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Cuba, Reforma

Cuba: Reforming the System Won’t Do Much

It is not a question of reforming the Communist system, but of cancelling it, and of willingly accepting that some citizens live better than the average.

[Leer en Español]

The Cuban regime wants to make reforms. That is very good. Cuban society is amazingly unproductive. They will start with the currency. Good thinking! It is useless to make reforms if the essential element, money, is worth very little. Especially in the neighborhood of the United States, where His Majesty the Dollar reigns, despite the fact that since 1971 its value has been measured subjectively and arbitrarily (in that year, Nixon eliminated the gold standard for U.S. currency).

Cuban reformers would do well to look at what is happening just 90 miles from their shores. The exiles, who left with the frightening cry of “we don’t want them, we don’t need them,” have thrived tremendously. In the USA, with nuances, things are done as they are done in the richest nations on earth.

Let’s talk about the 20%.

A few are “filthy” rich. They are billionaires. For others, it’s enough to have several million. There are many professionals who are very wealthy. Doctors, lawyers, accountants, bankers, architects. Almost all of them have money in the stock market, second homes, and buy art. To this group we can add the small businesspeople. Some of them will grow to become big businesspeople. Others will disappear, but along the way they will have learned a useful lesson.

The remaining 80% are part of the three middle social groups, plus the poor who struggle to integrate into them: the upper middle group, the middle-middle group, the lower middle group and the poor. Fortunately, social mobility is tremendous in the United States. I don’t speak of “classes” because it is a closed concept, which Marxists have appropriated (and so it goes).

The solemnly poor in the U.S. are those who have up to $25,000 a year for a family of four. Generally, they are poor but with cars, television, air conditioning, heating, drinking water, electricity, telephones, food stamps, police protection, the judicial system, free schools, and hospitals. They live in government “projects” or small subsidized apartments that, at least in South Florida, are called “Plan 8.”

20 and 80 %. That’s the “Pareto Principle.” It is not a law of nature to be enforced. It is a “principle”, an “observation” that is almost always fulfilled. Vilfredo Pareto was a great mathematician of Italian origin who taught at a Swiss university between the 19th and 20th centuries. He dedicated himself to finding out about the historical disparity between those who have resources and those who lack them. Wherever there is freedom to create wealth, there are inventors, entrepreneurs, people who stand out for their desire to succeed.

It should not be difficult for General Raúl Castro to understand the phenomenon. His father, Ángel Castro Argiz, who arrived from a Galician village in sandals, when he died in October 1956, he left behind a net worth of $8 million (today it would be more than $100), several hundred workers, a farm of 30 square kilometers, equipped with a cinema, run by his daughter Juanita, a school and a post office. Without a doubt, Ángel Castro belonged to the 20%.

Today the “Pareto Principle” has become a formula that is studied in marketing and in almost any activity: 20% of the causes generate 80% of the consequences. More or less 20% of the products generate 80% of the sales. 20 % of the salespeople support 80 % of the sales. And so on.

The problem with Pareto’s observation is that it leads to inequality in income ownership. Those who are part of the 20% receive a huge amount of the money that society generates.

This is anathema to Communists, who are determined that the results of all people should be approximately the same, because they have not realized that human beings are different, have different dreams and expect different remuneration, sometimes of an emotional nature.

This means that it is not a question of reforming the Communist system, but of cancelling it, and of willingly accepting that some citizens live better than the average. It is not a question of the disappearance of today’s three currencies, or of children or adults being able to drink a glass of milk when they please and not when centralized planning indicates it. It’s about asking Cubans if they want to continue with Communism or prefer to do their transactions as they do in the thirty most prosperous countries in the world.

That is the key.

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