Those who favor lifting the embargo often point to the examples of Vietnam and China to justify their position, claiming that eliminating the embargo will encourage the growth of a free-market economy which will undermine the communist regime. Such comparisons are not valid. Capitalism is destroying communism in China, but the driving force is not international trade. It is a strong domestic market economy tolerated by the communist government. China's market economy is dominated by many millions of small entrepreneurs who are devouring the communist command economy. Moreover, China's market economy has been growing in depth and diversity since the mid-1980s. Free trade is promoting faster market growth and expanding the personal freedom of millions of Chinese, encouraged by entrepreneurs and investors from Taiwan, Hong Kong, and elsewhere who are providing the capital, entrepreneurial skills, and international trade contacts which are compelling China to transform its economy. In the process, a vast and prosperous middle class is being created. In Cuba, however, the Castro regime is not willing to liberalize the economy and create a free market. Cuban exile communities in the United States, Latin America, and Europe are not willing to work with Castro, and market initiatives by the Castro regime to encourage them to do so are very recent, dating from 1993 for the most part. The basic orientation of the hard-liners surrounding Castro is to contain and restrict all initiatives that unleash individual entrepreneurship and creativity. For example, the government has arrested people for earning "too much" money in the dollarized informal economy, the variety of legally permitted "family businesses" has been restricted, and tax rates on the income of self-employed Cubans have been increased. Moreover, Cuba's constitution and legislation specifically prohibit all private initiative, notwithstanding recent reforms allowing self-employment by Cubans in approximately 140 categories of economic activity from which all professionals (the core of any middle class) are expressly barred. For over three decades, the regime has operated on the basis of divide and rule. Castro's bitter enmity toward the Cuban exile community precludes the possibility of replicating in the Caribbean what China's exile community has accomplished in China. None of the alleged "market reforms" undertaken to date in Cuba are true free-market initiatives. Free enterprise remains highly restricted. Foreign investors doing business in Cuba today deal mainly with Castro's regime. Cuban partners in joint ventures and mixed companies are approved by Castro as "safe." Moreover, unlike China, Cuba has barely started to open up its economy, and what little has been done to date has been permitted with great official reluctance and with the objective of assuring the communist government's political survival. China's economic transformation has been under way since 1978, when important agricultural reforms were introduced, including the right of peasant farmers to grow the crops they wished and retain some of their profit. Moreover, the government of China has encouraged the marketization of the country's coastal provinces, and since 1992 the Chinese constitution has incorporated the concept of the "socialist market economy." Although China remains a communist nation where political freedoms are sharply restricted, the ruling regime has permitted vigorous development of the private sector, thus laying the seeds for its eventual demise and potential replacement by a politically pluralist, more open society. (From "Backgrounder #1010" titled "WHY THE CUBAN TRADE EMBARGO SHOULD BE MAINTAINED", By John P. Sweeney, November 10, 1994. It is on the Heritage Foundation Web Page, www.heritage.org) Louis Proyect
