The surprise here is not that the totalitarian Castro dictatorship is canceling its economic “reforms” and pulling the rug out from under Cuba’s self-employed. The real surprise here is that anyone would be surprised that the Cuban regime is doing exactly what it has done over and over again for nearly six decades.
Congratulations To Cuba – Closing Down Fast Growing Companies Is Just The Way To Grow The Economy
It would appear that the authorities in Cuba have got the socialism bit down pat but haven’t quite grasped the point of markets. For they’ve just told one of the country’s most successful and fastest growing cooperatives that it must close down. For, apparently, having found interesting things to do which people wanted to have done, the very thing which was driving their growth. This isn’t known as a successful economic strategy, it has to be said, for more generally we think that finding out what people want done then going and doing it is the very nature and definition of economic growth.
There is actually a reason that Cuba is dirt poor and this is a nice example of that reason–the people running the place just don’t grasp even the vaguest basics of economics:
One of Cuba’s fastest-growing cooperatives said on Friday it had been ordered by the government to close, the latest sign that Havana is putting the brakes on its ambitious plans to reform its centrally planned economy.
The reason given for this forced closure is somewhat bizarre:
Dueñas said the decision came after the finance ministry complained Scenius was providing services outside its official remit. He said he disagreed with that assessment.
Well, yes, this is rather the point of a market economy. We don’t in fact know what it is that people would like to have done. We also don’t know what it is that we are able to do. Markets allow us all to go out and try and find out. What is it that we are able to do and what is it that people like among things we are capable of? Thus, an organisation which finds that people would like to to do this over here is the very purpose of what we’re doing. That experimentation to find out what we should be doing.
At which point Cuba closes it. Yes, there is a reason for Cuba being poor, that reason being that those who rule it have no clue.
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