The Private Corporation as a Threat to the Political Order: Of Cuban State Corporations and Private the Vehicle for Private Economic Development

The Cuban Communist Party and state apparatus have adopted a set of Guidelines (Lineamientos) in April 2011.  VI Congreso del Partido Cominiosta de Cuba,  Lineamientos de la política económica y social del partido y la Revolución (aprobado el 18 de abril de 2011).  These Lineamientos serve as a detailed, though still general, basis for reordering the economic framework within which Cuban socialism is understood.  They suggest the opening to potentially significant structural changes in Cuban economic policy.

 (Caption: "La política trazada incluye la estrategia de desarrollo de sectores generadores de los principales ingresos en divisa libremente convertible como el turismo Jorge Luis Baños - IPS"; From Cuba priorizará sector cooperativo, Inter Press Service, March 27, 2012)

  Among the least explored aspects of the Lineamientos has been its framework for organizing economic activity in the private sector. The key feature of that organization is the prohibition of the aggregation of capital or other means of production outside of the state sector.  If corporations are prohibited as a form of private economic activity but reducing such activity to prescribed simple sole proprietorships may not produce the sort of positive economic growth necessary to avoid economic stagnation, then the question of finding an alternative form of economic activity that permits private aggregations of economic activity becomes critical to the forward movement of Cuban economic reforms consistent with its governing ideology.  For that purpose the Cuban state will offer the cooperative in a form that is yet to be determined.  What follows describes the context in which this development is occurring and recent movements by state official to implement this form of activity. 

The broad prohibition against the aggregation of capital and other means of production for private economic activity, that is for economic activity not directly owned and controlled by the state, is clearly articulated in the Lineamientos. 

–03. En las Formas de gestión no estatales no se permitirá la concentración de la propie-dad en personas jurídicas o naturales.  (Lineamientos No. 3, at pg. 11)

The foundational principle is that under Cuban Marxist Leninist economic organization, only the people, organized through the state sector and directed by the Party, can accumulate the means of production and act engage in collective activities.  To permit collective activities outside the state sector would be understood as a threat to the principal authority fo the state and its apparatus as the vanguard of popular action. For those brought up under Soviet Socialist theory, this approach sounds familiar.  It has also, to some extent been abandoned virtually everywhere, at least in the form the Cuban Communist Party seeks to preserve it in the form of Lineamientos No. 3.  See, Backer, Larry Catá, Cuban Corporate Governance at the Crossroads: Cuban Marxism, Private Economic Collectives and Free Market Globalism. Transnational Law & Contemporary Problems, Vol. 14(2):337-418 (2004)) ("Like other Stalinist states, Cuba uses the forms of autonomous economic collectives as a handy means of dealing with foreigners, as the medium through which the State could deal with the capitalist exterior."  Ibid., 371). 

Yet at the same time, the Cuban state appears to understand that limiting the private economic sector to a mass of small proprietorship heavily regulated by the state might not be helpful in meeting its objectives of opening the economy and reducing the need for state employment for the great mass of Cuban people.      As an alternative, the Cuban state apparatus, and its intellectual elites, have been exploring an alternative--the cooperative form.  Larry Catá Backer,  Camila Piñeiro Harnecker on Cooperatives and Socialism in Cuba,   Law at the End of the Day, Oct. 3, 2012.   Much of the theoretical justifications and arguments supporting this form as an acceptable alternative for the organization of private economic activity has been recently explored in a collection of important essays published as  Cooperativas y socialismo: una mirada desde Cuba (Camila Piñeiro Harnecker, editor; La Habana: Editorial Caminos 2011)(ISBN 978-959-303-033-5).  The form of cooperatives is a potentially delicate alternative.  For cooperatives to work as an alternative acceptable under the current regime's assumptions about the corporate form, it would be necessary to distinguish between the autonomous governance form at the foundation of the corporate form and a cooperative form more amenable to state supervision and control.   

Recently,  the Cuban state has moved from   theory and intent to practice.  It was announced that Mafrino Murillo, the Vice President of the Counsel of Ministers, confirmed the preparation of new rules for the operation of cooperatives outside the agricultural sector ("Vicepresidente del Consejo de Ministros, Marino Murillo, confirma preparación de decreto ley y reglamento para ampliar las cooperativas al sector no agropecuario.")(From  Cuba priorizará sector cooperativo, Inter Press Service, March 27, 2012).  The announcement was timed to coincide with the visit of Pope Benedict XVI and was meant to suggest sustained movement to  implement the Lineamientos approved by the Party and State apparatus, without encouraging political reform. (Ibid).   

Con la primera prioridad colocada en el tema agropecuario, la política trazada incluye la estrategia de desarrollo de sectores generadores de los principales ingresos en divisa libremente convertible, como el turismo, el níquel y la industria biotecnológica y de medicamentos.

En segundo lugar, el vicepresidente mencionó la promoción de diferentes formas de propiedad y “otras firmas de gestión” que garanticen una mayor eficiencia económica, al tiempo que deben preservarse las conquistas de la Revolución cubana en los sectores de la salud pública y la educación.

Así, añadió, el nuevo modelo debe verse no como “igualitarista” sino como la creación de igualdad de condiciones para el desarrollo del ser humano, en un contexto en el que el ingreso principal tiene que proceder del trabajo.

Como la “tarea más importante” aparece “hacer eficiente la empresa estatal” y en la búsqueda de una solución en ese sentido, Murillo aseguró que se hace necesario avanzar en fórmulas que permitan, manteniendo la propiedad estatal, estimular la gestión eficiente por otros actores no estatales. (Ibid.).

 The move to liberalize the use of cooperatives is meant to be part of the larger strategy of opening the agricultural sector, reviving the tourist, extractives and biotechnology sectors without significantly altering the nature of political control of economic productivity.