Popular participation and central planning in Cuban socialism: The experience of agriculture in the 1980s

030~75OXl92 $5.00 + 0.00 Pergamon Press plc

World Development, Vol. 20, No. 2, pp. 229-240,1992. Printed in Great Britain.

Popular Participation and Central Planning in ,Cuban Socialism: The Experience of Agriculture in the 1980s MIEKE MEURS The American University, Washington, D. C. Summary. - In the 198Os, Cuba institutionalized mechanisms of central planning and popular participation under the System of Management and Planning of the Economy (SDPE). This paper examines the implementation of the SDPE in Cuban agriculture, finding that these mechanisms have yielded a number of the expected productive results. Tensions, however, have

also developed between participation and central planning, and these have limited the effectiveness of the SDPE. These tensions are linked to the specific forms of participation and material planning

incentives used. Alternative forms of material incentives and broader popular input into targets could reduce these tensions and improve agricultural performance.

1. INTRODUCTION

is often simply asserted, two substantiating arguments have also been articulated. One argument is that central planning, by definition, removes most real decisions from the enterprise level, depriving worker democracy of its content (see Brus, 1975, pp. 35-36, for example). A somewhat different argument, based on a study of the Yugoslav economy, is that since delegates to participatory structures must report to their constituents, local interests are their primary concern (Comisso, 1979, p. 17). When broad social interests conflict with local ones (channeling limited imported inputs away from local industry to priority national uses, in health care, for example, and thereby reducing potential earnings of employees in the local industry), delegates are likely to lobby against planning goals, or to use local participatory forums to undermine them. A participatory, planned economy is thus faced with inherent tensions that will pull it apart. Central authorities may have to choose between abandoning planning or repressing participation. Our capacity to evaluate this thesis is limited by the paucity of participatory mechanisms in existing socialist, planned economies, and by the lack of documentation of the participatory mechanisms which do exist. Examination of the Cuban system implemented beginning in 1975 (the System of Management and Planning of the Economy - SDPE), which includes comprehensive mechanisms of both (limited) popular parti-

In the postwar period, a number of lessdeveloped countries facing extreme economic inequality and underutilization of resources have turned to socialism as a development strategy. In the context of underdevelopment, the traditional Marxist goals of increasing economic democracy and overcoming the perceived irrationalities of capitalist production are particularly appealing. Cuba is one country which followed such a strategy. Defining institutions and mechanisms suitable to the achievement of these goals has proven difficult, however, as recent events in Eastern Europe have shown. Following classical Marxist critiques of capitalism, socialist countries have seen central planning of production and popular control of economic outcomes as mechanisms by which to achieve socialist goals. The Cuban government, too, expected to rely on these mechanisms,’ although they were not institutionalized until after 1975. Unfortunately, economic theory offers no significant treatment of the problem of integrating the mechanisms of economic planning and popular participation into a coherent system. Within the existing literature, the very compatibility of these two elements of the socialist vision has been highly debated, with many claiming that the two elements are inherently incompatible. While the incompatibility of participation and planning 229

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cipation and central planning, thus offers an opportunity to shed further light on this issue. It offers an important case study of the potential of these two elements to foster economic democracy and improved utilization of resources, and of the possibility of integrating the two elements into a coherent system. This study’ focuses on the implementation of the SDPE in Cuban state agriculture. The experience in Cuban agriculture indicates that substantial tensions do exist between the mechanisms of popular participation and economic planning. Analysis of the experience also suggests that these tensions are closely related to other institutional factors, such as the specific way in which participation is structured and the particular system of material incentives employed. This finding implies that such tensions are not an absolute element, but can be>ontrolled to a certain extent through the use of appropriate institutional structures. Further, as I will argue below, some forms of both economic planning and popular participation are necessary for the achievement of the socialist goals of economic democracy and an efficient allocation of resources.3 As both industrialized and Third World socialist countries struggle to define viable new economic structures and examine the possibilities for more democratic socialist systems, the experience of Cuba in attempting to combine these mechanisms is of particular value. In the following section of this paper, I review the roles of planning and participation in socialist development. In Section 3, I describe the mechanisms developed in agriculture under the Cuban SDPE, highlighting the factors which may have exacerbated or mitigated tensions between planning and participation. After reviewing the productive results of the SDPE in Section 4, in Section 5 I draw conclusions from the Cuban experience and suggest some alternative ways of organizing structures of participation and material incentives.

2. A SOCIALIST

VISION

Marx’s analysis of capitalist alienation underlies the socialist goal of democratic social control over resource allocation. Marx noted that when workers exchange their labor power for wages, they cede to their employer the right to control their labor and its products. Since Marx saw the human capacity for conscious productive activity as the key to humanity’s specificity from animals, he argued that capitalism, by alienating people from the products of their labor, alienates them

from their specificity as a species (1975, p. 73). In complex, industrialized economies, where products result from the associated actions of many producers in many firms, democratic control over individual firms is inadequate for workers to consciously control their production. Democratic control of the economy as a whole is necessary if people are to regain control over the products of their labor and overcome alienation. One goal of socialism is to develop such control. Marx also argued that the independent production choices of competing capitalists produce the boom and bust cycles which result in the periodic destruction of capital and underemployment of national resources. A second goal of socialism is thus to prevent recurrent economic crises and thereby permit the full application of national resources to achieve steadier, more rapid economic growth. Planning is one mechanism through which socialism is to achieve its goals. By permitting the consideration of information about national conditions not available to dispersed groups, including information about costs and benefits extending beyond the individual firm or locality (Nove, 1977, p. 77; Brus, 1975, p. 76), central planning is expected to reduce the booms and busts and other undesired consequences of the uncoordinated actions of competing agents (Engels, 1959, p. 104). Further, planning, by constraining the behavior of independent firms, is expected to guide production toward fulfillment of consciously chosen macroeconomic and productive outcomes. To do this effectively, planning must take a form somewhere between centralization of all production decisions and purely indicative planning which binds no actor with respect to any decision. Neither extreme form is likely to achieve the socialist goals. Completely centralized decision making would require the collection of impossible amounts of information about local conditions and the generation of innumerable individual prices and quantities. Purely indicative planning, on the other hand, is likely to permit a return to the uncoordinated pursuit of immediate, individual interests at the expense of longterm national development and democratic control of production. The degree of centralization appropriate to socialist goals will depend upon the potential to develop indirect means of guiding economic behavior and the costs of attempting direct control, which will in turn depend upon the level of economic development, education, and common political commitment, the degree of cultural and social homogeneity and other factors particular to the country at hand. The second mechanism, popular participation,

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obviously contributes directly to the goal of democracy - without participation in the planning process, planning can be seen as broadening social control of resource allocation only in the most paternalistic sense. But recent research suggests that popular participation can also contribute to the goal of improved resource use. Workers may be an important source of information regarding ways to rationalize production (Aoki, 1984, chapter 2; Horvat, 1967, chapter 3). Further, popular participation may force authorities to seek and properly consider all information relevant to the planning process (Brus, 1975, p. 193). Finally, studies of both capitalist and socialist firms have found that participation by workers in enterprise management often results in greater employee effort and improvements in productivity (Espinosa and Zimbalist, 1978; Levine and Tyson, 1989). As is the case with planning, there is a broad range of forms which popular participation might take. Within Marxist theory, popular control has usually been seen as involving some kind of hierarchical structure. Direct participation through community and/or workplace organizations is expected to feed into a pyramid of representative institutions at the level of regional and national government. Self-government may devolve to regions, but in the context of organized national unity and coordination under an elected national assembly (Marx, 1968, p. 292). Whatever form it takes, studies show that participation must convey real decision-making power if it is to generate the anticipated economic benefits (Levine and Tyson, 1989). In light of the arguments regarding the incompatibility of popular participation and central planning, and with the problem of their integration unresolved in practice, theorists have often argued that countries must choose either central planning, with no real popular participation, or decentralization, markets, and participation at the local or enterprise level (Brus, 1975; Horvat, 1967). The “solution” most often advocated within the literature on socialist economies has been the abandonment of planning in favor of worker-controlled firms in a market-socialist context. In the absence of democratic economic planning, however, this solution will leave workers subject to macroeconomic conditions over which they exercise little or no control. Uncoordinated market allocation of resources will also reproduce the boom and bust cycles of the capitalist model. Such a solution will therefore not achieve the socialist goal of democratic control of economic outcomes.

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While a real tension exists between participation (which fosters the expression of local interests) and the planning (which seeks to protect long-term, politically defined interests against particularistic demands), it should now be clear that neither the goal of democracy nor that of improved resource use can be fully achieved without both planning and popular participation. The search therefore continues for viable forms of coexistence between the two mechanisms, and attention shifts to an analysis of the factors which facilitate such coexistence. Since tensions between participation and planning reflect tensions between local interests and national goals, the coexistence of participation and planning depends, at least in part, on the potential of compromises between competing fostering groups in society. Factors such as education, common culture, history and political education are therefore important in determining the level of tensions which emerge between the two mechanisms. Institutional arrangements which influence the way in which individuals define their interests, such as the specific forms of participation developed, their effectiveness, and the type of material incentives implemented, will also have an important impact on the coexistence of planning and participation. These institutional arrangements are policy variables, open to change by government officials or democratic institutions. Clearly, however, the complexities of realworld economies prevent socialist institutions (and their capitalist counterparts) from fulfilling the expectations generated by textbook models. A search for mechanisms which will guarantee a continuous, optimal allocation of resources and pure democracy is therefore not the issue here. The relevant problem is, instead, the design of an institutional framework which will permit the best possible performance in a given economy and the greatest fulfillment of socialist development goals.

3. THE CUBAN REFORMS AGRICULTURE

IN

During the first 15 years of the Cuban revolution, the systems of economic planning and popular participation remained underdeveloped in agriculture, and the rest of the economy. Extreme centralization of economic decision making was the rule, but mechanisms for the collection and dispersal of detailed economic information and the monitoring of economic performance were lacking. Popular participation was limited to Workers’ Councils which were

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implemented only partially and in scattered enterprises, functioning sporadically over this period. In agriculture, the system was fairly effective in channeling resources into priority areas, but it performed poorly in terms of achieving firm-level efficiency and strong work incentives. While the pre-1975 system had successfully increased supplies of milk, meat, eggs and other basic goods to the majority of the population, planners had given inadequate attention to the production and distribution of the high-quality, varied fresh fruits and vegetables desired by consumers. Further, weak planning mechanisms and incentives meant that production in the state sector was characterized by inefficient use of labor and other inputs. Once the initial benefits of the channeling of investment into the previously capital-starved agricultural sector had be&r realized, growth rates slowed and consumer dissatisfaction over poor quality and lack of variety of food products mounted. The economy was falling short of both its goals of improved resource use and of economic democracy. In 1975, the Cuban government began to institutionalize both central planning and popular participation under the SDPE. The new system included limited administrative autonomy for state farms, as well as broad structures of material incentives and popular participation. The institutionalization of planning and participation was expected to strengthen planners’ ability to direct resource flows in line with political priorities. At the same time, it was expected to promote economic efficiency by reducing planners’ workload and permitting more local input into economic decisions. Increased democracy, however, does not appear to have been an explicit goal of the reform. Traditional simplistic conceptions of the socialist states as democratic per se appear to have blocked understanding of the need for such reform. While the augmenting of central control and broadening of participation and responsibility at the level of the enterprise could, taken separately, contribute to economic coordination and efficiency, slow implementation has sometimes limited their effectiveness. Further, the specific forms of participation and material incentives developed have, in many cases, exacerbated tensions between the popular participation and central planning.

(a) Administrative

autonomy

Prior to the SDPE, firms had been organized under the system of budgetary finance. Under

that system, firms functioned as individual branches of one economywide productive mechanism. Enterprises were simply to utilize the inputs and investments allocated by planners to produce the maximum amount of the assigned, socially necessary products. No individual accounts were necessary, since only overall social outcomes mattered. Administrative autonomy under the SDPE therefore meant, first and foremost, the constitution of the enterprise as an independent economic unit. This step was accomplished through the development of a comprehensive system of cost accounting and commercial relations between firms. Cost accounting has also been extended to internal subdivisions of the enterprise (work centers), so that costs (and in some case profits) can be tracked at the level of the individual production unit. Where possible, work centers have been further divided into permanent production brigades of 12-100 people. Eventually the brigades are expected to maintain a full system of accounting in order to achieve the closest possible monitoring of costs and profits. Administrative autonomy was to reduce planners’ workloads by providing enterprises with the economic information necessary to make some independent production decisions, and to increase efficiency by permitting some decisions to be made locally, where the best information would be available. The independent administrative units, however, gained minimally in terms of decision-making autonomy. In fact, planning was extended, as centrally determined targets for income, expenditures, and profits were added to the physical indicators of type and quantity of output, productivity, salary and work in enterprise plans. Ministries, still ultimately responsible for enterprise performance, have been hesitant to permit independent decision making - a complex set of planning targets therefore continues to be used to assure enterprise compliance with Ministry goals. Enterprises did gain an institutionalized role in recommending amendments to draft plans. They also gained responsibility for contracting for specific assortments of inputs and products with which to fulfill plan targets although, since there is only one potential supplier for most goods, firm initiative in this area is limited. In addition, firms may now engage in sideline production outside the national plan with permission from their branch Ministry (Hidalgo-Gato, 1980, p. 47). Finally, firms gained the right to independently borrow working capital from government sources and to modify the production process in order to increase efficiency. The right to retain or independently borrow funds for small investment

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projects was envisioned but, at least in agriculture, this has not been implemented. Without the ability to make even limited independent investment decisions, enterprise latitude to respond to locally available economic information is severely constrained. In practice, autonomy achieved under the SDPE has been further limited by its uneven implementation. While systems of cost accounting were implemented in over 90% of all (both agricultural and other) Cuban enterprises by 1980 (Comision National de Implantation de1 SDPE, 1979, p. 36; 1980, p. 403), the quality of accounting data continued to be uneven. Further, the use of cost accounting in work centers has not been fully extended (JUCEPLAN, 1985, pp. 63-70), and brigades had been extended to only 77 of 396 state agricultural enterprises by 1987 (Ministry of Agriculture, Interview 4, 1987~). Weak or poor accounting systems reduce the reliability of firm-level data as a basis for planning by both central and firm authorities. Perhaps as a result, implementation of autonomous decision making at the level of the enterprise has proceeded very slowly. One Ministry official estimated in 1987 that perhaps 75 of the approximately 400 state agricultural enterprises have been permitted substantial input into plan formulation and that 50% of enterprise suggestions are heeded by the Ministry (Ministry of Agriculture, Interview 1, 1987a). While data received through the new firm accounting systems remain somewhat imprecise, improvements over the information received in the previous system appear to be the most significant contribution of administrative autonomy to economic performance. The reform has done little to increase the flexibility of firms in responding quickly and creatively to the available information.

(b) Material incentives The system of budgetary finance which preceded the SDPE had been accompanied by a heavy reliance on nonmaterial, or “moral,” incentives. The devolution of limited decision making to the enterprise level and implementation of cost accounting under the SDPE made possible the use of various forms of material responsibility for productive results. A threetiered structure of salaries based on work norms (adherence to average rates of task fulfillment), bonuses (primas), and profit sharing (premios) has been developed to encourage economic efficiency by linking individual material interests

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with those of the enterprise and with social interests in economic growth and development. The fundamental part of agricultural workers’ incomes continues to come from salaries based on skill, experience, and working conditions but, beginning in 1980, their link to work norm fulfillment was tightened (Trabajadores, July 24, 1980, p. 4) (for a more complete discussion of the wage reform, see Ghai et al., 1988). In many cases, however, the tying of pay to completion of specific production tasks has failed to provide a link to final output or economic results. For example, norms for area of crops weeded may be fulfilled, but weeding may be done too quickly, resulting in poor final production results. The worker’s material interests can thus be addressed without meeting social interests in increased agricultural output. Other forms of linking pay to work done, such as pay for final production by crop cycle, provide a closer link to final output but still fail to encourage efficiency of input use (Ministry of Agriculture, Interview 3, 1987b). In these cases, pay schemes focus a worker’s interest mainly on the fulfillment of individual tasks and not on goals of increased production or efficiency. A second form of material incentive, the prima, was to link 2&40% of workers’ incomes to overfulfillment of certain plan targets, such as increases in output and labor productivity. Primas were to be paid monthly or quarterly (Comision National de Implantation de1 SDPE, 1978). While primas provide better incentives for economic efficiency than salaries, they often fail to encourage efficient use of inputs. In addition, many primas were poorly elaborated, incomprehensible or unobtainable (Trabajadores, August 20, 1985, p. 5; December 23, 1981, p. 1; December 3, 1982, p. 2). Finally, primas remained a very small share of worker incomes during 1983-85, they appear4 to have increased incomes by only about half of the expected minimum of 20% (CEE, 1985; Ministry of Agriculture, 1985). As a result of these problems, primas too failed to provide a significant incentive for increased work or efficiency. Further, instead of creating the desired link between individual and social interests, these incentive schemes foster a conflict of interest between the material interests of the workers and both enterprise economic performance and social interests in increased quality of production: workers are encouraged to produce without regard to thriftiness of resource use or the quality of final products. Such a conflict of interest can only exacerbate tensions between planning and participatory structures in Cuban agriculture. With little mate-

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rial interest in enterprise efficiency or productive performance, workers can be expected to use participatory forums to undermine plan targets - demanding extra inputs and boosting pay regardless of productivity growth. Of course, some conflict of interest will always exist between local and national interests. The problem is that, rather than attenuating this conflict, the system of salaries and primus implemented in Cuban agriculture appears to reinforce it. The premio, a stimulation fund formed from enterprise profits, offers the greatest potential for linking the material interests of individual workers with enterprise performance and the interests of society at large. Based on final economic performance of individual enterprises, premios are expected to reward efficiency of resource use and production of final goods. While annual payment of premios assures a link to final productive results, it may also reduce their incentive effect by increasing their distance from daily activity. More serious limitations on the ability of the premio to foster economic efficiency in agriculture result from technical problems with their implementation. Many prices of Cuban agricultural inputs and products do not cover costs of production or reflect the social value of resources used. Under these conditions, profit-based bonuses may encourage thriftiness of input use but cannot guide producers in the most efficient choice of inputs. Further, differences in profits across firms cannot, under these conditions, be attributed to differences in productive efficiency. Perhaps because of these problems, the system of stimulation funds has been the least implemented of the material incentives. By 1987, the system of premios had been extended in principle to 73.7% of agricultural enterprises (Trubujudores, April 3, 1983, p. 8), but only 6.3% of agricultural workers actually received premios in 1985 (Trabajadores, February 20, 1986, p. l), and in 1984 the stimulation funds only increased total payment to agricultural workers by 6.4% (Trubujudores, September 4,1985, p. 1; CEE, 1985). Where they have been implemented, methods for calculating the size and distribution of the premios have proven imprecise and excessively complicated, so that money is often distributed “like a lottery” (Ministry of Agriculture, Interview 3,1987b) - without any apparent connection to work and efficiency. These technical problems reduce the potential of the premio to encourage economic efficiency and to shift the focus of worker interests from task and output target fulfillment at the level of the work unit, to efficiency and final production.

(c) Popular participation

Along with the structures of administrative autonomy and material incentives, the SDPE included two parallel sets of institutions of popular participation. First, agricultural workers gained the right to participate at three levels in the administration of their enterprise. The SDPE provides for elected worker representatives to sit, with enterprise directors and technicians, on Management Councils. These councils meet at least monthly in the work unit or brigade and also at the enterprise level. While the representatives have no vote in this forum, the need for worker cooperation in the implementation of decisions is expected to lend weight to the suggestions of the worker representatives. Second, elected union representatives from each work center or brigade form an Assembly of Representatives which meets monthly with enterprise management. Finally, all workers are expected to participate in the monthly Production Assembly of their work center or brigade. In all three bodies, workers are to participate in the formulation and implementation of enterprise plans. The main aspects of the plan are to be analyzed and counterproposals made based on worker and management suggestions. When final plan figures arrive at the enterprise, workers are to participate in deciding how best to fulfill them, and management is responsible for implementing or responding to worker suggestions (Fuller, 1985, p. 93). This broad structure of worker participation could provide substantial opportunities for worker control of decisions devolved to the level of the enterprise. In so doing, it could improve the use of information held by workers and increase their identification with enterprise goals and performance, motivating increased work effort and concern for efficiency. Existing data suggest that Production Assemblies function regularly and that meetings are generally well attended. During 1979-80, worker attendance at meetings discussing means of fulfilling plan indicators rose from 75% to 91% of the agricultural work force (Perez, 1980, p. 26). Attendance at meetings formulating plan proposals increased from 62.5% of workers in 1981 to more than 67% for the plan of 1982 (Trabujadores, March 18, 1981, p. 1; August 27, 1981, p. 1). The quality of participation is, however, less clear. According to union officials, discussion of plan formation is geared toward generating approval for plans and eliciting ideas on how to improve production (Union of Agricultural and Forestry Workers, Interview, 1987). The limitations on administrative autonomy, discussed

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above, largely restrict worker participation to issues of plan implementation - workers have little decision-making power with respect to plan formation. Administrative problems have also limited workers’ role in decisions about how to implement plans. In 1983, delays in the distribution of plan targets meant that in some enterprises they were discussed only in Assemblies of Representatives (Trubajudores, October 25, 1982, p. 3). The quality of participation in Production Assemblies is also hurt by administration refusal to attend them regularly and to provide the information necessary for workers to participate effectively (Trubajudores, September 18, 1980, p. 1; April 7, 1986, p. 5). Perhaps as a result of these problems, discussion in one meeting that I attended in 1987 was limited to relatively minor matters. Mainly, it revolved around discussion of conditions in the cafeteria, the date of prima distribution, and one production issue - the need for better storage for raw materials, some of which were outside and exposed to rain. Worker participation in Management Councils appears to have developed even more slowly. In 1984, the federation of Cuban unions, the Council of Cuban Workers, resolved to exercise its legal right to participate at this level (Trubujudores, August 10, 1984, p. 4). Limited implementation of participatory structures reduces their potential to elicit valuable information held by workers and to increase worker identification with firm performance. Discussing the problems in state agriculture, for example, it was reported in the fourth Congress of the agricultural workers union, the SNTAF, that errors, violations, and deformations are linked to weak political work in which workers do not see themselves as collective proprietors of the whole of the means of production. This level of consciousness deepens as workers exercise their right to intervene in the making of fundamental decisions of conforming and administering the plan. It must be a real, effective, systematic right in each collective, not a symbolic, formal, schematic one as it has often been until now (Grunma, September 9, 1986, p. 1).

more importantly, the imbalance between fairly developed participation in Production Assemblies and low levels of participation in enterprise Management Councils reinforces the focus of worker interests at the level of the work unit, where they have a greater degree of control over the fulfillment of incentive indicators. The uneven development thus exacerbates tensions between immediate material interest of workers and the plan. Perhaps

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Popular participation has also been extended through a broad structure of elected government called Popular Power. Like the workplace structures, Popular Power is organized in three tiers. Representatives from each municipality are elected to Municipal Assemblies in competitive elections. The Municipal Assembly then elects one representative to both the Provincial and National Assemblies from among its members (Popular Power, Interview, 1987). Municipalities large enough to elect more than one representative to the National Assembly may also elect representatives from outside the municipality well-known sports figures or other national celebrities are often chosen in these cases, although it is hard to imagine that this representation is anything more than formal. Popular Power assemblies do not formulate the plan for their respective territory, but discuss and approve it or suggest amendments after briefings by enterprises directors, and by representatives from the ministries and JUCEPLAN, the national planning board. Fully developed structures of Popular Power could help to reduce tensions between participation and planning by promoting worker identification with planning goals at various levels. Worker interest in national planning goals, in particular, would help to offset individual or group interests. The importance of effective participation at the regional and national level is all the more important due to the extreme difficulty of creating effective material incentives at the national level. Combined with the structures of workplace participation, the organs of Popular Power also have the potential to permit significant levels of democracy. Beginning at the municipal and extending to the national level, they could permit workers to extend their control beyond the level of their individual firms. Control over the macroeconomic context of firms’ functioning (development priorities, investment levels, and wages) and the composition and distribution of the “social wage” (social security, subsidized goods and social services) are examples of the “conscious control of production” possible under such a participatory structure. Participation in Municipal Assemblies of Popular Power appears substantial, and generates a visible degree of popular control over the development and administration of local plans (within the budgetary and resource limits set by the national plan). Unfortunately, once the plan is in place, representatives are often ineffective in meeting the daily needs of the population. According to a recent poll on attitudes toward Popular Power, 48.6% of those surveyed felt that

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delegates did not have sufficient authority to solve problems. “Delegates have no resources or administrative influence,” according to one of those polled (Granma Weekly Review, August 5, 1990, p. 10). The effectiveness of participation in Popular Power appears to diminish with ascent of the organizational hierarchy. While about 10% of the Cuban population belongs to the Cuban Communist Party, over 90% of representatives in the National Assembly of Popular Power are party members. In addition, close consideration of the national plan in the National Assembly is. restricted to the 30-member Global Economic Activities Commission of the Assembly, consisting of experts in the area of economic planning and a representative selection of Assembly members (Popular Power, Interview, 1987). Broader possibilities for direct, popular discussion of national plans exist within the development of five-year plans, which are discussed in both municipal Popular Power Assemblies and in meetings of other social organizations. These meetings permit the Cuban people to consider proposed national planning priorities and express their views on them. No structures have been developed to ensure the implementation of suggested changes. A recent poll, however, found that two out of five people felt that they were not participating fully in governing the country (Granma Weekly Review, August 5, 1990). Weak implementation of participation in national planning goals reduces the potential of the system to provide for democratic control of economic outcomes. In addition, it does little to foster worker interest in planning goals. Overall, structures of popular participation appear more likely to focus interests at local levels, where participation is more effective. With little popular identification with national planning goals, local representatives are pressured to devise means of meeting local goals at the expense of national targets.

Table

1. Agricultural

Noncane Livestock Total Source:

CEE

production

-

4. RESULTS OF THE SDPE IN AGRICULTURE By comparison with earlier periods, agricultural production results under the SDPE are not especially impressive: growth rates of gross agricultural output for the Ministry of Agriculture have been slowing, from an average of 5.4% per year during 1970-75 (in 1965 prices)5 and 3.4% per year in the first five years of the SDPE (1975-EO), to 1.4% during 198&85, and 1.5% during 1985-87 (the latter figures in constant 1981 prices) (CEE, 1987, p. 303) (See Table 1). Economic growth rates, however, have been strongly affected by a prolonged drought,’ the recession on world markets and worsening foreign exchange constraints.’ In fact, similar problems resulted in the 1980s being a period of slow worldwide economic growth. A number of the individual elements of the system appear to have made the expected contribution to economic efficiency, and with improved implementation, further gains can be expected. One important improvement has been a reduction in losses in state agricultural enterprises from over $400 million (pesos) in 1980 to a low of $70 million in 1985 (Trabajadores, January 1, 1984, p. 1; December 12, 1985, p. 1). Approximately 19% of this improvement can be attributed to changes in relative input and product prices, but the remaining reduction in losses must be attributed at least in part to improvements in organization, motivation, and planning under the SDPE (CEE, 1985; CEE, 1986). The system of cost accounting has no doubt contributed greatly to this reduction by helping to pinpoint problems in production and resource flows. The tying of pay to measures of work done, and the initial enthusiasm with the various forms of participation under the SDPE, appear to have contributed to maintaining a favorable relation between productivity and salary increases.s Whereas the ratio of productivity to salary rose

state sector (constant 1981 prices in millions of pesos)

1975

1980

%/year growth

1985

%/year growth

1987

%/year growth

625.0 541.7 1,166.7

685.8 692.3 1,378.1

1.9 5.0 3.4

688.3 792.0 1.480.3

0.1 2.7 1.4

723.9 802.2 1,526.l

2.6 0.6 1.5

(1987),

p. 303.

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by an average of 1.5% per year during 19771980, during 1980-86, with the SDPE in place, this rate of growth increased to 3.2% per year (CEE, 1986; Ministry of Agriculture, n.d.). In the brigades, where the small size of production units improves the functioning of participation and material incentive schemes, productivity results have been even better, with the ratio growing by an average of 11.7% per year during 198>86 (Ministry of Agriculture, 1985; Ministry of Agriculture, 1986). As a result, a greater share of productivity increases are available for use in investment and development projects. Cuban economists note, however, that the improvements are not all that they had hoped (Centro de Estudios sobre la Economia Internacional, Interview, 1987). They are particularly disappointed by the slowing rates of improvement in the ratio of productivity to salaries. The rate of improvement has slowed from 3.3% during 1983-84 to 2.7% during 1985-86. Perhaps this drop is to be expected gains from reorganization of production may produce a onetime productivity increase, with some smaller continued improvements as workers learn to use the new structures more effectively. The Cubans, however, clearly hoped for and needed better results from the reorganization and are particularly frustrated by the fact that losses in the Ministry of Agriculture rose to $291 million in 1986 (Trubujudores, September 9, 1986), as the percentage of agricultural enterprises earning a profit fell from 49% in 1984 to 34.4% in 1986 (Trubujudores, March 9, 1987, p. 1). In addition to the factors listed above, Cuban officials attribute declining growth of productivity to a number of problems with the functioning of the system. They note the technical problems with individual elements of the system, such as lack of a close link between work and pay, which hurts labor productivity, slows output growth and increases Ministry losses. Inadequate price structures and resulting slow development of firm autonomy are also blamed. Given their emphasis on technical problems with the SDPE in agriculture, the Cubans have emphasized the need to fine-tune individual elements of the system. A price reform is scheduled for sometime in 1990 or 1991, and is expected to improve the functioning of the SDPE by increasing the reliability of economic signals and thereby permitting broader extension of the premios and, possibly, enterprise autonomy. Since the markup method of pricing’ will be continued, however, the reformed prices are unlikely to clearly reflect the social value of resources. Prices and profit will therefore still fail to provide the economic information necessary

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for efficient resource allocation. Nonetheless, the reform should eliminate some of the most irrational price signals currently disrupting agricultural production. Improving measurement techniques so that pay can be more effectively linked to output has been a second priority in improving the performance of the SDPE. Eighteen of 52 primus in the Ministry of Agriculture were eliminated in 1987 (Ministry of Agriculture, Interview 4, 1987e) due to their weak link with final results (those for mechanical work and artificial insemination, for example). There have also been efforts to structure more work units around the production of final goods, so that work center bonuses will reward socially useful production. The perfection of planning mechanisms has also been emphasized, in order to make it more difficult for individual enterprises to divert resources to their advantage. Predicted tensions have been developing between participation and planning, however, which threaten to limit economic improvements or to pull the system apart. Where workers are motivated by interests which contradict planning goals, for example, participatory forums have been used to undermine planning - to press for the payment of primus in excess of those indicated by productive performance and in violation of plan restrictions. Officials from the agricultural workers union note that firm participatory forums have been “converted into forums for asking for resources” (SNTAF, 1986, p. 4) and demanding more easily fulfilled plans, even at the expense of enterprise economic results and premio payments. In brigades, where material incentives are more closely linked to individual performance and participation is more direct, there is reportedly a particular problem with the use of “tricks” to achieve less demanding plans (Ministry of Agriculture, 1985, p. 16). Finally, enterprises seeking to maximize premio payments have undermined overall economic performance by overcharging other enterprises or substituting cheaper but less appropriate inputs in production. Speaking in 198.5, Fidel Castro noted that “Some of our enterprise directors have been converted into (capitalist entrepreneurs)” (Castro, 1986, p. 23). Responses to these problems have been combined into a broad political strategy which is being called “rectification.” A major element of rectification has been the attempt to reduce tensions between individual and social interests through intensified political work. Cuban officials argue that they had come to depend too heavily on individual material interests and economic mechanisms to motivate people, neg-

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letting emphasis on the commonality of interests across the Cuban population and the need to make compromises in immediate individual interests in order to achieve social goals of equality and development. In response, Fidel Castro, in numerous speeches during 1986-88, called for increased participation at all levels of society, beginning with popular participation in the resolution of the problems of the SDPE: “I am convinced, and convinced as few things convince me, that to air these problems freely within a socialist, revolutionary critique, . . . will give us tremendous force” (Castro, 1986, p. 158).

6. CONCLUSIONS Correction of the technical problem; of the SDPE (poorly defined material incentives, irrational prices, and insufficient enterprise autonomy) is clearly fundamental to its improved performance. In addition, the emphasis of rectification on popular participation and political consciousness may help confront problems of incomplete implementation of participation at the local and firm levels and specific instances of corruption, and may increase popular understanding of the link between social goals and individual interests. While these developments are necessary for the improved functioning of the SDPE, they cannot, in themselves, provide a solution to the tensions emerging within the system. There has been little analysis which places problems with the functioning of the SDPE in the context of the logic of the system as a whole. While both participation and planning are necessary for the achievement of the goals of Cuban socialism, the specific forms in which they have been implemented under the SDPE have exacerbated tensions between them. These tensions could be reduced with some changes in the institutional structures. For example, increased emphasis on material incentives based on productive efficiency, especially the premio, and a stronger link between long-term enterprise economic performance and premio payments would all help reduce the conflict of interests between individual agricultural workers and society. Greater rationality in the pricing system and increased firm autonomy are, however, clearly necessary conditions for the implementation and effective functioning of such incentives. Tensions between participation and planning are also linked to the specific forms of participation and political work implemented. The understanding of the link between work done and

social benefits received, which the Cubans are attempting to develop through political work, will not motivate effectively if the social benefits are not actually those desired by the population, and if individuals have no effective control over whether their effort translates into goal realization. The current emphasis on top-down revitalization of participation at the enterprise level and in the critique of government policy is too limited to develop serious commitment to national economic goals. To do this and to fulfill its role in increasing social control over production, participation must extend beyond participation in plan implementation, to include some degree of effective influence over plan goals and administration at the enterprise, provincial, and national levels. This effect could be achieved through the election of planners, representative participation in defining the broad outlines of national plans and administrative policy, or some other mechanism. Current structures could permit such participation if real decision-making power were devolved to them. Broader participation in national planning entails the risk that a workable compromise will not be reached among the interests of various social groups and that planning will fail, as occurred in Yugoslavia. But this danger could be partially mitigated if there were consent to abide by the decision of some arbitrator of last resort. The relatively homogeneous historical and cultural background of the Cuban population may also facilitate compromise. Extending popular participation in national planning implies greatly reduced power of party officials over the establishment of social priorities. Perhaps the party has been unwilling to relinquish its position of control. Or perhaps, more generously, the Cuban Communist Party has not been confident that Cuban society could reach an informed and workable compromise which would foster commitment to social and enterprise goals. Whichever is the case, key decisions have continued to be made by the party, as protector of what it perceives as the social interest, albeit with the benefit of fairly broad popular input. While party members emphasize the role of the political realm in improving economic performance, they continue to see political work as “a fundamental task of the Party” (Castro, 1987, p. 142), and have been unwilling to turn politics over to the population, revitalizing participation from the bottom up. In light of the analytical framework set forth above, however, problems with the functioning of the SDPE in state agriculture cannot be seen as resolvable within such a limited conception of

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political work. Maintaining party control of national economic and political priorities while bolstering participation at the enterprise level will promote some limited degree of selfdetermination in the workplace and may increase productivity. The experience with the implementation of the SDPE to date, however, indicates that this may serve, as well, to increase tensions

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between the structures of participation and those of planning. Expanding the role of participatory structures in order to bring the national economy effectively under popular control may be more likely to permit the realization of the economic potential of the SDPE, and the goals of socialism as well.

NOTES 1. See (Guevara,

comments by Ernest0 Che Guevara 1968) and Benglesdorf (1985), for example.

2. This study was carried out during February-May 1987. During that time I conducted numerous interviews with officials from the Ministry of Agriculture, the Union of Agricultural and Forestry Workers (SNTAF), Popular Power, and with state farm workers. 3. Two qualifications of the term “efficient” are needed here. The term is not used in the traditional sense of pareto optimal. First, prices to be applied in measuring socialist efficiency are not simply scarcity or shadow prices. As I have argued elsewhere (Meurs, 1989), these prices must reflect social priorities for growth and change in economic structures and income distribution, in addition to current scarcities. Second, in a socialist economy having goals of both economic democracy and efficiency, the search for a pareto optimal outcome may be replaced with a search to define an institutional structure which permits an outcome pareto superior to all other politically feasible outcomes. 4. Based on payments to brigades, which should serve as an indicator of overall payments (they are expected to be biased upward, if anything). 5. The estimate for 1970-75 is not strictly comparable with those for 1975-80 and 198&86, since the latter

two include growth of agricultural services in addition to growth in noncane agriculture and livestock production. Agricultural services constitute a small share of agricultural output, however (6-7%). 6. The only year since 1981 in which rainfall has reached near normal levels was 1983, and 1986 was a particularly dry year. Overall, rainfall has averaged 1,081 milliliters since 1981, compared to an average of 1,386 milliliters per year during 1931-72 (CEE, 1981, p. 30; 1985, p. 38; 1986, p. 40). 7. Cuba may sell on the world market any oil saved from its quota from the Soviet Union, keeping the difference between the reigning world price and the Soviet subsidized price. This revenue has been a major source of foreign exchange earnings in recent years. For a more detailed discussion of this see Turits, “Trade Debt and the Cuban Economy,” in Zimbalist (1987). 8. While the relationship between the organizational changes and productivity could be clarified by crosssectional comparisons, these are not possible at this time due to data limitations. 9. This system bases price on a mark-up over average cost. The system therefore fails to reflect either current scarcities or social utility (Zimbalist, 1988, p. 15), although by varying the mark-ups or subsidies planners may give weight to their own preferences.

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Castro, Fidel, “II Pleno de1 Comite Central de1 Partido Comunista de Cuba,” Cuba Social&a Vol. 23 (1986), pp. 141-178. Centro de Estudios sobre la Economia International, Interview (Havana: 1987). Comite Estatale de Estadistica, Statistical Yearbook (Havana: CEE, various years). Comission National de Implantation de1 SDPE, Segunda Plenaria National Be Chequeo de la Implantacion del SDPE (Havana: JUCEPLAN. 1980). Comission National de Implantation de1 SDPE, >lenaria National de Chequeo de la Irnplantacion de1 SDPE (Havana: JUCEPLAN, 1978).

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Comisso, Ellen Turkish, Workers’ Control Under Plan and Market (New Haven, CT: Yale University Press, 1979). Engels, Frederick, “Socialism: Utopian and scientific,” in Lewis Feuer (Ed.) Marx and Engels: Basic Writings on Politics and Philosophy (Garden City, NY: Anchor Books, 1959). Espinosa, Juan, and Andrew Zimbalist, Economic Democracy: Workers Participation in Chilean Industry 197&1973 (New York: Academic Press, 1978). Fuller, Linda O., “The politics of workers’ control in Cuba, 1959-1983: The work center and the national arena,” Ph.D. dissertation (Berkeley, CA: University of California, Berkely, 1985). Ghai, Dharam, et al., Labour and Development in Rural Cuba (London: Macmillan; 1988). Granma, Cuban national daily newspaper, official organ of the Cuban Communist Party. Granma Weekly Review, weekly English language summary of Granma. Guevara, brnesto Che, “On sacrifice and de&cation” in John Gerassi (Ed.) Venceremos (New York: Macmillan, 1968). Hidalgo-Gato, Frank, and Hector Ayada Castro, “Aspectos Teoricos de1 SDPE,” Economia y DesarL roll;, Vol. 56 (1980), pp. 43-60. Horvat, Branko, An Essay on Yugoslav Society (White Plains, NY: International Arts and Sciences Press, 1967). JUCEPLAN. Dictamenes Aorobadas en la IV Plenaria National de Chequeo dei SDPE (Havana: JUCEPLAN 1985). Levine, David I. and Laura D’Andrea Tyson, “Participation, productivity and the firm’s environment,” Economic Analysis and Policy Working Paper 33 (Berkeley, CA: Center for Research in Management, Uhiversity of California, 1989). Marx, Karl, Precauitalist Social Formations (New . York: Internatiodal Publishers, 1975). Marx, Karl, and Frederick Engels, Selected Works (New York: International Publishers, 1968). Meurs, Mieke, “Participation, planning, and material incentives in socialism: The case of Cuban agriculture in the 1990s” Ph.D. dissertation (Amherst, MA: University of Massachusetts, 1989): Ministry of Agriculture, Interview 1. Sub-Director. Provincial Dilegation (Havana: 1987a). Ministry of Agriculture, Interview 3 (series) (Havana; 1987b). Ministry of Agriculture, Interview 4, Department

Head, Perfection of Organization of Work and Salaries (Havana: 1987~). Ministry of Agriculture, “Evalucion de la experiencia sobre la introduction de la Brigada Permanente de Production y el calculo economico interno en las Empresas de1 Ministerio de la Agricultura,” (Havana: Ministry of Agriculture, 1986). Ministry of Agriculture, “Evaluation de la experiencia sobre la introduction de la Brigada Permanente de Production y el calculo economico interno en las Empresas de1 Ministerio de la Agricultura-1985,” (Havana: Ministry of Agriculture, 1985). Ministry of Agriculture, “Economic development” (Havana: Ministry of Agriculture, n.d.). Nove, Alec, The Soviet Economic System (London: George Allen and Unwin, 1977). Perez Gonzalez, Humberto, “Clausura de la 2nda Plenaria Sobre la Implantation de1 Sistema de Direction y Planificacion de la Economia,” Cuestiones de la Economia Planificada, Vol. 3, No. 3 (May-June 1980). . Popular Power National Assembly, Interview (Havana: 1987). Sindicato National de Trabajadores Agropecuarios y Forestales. “Palabras de Introduction a la Discussion de1 Informe al IV Congreso de1 SNTAF” (Havana: SNTAF, 1986). Stokes, Bruce, Worker ParticiDation. Productivitv and the Qua& of Worklife, Worldwatch Paper 25, (Washington. DC: Worldwatch Institute. 1978). Tribajador&, haily newspaper of the Cdngress of Cuban Workers. “Trade debt and the Cuban EcoTurits, Richard, nomy, ” in Andrew Zimbalist (Ed.), Cuban Socialist Economy Toward the 1990s (Boulder, CO: Lynne Rienner, 1987). Union of Agiicultural and Forestry Workers, (SNTAF), Interview. member of Secretariat (Havana! 1987). Zimbalist, Andrew, “Cuba’s statistical and price systerns: Interpretation and reliability,” Latin American Perspectives, Vol. 15, No. 2 (1988). Zimbalist, Andrew (Ed.) Cuban Socialist Economy Toward the 1990s (Boulder, CO: Lynne Rienner, 1987). Zimbalist, Andrew. and Claes Brundenius. The Cuban Economy: Measurement and Analysis ‘of Socialist Performance (Baltimore MD: Johns Hopkins Press, 1989).