Monday, October 4, 2010

Cuba has Finally Read 'Atlas Shrugged'

What does that mean?

It means that Cuba, one of the few remaining Communist countries, has finally begun to allow free enterprise.

What was the economic situation in Cuba?

Their economy has been about ready to collapse. Many workers in Cuba barely show up and they do little productive work when they do. In government offices in Havana, coffee and cigarette breaks last for hours. It's not that they are lazy, it's that they get paid about $20 per month, and have no motivation to work hard.

What specifically have they done to more toward freer markets?

Cuba has recently allowed beauticians and barbers to work for themselves. Drivers can operate their own taxis. Even some farmers have been allowed to own their own land. Of course, these are the people who are making a reasonable living. Also, Cuba just let go of 500,000 government workers, 10% of its government workforce.

Is this really a free market economy?

Certainly not, but it is a step closer. That seems to be the way it starts in all previously Communist countries.

What Communist countries are still remaining?

Mainly North Korea, although there are many countries that have such corrupt governments that they cannot be considered to have free markets.

What's so good about this?

For details about why free enterprise is the best system, see my blog entry about Economic Policy. The bottom line is that we are meant to be free. Therefore, governments whose main purpose is to protect each individual's freedom is the only sustainable form of government. After all, who has the right or authority to dictate how an adult should lead their life (as long as it is done in peace)?

Does this relate to the documentary, Waiting for Superman?

The documentary shows the plight of the poor and how desperate they are to get into good schools. The writer suggests having more charter schools, which is fine. But again, the only sustainable answer is to have school choice for all parents, rich or poor. There is no doubt that it will eventually happen, so why not start doing it now? If we are going to subsidize education, then allow the parents the freedom to decide how there children are educated.

Conclusion

In any area, the more free choices a person has for any product or service, the more those products and services tend to improve. Free enterprise, freedom or religion, freedom of education, free speech - all of these are natural rights, and should be protected by any good government. Hopefully, Cuba is taking its first steps in this direction.

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Tim Farage is a Senior Lecturer in the Computer Science Department at The University of Texas at Dallas. You are welcome to comment upon this blog entry and/or to contact him at tfarage@hotmail.com.
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5 comments:

Mary said...

Well done -- It's ironic that China's integration of capitalism made them so propsperous that it's their investment in our paper that now has them so motivated to see us get our problems straightened out.

Tim Farage said...

Ha! How did we ever get to the point where we're dependent on China?

Will it take an act of God to find a way to balance our budget?

Mary said...

Yes.

Mike said...

It's worth noting that there has never been an actual instance of Communism in human history. Countries like Cuba and China are communist in name only. It's primarily used as a blind label.

For example, you call North Korea communist. North Korea's actual name is the Democratic People's Republic of Korea. I'm sure we both agree that they are neither a republic nor a democracy. Yet what policies make them communist? Do the people have any say over property?

What is your opinion of free markets tending towards monopolies? Do you think government regulation is sometimes necessary?

Tim Farage said...

Mike,

Thanks for your thoughtful comments and questions.

You make goods points about questioning what I mean by 'Communism', because it's very important to define terms in order to have any sort of communication.

My definition of a Communist country is one that controls most or all of the economy. For example, it would own most property and businesses, decide which businesses are allowed, and what jobs people should do. No, there's never been a pure Communistic country but the former USSR, North Korea, China a few decades ago, and Cuba come close.

We know historically that all of these countries have created poverty and suffering amongst its people.

In addition, a country that protects individual rights and freedom is the only type of country that is sustainable - because people will eventually want to be free to live their lives in peace however they wish.

The United States Constitution does not define what kind of economy we should have, just as it does not decide what people's religion should be. So I would call our economy a free-market economy. This basically means we Americans should be free to start or do business however we wish, as long as we don't infringe on another's life, liberty or property.

This last sentence implies that laws and regulations on businesses could be appropriate. For example, regulations that limit pollution, regulations that don't allow banks to loan out more money than they have, and other such laws and regulations that protect life, liberty or property.

(An interesting, but related aside is that I believe that a business that extracts natural resources should be taxed based upon how much of the resources they extract. This is because the company did not create these natural resources, and so should compensate the rest of us for allowing them to extract them. And I'd actually prefer to have a natural resource tax replace the income tax. One of the many benefits is that natural resources would be more expensive, leading to companies and people toward conservation.)

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