Thread by @red_dilettante

To understand what's really going on in Cuba right now -- the massive protests across the country -- you have to grasp three things:

(1.) The Leninist government's years-long crisis of legitimacy;

(2.) the causes of recent hyper-inflation;

(3.) the mixed politics of dissidents

The first has been a slow-burning crisis for years. Fidel himself was legitimately popular; Raul less so; & Diez-Canal, not at all. Opposition to the party tends to be an ironic mix: resentment about the one-party state (shading into anticommunism), & resentment about austerity.

The reason the government had been imposing austerity in recent years -- cutting state services, privatizing parts of the economy, opening up a large foreigner-focused hotel sector -- was partly the hope of pulling a China, & partly a scheme to get dollars for imports via tourism

Imports are important because as a small island, Cuba's never been able to sustain itself purely by its own industries & needed to import food, oil, machines, & other resources. On paper, the govt was trying to reverse this. In practice, Cuba's position has worsened consistently.

SOURCES - On the crisis of legitimacy stuff

(1.) dissentmagazine.org/article/cuba-w…

(2.) dissentmagazine.org/online_article…

(3.) translate.google.com/translate?sl=a…

This brings us directly to the second point: the causes of the current hyperinflation.

Cubans are suffering enormously right now from shortages & massively increased prices in basic goods and services. This is actually what all the protests are immediately about.

Why?

A typical Left take in the US is: the cause of the inflation is the embargo.

Now the embargo doesn't help: it blocks a major export market (the US) which could provide Cuba lots of $ for imports.

But it's decades old & thus around last year; hyperinflation wasn't. What changed?

The truth is, Cuba suffered from a perfect storm of two nasty shocks resulting in a balance of payments crisis.

The 1st was COVID, which radically increased the need for imports -- totally out of the govt's control.

But the 2nd was the choice to end the dual-currency system.

(oh crap I forgot a good source on the crisis of legitimacy stuff, adding it here:)

translate.google.com/translate?sl=a…

That was a lot of jargon, so let's explain:

Inflation is a general & continuous rise in prices. Prices go up when costs go up because firms in the first instance set their prices as a mark-up over their costs. When costs across the economy go up & stay up, prices must be raised.

A balance of payments crisis is (to oversimplify) when a country can't pay for key imports, and/or imports get suddenly more expensive, and/or imports >>> exports, and/or a country's currency depreciates against foreign currencies it uses for imports.

All tend to go together.

The significance of the dual currency is difficult to explain and probably requires its own thread. But it's in many ways the fulcrum point of this entire crisis. I'll try to be succinct, but this will not be as in-depth as I'd like so I apologize in advance if it's confusing.

Basically, any country can issue as much as it wants of *its own* currency, circulate it through the economy to accomplish particular goals (e.g. paying people to build a road or bridge), & receive it back in taxes. Inflation is not really tied to the amount of money circulating.

But if a country ever needs imports, it must use *other* countries' currency to pay. It might pay for country X's products in country X's cash. Realistically, though, it will use 1 of the 4 "reserve currencies" (dollar, euro, yen, pound) used in basically all int'l transactions.

It does not issue these currencies itself. They are, unlike its own currency, *scarce* -- it doesn't print them, it has to hoard them. Usually it gets them by exporting goods & services, priced in the currency it needs. This foreign currency is called foreign exchange, or forex.

Why all this money talk? Check out the basic biophysical structure of the Cuban economy.

Centuries of colonization that created a cash crop plantation economy + limited arable land = a country that can't feed itself.

What are the top imports? The same prices that have soared.

The last time Cuba had a BoP crisis was during the Special Period in the 90s after the fall of the USSR (its major trade partner). The currency collapsed, legal imports became impossible, and black market dollars (forex) circulated freely & were used even for domestic payments.

In that context, the party created a dual currency system that was essentially a way of first hoovering up and then carefully rationing the forex. This rationing system for forex persisted until 2020, when it was phased out just before the pandemic struck.

The way this worked is complicated, and I've been trying to avoid getting into it but I suppose I have to a bit. Will link to sources that go in depth.

The very short answer is that there were two pesos, the local peso and the "forex"-peso. The local peso could buy staple goods within the Cuban economy. The "forex"-peso theoretically had an exchange rate with the dollar (1 f-peso = 1 dollar), and so could buy imports.

Imports, that is, chosen at the discretion of the person holding the forex-peso. Most of Cuba's food was ofc imported. But the govt would do those imports & re-price the food in local pesos, so people could buy them using those. Forex-pesos were for industrial inputs & luxuries.

Most Cubans were paid in local pesos, meaning they could only buy goods priced in it. A few in strategic sectors (state firm, export firms, tourism) were paid partly or wholly in forex-pesos, which let them buy whatever imports they wanted or needed (sort of).

The logic: these sectors either require imported parts/materials for their production (e.g. machines made only abroad), produces forex revenues via exports (e.g. tourism getting dollars from tourists), or both. Hence, they need some of the state's forex directly or as incentive.

Now this was a twisted system in many ways.

Many Cubans had one foot in each peso.

Some Cubans w/ useful skills but paid only in local pesos (e.g. engineers) would switch to the arguably silly and foreigner-focused jobs the state paid in forex-pesos (e.g. tour guides).

Finally, individuals (not firms) holding the forex pesos were not actually buying things from international markets directly. The "convertibility" was, for them, nominal. (As I understand it state firms had more leeway but this is a bit fuzzy to me tbh, help appreciated.)

Instead they could use them in state-run import stores, where the govt had decided what luxuries to import and priced them in forex-pesos (which, bc pegged 1:1 to the dollar, cost about as much as the forex the govt had spent to get it).

What this meant is that the dual currency system was a way for the state to retain total control over forex. They were the ones who had almost all the real dollars in the Cuban economy (and continually sucked up dollar remittances from family members abroad through the stores)...

...and they rationed mostly partial and occasionally actual access to these dollars, and hence foreign purchasing power, to only those they approved of, through payment in forex-pesos.

It was a widely despised system, both because of its complexity and authoritarianism.

But...

...but, from a purely technical point of view, the dual currency system actually did work for something very important. Something so important that, when it was removed, this essentially precipitated the inflationary crisis. It kept the exchange rate stable.

It stabilized Cuba's exchange rate (making imports predictable and cheap) by keeping dollars in the country (forex outflows make forex more expensive) by preventing people from spending them on imports without approval (tho with methods more extreme than normal capital controls).

It also did all that while insulating the local peso from a convertibility requirement. That basically means that Cuba could spend as many local pesos as it wanted/needed to on infrastructure.

It was ingenious in some ways. I wouldn't have designed it how they did -- they should've made forex-pesos actually convertible & given everybody a small amount while still rationing, imho, among other issues -- but it undeniably kept the ship sailing & is marked by its absence.

Now, the Cuban govt -- which remember is trying to build tourism and pull a China, retaining control over the commanding heights while ceding some sectors to capitalists to build export potential -- wanted to get rid of the dual currency since 2013.

Not because it was unpopular among Cubans -- Leninists are, uh, not very responsive to public opinion until they absolutely have to be -- but really primarily because it was confusing to the foreigners whose dollars the state needed for its tourism-based development plan.

So after years of preparation (changing currency is a big, delicate operation), in 2019, the Cuban govt decided that it was going to finally merge the two pesos and give the new peso a peg to the dollar with more convertibility. They set out to do it at the start of 2020.

The Cuban state knew that this would mess with the exchange rate, which would raise the costs of imports, which would lead to higher prices. But it made up for this by raising wages -- in the state sector anyway. Non-state employees were left to "adjust" to the higher prices lol.

Oh sorry, where I said 2019 before, I meant 2020. So Zero Day, the merging of the currencies, happened at the start of 2021. Wish Twitter had an edit function haha. Anyway:

When COVID hit in 2020, the travel restrictions enacted around the world meant that the tourist dollars the state had literally spent years reconfiguring the economy around suddenly evaporated. Also, COVID made imports more expensive due to cost-increases in global logistics.

Also-also, despite Cuba's excellent and growing medical industry (they make their own ventilators and masks), it still imports many of its pharmaceuticals and medical equipment, so the demand for these spiked, raising the amount of forex the govt needed to spend in general.

All this led to inflation throughout 2020, as well as a contraction of the economy.

And when, in the face of all this, the Cuban state decided to end the dual currency system at the start of 2021, I think it made a crucial error.

That was the straw that broke the camel's back

Because remember that control over forex reserves (only the state having real dollars) and over the exchange rate (via controls on forex outflows) were the only leverage against inflation Cuba still had. When it gave these up, it caused a spiral that threatened people's survival.

Now, not only was the state finding it more expensive to import food (> prices), but this food was being paid for not in the local peso that was effectively subsidized to be affordable, but in a new peso rapidly depreciating against the dollar due to the collapsing exchange rate.

(meaning >>>>prices)

Now, I don't want to underplay the importance of the embargo, particularly the sanctions Trump placed in November 2020 on dollar-remittances to Cuba. These hurt more than the rest. Less forex being sent to family members in Cuba --> less forex on the island for imports by anybody

But this must be put in its proper context. Remittances are a big source of forex for Cuba. But Trump's sanctions didn't completely stop them and allowed them to be sent to close family (meaning the state can still hoover them up through taxes or dollar store type schemes); and

...and more importantly, the end of the dual currency made the state *less able* to *fight* Trump's sanctions. Under the new peso, the state needs to worry about dollars leaving the country more easily, affecting the exchange rate, draining more reserves, & worsening inflation.

In fact, in a self-own, the Cuban state just last month actually itself shut down dollar remittances entirely, not partially, for this reason. It cut into its own forex supply in the hopes this would be less damaging than the forex they'd lose otherwise.

reuters.com/world/americas…

So the cause of the hyperinflation is a combination of the enormous pressure on Cuba's balance of payments created by COVID combined with the party's own terrible timing and stubborn insistence on ending the dual currency system -- a natural disaster compounded by human error.

That error meant that the crisis's costs have fallen more on the working class of Cuba than they would've otherwise.

Even under the old system, it was state bureaucrats who controlled the forex, & they used it to make bad investments that ultimately left the island vulnerable.

The embargo is still important due to the way it blocks Cuba from a natural, massive export market.

But Cuba has other countries around the world it can export to, and does. Disaster + mismanagement are more central causes. And the result is deep, widespread anger at the govt.

SOURCES FOR HYPERINFLATION

DUAL CURRENCY

(1.) newleftreview.org/sidecar/posts/…

(2.) blogs.lse.ac.uk/latamcaribbean…

(3.) translate.google.com/translate?sl=a…

CAUSES & EFFECTS OF HYPERINFLATION

(1.) reuters.com/article/us-cub…

(2.) reuters.com/world/americas…

(3.) reuters.com/world/americas…

(4.) translate.google.com/translate?sl=a…

Unfortunately that took a lot more time and energy than I was expecting, so I haven't even gotten to the thing people are likely most interested in, namely the mixed political character of the dissidents. Will have a shorter rant about that after a break. Hope this has helped!

OK so as promised, I'm back and continuing the thread.

The last point to understand is that the opposition in Cuba is not one thing.

It's internally divided between various Left, centrist, & reactionary factions; it is very small; the massive protests that started yesterday are *new*; and they will evolve based on which opposition group(s) (incl new ones?) become hegemonic in the amorphous protest environment.

Everyone knows that there are right wingers & centrists living under the Leninist government in Cuba who don't like it. That's been the case for a while. Liberals exist among the intelligentsia & in the party; the most important reactionaries are religious (Catholic, evangelical)

However, by all accounts, these factions were always small. Partly this was because of severe govt repression of them. Partly this was bc of the legitimate popularity of the govt under Fidel.

Any Leninist would tell you these facts individually. But together, they add up to something they deny: these grouplets, CIA $$$ be damned, could never have mobilized the sort of protests we're seeing now. They were equivalent, I daresay, to the "Left" that existed pre-Occupy...

...or even pre-Seattle in the US. In other words, practically nonexistent.

This analogy is actually pretty useful for us. Something *structural* has to have changed in Cuba, in much the same way that decades of neoliberalism set the stage for the rise of American socialism.

The structural transformations of the Cuban economy & social system over the course of the twenty-first century and especially the 2010s created new forms of dissent & opposition, social movements distinct from the Miami exiles, church, etc that set the stage for today's protests

There were several of these. Think of them as threads that slowly became interwoven.

One was the Cuban LGBT movement, which despite a history of persecution from literal labor camps to exile openly organized in civil society & won major changes in the face of fierce govt & church/right-wing opposition. Same-sex marriage, though unrecognized, is likely on the way.

Another was the antiracist Black movement, which gained steam due to the increasing inequality in Cuba under austerity & the way this suddenly led to poverty correlating more & more with racial identity -- partly due to white Cubans' access to remittances, partly due to racism.

Yet another was the anarchist movement, which was heavily involved in the earliest direct actions, had international connections, and helped bring democratic and libertarian socialists texts back into Cuba. Many organized around @AbraCuba and @FACCaribe.

And then there were the various (mostly independent and organization-free) intellectuals and artists who expressed interest in transitioning into democratic socialism of one sort or another, including workers' self-management.

They were, for the most part and at first, writers rather than proper activists; they wrote in places like @temascuba, @nuevasociedad_, @lajovencuba, @OnCuba, @LaJiribilla, and elsewhere; but as the social movements developed, they started thinking along with them.

As the economic transformations took their course over the past ten years or so, then, these new social movements started to come to consciousness of themselves.

They reacted to the party's cutbacks on the welfare state & promotion of tourism, to new inequality & precarity, with stories of what went wrong.

They started to discover each other.

Occupy is an important touchstone because like it -- and like the pre-civil war Syrian opposition -- these movements were politically amorphous. Under their umbrella you had a spectrum from liberals to left-liberals/social democrats to anarchists to dissident communists.

The general thread that developed, though, was the notion that Cuban society was suffocating under a deficit of democracy.

And the left-wing factions of this umbrella -- which, I would argue, spurred most dissident political activity in the 2010s -- want *socialist* democracy.

In probs the best essay on the Cuban dissident Left I’ve seen, by the sociologist & @temascuba editor Rafael Hernández, their social composition is described quite precisely.

Striking similarities to our downwardly mobile hipster types. (In Cuba’s case many youth seek to leave.)

Now, by the end of the last decade & the turn of this one, most of these dissident leftists had moved somewhere around the orbit of the @Mov_sanisidro, which started doing very Occupy-like protest art and advocating for imprisoned artists. That itself is a very loose collective.

I want to emphasize above all the amorphousness and the political ambiguity, as well as the small-scale nature, of this pre-2021 dissident movement.

San Isidro is *not*, I would argue, consistently leftist. It has the whole centrist to left-wing spectrum I've been talking about.

It's also less an organization with a line than a milieu like Occupy, as I understand. This is very important, because there are no doubt factions within it that the US State Dept would want to win. But there are also factions that support socialism and strongly oppose the US.

In other words, this small movement, as it existed last year or so, was really a set of intermingled movements. The most militant had an explicitly left-wing character; but some also cozied up to Washington; and the leftists were split on how to approach the Leninist regime.

And meanwhile, alongside these movements, there were the old right-wing formations that definitely *do* get lots of USAID funding -- neoliberal economist and free market types, Evangelical Christians, and politicized members of the Catholic Church.

Nothing quite captures this mess of contradictions quite so well as 2020's 27N protests, a very small movement numerically which made a huge impact by its mere existence as one of the most direct protests against the regime up to that point.

300 dissidents advocating freedom from the Leninists' then-new censorship laws and the imprisonment of artists occupied the culture ministry and demanded negotiations. Surprisingly, the request was granted. But this was mostly a stalling maneuver, to allow the cops to come in etc

Now, on the one hand, the left-wingers were the ones who really pushed forward and planned the direct action. And it led to more than the initial protest, to democratic assemblies & working groups that eventually composed a radically democratic manifesto.

e-flux.com/announcements/…

On the other hand, note the vague flubbing on the economic question -- just enough wiggle room to nominally include both anarcho-cooperative and free market types while making them mad. This shows the kinds of vagueries, compromises, and plain uncertainties plaguing the cause.

Similarly, the essay I mentioned reports that the socialists in the group broke off to go to a park in an Afro-Cuban neighborhood, in solidarity with the Cuban working classes, where they ended up debating idly whether the point is to reform or overthrow the Leninist government.

And worst of all, there was a lot of confusion about who should be in and who should be out. Most of the imprisoned artists being supported by 27N were leftists or apolitical, but one was a pro-Trump rapper. Liberals argued US money is fine to take, to leftist shouts. Etc etc

The reason this is all important to understand is that this is what the dissident scene looked like *before* the hyperinflation kicked in and began to threaten most people's ability to survive.

The mass protests are newly mobilized people, many of them among the poorest in Cuba.

And what that means is that this is the constellation of movements, factions, and social forces -- along with the US and even Cuban governments and their intel services -- who are going to be fighting to push their lines and achieve ideological hegemony in the protests.

The new mass protest wave has a malleable and protean character, and the old amorphous dissident movement -- both its left and right wings -- is going to be trying to capture the Cuban insurrectionists' imaginations and shape what they stand for.

So I'm gonna present some sources for my claims above, and then move into my conclusion.

SOURCES ON CUBAN DISSIDENT LEFT

(1.) dissentmagazine.org/online_article…

(2.) translate.google.com/translate?sl=a…

(3.) nacla.org/news/2018/10/1…

(4.) blackrosefed.org/solidarity-wit…

(5.) dissentmagazine.org/article/social…

(6.) translate.google.com/translate?sl=a…

(7.) translate.google.com/translate?dept…

(8.) nacla.org/news/2020/12/1…

SOURCES (cont'd)

I especially want to highlight this, the essay I took screenshots of earlier. If you read nothing else, read this one.

translate.google.com/translate?sl=a…

SOURCES (cont'd 2)

Also, I didn't have a good place to put this, but it's worth mentioning that even Telesur -- Venezuela's state media, and hence pro-Leninist -- couldn't actually find any evidence that Movimiento San Isidro is funded by the US.

telesurenglish.net/news/US-Invest…

(which isn't necessarily to the entire movement's credit, since its right wing of neoliberal types does a fine job of cozying up to the US and the indie media it funds in Cuba anyway!)

So to conclude, it's probably usefully illustrative to note some of the ways the old dissident Left -- the socialists, anarchists, and communists that is, excluding the right-wing opposition -- are responding in real time to the protests. The variety & trajectory of their lines.

First, one of the more active left-communist groups in Cuba, put out this statement on their blog. While they castigate the protests for having the "wrong slogan" (more on this later), they ultimately side with them, demanding the release of prisoners.

translate.google.com/translate?sl=a…

Second, on @havanatimes, two strong statements in favor of the protests, one denouncing state violence, the other outlining the situation and endorsing. The latter is a very prominent political historian in Cuba.

(1.) havanatimes.org/opinion/the-cu…

(2.) havanatimes.org/opinion/unprec…

@havanatimes This last is worth quoting at length, since it deals pretty well (if briefly) with acknowledging the various ambiguities of the situation.

The anarchists have endorsed the protests with an enthusiastic but nuanced neither-nor line, attacking both the Leninist regime & the right-wing dissident elements.

"Down with the embargo! Down with the dictatorship! No US intervention!"

https://twitter.com/FACCaribe/status/1414746396520075268

La Joven Cuba, a left-dissident site, took a mealy-mouthed approach. It vaguely denounced the government for failing to "heed warnings" about COVID, but blasted protestors for property destruction and foreigners for meddling. (But check out the comments!)

translate.google.com/translate?sl=a…

And finally, On Cuba, another important left-wing Cuban news source, published a Cuban professor living in the US demanding an end to the embargo.

translate.google.com/translate?sl=a…

He denounces the tendency among some protestors to call for a "humanitarian corridor," rightly noting the way this is used to justify military intervention. And he gestures vaguely towards some form of non-coercive medical aid from abroad.

But he veers rather close to denialism about any of the profound errors by the ruling class of Leninist bureaucrats that led to the current crisis. De facto, he seems to oppose the protests and adopt something close to the government line. V similar to the US Left twitter takes.

So that gives you a sense of the range of responses by individuals, media, and organizations involved in the left-wing dissident movements in Cuba towards the new mass protests. As you can see, it's a spectrum.

So whose line will win out? That's a question that becomes especially vexing when you add back in the other actors: the Cuban neoliberals, the Cuban far right, the Miami exiles, and the security services of Cuba and the US.

It's very hard to say, beyond a simple point: ordinary working-class Cubans have agency & they're exercising it. The crisis moved the masses, & now they're going to pick their direction. Everyone else -- including the CIA -- is just reacting & trying to spin things in their favor