Fidel Castro may be dead, but his spirit is alive and well in the suffering of the Cuban people. The boom in tourism following the Obama administration’s normalizing of relations with Cuba has had unanticipated consequences–namely, a shortage of food.
According to The New York Times, restaurants that cater to tourists are buying food in bulk, causing prices to surge, and product to disappear from store shelves:
While the influx of new money from tourists and other visitors has been a boon for the island’s growing private sector, most Cubans still work within the state-run economy and struggle to make ends meet.
President Raul Castro reacted to the shortages by issuing price caps on certain foods within the government-run markets. This, of course, has caused many sellers to move to the limited co-op markets, or go underground.
The Cuban government lost approximately 80% of its imports when the Soviet Union collapsed, causing a swift devolution in agricultural productivity. Failure to properly invest in the agricultural sector following this collapse led to continued food scarcity. However, with tourism booming, that scarcity is becoming properly dangerous.
The New York Times quotes University of Havana economist, Juan Alejandro Triana:
“The government has consistently failed to invest properly in the agriculture sector…We don’t just have to feed 11 million people anymore. We have to feed more than 14 million…In the next five years, if we don’t do something about it, food will become a national security issue here.”
This is communism in a nutshell. The government takes control, it fails to make proper investments because it lacks the diffuse intelligence of a free market populated by millions of individual minds. Scarcity of a product–food, toilet paper, or other basic necessities–becomes a critical problem, and the government steps in with price caps. These price caps drive sellers to the black market, or out of business entirely, further exacerbating the problem.
A free market avoids these issues entirely. As Kal Kelly of the Mises Institute writes:
…the underlying cause of any shortage is the lack of a free market, since genuine shortages cannot appear in a free market. Instead, while prices of goods would likely rise at the onset of reduced supplies, the goods in question would always be available at some price—and the higher the price, the more the supply would increase to meet demand, which would then of course reduce the price.
Despite Raul Castro’s slight venture into capitalist markets, Cubans still remain largely under government employ, making approximately $20 a month. With tourist restaurants gobbling up the sparse supplies that are available, price caps sending sellers underground, and low government wages keeping citizens impoverished, the situation will only become worse.
Castro’s chimeric mix of communism and heavily restricted capitalism simply isn’t working. Until control is relinquished, and communism is abandoned, the Cuban people will continue to suffer.