Bryan Caplan  

Cuba and Capitalist Contagion

The Masonomics Fab Four... The Left is Always Right...

Thinking about Cuba's prospects reminded me of Sobel and Leeson's neat chapter on "The Spread of Global Economic Freedom" in the 2007 Economic Freedom of the World study. In this piece, Sobel and Leeson use spatial econometrics to see whether economic policy in one country "spills over" onto geographical neighbors and/or trading partners. Their findings:

[E]conomic freedom spreads at about the same rate through both geography and trade, in both levels and changes. Countries "catch" about 20% of their average geographic neighbors' and trading partners' levels and changes in economic freedom. This result is remarkably robust to alternative specifications and estimation techniques.
But before you take up the Free Man's burden, keep in mind that:
Although these results provide strong evidence that freedom spreads, they also suggest freedom does not spread as strongly as the domino theory behind American and Soviet foreign relations during the Cold War suggested. The idea that reforms within a few key nations would substantially alter the state of economic freedom in the rest of the region does not appear to be correct.
If Sobel and Leeson's story is correct, opening up trade with Cuba will make them a lot more capitalist, but make us a tiny bit more socialist. At least in this case, though, I suspect that the feedback will, if anything, go in the opposite direction. Easy travel to Cuba will once again put the horror of socialism on the front page of every U.S. newspaper.

Fingers crossed.

Comments and Sharing

COMMENTS (5 to date)
Jim writes:

Speaking as a resident of a country which already enjoys easy travel to Cuba, I must say that the horror of socialism has been notable by its absence from our front pages. Perhaps this is due to Europeans being more likely than Americans to have travelled abroad before and thus aware that non-socialist countries can be poor too.

8 writes:

People who think Cuba is nice are unlikely to comprehend the truth because they only see with their eyes. The true horror of socialism is not in its buildings or factories, but in what it has done to its prisoners minds.

Given that many of the same people recreate mini-Cubas on university campuses leaves me skeptical.

Dr. T writes:
Easy travel to Cuba will once again put the horror of socialism on the front page of every U.S. newspaper.
Cuba's economic failure will not be ascribed to Socialism by our left-leaning media. The media will claim (with good justification) that Cuba was a mismanaged dictatorship that did not follow true socialist principles. The fact that the media (and many left-wingers) ascribed Cuba's supposed successes to Socialism conveniently will be forgotten.

In my experience, socialism and communism are like religion: facts and logic that contradict those isms never dissuade believers.

fundamentalist writes:

The left in the US already know what a horrible disaster Cuba is, yet they still worship Castro because he has pure motives. To the left, motives are the only thing that matter. Outcomes are totally unimportant.

Troy Camplin writes:

I agree with fundamentalist on this -- the problem is with Kantian ethics, where outcomes doesn't matter, it's the intentions behind the outcome. Naturally, the ends don't justify the means, either. As I pointed out on my blog earlier, we need an ethics that takes into consideration both ends and means, as it seems that both options stated above result in pretty rotten outcomes (because means can and do have outcomes).

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