MITTAL SCHOOL OF BUSINESS

SUBMITTED BY: VAISHNAVI BEHAL

SUBMITTED TO: DR. MOHD. AZHAR UD DIN MALIK

Course Code: ECO113 Course Title: BUSINESS ECONOMICS

Academic Task No: 1 Academic Task Title: socialism: a case study
of Cuba.
Date of Allotment: 14.02.2022 Date of Submission: 25.02.2022
Student Roll No: 21 Student Reg. no: 12100622
Term: 1 Section: Q2113
Max. Marks30 Marks. Obtained:
Evaluation Parameters

Learning Outcomes: Through this assignment I was able to corelate economic

concepts with real life issues.

Declaration:

I declare that this Assignment is my individual work. I have not copied it from
any other students’ work or from any other source except where due
acknowledgement is made explicitly in the text, nor has any part been written
for me by any other person.

VAISHNAVI BEHAL
Student’ Signature:

Evaluator’s Comments (For Instructor’s use only)

General observation Suggestions for improvement Best part of assignment

Evaluator’s Signature and Date:

 SOCIALISM: A CASE STUDY OF CUBA

INTRODUCTION:

Since our childhood, we have been taught that a human being works for satisfying the basic
needs that is food, clothing and shelter. Socialism guarantees fulfilment of those basic needs.
Socialism is an economic system in which the government owns and controls manufacturing
and is responsible for planning the economy. It was created in an attempt to eliminate the
difference between the rich and poor. In a socialist system, where the government owns
manufacturing, business, and property, the government determines what is to be produced
and distributes wealth evenly. The most important characteristic of the socialist economy is
that the goods and services are produced on the basis of the usage value. The usage value
subjects to the needs of the society at present. Therefore, it prevents overproduction and
underproduction. The government tries to strike a balance between social welfare and
capitalist economy. Socialism can be perfectly termed with 3 main aspects that is individual
liberty, democratic government and freedom of choice. The main aim of socialistic economy
is to ensure that there is maximization of wealth accumulated in the entire community. It
focusses on equal distribution of wealth amongst all the citizens.

Cuba is an island country in the Caribbean Sea. In the early 1960’s Cuba became a socialist
country. After following the triumph of the Cuban Revolution in the year 1959, and the
declaration of its socialist character in the year 1961, a form of Cuban socialism has been in
power. The government of Cuba controls approximately 90% of the country’s economy. The
government has dedicated a fraction of its limited budget to providing people with free
education and healthcare facilities. It can be clearly seen that the government gives high
priority to the welfare of the citizens of Cuba. It has its own health care program, subsidized
housing and subsidized food programs. But Socialism hasn’t delivered the goods as it was
promised in Cuba or anywhere else in the world countries that practiced socialism. Today,
Cuba is one of the poor countries that is made poorer by socialism. 

WHY?

After the two years of the revolution the Cuba economy entered into a major down spiral.
There was a massive unemployment, the inflation got out of control, Industrial and
commercial production was paralyzed. Due to militarization of society and conflict with the
United States along with the migration of around 2 million Cubans. The economy was
shattered and it never got recovered. The middle and upper classes were badly destroyed. The
workers of Cuba joined the group of unemployed, underemployed. Hence, they were working
for miserable wages.

IMPACT OF SOCIALISM IN CUBA

Positive Impact – Cuba provides free health care facility to its people that makes its life
expectancy even higher than united states. It has 23 medical schools with highest doctor to
resident ratio. Cuba spends 10% of it’s annual budget on the education of children and youth
that makes it literacy rate higher at 99.8%. Cuba also has its own Constitution and judicial
system that is followed by both citizens and leaders.

Negative Impact - Cuba is a massively corrupt economy. Cuba have shown widespread acts
of corruption that have affected their viability as a nation and harmed their chances at both
development and progression on political and governmental scale. Officials started stealing
from the treasury to pay their debts that led to complete distrust amongst people for elected
officials. Wealthy landlords were on an advantageous position because they used to bribe the
government. Along with this the condition of government hospitals is pathetic. Everyone
works for the government be it musician, dancers or construction workers, they need to pay
monthly license to the government. The government owns all of bars, stores, ice cream shops,
hotels, restaurants. People are paid very less in return for their hard work they have been
doing for years. Everyone has to steal goods from the government else the entire economy
would collapse in just few days. For Example, If the fuel was not stolen the transportation
would have collapsed immediately. The basic needs like electricity, food, home is most
expensive. People are living in acute poverty. They have to pay bride and gifts to officials for
getting their work done. The communists of government love the power and they can even
risk the well being and power of Cubans for maintaining their power. Many people suffer
with hunger and poverty because there’s no proper food available to them. People of Cuba
fled from there and the ones who are staying are suffering daily. Children are forced to get
education as prescribed by the government. It was claimed that Cuban revolution is teaching
violence to younger ones. The man works little, steals, suffers and waits to escape.

Today’s Economy of Cuba