The Cuban government of Raúl Castro announced last week that it would push 500,000 workers out of state jobs next year. According to the official trade union at least half of the 500,000 workers would be given new licenses for self-employment, and another 200,000 would be absorbed into cooperatives. The layoff announcement marks the latest stage of Raúl Castro’s drive to transform the Cuban economy from the heavily state-owned economy that dates back to the years after the 1959 Cuban Revolution.

Sam Farber is a veteran socialist who was born and raised in Cuba. He is the author of numerous articles and books on the country, including The Origins of the Cuban Revolution Reconsidered. He spoke to Alan Maass from the US magazine Socialist Worker about the meaning of the layoff announcement–and what’s ahead for Cuba.

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WHAT’S THE background to the dramatic announcement about Cuba shedding half a million state jobs?

I THINK it’s important first of all to place this in the context of the Cuban regime being in decline, and that decline being accelerated because of the terrible economic situation.

This is the result of a combination of factors. One is the irrationalities and crises generated by the bureaucratic system itself. Another, of course, is the world recession, which has had a very negative economic impact on the Cuban economy.

For example, while the number of tourists to Cuba has continued at more or less the same rate, income from tourism is down. And income from nickel production, which has actually been even more important than tourism for the last several years, really fell dramatically because of the big drop in commodity prices–though since then, the price has recovered somewhat.

So the economic crisis is very severe, and for a couple years now, the regime has been talking about how there are 1 million excess state workers–not half a million, but 1 million. So this is what I imagine could be considered a “compromise position”–of laying off half a million people, instead of 1 million, as had been discussed.

Of those half million, 250,000 are supposed to be given licenses for self-employment, and another 200,000 are supposed to be placed in non-state jobs–by which they mean many state businesses are going to be converted into co-ops, where the employees will be the ones responsible. This is what they’ve already done with taxis, and barbershops and beauty parlors. They want to do that with a lot more occupations and industries.

The official announcement of the layoffs from the main trade union federation–and by the way, shouldn’t that be the function of the employer?–left 50,000 workers unaccounted for, perhaps because they will be given new state jobs different from the ones they had before.

THIS IS certainly not the regime’s first step in this direction, is it?

I WOULD call this new move an important milestone in a process that’s been going on for some time.

A couple years ago, the government began to lease land–in 10-year renewable contracts–to farmers after the sugar industry almost completely collapsed, and the land was going to waste. The idea was for the farmers to become private farmers–to use the land for whatever they wanted. But they aren’t owners. They pay rent to the state to use previously idle land, and they must sell most of what they produce to the state at prices determined by the government.

I think this experience with farming might indicate tremendous problems ahead in terms of whether the shift of half a million state workers into self-employment or co-ops will work.

In the case of private farming, the majority of the people who were given land hadn’t previously engaged in agriculture. They were people from the cities who were clearly desperate to improve their economic situation, so they took this opportunity.

However, it has been very difficult for those people to acquire the tools they need. And by tools, I don’t mean high-tech scientific equipment or tractors or anything like that–I mean quite basic agricultural tools. The state has done a very inadequate job, to say the least, in helping these people with the basics. So the results so far have been far from impressive.

I expect that similar problems will take place with these new private businesses. For example, one of the occupations that will be shifted into self-employment or co-ops is auto repair. So a previous state employee becomes an auto mechanic. Where is he going to get spare parts? Where is that auto mechanic going to get the appropriate tools, except from the state?

Here’s where the problem of corruption comes into play. Corruption in Cuba is absolutely pervasive, and people are driven to steal in order to survive. At the most basic level, this takes place because you simply can’t survive on a monthly government ration that only covers two weeks. The ration book is being cut down all the time, and even sharper cuts are imminent.

So people carry out theft from the state as a way of surviving, and I suspect that if somebody becomes an auto mechanic, they’ll have to engage in even greater theft to be able to survive as a small businessperson.

The other possible avenue here is that people may get help from outside Cuban capital, particularly from South Florida. That would be illegal from the U.S. point of view, though it probably won’t be illegal in Cuba, because they want that capital to come in. But the consequences of allowing in outside Cuban capital on any scale are uncharted territory.

The Cuban government is in classic contradictory situation in Marxist terms. It has to take these actions, and yet if it does, all kinds of outcomes that could potentially subvert the system arise. They are between the devil and the deep blue sea.

Before this latest move, there were 591,000 people employed in private businesses. That includes the struggling farmers I just mentioned, but it also includes 143,000 self-employed in the cities. This is going to add another 250,000 people to the self-employed, plus 200,000 people in co-ops. If you’re just talking about strictly private businesses, there will be 450,000 private farmers, plus 400,000 self-employed people who will be legally allowed to hire other people. We’re talking about 850,000 people out of a labor force of 5 million–that’s 17 percent.

So they are creating a legal petty bourgeoisie in Cuba–and I say legal because a lot of people have been doing this illegally for some time. What consequences this will have is uncertain because there hasn’t been a situation like this, really, since the sixties. This is uncharted territory–especially if they succeed in getting investment money from Cuban friends and relatives in Miami.

Again, that’s illegal under American law, but there has always been a section of the American political establishment that thinks it’s important to provide money to private enterprises in Cuba to the extent that it can enter the island. Now, the Cuban government will probably allow it, and this will place heavy pressure to modify the U.S. economic blockade to make it possible.

IS RAÚL Castro responsible for this new direction in economic policy? Does any of it extend back to when Fidel Castro was in charge?

ALL OF this–back to the initiative around private farming–has taken place under Raúl Castro. Raúl Castro took over de facto in 2006 and officially in 2008, so he has been the principal person leading the government on a day-to-day basis. It’s unclear what role Fidel Castro has played in setting policy during that time, and what role he will play in the future.

So these measures have been underway since Raúl Castro took over, which can be explained in part by the fact that Raúl Castro has been a great admirer of the Chinese model–since long before he took power. But even more important, of course, is the severity of the economic crisis affecting Cuba.

THE MEDIA largely describes what is taking place in Cuba as a turn to capitalism–away from socialism. But is that accurate–to describe what has existed in Cuba for the past 50 years as socialism?

I HAVE always maintained that what existed in Cuba had nothing to do with socialism. But unfortunately, large sections of the left have confused state ownership with socialism.

When we talk about socialism, we should be talking about rural and urban workers–and their class allies, like the peasantry–running society together. That has never existed in Cuba.

It is true that for long periods of time, the regime was popular because it was able to deliver significant improvements in standards of living for the poorest people–and it provided a great deal of social mobility, which is something that is sometimes underplayed in terms of the popular support for the Cuban regime. Just in terms of the massive emigration of the petty bourgeoisie, the big bourgeoisie and professionals from Cuba, that alone allowed for a great number of people to take over those jobs.

But the point is that socialism, in our view, is not state ownership of the economy–because the question then is: Who controls the state? Certainly, working people in Cuba don’t control the state. Rather, it is a bureaucracy, organized around the Cuban Communist Party, that does.

So it isn’t socialism that is being replaced. A bureaucratic state ruling class has decided to incorporate as a very junior partner in the economy a newly created petty bourgeoisie–some of whom will be successful, and may become a new group of private capitalists, which has not really existed in Cuba since the 1960s.

So the bureaucracy will share power with this new group–economic power, at any rate–and a situation like China may eventually develop. But there is also the question of political power, and the central bureaucracy isn’t going to share power with newly minted capitalists unless they totally assimilate into the ruling bureaucracy. But this has also happened in China–you have capitalists joining the Communist Party and becoming a part of it.

WHAT ARE the implications of that analysis for what socialists should say about the U.S. blockade of Cuba?

THIS seems to me to be something that needs to be said over and over again, quite independently of the crisis in Cuba and independently of the crimes and misdeeds–and they are numerous–of the bureaucracy. We should continue to insist that the criminal economic blockade of Cuba must come to an end.

There is a matter of principle here: The United States has no right to intervene in the internal affairs of Cuba and try to use its economic might to force its preferred capitalist system to be installed in Cuba. This is the principal reason for our continued opposition to the blockade–to reaffirm the principle of national self-determination and stop the domination of U.S. imperialism.

But there is also a practical reason. The fact of the matter is that the Cuban regime has used the U.S. blockade for years and years as an excuse to hide its own dictatorial nature and economic incompetence.

So for both principled and practical reasons, I think it’s high time that this criminal blockade, which has gone on for more than 50 years, comes to an end.

WHAT WILL the effect of the state layoffs be in Cuba? Will they spark a new resistance?

I THINK a lot of people are going to be left out in the cold, because a lot of these enterprises will not have adequate access to the resources they need to succeed.

With respect to the so-called co-ops, they will be created from above. They won’t be co-ops created as a result of a surge in the workers’ movement, as has taken place, for example, in the U.K. and the Scandinavian countries, where a co-operative movement developed as an ally of the nascent labor movement. Co-op members in Cuba may have neither the access to resources nor the political motivation to succeed.

So it will be the case that many of these co-ops and private enterprise will be failures–for the reasons I was talking about before.

What is going to happen to those people? Emigration form Cuba has been a safety valve for quite some time. But it’s bureaucratically difficult and quite expensive to emigrate–there’s no legal right to travel in Cuba–so this won’t be sufficient.

Up until now, discontent and disgust with the political system has, to some extent, been directed into criminal activity. As I was saying, the problem of theft in Cuba is enormous–not just theft for the purpose of private enterprise, but to survive.

Most promising in terms of the breadth of alternatives about what goes on in Cuba is the tremendous youth alienation that is taking place, particularly among Black youth. There is a hip-hop movement in Cuba that expresses the disgust of young Black people, specifically against police harassment and brutality.

So youth frustration and alienation may express itself in political protest. This is possible, though we can’t be sure. I don’t want to be like so many people on the left and say that this is going to happen because we want it to happen. Unfortunately, things don’t work out that way.

But the objective possibility of a radicalization and a higher level of struggle will be considerably increased with the kinds of measures that the regime is taking. I have no doubt about that.

Transcription by Rebecca Anshell Song