Feature Articles Archive
2011-07-29 / Víctor Manuel Domínguez
The Work on Own Account and the Future
Returning of licenses for business running on one´s own account in Cuba, more than a sign of opening the centralized system of state employment, it is a fact which recognizes a fiasco of the economic model introduced in the country.
A half of century of non-productivity, over-employment and corruption, among other bad things generated by the governmental control of production, force the authorities to give small spaces for private efforts.
However, the (178) authorized jobs (to realize private business in the nation), will never accept the about 1 300 000 employees who were made redundant from their jobs in the country.
The absence of wholesale stores, missing capital for investment, together with imposed taxes and misused power, these are some of the limitations which make a barrier in front of running the private business.
The unsuccessful experience of thousands of Cubans who adapted a similar system in the 90´s, show that the government allows small changes in the labor control before a crisis.
Today it is the same. There does not exist a political will to liberate the productive forces for the country. The impossibility to push away the bankruptcy and fear of a social explosions open the cracks of the labor control by the state, who had a role of a unique employer.
Even though the government promised not to shift reverse in the implementation of the irregular work, there exists a big tension between those who adapted the plan.
Even if there grows the queue of the people who are looking for private business, the parallel form appears and another queue grows, this time with the ones, who are returning the license because of high taxes imposed, and the ghost of state control.
In the Cuban capital, the enthusiasm of the early October days gives its way to the fear of failure in the actual reality.
To show an example, one self-employee with a license for light food production has to pay taxes for sale of fried food, quotes are following:
- 500 pesos monthly for working license
- 496 pesos each three months if he has an assistant
- 262,50 pesos every three months for social insurance
- 10 % of monthly declared sales
There is too much competition and one has to buy oil and other ingredients for convertible peso, although he sells his products in national peso.
The same problem is know by the barbers, distributors of discs, and other private businesses, sometimes they have to pay much more than they earn in one month.
In many cases, cancellation of one´s work place forces people to find a solution in self employment, though they feel they cannot find one.
Apart from the necessity to obtain material resources for prices allowing a profit, they miss the equity and above all, a guarantee that their business will not be closed for any pretext when the business runs well.
How long will last the private business, when it seems to be the right option now?
It should not be forgotten, that from its beginnings, the revolution is based on control of production resources and it fights against any deviation independent from the state sector.
The thing is that already in 1960, a 52 % of the retail profit came from state property, in 1963 it was 75 % and in 1968 it reached 100 %, with thousands of confiscated small businesses. This was a clear signal of the interest in having all the employment under control.
In the speech pronounced on May 13th 1968 in La Habana, which declared initiation of so called “Revolutionary offense,” Fidel Castro expressed:
“The revolution was not done here to establish the right for commerce (...) In this country there is no future for commerce, private business, private industry, or anything.” This speech ended the residual spaces with surviving little businesses, on the brink of the state employment.
Is this conviction overcome? Only the time will tell us.
In October 1960, the Act No. 890 was announced, which confiscated violently and without any compensation a total of 376 industrial enterprises and businesses in
. The same month and year, the Act No. 891 ordered nationalization of the whole Cuban bank system.