Under the new political leadership of Raul Castro Cuba is beginning to reform. Two examples of such changes include allowing Cubans to own their own house, relaxing wage restrictions, and having cell phones (W-S J, April 12 & 15, 2008). In essence, Cubans are beginning to have the right to own property; whether owning house/land, communication, or labor. Ala Coase, property rights are essence to the efficient functioning of decentralized markets.
In a related issue, this also raises a question of economic warfare. Trade embargoes are enacted to alter the policies of a foreign government, either through direct persuasion or indirect rebellion. As we are nearing the 50th anniversary of the Cuban trade embargo a legitimate question is when should it be considered a failure? Alternatively, given reforms such as these, how much must policy change in order for the U.S. to justify lifting the embargo?
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- Dr. McCannon
- Welcome to the Law and Economics blog spot. Every year I teach an upper-level undergraduate course in Law and Economics at Wake Forest University. I find the issues quite interesting and want to have a forum to have continued discussions.
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As an update, the W-S Journal reported (May 2, 2008) that the Cuban national government is going to shift control of the farms to local councils. The goal is to increase food production and reduce dependence on imports. Interestingly, this goal signals that Cuba's government acknowledges that centralized, planned decisionmaking is less efficient than decentralized decisionmaking - at least in agriculture. Another sign of the freeing-up of the Cuban economy.
On May 8, 2008 (W-S J) President Bush stated that Cuba's post-Fidel leadership has made "only empty gestures at reform" and rejected easing restrictions on Cuba. :(
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