While President Obamas visit to Cuba three months ago had little effect on Cubas geriatric leadership, his decision to make it easier for Americans to travel to the island appears to have ignited a pro-freedom spark among the Cuban people, especially the young.
Thats my take-away from a recent visit to the "socialist paradise." I found hope, if not optimism, that things will get better.
The United States could give that hope a boost by doing away with the Cuban trade embargo, which has put the squeeze on the Cuban people for more than five decades, but has done little to deter the communist governments abuses. Obamas executive orders have made it easier for Americans, particularly Cuban Americans, to travel to the island. But if Americans want to see a freer Cuba, Congress should repeal the embargo.
Historically, the Castros have used the embargothey call it a "blockade"to blame the United States for Cubas poverty and other problems. Like any trade restriction, the embargo has made Cuba poorer. But it is not the underlying cause of Cubas problems.
Cubas poverty is a consequence of the countrys economic system, which is an appendage of its political system. Put simply, state ownership and management of major industry, from tourism and cigar-making to sugar milling and oil refining, has made a mess of the economy. The people pay the price.
In the few areas where Raul Castro has allowed some modest market-oriented economic reforms, things are somewhat better. In 2011, for example, he relaxed restrictions on renting out private homes to guests and operating private restaurants. Those sectors have seen some improvements. Compared with the large and often-decaying state-run hotels, private guest homes typically are cleaner, better maintained and less expensive.
The private restaurants also are typically more appealing than their government-run competitors. But as I noticed during my visit, their menus are strikingly similar, with limited choices due to the governments control of the supply chain, which invariably results in overproduction of some products and shortages of others.
The United States cannot impose reforms from afar. Reform has to originate in Cuba. But ending the embargo could help spur the process.
Economists have long appreciated that international trade, in addition to its economic benefits, promotes peace and cultural understanding, and helps undermine prejudices.
Increased commerce between the United States and Cuba would help more Cubans learn how a market economys "rules of the game" create opportunity and promote prosperity; this would create a demand for more of the same at home.
Economists Peter Leeson and Russel Sobel call this phenomenon "contagious capitalism." Leeson and Sobel studied changes in economic freedom among 100 countries during the period 1985 to 2000. They were especially interested in seeing if economic policy changes in one country would lead to similar changes among its geographically closest trading partners. And, indeed, the answer was yeseconomic reform is often contagious.
A Cuban university student I met in Havana seemed to understand this. He was pleased to learn I was from the United States and taught at a U.S. university. "It is good when more Americans come to Cuba. It helps us become a little freer," he confided.
He told me to ignore the anti-U.S. billboards and signs I would see in my travels. "Know that 85 percent of Cubans will be happy you are here," he said. After a week in the country, I got the impression that his estimate was on the low side.
Pro-U.S. sentiment is running high in Cuba since Obamas visit. If U.S. politicians can find the will to repeal the embargo, it might just be the nudge Cuba needs to make the market reforms that will loosen more of the shackles that bind the Cuban economy and people.
|Benjamin Powell is a Senior Fellow at the Independent Institute, Director of the Free Market Institute at Texas Tech University. He Independent Institute books include The Economics of Immigration: Market-Based Approaches, Social Science, and Public Policy, Housing America: Building out of Crisis, and Making Poor Nations Rich.|
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