Cuba: Postmortem of the Communist Revolution

One way or another, Cuba’s 67-year experiment with communism is coming to an end. Whether it is caused by American invasion, U.S. political and economic pressure, internal revolt, or some combination of the three, Cuba’s Communist Party monopoly on the exercise of power will cease. What will replace it is uncertain, and as the Haitian anarchy shows, things can always get worse.

But they can also get much better. With proper reforms overseen by the highly educated and well-heeled Cuban diaspora, the island’s economic growth could mirror that of Chile, which implemented free-market economic reforms after the overthrow of the Marxist President Salvador Allende in 1973, or Poland, which started its transition from communism to capitalism with the Balcerowicz Plan in 1989. Both countries were once basket cases, but are now widely recognized as regional success stories. If that happens, other desirables, such as renovated town centers, functioning sewage systems, better roads, and cleaner hospitals, will follow.

But one of the lessons that even a well-executed transition from communism to capitalism teaches us is this: Change takes time and is disruptive. A worker who loses his job because a loss-making enterprise (“loss-making” is the crucial term here) ceases to be propped up by the taxpayer does not blame the central planner for designing a factory that produces stuff that nobody wants to buy. He blames the capitalist who reallocates capital and human resources toward enterprises that can produce goods and services that people at home and abroad desire. Jobs are destroyed, and new ones are created. That churning is the essence of capitalism. It is, in part, what makes Americans rich.

Then there is the money illusion, or the human tendency to focus on nominal prices. Economic transitions are often accompanied by inflation. The Cuban peso, like Eastern European currencies before the fall of the Berlin Wall, is not freely traded. Its value is set by the authorities, leading to as high as a 24-fold gap between (imaginary) official and (real) black-market rates. The same can be said of foodstuffs. Bread is dirt cheap but rationed, and so it commands much higher prices on the black market. That is an old communist trick. Keep the official prices low to boast of how much ordinary people can afford relative to wages, even though, in practice, officially priced goods are hard to come by. When the peso starts floating freely, expect its value to plummet and prices of many goods to skyrocket.

Also, privatization of previously nationalized or state-built enterprises can be accompanied by corruption. That is especially true when the privatizing entity, usually a government-appointed board of some kind, either consists of or is connected to members of the former regime. As was the case in Slovakia, Hungary, and—most notoriously—Russia, self-dealing can have several deleterious consequences. First, it rewards, rather than punishes, ex-communists. Second, it extends ex-communist influence in society. Third, it leads to incompetent management and prolongs economic adjustment. Therefore, extreme care must be taken to offload state assets in a maximally transparent way (such as a blind auction) and, preferably, under international supervision. Importantly, privatization should be open to foreign (including diaspora) entrepreneurs who will bring with them tacit knowledge, including best accounting and production practices.

These issues matter, because humans suffer from selective memory and nostalgia. Returning to the Central (formerly “Eastern”) Europe of my childhood, as I occasionally do, I am struck by what people remember and what they have forgotten about life under communism. Gone are the recollections of long lines in front of stores selling stuff sophisticated Western customers would not glance at. Gone are the memories of widespread bribery that greased the wheels of commerce: “Are you sure you are out of this particular medicine?” Here is a bit of money “to look again.” Shortages? Never heard of them. Conversely, people love to remember (official) prices and contrast them with the present. Wage increases are seldom factored in. Capitalism is blamed for all that still ails society, while socialism is more fondly remembered by the old and idealistically reimagined by the young.

Left-wing demagogues use such quirks of human psychology to salvage from a century of socialist disasters some “positives” and to minimize the salutary effects of free enterprise. That is particularly true of Cuba—a tiny island nation that has for decades withstood the pressure from the American behemoth, thereby winning progressive admiration. Thus, before the Cuba of Che Guevara and the Castro brothers disappears over the memory horizon, it is vital to set the record straight and separate the reality from the myth.

Let us start with the promise of the Cuban Revolution that brought the communists to power in 1959.

Novelist Norman Mailer said Castro was “the first and greatest, hero to appear in the world since the Second World War.” Susan Sontag wrote, “Ever since my three-month visit to Cuba in the summer of 1960, the Cuban revolution has been dear to me, and Che, along with Fidel, have been heroes and cherished models.” French philosopher Jean-Paul Sartre called Che Guevara “the most complete human being of our age.” His partner, Simone de Beauvoir, wrote of her visit to Cuba, “For the first time in our lives, we were witnessing happiness that had been attained by violence.” Activist Malcolm X praised Cuba’s race relations, while the once-influential sociologist C. Wright Mills praised the revolutionaries for their humanity.

Obviously, things turned out differently.

According to Cuban American journalist Frank Zimmerman’s new book 12 Myths about Cuba: The Power of Narrative, Cuba’s communist regime bears responsibility for thousands of dead and millions forced into exile. From the outset, Castro reinstated the death penalty, ordered firing squad executions, and interned tens of thousands in prisons and forced-labor camps. Che Guevara personally directed summary executions at La Cabaña fortress. Between 25,000 and 30,000 Cubans were sent to forced-labor camps for being gay, religious, or ideologically “deviant.” State-induced scarcity, economic collapse, and a tourism-driven survival economy pushed many Cubans, including minors, into prostitution during the Special Period in the 1990s.

The regime proclaimed the end of racism by decree in 1959, then systematically betrayed Afro-Cubans. For example, the “pre-criminal social dangerousness” law, which allowed imprisonment without a crime, was most frequently applied to young Afro-Cubans. During the July 11, 2021, protests over deteriorating economic conditions made worse by the COVID-19 pandemic, black Cubans were prominent among those arrested, beaten, and given sentences. Structural racism was replaced not with equality but with superficial, folkloric representation on state media. Diversity is permitted only when it applauds power. The moment Afro-Cubans organize autonomously or dissent, repression follows.

In 1958, Cuba’s per-capita GDP topped the equivalent of $24,000 in today’s dollars, placing it among the most prosperous economies in Latin America. By 2025, official figures put it at roughly $7,500—a number Zimmerman finds far too high. Poverty was never eliminated. Instead, it was centralized, rationed, and weaponized as a control mechanism. Private enterprise was dismantled, and independent economic activity criminalized. The military conglomerate GAESA captures an estimated 37 percent of GDP. George Orwell, reflecting on the communist assertion that, “You can’t make an omelet without breaking eggs,” once famously retorted: “Yes, but where is the omelet?” That’s a question as appropriate regarding Cuba as any other socialist disaster zone.

And so, the left-wing salvage operation got underway.

In 2016, Barack Obama said to Raul Castro, “Look, you’ve made great progress in educating young people. Every child in Cuba gets a basic education. That’s a huge improvement from where it was. Medical care—the life expectancy of Cubans is equivalent to the United States despite it being a very poor country, because they have access to health care. That’s a huge achievement. They should be congratulated.” (To his credit, Obama also noted that the Cuban “economy is not working.”) In 2020, Vermont Sen. Bernie Sanders said, “We’re very opposed to the authoritarian nature of Cuba. But you know, it’s unfair to simply say everything is bad. When Fidel Castro came into office, you know what he did? He had a massive literacy program. Is that a bad thing? Even though Fidel Castro did it.”

Likewise, Justin Trudeau opined that “Mr. Castro made significant improvements to the education and healthcare of his island nation.” “They have a superb health system, perhaps the best on earth,” Jimmy Carter explained. Lesser figures, such as Ted Turner and Michael Moore made similar observations. Finally, Nicholas Kristof opined on the pages of the New York Times, “Cuba in health care does an impressive job that the United States could learn from … an American infant is, by official statistics, almost 50 percent more likely to die than a Cuban infant. … A major strength of the Cuban system is that it assures universal access. Cuba has the Medicare for All that many Americans dream about.”

What do the facts say?

Before the revolution, Cuba already had a 76 percent literacy rate, among the highest in Latin America. The pre-Castro republic had functioning universities, a pluralistic press, competing political parties, and educators like Ana Echegoyen Montalvo, who led a national adult-literacy campaign in the mid-1950s. That history was deliberately buried because the regime needed the fiction of an illiterate past to make its harsh rule more defensible. The 1961 literacy campaign did not teach reading so much as it brainwashed the populace. To learn the letter “F,” Cuban children read, “The rifle is Fidel’s; faith sharpens his ideas; the island puts its faith in him.” Every letter was saturated in ideology. What Western leaders praised as emancipation was, in practice, the regime’s first attempt at mass indoctrination.

The same logic governed formal schooling. From primary school onward, children were enrolled in the José Martí Pioneer Organization, chanting daily, “Pioneers for communism: we shall be like Che.” University admission depended less on academic merit than on ideological reliability, including participation in the Union of Young Communists, attendance at political rallies, and demonstrated conformity to official doctrine. Chile, Uruguay, and Costa Rica achieved comparable educational outcomes without criminalizing dissent or converting classrooms into instruments of surveillance.

The infant mortality figures, the life expectancy comparisons, and the doctors-per-capita ratios similarly fail to describe what really happens when an ordinary Cuban gets sick. Two medical systems operate on the island simultaneously. One serves party cadres, senior military officers, and foreign visitors with hard currency, at showcase institutions like CIMEQ—a well-stocked, functional, and carefully photographed center for medical and surgical research. The other is endured by everyone else: hospitals where operating rooms lose power without warning; where antibiotics are a luxury; where patients are routinely told to bring their own syringes, gauze, painkillers, and bed linens.

According to Zimmerman and other Cuban writers, the average Cuban wage in 2025 stood at approximately $17 a month, which is not enough to purchase basic medicines. What the regime presents as universal healthcare dissolves, at the hospital door, into an informal economy of bribes, favors, and political connections. Care follows loyalty, not clinical urgency. Dissidents report deliberate denial of treatment and medical records share filing cabinets with political profiles.

The island’s medical export program—currently about 25,000 Cuban doctors are deployed in 56 countries—is often held up as proof of the revolution’s success and generosity. It is, in practice, the island’s most lucrative industry and, by the account of serious international observers, a system of forced labor. Host governments pay the Cuban state between $10,000 and $12,000 per doctor per month. The doctors themselves receive between 2.5 and 20 percent of that sum, meaning a physician in Venezuela might pocket $250 to $300 while Havana collects more than $10,000, and one in Qatar keeps roughly $1,000 of the $5,000 to $10,000 paid on his behalf. In 2018, this arrangement generated approximately $6.4 billion for the regime, accounting for Cuba’s single largest source of foreign revenue. The U.S. State Department’s Trafficking in Persons Report has cited that figure as evidence of forced labor.

If economic and political freedoms survive, future generations will not have to wait in lines for basic goods. They will not have to memorize the propaganda alphabet or bribe the pharmacist for aspirin. They will encounter Cuba the way most people encounter much of history: through the curated myths of admirers, the selective memory of nostalgists, and the romantic imagination of ideologues who never had to live inside the system they celebrate. That is precisely why the Cuban record matters. The literacy campaigns were indoctrination. The hospitals were a two-tier lie. The doctors were, by any serious legal definition, coerced labor. Cuba was not a social-justice experiment that failed for want of resources. It was a system that could not produce resources. It was also a system designed to concentrate power, and it succeeded at that completely. Forgetting these facts about Cuba is not compassionate. It is the precondition for repeating it.

Markets FTW

The Most Important IPO in History

SpaceX priced its IPO at $135 per share, raising $75 billion and valuing the company at $1.8 trillion. The financial press will spend the next several weeks arguing about whether that number is justified by Starlink’s margins, the Starship program’s trajectory, and the AI infrastructure buildout. Those are reasonable conversations to have. But they are also, in the deepest sense, beside the point. The more important question is not whether SpaceX is worth $1.8 trillion to investors. It is whether the mission that animates the company—a self-sustaining, multiplanetary human civilization—is worth pursuing at all. The answer is unambiguously yes.

Begin with a fact that tends to get lost in debates about climate change: Well over 99 percent of all species that have ever lived on Earth have gone extinct. Five mass extinction events have swept the slate almost clean, and not one of them required human assistance.

The Ordovician-Silurian event 444 million years ago was driven by glaciation, or vast ice sheets that caused sea levels to drop sharply, destroying shallow ocean habitats. The Late Devonian crisis followed as expanding land plants led to oxygen-depleted waters and global cooling. The Permian-Triassic extinction 252 million years ago resulted from massive Siberian volcanic eruptions that released huge amounts of greenhouse gases, causing extreme warming and ocean acidification. Triassic-Jurassic volcanism raised CO₂ levels and destabilized climates. The Cretaceous-Paleogene extinction 66 million years ago combined an asteroid strike with volcanic activity, creating global darkness, acid rain, and cooling that ended the dinosaurs.

There is no reason to think that naturally occurring challenges to human survival are a thing of the past. A super volcano eruption beneath Yellowstone could inject enough sulfur dioxide into the atmosphere to trigger a volcanic winter, destroying global agriculture. A sufficiently large asteroid strike of the kind that ended the Cretaceous would produce an “impact winter” of similar character. A supernova within 30 light-years of Earth could strip away the ozone layer, exposing all life to lethal ultraviolet radiation. The sun itself will eventually boil the oceans away as it evolves into a red giant.

Just because Earth is habitable today does not mean it will be habitable tomorrow. Our planet is not a sanctuary. It is a rock in an indifferent cosmos, subject to forces against which a single-planet civilization has essentially no defense. The only meaningful hedge against that exposure is to become two civilizations, then several, spread across worlds that no single asteroid, no single super volcano, no single dying star can simultaneously destroy.

That is what the $75 billion raised today is ultimately for. Not Starlink subscriptions, though those matter. Not launch contracts, though those matter too. The deeper logic of SpaceX—the reason Musk has described Mars colonization as a life insurance policy for the human species—is that technological and economic progress must eventually escape the gravitational pull of a single planet.

Chart of the Week

Spain’s Long Descent, and What It Tells Us About the Rise of the West

The chart below tracks the ratio of Spanish to British income per person between 1277 and 2024, and it records one of the most dramatic economic reversals in European history. In a new working paper, Leandro Prados de la Escosura of Universidad Carlos III de Madrid has produced the most careful account yet of why the gap opened. His answer is that Spain stopped being good at using what it had. Using sophisticated price data to measure economic efficiency, he finds that Spain and Britain were roughly equal in worker productivity as late as the 1590s. Then Spain fell behind. By 1800, British workers were more than twice as productive as Spanish ones. The culprit was not a shortage of land or capital. It was a collapse in what economists call total factor productivity—basically, how efficiently an economy turns its resources into output. Spain had the inputs. It just stopped using them well.

Why?

Prados de la Escosura points to several causes. The most important, in his view, is de-urbanization. Between 1591 and 1646, the share of Spain’s population living in cities fell from nearly 15 percent to under 9 percent. That might sound like a small reduction, but it wasn’t. Cities are where commerce, specialization, and productivity gains happen. In northwest Europe, especially England and the Netherlands, growing cities were pulling agricultural workers to be more productive, because urban demand gave farmers a reason to produce surpluses and earn money to buy city goods. Spain ran this engine in reverse. Escosura’s research with Carlos Álvarez Nogal shows that as King Philip II doubled consumption taxes to pay for his wars across Europe, Castilian cities shrank, trade contracted, and incentives for productivity improvement disappeared. Real wages and land returns fell.

Remarkably, Philip II was compelled to raise taxes despite the massive amounts of silver that Spain received from the New World. Scholars continue to debate the effect of silver inflows on the Spanish economy, but silver’s damage to Spanish institutional development is widely accepted. The crown used silver-backed borrowing to finance wars without seeking the consent of the Cortes, or Spain’s parliament. That allowed Philip II to present the Cortes with fiscal faits accomplis: spend first, demand taxes afterward, leaving representatives little choice but to comply. The Cortes, which had genuine potential to evolve into a meaningful constitutional check on the monarchy, as happened in Britain and the Netherlands, was gradually sidelined and eventually met only ceremonially after 1663.

That matters for a much larger debate. A popular argument holds that Western prosperity was built on colonial plunder. Spain’s experience cuts against this story on both logical tests. Was colonial wealth sufficient for prosperity? Clearly not. Spain extracted more treasure from the Americas than any other European power, yet fell into seven bankruptcies between 1556 and 1656, as well as prolonged relative poverty. Was it necessary? Also no. Most scholars, including the Nobel Prize-winning economist Douglass North and the Nobel Prize-winning economic historian Joel Mokyr, agree that Britain’s great productivity surge (the one that left Spain so far behind) was driven by better domestic institutions, including parliamentary checks on the power of the monarch, and the concomitant commercial, scientific and technological dynamism—not by what was taken from foreign territories.

True, Britain also had an overseas empire, though it was less extractive and came later. The most decisive evidence in favor of domestic reforms and endowments rather than colonial exploitation as drivers of prosperity, therefore, comes from countries that had no colonies at all. Switzerland became rich without a single overseas possession. Ditto Norway and Finland. Swedish colonies amounted to little more than St. Barts in the Caribbean. The German colonial footprint was trivial before 1884—by which point the country had already become an economic powerhouse. In that sense, the German Empire in Africa was a result, rather than a prerequisite, for prosperity.

The engine of Western European prosperity was ingenuity and good institutions—things that could be built at home and destroyed there too. Spain’s story, in the end, is not about what was seized abroad. It is about what was wrecked at home by war, by taxes, by the slow suffocation of the parliaments, cities and industries that might have carried Spain into modernity alongside Britain.