Gary Becker, a Nobel laureate, expert in applied economics, and professor of economics and sociology at the University of Chicago, died this past weekend. His last post on the Becker-Posner blog is titled, “The Embargo of Cuba: Time to Go” and speaks to his legacy as an eminent economist.
In the post, Becker argues that resuming free trade with Cuba will pressure the Cuban government to “end its failed experiment with communism.” The U.S. International Trade Commission estimates American losses from the embargo to be $1.2 billion annually. This accounts for opportunity costs from potential gains in tourism, real estate, agriculture, and other industries.
Evidence supports Becker’s claim that opening up Cuba would do a lot more to force its liberalization than keeping it closed. Tourist areas like Varadero that have been exposed to capitalism in a limited sense are markedly different from the rest of Cuba. As Becker points out, the change would be almost immediate.
Becker believes that, rather than punishing communism, the embargo senselessly punishes the Cuban people—those who it was designed to help. Sound familiar? Like Obamacare, the embargo is a forced disruption of the private market responsible for distorting market incentives and redirecting profits and power away from the consumer and towards the government. I wrote about Cuba’s fiscal fiefdom, costly dual-currency system, and government-mandated social and economic oppression last year. Not much has changed.
President John F. Kennedy implemented the embargo in October of 1960 with the intention of forced regime change through economic pressure. Yet because “Cuba no longer provides any significant threat to American interests,” Becker explained, “there is no sense in continuing to punish the Cuban people with an embargo on trade, nor to provide excuses to its leaders for the poor performance of the Cuban economy.”
He compares two similarly sized countries—Cuba and Taiwan—to highlight how economically malnourished Cuba has become: “Cuba’s per capital income is a fifth or less of that of Taiwan. Sugar and tobacco remain important exports of Cuba, while Taiwan has shifted toward complex electronic and industrial goods.”
How many Cubans have suffered because of the stubbornness of old men and their political vendettas?