Millions of economic transactions take place every hour in the
United States, too many for any central committee in Washington to
handle or even Understand, even if they all graduated with honors
from Harvard’s Kennedy School of Government.
For the most part, the economic transactions happen
instantaneously, automatically sending market signals that organize
production according to size and color, spontaneously determining
losses, profits, wages and prices.
And so, if we want organic pomegranate granola with
cherries, it’ll be there, right on time for breakfast every day on
the capitalist shelves. It’s the same with red Corvettes or caramel
ice cream with cinnamon bun dough and a streusel swirl.
It takes a little longer to get it right once the central
controllers take charge of deciding things.
Starting on October 1, 2011, some 52 years after Fidel
Castro shot his way to power in Cuba, it finally became legal for
some poor guy in Cuba to sell the 1965 Russian-made Moskvich piece
of junk he’s had sitting up on blocks in his front yard for the
better part of half a century.
Previously on this island of alleged power to the people,
Cubans were permitted only to sell their own automobiles if they
were manufactured before the 1959 revolution.
By some strange twist of collectivist logic, reselling any
car that was produced in the post-revolution period was viewed as
an act of capitalist sabotage, a crass act of individualism and
greed.
As a result, it paid to keep a legally transferable ‘57
Chevy on the road, even if it was held together with coat hangers
and duct tape. That’s why the streets of Havana look like those
shopping center parking lots in the U.S. on Sunday afternoons in
the summer when the vintage car guys get together in their shined
up ‘59 Impalas and ‘56 T-Birds to sit on lawn chairs, drink beer,
and listen to Chubby Checker.
But now things will be different in Cuba, more like a free
market, according to President Raul Castro’s speech to the National
Assembly in December 2010, pushing his effort to cut bloated
government payrolls and encourage private sector initiatives in
Cuba’s failed economy. “The state has no business getting involved
in a matter between two individuals,” he proclaimed, sounding more
like Ron Paul than brother Fidel.
The new decree from the Cuban government allows someone to
sell his own car from all years of production, even post-revolution
models, and also permits, with a progressive tax penalty, the
ownership of more than one car per person.
The Cuban government, additionally, wants 8 percent of the
price of each car sold, with buyers and sellers each to pay a 4
percent tax. Try to cheat on that and you’ve got to worry about
some neighbor on the Committee for the Defense of the Revolution
getting a few extra pesos in his government paycheck for
squealing.
New cars can be only sold in state-owned
monopolistic dealerships. The state-established price on a new
Hyundai runs around $30,000, not counting the bribes that may be
required to get the right color and a half-speedy
delivery.
The average income in Cuba is $20 a month, so a $30,000
Hyundai is equal to the total income for 125 years of the typical
Cuban worker. If the worker could manage to save 10% of his pay
every month, he’ll have the $30,000 in 1,250 years.
Under the new rules, any buyers of a new car will be
required to prove they made the money for the purchase in a
government-approved occupation.
That might not be so easy. Under various government
dictates, for instance, hundreds of occupations were disapproved
for Cuban women, including the jobs of grave digger, house painter
(unless the house was extra short) and deep sea diver.
It was legal under the government rules to open a
restaurant, but anything bigger than 12 chairs for customers was
prohibited, no matter how much the neighborhood liked the
food.
Employees in a restaurant were also illegal — too
hierarchical for the collectivist mindset — so someone seeking to
be a restaurateur had to be like one of those multi-armed Hindu
deities, able to simultaneously seat customers, clean tables, cook
the food, serve drinks, pay the bills, play the bongos, and wash
the dishes.
