Analysis: Adjusting the socialist model: Cooperatives

By José Manuel Pallí, Esq.

The notion that workers/owners could effectively and efficiently direct production in a given business organization within the tenets of a market-based economic system has historically been branded as utopian. This is even more so the case today. Faced by the ever more pronounced crisis of a system driven by poorly understood financial forces (even by those who claim to master the universe), the defenders of the dogmas and mantras of a no less utopian neo-liberalism cling to the fraudulent argument that it is either their way or the communist party’s way. In fact, this false dichotomy seems to be grounded on both Marxism’s and Neo-Liberalism’s reliance on a particular “institution” that is key to their respective socio-economic construct: the Ministry or Department of Wishful Thinking (an institution that has achieved church or cult-like status in Miami, where I live).

Cooperativism in agricultural activities is deeply rooted in the Cuban experience. The Taínos, who inhabited the island when Columbus landed, did not recognize individual ownership of land and tilled and cultivated it collectively, in a sort of productive association. The spirit of cooperativism can also be found in the number of fincas or haciendas comuneras — undivided (and, in many cases, factually indivisible) ranches — that characterized and often complicated the land tenure system that preceded the Cuban Revolution (a problem that you are bound to find throughout the world, specially in the less wealthy parts of it). Although this form of land ownership, known elsewhere as proindiviso, is, in essence, private ownership of land, it often compels those forced into co-ownership to engage in associative production schemes, at least for as long as the land remains undivided.

Among the steps taken by the Cuban government to offset the effects of the crisis of the 1990s (a.k.a. Periodo Especial) was the creation of the basic units for cooperative production (unidades básicas de producción cooperativa, or UBPC), presumably a way to streamline food production at a time when Cuba had lost close to 80 percent of its trading partners due to the demise of the Soviet empire. Decreto Ley 142 of 1993 was aimed at increasing agricultural production by creating the incentives that would lead individual campesinos to better use and conserve the land, getting the most out of it at the lowest possible level of costs and governmental expenses. Originally conceived for what was still then Cuba’s main productive industry, that of sugar, the creation of the UBPCs fell short because it ignored what the law itself and its enabling regulations claimed was one of its basic tenets: autogestión.  Any autonomy that the law nominally extended to the UBPCs[1] was severely watered down by subjecting them to the dictates of the Ministries of Sugar and of Agriculture.

Small wonder then that, beginning in 1997, individual campesinos who owned their lands — there are well over 100,000 such small landowners of less than 5 caballerías[2] in Cuba — and some who hold land in usufruct, began forming independent agricultural cooperatives throughout the island. Despite efforts by the Cuban Government to manipulate this process and despite the lack of financing, these individuals’ pursuit of economic independence through solidarity and mutuality of interests has been successful to some extent and at different levels.

It is this sense of achievement, even if modest, that should be used to gauge the success of the cooperative movement as an economic form of production (beyond agriculture) and as a vehicle for the satisfaction of collective goals in the Cuba of the future.

And in order to more effectively gauge that success, it could be helpful to be free of ironclad notions about what success and other concepts — including property rights — actually mean for people with views and priorities that may differ from ours. For instance, in other societies that have emerged from behind the Iron Curtain or from authoritarianism in the recent past, the present worldwide crisis has driven people to certain measures that we would consider anathema. Not only are homeless people — families made homeless, in many cases, by mortgage foreclosures — taking over (occupying) unfinished apartment buildings in Spain and other countries with battered-down economies. Even in Germany (in what used to be East Germany or the GDR) tenants are trying to figure out how to preserve their housing from ever escalating rental prices. Some of these tenants at risk are forming cooperatives in order to buy the buildings they inhabit — social housing still owned by government-controlled holding companies — before they are sold to profit-hungry private landlords.

Cuba has yet to publish the new rules that will govern cooperatives in the island. It would be good to see in those impending rules a stronger sign that cooperatives in all segments of Cuba’s productive system will be truly independent and autonomous when they decide what to produce, what and who they sell to or buy from, even if they remain loosely integrated into a collective productive system that, at times, calls for state intervention in order to coordinate their activities with other socially desirable goals. It would be even better to see these other goals determined freely and democratically by all Cubans soon, without any exclusion whatsoever.

Utopian? Maybe. But not any more so than anything out of the mouth of Jamie Dimon at JP Morgan Chase …

Our next look into the way Cuba is trying to adjust its socialist model will explore the still not fully regulated and clarified use of derechos de superficie in Cuba, specially how they relate to the kind of rights foreign investors can expect to hold over Cuban real estate.

José Manuel Pallí is a Cuban-born member of the Florida Bar, originally trained as a lawyer in Argentina. He is president of Miami-based World Wide Title

[1] Resolución 354/93 (as amended)of the Ministry of Agriculture, which enacts the Reglamento General for the entities (UPBC or Unidad) created under DL 142/93, defines the Basic Unit for Cooperative Production as a business and social economic organization formed by workers and autonomously run, that is wired into the (national) production system.

[2] In “Cuban”, one caballeria de tierra amounts to 13.42 hectares, or slightly more than 33 acres.

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