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http://www3.rebelion.org/noticia.php?id=114561
Risks
that expanding nonstate enterprises entail to the Cuban economy and
recommendations to avoid them Risk: the proliferation of capitalistic practices and values As stated in other papers, a socialist enterprise –namely, where “social property” becomes a reality– is not necessarily a state-run entity, but one defined by the extent to which its management is controlled by society, that is, both the employees, the surrounding communities and other social groups affected by the said enterprise’s activity. We’ll see further on how the degree and scope of the control that these social stakeholders need to have over a group of democratically managed workers –the most affected by the system– will be contingent on their enterprise’s output and the social interests they stand up for. By this logic, an individual who works alone –a self-employed worker– or an enterprise democratically managed by its employees –a self-managed, cooperative-style entity– and also socially oriented, is a socialist enterprise, a true instance of social property that in no way entails a backward step for the construction of socialism. However, an enterprise run by an individual –self-employed or not– who hires other people on a permanent rather than a temporary basis is not a socialist enterprise, but an entity managed by a capitalist who holds the sole right to make decisions. And by selling their labor, these wage earners waive their ability to participate or have a say in the management process. According to Marxist theory, this private asocial control or “private property” embodied in the capitalist-wage earner relation of production is capitalism’s driving force. Through the daily practice of this kind of relation, people –be they capitalists or wage earners– become individualistic, selfish, apathetic or oblivious to the needs and interests of other human beings. What makes a wage earner’s status unjust is neither the amount of their salary nor whether it’s on a par with their output or sufficient to meet their basic needs, but the undemocratic nature of a management for which a worker is simply a machine or an input for the production process and not a human being with intellectual skills. Never mind that the capitalist who owns both the enterprise and its capital may be well-intentioned: as long as he holds total control over management rather than share it with his employees, he is nurturing unjust social relations. Therefore, if we foster unlimited labor hiring without even a chance to create self-managed enterprises capable of doing whatever needs more than one person to be done, we will be promoting capitalistic practices and values and stopping those compelled to sell their skills from developing as fulfilled individuals by making them feel useless and expendable in the eyes of society. By so doing we are neglecting the greater good and favoring authoritarianism over democracy and selfishness over solidarity. Recommendation: give self-managed enterprises right of way over the hiring of wage earners Banning the hiring of wage earners is neither necessary nor advisable to encourage socialist production relations –what Marx described as the association of free workers united by a plan– provided we draw the line at some point to make sure that those who have the advantage of having money and entrepreneurial talents find it better to establish self-managed organizations which those who don’t may prefer to join rather than be paid by. A strict possibility would be to make it clear that labor will be hired only on a temporary basis to meet seasonal needs or unforeseen situations calling for more hands. If hiring permanent labor is given the go-ahead, the tax levied on the enterprise for each temporary employee could be lower than for the permanent ones. A gradually rising tax ceiling for every permanent –and perhaps temporary– worker would be advisable as their number increases. So if the intention is that no enterprise hires more than X number of workers, a much higher tax could be placed on worker X + 1. Of course, these rules or negative incentives are not enough to prevent capitalists from finding ways to line their pockets, say, by establishing several enterprises in the name of people they trust and thus hire more workers; hire the same workers repeatedly as temporary to deal with actually permanent problems; hire under the table to evade taxes; and so on. Hence the benefit of designing incentive schemes to promote the socialist enterprise and make it more attractive. But if that’s what we’re after, we need a law on cooperatives or a law on self-managed enterprises –with a larger scope and more room for other forms of self-management such as co-management and partnerships– to facilitate their development and make our State institutions responsible for supporting them. To that end we need territorial offices, like those that the National Association of Small Farmers (ANAP) has for cooperative farm management, to take care of the legal and license agreements, give or facilitate traning on management of democratic enterprises, and provide accounting and legal services, technical assistance and the relevant certificates and evidential documentation. One key task would be to supervise every enterprise registered as self-managed by demanding regular reports on their economic performance (balance sheets), social activity (minutes of the workers’ meetings to prove their role in decision-making, lists of associates, and number of temporary workers –if any– and permanent employees, if applicable) and other matters of interest to see to it that they’re really self-managed and not capitalistic enterprises in disguise to enjoy the benefits of the former. Self-managed organizations like the cooperatives and any other kind of democratic enterprise thus approved should be tax-exempt for hiring labor, since–if they really practice democratic management– their workers are associates rather than wage earners. But if they do hire the latter, then they should pay the same taxes as a capitalistic entity. Given that the aim of an enterprise registered as self-managed is not profit-making but profit-sharing, perhaps it would be right to restrict its hiring ability to temporary labor or make the number of the permanent wage earners it hires proportional to the number of its associates (10% to 30% in some countries). Among other effective steps to fuel self-management are to demand the State institutions to give these enterprises both precedence over the capitalistic organizations when hiring goods and services and the chance to buy consumables at lower, non-subsidized prices or get loans under more favorable conditions. Prioritized access to funds (at lower interest rates and longer grace periods) would also be adequate. But in order to keep entities which behave as real capitalists from taking advantage of all these prerogratives, both the above-mentioned offices and the citizens –especially the workers themselves– should supervise their operations, and for that purpose it’s paramount that they be totally transparent workwise: they should put everything in writing and make it available to public scrutiny through the institution in charge of overseeing their performance. The legislation governing self-managed enterprises should clearly lay down their rights and duties, as well as the consequences in case they fail to fulfill the latter. Nevertheless, the Cuban State will have to ascertain their stand on the issue of hiring permanent labor and define whether or not our socialism will rely on a level of social justice such that these organizations will just strike a sour note in our society before they can be granted any privilege. And that can only be feasible if our definition of social justice envisages people’s right to fully develop as human beings and fulfill their material and spiritual needs as social individuals. Risk: an economy motivated by gain rather than the satisfaction of social interests Marxism highlights the need that all enterprises be democratically managed associations of free workers acting united in, and guided, by a plan to guarantee the satisfaction of their interests as crucial to labor organization in a socialist society, which means economic activity must be democratically managed by society. The need for prior planning or coordination is not only a way to dodge capitalism’s cyclic crisis but also to lay production targets and really meet people’s topmost needs, not a means to yield more profits. In fact, if society lacks control over its business world and fails to orient its purposes toward the said needs, the enterprises will be exclusively motivated by gain –a market economy’s raison d’être– which is rarely in line with any essential social interest. By that logic, the enterprises tend to favor more profitable productions over the basic commodities, concentrate supply in the social groups with more purchasing power (and less needs), overprice goods whenever possible, evade taxes, use cheaper raw materials and technologies even if they’re not exactly safe or environmentally friendly, and shut out those who have a lower production capacity (even if it’s for reasons beyond their will), among other conducts inconsistent with their legal obligations and/or leading to drawbacks such as shortages, inequality, unemployment, and health and environmental problems. As evidenced by daily life and even by neoclassicism should its tenets are carefully studied, the law of supply and demand is not effective to guarantee the basic goods and services that people can’t do without, even if they become more expensive and have to give up others to afford these. Besides, this law only comes on stage when the problem already exists. A market economy is the least able to maintain a given level of equality, shun sexism and other kinds of discrimination, help internalize social costs like environmental pollution and unemployment and externalize social benefits like the dissemination of know-how and other resources, to name a few setbacks. In general, any real attempt by an enterprise in a market economy to be socially responsible will entail opportunity costs in detriment of its market share. We must remember that it’s the very nature of the market what usually stops enterprises from laying out their activity in conformity with social interests, as well as the fact that an economic plan designed to make as much individual profit as possible –a most common excuse to boost a mercantile system– is by no means a means to even satisfy people’s foremost material needs. On the other hand, it’s worth mentioning that state enterprises –that is, managed by state representatives– are not necessarily under society’s control or meant to meet its needs, unless the said state managers abide by guidelines laid down by the parent organization which in turn seek to meet social demands. Countless economists have alerted to the shortcomings of a too centralized, authoritarian, undemocratic planning system to pin down society’s interests and encourage state managers to provide the information required to both come up with effective plans and then perform as instructed. Recommendation: promote social control over nonstate entities by local governments and citizens However, a market system is not the only alternative to authoritarian planning. Economists have put forward ways to establish institutions that promote and facilitate horizontal, i.e., non-market trade relations compatible with society’s interests. Instead of taking the said relations at face value because of their unquestionable advantages –swiftness, flexibility, multiple choices– and given the inefficiency of authoritarian planning, we can aim at a model that benefits from decentralization and a planning system oriented to meet the social interests of those territories and sectors where they have great impact. In other words, have enterprises, state or otherwise, work as a function of rewarding socially responsible performance and punishing the opposite. In order to successfully meet society’s needs and expectations, an enterprise must identify with and be organized on the basis of social interests. Given their bilateral nature, horizontal relations won’t of themselves make it easy for buyers and sellers to pinpoint and take into account other people’s interests, which can only be achieved if these actors and those affected by their actions agree on each other’s particular interests and tailor them as much as possible to society’s, and their own operational basis will then internalize the said interests. Since the impact of the new nonstate SME’s will be felt mostly at local level, the extent of society’s control to make sure they respond to its interests can focus on institutions and policies at municipal or people’s council level. Therefore, the local governments should be in charge of pointing the enterprises withing their jurisdiction in the right direction. To this end, it’s prudent to provide for democratic coordination among representatives of nonstate enterprises –self-managed and capitalistic enterprises, self-employed workers’ associations– and society –social organizations, people’s power delegates– in their territories who can devise joint plans, set up adequate policies and monitor their progress. The better governments truly recognize and plan for society’s interests in their local development plans and set in motion effective policies and regulations, the more legitimate their control over their enterprises will be; and the more aware these enterprises are that their output will be effectively used to meet society’s needs, or better yet, that they have a say on and control over its use through participatory democracy –if the local government renders accounts in a really transparent manner– the harder for them to evade taxes and other social responsibilities. Of course, the scope and extent of a local government’s control over the enterprises in its territory should depend on their basic value and strategic importance. A clear statement of what’s expected from them in their work permits, usufruct and financial agreements and contracts of sale and purchase will be sufficient in most cases without meddling in their decision-making process. Depending on their activity and gain, they may be asked to make a financial contribution to local, provincial and national budgets; expose their criteria to set prices based on social costs and benefits, production and quality indicators; and declare their commitment to sell to public institutions, among other obligations. Every enterprise should contribute to our social security system so that workers in Cuba can count on the basic resources and services they will need by the time of retirement or if they have some disability. They should also be taxed based on their net profits, although not so much that they should be forced to request funding to restart production. It’s also important to point out that a sales tax, advisable though it may be to secure an enterprise’s contribution –in case it decides to overspend in order to cut on their share– should never be so harsh either for basic or new goods in production, less customers end up paying a higher price for them. So in order to not make extreme calls at the expense of the enterprise’s goals and the staff’s interests that may discourage production, the entity’s obligations should tally with the local plans for development democratically designed by all stakeholders. As I previously said about the process to hire permanent wage earners –whose eventual eradication should be in the interest of any society devoted to building socialism– if we want our social needs to be taken into account as legal commitments laid down in the entity’s license and state contracts, we must demand transparent management practices and supervision by the relevant institution and any concerned citizen bent on having their interests observed. In addition to these negative incentives linked with penalties for failure to do their duties, we should implement the same positive incentives that I mentioned above to give self-managed enterprises priority over the capitalistic ones and reward those that best contribute to meet society’s needs. Finally, I must underscore that this social control over corporate activity does not involve stopping an enterprise from either weaving horizontal trade relations –since decentralization is crucial to any entity willing to be swift and flexible– or trying to increase its profits, which is obviously as impossible as it is counterproductive. It’s about making it possible by means of democratic planning and a proper system of negative and positive incentives that the rationale of horizontal trade relations behind an enterprise’s performance is not merely the maximization of personal profit, but the internalization of society’s interest. By way of conclusion The promotion of nonstate enterprises can have further downsides if we fail to improve the management of our state entities through both decentralization and democratization. For instance, the latter will be increasingly weakened by theft [of consumables] and labor exodus [to the nonstate sector]. It would have been preferable to start by making reforms at the level of our state enterprise management before we opened the door to nonstate entities. Besides, if we fail to set forth basic conditions for the success of new nonstate enterprises before the large-scale layoffs begin as scheduled, there’s a risk that a high number of them will go belly up. Their workers will lose faith in their own ability to try again as a result, let alone the serious effects of unemployment for them and society as a whole. Cuba’s opening-up to small and medium nonstate enterprises might bring along very positive benefits, including more employment and better opportunities to meet consumption needs as yet unfulfilled. But to what extent these enterprises will develop their potential and give a wide berth to the above negative consequences will depend largely on the decisions they will make and who will participate in the decision-making process. If we want to succeed as a society devoted to building socialism –a demanding but inescapable goal– we must make well though-out decisions which took into account all possibilities, but with society’s interests in mind at all times. And if we want to be clear about our society’s interest and preserve the forward-looking approach that we take as a guide, it’s imperative and indispensable to define the fundamental principles of Cuban socialism, as Raúl called us to do in his speech to the National Assembly on August 1st, 2009. ---ooOoo--- REBELION has published this article with the author’s permission through a Creative Commons licence and respecting her choice to publish it elsewhere. |
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Riesgos de la expansión de empresas
no estatales
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