Table Of ContentErnesto ‘Che’ Guevara:
socialist political economy
and economic management
in Cuba, 1959-1965
Helen Yaffe
London School of Economics and Political Science
Doctor of Philosophy
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UMI Number: U615258
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Abstract
The problem facing the Cuban Revolution after 1959 was how to increase productive
capacity and labour productivity, in conditions of underdevelopment and in transition
to socialism, without relying on capitalist mechanisms that would undermine the
formation of new consciousness and social relations integral to communism.
Locating Guevara’s economic analysis at the heart of the research, the thesis
examines policies and development strategies formulated to meet this challenge,
thereby refuting the mainstream view that his emphasis on consciousness was
idealist. Rather, it was intrinsic and instrumental to the economic philosophy and
strategy for social change advocated.
Analysing the evolution, impact and institutionalisation of his ideas, this thesis fills
several gaps in the history of economic thought, Cuban economic history and the
literature on Guevara. Highlighting his study of Marx’s Capital, recourse to the
technological and managerial advances of capitalist corporations and critique of
Soviet political economy, the research offers a stimulating new contribution to the
field of socialist theory. It examines the organisational structures and control
mechanisms Guevara created, demonstrating how they link to his Marxist formation.
It provides the first record of Guevara’s role in several critical areas: promoting
education and training; establishing accounting, investment and supervision systems;
forging workers’ participation in management; founding research and development
institutions; formulating policies to raise consciousness and integrating psychology
as an economic management tool.
The research is based on new archival and interview sources. The thesis concludes
that Ernesto ‘Che’ Guevara made an indispensable contribution to socialist political
economy and played a vital role in industrial organisation and economic
development in Cuba. It connects these two contributions, demonstrating how
Guevara’s analysis of the law of value was integral to the economic management
system he created as Minister of Industries.
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Contents
Acknowledgements
CHAPTER 1
Introduction and methodology
PART ONE
Historiography and Literature
CHAPTER 2
Cuba: historiography
CHAPTER 3
Ernesto ‘Che’ Guevara: the existing literature
PART TWO
Background to the Budgetary Finance System
Prologue
CHAPTER 4
Revolutionary consolidation and emergence of
Budgetary Finance System
CHAPTER 5
The Great Debate 1963-65
Table 1
PART THREE
Guevara’s solutions
Prologue
CHAPTER 6
Education, training and salaries
CHAPTER 7
Administrative control, supervision and investment 186
CHAPTER 8
Collectivising production and workers’ participation 227
CHAPTER 9
Science and technology 270
CHAPTER 10
Consciousness and psychology 319
PART FOUR
Conclusions 371
Prologue 372
CHAPTER 11
Critique of the Soviet Manual of Political Economy 376
CHAPTER 12
Assessment and conclusion 407
APPENDICES 416
1. Organigram of the Ministry of Industries 417
2. Standard interview questions 419
3. Bibliography: primary sources 424
4. Bibliography: secondary sources 436
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Acknowledgements
Between autumn 1995 and summer 1996 I lived in Cuba with my sister - austere
years during the Special Period. Cubans dug deep to find what they needed to
survive, as individuals and as a socialist society. During a solidarity brigade to an
agricultural camp in Ciego de Avila we met hundreds of young Cubans who had
volunteered to work in the fields. One teenager of my own age told me they were
there ‘to defend our country, to defend socialism.’ Having grown up in central
London, this was an unfamiliar attitude which served as an important insight into
moral incentives and socialist consciousness. Since then this lesson has been
reinforced on frequent trips to Cuba, by the commitment and sacrifice demonstrated
by members of the Union of Young Communists who led brigades and organised
international festivals.
This thesis owes its content to the many protagonists who collaborated with Guevara
in Cuba 1959-1965 and who patiently responded to my questions. Without them it
would not have been possible, certainly not in its current form. This history is almost
as much their own as Guevara’s. Orlando Borrego Diaz showed endless patience and
encouragement, as the list of interviews in the bibliography demonstrates. My
determination to read his book led me to Guatemala to improve my Spanish. It was
worth it. Angel Arcos Bergnes offered me support and material from his own
archive, and responded to my endless enquiries with the enthusiasm for which
Guevara had praised him. Other important interviewees who allowed me to return for
a second interrogation include Edison Velazquez, Enrique Oltuski and Tirso Saenz.
These revolutionaries share an exciting history as part of Guevara’s inner circle and
it is their commitment to Guevara’s theory and practice, and their wish to
disseminate knowledge about it, which motivated their support.
Several Cuban companeros from the younger generation encouraged and facilitated
my doctoral research. Particularly, I would like to mention Rogelio Polanco Fuentes
who, despite his overwhelming responsibilities as Director of Juventud Rebelde
among other posts, showed a genuine interest in my studies and did more than I
expected to make contacts and organise interviews with revolutionary leaders. The
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Che Guevara Study Centre opened archives and Tatiana Martinez Hernandez gave
me her own material and friendship. Kenia Serrano Puig also did everything in her
power to help me and together with Nancy Coro Aguiar showed great concern,
friendship and support.
Yani Cruz Gutsens has been my rock since we met in 1998, not just helping with the
research, but also acting as my surrogate sister during field work. She has been a
great inspiration, along with her husband Eric, son Adrian and the rest of the family,
who have taught me that political commitment is entirely compatible with fiesta
pachanga! I have eternal gratitude for Mongui who welcomed me into his family
with open arms, even before I met his son, Daniesky Acosta Linares, who gave me
the ultimate moral incentive to finish the PhD - before our wedding!
Back in London the first acknowledgement goes to my supervisor at LSE Colin
Lewis. He worked hard to pin me to academic paradigms, but always supported and
defended the intellectual integrity and authenticity of the thesis. Thanks also to
Meghnad Desai who joined in as secondary supervisor and overwhelmed me with
useful references. Thanks to Paul Bullock for stimulating discussions about the
theoretical material. Thanks to all my companeros who have shown that moral
incentives can even function ‘in the belly of the beast’. Special thanks to those who
helped with proofreading this thesis, especially Carol and Nicki, but also Sam and
Ethesham. Finally thanks to the unconditional support of my family: Susie and Leo,
who had two beautiful babies while I was busy producing just one thesis; and my
parents, Ann and David, who brought me up to think critically, and most important,
to care.
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Chapter 1: Introduction
CHAPTER 1
Introduction
Popular biographies, memoirs, academic articles and political tracts have focussed on
Ernesto ‘Che’ Guevara’s military commitment to revolutionary social change; the
influence of his travels in Latin America, his participation in guerrilla warfare in
Cuba 1956-1959, the Congo 1965 and Bolivia 1966-67. Four decades after his death,
Guevara is still both admired and derided, testimony to the fascination his persona
continues to hold. Yet his most significant contribution remains largely unknown.
His economic ideas and work in the Cuban government 1959-1965 have received
scant attention from historians, social scientists and other commentators.
Analysing the evolution of Guevara’s economic analysis, its impact and
institutionalisation through the Department of Industrialisation, the National Bank
and the Ministry of Industries, this thesis fills several gaps in the history of economic
ideas, Cuban economic history and the literature on Guevara. It demonstrates that
Guevara made an indispensable contribution to socialist political economy and
played a vital role in industrial organisation and economic development in Cuba. It
connects these two contributions, demonstrating how Guevara’s Marxist analysis of
the law of value was integral to the economic management system he created, known
as the Budgetary Finance System (BFS).
The problem facing the Cuban Revolution after 1959 was how to increase productive
capacity and labour productivity, in conditions of underdevelopment and transition to
socialism, without relying on capitalist mechanisms that would undermine the
formation of new consciousness and social relations integral to communism.
Locating Guevara’s economic analysis at the heart of the research, the thesis
examines policies and development strategies formulated to meet this challenge,
thereby refuting the mainstream view that his emphasis on consciousness was
idealist. Consciousness was intrinsic and instrumental to the economic philosophy
and strategy for social change.
8
