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Cuba’s Socialism Has Lessons for Americans


Americans ought to pay attention to what Cuban President Raul Castro is doing in Cuba because he is providing them with excellent insights into realities about America’s economic system.

According to the New York Times, Castro has recently decreed that various modern consumer items, such as computers and cell phones, should be available for purchase to the Cuban people. He has also lifted a ban on Cubans’ use of tourist hotels and is letting farmers farm unused land at a profit. On the horizon is the possibility that Cubans will be permitted to buy and sell their own cars and homes.

On reading these things, some Americans might be tempted to think that this means greater freedom for the Cuban people.

Nothing could be further from the truth. The reason lies in the principles enunciated in the Declaration of Independence. As Jefferson pointed out, man has been endowed by God and nature with certain fundamental and inherent rights. As such, these rights not only don’t come from government, they preexist government. In fact, the only reason that people need government is to protect the free exercise of such rights.

Among these fundamental and inherent rights are life, liberty, property, and the pursuit of happiness.

Unfortunately, however, Americans have come to view the concept of liberty in political, intellectual, and religious terms, by and large forgetting (or never learning) the importance of economic liberty (as well as civil liberty). That is, as long as they have the right the right to vote, freedom of speech, and the right to make their own choices on religion, Americans view themselves as a free people living in a free country.

In fact, when it comes to the concept of economic liberty, the best way to describe the plight of the American people is with the words of Johann Goethe: None are more hopelessly enslaved than those who falsely believe they are free.

Consider, for example, such government programs as income taxation, welfare, Social Security, public (i.e., government) schooling, Medicare and Medicaid, and farm subsidies. If asked, the average American would say, “All these programs are the backbone of America’s free enterprise system.”

Now, examine this excerpt from the New York Times article about what Raul Castro is doing in Cuba: “For now, his government seems willing to accept those disparities, tolerating the notion of class differences while continuing to cling to a Cuban vision of socialism that includes food subsidies, free education and health care for all, Mr. Castro’s backers in the government say.”

Now, that is reality: Cuba has a socialist economic system. Everyone acknowledges that. But what does that mean? As the article points out, it means “food subsidies, free education, and health care for all.” And it also means government welfare and income taxation.

In other words, the same programs that Americans believe are the backbone of a free-enterprise system.

Despite the fact that Cubans and Americans have the same types of government programs, Americans continue to cling to the notion that they have a free-enterprise system while Cuba has a socialist system. One reason for this psychological phenomenon is that Americans equate wealth and higher standards of living with “capitalism” and poverty and lower standards of living with “socialism.” Another reason is that most Americans have been deeply indoctrinated by government officials for 12 years in public schools into believing that America has a free-enterprise or capitalist system.

But the truth and the reality are that the only real difference between the Cuban and American economic systems is of degree, not of principle. What Fidel Castro did is take socialism to its logical conclusion, while U.S. officials have applied their socialist principles less harshly than Castro has.

For example, the American income tax/capital-gains tax, inheritance-tax/welfare-state way of life is based on equalizing wealth among the citizenry. The idea is that government takes money from the rich (and the middle class) and redistributes it to the poor, thereby helping to reduce large disparities of wealth.

Isn’t that precisely what Fidel Castro did when he took charge in Cuba? He confiscated all the businesses and the big mansions, all for the benefit of the poor. He equalized wealth in Cuba. Never mind that he did so by making most everyone equally poor. What mattered was that most people were now “equal.”

Raul Castro’s changes in Cuba might mean more consumer goods for the Cuban people but they don’t mean more freedom for them. Since economic liberty is a fundamental and inherent right, its exercise doesn’t depend on government permission. When government officials are letting people be “free,” freedom is absent in that society.

By the way, our American ancestors understood that economic liberty was as important as religious liberty, intellectual liberty, and political liberty. That’s why they chose a way of life without such socialist programs as income taxation, Social Security, welfare, Medicare and Medicaid, public schooling, and farm subsidies.

By studying Cuba’s economic system and the changes that are now taking place there, Americans stand a better chance of breaking through to the reality of America’s economic system and leading the world to the restoration of economic liberty.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.