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Recently, economists Pedro Monreal Related Inflation and Workers’ Compensation It is emphasized that even if the government announces a macroeconomic stabilization plan including budget management, Price ceilingTo achieve this goal, banking and other inflation control measures mostly resort to “depressing aggregate demand by depressing the share of worker compensation in GDP.”
Dr. Monreal’s argument is logical and common in inflation downgrades. For example, in Argentina, while wages and pensions are now slightly up, they were drastically reduced by inflation in the first months of the Milley government, not because the liberals are psychopaths who hate the working class, but because after the monetary populism of the previous years, the government inevitably had to adjust the economy to reality, and the deceived people had to pay for the money they had wasted.
However, Monreal’s paper assumes that the Cuban government wants to reduce inflation.and in reality, in addition to a lot of verbal bombardment, There are no concrete actions to prove or even demonstrate that reducing this scourge is a top priority of Castroism.. Therefore, the relationship established by Monreal between inflation and labor compensation, although it exists, is in our opinion the opposite of the way he expresses it.
As he points out, this is indeed the case Cuba’s inflation curbs mainly due to reduced demandThat is, according to official data, people are too poor to bid for the existing supply, so prices are “only” increasing by about 30% per year. However, this does not necessarily lead to the conclusion drawn by Professor Monreal: Castroism impoverished the people to curb inflation.
If curbing inflation in Cuba is the government’s real goalThe plan to reduce state spending required for this purpose is already known. However, although this plan is invoked at every Castro rally, its details are unclear. Nor has any real anti-inflation measures been takenIf prices stabilize, it is not because the government wants it to, but because people do not have the money to bear higher prices.
Castroism loves inflation, it worships it because it is like a tax Thus, transferring resources from citizens to the state. Moreover, the government is the largest property owner in the country, Inflation liquefies real wages, which is good for him To keep the accounting of state-owned companies profitable, while the resources extracted from the people are invested in areas that really interest those in power: tourism.
Lowering inflation in Cuba requires reducing government demandbut this means reducing the economic and social influence of the party/government, freeing up resources for the people and giving them greater freedom to manage them effectively. In short, Custerism must go the way of Vietnam and China, and that is exactly what it avoids doing He has avoided doing this since the collapse of the Soviet Union in 1989, even at the cost of destroying the economy. Even though the “achievements” of health, culture, education, sports, civic tranquility have vanished. Fidel, Raúl, Díaz-Canel and everyone have avoided doing this, even though by doing so they have turned the island into a terror sanatorium that young people flee from.
There is no sign in the Castro regime’s recent political and economic decisions that it has stopped subordinating the economy to its political interests. Instead, consistently failing price controls and widespread demagogic crackdowns on the private sector suggest that this administration would rather commit suicide than change its policies. A policy that involves as little innovation as possible And only if the regime’s power is not in imminent danger. Even doing nothing would be worse for Castroism itself in the long run.
in short, General evidence suggests that poverty is not a side effect of inflation, but rather it is created to deliberately impoverish the people in order to support the regime.. Rather than try to control it, the government’s decision is to do nothing, and of course, it pretends to work, making plans and chasing after MSMEs like a man jumping half-naked around a bonfire to pray for rain.
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