September 26, 2011 — First posted at Cuba’s Socialist Renewal, posted at Links International Journal of Socialist Renewal with permission — Cooperatives and Socialism: A Cuban Perspective is a new Cuban book, published in Spanish earlier this year. This important and timely compilation is edited by Camila Piñeiro Harnecker (pictured above). Avid readers of Cuba’s Socialist Renewal will recall that I translated and posted a commentary by Camila, titled "Cuba Needs Changes" [also available at Links International Journal of Socialist Renewal], back in January. Camila lives in Cuba and has a degree in sustainable development from the University of Berkeley, California. She is a professor at the Centre for Studies on the Cuban Economy at Havana University, and her works have been published both in Cuba and outside the island.

Camila hopes her book may be published in English soon. In the meantime, she has kindly agreed to allow me to translate and publish this extract from her preface to Cooperatives and Socialism with permission from a prospective publisher. I hope that sharing this extract with readers will make you want to read the whole book. If it does become available in English I’ll post the details here. If you read Spanish you can download the 420-page book as a PDF here or here.

At the end of the text you’ll find the footnotes and table of contents, translated from the Spanish — Marce Cameron, editor Cuba’s Socialist Renewal

Preface to Cooperatives and Socialism: A Cuban perspective (extract)

By Camila Piñeiro Harnecker, translated by Marce Cameron

This book arises from the urgent need for us to make a modest contribution to the healthy “birth” of the new Cuban cooperativism and its subsequent spread. Given that cooperatives are foreshadowed as one of the organisational forms of labour in the non-state sector in the Draft Economic and Social Policy Guidelines of the Sixth Cuban Communist Party Congress, the Dr. Martin Luther King Memorial Centre approached me to compile this book. The Centre has made an outstanding contribution to popular education aimed at nurturing and strengthening the emancipatory ethical values, critical thinking, political skills and organisational abilities indispensable for the conscious and effective participation of social subjects. The Centre considers it timely and necessary to support efforts to raise awareness about a type of self-managed economic entity whose principles, basic characteristics and potentialities are unknown in Cuba. There is every indication that such self-managed entities could play a significant role in our new economic model.

For this to happen we must grapple with the question at the heart of this compilation: Is the production cooperative an appropriate form of the organisation of labour for a society committed to building socialism? There is no doubt that this question cannot be answered in a simplistic or absolute fashion. Our aim here is to take only a first step towards answering this question from a Cuban perspective in these times of change and rethinking, guided by the anxieties and hopes that many Cubans have about our future.

When it is proposed that the production cooperative be one – though not the only – form of enterprise in Cuba, three concerns above all are frequently encountered: some consider it too “utopian” and therefore inefficient; others, on the basis of the cooperatives that have existed in Cuba, suspect that they will not have sufficient autonomy[1] or that they will be “too much like state enterprises”; while others still, accustomed to the control over enterprise activities exercised by a state that intervenes directly and excessively in enterprise management, reject cooperativism as too autonomous and therefore a “seed of capitalism”. This book tries to take account of all these concerns, though there is no doubt that more space would be required to address them adequately.

The first concern is addressed to some extent with the data provided in the first part of the book regarding the existence and economic activity of cooperatives worldwide today. This shows that the cooperative is not an unachievable fantasy that disregards the objective and subjective requirements of viable economic activity. Thus, the experiences of cooperatives in the Basque Country, Uruguay, Brazil, Argentina and Venezuela that are summarised in the third part of the book demonstrate that cooperatives can be more efficient than capitalist enterprises, even on the basis of the hegemonic capitalist conception of efficiency that ignores externalities, i.e. the impact of any enterprise activity on third parties.

The efficiency of cooperatives is greater still if we take into consideration all of the positive outcomes inherent in their management model, which can be summarised as the full human development[2] of its members and, potentially, of local communities. The democratic abilities and attitudes that cooperative members develop through their participation in its management can be utilised in other social spaces and organisations. Moreover, genuine cooperatives free us from some of the worst of the negative externalities (dismissals, environmental contamination, loss of ethical values) generated by enterprises oriented towards profit maximisation rather than the satisfaction of the needs of their workers.

It’s not possible to take up here the arguments of enterprise administration theorists who hold that cooperatives are inefficient. These criticisms are based, in general, on the fact that democratic decision-making takes time, ignoring the fact that this participation is also the principal source of the advantages of cooperatives over other, non-democratic enterprises. In addition, they condemn cooperatives for not resorting to dismissals, as well as for a supposed tendency to undertake little investment due to the maximisation of member incomes and their aversion to risk. However, such behaviour is not revealed in the practices of the cooperatives analysed in this book, practices which also demonstrate the advantages of democratically managed enterprises in terms of the positive motivation of cooperative members. While the negative incentive of the fear of dismissal is undoubtedly effective in eliciting certain behaviours, not even this is sufficient. The tendency of capitalist enterprises to incorporate methods of democratic management suggests that they understand that participation in decision-making is needed in order to achieve the levels of worker motivation necessary for competitive success in the capitalist market.

We hope that those who, on the basis of the Cuban experience, doubt that it is possible for a cooperative to be truly autonomous and democratic will find this concern adequately addressed in the first part of the compilation. Here, when we explain what a cooperative is, we point to the basic differences between a cooperative and a socialist state enterprise. In a genuine cooperative, the participation of the cooperative members in management does not depend on the enterprise management council deciding to involve them more in decision-making; such participation is a founding principle, concretised in the rights of members established in the internal rules of functioning and exercised through bodies and decision-making procedures that are drawn up and approved by the cooperative members themselves. Although the degree of autonomy of the new Cuban cooperatives will depend, of course, on the content of the anticipated legislation on cooperatives and on the implementation of the regulations it establishes, the Draft Economic and Social Policy Guidelines seem to indicate that they will be granted the powers of self-management that characterise cooperatives everywhere, and without which democratic self-management is impossible. We hope the legislation resolves the deficiencies of the current legal framework for Cuban agricultural cooperatives, which are analysed in the fourth part of this book.

The third concern, that which gives rise to the inclination to reject the cooperative as an option for socialist enterprise organisation because it is considered too autonomous and therefore incompatible with broader social interests, takes up the most space in this book. Beginning with the first essay in the compilation we attempt to demonstrate that genuine cooperatives function according to a logic that is diametrically opposed to that of capitalist enterprises. Instead of profit maximisation for the shareholders, the driving force of cooperatives is the satisfaction of the human development needs of their members, needs which are inevitably bound up with those of local communities and of the nation, and even of humanity as a whole. Throughout the book it is suggested that while it’s true that cooperatives cannot be incorporated into the national economic plan or regional or local development strategies though mechanisms of coercion or imposition, it is possible to harmonise and coordinate the orientation of their activities towards the fulfilment of social needs identified through the planning processes, above all if the latter are democratic and respond to the interests of the surrounding communities or those to which cooperative members belong.

However, to argue for the relevance of cooperatives as part of a socialist project we need to begin by clarifying what we mean when we refer to these socioeconomic entities. In the first part of this book, Jesus Cruz[3] and I try to define the cooperative as simply as possible. Here, it is important to stress that in the international context, cooperatives carry out a great diversity of economic activities, and that a not insignificant part of the global population either belongs to one of these organisations or directly benefits from their activities. This should not be surprising if we consider that the form of the organisation of labour that characterises a cooperative, self-management, has existed since the emergence of humanity. The cooperative has persisted as the most common organisational form chosen by groups of people that seek to resolve common problems through their own efforts.

What differentiates a production cooperative (referred to hereafter as “cooperative” since we emphasise this type[4]) from other forms of enterprise organisation is emphasised, based on an analysis of the cooperative principles[5] that have contributed to the success of these organisations since the emergence of the first modern cooperatives. These early modern cooperatives understood the imperative of achieving an effective enterprise management that would allow them to survive within the more savage and monopolistic capitalism of the late 18th and early 19th centuries. To the degree to which cooperatives have observed these principles in their daily practice, they have benefited from the intrinsic advantages of this form of enterprise. These advantages ultimately derive from a democratic management model that permits the harmonisation of individual interests with those of the collective (i.e. of the common interests of cooperative members) and even, though in a less axiomatic way, with the social interests of the local communities with which they interact the most.

The observance of these principles is also what allows cooperatives to reduce the inevitable corrupting effects of the capitalist surroundings in which the majority of them have developed. The capitalist environment privileges individual over collective solutions; makes it difficult to achieve equality by generating and reproducing differences in abilities and social status among cooperative members; denies them the time needed for democratic decision-making; punishes genuine acts of solidarity; and promotes the super-exploitation of human beings and nature. While this undoubtedly limits the horizon of human emancipation – the overcoming of the barriers that stand in the way of us fulfilling our human potentialities – an emancipatory dynamic has always been latent in genuine cooperatives. The capitalist environment is not an absolute barrier to cooperatives becoming spaces in which these principles are put into practice, and in which the values that such practices instill may develop. The experiences of successful cooperatives presented in this book demonstrate the economic and ethical-political potential of these organisational principals, above all when cooperatives that embody these principles are able to link up with other self-managed entities, and when they promote the approval of laws and regulations that undermine the prejudices that exist regarding cooperatives in the legal framework and in the practices of capitalist enterprises and state institutions.

As Julio Gambina and Gabriela Roffinelli argue, the cooperative should be seen as one of the many forms of the self-managed social organisation[6] that will allow us to transcend the capitalist logic of maximising narrow individual interests. Because it takes no account of human nature and its social and ecological constraints, such economic “rationality” is in fact irrational and suicidal. For as long as it pervades our daily practice, the logic of capitalism will not only distance us ever more from the socialist or communist ideal of complete social justice; it is also taking us to the brink of an irreversible rupture in the dynamic equilibrium of the biosphere.

The rationality that drives a cooperative, as with all forms of genuine self-management, is the necessity for a group of people to satisfy common needs and interests. It is based on the recognition that they share collective interests that correspond to some degree with their own individual interests, and that it is collective action that allows them to pursue these interests most effectively. This, together with the recognition that all its members are human beings with the equal right to participate in decision-making, results in democratic management in which the cooperative members decide not only who the leaders are and how revenues should be allocated, but also how to organise the process of production: what is produced, how and for whom.

The managerial autonomy of the collective that makes up the cooperative – the ability of this group of people to make decisions independently – is the key reason why the historical experiences of socialist construction have rejected their relevance to the building of socialism and have relegated them to agriculture or marginal economic spaces. Some see in autonomy a disconnection from, or a wanting to have nothing to do with, social interests and the strategic objectives embodied in the socialist economic plan, and ask the following questions: Is it possible to “hitch” an autonomous enterprise to a planned economy? Can a cooperative respond not only to the interests of its members but also to wider social interests? When one thinks in terms of absolute autonomy and authoritarian (i.e. undemocratic) planning, if the interests of collectives (groups) are considered a priori to be indifferent to social interests, then the answer is obviously negative. The authors of this book are motivated by the certainty that the answer is affirmative. We argue the case here, though we are unable to respond to all of the questions about how this can be achieved in practice.

Here, we must point out that we make no claim to have solved this practical problem which dates back to the times in which socialist theories were first elaborated. It is perhaps more of a conceptual problem than a practical one, since there are examples of collective and even private enterprises that satisfy social needs more effectively, and that have established decentralised horizontal relations that are more socially responsible, than some socialist state enterprises. Our focus here is on the form of organisation of labour within a productive unit and not in the economic system as a whole. The analysis of how a socialist-oriented society should guide the management of enterprises, or of the form in which the fruits of cooperative labour should be distributed in society, are thus topics that we do not attempt to grapple with in this initial approach to the problem. However, we do put forward some ideas in relation to these themes throughout the book.

\The “fruits” of cooperative labour that interest us most here are the human beings themselves that are “produced” as a consequence of the particular form in which the productive process is organised in the enterprise: the social subjects that work together as members of a cooperative and who are motivated to give the best of themselves to the success of their enterprise and, potentially, to local communities.

What differentiates a cooperative member from an employee of either a capitalist or socialist state enterprise? In light of the experiences of cooperatives analysed in this compilation, the member of a genuine producer cooperative, or other form of self-managed entity, is the true owner of their enterprise and thus feels like it. He or she, together with the collective they belong to, participate in a conscious and active way in strategic and managerial decision-making, as well as in their implementation and in verifying that decisions are carried out. What characterises a cooperative is not legal ownership of the means of production (premises, land, machinery) by the collective or group of people that comprise it, but the fact that decisions regarding the use of means of production are made by the cooperative as a whole, either directly or by representatives that they elect, in such a way and with such powers as decided by the collective. Albeit limited to the cooperative enterprise and its activity, this is a concrete form of self-management, of the exercise of popular sovereignty.

Given this, for Gambina and Roffinelli the relevance of various forms of worker self-management, in particular cooperatives, to the building of socialism depends on the degree to which they serve as an “an apprenticeship in administration outside the control of capital”. Thus the value of the cooperative lies in the nature of its daily practice, in the social relations of production that are established among its members: relations between associated producers rather than between wage-workers and capitalists. Cooperative members are not obliged to renounce, in exchange for wages or salaries, their capacity to think, be creative and make decisions. They exercise these capacities via democratic mechanisms in conditions of equal rights and duties. There are no bosses and subordinates in a cooperative but an organisational structure and a technical division of labour that have been collectively drawn up and approved.

Thus cooperatives can be valuable weapons in the struggle to build socialism. They are not the only such weapons, they are insufficient by themselves and are not devoid of risks and challenges, but they are nevertheless tools – perfectible and adaptable – for socialist construction. They are tools that we should not allow to be abandoned due to either state-centric dogma or the misconception that only what is privately owned and managed, and operates according to capitalist logic, works. As Gambina and Roffinelli argue, “… there is a dialectical relationship between socialism and cooperativism that is either promoted or discouraged in specific socio-historical conditions.” The extent to which cooperatives contribute to the building of socialism depends on the context in which they arise and develop, and on the relationship they establish with this context. 

Footnotes 

[1] By “autonomy” we mean the ability to make decisions independently. As we shall see, no social organisation anywhere in the world is completely autonomous since its options are always conditioned in one way or another by its social context.

[2] The term full or integral “human development” is used to make clear our rejection of the progressivist and economistic mythology that reduces development to achieving an abundance of material goods, without taking into account that development also has intrinsic ethical and spiritual dimensions, in which people can achieve professional fulfilment and the realisation of their potentialities as social beings.

[3] A brief biography of each of the contributors to this compilation is included at the end of the book.

[4] Cooperatives can be classified as either production cooperatives, in which cooperative members unite in order to collectively produce goods or provide services; or consumer cooperatives, in which the members acquire goods or services collectively.

[5] Essentially, as is clarified in the first contribution to this compilation, a cooperative must be: (1) open to members joining and leaving and flexible with regard to its internal organisation; (2) run democratically; (3) based on the labour of its members; (4) managerially autonomous; (5) prioritise the education and training of its members and the general public; (6) establish mechanisms for cooperation with other cooperatives; and (7) committed to the community.

[6] Other forms of enterprise self-management are the various forms of co-management (in which the work collective participates in the management of the enterprise together with the legal owners of the means of production, or owns shares in the company); professional partnerships (professional associations in which members provide services on an individual basis, but pool a part of their incomes to acquire services and goods collectively; they are usually limited liability companies); associations, etc. There are also forms of self-management outside the economic enterprise sphere, such as self-management in regions, communities and local governments.

* * *

Cooperatives and Socialism: A Cuban Perspective

Compiled and edited by Camila Piñeiro Harnecker

Editorial Caminos, La Habana, 2011, 420 pp.

ISBN: 978-959-303-033-5

Table of contents

Preface, Camila Piñeiro Harnecker

Part 1: What is a cooperative?

1. An introduction to cooperatives, Jesús Cruz Reyes and Camila Piñeiro Harnecker
2. The construction of alternatives beyond capital, Julio C. Gambina y Gabriela Roffinelli
Part 2: Cooperatives and the socialist theoreticians
3. Cooperativism and self-management in the perspectives of Marx, Engels and Lenin, Humberto Miranda Lorenzo

4. Socialist cooperativism and human liberation: Lenin’s legacy, Iñaki Gil de San Vicente

5. Che Guevara: cooperatives and the political economy of the socialist transition, Helen Yaffe

6. The basis for self-managed socialism: the contribution of István Mészáros, Henrique T. Novaes

Part 3: Cooperatives in other countries
7. Mondragón: the dilemmas of a mature cooperativism, Larraitz Altuna Gabilondo, Aitzol Loyola Idiakez and Eneritz Pagalday Tricio

8. Forty years of self-managed community housing in Uruguay: the “FUCVAM model”, Benjamin Nahoum

9. Solidarity economy in Brazil: the current state of cooperatives for the historical emancipation of the workers, Luiz Inácio Gaiger and Eliene Dos Anjos
10. Worker self-management in Argentina: problems and potentialities of self-managed labour in the aftermath of the crisis of neoliberalism, Andrés Ruggeri
11. From cooperatives to community-managed social property enterprises in the Venezuelan process, Dario Azzellini
Part 4: Cooperatives and building socialism in Cuba
12. Cuban agricultural cooperatives from 1959 to the present, Armando Nova González
13. The Basic Unit of Cooperative Production (UBPC): redesigning state property with cooperative management, Emilio Rodríguez Membrado and Alcides López Labrada
14. Key features of the legal framework for Cuban cooperatives, Avelino Fernández Peiso
15. Challenges for cooperativism as a development alternative in the face of the global crisis and its role in the Cuban economic model, Claudio Alberto Rivera Rodríguez, Odalys Labrador Machín and Juan Luis Alfonso Alemán

Bus/Taxi Coop in Cuba

Cuba is poised to be the first country in the world to have cooperatives make up a major portion of its economy. It is a laboratory for a new society.

By Cliff DuRand

Cuba is engaged in a fundamental reshaping of its society. Calling it a renovation of socialism or a renewal of socialism, the country is re-forming the economic system away from the state socialist model adopted in the 1970s toward something quite new. This is not the first time Cuba has undertaken significant changes, but this promises to be deeper than previous efforts, moving away from that statist model. Fidel confessed in 2005 that “among the many errors that we committed, the most serious error was believing that someone knew how to build socialism.” That someone, of course, was the Soviet Union. So, Cuba is still trying to figure out for itself how to build socialism.

To understand the current renovation it is important to distinguish between ownership and possession of property. The productive resources of society are to remain under state ownership in the name of all the people. Reforms do not change the ownership system. Reforms are changing the management system, bringing managerial control closer to those who actually possess property. So while the state will continue to own, greater autonomy will be given to those who possess that property. In effect, Cuba is embracing the principle of subsidiarity, which holds that decisions should be made at the lowest level feasible and higher levels should give support to the local. This means more enterprise autonomy in state enterprises and it means cooperatives outside of the state.

It is expected that in the next couple years the non-state sector is expected to provide 35% of the employment. Along with foreign and joint ventures, the non-state sector as a whole will contribute an estimated 45% of the gross domestic product (PIB). Hopefully coops will become a dominant part of that non-state sector.

Cooperatives

Already 83% of agricultural land is in coops. Much of that has been in the UBPCs (Basic Units of Cooperative Production) formed in the 1990s out of the former state farms. But these were not true cooperatives since they still came under the control of state entities. Now they are being given the autonomy to become true coops.

Even more significantly, new urban coops are being established in services and industry. 222 experimental urban coops are to be opened in 2013. As of 1^st of July, 124 have been formed in agricultural markets, construction, and transportation. A big expansion in this number is expected in 2014.

In December 2012 the National Assembly passed an urban coop law that establishes the legal basis for these new coops. Here are some of its main provisions:

• A coop must have at least 3 members, but can have as many as 60 or more. One vote per socio. As self-governing enterprises, coops are to set up their own internal democratic decision making structures.

• –Coops are independent of the state. They are to respond to the market. This is to overcome the limits that hampered some agricultural coops in the past.
• –Coops can do business with state and private enterprises. They will set their own prices in most cases, except where there are prices established by the state.
• –Some coops will be conversions of state enterprises, e.g. restaurants. They can have 10 year renewable leases for use of the premises, paying no rent in the first year if improvements are made.
• –Others will be start-up coops.
• –There will be second degree coops which are associations of other coops.
• –Capitalization will come from bank loans, a new Finance Ministry fund for coops and member contributions. Member contributions are treated as loans (not equity) and do not give additional votes. Loans are to be repaid from profits.
• –Coops are to pay taxes on profits and social security for socios.
• –Distribution of profits is to be decided by socios after setting aside a reserve fund.
• –Coops may hire wage labor on a temporary basis (up to 90 days). After 90 days a temporary worker must be offered membership or let go. Total temporary worker time cannot exceed 10% of the total work days for the year. This gives coops flexibility to hire extra workers seasonally or in response to increased market demands, but prevents significant collective exploitation of wage labor.

This is a big step forward for Cuba. Since 1968 the state has sought to run everything from restaurants to barber shops and taxis. Some were done well, many were not. One problem was worker motivation. Decisions were made higher up and as state employees, workers enjoyed job security even with poor performance. However, their pay was low. Now as socios in cooperatives they will have incentives to make the business a success. The coop is on its own to either prosper or go under. Each member’s income and security depends on the collective. And each has the same voting right in the General Assembly where coop policy is to be made. Coops combine material and moral incentives, linking individual interest with a collective interest. Each socio prospers only if all prosper.

Remittances: Much of the start-up capital from members is likely to come from remittances sent by relatives living abroad. This is a good way to harness for the social good some of the $2.455 billion of remittance money (2012 figures) that comes into Cuba. Although 62.4% of the population receive remittances, the bulk of this money is likely to come to whiter Cubans. As a result Black Cubans will end up being underrepresented in this sector of the economy. In the long run, this presents social dangers.

Recommendation: Preferential bank lending policies can avoid this problem. Cuba does not need to adopt race based affirmative action policies to correct this imbalance. Banks can give preference in their lending policies to those coops that lack funding from remittances. To each according to his need.

State plan. If coops are truly autonomous, how can this sector of the economy be articulated with planning? Guideline #1 says the socialist planning system is to remain “the principle means to direct the national economy.” How can market and plan work together? In addition to responding to the market, coops are also charged (by charter?) with a “social object.” In addition, local entities can also request that they assist in specific social projects. Their participation is voluntary. This applies to individual coops.

But beyond this, the investment function can be used to direct the development of this sector. Bank lending priorities can be based on state development plans. The model for economic democracy developed by US philosopher David Schweickart shows how this can operate. In After Capitalism (1) Schweickart envisions a society made up of democratically managed cooperatives exchanging goods and services in a free market. But the allocation of investment capital is made by government bodies at national, regional and local levels based on social criteria democratically decided upon. Something like this would seem to fit well the new economy developing in Cuba today.

Coops are recognized as a socialist form of organization in the Guidelines or lineamientos. In part, this is because they foster a social consciousness. By bringing people together in their daily worklife in democratically self managed organizations, coops nurture the democratic personality and the human being is more fully developed. This point has been strongly advocated by Cuban economist Camila Piñeiro Harnecker. She argues that coops “promote the advancement of democratic values, attitudes and habits (equality, responsibility, solidarity, tolerance for different opinions, communication, consensus building).” (2) Coops are little schools of democracy in which the new socialist person can thrive, more so than was possible under state socialism. (3) Thus coops spontaneously generate at the base of society momentum toward that society of associated producers that is the aim of socialism. Coops are the kind of institution that can make socialism irreversible by embedding its practices in daily life.

Private Businesses

The other component of the non-state sector is made up of private businesses. These small and medium sized private businesses are called self employment or cuentapropistas. While limited areas of self employment were opened up in the 1990s (e.g. paladares), this was expanded to 178 occupations in 2011. In part, this was designed to quickly absorb the large number of redundant state employees that were to be dismissed. It also allowed underground activities that had flourished since the Special Period to come out into the open and operate legally where they could be licensed, regulated and taxed.

The acceptance of small private businesses signifies that the leadership recognizes that a petty bourgeoisie is compatible with socialism. As it is often said, the state cannot do everything. Contrary to a common claim in the US media, this is not the beginning of capitalism. The Guidelines say that accumulation of wealth is to be avoided. This means the petty bourgeoisie will not be allowed to grow into a big bourgeoisie, a capitalist class.

Unlike coops which nurture a social consciousness, private businesses foster individualism. Self interest becomes the primary concern of private businesses. For that reason the petty bourgeoisie is a decidedly non-socialist class. While its existence is allowed, its growth should not be encouraged where coops can do the job instead.

Unlike the paladares which could employ only family members, these private businesses can hire others as well. While this is also called self employment, in reality it is wage labor. While the private exploitation of wage labor is widely understood to be incompatible with socialism (as well as in violation of the Cuban constitution), it is accepted as necessary to quickly absorb surplus workers.

In recent years, small private businesses have been the fastest growing element in the Cuban economy. If they were to come to make up a sizable portion of the non-state sector, they could easily acquire significant political influence, moving Cuba away from socialism. This is because class power is fundamentally rooted in the significance a class has in the economy as a whole and thus the dependence other classes and groups have on its success.

For that reason, the continued development of socialism requires that coops rather than private businesses come to make up the bulk of the non-state sector. That is likely to be the case for several reasons.

• –Coops are favored by the state in terms of tax policy and loan policies.
• –In direct competition between coops and private businesses coops often are in more advantageous positions. E.g. state restaurants that convert to coop restaurants generally have better locations than private restaurants.
• –Labor efficiency and productivity is high in coops due to the greater incentives for socios.

Recommendation. In the long run it would be desirable to convert many private businesses into coops so all who are employed there can enjoy the benefits equally (no exploitation) and participate in decision making (democracy). This could be done by restrictions on the size of private businesses, tax incentives for conversion, and political organizing of their wage labor force.

Role of CTC (Central de Trabajadores de Cuba)

In view of the new and growing diversity among Cuba’s workers, the role of its labor movement needs to be rethought. Under state socialism the CTC represented the interest of the working class as a whole in the councils of government. Unlike unions in a capitalist society which represent workers in an industry or particular workplaces in an adversarial relationship with capital, in state socialism the state and the working class are considered to be united in their interests. It is for this reason that the CTC has been given a central position in the political structure. Its role is not to represent workers in negotiations with their employers, but to be their voice in making public policy in a socialist society.

Previously only 9% of employment was in the non-state sector. Now it is 22% and is expected to grow to 35%. This raises new questions for the labor movement. Reportedly, 80% of cuentapropistas have joined unions. How can the CTC represent the interests of those cuentapropistas who are private business owners? The petty bourgeoisie has interests different from the working class (even though they do work in their businesses). How can CTC at the same time represent the interests of the cuentapropistas who are in fact the wage laborers they employ (and exploit)?

And how can the CTC represent the interests of cooperative socios given the fact that they are at once both owners and workers? While the CTC could advance socialism by advocating for the cooperative sector as a whole over against the private business sector, it might be more suitable to have a separate federation of cooperatives to carry out this role. It might also take on an entrepreneurial role for cooperatives, doing market research, organizing workers for new start-up coops, providing training in self-management, and even monitoring coops to ensure compliance with their own self-governance processes.

21^st Century Socialism

The project called 21^st Century Socialism has been associated primarily with the Bolivarian Revolution in Venezuela. It is an attempt to reinvent socialism after the collapse of the state socialism that characterized the 20^th century. In Venezuela this has involved using state power to promote cooperatives and communal councils at the base of society as seeds of a future socialism. Social transformation is constructed both from above and from below. (4) In Venezuela this is taking place in what is still overwhelmingly a capitalist society. In Cuba we see a very similar process in the context of a state socialist society. Here the state is also promoting cooperatives, relaxing administrative control over enterprises and decentralizing governmental power to the local level. Both see the empowerment of associations at the base of society and the active participation of working people in directing their affairs as key to building the new socialism. In the Venezuelan case this is seen as eventually replacing the existing bourgeois state with a new communal state, the beginnings of which are being constructed by associations of communal councils.

In the case of Cuba, resistance to this dispersal of power away from the state is reportedly coming from the state bureaucracy itself. Some see this as motivated by the self interest of an entrenched bureaucratic class that will block Cuba’s reforms. Others see the resistance as due to bureaucratic habits that are slow to change. In that case it can be overcome by a change of mentality. (5) There is also bureaucratic resistance in Venezuela. That is why power and resources are being sent directly to communal councils, effectively by-passing traditional channels. Something like that same strategy is being used in Cuba as some taxes are being collected at the local level rather than nationally to be distributed downward. This then shifts the capacity to initiate action to the local level, a far cry from the vertical structure of state socialism.

Democratically self governing cooperatives are an essential feature of 21^st century socialism. They empower the associated producers in their daily work, giving them some control over their lives. At the same time these little schools of democracy are the soil in which the new socialist person will thrive, more so than was possible under state socialism. And with that it becomes possible to envision the state eventually withering away as society comes more and more under the direction of a truly civil society, or what Marx called the associated producers.

Conclusion

Cuba is poised to be the first country in the world to have cooperatives make up a major portion of its economy. It is a laboratory for a new society. Those who are implementing the Guidelines are aware that they are redesigning society and approach the challenge in an experimental way. The new urban coops are being set up as experiments. As difficulties emerge lessons are to be learned so as to improve the process as it goes along.

One difficulty is already evident. That is the need for education in cooperativism. (6) Previous experience in the UBPC agricultural coops showed that workers were not practiced in democratic decision making. Nor did the coops have the autonomy necessary for them to feel they were really in control. The UBPCs were actually under the control of state enterprises, such as the sugar centrals. Now for the first time they are being given real autonomy.

Likewise, the workers in urban state enterprises now being cooperativized have deeply established habits of compliance with higher authority. Under state socialism decisions came from higher up. It was a structure that bred passivity. That is part of the “change in mentality” so often talked about these days that needs to take place.

Many years ago Cuban philosopher Olga Fernandez pointed out to me that under the model of socialism Cuba had adopted, rather than the state withering away, it was civil society that was withering away. Today’s renovation of socialism is an effort to rejuvenate civil society, to construct a socialist civil society. Cooperatives may be a key link in that rejuvenation that can sustain Cuba on its way to a society run by the associated producers. If it can succeed, it will be of world historical importance.

Notes

1. David Schweickart, After Capitalism (Rowman and Littlefield, 2^nd edition 2011), pp. 47-58.

2. Camila Piñeiro Harnecker, “Las cooperatives en el Nuevo modelo economico cubano” http://rebelion.org/mostrar.php?tipo=5&id=Camila%20Pi%F1eiro%20Harnecker&inicio=0, also Cooperativas y socialismo: Una mirada desde Cuba (La Habana: Editorial Caminos, 2011).

3. Michael A. Lebowitz, The Contradictions of Real Socialism (Monthly Review Press, 2012).

4. Dario Azzellini, “The Communal State: Communal Councils, Communes, and Workplace Democracy” NACLA Report on the Americas (Summer 2013), pp. 25-30.

5. Olga Fernandez “Socialist Transition in Cuba: Economic Adjustments and Socio-political Challenges” Latin American Perspectives (forthcoming).

6. This has been emphasized by Beatriz Diaz of FLACSO in “Cooperatives in the Enhancement of the Cuban Economic Model: The Challenge of Cooperative Education” Latin American Perspectives (forthcoming). Camila Piñeiro Harnecker has proposed establishment of a special department to train coop members for their new role. Op. cit.

Schafik Handal, Hugo Chávez, Fidel Castro and Evo Morales, in Havana in 2004

By Roger Burbach

Telesur, July 1, 2014

Something remarkable has taken place in Latin America in the new millennium. For the first time since the Sandinista revolution in Nicaragua, radical left governments have come to power in Venezuela, Bolivia, and Ecuador, raising the banner of socialism. The decline of the US empire, the eruption of anti-neoliberal social movements, and the growing integration of the region on its own terms have created a space for the rejuvenation of socialism after the dramatic setbacks of the last century. Cuba is part of this transformative process as its leadership moves to update the country’s economy while the Cuban people experience new freedoms.

In what follows, the theoretical debates and the praxis of socialism in the twenty-first-century socialism will be explored. The intent is not to provide a singular theory of the new socialism, but to put forth some of the interpretations of the contemporary struggles that are taking place in Latin America.

Theories of Twenty-First-Century Socialism

Drawing on the wide-ranging discussions of twenty-first-century socialism taking place in the hemisphere, political theorist Marta Harnecker, who served as an informal adviser to Hugo Chavez, outlines five key components of what constitutes socialism. First, socialism is “the development of human beings,” meaning that “the pursuit of profit” needs to be replaced by “a logic of humanism and solidarity, aimed at satisfying human needs.” Secondly, socialism “respects nature and opposes consumerism – our goal should not be to live ‘better’ but to live ‘well,”’ as the Andean indigenous cultures declare. Thirdly, borrowing from the radical economics professor Michael Lebowitz, Harnecker says, socialism establishes a new “dialectic of production/distribution/consumption, based on: a) social ownership of the means of production, and b) social production organized by the workers in order to c) satisfy communal needs.” Fourthly, “socialism is guided by a new concept of efficiency that both respects nature and seeks human development.” Fifthly, there is a need for the “rational use of the available natural and human resources, thanks to a decentralized participatory planning process” that is the opposite of Soviet hyper-centralized bureaucratic planning.(1)

To construct a socialist utopia along these lines will be a long endeavor, taking decades and generations. Today different explorations, or counter-hegemonic processes, are at work throughout the hemisphere. As Arturo Escobar – a Colombian-American anthropologist known for his contribution to post-development theory– writes in ‘Latin America at a Crossroads’:

“Some argue that these processes might lead to a re-invention of socialism; for others, what is at stake is the dismantling of the neo-liberal policies of the past three decades – the end of the ‘the long neo-liberal night,’ as the period is known in progressive circles in the region – or the formation of a South American (and anti-American) bloc. Others point at the potential for un nuevo comienzo (a new beginning) which might bring about a reinvention of democracy and development or, more radically still, the end of the predominance of liberal society of the past 200 years founded on private property and representative democracy. Socialismo del siglo XXI, pluri-nationality, interculturality, direct and substantive democracy, revolución ciudadana, endogenous development centered on the buen vivir of the people, territorial and cultural autonomy, and decolonial projects towards post-liberal societies are some of the concepts that seek to name the ongoing transformations.” (2)

Orlando Núñez, a leading Marxist theorist from Nicaragua, amplifies our understanding of the long transition to socialism with a more orthodox approach. Rejecting 21^st century socialism as a concept to describe what is occurring in Latin America today, he asserts that the region is in a very preliminary phase of “transitioning to socialism in which we should not pretend we are constructing socialism.” Rather we are confronting neoliberalism and each country in Latin America is “facing different conditions.” He adds, “new flags are appearing in the social struggle against the dominant system that cannot be resolved by the logic of capitalism.” It is “a post-neoliberal or post-capitalist struggle” against woman’s inequality and patriarchy, racial and ethnic discrimination, and the degradation of the environment. More fundamentally it is against “savage capitalism,” and “neo-colonialism,” both internally and externally. (3)

The Brazilian political scientist Emir Sader, in The New Mole: Paths of the Latin American Left, argues that the setback for socialism in the 20^th century was so severe that it is still recuperating to this day. Socialism can be part of the agenda, but the priority must be on forming governments and political coalitions to dismantle neoliberalism, even if that means accepting the broader capitalist system for the time being.(4) This in part explains why the construction of socialism in the coming years and decades will be a diverse process – differing widely from country to country. There is no single definition or model–we are indeed witnessing, two, three, many transitions to socialism..

Part 2: Rise of the Social Movements and New Theories of Social Struggle

The origins of twenty-first century socialism are found in the wave of social movements led by peasants and indigenous organizations that swept the rural areas of Latin America as state socialism was collapsing. By the mid-1990s they had assumed the lead in challenging the neoliberal order, particularly in Ecuador, Mexico, Bolivia, and Brazil. These new organizations were generally more democratic and participatory than the class-based organizations that traditional Marxist political parties had set up in rural areas in previous decades. In general, they came to fill the gap left by a working class that was fragmented, disoriented, and dispersed due to the assault of neo-liberalism. With a broad range of interests and demands, including indigenous and environmental rights, these new social movements transcended the modernist meta-narratives of both capitalism and traditional socialism.

At the dawn of the new millennium, social struggles and popular rebellions irrupted primarily in the cities that often overlapped with existing rural-based struggles. The uprising in Buenos Aires and other major Argentine cities in late-December 2001, and the popular rebellions in Quito, Ecuador in January, 2000 and then in April, 2005, dramatically altered these countries histories. The urban organizations that participated in these rebellions and mobilizations varied greatly, some with a distinct class basis and others having a multi-class composition.

Post-Marxist philosophers Michael Hardt and Antonio Negri broke with classic Marxism in their theoretical approach to the new social movements. In The Multitude they declare: “Some of the basic traditional models of political activism, class struggle, and revolutionary organization have today become outdated and useless." They add, "The global recomposition of social classes, the hegemony of immaterial labor, and the forms of decision-making based on network structures all radically change the conditions of any revolutionary process …" (5)

For Hardt and Negri, the Zapatista movement in Mexico–with its national and international networking, democratic decision-making process, its horizontal forms of organization, and its insistence on changing the world from the bottom up—is part of what they call the multitude. Whereas older Marxist theories lumped all the groups involved in global rebellion into one category called "the masses," the concept of "the multitude" recognized the diversity of the groups involved. It also differs from the classical Marxist belief that the industrial working class has to be the vanguard of any revolutionary movement.

While Goan Therborn does not break as sharply with classical Marxism, in his article "Class in the Twenty-First Century" in New Left Review, does see a new social and geographic dynamic emerging that breaks with the twentieth century: “The red banner has passed from Europe to Latin America, the only region of the world where socialism is currently on the agenda, with governments in Venezuela, Ecuador and Bolivia speaking of ‘21st-century socialism’.” Unlike the century past when the industrial working class drove socialist politics, the new socialism “will find its base among workers and the popular classes in all their diversity—the plebeians, rather than the proletariat.” He adds: “The ‘socialism’ of Morales, Correa and Chávez is a new political phenomenon, which stresses its independence from 20th-century Eurasian models of left-wing politics and is itself quite heterogeneous.” (6)

Orlando Núñez takes a somewhat different tack in characterizing the current social and economic struggles by using Karl Marx’s concept of “freely organized associate producers.” The term originally meant that the workers in a socialist society would run the factories and work places as associate producers, setting the direction for the state and the economy as a whole. Today Núñez argues that there is a “via asociativa hacia el socialismo,” a path to socialism that is constructed by producers from below. (7)

Núñez points out that in most third world countries formal employment in large scale capitalist enterprises is being replaced and/or augmented by an ever increasing number of self-employed workers many of whom are part of what he calls “the popular economy.” It includes street vendors, micro-entrepreneurs, artisans, sellers in open air markets, fishermen, loggers, small farmers, bus and taxi cab owners, truckers and many more. This is the new proletariat that is being exploited in the realm of commerce and circulation. Most of its participants earn subsistence incomes as they sell their services and commodities in a market dominated and manipulated by big capital and transnational corporations.

Many in the popular economy become freely organized associate producers as they affiliate in credit and producer cooperatives, merchant and peasant associations, and transportation collectives. They pressure the government for resources and become conscious of their exploited role in society, demanding a more socialized state that provides universal education, health services, access to credit, etc. Núñez as well as radical theorists like Marcos Arruda of Brazil believe that a social solidarity economy is being constructed in Latin America in which networks of collaboration and equal exchange proliferate among the workers and independent producers at the base of the economy. (8)

Part 3: Contesting the State via Democratic Insurgencies

A groundbreaking perspective on how social forces and the popular movements maneuver and engage in a struggle for control of the state comes from Katu Arkonada and Alejandra Santillana in their 2011 article from Le Monde Diplomatique, "Ecuador and Bolivia: The State, the Government and the Popular Camp in Transition."

They assert that the state should be viewed as "an historic aspiration of the popular organizations and the indigenous peoples, and as a space open to political dispute." (9) In recent years the popular movements have sought to alter the state, to make it responsive to their interests and needs.

With the ascent of democratically elected new left governments, the contest over who will control the state is becoming even more intense. Arkonada and Santillana argue that "the construction of hegemony comes out of civil society," meaning that the "popular camp" in this period of transition is presenting its projects and interests, hoping to capture ever more space within the state. The popular forces will become hegemonic, they believe, as the state becomes an instrument of "collective interests," and "a universalizing political project."

A central question facing the popular forces is what type of democracy should be constructed. At present the political systems where the new left has come to power can be described as liberal in the classical sense. Broadly speaking, this liberal paradigm emerged with the philosophies of John Locke and Thomas Hobbes. It consolidated in the eighteenth century with the American, French, and industrial revolutions, based on the concepts of private property, representative democracy, individual rights, and the market as the organizing principle of the economy and social life. (10) With the rise of capital, the dominant economic interests have manipulated the state, resulting in controlled democracies where citizens are allowed to vote every few years for candidates that generally do not question the capitalist order or respond to the interests of the people. Today in Latin America there is growing disillusionment with this liberal form of government and representative democracy.

The popular forces are envisioning a democracy that is more substantive, integral, and participatory, starting at the local level. Like never before, communal self-rule is being embraced in Latin America. We see it taking hold in Bolivia’s indigenous communities and Mexico’s Zapatistas in the state of Chiapas. In 2006 the citizens of Oaxaca occupied the state capital and formed the Popular Assembly of the Peoples of Oaxaca that kept federal forces at bay for several months in a manner reminiscent of the Paris Commune of 1871. Over the past decade and a half, hundreds of Brazilian municipalities have launched participatory budgeting to engage local communities in the allocation of city funds. Venezuelan communities have founded over 40,000 neighborhood-organized communal councils. (11)

A central characteristic of the three countries in South America that have raised the banner of socialism is that they are deeply committed to democratic procedures. During the fourteen years of Hugo Chávez, starting with his first presidential election, there were sixteen national elections or referendums. Under Evo Morales there have been seven in seven years and during Rafael Correa’s six years in office eight elections and referendums have occurred.(12)

The commitment to democratic procedures means that twenty-first-century socialism in Latin America is tied to the electoral cycle. A likelihood exists that in Venezuela, Bolivia or Ecuador, the incumbent presidents or their designated successors will eventually be voted out of office. This will mark a new unpredictable phase in the struggle for socialism. Will the new non-socialist leaders seek to overturn the deep reforms of their more radical predecessors? Or will they have to accept many of the changes, particularly the social and economic reforms that have benefited the popular classes? Will new openly socialist candidates win back the presidential office in future elections? Given that Rafael Correa won a resounding reelection in 2013 and that Evo Morales will probably be victorious in 2014, the most immediate challenge is in Venezuela where President Nicolas Maduro is facing a renewed right wing offensive as the oligarchy moves to destroy the economy, using tactics and strategies reminiscent of those employed by the Chilean bourgeoisie and the CIA  against the popular unity government of Salvador Allende (1970-73).

Part 4: Renovating Cuban Socialism

is important to discuss the trajectory of socialism in Cuba and its relationship to 21^st century socialism. Aurelio Alonso, sub-director of the magazine Casa de las Américas, in Havana, draws a distinction between socialism in the 21^st century vs. socialism of the 21^st century (socialismo en el siglo 21 vs. socialismo del siglo 21).

This difference in wording reflects the fact that the socialism being constructed in the rest of Latin America is unique to the new millennium whereas in Cuba it has a much longer trajectory. Alonso told me that “the ‘punta de partida’ (point of departure) is different for Cuba and the rest Latin America,” both in terms of time and politics: “The Cuban process today is an attempt to advance the socialism that triumphed in the 20^th century while in Latin America at large the left is in a protracted struggle with the oligarchy to construct a new socialism of the 21^st century.” (13) Socialism has very different protagonists and antagonists in each region. For Cuba the opposition is not the oligarchy, but the bureaucracy and elements within the Communist party that want to hold onto the old 20th century order with a centralized economy and an authoritarian state.

Cuba is also different from the Latin American continent in that its historic trajectory is related to the other surviving socialisms of the 20^th century, particularly China and Vietnam. All three countries in their earlier stages adopted the Soviet model in one form or another with the centralization of their economies and state ownership of the means of production. The market played only a marginal role as the state set prices and issued five year plans to determine production goals.

The two Asian countries moved much earlier than Cuba to market economies; China beginning in 1978 under Deng Xiaoping with its “modernization” policies, and Vietnam in 1986 with its “renovation” program that it adopted in the face of widespread food shortages and famine. Both were largely rural societies at the time, and many of the early reforms were directed at the countryside and quickly succeeded in increasing agricultural production. Although only a quarter of the Cuban population is rural, the early economic reforms are aimed at unleashing agriculture by granting 10 hectare parcels in usufruct to small scale producers who sell a portion of their produce in the free market. And like China, the Cuban government is encouraging food processing and rural light manufacturing via municipal enterprises and cooperatives that also operate in the open market. Measures opening up the sales of houses and motor vehicles, along with the creation of 171 self employment categories, are designed to place many of the smaller enterprises and economic activities–ranging from taxis and barber shops to restaurants and produce venders– in the hands of independent owners, merchants and producers who set their own market prices. (14)

China, Vietnam, and now Cuba share the belief that the market should not be identified exclusively with capitalism. The market functioned in feudal societies and it can help distribute resources in an efficient manner in a socialist economy. But free reign cannot be given to individuals to dominate and manipulate the market. The market place itself needs to be regulated.

The Cuban leadership does not express an official view point on the large scale accumulation of private capital and the emergence of a new bourgeoisie in China. However, Cuban academics and some party officials assert that their reform process will be different from both the Chinese and Vietnamese experiences, because they are “Asiatic societies,” whereas Cuba is firmly rooted in the “Western tradition.” There are critical differences in culture and history, perspectives on leadership, and the role of the peasantry and the workers. Differences in geography and the size of the populations also weigh heavily in determining what types of economic and political institutions evolve under market socialism in each country.(15)

There are different schools of thought in Cuba on how to move the economy forward. Camila Piñeiro Harnecker, in an essay titled “Visions of the Socialism That Guide Present-Day Changes in Cuba,” describes three different visions: (a) a statist position, largely reflecting the old guard, (b) a market socialist perspective, advanced by many economists, and (c) an autogestionario, or self-management, stance that calls for democratic and sustainable development primarily through the promotion of cooperatives.(16)

The statists recognize that Cuba faces serious economic problems but argue that they can be corrected through a more efficient state, not through a dismantling of the state. They call for more discipline and greater efficiency among state industries and enterprises. A loosening of state control, they contend, would result in greater disorganization and even allow capitalist tendencies to emerge. This position points to the disaster that occurred in the Soviet Union in the late 1980s after an attempt to end central control over state enterprises.

The statist position is most deeply entrenched among midlevel bureaucrats and the party cadre, who fear a loss of status and income with the end of direct control over Cuba’s economy. Some heads of the Cuban military enterprises—which include food and clothing factories, as well as hotels, farms, and telecommunication stores—also manifest this tendency, although surprisingly many officers, including Raúl Castro, are in favor of decentralization and a greater use of market mechanisms.

Those committed to a socialist market economy contend that only the market can unleash Cuba’s productive forces. To increase productivity and efficiency, the state needs to grant more autonomy to enterprises and allow competitive forces to drive the market. In the short term, privatization is necessary, even if this means an increase in inequality, the exploitation of wage workers, and environmental degradation. As the country develops, the state can step in to level the differences and distribute the new surpluses to support social programs.

The economists who argue for market socialism tend to be located in what is referred to as academia—the research institutes and centers, many of which are affiliated with the University of Havana. Academia looks to the Chinese and Vietnamese experiences, particularly their appeal to foreign investment, although they believe that Cuba should do a better job of controlling corruption. This position also finds support among state technocrats and some managers who want to see their enterprises expand and become more profitable as they are privatized. There is also significant support for the market economy among self-employed and working people who feel that they can enjoy the material prosperity of China or the Western world only through more individual initiative and private enterprise via the market.

The autogestionario position, which Piñeiro advocates, has a fundamentally different view from the economists over how to break with the old statist model. Instead of relying on competition and the market to advance productivity, the democratic socialist values of participation, association, and solidarity should be at the heart of the workplace and the new economy. Control should not come from the top down but from the bottom up, as workers engage in self-management to further their social and economic concerns. As Piñeiro writes, “The autogestionarios emphasize the necessity of promoting a socialist conscience, solidarity, and a revolutionary commitment to the historically marginalized.” These principles can be practiced in cooperatives and municipal enterprises, leading to increased consciousness and productivity in the workplace.

Piñeiro admits that support for the autogetionario position is less consolidated, coming from intellectuals, professionals, and those involved in the international debates over 21st-century socialism. One of the problems is that the old statist model used the terms participation, autonomy, and workers’ control to characterize the relations in the factories, enterprises, and cooperatives that operated poorly in Cuba, and this language has now fallen into disfavor. Today those who try to revive these terms are often seen as making a utopian attempt to resuscitate failed policies.

Ultimately, Piñeiro is optimistic, seeing “a new path for the nation.” It will be a hybrid composed of “a state socialism better organized, a market,” and “a truly democratic sector.”

While the debate within the government and the Cuban Communist Party over the direction of the economy is comprehensive, the leadership has made it clear that Cuba will remain a one party state. Here Cuba differs from the emerging socialist societies in the rest of Latin America that are committed to holding multiparty national elections. However, important changes are taking place within the political and state apparatus. With the demise of Fidel Castro and the limits of Raúl, who is now in his 80s, a new generation is coming to the fore that will act more collectively.  Raul has announced he will be stepping down in 2018 and Miguel Diaz-Canal who is in his early fifties–with broad experience in the Communist party and the state, particularly at the provincial level–is Raul’s apparent successor as the new vice-president. Legislation is being advanced in the National Assembly that limits all upper level government positions to two five-year terms. The National Assembly itself is also becoming more important as a center of debate and discussion over policies, while the election of delegates is more competitive than in the past.

Part 5: Economic Challenge: Extractivism and Socialism in Latin America

The Achilles heel of the counter-hegemonic and anti-systemic processes in South America is the difficulty of  breaking with the old economic model.

The new left governments are heavily dependent on extractivist exports: petroleum in Venezuela, natural gas and minerals in Bolivia, petroleum and agricultural commodities in Ecuador.

The Uruguayan sociologist Raúl Zibechi argues that dependence on extractive exports means that countries like Bolivia and Ecuador are mired in a second phase of neoliberalism and have not escaped from dependent capitalist development. (17) But this criticism is too harsh and absolute.

The economies of Latin America have always been driven by extractive exports. To expect this to change in a decade or so is unrealistic, especially in a global system dominated by transnational capital. What we are witnessing in the short term is the determination of these countries to capture a much larger portion of the rents that come from exports and to use this revenue to expand social programs and to encourage endogenous development. Zibechi is tapping into the debate within the left over how to exploit these natural resources, with many indigenous and ecological organizations insisting that the earth should not be ravaged and that the environment needs to be respected.

In the sphere of international trade, the socialist oriented countries are promoting innovative policies. Venezuela and Cuba founded ALBA in 2004, the Bolivarian Alternative for the Peoples of Our Americas, which encourages "fair trade" not free trade, and promotes integration through complementarity and solidarity. Bolivia joined in 2006 and later Nicaragua, Ecuador, and five Caribbean countries.

The exchange of Cuban medical personnel for Venezuelan oil is just one early example of the type of agreement reached under ALBA. Cuba and Venezuela have also collaborated under ALBA to provide literacy training to the peoples of other ALBA member countries, such as Bolivia. The key concept is to trade and exchange resources in those areas where each country has complementary strengths and to do so on the basis of fairness, rather than market-determined prices. (18)

Along with these state-level economic initiatives, a transformative and radical dialogue is taking place at the grassroots that may not be explicitly socialist but it is anti-systemic. Civil society and local movements are questioning the process of development itself because it harms the environment and is intricately linked to capitalism. Social movements and many of the new left governments have increasingly clashed with their governments over developmental projects. In Bolivia the dispute over a road that would link previously unconnected parts of the country, but which would bisect the TIPNIS Indigenous Territory and National Park, raised fundamental questions about issues of development, indigenous autonomy, and the rights of Mother Earth.

In Ecuador the social movements even after President Rafael Correa’s resounding reelection in February, 2013 continue their criticism of his policies of exploiting the country’s petroleum and mineral resources at the expense of local communities. CONAIE, the major indigenous organization in Ecuador, is openly challenging Correa’s developmentalist approach in mining, water rights, and the exploitation of oil reserves in one of the most biodiverse areas in the world.

Bolivian vice-president Alvaro García Linera puts a positive spin on these developments, asserting that these conflicts are inherent in a transformative process. The popular forces will have different factions that try to push their particular interests and visions of where they want the society to go. The vice-president calls these ‘creative tensions’ and even argues that they are essential for social and political progress to take place. (19)

Venezuela made significant advances during the eight years after Hugo Chavez’ call for 21st century socialism at the World Social Forum in Brazil in early 2005. Later in that year he urged citizens to form communal councils. The Law of Communal Councils defined these councils as "instances for participation, articulation,and integration between the diverse community-based organizations, social groups and citizens, that allow the organized people to directly exercise the management of public policies and projects." To date over 40,000 communal councils have been formed. Cooperatives are also a major form of constructing socialism from below. Many factories are now administered by workers councils, particularly in the steel, aluminum and bauxite industries. Food distribution centers are also controlled by the workers. (20) The road to socialism, however is fraught with difficulties, as shortages and inflation have gripped the economy, undermining the stability of the government of Nicolas Maduro. Even Chavez acknowledged in his final days that Venezuela had by no means achieved a socialist utopia.

Part 6: Transitional Turbulence and the New Socialisms

This is a period of turbulence and transitions. It is not an age of armed revolution as was the century past.

Socialism in twenty-first-century Latin America is part of a complex process of change sweeping the region.

Cuba is striving to update its economy while on the South American continent the socialist banner is unfurling at very distinct paces. In Venezuela the quest for socialism is most advanced politically and economically while in Ecuador, although Rafael Correa proclaims he is undertaking a “citizens revolution” and is a twenty-first century socialist, his government has taken virtually no steps in the direction of a socialist economy. Bolivia occupies a middle ground in which innovative discussions are taking place within and between the government and social movements that relate socialism to the indigenous concept of buen vivir.

Socialism is making an appearance in other countries through a variety of social actors. In Chile the 2011 student rebellion ignited Chilean social movements, which are now rethinking the country’s socialist legacy. They have been instrumental in compelling the second presidency of Michelle Bachelet to call for a series of progressive reforms, including a new constitution, that break with the neo-liberal agenda of her first term. In Brazil the MST, Movement of Landless Rural Workers, the largest social organization in the hemisphere, continues to espouse socialism in its platform and in the daily practices of its land reform settlements. It does not look to a paternalistic state, as demonstrated by its frequent criticism of the policies of President Lula da Silva when he held office 2003 to 2011. The MST seeks to maximize the participation of its own members in the running of their own cooperatives and communities.

While the wording is not explicitly socialist, the constitutions of Bolivia and Ecuador call for people to live in harmony with “Pachamama,” Mother Earth, and for buen vivir, or good living – a holistic cosmovision of the world where people strive for harmony. It is more than a hollow dream; it influences contemporary policies in opposition to capitalist development. For example, food sovereignty as it is conceived of in the Andean countries is adapted to buen vivir. It breaks with the traditional concept of development, asserting that food production should not be driven simply by the marketplace, especially the international market. Food sovereignty means that people have access to nutritious and sanitary foods that are produced at the community level by local producers in accordance with local needs and cultures, be they Andean or non-Andean. As Francisco Hidalgo Flor, an Ecuadorean sociologist, asserts in his October 2011 article ‘Land: food sovereignty and Buen Vivir,’ ‘the state has the responsibility to stimulate production … to provide support to small and medium scale producers,’ ensuring that they have adequate technical assistance and credit. (21) Land should be controlled or owned by those who work it. The promotion of cooperatives and a solidarity economy are part of the effort to construct a participatory society, be it in Brazil with the MST or in Bolivia with the indigenous communities.

Latin America is a cauldron of political and social ferment. There are no discernible laws of history driving this upheaval, but socialism is a central component of the brew that is being stirred up by the social movements and the popular forces. Rather than a lineal historic clash between capitalism and socialism that classic Marxism envisioned, we are now witnessing a plethora of struggles and confrontations that veer across the pages of history–between classic liberalism and post-liberal politics; extractivism and post-development; transnational agribusiness and food sovereignty; patriarchy and feminism; exclusionary educational systems and free democratic centers of learning; nation-states dominated by the descendants of the colonizers and the new plural-national states.

Francois Houtart, a leading organizer of the World Social Forum and the executive secretary of the World Forum of Alternatives, argues that it is not important whether we call this new project buen vivir, socialism of the twenty-first century or something else. What is important is that it is a “post-capitalist paradigm” that projects a new utopia. “We need it because capitalism destroys every utopia, it considers itself the end of history. If there is no utopia there are no alternatives.” (22)

A multiplicity of groups and movements are now imagining new utopias. ‘One world with room for many worlds,’ proclaim the Zapatistas. In the short term, twenty-first-century socialism could flounder or experience setbacks in any one of the countries in the Americas where the socialist banner has been planted – Venezuela, Bolivia, Ecuador, or less likely, Cuba. But it will not disappear. Socialism runs deep in the historic waters of the hemisphere, and the quest for a renovated socialism in Latin America offers hope to a world torn asunder by wars and economic crises.

Endnotes:

1.Marta Harnecker, ‘Cinco reflexiones sobre el socialism del siglo XXI,’ Rebelión, 26 March 2012, www.rebelion.org/docs/147047.pdf.

2.Arturo Escobar, ‘Latin America at a crossroads,’ Cultural Studies, 24(1) (2010): 2.

3.Orlando Núñez Soto, ‘La via asociativa y autogestionaria al socialismo,’ Revista Correo, No. 24, Noviembre-Diciembre, 2012 Managua, Nicaragua, p. 11

4.Emir Sader, The New Mole: Paths of the Latin American Left (Verso, 2011), p. 104-5.

5.Michael Hardt and Antonio Negri, The Multitude: War and Democracy in the Age of Empire (Penguin Books, 2005), pp. 68–9.

6.Göran Therborn, Class in the 21st Century, New Left Review No. 78, Nov.-Dec. 2012, p. 20.

7.Núñez, pp. 16-18.8.For an insight into  Marco Arruda’s extensive work on the solidarity economy, see: http://programaeconomiasolidaria.blogspot.com/2010/06/economista-marcos-arruda-lanca-amanha.html

8. Also http://www.tni.org/users/marcos-arruda

9. Katu  Arkonada and Alejandra Santillana,‘Ecuador and Bolivia: The State, the Government and the Popular Camp in Transition.’ Rebelión, 13 September 2009, www.rebelion.org/noticia.php?id=135502.

10.Escobar  p. 9.

11. Roger Burbach, Michael Fox and Federico Fuentes, Latin Americas Turbulent Transitions: The Future of Twenty First Century Socialism, London, Zed Books, 2013, pp, 7-8.

12. Ibid., See Appendix: Nationwide Elections in Venezuela, Bolivia and Ecuador, pp. 159-60.

13. Aurelio Alonso, Interview, April, 2012.

14.For a more extensive discussion of the transformations and debates occurring in Cuba, see Roger Burbach, A Cuban Spring, NACLA Report on the Americas, (January-March), 2013.

15 Julio Díaz Vázquez, “Un balance critico sobre la economía cubana: Notas sobre dirección y gestión,” Temas, (April-June 2011): 128. Also interview with Juan Valdes Paz, April, 2012.

16.Camila Piñeiro Harnecker, “Visiones sobre el socialismo que guían los cambios actuales en Cuba,” Temas, no. 70 (April–June, 2012): 46–55.

17.Raúl Zibechi, ‘Ecuador: A new model of domination,’ Latin America Bureau, trans. Alex Cachinero-Gorman, 5 August 2011.

18. ‘¿Que es el ALBA-TCP?’, Portal ALBA-TCP, 3 December 2009, www.alianzabolivariana.org/modules.php?name=Content&pa=showpage&pid=2080.

19.Álvaro Garcia Linera, Las Tensiones Creativas de la Revolución: la quinta fase del Proceso de Cambio (Vicepresidencia del Estado, 2010).

20.Roger Burbach, “”Chavez Renewed Latin America and Revived Socialism, The Progressive Magazine, March 6, 2013. www.progressive.org/chavez-renewed-latin-america

21. Hidalgo Flor, ‘Tierra: soberanía alimentaría y buen vivir,’ La Línea de Fuego, 14 October 2011, lalineadefuego.info/2011/10/14/tierra-soberania-alimentaria-y-buenvivir-por-francisco-hidalgo/.

22.François Houtart, “El Desafio Fundamental Para Bolivia, Venezuela y Ecuador es Definir La Transicion Bajo Un Nuevo Paradigma Poscapitalista: Entrevista por Katu Arkonada, Publicado por lalineadefuego  November 8, 2013, http://lalineadefuego.info/2013/11/08/el-desafio-fundamental-para-bolivia-venezuela-y-ecuador-es-definir-la-transicion-bajo-un-nuevo-paradigma-poscapitalista-entrevista-a-francois-houtart

About the author:

Roger Burbach is director of the Center for the Study of the Americas (CENSA) based in Berkeley, California. He has written extensively on Latin America and US foreign policy for over four decades. His first book, Agribusiness in the Americas (1980), co-authored with Patricia Flynn, is regarded as a classic in the research of transnational agribusiness corporations and their exploitative role in Latin America. His most notable book is Fire in the Americas (1987), co-authored with Orlando Núñez, which is an informal manifesto of the Nicaraguan revolution during the 1980s. With the collapse of twentieth-century socialism in the Soviet Union and eastern Europe he began to study the emergent system of globalization and to write about the new Latin American social movements and the renewed quest for socialism, His most recent book is: Latin America’s Turbulent Transitions: The Future of Twenty-First-Century Socialism, co-authored with Michael Fox and Federico Fuentes. See the web site: www.futuresocialism.org

Vietnamese Party General Secretary Nguyen Phu Trong (right) with his Cuban counterpart Raul Castro.

PART 1, THE VIETNAM CASE

By Harry Targ

Diary of a Heartland Radical

Introduction

The weight of history bears down on humankind such that, paraphrasing Marx, people make history but not precisely as to their own choosing. The rise of capitalism out of feudalism in Northern Europe spread over the centuries to Africa, Asia, and Latin America ripping asunder traditional patterns of economic, social, and cultural relations. A new political economy dynamic, now called “neoliberal globalization,” spread across the face of the earth extracting natural resources, enslaving and exploiting human labor power, and expanding production and distribution such that by the twentieth century the whole world was touched. The impact of capitalist globalization included enormous scientific and technological advances, significant increases in the capacity to sustain life, coupled with the capacity to exploit, destroy, kill, uproot traditional cultures and communities, and defile the human landscape.

Capitalism created a global empire. It also created global resistance. The drive to construct empires and to build economic, political, and cultural hegemony stimulated revolution, non-violent resistance, and desperate efforts to create new forms of social and economic being. During the period since World War 11, socialist regimes and radical nationalist movements have challenged the hegemony of U.S., European and Japanese capitalism. The twentieth century socialist project disintegrated for a variety of reasons but its loss spurred new and diverse forms of resistance that complicated the rule of “victorious” empires. The economic, political, and military crises of the early 21^st century, coupled with renewed resistance raised the specter of new “21^st century socialist” visions. These visions became concrete programs, again paraphrasing Marx, that were not precisely of peoples’ choosing but necessary transitional steps to socialism nonetheless.

Vietnamese History

Southeast Asia, a diverse space geographically, culturally, politically, and economically, has experienced many kinds of imperial rule and resistance. Vietnamese national identity emerged about 100 BC as a result of Chinese expansion and resistance to it among indigenous kingdoms. But China established its hegemony over Vietnam from 200-900 AD. After that time Vietnam consolidated its independence.

During the 1850s Vietnam came under the domination of the French. Occupied by France, Indochina (now Vietnam, Laos, and Cambodia) became a classic colony. The Japanese military conquered Indochina during World War II. The Japanese had collaborated with the old French colonial administrators and land owners to control the Vietnamese people. After the Japanese were defeated, the Vietnamese people rose up to challenge the French effort to reestablish their old colony.

From 1946 to 1954, revolutionary forces led by Ho Chi Minh and the Viet Minh fought and won a victory against the French. At the Geneva Conference, 1954, the war was settled. The United States, however, in violation of the main agreements reached, established a puppet regime in South Vietnam that became the basis for continuing war on the Vietnamese people. The Vietnam War, with the U.S. replacing the French, continued until 1975, when the Saigon military collapsed. Finally, after short and brutal battles with hostile forces in neighboring Cambodia and a short war initiated by China in 1979, violence ended. Now the Vietnamese had to rebuild their country and begin constructing the socialist society they had struggled for since the end of World War II.

Post-war reconstruction was initiated after “the U.S. military and their allies dropped four times the tonnage of bombs used in World War II in Vietnam, which is equivalent to 725 nuclear bombs dropped in Hiroshima and Nagasaki. More than 3 million Vietnamese were killed and 4 million were wounded. At the same time, the U.S. military used up to 80 million liters of chemicals to ‘clear’ the land.” (Tran Dac Loi). Agent Orange sprayed liberally over the entirety of Vietnam from 1961 and 1971 affected millions of Vietnamese and U.S. soldiers and poisoned the land. Unexploded ordinance and descendants of Vietnamese exposed to Agent Orange/Dioxin remain part of the Vietnamese experience today. The devastation of land and people was reinforced by a U.S. initiated economic blockade of Vietnam that lasted from 1975 until 1994.

From a Socialist Command Economy to Doi Moi (a socialist-oriented market economy)

Tran Dac Loi, Vice-President of the Vietnam Peace and Development Foundation, wrote about post-war economic policies in Vietnam in an essay in Vietnam: From National Liberation to Socialism (Changemaker, Committees of Correspondence for Democracy and Socialism, forthcoming). Loi explained that after the war against the United States ended the newly united Vietnamese nation adopted a centrally-planned socialist economy.

Although small shops based on family labor were allowed the bulk of the economy was state-run as “…all essential production materials and consumer goods were circulated through the state distribution system.” The evolving command economy reduced inequalities but labor productivity was low, inflation-rates grew, and the Vietnamese experienced chronic food shortages. Over 60 percent of the Vietnamese people by the early 1980s lived below the country’s self-defined poverty rate.

Loi asserts that state ownership, management, and distribution became inappropriate for the post-war Vietnamese economy. Adequate “economic, material and technical conditions, as well as cultural development” did not exist to achieve a fully developed socialist society. Entrepreneurial skills and corporate and individual competition, characteristic of economic development in market economies, it was realized, were necessary to stimulate economic growth. Vietnamese leaders recognized that economic development was “a long-term process, not a one-day business and cannot be realized only by political will. In fact, we did not yet have socialism; we were at the beginning of the process of building it. And there is a need for sustainable policies and steps relevant to the existing context and objective conditions.”

Thus at the 6^th Party Congress of the Communist Party of Vietnam (1986) a new set of policies were adopted called Doi Moi. They called the new policy “a market economy with a socialist orientation.” Doi Moi included the following:

-a regulated market economy.

-a market that should be coordinated with planning to maximize the rational distribution of resources and economic development.

-a rationally encouraged use of “external resources” such as foreign investment.

-construction of a multi-level pattern of ownership including a state sector controlling energy, natural resources, heavy industry, communications, railways and public transportation, aviation, banking and insurance and the distribution of lands for agricultural use on a household and cooperative basis.

-the expansion of foreign trade, particularly the export of rice.

-the provision of primary education for all Vietnamese.

-free health insurance for the poor.

Many observers, including the Vietnamese themselves, point to serious economic, political, and cultural problems that have emerged since Doi Moi. However, basic economic changes have resulted from the programs embraced in the 1980s. Per capita GDP has risen by a factor of ten since 1986. Vietnam no longer ranks as one of the UN’s most underdeveloped countries. Industrial growth has doubled. Having overcome the post-war shortage of food, Vietnam is now the second largest rice exporter in the world. Vietnam, since Doi Moi, has increased access to education and health care, significantly increased life expectancy, reduced rates of poverty from over 60 percent to 11 percent, and, according to the United Nations, has increased its Human Development Index score (HDI) from .498 in 1991 to .733 in 2007.

With the weakening of state socialism as a world force and the shift virtually everywhere to neoliberal economic policies by the 1980s, the Vietnamese came to the realization that transitioning to 21^st century socialism would require the construction of a more complicated economic model that continued to support a renovated state sector, allowed a regulated marketplace, and encouraged local socialist forms, such as workers cooperatives.

Sources

This discussion of Vietnam draws heavily on materials from Vietnam: From National Liberation to Socialism, Changemaker, Committees of Correspondence for Democracy and Socialism, forthcoming, 2013. Essays referred to include Tran Dac Loi, “Vietnam: 65 Years of the Struggle for National Independence and Socialism;” Merle Ratner and Ngo Thanh Nhan, “Vietnam Update 2013: Opportunities and Challenges,” and Duncan McFarland, “Origins of Doi Moi in Vietnam and the Relationship to Lenin’s New Economic Policy.” Also the essay by Paul Krehbiel, “A Nation at Work,” and his suggestions for revision of this paper were very helpful.

(Prepared for a presentation at The Labor and Working-Class Studies Project, Working Class Studies Association, Madison College, Madison Wisconsin, June 12-15, 2013. “Transitional Steps to Socialism: Part 2, The Cuban Case” will discuss reforms in Cuba and their similarities and differences with Vietnam.)

PART TWO: THE CUBAN CASE

Spanish colonialism came to the Western Hemisphere in the fifteenth century. Indigenous people were killed or enslaved. Africans were brought to the occupied land to produce sugar, tobacco, coffee, dyes, and other commodities that would find their way to Europe and processing for sale in the new global market place. The era of primitive accumulation, as Marx called it, marked the “happy dawn” of a new era.

Cuba became part of this new imperial system. Indigenous people were destroyed. Sugar plantations were established. And Cuba became an administrative center of Spanish colonialism in the “new world.” Some of Havana’s landmark buildings were constructed in the fifteenth century to house Spanish administrators.

Resistance and the passion for national autonomy were embedded in Cuban culture. Slave revolts and revolutionary campaigns occurred throughout the nineteenth century. The so-called “Spanish American War” constituted the culmination of Cuba’s anti-colonial struggle and the imposition of United States neo-colonialism on the island.

From 1898 until 1959, U.S. investors controlled the plantations, businesses, tourist enterprises, and public utilities while American tourists enjoyed Cuban beaches and culture. When the Fidelistas marched joyfully into Havana in early January, 1959 after Fulgencio Batista’s armies were defeated, a new era of hostile Cuban/U.S. relations was born. From 1959 to the present, the Cuban regime has experienced non-recognition, an economic blockade, a nuclear crisis, sabotage, efforts to cut off Cuban relations with neighboring governments as well as those in Europe, and sustained campaigns to undermine and overthrow the Cuban revolution. Despite enormous pain and suffering and extensive internal debates about the direction the revolution should take, the Cuban revolution survives until this day.

Socialist Paths: Material vs. Moral Incentives, the Socialist Command Economy, Rectification, the Special Period, to 313 Guidelines

The United States project from 1959 on was to stifle, dismantle, and destroy the Cuban Revolution. The Cuban revolutionaries had two main projects in mind: national self-determination and achievement of the basic social and economic rights referred to in Fidel Castro’s “History Will Absolve Me” speech. In this speech Castro proclaimed that the Cuban people wanted to secure basic social and economic justice within a framework of national independence.

Over the next sixty years, Cuban society has been an experimental laboratory for testing and evaluating the effectiveness of economic and political policies designed to achieve the goals of the revolution. During the 1960s, leaders of the revolution debated whether the Cuban people were ready to embrace fully an economic system of moral incentives modeled after altruism and self-sacrifice or whether, given the neo-colonial capitalist system out of which the revolution occurred, a period of continuing material incentives was needed to encourage production for revolutionary change. The system of moral incentives was put to the ultimate test during the campaign of the late 1960s to produce 10 million tons of sugar. It failed.

After the disastrous sugar campaign, Cuba joined the Eastern European common market (COMECON) and shifted more in the direction of Soviet bloc command economies. Despite economic growth over the 15 years of command economy experience, the Cubans, in 1986 committed themselves to a campaign of “rectification” or reintroducing incentives and exhortations to rebuild revolutionary enthusiasm which they believed had been stifled by the Soviet state socialist model. From the point of view of the Cuban leadership, bureaucratization and centralization of control had reduced ties between the revolution and the popular classes.

With the collapse of the Soviet Union and COMECON, the Cuban regime, because of deep economic crisis, shifted away from socialist command economy policies and revolutionary enthusiasm to policies, referred to as the special period, designed to save the revolution from collapse. The Cuban economy was opened to foreign investment, tourism was reinstituted as a core foreign exchange earner, some shift to small scale markets was allowed to resume, and state farms were shifted to cooperatives. The result was, despite the predictions of U.S. “experts” on Cuba, some economic recovery and growth from the depths of depression in the mid-1990s until 2006.

For a variety of reasons, including the retirement of Fidel Castro, rising generations of post-revolutionary youth, reduced growth in tourism due to global recession, and severe natural disasters, the Cuban economy’s growth rates were modest after its remarkable recovery from the special period. Economic inequality and inadequate absorption of a highly skilled work force added to a growing malaise. Leaders of the Cuban Communist Party, economists, and social movement activists began to argue that substantial changes needed to be made to better satisfy the twenty-first century needs and wants of the Cuban people and to sustain economic growth in a world still dominated by global capitalism. The state-dominated economy led to excessive bureaucratization, corruption, too many state employees, and insufficient innovation and competition.

Raul Castro, who replaced his brother in 2006, initiated a public discussion of Cuba’s economic future. Literally 2.3 million proposals for policy changes were introduced in various assemblies over a three year period. These were concretized and publicized as 291 “Economic and Social Policy Guidelines for the Party and the Revolution.” In April, 2011 after extensive debate a new document with 313 guidelines was presented and adopted by the 6^th Party Congress of the Cuban Communist Party.

These guidelines have become the basis of a model of 21^st century socialism that incorporates a strong but rationalized state sector, expanding markets, and the encouragement of workers to form various cooperatives in urban as well as rural areas. Also the guidelines allowed the expansion of private enterprises in small business, service, production, and agricultural sectors. Almost two million state workers overtime would be shifted to the non-state sector of the economy, private enterprises and cooperatives.

While the guidelines have begun to be translated into policy, Camila Pineiro Harnecker suggests debates continue between those Cubans who believe that the regime should continue to maximize the role of the state, those who argue that markets should become primary, and those who see economic democracy and workers’ cooperatives as central to Cuba’s future development of twenty-first century socialism. Interestingly, all three positions are represented in the guidelines; a better organized state sector, broadening of markets, and a growing sector based on workers’ control of production and distribution.

Among the central features of the guidelines are the following:

-socialist planning will continue more efficiently and will open spaces for other forms of management, production, and distribution of goods and services in the economy. A significant shift in employment from the state sector to the marketplace and cooperatives will proceed over a modest time period.

-along with state enterprises, the guidelines allow capitalist enterprises including foreign investment, the leasing of state-owned farmland, the leasing of state owned premises, self-employment, and the encouragement of urban and rural workers’ cooperatives.

-Expansion of categories of self-employment.

-Economic entities of all kinds will be required to maintain themselves financially, without subsidies for losses.

-Wages and incomes in state, private, and cooperative sectors will be determined by real earnings.

-Self-sustaining cooperatives will be encouraged that will decide on the income of workers and the distribution of profits after taxes.

The guidelines, while incomplete and still being developed, represent an effort to move beyond the dilemmas of a poor, but developing country historically committed to improving the quality of life of its people as to education, health care, culture, and economic security.

Vietnam, Cuba, and 21^st Century Socialism: A Work in Progress

Vietnam and Cuba share many experiences in common. They both are historic products of years of colonial and/or neo-colonial domination and patterns of national resistance. Twentieth century nationhood was formed during the period of emerging global industrial and finance capitalism. Both Vietnam and Cuba resisted imperialism and won revolutionary wars against it only to be forced to survive in an era of harsh neoliberal globalization and political/military subversion. Concretely both experienced economic blockades from the United States at their most vulnerable time of economic reconstruction. And both as allies of the Soviet Union were forced to embark on the path of transitioning to socialism at a time when the socialist bloc was collapsing.

The generation of revolutionaries who fought the U.S. marines in the countryside and creatively withstood horrific bombing in Vietnam and fought against U.S. puppet armies in the mountains of Cuba, brought to victory a hardened vision of constructing a radically new society based on state socialism. With the collapse of state socialism as a world force and the shift virtually everywhere to neoliberal economic policies, Vietnamese and Cubans came to the realization that transitioning to 21^st century socialism would require the construction of a more complicated economic model that continued to support a renovated state sector, allowed a regulated marketplace, and encouraged local socialist forms, such as workers cooperatives.

Presently advocacy of workers’ cooperatives seems stronger in Cuba than Vietnam. As the Cuban guidelines suggest, workers cooperatives are advocated to continue the socialist vision by more effectively institutionalizing worker participation in decisions that affect their lives. Decisions about management, distribution of profits, commitments to the communities in which they work all would be determined largely by those in the cooperative units. Given the broad array of grassroots mobilizations that dot the map from the Middle East, Asia, Latin America, Europe, and North America, some creative combination of workers’ states and workers’ cooperatives might constitute the centerpiece of a 21^st century socialism.

Sources

The discussion of Cuba draws upon Cliff DuRand, “Renovation of Cuban Socialism,” March, 2013, (and insightful editorial comments on a draft of this paper from that author) and Camila Pineiro Harnecker, “Visions of Socialism Guiding the Current Changes in Cuba,” translated by Emily Myers, Center for Global Justice, both available from Cuba@globaljusticecenter.org ; Roger Burbach, “A Cuba Spring?” NACLA Reports, Spring, 2013; Raul Castro, “Report to the 6^th Communist Party Congress,” ; Olga Fernandez Rios, “The Socialist Transition in Cuba: Economic Adjustments and Socio-Political Challenges, Institute of Philosophy, University of Havana, translated by Emily Myers, Center for Global Justice, 2012; Pedro Campos, “New Cooperative Policy Big for Socialism,” Havana Times, April 9, 2012, http://www.havanatimes.org/?p=66858

Part 2 of a presentation prepared for The Labor and Working-Class Studies Project, Working Class Studies Association, Madison College, Madison Wisconsin, June 12-15, 2013. To access Part 1 see www.heartlandradical.blogspot.com

By Circles Robinson

Havana Times, Feb 26, 2013

Vicente Morin Aguado interviews non-Marxist US socialist Grady Ross Daugherty

HAVANA TIMES — Over several weeks of difficult back and forth emails (it’s hard to imagine the slow speed and high cost of Internet in Cuban hotels), I attempted to clarify the thinking of Grady Ross Daugherty ^[2], the leader and founder of the “modern cooperative socialist movement” in the United States and who is a regular reader of HT.

HT: What place do you see for cooperatives in the current reform process taking place within Cuba’s socialist experiment?

Grady Ross Daugherty: Thanks for characterizing Cuba’s half-century post-capitalist period as an “experiment.” An experiment is a way of testing a reasonable hypothesis. If we look at the Cuban model as an experiment, as a modifiable work in progress, its performance can be altered to achieve greater prosperity and progress.

In our discussion, we need to keep in mind that most types of cooperatives require a certain basis of legal private ownership, assuming we want them to be functional. For example, agricultural cooperatives require the ownership of cultivated land and the families homes — not usufruct rights — if we hope them to be effective and make Cuba self-sufficient in production.

HT: Regarding the issue of ownership, I began to understand your non-Marxist position prior to our exchange. It may seem like a digression, but it’s good to point out something as controversial as your self-declared non-Marxist yet socialist position.

GRD:  Since its origins in the nineteenth century, the socialist movement was mutual and cooperative. This was something notable in France and England, where workers and farmers were eager to own land and the instruments of production as their property. They didn’t want ownership in the hands of private capitalists or government officials.

I think that if Cuba’s political leaders can clear their minds about the theory of state monopoly and its consequent personality cult, typical of the founders of Marxism during the nineteenth century, Cuba will be a socialist country in the long term.

Marx and Engels instilled prejudice against private property, pointing to it as a cause of society’s ills and as something antithetical to their aim of “scientific” socialism. Nevertheless, for cooperatives to be real they require ownership, which supposedly would be “capitalist” – as opposed to state-run or scientific forms like “socialist” ones.

Despite this, harsh reality has led Cuban politicians to take a fresh look at cooperatives. They’re beginning to look at socialism as an ongoing experiment.

HT: Of course Marx criticized Proudhon, the father of French cooperative and mutualist socialism, considering him petty bourgeois for all his vacillation and wavering, which is typical of his social class.

GRD:  Correct, Marx criticized Proudhon as being petty bourgeois, but Proudhon was a manual worker with calloused hands, while Marx was nothing like that.

The essential fact is that all workers — women, men, blacks and whites — have an intrinsic desire to control their workplace and direct their own productive lives. Marx and Engels couldn’t accept that idea. Marx was a bookworm, from a privileged bourgeois family. Engels was an office clerk in the textile business of his father, who offered prospects of eventually leaving the younger Engels a hefty inheritance.

If workers directly own the means of production under socialism, they won’t need capitalists, nor will they need bourgeois communist “friends” whose desire is to arrogantly stay on top and always be the stars of the show.

^[3]

Gateway to the Mondragon cooperative complex.

GRD: Cooperative enterprises are often thought of as small and basic, but look at the example of the Mondragon cooperative experiment in northern Spain. There, the worker-owned factories are very large, automated and competitive – similar to other factories in advanced capitalist countries.

A derivative of Mondragon is the workers grocery chain Eroski, which constitutes the largest company of its kind in the country. So, as we can see, cooperatives come in all shapes and sizes.

HT: Is a cooperative political republic actually the third option between capitalism and socialism, or is it a limited an oscillating concept of the petty bourgeoisie?

GRD: That’s an excellent question. It would be more accurate to say it’s a third way between capitalism, on the one hand, and Marxism as a socialist state monopoly on the other – which is so familiar to Cubans.

From a distance, it seems that Marxists couldn’t shake their philosophy as a religion, a holy truth, therefore they couldn’t get their arms around the idea of workers possessing their workplaces directly under socialist state power.

HT: In the failed experiment in the USSR, cooperatives under perestroika ended up being a bridge to capitalist enterprises when the communists lost political power.

GRD: A reasonable theory would be to understand that — if workers must possess productive property directly and cooperatively in a socialist country led by a vanguard party that does the macroeconomic planning and coordination (be it a restaurant, hotel, factory, bus company, etc.) — these companies would then be socialist.

HT: Have you ever been to Cuba? What are the bases of your suggestions?

GRD: I haven’t been to Cuba yet, mainly because I’m a retired worker without much money to travel. But what I recommend for Cuba is largely the same as for my country. From this angle, my observations may be better than those of others who’ve been fortunate enough to visit the land of the valiant Marti.

If workers directly own the means of production under socialism, they won’t need capitalists, nor will they need bourgeois communist “friends” whose desire is to arrogantly stay on top and always be the stars of the show.

HT: They say that sometimes those sitting outside a game of dominoes can see the plays better than those playing. What do you see?

GRD: The traditional management system in Cuba is the necessary byproduct of 100 percent government ownership. In other words, what’s needed is a new system of ownership. Many Cubans, including the highest political leadership, don’t understand that associated labor, just like a company, is a “private” form of the socialist enterprise. What’s more, without this form of private cooperatives in Cuba it would be a repetition of the Yugoslav experience and therefore doomed to failure.

HT: Along the path we’re pursuing, based on the idea of cooperativism, how do you see the future of my country, either with or without socialism?

GRD: No one can predict the future, of course, but I think that if Cuba’s political leaders can clear their minds about the theory of state monopoly and its consequent personality cult, typical of the founders of Marxism during the nineteenth century, Cuba will be a socialist country in the long term. On the other hand, if the same mentality retains its paralyzing grip, then we can consider the socialist state as being endangered, with brutal imperialism waiting in the wings to reassert itself.
—–

To contact Vincent Morin Aguado, write: morfamily@correodecuba.cu ^[4]

2 Comments To "Cooperatives Could Save Cuban Socialism"

#1 Comment By Moses Patterson On February 26, 2013 @ 8:40 am

Thank you for what seems to be a thoughtful analysis. Where does technological innovation fit in your “modern cooperative socialist movement”? How would entertainment companies that produce $100 million blockbuster movies find funding? Who decides how much to spend on scientific research for breast cancer or childhood diabetes? The point of my questions is without a free market and without the possibility of huge rewards associated with huge investment risks, how do the great advances or simple joys in society come about?

#2 Comment By Griffin On February 26, 2013 @ 10:24 am

An interesting discussion. Grady mentioned how Marx & Engels were not workers, but were in fact from the bourgeois class. The same could be said of the sons of a prosperous Cuban plantation owner, who were sent to the best schools on the island and one of whom became a lawyer. The intellectuals of the bourgeois class are always fascinated with perfect schemes and utopian ideologies, with no firm basis in economic and social reality.

Grady, when you say the co-operatives must be owned by the workers, how exactly does that work? Does an individual own a share in a co-op? Can she sell her share to somebody else, or to a fellow co-op member? If so, how is the price of such a share set? What powers does the co-op have to set working conditions and to deal with members who refuse to work? Can an uncooperative fellow be expelled from the co-op?

It has become well understood that one of the chief causes of the failure of the Marxist/Castro system followed by Cuba is the inefficiency of the centrally planned economy. It is simply impossible for a government ministry to collect enough data, to have enough time and resources to fully analyze & understand the data, and to formulate policies and plans to adequately organize the complex interrelationships of production, distribution & consumption of resources in a national economy. It is not possible to know everything in order to plan everything.

So how does the co-operative model deal with this problem? What degree of autonomy does the co-operative have to make their own economic decisions? What about the channels of resources, supplies, advertisement and product distribution? If the co-operatives must exist under a socialist political monopoly, what freedom do they have to make their own economic decisions? The Mondragon Co-operative has been successful, but it exists within an overall pluralist free-market capitalist economy, the EU. Would the co-operative be as successful without the interactions with private corporations, businesses, customers and professionals and as an economic community?

So what about private enterprise? Would privately owned and operated businesses be allowed in your co-operative socialist republic? Suppose I didn’t want to join a co-op and accept the decisions of a committee on how to run my life & work? Can I open my own privately owned business and hire workers? Or could I accept a job offer from Moses to go work in his private firm as a salaried employee? If not, who has the authority and power to say no? Do I not have the right to decide for myself how I am going to use my mind, my capital and my labour?

Finally I ask, how is this movement you say you founded, the modern co-operative socialist movement, not another scheme to prefect society, a utopian ideology? And when you describe yourself as the “founder” of a “movement”, roughly how many people are in your movement, how do they join and what is your relationship to the members of this movement? When I googled your name I came up with a few pages of self-promotion and your two books at Amazon. The books rank as #1,170,428th and #6,349,213 place as sellers. Not very popular titles, really. But there is no trace of a “modern socialist co-operative movement” of which somebody named Grady Ross Daugherty is a founder. So what gives? Does your movement actually exist outside the covers of your two books?

Article printed from Cuba’s Havana Times.org: http://www.havanatimes.org

Nguyen Phu Trong Meeting with Raul Castro

Socialism and the Path to Socialism – Vietnam’s Perspective

By Nguyen Phú Trong
General Secretary of the Communist Party of Vietnam

Nguyen Phu Trong, general secretary of the Communist Party of Vietnam, paid an official friendship visit to Cuba and gave a presentation at the Nico Lopez Party School of the Cuban Communist Party.

Following are excerpts from Party leader Trong’s presentation.

Socialism and the path to socialism is a fundamental and practical theoretical topic with broad and complicated content, demanding thorough and in-depth study. I hereby mention just a few aspects from Vietnam’s perspective for your reference and our discussions. And several questions are focused: What is socialism? Why did Vietnam choose the socialist path? How to build socialism in Vietnam step by step? How significant has Vietnam’s renewal and socialism building process been over the past 25 years? And what lessons have been learnt?

As you know, socialism can be understood in three different aspects: socialism as a doctrine, socialism as a movement, and socialism as a regime. Each aspect has different manifestations, depending on the world outlook and development level in a specific historical period. The socialism I want to discuss here is a scientific socialism based on Marxist-Leninist doctrine in the current era.

Previously, when the Soviet Union and its constellation of socialist countries existed, striving for socialism in Vietnam seemed logical and implicitly validated. But after the collapse of the Soviet Union, socialist regimes fell in many countries and the worldwide socialist revolution began to ebb. Now, the cause of socialism has been revived, sparking widespread interest and heated debate.

It is true that capitalism has never been more widely accepted than it is now, and it has achieved great successes, especially in liberating and developing productive capacity and advancing science and technology. Many developed capitalist countries have established social welfare systems which are more progressive than ever before, thanks to strong economies and long struggles by their working class. However, capitalism cannot overcome its inherent fundamental contradictions.  We are witnessing a financial crisis and economic decline which originated in the US in 2008, rapidly spread to other capitalist centers, and has impacted every country around the globe.

In addition to this economic crisis with its related food and energy crisis, a depletion of natural resources and deterioration of the environment are posing great challenges to the existence and development of humankind. These are the consequences of a socio-economic development process which champions profits, considers wealth and material consumption the measures of civilization, and makes individualism the main pillar of society. They are the essential characteristics of capitalism’s mode of production and consumption.  The ongoing crisis once again proves that capitalism is anti-advancement, anti-humanity, and unsustainable economically, socially, and ecologically. As Karl Marx said, capitalism damages the things that constitute its wealth, namely, labor and natural resources. According to scientists, the current crisis cannot be completely resolved in the framework of a capitalist regime.

Recent social protest movements flaring up in many developed capitalist countries have exposed the truth about the nature of capitalist political entities. In fact, democratic regimes which follow the “free democracy” formula advocated and imposed by the West never ensure that power truly belongs to the people and for the people—the natural factor of democracy. Such a power system still belongs mostly to the wealthy minority and serves the interests of its major capitalist groups. A very small proportion, as small as 1% of the population, holds the majority of the wealth and means of production, controls most of the financial institutions and mass media, and dominates the whole society.

We need a society where development is truly for humans, instead of exploiting and trampling on human dignity for the sake of profits. We need economic development in parallel with social progress and fairness instead of a widening gap between the rich and the poor and social inequality. We need a society which yearns for progressive and humane values, a society of compassion, unity, and mutual assistance instead of rivalry for the selfish benefits of individuals and groups. We need sustainable development and harmony with nature to make our living environment clean for present and future generations, instead of exploiting, appropriating resources, infinitely consuming materials, and destroying the environment. And we need a political system under which power truly belongs to the people, by the people, and serves the interests of the people, instead of a wealthy minority. These are the authentic values of socialism, aren’t they?

As you comrades and friends know, the Vietnamese people have undergone a prolonged, harsh, sacrifice-filled revolutionary struggle against colonialist and imperialist domination to win national independence and sovereignty in the spirit of the slogan “There is nothing more precious than Independence and Freedom”.

National independence associated with socialism is the basic guideline of Vietnam’s revolution and the essential point of Ho Chi Minh’s legacy. His rich experience combined with the revolutionary theories and science of Marxism-Leninism led Ho Chi Minh to the conclusion that only socialism and communism can create a truly free, prosperous, happy life for every person in every nation. Advancing to socialism is the objective and the inexorable path of the Vietnamese revolution, harnessing the people’s aspirations and historical trends.

But what is socialism? And how does one advance to socialism? This is what absorbs our thoughts—finding our way step by step, creating orientations and guidelines which fit the specific circumstances of Vietnam.

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To date, though there remain some issues that need further study, we realize that the socialist society that the Vietnamese people are striving for is a society of prosperous people in a strong nation characterized by democracy, fairness, and civilization. It’s a society where the people are the masters, which has a highly-developed economy and is based on modern forces of production and progressive relations of production. It has an advanced culture imbued with national identity, and a prosperous, free, and happy people who are blessed with opportunities for comprehensive development. Ethnic groups in the Vietnamese community are equal, united, respectful and supportive of each other. A law-governed socialist state of the people, by the people, and for the people is led by the Communist Party and has friendly and cooperative ties with countries all over the world.

To achieve these goals, we should speed up national industrialization and modernization; develop a knowledge-based and socialist-oriented market economy; build an advanced culture imbued with national identity; boost human resource development; improve people’s living standards; promote social progress and fairness; ensure national defense; safeguard national security and social order; implement a foreign policy of independence, self-reliance, peace, friendship, cooperation, and development; proactively integrate into the world; build a socialist democracy; exercise national unity; expand the national unification front; build a law-governed socialist state of the people, by the people, and for the people; and build a stronger, more transparent Party.

The more we delve into reality, the more we are aware that the transitional period to socialism is a long, extremely difficult and complicated process because it needs to create a profound change in all areas of social life. Vietnam is bypassing the stage of capitalism and moving on directly to socialism from an obsolete agricultural society with low productivity further weakened by decades of wars. Constant attempts at sabotage by hostile forces have hindered Vietnam’s path to socialism, which unavoidably involves a lengthy transition period through various stages and forms of socio-economic organization accompanied by inevitable conflicts between the old and the new. By ‘bypassing the stage of capitalism’, I mean bypassing a regime of oppression, inequality, and capital exploitation, bypassing evils and political entities inappropriate to a socialist regime. This doesn’t mean that we must ignore the achievements and civilized values that humankind has achieved during the process of capitalist development. Indeed, the inheritance of these achievements should be based on an attitude of selective development.

The concept of a socialist market-oriented economy is a creative and fundamental theoretical breakthrough for our Party and an important fruit of the 25-year renewal process, which stemmed from Vietnam’s reality and accumulated experiences of the world. In our opinion, a socialist market-oriented economy is a multi-sector commodity economy, which operates in accordance with market mechanisms and a socialist orientation. It is a new type of market economy in the history of the market economy’s development. It is a kind of economic organization which abides by market economy rules but is based on, led by, and governed by the principles and nature of socialism reflected in its three aspects—ownership, organization, and distribution—for the goal of a prosperous people in a strong nation characterized by democracy, fairness, and civilization. This is neither a capitalist market economy nor a socialist market economy.

In a socialist-oriented market economy, there are multiple forms of ownership and multiple economic sectors. Economic sectors operating in accordance with the law are major components of the economy and equal under the law in the interest of co-existence, cooperation, and healthy competition. The state economy plays a key role; the collective economy is constantly consolidated and developed; the private economy is one of the driving forces of the collective economy; multiple ownership, especially joint-stock enterprises, is encouraged; the state and collective economies provide a firm foundation for the national economy. The relations of distribution ensure fairness, create momentum for growth, and operate a distribution mechanism based on work results, economic efficiency, contributions by other resources, and distribution through the social security and welfare system. The State manages the economy through laws, strategies, plans, policies, and mechanisms to steer, regulate, and stimulate socio-economic development.

Typical characteristic of the socialist orientation in Vietnam’s market economy is the combination of economics and society, the coordination of economic and social policies, economic growth in parallel with social progress, and fairness applied at every step, in every policy, throughout the development process. This means that we neither wait for the economy to reach a high level of development before implementing social progress and fairness, nor “sacrifice” social progress and fairness to the pursuit of mere economic growth. On the contrary, every economic policy should target the goal of social development and every social policy should create momentum to boost economic development. Encouraging people to enrich themselves legally should go hand in hand with reducing poverty and taking care of the disadvantaged and those who have rendered great service to the nation. These are the principles required to ensure a healthy, sustainable, socialist-oriented development.

Our Party sees culture as a spiritual foundation of society and considers cultural development on a par with economic growth and social progress in its fundamental orientation toward socialism building in Vietnam. The culture Vietnam is building is progressive and imbued with national identity, a united-in-diversity culture based on advanced humanitarian values, where Marxism-Leninism and Ho Chi Minh’s thoughts play a leading role in social spiritual life, where we inherit and uphold the fine traditional values of all ethnic groups in Vietnam, absorb humankind’s cultural achievements, and strive to build a healthy, civilized society that promotes human dignity, higher knowledge, morality, physical fitness, aesthetics, and a fulfilling lifestyle. We believe that people should play the central role in any development strategy; that cultural development and human resources development are both the target and the momentum of the renewal process; that the development of education and training and science and technology should be priorities of national policy; that environmental protection is one of the vital issues and a criterion of sustainable development; that building happy, progressive families to be healthy cells of society and implementing gender equality are criteria of advancement and civilization.

A socialist society is a society that yearns for progressive and humane values based on people’s common interests, which is totally different from competitive societies based on the interests of individuals and groups. A socialist society fosters social consensus rather than social opposition and antagonism. In a socialist political regime, the relationship between the Party, the State, and the people is a relationship of entities unified in their goals and interests. Every Party guideline, every government policy, law, and action is in the people’s interest. The political model and overall mode of operation is that the Party leads, the State manages, and the people are the master. Democracy is the nature of the socialist regime and both the goal and the momentum of socialism building. Building a socialist democracy, ensuring that real power belongs to the people, is the ultimate and long-term task of Vietnam’s revolution. We intend to unwaveringly uphold democracy, build a law-governed socialist State truly of the people, by the people, and for the people on the basis of an alliance between workers, farmers, and intellectuals led by the Communist Party of Vietnam. The State represents the people’s right to mastery and at the same time organizes the implementation of Party guidelines. There are mechanisms for the people to exercise their right to direct mastery in all areas of society and to take part in social management. We realize that a law-governed socialist State is by nature different from a law-governed capitalist State. Legislative power under a capitalist regime is really a tool to protect and serve the interests of the bourgeois class, while legislative power under a socialist regime is a tool to reflect and exercise the people’s right to mastery and protect the interests of the masses. By enforcing laws, the State enables the people to wield political power and dictate against all acts that violate the interests of the fatherland and the people. At the same time, we define national unity as a source of strength and a decisive factor for the lasting victory of the revolutionary cause in Vietnam. Equality and unity between ethnicities and religions are constantly promoted.

Being well aware of the Communist Party’s leadership as a factor that decides the victory of the renewal process and ensures a national development in line with socialist orientation, we pay special attention to party building, considering it a key and vital task for the Party and the socialist regime. The Communist Party of Vietnam is a vanguard of the Vietnamese working class. The Party was born, exists, and develops for the interests of the working class, the laborers, and the nation as a whole. When the ruling Party leads the nation, it is acknowledged by the entire people as their vanguard. Therefore, the Party is the vanguard of the working class, the laborers, and the Vietnamese nation as a whole. This doesn’t mean playing down the Party’s class nature, but reflects a more in-depth and more complete awareness of the Party’s class nature since the working class is a class whose interests match the interests of the laborers and the nation as a whole. Our Party unswervingly considers Marxism-Leninism and Ho Chi Minh’s thoughts as the ideological foundation and lodestar of our revolutionary activities, and considers democratic centralism as the basic organizing principle. The Party leads with its platforms, strategies, and policy guidelines, with its communications, persuasion, mobilization, organization, and supervision, and with Party members’ role models and unified leadership of personnel work. Considering corruption, bureaucracy, and moral deterioration as threats to the ruling Party, particularly in a market economy, the Communist Party of Vietnam demands constant self-reform, self-rectification and rejection of opportunism, individualism, corruption, bureaucracy, waste, and moral deterioration within the Party and the entire political regime.

The renewal process, including the development of the socialist-oriented market economy, has truly brought about positive changes in our country over the past 25 years.

Vietnam used to be a poor, war-torn country, with devastated human lives, infrastructure, and environment. Food and other necessities were in critically short supply, and people’s lives were extremely hard, three-fourths of the population being below the poverty line.  That was the reality in Vietnam before the renewal process.

Thanks to the renewal process, the economy has been growing steadily over the past 25 years at an average annual rate of 7 to 8%. Per capita income has increased 11 fold. In 2008 Vietnam escaped from its former status as a low-income country. From a country with chronic food shortages, Vietnam now not only ensures its own food security but also has become a leading exporter of rice and other agricultural produce.  Industry has developed rapidly with industry and services now accounting for 80% of GDP. Exports have increased steadily, topping 100 billion USD in 2011. Foreign investment had climbed to nearly 200 billion USD by the end of 2011. Economic growth has enabled the country to escape the socio-economic crisis of the 1980s and improve its citizens’ living standards. The poverty rate falls 2 to 3% every year. It went from 75% in 1986 to just 9.5% in 2010. Vietnam completed the eradication of illiteracy and popularization of primary education in 2000 and popularization of secondary education in 2010. The number of tertiary students has increased 9 fold over the past 25 years; 95% of Vietnam’s adult population is literate. Many common diseases have been successfully contained. The poor, children under 6, and the elderly are provided free health insurance. The child malnutrition rate has been slashed 3 fold. The new-born mortality rate has fallen 6 fold. Life expectancy has increased from 62 in 1990 to 73 in 2010.  Vietnamese cultural life has expanded to include an ever-wider range of cultural activities. Vietnam now has about 25 million internet users and is one of the countries experiencing the fastest growth of IT technology. The United Nations has recognized Vietnam as one of the leading countries in reaching its Millennium Development Goals.

So it can be said that the renewal policy has brought about very positive changes in Vietnam: economic growth, higher productivity, rapid poverty reduction, a higher standard of living, reduced social problems, more political and social stability, ensured security, enhanced national posture and strength, and greater trust in the Party’s leadership. Reviewing 20 years of renewal, our 10th National Party Congress remarked that the renewal has recorded “great achievements of historical significance”. In fact, the Vietnamese people are now enjoying better living conditions than at any time in the past. That’s why the renewal initiated and led by the Communist Party of Vietnam has received the Vietnamese people’s full and active support. Renewal achievements in Vietnam have proved that socialist-oriented development not only has a positive economic effect but also resolves social problems much better than capitalist development at a similar development level.

Despite all these achievements, there remain shortcomings, limitations, and new challenges to be overcome in Vietnam’s pursuit of national development.

Economically, the quality of growth remains low, infrastructure development is uneven, the efficiency and capacity of businesses—including state-owned enterprises—are limited, the environment is polluted in many areas, and market management and regulation are inadequate.  Meanwhile, competition is becoming fiercer with globalization and international integration.

Socially, the gap between the rich and the poor is widening, the quality of education, healthcare and many other public services is low, culture and social ethics are deteriorating, and crimes and social vices are becoming more complicated. In particular, corruption, waste, and the deterioration of political ideology and personality morality are tending to spread among cadres and Party members.

We realize that Vietnam is now in a transitional period towards socialism. During this transition, socialist factors have been established and developed, intermingling and competing with non-socialist factors, including capitalist factors.  The intermingling and competing are more complicated and aggressive in the current context of market opening and international integration. Along with positive aspects, there will always be negative aspects and challenges that need to be considered wisely and dealt with timely and effectively. It is a difficult struggle that requires spirit, fresh vision, and creativity. The path to socialism is a process of constantly consolidating and strengthening socialist factors to make them more dominant and irreversible. Success will depend on correct policies, political spirit, leadership capacity, and the fighting strength of the Party.

At present, we are revising our growth model and restructuring our economy with greater priority being given to quality and sustainability by focusing on infrastructure, human resources and administrative reforms. Socially, we are continuing to pursue sustainable poverty reduction, improve healthcare, education, and other public services, and enrich the people’s cultural life.

Theory and experience agree that socialism building means creating a new type of society, which is by no means an easy task. The challenges and difficulties before us require that the Party’s leadership role be matched by the creative ideas, political support, and active participation of the people. The people will accept, support, and enthusiastically take part in carrying out the Party’s guidelines when they see that those guidelines answer their needs and aspirations. The ultimate victory of Vietnam’s development is deeply rooted in the strength of the Vietnamese people.

At the same time, the Party’s directions and policies must originate not only in the reality of Vietnam and its history, but also in the reality of the world and era in which we all live. In today’s globalized world, no country can stand aloof from the world community and its complex interactions. We therefore intend to proactively integrate into the world and implement a foreign policy whose pillars are independence, self-reliance, peace, cooperation, and shared development. Vietnam is committed to multi-lateralization and diversification of its international relations on a basis of equality, mutual benefit, and respect for national sovereignty, territorial integrity, and non-interference in each other’s internal affairs.

Even more important is that we should be consistent and firm on the foundation of Marxism-Leninism, a scientific and revolutionary doctrine of the working class and the masses of laborers. The radical scientific and revolutionary characteristics of Marxism-Leninism are lasting values and have been pursued and implemented by revolutionaries around the globe. It will continue to develop and prove its vitality in the reality of revolutions and scientific development. We need to selectively accept and supplement in the spirit of criticism and creativity of the latest ideological and scientific achievements so that our doctrine will be forever fresh, energized, and filled with the spirit of the era.

We are aware that ours is an extremely complex and unprecedented undertaking, which will require us to learn the lessons we will need as we go along. The steps we have already taken are just the first steps of a long journey…The goals of socialism may be the same in every country, but the methods necessary to achieve those goals are diverse, depending on the specific circumstances of each country.

Our journey will demand all of our ingenuity and vitality.

www.talkvietnam.com

November 17, 2012