I'm forwarding a note from Al Campbell, who was my source in my
preceding post on this topic. Hope this helps.
michael
-------- Forwarded Message --------
Subject: Again on Cuban gdp
Date: Mon, 21 Mar 2016 07:15:43 +0000
From: Al Campbell <[email protected]>
To: michael a. lebowitz <[email protected]>
Dear Michael,
Five quick things (again on how I see these thigs, nothing here is
offered as “proofs,” and some others will disagree of course, as on
everything on Cuba)
1) First, very small, on terminology – “nominal” is not “used just by
journalists.” In economics when we use the word “nominal” it is usually
opposed to “real,” which supposedly is ‘corrected for inflation.’ To do
a comparison of GDP between countries for a given year (the idea behind
finding what the GDP “really means”), one would certainly not use real
GDPs (that would add problems of how they were corrected for inflation
from their base year). The issue is not nominal vs real, but how the
comparison is made between two countries that measure their GDP in
different currencies, via exchange rates of the currencies or PPP. OK,
that is an aside on terminology, it is clear what was meant, but
actually there is appoint here – the only accepted standard alternative
to using exchange rates to convert to a single currency is (which has
huge problems), is to use PPP (which has problems, in fact that is what
this is all about, the figure of 20 K using standard PPP ‘seems high,’
“seems like people with that should have more stuff” – but it was done
by a standard methodology, not some political agenda for this specific
case and country)
2) The general feeling of “there should be more stuff” for a 20 K PPP
GDP I do not a priori agree with. Cubans consume a lot (of course, GDP
is actually what they produce, but we’ll leave that aside for the
moment). Yes, education and health care and pension plans involve
massive consumption. When one compares to Mexico or Brazil, one
immediately notes the superior state of the cloths of the majority of
the population, and they consume more food. More books. I am not looking
at the figures, but I am pretty sure they have a higher per capita level
of TVs and refrigerators (I would not make a guess on washing machines
or dryers). And so on. These are major consumption items. I am pretty
sure their per capital level of cars and computers is lower, and one
could think of other such things. Cell phones and even (to a lesser
extent, of course) smart phones were surely as high 5 years ago as those
other countries, but are exploding – not sure how they compare today (my
guess would be still lower), but I would guess they will be higher in 5
years. Here is a big ticket item I would guess (I don’t know off the top
of my head) they are as high as Mexico and Brazil per capita – energy
consumption. And so on. The point is there are lots “things” beyond
health and education. NOTE – I am not even beginning to argue that Cuba
‘really has all the consumer items it needs” – from a human development
point of view (where I always start) that is dead wrong. I am just
considering how they compare to Brazil and Mexico, when those countries
have similar PPP GDPs.
3) The stuff from the 1980s is of no use. The issue there was figuring
how to make the conversion form the Soviet Style accounting ”Material
Production” to the UN National Accounts type accounting. The best work
on that was Zimbalist and Brundenius in the late 1980s, though the Jorge
Perez-Lopez that he mentioned went through after them and redid their
work (in his usual half-baked way) to make things look worse for Cuba –
as Perez-Lopez always does whatever he writes on Cuba – the academic
quality of the work by Z&B was clearly superior.
4) The main question being asked is if anyone, who is not known to be
ideologically opposed to Cuba’s socialist project (either neutral or for
it) has gone through and carefully reviewed Cuba’s GDP figures. The
answer to that, as far as I know, is NO.
It is worth asking why one would be so concerned to do it. I would argue
the general concern (for most people, maybe not this person you are
corresponding with - even correct generalizations cannot be mechanically
projected onto individuals of course) is part of the general attitude
that has been built up in the US over 50 years that “whatever Cuba says
you cannot believe it.” I am sure there are errors in Cuba’s national
Accounts, there are errors and questionable things in the US National
Accounts (like how they evaluate the “real value” of computers, to name
just one). I would argue Cuba has an above average reputation with
international bodies for the quality of the statistical material it
publishes, that most Third World (and even some First World) countries
have less reliable data. Two things I would add. Usually if Ciba does
not want to report some data that they are looking bad in, they simply
do not publish it, as opposed to manipulating it and publishing it
(again, that is why international bodies usually treat data that is
published by Cuba as “pretty good.”) The result is that Cuba’s economic
data, while quite extensive, is definitely not complete – and Cuba could
only be called “mediocre” in “economic data transparency.” I good
example is Foreign Direct Investment. This example also brings up how
complicated looking at these issues are. Cuba claims (has claimed for 25
years since they went to the UN NA system) that if they published that,
the US would know who was doing what and interfere, cause planned
investment to be withdrawn. This is clearly true, and at the same time
it serves often for them becoming secrete about stuff they do not need
to be secrete about to protect themselves from the US – a complicated
issue, and one that of course it’s even more complicated for us to judge
as we are not experts in what the US has done to negotiations they have
had for FDI that have been sabotaged by the US..
Anyway, again, to reiterate the main point – no, there are no studies of
the type he is asking for, that I know of. Also to reiterate, to get a
feeling for the level of GDP when converted into PPP by the standard
methodology, I would definitely not spend my time checking the accuracy
of World Bank estimates of their PPP on the basis of their production
figures, I do not believe it will give a fundamentally different picture
of the level of their annual production relative to other countries than
the 20 K figure gives.
5) Finally a word on Jorge Perez-Lopez and his study. JP-L does not do
the quality of work of say Carmilo Mesa-Lago, who also is for restoring
capitalism to Cuba (however, M-L does the best quality work of anyone
who has capitalist restoration as their overwhelming central concern).
If you want a great example of how bad the work of JP-L can be, read his
book with Sergio Diaz-Briquets called “Conquering Nature, “ in which he
attacks everything Cuba has ever done concerning the environment, and
always with the solution “restore capitalism to fix the problem”)
(actually, he is methodologically even worse than that – much of the
book is about how bad the environmental policies of the USSR were (which
they largely were), and because Cuba and the USSR are both “communist
countries” then one is criticizing Cuba whenever one talks about what
the USSR did, which he throws in lots of “in passing” remarks on – and
again the solution is to restore capitalism).
But we cannot simply ignore his work (or even some work of lesser
quality - some “work,” yes, we can, some anti-socialist authors write
pure garbage on Cuba) because his work is mediocre, has assertions are
inconsistent, etc. Mediocre means there is something to it. Yes, it
would be politically important for someone to do a carefully study
Cuba’s national accounts, not so much because we need check on Cuba, but
to look in detail at every assertion that JP-L made to dispel what is
almost certainly a distorted treatment, but it is “the only game in
town.” Again, my guess a priori would be that some of his accusations
are correct, things Cuba does wrong, but again, one would need to check
every claim in detail, because he will often present stuff that a deeper
understanding would explain why it was that way, other than what he
offers as the reason. So a big project, and a priori I would strongly
expect that none of the correctly indicated errors would change the big
picture, any more than the US errors make our GDP accounts “useless” –
they are very useful to both defenders and opponents of capitalism in
the US, that is, they are very useful in giving a good picture of what
is going on despite their errors and shortcomings – similarly for Cuba.
OK, more than enough. Good luck, Al
*From:*michael a. lebowitz [mailto:[email protected]]
*Sent:* Saturday, March 19, 2016 5:54 PM
*To:* Al Campbell
*Subject:* cuba gdp more
Hi Al,
I passed on [as you can see] your point re ppp, and the guy asking
responded with further questions. If you have any answers or references,
I'll pass them on [and giving you credit]./m
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Re: [Pen-l] What is Cuba's GDP? [question posed on prog econ list
<http://www.mail-archive.com/[email protected]&q=subject:%22Re%5C%3A+%5C%5BPen%5C-l%5C%5D+What+is+Cuba%27s+GDP%5C%3F+%5C%5Bquestion+posed+on+prog+econ+list%22&o=newest>
Maxim Linchits
<http://www.mail-archive.com/[email protected]&q=from:%22Maxim+Linchits%22>
Sat, 19 Mar 2016 00:29:07 -0700
<http://www.mail-archive.com/[email protected]&q=date:20160319>
Thanks Michael. I looked at those numbers too, and realized that a number like
7K is not only formally inadequate (who looks at nominal GDP, besides
journalists?) but also unintuitive. But 21K? If we follow the eyeballing
method, the answer will be in eye of the beholder. And I think most observers
would expect to see much more “stuff” for 21K, including cars, computers,
internet access, construction etc. Health and education are highly important
stuff, but there’s lots of other stuff one would expect to see for that kind of
money - unless you live in the US. I’d expect to see much more consumption,
given that Cuba is vastly more egalitarian than the GINI champions you
mentioned.
So perhaps there is more to discuss. Has anything been written on Cuba’s
national accounting methodology? How accurate is the data on purchasing power?
I remember seeing a paper from the 1980’s on Cuban national accounting
practices, but I assume a lot has changed since then. The most recent account I
could find is “Measuring Cuba’s economic performance” by Jorge F Perez.:
https://books.google.ru/books?id=fqx0BQAAQBAJ I have not read it yet and I
don’t expect this source to give an unbiased assessment, but it seems to be
the only serious study of the topic in print.
Reducing relatively open capitalist and relatively closed socialist economies
to a common denominator is a challenge worth exploring, but it seems little has
been done on that front since the collapse of the USSR. For what it’s worth the
CIA World Factbook implies that Cuba’s output should be around 11-12K today. I
doubt this figure is the product of painstaking research, or that the figure
even comes from the CIA, but it does not seem implausible.
From:[email protected] <mailto:[email protected]>
[mailto:[email protected]] On Behalf Of michael a. lebowitz
Sent: Thursday, March 17, 2016 12:40 AM
To: '[email protected] <mailto:[email protected]>'<[email protected]>
<mailto:[email protected]>; Progressive Economics
<[email protected]> <mailto:[email protected]>
Subject: Re: [Pen-l] What is Cuba's GDP? [question posed on prog econ list
A friend who does work on the Cuban economy commented that you should forget
about the official gdp measure and consider only the ppp. He notes that the WB
has
Brazil at about 15, Mexico at 16, Panama at 20 and Chile at 22 (Argentina not
given). And the US is 53 K. When I look at those numbers and consider what
Cubans produce, I find the number of 20 K not at all unreasonable. We could
talk about reducing it to 18 or whatever, that’s more or less irrelevant – they
rank about where they should by what their country produces, compared to other
LA countries. Yes, I know 20 K seems like most Cubans do not have that in their
pocket (and they don’t), but most Brazilians do not ever see 15 K, most
Mexicans do not see 16K, and so on. Of course lots more one could say and
discuss, but that’s the super short form.
https://lists.csuchico.edu/mailman/listinfo/pen-l
--
WHILE I AM IN CUBA, PLEASE [email protected] <mailto:[email protected]>
<mailto:[email protected]>
FOR PERSONAL MAIL AS THAT OFTEN IS EASIER TO DOWNLOAD
---------------------
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
8888 University Drive
Burnaby, B.C., Canada V5A 1S6
Cuba home: 7 832 8189
Cuba cell: 53 5 476 0553
WHILE I AM IN CUBA, PLEASE [email protected] <mailto:[email protected]>
FOR PERSONAL MAIL AS THAT OFTEN IS EASIER TO DOWNLOAD
---------------------
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
8888 University Drive
Burnaby, B.C., Canada V5A 1S6
Cuba home: 7 832 8189
Cuba cell: 53 5 476 0553
--
WHILE I AM IN CUBA, PLEASE [email protected] FOR PERSONAL MAIL AS THAT
OFTEN IS EASIER TO DOWNLOAD
---------------------
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
8888 University Drive
Burnaby, B.C., Canada V5A 1S6
Cuba home: 7 832 8189
Cuba cell: 53 5 476 0553
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