Very few socialist figures are as recognizable as Che Guevara. His work as an economist, however, is less recognized. From 1959-1965, Che was the president of the National Bank and worked as the Minister of Industries. In these roles, he overhauled the Cuban economy and expanded socialist economic theory. On the 57th anniversary of his execution, there is no better time than now to explore his economic theory.
“I thought you wanted a good communist“
Che became the president of the National Bank during a meeting of ministers addressing the exodus of property-owning Cubans. Fidel Castro, looking for a new economic lead, asked, “Who is a good economist?” Che, in a daze, raised his hand; however, once realization struck, Che clarified, “I thought you wanted a good communist.” Despite the immediate confusion, Che quickly went to work and showed himself to be up to the task.
Stemming from the consequences of imperialism, Cuba’s economic capacity was — to be generous — uneven. Its productive forces were allotted to U.S. owned companies and the sugar industry. The former drove revenue toward a foreign private sector, thus reducing their developmental capacity. The latter, as explained by Helen Yaffe in her book “Che Guevara: The Economics of Revolution” caused the issues inherent to sugar production:
The seasonal demands of the sugar industry, which dominated the island, meant that underemployment and severe rural poverty were endemic… the economy was heavily reliant on imports and exports, mainly sugar-related, and trade was dominated by US interests.
The primary contradictions that had to be addressed at that time were a result of U.S. capital interests — much like today. Acquiescence meant death of the revolution, but revolt bred the potential for destitution.
The BFS and the law of value
Che was at the helm of various economic maneuvers that protected Cuba from aggressive U.S. tactics — like changing the bank notes, thus reducing dependence on foreign inflationary pressures. Many people are aware of the agrarian reform — less are aware of how limited it was — but Che’s economic policy hinged on the Budgetary Finance System (BFS). For those familiar with the Soviet economy under Lenin and Stalin, the budgetary financial system is hardly an innovation. However, Cuba’s implementation of the BFS while the USSR was shifting away from this model demonstrated an ability to analyze the material conditions affecting Cuban society.
Che supported his reliance on the BFS with his interpretation of Marx’s theory of value and the use of commodities. Che believed that in a state-controlled system there is no exchange of ownership while property moves between institutions. The objective was to contain domestic production and trade within the state-controlled systems, which would practically eliminate the profit motive. With revenue primarily contained within state industries, there was no need for commodities to be transferred away from workers; so Che used money as an accounting tool to track productivity and address inefficiencies. However, private markets — albeit reduced — continued to exist, even after the revolution. For Che, the hope was that BFS would act as the dam preventing existing markets from expanding while simultaneously industrializing the country.
Economic foco
Contingent to the success of the BFS was the consciousness of workers. A primary objective of Che’s plan was to put a variety of resources toward education so that workers would eventually rely on moral incentives and not material incentives. This principle correctly determines that there is a dialectical relationship between consciousness and production — one that Che acknowledges — but it assumes a mutual exclusivity between the material and the moral and that this contradiction must be addressed. Che’s response is to emphasize the latter.
The Guevarista pendulum
57 years after his death, Che’s theories still impact the world — most notably in Cuba. Shortly after leaving Cuba in 1965, the ministers eliminated the BFS and expanded markets in hopes of emulating the Soviet model. This was short lived. Two years later, they returned to the BFS in hopes of holding the profit motive at bay. Helen Yaffe explains this to be the Guevarista Pendulum.
In “Che Guevara’s Enduring Legacy: Not the Foco But the Theory of Socialist Construction”, Helen Yaffe quotes Alfredo Gonzalez Gutierrez:
Some aspects of Che’s ideas have become redundant today because of new realities. But the way in which he thought about problems is still relevant and the way he identified the underlying problem was more profound than that of any person in our context…
The Cuban economy under Che is just one model worth examining. Like Che, as socialists, we must grapple with the construction of a worker-run economy and learn how to adapt it to the conditions of the day.
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