Thursday, July 11, 2013

Just Published: "The Cooperative as a Proletarian Corporation: The Global Dimensions of Property Rights and the Organization of Economic Activity in Cuba"

My article, "The Cooperative as a Proletarian Corporation: The Global Dimensions of Property Rights and the Organization of Economic Activity in Cuba" has just been published and will appear in Northwestern Journal of International Law and Business 33:527-618 (2013).

(Pix of a Cuban billboard from Cooperative Cuba is on the horizon, The Cuba Bug, Jan. 18, 2013)

The abstract, table of contents and Introduction follows.  The article may be accessed HERE or HERE.


 "The Cooperative 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 (2013).
Abstract: Since the 1970s, the relationship between productive property, and the state and individual has been contested in Marxist-Leninist nations. Though China has moved to permit robust private activity and the private aggregations of capital in corporate form, Cuba has strictly adhered to traditional communist principles. In the face of recent financial upheavals, Cuba is seeking to liberalize its approach to economic organization, but in a way that would retain a state monopoly of the use of the corporate form while opening a small and well-managed consumer oriented private sector. Among the most innovative alternatives being developed is the cooperative, which has the potential to develop into a useful form of what this Article calls a proletarian corporation. But innovation faces substantial hurdles. This Article examines in Part II the context for the development of this new approach to cooperative organization. Part III then turns to a close study of the cooperative and its constraints, starting with a consideration of the agricultural cooperative as template for changes. It then turns to a critical consideration of the development of a theoretical basis for changing the function and operation of cooperatives developed by Cuban intellectuals, and ends with an examination of the transposition of that theory into the guidelines for restructuring the Cuban economy (Lineamientos) adopted by the Cuban government, and then articulated through a regulatory framework. Part IV then briefly considers the role of the cooperative in efforts to internationalize the Cuban economic model through vehicles such as the Alianza Bolivariana. This Article concludes that while the cooperative fits nicely within Cuba’s efforts to develop a complex and well-integrated program of economic organization, its theoretical elegance remains in tension with the realities of Cuban politics. This tension increases the risk that cooperatives will be reduced to little more than a means of privatizing central planning.

Table of Contents

I. Introduction. 528

II. Economic Organizations in Cuba: Limiting Power of Individuals to Aggregate Capital or Labor Without Direct State Control 541

   A. Resetting the Regulatory Context: From Command to Lineamientos 542

   B. Economic Organization After the Lineamientos 552

     1. The Omnipresent State Sector 552

     2. The Role of Private Enterprise. 557

III. Ideal and Reality: From Agricultural Cooperative to Proletarian Corporation? 564

    A. Structural Template: The Agricultural Cooperative in Cuba Post-1959 556

    B. The Cooperative as a Proletarian Corporation: The Debate Within Cuba 568

   C. The Cooperative in the Lineamientos and Regulation: From Political Guidelines to Regulatory Program 583

     1. The Lineamientos 584

     2. The December 2012 Regulatory Framework. 590

          .... i. Consejo de Estado Decreto-Ley No. 305: the “Proletarian” Corporate Law of  Cooperatives 590

         .... ii. Consejo de Estado Decreto-Ley No. 306: .... Governmental Impositions and the Private Sector Contributions to the National Social Security 
System.. 600

          .... iii. Consejo de Ministros Decreto No. 309: the Implementing Regulations 601

          .... iv. The Ministerial Resolutions 606

IV. Theory and Engagement: State and Cooperative in the Global Context 607

V. Conclusion. 617

I. Introduction

Cuba has been facing increasingly challenging economic problems since the fall of the Soviet Union[1] and the end of the Soviet system of state-to-state based economic activity.[2] In the absence of Soviet aid, and in the face of U.S. political and economic hostility,[3] Cuba has sought new partners and allies.[4] Cuba also has increasingly experimented with innovative ways of organizing economic activity that avoid reducing the paramount power of the State to own and control property, especially capital, but that also permit the aggregation of effort for mutual economic benefit.[5] At the center of this tension, Cuba faces issues of the role and character of property, along with the issue of how to divide the power to control and use property between the State and individuals. This Article considers one of the most interesting innovations—the Cuban cooperative—both as a theoretical and practical solution to the peculiar political and economic problems of Cuba, as constrained by its own legal system, and as a vehicle of economic activity with application beyond the peculiarities of Cuba.

In the West, notions of property are at the center of economic and political organization.[6] The law-state—that complex of social, governmental, administrative, and economic organization[7]—is to a great extent grounded on the elaboration of rules and systems for the taxonomy and systemic protection of property. This means creating systems for dividing things and ideas into manageable and negotiable bits, and then developing rules to govern transactions in these bits, along with rights to exploit these bits.[8] Individuals can aggregate property for the production of private wealth; organized as corporations, this property assumes a double character.[9] In one sense, corporations are understood as property that is represented, for example, by shares, which in turn constitute property in the hands of shareholders, giving each shareholder certain rights including control, income, and assets of the entity. In another sense, corporations are also understood as autonomous entities with a governance architecture constructed and existing outside the direct control of the shareholders in whose collective interests the enterprise operates. In this sense, as a government independent of investors, but operating to further investors’ interests, corporations resemble other institutions formed by communal aggregations—such as religious institutions and even states[10]—in their character though, of course, with a more limited scope.[11] As an entity, for example, corporations may acquire political rights under domestic law[12] and at least some measure of responsibility under international law.[13]

A very different picture emerges in Marxist-Leninist states.[14] In such states, the means of production traditionally belong to the revolutionary elements of society organized within a structure of a democratic dictatorship awaiting the transition from socialism to pure Marxism.[15] Deeply embedded in these states is the distinction between property ownership and property use.[16] Productive property[17] is understood as inherently political in character—an instrument for the satisfaction of the needs of the people. Conversely, productive property owned or controlled by individuals, especially where that ownership is not under state control or direction, could be understood as a challenge to the unity of the people and a political threat. Vesting political or economic power in institutions through the aggregation of property in the hands of private individuals, such as the shareholders of a corporation, is viewed as a challenge. Like the organization of political power, which is understood to be necessarily centered on the state as the sole embodiment of collective power, the organization of economic power is understood to be centered on the state apparatus as the sole embodiment of economic power. Corporations could be organized as a form for the aggregation of capital and be considered separate legal entities, but such enterprises remain instrumentalities of the state.[18]

The relationship of property to the individual (the proletariat) and the state has been at the center of revolutions in Marxist-Leninist theory for the last generation. But the last several decades have seen an ideological split about the relationship of the ownership of productive property to the state within the Marxist-Leninist community of states. Led by changes in China that accelerated in the years after the late-1970s, China has abandoned the traditional notion of the state’s monopoly on productive property and the necessity of aggregating for the apparatus of the state all power to direct and manage productive assets and the people through which productivity is extracted.[19] Central planning has been abandoned in favor of centralized control of key sectors and central direction of the rest, with control conforming generally to Marxist-Leninist principles as continuously developed within the Chinese Communist Party. In effect, China has been moving from micro to macro management, with exceptions for key economic sectors. Yet, as its critics argue, this is still a Marxist approach to property and its relationship to individuals and collective ownership.[20] The process has not been without deep division within the Chinese Communist Party at times, as different groups advance distinct visions of the future course of development of Marxist-Leninist economies.[21]

Cuba, however, is an entirely different story.[22] Under the leadership of Fidel Castro from 1959 to 2006, Cuba remained deeply committed to the central planning model.[23] Though Cuba has been moving away from an old Soviet-style model under the leadership of Raúl Castro,[24] it has retained both the state apparatus and communist party ideology to support the idea that substantially all control of significant economic activity must be directed, as a political matter, by party loyalties according to communist principles but as ordered directly through a large state bureaucracy. Productive property, for all intents and purposes, retains its direct connection to the state along with a strong commitment to the direct ownership and management role of the state in economic activity.[25] In this respect, Cuba retains the strongest loyalty to the Soviet model of state organization, which all but disappeared after the dissolution of the Soviet Union nearly half a generation ago.[26] Though Cuba remains very much in the Soviet orbit long after its center disappeared,[27] Cuba’s ideological foundations remain perhaps more aggressively Marxist-Leninist than even the Soviet model.[28]

Yet, modern realities have produced a strong pull against this form of economic organization.[29] Globalization has substantially changed the rules through which global production of goods is organized,[30] though not without criticism.[31] Liberalized trade regimes have made the movement of goods, capital, enterprises, and to some extent people, easier, while permitting local diversity that complements global tastes in variety.[32] Cuba’s poor economic performance and its difficulty in providing for its people has been exacerbated for many years by a state and administrative apparatus that seemed oblivious and jealous of its power[33] and a U.S. policy of isolating Cuba from globalization.[34]

Cuba has both recognized and resisted these realities.[35] On the one hand, over the past decade Cuba has sought to internationalize a counter-model to that offered by conventional globalization, forming for that purpose the Alianza Bolivariana para los Pueblos de Nuestra América (Bolivarian Alliance for the Peoples of Our Americas) (ALBA).[36] On the other hand, Cuba has also embarked on what was a potentially far-reaching project of internal self-reflection and change within the parameters of the current political structure of the Cuban state.[37] This project produced a potentially far-ranging set of economic reforms, undertaken through the Cuban Communist Party (CCP), with the objective of establishing a new direction in CCP policy to be followed by changes to Cuban law through appropriate legislation undertaken by the Cuban government.[38] The broad structures of economic reform policies were memorialized in a set of Guidelines, the Lineamientos de la política económica y social del partido y la Revolución (Lineamientos),[39] which were approved at the Sixth Party Congress in 2011. Subsequently, these Guidelines were expected to be taken up by the government and transposed into legislation and ministerial regulations.[40]

As a consequence, what has been emerging—especially since 2009 and accelerating with the adoption of the Lineamientos—is what appears to be significant efforts by Cuba’s leaders to embark on a peculiarly Cuban version of economic experimentation.[41] That experimentation has been carefully circumscribed within the CCP’s sense of its Marxist-Leninist organizational principles. Cuba continues to re-affirm its fundamental commitment to some of the ideals of Soviet state organization: strong and direct state ownership and control of the principal levers of economic activity and a deep suspicion of the allocation and aggregation of productive property in the hands of private individuals. But some key factions within the CCP—the intellectuals that support it and state officials—are also trying to create spaces beyond a centrally-planned control economy, both in the state sector and within what is hoped to be an important (although small) non-state sector.[42] Both are reflected in the thrust of the conceptual basis of ALBA and of the Lineamientos, and to some extent in the first tentative steps toward regulatory implementation.

The resulting approach, being slowly and unevenly incorporated into the legal structures of Cuban economic regulation,[43] is grounded in the division of economic activity regulation around four distinct spheres. The first is public and centered on the reorganization of state-managed economic activity; the second is private and centered on the production and delivery of consumer goods and services; the third is national and centered on the development of an integrated economy grounded in direct and indirect state ownership and management; and the fourth is regional and centered on the development of state-to-state economic activity under the ALBA model. Integrating these approaches requires a careful balancing of the logic of a centrally-planned and publicly-oriented Marxist-Leninist approach to economic control and the logic of the framework of a markets-based system of economic globalization. But that balancing produces the potential for an important contradiction. At the heart of this contradiction is the tension between the norms and forms of economic globalization, grounded in the free movement of capital through market transactions, and the current conventional framework of Cuba’s Marxist-Leninist state organization, grounded in state control and management of economic activity.

Some of the elements of this experimentation have been widely discussed and criticized[44]—from the efforts to produce a rigidly controlled class of proprietorship businesses,[45] to the limited and highly regulated efforts to open agricultural cultivation to farmers.[46] The institutional forms in which economic development is to be undertaken are less developed. The Lineamientos strictly limited the availability of the corporate form to state-owned enterprises (SOEs) and enterprises involving the state and foreigners.[47] The rationale is that the Marxist-Leninist foundation of the state would be undermined if the corporate form were made available to individuals or others without the direct oversight of the CCP and operated as an instrumentality of the state apparatus. That rationale, in turn, is founded on the idea that only the state may aggregate the ownership of property and that the corporate form, in effect, is a manifestation of political rather than economic or property power. The foundational principle is that under Cuba’s Marxist-Leninist economic organization, only the people, organized through the state sector and directed by the CCP, can aggregate the means of production and engage in collective activities for social rather than individual profit. To permit collective activities outside the state sector would be understood as a threat to the principal authority of the state and its apparatus as the vanguard of popular action. For those brought up under Soviet Socialist theory, this approach sounds familiar. However, it has, to some extent, been abandoned virtually everywhere outside of Cuba, at least in the form that the CCP seeks to preserve.[48] In its place, other, more limited vehicles for aggregating productive activity in private ventures have been suggested.

If corporations are prohibited as a means of engaging in private market based activities, and reducing private economic 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, constrained by its governing ideology. To be palatable, these vehicles cannot be understood as a means of aggregating capital for absent owners. Instead, they must provide a basis for pooling labor or other direct contributions by the participants in the enterprise. These aggregations of activity must permit the use of capital while remaining grounded in principles of participant control and operation. And, for Cuba, they must be compatible with the organization of the national economy, within which only a small place is available for individual activity that must be licensed and controlled by the state.

Among the most important of these alternatives are cooperatives.[49] The cooperative device is not new. It has become an important element in the aggregation of efforts around the world.[50] Since the 1990s, new models have emerged that “appear to be not only a reaction to the exogenous environmental influences of globalization, industrialization, consolidation, technological advances, institutional uniqueness of the country to legal environment, and overcapacity in the food sector but also to the intrafirm coordination challenges of redirecting strategy.”[51] Indeed, cooperatives “represent a substantial share of the economy in most developed market economies. . . . [and are] larger in advanced market economies than it is in less developed economies.”[52] But these traditional models tend to be based on the property rights being restricted to members-patrons.[53]

Since the 1959 revolution in Cuba, the cooperative has served principally as a device for managing agricultural production. But the continuing economic crisis in Cuba now may be spurring new and potentially more radical economic organization based on the cooperative form. The steps being taken are both tentative and circumscribed by the realities of Cuban politics.[54] Indeed, the Cuban authorities were slow to deliver a set of regulations implementing the Lineamientos, promising[55] and then announcing their enactment only at the end of 2012.[56] Despite this, the theoretical premises underlying this movement suggest the possibility of the development of a theory for aggregations of productive capacity in which capital is not privileged—a theory identified here as a “proletarian corporation.”

This Article examines the potential consequences of the current approach to the creation and management of economic enterprises within Cuba. The examination is structured around the work of academics organized by Camila Piñeiro Harnecker of the University of Havana’s Centro de Estudios de la Economía Cubana.[57] The new policies that have emerged from this work have had practical consequences on the legal regulation and management of economic enterprises can be seen in recent actions of the CCP, both in the construction of an internal governance order and in the exportation of that order in the construction of multilateral trade relations.[58] The principal insight of this work is that by constraining the ability of individuals to aggregate capital, the Cubans may have stumbled onto the key to the development of a proletarian corporation. A proletarian corporation can be constructed on the structures of the cooperative by emphasizing the contribution of labor, rather than capital, to the firm.

Following this Introduction, Part II examines the development of the new Cuban economic model. This new structure of economic organization in Cuba reveals a limited space for individual economic activity in the shadow of but not directly managed by the state. To operationalize that structure, the Lineamientos provides a framework that allocates permitted forms of economic activities and specifies their limits: private individual enterprise, corporate organization for some state enterprises, and the possibility of individual labor aggregation through cooperatives. Part III then considers the cooperative in more depth. It examines the way in which the structures of the agricultural cooperative—a peasant socialization technique with roots in Leninist theory—was redeployed as a vehicle for the aggregation of productive forces without displacing state ownership and management of capital. Thus re-purposed, the cooperative was transformed. From theoretical transformation, Part III then considers the transposition of cooperative theory first the Lineamientos, and then as written into law through the measures adopted on December 11, 2012. The analysis reveals the way in which the move toward acceptance of the cooperative as a means of aggregating economic activity in the small non-state sector has opened potentially deep ideological fissures within the CCP. Within that context, the analysis also suggests the benefits and limitations of this peculiarly Cuban innovation within the confines of Cuban political ideology, as well as what the turn to the cooperative form in private enterprise may mean for the future course of the development of Cuba’s state-party ideology.

Part IV analyzes Cuba’s approach within the structures of its regional economic engagements. The cooperative is an important element for the development of an integrated approach to regional trade grounded in state-to-state economic transactions. The focus is the internationalization of the Cuban model through the structure of the socialist trade organization, ALBA . The problem of the cooperative highlights a fundamental conundrum of Cuban economic development: can Cuba develop a conceptually useful vehicle, like the cooperative, that enhances individual autonomy, and not hobble it for fear that it will undermine the socialist character of the 1959 Revolution? Cuba’s solution to that problem will determine the course of its future.


[1] See Jorge Pérez-López, The Cuban Economic Crisis of the 1990s and the External Sector, 8 Cuba Transition 386, 386 (1998),

[2] On the Soviet trade system, see Nicolas Spulber, The Soviet Block Foreign Trade System, 24 L. & Contemp. Probs. 420 (1959). Even before the collapse of the Soviet Union and its trade system, some argued that the Soviet economic trade model mimicked, in one important respect, the exploitative traits of Western markets-based trade systems. See David Ray, The Dependency Model of Latin American Underdevelopment: Three Basic Fallacies, 15(1) J. Interamerican & World Aff. 7–10 (1973) (arguing that Soviet economic imperialism produces economic dependence within the Soviet system similar to that ascribed to capitalist states in their relationship with developing states); but see Guy J. Gilbert, Socialism and Dependency, 1 Latin Am. Persps. 107 (1974).

[3] See generally Daniel Hansen, Dayne Batten & Harrison Ealey, It’s Time for the U.S. to End Its Senseless Embargo of Cuba, Forbes (Jan. 16, 2013, 8:36 AM),; see also Cuba, N.Y. Times, (last visited Mar. 20, 2013) ( news, reference, and archival information as well as photographs, graphics, audio, and visual files published on Cuba).

[4] Among the most important partners are China, Venezuela and Brazil. See Agence Fr. Presse [AFP], China Pledges Financial Aid to Cuba’s Castro, Google News (July 5, 2012), (“China on Thursday pledged financial aid to Cuba as it undertakes historic economic reforms, promising visiting President Raul Castro a new credit line as well as help in health care and technology.”); Juan O. Tamayo, Raul Castro’s Long Trip to China Raises Questions About a Secret Stopover, Miami Herald (July 5, 2012), (“China is Cuba’s second or third-largest trade partner after Venezuela and neck-and-neck with Canada, with bilateral trade totaling $1.8 billion in 2010. Beijing’s interests in Cuba and other parts of the Caribbean have been growing in recent years.”); see generally María Alejandra Calle, A Brief Note About the China-Latin American Trade Partnership: An Opportunity for Trade Diversification or a Threat to a Green Agenda in the Region?, 3 Revista de Negocios Internacionales 57 (2010), available at; Daniel Erickson, Cuba, China, Venezuela, New Developments, 15 Cuba Transition 410 (2005),; Jorge F. Pérez-López, Swimming Against the Tide: Implications for Cuba of Soviet and Eastern European Reforms in Foreign Economic Relations, 33 J. Interamerican Stud. & World Aff. 81 (1991); Hernán Yánez, The Cuba-Venezuela Alliance: ‘Emancipatory Neo-Bolivarismo’ or Totalitarian Expansion (Inst. for Cuban & Cuban Am. Studies, Occasional Paper No. 7, 2005), available at

[5] Larry Catá Backer, Cuban Corporate Governance at the Crossroads: Cuban Marxism, Private Economic Collectives, and Free Market Globalism, 14 Transnat’l L. & Contemp. Probs. 337 (2004); Raj Desai, Can Raúl Castro Revive Cuba’s Private Sector?, Brookings Pol’y Brief Series (Brookings Inst., Wash., D.C.), no. 165, Mar. 2008, available at

[6] For an excellent short discussion, see James Gordley, Foundations of Private Law: Property, Tort, Contract Unjust Enrichment 7–31 (2006); Ugo Mattei, Basic Principles of Property Law: A Comparative Legal and Economic Introduction 39 (2000).

[7] See generally Larry Catá Backer, On the Tension between Public and Private Governance in the Emerging Transnational Legal Order: State Ideology and Corporation in Polycentric Asymmetric Global Orders (Consortium for Peace & Ethics, Working Paper Apr. 16, 2012), available at

[8] See, e.g., Index of Economic Freedom, Heritage Found., (last visited Feb. 24, 2013) (“The more certain the legal protection of property, the higher a country’s score; similarly, the greater the chances of government expropriation of property, the lower a country’s score.”).

[9] Katsuhito Iwai, Persons, Things and Corporations: The Corporate Personality Controversy and Comparative Corporate Governance, 47 Am. J. Comp. L. 583, 584 (1999).

[10] Larry Catá Backer, Reifying Law—Government, Law and the Rule of Law in Governance Systems, 26 Penn St. Int’l L. Rev. 521 (2000).

[11] See generally Jennifer A. Zerk, Multinationals And Corporate Social Responsibility: Limitations And Opportunities In International Law 8 (2006); David Kinley & Junko Tadaki, From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations at International Law, 44 Va. J. Int’l L. 931, 933 (2004).

[12] See, e.g., Citizens United v. Federal Election Comm’n, 558 U.S. 310 (2010).

[13] See Larry Catá Backer, From Institutional Misalignments to Socially Sustainable Governance: The Guiding Principles for the Implementation of the United Nations’ “Protect, Respect and Remedy” and the Construction of Inter-Systemic Global Governance, 25 Pac. McGeorge Global Bus. & Dev. L.J. 69 (2012); Larry Catá Backer, Multinational Corporations, Transnational Law: The United Nations’ Norms on the Responsibilities of Transnational Corporations as a Harbinger of Corporate Social Responsibility in International Law, 37 Colum. Hum. Rts. L. Rev. 287 (2006) [hereinafter Multinational Corporations].

[14] See, e.g., Jeremy Waldron, The Right to Private Property 5–16 (1988) (offering a critical assessment of prominent property theories, from Marxist to libertarian theories); Barden N. Gale, The Concept of Intellectual Property in the People’s Republic of China: Inventors and Inventions, 74 China Q. 334, 334–35 (1978) (analyzing Chinese Marxist view towards intellectual property).

[15] See, e.g., Xianfa pmbl. (1982) (China), translated in Constitution of the People’s Republic of China, People’s Daily Online, (last visited May 15, 2013) (“After the founding of the People’s Republic, the transition of Chinese society from a newly-democratic to a socialist society was effected step by step. The socialist transformation of the private ownership of the means of production was completed, the system of exploitation of man by man eliminated, and the socialist system established. The people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants, which is in essence the dictatorship of the proletariat, has been consolidated and developed.”).

[16] “Indeed, since political power is in the hands of the working class, since this political power owns all the means of production, the only task, indeed, that remains for us is to organize the population in co-operative societies.” Vladimir I. Lenin, On Co-Operation, in What is Soviet Power? 91 (1973).

[17] “It is important to understand that Marx defines the word property in two senses, as personal property and as productive property . . . . By productive property, Marx means objects people owned privately which did produce social wealth, such as oil wells, coal mines or steel mills.” György Lukács, The Process of Democratization 8 (Dennis J. Schmidt ed., Susanne Bernhardt & Norman Levine trans., 1991).

[18] A.F.M. Maniruzzaman, The Relevance of Public International Law in Arbitrations concerning International Economic Developments, J. World Inv. & Trade 263, 281 (2005). Maniruzzaman notes: “As far as we are concerned here . . . it is quite likely that in most countries the separation between a State and a State enterprise as parties may be disregarded and the presence of the State itself through its State Enterprise can be attributed as such.” Id. at 279.

[19] See Pitman B. Potter, The Chinese Legal System: Globalization And Local Legal Culture (David S.G. Goodman ed., 2001); Mathew S. Erie, China’s (Post-)Socialist Property Rights Regime: Assessing the Impact of the Property Law on Illegal Land Takings, 37 H.K.L.J. 919 (2007) (explaining the tension between reformers and orthodox Chinese Marxists).

[20] See, e.g., Ryan Van Steenis, From Mao to Madison and Back: An Examination of China’s National Property Law and Its Diminished Potential, 23 Temp. Int’l & Comp. L.J. 35, 58–63 (2009).

[21] See generally Joseph Fewsmith, Dilemmas of Reform in China: Political Conflict and Economic Debate (Mark Selden ed., 1994).

[22] See Fidel Castro Ruz, Cuba’s Revolutions in Economy and Defense, in Fidel Castro: Speeches 1984–85: War and Crisis in the Americas 57, 57–81 (Michael Taber ed., Pathfinder Press 1st ed. 1985) (documenting Castro’s speech delivered December 28, 1984 at the close of the seventh session of the National Assembly of People’s Power in Havana, Cuba).

[23] Daniel P. Erikson, The Future of American Business in Cuba: Realities, Risks, and Rewards, 14 Transnat’l L. & Contemp. Probs. 691, 694–95 (2004).

[24] Some in the West have described this as a move away from Marxism toward capitalism. See, e.g., Revolution in Retreat, Economist, Mar. 24, 2012, at S.3 (“Raúl Castro, who formally took over as Cuba’s president in February 2008 and as first secretary of the Communist Party in April 2011, is trying to revive the island’s moribund economy by transferring a substantial chunk of it from state to private hands, with profound social and political implications.”).

[25] As one commentator notes:

In communist countries, the state repealed or emasculated private law in employment relations, land ownership, antitrust, consumer products liability, and worker safety. Once the legal impediments were removed, officials ruled by decree. So, central planning is a way of making law as well as commodities. Central planning produced remarkably similar results in vastly different countries, such as Poland, Vietnam, and Cuba. Specifically, central planning emphasized economic growth through forced savings and expansion of the capital stock in heavy industry. Everywhere, central planning failed to produce consumer goods in abundant quantity or high quality.

Robert D. Cooter, The Theory of Market Modernization of Law, 16 Int’l Rev. L. & Econ. 141, 146 (1996); cf. George Philip, The Political Economy of Development, 38 Pol. Stud. 485, 486 (1990).

[26] Edward Yates, Central Planning Meets the Neighborhood: Land Use Law and Environmental Impact Assessment in Cuba, 16 Tul. Envtl. L.J. 653, 653–54 (2003) (discussing Cuba’s alignment with the former Soviet Union).

[27] See Jorge Pérez López, Coveting Beijing, but Imitating Moscow: Cuba’s Economic Reforms in a Comparative Perspective, 5 Cuba Transition 11, 11–20 (1995),

[28] “In Castro’s ideal socialist world the worker identifies totally with the society, the state, and the means of production and covets complete harmony between his work and himself.” Sheldon B. Liss, Fidel!: Castro’s Political and Social Thought 61 (1994).

[29] Cf. Thomas L. Friedman, The Lexus And The Olive Tree (1999) (discussing how the modern realities of globalization clash with local culture and efforts to preserve ancient traditions).

[30] Cf. Jagdish Bhagwati, In Defense of Globalization (2004) (arguing that globalization has the capacity to be a powerful tool to further social goods).

[31] See, e.g., Joseph Stiglitz, Globalization And Its Discontents (2002); Joseph Stiglitz, Making Globalization Work (2006).

[32] Boaventura de Sousa Santos, Globalizations, 23 Theory, Culture & Soc’y 393, 396–97 (2006).

[33] See generally Sergio Díaz-Briquets & Jorge Pérez-López, Corruption in Cuba: Castro and Beyond (2006).

[34] See, e.g., Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 §§ 301–302, 22 U.S.C. §§ 6081–6082 (2006).

[35] See, e.g., Fidel Castro, La globalización neoliberal conduce al mundo al desastre [Neoliberal Globalization is Leading the World to Disaster], in De Seattle al 11 de Septiembre [From Seattle to September 11] 175, 175–79 (2002).

[36] Larry Catá Backer & Augusto Molina, Cuba and the Construction of Alternative Global Trade Systems: ALBA and Free Trade in the Americas, 31 U. Pa. J. Int’l L. 679 (2010).

[37] Heather E. Shreve, Note, Harmonization, but Not Homogenization: The Case for Cuban Autonomy in Globalizing Economic Reforms, 19 Ind. J. Global Legal Stud. 365, 378–81 (2012).

[38] Lina Forero-Niño, The Cuban Government Approves Guidelines to Reform Cuba’s Economic Model and Develops an Implementation Strategy, 17 Law & Bus. Rev. Am. 761 (2011); Marc Frank, In Cuba, Reforms Bring Cheers but also Jeers, Reuters (July 13, 2011),

[39] Lineamientos de la Política Económica y Social del Partido y la Revolución [Guidelines on the Political and Social Economy of the Party and the Revolution], VI Congreso del Parido Comunista de Cuba [Sixth Congress of the Communist Party of Cuba] (adopted Apr. 18, 2011) (Cuba) [hereinafter Lineamientos], available at (translation available at; see also infra note 56 and accompanying text for the state-apparatus implementing measures.

[40] See Resolución sobre los Lineamientos de la Política Económica y Social del Partido y la Revolución [Resolution on the Guidelines on the Political and Social Economy and of the Party and the Revolution], Cuba Debate (Apr. 18, 2011), http:// Among other things, the resolution adopting the Lineamientos suggested the creation of a governmental commission to implement and further the project of the Lineamientos. The National Assembly then ratified the Lineamientos and committed to move them to implementation through appropriate law making. See Archibald Ritter, El VI Congreso Del Partido Y Los Lineamientos: ¿Un Punto De Viraje Para Cuba? [The Sixth Congress of the Party and the Guidelines: A Turning Point for Cuba?] Espacio Laïcal Suplemento Digital [Lay Space Digital Supplement], No. 132, June 2011, translated in Cuban Economy (June 17, 2011),

[41] See generally John Cairncross, Raúl’s Plan: Examining the 2010 Cuban Reform Initiative, 21 Cuba Transition 265 (2011),

[42] Stephen Wilkinson, Cuba Lay-offs Reveal Evolving Communism, BBC News (Sept. 14, 2010),

[43] See Manuel Barcia, Cuba’s Slow Path to the Future, Al Jazeera (Jan. 11, 2012),

[44] For an excellent analysis of this economic experimentation, see Carmelo Mesa-Lago, Will the VI Communist Party Congress Solve Cuba’s Economic and Social Problems?, 21 Cuba Transition 292 (2011),

[45] For an analysis from within Cuba by one of its most prominent independent economists, see Oscar Espinosa Chepe, Situación económica, política y social de Cuba [Economic, Political, and Social Development of Cuba], 21 Cuba Transition 18 (2011),

[46] See G. B. Hagelberg, If It Were Just the Marabú. . . Cuba’s Agriculture 2009–10, 20 Cuba Transition 32 (2010),

[47] Lineamientos, supra note 39, at 11 (“En las Formas de gestión no estatales no se permitirá la concentración de la propiedad en personas jurídicas o naturales.”).

[48] In China, for example, the government has developed a sophisticated regulatory framework for corporations, including enterprises owned by non-state parties and has sought to develop a socialist approach to the regulation of corporations and corporate governance that furthers the governing state ideology while permitting private access to the corporate form and the development of robust securities markets in the shares of such enterprises. See, e.g., The Company Law of the People’s Republic of China (promulgated by the Standing Comm. Nat’l People’s Cong., Dec. 29, 1993), available at For an example of Chinese corporate governance standards, see Code of Corporate Governance for Listed Companies in China (promulgated by the Sec. Regulatory Comm’n & the State Econ. & Trade Comm’n, Jan. 7, 2001), available at

[49] Int’l Labor Org. [ILO], Promotion of Cooperatives Recommendation, art. 2, R193, (June 20, 2002), available at (“[T]he term ‘cooperative’ means an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.”); Co-operative Identity, Values & Principles, Int’l Co-operative Alliance, (last visited Feb. 7, 2013) (“[A] cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”). The International Co-operative Alliance (“ICA”) was established in 1895 and serves as a representative of cooperatives worldwide. See The ICA, Int’l Co-operative Alliance, (last visited Feb. 7, 2012). Cooperatives come in a large variety of forms, including producer, agricultural, and marketing cooperatives. In some of the literature, cooperatives are more broadly defined to include partnerships and non-profit organizations. See John P. Bonin et al., Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?, 31 J. Econ. Lit. 1290, 1292 (1993) (“The theory of the PC focuses on the changes resulting from replacing the profit-maximizing objective of the neo-classical firm with some other maxim and reflecting both workers’ participation in the decision-making process and workers’ sharing in the residual surplus.”).

[50] Co-operative Identity, Values & Principles, supra note 49.

[51] Michael L. Cook & Brad Plunkett, Collective Entrepreneurship: An Emerging Phenomenon in Producer-Owned Organizations, 38 J. Agric. & Applied Econ. 421, 423 (2006), available at

[52] Henry Hansmann, Cooperative Firms in Theory and Practice. 4 Liiketaloudellinen Aikakauskirja [LTA] 387, 387 (1999) (Fin.), available at

[53] See F.R. Chaddad & Michael L. Cook, Understanding New Cooperative Models: An Ownership-Control Rights Typology, 26 Rev. Agric. Econ. 348, 348–60 (2004).

[54] See Patricia Grogg, Cubans Want Faster Economic Reforms, Inter Press Service (May 8, 2012), (“Among non-state forms of production, Cuban authorities are prioritising cooperatives, although new legislation announced for that sector is still being studied. ‘One of the aspects that apparently is being discussed is the scope or degree of autonomy that this type of association should have,’ said a source who asked to remain anonymous.”).

[55] See Peter Orsi, Associated Press, Cuba Economy Czar Says Cooperatives By Year End, Big Story (July 23, 2012),

[56] These include two decree-laws of the Council of State, one decree from the Council of Ministers, and two ministerial regulations. See Consejo de Estado Decreto-Ley Número 305 [Council of State Decree-Law Number 305] (Gaceta Oficial Extraordinaria No. 53, Dec. 11, 2012, at 249) (Cuba) [hereinafter Decreto-Ley No. 305]; Consejo de Estado Decreto-Ley Número 306 [Council of State Decree-Law Number 306] (Gaceta Oficial Extraordinaria No. 53, Dec. 11, 2012, at 254) (Cuba) [hereinafter Decreto-Ley No. 306]; Consejo de Ministros Decreto No. 309 [Council of Ministers Decree No. 309] (Gaceta Oficial Extraordinaria No. 53, Dec. 11, 2012, at 260) (Cuba) [hereinafter Decreto No. 309]; Ministerio de Económica y Planificación Resolución No. 570/12 [Minister of Economics and Planning Resolution No. 570/12] (Gaceta Oficial Extraordinaria No. 53, Dec. 11, 2012, at 270) (Cuba) [hereinafter Ministerio de Económica y Planificación Resolución No. 570/12]; Ministerio de Finanzas y Precios Resolución No. 427/12 [Minister of Finances and Pricing Resolution No. 427/12] (Gaceta Oficial Extraordinaria No. 53, Dec. 11, 2012, at 273) (Cuba) [hereinafter Ministerio de Finanzas y Precios Resolución No. 427/12]. For a discussion of the above regulations, see O. Fonticoba Gener, Cambio a la actualización del modelo económico [Updating Changes to the Economic Model], Granma (Dec. 11, 2012) (Cuba),

[57] See generally Cooperativas y socialismo: una mirada desde Cuba [Cooperatives and Socialism: A Cuban Perspective] (Camila Piñeiro Harnecker ed., 2011) [hereinafter Cooperativas y Socialismo].

[58] See Grogg, supra note 54 (“The [policy] changes should be sped up in some economic sectors . . . . [and the] best candidates for obtaining immediate significant results’ through the new policies appear to be non-state forms of organising small-scale production . . . .”).

No comments: