The "Mixed Enterprise" in Cuba

Louis N Proyect lnp3 at
Mon Mar 27 13:31:48 MST 1995

The rain-forested, open-roofed lobby of the Melia Varadero brought to
mind a Hyatt Regency. We wandered through an atrium to the dining
room, which overlooked a massive swimming pool complete with its
own sandy beach. "If you came here blindfolded and then opened your
eyes,"" Alvaro asked playfully, "would you ever guess you were in

We might as well not have been. In a city where even the top tourist
hotels offer buffets of suspicious-looking cold cuts and rubbery fried
eggs, the fare in Varadero--boiled lobster, grilled swordfish, filet
mignon--seemed right out of Malibu, as did Alvaro's lunchtime
discourse, which extolled the "flexible" organization that Cuban mixed
enterprises are now allowed to have, "freeing us from the slow
machinery of our socialist state. One of the biggest problems in Cuban
industry," he said, "is that usually it is very hard to fire a worker.
There's always the union in between, the Communist Youth, too many
layers of protection. But in mixed enterprises, personnel management
is more flexible. It's easier to fire workers. In return, the worker gets a
salary about 15 percent above the national scale. We also pay for better
food for the worker, offer better work, clothes, and in some cases the
workers are given a monthly <jabita>, a little bar, full of hard-to-get
items like soap and razor blades."

As Alvaro explained the rules governing mixed companies in Cuba, it
became clear that the big winner was the Cuban state. The government
provides workers for each foreign enterprise and charges the employer
a monthly salary in dollars. A waiter in a tourist hotel, for example,
costs a company about $350 a month, most of which is pocketed by the
state. The worker receives, from the state, the base salary of a Cuban
waiter: 192 pesos a month, or about $2.

"How much do you earn?" I asked Alvaro over dessert.

"My salary is 350 pesos a month," he answered. "My employer pays
the Cuban state $706 a month for me. And I get the rest."

"Less than four dollars a month," I calculated aloud. "How do you buy
a Rolex on that pay?"

"My foreign employer understands the situation here and takes care of
my needs," he said.

"You mean he gives you a packet of dollars each month."

"Obviously. For the moment, there's no other way."

His candor prompted another line of questioning. "I know you support
the Cuban government," I said, "but its future is unstable. What do you
tell foreign investors who are contemplating coming in to Cuba but are
wary of the risks?"

"Cuba is the safest place in the world for foreign investment," he
answered. "We already made our socialist revolution, defended it for
thirty years, and now we're opening up. Your best bet is right here.
Because no matter what happens, life will become easier for investors.
No one is going to expropriate your factory. Even if our government
fails--and I don't think it will--it would mean that socialism has failed.
So whatever comes next is not going to be unfriendly to business."

The bill for our three-person lunch--chicken, beer, dessert--came to
just under $100. Alvaro paid with a crisp C-note. "What everyone
wants is to live well," Alvaro said. "One way you can do that
nowadays is by working in a mixed enterprise. There are those who
criticize us, envy us our success. What do I say to them? Well, we tried
to create the New Socialist Man here using moral incentives, the most
beautiful idea in the world. But you can't eat ideas. So I'm trying to do
what is best for society and for me. Right now that means sell, sell,
and sell some more"

(From "For Sale: Used Marxism", Castro's 'Grandchildren' Discover
the Glory of the Dollar" by Marc Cooper in March 1995, Harper's

Louis Proyect

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