cuba: economics red in tooth and claw arroz con mango humberto barreto depauw university...

Cuba: Economics Red in Tooth and Claw

Arroz con Mango

Humberto BarretoDePauw University

hbarreto@depauw.edu

Scale Model of Havana

Operation Peter Pan

Patria potestad

Maceo CheJune 14, 1845 and 1928

Religion

La Virgen de Regla

Art: Wifredo Lam

http://www.moma.org/collection/object.php?object_id=34666

The Jungle (1943)

El Tercer Mundo (1965)

Museo Nacional de Bellas Artes, Havana

Universidad de La Habana

Alma Mater

Mulata?

Health Care96%92%81%79%

Source:www.google.com/publicdataWorld Bank, World Development Indicators

26.7%

9.6%6.8%4.4%

Health Care96%92%81%79%

Source:www.google.com/publicdataWorld Bank, World Development Indicators

26.7

9.66.84.4

Why is US Infant Mortality so High?

Table 116. Infant Mortality Rates by Race, States and Island Areas: 1980 to 2007http://www.census.gov/compendia/statab/cats/births_deaths_marriages_divorces/deaths.html

Why is US Infant Mortality so High?

Table 116. Infant Mortality Rates by Race, States and Island Areas: 1980 to 2007http://www.census.gov/compendia/statab/cats/births_deaths_marriages_divorces/deaths.html

Education

Cuban Education

Argentina Bolivia Brazil Chile Columbia Cuba Mexico0

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4th Grade Math Achievement

Argentina Bolivia Brazil Chile Columbia Cuba Mexico0

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100

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400

4th Grade Language Achievement

From Carnoy, Table 4.1B, p. 66; Laboratorio Latinoamericano de Evaluación de la Calidad de Educación, 1997-98

Why such High Scores?

Argentina Bolivia Brazil Chile Columbia Cuba Mexico0

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14th Grade Teacher Education

Secondary

University

From Carnoy, Table 4.1B, p. 66; Laboratorio Latinoamericano de Evaluación de la Calidad de Educación, 1997-98

“In the beginning of this study we asked why Cuban elementary schoolers score so much higher in math and language tests than children in other Latin American countries. The answer turns out to be fairly straightforward: Cuban children attend schools that are intensely focused on instruction and are staffed by well-trained, regularly supervised teachers in a social environment that is dedicated to high academic achievement for all social groups. Combining high-quality teaching with high academic expectations and a tightly controlled school management hierarchy with well-defined goals is what makes the Cuban system tick. It distinguishes Cuban education from other systems in Latin America. In essence, Cuban education gives most Cuban pupils a primary education that only upper-middle-class children receive in other Latin American countries.” (Carnoy, p. 141)

It’s Labor, not Capital

Why such High Scores?

Cuba’s Economic Performance

MaddisonData.xls

Why is Cuba’s Economy so Bad?

Because Cuba’s economy is based on a Soviet-style government bureaucracy that does a poor job of allocating resources and generating economic growth.

Economics: La Libreta

Economics: Labor Markets

• Taxi drivers– State jobs pay from 200 to 800 pesos per month– I paid 5 CUCs from the airport to my hotel– Who drives taxis?

• My cousin’s career switch– HR Manager at a hospital smoked pork factory– Why did he switch?

Economics: Entrepreneurship

• Paladares– An oasis of free markets

• “Se permuta”– How housing works

• Tour Operator– “Ay, Humberto, es imposible.”

Economics: Cephalization

An evolutionary process whereby nervous tissue concentrates at one end of an organism, producing a head that controls the rest of the body

Economics: Cephalization

“When uncertainty is present and the task of deciding what to do and how to do it takes the ascendancy over that of execution, the internal organization of the productive groups is no longer a matter of indifference or a mechanical detail. Centralization of this deciding and controlling function is imperative, a process of "cephalization," such as has taken place in the evolution of organic life, is inevitable, and for the same reasons as in the case of biological evolution.”

http://www.econlib.org/library/Knight/knRUP8.html#III.IX.8

Frank Knight, Risk, Uncertainty, and Profit

Economics: CephalizationThe Cuban economy has no effective way of choosing managers and leaders of individual units of production.

It does a poor job of replacing ineffective managers.

It is exceptionally bad at transferring leadership positions from old to young.

Freakonomics: The Church of Scionology

Politics: Succession

19 April 2011New York TimesFront Page Article“Cuba Lays Foundation for a New Leader”HAVANA — Cuba on Tuesday made the most significant change to its leadership since the 1959 revolution, naming someone other than the Castro brothers for the first time to fill the second-highest position in the Communist Party and possibly setting the stage for their eventual successor.

Conclusion