Introduction and Goal

1 The aim of this article lies in demonstrating the variety, and hence the complexity, of ways of living, thoughts and ideological convictions in today’s Cuba. For this purpose I will investigate how the tremendously difficult socioeconomic circumstances appeal to citizens and what the implications of this are. The main questions raised by Autrepart can also be resumed : First, I will inquire if the transition towards capitalism is leading to an increase in, or an escape from poverty ; second, for which groups ; and third, what effects upon equality within society are to be expected.

2 In order to further a general understanding of the actual situation in Cuba, relevant achievements, as well as still significant moves towards capitalism will be outlined. After this, the theoretical framework using Bourdieu’s theory of “capital” and network analysis will be set out, in order to explore the importance of “capital” not only in the economic but also in the social and symbolic sense.

3 Research material will provide insights into the realm of cuenta propia (self employment) on the basis of two diametrically opposed ways of securing a livelihood. By means of these cases examples of the prevailing attitude towards the private sector and challenges faced due to an illegal or legal status will be outlined. This will exemplify, on the one hand, how policy changes on the economic level influence the everyday life of local people, and on the other hand, highlight strategies applied. Finally, the officially proclaimed goal of equality within society will be looked at in general and in the form of aspirations within a specific “microcosm”.

4 The proclamation “no es fácil” ( “it is not easy”) shall thereby serve as a guide, referring to the concrete livelihood experiences of the actors, and the structures of the Cuban society. For this reason I intend to compare positions from outside Cuba and – as a social anthropologist – from within the Cuban society, by relying on scientific literature, statistics and data collected during extensive field research conducted in Cuba’s capital, Havana  [1]. The research was conducted over a period of six years which enables inter- and intra-comparison. During these various stays – amounting to more than a year’s living and researching – I included different areas within the city in order to facilitate comparisons between them  [2].

From the Early Revolutionary Days to the “Special Period in Time of Peace”

5 In 1961 the socialist character of the revolution was declared by the máximo líder, Fidel Castro. The Cuban economy was no longer capitalist, and new forms of politics emerged [Niess, 2001, p. 284] ; [Pérez-Stable, 1993, p. 80]. One of the main goals consisted in improving the standard of living of the population  [3]. In order to guarantee at least the most basic needs of everyone, a redistribution of income had to be undertaken. The first changes consisted in a land reform which went along with the ousting of major land owners, the favouring of small enterprises over large ones, and new forms of employment. An increase of the salaries for most of the population gave rise in domestic spending to 200 million pesos within the first eight months [Pérez-Stable, 1993, p. 65]. According to O’Connor’s calculations the real income increased by 30-40 per cent for about 80 per cent of the population [O’Connor, 1970, p. 245], and Brundenius estimates that at least 60 per cent of the work force profited from the reforms [Brundenius, 1981, p. 149].

6 A rise in salary however, does not guarantee a better living standard. The critical supply situation at that time lead to the introduction of a ration card system, the libreta, in 1961. Since then, the libreta – at least in principle and assuming enough goods are available – guarantees a minimum of food to everyone  [4]. Seen in this context, the goal of economically equalising the population can be considered an objective from the early revolutionary days. Credit also has to be given to the attempt to diminish pre-revolutionary differences between the rural and the urban areas. An effort clearly manifested in the alphabetisation campaign and the obligation of all recently graduated doctors to spend their first two years in a rural area  [5].

7 Favourable for some, these intentions implied negative consequences for others, especially for those who were working in the private sector. In 1968 the expropriation of the remaining 57,000 small scale enterprises took place : all private restaurants, greengrocers, bakers or handicraft businesses were either shut down or taken over by the revolutionary organisations [Herzka, 1998, p. 15]. As a result the private sector was inexistent for decades to come.

8 Along with the pursuit of the socialist path, Cuba joined the COMECOM (Council of Mutual Economic Assistance) in the seventies. This allowed Cuba to buy and sell products on very advantageous terms when compared to world market prices [Pastor, 1996, p. 219]. A negative implication, however, was Cuba’s resulting dependency on its socialist allies on the one hand, and its concentration on sugar monoculture on the other. Therefore, the near-collapse of the Eastern Bloc and the former Soviet Union in 1989 was devastating for Cuba, and lead two years later to the proclamation of the so called “special period in time of peace” by Fidel Castro  [6]. Consequences of the catastrophe were, among others, a drop of 73 per cent in imports [Fernandez, 1999, p. 81], and a reduction of daily gas and fuel deliveries [Schulze, 1993, p. 90]. Besides the embargos imposed on Cuba, a drop in the world-market price of sugar added to the severity of the situation.

9 The effects of the shortages were like a vicious cycle affecting sector after sector of the Cuban economy. On the one hand the state sector salaries did not allow workers to secure a livelihood, therefore the phenomenon of absenteeism increased as some searched for alternative forms of income [see e.g. Kildegaard, Orro Fernández, 1999, p. 369]. On the other hand the lack of materials, electricity, and petroleum in turn hindered an increase in production.

The Rise of the Black Market

10 Over this period the black market grew and although the US dollar was penalized until 1993, it circulated widely and was appreciated by speculators as well as by the local population.

11 The vast majority of the population was involved in one or the other way in the black market [7]. Estimates of the volume of the black market differ [Carranza Valdés, 1996 (1994) ; Herzka, 1998]. However, the phenomenon was well known not only by Cubanists [e.g. Burchardt, 1999] but also publicly admitted by Cuban officials. As this quotation from the Cuban journal Bohemia proves :

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[…] según cifras oficiales el 20 % de los gastos en alimentos del cubano en los últimos años se hace en el mercado negro o informal, alimentos que provienen del robo o desvío de recursos de distintos sectores, mayoritariamente del Estado […] [Revista Bohemia, 1998, p. 35]  [8].

13 Being aware of this situation, a policy change was imminent : the goal lay in recovering the “lost dollars” for the official domestic economy. The most radical measures consisted in the legalisation of the US dollar as a means of payment in 1993, the granting of licences in order to work as a cuenta propista [e.g. Eggenberger-Argote, 2002, p. 211-216], the reopening of the agricultural markets in 1994, the allowing of foreign direct investment in 1995 [Carranza Valdés, 1996 (1994), p. 35], and the establishment of “dollar stores” called shoppings by the locals. Contrary to the past when the shoppings were only accessible to foreigners and, as my data make evident, to persons with well established contacts with the nomenclature, everyone who owned “dollars” or the equivalent domestic form, the Peso Convertible, was welcome to purchase.

14 The US dollar ceased being a means of payment in 2004. The import ban of the US dollar is first and foremost of symbolic and political relevance. Furthermore, it allowed the state to collect revenues from the additional exchange fees, usually ten percent, which are imposed if US dollars are being converted into Pesos Convertibles. Since then, the existing national currency, the Peso Cubano (which forms the base of Cuban salaries and local products), the Euro in some tourist centres and the Peso Convertible remain as legal tender. Despite this monetary complexity, “dollar” is still being used in Havana’s local parlance for Peso Convertible. I will proceed alike and therefore use “dollar” for the US dollar and the Peso Convertible.

15 Unsurprisingly however, these policy changes led to a division within Cuban society between those who had access to “dollars” and those who did not. This divide is relevant because numerous indispensable daily products stocked by the shoppings, such as cooking oil or soap were until recently exclusively available for “dollars” or on the black market. In theory everyone had access to US dollars by exchanging Pesos Cubanos into US dollars in the official Cadecas (exchange offices). Nevertheless, the prices for “dollar” products remained far higher than products in Pesos Cubanos, and were as a result inaccessible for persons without extra income. At this time some of the products became available for Pesos Cubanos but at “dollar” prices. The challenge remains obvious : one bottle of cooking oil, for example, amounts to one fifth of an average monthly governmental salary, and thus motivates the search for other solutions.

16 The exclusion mechanism has thus shifted away from foreigners and a small “elite” to the mere question of having or not having “dollars”.

Shifts in (Il)-legality

17 Some of my informants work in the national economy and still engage in illegal activities from time to time. It is therefore important to note that illegal activities can supplement the salary from official and legal work [9]. Others however, work exclusively in the world of the cuenta propia in the form of small or medium sized entrepreneurial activities ranging from the production and sale of different kinds of foods or handcrafts to the providing of services (e.g. “beauty services”, accommodation for foreigners, coaching or religious counseling). Most of these activities are organized from home and are motivated by the need for an additional income.

18 Whereas some activities are perfectly legal, some border on legality and others are completely illegal. Interestingly, the same activity can – depending on the circumstances and the existence or non-existence of legitimising documents – shift from legality to illegality. One example is the provision of accommodation for foreigners. In order to house foreigners, an official licence is requested. However, if only a small number of foreigners visit for a few days over the year, the house owners can declare them as “family members” or “close friends”. A practice which is not uncommon and depends mainly on ones social capital : on the one hand, in order to meet “guests”, and on the other, in order to legitimise the declaration of “family members”.

19 With the aim of understanding different forms of social capital, I will now shed light on Bourdieu’s theory of “capital” and the networks analysis.

Forms of “Capital”

20 Using Bourdieu’s theory of “capital” [Bourdieu, 2000 (1972)] ; [Bourdieu, 1980] the course of individual actions can be analysed well. Bourdieu differentiates mainly between economic, social, cultural and symbolic capital  [10]. While economic capital comprises financial and material goods, cultural capital can be circumscribed to education. The symbolic and the social sometimes merge into one capital as the borders between them are indeed fluent. Despite points of contacts a distinction remains meaningful since some forms of differentiation are evident, such as prestige or “honor”  [11] which form part of symbolic capital. To the contrary, relationships with other people, whether professional or friendship based, correspond to social capital. Nonetheless, an increase in social capital can occur with a rise in symbolic capital and vice versa.

21 In Cuba symbolic capital is – as a logical consequence of socialism – of particular relevance since for decades individual and collective efforts such as volunteer work have been rewarded by the state in symbolic ways ; for example by means of certificates, speeches and to a smaller extent medals. Hence, symbolic capital makes reference to incorporated “socialist values” which in turn facilitate the access to other capitals (for example, cultural, social and economic capital) even today.

22 In numerous studies social capital is analysed in the form of social networks in which specific attention is paid to the network structure and to a specific set of social actions [Dahinden, 2005, p. 46]  [12].

23 Bourdieu notes how important it is to maintain social networks :

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[…] plus largement, de relations, qu’il s’agit de conserver intactes et d’entretenir régulièrement, héritage d’engagements et de dettes d’honneur, capital social de relations, impliquant des droits et des devoirs, qui, accumulé au cours des générations successives, est une force d’appoint susceptible d’être mobilisée lorsque des situations extra-ordinaires viennent rompre la routine quotidienne […] [Bourdieu, 2000 (1972), p. 363-364].

25 Mutual rights and duties involved in social relationships can impose a power hierarchy within the relationship, or on the contrary, take on the form of a balanced “give and take”. While some relationships are cultivated intensively, others remain becalmed and yet others are only activated in case of urgent need or a “crisis”. Likewise the goals of a relationship can be similar for all participants or be one-sided [e.g. Barnard, Spencer, 1996 ; Granovetter, 1973 ; Schweizer, 1996]). Granovetters result, which shows that not only strong but also weak ties are of relevance, is also of importance for the understanding of successful networks in everyday [Granovetter, 1973]. Weak ties, above all in informal settings, enable a participant to gain new and diverse information through persons from various socio economic backgrounds. The following case examples from my field research will demonstrate the importance of weak and close ties as well as the support granted in situations of crisis.

Juan Carlos the Self Declared “Innovator and Founder of all Illegality”

26 Juan Carlos’past was characterized by a deep belief in socialist values. After having joined the Communist Youth Union (UJC) he became a party member and began a military career which involved years of combat in Angola. The sacrifices he had to make during his wartime experiences were in his opinion a small but important step for the sake of the Cuban revolution and hence, “his nation”.

27 Juan Carlos’life changed drastically due to the “special period in time of peace” because he was urged out of economic necessity to migrate together with his wife Maria from the eastern part of Cuba to the capital. In Havana he immediately applied for a licence to sell pizzas. Like others who succeeded obtaining one, in 1994, the couple started small scale production of pizzas in their house. Months later, their ability to invest their savings shrewdly and to attract numerous customers soon led to an increase in sales from the initial ten per day, to up to one hundred.

28 The bisneo (business) went well but as orientales  [13] they needed to rent a house which was claimed back by the former owner a year later. Owing to scant housing possibilities in Havana they felt lucky to join Marias family in another district of Havana. Due to their “inner-city migration” they lost their licence and have not managed to obtain a new one ever since. Seen in retrospect this was the turning point : weeks passed, their savings started to vanish and so they started to sell pizzas illegally. Instead of the small wooden advertising label “we sell pizzas” Maria wandered around the nearby streets and mumbled that they were selling pizzas. This strategy involved discretion and a reduction to an average 30 pizzas per day in order not to raise unnecessary attention.

29 In cases in which the entire income of a family depends on illegal activities, small fines from time to time form part of everyday life. Add to this the intensified controls exercised by the state over illegal activities and the question was soon no longer whether corruption was necessary, but who needed to be bribed and with how much money. During the negotiation processes both parts achieved a satisfactory result : Juan Carlos gained the protection to continue with his bisneo, and the inspectors received regular sums in addition to their salary. In spite of these extra expenditures the couple’s net income of 5000 Pesos Cubanos per month (about 200 “dollars”) is well above the average salary. According to official statistics the average salary in Havana rose from 252 Pesos Cubanos in 2001 to 387 Pesos Cubanos by the year 2006  [14] and is therefore more than ten times lower than the income of the couple.

30 Juan Carlos and Maria gained experience in living in complete illegality through the secret selling of food for more than a decade. In the course of subsequent in-depth interviews, and thanks to their increased trust and willingness to talk honestly about their strategies, I received more insights into their social ties. Juan Carlos declared with shining eyes and a proud voice :

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Somos los inventores y los fundadores de la ilegalidad !
(We are the inventors and founders of all illegality ! )

32 The active business of selling pizzas perpetuates the network in form of weak and close ties : constant involvement in the gossip provides a fund of actual information about the district in the form of weak ties. In addition, a close relationship among the couple and the extended family members functions, among other things, as a warning system in case of sudden controls by uninformed or not yet corrupted inspectors. Also of importance are the neighbors, who – well aware of the numerous visitors – either obtain benefits in the form of material goods or are obliged to remain silent because of their own involvement in illegal activities.

33 Illegal work without a licence has yet another consequence. Since balance is of utmost importance in order to guarantee continuity, social desirability exerts pressure upon individual actions. The couple needs to make sure that their earnings do not obviously surpass those of their surrounding neighbors, for example. Otherwise protests would result in a rise in bribery costs, “gifts” and would eventually end with formal complaints to the authorities.

34 Therefore, the couple’s aim consists in surviving without pursuing a profit-maximizing, capitalist strategy, and although it is not legal it is perceived as legitimate by most of Havana’s citizens.

Rosa and her Paladar

35 Rosa has never worked without a licence : hence she is a legal owner of her paladar  [15] and resulting business activities.

36 In comparison to Juan Carlos, whose business, licensed or not, trades in the realm of the national currency, the Peso Cubano, Rosa sells her dishes at “dollar” prices. For this reason she is also obliged to pay regular taxes regardless of her income in “dollars”. As a base fee, 480 “dollars”, and for each of her employees 95 “dollars” per month : a minimum of almost 1000 “dollars” a month, and at the end of each year an additional tax which is calculated in relationship to her declared income. General restrictions imposed on cuenta propistas consist in the fact that the number of tables is limited – which reduces the number of customers – and that non family members cannot become employees [Tablada, 2001, p. 41]. Nevertheless, despite seasonal fluctuations Rosa manages to earn enough and as she says with a smile “to live well” with her net income of 100 to 250 “dollars” a month.

37 Even with high taxes and imposed limitations, Rosa manages to make a satisfactory living and considers that due to her apparently higher income she is not a representative of the population at large. All the same, she has experienced years where her monthly income was well beyond one hundred “dollars”, and the emotional burden of paying all the taxes caused her intense troubles. Due to her legal licence however, the goal of profit maximisation is not being hindered by neighbors.

38 Seen in this context it is of interest to investigate the motives behind performing illegal activities.

Capital or Capitalism ?

39 The transition which I have described in the economic sector and exemplified at the local level will now be observed at the level of society. Before providing an answer to the first question raised, of whether the transition towards capitalism is resulting in positive or negative consequences, the link between policy changes and capitalism will be scrutinised. In this way I will analyse whether the policy changes are indicators of a shift towards capitalism or if they represent an attempt to increase capital.

40 For this purpose, after the example of providing licences in order to work in the realm of the cuenta propia, a relevant part of the private sector will be looked at. In 1997 more than 400,000 Cubans were working as cuenta propistas, but the rise of the “bourgeoisie” was observed with displeasure [Herzka, 1998, p.173] and measures to reduce the phenomenon were taken : stricter controls by inspectors and higher taxes among others. These measures seem to have been effective, as according to Cuban statistics the number of people who worked as cuenta propistas decreased to 169,400 in 2005. As a consequence of this decline, the legal private sector, which in 1995 was absorbing 5 per cent of all registered workers, shrunk at the turn of the century by more than one third [Burchardt, 2000, p. 7-11]. Seen from this perspective one can wonder if a shift towards illegality has taken place, as Padilla argues [Padilla, 1997].

41 My data makes evident that of those informants who work illegally as cuenta propistas the majority would prefer a legal job and have consequently sought to obtain a licence on more than one occasion. The motivation for working legally is mainly based on rational calculation : legality provides a safe way to invest and to optimize income, in contrast to an illegal procedure which involves the risk of enormous fines, and since a few years ago, even prison. Therefore, neither the time required to deal with bureaucratic red tape nor the money needed to obtain a licence to common Peso Cubano prices seem to be obstacles, but rather the prevailing policy or sometimes outrageous sums demanded by inspectors. Whereas in the past, according to my data up to 2002, the non-issuing of new licences could, at least in some parts of Havana, be avoided by wealthy people who guaranteed bribes which amounted to more than 1000 “dollars”, controls have now become tighter.

42 Hence – unlike Vietnam, where the government actively promotes a “market economy with socialist direction”, and declares the entrepreneurs to be “heroes of the nation” – here, private or family sized businesses are not promoted. Pastor, for example, believes that small businesses in Cuba are suppressed [Pastor, 1996, p. 229]. The official attitude can well be summarized by Fidel Castro’s own statement : “Capital yes, capitalism no” [Eckstein, 2003, p. 612].

Transforming “Capital” in the Bourdieu Sense

43 The example of the pizza selling couple demonstrates the importance of a well elaborated network in situations of crisis which transcend the common and ordinary. As shown, social capital is a necessary precondition and can be transformed into economic one. Therefore, the element of trust is of utmost importance. Apart from time, sympathy and emotions, trust seems to be won through “gifts”.

44 The balance of tight networks is the most delicate point. The fear of not profiting enough or of having been accused by an unknown partner can put into motion an avalanche of accusations and formal complaints which can lead to a breakdown of previously successfully operating networks. A fact I have observed twice and which ended with the imprisonment of roughly one family member of every household inside the same cuadra (block of flats). The case examples have made obvious that legality and illegality form a microcosm in which the stability between different actors – such as the neighbors, the delegates of the cuadra, CDR guards, inspectors and, in the case of profitable networks, also party members – needs to be preserved. Anecdotic proof of the feeling of mistrust towards “outsiders” of these networks is the fact that Cuban friends of mine who once passed by the street of the couple in order to ask for someone who sells pizza received no information.

45 In this sense I agree with Hann’s statement that activities in :

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the economy variously described as “informal”, “second” or “underground” […] are always tightly connected to the “official” economy, and that allegedly impersonal spheres of market and contractual relations are always mediated by personal contacts [Hann, 2002, p. 9].

47 Although a well elaborated network can facilitate illegal activities, some measures of precaution need to be taken into consideration : such as a modest, instead of a profit maximising, habitus which corresponds to the social desirability of luchando (fighting) to survive, rather than being ambitious and obviously capitalist.

Conclusion

48 Cuba contains elements – such as the possibility of foreign direct investment, the granting of legal status to some private or family based enterprises as well as the development of mass tourism – which transcend the former socialist orientation. Thus, a transition has obviously occurred. The opening-ups approved by the Cuban government towards the private sector seems to be coherent with the maxim of increasing capital for the sake of the survival of “socialism” but not (yet) with a move towards a “capitalist habitus”.

49 Another characteristic of the changes occurring in Cuba’s economy is that they are not evolving in a steady, linear direction “from A to B” but that the reforms are characterized instead by a “back and forth” movement. The “dollarization” of society clearly incorporated one part of the illegal parallel economy ; however the consequence is a resulting division within society.

50 People who work in joint-stock or mixed companies receive in addition to their salary in the national currency a bonus. More and more the former jaba – a bag containing essential items from the shoppings – is being replaced by “dollars”, and provided to everyone who arrives on time and is not missing more than three days a month without a medical certificate  [16]. This is an apparently successful attempt to combat the phenomenon of absenteeism. Drawn from my research results this practice is increasingly being introduced in some parts of the national economy as some – especially higher-ranking – employees in the legal national economy receive a bonus of an average twenty to thirty “dollars” in addition to their monthly salary.

51 The granting of equality among Cubans independent of race or gender has been one of the revolution’s main goals. Nevertheless, not everyone was granted the same privileges in reality. Benefits ranging from extra food portions in addition to the libreta or possibilities to travel abroad at public expense, to the granting of priority in bureaucratic or practical matters (such as repairs to the house or free hotel bookings) remain in forms which perpetuate inequality even today.

52 For those who neither have friends or relatives outside Cuba to support them financially nor manage to achieve an income in addition to their salary in the national currency it is all but easy. This group is excluded from various domains within society due to the economic division prevailing in Cuba.

53 With respect to equality a crucial challenge lies ahead if we take into account the emerging group of “dirigeants-entreprenuers”  [17] who for the majority are party members or members of the armed forces in charge of directing big state enterprise or joint ventures. This group administers and is in direct contact with a considerable amount of economic, social, cultural and symbolic capital in “Bourdieu’s sense”. Due to their protected position within the official sphere they are not subjected to the tricky day to day negotiating cuenta propistas face. Hence, it is probably within this realm of state “gatekeepers” where one of the biggest challenges lies ahead, making it to a promising research topic.

54 In the case that in next decade the salaries in the national economy continue to be modest compared to tourism or joint-venture enterprises, I suspect that the quality of education and the health sector will diminish due to a lack of qualified and motivated personnel  [18]. A further challenge which can already be perceived is the apparent disillusionment towards the effort of acquiring a higher education especially among the younger generation who take into consideration expected salaries. My results make evident that those adolescents whose family are excluded from sources of “dollars” prefer to work either in low qualified but well paid jobs or to engage in illegal activities. This holds true regardless of the family’s background and the volume of cultural capital.

55 Differences among the population of Havana have in my opinion become more visible during the last few years. Yet this is not necessarily accompanied by a higher percentage of poor people. Derived from my analysis it becomes clear that the standard of living of the majority of my informants has not only improved compared to the “special period in time of peace but also compared to 2000. This fact is also backed up by my observations, and seems to find confirmation in Cuban statistics  [19]. At least one result however raises questions, as the year 2005 seems to be an exception : the greater part of my informants complained about drastic aggravations. To summarise, one can state that the transition which followed the crisis in the nineties went ahead with a general increase in living standards. Numerous problems however await a solution.

56 The proclamation “no es fácil” forms part of the idiosyncrasy of the Habaneros and Habaneras but despite the still remaining economic hardships, creativity, inventions and talent to make use of available “capitals” are easily observable. In this way, the borders between the possible and the impossible are being transformed and redefined, and it is to be hoped that this will ease the daily challenges still to be faced.