Economics With A Face

After spending a week in Havana, with the blessing of the U.S. government under a free-lance journalism license, the answer to this question is a bit clearer. Following my visit it was even more evident to me that Cuba’s socialist government would cease to exist if it could not rely on a steady flow of tourist dollars, euros, pesos, etc. that are currently keeping the government afloat. Additionally, many of those who are spending this money experience a very different Cuba than those who live their entire lives on the island.

Walking through the city the contrast is glaring. Wearing shorts, a raggedy shirt, and flip-flops, I could walk into the lobby of a hotel, order a steak at the bar, and enjoy my meal while watching CNN just steps away from the street. Ordinary Cubans passing by outside were not allowed in the hotels, could be sent to jail if they raised and slaughter a cow for beef, and if they had a television their reception was restricted to a few government stations. These, and many more glaring contrasts, made you sick to your stomach and wonder why anyone would ever want to go to Cuba for vacation.

And of course, the hotels that tourists from Canada, Europe, and the rest of the world frequent, are owned by the government in partnerships with foreign corporations. On top of that, nearly everything bought and sold goes through the Cuban government. Thus, almost every dollar spent gives Fidel more money to exercise control over the Cuban people. In 2003 this oppression was center stage for the world to see when Fidel threw over 70 journalists, economists, poets, and librarians into prison for defying the regime. He also had three men sentenced to death for attempting to hijack a ferry and make it to Florida.

Not surprisingly this arouses strong emotions. Maria Elena Alpizar Arioso, an independent journalist who lives in Havana, is but one passionate supporter of the embargo. She had this message for her two sons who reside in Venezuela: "I told them not to come here, not even to see my cadaver, while Fidel Castro is here."

But despite these facts one can look at the embargo from a different angle. To start with, the Cuban embargo does not stop any American goods from reaching the shores of Cuba. Since every other country in the world is free to buy U.S. goods, what’s to stop entrepreneurs in Mexico, Canada, Europe, and wherever else from buying U.S. products and selling them to Cuba if they desired? Absolutely nothing.

And of course the Germans have no laws prohibiting businessmen from selling Saabs to Cubans, nor do the Japanese have laws restricting the sale of Toyotas. The reason that there are so many cars from the 50’s still circulating around Cuban streets is that Fidel’s socialist policies have impoverished the country.

Yet the ramifications of the Cuban embargo are even worse. By continuing to enforce these restrictions on travel and trade, the U.S. gives Castro a scapegoat for his country’s poverty. They are poor, he states, because of the U.S. embargo. (Of course, the logic seems to escape Castro that if Communism works so well, why then is their economy dependent on the capitalistic government to the north?) And there is no doubt that Castro’s message does hold sway with some Cubans. I’m sure they wonder… why does the U.S. government have these restrictions against Cuba but not against China, which is also a communist state?

When one looks at the recommendations put forth by President Bush and his commission it only gets all the more bizarre. Since May 2004 Cubans in the United States can only go to visit family members once every three years (instead of once a year which was the previous policy), the definition of family members has been restricted to include only immediate family, and Cubans visiting family are only allowed to spend $50 dollars a day in the country instead of the previous amount which was $164.

If that were not enough, cash remittances can now only be sent to immediate family members, they remained limited to $300 per family every three months, and gift parcels must be worth less than $200 (not counting food which is excluded). The administration also further restricted the travel by students to Cuba through educational programs.

Are we not punishing the wrong people here?

All these policies, taken as a whole, sum up to an appalling strategy for dealing with Cuba. Fidel Castro and his confidants don’t suffer because of the embargo. They eat luxurious dinners every night relaxing at Fidel’s finca. Meanwhile, the Cuban people are not only denied direct flow of American goods, but more importantly they are denied contact with U.S. citizens, something that could be enormously beneficial.

I truthfully believe that people in the U.S. understand the benefits of free enterprise better than anyone else in the world. Thus, American students, travelers, and entrepreneurs would bring a unique taste of freedom to Cuba that won’t be found anywhere else. With Florida only 90 miles away, there is no doubt it would be an easy trip for many.

Economics professors could arrange trips with their students for a first hand look at the inefficiencies that are inherent in a command economy. Travelers could bring Cubans not only over-the-counter medicine, which Cuban’s sorely need, but they could also bring along some copies of the New York Times and The Wall Street Journal. Entrepreneurs, if allowed to start businesses, could demonstrate by there own actions how a market economy works. That is of course if Castro allowed such things, which I’m sure he would not.

But then that’s really the point. Instead of the U.S. looking like the villain to many people in Cuba and others across the world, the blame would be placed directly where it belongs. And back in the U.S., instead of reading headlines about the Treasury Department fining American citizens who violated the embargo, instead we’d be reading more headlines how Castro himself was restricting the travel of Americans; Americans who were doing nothing more than trying to better the lives of the people Fidel controls.

So why not Mr. President? Let’s give the American people the same freedoms we lambaste Castro for taking away. I know we will use it wisely. If you’re serious about advancing a day of Cuban liberty, there would be no better way to do it.