Socialism is like a fine Cuban cigar that has gone bad. In the beginning, smoking is a magical experience, providing you with a sublime taste, an incredible texture, and an exotic aroma that gives you more pleasure than a hungry Venezuelan finding clean water and a fresh empanada. Eventually, the cigar becomes dry and stale, and mold begins to form, emitting a foul stench that makes everyone cough. It’s comparable to a dilapidated Cuban hospital or the downtrodden economy.
Cuba Trumps Cuba Before Trump
For several decades, U.S.-Cuba policy was frozen in the 1960s. The previous administration attempted to initiate a new economic and diplomatic partnership for the 21st century, though it was crony from the beginning. The current administration, however, is slowly dismantling any gains Washington has made since 2011.
Recently, the Treasury Department confirmed that it was imposing travel restrictions on the island nation. The measures would prevent cruise ships and group educational trips from touching foot on Cuban soil. Washington believes that the communist regime is playing a role in the destabilization of South America by “providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability.”
This is part of a wider effort to hurt the Cuban economy and ensure Havana is pummeled into submission. But is it a case of too little, too late for President Donald Trump? Cuba, which has enjoyed a surge in American tourists, is being squeezed like cigars being rolled by Dominicans. If the primary objective is to hurt the island economy, then the Cuban leadership is already achieving that goal by employing the hallmarks of socialism.
How? Price controls.
Please, Senor, Can We Have Some More?
The Cuban government recently announced that it would be rationing basic goods, such as chicken, eggs, beans, rice, flour, and soap. Every Cuban will be given a ration book that will allow them to purchase small quantities of these items each month. For instance, cheap chicken (low quality) will be limited to 11 pounds per purchase, and expensive chicken (high quality) will be capped at two packages per transaction.
For the last couple of years, the country has intermittently run out of these essential items, but it has worsened in recent months. This year, there has been an increasing number of products that have vanished from store shelves for weeks at a time, and long lines have become the norm. It is incredibly frustrating for shoppers when they wait for hours at a state-run supermarket and get nothing in the end.
Havana imports about two-thirds of its food to the tune of $2.7 billion a year. The remaining third is produced domestically, but it is never enough to satisfy national demand. For instance, during the March-April period, Cuba produced between 600,000 and 900,000 fewer eggs than the 5.7 million needed daily.
Why are farmers not keeping up? The answer lies in one of the traditions of socialist economics: Price controls.
Since May 2016, the government has instituted price controls to amplify stockpiles, sell popular agricultural goods, and prevent shortages. Ostensibly, nobody taught these geniuses in Havana about basic economics. If these socialists ever took an Econ 101 class, they would have learned that when government-mandated price ceilings are enacted, an artificial demand follows, leading suppliers to not bring as many goods to market. This generates shortages, which usually causes officials to implement even more price controls. Government begets government.
Cuba has been through this before.
In the 1960s, Fidel Castro initiated a rationing system to stabilize the economy after the U.S. government slapped the country with sanctions. Although both policies impacted millions, government controls inflicted more damage than the sanctions. Cuba had failed to produce food that previously grew easily on its soil. In fact, the state had enjoyed an abundance of food before the 1959 revolution, but then the Castro regime introduced price controls for a diverse array of goods, enacting misery for all.
As expected, the government refuses to admit that it was wrong. Instead, it is using the go-to excuse to explain the shortage: Blame the hoarders! Yeah, and Fidel Castro would have been an excellent pitcher for the New York Yankees.
No Juan Wants Socialism
British Prime Minister Margaret Thatcher famously said that the main problem with socialism is that you eventually run out of other people’s money. Well, there’s another issue with this failed ideology: You inevitably run out of food. Just ask the Chinese who lived under Mao, the Russians who resided under communist rule, and now the Cubans who are barely surviving under socialism. Despite some new window dressing over the last year, the island nation is still reverting to interior décor from the 1960s.
Capitalism, socialism, and communism meet for afternoon tea. Capitalism and communism arrive on time, but socialism is running late. When he finally arrives for tea, he apologizes and reveals he was standing in line for a sausage. Capitalism replies: “What’s a line?” Communism asks: “What’s a sausage?”
That’s a key joke that explains what you get with these three economic systems, though one could argue that communism and socialism are interchangeable, and you will wait in line and never get a sausage under both models.
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