Cuba's Coming Co-operative Economy?
Reflections From Two Recent Field Trips

by Marcelo Vieta

The Bullet (Canada)
Socialist Project E-Bulletin No. 667
July 18, 2012

http://www.socialistproject.ca/bullet/667.php#continue

[In 2011, I made two trips to Cuba to study the new co-
operatives. In June I was kindly invited by Camila Piñeiro
Harnecker, a professor at the University of Havana and one of
the country's leading experts on its co-operative movement, to
participate in two conferences. In December, Wendy Holm
(Canadian agronomist and co-operative facilitator working in
Cuba for the last dozen years) extended an invitation to
participate in the "Walking the Walk: Cuba's path to a more
co-operative and sustainable economy" workshops, again in
Havana. Both trips had international guests share experiences
and knowledge of the co-operative organizational model with
our Cuban hosts. The backdrop was, on both occasions, the
recently proposed economic reforms coming out of los nuevos
lineamientos (the new guidelines) of the Sixth Congress of the
Communist Party of Cuba, completed and released on April 18,
2011.


Both of these experiences were eye opening and inspirational,
and full of promise for a possible broadening of the co-
operative movement in Cuba, while building lasting
transnational networks of co-op practitioners and researchers
from Cuba and afar. In a nutshell, these trips suggest that
Cuba stands on the brink of making a major effort to build a
co-operative-based sector. This recalls some of the classic
thinking of Robert Owen, William King, George Holyoake, and
even Karl Marx, on a co-operative based society. But,
undoubtedly, major challenges along this path remain for Cuba,
as they have for other state-centred command economies as they
entered a period of structural transformation. The following
is a report from these field trips and the discussions at the
conferences.]

Almost instantly upon arriving in Cuba in late June of 2011 I
noticed the wherewithal of its people, especially their
tenacity to get by on little. In many ways, I discovered,
Cubans have already been forging an alternative socio-economic
reality for decades now. For instance, we can think of how
they revolutionized their agricultural sector during and after
the Special Period, making Cuba the first nation to adopt a
predominantly organic farming sector rooted in agricultural
co-ops and the notion of subsidiarity (i.e., economic activity
with a strong focus on the local and managed by local people).

The Potential for a Boom in Co-operatives

The two conferences I presented at in June 2011 were
exceptional, if ultimately a bit surprising for me in ways.
First, I participated in the "Corporate Social Responsibility,
Cooperatives, and Local Development" conference on June 21
with a diverse group of co-op practitioners, social
entrepreneurs, and social and solidarity economy researchers
from different parts of Latin America and Canada. Organized in
part by the University of Havana's Centre for Studies on the
Cuban Economy, a Latin American NGO called Fundación AVINA,
and American social entrepreneur Eric Leenson. At this first
conference I presented some of the results of my ethnographic
and political economic work with Argentina's empresas
recuperadas por sus trabajadores (worker-recuperated
enterprises, or ERTs). Many Cuban academics and officials
working with co-ops and local development initiatives in
attendance seemed to be fascinated with the experiences of
workers taking over businesses in trouble in Argentina, based
on their comments to me afterwards. They were interested to
know more about how to make autogestión (self-management) work
in a country that has had no real experience with co-
operatives in general outside of agriculture, a sector where
they have engaged in promising experiments with Cooperativas
de Crédito y Servicio and Cooperativas de Producción
Agropecuarias (producer and consumer co-ops in the farming
sector also known as CCS and CCP respectively) and Unidades
Básicas de Producción Cooperativa (worker-run and state owned
co-operatives that service the agricultural sector, known also
as UBPC) (Piñeiro Harnecker, 2011a). These Cuban academics and
officials I spoke with looked at the experiences of
Argentina's workers starting co-ops from scratch as similar to
what many Cubans might have to embark on in the next months
and years. This is especially the case, they shared with me,
given that hundreds of thousands of Cuban workers will be
transitioned from "empleo estatal" ("state employment") to
"empleo no-estatal" ("non-state employment") over the next few
years.

Indeed, the vision of the nuevos lineamientos of the Cuban
Communist Party is to increase the non-state employment sector
from 16 per cent of Cuba's workforce (2010 figures) to 35 per
cent of Cuban workers by 2015. This would mean that in three
years, if this projection holds, Cuba will have 1.8 million
non-state workers employed either as cuentapropistas (the
self-employed), trabajadores asalariados (salaried workers),
or cooperativistas (cooperators) (Piñeiro Harnecker, 2011a).

While many of these new, non-state workers have the potential
of eventually working in an expanded, non-rural co-operative
sector, they could equally be employed in an expanding private
sector. There is room in the economic reforms for a boom in
private businesses, as well (sections 11 to 24 of the
lineamientos), together with a continuation of "state-funded
entities" (sections 30 to 34). Regardless, it is also
undeniable that sections 25 to 29 of the lineamientos leave
ample room for the potential mushrooming of the co-operative
movement. "Grade 1 co-operatives," section 25 begins:

    "shall be established as a socialist form of joint
    ownership in various sectors. A co-operative is a
    business organization that owns its estate and
    represents a distinct legal person. Its members are
    individuals who contribute assets or labour and its
    purpose is to supply useful goods and services to
    society and its costs are covered with its own
    income."

While there are, as yet, no guarantees that a boom in "Grade 1
co-operatives" will necessarily emerge, there is growing
interest afoot in Cuba to encourage such a new, non-
agricultural co-operative sector. The strong language on co-
ops in the lineamientos is offering much inspiration to some
in this regard. But the interest in co-ops extends far beyond
the decrees of the lineamientos. One Cuban professor suggested
to me that co-operatives could take over the economy in
sectors such as food provisioning, consumer services, housing,
and sanitation. Another group of Cuban researchers I spoke
with believe that worker co-operatives of all stripes could
particularly blossom in areas such as tourism, public
transportation, manufacturing, and community services. "In the
short term," reads section 217 of the lineamientos, "the
industrial productions shall be re-oriented to meet the
demands from different forms of production (particularly co-
operatives and self-employees)."

What are some of the lingering concerns amongst some Cubans
that aspire to expand the co-operative sector, then? The
general answer given to me by co-op developers and researchers
was that Cubans lack knowledge in co-operative organizing and
values. Yes, they underscored, many Cubans do indeed have
experience with agricultural co-ops or urban agricultural co-
ops (organopónicos), and most have been involved in "popular
power" initiatives, or with community-based committee
experiences for some time. But most of these experiences, I
was told, have been, up till now, top-down or party-led.

The Cubans I talked with during my first visit in June 2011
wanted mostly to know how to co-operatively organize and
practically manage themselves bottom-up, and how to start
teaching each other the ins-and-outs of forming co-operatives
"from below," from out of their own initiatives. From Cubans
that I spoke with, there is, on the one hand, a pragmatic
sense that they must know how to manage themselves better and
produce adequately without government quotas and such. At the
same time, we discussed and debated how exactly the "non-
state" sector might emerge in Cuba, as well as the virtues of
co-operatives and the risks of opening up their economy to
free markets and outright capital-based and investor-owned
firms. During these conversations, I tried to focus on my
observation that, given what I know of the explosion of the
social and solidarity economy in other parts of Latin America
in recent years, Cubans too could make a go of a non-state
enterprise sector that still respects key aspects of their
socialist project by thinking about "co-operativizing" their
economy. This would include co-operative production, co-
operative service delivery, co-operative exchange or
"markets," and co-operative banks or credit unions. Moreover,
we agreed, this would allow Cubans to hold on to much of the
social values and collaborative spirit they already have
within their existing version of socialism. 

The Potential for a Social and Solidarity Economy

The second conference I presented was at the Centre for
Studies on the Cuban Economy (CEEC in Spanish). It was their
annual conference of mostly Cuban economists, government
officials, and municipal development officials. This
conference was a slightly different but equally rewarding
experience. There, I gave what I thought was a straightforward
conceptual definition of the "social and solidarity economy."
In this presentation, I made an effort to bridge Canadian,
European, and Latin American conceptualizations while
connecting notions of the social and solidarity economy to
actual on-the-ground experiences in Latin America. Drawing
from these traditions, in this presentation I defined the
social and solidarity economy as:

    "...social and economic practices and organizations
    that are not investor-owned or for-profit entities
    (although its organizations can make and draw on
    surpluses), nor government- owned or controlled
    (although its organizations may receive government
    funding), and that operate with the values of
    provisioning, first and foremost, for the
    socioeconomic needs of members. Known also loosely as
    the `third sector,' social and solidarity economy
    organizations tend to have social objectives (such as
    sustaining and creating jobs, provisioning less
    expensive or environmentally sound consumer goods and
    services, facilitating the social or economic
    capacities of individuals and communities, etc.) and
    are usually organized in some sort of democratic
    fashion where each member has a vote or say in the
    operation, governance, and goals of the firm."

The Cubans that listened to my presentation were very
interested to know more about the social and solidarity
economy but seemed not to be as familiar on the whole with a
working definition of the concept. This was the case, as some
Cuban academics told me, because they haven't needed such a
concept until now with a Cuban state and economy that is
already "socialist" and "socialized." This was surprising to
me at first, especially given Cuba's already-existing social
economic practices that in many ways have been part of their
daily reality for decades now. Think, for example, of their
mostly do-it-yourself and community-based car parts
manufacturing and repair shops, or the common practice
throughout Cuba of sharing scarce commodities and products
amongst neighbours.

Here some rich debates emerged amongst us concerning the terms
socialized, social, and socialist; how a social and solidarity
economy is different or similar to what Cubans have been
practicing under state socialism; and how such
conceptualizations of the social and solidarity economy could
help Cubans think about a new socialism that connects the
broad economic reforms the Party is proposing with the
everyday practices of Cuban people. Conceiving of the "non-
state" sector as a social and solidarity economy could also
prove to be a softer landing for the hundreds of thousands of
state workers that are expected to become (without a clear
transition plan so far, it seems to me) cooperativistas and
cuentapropistas. 

Challenges, Tensions, and Possibilities for a Co-operative
Economy in Cuba

The release of the "Draft Guidelines" of the economic reforms
in the fall of 2010, and the promising public consultations
that were had between December 2010 and February 2011 with
over 1 million Cubans in the process of developing the
lineamientos, has, most certainly, committed Cuba to a massive
reform of the economy such as it has never seen before. Cuba
is, in a word, at a crossroads right now. There will
definitely be room for a new kind of economy where "non-state
enterprises" will be a reality sooner rather than later over
the next three to five years. This will include a new Cuban
entrepreneurial class, a larger class of cuentapropistas, a
much larger class of salaried workers, and - potentially - a
substantial social and solidarity economic sector populated by
many co-operatives.

Whether a new private sector will dominate the new Cuban
economy, or whether Cuba turns primarily to a new socialized
economy rooted in co-operatives, remains to be seen.
Certainly, Section 1 of the lineamientos (concerning Cuba's
new "Economic Management Model") leaves interpretive room for
either, although the preamble to the lineamientos could
arguably align more easily with a social economy made up of
co-operatives:

    "The economic system that shall prevail will continue
    to be based on the people's socialist ownership over
    the fundamental means of production, governed by the
    socialist principle of distribution: `from each
    according to his/her capacity to each according to
    his/her contribution.'"

Whichever way Cuba heads, and based on the open way these
economic reforms are being discussed in Cuba right now
(including in the daily Granma by the actual Party), these
reforms will potentially be broader and more transformative
than the reforms that emerged during and immediately after the
Special Period in the early 1990s.

Some economists that presented at the CEEC conference, for
example, are pushing for the quick introduction of these
reforms and talk liberally of increasing the space for
cuentapropistas (the self-employed, which also includes
entrepreneurs and employers) and allowing for a Cuban-owned
and -run private sector that will be able to hire employees
other than family members. Indeed, this view is in line with
sections 11 to 24 of the lineamientos. Some of the economists
I heard, inspired by the Chinese model of economic growth,
talk as if some sort of a broader private sector is an
unavoidable reality, necessary for the increased productivity
and innovation needed in Cuba, they argue, in order to lift it
out of its developing country status. The major indicators
being used by these economists is economic growth, GDP,
investment-to-profit ratios, and so on. This can be straight-
up neoclassical stuff and risks putting Cuba on the path of
yet one more former socialist country that opens up its
economy to unbridled markets. Moreover, the Cuban government
is, as I write, also expanding its list of permissible private
sector firms.

But, on the whole, opening up the Cuban economy more and more
to straight up capital-labour relations and free markets is, I
believe, the most perilous part of the suggested reforms and
what might very well put Cuba's many socialist gains (i.e.,
free health care, excellent public education, low poverty
rates, low crime rates, virtually no unemployment, subsidized
housing, public transportation, etc.) at most risk of
eventually evaporating into a market-driven system.

The degree of inter-firm competition that this new economy
could involve is particularly unclear. And what of the
characteristics of a new wage-based labour market that will be
needed to supply employees to private firms, where the labour-
power of a new class of "productive" workers would become one
of Cuba's newest commodities and where out-and-out surplus-
value extraction and capital accumulation would be the prime
mover for more and more privatized firms and economic sectors?
Surprisingly, there is very little mention of such basic
socialist concepts and critiques from some of the Cuban
economists I have heard and read in the past year.

Another set of issues posed by some Cuban economists and co-
operative developers is how production inputs will be
provisioned in a non-state sector. They realize that some sort
of wholesale market will be needed, for instance, but are not
clear about its make-up. This has been traditionally handled
by state quotas in Cuba. How will the non-state sector adapt
to supply and demand constraints? Will a production input and
supplies market be driven and regulated by price-indicators
for new non-state businesses to capitalize, or will state
planning still be maintained there? Both of these scenarios
have their downsides for a potential co-operative economy. And
what is the role of foreign businesses and suppliers? The
issue of what type of consumer markets will emerge is equally
vague still. Finally, if the Cuban government's plan is to
transition former state-employees to the new "non-state"
economic sector and, in so doing, increase the country's non-
state workers by as much as a fifth by 2015, how exactly will
this transition happen and how will the Cuban state guarantee
the lineamientos' and Raul Castro's repeated assurances that
"no one will be left unprotected" in the process?

All of these questions remain without clear answers to most
Cubans I spoke with. But what is clear is that co-operatives
will surely be allowed to emerge outside of the agricultural
sector as service, consumer, housing, and worker co-
operatives. There is, moreover, a pending law of co-operatives
that is being written right now, set to be released sometime
this year, that should clarify to what degree the government
is expecting co-operatives to take a leading role in the new
non-state economic sector (Piñeiro Harnecker, 2012).

In sum, from the countless conversations I had while in Cuba
with academics, government workers, co-operators, and people
on the street, many Cubans are very willing to contemplate and
consider the role of a larger co-operative sector. There is no
doubt that many Cubans are working hard to make this a reality
in the coming months and years. My sense is that many -
perhaps the majority - of Cubans know that they have too much
to lose to go down the neoliberal path, a distinct possibility
given the trajectory of other `socialist' command economies,
and the structural reforms that are unfolding. The co-
operative path to economic sustainability would, I think, be a
viable alternative development model for many key sectors of
the Cuban economy. Such a development model would keep social
wealth within the country and expand the capacities of Cuban
workers in self-management. Such activism and participation
among workers can also be a key spur to the nature of reforms
in crucial areas where large state enterprises will remain,
whether fully state owned or in joint enterprises. The co-
operative road to reforms, most importantly, could help
conserve the successes of Cuba's brand of socialism, notably
its egalitarian education, cultural and health sectors, which
remain quite unique across South America and the Caribbean. At
the same time, such co-operative-based reforms could help Cuba
move along a new path toward 21st century socialism.

[Marcelo Vieta recently completed his Ph.D. from York
University's Program in Social and Political Thought with a
dissertation looking at the innovations, challenges, and
political economic conjunctures of Argentina's empresas
recuperadas por sus trabajadores (worker-recuperated
enterprises). He is currently a Post-Doctoral Research Fellow
at the University of Trento's European Research Institute on
Cooperative and Social Enterprises (EURICSE) in Trento, Italy.
Marcelo can be reached at: [log in to unmask] or
[log in to unmask] ]

Additional References on Cuba's new co-operatives:

 * Holm, Wendy. (2011). "Report on the outcomes of an informal
 Havana dialogue between co-op thought leaders from Cuba,
 Canada, the United States, and Scotland," 12-16 December.

 * Piñeiro Harnecker, Camila. (2011a). Empresas no estatales
 en la economía cubana: potencialidades, requerimientos y
 riesgos. Working Paper, Centro de Estudios de la Economía
 Cubana.

 * Piñeiro Harnecker, Camila. (2011b). Y las cooperatives,
 cuando? Potencialidades de las cooperativas para la
 actualización del modelo económico cubano, Palabra Nueva,
 October.

 * Piñeiro Harnecker, Camila. (2011c). (Ed.), Cooperativas y
 socialismo: Una Mirada desde cuba. Havana: Editorial Caminos.
 [The Spanish preface to the book can be found here. An
 English preface can be found here. An English translation of
 the book is forthcoming.]

 * Piñeiro Harnecker, Camila. (2012). Ahora que sí van las
 cooperativas, vamos a hacerlo bien. Rebelión, 2 March.

 * Sixth Congress of the Communist Party of Cuba. (2011).
 Resolution on the Guidelines of the Economic and Social
 Policy of the Party and the Revolution, 18 April. [The new
 social and economic lineamientos (guidelines) of the Sixth
 Party Congress of Cuba.]

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