adherence of the proto-cooperants’ is a basic principle of the formation and success of the formation of co-operatives.25 • The lack of practical experience of the actors who are conducting cooperativism in the process. For this, a process of forced learning has been necessary for those who induce it, those who have not always considered the national experience of several decades, jeopardising its success. • The slow approval process of co-operatives, which, given the experimental nature of the standard, leaves no room for local and territorial governments to draw up their policy on the process. The process becomes bureaucratic 25

This is the case of co-operatives formed in the gastronomy sector which have been induced by their ministry without adequate sensitisation and which may be hiding a virtual privatisation and way for the formation of private companies under the umbrella of co-operativism.

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and dependent on ministerial policies that as reference bodies become policy makers that only in localities could be endorsed according to integrated development programs. Finally, it is necessary to define organisations representative of co-operativism in general and in particular for agricultural co-operatives.26 This will be essential as the law that accompanies them will have to be the co-operative law and not the mercantile law and all that implies. As workers’ co-operatives they are generally only thought of in terms of unionisation, but this would imply changes in the way in which they should relate to the rest of the organisations in this type of workers’ organisation, something that is not clear, as it is not for anap, despite the transformations that are taking place today. The ubpc is still not characterised by this type of mass organisation. If it does not want to disappear in the process of privatising land, transferring it to individuals and families, the supporters of agricultural ­co-operativism must take special consideration in its strengthening, considering that the measures being taken currently do not point towards a true consolidation. Policies regarding it should be made explicit and part of the solution of the national agrarian problem. The organisation of the agricultural market must be explicitly addressed by the agricultural co-operative policies so that it does not become part of the process of disintegration due to the lack of profitability of the existing cooperative organisations. We must consider the fact that there are so-called consumer co-operatives that can be a viable and creative formula for this moment in the country. 5 Conclusion The transition to socialism necessitates the consolidation of the culture of ­co-operation and co-operative education expressed in the principles and values of co-operativism that are the ones who bring it closer to the essence of the new mode of production. The learning of the socios (co-operants), the separation of the objectives of the co-operatives from those of the capitalist enterprises, in aspects as essential as the desire for profit, need to be divulged and accepted by all who drive the movement that contributes to the creation of the ideals of socialism. 26

The formation of the Basic Co-operative Production Units in 1993 did not incorporate this special type of co-operatives into anap, leaving its workers as members of the Union of Agricultural Workers; nor did it organise them under the Co-operatives Law in 2002.

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Co-operative culture does not arise spontaneously. It has material and social foundations. From the social perspective, an essential element is the knowledge of the members who would know how to attain, direct and distribute the co-operative’s production as a contribution to the broad socialist project. The path of learning is long and bumpy, but attainable if one can evaluate and adjust the challenging circumstances affecting contemporary Cuban co-operativism. The current praxis cannot ignore the experience of the agricultural sector and much less the theory that is based on practical evaluation provided for decades by the political economy of socialist transition. The evaluation of successful experiences can contribute to the co-operative movement and to the consolidation of this socioeconomic type. The formation of urban and rural co-operatives in Cuba requires the evaluation and monitoring of the experience achieved, especially those aspects that have to do with the essence of the co-operative movement. References DECRETO No. 309 del Consejo de Ministros. En la Gaceta Oficial de la República de Cuba. Ministerio de Justicia. Gaceta Oficial No. 053 Extraordinaria de 11 de diciembre de 2012. DECRETO–LEY No. 305, 306 del Consejo de Estado. En la Gaceta Oficial de la República de Cuba. Ministerio de Justicia. Gaceta Oficial No. 053 Extraordinaria de 11 de diciembre de 2012. Donéstevez, S., G. (2006). La economía campesina en la transición al socialismo en Cuba: el proceso de descampesinización-campesinización. Editorial Feijoo. Tesis en opción al grado científico de doctora. Libro digital, uclv Library, Villa Clara, Cuba. Fajardo, N.L. et al. (1996). La presencia Isleña en el cultivo del tabaco en la Cpa ‘La Nueva Cuba’ de Cabaiguán. Revista Guize, Asociación Canaria de Antropología, 3, Universidad de la Laguna, Tenerife, España. Figueras, M., et al. (1999). La fuerza de trabajo colectiva en las Co-operativas de Producción Agropecuaria. In Participación Social co-operativismo. Havana: Editorial F. Varela. Figueroa, V.M. (2014). Critique of the preliminary draft of agricultural co-operatives from the Political Economy. In Co-operativism and Development: Challenges of the Update of the Cuban Economic Model. Havana: Editorial Caminos. Lister, J. (1955). Co-operativismo Agrícola en Cuba. Su estado actual y posibilidades ­futuras. Misión de Estados Unidos en Cuba. Havana.

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Muñoz, R. et al (2014). Development and Co-operativism Challenges: The Cuban Model of Transition to Socialism. Editorial Caminos. Havana. Resolución No. 427/12. Ministerio de Finanzas y Precios. En la Gaceta Oficial de la República de Cuba. Ministerio de Justicia. Gaceta Oficial No. 053 Extraordinaria de 11 de diciembre de 2012. Resolución No. 570/12. Ministerio de Economía y Planificación. En la Gaceta Oficial de la República de Cuba. Ministerio de Justicia. Gaceta Oficial No. 053 Extraordinaria. Sánchez, G.M.D., Ruiz, J.G., González, I.L., Nápoles, L.F., Matos, D.F., Seijo, A.G., .... Alfonso, Y.M. (2014). Guía para la constitución de cooperativas no agropecuarias. In U.C.M.A.d.L. Villas (Ed.), (1ra Edición ed.). La Habana. Cuba: Editorial Caminos.

Chapter 7

Agricultural Production Co-operatives in Cuba: Toward Sustainability Frederick S. Royce Cuba’s farming co-operatives constitute the dominant organisational form within Cuban agriculture.1 They grow food for national consumption and for export, and at the beginning of the current century, provided full-time jobs for around 300,000 co-operative members, supplying social benefits for members and their families: over a million people (Álvarez, 2002: 80; Nova González, 2003a: 18, 22, 25). Today their dominance within most crop sectors has diminished somewhat compared to the early 2000s, but still today over 2,000 co-­operative farms manage about 41 per cent of Cuba’s croplands. So how do Cuba’s agricultural production co-operatives actually function? As Cuba’s economy, and agriculture in particular, enter increasingly into world market economic competition can these worker-managed organisations survive? After briefly recounting the history of agricultural production co-­ operatives in Cuba, this chapter provides insight into the range of co-operative experience, based on a literature survey supplemented by details from specific agricultural production co-operatives visited by the author on multiple occasions. Looking toward the future, the chapter addresses issues important to the sustainability of Cuba’s agricultural production co-operatives. 1

History of Agricultural Production Co-operatives in Cuba

Five types of production co-operatives have been established in Cuba since 1959. The following definition by Edward Reed fits some of these co-operatives more precisely than others, yet is useful for all. An agricultural production cooperative is a farm where,

1 This is a revised version of a paper presented at the Association for the Study of the C ­ uban Economy 14th Annual Meeting, Aug. 5–7, 2004. Miami.

©  koninklijke brill nv, leiden, ���8  |  doi:10.1163/9789004361720_009

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the land and major capital items are held in joint ownership by the farm workers themselves, the bulk of the land is collectively cultivated, and any profits from the enterprise are shared by the co-operative members. Ideally, as joint owners, members of production co-operatives participate in the decision-making process concerning all aspects of production, distribution, and investment. Thus, this type of group farm is distinguished from the state farm, where workers are wage employees of the state, and forms co-operation where farmers cultivate their individual plots while carrying out some operations jointly. reed, 1977: 360

Since 1959, there have been three periods during which the Cuban government has promoted the formation of agricultural production co-operatives. 1.1 First Period: Diverse Early Co-operatives The first period, from 1959 through 1963, saw the formation of three types of co-operatives. The earliest, called simply ‘agricultural co-operatives’, were established on large non-sugarcane farms or ranches, which had been expropriated during the first months of the revolution, under the first agrarian reform law (Bianchi, 1964: 105). Between May 1959 and May 1960, 881 of these agricultural production co-operatives, mostly in the size range of 200 to 300 hectares, were organised. This first co-operative experience was short-lived, however. In January of 1961 they were merged into the centrally managed network of state farms. Meanwhile, in June of 1960 similar co-operatives were established on the lands of large sugarcane plantations. Within two months, over 600 of these ‘sugarcane co-operatives’ were established, and in May 1961, 622 co-operatives, with a total of 122,000 members controlled 809,000 hectares of land (Binchi, 1964: 108). Like the ‘agricultural co-operatives’, the ‘sugarcane co-operatives’ were to be a brief institutional interlude on the road to a centrally managed agriculture. After only two harvests, in August 1962, the National Congress of Sugarcane Co-operatives voted almost unanimously to transform their cooperatives into state farms (Domínguez, 1978; Bianchi, 1964: 107). Soon after, the National Association of Small Farmers (Asociación Nacional de Agricultores Pequeños-anap) initiated a somewhat more enduring effort at co-operative agricultural production. Between May 1961 and May 1962, anap organised 229 ‘agrarian societies’ (Sociedades Agropecuarias or SA). These co-operatives differed from the previously established ‘agricultural co-operatives’ and ‘sugarcane co-operatives’ in three major ways. First, they were composed of small farmers who pooled their land in order to work it collectively, sharing draft animals and implements (Martín Barrios, 1987). Second, they were much smaller

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than either the agricultural or sugarcane co-operatives: the average size of the 345 agrarian societies reported in August 1963 was 137 hectares, with an average membership just under 13 farmers. Finally, the SA were more democratic, with members electing their own leaders (the government appointed the managers at the agricultural and sugarcane co-operatives) (Bianchi, 1964: 106, 127). Although over 500 SA were organised in 1962 and 1963, they failed to generate broad interest among the small farmers (Regalado, 1979). By late 1967 only 126 remained, and four years later, the count had dropped to 41 (Domínguez, 1978; Martín Barrios, 1987). Among the causes for the failure of the SA co-operative model were the timing of the effort, so soon after many small farmers had received individual land titles from the agrarian reform, and the much higher priority placed by the government on expanding the state-run agricultural sector during those years (Figueroa Arbelo, 1997). Despite the apparent failure of these ‘first period’ production co-operatives, the experience gained would later bear fruit. 1.2 Second Period: Voluntary Farmer Collectives Beginning in 1975, the Cuban government began a gradual, voluntary process of attracting farmers into agricultural production co-operatives of their own making (Deere, Meurs, and Pérez, 1992: 120; Zimbalist and Eckstein, 1987: 7). The ‘agricultural production co-operatives’ (co-operativas de producción agropecuaria or cpas) organised during this period were structurally very similar to the earlier SA. This was not a coincidence, since prior to 1977, when anap ­formally adopted collectivisation of the small farmers as its organisational long-term goal, groups of farmers were making visits to some of the remaining SA (Martín Barrios, 1987). But lessons had been learned. The collectivisation effort launched in the mid-1970s was more widely consulted with farm families, and would have a much greater commitment from the state than was the case with the previous attempt. Furthermore, anap had a decade or more of additional experience (Deere and Pérez, 1999: 200–201). Beginning in the early 60s, anap membership was increasingly organised into mutual aid groups and ‘credit and service co-operatives’ (co-operativas de crédito y servicios or ccss) that ‘enable the sharing of irrigation and other installations, services and productive means, as well as collective arrangements for credit, even though the land, tools and production of each farm remain private’ (Asamblea Nacional del Poder Popular, 2002). This organised, small farmer base proved to be fertile ground for the creation of agricultural production co-operatives, over 1,000 of which were established between 1977 and 1980 (Martin Barrios, 1987). A good deal of the success of this effort seems to have

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been due to the emphasis placed on persuasion, rather than coercion (Deere & Pérez, 1999: 185–186). By pooling their lands, and working collectively, individual farmers were no longer tied to a particular, often isolated, plot of ground. Co-operatives brought co-operative members and their families together, often closer to towns or ­villages, and permitted access to electricity, improved housing, schools, and medical care. Co-operative production enabled greater use of machinery, to reduce drudgery and to increase labour productivity. These co-operatives provided for paid vacations and retirement pensions, benefits that small farmers had never known. As a final incentive, those who entered the co-operatives with land would be gradually paid off by the co-operative for the land ‘­contributed’ (Deere, Meurs and Pérez. 1992: 121: Ghai, Kay and Peek, 1988; Asamblea Nacional del Poder Popular. 1982). According to Cuban economist Victor Figueroa, these changes in rural life brought about by the process of voluntary collectivisation into cpas constituted no less than a ‘profound cultural revolution in the countryside’ (Figueroa Arbelo, 1997: 2). Throughout the first few years of cpa development, a typical co-operative would comprise less than 30 socially homogeneous members. Thereafter, due to the entry of new members, and to a tendency to amalgamate smaller co-operatives into fewer, larger units, the average membership size grew to around 50, where it has remained (Deere, Meurs and Pérez, 1992: 123). The social origins of the membership also became more diverse, with new members increasingly from the ranks of landless agricultural labourers, skilled workers (mechanics, welders) and professionals (accountants, agronomists). The latter category was particularly important, with 2,750 professionals and paraprofessionals (técnicos medios) reported among cpa members as early as 1992 (Arias Guevara and Castro Hermidas, 1997: 30). Although the presence of a core of former small farmers and their family members remained a very important characteristic of the cpas into the 1990s, the tendency is for the co-operatives to become numerically dominated by the other groups mentioned. By all measures, the production co-operatives established during this second period of co-operative formation were more successful than those of the first period. Yet they were not without problems. In 1983, there were 1,472 cpas, with a total of over 82,000 members (Figueroa Arbelo, 1997: 10). By December 2000, there were 1,146 cpas, with 61,083 members (one, 2001). Almost 90 per cent of the decline in membership had occurred prior to 1990 as older members took advantage of the retirement benefits offered by the government as an original incentive for joining the co-operatives. Also, restrictions on cpa economic activities throughout the 1980s led to reductions

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of ­economic autonomy and income, particularly as compared to individual farmers, thus weakening the appeal of the co-operatives, and explaining why individual farmers were no longer joining production co-operatives (Deere and Pérez, 1999: 214–218). With the initiation of the ‘Special Period’ in 1991, the overall membership numbers stabilised for a decade, but began to decline again in the mid 2000s. By 2015 there were 867 cpas on 606,000 ha of land. The continuing lack of mechanised inputs and the closer government supervision of cpas as opposed to individual farmers may have been ongoing factors in this decline. 1.3 Third Period: Co-operatives Become Dominant The most recent major period of co-operative formation, from September 1993 through early 1995, constitutes a reversal of the early 1960s policies that converted the agricultural and sugarcane co-operatives to state farms. During the crisis of the early 1990s, the inefficiencies of the huge state managed farms that controlled over 85 per cent of Cuba’s agricultural land area became increasingly untenable (Arias Guevara and Castro Hermidas, 1997). Now it was the turn of the relatively more efficient cpa to provide the organisational model, just as the SA had provided the cpa direction, over 15 years earlier (Alvarez and Peña Castellanos, 2001). The many lessons learned, regarding both the potential of production co-operatives and the limitations of the state-managed alternative, assured that co-operative organisation would not now be as ephemeral as thirty years before. The process of transformation of state farms into a new form of co-­ operatives, called ‘basic units of co-operative production’ (ubpc). constituted a fundamental, widespread, and permanent transformation of the structure of agricultural production (Deere, Pérez Rojas, Torres Vila, García Aguilar and González Mastrapa, 1998; Burchardt, 2000a: 174; Enríquez, 2003: 204). Beginning in September of 1993, the organisation of ubpcs proceeded very rapidly. In March 1995, there were a total of 2,879 ubpcs; 1,426 in sugarcane and 1,453 in other crops and livestock (Valdés Paz, 1997). These farms, with a total membership of over 260,000, occupied 3,161,000 hectares or 48 per cent of Cuba’s agricultural lands (Figueroa Arbelo and Averhoff Casamayor, 2001). While the ubpcs were patterned after the cpa model, they differ in that the cpas were formed by small farmers pooling their lands, whereas the ubpcs were populated by former state farm workers, on lands still owned by the state, with openended, rent-free usufruct granted to the co-operative. Furthermore, the scope of the ubpc effort was much more ambitious, and took place under extremely unfavourable economic conditions. Soft credit was provided for the ubpcs to purchase existing crops, infrastructure, machinery and irrigation works from the state (Deere, 1995: 14).

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2

Recent Situation

Cultivated land area and land tenure by type of farm. In 2000 the ubpc and cpa production co-operatives together farmed 56 per cent of remaining 44 per cent is fairly evenly divided between state and individual producers. By 2015, after significant distribution of rent-free but state-owned land to individuals, these numbers had changed: the ubpc and cpa co-operatives farmed 41 per cent of cultivated land, whereas the individual-managed sector had increased from 21 to 40 per cent. This shift represents a change in Cuban government policy, most notably from 2007, to favour individual management of smaller areas, particularly in basic food crops. These general proportions have never provided much insight into the relative importance of each management organisational form for a particular crop. For example, in 2000, sugar was heavily dominated (86%) by co-operative producers, whereas individual farms overwhelmingly managed the important tobacco crop (Table 7.1). Table 7.1

Cultivated land areaa by management, December 2000

Total area crop

(1000 ha) State % ubpc % cpa % Individual %

All cropsb 3599.6 Sugar 1681.1 Coffee 139.4 Cocoa 8.3 Bananas 112.6 Citrus 83.6 Other fruit 84.8 Perennial pasture & 298.8 forage Rice 200.0 Vegetables and root crops 727.1 Tobacco 70.3 Annual forage 17.2

23 10 29 12 42 44 37 56

46 73 22 35 28 43 23 40

10 13 14 16 11 4 11 3

21 4 35 37 19 9 29 1

53 26 10 61

29 16 8 36

7 9 14 2

11 49 68 1

a The land dedicated to a particular crop, including the area planted, under preparation, ­fallow, awaiting planting, and including the access roads, borders, irrigation and drainage canals, and other areas that are necessary for farming operations. Does not include natural pasture or forest lands. Oficina Nacional de Estadísticas. 2001. Anuario Estadístico de Cuba 2000. Havana. b All crops total is greater than sum of crops listed, because not all minor crops are included. Source: Nacional de Estadísticas. 2002. Anuario Estadístico de Cuba 2001. Havana.

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Table 7.2 Farmer demographics by organization, 2000

Number of farms Number of members (farmers)

ubpc

cpa

Individual

2,565 241,607

1,146 61,083

n/a 210,000 (approx.)

Source: Nova González (2003b: 9, 26); one, 2002; Figueroa Arbelo and Averhoff Casamayor (2001).

Production co-operatives also dominate Cuban agriculture demographically (Table 7.2). It is worth noting that much of the ‘Individual’ sector in Tables 7.1 and 7.2 consists of credit and service co-operative (ccs) members. Figure 7.1 shows the numbers of each type of production co-operatives and their total membership by year, from 1959 through 2001. No reference to the number of members of the 1959–60 ‘Agricultural Co-operatives’ has been located, so the ‘Total Members’ for 1959 and 1960 are estimated from cited values for 1961. Figure 7.1 shows the numbers of each type of production co-operatives and their total membership by year, from 1959 through 2001. No reference to the number of members of the 1959–60 ‘Agricultural Co-operatives’ has been located, so the ‘Total Members’ for 1959 and 1960 are estimated from cited values for 1961 (Bianchi, 1964: 108). Reduction of sugar production. In April, 2002, the Cuban government announced a drastic reduction of sugar production capacity (Alvarez, 2004; ­Peters, 2003). Information on this downsizing has focused principally on the closing of nearly half of Cuba’s 156 sugar mills, but a key part of the strategy also involves reducing the area planted in sugarcane (minaz, 2003). This indicates that although some ubpcs failed to the point of their lands being returned to state administration or withdrawn from production, most of the reduction in the total number of ubpcs was due to consolidation. The reduction of area devoted to sugarcane within these co-operatives during the 1994–2001 period was over 18 per cent (1,494,000 to 1,223,000 ha). Apparently, the shift from sugarcane to other crops began well before the announcement of April 2002. The process of conversion did, however, accelerate around that time: between ­September of 2001 and September of 2003, there was a reduction of 29 per cent (1,223 to 865 thousand hectares) in area devoted to sugarcane on the ubpcs. Since the same period saw reductions of less than four per cent in number of co-operatives and agricultural lands, the drastic reduction in sugarcane area was carried out by dedicating sugarcane lands to other crops. Although few of

Number of Co-ops

4500

450.0

4000

400.0

3500

350.0

3000

300.0

2500

250.0

2000

200.0

1500

150.0

1000

100.0

500

50.0

Total Members (1000s)

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Agricultural Production Co-operatives in Cuba

0.0 2001

1997

1999

1995

1991

1993

1987

1989

1985

1981

1983

1977

1979

1975

1971

1973

1969

1967

1965

1961

1963

1959

0 Year Agricultural Cooperatives CPA

UBPC

Sugarcane Cooperatives

Agrarian Societies

Total Members

Figure 7.1 Production co-operatives and membership, 1959–2001. Source: one (2002).

the ubpcs that grew sugarcane disappeared, the number specialising in cane fell by 23 per cent (178) from 2001 to 2003. That a 29 per cent reduction in area devoted to sugarcane was accompanied by a 23 per cent reduction in farms specialising in that crop seems to imply that most of this recent reduction took place by entirely changing the crop specialisation of 178 co-operatives. Interestingly, it appears that these former sugar co-operatives would continue to be administered under the Ministry of Sugar (and later its successor, azcuba) rather than the Ministry of Agriculture, as is the case of other non-sugarcane ubpcs (Peters, 2003; Sulroca, Quintero, and Figueroa, 2004). Several thousand workers moved from closed mills to co-operatives, increasing the membership of the sugarcane and former sugarcane ubpcs. 3

Co-operatives and the State

Cuban agricultural production co-operatives are organised around governmentmanaged purchasing, marketing and coordinating entities. In the case of

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sugarcane, each cane production co-operative is associated with an agroindustrial complex (complejo agro-industrial, or cai). The cai is owned by ­Ministry of Sugar, and is the most visible and active link between the state, and each sugar farm. When organised in the early 1980s, each cai was to integrate the agricultural, industrial and transportation components of sugar production of a particular territory (Alvarez and Peña Castellanos. 2001). With the formation of the ubpcs in 1993–94, sugarcane production was removed from cai activities, but the close links to production remain. Each co-operative (ubpc or cpa). is associated with a particular cai, which purchases and processes the farm’s cane, and supplies all major farm inputs, notably machinery, parts, fuel, lubricants, fertiliser and herbicides. Furthermore, the cai has retained a very active role planning the annual sugarcane production plan and overseeing its progress, even though the co-operative farms have a legal claim to some degree of management autonomy (Comité Ejecutivo del Consejo de Ministros. 1993). Agricultural production co-operatives that produce crops besides sugarcane are similarly integrated into crop-specific state-run enterprises, under the Ministry of Agriculture, which like their counterparts in the sugar industry, purchase the bulk of co-operative production, supply nearly all inputs, and perform a range of services for the associated co-operative farms. The extensive state involvement in the management of co-operative farms, especially sugarcane co-operatives, has been frequently criticised by Cuban academic and journalistic observers (Alvarez and Peña Castellanos, 2001; Nova González, 2004: 20; Rodríguez Castellón, 2000: 196–199; Sexto, 1995). Some of the major limitations on co-operative autonomy are: • Co-operatives may not change from their major crop without authorisation. For example, land dedicated to sugarcane must remain so, unless change is authorised by minaz. • Land cannot be sold or rented. It can be acquired, if the co-operative can convince a landowner to join, or to sell land to the co-operative. • The state is the principal purchaser of production. In some cases, over-quota production can be sold in farmers’ markets, but for a number of important crops, including sugarcane, the state is the only buyer. • The state is the only supplier of agricultural inputs. The co-operatives ­therefore have a very limited capacity to choose, vary, or often to even acquire the inputs they need. If a needed input is not available through the corresponding state supplier, it is very difficult for the co-operative to obtain it at all. In practical terms, this is probably the single most severe limitation on co-operative autonomy.

Agricultural Production Co-operatives in Cuba

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Case Study Examples

According to Robert Yin, ‘the distinctive need for case studies arises out of the desire to understand complex social phenomena. In brief, the case study method allows investigators to retain the holistic and meaningful characteristics of real-life events—such as … organisational and managerial processes…’. The case study is appropriate for such complex situations in part because it ‘copes with the technically distinctive situation in which there will be many more variables of interest than data points’ (Yin, 2003). Two case studies carried out by the author will be used to provide specific examples in this chapter. • The first, based on interviews, documents, and observations at the ‘Amistad Cuba Laos’ sugarcane cpa in Artemisa province, was performed during 1995–96. The resources available for that work were sufficient to accomplish a formal case study (Royce, F.S. 1996). • The second case is based on multiple visits to two adjoining citrus co-­ operatives, also in Artemisa province, during 2002–03. Available funding was not sufficient to carry out a formal case study at that location, so the examples reported here emerge from what might be termed a ‘pre-case study’, based on much less detailed data. Amistad Cuba Laos Sugarcane cpa. The co-operative was formally established on December 9, 1980, with 134 hectares of land, and 18 members. On April 15, 1983, the original ‘Amistad Cuba Laos’ merged with the nearby ‘Antonio Maceo Grajales’ cpa. That same year, the co-operative reached 809 hectares and 71 members. At the time of the study the co-operative possessed a total of 1,188 hectares, which included the following distribution: • 876 hectares in sugarcane. • 39 hectares in food crops for members. • 39 hectares for livestock (mostly milk cows for member consumption). • 234 hectares not useable for agriculture (areas for houses, buildings, access roads, drainage ditches and especially hillsides). There were 96 members in June of 1996. The co-operative was highly mechanised, with 28 wheel tractors, four track-type tractors, four sugarcane combine harvesters, and two medium-duty trucks. Citrus ubpcs. The ‘30 de Noviembre’ co-operative is one of the five ­u bpcs that comprised the production areas of the ‘Cítricos Ceiba’ enterprise in ­Havana province in 2003. It was founded in 1994, with 250 members and 900 hectares of citrus. By the end of 2002, the membership had increased to 321, while the area in citrus had decreased to 813 hectares, following a strategy of eliminating the least promising citrus areas, and diversification. Over half the

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citrus area (470 ha.) is planted in Valencia oranges, and only 46 ha is dedicated to grapefruit. In addition, there were 30 hectares for cattle, and 67 in food crops for members. The co-operative owns 24 sheltered production houses (casas de cultivo) whose purpose is to protect vegetable crops against pests. These are of two sizes: 900 and 1,200 square meters. In April of 2003, the co-operatives membership workforce was distributed approximately as follows: • 57 members attend the citrus area day-to-day • 74 accomplish the harvest • 23 work in the production casas de cultivo • 40 attend the food crop and cattle area • 30 provide technical or administrative support • the remainder includes mechanics, drivers, cooks, custodial, security and other. The adjoining ‘9 de Abril’ ubpc is also associated with the ‘Cítricos Ceiba’ enterprise. In early 2003 this co-operative had a membership of around 500 ­(including 90 women). farming 1,309 hectares of citrus (732 ha. grapefruit) and tend 42 casas de cultivo. The distribution of the workforce was proportionally similar to the ‘30 de Noviembre’ co-operative. 5

Organisational Similarities

A defining characteristic of both the cpa and ubpc is the election of co-­ operative directors by the membership. In both cases, the term of office is five years, although recall is permitted before the term expires. Therefore, the General Assembly (all members) is shown as the highest authority in each of the organisational diagrams (Figures 7.2 and 7.3). The positions occupied by members of the board of directors (cpa-junta directiva; ubpc–junta administrativa) are shaded. In both the cpa and the ubpc, the department heads are generally members of the board of directors, but each of the two co-operatives had one department head that was not included. On the other hand, each co-operative board includes some non-administrative workers among those elected. Note that the cpa includes two ‘staff’ positions: agronomist (ingeniero agrónomo) and mechanisation expert (ingeniero mecanizador). Each of these individuals has functional, but not formal, authority within a vital activity, as indicated by the dotted lines. That the cpa model served as inspiration for the ubpcs is borne out by the similarity of the organisational diagrams of these two co-operatives. There are some differences, however. The designation of the co-operative executive as ‘administrator’ instead of president may reflect the more limited managerial autonomy available to the ubpcs. The relative

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Agricultural Production Co-operatives in Cuba general assembly of members

president

production

economy

procurement

machinery

agronomist

mechanization specialist sugarcane

accounting

purchasing

repair shop

food crops

payroll

storeroom

equipment parts stores

livestock

Figure 7.2 ‘Amistad Cuba Laos’ cpa organizational diagram, 1996. Source: Author’s own creation. general assembly of members

administrator

crop production

economy

accounting

member services

technical & plant protection

machinery

food production food crop production

herbicide pesticide & fertilizer inventory

dairy, poultry, meat production

payroll field records

food distribution

citrus

other fruit

greenhouse

purchasing

storeroom

harvest

irrigation equip maint

citrus

other equip maint

other fruit

maintenance shop

greenhouse

fuel & parts inventory

Figure 7.3 ‘9 de Abril’ ubpc organizational diagram, 2003. Source: Author’s own creation.

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importance given to ‘Food Production’, i.e. self-provisioning, at the ubpc is ­probably indicative of the origins of those co-operatives during moments of food scarcity in the early 1990s. For this reason, secure access to food was a much more important motivation for the workers who founded the ubpcs, than for the small farmers who began the cpas under much more favorable economic circumstances. Furthermore, self-provisioning is the production area most completely under co-operative (as opposed to enterprise or ministry) management control (Pérez Rojas, N., and D. Echevarría León. 2000: 159). The larger population of the ubpc, with approximately 500 members compared to about 100 at the cpa, also may influence organisational complexity. 6

From Here to the Future: The Prospects for Sustainability of Agricultural Production Co-operatives

The purpose of this section is to indicate some major issues that affect the sustainability of the cpa and ubpc farms. Although sustainability is popularly associated with long-term environmental impact, here a broader conceptual framework is used, which includes not only environmental, but also economic and social sustainability. It is the economic sustain-ability of production cooperatives that is most frequently called into question (Deininger, 1995). 7

Economic Sustainability

The ubpcs were born at the nadir of an extremely deep economic crisis. The productive infrastructure (see Figures 7.2 and 7.3) they purchased from the government was largely worn out, and the management methods they inherited were appropriate to an economic system that no longer existed. S­ hort-term capital for agricultural inputs was very limited, and long-term capital for retooling was almost non-existent. Food was scarce, even in the countryside. ­Under these circumstances, it is not surprising that for most of these new ­co-­operatives, the first few years were economically difficult. Some did not survive, but as Armando Nova González has recently shown, most did, and recently most have been profitable (Nova González, 2003c: Cuadro 10). As shown in Table 7.3, by 2001 most of the unprofitable co-operatives, whether ubpc or cpa, were sugarcane producers. Since that time, this s­ ituation has been at least partly addressed by the downsizing of the sugar industry. Yet, the differences in profitability between cpas and ubpcs producing the same crops and operating within the same overall system, is an indication that it may be

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Agricultural Production Co-operatives in Cuba Table 7.3 Number of profitable agricultural production co-operatives, 2001

Sugarcane

Agriculture & Livestock

ubpc (%) cpa (%) ubpc (%) Profitable 410 (44) Unprofitable 522 (56) Total 932

312 (83) 1116 (69) 63 (17) 493 (31) 375 1609

Total

cpa (%)

ubpc (%) cpa (%)

655 (93) 52 (7) 707

1526 (60) 970 (90) 1015 (40) 112 (10) 2542 1082

Source: Nova González (2003. Tablas 6, 8, 9).

possible to make considerable progress toward profitability with changes in co-operative management, and possibly some changing of rules that place greater burdens on, and permit less autonomy to ubpc as compared to cpa co-operatives. Evidence from the sugarcane co-operative case study indicates, however, that sugarcane may simply be a relatively difficult crop to grow profitably in Cuba under current conditions of input scarcity, low crop price, and the negative effect on work incentives caused by the income structure described in Table 7.3. Although the ‘Amistad Cuba Laos’ cpa was consistently profitable through the mid-1990s, during some years the profit was due to income from sidebusinesses, such as selling cold guarapo (sugarcane juice drink) to a thirsty public. Low sugar prices notwithstanding, part of the difficulty in maintaining profitability on the sugarcane farms appears to have resided in the key areas of member income, motivation, and discipline. A primary justification for the conversion of state-run farms into co-operatives was to take advantage of the ‘productive reserves’ (reservas productivas) of labour-power; i.e. to increase labour productivity (Buró Político, 1993). Yet the cpa co-operatives that served as models for the new ubpcs are not without their own problems in this sense. Analysis of the system of payment at the cpa ‘Amistad Cuba Laos’ during the early years of the special period found it dominated by non-monetary, nonperformance related elements (Royce, 1996). Table 7.4 lists five types of income available to members of the ‘Amistad Cuba Laos’ co-operative. ‘Advance’ and ‘shares of co-operative earnings’ were distributed based on days worked. ­‘Advance’ was sometimes related to quality and quantity norms, and of course the magnitude of ‘Shares of co-operative earnings’ to be distributed depended on farm profitability. All other income sources depended solely on membership. Strictly speaking, a member need not even have shown up for work, yet would have remained eligible for these benefits. This in-kind, membership-based

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Table 7.4 Per member income equivalent in Pesos, July 1994–June 1995

Income component Advance on Profits End of Year Profits Food Crops Allotment Individual Plot Production Patio Pigs Total

Amount

Percentage of total

2,236 1,271 6,075 2,000 2,700 14,282

16% 9% 43% 14% 19% 100%

Source: Royce (1996: 162). Non-cash components were priced at the near-by Bauta agricultural market, and the lowest estimated or observed market prices were used to generate conservative values for comparison.

incentive system severely limited income differentiation, or rewards, within the co-operative according to job performance. Non-cash components were priced at the near-by Bauta agricultural market, and the lowest estimated or observed market prices were used to generate conservative values for comparison. Problems related to income, work, and motivation were by no means unique to the ‘Amistad Cuba Laos’ cpa. To the contrary, they were widespread, and well-recognised by the architects of the ubpc system, who stipulated as a primary characteristic of the new organisfations the vinculación del hombre al área, literally, ‘linking the man to the field’ (Buró Político. 1993). The idea is to organise production in such a way as to link the income of each co-operative member to the results, in quantity and sometimes quality of output, of his or her work. In effect, vinculación decentralises management within the ubpc (Pérez Rojas and Echevarría León, 1998: 119). In some cases vinculación may also be a mechanism for introducing family labour into the productive process, at no direct cost to the co-operative. This process can be relatively straightforward with crops such as tobacco or coffee, which use little mechanisation, do not cover extensive areas, and benefit from close attention by the farmer (Perez Rojas and Echevarria Leon, 1998). In contrast, applying the principles of vinculación at highly mechanised sugarcane co-operatives, which include a high proportion of specialised members, has proven to be more problematic (Torres Vila, González, Niurka Pérez Rojas and García, 1996: 81; Deere, Pérez Rojas, Torres Vila, Garcia Aguilar and González Mastrapa, 1998: 71). Other Cuban observers worry that the process of

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143

assigning individual responsibility may lead to a breakdown in group cohesion and solidarity (Pérez Rojas and Echevarría León, 1998: 121; Arias Guevara and Hernández Benítez, 1996: 132). The ‘9 de Abril’ ubpc provides an example of a well-implemented system of payment based on the vinculación concept, which avoids some of the distortions inherent within the payment system of the sugarcane cpa. The system described here only applies to 86 of the co-operative’s 500 members; other groups, whether the harvest crews, casa de cultivo workers, machine operators or office staff, are covered by other rules. The co-operative’s 1,309 hectares of citrus lands have been sectioned into 86 fincas (farms) of about 15 hectares each. Each finca is assigned to a different member of the co-operative, who is provided 4 tools: a machete, a manually actuated backpack sprayer, pruning shears, and a pruning saw. As the tool list implies, this finca caretaker, or finquero, is responsible for controlling weeds, pruning each tree, placement of irrigation tubes, and maintaining a presence to avoid theft of fruit or equipment. The finquero also oversees operations that are performed on the finca by other co-operative members: fertiliser application by the mechanisation group, and harvest by specialised fruit-picking crews. As is the case with the sugarcane cpa, each finquero is paid a periodic advance on earnings. Unlike the cpa however, year-end payment (after the harvest) is not based on days worked throughout the year, but on the amount of fruit harvested, with the price paid per unit weight increasing on a sliding scale as production per hectare (yield) increases. In this way, income of each finquero is directly related to the productive results of his/her work. The citrus ubpc also has a food production area, the output from which is sold to the membership at low prices. Although we do not have sufficient data to perform a quantitative comparison of the contribution of each income source to the overall member income, a finquero from the neighbouring ‘10 de Noviembre’ ubpc reported yields of 17 metric tons per hectare (which he said are slightly below average). and annual earnings of 7,300 pesos, or 608 per month, during 2002. The co-operative reports that a few finqueros earned double this amount. These were (and are) relatively good incomes in Cuba, where a high-level administrator or professional might have received less than 500 pesos per month at that time. This accounts for the presence of some skilled workers and even professionals among the finqueros. Most importantly, there is a clear relation between effective effort, and income. In 1993–94, the Valencia orange yield was barely two tonnes per hectare, from trees largely covered by vines. Figure 7.4 shows the production increase partially credited to the finquero system, as well as losses related to hurricane Michele of November 2001.

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Royce 12000

Metric Tons

10000 8000 6000 4000 2000 0

1994–95 1995–96 1996–97 1997–98 1998–99 1999–00 2000–01 2001–02 2002–03 Crop Year

Figure 7.4 Total Valencia orange production, ubpc ‘30 de Noviembre’.

Based on these descriptions, it is tempting to conclude that the vinculación system described at the citrus ubpc represents a solution to the apparent problems related to payment, incentive and motivation described at the sugar­ cane co-operative. However, due to substantial operational and economic differences between citrus and sugarcane production systems in Cuba, a direct comparison of these two co-operatives is difficult. Rather, the two systems illustrate a portion of the heterogeneity of specific practices present among contemporary Cuban agricultural production co-operatives. The ability of these co-operatives to creatively adapt their management systems to changing social, technical and especially economic conditions will to a large extent determine the sustainability of these innovative farms. Another requirement for consistent improvements in economic performance is a functioning cost accounting system. The system described for the citrus ubpcs takes no account of either input costs, or fruit quality in calculating payment to the finqueros. It was implemented to rapidly raise production from the abysmal levels of the years following the collapse of the ussr and Eastern Bloc. For the 2002–03 season, the Valencia orange yield at the ‘10 de Noviembre’ farm was 22.5 t/ha, a vast improvement, but around 10 t/ha (31%) below average Valencia yields in Florida. Grapefruit yields are more important for the ‘9 de Abril’ ubpc, and at 35.3 t/ha, are also well short of the ‘potential’ represented by Florida’s 44 t/ha average grapefruit production. Part of this ‘yield gap’ is caused by a continuing shortage of chemical inputs, particularly fertiliser. Chronic input shortages have been a way of life in Cuban agriculture since the collapse of the ussr/socialist bloc.

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These shortages explain why little attention within the incentive system has been given to cost of inputs: the finqueros tend to use all the inputs they are provided. With yield maximisation as the goal, little would be gained by accounting for the costs of these inputs, which are rationed at sub-optimal quantities. Nevertheless, as input shortages are gradually resolved, cost accounting is becoming a priority. Unfortunately, several factors tend to complicate the calculation of production costs in Cuba including the dual currency system used in Cuba, different currency exchange rates applied to state versus co-operative or individual producers; the non-market aspects of Cuba’s economic system; increasingly diverse farming operations on the co-operatives; and a long history of disregard for cost accounting within the context of Cuba’s planned economy. Prominent Cuban economists argue for significantly greater reliance on agricultural input markets, including credit (Du Wong, Fernández, Nova, García, and Atienza, 1996: 15; Nova González, 2003: 15). Under the current system of input rationing by the state enterprises, even when a co-operative accumulates profits, it can be very difficult to invest in production, since there are only limited markets for inputs, machinery, or building supplies. Establishment of agricultural input markets would constitute a very significant and, for most Cuban observers, positive development for the co-operative agricultural production sector. 8

Social Sustainability

Social sustainability here refers to the sustainability of the complex network of relations that characterise the agricultural production co-operatives. In large measure, this complexity derives from the participation of the members in various aspects of co-operative decision-making. The previous section detailed some of the income-related factors that lead to some members delivering less than their full measure. The emphasis on vinculación and other ­changes in cooperative management originate in the difficulties many co-operatives have experienced in eliciting acceptable levels of productive effort from their memberships. Yet, as important as the relation between income and work is, additional motivational mechanisms exist. For example, a range of managerial experts and economists maintain that participation in decision-making itself can elicit greater efficiency and effort from workers (Carnoy and Shearer, 1980; Koont and Zimbalist, 1984: 172; Manz and Sims, 1987: 118–121; P ­ rychitko and Vanek, 1996: xviii). Since Cuba’s agricultural production c­ o-operatives ­operate under rules that favor member involvement, there should be little ­difficulty

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and considerable potential benefit to promoting a high level of member participation in decision-making. An important question therefore is the extent to which particular co-operatives are taking advantage of this potential source of strength. Clearly, member participation in decision-making at these co-­operatives is high compared to worker participation at farms of this size usually found in other parts of the world. Unlike most farm workers, these ­worker-members elect their own leaders, regularly attend meetings where a variety of production, investment and employment decisions are made, and are members of work-groups that daily confront, discuss and resolve operational issues. Yet, observations at the ‘Amistad Cuba Laos’ sugarcane ­co-operative provided a general indication that member participation is not as developed as it could, and probably should, be. Some apparent limitations to greater participation are readily identified, and can be classified according to the ability the co-operative has to affect that limitation. First, member participation takes place within the framework of co-operative autonomy. A clear distinction should be made between the autonomy of the co-operative to manage its affairs, and member participation in co-operative decision-making. Even the highest levels of enterprise autonomy do little to assure worker participation, as exemplified by the tremendous autonomy within a capitalist economy of private firms, whose workers have almost no ability to participate in meaningful decision-making. Yet clearly a production entity must be permitted some degree of decision autonomy, if members are to be involved in decision-making. While Cuban agricultural production co-operatives are subject to considerable limits on their autonomy (see below), it seems very clear that additional space for member participation in decision-making exists. Participation is also inhibited by the manner in which co-operatives themselves manage information. At the ‘Amistad Cuba Laos’ sugarcane co-­operative, a crucial, post-harvest general assembly (all members) meeting is held in July. Among other business, the draft annual report is presented to the membership. This report is a multi-page document that includes narrative, and numerous 5 and 6-digit figures referring to each of the co-operative’s areas of economic activity. After the economic officer reads the report aloud, the floor is opened for discussion and possible modification, and the document, as modified, is eventually approved by a show of hands. According to the economic officer himself, no written materials, either handouts or wall charts, are prepared to aid the membership in the analysis and evaluation of their annual report. There are indications that co-operative members would respond well to accessible, written materials of this nature. Making quantitative indicators of co-operative performance more readily

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available for analysis and decision-making by the co-operative rank-and-file would certainly promote informed participation. At the root of the tension between top-down management and co-­operative autonomy may be divergent interpretations of the function of the agricultural production co-operative in Cuba. Prior to 1993, the cpas were closely integrated into an overwhelmingly state-dominated structure of production, while the ubpcs had not yet been carved out of the large, centrally managed ­state-run enterprises. The role of state agencies as sole purchasers of farm production and sole suppliers of farm inputs constituted a fundamental limit to autonomous economic action, even for the cpas. With the establishment of the ­u bpcs, the opening of agricultural markets with prices determined by supply and demand, and a declining ability of state entities to guarantee adequate supplies of production inputs, the structural differentiation between the co-operatively managed production and the state enterprises has increased. The state agencies associated with each co-operative still constitute the principal purchasers of output, and suppliers of inputs. These factors still limit management autonomy, even though the farm is internally structured as a cooperative (Bu Wong, Fernández, Nova, García, and Atienza, 1996: 27; ­Valdés Paz, 1997). These management limitations raise the question of the actual function of the co-operatives. The ubpcs in particular are still considered by some state administrators to be productive units whose success is quite simply determined by the care with which they follow Ministry technical recommendations, such as fertiliser application rates and planting schedules. In contrast, co-operative leaders and other members increasingly see their farms as collectively run businesses. These dualities of structure and function help explain the persistence of top-down methods in the relations between co-operatives and state entities, as well as the resistance to those methods (Burchardt, 2000b: 176.). Table 7.5 shows the effects on managerial autonomy and worker (member) participation that combinations of these structural and functional dualities tend to engender. Assuming that the gradual trend within Cuba continues toward more decentralised, economic-based decision-making, there is reason to believe that the conditions favouring both high autonomy and high participation may eventually be achieved. To what extent might the increased emphasis on individual effort and reward inherent in the vinculación management (as illustrated with the citrus finquero example) tend to reduce the commitment to the collective as a whole, and possibly even lead to a voluntary de-collectivisation of production? ­Although this is a difficult question to evaluate, observations during several visits during the early 2000s to the ‘10 de Noviembre’ and ‘9 de Abril’ citrus

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Structural Characteristics

Table 7.5 Effects of structural and functional characteristics of farms on managerial autonomy and worker participation

Functional productive unit

Characteristics business

low autonomy

high autonomy low participation

State Enterprise low participation low autonomy

high autonomy high participation

Cooperative high participation Source: Adapted from Burchardt, H.J. (2000).

co-operatives suggested that the sense of group identity and member solidarity at the co-operative was strong, and even increasing. This impression was based partly on the maintenance and expansion of the co-operatives’ common resources: the child daycare centre, the self-provisioning (food production) efforts, improvement to the dormitory-style housing for members who are not local residents, and a large new covered area for meetings, meals and other group activities. Furthermore, conversations with members gave little or no indication of a desire to ‘go it alone’. To the contrary, there appeared to be an awareness of the advantages of being part of a large operation, particularly one in which they have a ‘voice and vote’ and one which both rewards individual effort, and defends against hardship beyond individual control. In the end, an increased focus on individual effort and reward that generates success may be less of a threat to the co-operative unity and member solidarity, than a more egalitarian system that is economically stagnant. Of course, under current government policy, it would not be legal for cooperatives to divide their lands into family parcels, as a way of becoming individual family farmers. However, even if this option becomes available, there may be little incentive to partition the co-operative farms. The average amount of cultivated land available per member would be 6–7 hectares, and for some types of co-operatives, such as the citrus ubpcs, the average cultivated area per member might be much smaller, at around three hectares. Family farms of this size would require significant changes in life-style for many Cuban cooperative members. Moving away from the village or town to develop an isolated homestead on their property would be one of the most dramatic of these changes. These families would become aware of the ‘24 hour, 7 day’ nature of

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taking care of animals and crops, hauling water to the homestead, finding fuel for cooking, and walking long distances to shop, find medical assistance, and schooling. Reluctance to turn their backs on the ‘profound cultural revolution in the countryside’ carried out by the co-operatives might be expected, based on considerations of family well-being (Figueroa Arbelo, 1997: 2). With respect to work itself, the co-operatives we have examined are typical in that they rely heavily on modern technologies, especially agricultural and transport machinery. Various factors have been identified that inhibit individual small farmer participation in modern technologies (Carter and Barham, 1996: 1138). Among such technologies, machinery is a particularly important component of collective farming operations, and one that is not easily divided or shared if a decision is taken to parcel-out the co-operative. Poor utilisation of agricultural machinery in Cuba during the 1970s and 1980s, combined with very limited import capacity during the Special Period, has led to criticism of machinery’s ecological and economic costs, as compared to human or animalpowered alternatives (García Aguilar, 2000: 238–239; Ríos and Ponce, 2002: 156–160). Of more immediate concern to labouring co-operative members however is machinery’s ability to alleviate drudgery, an aspect of mechanisation that is difficult for economists to evaluate (Campbell, 1990; Crossley, Kilgour and Morris. 1983; Stout, 1990). Alternatives to machine power may have other costs such as truncated education (on-farm child labour) or transfer of croplands to grazing or fodder land (animal power) (Pingali, Bigot and Binswanger, 1987). ­Finally, some types of mechanisation appeal to low-income farmers specifically because they reduce severe risks, i.e. machine-powered irrigation pumps where drought is common, or tractor-drawn tillage where weather patterns provide a short window of opportunity for field preparation. One further consideration when evaluating the prospects for voluntary de-collectivisation, or parceling, of the co-operatives is that the overwhelming majority of current members of production co-operatives have no experience with individual family farming. Historically, the greatest threat to agricultural production co-operatives may be the very governments that establish them. Government land reforms in China, Vietnam, Peru, and Mexico each established a significant agricultural production co-operative sector, only to subsequently adopt policies that promoted, or even required, disbanding the very co-operatives they had established. At the present, there is no indication that the government of Cuba is contemplating the dissolution of agricultural production co-operatives. Moreover, government policy makers could have used the recent downsizing of Cuba’s sugarcane industry to shift a significant proportion of co-operative lands into individual-family management. At that time, such a transfer did not

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occur (minaz, 2003; Peters, 2003). Land taken out of sugarcane production was intended to be utilised for other crops, livestock or forestry, but in many cases resources for such conversion were not available, and a considerable amount of former sugarcane lands were abandoned and gradually taken over by marabu (Dichrostachys cinerea) a thorny, invasive woody shrub. Since 2007 much of this abandoned land has been assigned to individuals as ‘usufruct’ parcels averaging less than 10 hectares each (Mesa-Lago, 2014), with no rent and 10–20 year use rights, in what amounts to a transfer from former sugarcane producing ubpcs to individual small farmers. 9

Environmental Sustainability

Avoiding negative environmental impacts is certainly as relevant to the sustainability of Cuban agricultural production co-operatives as it is to farms in any part of the world. Sulroca et al. report that co-operatives are particularly effective in assuring environmentally responsible practices, stating that 90 per cent of their lands are prepared using minimum tillage techniques, that industrial organic byproducts have replaced substantial amounts of inorganic fertiliser, and that they are using biological pest and disease control on their crops (Sulroca, Quintero and Figueroa. 2004: 14). In contrast, at least one case study in Cuba found small, individually managed family farms to have lower environmental impact than the production co-operatives. The co-operatives were able to more creatively blend traditional and modern agricultural practices, however (Sáez, 1997: 480–484). The protected cultivation (casas de cultivo) found at the ‘10 de Noviembre’ and ‘9 de Abril’ citrus co-operatives seems to be an attempt to substitute a physical barrier, and labour-intensive attention for high levels of pesticides often required for production of ‘tourist quality’ vegetables in the tropics. At the same co-operatives, citrus pest presence is monitored through traps placed at various points across several co-operative farms. Checking and maintaining these traps is part of duties of some (not all) finqueros, whose reports are consolidated by co-operative and Ministry of Agriculture specialists. This type of system would be extremely difficult for individual family farmers to manage. In some cases the chronic input shortages have led to high level of chemicaluse efficiency. The citrus groves visited at the ‘10 de Noviembre’ and ‘9 de Abril’ co-operatives were practically weed-free. Herbicides application is one of the jobs of the finqueros, and is accomplished with a backpack sprayer on a weedby-weed basis. The per hectare expense for herbicides is said to be less than $50, about 25 per cent of typical per-hectare herbicide expenditures in Florida at the time of this study in the early 2000s.

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At the same time, members of the ‘Amistad Cuba Laos’ cpa listened patiently as they were encouraged to replace their tractors with oxen in the mid– 1990s. Although they readily agreed that there were a few tasks that the oxen could handle around the co-operative, they were not practical for any major substitution of tractors in cane work. First, they noted, which lands should we dedicate to animal forage instead of sugar production? Next, since the co-­ operative is nearly ten kilometers long, the oxen would have to be kept in several areas around the co-operative. Cattle rustling was a serious problem, so each group of oxen would require constant guarding, and of course the guards as well as the animals would require infrastructure: housing and corrals. Guard duty would represent a non-productive drain on the co-operative. Similarly, there were pressures from the government to substitute organic sugar mill byproducts for inorganic fertilisers. Undoubtedly some fertiliser could be saved, but the logistics of transporting and distributing the per hectare recommendation of 35 tons of filter cake and 25 tons of ash, are daunting in contemporary Cuba (Rodríguez Castellón, 2000: 6–7). 10

Co-operative Member Attitudes

Relevant to each of these aspects of sustainability are the attitudes that develop from, and shape, the interaction of co-operative members with their natural and social environments. The Cuban government transformed state farms into co-operatives in large measure to increase labour productivity by influencing the attitudes of workers toward their work (Buró Político. 1993). The complex interactions between government policy, work incentives, member participation, co-operative autonomy and livelihood alternatives will continue to shape the attitudes hundreds of thousands of co-operative members and their families. The extent to which a co-operatively oriented sense ownership and membership develops may determine the long-term prospects for Cuba’s agricultural co-operatives (Arias Guevara and Hernández Benítez. 1996: 132–134; Figueras Matos, Fajardo Nápoles and Donéstevez Sánchez, 1999: 160). 11

Possibilities for Further Expansion of Co-operative Production in Cuba

The state still directly manages about 20 per cent of Cuba’s agricultural lands. Might a substantial part of this area be organised into production co-­ operatives? Probably not, at least in the short-term. The single largest remaining state agricultural production enterprise, the citrus development at Jagüey

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Grande, Matanzas, consistently achieves some of the highest citrus yields in the country. To the extent that the Cuban government is currently shifting land out of state management there is a preference to supply small-farm areas to families. However, over the longer run, the possibility of converting significant state managed lands to co-operatives cannot be discounted. Intensive urban agriculture areas, known as huertos intensivos or organopónicos, constitute a rapidly growing source of fresh vegetables and condiments in Cuba (Companioni, Ojeda Hernández, Páez, and Murphey, 2002; Murphy, 1999: 24–27). There were 12,598 of these urban agriculture areas reported to exist in Cuba at the end of 2002 (Madruga, 2003). Although many are attached to workplaces, some are organised as production co-operatives. In the city of ­Havana alone, between 1994 and 2000 the number of urban agriculture ubpcs increased from zero to 178, with plans to organise over 100 more (González Novo, M. 2000). A particularly successful example is the ‘ubpc Organopónico Vivero Alamar’. Founded with only five members in January of 1997, within five years the co-operative provided employment for over 50 members on less than four hectares of land nestled between residential areas in Habana del Este. These ubpcs represent an extension of co-operative structures into urban areas. As urban agricultural co-operatives became more common, it was only a matter of time that the co-operative idea would spread to other productive or service activities, such as construction, tourism or transportation. Finally, the Cuban state may decide to divest more of its current functions to co-operatives. According to several Cuban analysts, 2nd-level co-operative organisations, whose members would be the cpa or ubpc production co-­ operatives, as well as credit and service co-operatives, could become suppliers of inputs and services, and sellers of agricultural products to nongovernmental entities (Pérez Villanueva, E. 2000: 93; Villegas Chádez, R. 1999: 66–68; Sulroca et al., 2004). Such a development could broaden co-operative autonomy by introducing farm input markets and expanding markets for farm production, and extend co-operative autonomy, into new commercial and service arenas. 12 Epilogue In the sugar industry downsizing of 2002, the Amistad Cuba Laos cpa lost the mill that bought its sugarcane. The co-operative did not survive the changeover to other crops, and disbanded. Both the 30 de Noviembre and the 9 de Abril ubpcs were hard hit by tropical storms in the early 2000s and then by the most devastating of all citrus diseases, hlb (Huanglongbing, known as ‘citrus

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greening’ in the US). Their citrus production is minimal and both c­ o-operatives have shifted production to tropical fruit, vegetables and even honey production and sales. They both hope to return to citrus production in spite of the disease presence. The policy of prioritising individual farmers through transfer of tenure has not led to the hoped-for increases in food production and availability. Following the creation of the ubpc co-operatives in 1993–94 there was an increase in production of several major domestic food crops (Figure 7.5). This increase came to an end by 2004, possibly due to lower levels of imported inputs. The significant transfer of land to individual farmers beginning in 2007 actually appears to coincide with years of output stagnation, rather than increase. Export crops present an even starker example of the lack of correlation between agricultural improvement and individual, small farmer production in Cuba. Figure 7.6 shows output of three crops that are produced largely for export: sugarcane, tobacco and coffee. Sugarcane is produced almost exclusively by ubpcs and cpas, whereas tobacco and coffee are produced by individual farmers. Of these three export crops, only sugarcane has shown consistent increases in production over the most recently reported five-year period, and only sugarcane has returned to the level of production that existed in 2007. ­Increasing investment for inputs, equipment and infrastructure is a surer path to increasing agricultural production in Cuba than shifting land to ­smallholders. The 2016–17 edition of the Cuban government’s Portfolio of 1000% 900% 800% 700% 600% 500% 400% 300% 200% 100% 0%

0 91 92 93 4 95 6 97 8 9 0 01 02 03 4 05 6 07 8 9 10 11 12 13 14 15 199 19 19 19 199 19 199 19 199 199 200 20 20 20 200 20 200 20 200 200 20 20 20 20 20 20

Viandas (tubers+plantains)

Vegetables

Grains

Dry Beans

Fruit (non-citrus)

Figure 7.5 Selected food crops per cent of 1990 base production. Source: Oficina Nacional de Estadística E Información (1996–2016). Anuarios Estadísticos de Cuba (various years). Havana

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120% 100% 80% 60% 40% 20%

199 0 199 1 199 2 199 3 199 4 199 5 199 6 199 7 199 8 199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 200 8 200 9 201 0 201 1 201 2 201 3 201 4 201 5

0% Coffee

Tobacco

Sugarcane

Figure 7.6 Selected export crops per cent of 1990 base production. Source: Oficina Nacional de Estadística E Información (1996–2016). Anuarios Estadísticos de Cuba (various years). Havana.

Opportunities for Foreign Investment has a significantly expanded section on agriculture, and includes for the first time a brief guide to ‘Foreign Investment with the partnership of agricultural co-operatives’. Can foreign investors and Cuba’s agricultural production co-operatives overcome entrenched ideologies and bureaucracies of the US and Cuba to become partners? This is the major issue for Cuba’s agriculture today, since there is no other obvious source for the extensive investments needed to break out of Cuba’s long-term agricultural stagnation. References Alvarez, J. (2004). The Current Restructuring of Cuba’s Sugar Agroindustry [Online]. ­Retrieved from . Álvarez, M.D. (2002). Social organization and sustainability of small farm agriculture in Cuba. In F. Funes, L. García, M. Bourque, N. Pérez, and P. Rosset (eds.) Sustainable agriculture and resistance: transforming food production in Cuba. Oakland, CA: Food First Books. Alvarez, José and Lázaro Peña Castellanos, 2001 Cuba's Sugar Industry. Gainesville, FL: University Press of Florida. Arias Guevara, M.A., and R. Hernández Benítez (1996). Co-operativas con obreros agrícolas: autogestión y sentido de propiedad. In N. Pérez Rojas, E. González Mastrapa,

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Peters, P. (2003). Cutting losses: Cuba downsizes its sugar industry. Lexington Institute, Arlington, Virginia. Retrieved from . Pingali, P., Y. Bigot and H. Binswanger (1987). Agricultural mechanization and the evolution of farming systems in sub-Saharan Africa. Baltimore: Johns Hopkins University Press. Prychitko, D.L. and J. Vanek (1996). Introduction. In D.L. Prychitko, and J. Vanek (eds.) Producer co-operatives and labour-managed systems: case studies (p. xviii). Cheltenham, UK: Edward Elgar Publishing. Reed, E.P. (1977). Introducing group farming in less developed countries: some issues. In P. Dorner (ed.) Co-operative and commune. University of Wisconsin, Madison, Wisconsin. Regalado, A. (1979). Las luchas campesinas en Cuba. Havana: Editorial Orbe. Ríos, A., and F. Ponce (2002). Mechanization, animal traction, and sustainable agriculture. In F. Funes, L. García, M. Bourque, N. Pérez, and P. Rosset (eds.) Sustainable agriculture and resistance: transforming food production in Cuba (pp. 156–160). Oakand, CA: Food First Books. Rodríguez Castellón, S. (2000). Las Unidades Básicas de Producción Coperativa. El plan y el mercado. In H.-J. Burchardt (ed.) La última reforma agraria del siglo: La agricultura cubana entre el cambio y el estancamiento (pp. 196–199). Caracas: Nueva Sociedad. Rojas Senisse, H. (1993). Perú: de exportador a importador de azúcar. Lima: Instituto Peruano del Azúcar. Royce, F.S. (1996). Cooperative Agricultural Operations Management on a Cuban Sugarcane Farm: …And Everything Gets Done Anyway. (Unpublished M.S. Thesis, University of Florida). Retrieved from . Accessed 31 August, 2004. Royce, F., W. Messina Jr., and J. Alvarez (1997). An empirical study of income and performance incentives on a Cuban sugarcane cpa. Cuba in Transition, 7. Washington, DC: Association for the Study of the Cuban Economy, 457–471. Ruben, R. (1999). Making co-operatives work: contract choice and resource management within land reform co-operatives in Honduras. Amsterdam: cedla. Sáez, H. (1997). Property rights, technology, and land degradation: a case study of Santo Domingo, Cuba. Cuba in Transition, 7, Washington, DC: Association for the Study of the Cuban Economy. Sexto, L. (1995). Ser o no ser autónomas, esa es la cuestión. Bohemia, 87(8), September, B27–B29. Shue, V. (1988). The reach of the state. Stanford: Stanford University Press. Stout, B.A. (1990). Handbook of energy for world agriculture. Essex UK: Elsevier Science Publishers.

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Sulroca, F., R. Quintero, and J.C. Figueroa (2004). Las co-operativas en la agricultura cañera cubana. Seminario de las Cátedras Azucareras de las Universidades Cubanas. Havana: Universidad de la Habana. 10 June. Torres Vila, C., E. González, N. Niurka Pérez Rojas and M. García (1996). Estudios de caso de dos ubpc cañeras de Güines: Análisis comparativo. In N. Pérez Rojas, E. González Mastrapa, and M. García Aguilar (eds.) ubpc: Desarrollo rural y participación (p. 81). Havana: Universidad de la Habana. Treto, E., M. García, R. Martínez Viera, and J.M. Febles (2002). Advances in organic soil management. In F. Funes, L. García, M. Bourque, N. Pérez, and P. Rosset (eds.) Sustainable agriculture and resistance: transforming food production in Cuba. Oakland, CA: Food First Books. Utting, P. (1992). From orthodoxy to reform: historical experiences of post-revolutionary societies. Third World Quarterly, 13(1). Valdés Paz, J. (1997). Procesos agrarios en Cuba 1959–1995. Havana: Editorial de Ciencias Sociales. Villegas Chádez, R. (1999). Sobre la necesidad de la intercooperación e integración agroindustrual en las ubpc. In N. Pérez Rojas, E. González Mastrapa, and M. Garcia Aguilar (eds.) Participación social y formas organizativas de la agricultura. Havana: Universidad de la Habana. Yin, R.K. (2003). Case study research: design and methods. Thousand Oaks, CA: Sage Publications. Zimbalist, A. and S. Eckstein. (1987). Patterns of Cuban development: the first twentyfive years. World Development, 15(1).

Chapter 8

Cuba’s Co-operative Sector and the Project of Deep Reforms Al Campbell From the first official declaration that Cuba’s Revolution was socialist on April 15, 1961, to the present, Cuba’s ‘model of socialism’1 (the institutional structure Cubans have built to realise the goals of their general concepts of socialism) has constantly changed.2 However, the changes to its model of socialism which have been continuously unfolding since the beginning of the Special Period on August 29, 1990, are arguably broader and deeper than any of the previous changes. The extent to which Cuba now holds that it is necessary to deeply rethink both of the related issues of what socialism is and how best to build it was poignantly expressed recently by President Raúl Castro. In his remarks to the National Assembly on December 18, 2010, Raúl Castro described the process of constructing socialism as, analogous to flight into space, un viaje a lo ignoto (a journey into the unknown). At the end of 2010 Cuba took a first major step in systematising its two ­decades of experience with finding a new economic and social model for building socialism since the beginning of the Special Period. The Communist Party of Cuba (pcc) drafted what became known simply as the Lineamientos (hereafter ‘Guidelines’), a document of 291 guidelines for the ongoing process 1 The author of this chapter, a trained economist, strongly rejects economic reductionism in general, and in particular for consideration of constructing socialism. The construction of not just socialism as an entire social system, but even of a socialist economy, is a political and social process as well as an economic one. The focus of this chapter is on economics because (i) Cuba has explicitly declared it will focus first on economic reforms in its current reconstitution of its socialist model and only subsequently on major political changes, (ii) the effects of the co-operatives to date, and for the near future, have been and will be primarily economic (with potential deep social implications to follow). and (iii) of the restricted length of this chapter. 2 The changes from the simultaneous experimentation with both the Auto-Financing System and Budgetary Finance System in the early 1960s, to the extreme voluntarism of the late 1960s, to the System of Economic Management and Planning (sdpe, a modified Soviet system) in the 1970s and first half of the 1980s, to the Rectification Process reaction against the sdpe in the second half of the 1980s, were each major changes in Cuba’s economic model for socialist construction.

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of constructing the necessary new model of social, and especially economic, socialist development. Particularly important to its nature as guidelines for Cuba’s central social project, the original document was submitted for a national discussion from December 2010 to February 2011. At its 6th Congress from April 16 to 19, 2011, the pcc then approved the final form of the Guidelines, which were extensively changed from the original proposal on the basis of the national discussion.3 As this chapter is being written in the late summer of 2016, Cuba is taking a second major step in the ongoing process of its self-clarification of what the socialism is which it is seeking, and how it will attempt to achieve it. At its 7th Congress from April 16 to 19, 2016, the pcc approved two preliminary documents for national debate. The first addresses the conceptualisation of its evolving economic and social model of socialist development. (pcc, 2016a) It will hereafter be called the ‘conceptualisation’. The second one, more like the Guidelines from 2011, addresses the current broad and general thinking on how those concepts will be applied in practice over the next 14 years. (pcc, 2016b) It will hereafter be called the ‘ltp’ (Long-term Plan). On June 15 a national discussion was opened on the two documents. This national discussion is scheduled to last until around September 20. This will be followed by changes to the documents resulting from the national discussion, and then adoption of the revised documents by the Party and the government at the end of the year, as central social guidelines for Cuba’s socialist construction. There is a broad spectrum of differing degrees of concern (as well as a broad spectrum of differing degrees of hope and optimism) among supporters of Cuba’s project of constructing socialism about what the ongoing current economic changes will mean for that project. The deepest fear is that the changes could lead to the end of the project to build socialism, a return to capitalism. 3 Given the deliberately created dominant misconception outside of Cuba of the lack of social participation by Cubans in governing their society, it is important for this issue of creating its new model of socialism to briefly underline the breadth of the national input into these Guidelines. Cuba has a population of about 11.2 million, with a bit under one fifth of that being age zero to fourteen. 163,079 meetings were held across the country to discuss the Guidelines. Noting that of course many people attended more than one meeting (say one in their workplace and one in their community). the total number of 8,913,838 participants in the meetings nevertheless represents extensive participation by the adult population. There were 3,019,471 ‘interventions’, which were grouped into 781,644 ‘opinions’. More than 395,000 opinions were accepted and included in the reformulation of the Guidelines. Of the initial 291 proposed guidelines, only 94 were accepted as originally proposed. 181 were modified, 16 were integrated with others, and 36 new ones were introduced. A complete listing of all the original guidelines, how they were changed and the sources of each change is available at pcc (2011b).

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The spectrum of concern ranges from those who see the changes containing such a danger if they are not economically, socially, politically and ideologically correctly implemented,4 to those who believe that the changes will ‘very likely’ or even ‘inevitably’ restore capitalism. Among the plethora of changes over the last two and a half decades, and those further projected in the 2011 Guidelines and the current two documents just referred to, two have been of particular concern to those worried about the changes leading to a restoration of capitalism. The first is the changes in ownership of the means of production, which I will often refer to simply as ‘property’. The second is the expansion of the role of markets in the economy. As indicated by the title, this chapter is concerned with one major change in Cuba’s economic and social model, the expansion of workers’ co-operatives. Of the many potential effects of this change, it addresses one of central importance: how that expansion will interact with and affect Cuba’s project of constructing socialism. Since the theoretically deepest misgivings by supporters of Cuba’s project of building socialism with its projected expansion of co-operatives concerns their nature as non-state property and their use of markets, this chapter’s discussion of the interaction of Cuba’s expansion of ­co-operatives with its socialist project will be organised largely, though not exclusively, around a careful consideration of these two issues in the process of constructing socialism. 1

Expanding Non-state Means of Production, Co-operatives and Markets

Article 120 of the Conceptualisation document from the 7th pcc Congress ­defines five ‘principal forms of property of the means of production’. For the use of the most comprehensive and authoritative single source of economic data from Cuba, the Anuario Estadístico de Cuba (aec) which will be used here, it will suffice as an approximation to consider just three of the five from article 120, ‘socialist property of all the people’, ‘co-operative property’, and ‘private property’.5 4 This position is held by many in the Cuban government, who also believe they have the a­ bility to direct a social process that will implement the changes economically, socially, p ­ olitically and ideologically appropriately. 5 In both the current documents from the 7th Congress and the Guidelines from the 6th ­Congress in 2011, ‘co-operative property’ is defined as a form of socialist property (as it has been in Cuba since the Co-operatives of Agricultural Production were set up in the 1970s) and not as private property. It is unimportant to this work to discuss the debated issue of

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Employment figures give one useful measure of the relative size of the state and non-state6 sectors of the economy, and from that their change from the old economic model to what is emerging. Of the roughly 20 per cent of the total workforce in agriculture7 in 1989, just over 20 per cent worked in the nonstate sector (one 1990, Tables IV.1 and IV.2).8 In agriculture in the evolving model as of 2014, the non-state sector had exploded to almost 95 per cent9 (onei 2015, Tables 7.2, 7.3) The expansion of the non-state sector in the dominant non-agricultural sector of the economy is also dramatic, but its projected endpoint is markedly different. In 1989 this sector had 25,200 self-employed and 16,300 wage-salaried workers, for a total non-state employment of only 1.5 per cent of the total of 2,805,500 non-agricultural10 workers. (one 1990, Tables IV.1 and IV.2) It would not be seriously misleading to say that then the majority non-agricultural part of the economy, unlike the agricultural sector, was entirely state run. By 2014, the non-agricultural non-state sector of the emerging new model had 488,900 non-state workers out of a total of 4,030,700 workers, 12.1 per cent, in the slightly over 80 per cent non-agricultural part of the economy11 (onei 2015, Tables 7.2, 7.3). Academic and political discussions in Cuba consider that the non-state part of the non-agricultural sector could rise to 40 or even 50 per cent. This would be a major further expansion from what has already occurred, but also qualitatively different from the non-state share in the agricultural sector. Given this major expansion of the non-state sector in both the agricultural and non-agricultural sectors of the economy, the question arises, what part of that is expansion of the co-operative sector and what part is expansion of the private sector? Again, the issue of the expansion of co-operatives in the new emerging economic and social model in Cuba has been markedly different in

whether that is an appropriate definition, but it is important for understanding the data that follows to know that they define it that way. 6 The aec frequently gives state and non-state totals, where non-state is the sum of private and co-operative. 7 This figure does not include forestry in 1989, which was just under one per cent. 8 Tables IV.1 an IV.2 are not quite consistent since one uses the population December 31 while the other uses the average for the year, but they are close enough to give the rough figures that will show the dramatic change to 2014. 9 (1,147,000–483,400=) 663,600 private agricultural workers plus (231,500–5,500=) 226,000 ­agricultural co-operativists equals 889,600 non-state agricultural workers, out of 939,100 ­agricultural workers. 10 Here including forestry. 11 483,400 self-employed plus 5,500 non-agricultural co-operativists equals 488,900 nonagricultural non-state workers. 4,969,800 workers minus 939,100 agricultural workers equates with 4,030,700 non-agricultural workers.

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the agriculture and non-agricultural sectors. In 1989 there were 64,500 agricultural co-operativists out of the agricultural sector workforce of 690,300, 9.3 per cent. By 2014 this sector experienced a major expansion under the evolving new model to 226,000 co-operativists, 24 per cent of the agricultural workforce of 939,100.12 The private agricultural sector was nearly twice as large as the co-operative agricultural sector in 1989, with 123,100 workers, 17.8 per cent. By 2014 it was almost three times as large with 663,600 workers, 71 per cent of the agricultural workforce.13 The situation of the expansion of co-operatives in the dominant nonagricultural sector of the economy is entirely different. Here there has been very ­minimal expansion to date. There were no co-operativists in the nonagricultural sector in 1989, and there were still none at the end of the first two ­decades of the development of the new economic and social model. In the last five years non-agricultural co-operatives have been stared. But as of 2014, of the 4,030,700  workers in the non-agricultural sector, only 5,500 were ­cooperativists, 0.14 per cent. There are a number of strong reasons to believe there will be a major expansion of co-operatives in the non-agricultural sector in the near future. First, the government has launched an experiment with non-agricultural cooperatives, a procedure they frequently do before implementing major social programs nation-wide. They announced in December 2012 that they would create 498 ­non-agricultural co-operatives, and then study their performance for problems before promoting them further. The large majority of those were created between April 2013 and June 2014. There have been scores of careful studies of these (and the agricultural co-operatives). Second, as noted above, ­co-operatives were defined as socialist property in the Guidelines and the Conceptualization. This would suggest that the government might well favour them, in line with its goal of building a socialist society, as the form of nonstate property that significant parts of state property should be converted to. 12

13

In 1989 agricultural co-operativists were in the Co-operatives of Agricultural Production (cpas). A law for a new type of workers’ co-operative was passed in 1993 creating Units of Basic Agricultural Production (ubpcs) (so a subcategory of ‘co-operatives’). largely out of dismantled state farms. In 1989 private agriculturalists consisted of individual private agriculturalists and members of Credit and Service Co-operatives (ccss), which are producers’ co-operatives, not workers’ co-operatives. In 2008 a law was passed creating the category of usufructuarios, people given the right to work the land essentially as private farmers (so a subcategory of ‘private’), although the state formally maintains ownership of the land. Of the 663,600 private agriculturalists in 2014, the old categories of individuals and ccss were up to 350,300, 37 per cent of the agricultural workers, while the 312,300 usufructuarios alone made up 33 per cent (onei 2015, Tables 7.2, 7.3 and 9.4).

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Third, while Cuba has not yet written its general law for the non-agricultural ­co-operatives,14 the government has stated repeatedly since 2013 that it will ­favour co-operatives over private enterprises in its tax policies, its state purchasing policies, its specification of what sectors of the economy non-state enterprises can operate in, and through other measures.15 And finally, the ltp and especially the Conceptualization documents currently being socially debated give much more attention to non-agricultural co-operatives than did the earlier Guidelines, suggesting not only a continuation but a deepening of the commitment to the project of a major expansion of non-agricultural co-operatives. For the ‘expansion of the role of markets’ it is much harder to produce any quantitative measure than for the expansion of the non-state sector or the ­expansion of co-operatives. ‘The fraction of economic activity that is market versus nonmarket’ is not a standard economic statistic complied by any ­country. Further, notwithstanding the largely accepted view that command economies related to the Soviet model had quantitative targets at the center of their production process, there is a debate far beyond what this chapter can consider about what role particular types of markets, certain processes of exchange based on values computed at administered prices, played in those economies. For the purposes of this chapter it will suffice to simply accept the standard view of both those who want to see Cuba’s construction of socialism continue and those who want to see Cuba return to capitalism, that the emerging new model has an expanded role for markets. The concern of this chapter again is what this expansion means for Cuba’s socialist project. 2

State and Non-state Property, Cuban Co-operatives, and Building Socialism

The starting point for considering the possible relations of state and non-state property to the project of building socialism has to be a consideration of the goal of socialism. 14 15

The idea is that the general law will be strongly informed by the results and experiences of the government experiment. At present, however, it is much more difficult to form a co-operative than a private enterprise. This is not inconsistent with the government’s stated intent to favour them. The government has indicated it wants to discourage co-operatives from forming until it has decided on the appropriate legislation, based on the experiments, so that when they are formed the co-operatives will function well socially as well as economically as part of Cuba’s project to build socialism.

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Throughout their entire oeuvre, Marx and Engels were very clear on the goal of capitalist production. In a particularly well-known pithy passage, Marx  ­expressed it: ‘Accumulate, accumulate! That is Moses and the prophets’ (Marx [1867]: 591). The goal of production in capitalism is to obtain profits (through seizing surplus value), to be reintroduced into the circuits of capital and thereby drive capital’s self-expansion. ‘Accumulation for accumulation’s sake, production for production’s sake’ (ibid.). The goal of production (and all other aspects of society) in socialist theory is to promote human development16 by meeting human needs. This i­ mmediately poses the questions: first, who decides what society’s human needs are, second, who decides how best to use existing resources to meet those needs, and third, who will execute and monitor those decisions? An essential corollary of the modern socialist vision is that the ensemble of people who compose the given society must themselves collectively be the agent that decides what their collective needs (society’s needs) are, and how they (society) can best allocate available resources and human labour to meet those needs, including the desired distribution of the net output to individuals. For Marx and Engels this is more than just an economic recipe for having social decisions made, and actions for production and distribution undertaken, once capitalist decision makers are removed. For them this is the issue of popular sovereignty or collective self-determination by humans in all the institutions they are part of, here applied to their economic institutions, as part of socialism’s support and promotion of humanity’s goal of human development. Under the assumption that the first step in a revolution to transcend capitalism would be the creation of authentic democracy17 by taking control of the state by the majority working class18 from the minority capitalist class, Marx and Engels saw nationalisation19 of the means of production as equivalent to socialisation (control by all society), which their vision of socialism required. 16

17 18 19

Many other expressions encountered in the literature refer to this same human goal of ‘human development: ‘development of one’s human potential’, ‘realisation of one’s potential capabilities’, etc.’ Freire ([1970]: 40) stated it particularly poetically; ‘man’s ontological and historical vocation to become more fully human’. For more on this central goal for socialism see Campbell (2006: 113 ff). ‘The first step in the revolution by the working class is to raise the proletariat to the position of ruling class, to win the battle of democracy’ (Marx and Engels, [1848]: 504). Which the transition to socialism was to make into the entire society. Both in common discourse and in socialist discussions, the term ‘nationalised’ has come to nearly universally mean ‘statisised’, the transfer of ownership to the state. It will be used in this chapter also in this standard way.

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The proletariat will use its political supremacy to wrest, by degrees, all c­ apital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e. of the proletariat organised as the ruling class (Marx & Engels, [1848]: 504). A number of social experiments in the twentieth century claimed to attempt to construct a Marxist inspired socialism, nationalised the means of production, failed to develop anything that resembled Marx and Engels’ ideas on ­socialism or a transition to it, and in the end returned to capitalism. There is an enormous ongoing debate on why these experiments failed. For the ­concerns of this section of this chapter on state property and the current discussions in Cuba, however, the following very brief and very general statements are all that are needed. Many socialists reflecting on the failed experiments concluded that contrary to what socialism requires, a bureaucracy became separated from and opposed to the rest of the people. It came to serve its own interests instead of being a tool for effecting the social will, controlled by society through socialist democracy. In the terms Marx used in the quote above, the proletariat did not become the ruling class. By the end of the 20th century and in the 21st century the above considerations led many Marxist-socialists20 to begin to call for social property, as specifically counterposed to the historical call for state property. This terminological counterpoint immediately poses the question of what the d­ ifference is, regarding the process of building socialism. This worldwide discussion takes a concrete form in the debates and resulting policies in Cuba today: are co-­operatives, when part of a social process of building socialism, social property?21 A first possible answer to the question of the difference between state property and social property was dominant among the socialist critics of the processes in the ussr and China in the 20th century, who held those processes were not in fact building socialism. It continues to be an important current of socialist thought around the world today. This position holds that to be social property as required by socialism it must really be controlled by ­society 20

21

This term simply intends to partially sidestep the arguments about who is ‘really a Marxist’ by considering a broader group of people who consider themselves some variety of socialist, and consider their views to be significantly related to those of Marx, regardless of some number of secondary disagreements. Note the answer to this is not determined by the modifying clause ‘when part of a process of building socialism’. It is also not the same question as if co-operatives can help in the construction of socialism in Cuba today. Cuba holds that (regulated, small scale) capitalist property meets both these criteria in Cuba today, but it does not hold that therefore capitalist property is social property.

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as a whole, and that the only vehicle by which society can operationalise its ­collective will is through a state controlled by society. Hence this position holds that state property of the means of production is a necessary but not sufficient condition for the socialist requirement of social property. The additional condition needed is, as Marx and Engels indicated above, that the state be ‘the proletariat organised as the ruling class’, that the state be controlled by proletarian or socialist democracy. Note specifically that this position does not consider workers’ co-operatives, even as a component of a national process of building socialism, as social property. Another possible answer that has been growing in popularity in recent decades starts with the consideration above that at the heart of socialism is that all humans collectively determine the operation of all the institutions of which they are a part. In this approach the means of production are social property if their operation, and the distribution of the results of their operation, are determined collectively by those involved in their operation. Note in particular that under this approach workers’ co-operatives could be considered social property (discussed further below). The Conceptualization document referred to in Section ii, which is presently being nationally discussed, makes no pretense to being a final theoretical treatise on the nature of socialist property. Nevertheless, as presently proposed (and very likely as ultimately enacted) it clearly adopts the second approach to the issue of the nature of co-operative non-state property just indicated. Under article 158, co-operative property, the first point it makes (article 159) is ‘the types of co-operatives22 that the [Cuban Economic and Social] Model recognises form a part of the socialist property system, in that they apply the principles of collectivity to production and to the distribution of the results of its production’ (pcc 2016a, article 159). Being understood as part of the socialist property system seems to suggest that co-operatives will be accepted as a permanent part of Cuba’s project of constructing socialism. At the same time, an echo of the first position seems to remain in a clear statement of the intended priority of state property in that project. Already the 2011 Guidelines declared that in the developing new ­model ‘The management model recognises and encourages socialist State-owned companies—the main national economic modality …’ (pcc 2011a, article 2). This position of the intended centrality of ‘socialist property of all the people’ (state property) has been extensively further elabourated on in the (far from 22

Cuba classifies only workers’ co-operatives as co-operative property, and in particular not consumers’ (which it does not have) or producers’ (which it does have, the ccs) co-operatives.

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complete) presentation of the theoretical basis of the evolving model in the Conceptualization.23 There is a rich discussion in Cuba today on what is the potential of ­co-operatives, if economically, socially, politically and ideologically appropriately structured and introduced,24 to contribute to Cuba’s project of constructing socialism. Little of this is known, or even easily accessible, outside the Island.25 An edited collection of articles by Piñeiro Harnecker (2013)26 is intended to revolve around exactly the question of concern to this chapter, are workers’ co-operatives an adequate form of organisation of work for a society committed to constructing socialism?27 Four important points from her contribution to the collection, concerning the issue of the possible role of ­co-operative non-state property in building socialism, follow. 1. A central principle of ‘real co-operativism’ is autonomy. Decisions ­concerning operating the enterprise must be made collectively and democratically by the associated producers. Her chapter and the whole edited collection clearly state and discuss a central concern (‘it is the one most addressed in this book’) of many socialists regarding this issue: are 23

24 25

26

27

See article 10 in the Introduction, article 63 in the section ‘Principles of our socialism that sustain our Model’, articles 117 and 118 that introduce the section ‘Property in the means of production’, articles 121 through 157 that describe the ‘socialist property of all the people’ at length, and elsewhere in the document. (pcc, 2016a). The discussion of course necessarily includes debate of what is the economically, socially, politically and ideologically appropriate structure of co-operatives, given the specifics of Cuba’s process of socialist construction today. First, most of the written discussion is only in Spanish, not in the world lingua franca, English. Beyond that, (many) Cuban books and journals that are published have limited availability outside of Cuba, particularly if not obtained when first released. This situation is beginning to change with electronic availability particularly for some Cuban journals, but it’s still problematic for many journals, and still almost universally problematic for books, a format extensively used in Cuba for engaging in current debates in edited collections. While the author of the piece is a respected voice in Cuba on this issue of co-operatives and their role in building socialism, it needs to be underlined here to avoid any misunderstanding that she is only one of a significant number of people there participating in this debate. While articles in English about co-operatives in Cuba are not numerous, ones addressing the concern of this chapter with a discussion of their relation to Cuba’s project of constructing socialism are exceedingly scarce. This article has been selected to illustrate four central points in this discussion in Cuba because it is in English, and because it was published by a major First World publisher after its publication in Cuba and so is readily accessible to the reader of this chapter. Note that this question is not presented as a consideration of if co-operatives should be the unique property form for constructing socialism, but rather in the frame of them ­being one form along with possibly others (in particular, state enterprises).

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3.

4.

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c­ o-operatives ‘too ­autonomous and therefore irreconcilable with the interests of society’? (p.3). ‘Is it possible for a co-operative to respond not only to the interests of the group of people that constitute it but also to the social interests?’ (p.5). Considering this issue more concretely in terms of the standard institution in socialist theory (and past Cuban practice) for expressing the social interest in production, a national plan, that question becomes: ‘would it be possible to couple an autonomous enterprise with a planned economy?’ (ibid.). First, the chapter acknowledges what is practically defined by the words ‘autonomous’ and ‘national plan’: ‘when looked at in terms of absolute autonomy and authoritarian (non-democratic) planning, in terms of the group interests of a collective unit that are considered in advance as being alien to social interests, then the response is obviously negative’28 (ibid.). But at the same time, the chapter strongly asserts that yes, ‘it is possible to reach agreements and coordinate with [co-operatives] so that they orient of their activities toward the satisfaction of social needs identified in the planning process’ (p.3). The author refers to, only as examples to show that it is possible, the works of Devine (1988) and Albert and Hahnel (1991) as two different worked-out models with both social planning and relative work-place autonomy. Given the incompatibility of workplace autonomy and social planning if they are defined as in the first part of point 2, their possible compatibility, which the author asserts, requires either that the planning be democratic and participative, or that the autonomy be only of a ‘high level’ (p.8) Or both, which is clearly Piñeiro Harnecker’s position. The nature of their relative autonomy is determined by the laws that establish the nature of co-operatives and the environment they operate in pp.17–18), and by regulatory bodies that see that those laws and co-operative principles are adhered to. (p.19) A final point concerning co-operatives and state property in the means of production, broached both by the author and by some current ­Cuban practice, partially sidesteps the potential conflict. The author holds that ‘what characterises a co-operative is not the legal ownership of the means of production (facilities, land, equipment) by the collective or group of people who make up the co-operative, but the fact that the decisions about their utilisation are made collectively by all members’ (p.16). While co-operatives have come to be thought of as owning their means of ­production, that is because they evolved in capitalist societies where Note this would be just as true for Marx’s ‘freely associated producers’ as for co-operativists.

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generally control is determined by ownership. Control and ownership (and even what the latter means) could have an entirely different relation under socialism. This understanding of co-operatives raises the possibility of the state (collective society) continuing to own the means of production while the co-operatives rent them, which is currently the case with some of the means of production used by some Cuban ­co-operatives. Note that this does not in itself resolve the issue of concern to this chapter of the potential conflict between workgroup autonomy and social interests. Society would still need to determine what sorts of decisions should be part of the workgroup’s ‘high degree’ of relative autonomy, and what decisions should be retained for society as a whole as part of what it would mean that society socially own the means of production. 3

Markets, Planning, Cuban Co-operatives, and Building Socialism

Many supporters of Cuba’s commitment to build socialism fear, and all the advocates of a restoration of capitalism hope, that Cuba’s ‘expanded use of markets’ will return it to capitalism. Members of the latter group often use the word ‘markets’ to mean ‘capitalism’ in order to be less open about their actual goal, the return of Cuba to the world capitalist system. As early as 1994 the dean of US anti-socialist Cubanologists, Carmelo Mesa-Lago, wrote a booklet hopefully entitled ‘Are Economic Reforms Propelling Cuba to Markets?’ For two and a half decades The Economist magazine has applauded every reform they call ‘pro-market’ and bewailed every ‘retreat from markets’, in the name of the need to promote a ‘market society’ in Cuba. Presidents Obama and Bush included the same requirement of a ‘market society’ as one of their central demands for ‘fully normalising relations’. All use the word markets as a euphemism for their desired capitalism. The discussions on the role of markets in building socialism is seriously confused by the failure to distinguish markets in general from capitalist markets.29 Four brief definitions are necessary to address this conflation of markets and capitalism. As defined in a dictionary, markets are any place (or institution, or process) for the regular exchange of anything. Hence as long as a society has a division of labour and people get through exchange what they need but do not produce themselves,30 such a society will have markets. Commodities 29 30

The following three paragraphs draw heavily on Campbell (2016). Note this would exclude Marx’s higher stage of communism where people get what they needed on the basis of their need, but it would include his lower stage. See Marx ([1875], respectively pp. 87 and 86).

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are anything produced not to be consumed by the producer, but to be traded. Then capitalist commodities are commodities that are part of a capitalist process,  commodities produced to be exchanged in order to accumulate and expand capital.31 Capitalist markets involve the exchange of capitalist commodities. With this terminology one can easily present the role Cuba intends for markets in its updated economic model. Commodities will be exchanged in Cuba’s new markets, but commodities produced mostly by self-employed workers to exchange, via money, for what they want to consume. This will resemble the producers in the first chapters of Capital or the feudal shoemakers in footnote 31. In particular, production will not be ‘determined by markets’, meaning by the drive of capital for accumulation and expansion through exploitation, achieved by the production of capitalist commodities that are sold in capitalist markets. The Guidelines from 2011 already indicate at their beginning Cuba’s chief legal barrier to the petty commodity production morphing into capitalist production: individual capital’s goal of continual self-expansion is disallowed. ‘In the forms of non-State management, the concentration of property in the hands of any natural or legal person shall not be allowed’ (pcc, 2011a, article 3). Thus the intention is for (most of) Cuba’s markets to not be capitalist markets, and hence for them to be unable to contribute to the creation of largescale domestic capital and a domestic capitalist class, and through them the ­restoration of capitalism. The foreign press often refers to Cuba’s market reforms as steps toward market socialism. While the term ‘market socialism’ is used in sharply different ways by different authors, the common meaning is that enterprise members will produce for their collective profit (hence produce capitalist commodities) and the state will intervene to limit the system’s tendency to inequality. But Cuba has stated that it does not intend to establish this sort of system of production. Cuba has repeatedly declared that it will have socialism with markets  (socialismo con mercados), but not market socialism (socialism del mercado). Eliminating capitalist markets as the engines of the economy requires the replacement of their role in capitalism of determining production. Marxist-socialists have always seen planning in a dual role. Functionally, it enables p ­ roduction to occur in the absence of capitalism by establishing 31

Note the commodities described in the first chapters of Capital are not produced or exchanged to expand capital (that concept has not yet been introduced in those chapters). Likewise, shoes produced by feudal shoemakers were mostly produced for exchange for food and other necessities, or even for luxuries, made by other producers, not for the expansion of capital. Neither this theoretical nor this real-world example involve capitalist commodities.

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its goal. More  broadly, democratic social planning represents the collective ­self-determination, here applied to the economic sphere that is part of socialism’s goal of humans ‘becoming more fully human’. In the Guidelines from 2011 and again in the current Conceptualization from 2016, Cuba stresses that planning will be central to the operation of the economy. The first sentence of the first guideline reads: ‘The socialist planning system will continue to be the main way to direct the national economy’ (pcc, 2011a: 8). Because for historical reasons ‘socialist planning’ came to be identified with the type of planning carried out in the ussr and countries that later developed related economic structures, it needs to be stressed both that there is nothing in Marxist-socialist theory that indicates that planning (and the related economy) needs to organised that way, nor is anything even similar to that an option for Cuba’s socialist project today. Partly because the new economic structure for building socialism is still evolving, there is minimal writing on the appropriate new planning system even in Cuba. Just as one indication of how different the new planning system will be, it is worth noting that there is a broad consensus in Cuba that the new system will give a much greater role to planning using price mechanisms instead of the almost complete centrality of quantitative planning in the old system.32 For the purposes of this chapter, the point about planning is that because the direction of the economy by the drive of capitalist markets to accumulate is precluded by Cuba’s human-centred goal of constructing socialism, some sort of system for humans to socially and ­collectively determine the nature of their economic activity and the distribution of its output needs to be developed. Any such system constitutes a form of planning. 4

The Potential Contribution of Co-operatives to Building Socialism in Cuba Today

The previous two sections have argued against the position of some supporters of Cuba’s process of constructing socialism that co-operatives are h ­ armful

32

This is not to say there will be no quantitative planning in the new system. Recall that during wwii both the UK and the US had extensive and effective planning systems that involved both quantitative targets, particularly in several key industries, and planning through controlling prices. While as indicated the debates on the specifics of the appropriate new planning have basically not even begun, many Cubans involved in developing the new economic structure assume that overall it will be a hybrid, in the sense of involving a greater use of prices and yet still involving some priority quantitative targeting.

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to that project. This section will take the stronger position that today in Cuba co-operatives, properly designed and properly embedded in the socialist project, would actually strengthen the process of building socialism. While there are other arguments that could be made to support this position, this section will present only the following four, which this author considers the most important in Cuba today: co-operatives will impede the expansion of capitalist markets, they will impede the formation capitalist property, they will impeded the concentration of capitalist property, and they will contribute to the human  transformation that is necessary for a socialist society. The first three of these points will draw heavily on the material developed in the last two sections. 1. As noted in the last section, to the extent that co-operatives are considered to be created as substitutes for the creation of capitalist enterprises, they do not harm Cuba’s socialist project by expanding the use of markets, since both use markets. But here it is argued further that, to the extent that they are formed as ‘genuine co-operatives’ as advocated by many proponents of cooperatives on the Island, they strengthen Cuba’s socialist project. As Harnecker (2013: 13) argues: Our aim is to show that real co-operatives operate under a logic diametrically opposed to that of capitalist businesses. Instead of maximising the individual profits of shareholders, co-operatives are motivated by satisfying their members’ needs of the necessities of the human development of their members, which are inevitably linked to the needs of their ­surrounding communities and of the nation, and even the greater human family. As discussed in the last section, such units would produce non-capitalist commodities. They would thus impede the expansion of capitalist markets by their supply of the desired goods through non-capitalist markets. This would ­reduce the expansion of capital and thereby strengthen Cuba’s socialist project through the reduction of this threat to it. 2. Co-operatives strengthen Cuba’s socialist project by impeding the formation of capitalist property in the means of production. As discussed above, to be capitalist production the goal of production must be the self-expansion of capital. As that is not the goal of co-operative production, destatised means production which is made co-operative in form rather than as new capitalist property. Additionally, the ongoing operation of co-operatives creates no additional capital property as does the constant expansion of capitalist means of production, again impeding the formation of capitalist property.

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3. Co-operatives strengthen Cuba’s socialist project by impeding the concentration of capital. The restoration of capitalism is only possible if not only a significant part of the economy is capitalist,33 but if that capital has sufficient concentration to coordinate itself to act politically. Co-operatives do not have an inherent tendency to concentrate while private capital does. Hence any displacement of capitalist production by co-operative production does more than just reduce the amount of capitalist property discussed in the last point, it also contributes to preventing the concentration of capitalist property that is necessary for a capitalist restoration.34 4. Advocates of socialism have long argued that being a worker in a capitalist enterprise deforms a person (relative to their potential to ‘be more fully human’) in various ways.35 Certain potential human traits and skills are penalised, or at a minimum allowed to atrophy. Among these, five are particularly important for building a socialist society. First, the human trait of solidarity (the ability to feel empathy with other individuals). Second, the human trait of collectivity.36 Third, the skill of complex social communication. Fourth, the 33

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Logically, if anything approaching 100 per cent of the economy were capitalist, it would indeed be a capitalist economy. The point being made here is that the restoration of capitalism in the real world does not result from the simple growth of the capitalist sector, but requires a political act. If a government committed to building socialism had power and 50 per cent of the economy was capitalist (far above the current per cent in Cuba) without a significant economic concentration to give it political coordination, that large capitalist sector would not have the power to disrupt the process of building socialism, not to speak of restoring capitalism. Note that this claim does not ignore the potentially lethal ideological influence such a large sector could have either on the population or particularly on the political leadership of the country, especially in the presence of some combination of a capitalist domination of the world economy, a domestic economy that the population considers to be performing weakly, and insufficient socialist political and economic democracy in the country. The recognition by the Cuban government of the importance of a concentration of capital to a restoration of capitalism, independent of the contribution to impeding that by co-operative discussed here, is indicated at the very beginning of the Guidelines where it sets out a frame for the legal prohibition of such concentration. ‘In the forms of non-State management, the concentration of property in the hands of any natural or legal person shall not be allowed’. (pcc 2011a, guideline 3). While the situation is different, there are numerous important similarities for workers in state enterprises in societies attempting to build socialism, if they are not involved in collectively managing their enterprise. Marx saw this as part of our species-nature. What this involves is the way we see the relation of ourselves to larger collectives of humans that we are part of. It involves viewing our potential individual actions as being a part of the collective activities that are necessary for our survival in the first place, and our human development beyond that (of which production is just one important part). It stands in opposition to the Robinson

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closely related but distinct skill of complex social decision-making. Finally, and this requires the third and fourth skills, the skill of acting collectively. Working in a co-operative clearly would promote these human traits and skills that humans must develop for a socialist society to function. Human history has shown, however, that the issue of scale is important for this issue. From the time of hunter-gatherer societies forward, solidarity, collectivity, and the development of the skills for collective communication, decision-making and activity, have often arisen quite naturally and readily in small groups with extensive personal contact. Beyond such a scale, however, extensive development of these traits and skills has been rare. From this comes the general position of most of the Cubans who advocate co-operatives as potential contributions to Cuba’s socialist project. The development through work in cooperatives of a number of human traits and skills that must be developed in Cuba for socialism to function tends to occur ‘rather automatically’ on the level of the co-operative workplace.37 Their extension to the local, regional and national levels, to the contrary, requires a conscious political-ideologicaleducational process. Hence, while the development of these traits and skills at the level of the co-operative is not sufficient for building socialism, it can form the concrete social basis for their necessary conscious construction on all scales of a socialist society. 5 Conclusion Cuba is twenty-five years into a process of deep economic reforms, with projections of more economic updating to come. The Cuban government maintains that these reforms will strengthen its social-economic goal of building socialism. Some supporters of Cuba’s socialist project fear, and all opponents hope, this updating will in fact take Cuba back to capitalism. Key reforms have included expanding non-state property in the means of production while declaring its intent to keep state property central, expanding the use of markets while maintaining planning, and decentralising and de-bureaucratising (not yet enough) the economy.

37

Crusoe view of the relation of the individual to the collective that underlies neoclassical ­economics and classical liberal political theory. There will be some rather automatic spill-over effects, especially to their communities, as some people who develop these skills in the workplace then want to exercise them in other institutions that they are part of. ‘The desire to participate and the ability to participate develop in a symbiotic relationship … participation feeds on itself’ (Devine 1988: 159).

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This chapter has addressed the expansion of co-operatives throughout the economy, a change that involves all three of the reforms just mentioned. Its ­focus has been the interaction of the projected expansion of co-operatives with the Cuban Revolution’s historical project of building socialism. It has specifically looked at this interaction in terms of the two forms it is most discussed in. The first form is the feared/hoped for restoration of capitalism. The chapter concludes this is not an inevitable outcome of the ongoing updating process. It is, however, a danger, where that danger is strengthened whenever the process of implementing the reforms makes economic, social, political, or ideological errors. The second form the interaction is extensively discussed in is if the reforms have the potential to improve the process of building socialism in Cuba, the position of the government. The chapter agrees with this position as to their potential, while again arguing the danger of those potential improvements not being obtained if the implementation process makes too large and/ or too many errors. The chapter holds that the final determination of whether the reforms will restore capitalism or improve the process of building socialism will be determined by the outcome of the class battle between capitalism and socialism in Cuba and on a world scale. The quality of how the updating process is constructed and implemented in Cuba, including how the ­potentially important co-operatives are constructed and implemented, are ­important factors in that battle. References Albert, M. and R. Hahnel. (1991). Looking Forward: Participatory Economics for the Twenty First Century. Princeton: Princeton University Press. Campbell, A. (2016). Updating Cuba’s economic model: socialism, human development, markets and capitalism, Socialism and Democracy, 30(1): 1–29. Campbell, A. (2006). Competition, Conscious Collective Co-operation and Capabilities: The Political Economy of Socialism and the Transition. Critique, 34(2): 105–126. Devine, P. (1988). Democracy and Economic Planning. Cambridge: Polity Press. Freire, P. (1992[1970]). Pedagogy of the Oppressed. New York: Continuum. Marx, K. (1996[1867]). Capital. Volume i, in Karl Marx Frederick Engels Collected Works. Vol. 35. New York: International Publishers. Marx, K. (1989[1875]). Critique of the Gotha Programme. In Karl Marx Frederick Engels Collected Works (pp. 75–99). Volume 24. Moscow: Progress Publisher. Marx, K. and F. Engels. (1984[1848]). Manifesto of the Communist party, in Karl Marx Frederick Engels Collected Works, Vol 6. Moscow: Progress Publishers.

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Mesa-Lago, Carmelo. (1994). Are Economic Reforms Propelling Cuba to the Market? ­Miami: North-South Centre. one—Oficina de Estadísticas. (1990). Anuario Estadística de Cuba 1989. Habana: one. onei—Oficina de Estadísticas e Información. (2015). Anuario Estadística de Cuba 2014. Habana: onei. pcc—Partido Comunista de Cuba. (2016a). Conceptualización del Modelo Económico y Social Cubano de Desarrollo Socialista. Habana: pcc. pcc—Partido Comunista de Cuba. (2016b). Plan Nacional de Desarrollo Económico y Social hasta 2030: Propuesta de Visión de la Nación, Ejes y Sectores Estratégicos. Available at . Accessed 1 September 2011. pcc—Partido Comunista de Cuba. (2011a). Lineamientos de la Política Económica y Social del Partido y la Revolución. Available at . Accessed 1 September 2011. pcc—Partido Comunista de Cuba. (2011b). Información sobre el resultado del Debate de los Lineamientos de la Política Económica y Social del Partido y la Revolución. Available at . Accessed 1 September 2011. Piñeiro Harnecker, Camila. (2013). Prologue. In Camila Piñeiro Harnecker (ed.). Co-operatives and Socialism. A View from Cuba. Houndmills, UK: Palgrave Macmillan.

Chapter 9

Co-operatives in Cuba’s New Socio-economic Model: What Has Been Done and What Could Be Done? Camila Piñeiro Harnecker In the last five years, Cuba has taken measures to strengthen agricultural cooperatives and has promoted the creation of co-operatives in varied economic sectors beyond agriculture. After the approval by the Cuban people of these Guidelines in 2011, beginning in 2012 a series of measures have been taken—even if rushed and insufficient—to overcome existing agricultural cooperatives’ problems, and simultaneously promote co-operative creation in other economic sectors through the establishment of a legal framework for the so-called ‘non-agricultural co-operatives’ approved in December of that same year.1 This reflects a decision taken in 2011 by the Cuban government—with the approval of the Cuban people—to make co-operatives the most significant business form after the state-managed enterprise, with priority over private businesses. While policies and legislations giving co-operatives preferential treatment over private business have been established in other countries, what is significant in Cuba’s case is that many of the co-operatives to be created will come out of state enterprises. This represents great challenges but also opportunities (Piñeiro 2014). This chapter examines the role that co-operatives are playing in Cuba’s economy with a critical view, looking at shortcomings and pitfalls. I conclude by suggesting actions that could be taken for co-operatives to contribute significantly to increasing economic efficiency and, foremost, to satisfying social needs. 1

Objectives that Guide the Promotion of Co-operatives in Cuba

What are the goals that are being pursued by the Cuban government in their promotion of co-operatives? Broadly, the idea is to reduce the state business sector and to expand the co-operative and private sector, giving priority to the 1 This legislation package is analyzed in Piñeiro (2013, 2014). ©  koninklijke brill nv, leiden, ���8  |  doi:10.1163/9789004361720_011

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co-operatives because they are recognised as more a socialised form of business and thus more congruent with socialist values. One of the tasks pursued as part of Cuba’s ‘updating’ or reform process is to transfer jobs, in the most socialised way possible, from the state to the non-state sector redundant workers (estimated 30–50 per cent in some state businesses), as well as some activities that under the state’s management have been ineffective (personal and technical services, gastronomy, commerce, etc.). The creation of co-operatives in different activities can facilitate this process and can also contribute to other goals such as generating employment, increasing the availability of consumer goods and services, and solving local problems at the local level. President Raúl Castro, Vice President Marino Murillo and other officials have said, and it is reflected in approved regulations, that co-operatives as a business model are prioritised and preferred over private business (termed ‘self-employment’), because they are more ‘socialised’. That means they are recognised as socio-economic organisations that generate and distribute wealth in a more equitable and just way: all co-operative members are also owners and have the same right to participate in decision-making, management and control, and distributed profits are divided according to work contribution, not capital contribution. So, the expansion and consolidation of co-operatives in our economy and society could achieve the aforementioned economic objectives and at the same time, promote ethical values and practices congruent to the building of socialism, as we will see further ahead. But this possibility rests on the ‘quality’ of the co-operatives that are promoted, that is, on to the extent that they function as true co-operatives. 2

The Current Situation Regarding Co-operatives

Before we explore what role co-operatives could play in Cuba’s economy going forward, let us delve into the situation of co-operatives in Cuba today. First I examine the agricultural co-operatives, which have existed for many years, and then the new so-called non-agricultural co-operatives. 2.1 Agricultural Co-operatives As it has been examined elsewhere,2 agricultural co-operatives have been around in Cuba since the early years of the Revolution, and their main elements are summarised below: 2 For more information on the origins and evolution of Cuba’s agricultural co-operatives, see Nova (2012), Rodríguez Membrado & Lopez Labrada (2012), and Piñeiro (2013).

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• Credit and Service Co-operatives (ccss), begun in 1960. • Producer co-operatives: an association of private farmers3 who unite to share equipment, supplies and credit and to market their products. • Associates maintain ownership of their land, work it separated and generally contract other workers. • Agricultural Production Co-operatives (cpa), begun in 1975. • Worker co-operatives: a co-operative of associated workers where members work jointly, property is communally owned; and they are limited to hiring outside workers on a temporary basis. • Associates would sell their land to the co-operative, if they have any • Basic Production Unit Co-operatives (ubpc), begun in 1993. • A combination or hybrid between a state-owned business and a cooperative: associates work jointly, on collective land that is provided rentfree and with means of production purchased from the state. According to the most current data available,4 the ccss are the most common agricultural co-operative (more than 2,500—see Figure 9.1) and with the most members (around 340,000). The least common type of agricultural co-operative and with less total members are the cpas–less than 900 cooperatives with almost 45,000 members total. ubpcs are around 1,7 thousand with around 60,000 members. All three contribute more than ten per cent of employment in Cuba. The ccss are really the one with fewer members in relation to the land they work, but hire seasonal wage labourers. As Figure 9.2 shows, they have more land than the cpa and it has increased over the last years. The most recent available data regarding co-operatives’ land tenure is from 2014, and is also shown in Figure 9.2. It is around 70 per cent of Cuba’s ­agricultural land. In the last decade, the total land worked by all types of ­co-operatives has not varied drastically. What is significant is that since the passing of the legislation to redistribute idle land there has been a redistribution of land mostly from ubpc to ccs. In relation to Cuban co-operatives’ production, onei indicates that in 2015 agricultural co-operatives produced more than 85 per cent of main agricultural produce (vegetables, tubers, grains and fruits) and more than 55 per cent

3 The term ‘private farmers’ does not include new usufructuaries, only landowners that do not belong to a ccs. Private farmers’, are landowners that are not members of a ccs and their number is consistently estimated between 40,000 and 50,000. This term does not include new usufruct owners because they do not necessarily go on to be members of co-operatives. 4 Data provided by the National Office of Statistics and Information (onei). National Association of small fishermen (anap). the Ministry of Agriculture (minag) and Grupo Azucarero (azcuba).

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1690 CCS 2508

CPA UBPC

894

Figure 9.1 Number of agricultural co-operatives, March 2016. Source: National Office of Statistics and Information (onei).

of meat and milk. But there is no clarity about what part of co-operative production is directed to distinct markets of official consumption, instead of for personal consumption or informal markets. 2.2 Economic and Social Performance The economic performance of Cuban co-operatives, although very diverse and—as we will analyze next—lagging in many cases, in general has surpassed state agricultural companies (see Figure 9.3). Co-operatives, with fewer supplies and less land, have achieved the greatest outputs. But the performance of agricultural co-operatives could be higher, considering that the state firms’ productivity is very low in most cases, and that all production forms’ outputs are well below their potential. Scholars of the sector and minag diagnostics point to grave deficiencies in co-operatives’ economic and social functioning, caused by both external and internal factors. The Ministry of Agriculture estimates that 73 per cent of ubpcs in 2012 had economic-financial problems, and 36 per cent of cpas in 2014 were demonstrating similar problems and need to be refinanced.

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Co-operatives in Cuba’s New Socio-economic Model 36.9%

40.0%

28.0% 30.80%

35.0% 26.70%

30.0% 25.0% 20.0%

18.5% 18.8%

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CCS y campesinos privados

CPA 2007

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Figure 9.2 Percentage of land worked by agricultural co-operatives, 2007, 2011, 2014. Source: Created by author, based on Nova (2011: 333) and MINAG.

No less important is the fact that they do not take advantage of democratic management to motivate workers and producers to increase productivity, innovate and problem-solve. The lack of real democratic management versus better paid employment opportunities, is also one of the reasons—among other factors that result in the migration out of rural settlements—for Cuban co-operatives’ difficulties in attracting and retaining members (Piñeiro, 2013 and Figure 9.4 below). As these graphs show, for ubpcs and cpas, after the period that were they were first created their number (Figure 9.5) and their memberships have steadily declined; co-operatives have disintegrated and few have been created. In fact, since 2008, more than 400 agricultural co-operatives have been dissolved, three quarters of them ubpcs, some cpas and a few ccss.5 The number of ccss has varied mostly because of the fusion and separation of big ccss into smaller ccss.

5 The dissolved co-operatives faced financial problems that were insuperable even with a ­favourable renegotiation of their debts.

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Vegetables

60 40 20

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Figure 9.3 Percentage participation of agricultural co-operatives in total production, 2015. Source: Created by author, based on onei.

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CPA and UBPC members CCS members Figure 9.4 Agricultural co-operatives members, 1981–July 2014. Source: Created by author, based on one, minag and azcuba (various years).

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3500 3000 2500 2000 1500 1000 500 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1993 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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Figure 9.5 Number of agricultural co-operatives, 1977–2015. Source: Created by author, based on onei (various years) and Valdés Paz (2009: 62, 63, 78, 97 & 101).

It is not possible in this chapter to analyze all the factors that have caused the reduction in the number of cpas and ubpcs and their membership. But the same factors mentioned—and analyzed elsewhere (Piñeiro, 2013)—that affect their economic and social management have resulted not only in the failure and extinction of some co-operatives, but also that people are no longer interested in joining them or even, as we have seen, decide to leave. Nevertheless, despite these and other deficiencies, agricultural co-operatives have contributed significantly to a rise in living standards of Cuba’s rural residents. In addition to offering stable and dignified employment for their members, these organisations have directly fulfilled some important needs of their members and the surrounding communities, such as housing, electricity, food and other social goods and services. Although Cuba still needs to import large quantities of Cubans’ basic staples—rice and beans—co-operatives do contribute significantly to feed the Cuban population. 3

Problems Faced

Cuban co-operatives could reach greater levels of productivity if they had fewer problems accessing supplies, technology and productive services, as well as marketing. This, as well as asset-stripping and the exodus of the labourforce into activities and sectors that are relatively better paid (tourism) and better

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supplied (urban areas), are the factors that have had an influence on the economic performance not only of agricultural co-operatives but all productive forms within the agricultural sector and other sectors of the Cuban economy as well. The fact that co-operatives have not been able or not prepared to exercise their own autonomy and democratic management, nor have develop strategies to ease these difficulties, has resulted in an even larger impact. All evidence suggests that the promotion of agricultural co-operatives by the Cuban state, so far, has not been as effective as possible. Even if they encouraged the creation of co-operatives in their initial stages, they have not established integrated policies to accompany that process nor to help them consolidate their interests. The different state institutions that have been charged with ‘dealing with’ the co-operative sector at different moments—the National Agrarian Reform Institute (inra) in the 60s and 70s, the National Small Farmers’ Association (anap) since the 1980s, along with the Workers Central Union of Cuba (ctc) for the ubpcs, and the minag and old Ministry of Sugar (minaz)—have not been created with the specific needs of co-operatives in mind. The ubpc are in the worst situation regarding institutional support because it is dispersed (minag and minaz) and they don’t have anap —like the cpas and ccss—to represent their interests vis a vis the state. Until recently, there has not been a clear policy regarding the sector either. And the existent does not give proper value to the importance of specialised support to emerging co-operatives and those facing problems. 4

Recent Measures

To address the main difficulties and barriers of the agricultural co-operatives, some recent steps have been taken to consolidate the existing ones and promote the creation of new ones. The regulatory framework for agricultural co-operatives is changing. In September 2012, a package of 17 measures was approved that modified existing legislation in relation to the functioning of ubpcs and their relationships with state entities, which may possibly improve the financial-economic situation of those ubpcs with problems. One of the changes in the legal and institution framework of the ubpcs is the approval of a new General Rule establishing that the ubpcs are no longer subordinate to any state-owned business, which means autonomy to establish contracts as well as make purchases and sell directly. In addition, it gives the General Assembly power to decide the per centage of profits or surplus to be distributed

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among members. A new addition is that it allows legal persons living on usufruct land to form ubpcs. The purpose of these measures extends to the cpas and the ccss that may also be demonstrating serious limitations in their operative capacity. The idea is to grant all three types the same autonomy so they all have the same leeway to function. But the passing of these new rules has not produced yet the expected outcomes, in that overall agricultural production continues to lag well under Cubans’ consumption needs. There are also serious deficiencies in the distribution and commercialisation of co-operatives outputs that result in disincentives for production and very high relative prices for consumers. The creation of second tier co-operatives6 it is still pending and long overdue, according to the new legislation for non-agricultural co-operatives. In my view, the creation of second degree co-operatives among the existing agricultural co-operatives could contribute greatly to solve many of the problems they face. 5

Non-agricultural Co-operatives

After the legal framework for non-agricultural co-operatives (see Piñeiro, 2013, 2014) was approved in December 2012, the first organisations of this type were not formed until the beginning of June 2013. This delay was related to the centralised character of the procedure for the approval and constitution of these co-operatives, analyzed below. There were also communication delays about their approval from the corresponding ministries and Provincial Administration Councils—until they are officially notified of their approval they cannot begin the process of constitution. Today, 498 co-operatives have been authorised. The majority (77%) originated from the state, which means, they were created by and out of state enterprises. The rest (23%) were proposed by groups of people. As can be seen in Figure 9.6, the activities of these co-operatives vary, but are concentrated on food services or ‘gastronomy’ (43%), retail sales of agricultural products (20%), construction (14%) and personal and technical services (6%). 6 Second degree co-operatives are currently non-existent in Cuba. In the 1980s Cuba experimented with second level co-operatives, that regionally integrated agricultural co-operatives, and were called Municipal Agricultural Co-operative Unions (umcas). but in only a few of the country’s municipalities and only for a few years.

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Figure 9.6 Approved co-operative proposals, different activities. Source: Created by author, based on cidel (2014).

Another 205 proposals to create co-operatives are waiting to be authorised. The last group of proposals was approved in March 2014. The delay in authorising the creation of more non-agricultural co-operatives was explained by President Raúl Castro on the fact that before creating more co-operatives the conditions necessary for their success must be in place.7 As we will show, there are significant pitfalls in the process to create these co-operatives and there as well as great barriers to their everyday operation.

7 In the monthly meeting of the Council of Ministry, on May 29th 2015, President Castro said that the idea is ‘not to massively create co-operatives, the priority ought to be in consolidating the existent ones and continue to advance [in the creation of new ones] in a gradual form; otherwise we will be generalising the problems that they face today’.

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Figure 9.7 Constituted co-operatives, June 2013-March 2016. Source: Created by author, based on ONEI.

According to Murillo,8 this does not mean that the ‘experiment’9 with co-­ operatives is being stopped. Rather, it will be ‘extended’ but considering Raúl Castro’s demand that steps need to be taken to solve current deficiencies ­before creating many more co-operatives. It must be recognised that the government is involved in a larger reform process that is very complex and has great consequences for Cuban society, so it is to be expected that solutions to co-operatives problems will not happen right away. This caution is also evidenced in that, as shown in Figure 9.7, since the beginning of 2015, the pace in the creation of co-operatives has flattened. While in the first two years 198 and 147 co-operatives were created, respectively, in 2015 only 22 were. Up to March 2016, a total of 383 had been created, so 115 of the approved ones remain to be created. The stalemate in the creation of co-operatives might be due to the fact that the vast quantity of these approved proposals is for co-operatives promoted by local governments to convert state cafeterias and restaurants to co-operative management. Officials interviewed at mincin, the Ministry which oversees those activities, have said that the pace has been slowed because they wanted to improve the training process of future co-operatives members and state functionaries, and were also waiting for the passing of regulations that would

8 In that same meeting of the Council of Ministry. 9 The legal framework for the non-agricultural co-operatives has an ‘experimental character’, established in the legislation itself. The idea is that the experience with this new type of co-operatives together with agricultural co-operatives will allow crafting a General Law for Co-operatives. President Castro had announced it for 2016, but doesn’t seem possible.

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facilitate co-operatives access to inputs and improve existing rules for the bidding by locals, accounting, etc.10 6

Economic and Social Performance

In general, the so-called experiment with non-agricultural co-operatives is seen by co-operatives, policy makers and most of the population as a success. It is acknowledged that co-operatives are more efficient than comparable state enterprises, provide better goods and services, and that workers are happier. Empirical research (See Piñeiro, 2014, 2015) has confirmed the perception of government officials11 that co-operative members have increased their income significantly. Still more investigation needs to be done to evaluate whether the increase in profits is due to higher productivity or to higher prices. In some cases, such as retailers of agricultural products, it is clear it comes from the latter, but in most cases it is higher workers motivation, reduced waste and more control of resources, and even some improvement of their technologies what has lead to increased productivity and longer work hours. In most cases, clients are more satisfied because co-operatives offer better quality and more varied good and services, and have more flexibility in accommodating clients’ preferences. Though there is generalised discontent among the population with the increase in the prices of agricultural produce markets. Workers are also happier not just because their incomes have surged. Interviewees also expressed that they value ‘the power to make the most important decisions’, and the sense of belonging. They also enjoy better working conditions, as well as greater unity, collabouration and teamwork. Unlike what has been the behaviour of Cuban private business, c­ o-operatives have paid their taxes dutifully, according to public officials at the National ­Office of Taxation (Oficina Nacional de Administración Tributaria-onat).12 But the social impact of co-operatives should go farther than fulfilling tax commitments. However, as recognised by Murillo,13 despite de fact that local governments can promote de creation of co-operatives to solve local problems, 10 11 12 13

On March 30th and April 1st several legislations were passed by mincin updating the rules for renting locals to private entrepreneurs and to co-operatives. See Gaceta Oficial Números 12 y 13 publicadas el 13 y 21 de abril, www.gacetaoficial.cu. See declarations of R. Castro and Murillo in the same meeting of the Council of Ministry (Granma). Declarations in the same meeting of the Council of Ministry. Declarations in the same meeting of the Council of Ministry.

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they are not taking advantage of it. However, while it is true that many local governments do not have the interests or the resources to develop such proposals, at least two local municipalities in Havana expressed to have had presented proposals and not had received the necessary approval. So far, it is known of only a couple co-operatives that have been near to closing because of business failure; one or two co-operatives that are said to be in the process of extinction because of conflicts among members. There are around five fake construction co-operatives that are facing sanctions and risk being intervened by regulators because they were really subcontracting and exploiting workers; an outcome that might have been avoided if co-operative education had been made mandatory for founding and new co-operative members. 7

Problems Faced

On the other hand, these co-operatives are confronting major difficulties in the creation process, as well as in training and education, limitations in accessing supplies and services, and other situations that have resulted in a rise in their operational costs. These problems have been analyzed in other essays (Piñeiro 2014, 2015, 2016) but we will delve some more into the most significant and particular forms of these co-operatives. The policies and legislation established for the new non-agricultural ­co-operatives seem to have learned from many of the mistakes made with agricultural co-operatives. But, still more recognition needs to be given to cooperative education, especially before forming a co-operative but also all along their lives; inter-co-operation and social responsibility of co-operatives. The procedure for creating co-operatives is too complicated, slow and subordinate to administrative whim because the approval criteria have not been made explicit, among other problems. The shortcomings of this procedure have fatal effects in the new born co-operatives out of state enterprises. In many cases, they have been formed without the proper preparation, both in terms of training but also in terms of its business plan. Empirical research conducted by the author also found that in those cooperatives created out of state enterprises that receive heavily subsidised inputs and have little accountability (such as food services), the state institutions in charge of creating them do not have the incentives to do so in the correct way, but have all the incentives to make sure that they fail. The success of cooperatives means their eventual demise is assured.

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Another great problem is the absence of an institution that supervises the internal functioning of these co-operatives and supports them. The existence of this institution would allow overseeing the creation process of co-operatives to ensure that minimal requirements for success are met and, in particular, by providing necessary training and startup support. Also, and especially as the number of non-agricultural co-operatives is expected to grow, it will be greatly useful for them to count with an organisation that represents their interests; which could be similar to the one that exist for agricultural co-operatives already. Some measures have been announced that benefit non-agricultural cooperatives but are yet to be passed, such as the extension of the initial grace period for paying taxes from three to six months, and the ability to hire wage labour for one year instead of three months (while still not surpassing ten per cent of total members’ work hours). As mentioned, legislation was recently passed by mincin to facilitate co-operatives access to inputs, among other issues. 8

The Role of Co-operatives in Cuba’s New Socio-economic Model

Finally, now that Cuba’s agricultural and the new non-agricultural c­ o-operatives have been examined, let’s explore the role that co-operatives are starting to play in Cuba’s new economic model. The participation of Cuban co-operatives in Cuba’s new economy is significantly different than in the past. In the past, the state would provide most inputs to agricultural co-operatives and demand that most production be sold to it at marginal cost prices so that all Cuban population could buy it at accessible prices.14 But Cuba’s economy has been under an ‘updating’ process or adaptation process to the new circumstances where the state recognises it cannot longer provide state business and co-operatives with all the production inputs they need. State provisioning of production inputs faces great constraints and difficulties in imports due to Cuba’s lack of liquidity but also due to US commercial and financial measures as part of the embargo—which remains still in place, even if the Obama government is beginning to remove them that still make it 14

In the past not only goods, services and equipment –even if insufficient and sometimes late- was sold at even subsidised prices, but also students were assigned to business to complete internships and a mandatory two-year social service.

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Figure 9.8 Co-operatives and social responsibility. Source: Author’s own creation

very difficult for Cuba to find vendors interested in taking the risk of selling to Cuba, and still must pay high prices and interest rates for credit. There are also longstanding inefficiencies in a centralised and bureaucratic state apparatus. For the past few years the state has attempted to provide many inputs to cooperatives’ productions related to basic needs—food, public transportation, etc. But co-operatives can buy from other providers (even import through state agencies) and can sell to any economic actor and prices are set by them; except that only a few products (less than 10 agricultural produces, price of bus ticket, and other) have been fixed. Finally, the full autonomy of co-operatives has been recognised with new legislations and general Rules for all co-operatives, and state institutions have been instructed to respect their autonomy. The challenge is how to achieve that autonomous co-operatives (and even more autonomous state businesses) play a positive role in an economy oriented towards the satisfaction of people’s needs, and avoid that profit-seeking detracts them from that necessary objective. In my view, co-operatives can contribute in many ways to this goal. As I try to illustrate in Figure 9.8 above, to achieve this objective and maintain and improve Cubans’ living standards, co-operatives should not see their

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social responsibility principle as only contributing taxes to the state, they need to attempt to provide themselves the necessary goods and services [to communities and other businesses] to the Cuban population or to facilitate that state and private business with such goals do it by providing them with production goods and services they need. This can be by the initiative of the co-operatives themselves following market signals. But also, local governments could play an active role identifying unsatisfied needs and promoting the creation of new co-operatives or ­partnering with existing ones with that objective, or just providing incentives that achieve the same goals. While co-operatives are supposed to be able to request goods from the national plan through state enterprises and import through state agencies, the reality is that state institutions prioritise their peers’ needs and even their demands are rarely fully met. A study of how to insert co-operatives in the State Planning process has been announced to be underway. In the case of Cuba, where the state businesses are generally too big and have too many employees for their production capacity and even more if current technology is acquired by them, co-operatives can allow state businesses to concentrate in their main activities by providing them with support activities in a much more efficient and effective way while at the same time increasing the incomes of state and co-operative workers. Indeed, as we have found out in our diagnostic, the income of all the former state employees and now co-operative workers has increased and in most cases very significantly. More generally, in cases where employees are unemployed or unhappy with their current labour relations, workers’ co-operatives can provide them with a dignified work that satisfies not only their material needs but also their need for professional and personal development. Co-operatives, due to their democratic management and social orientation, can also facilitate and encourage the development in their members of solidarity, concern for the needs of others, and all those values necessary for people and societies in large to put humans above profits, long term over short term. They are also schools where members can learn and exercise democratic values and skills like deliberation, tolerance for different views, teamwork, solidarity and justice. Moreover, the expansion of co-operatives—if true to their principles—can be an example for other kind of businesses, pushing them to have better labour practices and be more socially responsible. Finally, an expansion of co-operatives in Cuba, if well done would bring benefits that would contribute to the consolidation and advancement of Cuban emancipatory, socialist project. It would institutionalise the selfmanagement practices already present in some state enterprises. It would

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promote the formalisation of co-operative relationships that are already happening among self-employed workers. 9 Conclusion The decision to make co-operatives important actors of Cuba’s new socioeconomic model confronts great challenges. First, the challenges that come with fomenting the creation of this kind of economic and social organisation when there are public policies that give them preferential treatment, in particular, the need to establish an effective supervision to avoid false co-operatives or the distortion of honest co-operatives. In addition, the fact that most co-operatives created—at least at the beginning—will originate from the state, from state-owned enterprises, something almost unprecedented worldwide, therefore requires constant critical evaluation and the political determination to advance slowly and carefully instead of the forming of lots of co-operatives that are not really co-operatives and that fail because they do not have the minimum requirements needed for success. Effective training of co-operatives’ potential members and state officials in charge of promoting them, before creating them, is crucial; and no less for those created by group initiative. They should receive support not only through training and consulting services (legal, accounting, administrative and management in general) but also through accompaniment for those who need it most. Given the aforementioned, it is necessary to create an ‘institutional infrastructure’ that supervises them from a pedagogical standpoint, supports them and represents them. It also requires solving the operational economic constraints that all business forms face in Cuba due to the deficiencies of our economy. References Nova, A. (2012). Agricultural Co-operatives in Cuba. In C. Piñeiro (ed.), Co-operatives and Socialism: A View from Cuba (pp. 279–91). London: Palgrave MacMillan. Piñeiro Harnecker, C. (2016). Cuba’s Co-operatives: Their Contribution to Cuba’s New Socialism. In C. Durand (ed.), Moving Beyond Capitalism. London: Routledge. Piñeiro Harnecker, C. (2015). Nuevas co-operativas cubanas: Logros y dificultades. In Miradas a la Economía Cubana: Análisis del Sector No Estatal (pp. 51–61). La Habana: Ed. Caminos.

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Piñeiro Harnecker, C. (2014). Diagnóstico preliminar de las co-operativas no agropecuarias en La Habana, Cuba. In Economía Cubana: Transformaciones y Desafíos (pp. 291–334). Ciencias Sociales. La Habana. Piñeiro Harnecker, C. (2013). Las co-operativas en Cuba. In M.A. Font & M. GonzálezCorzo, (eds) (2014). Reformando el Modelo Económico Cubana (pp. 63–82). Bildner Center for Western Hemisphere Studies. New York: City University of New York. Piñeiro Harnecker, C. (ed.). (2012). Co-operatives and Socialism: A View from Cuba. London: Palgrave MacMillan. Rodríguez Membrado, E., & A. Lopez Labrada. (2012). The ubpc: A Way of Redesigning State Property with Co-operative Management. In Piñeiro, ed. Co-operatives and Socialism: A View from Cuba (pp. 292–316). London: Palgrave MacMillan.

Chapter 10

The Role of Co-operatives in Transforming Cuba’s Economy Sonja Novković Cuba’s experiment with co-operativism within a socialist economic system offers important lessons for the co-operative movement. Co-operatives as defined by the International Co-operative Alliance Statement of Co-operative Identity (ica.coop) typically function within capitalist market systems where they face pressures from competition with investor owned businesses, and institutions designed to support and protect investors. Co-operatives often face isomorphism, they may encounter barriers accessing finance, and they may succumb to capitalist market logic in their hierarchical governance systems. Co-operatives in capitalism often identify as non-capitalist or anti-capitalist, but rarely as socialist. This chapter explores the underlying features of socialist co-operatives, and discusses the role of co-operatives in the Cuban transformation of its socioeconomic model. The particular emphasis is on the ability of co-operatives to maintain focus on human development, thereby continuing the legacy of the Cuban Revolution. 1

Cuban Transformation of the Economy

Social transformation can be seen as strive towards change, or as resistance to it (unesco, n/d). For Cuba, it may be a bit of both. Judging by the Lineamientos (2011) and the follow-up official report at the 7th Party Congress in 2016 (see Campbell in this volume). Cuba remains steady on the socialist path, so the transition possibly guided by co-operativism could be a change of the centralised socialist economic system to a decentralised one, marked by resistance to capitalist market features. During the special period in the early 1990s, Cuba opened its economy to foreign direct investment and allowed private ownership of the means of production (small private businesses) and self-employment. This created income inequalities and rents on capital in a relatively short time, but it also resulted in some important positive achievements. Government continued its provision of health services, education, and food security. New agro-ecology methods of

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food production and urban agriculture gained international recognition, and with support from the Association of Small Farmers (anap). Cuban farmers engaged in indigenous knowledge diffusion via the ‘Campesino a Campesino’ method, in step with international grassroots peasant movements (Rosset et al., 2011). This propelled Cuba’s reputation as a country that found solutions applicable to peak oil crisis and conducive to sustainable development. It also meant that Cuban co-operative solutions were seen to be the vehicle for democratic citizens’ participation in building a sustainable economy, with government as the provider of public goods. But since the 1990s Special period, as economic indicators bounced back with support of Venezuelan oil, bicycles were pushed off the roads, and gas-guzzler cars were back in fashion. There are some indications that agroecology is also not the priority any longer (Patel, 2016). If this proves correct, Cuba may be stepping back off track to sustainable prosperity fit for the 21st century. Twenty years after the Special Period, Cuba is promoting a diverse economy with diverse ownership and enterprise models in order to tackle its low productivity, low wages and inefficiency (Gabriele, 2011). The exact structure and institutional mix is a moving target, but they include state owned, co-­operative, and private businesses, including foreign direct investment (­Lineamientos 2011). In this context, co-operatives as collective enterprises may be seen as gatekeepers against capitalist institutions (Campbell 2016), but they may also be seen to carry the danger of increased income inequality, accumulation of capital, and ultimately, a road to privatisation of the Cuban economy. 2

Agenda for Change

The most dramatic changes for a centrally planned Cuban economy came in the 1990s with the ‘special period’ marked by crisis management. Cuba opened its economy to foreign direct investment mainly in tourism and mining, it handed idle land to farmers in usufruct, allowed private ownership of small enterprises and of durable consumer goods, and encouraged self-employment. Over the period of two decades, these policies lead to increased income differentials and inequality in Cuba, and to structural issues in the economy that needed to be addressed with more radical changes. Coming out of the crisis Cuba finds itself in need of major restructuring of the economy, but also a radical social transformation after decades of state planning and paternalism. Not unlike other centrally planned economies, its public sector is overgrown, featuring underemployment, low wages and low productivity. A huge bureaucracy is stifling the process of necessary

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­transformation (Sánchez & Mario, 2012). Most importantly for a country that guarantees to provide basic needs to its citizens, Cuba’s food sovereignty is compromised as the country continues to depend on food imports. The agenda for change, outlined in Lineamientos in 2011, identifies key priorities in the coming years to be: sustainability (ecological, energy, economic, nutritional, and social); increased institutional flexibility; international competitiveness; and restructuring the relationship between state and society (Sánchez & Mario, 2012). The state remains involved in central planning, and in securing equal rights and opportunities for all Cubans. Besides addressing the short-term imbalances and incentive structures, long term change would reconfigure relationships in production warranting more autonomy to state enterprises, increase self-employment and small private business sector, and expand co-operative management beyond agriculture. Key in these developments is the challenge presented by economic restructuring at a potential cost to the social contract. Increasing income inequality and the ensuing social polarisation is a major concern, but probably more concerning for the socialist project is the emergence of a rentier class borne in the Special Period. Coupled with a capitalist job market as businesses are allowed to hire labour, these features suggest that capital, rather than labour, is dominating the production relations in some sectors of the Cuban economy. In addition to changes in the small business sector, the fate of the state enterprise will mark an important factor in support of, or opposition to, the capitalist economic model. While Cuban government promotes the system in which ‘the commanding heights’ are remaining firmly in state hands, the management is becoming more autonomous and independent, resembling the Chinese experiment in the early 1990s (for example, see Coase & Wang, 2012). The next step toward capitalism in China was effective privatisation of state enterprises through initial, fairly distributed, employee buyouts turned into public share offerings. Although there is no indication that Cuba would follow China’s path, what is unclear for Cuba is the relationship between workers and managers in state firms- an important variable in the framing of production relations as either adversarial and therefore structured along the principal-agent model, or as economic democracy entrusted with stewardship of social assets. Worker self-management could frame relations differently, ensure supply chain and procurement contracts with independent worker and agricultural co-operatives, and signal the economy-wide push for solidarity economic relations and accompanying social transformation. Some of the younger Cubans are impatient to see some real change, rather than decisions made by decree (Havana Times, 2016). A possible regional wave of new co-operativism (Vieta, 2010) may be the opportunity to connect Cuba with social-solidarity economy

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and ‘post-capitalist’ movements around the globe striving towards creation of another system. These ideas are explored in the remainder of the chapter. 3

Co-operativism in Cuba

Outside agriculture, the co-operative project in Cuba is seemingly at an impasse. In the five years since the Lineamientos were presented at the 6th Party congress, just under 500 non-agricultural co-operatives have been approved,1 most of them in Havana, and mostly by conversion of service operations in state enterprises. Whether state conversions or greenfield developments, new co-operatives feature worker members; they co-operatively manage stateowned (or private) resources; and they have autonomy over major business decisions. Newly established worker co-operative experiences are mostly positive—productivity increased, incomes rose multiple times, and members beam with pride talking about independent decision-making, and t­ aking care of each other by establishing emergency funds besides the mandatory reserves.2 Internal social cohesion is also on the rise, as is the number of members in some co-operatives where demand for their services increased. The greatest impediment to most co-operative businesses is lack of access to inputs and international markets—a legacy of central planning and state dominance in international trade. Considered a pilot project, most worker co-ops were established in 2013– 2014, with no new licences to speak of issued in the following two years. The Council of Ministers identified the most pressing problem with new co-­ operatives: prices increased (especially for food items) and both food security and purchasing power declined as a result; precisely the outcome Cuban government was hoping to avoid. Without approving the much-requested wholesale markets that would guarantee stable supplies for the non-state sector at competitive prices, thus preventing inflation in the cost of merchandises and services, the Council of Ministers decided ‘not to massively expand the creation of co-operatives. The priority will be to consolidate the existing ones and move ahead gradually, because otherwise we would be generalising the problems that come up’ ­(Morales Rodriguez, 2015). 1 These non-agricultural co-operatives are perceived experimental—see Pineiro Harnecker and Campbell in this volume. Experiences from this experimental group of co-operatives will be used to develop the legal and institutional framework for further co-operative developments. 2 Personal communications during visits to worker co-operatives in Havana in October 2015.

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This response, combined with more government price controls, is likely to further delay changes. It can also establish negative perceptions about co-operative organisational form, before the project takes off. At the same time, there is no evidence of efforts to provide the right kind of institutional ­support for co-operative development, or assist formation of co-operative networks and federations, which would impact on co-operative social capital and performance. The expectation of co-operative form of organisation by its supporters is that it provides collective ownership, and is therefore an ownership form conducive to socialist development. In reality, this organisational form needs the right design and incentives. As an illustration of the emerging issues with new co-operatives in Cuba, agricultural co-operatives sell produce to new urban food market co-operatives, whose members are market workers. They in turn sell produce to the final consumer, increasing the mark-up as much as demand will bear. In markets where foreigners or private restaurant owners trading in Convertible Pesos (cuc) dominate the demand, prices are prohibitively high for ordinary Cubans (Holm, 2016). Although some price inflation can be expected in the heavily subsidised food markets, the discontinuity in co-­operative supply chains between producers and market workers created unnecessary price inflation, exacerbated further by the dual currency. The perception among consumers and policy makers is that co-operative business model is unable to shield consumers from price inflation, and is therefore not different than private businesses. This mix of inadequate institutional setting and false expectations may be detrimental for further co-operative development. 4

What is the Role of Co-operatives in Cuba’s Reform Process?

This section describes the current or potential role for co-operatives in the ­Cuban economy, based on what is known about their impact in market economies around the world and in Cuba, but also the market-socialist experience with autonomous co-operatives in the former Yugoslavia and subsequent independent states in transition. State Enterprise Conversion into Mutual, RatherThan Private Business Co-operative ownership is recognised as socialist ownership in Cuba (see Campbell in this volume). Co-operative ownership and/or management of state-owned assets is therefore prioritised over private business forms (Pineiro Harnecker, 2016) and state companies in non-strategic sectors are mutualised through co-operative formation, rather than privatised as was experienced in

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Eastern European economic transition in the 1990s. Eastern European experience had a dramatic negative impact on the overall well-being of the population, with declining life expectancy and gaping income inequality. Where worker buyouts were used as a privatisation method, they served a transitionary role to privatisation. It is important to stress that worker ownership of shares in a publically traded company are not equivalent to worker ownership in co-operatives, where workers assume democratic control over all decisions, and co-operative shares cannot be traded on the market. Contrary to Eastern European developments, Cuban policymakers are clear in maintaining a socialist path. Worker co-operatives are viewed as socioeconomic organisations, generating and distributing wealth equitably based on labour, rather than capital contributions of their members. Also important to socialist development, co-operative collective decision-making and management has emancipatory and therefore socially transformative potential. Labour for hire is less likely in worker co-operatives, and restricted in Cuba to ensure against labour exploitation. Therefore, co-operatives in Cuba serve to collectivise social property or collectively manage state-owned property; collectivise privately owned assets (for example, the cpa co-operatives in agriculture), as well as associate labour outside agriculture. Associated labour in former state enterprises, new co-operative enterprises and agricultural cooperatives engage in autonomous management through democratic control of their organisations. 4.2 Boosting Efficiency and Productivity, and Increasing Incomes Co-operatives are vehicles for increased productivity and rising labour income. Equitable income distribution is integral to worker co-operative design due to autonomous decision-making and member self-management. Furthermore, self-determination in setting the rules serves as an incentive to enhance a sense of ownership and increase effort. The productivity effect is evidenced elsewhere (Perotin, 2016; Erdal, 2014; Bonin et al., 1993), while in Cuba, this effect is indisputable and demonstrated by co-operative members’ accounts and surveys (Pineiro Harnecker, 2013, 2016). Incomes of co-operative members increased on average threefold since their transformation into co-operatives. They report high levels of satisfaction with more autonomy to make decisions, and solidarity and cohesion among members, resulting in increased effort and productivity. 4.3 Advancing Human Development Human development is a holistic concept that places capabilities of human beings at the centre of socioeconomic activities and the very purpose of those activities (undp, 2015). This is not about economic growth for its own sake,

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or development of productive skills of the labour force; rather, human development as enlargement of options in human actions is the goal of economic activities. Direct enhancers of human capabilities in this view are long and healthy life, knowledge, and decent standard of living. The enabling factors for human development are human rights and security; promoting equality and social justice; environmental sustainability; and participation in political and community life (undp 2015). Each of these factors can be explored in the context of co-operativism as a vehicle that enables human development through deliberate and autonomous collective decision-making. As stated above, income increase, high productivity, and equitable income distribution are common traits of worker co-operatives, contributing to human development (Perotin, 2016). There are other important effects of co-operation impacting individuals and communities that are not easily measurable. Decent and dignified working conditions positively affect human health, while work in co-operative collectives where labour is freely associated enhances health, wealth, and shared knowledge. A major study was conducted in Italy in 2000, with a comparison of three communities differentiated by co-operative density (Erdal, 2014). Community with the highest presence of co-operatives (one in three inhabitants are members of a worker co-operative) exhibited positive externalities measured by social variables grouped into: crime, education, health, social networks, and social participation. The ‘co-op town’ exhibited lower crime rates, better health, lower mortality rates, and tighter social networks. A similar study was conducted in Spain (Freundlich & Gago, 2012, cited in Erdal, 2014: 218) and early results confirmed a negative relationship between co-operative density and mortality rates. There is every reason to expect high rates of human development in Cuba, with a socialist state concerned about provision of public goods directly impacting human development (Veltmeyer & Rushton, 2011; Campbell, 2016). Government policies include equal access to healthcare and education, food security, and the provision of basic necessities including shelter, to its citizens. Co-operatives can thrive in a supportive environment; they can help develop an economic model that will complement government efforts in providing social goods. Co-operative longevity is also well documented, as is job stability and low rates of labour turnover (Smith & Rothbaum, 2014, Perotin, 2016). Faced with unfavourable market conditions, worker co-operatives adjust wages rather than jobs, adding stability to the system through this counter-cyclical adjustment mechanism. They also retain larger share of profits than comparable investor owned firms, indicating that worker co-operation exhibits behaviours conducive to local development.

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The ‘Competitive Yardstick’ Role—Market Failure and Government Failure In capitalist market economies, co-operatives often serve a ‘competitive yardstick’ role (Nourse, 1992), correcting for market failures. This is particularly relevant in agricultural markets with imperfect competition, and written about in the literature as the reason for co-operative entry3 (see Cook, 1995; Milford, 2004). The role for co-operatives in a capitalist economy, as envisioned by Nourse, is to keep other businesses ‘honest’ by pushing the price toward a competitive level. Firms in monopsony commodity markets, for example, will use their market power to underprice the product, thereby treating farmers unfairly. Farmer co-operatives increase commodity prices they pay to producers and force the competition to follow suit, thereby impacting the entire market. Co-operatives also mitigate market failures by maintaining presence in locations that are not profitable for investor- owned firms, or employ marginalised population excluded from the labour market (Novkovic, 2008). Co-operatives (and social enterprises) can correct for government failure as well. Government failure, referring to ineffective regulatory framework, missing public goods or services, or intervention that worsens social outcomes (Orbach, 2013), can be the reason for the formation of co-operatives or social enterprises. In some cases, such as governments operating with austerity budgets, support of social enterprises is a deliberate policy.4 The inability of government to deliver particular services seems relevant to Cuba where state is changing its role in the economy from centralised delivery of goods and services to a regulatory one, providing support to independent economic agents through decentralised local administration. Further, employment in the ­government sector must be reduced by half a million people. Creating opportunities for self-employment and co-operative employment is therefore a deliberate policy design to remedy the problem and avoid unemployment. One additional role for co-operatives in Cuba is to serve as a yardstick in collective management practices and outcomes. Increased efficiency and income in coops may boost productivity in state enterprises. State firms may adopt 4.4

3 Zamagni and Zamagni (2010) contrast the demand side theories of co-operative entry, where co-operatives correct for market failures or government failures, and the supply side theories of co-operation where co-operatives are a product of deliberate design as an alternative organisational form countervailing the investor owned dominance. The latter form is dominant in social and solidarity economy contexts and in framing the ‘new co-operativism’ (Vieta, 2010). 4 As an example, Croatian government is supporting social enterprises where it is fiscally unable to deliver the services (Novkovic & Golja, 2015).

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self-management practices, and are looking to co-operative members’ earnings as a benchmark for their own performance. 4.5 Association of Labour and the Commons The socialist framework of the Cuban model lends itself to co-operativism in the provision and regulation of land, labour, and other fictitious commodities (Polanyi, 1944), or the commons5 (see Allen, 2014). Cuba’s regulatory framework supports co-operative ownership as a socialised ownership form, but also as a collective enterprise able to manage socially owned, state-controlled, assets. In agriculture, this is evident in the three diverse forms of co-operation – ccs with privately owned land by farmer-members, cpa with collectivised land or leased state land, and ubpcs where worker co-operators use state land for agricultural production (see Donestevez Sanchez in this volume; Nova, 2013). Worker co-operatives in urban areas are leasing office space from the government at a discounted rate, and cannot dispose of those assets. De Peuter and Dyer-Witheford (2010) place collective association at the heart of all ‘commoning practices’, and describe worker co-operatives as a form of labour commons. Collective association of labour is at the centre of worker co-operation in general, and socialist co-operatives in particular, if one considers labour theory of value as the key argument in favour of labour sovereignty (see Novkovic, 2014). This line of socialist thinking was translated into institutionalised social ownership of the means of production in the former Yugoslavia, with organisations of associated labour at its microeconomic core. Co-operatives, whose members were private owners of the means of production, served as the bridge between self-employed producers and organisations of associated labour (Golja & Novkovic, 2014). A more fundamental argument in favour of labour association is presented by Ellerman (2016) who extends this analysis to the labour theory of property in arguing that workers (although under capitalist labour contract) are in fact legally responsible for their actions, and should also be the legal owners of the outcomes of their actions. The implication of this argument is: ‘The legal members of the firm as a legal party would then be the people working in the firm. After abolishing both the owning and renting of persons, private property would finally be founded on the principle on which property is supposed to rest. 5 ‘Commons discourse resumes older discussions about “public goods,” but breaks new ground, both in the range of ecological, biogenetic, and cultural domains it addresses, and in its interest in the possibilities for the organisation of resources from below, rather than according to the models of command economies or bureaucratic welfare states’ (De Peuter & Dyer-Witheford, 2010: 31).

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Such a firm is a democratic firm and the private property market economy of such firms is an economic democracy’ (Ellerman, 2016: 34). Cuban policy makers and academics are debating contractual labour as fundamentally non-socialist. Legal provisions at present time recognise increase in seasonal labour demand, but they restrict hiring labour in worker and producer co-operatives to three months and a maximum of ten per cent of total work hours (Pineiro Harnecker, 2016). However, labour contracts have been legalised for other private businesses. 4.6 Integration in the Solidarity Economy Movement Cuban co-operatives recognise the principles and values of co-operation defined by the international co-operative movement, captured in the Statement of Co-operative Identity (International Co-operative Alliance 1995, ica.coop), but are also vehicles of socialist transformation, thereby assuming a more radical role reaching beyond the ica principles. This mandate fits well with Latin American solidarity movements that extend co-operativism to all forms of self-managed organisations serving people, rather than capital. Solidarity economy ‘pushes the envelope of transformative change fundamentally challenging the core institutions of the capitalist system and seeking alternatives centred on redistributive justice, deep sustainability, active citizenship and a more profound reconfiguration of power relations’ (Utting, 2016). At its core, Social and Solidarity Economy (sse) encompasses organisations and enterprises that have explicit economic and social (and often environmental) objectives; involve varying degrees and forms of co-operative, associative and solidarity relations between workers, producers and consumers; and practice workplace democracy and self-management (Utting, 2016). With its explicit mandate to decentralise social property through collective ownership, deliver social goods and services, and replace state provisioning of public goods with solidarity as the underlying value, Cuban co-operatives share an understanding of the economy as a means to meet the needs of the people with solidarity movements in Latin America and elsewhere. Further, Cuban co-operative members are workers, which ties them with other worker co-operatives around the world, but potentially also places them at the forefront of ‘new co-operativist’ movements (Vieta, 2010, and in this volume). 5

Co-operative Design for Social Transformation

Co-operatives have varied ideological backgrounds, although they share social or economic justice as the root cause of their autonomous appearance. Italy,

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for example, is representative of the two predominant streams of thought behind co-operation in the 19th and 20th century—one rooted in socialist ideals and labour movements, while the other drew its inspiration in the Catholic social doctrine. Regardless of these different backgrounds, they share the essence of co-operation marked by social justice, economic justice, dignity of human persons and their work, and solidarity (Herrera, 2004). ‘Labour is the principal factor for transforming nature, society and human beings themselves’ (Arizmendiarrieta, cited in Herrera, 2004). Based on the nature of socialist relations in production, socialist co-­ operatives must have workers for members (Novkovic, 2014). Co-operatives in socialism, therefore, may be producer co-operatives, worker co-operatives, or they may take the solidarity co-operative (multi-stakeholder) form. Only producer and worker co-operative form is recognised in Cuba at present, although I agree with those who make a case that solidarity co-operatives may serve the intended transformative purpose better than co-operatives with single member types (see for example Vezina & Girard, 2014). Rooted in solidarity, worker co-operatives are the epitome of emancipatory economic organisation that embodies human dignity and advances human development. Herrera (2004) starts from the Catholic social doctrine to describe the features of Mondragon worker co-operative arrangements, illustrating that they in fact share the microeconomic features necessary to achieve socialist goals. In addition, in a socialist economy some property rights are limited to usufruct, whereas in a capitalist economy productive assets are privatised, although the institutional setup of co-operatives in capitalist economies typically includes mandatory non-divisible reserves, as well as prevents members to personally benefit from co-operative assets upon dissolution: ‘Typically, joint ownership is reflected in the self-imposed constraints on the withdrawal of a member’s share, as well as on the reinvestment of a part of the surplus into indivisible reserves. On top of these constraints, cooperative shares cannot be sold on the open market, and co-operative assets are often transferred to the community if a co-operative shuts down. This joint ownership, or a sense of a co-op belonging to “us”, is of critical importance in u ­ nderstanding co-operatives as a common asset, and devising appropriate democratic governance systems that fit with these characteristics of the enterprise’ (Novkovic & Miner, 2015: 15). What then are the institutional characteristics of worker co-operatives fit for socialist transformation to economic democracy? Worker ownership of the means of production and participation in decisionmaking. A key characteristic of socialist relations of production is labour ownership of capital, and worker self-management. Worker participation is the

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necessary ingredient in building a socialist solidarity economy. As pointed out, this does not preclude multi-stakeholder co-operative form that may be preferable for local development. Participation in worker co-ops takes multiple forms. It includes (a.) economic participation through investment in member shares, ownership rights and responsibilities, and profit sharing based on work; (b.) democratic participation in decision-making at the team and unit level, organisational level, and networks level6 (where they exist); and (c.) participation in community development by means of meaningful tenured jobs, community profit sharing (ten per cent in Spain, for example), and/or participation in decision-making at the community level including research and education. Although their governance is seemingly authoritative with President serving a dual role as the ceo and Chair,7 Cuban urban co-operatives inherited healthy democratic practices from the existing agricultural co-operatives, such as, for example, monthly membership meetings.8 Co-operative members value member solidarity, reflected in fair income distribution and in the creation of emergency funds for members in need. Co-operation among co-operatives has not yet taken hold in Cuba so there is no sense of a wider social solidarity framework. This is a task for the formation of second tier co-operatives and solidarity networks. For discussion of the co-operative institutional framework in Cuba see Bateman et al. in this volume. Social and economic justice. Worker self-management precludes treatment of labour as purely an input in production and therefore limits labour markets to a coordination role (rather than price signals, although implicit knowledge of historic wage levels may be a factor affecting labour supply in particular 6 While Mondragon’s multiple levels of worker decision-making are well known, in Yugoslavia those included participation in three nested levels (basic organisation; work organisation, and complex organisation of associated labour; as well as election of delegates to financial institutions and local social organisations-hospitals, social services, ngos, etc). Personal investment in member shares was not a part of the Yugoslav institutional setup, resulting in the Furubotn-Pejovich underinvestment hypothesis, later disputed for worker co-operatives (Arando et al., 2010). Effective worker organisation would therefore need to consider purchase of member shares, as well as reinvestment of surplus into dual accounts: personal, and collective, as is the case in Mondragon. 7 This arrangement is in line with the humanistic governance paradigm rooted in solidarity, and opposed to predictions of the agency theory in neoclassical economics. See Novkovic & Miner (2015: 13). 8 In comparison, membership meetings are held once a year in most co-operatives in capitalist economies, particularly consumer and financial co-operatives. Worker co-operative members are more likely to be involved in decisionmaking, and exhibit flatter management and governance structures.

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industries). Layoffs are typically not practiced in worker co-operatives, contrary to the implications of the neoclassical co-operative model (Ward, 1958), which suggests a backward bending labour supply.9 Limited pay differential is ensuring that dignity of persons and their work is an operational element, which contributes to social justice and transformative social relations, whereas participatory management reduces the likelihood of managerial externalities (i.e. socialising the costs). Capital is subordinate to sovereign labour in worker co-operatives, and the principle of co-operation among co-operatives ensures that external and community solidarity is also practiced (See Arando et al., 2010). Self-prescribed bylaws imply that workers share benefits, as well as losses and that job security is of primary importance. Co-operatives use reserve funds as inter-solidarity resources, but also as investment funds that can be used for community development. Worker co-operatives further enhance these positive externalities between work and human development through equity, equality, fairness, solidarity and transparent transactions within the organisation. Worker co-operation does not come without risks. If human relations are non-transparent and divisive, worker co-operative form may in fact trigger negative externalities, so effective conflict resolution mechanism are imperative in the co-operative institutional development. Also important are carefully drafted and democratically accepted policies that ensure clarity of purpose, identify solidarity practices, and include ‘poison pill’ provisions precluding ­asset stripping and personal gain of members, such as restrictions on asset appropriation discussed above (Novkovic & Miner, 2015). Solidarity co-operatives. The trial with 500 non-agricultural worker co-­ operatives in Cuba highlighted immediate positive outcomes of autonomous decision-making, such as increased productivity, rising incomes, strengthened member cohesion and solidarity, and democratic governance and participatory practices that minimise opportunism. On the other hand, it also showed that worker co-operation without a wider solidarity framework throughout the value chain need not produce socially optimal outcomes. A solidarity co-operative, or multi-stakeholder co-operative10 9

10

According to the Ward (1958) model of the labour managed firm (lmf). and Vanek’s followup in 1970, worker co-operatives maximise average income. Workers lay off some members when product demand is high, and divide profit among fewer members. ­Reverse is true in times of low demand. This unrealistic consequence of the lmf model has been studied over the ensuing decades, and produced no evidence of a backward bending supply. Other types of social business can also take the multi-stakeholder approach, but we restrict the analysis to co-operatives, given Cuba’s policy directions.

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framework is therefore better suited to achieve multiple and complex goals: integrate labour into decision-making, and give voice to the stakeholders11 engaged with, or impacted by, the enterprise. The term multi-stakeholder (msc), or solidarity co-operative is used to describe a co-operative with multiple types of members engaged with the co-operative in different capacities. Any combination of types of stakeholders could be members and may include such constituents as workers, producers, consumers, suppliers, and volunteers, among others. This co-operative form was universal in the early days of modern cooperation. Rochdale, the first modern co-operative formed in the UK in 1844, was a solidarity co-operative with worker and consumer members. Over time, co-operatives with single membership type became dominant, and most legal frameworks developed for this type of a model. In recent decades Italy, Spain, France, followed by other European countries introduced special laws to support development of solidarity co-operatives. In Canada, Quebec was the first province to introduce solidarity co-operative legislation in 1997 (Lund, 2011; Vezina & Girard, 2014). Reasons for entry of solidarity co-operatives vary, but they are often connected to association of labour, and/or engagement of civil society in the delivery of the commons. Italian mscs are mostly social co-operatives developed to fill the gap in the provision of social services due to government failure to meet the needs on the one hand, and a growing demand for civil society’s participation in the delivery of social and economic services, such as integrating the marginalised population into the labour force on the other (Vezina & Girard, 2014). Incorporating civil society actors with users of services and government agencies into the solidarity co-operative model ensured the long-term survival of these projects. The purpose of social co-operatives is to serve the general interest of the community, and not just of its members. In Quebec, the co-operative model with a single category of members had shown its limits in the ability to resolve complex socio-economic issues involving coordination of multiple social and economic actors (Vezina & Girard, 2014). In particular, a growing mobilisation of civil society around revitalisation of communities experiencing decline in the population emphasised the need for solidarity co-operatives to meet the community development goals. 11

The term stakeholder often implies a trade-off and a conflictual relationship between independent self-interested groups, each with a ‘stake’ in the organisation. In contrast, the humanist approach to co-operative governance and management implies that cooperative stakeholders are motivated by solidarity, and a shared objective they can realise through a co-operative enterprise. They each bring a different perspective to the table, but their interests align to work towards co-operative viability and adherence to co-­operative values (Novkovic & Miner, 2015).

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This was also triggered by government failure to continue to provide local services. Besides community development, the msc model was used for delivery of home-care services for the elderly; early childhood day care services, increasing parents’ involvement in the governance of day-care organisations and mobilising various groups of stakeholders; and for reintegration of people excluded from the job market that requires collaboration and coordination of multiple actors and groups, bringing diverse resources into the process. In France and elsewhere, solidarity co-operatives include worker members, as well as other beneficiaries and supporting members with shared social and economic objectives, values, and purpose of the enterprise. Involved in diverse sectors and activities, solidarity co-operatives’ formation is on the rise as a deliberately chosen model of co-operation, often with government provided development resources and/or institutional frameworks. However, in many countries multi-stakeholder co-operatives function by default and do not fall under a special law. For example, in the former Yugoslav states, self-managed socialist past framed co-operatives as multi-stakeholder constructs. Co-operatives were associations of self-employed producers working with their own means of production, and workers associating their labour (managers, office staff, and other support workers in a co-operative). Current law in Croatia, for example, does not specify membership type, providing needed flexibility for solidarity co-operatives formed for community development.12 In this transition economy case, civil society actors are key partners and initiators of solidarity co-operative development (see Novkovic & Golja, 2015). The contentious issue for mscs is their complex governance, particularly if members are self-interested stakeholders as assumed in neoclassical economics. Under the solidarity framework and with carefully designed governance and income distribution mechanisms, the evidence points to msc longevity and successful community development outcomes (Leviten-Reid & Fairbarn, 2011). This brief overview of multi-stakeholder co-operatives serves as an illustration that Cuba may benefit from its consideration. mscs work in multiple contexts, but they thrive with the right type of institutional support and deliberate 12

An example is Poljoprivredna Zadruga Vodnjan (http://www.pz-vodnjan.hr) whose founding members are members of the Association Agroturist, local olive growers and the municipal government. The mandate of the association is the promotion of agriculture in the region. The co-operative, on the other hand, produces its brand of olive oil as a joint product of regional olive growers, as well promotes olive growing, and sells seedlings of indigenous sorts of olive trees. The co-operative is the vehicle for regional economic development. (Novkovic & Golja, 2015).

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design. Labour association is the key ingredient of socialist co-operatives that gives Cuba the advantage of clarity of purpose.13 Cuban society is moving away from paternalistic relationship with the state; there will be increased need for social activism in the delivery of the commons, as well as essential social goods and services. Cuban policy makers are well placed to provide the framework for social development delivered by autonomous multi-stakeholder cooperatives, to ensure that their concerns with labour integration and socially optimal outcomes are addressed in non-state enterprises. However, there is no indication so far that solidarity co-operatives would be a legal form of organising in Cuba. 6

Cuban Co-operatives and Human Development

Cuban co-operatives embody social and economic transformations, with the potential to serve as the benchmark for self-management in both the state enterprises,14 and social enterprises as they develop (Sagebien & Betancourt, 2014). Co-operativism as a movement rests on shared values and solidarity, but it may include varied types of enterprise. Co-operatives in Cuba are defined by a set of principles15 that offer: (i) a path from central planning to economic democracy; (ii) self-reliance and empowerment of workers as decision makers, which carries over to other aspects of life; (iii) increasing consumer power with increasing incomes; (iv) internal income equality /equity (although there

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15

Similarly, Mondragon’s co-operatives have a clear goal to preserve or create jobs. ­ rganisational innovations have been driven by this purpose, including the co-operative O ­governance and structure—they include either worker co-ops, or solidarity co-operatives with consumer and worker, or producer and worker members. The question of emancipation of workers in Cuban state enterprises remains an important one. Although state enterprises are seeing more autonomy in management, it is ­unclear whether workers have a voice in decision-making. While Cuban political decision-making has been participatory (Campbell, 2016). economic democracy can be perceived as a new approach to mitigate Cuba’s troubled economic performance. The key in this struggle is finding the right incentives, or striking a balance between markets and solidarity, without falling to pressure of open markets lurking down the path as the US embargo is lifted. Co-operative principles of Cuban co-operatives by Law # 95 (04) published in the Official Gazette of the Republic of Cuba, are as follows: 1. Voluntary participation; 2. Co-operation and mutual assistance; 3. Contribution to the development of national economy; 4. ­Co-operative discipline; 5. Collective decision-making; 6. Territoriality; 7. Wellbeing of co-operative members and their families; 8. Collabouration between co-operatives; 9. ­Human solidarity; 10. Social concern.

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are potential income differentials across regions and industries); e. localisation of production; (v) solidarity value chains; (vi) collective entrepreneurship and social innovation; and ultimately, (vii) building on socialist advances in human development. A critically important aspect of the socialist project is advancing relations in production where capital is subordinate to labour.16 This feature can set apart social-solidarity and new co-operativist movements from capitalist social enterprise projects. While both may result in community development, they carry different risks. Co-operatives may benefit their members, and therefore limit their impact on community beyond the spill-over effects, while ­social entrepreneurs work on projects with an investment point of view. A return on investment and longevity of the project depends on the preferences of the particular entrepreneur. Between the two models, co-operativism with emancipatory power of labour association has the upper hand in socialist transformations. Solidarity co-operative structure (as well as community co-operatives/ enterprises) outlined above, may combine the two worlds in an effective way: secure labour sovereignty on the one hand, and include community stakeholders in decision-making and in shared benefits of the enterprise on the other. This co-operative form, designed for community development, carries a lot of potential for the Cuban socialist project. 7 Conclusion Cuba proudly displays its accomplishments in human development in the years after the revolution; even during a major economic crisis of the special period it maintained focus on health, education, housing, income equality and food security. This is attributed to a socialist system whose focus is development of its people. A long exposure to centrally planned, rigidly controlled system produced discontent of the citizens while, arguably, motivation to struggle lost its sharpness with the post-revolution generation. However, this new generation is exposed to experiences of regional and global crises triggered by the tenets 16

Cuba may take a more pragmatic view, similar to China’s approach to economic transformation illustrated by often cited quote from Deng Xiaoping: ‘It doesn’t matter if a cat is black or white, so long as it catches mice’. However, Lineamientos and the followup blueprints presented at the seventh party congress in 2016 continue to prioritise worker co-operatives over other private businesses, suggesting that labour association has a critical role to play in shaping Cuban economic institutions.

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of neoliberal policies and institutions. Cuba can capitalise on the convergence of the achievements of the revolution with post-capitalist movements around the globe, and most notably solidarity movements in Latin America. Cuba’s advantages can be found in a strong developmental state, well-­ educated labour force, unique knowledge and experience in urban and ecological agriculture, biotechnology, healthcare and education. These advances give the island an edge in looking for local solutions to global issues such as the climate change and local food production, or managing the commons. The path for Cuban social transformations builds on its state socialist legacy with advancements in human development, but changes from state paternalism to a regulatory and a supporting role in a new economic model will require cocreation of policy and co-production of social goods between labour, civil society actors and government. How to achieve that under pressures of economic survival is a question for this generation of Cubans to resolve. Emancipation of labour and its dominance over capitalist expansion may have a decisive role to play in framing the new socioeconomic system. This chapter captured microeconomic arrangements in Cuba’s new economy rooted in co-operativism as a system of values implicated in the Lineamientos, and discussed some key roles co-operative enterprises may assume on this journey. Building on experiences with positive externalities of co-operation in other countries, worker co-operatives in Cuba can carry multiple roles. They serve as a vehicle for mutualisation, rather than privatisation of state enterprises, or to collectively manage state owned (social) assets and resources. Worker co-operatives harbour labour and community commons, as well as serve as a benchmark for state enterprises and other private businesses in a number of ways: they correct for market or government failures, showcase collective management and innovation, as well as realise productivity gains, high income levels, and equitable distribution. Democratic governance empowers workers, although it may also be a detriment if internal rules are not well developed. An additional advantage of co-operativism in Cuba is its connection to social and solidarity movements in the region. Challenges are many. Cuba’s lingering bureaucracy and poor economic performance is a recipe for rash decisions to emulate capital-relations. Planning and market adjustment and coordination is not functioning well, as non-­government businesses struggle to access input markets and convertible ­currency. Control over inputs and access to international markets is limited or non-existent. For co-operatives, this is coupled with a lack of appropriate institutional support and a cohesive legal framework to encourage co-operative value chains and networks, hampering progress. On top of these issues, misplaced

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incentives may lead to abuses of the co-operative model, as is already evident in the food value chains, and some new co-operatives. The chapter e­ mphasised the potential of solidarity co-operatives as multi-stakeholder constructs to address complex development issues in Cuba. Solidarity co-­operatives can serve as a tool to bridge the gap between insider and community interests; therefore, their potential contribution to Cuban economic transformation warrants further scrutiny. References Allen, B. (2014). A role for co-operatives in governance of common pool resources and common property systems. In S. Novkovic and T. Webb (eds.) Co-operatives in a post-growth era (pp. 242–64). London: Zed Books. Arando, S., M. Gago, T. Kato, D. Jones, and F. Freundlich. (2010). Assessing Mondragon: Stability & Managed Change in the Face of Globalization. William Davidson Institute Working Paper No. 1003. Retrieved from . Accessed 30 December 2016. Bonin, J.P., D.C. Jones, and L. Putterman (1993). Theoretical and Empirical Studies of Producer Co-operatives: Will Ever the Twain Meet? Journal of Economic Literature, 31, (September): 1290–1320. Campbell, A. (2016). Updating Cuba’s Economic Model: Socialism, Human Development, Markets and Capitalism. Socialism and Democracy, 30(1): 1–29. Coase, R. and N. Wang (2012). How China Became Capitalist. Palgrave McMillan. Cook, M. (1995). The Future of U.S. Agricultural Cooperatives: A Neo-Institutional ­Approach. American Journal of Agricultural Economics, Vol. 77, No. 5, pp. 1153–1159. De Peuter, G. and N. Dyer-Witheford (2010). Commons and Co-operative. Affinities: A Journal of Radical Theory, Culture, and Action, 4(1): 30–56. Ellerman, D. (2016). The labour theory of property and marginal productivity theory. Economic Thought, 5(1): 19–36. Erdal, D. (2014). Employee ownership and health: An initial study. In Sonja Novkovic and Tom Webb (eds.) Co-operatives in a post-growth era (pp. 210–221). London: Zed Books. Freundlich, F. and M. Gago (2012). Cooperative employment density, social capital and public health: Evidence from Gipuzkoa Province, the Basque Country. Paper presented at the workshop: Cooperatives and Public Health. Edinburgh: Scottish Enterprise, 08th May, cited in Erdal, 2014: 218. Gabriele, A. (2011). Cuba: From State Socialism to a New Form of Market Socialism? Comparative Economic Studies, 53(4): 647–678.

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Golja, T. and S. Novkovic (2014). Determinants of Co-operative Development in Croatia. In L. Hammond Ketilson and M.-P. Robichaud Villettaz (eds.) Co-operatives’ Power to Innovate: Texts Selected from the International Call for Papers (pp. 15–26). Lévis: International Summit of Co-operatives. Herrera, D. (2004). Mondragon. A for-profit organization that embodies Catholic social thought. Review of Business, 25(1): 56–68 Holm, W. (2016). Dos Papas pero sin papas. Western Dairy Farmer, March: 20–21. ­Retrieved from . Accessed 4 January 2017. Leviten-Reid, C. and B. Fairbarn (2011). Multi-stakeholder Governance in Co-operative Organizations: Toward a New Framework for Research? Canadian Journal of Nonprofit and Social Economy Research, 2(2): 25–36. Lund, M. (2011). Solidarity as a business model. A multi-stakeholder co-operatives manual. Co-operative Development Centre at Kent State University. Milford, A. (2004). Coffee, Co-operatives and Competition: The Impact of Fair Trade. cmi Report R 2004, 6. Chr. Michelsen Institute, Bergen, Norway. Retrieved from . Accessed 4 April 2007. Morales Rodriguez, G. (2015). Cuba’s Urban Co-operatives: Hard to Receive Approval, Difficult to Grow. Havana Times, 14 June. Accessed from . Accessed 22 April 2016. Nourse, E. (1992). The Place of the Co-operative in Our National Economy. Reprint from American Co-operation 1942 to 1945. Journal of Agricultural Co-operation, 7: 105–111. Nova-González, A. (2013). Agricultural Co-operatives in Cuba. In Piñeiro-Harnecker (2013). Novković, S. (2008). Defining the co-operative difference. Journal of Socio-Economics, 37: 2168–2177. Novković, S. (2014). Co-operatives in a Socialist Economy: Cuba’s decentralization of decision-making. A version of the paper presented at the Managing the Co-­operative Difference conference in Moncton, New Brunswick. Unpublished. Novković, S. and T. Golja. (2015). Co-operatives and the Civil Society: Potential for local co-operative development in Croatia. Journal of Economic and Organizational Diversity, 4(1): 153–169. Novković, S. and K. Miner (eds.) (2015). Co-operative Governance Fit to Build Resilience in the Face of Complexity. Burssels: International Co-operative Alliance (ica). Retrieved from . Accessed 17 May 2016. Orbach, B. (2013). What Is Government Failure. Yale Journal on Regulation Online, 30: 44–56

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Patel, R. (2016). What Cuba Can Teach Us About Food and Climate Change. Slate, ­December 29. Retrieved from . Accessed 29 December 2016. Pérotin, V. (2016). What do we really know about worker co-operatives? Co-ops UK. Retrieved from . Accessed 29 December 2016. Piñeiro-Harnecker, C., ed. (2013). Co-operatives and socialism: A view from Cuba. New York: Palgrave Macmillan. Piñeiro Harnecker, C. (2016). Cuba’s cooperatives: Their contribution to Cuba’s new socialism. In C. Durand (ed.), Moving Beyond Capitalism. London & New York: Routledge. Polany, K. (1944). The Great Transformation. New York: Farrar & Rinehart. Rosset, P.M., B. Machín Sosa, A.M. Roque Jaime and D.R. Ávila Lozano. (2011). The Campesino-to-Campesino agroecology movement of anap in Cuba: social process methodology in the construction of sustainable peasant agriculture and food sovereignty. The Journal of Peasant Studies, 3(1): 161–191. Sagebien, J. and R. Betancourt. (2014). Non-State Socially Responsible Enterprises: The Key to Inclusive Economic Growth in Cuba. In C. Brundenius and R. Torres Pérez (eds.). No More Free Lunch: Reflections on the Cuban Economic Reform Process and Challenges for Transformation (pp. 193–222). Springer International Publishing Switzerland. Sánchez, E. and J. Mario (2012). Challenges of Economic Restructuring in Cuba. Socialism and Democracy, 26(3): 139–161 Smith, S.C. and J. Rothbaum (2014). Co-operatives in a Global Economy: Key issues, recent trends and potential for development. In S. Novkovic and T. Webb (eds.) ­Co-operatives in a post-growth era (pp. 221–42). London: Zed Books. undp (2015). Human development report 2015: Work for Human Development. New York: undp. Retrieved from . Accessed 15 November 2016. unesco. (n/d). Social Transformation. Retrieved from . Accessed 13 November 2016. Utting, P. (2016). Mainstreaming Social and Solidarity Economy: Opportunities and Risks for Policy Change. unsse: unsse.org Retrieved from . Accessed 30 December 2016. Veltmeyer, H. and M. Rushton. (2011). The Cuban Revolution as Socialist Human Development. Leiden: Brill Publishers.

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Vezina, M. and J-P. Girard (2014). Multi-stakeholder Co-operative Model as a Flexible Sustainable Framework for Collective Entrepreneurship: An International Perspective. In C. Gijselinckx, Z. Li and S. Novkovic (eds.) Co-operative Innovations in China and the West. London: Palgrave MacMillan. Vieta, M. (2010). The New Co-operativism (Editorial). Affinities: A Journal of Radical Theory, Culture, and Action, 4(1): 1–11. Ward, B. (1958). The firm in Illyria: market syndicalism. American Economic Review, 48: 566–89. Zamagni and Zamagni. (2010). Cooperative Enterprise: Facing the Challenge of Globalization. Cheltenham, UK & Northampton, MA: Edward Elgar.

Chapter 11

Supporting Co-operative Development in Cuba: Getting the Local Institutions Right Milford Bateman, Dayrelis Ojeda Suris and Dean Sinković Cuba is currently undergoing an historic transition away from its long standing but inefficient centrally planned economy model, towards a more decentralised, flexible, participative ‘bottom-up’ model of development. Initiating this potentially far-reaching transition began at the historic 6th Party Congress in 2011 when the Cuban government announced major changes to the economic system. Among the changes put forward was an important stipulation that the Cuban government wished to put much less emphasis upon state ownership and in its place build a major co-operative enterprise sector (Backer, 2013). ­Following this decision there has been much subsequent discussion among Cuban economists, notably in an important edited volume by Cuban economist Piñeiro-Harnecker (2013), as well as within the wider academic and international development community (Ranis, 2016: 118–138: Ritter, 2016), as to what practical measures now need to be undertaken in order to best promote the co-operative sector. This chapter is meant as a contribution to this important debate. Much of the debate so far, especially that underway in the US academic and ‘think-tank’ community and in US government institutions, argues (rather predictably) that the transition will be best facilitated if the Cuban government adopts a firmly neoliberal-oriented transition policy package. This is to say the Cuban government needs, above all, to rapidly deregulate and de-supervise the economy and shrink all forms of state capacity. This should enable private individuals to much more easily get involved in individual entrepreneurial projects that, so the thinking goes, will then drive forward the process of development and growth. Rather awkwardly, however, neoliberalism has greatly informed government policy right across the world since the early 1980s, and it has experienced very little real success. We look instead to the lessons of global economic history, and in particular to the practical lessons to be learned from the most successful episodes of sustainable and equitable enterprise development in those countries that have undergone a broadly similar transition to the one that Cuba is undergoing today, but under a quite different proactive policy regime. Of relevance, here is the ‘local developmental state’ model, ©8 koninklijke brill nv, leiden, ���8 | doi:10.1163/9789004361720_013

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a local state-driven way of successfully promoting enterprise development ‘from the bottom-up’ (see Bateman, 2000, 2016). Our argument is that Cuban local governments need to pay heed to the ‘local developmental state’ model and take the lead in promoting co-operative enterprise development by building a constellation of local state-driven promotional, advisory, financial, R&D, public procurement, technology-transferring and regulatory institutions, among others. 1

What is the ‘Right Type’ of Enterprise Development and How to Promote It?

Neoliberal ideologues, economists and politicians since the 1940s, and even before that neoclassical economists since the time of Adam Smith, hold to the firm belief that the primary impetus behind enterprise development is provided by free market forces and entrepreneurial initiative (Hayek, 1944; Friedman, 1962; Kirzner, 1973). Individual private entrepreneurs and enterprises are said to possess the knowledge, ability, foresight and private incentive to identify the best business opportunities and to appropriately allocate private energies and capital in that direction, the combination of which under competitive conditions produces development and growth. The best the state can do here is to ‘get out of the way’, a term encapsulated in US President Ronald Reagan’s inaugural speech made on January 20th 1981, in which he declared that ‘Government is not the solution to our problem; government is the problem’.1 Following the imposition of such neoliberal policies right across the world, the widespread expectation was for major economic and social progress. ­However, things have not worked out that way at all. In the developed countries, the result was many years of very weak economic performance, stagnant wages, growing informality and insecurity, a series of financial and asset bubbles, and stratospherically growing inequality. The destructive crescendo was finally reached with the Great Recession that began in 2008 (Galbraith, 2014). As Akyüz (2017) points out, the world economy was plunged after 2008 into a secular stagnation trap that policy-makers appear unable to do anything about, at least within the boundaries of the current capitalist economic paradigm. 1 See ‘Reagan’s First Inaugural: “Government is not the solution to our problem; government is the problem.”’ Heritage Foundation, January 21st, 1981. Retrieved from . Accessed 12 October 2016.

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Indeed, it is only because of the recent (but manifestly unsustainable) resumption of rising global debt, reaching an astonishing US$152 trillion by 2015, that the current economic situation is not considerably even worse at present (imf, 2016). Unfortunately, in the global south the neoliberal policy model proved to be an even larger development disaster. It has also generated only very low levels of growth, promoted massive inequality, failed to generate sufficient decent employment opportunities and it gave rise to widespread profiteering, corruption and speculation that have destroyed the governance structures of one country after another (Chang & Grabel, 2014; Whyte & Weigratz, 2016). At the local level, the neoliberal approach to local economic development has always centrally involved a major emphasis upon individual entrepreneurship and self-help (Bateman, 2010). Deregulation and liberalisation became the watchwords of all activities at the local level. The result was a very rapid rise in the numbers of small-scale individual informal microenterprises and selfemployment ventures. This development was widely portrayed by neoliberal policymakers as the ‘enterprise culture’ taking hold, and the almost universal contention was that such an explosion of entrepreneurship at the so-called ‘bottom of the pyramid’ would quickly lead on to sustainable development and growth. The proliferation of individual informal entrepreneurial activities might have appeared to be a very positive outcome (for example, the mainly right wing media helped everywhere by locating the outlier ‘success stories’ and heavily promoting them as the norm), but we now know that it was not. In fact, economic history shows that this development is far more likely to undermine, if not entirely block, development and growth. This is because development is simply not a function of individual enterprise development per se, or by large numbers of individual enterprises. It is actually only brought about by the entry, expansion and survival of just a narrow group of dynamic higher productivity innovative enterprises operating under a variety of ownership and control structures. This is especially the case in more recent Post-Fordist times (Piore & Sabel, 1984), where there is growing evidence that increasingly rapid changes in technology, markets and consumer tastes cannot be addressed by slow-moving large state or privately-owned enterprises. The most efficient types of enterprises from a local development and growth perspective are those that are formal, beyond minimum efficient scale (typically small and medium enterprises, smes), technology-driven, innovative, extensively interconnected to other enterprises (both vertically and horizontally), and also able to continually facilitate the creation of new organisational routines and capabilities (Nelson & Winter, 1982; Acs & Audretsch, 1990; Baumol, 1990; Chang, 2010a; Nightingale & Coad, 2014). Crucially, being able to identify, promote,

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capitalise, endow with the right technology, connect to other enterprise, and expand such development-driving enterprises has generally always required critical inputs from the state (Lazonick, 2003; Mazzucato, 2013). Contrasting this model of enterprise development with the ‘pure’ neoliberal policy model adopted in the global south we find the major difference: the neoliberal policy model is overwhelmingly linked to the expansion of the ‘wrong type’ of low productivity ‘here today but gone tomorrow’ informal microenterprises and self-employment ventures, enterprises that simply do not possess the ability to catalyze development and growth into existence (Reinert, 2007: Bateman, 2010; Naudé, 2016). Put simply, this is why we see so many countries with very large numbers of individual entrepreneurs, notably in Africa where there are more individual micro-entrepreneurs per capita than anywhere else on earth (African Development Bank and oecd, 2005), are at the very same time also the very poorest countries. As Chang (2010a: 157–167) explains, an economic system producing large numbers of individual entrepreneurial projects, but of entirely the wrong sort, simply cannot facilitate the establishment of a sustainable development and growth trajectory. Moreover, and even worse, the huge amount of financial resources now mobilised to programmatically expand the informal microenterprise and selfemployment sector are effectively resources denied to the needed ‘right type’ of higher productivity formal small and medium enterprises just noted. This constitutes a form of financial sector ‘crowding out’ that has very profound negative implications for development policy (see Bateman, 2013, 2017; Tyson, 2016). The adoption of the ‘pure’ market-driven policy approach does not lead to positive structural transformation but propels a local economy down a destructive path towards primitivisation, informalisation and deindustrialisation. The result is an ‘anti-developmental’ low-productivity economic structure that is inevitably incapable of giving rise to sustainable local economic development and growth. More recently, this adverse ‘anti-development’ trajectory has been highlighted by such as Rodrik (2015) and unctad (2016a) using the term ‘premature deindustrialisation’, and it is now being described as one of the fundamental barriers to sustainable development in the global south. 2

Anti-development Entrepreneurship under Post-communist Transition in Eastern Europe

A destructive anti-developmental trajectory was a major outcome of the neoliberal transition policy packages adopted in Eastern Europe after 1990 (Andor & Summers, 1998). With little interest in supporting at least some of Eastern

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Europe’s large enterprises to restructure and upgrade in order to compete as independent companies in the new post-communist world, as Amsden, ­Kochanowicz & Taylor (1994) argued was desperately needed in order to avoid a complete economic collapse, the industrial structure was effectively allowed to disintegrate. Neoliberal policymakers were not worried about this development, however, because their theory held that a new generation of innovative industry-based smes would arise spontaneously from the ‘bottom-up’ and quickly take the place of the old socialist industrial behemoths. The main, if not only, requirement for this to happen was for a radically liberalised business environment. However, the hopes for a major formal sme development impetus for growth were soon dashed everywhere in Eastern Europe. What transpired instead at the local level was the massive proliferation of simple informal microenterprises and self-employment projects, an economic structure that possessed almost no capacity to impel sustainable development and growth (Bateman, 2000). Two of the transitioning countries were particularly badly affected by this form of ‘anti-developmental’ development—Poland and Bosnia and Herzegovina—and it is useful to briefly examine further the lessons that arise from their progress (or lack of it) at the local level. As both countries entered into transition (Poland after 1990, Bosnia and Herzegovina after 1995), an enterprise development ‘miracle’ was quickly announced by the international development community. In Poland, for example, advisor to the Polish government, Jeffrey Sachs (1993; see also Johnson & Loveman, 1995), wildly celebrated the rapid registration of more than a million new individual private enterprises. This, he argued, had created the ideal foundation for sustained economic reconstruction and development. The equally rapid and wildly celebrated expansion of the microenterprise sector in Bosnia and Herzegovina after 1995, a development greatly aided by the arrival of the global microcredit model, also led many to announce that the once war-torn country was creating a firm footing for future prosperity thanks to its booming microenterprise sector. Indeed, Bosnia’s related microcredit institution-building efforts were said to serve as a ‘role model’ for other countries.2 In both of these transition countries, however, the explosion of low productivity ‘here today but gone tomorrow’ overwhelmingly petty trade-based entrepreneurial projects soon gave way to a gradually unfolding economic disaster. 2 Nancy Barry, then head of Women’s World Banking famously claimed in relation to the ­country’s booming microenterprise sector and the support it obtained from the also booming microcredit sector, that, ‘Any war-torn country should look to Bosnia as a role model’ (see Dolan, 2005).

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Just as in Africa this last fifty years or so, it became abundantly clear that the presence of a large number of petty microenterprises actually frustrates and undermines the construction of a sustainable and equitable economic and social development trajectory. Let us provide a few more details of exactly how it all went wrong. In the case of Poland, Hardy and Rainnie (1996) early on flagged up the rapidly primitivising, deindustrialising and exploitative ‘flea-market-style’ local economic structure being established as a result of market forces. They traced this adverse development back to the focus upon promoting individual entrepreneurship and the accompanying lack of state support for, and so limited progress in developing, other forms of higher productivity enterprise.3 Very few of the new enterprises were capable of survival, let alone growth. In fact, the vast bulk of new enterprises were simple shuttle-trading operations, many of which got in touch with Western European companies only too eager to provide generous supplier credit and ‘sale or return’ offers in order to get their goods quickly into Poland (Feakins, 2002). The extent of the damage done to the Polish economy and society was later amply confirmed. By 2003 unemployment in Poland was peaking at nearly 20 per cent, poverty had very quickly risen to historically unprecedented levels (Okrasa, 1996), a modest agricultural surplus with the EU countries had been turned into a major deficit, and most local innovation and technology transfer processes had disappeared.4 Above all, with the economy dramatically failing, it gradually became clear what the future default employment option was to be for millions of unlucky Poles (at least those unable to migrate—see the next point)—self-exploitative low paid, insecure, temporary, non-unionised, and, very often, bogus forms of selfemployment (Trappmann, 2011; Kowalik, 2012; Skóra, 2013). With the economy in free-fall, and with neoliberal policymakers in the EU and everywhere else in panic that a failed neoliberal experiment in Poland would discredit and halt the entire global neoliberal project, an artificial rescue for the Polish economy was deemed necessary and engineered in the nick of time. This rescue came in the form of Poland’s accession into the EU in 3 The chief architect of Poland’s neoliberal ‘shock therapy’ transition policy, Leszek Balcero­ wicz, was personally ideologically very strongly opposed to special programs of state support for enterprise development, believing that stabilisation, privatisation and liberalisation were all that was required to establish a sustainable enterprise development trajectory at the local level (see Balcerowicz, 1995: 246). 4 For example, work by Haudeville, Dabić and Gorynia (2002) highlighted the comparatively high level of technologies, skills and innovation activity in Poland prior to 1990 and found that, unlike in some other transition economies, almost none of this valuable inheritance was utilised or built upon in Poland after 1990.

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2004, an historic event that provided a last minute life-line for the failing Polish economy in two very fundamental ways.5 First, it provided large amounts of EU structural funding that quickly gave rise to an infrastructure-driven boom, facilitated the quick relocation of many German companies to lower cost and higher EU subsidy Poland, provided for the transfer of important technologies to Poland, and gave rise to a major episode of rural poverty reduction thanks to generous agricultural subsidies. Very much like the Marshall Plan that rescued western Europe after 1945, the additional financial resources provided the fiscal space for important growth-oriented, as opposed to mere survival-oriented, policy measures. Second, accession gave Poles the immediate right to migrate to other better-off areas of the EU. Nearly 2.5 million Poles soon took advantage of this historic offer. This contributed to a very rapid reduction in the level of Poland’s shockingly high level of unemployment and, not unimportantly, a major rise in valuable remittance payments back to Poland, as Poles working abroad began to send cash back home to their struggling families. In post-communist and post-war Bosnia and Herzegovina (hereafter Bosnia), the major emphasis upon promoting individual entrepreneurship gave rise to a petty entrepreneurship-driven ‘anti-developmental’ trajectory just as destructive as in Poland. As Bateman and Sinković (2017) show, this adverse outcome was greatly helped by the world’s then second largest microcredit sector (after Bangladesh), which meant that start-up capital was available to virtually anyone, no matter how poor, who wished to make use of it. Very soon Bosnia’s petty entrepreneurial sector began to expand at a very rapid clip. Its main streets and squares and abandoned business premises became the operating location for hordes of individuals selling anything they could get their hands on, often secured, just as in Poland, by regular buying trips to neighbouring countries. Second hand goods, including old clothes and household goods, constituted a major part of the stock to be sold on by this new generation of individual entrepreneurs. Meanwhile, Bosnia’s largest enterprises, many of which were major exporters in the pre-war era (especially to the Middle East), were allowed to rapidly contract. There was very little external financial or technical support for them. Bosnia’s remaining smes also quickly contracted 5 In the early stages of Poland’s transition the experiment in neoliberal ‘shock therapy’ and fiscal austerity was doing much damage to the Polish economy and society, and it looked for a time that it might even be rejected by the populace. However, rather than allow the first major test-case in Eastern Europe for such neoliberal transition policies explode and tarnish the entire concept, the US government hastily arranged for a 50 per cent write-off of Poland’s international debt obligations cutting Poland’s annual interest payment by around $US2.5 billion, and thus providing the Balcerowicz government with significantly increased fiscal space to implement ameliorating social policies (see Andor & Summers, 1998: 24).

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in the face of no real forms of financial support, plus unfair competition from informal competitors that paid no tax, hired informal labour and had little respect for important social and environmental protection measures. The Bosnian industrial economy soon began to ‘hollow out’ and the wider economy was awash in primitive ‘buy cheap, sell dear’ informal microenterprises more familiar to the global south than the edge of Europe. Ordinary Bosnians took to using terms like ‘Africanization’ (Bateman, 2003) to describe the ongoing market-driven collapse of their country’s once relatively advanced industrial economy. The extent of the market-driven deindustrialisation and primitivisation of the Bosnian economy finally began to register with the international development community, including on those institutions, such as the EU, that had steadfastly insisted on the imposition of the neoliberal policy package in the first place. For example, there were desperate calls by the EU/Bosnia and Herzegovina Consultative Task Force, a body set up by the Council of Europe in June 1998, for urgent measures to somehow increase the entry of small private industrial enterprises utilising at least some simple technologies. The fear was, among other things, that Bosnia’s well-regarded networks of technical colleges and training institutions would soon collapse, at a time when many developing countries were desperately trying to build such an important infrastructure from scratch (and often with the help of EU development aid support). But apart from the establishment of a few minor small business credit lines, which were given much publicity but were mainly taken up by companies importing capital and consumer goods into Bosnia, nothing happened. It is also important to remember that, thanks to the unprecedented level of international financial support coming its way,6 Bosnia was far from being short of the necessary financial resources to support more concrete industrial development measures. As in the Italian province of Emilia-Romagna after 1945, which possessed a substantial military-industrial sector that served as the source of ideas, skills and technologies that underpinned the rise of what was to become its world-beating sme sector (Capecchi, 1990), in Bosnia this might have included a local industrial policy and major support programs that would have enabled it to also create a raft of industry-based smes out of its once very substantial military-industrial sector.7 6 In per capita financial terms foreign aid to Bosnia after 1995 exceeded the level of Marshall Plan funding that helped Western Europe recover from the Second World War (cfer, 2000). 7 Before the Yugoslav civil war, the mountainous southern republic of Bosnia possessed most of the former Yugoslavia’s military-industrial facilities, which were relocated there from other parts of Yugoslavia in the 1950s and 1960s in anticipation of a possible Soviet invasion from the north.

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The extent of the damage brought about by the neoliberal transition policy adopted after 1995 was brought into sharp relief, rather surprisingly, by the US government financed and overtly neoliberal-oriented Centre for International Private Enterprise (cipe). cipe (2004: 2) was forced into indirectly arguing that Bosnia’s neoliberal policy package had effectively undermined the chances of sustainable development, pointing out that Bosnia (is) going through a process of de-industrialisation on a devastating scale. The new private sector is dominated by microenterprises in trade and basic services, generating very little employment. Bosnia seems to be developing backwards: where once it manufactured jet aircraft, it now exports aluminium; where once it exported furniture and finished wood products, it now sells only raw timber. Outside of the larger cities, many Bosnians are abandoning the towns and returning to the land their families left a generation ago. Forced out of the formal economy, they scrape together a living through some combination of casual labour, informal trade and subsistence agriculture. The end result of Bosnia’s neoliberal policy experiment, just as in Poland, was that a once highly industrialised economy began to collapse inwards. In spite of seeing nearly 30 per cent of its pre-war population departing abroad, amounting to about 1.6 million people,8 by 2014 unemployment had reached an historic high of just short of 28 per cent,9 within which it possessed the world’s highest youth unemployment rate of nearly 60 per cent.10 Unlike in the case of Poland, however, EU membership (still a distant possibility for Bosnia) did not arrive with significant funding and legal migration possibilities that might have artificially headed off the approaching economic and social disaster.11 To all intents and purposes Bosnia’s once advanced industrial economy imploded, and the overall economy has continued to decline to this day. In both Poland and Bosnia, the neoliberal policy program centrally involved the programmed proliferation of simple microenterprises and selfemployment ventures. But this dogmatic policy approach did not achieve the hoped for ‘bottom-up’ development and growth. Instead, both economies 8 See https://www.weforum.org/agenda/2016/12/fifth-of-people-from-these-countries-live -abroad/. 9 See http://data.worldbank.org/indicator/sl.uem.totl.zs?view=chart. 10 See http://data.worldbank.org/indicator/ sl.uem.1524. zs. 11 However, along with substantial migration of its highest skilled individuals to the us, Canada, Australia and New Zealand, since 2000 around 15,000 to 20,000 Bosnians a year have been allowed to migrate to the eu (Kačapor-Džihić and Oruč, 2012).

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buckled under the power of ‘free markets’ and the enforced absence of important forms of state intervention. It was only thanks to massive countervailing non-neoliberal interventions, in the form of extreme social dislocation (i.e. forced emigration) and one-off financial support (EU structural funds), that outright economic collapse was narrowly avoided in Poland. The Bosnian economy, on the other hand, has effectively collapsed. This experience in postcommunist Eastern Europe, as well as many other similar experiences under similar circumstances (including in Latin America),12 does not suggest a very successful model of enterprise development, still less one that other countries such as Cuba might wish to deliberately emulate. 3

Will Cuba Be Forced to Go along with the Neoliberal Recipe for Local Economic Development?

The abysmal track record of neoliberal enterprise development policy in parallel historical situations to the Cuban transition, as just shown, should indicate that an alternative policy model would be a very wise choice in Cuba today. Nonetheless, so far, the US government, most US-based economists and all right-wing ‘think-tank’ institutions (such as the Heritage Foundation—see Fisk & Johnson 2001), have remained supremely vocal in advocating for the Cuban government to adopt an almost unchanged ‘pure’ neoliberal transition policy model. So, the emphasis has above all been on the need to support individual private microenterprises and self-employment ventures (‘cuentapropistas’) as the foundation for future growth in Cuba. Even those on the left have 12

Further very important evidence to back up the argument just made comes from Latin America during the so-called ‘Washington Consensus’ years (1980–2008). After a major examination of the issue, researchers based at the Inter-American Development Bank (idb) were forced to conclude that Latin America’s poverty had been caused by its financial institutions gradually moving away from financially supporting high productivity formal technology-intensive smes, which was seen as an increasingly risky and low profit activity for them, and moving into supporting low productivity informal microenterprises and self-employment ventures, which (thanks to high interest rates) became a high profit and low risk activity (Pagés, 2010: see also Bateman, 2013). Researchers from the idb pointedly note that this process has been deeply damaging to Latin America and achieved nothing more than ‘the pulverisation of economic activity into millions of tiny enterprises with low productivity’ (Pagés, 2010: 6). Similar ‘anti-developmental’ processes have also been registered in Africa, and particularly in post-apartheid South Africa (Bateman, 2016). Overall, Chang (2010a: 157–167) sees such an ‘anti-developmental’ dynamic at the heart of just about all developing countries’ inability to develop and grow in recent years (that is, during the neoliberal period).

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bought into this understanding (for example see Hencken & Vignoli, 2015) and they offer their support for the expansion of the cuentapropistas movement without raising any of the potentially damaging trends and forms of path dependency that, if unaddressed, will eventually precipitate and lock in place an ‘anti-development’ trajectory. Instead, expansion of the cuentapropistas is seen as the immediate solution, and it only requires that the Cuban government immediately liberalise the economy and shrink state capacity. In short, the overwhelming direction of the current advice to the Cuban government in terms of enterprise development policy is pretty much in line with the neoliberal transition policy package deployed time and again to no good effect elsewhere around the world. This, we believe, runs the very great risk of creating in Cuba a rapid Eastern European-style economic and social collapse, not implanting a gradual trajectory towards the desired expansion of sustainable high productivity enterprises and associated positive social change. There is, however, an obvious alternative to the ‘pure’ neoliberal policy approach to enterprise development, one that has instead achieved important success all around the world and—crucially—under conditions very similar to those currently experienced by the Cuban economy under transition. Economic history shows that the entry, consolidation and growth of the most potentially productive enterprises is best achieved, if indeed it is not entirely conditional upon, the existence of a range of state-coordinated institutional support structures. These state structures ‘guide’ enterprise development, among other things by providing the potentially highest productivity enterprise projects with a judicious combination of technology, finance, information, a market, trained labour and many other of the factors and infrastructure that they require to eventually succeed. This ‘institution-driven’ explanation for the clear majority of transformational enterprise development episodes in the 1980s gave rise to the ‘developmental state’ paradigm, which can be very simply defined as ‘a state that intervenes to promote economic development by explicitly favouring certain enterprises (individually, clusters and sectors) over others’ (Chang, 2010b: 83). The real-life evidence for the efficacy of this approach to enterprise development is pretty overwhelming. Chang (2002) shows that all of todays developed economies deployed the developmental state model in order to achieve their economic development success. Very notably, as Block (2008) and Block & Keller (2011) show, this is the case with regard to the US, which is, of course, often seen as the example par excellence of a successful free enterprise-led economy. These important lessons were then quietly interwoven into the institution-building exercises carried out in the early East Asian ‘miracle’ economies (South Korea, Taiwan) and in the later ones too (Malaysia, Thailand,

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Vietnam, China) (Amsden, 1989: Wade, 1990: Studwell, 2013). Latin America’s economic giants (Argentina, Brazil, Chile, Mexico) also made great use of the developmental state model in the early 1900s through to the 1980s in order to successfully industrialise and escape their roots in raw material exports ­(unctad, 2016a), a crucial factor in their development history that has often been deliberately covered up in order not to delegitimise the neoliberal policy model. Best summing up the long-term success of the developmental state model is Peter Evans, who concluded that (2010: 37); ‘History and development theory support the proposition “no developmental state, no development”’. The burning question for any country today, including Cuba, is thus not whether it ought to build a developmental state to promote enterprise development, but how best it can do so. 4

The Local Developmental State Model and Co-operative Enterprise Development

Further unpacking the developmental state model in recent years has helped to reveal an even more important and very relevant finding with regard to enterprise development: many of the historic successes that have been attributed to the ‘developmental state’ model were actually successes that could be traced back to distinctly sub-national state institutions and pro-activity. That is, rather than being just a ‘top-down’ central government-led model of a developmental state, as most of the literature has focused upon since the concept was first formally introduced by Chalmers Johnson (1982) with regard to post-war Japan, there is much evidence to show that there also exists a local developmental state that has been able to very successfully promote enterprise development from the ‘bottom-up’ (Bateman 2000, 2001, 2005, 2016; unctad, 2016b: 117–119). Indeed, such is the proliferation of developmental state-type successes achieved by sub-national government institutions that the concept of the ‘local developmental state’ might even provide a better explanation of overall development success, one that highlights the crucial push to enterprise development delivered by local state institutions working ‘from the bottomup’ rather than central state institutions working from the ‘top-down’. Importantly, the local developmental state model has also proved to be a decisive factor in very many of the most successful examples of sustainable co-operative development. This certainly holds true in northern Italy, where competent left-leaning regional and local governments achieved much economic and social development success after 1945 by placing the co-operative model at the centre of their post-war vision for a new socially inclusive and

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equitable economy. Enormous technical, financial and other forms of support were provided directly to the co-operative sector, and also indirectly through support for co-operative sector organisations (such as to the Co-operative Federations) and by establishing a regulatory and tax regime that helped promote co-operative development wherever possible (such as laws prohibiting current members from asset-stripping their own co-operative, and a tax framework that rewarded the collective investment of any surpluses). In Spain, the Basque regional government quickly learned the practical lesson from the famous Mondragon model and began to build a raft of similar developmental institutions within the orbit of the regional state, thus helping to extend the cooperative philosophy and sector well beyond Mondragon and into the wider Basque economy (Cooke & Morgan, 1998: 162–192). Notably, this new institutional model contributed greatly to the processes of new enterprise formation and growth, strategic industrial upgrading and structural transformation, and by the new millennium had helped turn the once endemically poor Basque region into one of its richest regions (Bateman, Girard & McIntyre, 2006). In Latin America from the 1960s onwards radical leftist local governments have taken the lead in promoting co-operative enterprises. Their aim, among others, has been to show the public that a more efficient and equitable development path is possible than what generally transpires under the top-down economic policies and structures demanded by neoliberal-oriented central governments, which are anyway mainly designed in advance to benefit economic elites (Bateman, 2015). In Brazil, for instance, the extensive co-operative sector has had much support from local and state governments, particularly in helping develop the agricultural sector through local public sector purchasing programs (Da Silva, Del Grossi & de França, 2011). Likewise, in Colombia, where in the 1960s radical leftist local governments, notably in the state of Santander, often took the lead in forming financial co-operatives, which were seen as the preferred financial model to exploitative US-style neoliberal financial capitalism and big private banks (Fajardo-Rojas 1998). Thanks to its efficiency on both the savings and loan side, the financial co-operative sector subsequently expanded across Colombia to become a very important feature of the financial system. By the early 2000s, for instance, and despite much resistance from the aggressive US-style corporate financial sector, the financial co-operative sector had succeeded in capturing as much as 21 per cent of savings deposits (Solo & Manroth 2006, 24). Many other such examples from elsewhere in the world (see Bateman, 2016) demonstrate that the local developmental state model seems to equally apply to supporting the sustainable development of both conventional and co-­operative enterprise structures. It is the many examples of successful

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­co-operative development achieved with the support of the local state, however, that provide us with a rich set of institutional vehicles to examine with regard to their adaptability to other particular situations, such as that of the Cuban economy undergoing transition. Not all such institutions and their specific modes of operation will resonate with Cuba today, but the fact remains that much can, and should, be learned from previous experience—good and bad—in this field. 5

Promoting Co-operative Enterprise Development in Cuba

With Cuba entering a period of major transition, many of the leading capitalist country governments, but especially the US government, are jostling to impart influence over Cuban policymakers in terms of the design of Cuba’s transition policy. Notwithstanding such external pressures, many of which, unfortunately, are based on US government self-interest rather than a concern to assist the Cuban people,13 the Cuban government has—so far—maintained its position that the co-operative enterprise sector should take precedence over development of cuentapropistas.14 Apart from the historic failure of individual private entrepreneurship to serve as a meaningful development engine under transition conditions (noted above), at least two very important reasons account for the Cuban government’s fundamental change in economic policy towards favouring support for co-operative enterprises. First there is the obvious economic rationale for cooperative enterprise development. This is that networks of co-operative enterprises have in many developed and developing countries proven capable of raising output, improving product quality and can deploy important new ­technologies and innovations, while—crucially—avoiding the exploitation, ‘hire and fire’ practices, rampant speculation, unethical ceo and senior management behaviour, and grotesque levels of inequality that are increasingly typical of entrepreneur/investor-driven enterprises (Ellerman, 1989: ­Ammirato, 13

14

The sizeable Cuban community in the usa is a major electoral force and it exerts much influence over the shape of us government policy regarding Cuba. Since many Cuban exiles desire to return to their homeland and purchase assets at fire-sale prices, and thus become the new Cuban capitalist elite, the idea of passing state assets over to the Cuban people to run as co-operative or collective enterprises is naturally anathema. For example, lower tax rates will be applied to co-operatives compared to individual enterprises, which is another measure to incentivise individuals to group together as cooperatives rather than work alone. See ‘Cuba call for workers to join forces in co-ops’, International Herald Tribune, 12 December 2012.

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1996; Restakis, 2010; Zamagni & Zamagni, 2010; Sanchez-Bajo & Roelants, 2011; Novković & Webb, 2014; Perotin, 2014). The hope is that co-operatives can deliver up similar economic benefits in Cuba, thereby contributing to a sustainable and inclusive ‘bottom-up’ growth and development trajectory in a way that no other expansion of individual microenterprises and self-employment has historically ever been able to achieve. There is also a political rationale. This is that introducing democracy and participation into the Cuban workplace and community through a major expansion of the co-operative sector will help to lay the foundations for a genuinely democratic socialist-oriented, or ‘solidarity-economy’, economic model to emerge (on this, see Santos, 2006), which remains the ultimate political goal of the present Cuban leadership (Campbell, 2016). Progress to date in promoting co-operative enterprise has been patchy, however. In the agricultural field, the co-operative sector has been an acceptable structure since at least the early 1960s. Since then, a growing sector of agricultural co-operatives has emerged across Cuba, with various adjustments to the basic agricultural co-operative model deployed in response to particular local circumstances and problems. However, even co-operative advocates agree that much more should have been achieved by now in terms of establishing functioning agricultural co-operatives that embody higher productivity as well as democratic management methods (Rodríguez Membrado & López Labrada, 2013). This weak performance has taken place despite some limited institution-building efforts from the very start of the experiment. For example, anap (National Association of Famers, Asociación Nacional de Agricultores Pequeños) was founded in mid-1961 in order, among other things, to help develop agricultural co-operatives. But the Cuban government’s overall approach at the time seems to have been that merely removing the barriers to an individual or group wishing to establish an agricultural co-operative sector would automatically give rise to a robust agricultural co-operative sector. In some respects, it might be argued, the typically misplaced market automaticity views held by many neoliberals were also subconsciously held by the leadership of the Cuban Communist Party. More recently, it has been recognised that more robust forms of support are required if the agricultural co-operative sector is to flourish as many want. For example, the Ministry of Agriculture has begun to decentralise many of its support operations down to new municipal-level structures, which Nova-González (2013: 288) sees as ‘becoming key spaces for operations and decision-making, and are helping to simplify the ministry’s structures and functions’. Equally important is the fact that the worker co-operative sector has finally begun to receive official legal validation and some practical support measures.

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For instance, the series of ‘guidelines’ (lineamientos) introduced in 2011 were followed up a year later by decree law 305, which committed the Cuban government to offering its full support to the co-operative enterprise sector as part of the ongoing Cuban revolution (Ranis, 2016: 118–9). In particular, the Cuban government has announced that there is a huge potential to raise productivity, extend democracy and yet retain equality by transforming often inefficient state-controlled small and medium enterprises (smes) into independent worker co-operatives. Rather than passing state assets on to a narrow group of individuals that would later constitute a new Cuban elite, this bold move would retain the common ownership of capital assets (usufruct) relatively intact. As in the case of agricultural co-operatives, the assumption is made that once all barriers to entry have been removed the co-operative sector will be free to expand and grow as much as its constituent members wish. Is this progress the beginning of much greater progress in the future? Or will Cuba go the way of the former Soviet Union in the 1980s and create an artificial boom in co-operatives, one that turns to a severe and delegitimising bust very soon afterwards?15 Our argument, based on insights from global economic history, is that it is nothing more than wishful thinking to believe that the co-operative enterprise sector will emerge under the present conditions. In fact, without the existence of a solid institutional support structure, a major co-operative enterprise sector in Cuba is likely to remain nothing more than an aspiration. This is where, we believe, the concept of the local developmental state comes in. 6

Local Developmental State Support for Co-operatives in Cuba: Can Local Government Reform in the Required Direction?

As in previously centrally planned economies in Eastern Europe, the central planning system in post-revolutionary Cuba held that the role of local 15

As the Soviet state under Gorbachev sought to reform the inefficient economy in the 1980s it introduced in 1988 a pioneering new law that allowed individual entrepreneurs and business groups to adopt the co-operative format, often as a way of obtaining state property through privatizsation, and to operate these co-operatives against a background of extensive deregulation and minimal state ‘interference’. However, the Soviet state was then almost powerless to stop the most opportunistic and unethical of these individuals and groups from going on to destroy the co-operative ideals, and the nascent sector itself, thanks to their illegal activities, egregious exploitation of the wider population and then the inevitable transfer of the co-operative’s assets over to narrow individual private or corporate ownership (see Jones and Moskoff, 1991; Cooke, 1993: 131–149).

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­governments was to act as a transmission belt for orders and instructions coming down from higher planning authorities. Local governments were expected to monitor the local enterprise sector and ensure its compliance with the central plan. After 1976, however, the role and functioning of municipal governments in Cuba changed considerably and, among other things, municipal assemblies were created that were composed of members elected by the community. Apart from the introduction of a novel form of direct democracy, it was important that municipalities gained much more autonomy from the centre. Crucially, they were also given the ability to generate their own resources in order to better undertake the wide range of local services now devolved into their hands, alongside any other activities deemed necessary to advance the community (Greenwood & Lambie, 1999; Dilla-Alfonso, 2001). Though this major reform increased the municipality’s local economic development capacity, they were still unable to do as much as they might want in order to promote local economic development. As Dilla-Alfonso (p. 3) described it at the time, ‘local governments are equipped to participate in local development, but not to lead the process’. More changes in capacity and operational mandate were then forthcoming in the 1990s as the central government sought innovative local responses to the crisis brought about by the fall of the Soviet Union in 1990 and the ending of its trade, credit and aid support for Cuba. In spite of the previous changes, Cuba’s municipal government structures remained weak, and they had limited capacity to provide any urgent respite for the Cuban population through accelerated local economic development. Local government functions also remain excessively political. Even after the publication of the Guidelines in 2011, which encompassed the role and functions of local government, the central authorities were probably as much concerned for maintaining political functions as in extending into new economic functions.16 And, as Segura and Magaly (2012) pointed out at some length, there remain a dizzying array of problem areas that local governments must first overcome before they are in a position to substantively promote the development of the local economy. For example, decently functioning big local companies that might provide an effective springboard for local sub-contracting and cluster building to take place, must still consult with central government on a whole range of minor details before any local action can be taken. Some municipal governments have quietly begun moves to upgrade their own local economic development functions, mainly in the form of d­ eveloping 16

For example, see ‘La Estructura del estado Cubano’, Diario Granma, 11 March 2014, 18(70). Retrieved from: .

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capacity and acquiring resources to promote new businesses and business growth. This capacity building was initially targeted at increasing the rate of entry of independent private self-employment ventures upon which they could levy local taxes on profits and incomes (Feinberg, 2011). Thanks to these measures some successful examples of local economic development after 1990 were registered, but, looking closer, they were largely to be found in areas where major resources and/or historic attractiveness were located, an initial endowment that gave the municipality in question an obvious head-start compared to others. This uneven distribution of resources then set in train a familiar regional development process whereby the richer regions began to attract even more business activity. Now much more independent state enterprises, government offices and enterprises with foreign connections all began to relocate to these regions, such as in the Varadero-Cardenas tourism node and along Havana’s coastal strip. Turning finally to the very latest changes brought about by the current transition process that began in 2011, many analysts expected things to improve quickly. As Feinberg (2011) further reports, municipalities were now very much empowered to provide a growing range of institutional support measures that might underpin the growth of new co-operative enterprises. A number of additional programs also emerged. One such effort in this direction was the Initiative for Municipal and Local Development (imdl), a Cuban central government program that built upon a number of ongoing Cuban government programs and two international donor programs. Another innovation was the establishment of a development fund at the national level that could transfer capital to municipalities to be used to finance a range of locally designed development projects. The Cuban financial system is also decentralising fast, and there are a growing number of local bodies able to work alongside municipalities to promote the co-operative sector. The Bank of Cuba has established subsidiary operations with the aim that these should play more of a future role in supporting enterprise development. There is also a growing list of state and private commercial banks that are meant to support enterprise development (though by all accounts it will be mainly expansion plans that are financed rather than new entry, which is a far riskier area of activity). Since 2013 state banks have been pushed to finance co-operative enterprise development efforts. Another state measure is the ‘Trust Fund for development of new forms of non-state management’ which is designed to assist new private enterprises that are both individually and co-operatively managed. These steps taken to move the Cuban state away from controlling and monitoring enterprises under central planning, and towards a system where the

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state begins to support enterprises to emerge and expand as independent units on (managed and regulated) markets, bode well for the future. The Cuban government appears to be keen to avoid making the same mistakes that Eastern Europe’s first post-communist governments made, which was to overlook the need for an active state, one that undertakes a ‘market-making’ function rather than a monitoring/controlling one as under central planning (see the discussion in Killick & Stephens, 1992). It also greatly helps that other section of the Cuban government can learn from the important experience of the specific Cuban state institution that successfully nurtured the biotechnology sector, one of the most important new high technology industrial sectors in Cuba, and a leading sector in the world. This was the business and project development group working inside the Genetic Engineering and Biotechnology Centre (cigb), an institution that helped develop and market several path-breaking drugs and treatments, resulting in an export trade valued in 2013 at just under $1 billion. Overall, therefore, it seems that many vital initiatives are underway that could combine to meaningfully upgrade the capacity and pro-activity of municipalities in Cuba. New higher productivity co-operative enterprises are clearly urgently needed, but their emergence and survival, as everywhere else around the world, is greatly enhanced by a dynamic local state providing the necessary infrastructure and impetus through the provision of a variety of public goods. This includes business support and advice, financial support, technology transfer and adaptation mechanisms and linkage creation (such as science parks and cluster projects). It has also been recognised that there is some urgency to this task because institutional weakness often gives rise to ­destructive trajectories that cannot later be changed (i.e. path dependence). For example, Dilla-Alfonso (2001: 5) argues that the weakest and least pro-­ active municipalities are unable to halt the destruction of important ecological and environmental endowments, such as the fragile ecosystem in the Varadero peninsula, which is in danger of being compromised by rapid development of tourist facilities. 7 Conclusion Our analysis in this chapter has been informed by the fact that Cuba’s success in building a more efficient economic system based around the co-operative enterprise format will represent a major advance for Cuba and its people. Such experience could also help inform many other countries in the global south, especially those countries that have attempted but failed to restructure and

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develop their economies in line with the policy parameters associated with the now collapsing US-led global neoliberal project. The alternative of promoting individual microenterprises and self-employment ventures as the basis for future development has little from economic history to recommend it as a policy choice. However, we also recognise that the difficulties in promoting a major cooperative enterprise sector in Cuba, as everywhere around the capitalist world, cannot be downplayed. One of the ways to address this issue, we believe, is to construct the institutions of the ‘local developmental state’, a model of enterprise development that has registered important success across both the developed and developing economies. The most pressing question for Cuban policymakers then, we believe, is how best might the Cuban government build a ‘local developmental state’? Efforts are now being made in Cuba to build more sophisticated institutional support structures, including at the municipality level. However, it remains to be seen whether these measures will arrive early enough to take advantage of the great well of support for co-operative enterprises within the Cuban government, or whether little progress in the short to medium term, combined with US government pressure to scupper the policy emphasis upon co-operatives, will dissolve the current enthusiasm for co-operative enterprises. References Acs, Z. and D. Audretsch (1990). Innovation and small firms, Cambridge, MA: mit Press. African Development Bank and oecd (2005). African Economic Outlook 2005, Paris: oecd. Akyüz, Y. (2017). Inequality, financialization and stagnation. South Centre Research ­Paper no. 73, February, Geneva, South Centre. Ammirato, P. (1996). La Lega: The making of a successful co-operative network. ­Aldershot: Dartmouth Publishing. Amsden, A.H. (1989). Asia’s next giant: South Korea and late industrialization, New York: Oxford University Press. Amsden, A.H., J. Kochanowicz and L. Taylor (1994). The market meets its match: restructuring the economies of Eastern Europe. Cambridge, Mass: Harvard University Press. Andor, L. and M. Summers (1998). Market Failure: Eastern Europe’s Economic Miracle. London: Pluto Press. Backer, L.C. (2013). The Co-operative as a Proletarian Corporation: The Global Dimensions of Property Rights and the Organization of Economic Activity in Cuba. ­Northwestern Journal of International Law and Business, 33: 527–618.

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Ritter, A. (2016). Alternative institutional futures for Cuba’s mixed economy. The Cuban Economy, February 1. Retrieved from . Rodríguez Membrado, E. and A. López Labrada (2013). The ubpc: A Way of Redesigning State Property with Co-operative Management. In C. Piñeiro-Harnecker (ed.). Co-operatives and socialism: A view from Cuba. New York: Palgrave Macmillan. Rodrik, D. (2015). Premature Deindustrialization. Economics Working Paper, 107 ­( January). ias School of Social Science. Sachs, J. (1993). Poland’s Jump to the Market Economy. Cambridge, Mass: mit Press. Sanchez-Bajo, C. and B. Roelants (2013). Capital and the Debt Trap: Learning from ­Co-operatives in the Global Crisis. Basingstoke: Palgrave Macmillan. Santos, B. de Sousa (2006). Another Production is Possible: Beyond the Capitalist Canon. London: Verso. Segura, L. and C. Magaly (2012). El municipio y los procesos de desarrollo local en Cuba. Revista Caribeña de Ciencias Sociales, October. Skóra, M. (2013). Will Self-Employment Save Poland From Crisis? Social Europe Journal, May. Solo, T.M. and A. Manroth (2006). Access to Financial Services in Colombia: The ­‘Unbanked’ in Bogotá. World Bank Policy Research Working Paper 3834, (February). Washington DC: World Bank. Studwell, J. (2013). How Asia works: Success and Failure in the World’s Most Dynamic Region. London: Profile Books. Trappmann, V. (2011). Precarious employment in Poland—a legacy of transition or an effect of European integration. emecon, 1. Tyson, J. (2016). Shockwatch Bulletin: Sub-Saharan Africa’s Economic Downturn and its Impact on Financial Development. odi Working Paper No 440, London: odi. unctad (2016a). Trade and Development Report 2016—Structural Transformation for Inclusive and Sustained Growth. New York and Geneva: United Nations. unctad (2016b). Virtual Institute Teaching Material on Structural Transformation and Industrial Policy. New York and Geneva: United Nations. Wade, R.H. (1990). Governing the Market: Economic Theory and the Role of Government in East Asian industrialization. Princeton: Princeton University Press. Whyte, D. and J. Wiegratz (2016). Neoliberalism and the Moral Economy of Fraud. ­London: Routledge. Zamagni, S and V. Zamagni (2010). Co-operative enterprise: Facing the challenge of g­ lobalization. Cheltenham: Edward Elgar.

Conclusion Placed in the Latin American context of struggles to establish post-capitalist socio-economic systems for the benefit of its peoples, Cuba is expected to possibly pave the way with an alternative imagination, given the ‘luxury’ of a state that has been antagonising capitalist visions for over half a century. At issue in the wider Latin American context is the construction of an associative economy. Although fraught with ups and downs of the politics of the region and the onslaught of colonialist and neo-liberal policies over the past century, a consensus is building about the call to create a socially, economically and ecologically just system that prioritises people over capital. As pointed out by Veltmeyer (Chapter 2), the neoliberal view of the social and solidarity economy (sse) is seemingly converging with its socialist counterpart in Latin America and elsewhere; sse is becoming the vehicle for delivery of goods and services under austerity budgets, a means of formalising associative practices in the informal economy, and a tool for marketisation, if not commodification, of the non-marketed facets of the economy. The latter is where the two points of view converge on the surface.1 In reality, they differ substantially in the understanding of the role of the sse. The neoliberal position, however evolving, is treating sse as the third sector, filling the gap left by the private sector or government. Co-operatives are also often conceptualised to be addressing ‘market failure’ or ‘government failure’ (see Cook, 1995, Hansmann, 1996, for example). The other way to understand the sse is as a vehicle for social transformation, and a profound change in economic relations, from a subservient contractual relationship to one of self-help. Authors in this volume explore the extent to which Cuban updating of the economic model, favouring co-operativism over private enterprise and state enterprise over all other forms, is a move in the right direction, marrying sse with socialist ideals. Staying true to socialism is a challenging task—mostly a failed one in Eastern Europe and Asia—and the reason why the sse community in Latin America and around the world is looking to Cuba. With a socialist developmental state at its helm (see Bateman et al. Chapter 11), a history of 1 See Wilson (2014), who describes the morphing of neoliberalism on issues of social responsibility, illustrating this metamorphosis with the case of Jeffrey Sachs, a well-documented consultant to many governments in transition, who went from advising shock therapy in Latin America and Europe, to promoting aid to Africa. While the essence of neoliberal philosophy remains the same, it is becoming evident to its proponents that the social cannot be separated from the economic, or better yet, that ‘social’ is marketable (e.g. the poor are becoming the market for social enterprises).

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remarkable human development as a relatively poor country, and a developed social solidarity among its citizens, Cuba’s chance of success is tangible, although odds are stacked against it if judged by experiences of other socialist economies. As laid out in the introduction to this volume, Cuba’s transforming economy and institutions raise the question: Can this small island country, marked by 50 years of the US embargo and a crumbling state-socialist system after the disintegration of its key ally and trading partner a quarter century ago, preserve socialism in the interest of human development of its people? What role, if any, can co-operativism play in achieving this goal, and is it a ‘wolf in sheep’s clothing’, or a true opportunity for realisation of democratic socialist ideals? Throughout the volume, authors point out the dual concern in answering this question. On the one hand, they track dramatic changes in policy and institutions in Cuba, and look for evidence that these new policies are in fact supporting socialist development, or at the minimum adopting ‘...forms of associated property oriented toward the production of use-values [that] should radically alter the self-contradictory internal dynamics of the dominant social order, which imposes the brutal subjugation of human needs to the alienating needs of capital’s expansion’ (Gambina & Roffinelli, Chapter 1). On the other hand, the authors highlight the Cuban experience with co-­ operativism and its various forms after the Revolution, including the more recent changes supporting worker co-operatives outside agriculture. This dual inquiry marries the two issues—can decentralisation achieve socialist/­ collectivist aspirations, and how can Cuban policy makers ensure that co-­ operatives will deliver the objectives of socialist development? 1

Conceptualising the Relation between Co-operativism and Socialism

On the conceptual side, Gambina and Roffinelli (Chapter 1) discuss new forms of social development of the 21st century in the Latin American context, taking the Marxist perspective. They view co-operativism as a solidarity-based form of association, and one that Marx supported as anti-capitalist form of ownership. Possibly more importantly for the region at present time, co-­ operativism includes all types of associative, community based and non-profit forms of economic organisations aiming to improve well-being of the people, instead of capital accumulation. Given this interpretation, co-operativism may be perceived as the pillar for the region’s diverse efforts to advance a new

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­ ost-­capitalist socioeconomic model. New co-operativism developing in Latin p America (Vieta, Chapter 3) is particularly important and relevant for the integration of Cuban socialist co-operatives in the regional frameworks of sse, because it folds associated labour into co-operative membership, giving workers a voice. The rest of the international co-operative movement is divided between the ‘new co-operativist’ understanding of the associative economy (this includes worker co-operatives), and one rooted in consumer sovereignty, where labour is hired as simply a factor of production, while consumers are members and decision-makers. Veltmeyer (Chapter 2) points out that the architects of the Bolivarian revolution in Venezuela, as well as the Zapatistas movement in Mexico, viewed sse and co-operativism as socialist human ­development—not as a third sector complementing the private and public sectors, but as the essential element of socialism for the 21st century. In Cuba, agricultural co-operatives were introduced in the early 1960s as a key component of socialist transformation (see Fernandez, Chapter 4 and Donéstevez Sánchez, Chapter 6). The post-Revolution period was the process of socialist transition with ‘unprecedented economic, educational, and cultural advances, together with security and dignity’, and with social justice as the principal premise of economic progress (Fernandez). As a component of socialist transition, land was nationalised and handed over to farmers, extending the co-operative form of ownership and management, which was viewed as compatible with the objectives of socialism. Agricultural co-operatives converted agricultural workers into landowners and introduced changes to the structure of land ownership and labour relations. ‘These agricultural co-ops have been shown to be a form of property and economic management compatible with the objectives of socialist transition, and this favoured the creation of urban co-operatives beginning in 2012’ (ibid.). Durand (Chapter 5) further elaborates the relationship between the commons, socialism and co-operativism. If socialism is about ‘reclaiming from capital of [..] resources that can be best held in common’, and worker cooperatives socialise the workplaces, co-operative enterprises can easily be understood as the anchor of a democratic socialist system. Further, Durand argues, Cuban state-centric socialism modeled on the former Soviet Union, did not achieve the promise of a society governed by associated producers. Co-­operatives contribute to this goal, as the building block of socialised institutions ‘through which communities can democratically manage their common resources so as to promote human development’ (ibid.). To do that, the dominant form of co-operation in socialism must include labour in its membership, giving it ownership, voice and control in the workplace (Novkovic, 2014; and Chapter 10).

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An economic system ultimately boils down to ownership and control over productive resources. Cuban leadership consider co-operative ownership as a part of socialist ownership of the means of production, due to their collective nature in both property and decision-making, and distribution of the results of their operations according to work contribution, rather than capital (Lineamientos, 2011, article 159; Campbell, Chapter 8, this volume; Piñeiro Harnecker, Chapter 9, this volume). Therefore, co-operative developments in Cuba include agricultural producers and workers, as well as workers outside agriculture. Financial co-operatives, and consumer co-operatives of any kind have not been discussed in policy circles at this point in time. 2

Cuban Institutional Changes and Impact on Co-operative Development

Besides positive impacts of socialist policies built on the principles of social justice, and resulting in a high level of human development and solidarity, Cuban state-paternalistic socialist model also featured numerous deficiencies. From over-employment in the state sector, to bureaucracy, black markets and corruption, it was recognised in the 1980s that the system is in need of change (Fernandez, Chapter 4). Initial experiments included the introduction of market mechanisms in enterprise management, with limited decentralisation of decision-making, as well as distribution of rationed consumer products through the market mechanism and regulation of farmers’ markets (ibid.). The 1990s brought the collapse of the socialist trading block, bringing Cubans to the brink of starvation. The 4th congress of the Communist Party in 1991 and the ensuing constitutional changes in 1992 opened the economy to mixed ownership and foreign investment, particularly in resource industries and tourism. Foreign investment in the tourist industry also meant the beginning of rise in income inequality and unequal access to foreign currency and goods supplied by and for tourism. This fragmented the Cuban society, and provided the starting point for a rentier class evidenced decades later (Novkovic, Chapter 10), but it also gave an impetus to deeper reforms. In terms of co-operative development, early 1960s included the land reform, the formation of anap (National Association of Small Farmers)—an ngo representing independent farmers, and the formation of Credit and ­Service Co-­operatives (ccss). anap has a democratically elected leadership at the ­municipal, regional, provincial and national levels, and exists to provide organisational and productive support to agricultural co-operatives for training, promotion, marketing, international co-operation, and the preservation of Cuba’s

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farming traditions (Holm, 2014). anap has played a critical role in providing support to Cuban co-operatives, both in sustainable farming and education, and in ensuring national representation and voice.2 The next stage for co-operative development came in 1970s, with encouragement of collectivisation of private land, and the formation of production co-operatives (cpas).3 resulting in remarkable improvements in lives of rural communities (see Donéstevez Sánchez, Chapter 6 and Royce, Chapter 7). ­Despite significant success, the following years saw a decline in the number of cpas due to restrictions on cpaeconomic activities throughout the 1980s leading to reductions of economic autonomy and farm income (Royce, Chapter 7). The Special period gave rise to the process of transformation of state farms into a new form of co-operatives, called Basic Units of Co-operative Production (ubpcs), creating the third type of agricultural co-operatives in Cuba (Royce, Chapter 7). This change constituted a ‘fundamental, widespread, and permanent transformation of the structure of agricultural production’ (ibid.). ubpcs are not members of anap, but fall under the jurisdiction of the Ministry of Agriculture. In the years following the introduction of ubpcs, this co-­operative experiment yielded mixed results, particularly due to a lack of autonomy in ubpcs as their economic activities were tied to the state enterprise. Further growth of new co-operatives continued in 2008, when the Cuban government instituted a new policy of land distribution to boost food security (Holm, 2014). By the fall of 2011, 1.3 million hectares of land had been distributed in usufruct to new farmers, accompanied by two years of appropriate agricultural expertise and other technical support. In addition, ‘All farmers must be accepted by an area ccs to provide them with further incubator support. This is also a way of screening new land applicants—acceptance by a local farmers’ co-operative is a solid indicator of character and capacity’ (Holm, 2014). The resolutions approved by the 6th Congress of the Communist Party of Cuba (pcc) in April 2011, especially the Social and Economic Policy Guidelines of the Party and the Revolution (los Lineamientos), initiated the process of updating of the economic and social development model, centred on changing property forms by creating space for non-state sectors in the economy. ­Co-­operatives are recognised as the most socialised form of enterprise in the 2 In addition to anap, agricultural producers and co-operatives are supported by other ngos, such as Cuban Association of Agricultural and Forestry Technicians (actaf) and Cuban Animal Production Association (acpa), but also respective Ministries and groups they support such as Organic Farming Group (gao), an organisation of Cuban scientists and professors formed in 1993, through the leadership of the Ministry of Higher Education (Holm 2013). 3 cpas are also represented by anap.

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non-state sector, and are given a preferential treatment4 (Piñeiro Harnecker, Chapter 9). This marked the beginning of a new era in co-operative development in Cuba, with non-agricultural co-operatives allowed to form as either a method of mutualisation of state enterprise, or a new venture. However, as described by various authors in this volume, only an initial experimental group of co-operatives could apply for the non-agricultural worker co-operative status. Close to 500 worker co-operatives are in operation (or in the process of forming) in Cuba as of 2016, with the process put on hold for evaluation of its success, and to ensure appropriate legal framework is in place before further co-operative start-ups are allowed to emerge. However, the existing non-­ agricultural co-operatives faced many obstacles in the formative months, from excessive bureaucracy, to a lack of inputs and access to markets, and a complete void of any institutional support. The pccs 7th Congress in April 2016 reaffirmed the updating process and made specific proposals and plans for its continuation (Fernandez, Chapter 4). In particular, the pcc approved two preliminary documents for national debate: one addressing the conceptualisation of its evolving economic and social model of socialist development, and the second one addressing how those concepts will be applied in practice into the year 2030 (Campbell, ­Chapter 8). These documents further the commitment to the expansion of the co-­operative model, giving more attention to non-agricultural co-operatives than the Lineamientos in 2011. Nevertheless, what form the support for co-op development might take remains to be seen after the public debates and ratification of the proposed policies. 3

Co-operative Potential to Advance Socialist Human Development

In the context of social, economic and institutional changes in Cuba, and the changing role of the State from a paternalistic central planner to a more localised regulator, the concern is the agency for social and human development. If the State no longer controls all facets of society’s wealth creation, can co-operatives be the agents to deliver social welfare? History reveals a mixed record, albeit with limited data available for proper assessment, but for the

4 The preferential treatment includes indirect measures, such as lower tax rates, as well as direct ones such as access to state owned real estate and other assets, as well as intermediate inputs.

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most part co-operatives in and of themselves do contribute to the welfare of communities.5 On the community welfare issue, and impact of co-operatives on social outcomes, the best evidence we have in support of widespread worker co-­operation as a means for social development is a study conducted by David Erdal in 2000. Erdal compared three Italian towns in the Emilia Romagna region, differentiated by the number of co-operatives in each town, but o­ therwise comparable including in average income. Town with the largest co-operative density featured a population with 26 per cent of the employed being members of a worker co-operative, the next one had 13 per cent of worker co-operative employment, while the third town had none. A comparison of the three towns established a correlation between co-operative density and positive social outcomes. The ‘Cooptown’ with the highest co-op density showcased higher income equality, high trust among the citizens, denser social networks, larger voter turnout, and higher levels of blood donations, among other, when compared to the other two towns. Surprisingly, they also experienced a longer life expectancy (Erdal 2014). This inverse relationship between co-operative density and mortality rates has been confirmed in a study of Spanish co-operatives (Freundlich & Gago, 2012). Early explanations include the reduced work place stress, and ensuing incidence of coronary disease. While the potential is clearly there, the issue with worker co-operation is that it is relatively rare, and regions with dense worker co-operative networks are even scarcer. While Yugoslavia nurtured an entire economy of self-­managed enterprises, and exhibited high rates of growth and development during the 40 years of market socialism and economic democracy, we do not have other examples of worker co-operation on a large scale. Mondragon and Emilia ­Romagna region qualify as examples of regional development models based on high density of worker co-operatives, but it remains to be seen which route Cuba will take. The evidence so far does not look encouraging for a co-­operative economy (Veltmeyer, Chapter 2; Bateman et al., Chapter 11), with the exception of

5 Although they do not necessarily contribute to the protection of the environment without a concerted effort and awareness, coupled with regulatory frameworks to achieve ­ecological sustainability. This is evidenced by the 40 years of self-management in the former ­Yugoslavia at the time when environmental degradation was widespread around the world. ­Self-management in and of itself did not provide any different treatment of the environment as there was a general lack of awareness about carbon emissions and other types of pollution. The focus was on industrialisation, economic growth and development, and the system performed well on those grounds.

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agriculture where producer and worker co-operatives dominate.6 If this indeed proves to be the experimental stage for co-op development, resulting in appropriate institutional support and a continued commitment to large ­presence of co-ops in the economy, tables may turn in favour of economic ­democracy. The right type of state support is described by Bateman et al. as a ‘­dynamic local state providing the necessary infrastructure and impetus through the provision of a variety of public goods. This includes business support and advice, financial support, technology transfer and adaptation mechanisms and linkage creation (such as science parks and cluster projects)’ (­Chapter 11). Besides these types of support structures created by local governments, as well as cooperatives themselves, lessons from successful (worker) co-operative economies must include institutionalisation of co-operative finance and incentive structures, most notably the indivisible reserves, financial institutions with co-operative development capacity, and internal capital accounts. 4

Whither Cuban Co-operativism? Without a doubt, what is crucial to the viability of the Cuban project is a rearticulation of a vision of the future, one which links the personal life projects of the country’s citizens with the transformations being implemented. This alone, not the institutional aspects, is the key to sustainability. graziella pogolotti (2010)

Co-operatives are shaped by the imagination of their members. They can reflect a number of views of the co-operative economy: from providing a purely economic benefit to members in a capitalist economy, to being an integral part of the social economy as the ‘third sector’, or social economy transforming socio-economic relations and thereby creating a different economic s­ ystem. Which interpretation will dominate in Cuba remains to be seen, but it will be shaped by the local experience, member needs and expectations, and ­institutions that support or hinder co-operative development. As Pogolotti so eloquently states, co-operatives must be relevant in people’s lives to be viable. Cuban co-operatives need to be properly designed and properly embedded in the socialist project (Campbell, Chapter 8; Piñeiro Harnecker, Chapter 9) 6 Fernandez in Chapter 4 and Donéstevez Sánchez in Chapter 6 describe incredible socioeconomic development achievements in rural communities in Cuba after land nationalisation and the introduction of co-operatives to agriculture.

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to strengthen the process of building socialism. Their potential to impede the expansion of capitalist markets, the formation and concentration of capitalist property, and contribute to the human transformation that is necessary for a socialist society (Campbell, Chapter 8) is recognised in theory. In practice, the co-operative project is facing some trust-eroding challenges. Among the challenges are: an already segmented economy and society due to income differentials and uneven access to resources introduced during the Special period; misplaced incentives that induce formation of fake co-operatives; resolving emerging issues by direct control of co-operatives (access to markets, access to inputs, political directives in their governance structures). rather than autonomy, consultations and transparent governance; and a lack of supporting institutions and infrastructure for co-operative development. While Fernandez (Chapter 4) points out to income inequality as one of the underlying social impacts of the changing role of the State, it seems to us that the danger for the socialist project is not income inequality per se, as it can be adjusted with progressive taxation and other fiscal policy measures, but the creation of a rentier class exploiting labourers purely by ownership of assets,7 thereby contradicting the concept of distribution according to one’s contribution of work which is considered as the principle means of personal realisation and social development (Fernandez, Chapter 4). Access to income and consumer goods through tourism also create inequalities between the tourist areas and other parts of the island, and feed the perception of social injustice. These regional disparities should be corrected with appropriate policies, but they can also be internalised in co-operative value chains. Another source of mistrust in the co-operative model are misplaced incentives. With preferential treatment given to co-operatives over other types of business, coupled with insufficient education and/or control, there is room for the formation of fake co-operatives. These types of enterprises can disrupt the overall transformation effort and take it on a different path. It is therefore important to construct incentives fit for collective governance and control. Government intervention, besides the fact that Cuba features a centrally planned economy, can be excessive. The extensive state involvement in the management of co-operative farms has been frequently criticised by Cuban academics and writers over many years (Royce, Chapter 7). The state is still the principal purchaser of production, 25 years after the introduction of ubpcs. Over-quota production can be sold in farmers’ markets since the 1990s, and at

7 An example are taxi cabs rented out to private drivers who pay exorbitant rents to the cab owner.

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increasing rates after the Lineamientos in 2011,8 but for a number of important crops the state is the only buyer. For a long time the state has also been the only supplier of agricultural inputs. The co-operatives therefore have a very limited capacity to choose, vary, or even acquire the inputs they need. If a needed input is not available through the corresponding state supplier, it is very difficult for the co-operative to obtain it at all. In practical terms, this is probably the single most severe limitation on co-operative autonomy (ibid.). Beyond these issues, government intervention in the supply chains, governance, and institutional changes creates an unstable environment. Lastly, Cuba’s decades of experience with co-operatives indicates that there is awareness of the importance of supporting organisations, such as anap for agricultural co-operatives, that provides technical assistance, governance, networking, and education programs. anap’s role is also evolving with the changing institutions. Since the 1990s it has encouraged international co-operation with non-governmental and governmental organisations and agencies, and promoted exchanges through the building of international networks9 to reinforce the sustainable agriculture movement by building co-operation and solidarity across borders. Importantly, anap’s primary goal today is to help members strengthen the integration of co-operative principles, values, and management within their co-operatives and to encourage the use of agro-­ ecological farming (Holm, 2014). Besides anap, Cuban universities have a wealth of experience with co-operative development, management, and education. These home-grown resources should be used more effectively toward the advancement of institutions for co-operative expansion and support in all sectors, including agriculture. Where will Cuba go from here? Will it face a decade ‘lost to co-operativism’, or a decade of co-operative-led sustainable growth and development? The answer to these questions is left to future observations.

8 Autonomous access to markets has been increasing in the past five years, so that co-­operatives can sell surplus production directly to farmers markets, private sector, or tourist industry. 9 These include the Vía Campesina, Coordinadora Latinoamericana de organizaciones del campo, Movimiento Agroecológico Latinoamericano, and Red Latinoamericana de Biodiversidad Agrícola (Holm 2013). anap also partnered on a number of international projects funded by undp and other agencies that included components of development and improvement of co-operative organisational practices.

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References Cook, M. (1995). The future of US agricultural co-operatives: A neo-institutional approach. American Journal of Agricultural Economics, 77(5): 1153–1159. Erdal, D. (2014). Employee ownership and health: An initial study. In Sonja Novkovic and Tom Webb (eds.) Co-operatives in a post-growth era (pp. 210–220). London: Zed Books. Freundlich, F. and M. Gago (2012). Co-operative employment density, social capital and public health: evidence from Gipuzkoa Province, the Basque country. Paper presented at the Co-operatives and Public Health workshop, Scottish Enterprise, Edinburgh. Hansmann, H. (1996). The ownership of enterprise. Harvard, MA: Harvard University Press. Holm, W. (2014). Sustainable Paths to a Just Economy: Co-operatives in the Land of Marti. Co-operatives’ Power of Innovation. Paper presented as the International ­Co-operative Summit, Québec. Novković, S. (2014). Co-operatives in a socialist economy: Cuba’s decentralization of decision-making. Paper presented at the Managing the Co-operative Difference conference in Moncton, NB, Canada. Pogolotti, G. (2010) Cited in Sánchez Egozcue, J.M. (2012). Challenges of Economic Restructuring in Cuba, Socialism and Democracy, 26(3): 139–161. (p. 161). Wilson, J. (2014). Jeffrey Sachs: The Strange Case of Dr. Shock and Mr. Aid. London: Verso.

Index agriculture Agrarian Reform Law (1959) 83–4, 84fn2, 129 agrarian societies 114, 129–30, 135 crisis 114–15, 118, 120 inputs 53–5, 67–8, 132, 135–6, 140–1, 144–7, 150, 152–3, 189–90, 192–3, 214–15, 249, 251–2 investment 110, 128–9, 145–6, 153–4 Ministry of 181fn4, 182, 186 reform 83–4, 116, 125, 129–30 technology 116, 123, 149, 185–6, 190, 224–5 and tourism 150, 252fn8 alba See Boliviaran Alternative for Latin America anap See National Association of Small Farmers anteag See National Association of Workers in Self-Managed Companies Argentina 16, 31fn3, 33fn8–9, 35, 63–8, 71, 230 assets 18, 53fn2, 61, 186–6, 199, 201–2, 205, 207, 209, 214, 220, 230–1, 232fn13, 234, 239fn4, 252 autogestión See management, selfautonomy 21, 29fn1, 35, 42fn20, 59, 63–6, 88, 92–3, 114fn12, 116–17, 117–18fn20, 119–23, 131–2, 136, 138–9, 141, 146–8, 151–2, 169–71, 185–7, 193, 199–200, 202, 212fn14, 235, 248, 252–3 Basic Units of Co-operative Production (ubpc) 11, 70fn11, 86, 114, 117fn18, 118–21, 125, 132–44, 147–50, 152–4, 164fn12, 181–7, 205, 248, 252 biomedicine 85 biotechnology 85, 214, 237 blockade 51, 85, 87–8, 192–3, 212fn14, 245 Bolivia 16–17, 24, 33fn9, 35, 37, 42–3, 63–5 Brazil 17, 31fn3, 33fn8, 35–6, 40, 44, 63–6, 229–31 buen vivir 29, 62–5

bureaucracy 21–3, 82, 84–95, 100, 104–5, 124–5, 154, 167, 176–7, 192–3, 198–9, 205fn5, 214–15, 247–9 cai See complejo agro-industrial capital accumulation 1, 33fn7, 37–8, 45, 55, 105, 171–3, 198, 245–6 financial 71–2, 197, 222, 225–6, 236 flight 62–3 human 1, 6, 41, 102 investment 10, 31, 38, 43, 51, 82, 107, 110, 129, 146, 154, 197–8, 209, 247 management 19–20, 25, 202, 205, 214 private 43, 175 social 29–30, 33fn7, 38–9, 44, 201 Castro, Fidel 85–6, 87fn9 speech (2005) 86 Castro, Raúl v, 1, 3, 11, 56, 87–7, 90, 106, 160, 180, 188, 188fn7, 189fn9, 190fn11 speech (2007) 87 cbld See Inclusive and Sustainable Development ccss See co-operatives, credit and service ccsfs See co-operatives, Credit and Strengthened Services coffee 116fn15, 133, 142, 153 Chávez Frías, Hugo 2–3, 16fn1, 44–6, 64 Chile 31fn3, 32, 35, 64, 65, 229–30 China 2, 149, 167–8, 199, 213fn16, 229–30 class 9, 58, 86, 95, 97, 110fn1 capitalist 100, 106, 166, 172 contradictions 93fn21 differences 56, 96 division 4, 7–8, 37 exploitation 16 power 107 rentier 199, 247, 252 ruling 18, 20, 166fn17, 167–8 solidarity 43 struggle 16, 18, 34, 177 working 20–1, 30–1, 41, 44, 100, 166

256 cmea See Council for Mutual Economic Assistance co-gestión See management, cocollectives 11, 29, 35, 37, 59, 65, 105, 117, 117fn19, 123, 130–2, 147–8, 170–1, 175–6fn36, 203 co-management (co-gestión) See management, cocommodities 22, 24fn3, 55, 61fn6, 70, 89, 171–2, 172fn31, 204 commodification 21, 23, 101, 244 fetishism 21 fictitious 205 commune in Bolivia 45 communal banks 46 communal councils 46 communal needs 45 communal power 46 communal property 17, 181 economy 40 Communist Party of Cuba (pcc) 11–12, 82–3, 87–9, 91–4, 160–1 4th Congress (1991) 86 6th Congress (2011) 89–90fn15–16, 96–7, 96fn24, 161, 248–9 7th Congress (2016) 96–7, 162, 249 Community-Based Local Development (cbld) See Inclusive and Sustainable Development Community Social Organisations (csos) 36 complejo agro-industrial (cai) 135–6 conaie See Confederation of Indigenous Nationalities of Ecuador Confederation of Indigenous Nationalities of Ecuador (conaie) 33–4 co-operatives agricultural 11–12, 70, 72, 82–6, 110, 112– 22, 124–5, 128–54, 162fn5, 163fn9, 164, 164fn12, 179–87, 189fn9, 192, 199–200, 208, 233–4, 246–8, 253 non- 10–12, 51–4, 64, 67, 69, 89fn14, 90, 110fn2, 122fn24, 123–4, 163–5, 179–80, 18792, 200–2, 209, 249 construction v, 10, 51, 67, 89, 104, 152, 187, 191 Credit and Service (ccs / ccss) 70, 110, 114fn11, 114fn13, 118, 121, 130, 134, 164fn13, 168, 181–7, 205, 247–8 Credit and Strengthened Service 121

Index history 11, 30, 35–6, 57, 128–40 legal aspects 12, 53fn2, 89–90fn15, 112–13, 114fn12–13, 121, 123–4, 136, 148, 170, 172, 175fn34, 179, 186–7, 189fn9, 200fn1, 205–6, 210–12, 214–15, 233–4, 249 membership 104–5, 121, 129–32, 134–5, 137–8, 141–3, 146–7, 151, 183, 185, 208, 210–11, 245–6 new co-operativism 10, 51–74, 199–200, 204fn3, 245–6 participation 21, 25, 35, 74, 115, 117fn17, 122–3, 145–8, 151, 197–8, 207–8, 212fn15 productivity 131, 141, 151, 183, 185–6, 190, 200, 202–5, 209, 214, 237 production (cpas) 11, 37, 70fn11, 83–4, 110fn1, 114–15, 117fn18, 118–21, 128–54, 181, 248 profitability 120, 123, 125, 128–9, 141–2, 145, 172, 180, 186–7, 190, 203, 208, 209fn9 service 10, 17–18, 25, 51–3, 60, 62, 88–9, 122, 130–1, 136, 152, 180–1, 185, 187, 190–1, 192fn14, 195, 200, 204, 206, 210–12, 244 urban 3–4, 54, 67, 84, 89, 89–90fn15, 104, 110fn1, 126, 152, 185–6, 201, 205, 208, 214, 246 consensus 40fn17, 82, 95, 98, 173, 244 constitution 6, 24fn2, 44, 64, 86, 91–2fn17– 20, 110fn1, 247 consultation v, 29fn1, 52–3, 70–1, 94, 251–2 corruption 3, 62–3, 84–7, 93, 95, 221, 247 Council for Mutual Economic Assistance (cmea) 85, 85–6fn5 cpas See Co-operatives, Production credit 17, 25, 45, 70, 112, 114fn11, 130–2, 145, 181, 193, 221, 224–6 crisis agrarian 114–15, 118, 120 agriculture 118–19, 132 of capitalism 87 economic 1, 5, 17, 27, 35, 46fn23, 61fn6, 140, 213, 235 management 198–9 peak oil 198 production 119 of socialism 21 cscs See co-operatives, Credit and Service csos See Community Social Organisations ctc See Workers’ Central Union of Cuba Cuban Peso (moneda nacional) 55–6, 86, 201

257

Index cuentapropismo 2–4, 52–5, 69–70, 88–9fn12, 172, 194–5, 228–9, 232 cup See Cuban Peso currency 55–6, 86, 96fn24, 145, 201, 214–15, 247 decentralisation 1, 13, 31, 33fn8, 38–9, 41–3, 46, 52–5, 60, 85fn4, 86, 88, 91–4, 97, 110–11, 121–2, 142, 147, 176, 197, 204, 206, 219, 233, 236, 245, 247 democracy 16fn1, 25, 42, 57–8, 61, 65–6, 87fn10, 91, 92fn18, 94, 101–3, 166, 166fn17, 167–8, 175fn33, 199–200, 206–7, 212–13, 233–5, 250–1 demographic shift 91, 234 development agencies 37, 40–1, 43–4 alternative 36, 39–40, 42–3, 47, 74 anti- 222–29, 228fn12 capitalist 1, 4, 10, 30–2, 35, 44, 116f15 critical 61–2 discourse 2 economic 5, 21, 44, 68, 82, 85–7, 90, 95, 97, 105, 118, 220–1, 224, 228–9, 235–6, 248–9 human 1, 4–9, 11, 13, 29, 44–5, 85, 98, 100–1, 115, 166, 175–6fn36, 197, 203, 209, 212–14, 244–7 as imperialism 36fn12 inclusive 39, 41, 45fn22 local 1, 10, 29–30, 34, 36–9, 41–4, 46fn23, 47, 52–3, 59, 61, 110–11, 208–11, 213, 219–21, 228, 230, 235–6 lost decade 32, 41 national 1, 9, 35–6, 39, 45fn22, 87, 92fn18, 122 new paradigm 39 post- 36fn12, 62 process 4, 219 rural 29, 30, 84, 89 self 8, 29–30, 44, 65 social 5–6, 5fn1, 16–17, 21, 24, 36, 43, 43, 47, 82–3, 86–7, 95–6, 113–14, 212, 224, 230, 245, 248–50, 252 socialist 3, 10, 88, 111, 160–1, 201–2, 245–6, 249 state 6, 30–1, 229–30, 234, 238, 244–5 strategy 37–8 sustainable 39, 44, 198, 221–3, 227, 253 theory 1

under 112 uneven 4 discrimination 4, 21 eclac See Economic Commission on Latin America and the Caribbean Economic Commission on Latin America and the Caribbean (eclac) 31–2, 36, 39,  44, 45fn22 economy central planning 13, 55–6, 58, 91, 97, 129, 147, 173, 176, 198–9, 200, 212–13, 219, 230, 234–7, 252 social and solidarity (sse) 29, 206, 244, 246 Ecuador 16–17, 33–4, 33fn9, 37, 63–5 education 5–8, 27, 36, 41–2, 54, 56, 63, 65–9, 71, 83–4, 87fn9, 91, 95, 96fn24, 112–15, 118, 124–5, 149, 176, 191, 197–8, 203, 208, 213–14, 246–8, 252–3 efficiency 12, 41–2fn18, 72–3, 82, 84, 90, 93, 96, 121, 132, 145, 150, 179, 190, 194, 202, 204–5, 221, 229, 231, 237 in- 1, 13, 74, 132, 193, 198, 219, 234 embargo See blockade employment 35, 72, 91, 95, 104, 123, 146, 152, 163, 181, 183, 185, 247, 250 full 2, 6, 84–5, 88–9 self- 2–3, 52–3, 89–90fn15, 180, 197–9, 204, 221–4, 227–8, 233, 236–8 un- 60, 66–7, 198, 204, 225, 227 empowerment 29–30, 38–44, 93–4, 97–8, 100, 103–4, 107–8, 212–14, 236 empresas de producción social (eps) 45 Engels, Friedrich 18–20, 57, 166–8 enterprises 206, 213, 222–3, 225, 250, 252 co-operative 10, 4–44, 55, 202, 204, 213–14, 231–2, 236–8, 246 micro- 43–44, 89, 221–8, 233, 238 private 52–3, 165, 169fn27, 175fn35, 212, 220–1, 226, 229, 236 small and medium (smes) 221–2, 234 social 204, 212, 244fn1 socially responsible 45–7, 53, 194 state 10, 12, 38, 45–7, 51, 53, 64, 67, 69, 71, 104, 110fn1, 136, 145–7, 175fn35, 179, 190–1, 194–5, 199–200, 202, 204, 212, 214, 236

258 entrepreneurs 3, 13, 41, 55, 68, 100, 106, 190fn10, 213, 218, 220–2, 225, 232, 234fn15 environment 7–8, 24fn2, 29, 59–62, 73, 116, 140, 150, 202–3, 226, 237, 249–50fn5 eps See empresas de producción social equality 4, 8–9, 16fn1, 21, 84–5, 95, 96–7, 115, 203, 209, 212–13, 234, 250 in- 38–9, 56, 172, 198, 202, 220–1, 232, 247, 252 equity 8, 41, 59, 61, 95, 106–7, 115, 123, 209, 212 in- 3–4 erts See worker-recuperated enterprises Europe 18, 85, 201–2, 210, 222–9, 234–5, 237, 244–5 European Union (eu) 224–8 eu See Europe, European Union exports 31n3, 85–6fn5, fn7, 116fn15, 123, 128, 153–4, 227, 230, 237 ezln See Zapatista Army of National Liberation fao See Food and Agriculture Organisation farms associations 69, 253 co-operative 7, 114fn11, 116, 121, 128–9, 133, 136, 143–8, 151, 246, 252 credits & loans 112fn4, fn7 cultivated land 133–4, 138, 143 family 54, 131, 148–9, 150–2 farmers 94, 131–4, 198, 204, 248 farming methods 142–3, 145, 247–8 labour 37, 121, 131, 142, 149 markets 85fn4, 86fn7, 136, 247, 252 mid-size 84fn2 organic 70, 248fn2 peasant 6–7, 35–6, 117 private ownership 133, 153, 164fn13, 180–1, 181fn3, 205, 247 at risk 1–2 small 3, 82, 84fn2, 120, 129–30, 132, 140, 148–50, 153, 247 state 116, 120, 129, 132, 141, 151, 164fn12, 184, 186 sugarcane 134–6, 141 urban 54 fdi See investment, foreign direct

Index finance 229, 236 access to 13, 197 co-operative 52, 182, 251 foreign 36, 113fn9, 227 micro- 38, 44 food crops 128, 133, 137–40, 142–3, 148, 153, 185, 197–8, 214 imports 199 markets 201 security 33, 95–6, 118, 140, 193, 197–200, 203, 213, 248 services 3, 89, 187, 191 Food and Agriculture Organisation (fao) 7, 44 gender 9, 60, 73, 87 globalisation 32fn4, 44, 59, 68 governance 13, 38–42, 58, 101–5, 107, 197, 207–11, 212fn13, 214, 221, 251–3 Grameen bank 44 Gramsci, Antonio 58 growth 9, 175fn33, 219–25, 227, 231, 253 of bureaucracy 87 of civil society 33 of co-operativism 38, 66, 118, 233, 248 economic 1, 5fn1, 55, 95, 107, 110, 123, 202–3, 250 with equity 41 inclusive 45, 45fn22 low- 5–6, 221 of the private sector 13–14, 228–9, 235–6 or production 110, 113–14 guidelines See Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution hdi See Human Development Index health 5–8, 36, 40fn16, 41–2, 56, 63, 65–8, 74, 84–5, 87fn9, 91, 95–6, 96fn24, 101, 107, 197–8, 202–3, 213–14 Helms-Burton Act (1997) 85 housing 3, 6, 25, 56, 63, 67–8, 95–6, 131, 148, 151, 185, 213 Human Development Index (hdi) 5–9 ica See International Co-operative Alliance ilo See International Labor Organisation

259

Index imdl See Initiative for Municipal and Local Development imf See International Monetary Fund imports 85–6fn5,fn7, 106, 123, 149, 153, 185, 192–4, 198–9 Inclusive and Sustainable Development (cbld) 39, 41, 45n22 income co-operative 53fn2, 131–2, 143–5, 190, 194, 200, 202–5, 209, 212–14, 250 distribution 7–9, 9fn2, 37, 115, 208, 211 earned 6–7 household 38 inequalities 86, 105, 197–9, 202, 247, 251–2 low- 5–6, 96, 149 per capita 5, 8 policies 131–2, 236, 248 sources 95, 104, 123, 141–3 India 5fn1 industrialisation 229–30, 249–50fn5 de- 222–27 Initiative for Municipal and Local Development (imdl) 236 inra See National Agrarian Reform Institute institutions anti-poverty 38 in Bolivia 42–3 in Bosnia 223, 226 control of 107, 198, 206 co-operative 46–7, 66, 102, 106, 120, 129–30, 186, 191–2, 195, 200fn1, 201, 207–11, 213fn16, 231–6, 250–2 development 40, 43–4, 238 dysfunction 84–7 farm credit 112fn4 financial 37, 208fn6, 251 flexibility 199 innovation 39 investment 12–13 mercantile 24 neocolonial 113 neoliberal 42, 213–14, 219, 228 public 107 reform 4 regional 17

regulatory 13–14, 219–20 socialist 6, 91–2, 97, 100–1, 104, 111, 160, 166, 168, 171–2, 205, 211–12 state 84, 91, 93, 95, 112fn7, 186, 191, 193–4, 229–30, 237 transforming 245, 247–9, 253 in Venezuela 30, 44–5 weak 237 in Yugoslavia 208fn6 International Co-operative Alliance (ica) 54, 58–9, 64, 206 International Labor Organisation (ilo) 32fn4, 39–41, 44 International Monetary Fund (imf) 30–1, 33–4, 33fn8, fn9, 221 investment capital 31 in co-operatives 55, 72–3, 129, 145–6, 203–4, 208–9, 213 foreign direct (fdi) 10, 38fn14, 51, 82, 86, 107, 110, 154, 197–8, 247 in human capital 41 investor-owned businesses 12–3, 73, 197, 203, 232–3 policies 43, 62, 105, 153, 197 of surplus 67–8, 71, 207, 209, 231 Kerala 5 labour power 19, 24–5, 55, 102, 141, 213 slave 19, 25 wage 10, 19, 24–5, 38, 51, 55, 102, 105–6, 120–1, 163, 181, 192 land 20, 83, 128–30, 136–7, 143, 150–1, 198 access to 37, 42fn20, 65–6, 101–2, 107 collective 131–4, 170, 181, 205 -holding 6, 82–4, 113, 115 -less 6, 31, 33–6, 38, 63, 131 nationalisation 114, 117, 129, 246, 250fn6 private 84, 88fn11, 120, 125, 130, 148, 164fn13, 248 productivity 182 reform 6, 83–4, 114–15, 114fn12, 118, 120–1, 130, 149, 152–3, 186–7, 247–8 seizure 40fn16 tenure 36, 133, 181 traditional 63, 65, 116fn16, 227

260 Landless Workers’ Movement (mstBrazil) 38, 63, 66–7 legislation 6–7, 10, 12, 42, 51, 63–4, 67–9, 113–14, 120, 165n15, 179, 181, 186–7, 189fn9, 190fn10, 191–3, 210 Lenin, Vladimir 21, 57–8 libreta See ration card Lineamientos See Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution literacy 7–8, 68–9 livestock 132, 137, 139, 141, 149–50 management 82, 85, 88, 90, 103, 110fn1, 111, 114, 116, 117–18fn20, 123, 133, 149, 168, 247 autonomy 26, 35, 64, 88, 114fn12, 116–17, 117–18fn20, 119–21, 123, 126, 136, 141, 147, 152, 186, 201–2, 212fn14, 252 co- (co-gestión) 44, 60, 64 collective 53fn2, 204–5, 214 co-operative 84, 104–5, 114–17, 136, 140–5, 180, 185, 189, 199, 201–2, 210fn11, 212–13, 246, 252–3 democratic 20, 60, 104, 183, 186, 194, 202, 207–9, 213, 233, 246 despotic 19–20 experience 27 imposed 26 non-state 89, 152, 172, 175fn34, 236 participatory 94, 209 self- (auto-gestión) 1, 21, 27, 30, 34–5, 44–5, 58, 61, 69, 86fn6, 119, 122–4, 194–5, 202, 204–8, 249–50fn5 sustainable 29fn1 market 23–4, 40, 86fn7, 90–1, 93, 162, 165, 176, 202, 206, 212fn14, 221–2, 226, 229, 233 access 249, 251–2 agricultural 122, 125, 142, 145, 147, 152, 190, 204 alternative 63, 85fn4, 182 black 3, 84–5, 88fn11, 95, 247 burden 22 capitalist 12–13, 103, 105, 107, 172–4, 197, 204, 251–2 competitive 10, 103 conditions 203 deregulation 31 domestic 86 failure 204, 214, 244

Index farmers’ 37, 85fn4, 112fn5, 136, 201, 247 forces 224 free 1, 9, 16, 41, 55–6, 220, 227–8 international 200, 214 labour 31, 33fn9, 37–8, 40–1, 46, 55, 121, 199, 204, 208, 211 local 29 logic 21 power 21, 204, 228 real estate 105 reforms 2–4, 172 regulation 97, 236–7, 247 socialism 21, 171–2, 201, 250 wholesale 200 world 128 Marx, Karl 18–26, 38fn14, 45, 57–8, 88fn11, 91–2fn17, 93fn21, 96–7, 101, 103, 166–8, 170fn28, 171fn30, 172–3, 174fn36, 245–6 means of production 6, 9, 17, 19–20, 23, 35, 54, 57, 58, 60, 83–6, 86fn6, 88fn11, 90, 100, 103–4, 130, 162–8, 169fn23, 170–1, 174, 176, 181, 197–8, 205–8, 211, 247 Mexico 29, 31fn3, 32, 37, 46, 65 Revolution 34 minag See Ministry of Agriculture minaz See Ministry of Sugar mincin See Ministry of Domestic Trade Ministry of Agriculture 181fn4, 182, 186 Ministry of Domestic Trade (mincin) 189– 90, 190fn10, 192 Ministry of Sugar (minaz) 136, 186 Movement of Unemployed Workers (mtd-piqueteros-Argentina) 62–3 Movimento dos Trabalhadores Sem Terra S ee Landless Workers’ Movement (mst-Brazil) mtd See Movement of Unemployed Workers National Agrarian Reform Institute (inra) 186 National Assembly of People’s Power 10, 51, 160 National Association of Workers in Self-Managed Companies (anteag-Brazil) 35 National Association of Small Farmers (anap) 69, 71, 125, 129–31, 181fn4, 186, 197–8, 233, 247–8, 248fn2,fn3, 253, 253fn9 nationalisation 2, 6–7, 9, 83–4, 117, 166–7, 166fn19, 246, 250fn6

Index neoliberalism 1–2, 9fn2, 10, 13, 16, 30–4, 32–3fn6, 38fn14, 41–3, 46, 57–60, 62–8, 74, 107–8, 213–14, 219–33, 225fn5, 237–8, 244 new world order 32, 41 ngos See Non-Governmental Organisations Non-Governmental Organisations (ngos) 32–6, 32–3fn6, 44, 65, 152, 208fn6, 247–8, 248fn2 North Korea 2–3 Nuevos Lineamientos See Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution ownership collective 35, 60–1, 105, 201, 206 co-operative 84, 87fn10, 103–4, 170–1, 201–2, 205, 245–7 forms of 88, 93, 110fn1, 162, 198, 221–2 joint- 59, 128–9, 207 of land 115, 128–9, 181, 246 private 114fn11, 197–8, 234fn15 social 52, 58, 64–5, 88–9, 114, 205 of the social product 26 socialist 54, 88fn11, 201–2, 205, 247 state 13, 88fn11, 164fn13, 166fn19, 219 worker 202, 207–8, 234 organopónicos 54, 152 Paris Commune 20, 35 Partido dos Trabalhadores See Workers’ Party (pt-Brazil) paternalism 88, 91, 95, 100, 198–9, 211–12, 214, 247, 249 pcc See Communist Party of Cuba people’s power 26, 46, 54, 83, 91–2fn17, 92, 92fn18, 92–3fn20, 94, 97–8 Peru 32, 33fn8, 35, 64–5, 149 piqueteros See Movement of Unemployed Workers (mtd-Argentina) Poder Popular See people’s power poverty 2 extreme 7 global 32 mitigation 36–44, 66, 224–5, 228fn12 rates 5, 56 rising 32, 56, 224 rural 6, 32, 37–8, 224–5

261 prealc See Regional Program on Employment private ownership 13, 52–4, 58, 65, 88fn11, 102, 105–7, 110, 114fn11, 117fn17, 120, 162, 164fn13, 180–1, 183fn3, 197–8, 201–2, 205–6, 221, 234fn15, 252fn7 privatisation 10, 31, 33fn8–9, 51–6, 60, 72–4, 96–7, 101–2, 105–7, 124–5, 124fn25, 199, 201–2, 207, 214, 224fn3 pt See Workers’ Party (Brazil) purchasing power 55–6, 147, 200, 232fn13 race 9, 87 ration card (libreta) 6, 56, 85fn4, 96fn24 rectification 82, 85, 91, 160fn2 Regional Program on Employment (prealc) 32–2, 32fn4 Resolution on the Guidelines of the Economic and Social Policy of the Party and the Revolution 10, 51–55, 53fn2, 60–61, 70–71, 82–98, 96fn24, 160–1, 197–200, 213fn16, 214, 233–4 resources 11, 69, 88, 100–1, 209, 225–6, 235–6, 253 access to 8, 102, 120, 149–50, 190–1, 251–2 distribution 21–3, 211, 222, 236 economic 27, 111 human 122 management 27, 29fn1, 46, 65–6, 90, 94, 103–4, 119, 123, 166, 190, 200, 205fn5, 214, 246 natural 17, 111, 122 productive 9, 42fn20, 247 revolution Bolivarian 30, 44–5, 246 Bolivian 35 Cuban 1, 5, 9–13, 51, 63, 68, 70, 82–3, 86–7, 91, 95–8, 104, 106–7, 117, 129, 160, 177, 180, 197, 213–14, 234–5, 245–6 industrial 18 Mexican 34 risk in agriculture 149 of co-operation 209, 213 credit 192–3, 236 of privatisation 53 of reform 56, 82–3, 229 to socialist gains 56

262 savings 9fn2, 231 science 18–19, 85, 237, 251 smes See enterprises, small and medium socialism 6, 17, 65 21st Century 16fn1, 43–6, 73–4 abandonment 2, 85 actually existing 2, 21 building 10–12, 16, 20–1, 26, 45–6, 82–3, 86–8, 90, 95–8, 100–1, 105–6, 161–2, 165–77, 180, 251 and co-operativism 18, 51–3, 56–7, 61–3, 68, 73–4, 102–3, 106, 110fn1, 111, 115, 125–6, 207, 245–6 Cuban context 9–10, 53, 56, 68, 70–3, 87–8, 104, 112, 160–1, 246 end of 2, 244 market 172, 250 opposition to 36, 107 socially responsible enterprises (sres) 45–7 social movements 10, 12–13, 17–18, 29–34, 29fn1, 32–3fn6, 34fn10, 36, 46–7, 59, 60, 66–8, 197–200, 206 South Korea 229 Soviet Union See Union of Soviet Socialist Republics Special Period 11, 60–1, 70, 72, 85–6, 87fn9, 119, 131–2, 141, 149 sres See socially responsible enterprises sse See economy, social / solidarity state enterprises 10, 12, 38, 45–7, 51, 53, 64, 67, 69, 71, 104, 110fn1, 136, 145–7, 175fn35, 179, 190–1, 194–5, 199–200, 202, 204, 212, 214, 236 -led development 6, 30–1, 229–30, 234, 238, 244–5 farms 116, 120, 129, 132, 141, 151, 164fn12, 184, 186 institutions 84, 91, 93, 95, 112fn7, 186, 191, 193–4, 229–30, 237 ownership 13, 88fn11, 164fn13, 166fn19, 219 power 1, 42–3, 103–4 structural adjustment 30–1, 44, 66 with a human face 41–2 programs 33fn8 sugar 83–4, 114, 119, 129–30, 132–54, 186

Index Taiwan 229 taxation 3, 6, 43–4, 53–4, 89, 105–6, 165, 190–4, 225–6, 230–1, 232fn14, 235–6, 249fn4, 252 technology access 84, 185–6, 190, 194, 226, 229, 232 appropriate 116, 123, 149, 221–2, 224fn4, 228fn12 bio- 85, 214, 237 transfer 13–14, 85, 219–20, 224–5, 237, 251 third sector 38–9, 46, 244, 246, 251 tobacco 116fn15, 133, 142, 153–4 Torricelli Act (1992) 85 trade 31, 51, 85, 200, 202, 223–4, 227, 235, 237 fair 65 transportation 3, 10, 33, 51, 89, 96fn24, 103–4, 136, 149, 151–2, 188, 193 ubpc See Basic Units of Co-operative Production ueb See Unidades Empresariales de Base un See United Nations undp See United Nations Development Program Unidades Empresariales de Base (ueb) 120–1 Union of Soviet Socialist Republics (ussr) 1–3, 9, 45, 61fn6, 85, 93fn21, 144, 160fn2, 165, 167–8, 173, 226fn7, 234–5, 234fn15, 246 unions 20, 34–7, 65–7, 88–9fn12, 94, 106–7, 125, 125fn26, 186, 187fn6, 224 United Nations Development Program (undp) 1, 4–5, 7–9, 42fn19 United Nations Research Institute for Social Development (unrisd) 36–40 United States of America (usa) 8–9, 9fn2, 13, 82, 87–8, 87fn9, 106–8, 112fn3, 152–4, 171, 173fn32, 192–3, 212fn14, 219–20, 225fn5, 227, 227fn11, 228–32, 237–8, 245 United States Agency for International Development (usaid) 36, 42fn19 unrisd See United Nations Research Institute for Social Development us See United States of America usaid See United States Agency for International Development

263

Index ussr See Soviet Union usufruct  82, 114fn12, 121, 121fn23, 132, 150, 164fn13, 181fn3, 198, 207, 234, 248 Venezuela 2–3, 16fn1, 17, 30, 33fn8, 43–6, 64–5, 198, 246 Vietnam 2–3, 55, 149–50, 229–30 Washington Consensus 9–10, 41, 228fn12 post- 41–2, 45fn22 water 7, 33, 33fn9, 101, 149 wealth 7–9, 20, 25, 58, 60–2, 74, 89, 101, 105–7, 115, 117–18fn20, 123, 180, 202–3, 249, 253 Weber, Max 22 welfare 36, 250 human 5–6 social 6, 84, 249 state 6, 30–1, 66fn10, 205fn5 system 7 work-for- 66 women 43–4, 94, 138, 223fn2 worker-recuperated enterprises (erts) 35, 63, 66–9 workers 131, 191, 201, 206 alienation 25–6 in agriculture 84, 116, 120–1, 128–9, 132, 143, 146, 246–7 in co-operatives 53–4, 66–7, 70–1, 89, 100, 103–4, 114, 119–20, 123, 125, 135, 146, 162, 168–9, 181, 190, 194, 200–11, 213fn16, 214, 233–4, 245–51

layoffs 4 non-state 54, 163 organised 18, 25–6, 35, 58, 65 pay 6–7, 24 protections 73, 106 rural 34, 38 by sector 163–4 self-employed  See also cuentapropismo 2–44, 52–5, 69–70, 88–9fn12, 172, 194–5, 228–9, 232 self-management 1, 11, 19–20, 27, 30, 35, 45, 58, 67, 71, 74, 82, 119, 128, 145–8, 199, 207–8, 212 socialisation 11, 94, 117, 175 state 2–3, 56, 199 support 4, 105, 107, 151, 183, 190 surplus 100, 180 wage- 19, 37, 54, 89, 102, 106 Workers’ Central Union of Cuba (ctc) 4, 186 Workers’ Party (pt-Brazil) 65 World Bank (wb) 1–2, 31, 32fn3, 33, 33fn8, 37, 38fn13, 41–3, 41–2fn18, 42f19, 223fn2 World Health Organisation (who) 7–8 World Social Forum (wsf) 45 wsf See World Social Forum Zapatista Army of National Liberation (ezln) 29–30, 34, 39–40, 40fn16–17, 42–3fn21, 43, 46–7, 63–6, 245–6