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The Russian envoy accused the Chinese Embassy of “spreading anti-Soviet literature, with a written request that it be distributed to the various Soviet specialists working in Cuban organizations.”31 Che defended it, arguing that everything was actually a provocation by another Socialist-bloc embassy (which, though he did not say so, was probably that of Albania). He himself had discussed the issue with the Chinese ambassador, who had denied any involvement whatsoever. The propaganda leaflets were even examined by the Cuban security laboratories and found not to be of Chinese origin. They had arrived in Cuba by some embassy’s diplomatic pouch, and various Cuban Trotskyists helped distribute them, together with a Trot-skyist Argentine official from the Ministry of Industries who was under scrutiny.32 In fact, Che was being associated with China despite himself, although he did not disguise his admiration for Mao (he called him a wise man) or his gratitude to the People’s Republic:
The Chinese leadership has behaved in a way that is difficult for us to criticize. They have given us considerable aid, that we cannot neglect. For example we asked the Czechoslovaks for arms; they turned us down. Then we asked the Chinese; they said yes in a few days, and did not even charge us, stating that one does not sell arms to friends.33
The geopolitical, ideological, bureaucratic, and affective barriers all around him were closing in. If in 1963 he traveled little, in 1964 he spent entire months away from Cuba. His pattern of flight was overtaking him once again.
The disagreement among China, the U.S.S.R., and Guevara was not just ideological. Nor did it center exclusively on the issue of support for revolutionary movements in other countries—important though that was. The underlying dispute involved economic policy. In January 1964, Fidel Castro returned to Moscow to negotiate new Cuban sugar deliveries; he confirmed the island’s long-term concentration on cane. Che agreed in principle, and was willing to reverse the shift away from sugar begun in previous years; but he opposed the unavoidable consequences of that decision.
Nor could he have been pleased by the implications of Fidel’s second trip to the U.S.S.R. A confidential U.S. analysis of the mission emphasized that the U.S.S.R. had strongly—and successfully—pressured Castro to restrain “his natural impulse to promote violent revolution.” Especially, the Soviets sought to prevent Cuba from intervening in any way in the Panama crisis that erupted in January 1964.*12 In addition, they wanted Cuba to put its economic house in order, and, if it would not condemn China as the Soviets wished, at least to show a less neutral position in the conflict between Moscow and Beijing.34 Castro did not bow to all the Soviet demands; but, as pressure on him grew in the following months, so did his concessions. If one is to believe a report from the Brazilian government to U.S. Secretary of State Dean Rusk, the Soviet ambassador in Brasilia had told Brazilian President Castelo Branco that:
Fidel Castro has broken his link with Beijing; the Cuban government had suspended its relations with China and was peacefully disposed toward other countries, especially Brazil and the United States. The weapons found in Venezuela last November, which caused Cuba’s expulsion from the OAS … might have been sent by the Chinese. Many of the revolutionary pamphlets and other guerrilla propaganda attributed to Cuba actually came from Chinese sources.35
Che’s distress over Cuba’s pro-Moscow drift may have derived from the same dilemma shared by the millions of young people who paraded his picture during myriad mass demonstrations of the late sixties. They wanted the same ends, but not the means; they accepted the goals, but not the steps needed to attain them. In his Algiers speech Che clearly acknowledged that the shift away from sugar had been a mistake, but he rejected the next logical step, which was to reemphasize sugar cultivation. He did so because the economic changes underway in the U.S.S.R. during the Khrushchev era awakened in him sharply negative reactions; together with the disagreement over international trade and the revolution in Latin America, they made him increasingly antagonistic toward the U.S.S.R.
The Guevarist criticism of existing socialism was by now explicit, though not public, and it was indeed close to the doubts and reservations expressed by the Chinese. It stemmed from a “leftist” position, blaming many Soviet shortcomings on the “rightist” course adopted by Khrushchev. Also echoing the Chinese experience, Che drew away from the U.S.S.R. due to delays in assistance and broken promises. During 1963, Che was doubly disappointed by the U.S.S.R. Guevara soon surmised that Moscow was both less able and less willing to provide assistance than he had assumed.*13
His estrangement was based upon a radical position which today might be termed fundamentalist—and which was hardly distinguishable from the Chinese critique of Russian revisionism. At a Ministry of Industries meeting on October 12, 1963, he articulated his views with greater precision than ever before or after; as far as is known, his comments went unreported. Che was by now fully aware of the enormous economic difficulties confronted by the U.S.S.R. But, for him, the solution did not lie in any liberalization or Gorbachev-style reform. Rather it was to be found in greater economic centralization and in banishing market forces from all transactions except trade with capitalist countries. Guevara’s assessment was categorical:
Agricultural problems in the Soviet Union today come from somewhere. … Something is wrong. … It occurs to me, instinctively, that it has to do with the organization of the kolkhozes and sovkhozes, decentralization, or else material incentives and financial self-management, aside from various other problems, naturally, such as giving private plots to members of kolkhozes; in sum, with the little attention they have paid to moral incentives, especially in the countryside, concerned as they were by the countless problems they faced. … So the Soviet Union now has an agricultural catastrophe similar to ours, and this indicates that something is wrong. … There are more signs every day that the system serving as the basis for Socialist countries must be changed.36
Che was clearly taking sides in one of the most heated, ongoing debates in the Soviet Union. On one side were backers of Khrushchev’s economic liberalization, who favored reforms aimed at economic decentralization and more flexible planning, in a sort of premature perestroika generally identified with the economists Memtchinov, Trapeznikov, and especially Yefsei G. Liberman; on the other side were opponents to reform. The problem for Cuba, as Che saw it, was that Soviet influence no longer served to radicalize or advance socialism, but rather to undermine it. In his view, the inevitable next step would be “goulash socialism,” as the Chinese had labeled it, in view of its Hungarian origins.
Che considered the new Cuban emphasis on agriculture and sugar to be a betrayal of the industrialization process. He related Cuba’s growing links to the Soviet Union with that country’s process of decentralization, so-called financial self-management, and material incentives—all in contrast to the budgetary system he advocated, which was linked, instead, to moral incentives and centralization in investment and decision-making. Guevara tended to shove all these elements into the same bag, though his opponents were not necessarily aware of the binding links among them. For their part, the Cuban company managers and high officials who supported the Soviet-inspired reforms were in a sense disciples of Liberman without realizing it. As a Russo-French economic consultant of the Cubans at the time recalls: the champions of company autonomy and financial self-management were responding to the daily realities of administration, and not to any directives from Liberman or the Soviet Union.37
Che assessed all these issues in terms of a theoretical debate about the role of the so-called law of value in socialism. The term, taken from classical English economic theory and Marx’s Capital, served as a euphemism for what is now called the market. In Guevara’s view, the Soviet Union had fallen under the sway of the law of value, or the laws of the market. Identifying the prevalence of the law of value with his bêtes noires—centralization, material incentives, and self-management—Che believed that:
The budgetary system is part of a general conception of the construction of so
cialism and must thus be studied in context. The budgetary system … [implies] a certain way of guiding the economy … and all the relations within it, along with all the relations among moral incentives and material incentives in building socialism. All these things are linked together. Financial self-management must include material incentives as its fundamental pillar, along with decentralization and a whole organization of planning in accordance with these relations. … In the budgetary system there must be another type of planning, another conception of development, another conception of material incentives.38
As the French and Soviet economists who advised Che during the fateful years of 1963 and 1964 noted, his concerns were not just economic. Victor Bogorod and Charles Bettelheim, two French Marxist economists who assisted the Cubans in the early sixties, agree that Che was not really interested in economics; the part of his work that he most enjoyed was his daily contact with workers and staff.39 His real goal was to abolish all market and monetary relations based on value, both among state-owned companies and within the population as a whole. The underlying rationale for his apparently technical positions on the budgetary system, his views on moral incentives and on the concentration of management in state industry, is to be found in the last essay he wrote, the one that will be best remembered: “El socialismo y el hombre en Cuba” (“Man and Socialism in Cuba,” 1965). But his conception of the “new man” that the revolution had to create was not fully developed until 1965; the disputes of 1963 and 1964 took place on a purely economic battleground—one in which he could not win, due to his lack of technical knowledge and the international context.
Alban Lataste, a former aide from Chile who accompanied Che on his first trip to the Soviet Union and later parted ways with him, defined three indispensable tasks in which Guevara would ultimately fail:
1) To apply the principle of individual and collective material interest in economic policy; 2) To perfect the regime of real and nominal salaries, so as to achieve a true equivalence between effort and remuneration; 3) To improve the pricing system both as an element to redistribute national income and as a factor in economic calculations.40
Che’s failure derived precisely from his tendency to see alternatives in global, abstract terms. Every little disagreement was for him a matter of principle, the reflection of a deeper divergence. His opponents openly criticized him for elevating every discussion to the category of high principles of philosophy or doctrine, even with regard to minor technical details of management or problem-solving.41
Later, after Che left his economic policy post in Cuba, some of his ideas were retrieved by the leadership. This was due partly to another dispute between Castro and the Soviet Union, and partly to a relative improvement in the economy. Che’s internationalist ventures were also presented as harking back to his domestic-policy positions—not in economic, but in moral and ethical terms which the Revolution attempted to revive as its independence vis-à-vis the U.S.S.R. waned. But, as one of his principal intellectual opponents in those years, Carlos Rafael Rodríguez, noted, the economic and accounting policies implemented in the late 1960’s “had nothing to do with Che.”42 Fidel Castro himself commented in 1987:
Some of Che’s ideas were at times incorrectly interpreted, and even wrongly implemented. There was never any serious attempt to put them into practice, and during a certain period even ideas that were diametrically opposed to Che’s economic thinking were adopted.*14
In his Algiers speech in July, 1963, Che expressed his regret at having forsaken the sugar industry and adopting policies leading to a disastrous balance of payments. He related the economic debacle to problems in Socialist planning, as well as excessive ambition and idealism. However, though he acknowledged his mistake in underestimating the importance of sugar, he did not resign himself to a future of monocultivation for Cuba. Indeed, he saw things very differently:
The single-product structure of our economy has not yet been overcome after four years of revolution. But the conditions are there for what in time might become an economy solidly based upon Cuban raw materials, with a diversified production and technical levels that will allow it to compete in world markets. We are developing our own lines of production, and we believe that … by 1970, we will have laid the foundations for our economy’s independent development, based primarily upon our own technology and our own raw materials, mostly processed with our own machinery.43
Time would show that the agreements Castro signed with the Soviets in 1963 and implemented in early 1964 were effectively locking Cuba into its role as a sugar producer and an importer of consumer goods, energy, and light machinery. Granted, there was little choice; the monocultivation of sugar was probably the only path, or the only available path.†5 But it was not Che’s, nor one he could tout abroad, especially in Latin America. As Canadian Ambassador George Kidd noted, with his usual perspicacity:
It seems that Cuba’s leaders now intend to make the island a tropical New Zealand for the Communist world rather than a Switzerland for the Caribbean. … It is no doubt sensible for Cuba to be responsive to the needs of its principal customer. … [But] it is hard to see how such an economic programme can have much appeal to the left-wing nationalists in Latin America who are clamouring for rapid industrialisation largely of the disastrous kind Cuba undertook in the initial revolutionary period.44
Though everybody now agreed on Cuba’s need to produce more sugar, there was no consensus on the course to be followed. This was the focus of Guevara’s first significant disagreement with Castro and the rest of the government. As in other instances, he was partly right. As a lucid and knowledgeable critic of Cuban agricultural policy recognized a few years later, it was undoubtedly reasonable to reemphasize the agricultural economy, though perhaps without abandoning so many industrial projects. Che may not have been that wrong in pushing industry as much as he did. It may have seemed logical to reestablish the priority of sugar. But, as French agronomist René Dumont wondered, was it necessary to go beyond the realistic threshold of 8.5 million tons?45 Whether these nuanced, balanced stances were compatible with Che’s character and approach was another matter.
The dispute over sugar and industrialization came up in a private conversation between Che and Daroussenkov, concerning the renewed emphasis on agriculture and the delivery of a monumental steel mill promised by the USSR. Already a bitter debate was underway in Cuba about its construction. In a confidential 1963 cable to the British Embassy from the Foreign Office, London sent Counselor Eccles (probably the MI5’s man in Havana) a summary of British intelligence’s evaluation:
President Dorticós has now said that because of the need to develop agriculture, industrialisation will have to wait until after 1965. Che Guevara, the Minister for Industry, has complained that many of the industrial installations being delivered are unsuitable for Cuba because they require imports of raw materials costing nearly as much as it would cost to import the finished product. Dr. Castro has declared that the task of industry was to assist agriculture by producing fertilizer and agricultural machinery; and he has indicated that the building of a large steel-works with Soviet assistance, previously regarded as one of Cuba’s biggest projects and greatly publicised in the Cuban press, could be postponed or abandoned because there were more important things to do.46
Che did not openly contradict Castro, but he did not spare his reservations in a conversation reported by Daroussenkov to Moscow:
When I asked how one was to take the statement by Fidel Castro … that agriculture would be the basis for Cuba’s development in the next few decades, and that it might be more beneficial from an economic point of view to invest money not in building a steel mill but in irrigation, the chemical industry, and the construction of agricultural machinery, Guevara answered that the question of building the steel mill has not yet been decided. There are many arguments in its favor, he said. Under the current international circumstances, any country that does not have its own steel will face continual diffic
ulties in developing its economy. … The Soviet Union is trying to fulfill our needs, but sometimes it cannot do so for the simple reason that it, too, has difficulties in some types of production that we lack. Let us take tin as an example. We have very good prospects to develop the production of canned fruits, but to do so we need large quantities of a special tin that the Soviet Union cannot send us. Cuba needs to develop its ship-building industry. We live on an island. Our trade is maritime, and we have virtually no merchant or fishing fleet of our own. But to build modern ships one needs steel, and where are we to get it? Of course we cannot import it from across the ocean. … Some people, he continued, say that as Cuba does not have coke of its own the cost of steel would be very high, and so the Cubans should not develop their steel industry. But they forget that one can use progressive technology and an advanced production technology, so the import of coke is no longer a problem. For example, Japan’s steel industry functions not only with imported coke but also ore, and it successfully competes with other countries. In a word, the question of building the steel mill or not has not yet been resolved, and we will strongly insist on its construction.47