PhD. C. Marxlenin Pérez: Hello, how are you? How nice to greet you again. Welcome to “Cuadrando la Caja” (Cashflow), a television proposal to debate, question and reach consensus from Cuban socialism.
I am Marxlenin Perez and I welcome you to this special program, where we will talk about two concepts that have become more controversial in recent times: war economy and economic war in Cuba. Do you think it is relevant to talk about war economy in our current circumstances? If you are interested in the subject, join us.
To contextualize these concepts in our country, I welcome Dr. C. Ayuban Gutiérrez, professor at the Faculty of Economics of the University of Havana.
PhD. C. Ayuban Gutiérrez Quintanilla: Thank you very much for the invitation.
PhD. C. Marxlenin Pérez: To you, who always respond to our call. You are already part of the family. This panel is part of the “Cuadrando la Caja” family.
I would also like to introduce Mr. Adriano Garcia, policy expert and part of the strategic planning directorate of the Ministry of Economy and Planning. Welcome, Mr. Adriano García Hernández.
Adriano García Hernández: Thank you very much.
PhD. C. Marxlenin Pérez: And with us, my colleague and friend, Rafael Montejo, who has been the host and scriptwriter of our program. He is also a professor at the…
M. Sc. Rafael Montejo Véliz: Center for Management Techniques Studies at the University of Havana.
PhD. C. Marxlenin Pérez: Welcome!
M. Sc. Rafael Montejo Véliz: Thank you for the invitation.
PhD. C. Marxlenin Pérez: To all three of you, thank you for accepting our invitation. Let’s start with the topic we are proposing today.
First, let’s make a theoretical introduction to briefly contextualize and conceptualize. I would like to start with Adriano, what is war economy and what do we mean by economic war? Are they the same? What are their differences?
Adriano García Hernández: Let’s start with the economic war.
The economic war we are suffering is centered on the blockade, from its origins. Let us remember that there are several laws and resolutions in this framework, including the Trading with the Enemy Act of 1917, which justifies coercive measures against the enemy in situations of war and national emergency.
In 1977, a new law was enacted that exempts the president from the application of that law only in case of national emergencies. However, it continues to be applied to Cuba.
To say that we are not the object of an economic war would be to be more benevolent to the enemy than to us. It is clear that whoever thinks that imperialism will accept a socialist revolution under its nose and will not try to destroy it, does not understand the essence of imperialism, as Martí, Che and Fidel taught us.
We could speak of the intensification and sophistication of the blockade. Now it is more powerful and technologies allow for a more meticulous and surgical persecution. This is not a clean conflict; it is a dirty war, with methods of pressure, coercion and promotion of corruption. It is important to note that this war intensifies when there is more weakness in our situation, as happened in the 1990s and, logically, now with COVID-19 and the global crisis.
Measures have been implemented that had not been seen before, such as restrictions on tourism and the lack of supplies, for example, oil for our aircraft in Argentina, something that had been done for decades. In short, this situation is becoming more complex and more viciously applied.
PhD. C. Marxlenin Pérez: More precisely.
Adriano García Hernández: … and with more precision. The war economy, I am going to conceptualize it: it is not a Cuban fabrication, it is a concept that exists, which refers to how the economy is organized to face conditions of war conflict.
It is a concept established for war situations, where it is necessary to concentrate resources and efforts to meet the needs of the army, which generates an expense that does not have a clear economic compensation. This implies a series of policies and measures.
First, it requires the mobilization and reallocation of resources according to these priorities. This often entails price control and rationing, as it is necessary to direct access to certain resources to make them feasible to obtain.
The war economy also includes the redirection of productive activity to meet defense needs and investment efforts. The logic is to prioritize the actions and needs of the battlefield: the phrase “everything to the front” reflects this, while the rearguard must assume sacrifices, providing resources to an unforeseen expense and satisfying basic subsistence needs.
This focuses on using national resources, without seeking high competitiveness, but ensuring that it is sustained with local resources and efforts. In addition, regulatory measures are required, especially financial ones, to capture financing and achieve a forced redistribution of wealth towards priority activities. All of this requires centralization in management, aligning the actions of state and social business agents with discipline. It is a matter of redirecting production and coordinating production, distribution and consumption according to needs, thus breaking with the recognized mercantile economic logic and rationality, in order to face a situation of exceptionality.
PhD. C. Marxlenin Pérez: Someone could argue: “But you are not in an economic war”. I imagine that some will say that we are exaggerating, pointing out that no bombs have fallen and that you are not at war. However, couldn’t there be a more schematic, Hollywood-style conception of when a country and its economy are at war? Cubadebate
From what Adriano said and our daily circumstances, we can understand that Cuba is indeed in a situation of economic war and has been since the beginning of the revolution.
M. Rafael Montejo Véliz: The issue is quite complex but necessary. First, we must distinguish between two terms that may seem similar.
The economic war is apparently focused only on economic aspects, but as Adriano mentioned, it is not only the economy. Today, economic warfare encompasses many other factors, including psychological, cultural, communicational, diplomatic and political aspects. There is cognitive and emotional warfare; in essence, a lot of resources are directed at making another country’s economy ostensibly deteriorate.
PhD. C. Marxlenin Perez: The so-called hybrid wars?
M. Sc. Rafael Montejo Véliz: …seek that the population itself responds to that situation and seeks to change the regime. There is not much more to look for behind this purpose, regardless of who is the aggressor and who is the attacked country in this case of economic warfare. Therefore, this also implies how the aggressor defends itself. This must move to a phase of active defense, which includes, as Adriano explained, economic aspects in various areas that he described.
I would like to emphasize that mankind has lived in war practically since its origin. There is ample experience, and at some point it was discovered that war can be a factor of economic development. It is worth mentioning that today in the world, not only in Cuba, there are according to some publications around 100 hotbeds of war.
The world is in a state of permanent war.
Some conflicts are more notorious, such as those we know about in Africa, Asia and the Middle East. In addition to the real and hot conflict, there are pre-war elements.
It is not only about the use of force or economic aggression, but also about the threat of the use of force. This creates conditions in which one has to prepare and adapt the economy to respond to those circumstances.
Thus, there are pre-war, war and post-war elements of recovery that are permanently present. The war becomes an essential and transversal element that affects the whole economy and the life of society in general, especially the economy.
An important point is that economic warfare is also conceived in peacetime. This means that aggression can occur without a direct military exchange. Under these circumstances, a series of measures are necessary, which is contradictory, as it generates tensions and contradictions, as Adriano mentioned.
However, when we look at countries (including our own), they all act as if they are not at war. Human nature tends to behave as if it were not in extraordinary circumstances, which also generates tensions. In addition, the internal effect in each country varies, as different social sectors, classes and income levels experience these rigors differently, generating more contradictions.
PhD. C. Marxlenin Perez: You made me think about what you mentioned, because it has to do with the normalization of this type of wars, promoted by capitalist imperialism, which has led to establish certain conditions of hostility towards countries, especially those that have tried to build a different system, away from the logic of capital. This allows me to give you the opportunity to talk about the historical context and rescue the concept of war economy, which has an antecedent in Soviet Russia. But if you prefer, it is not necessary to go that far; handle it in the way you consider most useful for today’s debate.
PhD C. Ayuban Gutiérrez Quintanilla: I would like to begin by saying that wars are always instruments of power. They are a way of achieving objectives that have an economic background, and political, cultural, religious, etc. overtones as well. They are the result of the complexities and contradictions of the development of human history.
Economic warfare has the characteristic, as Montejo mentioned, that it takes place in times of peace, which adds a greater complexity to traditional warfare. In traditional warfare, war is experienced directly, while in economic warfare this is not the case, although it manifests itself in certain conflicts, some of which we are experiencing today.
For instance, we are in a technological war that is still developing; let’s remember what happened with the implementation of 5G and Huawei, and how the U.S. government arrested a top Huawei executive in Canada. There is also financial warfare; Cuba has been subject to financial warfare for a long time, as well as trade wars, which are very old.
It is interesting to note that trade wars have always been used when it has suited a power. England, for example, became the world’s leading power at the end of the mercantilist era thanks to its protectionism, which gave it almost 100 years of technological advantage over continental Europe. It then began to promote economic liberalism through successful ideological campaigns.
Regarding the war economy, there have been historical experiences that are associated with war conflicts. However, today Europe recognizes that there may be war economy situations that do not necessarily involve a war conflict, such as national catastrophes, resulting in a more local war economy in certain regions. COVID-19 is a recent example, as it disrupted the normal performance of economic relations, constituting a war economy.
Finally, during World War I, defining characteristics of what is understood as a war economy were established, such as autarky, which seeks to curb relations with the outside world and develop only through its own efforts. Rationing was used by England during this war, and in the Soviet Union, the famous “war communism” had a significant development that also contributed to the evolution of the theory of socialism.
PhD. C. Marxlenin Perez: I think this is a broad introduction to try to apply these two concepts to the Cuban case. In the next few minutes, we are going to talk about war economy and economic war from our perspective.
PhD. C. Marxlenin Perez: Now, how do we understand in our country, from our conditions, war economy and economic war? We talk about war economy, generally, from the country’s leadership, from research centers or universities. How are we relating to these two concepts, which seem to me essential for our circumstances?
M. Rafael Montejo Véliz: In the Cuban case, there are singularities.
One of them is that conventional warfare, not economic warfare, has been present.
Until 1970, there were armed gangs in Cuba.
From the Triumph of the Revolution until 1970, the country was constantly preparing for active defense due to the war zone and the presence of mercenaries.
During the 10 million harvest, mercenaries were still landing in places like Baracoa. It is important to keep in mind that this was not only an economic war, but a real war, a war of war.
In the 1990s, there were bombs, bacteriological aggressions that affected the population, including outbreaks of dengue fever that resulted in more than 100 children dying. During COVID-19, we were also denied resources that could have saved lives.
So, yes, we are talking about an economic war, but with the singularity that it is surrounded by the threat of an active, warlike war. I believe that this singularity, in the Cuban case, brings special nuances, since during these 66 years of revolution, keeping the peace has been an essential objective; avoiding a war and an open confrontation.
However, we cannot forget the Bay of Pigs episode, which is a milestone in our history and cannot be overlooked. That invasion is part of our historical account.
Therefore, I think it is important to pay attention to this singularity.
PhD. C. Marxlenin Perez: Yes, because you started by mentioning ’70, but recently we were commemorating the Bay of Pigs. It is clear that this is an economic war that is never solely economic.
M. Rafael Montejo Véliz: It is never only economic.Cubadebate
Dr. C. Marxlenin Pérez: That is so, although a central objective is perceived as causing damage, and a lot of damage, through economic factors. This leads me to connect with a question that I consider crucial: Is it pertinent to speak in terms of war economy in today’s Cuba? It is pertinent, Adriano.
Adriano García Hernández: Look, I am going to talk to you about relevance. When we in the government have mentioned a war economy, something we had not done before -not even in the hard circumstances of the special period- using that term now has to have a meaning. The first thing to clarify is to whom that message is essentially directed. If we declare ourselves as a war economy, it means that its operation is based on a logic that goes beyond the normal economic-mercantile rationality. We need to capture financing that comes from foreign investment; of course, we would give a bad signal if we interpret it narrowly. In that sense, we cannot expect a foreign investor to want to join the heroic effort to save socialism.
Dr. C. Marxlenin Pérez: A capitalist foreign investor.
Adriano García Hernández: Exactly. Besides, there is an issue that we must make very clear. When I was talking about this, I was thinking about how whoever runs the economy today must be considering how this economy operates compared to what he says, even though we are not in a war conflict. This is not due to additional spending generated by the war to sustain an army, but due to the drop in income. This drop is due to a number of factors, in addition to COVID; all these issues, together with the tightening of the blockade, amplify the situation. The persecution of our financial transactions and the supply of fuel to Cuba are topics that could give rise to a round table by themselves. Of course, I try to speak as little as possible and take for granted that we live in an economic war that never misses an opportunity to harm us in any way.
All these issues were achieved thanks to a concentration of the resources of the State, the Pentagon and the military-industrial complex, which allowed for major technological leaps to Silicon Valley. Really, when we observe that this is achieved in conditions where there is a leadership that interprets the needs of the people from underdevelopment, things like the ones we have witnessed can be accomplished. We won a war and created an atomic bomb in the Soviet Union under conditions of a very underdeveloped country.
If you talk about the excellence of military technology at the world level that Russia has, it is not a product of market competitiveness policies; it is clearly not.
When we look at our own history, we see how we defeated an army with few rifles at Giron, in Angola, and achieved literacy.
Having come out of a critical situation in the Special Period, where we had a much worse energy situation than today due to our total dependence, is remarkable.
The biotechnology pole, the energy revolution and the vaccine against COVID-19 were inspirations for the government, based on science, and they align with what Mariana Mazzucato conceptualized about mission-based policies. There is indeed an exploitable strength; however, when seeking our insertion, it is essential to understand that the ways of relating with the private sector, especially the foreign one, follow another logic.
In this sense, the priorities must be: to attract financing, generate resources, link up with income-producing activities, and substitute imports using high-impact national resources, such as energy and food security. These are the main priorities on which we must focus all our efforts, attending to the people in the most critical situation. It is essential to manage these circumstances with a logic that is not exactly market-based in certain domestic aspects, and to accept the logic of the market in the international economy; otherwise, we do not insert ourselves properly. This duality is part of how we understand the war economy, a subject that we have not explained and that we cannot leave implicit.
PhD. C. MarxLenin Pérez: Adriano, you have presented many important elements. Ayuban, I know that you surely wish to comment on some of them. Do you totally agree with the line Adriano has opened or do you wish to qualify something?
PhD. C. Ayuban Gutiérrez Quintanilla: I would like to qualify something Adriano has said, because I do not agree completely. First, I recognize that Cuba is a country under constant aggression. We are in a hybrid war, which manifests itself in an economic war and other types of war. That is a reality that cannot be ignored, especially considering that we face the greatest imperialist power in history, just 90 miles away. They use real instruments, from sanctions to blockades (some call it embargo); however, they are two different instruments. Although we have an economic blockade, it is not total. The definitions of the concepts can be confusing, and there are those who argue that Cuba exports or buys chicken from the United States, for example.
It cannot be denied that there are limitations, sanctions and aggressions; to do so is not to see the reality faced by the Cuban people and the Cuban economy. The concept of war economy cannot be seen in absolute terms; there are elements that work within a war economy, but the reality in which it develops is not the same as the one we have. I agree that we are in an exceptional situation, and hence the relationship with the concept of war economy, but I think there is a lot of room for different strategies. It is true that we need a proper management of centralization and decentralization, something that is not exclusive to Cuba; many capitalist countries have achieved a good relationship between the two to establish a dialectical approach.
It does not mean that we should eliminate the internal market. I do not believe that our market relations should be limited only to the external. That is to say, centralizing certain economic decisions and strategic resources does not imply denying the need for market relations in certain areas of economic life. Sometimes, it is misunderstood that having a market implies agreeing with a free market, but it must be a regulated market. In fact, capitalism has long since surpassed the free market and regulates it. Therefore, I do not entirely agree with Adriano that the market space is limited to the current situation; we are not in a classic war economy situation, where the market practically disappears.
This is important, especially for a country like ours, which is an island and faces blockades without much external effort. This discussion is perhaps one of the most polemic ones about the concept of war economy.
PhD. C. MarxLenin Perez: Let’s see what the Guru of Jatibonico has to tell us and, when we come back at the last moment of the program, I want to take up what Ayuban has left.
The Guru of Jatibonico:
No country on earth
as Cuba, year after year,
has suffered so much damage
by war economy.
A war that clings
to harm our people.
And although being independent
may not please a cruel neighbor,
our war is a destiny:
To be more efficient.
PhD. C. MarxLenin Pérez: And the Guru tells us that we must be more efficient. In this last moment of the program, we will dedicate it precisely to how to be more efficient from a war economy, and from the economic war to which we have been subjected since the first moment of our Revolution. But I know that Adriano has something to comment, in relation to what Ayuban had mentioned before about the Guru.
Adriano García Hernández: Of course, I would have reacted the same as him if I had heard what I said and how I said it. But obviously, it cannot be assumed that I am minimizing the role of the market. The central idea is that the similarity in the way the economy is conducted comes from making decisions that are too centralized in certain areas, without assuming the logic of the rationality of the ordinary market. We must make certain exceptions and sacrifice benefits for the sake of the country’s objectives. This implies a thorough review of the entire management and planning system, i.e., the logic of centralization and decentralization. We have a government program, but to structure it we need to incorporate the appropriate scientific content. In fact, in the formulation, the system of governance in science was added as point 10, which should preside over the whole message. We need to restructure the conception, structure, organization and functions of the State in each sphere, as well as the relationship between centralization and decentralization.
Regulation does not imply abolishing the market; in the interior we have more room for maneuver. There, the logic of labor in regulation prevails over the logic of capital. We must assume a system of relations that is not only typical of the rural era. The rules of the international market must be assumed as they are; if we want to insert ourselves, we have room for maneuver and we can give more weight to the social and solidarity economy.
Dr. C. MarxLenin Pérez: Which has to be nuanced by a socialist policy, obviously. Not only by a war economy, but by a socialist plan of production and social relations in general.
Adriano García Hernández: The war economy is the way in which socialism reacts to that war, but it is a singularity. You are talking about the transition, right? I am talking about the transition of the transition. How to get out of this complex situation of total crisis, prioritizing the essential issues. There is an analogy here with the historical leadership. In the 90s, the tactical-strategic initiative always showed Fidel and his sense of urgency in what was being done and coordination.
Dr. C. MarxLenin Pérez: That is why I am not afraid of the concept of war economy. In the historical conditions of our Revolution, comrade, either we assume a war economy or we will not advance. But undoubtedly, this awakens a certain fear, especially in some neo-liberal gurus. How do you see it in the final minutes, relating it to how to get out of our circumstances of crisis?
M. Sc. Rafael Montejo Véliz: Very briefly, I will try to be concise. When the government in mid-2024 announced that we are in a war economy, it generated many reactions in publications, both from those who support us and those who do not. However, the same is not said about Colombia, for example, a sister country that has been in internal war for a long time. But once you are in a war economy, you have to assume a General Staff to identify the potentialities and get out of that situation, improving. I think that is the real challenge Adriano was referring to, and there are many signs that it is possible, taking advantage of internal reserves and potentialities.
Dr. C. MarxLenin Pérez: With our endogenous resources, how can we get out of the impasse?
Dr. C. Ayuban Gutiérrez Quintanilla: The concern about the term is not only of neoliberal gurus and people outside Cuba. I believe that within the guild of economists and specialists it also generates certain reservations, because it is not a term normally associated to a categorical system of economics. There are many revolutionary economists in Cuba who understand perfectly well the issue of an economy under constant historical aggression, even before the Revolution, because the U.S. interventions were acts of aggression.
Dr. C. MarxLenin Pérez: Before the Revolution of 1959, because that was against the Revolution of 1968, which came from 1968.
Dr. C. Ayuban Gutiérrez Quintanilla: What happens is that the definition of war economy refers to a very specific situation that has been readapted to different conditions. The term war economy is not always applied in its extreme sense, which implies a restructuring and change in the use of certain instruments that are not considered applicable to the Cuban economy. For example, the issue of planning would mean returning to a totally centralized planning model, based on material resources. The war economy, I think many of us agree, requires planning, but within a context of mercantile monetary and market relations. That is an important difference with respect to what might occur in a war economy. Having priorities is logical and important; we all share this, and there are elements that are more of a priority than others, such as investments. Adriano was talking about fundamental investments. The Guru mentioned the issue of efficiency, because in a war economy overall efficiency is sacrificed in pursuit of increasing efficiency to achieve specific objectives, and that has a cost.
Dr. C. MarxLenin Perez: And isn’t that what we should be doing?
Dr. C. Ayuban Gutiérrez Quintanilla: It depends. There is a different management. One thing is the national management system of the economy under normal conditions and another, how the economy is managed in crisis. In crisis, it is crucial to prioritize: what is prioritized? Where are resources allocated? What mechanisms are used? To manage these resources, it is very important and it is not the same in a classic war economy as in an economy under aggression. That is, in this redefinition of the concept of war economy.
Dr. C. MarxLenin Pérez: I have just one minute left. One idea that is important to sustain, because I think we have made progress on the subject, but we have not reached a consensus on the use of war economy. We can leave it for the next program, but to round up the ideas we have handled so far, how can we conclude this topic in half a minute?
Adriano García Hernández: Simply that there are great similarities in the way a war economy operates, but with a different logic. It is necessary to specify very well what we mean by that and to project a change in the management and planning system that will allow us to assume that complexity at present.
Dr. C. MarxLenin Pérez: That General Staff.
M. Sc. Rafael Montejo Véliz: I believe that, under these exceptional conditions, a permanent General Staff of the economy is needed.
Dr. C. MarxLenin Pérez: Ayuban, do you agree with this?
Dr. C. Ayuban Gutiérrez Quintanilla: I totally agree, but there is a variable that is fundamental in a situation of economic war: time. That is vital. It is not only a matter of prioritizing, nor of having a centralized command for some decisions, nor of centralizing certain strategic resources, but of the speed with which changes are made. That is one advantage of centralizing certain economic decisions: to be able to do it more quickly and to direct resources where they are most needed, not only for today, but also for tomorrow.
Dr. C. Marx-Lenin Pérez: In terms of efficiency.
Adriano García Hernández: Regarding time, in the war paradigm, nothing gives more value to time than a war. A minimal difference between the General Staff and the communication with the base can decide whether you lose or win a battle. That is something that can be applied; but, logically, we must modernize our financial system and update many things from the point of view of public finance management. We also have to renew aspects of socialism that have worked well, but which we have not raised as questions asked by the classics, such as Fidel and Che, for which we have not yet found a solution. There is a component of renovation.
Dr. C. MarxLenin Pérez: Adriano, you have been insubordinate, talking about time at the last moment to close the program. I thank you for coming to talk about war economy and economic war in Cuba. It is a controversial topic that has many edges through which we can continue to address the issue. Remember that it is not enough to interpret or describe; we must participate together to transform our reality. What do you think about this issue? Remember that I count on you to transform our reality from Cuban socialism. See you soon.
Transcription: Yanet Muñoz Hernández and Anaylet Rodríguez Espinosa Gómez / IDEAS Multimedios
