Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.
In my first A-level economics class, at the age of 16, I was taught these guiding principles; people only produce if they can make a profit, humans have infinite desires, while resources are limited, so everything must be rationed through the price mechanism – demand and supply.
No concept of production for need or socialist economics appeared on the curriculum. This was the early 1990s, the socialist bloc had collapsed and neo-liberalism was triumphant, or so we were told. Over the previous ten years, British Telecoms, the British water industry, British Rail, British Gas and British Coal had been packaged up and sold off to corporations and share holders.
Rational economic man, it was said, would ensure efficiency through privatisation and competition, even while, in the following years, prices rose and accidents increased in these fundamental services of the economy. Darwinism was recruited to the cause, as underdeveloped countries were forced to ‘liberalise’ their economies, selling their natural resources to foreign investors, rolling back the state, and removing obstacles to the ‘revolutionising’ power of market forces. In Latin America, the ‘lost decade’ of the 1980s and the ‘Washington Consensus’ of the 1990s saw debt crisis, restructuring and liberalisation plunge millions more into destitution, with or without inflated GDP statistics.
Amidst this neoliberal onslaught, Cuba stood almost alone. The collapse of the socialist bloc countries between 1989 and 1991 cut off 80 per cent of Cuba’s trade, GDP plummeted by 35 per cent and food shortages decreased caloric intake by nearly 40 per cent. The crisis was exacerbated by punitive laws tightening the US blockade in 1990, 1992, and 1996. Despite entering a ‘special period in time of peace’, the Cuban revolution did not renege on political commitments to socialist welfare, state planning and the predominance of state property, even while forced to introduce pragmatic reforms – limited concessions to market forces – to stimulate the economy and get vital goods to the people.
Following my A-levels, in the mid-1990s, I lived in Cuba with my sister – an austere time during the ‘Special Period’. Cubans dug deep to find what they needed to survive, as individuals and as a socialist society. In December 1995, we participated in the first solidarity brigade of the campaign from Britain, Rock around the Blockade, staying in an agricultural camp where hundreds of young Cubans had volunteered to labour in the fields, conscious that the revolution’s future depended on the population’s ability to feed itself. This was my first glimpse of the important relationship between consciousness and production, which lies at the heart of the economics of revolution.
Like anyone who has visited Cuba, I felt the omnipresence of Che Guevara on the island. What became clear, however, that Cubans recognised a more multifaceted individual than the one caricatured outside the island; the romantic guerrilla fighter with idealistic notions of how human beings are motivated and how social change is brought about. In the mid-1980s Cuba had pulled back from the Soviet model of socialism, entering a period known as ‘Rectification’. This involved an overt return to the ideas, approach and symbolism of Che. Two Cuban academics, Fernando Hernandez Heredia and Carlos Tablada, published seminal works providing the theoretical basis for this move – linking Che’s promotion of voluntary labour and consciousness to his Marxist analysis of capitalism and his critique of the Soviet system which had relied on capitalist tools to build socialism.
Che was not alone in the 1960s in criticising the USSR for neglecting questions of consciousness and failing to put human beings at the centre of development – many Marxist intellectuals in Western Europe and the US had done the same. Having seized state power, however, the Cuban revolutionary leaders moved beyond the critique to the task of transformation. Che faced the challenge of demonstrating that there was an alternative approach – the possibility of carrying out the transition to socialism in an underdeveloped country, without relying on capitalist mechanisms (the law of value, the profit motive, competition, material incentives, and all those A-Level principles). What practical policies could be implemented to transform the consciousness of individuals and put the working class in control, whilst increasing the wealth of the country?
My historian’s curiosity was stirred. Hardly any information about Che’s practical work as a member of the Cuban government between 1959 and 1965 was available. Che had created a system of economic management which was unique to socialism – the budgetary finance system; but what did that involve and how was it different? I set out to Cuba to find out.
This book is the result of six years of research, analysis, writing and editing. My investigations uncovered new archival material, including the internal transcripts of the bimonthly meetings in the Ministry of Industry headed by Che from 1961 and his critical notes on the Soviet Manual of Political Economy, predicting the return of capitalism to the socialist bloc; a document so controversial that it was kept under lock and key for 40 years. I met and interviewed fifty of Che’s closest colleagues and compañeros, some of whom had never spoken formally about their experiences of working at Che’s side while he served as President of the National Bank, head of the Department of Industrialisation and Minister of Industries between 1959-1965.
The early 1960s in Cuba was a period of turmoil and transition; nationalisations, the shift in trade to the socialist bloc, the introduction of planning, the exodus of professionals, the imposition of the US blockade, attack, sabotage and the threat of nuclear conflagration. Yet under Che’s leadership, Cuban industry stabilised, diversified and grew – testimony to his capacity for economic analysis, structural organisation and the mobilisation of resources, both human and material. His approach was based on his study of Marx’s analysis of the capitalist mode of production, his engagement with socialist political economy debates and his recourse to the managerial and technological advances of capitalist corporations. Che’s promotion of voluntary labour and his emphasis on consciousness were not idealism but part of the search for ways to undermine the law of value, moving away from capitalist mechanisms in the construction of socialism.
As Minister of Industries, Che set up nine research and development institutes, studying everything from the mechanisation of the sugar harvest and a sugar derivatives industry, nickel production, green medicine, oil exploration, the chemical industry, to computing and electronics (at a time when there was just one computer on the island – a betting machine for the greyhound races). He integrated psychology as a management tool, secretly organised the printing of new banknotes, devised a new salary scale, promoted workers’ management, inventions and innovations. In six tumultuous years, Che made an indelible contribution to Cuban development.
There have been few more poignant moments in history to talk about the economics of revolution. 2009 is the 50th anniversary of the Cuban revolution – contradictions and challenges persist, but the Revolution remains vibrant. We see the growing radicalisation of social movements and governments in Latin America and the consolidation of the Bolivarian Alternative for the Americas (ALBA) trade and cooperation agreements between them. This is also a period of acute crisis for the global capitalist system.
In late September 2008, George W Bush, perhaps the US’s most neoliberal, anti-regulation, aggressively imperialist frontman in history declared: ‘The market is not functioning properly.’ Bankers, entrepreneurs, and moneyspinners, went from being hailed as the good guys who kept the economy dynamic, to facing public opprobrium and shareholder rage over the bonus systems which rewarded incompetence and greed.
Bush’s successor, Barack Obama, has poured enormous sums of money into the US economy, propping up failing banks and financial services, car manufacturers and the housing sector. Rational economic man has given way to an unprecedented level of state intervention in a desperate attempt to save the capitalist system – well beyond the state subsidiaries so mocked and criticised in the socialist countries by neoliberal commentators.
Huge companies like General Motors are going bankrupt, not because they are technologically stagnant or unproductive, but because of the restraints imposed by capitalism’s financial mechanisms and the crisis of profitability. Workers, skilled and manual, are being made redundant. Hundreds of US citizens join tent cities scattered around the capitals of highly industrialised US states, not because there are insufficient houses, but because families are thrown onto the street when they can’t afford to pay rent and mortgages. Where is the rationality in any of this? In London, at the G20 in April, Obama and Prime Minister Brown recognised the end of the Washington Consensus. After years of rolling back the state, governments around the world are now impelled to intervene.
Guevara was right to recognise the technological advances of the capitalist corporations and aspire to their high productivity and efficiency. But he was also correct in the view that state planning and centralised budgets are the only rational way to organise the economy; with production for people’s need, not for financial profit. In rescuing Guevara’s work as a member of the Cuban government, this book hopes to place his economic ideas firmly on the table for consideration in the search for alternatives to the bitter legacy and human suffering of collapsing market economies.
Che Guevara: The Economics of Revolution by Helen Yaffe,
Palgrave Macmillan, 2009, 368pp, hbk £70, pbk £17.99
Debate this article and the Cuban revolution’s relevance for the left in our forums
What if it's not us who are sick, asks Rod Tweedy, but a system at odds with who we are as social beings?
Survivors of the fire are still relying on thousands of community volunteers, writes Dan Renwick - but the failed council is plotting a comeback
The people could reach a democratic and non-violent solution if they were freed from US meddling, argues Boaventura de Sousa Santos
A decade after the start of the crash, economic power is in our hands – we must take it, writes Ann Pettifor
Nick Dowson looks at the new wave of co-ops and community groups where people are building their own truly affordable homes
Hsiao-Hung Pai meets people affected by the fire, and finds sadness and suffering mixed with a continuing wariness of the official investigations
Chris Williamson MP, winner of the election's tightest marginal, Derby North, and recently reappointed shadow minister for fire services, talks to Ashish Ghadiali about Jeremy Corbyn, the housing crisis and winning from the left
The Corbyn-supporting group is preparing for another election at any moment, writes Adam Peggs – and now has the potential to create powerful training initiatives, union links and party reform efforts
With the rise of Corbyn, is there still a place for the Green Party?
Former Green principal speaker Derek Wall says the party may struggle in the battle for votes, but can still be important in the battle of ideas
Fearless Cities: the new urban movements
A wave of new municipalist movements has been experimenting with how to take – and transform – power in cities large and small. Bertie Russell and Oscar Reyes report on the growing success of radical urban politics around the world
A musical fightback against school arts cuts
Elliot Clay on why his new musical turns the spotlight on the damage austerity has done to arts education, through the story of one school band's battle
Neoliberalism: the break-up tour
Sarah Woods and Andrew Simms ask why, given the trail of destruction it has left, we are still dancing to the neoliberal tune
Cat Smith MP: ‘Jeremy Corbyn has authenticity. You can’t fake that’
Cat Smith, shadow minister for voter engagement and youth affairs and one of the original parliamentary backers of Corbyn’s leadership, speaks to Ashish Ghadiali
To stop the BBC interviewing climate deniers, we need to make climate change less boring
To stop cranks like Lord Lawson getting airtime, we need to provoke more interesting debates around climate change than whether it's real or not, writes Leo Barasi
Tory Glastonbury? Money can’t buy you cultural relevance
Adam Peggs on why the left has more fun
Essay: After neoliberalism, what next?
There are economically-viable, socially-desirable alternatives to the failed neoliberal economic model, writes Jayati Ghosh
With the new nuclear ban treaty, it’s time to scrap Trident – and spend the money on our NHS
As a doctor, I want to see money spent on healthcare not warfare, writes David McCoy - Britain should join the growing international movement for disarmament
Inglorious Empire: What the British Did to India
Inglorious Empire: What the British Did to India, by Shashi Tharoor, reviewed by Ian Sinclair
A Death Retold in Truth and Rumour
A Death Retold in Truth and Rumour: Kenya, Britain and the Julie Ward Murder, by Grace A Musila, reviewed by Allen Oarbrook
‘We remembered that convictions can inspire and motivate people’: interview with Lisa Nandy MP
The general election changed the rules, but there are still tricky issues for Labour to face, Lisa Nandy tells Ashish Ghadiali
Everything you know about Ebola is wrong
Vicky Crowcroft reviews Ebola: How a People’s Science Helped End an Epidemic, by Paul Richards
Job vacancy: Red Pepper is looking for an online editor
Closing date for applications: 1 September.
Theresa May’s new porn law is ridiculous – but dangerous
The law is almost impossible to enforce, argues Lily Sheehan, but it could still set a bad precedent
Interview: Queer British Art
James O'Nions talks to author Alex Pilcher about the Tate’s Queer British Art exhibition and her book A Queer Little History of Art
Cable the enabler: new Lib Dem leader shows a party in crisis
Vince Cable's stale politics and collusion with the Conservatives belong in the dustbin of history, writes Adam Peggs
Anti-Corbyn groupthink and the media: how pundits called the election so wrong
Reporting based on the current consensus will always vastly underestimate the possibility of change, argues James Fox
Michael Cashman: Commander of the Blairite Empire
Lord Cashman, a candidate in Labour’s internal elections, claims to stand for Labour’s grassroots members. He is a phony, writes Cathy Cole
Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part
Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper
Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s
Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach
Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.
Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite
Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead
Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee
Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power
The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced
India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya