Sunday, November 27, 2016

Fidel Castro Is Dead

King Fidel died the other day.

What? You didn’t know he was a king? What do you call someone that ruled since 1959 without reasonable elections until they chose to retire, then abdicates in favor of a younger family member (i.e., King Raúl)? Oh, and there’s a son-in-law in the mix to succeed him; we’ll call him Prince Alberto. Oh, and somehow he’s worth a fortune, just like a king.

People call King Fidel a revolutionary. As if kings could not lead revolutions … hmmm … what was that bit in English history about a minor nobleman William of Orange being the military leader on the winning side of the Glorious Revolution and becoming King William III of England?

I’m going to pull rank here. King Fidel took over a country. The way to measure a country is with GDP. So, if you’re not getting information from a macroeconomist about Cuba and Fidel … you pretty much shouldn’t bother.

The thing is, it appears to be a huge mission of many people in the developed world to present Fidel as something that he was not, and this mostly begins with ignoring the GDP data.

From a macroeconomic perspective, Fidel is one of the worst humanitarian disasters in human history.

Data is not hard to come by on this. For all its faults, there is no competition for assessing economic conditions at the individual level than real GDP per capita. More on that later.

In the U.S., we are somewhat unsure of how we feel about Obama because the economy has struggled to grow real GDP at 2.0 to 2.5% per year. Even Obama’s supporters will typically admit that the economy doesn’t feel that great because we need to take away 1.5% to 2.0% population growth from the U.S. figure. Yet, from 1959 to 1999 Cuba’s real GDP per capita grew at 0.3% per year. Even in rather weak times, the U.S. has pulled away from Cuba.

Going further though, Cuba’s growth has lagged behind most of the world. It’s closest analogs in the Americas of 1959 were Jamaica, Panama, and Ecuador. All three have pulled away from Cuba, in terms of real GDP per capita.

One of the tightest arguments we make in science is to compare matched pairs. Try to find the closest analog, and then compare their differences with the passage of time. This is how we know North Korea is so bad — because it used to be comparable to South Korea. The same goes for the old West and East Germany. For Cuba, the closest analog is Puerto Rico. Both were Spanish colonies for 400 years. Both were occupied and dominated by the U.S. for the next 60 years. And Puerto Rico has quadrupled its real per capita GDP since 1959. The data on all this is solid, accepted, and widely used.

Fair enough. But supporters extoll the availability of free and effective healthcare and education in Cuba.

Let’s be very clear about this. If you don’t start with real GDP per capita, it’s easier to find claims about healthcare and education to be more convincing. But, if you do start with weak real GDP performance, then it should be clear that any claim that healthcare and educaton have gotten better in Cuba must be accompanied by a statement that everything else is even worse than we thought. Have you ever heard a statement like that? I didn’t think so.

Oh, and it’s very easy to find articles detailing how Cuba’s healthcare and education systems in 1959 were … already pretty good by international standards. Go ahead, dig into that on your own. Cuba only looks good on these counts if you forget the “compared to what” aspect.

Don’t believe me? Here’s a personal viewpoint from George Borjas. He’s a professor at Harvard, one of the top labor economists in the world, and a refugee from Cuba.

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