The Knowledge Economy and Socialism is an important contribution to the discussion of the future of socialism in Cuba and globally, finds Orlando Hill

Cuba is going through arguably the most serious period in its history. The slight thaw in the US relationship during Obama’s presidency was thrown into deep freeze at the twilight of Trump’s first term when Cuba was reinstated onto the State Sponsors of Terrorism list. Biden left it untouched. On 30 October, the UN general assembly once again voted on the resolution, titled ‘Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba.’ It passed with 187 votes in favour, two against (Israel and the US), and one abstention (Moldova).

The resolution is unbinding, and the US has ignored it. The US not only bans its firms from dealing with Cuba, but also punishes foreign companies that have ties with the Caribbean Island. Not being able to trade directly with the world means that Cubans go without very basic items. Cuba has a world-leading health system exporting medical services, but its citizens cannot access paracetamol. Its free, universal education system might be the envy of the world, but students make do with a few exercise books, pens and pencils.

Cuba is a small island nation with of a population of eleven million which probably will never exceed twelve million (p.126). Like all small nations, whatever it produces for national consumption will be small scale with a high cost per unit. Therefore, achieving economies of scale corresponds necessarily to an export economy.

That has been the country’s historical role since colonial days: a source of primary agricultural products (sugar and tobacco). After the revolution of 1959 and the proclamation adopting socialism in 1961, which consequently led to closer ties to the Soviet Union and the eastern European bloc, the terms of trade improved which led to a rise in the standard of living. Cuba has ‘an infant mortality rate below six per 1,000 live births, a life expectancy of 77.9 years, a 99.8 percent literacy rate among adults, universal schooling among children, an unemployment rate below 2 percent, and the world’s highest per capita number of medical doctors and teachers’ (p.156). Cuba occupies the 59^th place among 187 countries in the UN’s Human Development ranking (p.75). However, Cuba has continued with its historical role as a primary exporter whose main export product is still tobacco, representing 25% of total export.

Challenge of the knowledge economy

Cuba’s revolution and national identity are based on two factors: sovereignty and social justice. Cubans have a saying that you share what you have, not simply what you have left over. However, socialising poverty may be ethically correct, but it is not sustainable. Moreover, faced with an aging population, Lage argues that if Cuba is to maintain the two fundamental pillars of its revolution, it has to move into the production of high-added value goods.

Another crucial point in Lage ’s argument is that the world has moved onto a new stage in its development which he refers to as the knowledge economy. Knowledge has always been an important factor in the production of goods and services. The novelty is that there are now whole sectors of the economy dedicated to the production and distribution of knowledge rather than tangible goods.

Lage, as a committed communist, warns readers that this book ‘is written to defend socialism. Those antagonistic to this goal can stop reading now’ (p.20). In his view, capitalism is not only unfair, but also dysfunctional when producing knowledge. The production of knowledge is an accumulative process. New knowledge is built on previous knowledge. Capitalism, with its emphasis on private property, denies the common use of accumulated knowledge. Researchers ‘find that many pieces of knowledge they need for a project are already the property of someone with the right to deny their use or demand payment. The transaction costs may be enormous and dissuasive, and the whole system could hinder scientific knowledge’ (p.32). Marx predicted the end of capitalism not because of its injustice, but more because of the contradiction of private ownership and technological progress.

Lage is also critical of the overly centralised and bureaucratic style of socialism practised in the USSR and Eastern Bloc. According to him, the system worked up to the 1960s in a period of heavy industrialisation, but not when the application of knowledge becomes the main factor in the development of the forces of production. ‘Detailed and rigid planning and directing the economy with administrative methods and highly centralized decisions certainly do not create a fertile context for innovation’ (p.276). In the 1980s, the USSR had one-quarter of the world’s scientists and half of the engineers, but as Che Guevarra pointed out in 1965, technology in the soviet republics had remained stagnant. Social ownership, which is the basis of social justice, should not be confused with centralised planning. According to Lage, this mistake derives from the origins of modern socialism. This led to the idea that the application of certain laws of the economy could mechanically predict and direct economic development. Lage does not defend a return to irrationality, but an understanding that things are a bit more complicated.

Democracy for development

As a biologist, Lage understands that ‘living systems evolve by adaptive selection, that it is, by the accumulation of changes generated almost at random (exploring the realm of what is possible), followed by a selection and fixation of those changes that produce evolutionary advantage’ (p.277). For that to happen in the economy, there needs to be a consolidation of popular democracy. Space has to be open for innovation and exploration. The consequences will be unpredictable. Some of these innovations might go extinct, but the connection between innovation and production selects those with advantageous changes. Usually, arguments from evolutionary biology are used to support the most reactionary conclusions, so this take is an interesting reversal of the standard trope.

Education is at the root of the Cuban revolution. As early as 1961, Fidel set a challenge to eradicate illiteracy in a year. This was seen as impossible, but it was accomplished thanks to the commitment of the youth who went out to teach the campesinos how to read. Cuba understands that ‘education, health, science and culture are, in today’s world, preconditions for economic development’ (p.75). You do not develop the economy so as to achieve those objectives. ‘Social justice is achieved through politics, not through the economy. Economic development will come later based on politics’ (p.75).

The vast investment in education creates a problem of brain drain. The cost of educating a professional was estimated at US$30,000. Emigration represents a significant transfer from Global South to developed economies. It is objectively the South subsidising the North.

Although Lage admits that there are cases in which personal life makes the decision to emigrate understandable, he does not have much sympathy for the highly qualified professionals who deserted Cuba in the mist of the battle for development, lured by a superior individual standard of living. However, the problem of the brain drain has to be faced objectively. The policy of growth in national science and technological innovation must be resumed. This involves improving the basic infrastructure, and increasing communication with institutions in other countries.

Housing is a serious issue in Cuba. Most of the professionals who are in their most creative period of their lives ‘have not had the time or conditions to build a solid material foundation for their personal and family lives’ (p.289). However, fixing that will depend on ending the economic, financial and commercial embargo imposed by the US and backed by only one other country, Israel. That is where we can have an impact by strengthening the Cuba solidarity campaign to end the embargo. For further information on how you can get more involved visit the Cuba Solidarity Campaign.