Freeing Cuba to Free The World

Ludwig von Mises

The existing Communist government in Cuba provides a great opportunity to not only bring freedom and socioeconomic prosperity to Cubans but to use such a transformation as a beacon of economic education to help bring real freedom and prosperity to the rest of the world.

For a country to be prosperous its leaders have to discover the best information with which to order its citizens in the most productive and prosperous way. In free-market capitalist countries, private sector companies and the entrepreneurs that managed them are always motivated to innovate and copy the innovations of competitors thus constantly creating and spreading superior information and subsequent socioeconomic order. For example, a Honda engineer in Tokyo, may have invented power door locks which thanks to ‘economic competition’ motivated BMW, Ford, and other ‘competitors’ throughout the world to copy and thus spread superior information throughout the world. This wonderful automatic mechanism of COMPETITIVE KNOWLEDGE DISCOVERY which inadvertently turns the entire planet into a global supercomputer is “turned on” or “emerges” from the simple concept, or better said, tradition of ‘private property’. It is people’s ‘freedom to trade’ their ‘private property’ with the better informed auto-manufacturers(competitors), and as producers to make better autos, that motivates all competitors to learn and copy each other thus spreading superior information and subsequent order through out society. Morals are ways of acting, they are information which also spreads via competition. It is hard-working, honest, courteous people who treat everyone with respect who thanks to competition inadvertently motivate everyone else to be likewise.

The role of governments or coercion should be minimized because governmental, or ‘public sector’, or Socialist ‘central planning’ bureaucracies, being COERCIVE MONOPOLIES which get their wealth through taxes or compulsion are immune to the competitive-information-spreading incentives which motivate private sector entities to keep up with the competition in terms of information and hustle. Central or government plans can’t work if people are free to not go along with them so they inevitably require compulsion and tyranny. Government bureaucrats-“experts” have little motivation to work hard or learn from competitors because neither their future gains nor losses depend on their efforts so the wealth under their control is always mismanaged compared to when it is in the control of entrepreneurs. The former Soviet Union had plenty of highly educated scientists and “experts” whose plans required the coercion of millions, but they were thoroughly crushed by relatively freer Americans and their resulting superior “competitive knowledge discovery”. The “classic” image below helps explain the difference between competitive-private-free orders (South Korea) and monopolistic-government-coerced orders (North Korea). Keep your eye on how information arises-spreads via competition and continuously restructures the social order as people trade-exchange-move-reorder property-wealth in a manner where more wealth is produced than consumed thus being profitable and thus increasing the economic pie and socioeconomic order.

Thus freedom and private property shields us from coercion, civilizes us, and instead of leading to chaos, is what “turns on” the ‘competitive knowledge discovery’ which creates and spreads the information which coordinates our growing socioeconomic order or what the great British philosopher Herbert Spencer cleverly referred to as ‘The Social Organism’.

Socialism of the Cuban and Soviet style is IMPOSSIBLE to implement without destroying the social order itself. The following example helps understand this. A restaurant in Miami sells a meal for $10. Perhaps $1 might be profit, and $9 will be spent in costs, in other words, in the necessary consumption or use of existing of wealth needed to produce the meal-wealth, things like equipment, electricity, food, supplies, and everything employees and their families will consume at home since this consumption is needed to produce their labor. The businessman discovered 2 vital pieces of information needed to create a profitable order which are IMPOSSIBLE for central planners to discover 1) that there are enough customers willing to patronize the restaurant at the $10 per meal price taking into account their ‘freedom to trade’ their money-wealth for other things thus providing a superior-competitive-winning alternative to society, and 2) how to reorder $9 worth of stuff, like labor and supplies, to profitably produce the meal. If he sets prices too high, customers will choose other superior competing options thus he’d be failing to reorder a section of society in a useful or superior way. If he sets prices too low, he won’t be able to cover costs and thus end up shrinking the economic pie by consuming more than what he produces. Socialism-Communism can’t work because only free entrepreneurs dispersed throughout society are at the right time and place needed to discover people’s desires(1), (2) how to order a section of society in a manner where more wealth is produced than consumed, and (3) what prices to set to achieve these 2 things. Socialism, government, and central planning in general, by removing wealth from the private sector where profit and loss calculation motivates and ensures that people and companies are constantly trying to reorder themselves in the most profitable and thus pie-increasing way, and also innovating and copying each other’s innovations, simply destroys the mechanism needed to discover the necessary information needed to sustain, and much less expand the socioeconomic order. This inevitably causes more consumption than production leading to the shrinking and wasting away of society as the image of pre and post Socialism Cuba bellow shows. Regardless of over 63 years of worldwide technological progress since the Cuban Revolution in 1959 initiated Socialist central planning in Cuba, the pre-Socialist free-market order was far more productive than today’s as image shows.

If Socialism is so inferior to free-markets and Capitalism, why did so many bright and caring people fall for it? How can it still continue in Cuba even though Russia and China are now free-market based economies with large private and thus competitive sectors? Is this because the Cuban government is run by malicious or dumb people? Of course not. The key to world-wide prosperity lies in the answer to these questions and requires familiarity with insights from economist Carl Menger and his intellectual descendants known as ‘The Austrian School of Economics’ which we attempt to very briefly summarize bellow.

Language, which is obviously a vital mechanism for communication and even thought, is, to borrow the phrase from Adam Ferguson, “indeed the result of human action, but not the execution of any human design”. No caveman millions of years ago “invented” or “designed” it. It arose via an evolutionary process just like the respiratory, circulatory, nervous and other “systems” that help trillions of cells in your body create your complex multicellular order-life. The cells did not design these systems, and neither did man design language, they both arose via an evolutionary process. Similarly, what Menger’s intellectual descendants like Ludwig von Mises and 1974 Nobel Laureate in Economics F.A. referred to as ‘The Market Process’ and the parts it is composed of like money, finance and banking, interest rates, economic competition, and the legal and moral structures that sustain it, is the “system” that sustains and expands the socioeconomic order. And it too, just like language, evolved without man’s deliberate design. We are like cells in a human body having little clue how we have inadvertently become parts of something greater than ourselves because the “system” (‘The Market Process’) that unites us was NOT the result of our conscious planning or design just like language. Consider the following, when free people are looking to be as profitable as possible, either in their personal lives by learning new skills, or as business owners by innovating and-or learning from competitors, are they aware of the fact that they are creating and spreading the information that coordinates ‘The Social Organism’? When they use their freedom to buy what they consider to be superior products, are they aware of how this allows the better informed companies to expand their control of resources while also motivating competitors to do better? Not really, for the most part these vital benefits are “indeed the result of human action, but not the execution of any human design.”

A better and more profound example of this process was the Protestant Reformation. For centuries the Catholic Church’s traditions-myths held immense coercive-monopoly-competitionless power which prevented-retarded individual freedom and resulting ‘competitive knowledge discovery’. In the early 1500s Martin Luther preached that a person could go to heaven by believing in Christ without the Catholic Church’s approval, and that the Bible itself, not the Pope-Church’s edicts-interpretations, was what mattered. This helped reduce the coercive-monopoly power of the Church and spark a pro-freedom and thus emergent ‘competitive knowledge discovery’ that would lead to skyrocketing rates of innovation-production-prosperity in Europe-Christendom thus taking Europeans to prominence. Now, very important! Did Martin Luther “reason” that his religious interpretations would accelerate ‘competitive knowledge discovery’ leading to the emergence of Capitalism? Of course not! Again, just like solitary cells millions of years ago inadvertently created the respiratory-circulatory-nervous-etc. “systems” that led to multicellular organisms without ‘designing them’, so is ‘the free market’ or Capitalism “indeed the result of human action, but not the execution of any human design”.

By the late 1800s, not understanding how the bewildering complexity of modern cities “emerges” from ‘private property’-freedom since this amazing mechanisms-order had been designed, not by clever men, but by an evolutionary process few really understand at the time, homo sapiens fell for Socialist-Communist mythology believing that coercive-competition-immune-bureaucracies led by “experts” was needed to improve society. Eventually someone would describe these increasingly popular fallacies-myths in a manner that was bound to go viral and that is what happened with Karl Marx and his bite-sized ‘Communist Manifesto’(48 pages) where he summarizes:

“the theory of the Communists may be summed up in the single sentence: Abolition of private property”….”Abolition of the family!”

The slightly smarter apes via Vladimir Lenin’s Bolshevik revolution in Russia (1918) and others throughout the world like Castro created massive central-planning-coercive bureaucracies that destroyed ‘competitive knowledge discovery’ and thus their own socioeconomic order that had been created by it.

Notice how all man-made calamities, from religious slaughters, to world wars, to political chaos, are always the result of large groups of homo sapiens somehow coercing each other via government. For millions of years man evolved in little communal tribes where sharing was very important and the social order was coordinated by easily identifiable individuals. Today’s social order is coordinated, not by easily identifiable fellow homo sapiens, but by a system, by ‘the market process’, and a strong respect for individual freedom and private property, not coercive sharing, is vital. We have simply not evolved to understand the economic forces that create civilization, the vital need for freedom and privatization, and the immense harm that too much government can do. Supposedly the Dodo bird quickly went extinct because it had not evolved to recognize humans as potential dangers, we similarly just line up for ‘central planning’ and government coordinated self-destruction over and over and over and over.

The above is just a brief overview of some of the vital insights of ‘The Austrian School of Economics’. Since they identified Socialism, not as the result of malicious people or stupidity, but as an understandable error given the non-human-designed nature of the ‘Market Process’ and resulting socioeconomic order, they focused on economic education and outreach of influential politicians. Ludwig von Mises is arguably the intellectual Atlas that did the most to save civilization from world-wide Socialist self-mutilation when he showed the impossibility of central planning (summarized above) and persuaded Austrian politicians away from Communism/Bolshevism in 1919:

“I knew what was at stake. Bolshevism would lead Vienna to starvation and terror within a few days. Plundering hordes would take to the streets and a second blood bath would destroy what was left of Viennese culture.”.. “The most important task I undertook…was the forestalling of a Bolshevist takeover… The fact that events did not lead to such a regime in Vienna was my success and mine alone.” –Mises (Memoirs)

Later, Mises’ pupil, Hayek, via his classic book “The Road to Serfdom” which he dedicated ‘to socialists of all parties’, but also perhaps more importantly, the brilliantly written ‘condensed’ version which was only 30 pages long, by Max Eastman, which “Reader’s Digest” magazine placed in over a million of US homes, would play a vital role in educating thousands. Future British PM Margaret Thatcher read Hayek’s book as an 18 year old undergraduate at Oxford, so did 3-time presidential candidate Dr. Ron Paul while a medical student, and countless other future leaders of the free world.

It is vitally important that we identify Socialism and our government-created problems as myths, in other words, ‘as widely held but false beliefs or ideas’, akin to slavery and older religious tyranny. Socialism did not spread and destroy much of the 20th century because of a few bad apples or tyrants; it first spread through the minds of well-meaning intellectuals and citizens which then gave the future leaders the moral and intellectual justification for their actions. Hayek writes:

“It is necessary to realize that the sources of many of the most harmful agents in this world are often not evil men but high-minded idealists, and that in particular the foundations of totalitarian barbarism have been laid by honourable and well-meaning scholars who never recognized the offspring they produced.” (Hayek F. A., 1973, p. 70)

“Most people are still unwilling to face the most alarming lesson of modern history: that the greatest crimes of our time have been committed by governments that had the enthusiastic support of millions of people who were guided by moral impulses. It is simply not true that Hitler or Mussolini, Lenin or Stalin, appealed only to the worst instincts of their people: they also appealed to some of the feelings which also dominate contemporary democracies.” (Hayek F. A., 1976, p. 134)

Let us now apply their wisdom to the situation in Cuba. The Cuban government and much of its citizenry are neither malicious nor dumb, just understandably totally clueless. It is essentially a country full of human dodos. That being the case, vilifying the government or accusing it of being ‘immoral’ is a monumental error. Mises explains:

“The problems involved are purely intellectual and must be dealt with as such. It is disastrous to shift them to the moral sphere and to dispose of supporters of opposite ideologies by calling them villains. It is vain to insist that what we are aiming at is good and what our adversaries want is bad….The rigid dogmatism peculiar to religious groups and to Marxism results only in irreconcilable conflict. It condemns beforehand all dissenters as evildoers, it calls into question their good faith, it asks them to surrender unconditionally. No social cooperation is possible where such an attitude prevails.”

We must focus on sympathetic dialog, economic education, and clever marketing. This can be of course very difficult given how much some of us have suffered at the hands of the Cuban government but this does not change this fundamental fact.

Just like Mises was able to educate important politicians, we must try likewise. Just like Max Eastman was able to do a brilliant job simplifying vital information, today with social media perhaps we can do something similar. Perhaps we are just a great pro-freedom speech or song by famous Cuban Americans like Gloria Estefan or Pitbull (Armando Christian Pérez) from creating an intellectual revolution. Mises and friends saved civilization via economic education because they believed that they could do it, otherwise they would not have even tried. Thus if such a revolution is to happen we must have enough people who believe that it can happen and actively take steps to make it happen. Mises again:

Liberalism is rationalistic. It maintains that it is possible to convince the immense majority that peaceful cooperation within the framework of society better serves their rightly understood interests than mutual battling and social disintegration. It has full confidence in man’s reason. It may be that this optimism is unfounded and that the liberals have erred. But then there is no hope left for mankind’s future.

“Economics deals with society’s fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.”

One of the great things about the Cuban-American community, is that while much of America, especially the Democratic Party dodos keep pushing for ‘Democratic Socialism’, we are virtually the only community in the USA that openly despises Socialism and proudly thinks Capitalism is a great thing. We are ideally positioned to lead the world in a free-market reconquista.

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