Rotten Company – Folha de S. Paulo, November 28, 1971

by Plinio Corrêa de Oliveira

The various statements made by Fidel Castro in Chile merit careful review. They reveal the true character of the man and the regime that many Brazilians persistently insist on seeing as a model and a solution for the Ibero-American nations.

Since it’s impossible to address this huge task here, I will focus on analyzing a particularly striking point from the dictator’s speech in Rio Verde.

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This topic is particularly interesting because Fidel Castro offered the Chilean nation a veiled explanation for the repeated failures of the Cuban economy: “The ambition to do too much in too little time led us to gather many resources in Cuba, but these were not put to good use. We gathered thousands of tractors, but they were not properly maintained. They were used for everything: to go to a baseball game and even to visit girlfriends. We improvised workers, and they did not take good care of the machines.”

Apparently, tractors were a significant part of the “many resources” accumulated by Castro. Otherwise, there would be no reason for him to mention the losses caused by their misuse so specifically.

On the other hand, one or two rare trips with a tractor to a baseball field or a girlfriend’s house couldn’t have damaged so many tractors to such a great extent.

Therefore, Castro’s lament only makes sense if we acknowledge that the many tractors he “gathered” were widely used for purposes unrelated to their service.

Now, such abuse cannot go without an explanation, which is clearly obvious.

Indeed, what can we say about the workers at a private company who, over months and years, wore out the tractors by driving them around? Clearly, such workers lack proper transportation options, since habitually using a tractor doesn’t provide the features or comforts of a regular vehicle, not even a bus. These workers would therefore be poorly served regarding their needs.

That’s why they feel unhappy. They willingly exploit tractors for their own benefit, showing no regard for the company, believing they have the right to use and misuse what belongs to it to improve their lives.

If this were a private company, Dom Helder Camara and Father Comblin would say that the workers’ actions are justified, and so would Castro. But since this is not a private company, but a communist state, the situation is quite different for demagogues of all stripes.

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On the other hand, in a private company, such abuse would immediately raise another question: where are the top and mid-level managers responsible for preventing such abuses? What causes their inaction? Indifference? Complicity?

In either case, the conclusion is that this is a rotten company because from top to bottom, the people responsible for production are not fulfilling their duties.

But, since this is a communist state, many “toads” avoid this conclusion. They will say: Fidel’s Cuba is not a company (which it really isn’t) nor can it be considered corrupt (which it undoubtedly is).

Cuba’s resemblance to a failing business is further highlighted by the final part of Fidel Castro’s explanation. The tractors were brought to Cuba and used daily before trained personnel were prepared to maintain them.

The board of directors of a corporation that reports to shareholders admitting to a similar mistake would be completely discredited in industrial and banking circles and risk losing its mandate. Only bad faith, incompetence, or negligence can cause such a serious error. Since, in the case of Cuba, such a mistake can only be attributed to the highest levels of administration and finance, the corruption present in the workforce and at all levels of management also exists at the top, where administration is confused with the leadership of the state itself.

The Cuban State and administration are corrupt. Slightly expanding the meaning of the word “business,” Cuba is a corrupt enterprise.

But why is this enterprise rotten? Is it because of the corruption of the people involved? Maybe, to some degree. But it would be far too simple to see this rottenness as just the result of corruption.

Some companies operate effectively, even if the morality of their leaders is questionable. “The owner’s eye fattens the cattle,” says a proverb. Although the owner might not be honest, he has an interest in maximizing his company’s output. Therefore, he selects active and ambitious leaders who seek good salaries, bonuses, and promotions. These managers, in turn, aim to choose and motivate workers in ways that justify the improvements they want to see in their boss’s eyes. The workers, in turn, strive to produce a lot, earn well, and succeed. In this setup, the company is, from top to bottom, a coalition of legitimate individual interests. When this view prevails in the company, order and effort ensure the success of the entire organization.

To evaluate the real impact of this company idea, simply observe the progress of the Brazilian economy.

Cuba is a failing enterprise because it lacks “the owner’s eye,” the drive for increasing personal gain. The island’s entire production system is controlled by a large pyramid of poorly paid civil servants with no opportunity to become wealthy. And one cannot expect more than basic competence from civil servants, especially under such conditions. Usually, the energetic, enthusiastic, and heroic drive can only be expected from people motivated by the legitimate desire for profit and significant advancement.

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This explains why lethargy has overtaken the production system and brought misery to Cuba. As it has in all communist countries, including beloved yet unfortunate Chile, which is now beginning to struggle under Allende.

In turn, misery fuels tyranny. To fully grasp this idea, let’s revisit the Cuban example. Since the entire system of supervision and control fails, the only solution is the whip. This approach has always been the answer for slave labor, whether it involves a slave under an Eastern ruler or a modern communist despot. The difference is that in communist countries, the whip of the Eastern ruler has been replaced by a comprehensive system of moral and physical torture that we are very familiar with: widespread espionage, general insecurity, forced labor, beatings in work enforcement departments, concentration camps, and so on. For those who resist, the “paredón.”

What does the urgent and natural need for the “owner’s eye” and for promotions and salary increases, which help workers save money, demonstrate?

It shows man’s natural and legitimate tendency to be an owner, to work directly and immediately for himself and his family. Charity begins at home: “Let him, who begat Matthew, feed him,” says an old proverb. And another saying advises: “Matthew, care first for your own.”

Catholic doctrine teaches that we are obligated to love our neighbor. But we must do so in order of proximity; therefore, our first duty is to ourselves and our families.

Socialists and communists overlook these natural and constant realities. They prevent workers from saving and becoming property owners, and they hinder entrepreneurs from increasing their wealth. As a result, no one can secure their family’s future through inheritance or improve their living conditions.

The result is what you see in Cuba, Russia, Chile, and everywhere else where production is entirely controlled by a state system.

In other words, Cuba is a rotten enterprise because it has taken away from its workers the incentives offered by two natural institutions: property and family.

This is an important lesson for anyone who believes that fighting against family and property helps the people.