1. Since 1986 it has become more fashionable in Cuba to drop “Planificación” and refer to the system as SDE.

2. For one, see Juan Espinosa and Andrew Zimbalist, Economic Democracy (New York: Academic Press, 1978). Also see Martin Carnoy and Derek Shearer, Economic Democracy (New York: Sharpe, 1980); Participatory and Self-Managed Firms, edited by Derek Jones and Jan Svejnar (Lexington: Heath, 1982); and Wlodimierz Brus, The Economics and Politics of Socialism (London: Routledge and Kegan Paul, 1973).

3. José Acosta, Teoría y práctica de los mecanismos de dirección de la economía (Havana: Editorial de Ciencias Sociales, 1982), 305.

4. Acosta, Teoría y práctica de los mecanismos, 302; and Alexis Codina, “Worker Incentives in Cuba,” World Development 15, no. 1 (Jan. 1987):127–38.

5. Codina, “Worker Incentives,” 311.

6. In theory, self-financed enterprises are supposed to cover all their expenditures from their own revenues, without subsidies from the state budget. Generally, self-financed enterprises are also expected to turn a profit. The alternative form is the enterprise that is budget-financed. Such enterprises have their expenditures covered by the state budget and are not judged by the existence of profits or losses. In practice, self-financed enterprises in Cuba and other centrally planned economies generally do receive state subsidies and are not allowed to go bankrupt.

7. Codina, “Worker Incentives,” 130. On the history of piece payments in Cuba, see also Lázaro Domínguez, “Para un análisis de las deficiencias en la normación del trabajo en Cuba,” Cuba Socialista 4, no. 7 (July–Aug. 1987):96–103.

8. Two interesting sources on this debate are Roberto Bernardo, The Theory of Moral Incentives in Cuba (University, Ala.: University of Alabama Press, 1971); and Man and Socialism in Cuba: The Great Debate, edited by B. Silverman (New York: Atheneum, 1973). The Silverman volume contains translations of several original articles from the debate. An excellent Cuban source on this period is Ruby Rodríguez Suárez and Eduardo Montadas, Evolución histórica de la planificación en Cuba (Havana: Facultad de Planificación de la Economía Nacional e Industrias, Universidad de Havana, n.d.).

9. Carollee Bengelsdorf, “Between Vision and Reality: Democracy in Socialist Theory and Practice,” Ph.D. diss., Massachusetts Institute of Technology, 1985, 166. See also Linda Fuller, “The Politics of Workers' Control in Cuba, 1959–1983,” Ph.D. diss., University of California, Berkeley, 1985, ch. 7.

10. Codina, “Worker Incentives,” 131.

11. I have detailed the failure to develop worker participation in the 1960s in “Worker Participation in Cuba,” Challenge 18, no. 5 (Nov.–Dec. 1975):45–54. Other negative factors were also working to constrain the effectiveness of Cuban economic policy during this period.

12. Carmelo Mesa-Lago is one such author. He reports that economywide output per worker jumped 21 percent in 1972. See Mesa-Lago, Cuba in the 1970s, revised ed. (Albuquerque: University of New Mexico Press, 1978), 39.

13. These figures were taken from Castro's speeches to the 1975 and 1980 party congresses.

14. M. Pérez-Stable, “Institutionalization and Workers' Response,” Cuban Studies 6 (1976):331–34. Pérez-Stable's sample of fifty-seven workers was selected nonrandomly and represented disproportionately workers who are more highly educated and politically conscious.

15. Antonio Herrera and Hernán Rosenkranz, “Political Consciousness in Cuba,” in Cuba: The Second Decade, edited by John Griffiths and Peter Griffiths (London: Britain-Cuba Scientific Liaison Committee, 1979), 48.

16. Armengol Ríos and D'Angelo Hernández, “Aspectos de los procesos de comunicación y participación de los trabajadores en la gestión de las empresas,” Economía y Desarrollo 42 (July-Aug. 1977):156–79.

17. Acosta, Teoría y práctica de los mecanismos, 317–18. The share of norms that were elemental actually increased between 1982 and 1987. See L. Domínguez, “Deficiencias en la normación,” 90.

18. Dictámenes de la IV Plenaria Nacional de Chequeo del Sistema de Dirección y Planificación de la Economía, (Havana: JUCEPLAN, 1985), 52; and Mieke Meurs, “Planning, Participation, and Material Incentives : Motivating Efficiency in Socialist Cuba.” Paper presented at the Third Annual Workshop on Soviet and East European Economies, Washington, D.C., 1987, 30.

19. JUCEPLAN, Segunda Plenaria Nacional de Chequeo de la Implantación del SDPE (Havana: JUCEPLAN, 1980), 297.

20. Although the SDPE was adopted in 1976, the initial year was designated as a year of study and preparation. The actual implementation began in 1977.

21. Some analysts consider the establishment of the Grupo Central in December 1984 as the beginning of the current rectification period. The Grupo Central is composed of the vice-presidents of the Council of Ministers, all the ministers, the president of JUCEPLAN, provincial heads of Poder Popular, and heads of departments of the Communist party. The raison d'être of the Grupo Central is too complex to analyze fully here. Suffice it to suggest that its formation in part was an effort to weaken ministerialism (both sectoral chauvinism and excessive tutelage over enterprises), to facilitate lines of command and communication between the Council of Ministers and JUCEPLAN, and partly to deal with the worsening foreign-exchange crisis as effectively and expeditiously as possible. Finally, the Grupo Central was part of the larger effort to reinvigorate and rationalize the planning apparatus as well as to renew its personnel.

22. See the Banco Central publication Informe Económico, March 1986, 6.

23. Nelson Mata, “Los gastos de presupuesto de los Organos Locales del Poder Popular,” Finanzas y Crédito, no. 5 (1986):56.

24. B. Palacios et al., “Posibilidad de aplicación del balance intersectorial físico valor al proceso de elaboración del plan anual de la economía cubana,” Cuba: Economía Planificada 1, no. 2 (Apr.–June 1986):9–36.

25. Granma, 5 Oct. 1982, p. 2. Additional data through 1984 and analysis is provided in Oscar U-Echevarría et al., “Consideraciones metodológicas para el cálculo de la demanda de piezas de respuesto,” Cuba: Economía Planificada 1, no. 2 (Apr.–June 1986):110–39.

26. Dictámenes de la IV Plenaria, 25.

27. This system was actually begun on an experimental basis in 1979 in the province of Pinar del Río, but it was not implemented in Havana until 1986. The Soviet Union has employed this system for many years.

28. The campaña de rectificación is the name given to the current period of reevaluating the balance of material and moral incentives, redressing the perceived excesses connected to material incentives and private-sector activity, and addressing other problems of economic and political management.

29. See Dictámenes de la IV Plenaria. A clear indication of decentralizing inclinations at the time came in the speech by Humberto Pérez, then JUCEPLAN president, before the closing session of the Fourth Plenary: “We do material balances, we assign material resources, we set output targets, basing our decisions on technical consumption norms and inventory levels; we attempt to do all this at the most centralized level when, in fact, these things are only feasible at the decentralized level of the enterprise” (my translation). See “Intervención de Humberto Pérez,” Clausura de la IV Plenaria Nacional del Chequeo del SDPE, 25 May 1985, 25.

30. At the time of this writing (April 1988), it is clear that the direction of policy change in Cuba differs from that in the Soviet Union. Some analysts have predicted that this discrepancy will produce political conflict between the two countries, or at least discomfort. They have pointed to the sparse coverage in the Cuban press of the details of Gorbachev's economic reforms and statements by Castro that Cuba must find its own path. In fact, Castro has made such statements repeatedly during the course of the Cuban Revolution, and Gorbachev's reforms, while not highlighted in daily newspapers, have been seriously analyzed in the popular biweekly Novedades de Moscú. For various reasons, the Cuban government does not see the Gorbachev reforms as an appropriate topic for mass discussion in Cuba at this time. But if true discomfort and potential conflict were involved, it seems unlikely that the coverage in Novedades de Moscú would be tolerated, especially since Novedades sells out within a few hours of appearing at the kiosks.

31. Because two of Cuba's market-oriented reforms (the free farmers' markets and the direct sale of private housing) were actually ended, some readers might object to my characterizing the decentralization process as having been “put on hold” rather than “reversed.” The farmers' markets and free direct housing sales represented a particular aspect of the decentralization process in food distribution and housing. The farmers' markets never amounted to more than 3.2 percent of retail sales, and by 1985, their last full year of operation, they represented only 1.2 percent of retail sales. A more substantial process of decentralization in food distribution has occurred through expanding the parallel markets, which are state-run but charge prices approximating supply and demand conditions. The quantitative growth of parallel-market sales have more than made up for the disappearance of the peasant markets. Similarly, the major change in housing policy came with the reform aimed at eventually converting all tenants into homeowners and allowing the private exchange and sale of houses. The private sale of houses is still permitted, but now it cannot take place directly between the buyer and seller. To avoid speculation and exorbitant prices, the state now regulates such sales. The basic change, however, is still in place. This explanation is not intended to endorse the new policies but to argue that no reversion to the centralization of the 1960s and early 1970s has occurred. Decentralization in a centrally planned economy is a complex process that assumes varying forms and never progresses linearly. To describe decentralization as “put on hold” does not deny the backsliding or retrenchment that has taken place. Such retrenchment is normal and has occurred in other countries that eventually continued their reform processes. It seems more likely to me that the Cuban reform process will again move toward greater decentralization in the near future rather than return to the centralization of earlier periods, hence my description as “put on hold.”

32. A second wage increase in June 1986 benefited an additional 208,343 low-income workers (see table 1). The austerity measures curtailed various perquisites of officials, such as personal use of official cars. But other measures, such as retail price increases on various goods and the reduction of the monthly kerosene ration, disproportionately affected low-income budgets, a basic reason for the wage increases.

33. In Cuba there are actually five different systems of pay according to output, all based on norms and generally referred to as sobrecumplimiento de las normas. In order of the number of workers covered, these systems are: destajo individual (individual piece rates with specially set rates); acuerdo o campo terminado (pay according to number of tasks fulfilled where direct output quantification is not feasible): destajo colectivo (collective piece rates where technology mandates group evaluation); sistema del 1 x 1 (individual piece rates with pay increasing 1 percent for every 1 percent increase in production above the norm, and vice versa); and destajo indirecto (mostly for auxiliary workers, where direct output cannot be measured, with the result being that pay is a function of total output of the workers who are supported by the auxiliary worker).

34. Humberto Pérez, Intervención: clausura de la III Plenaria Nacional de Chequeo de la Implantación del SDPE (Havana: JUCEPLAN, 1982), 2.

35. An excellent article on the difficulty of applying rational norms and prices to construction work, given its highly variegated and specialized nature, is José Salom, “Influencia del exceso de rentabilidad en las empresas de construcción civil y montaje en el proceso inversionista,” Teoría y práctica de los precios, 2–85. Another article based on a December 1986 survey of 471 enterprises observes that in one construction enterprise, norm overfulfillment as high as 2447 percent was reported. See L. Domínguez, “Deficiencias en la normación,” 95.

36. See, for instance, William Foote Whyte, Money and Motivation (New York: Harper, 1955); Espinosa and Zimbalist, Economic Democracy; W. Ouchi, Theory Z (New York: Avon, 1982); and Harry Braverman, Labor and Monopoly Capital (New York: Monthly Review, 1974).

37. Leonard Kirsch, Soviet Wages (Cambridge, Mass.: Massachusetts Institute of Technology Press, 1972).

38. Vladimir Ilich Lenin, “The Immediate Tasks of the Soviet Government,” Pravda, no. 83, 28 Apr. 1918.

39. Frederick Winslow Taylor, Scientific Management (New York: Harper and Row, 1947).

40. Interesting case studies on the perverse effects of piece rates can be found in Case Studies on the Labor Process, edited by Andrew Zimbalist (New York: Monthly Review Press, 1979).

41. Granma Resumen Semanal, 14 Dec. 1986, p. 4.

42. Granma, 14 Jan. 1987, p. 5.

43. For one, see L. González Rodríguez, “Revisión de las normas de trabajo,” Bohemia, 6 Mar. 1987, pp. 49–51.

44. Granma Resumen Semanal 14 Dec. 1986, p. 3.

45. A useful background article on the prima is Aristides Pérez, “La prima como forma de estimulación material,” Economía y Desarrollo 80 (May-June 1984):153–70.

46. Primas for overfulfillment of quantity targets have been used primarily in agriculture. These primas are for enterprise plan fulfillment, not for the fulfillment or overfulfillment of work norms, as has been argued by Sergio Roca in “State Enterprises in Cuba under the New System of Planning and Management,” Cuban Studies 16 (1986). Also see Andrew Zimbalist, “Interpreting Cuban Planning: Between a Rock and a Hard Place,” Cuban Political Economy: Controversies in Cubanology, edited by Andrew Zimbalist (Boulder: Westview, 1988).

47. Calculations based on figures provided to the author by the Cuban Comité Estatal de Estadísticas.

48. See, for instance, the analysis of primas in Dictámenes de la IV Plenaria, 53.

49. For one, see Janos Kornai, The Economics of Shortage (Amsterdam: North Holland, 1980).

50. Calculated from data provided to the author by the Comité Estatal de Estadísticas.

51. A. Nove, The Soviet Economic System, (London: Allen and Unwin, 1977), 88.

52. This change in determining the normative adjustment coefficient began in 1985 and has not been applied uniformly to all sectors of the economy.

53. For the tenacious reader, a more detailed description of the system with numerical examples can be found in Carlos Martínez F., “El perfeccionamiento del mecanismo de estimulación material en Cuba,” Cuba: Economía Planificada 1, no. 1 (Jan.–Mar. 1986):157–202.

54. Pérez, Clausura de la IV Plenaria, 25 (my translation).

55. Acosta, Teoría y práctica de los mecanismos, 291.

56. In a sense, the motivation issue is all the more pressing in the late 1980s because Cuba's young workers represent a new generation. They have experienced neither the revolutionary struggle nor the romantic early years of the revolution.

57. See, for instance, Granma's coverage of Roberto Veiga's speech before the plenary of the CTC National Council in the issue dated 14 Jan. 1987.

58. For an excellent theoretical discussion on the vital role of worker participation in centrally planned economies, see the work of Wlodimierz Brus, particularly The Economics and Politics of Socialism. Also see Comparative Economic Systems: An Assessment of Knowledge, Theory, and Method, edited by Andrew Zimbalist (Boston: Kluwer-Nijhoff, 1984).

59. Granma, 1 Jan. 1984, p. 4.

60. Granma Weekly Review, 11 Jan. 1987, p. 3. Some workers have been lauded in the Cuban press for denouncing bureaucratic managers. One such worker in a cement factory in Santiago, Cuba, Silvia Spence, has been made into something of a national hero. See the detailed and fascinating coverage of her case in Granma, 25 and 26 Dec. 1986.

61. Trabajadores, 6 June 1986, p. 1. Cited in Mieke Meurs, “Planning, Participation, and Material Incentives.”

62. Cited in Meurs, “Planning, Participation, and Material Incentives.”

63. See Linda Fuller, “Power at the Workplace: The Resolution of Worker-Management Conflict in Cuba,” World Development 15, no. 1 (Jan. 1987):139–52.

64. See the review of this literature in Espinosa and Zimbalist, Economic Democracy, ch. 5. Also see, Carole Pateman, Participation and Democratic Theory (Cambridge: Cambridge University Press).

65. Bohemia, 4 July 1987, p. 7.

66. See Gordon White, “Cuban Planning in the Mid-1980s: Centralization, Decentralization, and Participation,” in The Cuban Economy toward the 1990s, edited by Andrew Zimbalist (Boulder, Colo.: Lynne Rienner, 1987). For a discussion of the sweeping mandate of the Study Commission (Comisión Nacional del Sistema de Dirección de la Economía), see Cuba: Economía Planificada 1, no. 3 (July-Sept. 1986):179–87.

67. The purpose and evolution of uniones de empresas are discussed in Gilberto Díaz Martínez, “El sistema empresarial estatal en Cuba,” Cuba Socialista 8 (Sept.–Nov. 1983):74–107.

68. The practice of brigade members selecting their own chief has also developed unevenly. When workers are unaccustomed to exercising such authority, it often takes time for worker attitudes and behavior to adapt to their new, augmented prerogatives. For instance, it appears that by early 1987, most brigade chiefs in agriculture were still being appointed by the state farm administration and approved by the Ministerio de Agricultura. Letter from Mieke Meurs to the author, June 1987. On the internal structure of the brigades, see Dharam Ghai, Cristóbal Kay, and Peter Peek, Labour and Development in Rural Cuba (Geneva: International Labour Organization, 1986), ch. 4.1.

69. This conclusion is supported by three separate studies as well as by my interviews. See Cristóbal Kay, “New Developments in Cuban Agriculture: Economic Reforms and Collectivization,” paper delivered at the Latin American Studies Association Meetings in Boston, October 1986; Mieke Meurs, “Planning, Participation, and Material Incentives”; and Alexis Codina, “Worker Incentives.” This conclusion is also supported in the case of non-sugar agriculture by two detailed unpublished studies of the Cuban Ministerio de Agricultura: “Evaluación de la experiencia sobre la introducción de la Brigada Permanente de Producción y el cálculo económico interno en las Empresas del Ministerio de la Agricultura,” Nov. 1985; and “Informe: resultados económicos de las empresas constituidas en BPP,” 1986.