Cuba’s new market reforms
U.S. imperialism is knocking on the door of the Cuban people. CBS News reported as early as late September that Trump is planning an invasion of Cuba to take place within 90 to 120 days. As part of an escalation of the trade embargo, Cuba has been subjected to additional U.S. sanctions this year, creating a humanitarian crisis on the island. Cuba relies on imports for many basic necessities—for example, a full 80% of the country’s food is imported. In addition to food, the embargo also covers drinking water, healthcare equipment, medicine, contraceptives, and more. Furthermore, the year began with an energy blockade described even by the UN—imperialism’s own “peacekeepers”—as an act of war.
The Yanks have said they don’t intend to stop there. They have stated loud and clear on numerous occasions that they will continue to increase pressure on the regime until it capitulates. But what does this mean? What changes do the Yanks want to see?
To answer that question, we need to have a brief look at Cuba’s modern history.
THE INTERRUPTED REVOLUTION: CUBA’S MODERN HISTORY
To make a long story short, let’s try to summarize Cuba’s modern history. Cuba began the twentieth century by freeing itself, two years earlier in 1898, from the colonial rule of the Spanish Crown. During the final year of the conflict, the Cuban freedom fighters received significant support from the United States, whose capitalism had by then evolved into monopoly capitalism. American capitalists were able to impose a semi-colonial relationship on Cuba by financing (and controlling) a handful of landowners. In addition, the Yanks were able to invest a small amount of capital in the country to establish their financial control, which created a clique of bourgeois on the island that was directly dependent on Yankee capital. This clique evolved into the compradors—the local administrators of U.S. imperialism.
Over the course of the 20th century, the capital, Havana, developed into a harem for Yankees who wanted to live a decadent, hedonistic life. In Havana, you would find a city built for tourists, rife with drugs, poverty, and prostitution. Surrounding the city was a relatively large semi-proletariat and urban petty bourgeoisie; in the countryside, the majority were peasants.
During the 1930s, the working class and the peasants launched a major uprising across the country. They went on strike and demonstrated. Weapons were even raised against the island’s rulers. Within the country’s most important industry—the sugar mills—a Soviet movement emerged, featuring revolutionary workers’ councils. It all culminated in the fall of the U.S.-led comprador government. But not long after that, the army staged a coup and established a classic Latin American-style military dictatorship led by Fulgencio Batista. It was all orchestrated from Washington.
During the 1950s, the petty bourgeoisie had developed into one of the most numerous classes in the country, as it was their organizations that were the most militant. Castro’s July 26 Movement emerged precisely from the petty bourgeoisie. Its 1956 program contained classic bourgeois demands and phrases. It was “guided by the ideals of democracy, nationalism, and social justice,” a “Jeffersonian democracy” (named after U.S. President Jefferson, 1801–1809), and they declared that “democracy cannot mean a government of one race, class, or religion; rather, it must be a government for the entire people.” In other words: the Castro-led movement did not fight for socialism or a new democracy, but to take over the U.S.-controlled economy and make it Cuban; it fought for a democracy that claimed to be above the classes.
With this program, Castro and a small group took up arms against Batista’s government in the Sierra Maestra mountains, while other young intellectuals and professionals organized resistance in the cities. This war won the support of nearly all other classes except for the small handful of people directly linked to the landowners and the United States. In the struggle, the decisive force was the small farmers, who waged an armed struggle against the landowners and the army. Batista’s army, which consisted largely of farmers, soon began to fall apart. Batista’s government disintegrated after two years of fighting in which only a few hundred armed rebels were involved.
During the final months of the fighting, even the U.S. government had withdrawn some of its support for the Batista regime, believing it was more likely that the July 26 Movement would agree to a settlement than that the Batista regime could survive. Shortly after taking power in 1959, Castro traveled to the U.S. on a “goodwill tour” and declared in New York: “I have clearly and definitively stated that we are not communists… The doors are open to private investment that contributes to Cuba’s development.” He even advocated for a massive U.S. aid program for Latin America, “to avoid the danger of communism.” His openly anti-communist rhetoric, intended to appease the Yanks, stemmed from the same reason that later forced him to change his tune and adopt “communist” rhetoric to appease the Soviet Union: he was the embodiment of opportunism.
Creating a new Cuba required expropriating the sugar plantations, which ran counter to the Yanks’ capitalist interests. These were the pillars of the economic and political system that had originally sparked the uprising. Challenging them meant challenging the entire colonial system that prevailed on the island, and there was no turning back, as the people would rightly view it as a capitulation. So it was quite convenient that a certain Nikita Khrushchev, who had recently led a capitalist restoration in the Soviet Union, came knocking on the door.
CUBA IS TRANSFORMED INTO A SEMI-COLONY OF THE SOVIET UNION
Following the capitalist restoration, the Soviet Union had begun to be governed by the laws of imperialism—that is, it was driven by the need to monopolize sources of raw materials, export capital to extract superprofits, and compete with imperialist rivals for world domination. They realized that by bringing Cuba into their imperialist sphere of influence, they would be able to extract great wealth from the country. Cuba thus became a political and military tool in the revisionist Soviet Union’s struggle against its American rivals.
Like any entrepreneur, the Soviets granted the first loans to Cuba at a low cost. In the early years of “aid,” loans were provided interest-free, and later they began charging 2.5% interest. Their actual profit, however, was much higher than that. Under the original agreement, 80% of the Soviet Union’s credit and funds were to be used to purchase Soviet products at heavily inflated prices. Just as with interest rates, once Cuba’s dependence had been firmly established, the Soviets raised the stakes and demanded that all credit be spent on Soviet products. According to one author with access to Cuban statistics, the Soviet Union charged 11% to 53% more for machinery than the price of comparable machinery in the West. And to make this robbery even more outrageous, they sold much of this sugar at an even higher price to Eastern Europe, even though the Soviets initially paid Cuba more for its sugar than the world market price at the time (which, of course, they soon stopped doing).
This was standard Soviet practice throughout the world. It was through unequal trade that the Soviet Union realized the surplus value generated by capital exports. Essentially, it was little more than an accounting arrangement regarding whether the profit returned to the Soviet Union in the form of interest or in the form of superprofits from sales, when those sales were tied to trade agreements and capital exports.
It was the sugar plantations that the Cuban economy was condemned to produce and export throughout the nineteenth century and the first half of the twentieth century. During the Spanish colonial era, it was administered by Spanish officials on the island; during the American era, by the landowners and compradors in the city; and later, by government officials in Havana during the Soviet era. During the Batista era, farmers were forbidden from cultivating unused land, as they were instead required to work on the sugar plantations. The same occurred under Castro. The people were herded into working on the sugar plantations; they were forced to work longer hours and, over time, were paid less.
Castro claimed that the country did not need to develop any other industry but, as mentioned, condemned the people to a life of perpetual plantation labor. Instead, he and his associates asserted that Soviet aid and sugar purchases enabled them to buy everything they needed to “build socialism and communism simultaneously in Cuba.” The Soviet Union succeeded in buying itself a new colony.
Castro had no interest in developing the country or building socialism. Instead, he chose to ensure that, just as the island had been ruled under the rule of landowners and compradors under the control of U.S. imperialism, the sugar industry would continue to dominate economic life on the island.
CUBA IS GOVERNED BY THE LAWS OF IMPERIALISM
Castro claimed, in an attempt to mislead the masses, that in order to achieve communism, Cuba first needed to develop the productive forces to produce a surplus. Therefore, he argued that the country needed to plan to maximize its profits by centering the economy on sugar plantations, and use the profits from this industry to develop the sugar industry and import food, cars, etc. It was precisely this line of reasoning that Castro used when workers’ wages were cut and they were forced to work longer hours.
This economic system described by Castro is based on the same principles that govern all capitalist countries, particularly in the form of state capitalism: that prices should be set based on production costs; that the factories and industries yielding the highest return on investment should be the areas where expansion is greatest; that the managers of these units should be paid based on their social status as well as the companies’ profitability; that workers should be paid based on the profitability of the companies they work for, and lose their jobs if production would be cheaper without them; and furthermore, that workers should be paid strictly according to their productivity, measured by piece-rate wages or based on whether they meet the production quota set for their jobs—in other words, whether they meet the standard.
This is truly capitalism in all its glory. Nowhere is this evident in its ugliest form more clearly than when Castro said in the 1970s that he regretted the terrible housing shortage in Cuba, but that “the revolution has not been able to do much” about it—while later revealing that the government was building 14 new tourist hotels and expanding others.
AFTER THE FALL OF THE SOVIET UNION
The Cuban state remained standing when the Soviet Union collapsed. During the 1990s, the country faced a severe crisis as its economy had become dependent on trade with the Soviet Union. Since then, the country has had to sell its goods on the international market. To illustrate this shift in the Cuban economy, we can look at the share of exports in GDP. Until 1990, exports accounted for 30% of GDP. During the remainder of the 1990s, this figure fell to between 10% and 15%, before fluctuating between 15% and 25% during the 2000s and 2010s. Since then, another shift has taken place: the country has opened up to more exports, and in 2022, trade accounted for 40% of the country’s total GDP. Today, Spain and China are the largest importers of Cuban goods.
Now that the Americans want to reclaim their former sugar colony, they have tightened their trade embargo. The U.S. trade embargo against Cuba, which has been in effect since 1962, prohibits most commercial and financial transactions between the two countries, with only limited exceptions for food and medicine. The embargo is enforced through various laws and regulations that make it difficult for Cuba to engage in international trade and gain access to financial markets. It also penalizes companies from other countries, which face fines or other restrictions when doing business in the U.S. The U.S. has tightened this embargo to counter Cuba’s efforts to expand its exports. Both Trump and Biden have imposed additional sanctions on Cuba since 2017—in 2017, 2021, and 2026.
SUMMARY OF THE SITUATION
As mentioned, a bureaucratic faction within the bourgeoisie has ruled Cuba since the 1959 revolution. By seizing control of the state apparatus, this class has been able to reshape the country to serve the interests of the bureaucrats and, by extension, imperialism. They have deepened the presence of semifeudalism on the island and transformed the country into a sugar colony, which has weakened the tendency toward capital accumulation within the country and thereby preserved the semi-feudal base throughout the country. Today, however, we see signs that the door is opening to a shift within the ruling class.
CUBA’S NEW REFORM PACKAGE
On June 18, 2026, Cuba’s National Assembly unanimously passed one of the most comprehensive market-oriented reform packages since the revolution. Most of the new reforms have not yet become law, but the trend is unmistakable: Cuba is opening up to the outside world in a way that is transforming the country from one with strong bureaucratic control over the economy to one that is opening up to more direct foreign intervention. Political power is shifting from the bureaucratic faction within the bourgeoisie to the more comprador elements. The result of the reforms, if they are fully adopted, is that both Cuban exiles and other foreigners will be able to do business in Cuba—provided the bureaucrats there are on board. In other words, once the “reforms” become law, Cuba will not be so different from El Salvador, Panama, Ecuador, and similar countries where the comprador factions rule the country.
It is not clear exactly which political factors have prompted the latest package of reforms. But it is impossible to analyze the situation without considering developments in the wider world. As the U.S. exerts ever-greater pressure on the rulers in Havana—who are holding their own people hostage—by choking off imports of essential goods, parts of the bureaucratic faction are choosing to switch sides to save their own skins and prevent the conflict from escalating into a de facto invasion. It is not farfetched to assume that internal opportunistic forces have joined forces with the U.S. Cuban exiles and their favorite senator, Marco Rubio. Now he finally has a chance for revenge; Marco is blocking oil and other essential supplies—such as medicines and baby food—from entering the country and boasts that he is the nation’s liberator. He is making all sorts of demands and urging the population to revolt, just as Trump is doing in Iran. Like Trump, he isn’t getting much of a response either.
Even the Los Angeles (LA) Times, on June 19, cited statements from both Trump and Rubio in which they both openly acknowledge that they want to impose U.S. imperialist control on Cuba. As mentioned, the U.S. does not rule out military intervention: as we noted in the introduction, CBS News reported in September that Trump is planning an invasion of Cuba to take place in 90 to 120 days—that is, around the turn of the year. This follows a year of preparations. The LA Times does not see a problem with these statements but treats them merely as the latest in a string of more or less crazy statements from the White House. The newspaper may have other things on its mind, which is understandable given the current situation. Had Cuba had the support of a rival superpower, such as the Soviet Union, however, the tone would have been quite different.
The LA Times further notes that market reforms are by no means a new phenomenon. Raúl Castro, Fidel Castro’s brother, has previously attempted to push through limited market-economy reforms but has been met with “bureaucratic obstacles.” From the newspaper’s reporting, we cannot determine whether it was simply that the party did not accept the reforms, or whether there were literally bureaucratic obstacles. It is reasonable to assume that there was resistance within the ruling class from segments of the bureaucratic faction of the bourgeoisie who themselves would stand to lose from the reforms. Regardless of the reason, the obstacles appear to be being removed this time.
BIRDS OF A FEATHER
Cuba’s president, Miguel Díaz-Canel, now states in official statements that the reforms are based on Vietnamese and Chinese “communist” economic models. The economic systems of these countries have even become so popular that bourgeois economists now view them as equivalent to those of the U.S. and the EU. A Cuban representative of the “Communist” Party is thus advocating for the market economies of revisionist states; he tries to keep up appearances by referring to Vietnamese mass production and Chinese financial institutions.
What does the “Communist Party” actually want to achieve with its “reforms”? Among other things, it wants to eliminate current restrictions that prevent individuals from owning multiple businesses, allow shareholdings in multiple companies, and create new legal forms of business entities, including jointly owned corporations. Similarly, the party proposes removing the cap on private enterprise size and allowing companies to employ more than 100 workers. In unabashedly capitalist fashion, such enterprises are now simply and unambiguously referred to as “private enterprises.”
Market-based solutions are also to be permitted in critical sectors in the “new” Cuba. These critical sectors include agriculture, which the population literally needs to survive. International trade is also to be facilitated. Through such trade, the country has its only chance to acquire products that cannot easily be manufactured domestically, such as cars, components for solar energy, and nuclear power plants. It’s no coincidence that Cubans still drive around in rusty turquoise ’50s Chevrolets with V8 engines that guzzle 4 liters per mile, since international trade is blocked by the U.S. Even the real estate sector is to be exposed to market forces – a sector that determines whether the population will have a roof over their heads or not. One might ask: what interests are driving this change?
THE SIMILARITIES BETWEEN STATE-MONOPOLY CAPITALISM AND BUREAUCRATIC CAPITALISM
Let’s draw a comparison with Sweden. Sweden, as we know, is a monopolistic-capitalist and imperialist country, and the people are mainly divided into two classes: the bourgeoisie and the proletariat. Within the bourgeoisie, there are essentially two factions: those who represent private monopoly capital and those who represent state monopoly capital. A similar contradiction exists in all oppressed nations between bureaucratic capital, which is linked to the state apparatus, and the compradors, who are directly linked to foreign capital. This contradiction also exists in Cuba.
Under the new “reform package,” the Cuban state will also be able to purchase minority stakes in private companies—that is, act like any other market participant. This policy is the same as in any Western European or North American country.
Given this, it is not entirely unreasonable that there are Cuban officials who are happy to look toward the northeast. On the other side of the Atlantic, in “social-democratic” Sweden, for example, there is the 100 percent state-owned energy company Vattenfall, where the CEO is paid an astronomical 1,600,000 SEK before taxes each month in salary. The irony is that this is something such “left-wing” figures in Sweden love to talk about, even as they offer their unconditional and uncritical support to the Cuban state. It would be fascinating to see if there are Cuban officials who translate these pages and learn from Vattenfall how to distribute the people’s property.
FOREIGN DIRECT INVESTMENT
So-called “foreign direct investment”—one of several forms of what Lenin called the export of capital, in which imperialists buy up natural resources, build production facilities, and exploit the local population, among other things—is to be permitted to an ever-greater extent in Cuba, according to the proposal. Before 1982, there were absolutely no opportunities for such foreign investment in Cuba. However, a “joint venture law” was passed that year, which required that foreign investments be jointly owned with the Cuban state. This law led to an increase in European and Canadian investments, though not American ones, since the U.S. did not permit such investments.
The difference between the 1982 law and the new proposal is that foreign direct investment could now take place entirely without state involvement—that is, not just in the form of partnerships where the exploitation of domestic resources can, at least in theory, be limited. In practice, this is a return to “old” Cuba, where the Yanks were allowed to own, for example, sugar plantations thanks to permits from willing officials, in order to produce cheap raw materials for the imperialists’ companies.
Everything we see in other bureaucratic-capitalist countries can, in practice, also happen in Cuba. Consequently, no “bribes” are needed for foreign compradors (locally hired corporate agents) to buy up natural resources, formerly state-owned enterprises, and infrastructure, as well as to price export products on the imperialist powers’ terms—including through demands from the International Monetary Fund (IMF) in order to secure new loans. The small Cuban bourgeoisie’s control over natural resources and enterprises will likely be outcompeted and disappear to the benefit of companies such as Dole, Chiquita, McDonald’s, Wendy’s, Monsanto, and energy companies. Admittedly, the Cuban state will still be able to control and grant or deny permits for direct investments in the future, but there are no guarantees that the greedy beaks of the compradors will be reined in.
CONCLUSION
On social media, the Communist Party of Cuba (Partido Comunista de Cuba, PCC) has stated that the reforms are “an expression of the logic of development” during our “historical period” and that they “in no way deviate from the socialist project.” The head of the “Ministry of Ideology” claimed that the reforms constitute a “domestic, creative, courageous, and revolutionary response” to the “economic war Cuba is facing.” What a joke! Given the actual content of the reform package, the PCC’s claims about revolution and socialism are nothing but a mockery.
However, it is not a given that the reform program will succeed. U.S. imperialism is proclaiming loud and clear that it is preparing an invasion, and most of the bureaucratic capitalists in Cuba are trembling with fear. To save their own skins, they are ready to implement reforms that would appease the Yanks, even if this is not popular among the people. At the end of the day, it is the masses who determine their own fate, and this reform package is not popular among the masses.
The Cuban people do not want to become slaves again to the masters on the other side of the Florida Straits. Instead, they are ready to defend themselves. All domestic forces that are ready to capitulate in the face of Yankee aggression are doomed to fall. For the Cuban people to be liberated, and for the Cuban nation to be formed, a definitive break with imperialism is required. The country cannot allow itself to remain merely a producer for all manner of foreign powers; it must develop independently and become self-sufficient. In this regard, bureaucratic capital becomes a bottleneck, since it profits only from keeping the country in a semi-colonial and semi-feudal state. Chairman Gonzalo teaches us that confiscating bureaucratic capital is crucial for paving the way for the democratic revolution and necessary for the transition to the socialist revolution. What is required in the war of liberation must therefore be proletarian leadership: a leadership that will never capitulate to save its own skin, nor settle for half-measures; it will loudly and clearly proclaim its intention to overthrow imperialism through people’s war.
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