Sunday, June 30, 2013

Cuba Sold Out

Xi Jinping Raul Castro
Then Vice-President Xi Jinping and Raul Castro, Havana, June 5, 2011  (photo: Forbes)
 In April 2011 in “Cuba for Sale” we reviewed the situation in Cuba following the 6th Congress of the CPC and the Guidelines which it adopted. We concluded that Raul Castro was taking Cuba down the ‘China Road’ to state capitalism. We did not think then that Cuba had reached the point of restoring capitalism. We were wrong. We predicted that Cuba was moving towards ‘market socialism’ and on the way meeting Venezuelan ‘state capitalism’. Today looking back after two years we think Cuba had already reached the point of restoring capitalism. We missed the significance of the 6th Congress in committing Cuba to a state capitalist ‘strategic partnership’ with Chinese imperialism. Cuba’s fate has always hinged on the revolution in Latin America. In the last decade the revolution has been strangled by the Bolivarian popular front with China. While the Castroist and Bolivarian regimes have made a great show of their opposition to US imperialism, in reality they have been increasingly subordinated to Chinese imperialism. We think that the intervention of imperialist China has played a key role in strangling the Latin American revolution and that as a result Cuba has gone capitalist. This means that a new Catroist bourgeoisie has emerged alongside the Bolivarian bourgeoisie as the main comprador agents of Chinese imperialist plunder of Latin American workers. A socialist revolution is necessary to overthrow that bourgeoisie and bring about a Socialist United States of Latin America!

[1] Cuba, China and Latin America

The Castroist Left takes Fidel Castro’s view that the fate of the Cuban revolution depends on the Latin American revolution. We agree completely. But for most of the so-called Left in Latin America this revolution takes the form of an anti-imperialist alliance against US imperialism. Virtually none on the Left recognises the entry of China in Latin America as an emerging imperialist power. They see China as an ally in the anti-imperialist front against the US. In reality, this AIF is a popular front between Latin American workers and Chinese imperialism strangling the workers’ revolution. That is why for us China is not a “progressive” partner in the struggle against US imperialism. For us, Cuba is not ‘renewing socialism’ under Raul Castro because of support from ‘socialist’ Venezuela or ‘market socialist’ China. Rather, Cuba’s links with Venezuela and China have allowed it to force restoration in Cuba and present restoration as a ‘renewal of socialism’.

Our article Cuba for Sale written in mid 2011 concludes that the restoration process was well on the road to completion, and that a political revolution to stop it must be based on the Latin American revolution and world revolution. The Bolivarian popular front between the Bolivarian Alliance for the Americas (ALBA) and China was a barrier to this revolution that had to be broken:

“Cuba’s ‘capitalist road’ converges with the much vaunted Chavista ’21st century socialism’. This is the key to the defeat of Latin American workers which is necessary to allow Cuba to complete its historic counter-revolution. Chavez’ Bolivarian revolution in Venezuela (and which leads the ALBA countries including Bolivia and Ecuador) has trapped Latin American workers behind a popular front with China. Chavez famously talks of walking hand in hand with China towards ‘21st century socialism’. It is the counter-revolutionary role of the Chavista popular front in Latin America that allows Cuba to complete a historic counter-revolution by the Chinese method of many defeats and repressions of workers over the decades and then to complete that historic defeat. It follows that if the Cuban counter-revolution is to be defeated before it is altogether victorious, it is necessary to smash the Bolivarian popular front. We cannot stress this enough. Chavez and Castro are part of an ‘anti-imperialist’ bloc with China and semi-colonial semi-fascists like Gaddafi and Assad to stop the new wave of workers’ uprisings against the global crisis-uprising which can play the critical role of breaking up the popular fronts and the fake ‘market socialism’ that ultimately serves imperialism.

So will the Cuban bureaucracy succeed in completing the restoration process before the world revolution destroys the Stalinist/fake Trotskyist barrier to socialist revolution in Latin America and brings a political revolution to Cuba? It depends on whether the Arab revolution deepens and spreads into the rest of Africa, into Europe, Asia and Latin America, where the strangle hold of the Stalinist/Menshevik popular front which ties the workers to imperialism is destroyed, and the international revolution advances to victory. Of course this means first and foremost a program for Political Revolution even at this late stage in Cuba.”

Yet even as we wrote these words, the “strangle hold” of the popular front was proving decisive in allowing the Cuban bureaucracy to transform the class character of the state from a deformed workers state to a capitalist state. While we expected a global struggle that was developing with the Arab Spring against paying for the capitalist crisis to influence the Latin American revolution and ultimately determine the outcome in Cuba, we underestimated the extent to which the downward pressure of the crisis had allowed Chinese imperialism to steal a march on the US and re-colonise Cuba as a semi-colony.

[2] From Workers State to Capitalist State

What we missed in Cuba in April 2011 was the insidious under-the-radar influence of imperialist China’s ‘state-to-state’ deals with Cuba. While we noted all the reforms that introduced the Law of Value (LOV) passed by the 6th Congress these could still be seen as falling short of the rejection of the Plan and a commitment to restoring capitalism. We counted all the trees (e.g. sacking 500,000 state workers, freeing up of self employment, cooperatives with legal inheritance, subcontracting of state services, monetary unity, etc.) but considered that a political revolution responding to a widening global struggle could still reverse this process. What we didn’t see was the ‘wood’ – the overall commitment on the part of the state bureaucracy to restore capitalism.

So almost immediately after the April 6th Congress introduced a number of ‘market reforms’, in June, Cuba signed major new deals with China over oil and gas investments, banking and economic planning, and negotiated the first Five Year Plan of Cuban-Sino Cooperation. It is now obvious that these deals were planned well in advance and signed when Hu Jintao visited in June. We now recognise that the decision to restore capitalism was made at the 6th Congress and that the class character of the Cuban state changed from Workers’ State to Capitalist State. We have no excuse for overlooking this since we had spent three years developing an analysis of China as an emerging imperialist power initially in a political struggle inside the FLTI. We were also preparing a polemic directed at the Spartacists showing that China’s road to restoration was via state capitalism.

This theoretical framework explains the significance of the agreements signed in June 2011 which committed Cuba to collaborate with China to develop along state capitalist lines and to set up high level age joint agencies to implement this development. These agreements marked the decisive turning point in the restoration process when the bureaucratic regime abandoned the stagnating planned economy and embarked consciously on capitalist development. The essential criterion for the change in the class character of the state was the decision of the bureaucracy to no longer defend the Plan and instead defend the Law of Value.

To explain why this determines the point at which the class character of the state changes, we have to show how the state ceases to defend workers property by means of planned prices of production and replaces these with prices of commodities set by the global market. To see how this happened we first we need to explain the Law of Value (LOV), then we need to show that the LOV doesn’t have to manifest itself in the ‘privatisation’ of state property, and that workers property can be converted into capitalist property while remaining state property, as anticipated by Trotsky. This will demonstrate how the Cuban bureaucracy has been able to use the state to restore capitalist property via the Chinese model of state capitalism.

First, what is the Law of Value? The Law of Value states that the value of commodities is equal to the Socially Necessary Labour Time expended in their production.  The LOV existed before capitalism when commodities were traded at roughly their labour cost. With capitalism the LOV became fundamental to production because commodity production was generalised to include the commodity labour-power. The exchange value of commodities was arrived at in the market. Prices responding to supply and demand fluctuated around the value of commodities. To sell, all commodities had a use-value which now included labour power, the unique commodity with a use- value to the capitalist to produce more value than it costs to reproduce i.e. surplus-value. Hence capital could expropriate surplus-value as the source of profits.  This was made possible by capitalists owning the means of production and forcing workers to sell their labour power to lower the price of production of commodities they produce (=wages + raw materials + average profit). 

This is why capitalism has a built-in motor force, the contradiction between the two classes; labour and capital, which constantly struggle over the share of the total value produced. The historical development of capitalism as class struggle is expressed in the laws of motion, the development of the forces of production, the tendency for the rate of exploitation to increase, which lead to periodic crises of falling profits (TRPF), and ultimately crises that increasingly cause massive destruction of the forces of production in depressions and imperialist wars, creating the conditions for socialist revolution.

Marx envisaged that socialism could succeed only if it overcame the destructive legacy of capitalism by developing the forces of production. To do this it must put their control into the hands of the working class to plan production to meet social needs. This means replacing the LOV (which presupposes the global capitalist market) with planned prices based on a valuation of labour not as a commodity but as a social value. In this way the working class determines how labour is distributed in society. How far the Russian revolution and the other countries that followed its model more or less achieved this is debatable. The main point is that these revolutions fell far short of realising socialism. They failed to develop the forces of production and stagnated. Most were forced to open up to the world market and the LOV and capitalist exploitation to stimulate their growth.

Such access to the LOV did not mean that planning was abandoned. That required that the surplus value brought into the planned economy be accumulated in the hands of an exploiting class to restore capitalism. To achieve this, surplus value had to be transferable or inheritable to signify the existence of an exploiting class with an interest in capitalist exploitation. Thus Lenin and Trotsky argued that because the bureaucracy in the Soviet Union did not accumulate personal wealth by this means, workers property remained, and capitalism was not restored. This is the theoretical tradition which we follow. We shall now look at how Lenin and Trotsky envisaged the restoration of capitalism allowing the bureaucracy to become a new bourgeoisie. In particular, because it is China and Cuba that interests us here, how can those who control the state convert state-owned workers property into state-owned capitalist property?

[3] What is State Capitalist Restoration?

The key to understanding restoration in Cuba is that it followed the Chinese path to restoration via state capitalism. For us state capitalism refers only to the capitalist economy where key means of production are highly concentrated in state ownership. Usually these state assets are in the form of state corporations (SOEs) in energy, transport, infrastructure or other essential services. They are owned collectively by the capitalist class since it alone benefits from their existence in providing infrastructure, utilities etc at a price of production in which the states sets a below average ‘profit’ as a subsidy to capital. This is the sense in which it is used by Lenin and Trotsky. When Lenin spoke of the Soviet Union as ‘state capitalist’ he did so to make a polemical point. To disarm those who spoke idealistically of actually existing socialism when it was not even on the horizon, he said that the soviet state resembled ‘state capitalism’ being reliant on the LOV in private agriculture and private industry. In Lenin’s specific sense then, capitalism was the private agriculture and commercial trading, yet the state was a workers state!

On the question of ‘state capitalism’ applied to the Soviet Union Trotsky says:

“To summarize: under state capitalism, in the strict sense of the word, we must understand the management of industrial and other enterprises by the bourgeois state on its own account, or the “regulating” intervention of the bourgeois state into the workings of private capitalist enterprises. By state capitalism “in quotes,” Lenin meant the control of the proletarian state over private capitalist enterprises and relations. Not one of these definitions applies from any side to the present Soviet economy.” 

It is only the first sense in which we apply the term to China and Cuba today. And here we refer to Trotsky’s discussion of the possible course of restoration via ‘state capitalism’. Trotsky writing in 1937 states that the class character of the state is defined by the social relations it defends and that capitalist restoration will have to begin with the nationalised economy:

“Should a bourgeois counterrevolution succeed in the USSR, the new government for a lengthy period would have to base itself upon the nationalized economy.  But what does such a type of temporary conflict between the economy and the state mean? It means a revolution or a counter-revolution. The victory of one class over another signifies that it will reconstruct the economy in the interests of the victors.” 

In other words the class character of the state will change from Workers state to Capitalist state, as the result of a counter-revolution, before it is possible to ‘reconstruct’ a capitalist economy! In the restoration process in the former Soviet Union (and Eastern Europe) this has proven to be the case. This process was relatively rapid and involved an open conflict between an openly pro-imperialist wing of the bureaucracy (Yeltsin and Co) and a more conservative wing of the bureaucracy (Yananev and Co) preferring a slow road in which the CPSU would guide the process. The victory of the openly pro-imperialist faction was a counter-revolution and marked a change in the class character of the state. The process of restoring capitalism then began as the state rapidly dissolved the Soviet Union, banned the CPSU, and destroyed the plan.

In the case of China however, a slower process of restoration by the CCP began in 1978 but only reached the ‘tipping point’ in 1992 at the 14th National Congress when the leadership committed itself to restoration. The new capitalist state then embarked on a process of ‘reconstructing’ the economy using the concentrated power of the nationalised economy. We analyse this process in detail in our recent paper on The Restoration of Capitalism in China. It is clear to us that China’s capitalist restoration vindicates Trotsky’s prediction. And the capitalist counter-revolution in China has become the model for the Cuban counter-revolution.

[4] State Capitalism in Cuba

In the case of Cuba the Catroist/Bolivarian Left is very confused by the restoration process. They have forgotten Trotsky’s prediction in 1937. The Castroist Green Left method is to equate capitalism with private ownership of the means of production. This is because the revolution gained control of the state and nationalised private property. Restoration reverses this process and privatises state property. Therefore so long as the state owns the main sectors of the economy there cannot be restoration. Obviously Cuba is a long way from restoration using this method. In fact the CBL claim the reforms under Raul Castro go hand in hand with the ‘socialist’ revolution in Venezuela. Unlike China under ‘market socialism’ – a concept that disguises the restoration of capitalism – the Castro Bros are held to be genuine socialists combating corruption and resisting the return of capitalism. This method is impressionistic and opportunistic and nothing to do with Marxism as we shall see.

On the other hand, equally impressionistic is the Morenoist view (LIT) that claims restoration is already complete because the state has abandoned the monopoly of foreign trade, the plan, and opened up to private agriculture and small business. The LIT seems to think that since the state has made some market reforms it has fallen short of its blueprint of a Workers’ State. The bureaucracy hand in glove with US imperialism (the LIT ignores China) has smashed the revolution. We could call this the sectarian dogmatic view of restoration. The LIT would have had great difficulty in defending the Soviet Union as a Workers State during the period when Lenin referred to it as ‘state capitalist’ as we explained above.

The key is the commitment of the bureaucracy in using the state to defend the plan, or to replace the plan with the law of value. The CBL opportunists don’t see the Castroist leadership as a bureaucracy so they take at face value its reforms as ‘renewing socialism’. They don’t understand that the bureaucracy has formed a strategic alliance with the Chinese imperialists to convert Cuba into a capitalist client state.

The sectarians on the other hand read into the intentions of the bureaucracy the plan to privatise the key sectors of the economy. But for them the evidence is the inroads of private FDI which as we shall see are relatively insignificant. They do not see the elephant hiding in the wood, the special strategic relationship built between Raul Castro, the army and the Chinese ruling class. While they are looking with contempt at the Castro’s and the expatriate gusanos in Miami, they ignore the looming shadow of imperialist China.

We argue that neither of these faulty methods arrives at the reality. Even the non-Marxist Feinberg of the Brookings Institute writing on FDI in Cuba shows that the experiments in market measures are not sufficient to show the state is sacrificing the plan for the market.  FDI is now in the form of joint ventures and since 2004 Cuba has moved to impose 51% state ownership. The restrictions imposed on FDI do not allow foreign firms to dictate world prices or transmit them into the dual economy. They have to operate within strict price controls. As Feinberg shows, private FDI into Cuba is not free to compete on the basis of international competitiveness.  The main motive for private FDI is the expectation of future windfall profits when the US embargo is lifted. Thus if projected profits do not justify current losses, major multinationals will leave as in the case of Unilever. When forced to renegotiate its contract to cede 51% control of its JV to the state and export 20% of its product at a loss, Unilever abandoned Cuba.

The free trade zones have failed because the terms were not attractive enough for FDI. This is because the state has only relinquished control over foreign trade or agreed to the dollar zone so long as these concessions earn foreign exchange. Micro-enterprises are a full employment measure and based on short-term leases so limit the formation of a new capitalist class.  It appears that the state, driven by crisis has tried to attract FDI, set up export zones, opened up a tourism industry in an attempt to produce exports and obtain foreign exchange. These are not in themselves sufficient evidence that the bureaucracy has committed itself to overturn the plan and impose the global market.

What both opportunist and sectarian approaches to Cuba’s economy do is focus on these relatively minor concessions to FDI and petty capitalism, etc., and ignore the much more fateful state-to-state deals done by the Cuban state – in particular with China. Much more decisive in pressuring Cuba towards capitalist restoration has been the decade of state-to-state deals with China which have converted it into a semi-colony of Chinese imperialism.

“The case of Cuba is instructive, as no other country is so openly condemned by Washington and so publicly praised by Beijing. With bilateral trade exceeding 1.8 billion USD in 2010 (down from a pre-GFC high of 2.3 billion USD in 2008), China is Cuba’s second-largest trading partner,[after Venezuela] and the two countries have pursued state-led cooperation in sectors as diverse as biomedicine, tourism, industrial manufacturing, nickel and oil mining, and oil refining (UN-COMTRADE 2011). The workings of Sino-Cuban initiatives are guarded as state secrets, provoking concerns from external observers about their intentions, capacities, and potential threats to the United States. These apprehensions dovetail with a broader discourse on the negative influence that China may bear on development and democracy in Latin America.” Hearn,157

Both private sector FDI and Cuban expatriate capital is extremely impatient for the US to lift its economic embargo on Cuba. Neither is able to make a sufficient profit that justifies investing in a backward, closed economy where China’s influence is dominant. If the US drops the embargo will it be satisfied with investing in tightly managed export zones while China, having moved into the driver’s seat left vacant by the Soviet Union, is able to exploit Cuba’s best resources, or will it look for a neo-liberal faction in the Cuban bourgeoisie to remove the pro-China faction and push the usual demands of a FTA to create an open economy that can be dominated by the US?

The official US embargo proved unable to break the Cuban regime or create a counter-revolutionary threat to the Catroist regime. Now that China has staged a backdoor capitalist coup, the exile community is split between hardline anti-communists and pragmatists who want the Obama administration to continue relaxing the embargo to allow US trade and capital investment. The émigrés in Miami together with the pressure from small business in the Cuban economy to demand more economic rights (e.g. private property rights of small businesses and cooperatives) and political ‘freedoms’ (i.e. multiparty bourgeois democracy) could provide a base for a neoliberal political party as a Trojan Horse to promote US interests to break China’s grip on Cuba. This would increase the pressure for the state to adopt more market reforms and privatise the profitable sectors of the economy currently dominated by China such as oil, nickel, infrastructure etc.

[5] What’s in it for China?

The Castroist/Bolivarian Left (CBL) has pink rose tinted classes when it comes to China. In the same way as some African regimes like the ANC look to China for ‘win-win’ development deals, the CBL views China as more or less ‘market socialist’ and not interested in profiteering at the expense of the development of the ALBA countries. The ‘win-win’ formula holds that China gets its resources while its clients get economic development. Not true. The ‘winners’ are the Chinese ruling class and its national bourgeois agents in its ‘partner’ states. The losers are the workers and poor peasants in the semi-colonies and China itself. The new bourgeois regime in Cuba is planning to turn workers into a source of cheap labour in collaboration with Chinese imperialism.

We denounce the muddle headedness of the petty bourgeois CBL whose tendencies continue to portray the Castros as revolutionary leaders of a healthy workers state.  Workers of the world need to know that Fidel Castro said the following in introducing the lash of large scale unemployment and in contrast to Marx’s assertion that the goal of communism is to make of work life’s chief want: “Without people feeling the need to work to make a living, sheltered by state regulations that are excessively paternalistic and irrational, we will never stimulate a love for work,” said Castro in April 2010. Since that time and especially with the 6th Congress a joint planning committee of Chinese Capitalists and PCC leaders has supervised the “rationalization” of Cuban industry. With unemployment results you can see on the following chart.

What is not admitted by the CBL is that such ‘win-wins’ are done on the terms of Chinese imperialism following the success of its own capitalist restoration. China demands repayment of its investments/loans etc on terms set by global capitalism. In our investigation of China’s relations with South Africa we asked “Can South Africa develop like China?”

“Let’s look at this prospect. The global crisis and the slump in demand for minerals as well as the hardship facing workers that led to Marikana, may speed up the China connection. China continues to keep the economies of the BRICS steaming along so long as its own economy is still growing rapidly. The current slowdown in China from 8% to maybe 7% is still a raging boom by comparison with Western imperialist states. In this sense China appears to be different from the established imperialist powers in continuing to keep the world economy from slumping into deep depression.

So is Chinese investment an alternative to imperialist super-exploitation? Is China different to the Western Powers? Can it sustain the world economy and in particular the BRICS. Will South Africa be able to attract more trade and investment out of China, and also increase its share of the rent from mineral extraction? And will he Chinese model of development reproduce in SA an increase in added value based on transfer of technology and knowledge?

Deborah Brautigam of China in Africa: The Real Story sees China as different from the European powers, but still expecting a commercial advantage from its investments in Africa. China is not copying European colonisation which sucks out resources and labour power without concern for upstream or downstream development, but can see the benefits in developing Africa after the Chinese model. Not only is China exporting its model to semi-colonies like South Africa but since 2000 and the policy to “Go Out” and membership of WTO, it is demonstrating this process of going up the value stream from cheap labour to high tech in its FDI in SA. This shows that China has used FDI in semi-colonies like South Africa to launch its “Go Global”.”

So far from acting as a boost to ‘socialism’ in the ALBA countries, China has created a sphere of interest in ALBA to base its intervention in Latin America. In all of its economic deals and political agreements, it is seeking to maximise its super-profits from cheap labour and raw materials. Under the impact of the global crisis China is forced to compete with the established imperialist powers to re-divide the world economy. Its special partnership with Cuba is the centrepiece of its Latin American strategy. This is why China has put massive pressure on Cuba to restore capitalism at least since 2004 and dressed to kill as the ‘renewal’ of ‘socialism’. This is how China has provided a ‘socialist’ spin for selling the process of capitalist restoration.

[6] China ‘goes global’ with State Capitalism

Despite the secrecy over the details of its state-to-state deals with Cuba, China’s economic stake clearly dwarfs FDI from Brazil, Spain and Britain. China has taken over from the Soviet Union as the main strategic partner and pushed Cuba down the state capitalist road. As we have seen China must value its loans and investments in Cuba in terms of international prices (the LOV) as it operates in the global capitalist economy. It will always seek deals that allow it preferential prices (i.e. super-profits or monopoly rent) over its rivals calculated over a longer period than private capitalist corporations. This means that it expects to get returns at least on a par with its imperialist rivals, and its national bourgeois partners get their small share of the profits, extracted from its state-to-state deals. This is as true of Cuba as the numerous other client states where ‘nationalist populist’ governments look to China for better deals than those of its imperialist rivals.

As Hearn points out, China kept the global economy from collapsing during the GFC and added 25% of global output between 2006 and 2011. On the strength of its state capitalist development model it has influenced the IMF and the UN to accept a greater role for the state in promoting growth. It has used its prominent role in G20 and BRICS to challenge the US dominated market-driven growth model based on ripping out resources for short term super-profits, and gain support for its state driven growth model where China factors in future long-term super-profits by investing in ‘developing’ its economic partners.

China’s economic stake in Cuba reflects this approach to economic ‘development’. It involves state-to-state agreements and a high level political collaboration to steer this development. But this is not a partnership of equals but between the fast rising No 2 global imperialist power and a tiny semi-colony. ‘Development’ actually means the extraction of super-profits for China. Typically when the projected profits do not materialise, China quickly re-adjusts its ‘development’ plans. We can illustrate this point by looking at the $5 billion deal to expand the oil refinery at Cienfuegos. One of the deals signed in 2011 was for China to take over from Venezuela the task of expanding the refinery in the expectation that exploratory deep sea drilling in the North Cuba Basin would strike big oil fields and bring a huge oil boom to Cuba’s economy.  Since three major attempts to find oil have failed China has not come up with the money forcing Cuba to look elsewhere to fund the refinery. When it comes to the balance sheet there is nothing ‘socialist’ about China’s imperialism.

[7] China as Cuba’s IMF?

Our method allows us to critique the Castro-Bolivarian Left who claim Raul Castro is ‘renewing’ socialism, and at the other extreme, currents like the LIT who claim Cuba is already capitalist because of MNCs in the dollar zone are paying millions into the foreign bank accounts of a new bourgeoisie. Neither sees state capitalism as the route to restoration. So while the Cuban state is using the plan to regulate and quarantine the LOV built into the deals with private FDI, putting strict limits on its NEP-type petty capitalist agriculture, and allowing informal capital into the peso sector from expatriate Cubans, it is the state-to-state deals with China going under the radar that has re-introduced the LOV and allowed the Cuban state to restore capitalism.

We have to turn to the academic literature to find serious documentation of the influence China has exerted on Cuba, and to show how this has made Cuba a semi-colony of China. Let’s look at China’s influence in Cuba and show how this has brought about an historic defeat of the revolution in that country that can only be reversed by a socialist revolution in the whole of Latin America.

According to Hearn China and Cuba are on a “Long march to the market”:

State-to-state cooperation has focused on building critical infrastructure as a basis for Cuban economic growth. Bilateral projects have targeted the upgrading of Cuban manufacturing, the gradual opening of markets, the coordination of industrial sectors, and more recently the controlled introduction of private entrepreneurship. As Chinese enterprises become increasingly comfortable with the rules of market exchange, Cuba’s slow implementation of reforms has generated bilateral tensions. However, since Raúl Castro replaced his brother as Cuba’s president, the pace of change has quickened, and China’s domestic experience with economic reform has assumed growing relevance for the island… China’s incremental approach to market expansion in Cuba is one component of a broader strategy of state-guided development that has proven successful across East Asia (Hira 2007: 87-96). A related component is the linkage of distinct industrial sectors into an integrated system, a process that analysts argue has given the Chinese government an unusual degree of control over international production chains (Ellis 2005)”

China’s growing stake in Cuba prepared the ground for the 2011 reforms:

“Effective implementation of the 2011 reforms will require a phased and coordinated approach, and in this regard China can provide some useful lessons. Among the insights Cuba has derived from China – with varying degrees of attentiveness – are the gradual sequencing of reforms under the management of a state-appointed reform commission (Laverty 2011:65; Lopez-Levy 2011b: 9, 2011c: 43-44), the adaptation of socialist principles to national conditions (Mao et al. 2011: 199), the military management of commercial activities (Klepak 2010), the attraction of investment from emigrants (Ratliff 2004: 21-22), and the testing of liberalisation in target territories prior to wider implementation (Heilmann 2008)” Hearn, ibid.

Concluding this point, Hearn as a bourgeois academic recognises the inevitability of the ‘Long March to the Market’. However what he can’t see as he doesn’t have a Marxist method is that the class character or the Cuban state has to change to carry through this long march. At some point the Cuban state ceases to defend the workers’ plan (albeit deformed and imposed top down by the bureaucracy) and commits to restoring capitalism. Hearn’s analysis backs up our view that the change in the class character of the state came in 2011 with the 6th Congress and the first Five Year joint plan signed between China and Cuba:

In November 2010, president of the Cuban National Assembly Ricardo Alarcón visited Beijing and officially recognised the relevance of China’s economic evolution to Cuba’s development. Raúl Castro had already expressed this sentiment during his visits in 1997 and 2005, which focused on labour market reform and the creation of hybrid state–market economic structures. In China’s experience, particularly since joining the World Trade Organization, these transformations were achieved through a blend of state oversight and privatisation, an approach that Chinese officials now routinely recommend to Cuba. When Chinese Vice-President Xi Jinping and CNPC President Jiang Jiemin visited Havana in June 2011, they not only signed memorandums of understanding on oil and gas investments, but also discussed banking and economic planning. According to Feinberg, the Chinese government would like to see Cuba quicken the pace of reform, and has offered to help lay the groundwork: “Cuba”, said a Chinese official, “needs assistance in making five-year plans” (quoted in Feinberg 2011: 31-32). As Feinberg notes, “Some observers opine, albeit with some exaggeration, that China has become Cuba’s IMF!” (Feinberg 2011: 42).” Hearn, ibid [our emphasis]

If we sum up the cumulative state-to-state deals between China and Cuba (and add the indirect influence of Venezuela’s subsidised oil and JVs with Cuba) it’s obvious that Cuba is as dependent on China today as it was on the Soviet Union before its collapse in 1992. But more important, China has actively steered Cuba towards re-entering the global capitalist economy as its flagship semi-colony in Latin America, setting up a confrontation with the US in its traditional ‘backyard’. This is like waving a red flag in the face of the US and the hostile ex-patriot gusanos in Miami. No doubt in their minds, despite the massive base at Guantanamo, in Cuba the ‘Monroe Doctrine’ is now checkmated by the ‘Mao Doctrine’. They will have seen the death of Chavez as a significant turning point in US fortunes in Cuba and in Latin America. Are we about to witness a revival of US imperialism re-asserting its hegemony over Latin America?

[8] Chavez is Dead: long live Chavismo?

Now that Chavez is dead will Maduro be capable of holding the line? Will he balance, repress, or win further concessions from US imperialism? What is not understood by the pro-Chavista left is that Chavismo rhetorically fights US imperialism but Maduro can only continue to offer concessions to the masses by falling into the arms of Chinese imperialism. Most of the Latin American self-proclaimed Trotskyists are so fixated on US imperialism they don’t see China as a threat. Most (e.g. LIT, FT-CI) think China is still a Degenerate Workers State. Some (FLTI) see China as a capitalist semi-colony of the US. . So the FLTI position which claims that Maduro and Capriles are in a deal with Obama to keep the lid on the popular front with Obama is blind to the elephant in the wood – China. Chavismo looks to China as its saviour without realising that this is a pact with the ‘red’ devil.

We re-assert what we said in the Chavez’ Death article, that the popular front that is most dangerous in Latin America is the one with China, not the US. And this is the key to restoration in Cuba. Since 2004 with the first visit of the Hu Jintao to the region, Venezuela and Cuba have led an alliance (ALBA) as the two main regimes in a Latin American popular front with China.  Of course Chavez promoted this as an alliance with ‘socialist’ China. During these years China built up special relationships with both countries that grew out of China’s ‘Go Out’ policy. This alliance was formed as an alternative to US alliances in Latin America (FTAA, etc) As with China’s ventures in other continents the basis of these special relationships were promoted by all parties as ‘win-win’ deals and the quid pro quo was recognising Taiwan, Gaddafi and Al Assad!

Chavez death will not alter China’s interests in ALBA.  China will continue to make new loans just as it expects its existing loans to be paid off. This may allow the Bolivarian movement to make further concessions to workers. Green Left seems to think so with the new labour laws cutting hours, increasing maternity leave, etc. coming into effect.

Is this a sign that China is subsidising the Bolivarian ‘socialist’ bloc and Cuba’s ‘socialist renewal’? We don’t think so, but the CBL by promoting the Bolivarian bloc will try to keep it alive to suppress the socialist revolution in all the ALBA countries. In Venezuela, Bolivia and Ecuador it will continue to give left cover to the popular front regimes. In Cuba it will help disguise the underlying relationship with China that has allowed Cuba to restore capitalism, and hold back the struggle to expose and overthrow the new Cuban bourgeoisie, create workers soviets and a workers plan for the first time, opening the road to socialist revolution in all the Americas.

[9] Workers international action to smash the Castroist and Bolivarian popular fronts

A growing global antagonism between the US and China may turn Cuba into a flashpoint in Latin America dragging workers into local wars. This will not be isolated to Cuba but rather will involve all the ALBA states for the obvious reason that they form a political bloc with China. If the US and China go head to head in Latin America this will drag workers who are trapped in the CBL popular front with China to defend China against the US in any local or regional wars. The CBL claim to be ‘Trotskyists’ but all act as the servants of the popular fronts with US or Chinese imperialism.  The danger is that this popular front with China masquerading as ‘market socialism’ would in any conflict between the US and China prevent workers from organising independently of both US and Chinese imperialism. The national bourgeoisies, including the Boli bourgeoisie, and now the Cuban bourgeoisie, will pose as ‘progressive’ on the side of China against the US. We have to have a clear program for socialist revolution that is independent of both US and Chinese imperialism.  Only the independent class organisation of the working class in all the ALBA countries has any prospect for defeating the national bourgeoisies that have already shown that their class interests are with Chinese imperialism and so turn their guns on the workers.

In the wider ALBA bloc the popular front is with both US and Chinese imperialisms. But the US front is not popular among workers and peasants. In any US/China conflict the CBL will side with China. China will be seen as a victim of US global oppression. For those who see China as ‘market socialist’ this will be a clear political alliance. For those who acknowledge China is capitalist, it will be a military bloc in defence of China against the US. Few, if any, in Latin America understand that China is imperialist and that the Bolivarian bloc with China is an international popular front tying the hands of workers to make them submit to the main challenger to US hegemony.

We can see this in the core Alba countries, Venezuela, Bolivia, Peru and Ecuador. The CBL is in popular fronts with bourgeois Bonapartist regimes where their ‘populism’ is based on ‘nationalising’ US investments, and at the same time opening up to Chinese state-to-state deals. Thus the left calls for repudiating the external debt and expropriating US property but not for the end to ‘win-win’ deals with China.  Its anti-imperialism is one-eyed. So long as populism is funded by China, the working class is trapped in a new more insidious popular front, painted as one that bankrolls the ALBA bloc to ‘develop’ along the road of the “Andean Capitalism” of Alvaro Garcia Linera or the “21st century socialism” of Hugo Chavez, and now the ‘renewed’ socialism of the Castros. Socialist revolution in the ALBA countries means breaking with both the Castroist bourgeoisie and the Bolivarian bourgeoisie and mobilising workers and poor peasant alliances for the seizure of state power and the founding of Workers’ and Peasants’ Governments.

[10] Cuba: for socialist revolution!

The CBL acts as the left cover of the popular front with China claiming that Cuba is a ‘socialist state’ in an alliance with the Bolivarian revolution and Chinese revolution. On the far left however, are the self-proclaimed Trotskyist groups who provide cover for the CBL left. As we have argued above by failing to understand the role that Chinese imperialism plays in the world and in particular, Latin America, they prevent workers from breaking with the Bolivarian popular front with China and disarm them in the front of inter-imperialist wars. In April 2011 we called for a hybrid program that combined the tasks of a political and social revolution since we did not then believe that the class character of the state had changed:

“As the capitalist restoration has been underway for some time and has now, with the firing of a half million workers, [it] has gathered speed and force, increasingly the transitional demands of the program for socialist revolution are objectively called for. As the Castroist bureaucracy goes about transforming itself into a Chinese-model ‘red’ bourgeoisie, the Cuban working class must see in itself its own best hope for reversing this historic defeat by overthrowing the usurpers of the workers’ political power and ‘expropriating the expropriators’ of the social wealth, of the labor of the revolutionary generations. Today combined tasks of the political revolution (against the bureaucracy) and social revolution (to defend social property, seize capitalist property, and put it under workers’ control) are on the agenda. To accomplish these tasks moreover, they need more than hope; they need a vanguard internationalist workers party of their own making, a new International, a World Party of Socialism, based on the 1938 Transitional Program, one which never subordinates their well being or future to alien class interests.

Today we now believe that the decisive change in the class character of the state took place at the 6th Congress which took the decision to follow the logic of restoration to completion. This decision was immediately reflected in further decisions taken by the Cuban State to enter a ‘strategic alliance’ with imperialist China. We now have to amend our program recognising that from that point political revolution was no longer sufficient in Cuba. A political revolution overthrows the bureaucracy without smashing the state. Workers property still exists despite the dictatorship of the bureaucracy. By removing the bureaucracy workers property is put under workers control and a new workers plan based on workers councils is the foundation of a healthy workers state.  Now that the Cuban state is committed to abolishing the plan and guarding state capitalist property as a new bourgeoisie, we must not only overthrow the new bourgeoisie but smash the state that defends capitalist property. Our demands must be those that are necessary to complete that historic task in Cuba and in all Latin America.

For Workers Democracy!

The democratic rights of workers have been sacrificed as the Castroist bureaucracy usurped state power from the workers substituting fake organs of popular power covered by the personality cults of Che and Fidel. The rights of socialist opposition parties have been denied while opposition inside the PCC is stifled.  The CBL, Stalinists, neo-Stalinists, Barnesites, Fraserites and Mandelista’s alike have for decades suppressed/abandoned the fight for democracy in Cuba for fear of being lumped with the Gusanos and counter-revolution.  What they did not tell you was that the lack of democracy within the PCC and the popular organizations, the constraining role of the bureaucracy would become incapable of defending and advancing the revolution and would become itself the agent of counter-revolution. What they were hiding and what these fake Trotskyists have to show is when did the Cuban workers ever vote to create the privileges the Party leadership and bureaucracy enjoyed?  When did the workers approve the agency of the separate currency paid to bureaucrats?  When did the workers approve separate shopping privileges for the bureaucracy and Party elite?  Who gets to play in the Maseratis and ride in the limousines?

The limits to workers democracy which long protected the privileged bureaucracy and the party leadership from exposure and challenge now serves to protect the restoration process and the subjugation of the workers to the LOV and the ‘development’ of Cuba into a semi-colony of the Chinese capitalist class.  Therefore the battle to improve the workers lives begins with the fight to restore the social wage and the inseparable fight for democratic freedoms of expression, assembly, the press and the independent self organization of the workers as they see fit.
  • For the right to freedom of expression, assembly, and the media!
  • For a Free Press for the working class! 
  • Free all political prisoners! For a Workers Court to penalise corruption!
  • Throw the bureaucracy and new bourgeoisie out of the PCC!
  • For the right of all anti-restorationist tendencies to form parties!
  • For the formation of democratic Workers, poor Farmers and Soldiers councils!
  • For an emergency Congress of Revolutionary Councils to make an Emergency Plan!
  • Disband the State army and Police and for the formation of a Workers’ Militia!
  • For a Workers’ and poor Farmers’ Government based on the Revolutionary Councils!
 For the Socialist Plan!
The task of revolutionaries in the DWS was to defend against counter-revolution, resist bureaucratic privileges and growth of bourgeois consumption appetites and the consciousness that goes with it. These appetites are the sea bed of capitalist restoration.  The collapse of the Soviet Union left the Castroist bureaucracy with a massive cut in their privileges. Venezuelan oil proved a stopgap but the bureaucracy found in China a new source of privilege, this time not as a bureaucracy but as a new Castroist bourgeoisie. When the bureaucrats put their own desires first this led directly to the destruction of the monopoly of foreign trade, first illegal and then with open private business; the circumvention of the plan and later the abandonment of the plan via its conversion into its opposite the 5 year Cuba-Chinese Cooperation Plan. To do this the party leadership had to refashion itself as a bourgeoisie-in-fact and further separate its decision making further away from the eyes of the masses into a high-level state institution to implement China’s imperialist plan for Cuba. The task of revolutionaries today is to fight for a Workers Government to expropriate the workers property that has been converted to capitalist property and create an Emergency Socialist Plan!
  • Jobs for All! All unemployed and self-employed provided with productive work! Reward necessary labour with a living wage! Down with the labour market!
  • For independent trades unions and workplace councils!
  • For Wage and Price committees that report to workers councils! For a sliding scale of wages that stops inflation of wages and prices to pay for the capitalist crisis!
  • Open the Books of the State, the SEOs and all Joint Ventures!
  • For an Emergency Socialist Plan!
  • Expropriate imperialist property and the property of the Cuban bourgeoisie!
  • A single State Bank under council control!
  • For the socialisation of private land! State aid to farmers’ cooperatives and collectives!
  • For the monopoly of Foreign Trade!
For Revolutionary Foreign Policy!
As a Deformed Workers State, Cuba's foreign policy was Stalinist so that while workers property was an inspiration and support for the LA revolution, its Stalinist regime locked the working classes on the sub-continent into popular fronts which suppressed the LA revolution. Thus under the Castroist regime Cuba in Latin America backed populist regimes against arming the workers (Chile ‘73, Central America ‘80s). Today the bourgeois regime in Cuba and its CBL fake left cover acts as an agent of US and Chinese imperialism in CEPAC and ALBA to make the Latin American working class and poor farmers pay for the global capitalist crisis, and drawing them into imperialist wars. A new Cuban Revolution is necessary to overthrow the regime that provides the left cover for the popular front with China, strangling the workers revolution. A Revolutionary Cuba will lead the Latin American revolution by the example of its revolutionary foreign policy. It will also impel the US and Chinese revolutions as workers refuse to go to war and turn their guns on their respective imperialist ruling classes. For Cuban revolutionaries this means the export of revolution by any means necessary. For example, instead of providing cover for the Bolivarian popular front with China, it will expose this front and break from it by setting the example of repudiating imperialism and expropriating its property. Most important, the new Cuban Bolshevik/Leninist Party and its revolutionary program will inspire the world’s workers in the same way the Bolsheviks inspired them in 1917 with the real prospect of socialist revolution today. It will lead by example to build a new revolutionary international, a new World Party of Revolution, based on the program of the 4th international of 1938 and incorporating the revolutionary tradition of the Communist movement!
  • Open the books to all secret treaties! Repudiate all treaties with imperialist powers!
  • Down with China’s imperialist agreements to plunder Cuba!
  • Down with the Castroist foreign policy of support for bourgeois regimes! For Revolutionary Cuban aid to revolutionary movements in the Bolivarian states!
  • Down with the Bolivarian bourgeoisies in the ALBA countries who tie the workers to the popular front with China!
  • Down with the fake Trotskyists and their ‘anti-imperialist united fronts’ that subordinate the workers and oppressed masses to imperialist China!  
  • For socialist revolution and Workers’ and Poor Peasants Governments in Latin America!
  • For a United Socialist States of all the Americas!
  • For a New World Party of Socialist Revolution!
 Liaison Committee of Communists, June 30, 2013.

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