America’s Berlin Wall

In October 2014, the UN General Assembly voted to recommend ending the US embargo on Cuba. Of the 193 UN members, 188 voted in favour. The only country siding with the US to continue the embargo was Israel. (The remaining three countries abstained.)

This is not the first time the UN has taken up the question. In fact, it is the 23rd time, having taken it up annually since 1992. On every occasion since 1992, the UN voted for the embargo to end. Israel remains the sole supporter to the US position.

Amit Narang, speaking for India, stated a common belief, that the embargo is a violation of the right of a sovereign state to development and to enjoy freedom of trade, economy, and navigation.

Hard to argue with that reasoning. In fact, hasn’t the US been the traditional champion of these values—in particular, arguing for the USSR to tear down the Berlin Wall in 1987? How is it that “America’s Berlin Wall” is any different?

Fast-forward to December 2014, when US President Barack Obama announced that he will re-establish diplomatic relations with Cuba. Immediately, there are hue and cry from pundits on the US news programmes that this is an outrage. Here are their most oft-stated reasons:

The US Is Losing Its Leverage with Cuba

This is an odd argument, as the US never actually established any real leverage with Cuba. The embargo has never been effective at stopping American goods from entering Cuba. Any visitor to Cuba can confirm that there is no shortage of products like Coca Cola in Cuban stores and restaurants. (Prominent American brands are either produced in Mexico under license or are shipped from the States to Mexico, thence to Cuba.) In addition, many other countries ship regularly to Cuba. Therefore, from a trade viewpoint, the embargo has been pointless. No leverage has been “lost.”

The US Is Opening Up Diplomatic Relations with a Ruthless Dictator

Those who have spent time in Cuba over the decades might well dispute whether the Castros have been more ruthless than in other countries. My own appraisal is that they’ve at times been ruthless with regard to political dissidents, but far more relaxed than many First World countries otherwise. Certainly, the atmosphere is less of a police state than in much of the First World, yet the Castro brothers have remained in power for over half a century—and Fidel was the world's longest serving political leader until illness forced him to step down. Although Cuba is undoubtedly a poor country, there is no sense of “desperation” to be seen on the streets. Indeed, Cubans often comment that they fear the US as an imperialist power that is more interested in policing the world than encouraging freedom.

The US Is Selling Out the Cuban People

For the most part, the Cuban people are not “crying out” for American-style freedom. It’s quite correct that the Cuban people lack personal wealth and the “stuff” that most Western countries’ citizens take for granted, but as Cubans in Cuba will state, they are fairly united in the belief that the American way of life breeds envy and greed. They value the fact that they are “one class” (the disparity in wages between a doctor and a farm worker is not substantial). This “equality” has served to unite them behind the government rather than rise up against it. They see the US bloqueo (blockade) not as a protest against the Castros, but as an oppressive effort that seeks to impoverish Cubans through a ban on trade.

So, how is it that the pundits on the US news programmes misunderstand the Cuban perspective to such a great degree? The answer, in large part, is the embargo itself, which limits travel between the two countries for the average person. Very few of the US pundits have actually been to Cuba, or even know someone who has. They tend to assume that the Cuban people see the Cuba/US relationship from the same perspective as Americans have been taught to see it. They do not.

Whenever any suggestion surfaces to open up trade with Cuba, the knee-jerk reaction by US media pundits is to say that, until the “brutal” Castro regime frees up the Cuban people, the US is morally obligated to maintain the all-but-valueless embargo.

How does this square with the other international relationships of the US? In the 1980s, the US supported Saddam Hussein, one of the world’s most ruthless leaders, with both arms and money. It also once supported an equally tyrannical Muammar Qaddafi and, in Panama, Manuel Noriega. But each of these relationships broke down when these leaders discontinued puppet-like control from Washington. Each leader was taken out.

Each was just as brutal when he was friends with the US and only became a “monster” in the US media when he deviated from the US dictate.

The US has never hesitated to back ruthless dictators. The issue has only been whether they would play ball with US interests. And herein lies the true reason for a half-century of vilification of the Castros and the unending bloqueo. The Castros never accepted the US as their puppeteer.

The issue has never been about communism. The US openly does business with communist countries every day. In fact, a largely communist country (China) is the US’s largest supplier of goods today.

And the US has never shirked from working hand-in-glove with dictators. The real issue is control. Small countries must accept that their lot is to be controlled by the empire, or they must be made to suffer.

So, what is the future of Cuba likely to be? My estimation (based upon decades of travel to Cuba and personal relationships with Cubans) is that, left alone, Cuba will slowly open up more to capitalism. (At one time, virtually every Cuban was an employee of the government. Today, about half of all Cubans are involved in private enterprise.)

This is inevitable, as the Cuban government is hopelessly inept with regard to economics and can no longer pay their citizenry. But through generations of communism, the majority of people now possess minimal ambition. Cuba has discouraged entrepreneurship on a large scale, so Cuban industry has failed to create substantial international trade.

The Cuban people understand that as the Castros fade from the political scene, they will have greater opportunity for free-market business. Yet, they have no desire to copy the American model, as it will destroy their strong sense of community and sharing.

If Cuba is left alone, what we should see would be a (very) slow transformation to a more free-market economy. However, I doubt this will happen. Instead, in a decade or so, the Castros will be dead, replaced by a new leadership that has cut deals with the US, and just as the Cuban people presently fear, Cuba will see a return to the Batista days. Cuba will return to being a fascist nation in which its leaders are tied directly to large business interests overseas. The money will come from the north, and the new Cuba will be transformed into another fascist “democracy.”

Presently, the Cuban people vote, but it’s clear to all concerned that this has no real meaning as to how Cuba is run. In the future, under “democracy,” the voter will have no more control over their government than they do now, but there will be the illusion of freedom.

Editor’s Note: Cuba represents just the kind of investment opportunity we are looking for in Crisis Speculator.

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