Balanced Reporting

by Russ Roberts on September 29, 2006

in Cuba, Media

Cuba is really poor. True, they’ve got that high literacy rate and the free health care (though I wonder how many MRI’s they have—you don’t jsut care about the price), but they’re really poor. The Washington Post reports:

Tiny flames jump and sputter in the night here, suspended above the roadbed as if held by an invisible wand.

The
uninitiated must pull up close on these unlighted roads to realize that
the flames are leaping from small buckets that dangle from wires on the
backside of horse-drawn buggies. In the near absence of passenger cars,
these buggies serve as taxis and local buses in rural areas of Cuba,
and the flaming buckets function as homemade taillights.

Countless chroniclers of Cuba have observed that the vintage
American cars in Havana — the fabulous, hulking Buicks and finned
Chryslers — make the capital feel like a city frozen in the 1950s. But
outside Havana, in the vast expanse of the Caribbean’s largest island,
the ambiance often leans more toward the 1850s.

The roads are there. It’s just that the cars aren’t.

But the thug who runs the country makes sure he can still collect his share of the national output:

Transportation is a huge problem throughout the island, even in Havana,
where many of the vehicles still on the road are connected to state-run
tourism or government activities. Hitchhikers are everywhere, and
people wait hours to ride oversize buses that seem to break down as
often as they run.

It’s an excellent article. Read it. But the reporter, Manuel Roig-Franzia, felt compelled to add an explanation for Cuba’s plight. And being a good reporter, he felt obliged to offer divergent viewpoints to explain why Cuba is so poor:

Supporters of Castro blame the U.S. trade embargo for the
transportation woes and especially for the dearth of personal cars.
Cuba makes no cars of its own. Non-U.S. automakers that might normally
be eager to ship vehicles and replacement parts to the island are
hampered because of U.S. trade rules. Ships are prohibited from
entering U.S. ports for six months after making deliveries to Cuba,
effectively blocking access for those companies to the world’s largest
market.

Castro’s critics view the situation differently, blaming
the failings of Cuba’s economic policies after years of communist rule.
The government’s weak financial position makes it impossible for it to
place large enough orders to overcome the limitations created by the
trade embargo.

We report, you decide. Two opposing viewpoints. Of course they could both be right. Both could be contributing to the problem. But is there equal logic and empirical support for both claims?

Call a car manufacturer. Is the six month delay a real cost? Is it enforced? If you go to the US first and then to Cuba, is the six month delay relevant? Are there other countries with similar embargoes? Do they have anyone sell them cars?

But more importantly, why is there virtually no meat in Cuba? And why is everything else in such short supply? Is that because non-American exporters are afraid of the costs?

Here’s a tragicomic story (scroll down to the middle where it talks about cattle) on the effects of tyranny on human beings:

In communist Cuba, only the state is allowed
                                      to slaughter cattle and sell the meat. Citizens
                                      who kill a cow–even if they raised it themselves–can
                                      get a 10-year prison sentence. Anyone who
                                      transports or sells a poached animal can
                                      get locked up for 8 years.

"My brother-in-law got a 12-year prison
                                      sentence for killing 12 cows," said
                                      an accountant who lives in the cattle-raising
                                      region.

But it’s not unheard of for Cubans to sneak
                                      into a pasture at night and butcher a cow
                                      on the spot. Residents have been known to
                                      descend on a cow struck by lightning, carving
                                      it up in minutes even though the meat often
                                      is charred and they risk a fine if caught
                                      by police.

The same thing can happen if a cow is hit
                                      by a car or dies of illness or malnutrition,
                                      in giving birth or of old age, even though
                                      residents admit the law requires them to
                                      leave the carcass alone and notify local
                                      officials.

Cubans have not always been hard up for
                                      beef. Before the 1959 revolution, Cuba was
                                      said to have as many cattle as people–about
                                      5 million–and one of the region’s highest
                                      per-capita consumption of beef, experts
                                      said.

But Fidel Castro’s revolutionary government
                                      nationalized the large land holdings of
                                      U.S. and other ranchers and slaughtered
                                      many of the cattle to make up for falling
                                      food production in other areas.

The beef industry never recovered, but
                                      dairy herds were built back up through huge
                                      investments and imported animal feed, experts
                                      said. Years later, when the Soviet Union
                                      collapsed and ended $5 billion in annual
                                      subsidies, Cuba lacked the money for feed,
                                      and much of the dairy herd also was lost.
                                    

Today beef is found almost exclusively
                                      in state-run restaurants catering to tourists
                                      and dollar-only markets beyond the reach
                                      of most citizens.

                                    
                                    
                                    
                                    
                                    
                                    

This article on the cattle industry also presents the debate on whether the beef situation is due to mismanagement due to Communism or the US trade embargo even though the trade embargo doesn’t apply to agricultural products! Read it if can handle it.

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{ 15 comments }

Doug Murray September 29, 2006 at 4:07 pm

Non-U.S. automakers that might normally be eager to ship vehicles and replacement parts to the island are hampered because of U.S. trade rules. Ships are prohibited from entering U.S. ports for six months after making deliveries to Cuba, effectively blocking access for those companies to the world's largest market.

If a non-US company exports cars to Cuba, is the vessel or the company prohibited from US ports for 6-months? If the company isn't, why can't it ship on vessels that don't call in the US? Surely there must be some. Or at least transfer them to such a vessel in another country, say, Venezuela.

Maybe there just isn't a market for them in Cuba, ya think?

Eric Hanneken September 29, 2006 at 4:17 pm

This is one reason *not* to embargo Cuba: it gives communists an excuse for the failure of their system to bring material prosperity.

Another reason is that it probably is hurting the Cuban people, by raising the transaction costs of trade with people in other countries. Meanwhile, Castro looks like he's living comfortably.

Ivan September 29, 2006 at 4:28 pm

No reasonable free-trader would be interested in restricting trade to communists.

Isn't that just punishing a populace unlucky enough to have a communist revolution even more?

I really can't believe the embargo still exists. What a waste.

Swimmy September 29, 2006 at 4:35 pm

I believe embargoes can be useful depending on context. As Eric Hanneken and Ivan note, the embargo probably does increase Cuban misery by some degree. The hope seems to be that the Cuban people will become miserable enough to turn on their government, but I imagine the real effect is that they just hate America more. However, in the case of South Africa, where not only the standard of living for the average Joe but that of the power elites was threatened by trade embargoes, the pressure was high to end apartheid. Unless the embargo can do some direct damage to Castro's regime (and judging by his reported net worth, it doesn't), I don't see any reason to continue it.

Sean September 29, 2006 at 8:57 pm

The embargo is dumb. Imagine if we had had an embargo against China over the last few decades. Would there even be such a thing as Wal-Mart? Probably, but we'd all be poorer, not just the Chinese.

Xmas September 29, 2006 at 9:07 pm

The embargo is dumb.

But that shouldn't stop someone, say, in Mexico, or Jamaica or some other country in the Carribean from making a good living shipping goods from there to Cuba (or vice versa).

But that only works if Cuba has money to buy goods, or if it had goods to sell.

Beerme September 30, 2006 at 9:12 am

Of course it's dumb and it's harming Cuban people, just not as much as Cuba's government is harming Cuban people.

The embargo should have been ended years ago. But Cuba's communist government should have ended years ago, as well…

True_Liberal September 30, 2006 at 10:00 am

The US trade embargo accomplishes nothing except to give Castro an excuse for his failures. Spain, Mexico, and a dozen other countries manufacture cars AND have normal relations with Havana, yet WE take the blame.

Both the US and Cuban peoples are suckers enough to fall for this fraud. Education is the only answer.

TGGP September 30, 2006 at 12:25 pm

I remember reading earlier that the restrictions on trade with South Africa strengthened the nationalist party, who were the architects of apartheid, but I forget where it was, so unfortunately I can't link to it.

BlacquesJacquesShellacques September 30, 2006 at 1:18 pm

The embargo is indeed stupid.

Lenin got it 100% backwards about who gets hung with the the ropes we are selling. Let's sell Cuba lots and lots of stuff, including plenty of ropes.

Free trade frees.

ncwod September 30, 2006 at 4:11 pm

All trade is conducted with the Cuban government, specifically the trade agency, Alimport. All benefits of the trade — access to food, cars, etc. — therefore goes to prop up the existing dictatorship and the nomenklatura.

Absent any Chinese-style liberalization in Cuban government policy, ending the embargo would actually reinforce the oppression.

BlacquesJacquesShellacques September 30, 2006 at 4:57 pm

"…ending the embargo would actually reinforce the oppression."

I disagree, because of what I know from my German relatives.

The first people to get the goodies would certainly be the nomenklatura. However the servants would see it and talk. "Juan, those foreign computers / sex toys / video games / whatever are really great."

Next, they get stolen or lost or sold or given away when older. The nomenklatura are human too, with girlfriends, friends, relatives.

The stuff spreads. People talk.

Pretty soon the carpenter is no longer ignorant about a new Black and Decker drill nor does he see it as a distant dream. He sees it as an attainable right. Likewise computers, cell phones, machine tools, drafting equipment. And just watch what they build, physically and politically, when they get a few tools.

Eventualy, there comes The Day. As happened in East Germany, Poland, Hungary…

Ronald Reagan pushed, perestroika pulled.

Bill October 1, 2006 at 12:46 pm

Communism is terrible, don't get me wrong. The majority of the problems with scarcity is likely the result of the communist government. That being said, the U.S. trade embargo is rather ridiculous. Cuba is an extremely poor country, and yet we have an embargo on them. Even if there would be shortages anyway, it appears as if it is all the fault of the United States.

There is even an Act of Congress, part of the whole embargo package, I forget the name, which says that american citizens who used to be cubans can maintail a legal cause of action in a United States court against any foreign company (like a Canadian dairy company for instance) who does business with a cuban government comany, if that Cuban government company took or is comprised of property that used to belong to the ex-cuban who is now an american citizen. (Bush continued to sign a clause which keeps this provision inactive, but it has to be signed every couple of years) (Note also that such a provision is pretty unique because while countries can pretty much do whatever they want to protetct the property of their citizens, this is the first type of legislation that I am aware of that seeks to protect the property of citizens before they were citizens. Imagine if the same law was passed for Palestinians or former citizens of Iraq)

One of the problems with this Act is that it creates uncertainty, and if a foreign company has the minimum contacts with America, then a united states court will have jurisdiction over it and its assets which are kept in the U.S. Another problem is that there is no real good way to know for sure who really has a legitimate claim to land and property that was seized in Cuba 50 years ago, especially if they fled and didn't bring their documents with them.

Although communism is Cuba's main problem, as long as we keep the embargo up, it will look like we're the ones causing it. And I don't think that it can be argued that the embargo is not really bad for Cuba. Sure, communism is worse, but the embargo is probable the main reason for the car part shortage. Granted, with no embargo, there would be government corruption and shortages too, but right now, the shortage is created by the embargo.

Also, I think you underestimate the power of the U.S., and the fact that there is a significant deterrent to other countries who would otherwise do business with Cuba. The market for cars there has got to be pretty small, because the people are so poor. Not wanting to piss off the U.S. seems like a pretty good reason for a company to not bother with trying to supply Cuba.

Kevin October 2, 2006 at 1:01 am

As I always like to say whenever Lefty yaks about Cuba's wonderful healthcare system — Geez it must be enormously costly to the Cuban people, maybe the chief cause of their poverty. (Of course they never understand what I'm saying, and argue that no, it's FREE!)

In such an impoverished country, if their healthcare is even half as good as libs claim, that must hugely distort the economy. I reckon every bright person on the island is drafted into healthcare. Imagine if you're competing for resources against healthcare when Castro thinks that his health system will keep him popular with Jimmy Carter and Hollywood. Imagine how all other industries suffer for that.

What if people had freedom of choice there? Healthcare is actually not the one most important thing in everyone's life every day — peoples' behavior certainly proves that.

Some people might like a couple more pigs instead of this year's dental check-up. Maybe they'd skip the anal probe this year in exchange for a used car, huh?

Lack of free trade causes all sides to be poorer than might otherwise be the case, but for Cuba the embargo is a drop in the bucket compared to the fact that Castro doesn't permit the economy to organize itself according to peoples' own free desires and calculations.

Zan November 19, 2007 at 10:40 pm

Our government consistently tells us that the embargo has nothing to do with the poverty in Cuba. Then why do we have it?

The reason is obvious to anyone who knows anything at all about modern history. The agenda is to keep a socialist government from succeeding. To let it succeed would send a message to impoverished countries all over the world and especially in South and Central America.

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