The best way to support Cuban protesters is to lift the embargo
Cubans took to the streets of towns around the island in the largest protests in almost 30 years. Although hunger and other shortages have helped spark the protests, protesters are not demanding handouts. They are asking for freedom. Ending the trade embargo is the best way for the United States to support these protesters.
The Cuban economy has contracted by 11 percent during the COVID-19 pandemic. The contraction has resulted in shortages of food, medical supplies and other essentials. But just like the drop in oil prices that preceded The collapse of Venezuela almost a decade ago, the external shock was not the real problem. Like Venezuela, Cuba’s underlying socialist economic system is the problem.
Socialist economic systems are defined by government ownership and control over major industries and businesses, allowing government planners to allocate scarce resources. State ownership and management, from tourism and cigar-making to sugar milling and oil refining, has shaken the Cuban economy for decades.
The emergence of COVID-19 has required millions of adjustments in the production and delivery of goods and services. In market economies, most of these adjustments have been made by entrepreneurs responding to price signals and shortages. In socialist systems, most of these changes were managed centrally. Decentralized entrepreneurial decision-making, which outshines clumsy bureaucrats in normal times, becomes even more important in rapidly changing circumstances like a pandemic. Cuba’s planned economy was doomed to failure.
In videos of protests across the country, Cubans can be heard psalmody, “Freedom!” Although the Cuban people understand that their socialist government is to blame for its problems, the Cuban government blames the United States and its economic embargo. Cuban Foreign Ministry tweeted that “Cubans know full well that the government of the United States is primarily responsible for the current situation in Cuba.”
Likewise, President Miguel Diaz-Canel appeared on emergency television broadcast blame the crisis on US policies that restrict exports and travel to Cuba. Blaming the United States for Cuba’s local problems is nothing new. Fidel Castro has been the scapegoat for the US embargo for decades. The United States should end this blame game to help Cuban protesters.
The embargo, like any restriction on free trade, impoverishes Cuba and the United States. Ending it would alleviate some suffering in Cuba at the margin. But the magnitude of the suffering caused by the embargo pales in comparison to the suffering caused by the socialist planners of the Cuban government. Ending the embargo would do more to reveal the real cause of Cuban suffering than to alleviate Cuba’s economic crisis.
Liberalizing trade with Cuba could also do more to promote longer-term freedom. Increased trade between the United States and Cuba would help more Cubans understand how the ârules of the gameâ of a market economy create opportunities and promote prosperity; this would stimulate demand for the same at home.
Economists Peter Leeson and Russel Sobel call this phenomenon âcontagious capitalismâ. Leeson and Sobel studied changes in economic freedom in 100 countries from 1985 to 2000. They were particularly interested in seeing whether policy changes in one country resulted in similar changes in its geographically closest trading partners. And, indeed, the answer was yes – economic freedom is often contagious.
Ending the blockade would do little to fuel long-term growth in Cuba if the government’s socialist economic policies remain in place. However, if Cuban protesters topple the regime and replace socialist planning with economic freedom, then US trade and investment would quickly revive the Cuban economy.
The United States should end its decades-long embargo on Cuba. Ending it could both help protesters gain greater economic freedom and quickly illustrate the superiority of a capitalist system over the Cuban people by fueling the growth needed to lift them out of poverty.
Benjamin Powell, senior researcher at the Independent Institute, Oakland, Calif., Is director of the Free Market Institute and professor of economics at Texas Tech University, and co-author of “Socialism sucks: two economists drink their way through the nonfree world. “