Cuba: Why nations fail, Part III

Cuba’s baby step into a market economy is foundering.

This week, Kim Jong Un, dear leader of North Korea made a first ever televised New Year’s speech in which he announced a similar adventure in capitalism.

Venezuela’s socialism is bringing their economy to a halt.

China’s brand of state capitalism is thus far working well, but the best work in this field predicts that it too will eventually stall out because of its exclusive political system. [1]

USSR-Uzbekistan 1991-92

My university contracted with the Soviet Republic of Uzbekistan to send me there in the summers of 1991 and 1992 to teach economics to a select group of college students and professors.

Elaine and I spent six weeks each summer in a communist youth camp high in the mountains outside Samarkand — a city on the Old Silk Road from China to Constantinople.

At the conclusion of each session, the best students were chosen to receive a school year of free education at our university.

As we were on the tarmac leaving Moscow in August 1991, a coup was underway that ended the Soviet Union.

This meant that in our second summer teaching there, we were in the independent Republic of Uzbekistan.

That provided a natural experiment comparing communist and not-so-communist Uzbekistan.

I have no cards of those year, but I do have photographs illustrating experiences helpful to understanding why Cuba is a failed society.

Religion

Being a satellite of the Soviet Union, Uzbekistan was officially atheist in 1991.

They sometimes mouthed some cultural phrases giving nodding assent to Islam but otherwise were totally secular.

In 1992, however, they were a bit more expressive their religion, which was inseparable from their national, cultural identity e.g., received by birth.

We visited a mosque built to display a rare copy of the Koran and an outdoor monument to it.

I’m not a theologian, but a glance at the map makes clear that for some reason Islam hasn’t spawned advanced industrial nations.

Tashkent was a modern city of a million, but it coexisted with ancient markets and houses made of homemade mud bricks.

I sat on a camel still used in the dessert containing the Old Silk Road.

We were given robes without buttons or zippers that had to be girded about with sashes which dated to “deels” Genghis Khan’s mounted warriors wore to keep their innards from jiggling, causing nausea.

Political Institutions

In 1991, the country was run by a coalition of Russians and Uzbeks.

While visiting Khiva in 1991, I was shown a room inside its massive tenth-century walls that were locked to outsiders since Stalin’s takeover in 1924. It contained pictures Uzbekistan’s historic, leading families. Their message? Uzbekistan’s tradition ruling few before Soviet rule endured and would re-emerge when the Soviets left. They did.

At the end of camp in August 1991, I had selected the top students to go to the USA only to see in the paper a picture of those of my students communist officials of the University of Tashkent had already selected to go. All were children of the ruling families.

In 1992, I carefully documented grades and publicly announced the 25 best students to go to the USA.

First, they made me an offer I couldn’t refuse: either the intellectually-challenged son of the ONLY Uzbek official who exchanged Uzbek currency for $USD goes or NO ONE goes. It was 1 for 25, a 4 percent corruption factor on my part, so I agreed. But, I got 24 others to go on the basis of merit — a clear win for the West.

We owed these Uzbeks this favor. Uzbekistan was the home of Muhammad ibn Musa al-Khwarizmi (780-850 A.D.) who gave the world algebra (Arabic, al-jabr).

Economic Institutions

The best research on the topic makes the link between the political institutions required to create the type of economic institutions required for national prosperity.

The East had these in the time of Genghis Khan, whose empire included Uzbekistan. Their national hero, Timur the Lame (Tamerlane) came later to restore Genghis Khan’s institutions, but he didn’t, was barbaric, and thus gave Genghis Khan a wrong, bad reputation. [2]

Islam and its association with political dictatorship continue to inhibit economic growth there.

As ancient kingdoms were run by “the man,” Uzbekistan was run by the “plan” under communism.

Every fall, university faculty were forced to live in tents in the cotton fields while picking enough cotton to meet the nation’s assigned goals.

Economies are too complex to be coordinated by man or plan.

In Leningrad (St. Petersburg) in 1975, I was in the toilet of their new tourist hotel where I encountered a man with a giant roll of toilet paper doling out just enough paper to each guest.

My interpreter and her husband had to take off work a month to scour Tashkent for materials to redecorate their apartment.

If washers, dryers, or appliances broke, there were no repair parts.

I knew then that communism wasn’t to be feared because they could do only a few things well, like rockets and armaments, but not many.

We needn’t worry ourselves over communist countries: they will fail — even China.

Political systems like Spain and Portugal in the 16th century, and communism in the 20th, which operate by and for the favored few don’t work.

Unfortunately Columbus didn’t know the Great Khubilai Khan had been dead 198 years and that Cathay (China) was 8,000 west when he bumbled onto Cuba in 1492.

Columbus was the agent of an absentee power who installed a favored few locals to run things and extract from the citizens their natural resources and economic product for the benefit of the ruling elite.

He was the carrier of the wrong institutions for Cuba to prosper.

[1] Acemoglu, Daron, and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty. NY: Crown Books, 2012.

[2] Weatherford, Jack, Genghis Khan, NY: Crown Publishers, 2004.