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Synthesis/Regeneration 21   (Winter 2000)

Economic Diversity in Kentucky and Cuba

by Stacey Cordeiro, Massachusetts Green Party

Until recently, the island nation of Cuba and the coal fields of eastern Kentucky did not strike me as similar places. The only similarity between them was that I was fortunate enough to visit both in the past year, as a student of economic development. At that time I was unaware that I would discover remarkable similarities in their economic history and current situation.

The condition that Cuba and eastern Kentucky share with many other regions is their struggle with economic colonization and a one-commodity economy. Both areas are possessed of great natural resources and once-strategic locations. At the time of their colonization, the populations of both areas were unsuspecting of the damage their colonizers would eventually do. In the past 10 years, both places have experienced the effective withdrawal of their colonizer, and are now struggling to build what had been prevented by colonization: a diverse local economy, capable of supporting its people. The challenge is especially great with the expansion of the global economy, which encourages dependence and exploitation.

In March of 1999, I traveled to some of the most impoverished of Appalachia's counties as part of a research project on economic development. We were trying to discover why certain areas had proved resistant to the efforts of non-profit and government agencies to end the horrible poverty there. During my initial research, I came across the short answer: it's all about the coal. I came across a map of Appalachian coal fields and mining-related environmental problems, and it overlaid prettily with a map of Appalachian poverty.

...while US industrial development was fired by, and capitalists were enriched by Appalachian coal, the people of Appalachia were impoverished by it.

British and US industrialists discovered Appalachian coal around the turn of the century. Coal was essential to industry as an ingredient for steel and for electricity. Central Appalachia's coal was both high quality (low-sulfur bituminous) and accessible, due to the flat strata typical of Appalachian geography. By 1904, railroads had snaked into the most remote valleys of eastern Kentucky and were carting out Appalachia's wealth by the thousands of tons. Foreign capitalists bought the land and mineral rights from farming and logging families who accepted small sums for the land, unaware of what it was worth to the outside world.

To this day, all of the coal and most of the land is owned by outside corporations, especially energy utilities. And while US industrial development was fired by, and capitalists were enriched by Appalachian coal, the people of Appalachia were impoverished by it. They lived in company houses and cashed in their tiny paychecks at the company stores. Like any other colonizer, the coal companies propped up their chosen lackeys in local government. The people became increasingly dependent, as their rivers were poisoned with acid runoff and their men died early, with lungs black from coal dust.

The ownership of Appalachia's wealth hasn't changed. The people never had control over their economic asset. For a long time, however, many people did derive income through work in the mines. This is what has changed. Aside from a peak in coal employment in the 1970s and 80s due to the oil crisis, mechanization of the industry has steadily reduced coal employment since the 50s. The population is now trying to earn a living in the global economy with nothing to sell. They have no land to farm and no rivers to fish, no flat land to build anything on, and a poor and corrupt education system.

For most of its history, Cuba has been a colony of the strongest imperialists of the day.

In June, 1999 I spent three weeks in Cuba, with the approval of the US Government, which has relaxed travel restrictions for journalists, professors, and students. For most of its history, Cuba has been a colony of the strongest imperialists of the day. From the earliest colonization of the Americas, Cuba was ruled by Spain and coveted by the US. As in much of the "New World," all the native people were killed and slaves were brought from Africa to work the plantations. The island's hardwood forests were eradicated to make room for sugar plantations to satisfy the world's sweet tooth. The people endured insufferable conditions on the plantations and the corruption and oppression of the imperialist government.

In 1898 Cuba won its independence from Spain with the assistance of a mightier empire, the US. For the next half-century, US companies took all profits from the island's economy, from agriculture (the same culprits exploited the rest of Latin America with assistance of the US government) to telecommunications. Cuba exported sugar to import candy, exported fresh fruit to import canned fruit, and the island became a Las Vegas-type vacation spot for Americans seeking debauchery.

...a remarkable experiment in economics: a country which has only known life as a colony of other nations is now trying to survive on its own, in a ruthless global economy. Just Like eastern Kentucky.

The Cuban revolution was not about socialism as much as anti-imperialism. The Cuban people were seeking relief from exploitation and from the invalid government of US puppets. Castro turned to the Soviet Union first, finding an ally in an enemy's enemy, and to socialism second, as it fit conveniently with his own ideas. As part of the Soviet trading bloc, Cuba continued to concentrate its production in sugar. The USSR paid inflated prices for the sugar and sold the island nation manufactured goods and fuel at discounted prices, as it did with other developing socialist countries, to promote industrialization. Under these favorable conditions, the Cuban government was able to carry out an extensive agrarian reform and develop first-rate health and education systems.

However, the trading arrangement with the Soviet Union did not prove to be in Cuba's best interest. The relationship between the nations was clearly one of dependence, and with the collapse of the Soviet Union, Cuba was unable to sustain its economic functioning. Cuban sugar was now for sale on the world market, which paid a much lower price than did the USSR. The price fell even further when Cuba flooded the market with its product. Without the discount on industrial goods from its former trading partner, Cuba couldn't afford to buy building materials, machinery parts, or fuel. The 1990s in Cuba have meant suffering for the Cuban people, and a remarkable experiment in economics: a country which has only known life as a colony of other nations is now trying to survive on its own, in a ruthless global economy. Just Like eastern Kentucky.

Both places have learned the lesson of too much dependence on one commodity. While it may make sense to specialize and trade on the world market, the "market" has long demonstrated its tendency toward wild swings. Economists describe these swings as "corrections"ójust a normal part of economic functioningóbut they can have enormous consequences for the regions on the wrong side of the pendulum. Economic diversification is one way of padding an economy against such shocks. When a region produces a greater proportion of what it consumes, it is less vulnerable to the fickle tastes of the " market." Fortunately, both Cuba and eastern Kentucky have some very smart and hard-working people who are working to improve the diversity and sustainability of their economies.

In eastern Kentucky, a small wave of political reformers is challenging the traditional alliance between corrupt local governments and coal bosses. Ownership rights to land and minerals are being contested in the courts, and coal companies are under increasing pressure to pay the taxes they've been avoiding since the beginning of their hegemony.

Appalachia's mountainous geography and inaccessibility make many kinds of commerce and industry impractical, but creative efforts are underway to take advantage of the area's resources. Some small entrepreneurs are responding to the new market of health conscious consumers and the growing Latin American immigrant population by turning to goat farming for milk and meat. They are using land too steep for any other purpose than grazing the sure-footed animals. Another idea that's being experimented with is growing shitake mushrooms in abandoned coal mines. The climate there is just right, and restaurants within driving distance of central Appalachia import these expensive mushrooms from vendors halfway across the world. While the area is not very accessible by roads, the internet goes to the mountains just as easily as anywhere else, and local crafts cooperatives are investigating the on-line market for locally produced art.

I found evidence for the opposite principle: that it is efficient and more sustainable to produce what you consume.

In Cuba, the government is introducing programs to promote self-sufficiency for the embattled island. Recently, huge state-owned farms producing only sugar have been broken up into farmers' cooperatives, and are growing food staples for consumption by the islanders. By one estimation, the city of Havana is now growing over 50% of its own food in community gardens.

The government has undertaken an extensive reforestation effort to restore the island's wealth of hardwood trees. Out of necessity, due to the economic history outlined above as well as the senseless lingering embargo, the country is turning again to local building materials to repair crumbling buildings made of the plaster favored by Spanish colonists. The fuel shortage has led to a clumsy but extensive system of public transportation, and the unavailability of pesticides has prompted extensive use of organic farming methods. Lacking basic medicines, Cuban pharmacies are now producing new antibiotics and selling these at fair prices to the rest of Latin America.

It would be misleading to suggest that things are going in a clearly positive direction for Cuba and eastern Kentucky. Both places are under serious pressures to behave the way the world market says they should. By conventional wisdom, one of Appalachia's best assets in the modern economy is its cheap labor force. Low-paying "back-office" jobs are being located there, including data entry and telemarketing. Black Lung is being traded for Repetitive Stress Injury, for lower wages and less unionization.

Cuba is losing ground to international developers of tourist resorts, under overwhelming pressure to earn foreign currency off the beauty of its Caribbean beaches. Cuban women are again dancing for tourists in hats covered in fruit, and Cuban children can again be seen hustling for Cokes in tourist hotels.

The cheerleaders of the new global economy would have us believe that it will bring greater efficiency. But in their terms, it is "efficient" for each economic unit to specialize in one product and import the rest. It is "efficient" for a multi-national corporation to set up shop in an undeveloped country to exploit its resources, human and otherwise. In eastern Kentucky and in Cuba, I found evidence for the opposite principle: that it is efficient and more sustainable to produce what you consume. The beginning of a solution to the world's dire economic circumstances is twofold: an end to ongoing colonization worldwide, and a smart globalism that balances self-sufficiency with fair trade.

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