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Cuban Government Legitimizes Black Market

Instead of trying to quell the country’s booming black market, Cuban president Raul Castro is seeking legitimize it by granting self-employment licenses to hundreds of thousands of workers, according to an article by Paul Haven of the Associated Press. In the last year, the country has made it legal to employ oneself in 178 state-approved jobs, and so far, over 220,000 Cubans have received these licenses just in the last seven months.

However, Cuba’s black market doesn’t fit into most peoples’ perception of the term “black market.” While the phrase tends to conjure images of big, duct taped bags of drugs, tables strewn with assault rifles, or worse yet, human trafficking, Cuba’s version centers around basic necessities like clothing and food, along with counterfeit cigars, bootlegged liquor, and the occasional pirated DVD.

The reason that the black market is so widespread in the first place is that the Cuban model of communism makes it difficult, if not impossible, for its citizens to get by. Even those on state salaries, like Manuel Rodriguez, former head of a medical center for children with disabilities, sometimes have to resort to black market activity to make ends meet. “You have to find a way to survive,” said Rodriguez, whose government ration card, combined with his wife’s salary, only afforded them two weeks worth of food per month. Though he moved to Miami in 2009, Rodriguez used to rent out pirated DVDs to supplement his family’s income. “I wasn’t hurting anyone…It’s not pornography. It’s not drugs,” he explained.

Interestingly enough, selling and renting bootleg DVDs is one of the jobs that can now legally be done in Cuba. The country ignores U.S. intellectual property laws in response to the embargo.

Marki, of the article’s anonymous sources, has previously served jail time for smuggling clothes into Cuba from Europe. “Everyone with a job robs something,” he remarked. “The guy who works in the sugar industry steals sugar so he can resell it. The women who work with textiles steal thread so they can make their own clothes.”

Many experts weighed in on the black market boom, with many supporting the Cuban government’s decision to legitimize many under-the-table jobs. “You could probably say that 95 percent or more of the population participates in the underground economy,” said Archibald Ritter, Canadian economist and professor at Ottawa’s Carlton University. “Stealing from the state, for Cubans, is like taking firewood from the forest, or picking blueberries in the wild. It’s considered public property that wouldn’t otherwise be used productively, so one helps oneself.”

Ted Henken, a professor at Baruch College in New York, also weighed in. “When legal options are limited or nonexistent, then everyone breaks the law, and when everyone breaks the law, the law loses its legitimacy and essentially ceases to exist.”

Anyway, I think this is a remarkably practical effort on the part of Cuba’s government. It’s definitely a much better solution than jailing what could end up to be 95 percent of the country’s population. In a country where the 2008 GDP per capita added up to just over $5500, according to the World Bank, I imagine that even if it weren’t semi-legalized, the black market would only continue to grow.

I personally think this is Cuba taking a major, long-awaited step towards a free market. In the meantime, keep an eye out for more of Raul Castro’s compromises—this could be the beginning of something great.

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