Cuba After Communism – Econlib

On January 1, 1959, Fidel Castro and his bearded revolutionaries marched into Havana. Church bells rang across the island as Batista fled into exile.

This January 1st marked the 67th anniversary of that revolution. Sixty-seven years of a system built on deception, imposed through violence, and sustained through repression. But now, for the first time since Castro’s march into Havana, genuine change appears inevitable.

Throughout the 1950s, Castro repeatedly insisted he wasn’t a communist. He promised free elections, a free press, and the restoration of the 1940 Constitution. By April 1961—barely two years after marching into Havana—Castro declared the revolution socialist. Commanders such as Huber Matos and the American William Morgan, who believed his earlier promises and opposed this communist turn, paid dearly. Matos was convicted and spent 20 years in prison, while Morgan was tried and executed for treason.

What followed was swift and total. Between 1959 and 1968, the regime nationalized every sector of the Cuban economy.

Share of the Economy Under State Ownership (%)

By 1963, roughly 95% of industry was in state hands; by 1968, private enterprise had been effectively eliminated. Research by Marianne Ward and John Devereux indicates that in the 1950s (before Castro’s takeover), Cuba’s living standards were among the highest in Latin America, with per capita income levels comparable to those of countries like Italy. But that pre-revolutionary economy, grounded in markets and private property, was replaced by Soviet-style central planning, with severe social consequences. Between 1959 and 1981, some estimates suggest that between 35,000 and 141,000 Cubans died under the regime. Dissent was suppressed, newspapers were nationalized, and repression was brutal, especially against those most openly opposed to the government.

For decades, the system Castro built appeared unshakeable. But on July 11, 2021, something unprecedented happened. Thousands of young Cubans flooded the streets of cities across the island, demanding freedom. “Libertad!” they shouted. “Patria y vida!” Homeland and life, a direct rebuke to the revolutionary slogan “Patria o muerte.”

The regime responded with brutal repression. According to Prisoners Defenders, Cuba currently holds about 1,187 political prisoners, many of them young people who simply demanded basic rights. But this time, the repression backfired. Instead of crushing dissent, it triggered the largest migration in Cuban history.

Between 2022 and 2023, Cuba lost roughly 20% of its population to emigration. The numbers are extraordinary. Entire neighborhoods in Havana have emptied. Doctors, engineers, teachers, and skilled workers of all kinds have fled. A few weeks ago, The Economist published a sobering assessment, noting that “most Cubans with get-up-and-go have got up and gone—a manpower hole is gaping at the heart of Cuba’s economy.”

The economic situation compounds the crisis. Inflation is estimated to be anywhere from 20% to 100%. A recent survey reports that 89% of Cubans now live in extreme poverty. As one 52-year-old Cuban told The Economist, “This system is so screwed up it’s unfixable. All you can do is get rid of it and start all over again.”

The regime has conducted some reforms, resulting from strong pressure to loosen controls in the import sector. But these have not been genuine market reforms. Access still depends on state discretion rather than predictable rules, open entry, and protected property rights. This limited liberalization thus favors rent-seeking behavior, with firms operating mainly to please party officials rather than compete in open markets.

But there are concrete reasons to think change is coming. A recent poll by CubaData reveals a striking ideological shift: 21.7% of Cubans now identify as “liberal or pro-market”—seven times the 3% who still consider themselves “staunchly socialist.” Among these pro-market Cubans, 65% believe the regime must conduct serious structural reforms. The broader numbers are even more telling: 79% of all Cubans believe socialism is in decline, and 78.8%  no longer consider revolutionary principles relevant. 

Even Cuban economists largely agree that the island’s problems stem not from the U.S. embargo but from the regime’s own policies. In addition, recent research by João Pedro Bastos, Jamie Bologna Pavlik, and Vincent Geloso found that the embargo explains only 3–10% of Cuba’s economic decline. The real culprits are nationalizations, the destruction of private property and markets, and their replacement with centralized economic planning. By 1989, even before Soviet support collapsed, these policies had already made Cuba approximately 55% poorer than it would have been otherwise.

This matters because it means Cuba’s problems are solvable. They are the result of specific institutional choices that can be reversed.

The regime now faces a perfect storm. It has lost people through mass emigration, and with them the manpower necessary to keep even basic services running. It has lost its ideological legitimacy. It has lost the ability to blame outside forces. 

I believe we will witness the fall of this regime in the coming years. When that moment comes, Cuba could follow the path of Estonia or Poland, countries whose market reforms dramatically improved living standards. The transformation will require intellectuals, political leaders, and groups capable of implementing market reforms, property rights, and the rule of law.

Paradoxically, the massive emigration may help provide this human capital. As Cubans assimilate into market economies abroad, they gain skills and institutional knowledge that Cuba will need. The exile community has already built infrastructure to educate new generations about the atrocities of communism and what prerevolutionary Cuba was like. These Cubans, with experience in functioning democracies and the motivation to help their homeland, will likely play a crucial role in Cuba’s reconstruction.

Sixty-seven years ago, Castro marched into Havana promising freedom and delivered tyranny. Now his system is losing its grip. The Cubans who risked everything to demand liberty in 2021, who refused submission through exile, who have turned away from socialism, are writing Cuba’s next chapter. The question is no longer whether the regime will fall. It is whether Cubans will seize the moment to build a free and prosperous country on their own terms.