Discussion Assignment -Business Writer

CAPITALISM VERSUS SOCIALISM: THE CUBAN QUANDARY

Speaker

After World War II ended in 1945, America's top enemy for 50 years was an economic system that

seemed unstoppable. Communism, the extreme form of socialism, its chief champion Russia, head of the

Union of Soviet Socialist Republics.

Male

One country of nine million square miles, that is our own country, three times over or all of North

America in a million square miles to boot.

Speaker

The USSR threatened to export its system worldwide and had nuclear weapons to back up the threat. The

US risked Russian attack in the name of freedom, democracy instead of dictatorship. The economic

freedom of a free market filled with choices instead of a command economy where government does the

choosing. The idea of socialism or communism though, can be quite appealing. An economy based on

sharing, collective effort for the common good. In the 1930's, this economic system actually seemed an

alternative to the risky free market capitalism of Europe and the US then suffering a great depression

with unemployment of 25%. By contrast, Russian workers was said to be fully employed, happy, equal.

Why even orchestras said the propaganda films had no conductor, no boss.

Male

There is no leader. You will notice that the eye of the musician is all his own, his music.

Speaker

But the image was a charade since bureaucrats, not the market set prices and production quotas, supply

and demand never met. Since everyone got paid the same, there was scant incentive to make good

products. Command non-market economies eventually collapsed in Russia and elsewhere. And yet a few

countries still swear by socialism, among the most extreme, Cuba, just 90 miles from Florida. No longer

supported by Russia, Cuba is now struggling with the tensions between free market capitalism and

government controlled socialism.

For the economic tourist, Cuba and especially its main city Havana is a surprise. Yes, there are plenty of

the expected third word vignettes, the make work jobs, the make shift travel arrangements, a public

transportation system bursting at the scenes. When the Soviet Union collapsed and its subsidies

vanished, people were nearly starving here. But in recent years, a major makeover has been in progress.

Cuba decided to sell its culture, its climate, and its beaches to foreigners. And so tourist poured in all over

the country from all over the world. Hotels now abound, especially in Havana and new ones are going up,

built by everyone from the Spanish, to the Chinese. The US forbids doing business with Cuba, but Cuban

joint ventures with the Japanese and Koreans have brought in household gear you might see at any

American shopping mall. And supermarkets offer on almost all Cuban clientele, everything from Brazilian

diet gelo to Jack Daniels and Jonny Walker red. This year's sales at the super Mercado?

Page 1 of 4Transcript - Capitalism Versus Socialism: The Cuban Quandary

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Male

Up to this moment, they are $ 6,324,000.00. The average bill per customer is $17.36.

Speaker

That is right. Here you pay not in Cuban Pesos, but in US dollars encouraged after the Russians pulled

out. Tourism and foreign investment helped dollars now reached it is estimated more than half the

Cuban population. In short, it seems like capitalism is taking root. On the other hand, many Cubans still

think capitalists are pigs. Business is dirty, and that all production should be sold to and through the

state, as these real pigs will be as soon as they fatten up.

Male

The state gives me everything I need, the grain, the breeding stock. So my commitment is to them.

Sometimes the private guy show up, but I do not trust their scale. With the state, I always have

confidence.

Speaker

The government still issues family a monthly ration book for enough food to survive. Dictator Fidel Castro

has banned billboard advertising in favor political propaganda featuring revolutionary martyr Che

Guevara and slogans like, "This is the socialist revolution right under the nose of the US." And when we

try to interview a-would be immigrant, the police stopped us, took our documents, and wanted to take us

downtown. We sneak these shots from our van. The government did let us interview prominent

dissidents. At least those who were not in jail like Elizardo Sanchez. But they said Cuba is as un-free as

ever.

Elizardo Sanchez

What we have here is closer to the Soviet Totalitarian system and absolute state monopoly that controls

virtually everything down to the barber shops.

Speaker

In Cuba then, an economics reporter can feel totally confused. At some moments, you think Castro has

saved that the command economy and right under Uncle Sam's nose. At other times, it seems clear the

free market is burrowing irresistibly from within.

The elite Lenin High School we figured might be one place to sort things out. Since this is Cuba's training

ground for the next generation. A group of English speakers was waiting for us.

Female

My schoolmates, I tell you, you are welcome and I hope you get satisfied with our school, with our

students, with us. Thank you.

Male

Well thank you.

Speaker

We have got the red carpet treatment and it kept getting redder.

Female

We do not want capitalist, we have... we want socialist.

Page 2 of 4Transcript - Capitalism Versus Socialism: The Cuban Quandary

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Female

We are the same people. We have the same clothes, the same things. It is not that the other country, that

you are better than me because you had a new Adidas and I do not.

Speaker

The kids at Lenin High seemed determined to sustain socialist equality even if it means no Adidas. And as

for the market changes, Cuba's made...

Female

We do not want those changes. We have to put them there because we need them. When we do not, if

we do not need them anymore, we will fade it.

Male

Fade it?

Speaker

They will fade it. That is phase out the free market experiment that Cuba has had to conduct. Now maybe

these market changes are temporary and schools like these will restore Cuba's purest past. Or maybe

instead, Cuba's many private markets are already beyond the point where anyone can fade them. Food

production is exported for instance because of free market incentives that let farmers sell privately some

of what they produce. So incentives work.

Male

Clearly yes, it is obvious. That is the way it works everywhere.

Speaker

Incentives not only mean more food, more available without long waiting lines. They also mean better

food at the private markets.

Male

It is better quality. This is what people are looking for. There is less fat, there is less bone you

understand?

Speaker

You even see Socialism versus Capitalism at the old ball game. Omar Linares is a slugging superstar who

has had million dollar offers from US teams but turned them all down. Why?

Omar Linares

I prefer to stay in Cuba because this is my country. Everything I have accomplished, I owe to the

revolution.

Speaker

On the field, the Socialist party line. In the stands, however entrepreneurship runs rampant.

Male

$5.00, Omar Linares no, this does not say Linares. It says a different name.

Male

It is the way he signs, he does it real fast.

Page 3 of 4Transcript - Capitalism Versus Socialism: The Cuban Quandary

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Male

He signs with another name?

Male

I do not know, maybe he was in a hurry.

Speaker

The question is, can social equality hold out as the market marches in? A question so much in the air, it is

the punch line of Cuba's top joke. Judging by how often we heard it, the Hotel Nacional gag. A girl dumps

her boyfriend the joke goes, because he pretended to be a hot shot at Havana's richest tourist hotel. He

swore he was a doorman at the Nacional, the girlfriend fumes. In fact, you know what he does? He was

just another damn Cuban neurosurgeon. In other words, there are Cubans paid by the state, Cubans paid

by the market and less and less do their wages meet. It was no joke to economist in Cuban exile, Antonio

Morales-Pita.

Antonio Morales-Pita

For me to become a professor, I had to study. Twenty years, I have to work very hard. I have to sacrifice

part of my youth, part of my marriage in order to become qualified. And then these are the person, has

finished eighth grade or ninth grade in grade school. How is it possible that you are going to make ten

times more than I make? I mean does it make any sense.

Male

Because you are undervalued.

Antonio Morales-Pita

You are undervalued.

Male

And eventually, they are not going to be very many bright people become professor.

Antonio Morales-Pita

Of course not, of course not, of course not.

Speaker

In Cuba, the struggle between market freedom and non-market rules rides on. You see it in sugar mills in

the country side, parking lots in the city, and the streets of downtown Havana. The question is, can

socialism hold out here in the face of a global market economy?

REFERENCES McGraw-Hill Education: Capitalism Versus Socialism: The Cuban Quandary

L i c e n s e d u n d e r a C r e a t i v e C o m m o n s A t t r i b u t i o n 3 . 0 L i c e n s e .

Page 4 of 4Transcript - Capitalism Versus Socialism: The Cuban Quandary

1/9/2018http://media.capella.edu/CourseMedia/mba6008/ts_MBA6008/Capital_trans/ts.html