Cuban and American Socialism

by Jacob G. Hornberger
Apr. 21, 2011

The disastrous failure of Cuba’s socialist economic system provides valuable clues to the American people as to why the United States is mired in economic woes. While total socialism has led Cuba into the depths of economic despair, the partial socialization of the American economy has led America in the same direction. Equally important is what socialism has done to the mindsets of both the Cuban and American people.

Consider Cuba’s system for providing food to the populace. Since the state owns everything in Cuba and has a totally centrally planned economy, the state is responsible for providing food to the people. It has long used a ration system, one in which the Cuban citizen goes to a nearby government-run ration station to pick up his regular allotment of beans, vegetables, meat, and other food-stuffs.

Recently Cuban President Raul Castro proposed doing away with the food-ration system, given the horrible economic disaster it has produced. Not surprisingly, that caused some degree of fear and consternation among the Cuban people. According to the New York Times, one 36-year-old engineer exclaimed, “How will we afford food? They will have to lower food prices a lot so people do not starve. This all seems so much so fast.”

That is what socialism does to people. Here is a guy who has lived under a system of socialist central planning with respect to food all his life. The system has proven to be a disaster, with people on the verge of starvation. Yet, when you propose to him that such a system be abolished, immediately, and that the food industry effectively be turned over to the free market, he panics. He simply cannot imagine how the free market could be trusted to ensure that everyone is adequately fed.

Of course, that was the same mindset that afflicted many people in the Soviet Union. The mindset was: “How can we sure that the free market will produce the correct number of sweaters, the right sizes, and the colors that everyone wants? Don’t we need the state to guarantee these things?”

If you were to ask the average American whether he would favor the federal government’s nationalizing the food industry, including all the farms and ranches, and taking over the production and distribution of food, he would exclaim, “Absolutely not! Leave food in the hands of the free market. The government would just make a big mess of things, as it has in Cuba.” And most Americans would not hesitate to explain to that Cuban engineer that the free market can be trusted to ensure plenty of food in privately owned grocery stores and convenience stores across the country.

But consider such socialistic programs as Social Security, Medicare, Medicaid, central banking (i.e., the Federal Reserve), and public schooling, all of which, by the way, are part and parcel of Cuba’s socialist system. Most Americans living today have been born and raised under these socialistic programs, which are almost as big a mess as Cuba’s food-rationing program. They are all in perpetual crisis, and no matter how many different reform plans are adopted, the crises are always ongoing.

The disastrous failure of these programs should not surprise anyone. Like Cuba’s food system, they all involve some sort of socialistic central planning — in the areas of retirement, charity, health care, money, or education. As the Austrian economists (e.g., Ludwig von Mises and Friedrich Hayek) showed long ago, socialistic central planning is inherently defective. It will always produce crisis and chaos no matter whose reform plan is adopted.

When libertarians propose the immediate end of Social Security, Medicare, Medicaid, the Federal Reserve and paper money, and public schooling, isn’t the reaction of most Americans just like the reaction of that Cuban engineer? Don’t Americans freak out at such a thought as much as the Cubans freak out at the thought of dismantling their food-rationing program?

“We can’t just end Social Security all at once. Why, old people would die in the streets!”

“We can’t just end Medicare and Medicaid all at once. Why, people would be dying of illness in masse!”

“We can’t restore sound money to America all at once. Why, there would be chaos in the financial markets!”

“We can’t separate school and state all at once. Why, everyone would be stupid!”

That’s what socialism does to people. It causes them to maintain a deep and abiding dependence on the state for their sustenance.

The best thing that could ever happen to the Cuban people would be for them to “push the button” and immediately and completely dismantle Cuba’s food-rationing system and, well, for that matter, its entire socialist economic system.

Equally so, the best thing that could ever happen to the American people would to “push the button” and immediately and completely repeal Social Security, Medicare, Medicaid, paper money and the Federal Reserve, public schooling, and, well, all other welfare-state (and warfare-state) programs.

An immediate dismantling of socialism and socialistic programs would immediately produce a tremendous surge in creativity, ingenuity, capital, productivity, prosperity, charity, and education.

What is needed to ditch socialism into the dustbin of history, once and for all? A restoration of self-confidence, self-esteem, and self-reliance and a renewed faith in freedom and free markets — in the Cuban people, the American people, and the people of the world.
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Jacob Hornberger is founder and president of The Future of Freedom Foundation.