Cuba should adopt Binary Economics

Fidel Castro has finally recognized that he has made a great mistake. His only defense is ‘youth and a misunderstanding of conscience’ or something like that, as he recently explained. He has urged more debate on political and economic matters. And very timely indeed! Cuba’s people are fed up with socialism. They stopped believing in it, when they started being hungry. And that’s not because of the American blockade. It’s because socialism does not work.

Meanwhile Cuba has placed itself in a unique position to introduce binary economics. Binary economics is based on the idea that ownership of the means of production should not be in the hands of max. 5% of the population (as in capitalism), nor in the hands of the state (as in socialism), but in the hands of a broad base in society (say 60% to 70% of the population). In Cuba this would be easy to accomplish, as the state could easily transfer ownership into the hands of the people in various ways.

Example of binary economic system

Let’s take Cuba’s health care system, for example. A Havana hospital could be privatized. A common stock corporation could be established, passing 1/3 of its common shares into the hands of the individual health care workers (‘ESOP’). If they work hard, any dividends accruing to their 33.3% shareholding would be theirs to divide among themselves.

A second third of the shares could be transferred to the hospital’s health care consumers (CSOP). This could be done by distributing the shares among the persons who take out private health insurance issued by the hospital itself. If the hospital makes a profit, these consumer-shareholders would receive their dividends in the form of a discount on their health insurance premiums.

The last third of the shares could be owned jointly by the Social Security Bank (which provides mandatory health insurance for low income employees) and the government who is responsible for providing health care for anybody who is not elsewhere insured. These two institutional health insurers will receive their dividends in the form of discounts on health services rendered by the hospital.

Kelso, Kurland, Ashford and Shakespeare

Compared to socialism as an economic model, capitalism (or the free market system) is superior. It has been proven that capitalist countries produced mores goods and services at lower prices than socialist countries. The latter all collapsed economically with people in the end receiving food subsidies for which they had to wait in long lines for hours on end. Everybody poor, as in Cuba. And on top, everybody oppressed, as in Cuba.

That is why Cuba will rid itself of socialism. There are groups at work already preparing for this transition. But they do not want to walk into the trap Russia walked into, i.e. exchange socialist universal poverty and oppression for capitalist poverty for the masses and privileges for the rich, including brutality by the rich. So Cuba needs an intermediate model. This model has been described by Louis Kelso and extended by Norm Kurland and Robert Ashford (US), as well as Rodney Shakespeare (UK).

As Kelso is no longer among the living, he cannot receive a Nobel prize for his work. But Kurland and Shakespeare deserve Nobel-recognition for their invaluable work and ceaseless efforts to promote the Kelsonian model (known as ‘binary economics’). For more info, go to (Kurland) or (Shakespeare).

Massive economic growth

Application of binary principles will result in massive distribution of productive capital (stocks and shares in companies) in the hands of a large portion of the population, as well as broad distribution of the income of capital (dividends). This income will be spent on consumption, because the poor do have consumptive needs. This will result in an enormous rise in demand (consumption), which means an equivalent rise in supply (production) triggering massive economic growth. So much so, that we have to be careful not to unduly damage the environment. This luxury problem can be solved, but we cannot go into that now. But it I much easier to solve luxury problems than scarcity problems.

In a capitalist system, however, the rich 5% have such enormous incomes, that they cannot possibly spend it all on consumption. So instead they end up buying even more stocks and shares, giving them even more capital income. So, whereas capitalism is more productive than socialism, it is a far cry from the economic expansion a binary economy would produce.

Two birds, one stone

Cuba would do well to adopt the binary model, which can only function in a political democracy. So it’s two birds with one stone, so to speak: Democracy and Binary Economics. Cuba would soon be the leader in the Caribbean, a place it deserves and we look forward to. Don’t forget, we all love Cuba, if only it would turn around. Otherwise it is an absolutely fabulous country, no doubt about it. We know the time is not far off that the winds of change will touch the Cuban shores. ARCO will be there to join in the celebrations! It will be one heck of a party!

Today’s video is a telephone conversation between Paula Gloria and Robert Ashford in which they discuss the universal spiritual nature of binary economics, mentioning Islam and Christianity in particular.