[Marxism] Cuban economic data

Richard Levins humaneco at hsph.harvard.edu
Tue Nov 24 15:43:03 MST 2009


To Louis, re Cuban economy: We do not have a GINI index for the Cuban population but we do have it for provinces. Candido Lopez Pardo has done a lot of work on measuring human development in various ways. For instance if we use the Human Development and Equity index and adjust for per capital income, Cuba is way up near the top. Best wishes, Dick
 

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Richard Levins

>>> Louis Proyect <lnp3 at panix.com> 11/22/2009 9:36 AM >>>
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http://www.solidarity-us.org/node/2455 
A Letter on Cuba
— Barry Sheppard

I APPRECIATE THE articles on Cuba from various viewpoints in ATC issues 
#141 and #142. They provide food for thought for socialists with 
different analyses of Cuba.

I would like to comment on the article by Frank Thomson in #141 
http://www.solidarity-us.org/node/2271) on the Cuban economy, which I 
think gives a false picture. Thompson acknowledges that per capita Gross 
Domestic Product is a poor measure of a country’s economic wellbeing. 
I’ll return to that -- but since he largely utilizes this measurement, I 
want to start there.

Thompson says, “…. in 2001, Cuba was the third poorest country in Latin 
America as measured by per capita GDP. Only Nicaragua and the 
poorest-of-the poor Haiti ranked lower.”

Be that as it may, in 2008 the situation was markedly different. 
According to the CIA’s “World Factbook,” Cuba ranked 107th in the world 
with a per capita GDP of $9,100. The world average, including the 
advanced imperialist countries (and the very poor), was $10,400.
The following countries of Latin America and the Caribbean rank below Cuba:

Colombia, #111 at $8,900
Surinam, #112 at $8,900
Anguilla, #114 at $8,800
Peru, #117 at $8,400
Dominican Republic, #118 at $8,100
Ecuador, #122 at #7,500
Jamaica, #123 at $7,400
El Salvador, #129 at $6,200
Guatemala, #137 at $5,200
Bolivia, #148 at $4,500
Honduras, #149 at $4,400
Paraguay, #151 at $4,200
Guyana, #156 at $$3,900
Nicaragua, #167 at $2,900
Haiti, # 202 at $1,300

It also should be noted that it is difficult to measure Cuban GDP in 
terms of U.S. dollars. The official exchange rate doesn’t reflect the 
real cost of living. This can be seen from the well-known fact that 
those in Cuba who receive dollars either in the dollar economy (tourism, 
mainly) or from remittances abroad have greater buying power than those 
who don’t. Also, basic food is rationed at low prices, and education and 
medical care are free to everyone, paid by the government from its 
general funds -- and how are these to be converted to U.S. dollars?

The measure of GDP is: GDP = C + I + G + (X-M). C is consumption, I is 
investment, G is government expenditures, X is exports and M is imports. 
Cuba has to rely on large imports, and these have to be paid in hard 
currency, so this is a large minus when calculating GDP in dollar terms.

But my main problem with Thompson’s article is that he relies on 
averages.  Per capita GDP is an average, the GDP divided by the total 
population. To see how most people in a country live, it is important to 
know the distribution of income. At best, GDP is only a rough indication 
of total income.

The distribution of income in capitalist countries is extremely skewed. 
A very few have very high incomes, and most people have much, much less. 
The average income, total income divided by total population, tells us 
nothing about what most people’s income are like in the United States, 
for example, because the hundreds of millions of dollars that a very few 
make greatly raise the average.

One person making $100,000,000 balances out one thousand making 
$100,000, and ten thousand making $10,000 (and there are many people in 
the U.S. making that).

The real incomes of the very rich contain hidden amounts not counted per 
person. Some examples: capital returns to trust funds, and that portion 
of company and bank profits not returned to shareholders but reinvested.

A more accurate measure would be not the average, but the median (50 
percent make more and 50 percent less). This too gives a figure too high 
because of the skewing of income to the very rich. Often figures are 
given for the median family income, but the median per capita income is 
less.

What would be the most accurate measure would be the mode, the amount 
the income of most people is bracketed around. The average, the median 
and the mode are often confused in the popular mind, but when statistics 
are highly skewed they are very different.

If a graph of the U.S. population on the X axis vs. income on the Y can 
be imagined, there would be a tiny tail of fewer and fewer people way 
out to the right towards incomes of $100,000,000 and higher, and we know 
there are higher just from the announcements of Wall Street bonuses, let 
alone the big capitalist families.

Most of the population would be clustered near the left, the mode, the 
highest point, and the graph would tail off from there. The median would 
be considerably to the right of the mode, and the average would be still 
further to the right.

Such a graph would be even more extreme if, instead of income, total 
wealth were plotted. In the United States, a sizable percentage has a 
total wealth of zero (do not own a home, stocks, bank accounts, and so 
forth). So the graph would run along the zero wealth line for a 
distance, rise up to the mode, and then tail off to the few who are the 
most rich.

In Brazil there would be an even higher percentage with a total wealth 
of zero. Brazil ranks a little higher than Cuba in the CIA’s chart, at 
#113 and a per capita GDP of $10,400. But Brazil has a tiny few of 
extremely rich people and a big number of poor people. Millions do have 
not enough food. In Cuba everyone has adequate food. Millions of 
Brazilians have no health care. Everyone has health care in Cuba. 
Millions in Brazil are illiterate. Cubans are highly educated and all 
schools through college are free. Ninety percent of Cubans pay no rent 
because they own their own homes.

A graph of income in Brazil would show a large mode on the left, at 
lower income, and a tail off to the right where the very rich reside. 
There are income disparities in Cuba, and income is skewed. There are 
different pay levels. Those who receive dollars earn more than those who 
don’t.

The bureaucracy skims off from its control over distribution, but not 
nearly the amount in the old Soviet Union, and even there bureaucrat’s 
incomes were nowhere near what capitalists “earned” – a main reason why 
the bureaucracy wanted a return to capitalism. But the graph in Cuba 
would not tail off to millionaires and billionaires. There are none. Not 
even $100,000-aires. The graph would have the average, the median and 
the mode closer together.

So Thompson’s unfavorable comparison between Cuba after the Revolution 
with Cuba under U.S. imperialist domination, dictatorship and 
gangsterism by using GDP is quite misleading. Income and wealth in 
pre-Revolution Cuba were highly skewed to the rich, and so were literacy 
and access to health care.

November-December 2009, web only


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