I.

I suppose the first issue to be addressed today is--why Cuba?

Yes, why Cuba at all? Why should we not look closely at some other Latin American country, one far larger, far more important, far more capable of impinging upon our welfare and our security?

Why not Mexico, our closest neighbor, possessing long a common border but also a distinctive and fascinating culture all its own--a country with whom we have an important free trade agreement that is bringing our economies and our societies every day closer to one another?

Why not Brazil, world's tenth largest economy, our second largest market in Latin America, an island-continent unto itself, the effective center of what might called the Luso-Sphere--a Portuguese-speaking world that circles the globe.

Or why not Venezuela, historically the third largest market for the United States in Latin America and--until a few days ago, at least--a principal source of our imported oil?

Why not even Argentina, a country that in ways strongly resembles our own--a frontier society populated by the descendants of European immigrants, one that closely shares our own devotion to social mobility and material success?

The answer, it seems to me, is three-fold.

First, although the cult of revolution pervades Latin American political discourse, and although some countries have indeed attempted drastic changes, Cuba is the only one to carry the ideal of complete and total transformation to its ultimate consequences.

Second, Cuba represents the ultimate expression of anti-Americanism in Latin America and to some extent worldwide. While many people around the globe resent our power, our wealth, our self-confidence, and our creativity--only Cuba, little Cuba, ninety miles from our borders, once a virtual American protectorate, has been willing, nay eager, to pay the full price of its rejection. One might even say that at this point that hatred of the United States and all its work is the defining principle of Cuban national identity and the country's chief claim to international status. In that sense, for people in other countries--including, in some quarters of our own--it resembles a kind of pornographic film. They wouldn't want to do those things. But it gives them a vicarious thrill to see Cubans do them.

Third, Cuba's revolution represents the definitive anti-paradigm of Latin America's current quest for democracy and free markets. While authoritarianism is a permanent Latin American political temptation, and many different kinds of Latin American regimes have attempted to subordinate the economy to narrow political agendas, the Cuban dictatorship alone has been truly successful in this regard.

Chronology alone tells the tale. The Perón regime in Argentina lasted nine years. The rule of General Augusto Pinochet in Chile lasted for sixteen. The Trujillo dictatorship in the Dominican Republic endured for thirty-two. But this year Cuba's revolutionary state will pass its forty-fourth anniversary.

This is so because Cuba alone has managed to marry the cult of the messianic leader, perhaps the oldest political tendency in Latin American politics, to the totalitarian principle. It has politicized every aspect of life, and very nearly destroyed civil society. For all their sins, neither Perón, nor Pinochet, nor Trujillo, even attempted as much.

So from the point of view of politics, ideology, and culture, Cuba is rather more important than its small population or its negligible gross national product would suggest. It is a kind of banner under which all of today's leftist, anti-American and utopian tendencies tend to assemble.

To be sure, Cuba's future is considerably more problematic than longevity of its political regime would seem to suggest. That is in fact the main point I plan to make today.

II.

The first crucial fact to grasp about Cuba is that it is not, and never has been, a "typical" Latin American nation. Discovered by Columbus on his second voyage in 1493-94, Cuba never became a major focus of Spanish colonization. This was so because it lacked the two things that drove the Spanish conquest of America--the search for abundant precious metals and a large, settled, and tractable Indian population to work them. Instead, Cuba became a jumping-off point for the conquest of Mexico and Peru, two venues rich in both. By the end of the sixteenth century Havana was the nerve center of Spain's American empire. It was here that once a year the treasure fleets from Mexico and Peru would reconnoiter to be accompanied on the dangerous journey across the Atlantic by Spanish convoys. It was here that the great Spanish merchant houses of Seville were represented. And it was here, too, that many of the important legal and administrative agencies of the empire had their principal American centers. The heavy, not to say overwhelming, peninsular presence in Cuba explains in a great measure why the island--alone of Spain's American dominions--did not revolt against the mother country and achieve political independence between 1810 and 1824.

But there was another, even more interesting reason why Cuba was for so long what the Spaniards were pleased to call "the ever-faithful isle". In 1791 a successful slave revolt on the French portion of another nearby island then known as St. Domingue--put an end to what up to that time was the most economically successful colony in the circum-Caribbean, one based on the production of sugar, molasses, and rum. Haiti--world's first black republic, and arguably the most politically radical of any to appear in the nineteenth century--was born in a maelstrom of extraordinary violence. The slaughter or expulsion of the French planter class, combined with a drastic land reform, put an end to export agriculture. It also led to the flight of French capital and expertise in the sugar industry to nearby Cuba and suddenly added an independent economic dimension to island's importance to its parent country. By 1860 Cuba was producing 450,000 tons of sugar a year--virtually a fourth of the world's production.

Harvests of this size required cheap labor, and lots of it. Thus Cuba became, perforce, a major importer of African slaves throughout the first half of the nineteenth century. The presence of millions of disenfranchised blacks, and the horrific example of race war in Haiti, for decades assured the loyalty of Cuban whites, or near-whites, to the Spanish crown and resident military. Slavery was abolished in Cuba only in 1866--a mere three years after United States. By ending servitude on the island, Spain cut the last important tie of loyalty between it and the Creole elite, and set the stage for a long struggle for independence that culminated in the war of 1895-98.

During these years when independence conspiracies were brewing, another, less dramatic development was taking place. The Cuban sugar industry was gradually being taken over by American interests. As a result, by the end of Spanish rule in 1898 it is fair to say that the island's economy was already heavily oriented towards the United States, and even, to some extent, controlled by American interests. The intervention of the United States in the last weeks of the war against Spain assured its successful outcome and underscored the fact that the new Cuban republic, established in 1901, would be an American protectorate.

Thus Cuba, alone of Latin American nations, not only came to political independence nearly a century late, but in effect traded Spain for the United States as its effective metropole. Between 1898 and 1901 the island was occupied by the U.S. army, which was withdrawn only after the constituent assembly of the infant republic agreed to insert a proviso in its new charter which gave the United States the right to intervene at any time that it deemed "life, liberty and property" to be in peril. This unusual concession, which was actually a Spanish translation of a rider to a U.S. army appropriations bill--the so-called Platt Amendment--poisoned Cuban politics for generations and if anything encouraged the very lack of political stability it was intended to assure.

That much said, the record of U.S. domination--like that of European colonialism elsewhere during the same period--is by no means wholly negative. Military occupation brought order and security, roads, and schools. The U.S. Army Corps of Engineers built Havana's first and only water piping system. A U.S. army doctor, Walter Reed, was responsible for much of the research that led to the extinction of yellow fever. Most important of all, a series of reciprocity treaties assured that sugar, Cuba's principal export, would have privileged entry into the United States at the same subsidized prices enjoyed by the domestic product. While this was not intended as an especial favor to the Cuban people--at the time most of the great plantations were owned by United Fruit or other American concerns--the effect on the island's overall economy was enormously positive.

The predictability assured by an American protectorate, combined with a large, profitable and guaranteed market for the country's principal product, acted as a unique draw for European immigration. In point of fact, between 1898 and 1920, more Spaniards migrated to Cuba than during the entire four hundred years it had been a Spanish colony. Apart from tilting the racial mix of the population back in the direction of "whiteness," it provided the germ of a middle class, which in time because the largest in proportion to population of any Latin American country with the possible exception of Argentina and Uruguay, two other destinations of massive Spanish emigration.

By 1958 virtually all the social and economic indicators put Cuba at the top of the Latin American range. What Cuba did not have was genuine--as opposed to formal-political independence. As one of our last ambassadors to the island put it, the United States envoy in Havana was usually as powerful as the president of the republic; at times, he added in an unfortunate coda, he was even more powerful. Whether literally true or not, this is certainly the way that politically engaged Cubans--not all of them leftists--regarded the bilateral relationship. The fact that Cuba had one of the highest per capita incomes in Latin America--one indeed that in the late 'fifties actually exceeded that of the poorer European countries--was little consolation. It was not to these that Cuba compared itself but to the United States. By that standard, every Cuban government would be found wanting, and whatever its other advantages, the relationship with the United States would always be found to be unjust.

III.

The Cuban revolution of 1958-59 opened a new chapter in the island's history, which, once again, established a trajectory unique in the history of Latin American countries. The special relationship with the United States was exchanged for voluntary entry (arguably the only one in history) into what might be called the Soviet Community of Nations. This development was all the more dramatic for being wholly unexpected. The diplomatic documents of the day, declassified after the thirty-year rule, are clear on this point. The idea that one of the most prosperous and dynamic Latin American countries--one wholly attuned to the latest developments in technology and lifestyles in the United States--seeking to become, as it were, a tropical Bulgaria, seemed to U.S. policymakers frankly inexplicable, when not downright bizarre.

Nor was Washington capable of divining the purposes of the Soviet Union. President Eisenhower and his associates, including veteran Soviet expert Charles Bohlen, were convinced almost to the end that the Soviets would not sign a mutual security treaty with Fidel Castro. Indeed, until the pact itself was announced, the president assumed that Moscow would not wish to provoke a crisis in its relations with the United States over so trivial a strategic asset as Cuba. By bald geopolitical logic, President Eisenhower should have been right.

But he failed to grasp what his opposite number in the Kremlin was quick to see--that symbolism can play a vital role in politics. The idea of a small Spanish-speaking country in the Caribbean, long considered a virtual part of the United States, passing into the Soviet camp was a propaganda victory of major proportions. Indeed, as a Latin American country, Cuba offered Moscow what it had lost in Spain in 1939: the linguistic and cultural equivalent of a warm water port. Whether in the end Soviet Premier Nikita Khrushchev was wise to invest the equivalent of ten Marshall Plans in Fidel Castro's ego is a matter that future Russian historians will have to decide for themselves.

But precisely because Castro wished to enter the Soviet orbit--in contrast with the puppet regimes the Red Army was compelled to install on Russia's borders--he was worth at least as much to Moscow in symbolic terms, and in its reach into the "non-aligned" Third World, as East German industry, Polish agriculture, and Czech armaments.

IV.

The Soviet relationship with Cuba was arguably the most unique of all those Moscow maintained with its other allies and satellites. Whereas the states of Eastern Europe were pillaged for resources--as in the case of East Germany--or forced to sell their harvests at artificially low prices--as in the case of Poland--at first blush Cuba seems to have walked away from the table with far more than it contributed. The Soviets stepped in to replace the United States as the principal customer for the Cuban sugar harvest, sometimes paying four times the world price. In exchange they were traded oil, industrial plants, some foodstuffs, and military hardware. Moreover, they forced their satellites in Eastern Europe to conclude trade agreements with Havana almost as advantageous to it. There are various ways of calculating the size of the Soviet subsidy during the alliance, but most experts settle at about six billion dollars a year. The size of this transfer explains how Cuba--an otherwise poor country--could offer its population free education and free medical care for thirty years.

To be sure, Cuba had to repay the Soviets in other ways. Few people around the world, and certainly almost nobody in Latin America, regarded the island in its new incarnation as a genuinely independent political actor. Moscow required not only ideological support for even its most outrageous acts, such as the invasion of Czechoslovakia, but active involvement in its proxy wars in Africa and Central America. During the decades of the Soviet-Cuban alliance, more than 300,000 Cubans served in foreign theaters of war; many of them never returned, and their families still do not know what happened to them.

At the same time, a disproportionate amount of Soviet aid to Cuba came in the form of military hardware, which is to say, in non-productive investments. Finally, Soviet influence in Cuba led to the establishment of an economic system there that does not work and cannot work even minimally without the continuous infusion of enormous subsidies from the outside. Even then such a system by its very essence discouraged--and continues to discourage--production, labor discipline, and product innovation. Once the Soviet Union was no more, the full costs of the alliance were revealed. Cuba today is poorer than it has ever been in its modern history, arguably poorer indeed than in all of its history.

V.

Paradoxically, having boarded the wrong bus, Castro's Cuba has nonetheless ended up at the destination it originally sought--full political independence--not just from the United States but from everyone else as well. The problem is that, like other Caribbean islands, independence of this sort is a luxury it can ill afford.

Like all of its neighbors, Cuba must now find a way of earning it own wage on the world economy. But it is less well equipped to do so than the Dominican Republic, Jamaica, Barbados, or even Haiti.

Cuba is no longer in a position to benefit from comparative advantage--that is to say, in the sale of the one product it was uniquely positioned to produce. To make things worse, its economic and social system prevents it from maximizing the benefits of what few options remain.

A Cuban statesman of the 1940s is famous for the lapidary comment, "without sugar, there is no country." Today there is almost no sugar. There is hardly a country either. The collapse of the Soviet Union deprived the island of its major customer. Meanwhile, poor quality grinding equipment imported from the former Eastern bloc, poor maintenance, lack of hard currency to buy replacement parts, and low work-force morale have reduced the size of harvests to what they were in the 1930s. In the meanwhile, the world price of sugar has slowly declined; in constant dollars it is less than half what it was when Castro took power. Moreover, today many more countries are in the business of producing sugar than in 1959; and new technologies, particularly the use of corn-based sweeteners, are challenging cane producers everywhere. Last year the Cuban government faced up to the consequences, and closed nearly half its mills, rendering redundant 100,000 workers--some 2.5 percent of the active work force.

At this point, in fact, Cuba survives mainly on the same things as other Caribbean islands--tourism and remittances from its former citizens living abroad. The size of remittances, like so much else about Cuba, is a matter of acute controversy. Some--for reasons of their own--want to push the remittance figure up to $1 billion a year. More credible estimates fix a ceiling of about $250. As for tourism, although in the last few years the island has netted nearly $2 billion in gross receipts, by the most generous calculations it nets about $440 million.

To put these numbers into some perspective, bear in mind that in order to replicate the Soviet subsidy of $6 billion a year, the tourist industry would have to gross nearly $30 billion a year. This is frankly impossible, since Mexico--with an infrastructure many times larger and a far more sophisticated, not to mention a far more complex menu of attractions--grosses less than $10 billion in a good year.

As if this were not bad enough, because of the nature of its economic system, Cuba is poorly positioned to maximize the benefits that come from tourism. Unlike Mexico, the Dominican Republic, or Barbados, in Cuba there is no almost no such thing as small business; thus the tourist dollar is not recycled several times through the economy. Nor can remittances realize their full potential. Since no Cuban is allowed to hire another Cuban, money received from relatives abroad can only be used for direct consumption. Thus Cuba, with one of the largest and the most prosperous overseas communities of any country in the Caribbean basin, cannot begin to replicate the explosion of micro-enterprises fueled by remittances such as we now see in El Salvador or parts of Mexico.

It is true that from time to time the regime experiments with extremely limited free market incentives in agriculture and specialized industries like cigars. But the moment that it looks as if the demonstration effect is arousing unhealthy appetites--or even worse, creating potentially independent centers of power--it pulls in the reins. The same goes for home restaurants, which are slowly being put out of business by a combination of taxes, inspections, and denial of access to foodstuffs sold only by government agencies at prices determined by them alone.

All of this suggests that the current controversy in the United States over the lifting of the trade embargo is largely irrelevant. If the embargo disappeared tomorrow, the nature of Cuba's economy--and of Cuba's current position in the global marketplace--is such that an opening to the US would have minimal impact on the welfare of its population. Certainly it would be nothing compared to what it was after the war of 1898, when sugar was still a highly profitable export product. Nor even what it was in the now halcyon days of the Soviet subsidy. Evidently, if Cuba had a free market system it would be in a better position to keep more of the tourist dollar, and presumably would experience a modest expansion in small-business activity. The harsh fact remains, however. It had a privileged position in the U.S. market. It gave it up. The world has changed. Cuba has lost its place in line. It must forever after live with the consequences.

Given these realities, the persistence of a suffocating authoritarianism on the island is perhaps understandable. No Latin American government elected by popular vote and facing an unrestricted press and public could endure the shocks to which Cuba has been exposed since 1989. For some--including almost all of our media, academic, and cultural elites--the very survival of the Castro dictatorship under these circumstances validates its popularity and legitimacy. To be sure, to reach this conclusion requires a careful factoring out of police brutality, torture, prisons, censorship, political discrimination for access to basic services, and exile.

However, all of us must confront the unpleasant fact that the Castro regime has been in power nearly half the country's independent history; that millions of Cubans have sacrificed their welfare and their happiness to their dictator's vision of ultimate victory over the United States. Probably few wish to admit that their sacrifices--or those of their parents--have been in vain. Most still want (and have been continually told they deserve) free everything--free housing, free education, free health care. Probably few are in a position to evaluate the real price they are paying for these abstractions. But, though I personally would like to see a free and democratic Cuba come into existence as soon as possible, given the enormous destruction wrought by tropical Communism these past forty years, I am not sure I envy the task awaiting any elected Cuban leader. Or for that matter, those who must design U.S. policy to help him out.

VI.

This brings me to the subject of the United States. What do we want Cuba for? In 1903 I could have answered that question easily. We wanted it because it provided important opportunities for investment in what was then a profitable crop--cane sugar, and to a lesser degree, tobacco. We wanted it because it sat astride the routes to Panama, where we were building an interoceanic canal. We wanted it because it afforded us a naval base at Guantanamo Bay, one of the best natural harbors in the Caribbean, where our ships could be restocked with coal. And we wanted it because we were afraid that if it failed to draw it into our own sphere of influence, some European power would do so instead.

A century later none of those factors are relevant. Indeed, it is fair to say that today Cuba has nothing--nothing at all--that the United States needs or wants. This point was driven home with a vengeance two years ago when our International Commerce Commission was tasked to investigate the potential size of the Cuban market. In the absence of the U.S. embargo, it found, U.S. exports to Cuba from all sources would have ranged between $658 million to $1 billion, somewhat less than 0.5 percent of all U.S. exports. To put these figures in a regional perspective, that would make Cuba a significantly less interesting customer than the Dominican Republic, which with roughly a third of its population takes more than $4.4 billion in goods and services each year from the United States, or Costa Rica, which with less than twenty percent of Cuba's population takes nearly $2.5 billion.

The acute limitations of Cuba's long-term economic potential also renders somewhat unreal the pending claims for compensation for U.S. property confiscated by the revolutionary regime, now hovering at about $6 billion. And it underscores the degree to which the island will represent a problem rather than a possibility for the United States, regardless of who ends up ruling it.

A country that cannot support its population will inevitably produce pressures for emigration. Since the 1960s the United States has been the principal destination of Cubans unhappy with their country. Under the 1994 migration agreements we are committed to taking a minimum of 20,000 a year. We also parole into our country such Cubans as manage to reach our territory illegally--usually on rickety rafts. These preferential arrangements have naturally brought complaints from other Caribbean nationalities as well as from various racial and ethnic lobbies in the United States, but as long as Cuba is ruled by a Communist dictatorship there is at least a moral and political justification for it.

But let us suppose that there is some sort of change of government in Cuba. Even a full-dress constitutional democracy would not resolve the country's economic problems, at least not overnight, and pressures to emigrate would continue. Indeed, they might well accelerate. With greater personal freedom, quite a few Cubans might decide to wait out the decades of reconstruction in more salubrious climes, such as southern Florida. What then? Does the United States close the door to Cubans? If not, how does it explain itself to Mexicans, Dominicans, Haitians, and others eager to enter? If it does close the door, what kind of contribution would that be to the viability of Cuba's fragile democracy?

Nor is it inevitable that a new Cuban government, even one whose ideological orientation is broadly coherent with our own, will summon up the will to turn back many of Castro's disastrous economic policies. If so, what choice will the United States have but to step in with massive economic assistance, somewhat on the model of what we are currently doing in Egypt, and with much the same result. Indeed, even a friendly government, driven into a corner by an economy in tatters and a neo-fidelista opposition, might be tempted to play the migration card. One less well disposed would do so uninhibitedly, as Jean-Baptiste Aristide has demonstrated in the case of Haiti.

Two final points. Cuba is fast becoming an old country. Due to a low birthrate, state-funded abortion on demand, and the steady exodus of young people, today 1.5 million Cubans are elderly. In 2025, it will have one of the oldest populations in the world. Meanwhile, its pension system is virtually bankrupt. This portends a major social crisis that no government, regardless of its ideology, will find easy to resolve.

At the same time, Cuba's educational system has summoned to life a work force that will never find suitable employment at home. How often we are told that it has scientists, technicians and engineers as numerous in the population as in the advanced industrial countries. If true, they will prove to be a burden rather than an asset, since the country is unlikely to ever possess the kind of infrastructure capable of absorbing such large amounts of sophisticated manpower. As it is, with some 7,000 veterinarians and 11,000 agronomists, Cuba is far from able to feed itself.

Under these circumstances, U.S. policymakers might well come to regard stability rather than freedom and democracy as the highest value in our Cuban policy. Indeed, this is precisely the change in priorities that the Castro regime has been trying to coax out of Washington for the last ten or twelve years and it has made considerably progress along these lines. Today it has many allies in high places--in our Congress, in the farm and business communities, and in the U.S. military. The domestic political equation currently renders that an impossibility. But not, it seems to me, for an indefinite term.

VII.

What about the Cuban-American community and its potential role?

On the face of it, that community should be Cuba's greatest hope. It represents an enormous wealth of human capital and financial resources. It has made contributions to virtually every walk of American life--from medicine to sports, from business to the arts. It is without question the most successful Hispanic community in the United States--the most talented, the most prosperous, the best-organized, the one with the greatest sense of self.

The problem, alas, is that these people represent the best of a Cuba that no longer exists, and that Cuba can never be summoned back to life. Differences of race, education, class, cultural orientation and historical experience open a huge gap between the two "countries"--the Cuba of the island and the Cuba of exile. It cannot easily be closed. Moreover, the Cuban-American community itself is undergoing an important shift in composition and outlook, as the result of the entry since 1990 of a new kind of refugee--one who is here not because he or she rejected Castro's revolutionary vision as such, but on purely pragmatic grounds--their government has failed to deliver a decent standard of living. As time goes on, thanks to demographics, the Cuban community in the United States will come to more nearly resemble in social composition, outlook, and temperament all the others from the circum-Caribbean. Its attitude towards its home country will become essentially apolitical. Given growing number who visit the island each year, and the role of remittances, it has already begun to do so.

VIII.

Critics both at home and abroad like to say that our Cuban policy these past forty years has been a failed policy. If they mean by that, that we have not managed to rid the island of Fidel Castro, they are right. To be sure, that says as much or more about U.S. restraint as it does about Castro's supposed legitimacy and historicity. But Cuba's Cuban policy has been a far bigger failure, one that I seriously doubt can be redeemed, regardless of who governs the island in the future.

To be sure, the longer Castro and his minions are in charge, the worse things will get, and the ultimate price to be paid will increase exponentially. The Cuba to come represents, inevitably, a serious inconvenience for the United States. But it represents something far worse for itself. May other countries contemplating a similar itinerary consider the lessons and act accordingly. Cuba has already paid a very high price for their education.

Mark Falcoff is a resident scholar at AEI.