Tuesday, September 14, 2010

Salir de Guatamala y Llegar en Guatapeor

Life is so strange. From today's WSJ comes the story that Cuba is desperate to create jobs in the private sector.

Now one might think that the way to create jobs in the private sector would be to create a favorable institutional environment for a functioning private sector, and then let people with entrepreneurial talent enter, flourish, grow their businesses and hire employees.

But that's not the Castro brothers' way.

They are simply going to fire over 500,000 state employees to create those private sector jobs! It's a strange way to go about trying to double the amount of people working in the private sector.

And here's the kicker:

"Cubans who decide to go into business for themselves will find a series of obstacles, including very high taxes, lack of access to credit and foreign exchange, bans on advertising, limits on the number of people they can hire, and a litany of small-print government regulations".


I guess that one way or another those poor people will become private sector workers or else!


Chris said...

I see this ending badly. When these 50,000 newly unemployed struggle to find work in Cuba's "private" sector, and the Cuban economy remains in the dumps, the Castro's and Chavez's will point to this and say, "see, free markets don't work!"

Hasdrubal said...

It's not the Castros and Chavez's I worry about, it's the Krugmans and Obamas that I worry about decrying the horrors of the free market using Cuba as if it were a natural experiment.