Title: On Cuba's budgetary finance system. A critique of Helen Yaffe's account

Authors: Alejandro Agafonow

Addresses: Department of Economics, Hansung University, 389 Samsun-dong 2-ga, Sungbuk-gu, Seoul 136-792, South Korea

Abstract: This article offers a critique of the budgetary finance system (BFS) conceived by Ernesto Che Guevara, as well as Helen Yaffe|s recent account of it. We build on the economic theory of market socialism to analyse four key aspects of the BFS: investments, incentives, quality, and entrepreneurship. It is our contention that the BFS was virtually impossible, in the sense that it could not be reasonably expected that the BFS marginally allocated non-primary goods to those persons most in need or who valued them the most. We maintain that the unified control of factors of production rocketed |diminishing returns to management| and weakened the effectiveness of the mixture of moral and material levers; that Cuban directors lacked entrepreneurship because, in the absence of a market, they were blind to their functions of running Consolidated Enterprises and, in addition, the system of moral compulsion fostered a powerful discouragement for them.

Keywords: Cuba; budgetary finance system; BFS; Ernesto Che Guevara; feasible socialism; Helen Yaffe; market socialism; planning; Soviet economy; investment; incentives; quality; entrepreneurship; moral compulsion.

DOI: 10.1504/IJMCP.2011.039803

International Journal of Management Concepts and Philosophy, 2011 Vol.5 No.1, pp.27 - 39

Published online: 20 Apr 2011 *

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