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Alexander William Salter: Cuba Reminds Us There Is No Political Freedom without Economic Freedom

Like all forms of oppression, communism and democratic socialism belong in the dustbin of history. We may be witnessing the end of Communism in Cuba. On July 11, thousands of Cubans took to the streets to protest the island's appalling political and economic conditions. Some media outlets are trying to spin these as "COVID protests" rather than a general rejection of government domination. The cries of "Freedom!" and "Enough!" and the prevalence of American flags put that narrative to rest. Cubans long to be free, and now they may get the chance.

The island nation of 11 million is a political and economic basket case. Its government is a brutal dictatorship with an appalling record of human-rights abuses. Freedom of speech and assembly are heavily curtailed, and in response to the protests, the regime has restricted Internet access. Cuba's economy is largely bereft of private ownership. Government-run enterprises are the rule, not the exception. Most workers are employed by the state. On the Heritage Index of Economic Freedom, only two countries rank lower: Venezuela and North Korea.

These are not separate problems. Political and economic tyranny are symptoms of the same malady. We must not fall into the trap of blaming only one kind of repression. In Capitalism and Freedom, Milton Friedman warned against thinking "any kind of economic arrangement can be associated with any kind of political arrangement." We aren't free to choose political and economic systems a la carte. Genuine democracy requires free enterprise, and vice versa.

Cuba's ongoing turmoil reminds us we can't compartmentalize human freedom. Sadly, many Western politicians and intellectuals remain obstinate. So-called democratic socialism is currently fashionable. It's also completely unworkable. F. A. Hayek, who shared the Nobel prize in economics in 1974 and was also an accomplished political philosopher, demonstrated this nearly 80 years ago. His Road to Serfdom shows economic control and political liberty are incompatible. The reason is obvious: Top-down economic planners cannot possibly obtain the knowledge of free citizens acting in their economic interest. Political freedom threatens the very control the elites wish to exercise. As Hayek recognized, democratic socialism "is not only unachievable, but that to strive for it produces something utterly different – the very destruction of freedom itself."

"What about China?" comes the inevitable reply. Yes, China has seen significant economic liberalization without political liberalization over the decades. But even now, the Chinese Communist Party dominates economic affairs. Formally and informally, many businesses take their marching orders from the government. In the words of Xi Jinping, the CCP's goal is integrating "the leadership of the party into all aspects of corporate governance." Don't be fooled into thinking the CCP's compromise with some amount of private residual income is a capitalist triumph.

Is it possible to have extensive economic freedom without political freedom? Certainly, it's possible. But far more importantly, how likely is this to work? Too often we focus on authoritarian-capitalist success stories — Singapore is a favorite — as if they provide a generalizable model. Robert Lawson, a researcher at Southern Methodist University and a leading expert on economic and political freedom, rightly calls out this ahistorical thinking. For every Lee Kuan Yew, Lawson reminds us, "there are dozens of tin-pot dictators who have ruined their nations." The extensive scholarly literature on political and economic freedom is clear: They are complements, not substitutes.

Of course, the fullest flowering of human political freedom is liberal democracy. While regular, transparent elections are important, these may matter less for economic liberty than "constitutional protections for speech, religion, assembly, and so on," writes Lawson. Reaching this destination is incredibly hard. It took a good long time in the Anglosphere. As ex-prime minister Gordon Brown once quipped, "When establishing the rule of law, the first five centuries are the hardest." Can it happen in Cuba, China, and other authoritarian states on a more favorable timeline? The jury is still out on how effectively political repression can function in these societies. What might be fragile in Cuba can weather a storm in China. Transitions are always tricky. Hopefully all nations suffering despotism can find their way.

Like all forms of oppression, Communism and democratic socialism belong in the dustbin of history. They deprive millions of life, liberty, and property. It's time to make a final push to eradicate these barbaric philosophies once and for all. We can only hope the brave Cuban demonstrators will lead the way. If they show the world the harmony of political and economic freedom, they can forever wear it as a badge of honor.

Alexander William Salter is the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business at Texas Tech University and a research fellow at TTU's Free Market Institute. He is also a Young Voices senior contributor and a senior fellow with the American Institute for Economic Research's Sound Money Project.

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Posted: July 22, 2021 Thursday 06:30 AM