THE ENGINE OF SOLIDARISM



In capitalist countries, the power to create money (out of nothing) is in the hands of private banks, owned by a tiny fraction of the population. This is a recipe for the concentration of economic power in the hands of a small economic elite. This elite uses its means to buy political control. Barack Obama, too, was bought this way. We have high hopes of him and are elated he was elected. His election in itself was an important step forward. But we know he has little freedom of movement. Therefore, the change he has promised will be marginal, although this could still be significant. Unfortunately, Obama is not moving in the direction of economic democracy, nor suggesting the introduction of any solidarist principles. We do believe, however, he will clear the way for this. Another president, maybe in 1212, will flick the solidarist switch. But Cuba could still be the first to enlighten the world.

In Cuba the power of money creation is in the hands of the State, i.e. the Cuban Central Bank. But its potential is not realized, nor fully utilized. It can’t be, because the Cuban State does not utilize the full potential of the people. The whole of Cuba is an absolute monopoly, one large plantation where the workers have to buy their necessities in the plantation’s own shops. The State is basically the only owner and only entrepreneur, not in any way spurred on by competition, nor encouraged by the desire to make profit. This is a recipe for slow economic degeneration, which is visible everywhere. Buildings are crumbling, roads are potholed, not to mention the moral degeneration of the people. The degeneration progresses slowly. You can hold out for quite a while, but like Cuba’s ‘carcasos’ (vintage cars), there comes a day the economy is beyond repair.

The only cure for the crime of poverty is work

It is production that counts in any economy. You have to produce to consume. In fact, the main reason why people produce (work) is to consume. This is even true for the church pastor; if he doesn’t work, he will not consume. So, in order to raise the economic level of the Cuban people (which they all want), Cuba has to produce more. This is not rocket science. To increase production and thereby the economic level of the people, production must take place as effectively and efficiently as possible, at the lowest possible prices to ensure products will be affordable for the people. No amount of fiery speeches by Raul or Fidel Castro will make this happen.

It will happen, however,
a) if the Cuban people (not the State, nor a tiny elite, but every individual citizen) owns a larger or smaller part of Cuba’s ‘means of production’, i.e. owns stocks and shares in the companies that produce the goods and services society needs (companies such as farms, factories, shops, hotels etc.) and
b) if these privately owned ESOP-companies have to compete with each other and are free to make a profit (to be distributed to the workers working there). We explained earlier what ‘ESOP’ means (Employee Stock Ownership Plan) and what ESOP-companies are.

The Cuban Central Bank can easily finance the transfer of all State-held businesses to a large number of ESOP-companies, to be held by the workers and farmers who work there. It can do so by extending the required credit to these companies, thus enabling them to pay an equitable purchase price to the Cuban State. However, in accordance with the ESOP-tradition, the workers and farmers would not have to use their private savings to pay for their shares; these can be paid for with the dividends their shareholding entitles them to. In other words, the purchase price will be generated by these ESOP-companies themselves. This, too, is not rocket science. The next article will explain the rules to be adhered to in order to create money safely.