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Cuban Crisis Shows Freedom is Linked to Property Rights by Giorgina Agostini

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Cuban Crisis Shows Freedom is Linked to Property Rights

In early November, as civic groups in Cuba prepared for a series of large pro-democracy protests scheduled to take place on November 15, the government predictably denied permits for the march and harassed, intimidated, and jailed opposition leaders. These demonstrations came as no surprise, since the island’s crumbling infrastructure has led to frequent power outages and a poor supply of food and medicines, while hundreds of government dissidents have been arrested without due process or forced into exile following the July 11 protests last summer.

With the government dodging blame and even accusing the U.S. of meddling, one lesson has become increasingly clear: today’s crisis in Cuba is rooted in the 62-year-old Communist regime’s assault on property rights, which has deprived citizens of freedom and prosperity.

When Fidel Castro came into office as Prime Minister in 1959, he and his ‘26th of July Movement’ campaigned to unify the country through a restoration of the Cuban Communist Party (PCC) and, more importantly, the Constitution of 1940.

The promise of reinstating the Constitution of 1940 was significant, as it would have guaranteed and protected private property rights. It rejected the Communist ideal of consolidating all means of production and putting it into the hands of the State. In fact, Article 24 of the Constitution states:

Confiscation of property is prohibited. No one can be deprived of his property except by competent judicial authority and for a justified cause of public utility or social interest, and always after payment of the corresponding indemnity in cash, judicially fixed.

By reinstating the constitution, the young Fidel Castro was seemingly endorsing the view that property rights are the building blocks for a strong, flourishing society that nurtures good governance and incentivizes human action.

Yet within days of coming into power, Castro instead embraced the Communist ideals of Marx and Engels by illegally amending Article 24 to allow for the seizure of private property from his political adversaries. Thus, the amended version of the constitution reads: 

However, confiscation is authorized in the case of property of natural persons or corporate bodies liable for offenses against the national economy or the public treasury committed during the tyranny which ended on December 31, 1958, as well as in the case of property of the tyrant and his collaborators.

The promise of unification and freedom quickly faded as Castro targeted private property and temporarily replaced the constitution with the so-called Fundamental Law that allowed all power to be concentrated in the Council of Ministers, a legislative body not popularly elected—and which had Castro as its president. This action gave Castro the authority to amend laws with impunity. 

Castro took advantage of this grip on power by swiftly amending Article 24 for the second time in November of 1959. With this revision, he expropriated the property of Cubans in exile and of all those that committed ‘counter-revolutionary acts’ at home and abroad.

But the expropriation of private property was seemingly not enough for Castro’s regime, and thus it was followed by the infringement of other rights. The Council of Ministers removed all judicial protections on private property and, under a third revision to the Fundamental Law, took away the ability of individuals to challenge government expropriation measures in court. 

Paired with the First Agrarian Reform Law of 1959, as well as the Second Agrarian Reform Law of 1963—both led by the Revolution’s Argentine ally, Ernesto “Che” Guevara—these revisions to Article 24 of the Constitution contributed to an economic collapse that eventually led to both worker and agricultural shortages.

This crisis worsened with further government overreach under Law No. 851 and Law No. 890, which virtually seized all American and Cuban businesses. Then, the Urban Reform Law exacerbated the situation by eliminating the right to buy and sell property between non-family members.

The pinnacle of Castro’s systematic assault on private property was the ratification of the Constitution of 1976, which was modeled after the 1936 Soviet Constitution. 
Although Cuba’s constitution asserts in Chapter I, Article 15 that property is “the property of all the people,” Cubans could not own property without express government intervention. All rights were thus secondary to the PCC, especially given Article 5 of the Constitution, which codified Communism as the ‘superior leading force’ that would guide all common efforts. The text officially recognized Cuba as a one-party Communist state and, consequently, emboldened all forces to construct a Communist society by any means necessary.  

With domineering intervention, the Cuban state by 1988 owned 82% of the 9.1 million available hectares of Cuban farmland. In total, it is estimated that the Castro regime seized more than $100 billion worth of property. Following this, innovation, competition, prosperity, and most importantly, the livelihoods of families were all shattered.

Castro’s assault on private property rejected the natural right to self-ownership that is protected in Article 17 of the Universal Declaration of Human Rights: “Everyone has the right to own property alone as well as in association with others. No one shall be arbitrarily deprived of his property.”

The infringement of property rights led to the deterioration of other human rights. Thousands of opposition leaders and human rights defenders were eventually censored or arbitrarily detained during Castro’s five decades in power. Others simply disappeared or were executed.

Castro demonstrated a complete disregard for ‘checks and balances,’ serving as President of the Council of Ministers, President of the Council of State, and First Secretary to the Communist Party of Cuba. And while a free press in other nations would have been able to shed light on government injustices of this kind, this has become nearly impossible in Cuba today. Domestic journalists operate underground while international reporters are restricted. In addition, since the communication infrastructure is run by the government, locals cannot access foreign websites for free.

Castro’s assault on private property rights has also trickled down to other areas of life, eliminating some of the basic elements that are central to democracy: accountability, ‘checks and balances,’ transparency. Castro’s assault on private property rights thus did far more than merely ‘redistribute’ wealth to the masses; it opened the door for a complete authoritarian takeover.

The historical experiences of other countries has shown that the first step for any government takeover is the elimination of private property rights. It took Castro a mere 14 days into his administration to begin this step. By eliminating the right to own, use, and dispose of property, Castro assaulted a core aspect of human nature—that is, the need for self-ownership. And with it, he eradicated the foundation of all other freedoms.

Property rights enhance individual responsibility since they incentivize people to generate and invest their own capital and create innovative businesses or products. Property rights also encourages a competitive ecosystem that rewards human labor. But Castro, by constraining individualism and increasing government intervention, destroyed the fruits of self-ownership. Instead, by taking ownership of all assets, he meticulously wove together various government institutions into a garment with which he cloaked himself in power—undermining prosperity and destroying personal freedoms in the process. 

But long suffering Cubans, recognizing the importance of self-ownership, rejected Castro’s legacy in a constitutional referendum in February 2019 to acknowledge property rights. Nearly 87% of Cuban citizens voted to restore property rights, as well as the right to habeas corpus, and the return to a presumption of innocence under the law. All to no avail. Under current President Miguel Díaz-Canal, Cuba remains a dictatorship.

While the text of the new version of the constitution may recognize some of the fundamental pillars of democracy, this has not changed the fact that Cuba still suffers from a biased judiciary, one-party communist rule, and a disastrous economy. And in terms of property protections, the state continues to regulate the use of land.

This vicious cycle leading from a restriction of property rights to the dawn of a dictatorship is of course not new. In Venezuela, former President Hugo Chávez famously proclaimed: “To those who own the land, this land is not yours. The land is not private, but the property of the nation.” In 2001, by an Enabling Law, Chávez passed 49 decrees, ranging from the expropriation of farmland to the takeover of private oil companies. With this, came rampant political discrimination, executive branch overreach, food shortages, and inflation. The fruits of all this are clear: once the richest oil country in Latin America, Venezuela today has 76.6% of the population living in extreme poverty with inflation averaging at 3,762.64% from 1973 to 2021. 

Today, Cuba ranks 31st of 32 countries in the Americas for economic freedom, according to the Heritage Foundation Index of Economic Freedom. Overall, Cuba ranked 176th, with only North Korea and Venezuela ranking lower. Cuban economists estimate that 41 to 50% of the population today lives in poverty. And in the Freedom of Press Index produced by Reporters Without Borders, Cuba ranked 171st out of 180. 

Cuba’s economic and humanitarian catastrophe is a lesson to the world—that there are grave consequences from having a poor property rights ecosystem. Having weak legal and political frameworks of property rights constrains free enterprise, human dignity, and liberty while undermining democracy. Protecting property rights is thus critical to safeguard the foundation of any just, free, and prosperous society.

Giorgina Agostini is a fellow at the Property Rights Alliance, a project of Americans for Tax Reform in Washington, D.C.

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