Che Guevara Internet Archive

Chronology of The Economic Ministry of
Comrade Guevara after the Revolution in Cuba

A secondary interpretive account

Written by: William Stodden; May 17, 2000
Transcription/Markup: William Stodden
Online Version: Che Guevara Internet Archive ( 2000

A good source for the activities of Ernesto Che Guevara's leadership of the Cuban Economy after the Revolution is found in a comprehensive biography on the man written by Paco Ignacio Taibo II and translated into English by Martin Roberts.  Taibo is a Mexican writer who conducted interviews of many of the participants of the Cuban Revolution of 1956-1959 concerning their memories of Che Guevara.  His research is very complete, using reports from the Cuban Government and texts and speeches by Guevara, and probably a good half of the text in his book are the words of Che Guevara himself.  It has been said by Taibo, and agreed with by those who reviewed this book, that Guevara was the second narrator of this book.  The book is an excellent source for Che's activities, contains a huge reference section of articles about Che's work and life and proved invaluable to the writting of this short essay.


During the Cuban Revolution of 1956-1959, led by Fidel Castro, which Ernesto Che Guevara participated in and became a commander in the Rebel Army, the goals of the Revolution changed from one of deposing the Dictator Fulgencio Batista, to a broader based social and economic movement, which featured agrarian reform as one of its main tenants.  A large part of the Guerilla forces led by Castro and Guevara, sometimes above 80 percent, were peasants, some dispossessed, all abused by feudal land arrangements of Cuba before the Revolution.  Many of the campesinos worked day in and day out for just barely enough to support a family.  Nearly all the peasants were diseased or malnourished.  This fact led Castro and Guevara to understand the need for the Agrarian Reform program instituted soon after the Revolution was accomplished, while they were still fighting the Revolutionary War (Guevara, 102).

Che's agrarian program was simple.  It was the Zapatista line of "Land for those who work it."  This seemed simple to him and was justified by the reality of the countryside, where those who worked the land had nothing and it caused all sorts of problems.  This line was subverted by leaders of the national movement which was supposedly coordinating activities with revolutionary aims throughout the country. In reality there were several factions within the national movement that were decidedly against each other, and in fact fought with each other and stole from each other, and there was, as was revealed after the Revolution ended indeed no harmony between those who had different agendas.  By November 1958, Che's version of Agrarian Reform was being put into place in the "liberated zone" (the zone controlled by the Rebel Army), which included confiscation of land owned by those who sympathized with Batista, and a granting of land to all those who had worked it or paid rent on it for 2 years or more.  This caused all sorts of problems among the revolution's "allies", who turned out to be opportunists and tried to block the reform where they could not gain some advantage.  Among those whose agenda ran counter to the Revolutionary program was a group called Front II who operated in the Sierra Escambray Mountains, near the town of Sancti-Spiritu and insisted on collecting dues on the agrarian programs instituted by the Revolutionary J-26 Movement (Taibo, 211).  Earlier in the struggle, a provisional government created by the revolution's "allies" in Miami, Florida, was condemned for their opportunistic tendencies by Fiedel Castro.  This group of Cuban "Revolutionary" leaders (which included some in the city component of the Revolutionary J-26 Movement) decided,  without including representation, or even consultation with those who were actually conducting the Revolution in the Sierra Maestra, that the government would be a coalition government of all the "revolutionary" movements throughout Cuba (Guevara, 211-227).  These and several other things, (including banditry in the name of the Revolution and the desire among several other "revolutionary" elements for a military junta in Havana) led to early controversy in the Revolutionary movement of Cuba. 

After the Revolution, the conflict came to a head.  Che leading the Rebel Army, felt that the Rebel Army should be the guarenteeors of the agrarian reform, since the army was made of those who were peasants and those peasants were fighting not only for the Revolution, but indeed that they were fighting for a better way for the peasants of Cuba.  Before the agrarian question was settled, the Cuban government in March nationalized the telephone company, and the public transportation system, and then ordered rents cut in half and lowering of the price of medicine.  This was certainly the flavor of the Cuban government to come.  The Agrarian Reform Law was signed into effect in May of 1959.  It confiscated plantations over 1000 acres and then paid for the expropriation with bonds maturing in 29 years. Then these lands would be turned into farm co-ops run by the government or split up among the peasants who lived on them.  Che rejected the act's moderation, calling it a "timid law, which did not take on so basic a task as suppressing the plantation owners" (Taibo, 277).

The Cuban Government took heat for this act from both sides.  From the left, Castro was accused of mollifying large landowners and from the right he was accused of betraying the revolution by changing the aims of the movement from eliminating the dictatorship to agrarian reform.  But as it happened, this was the agrarian reform that was presented in Cuba after the revolution, and from it Che moved on to other things.

On October 7, 1959, Che became the director of the Industrialization program of the National Agrarian Reform Institute (INRA) (Taibo, 288).  His job was to coordinate activities among the nation's industries which had been nationalized over the past 10 months.  Che's job consisted of keeping the business under his direction going no matter what.  Carlos Rodriguez, in a speech in 1987 described the purpose behind this very well.  These businesses were necessary, even if they weren't what capitalists would call "profitable."  They provided things the people of Cuba needed.  They weren't profitable, because they had to be practically given to people of Cuba, who had little money.  These products included such commodities as medicines and other essentials.  Che instituted a system where the workplaces would be organized as to what they produce, and the economy would be funded by a central funding agency tied to the Cuban treasury.  From there it would be easier to coordinate different businesses in the Cuban economy, and direct for production.  This was another step in making Cuba a Communist nation (the agrarian reform was the first).  Around this time Che also instituted a principle known as Voluntary labor, which consisted of men doing work for free during a day.  It was the beginning of Che's philosophy of "a new man", where people worked for the benefit of society and from that an individual received his reward.  This "moral" incentive (as opposed to a material one, where the worker receives a monetary incentive or a house or something for working hard) was far more important to Che's "New" man because it involved improving the lives of the many over the life of the individual.

In late November 1959, Che became the head of the National Bank of Cuba.  When he took on the job, he left the job at the INRA to Orlando Borrego.  But Che still oversaw the work at the INRA and returned to the work within the next year.  Che immediately set to reforming the banking system, despite the lack of skilled economists within the bank.  Che mentioned that foreign money interests had a hand in virtually every aspect of the Cuban economy, and this would cause great problems as the Revolution depended.  Che implemented several controls over the amount of foreign currency held in reserve by Cuba.  One of Guevara's main problems in the running of the Cuban National bank was trying to control capital flight from Cuba after the Revolution.  With no capital, Cuba was not able to industrialize.  Much of the capital flight early on in Che's administration was offset by a discount in the loans Cuba received for foreign nations.  Nonetheless, Che did have success in the area of the agrarian reform while with the bank, and was proud to sign the first deeds of the peasants for the lands they had been given.

Later, in 1960, as the Soviet Union was offering to help Cuba financially, Che began to understand the real problem of Cuban industrial development to be that Cuba is producing only raw materials while manufactured goods had to be imported.  This added up to a trade deficit from which Cuba could never recover, as long as it only manufactured raw materials. Che, along with others in the Government set about on a plan to eradicate Cuba's imports, by buying factories and machinery from Eastern European nations.  He organized the bookkeeping apparatus in Cuba's economy to offset the monetary losses of some "unprofitable" industries with the gain of others, thus allowing the Cuban economy to continue without laying off more workers.  Che rejected the appeals for raising wages, saying that if there were no increase in manufacture, raises would amount to simply printing more money, and then the money would be worth less, and people would become poorer.  This explanation is an indication of Che's simple, yet poignant view of the economic principles upon which a socialist nation could lay.  Cuba would have to produce more for there to be raises, and yet the Cuban economy continued in its course of rapid industrialization. Throughout this time, Che continued to work with voluntary labor brigades every weekend, setting the example for the entire countryside.

In the beginning of July, the United States stopped importing sugar from Cuba.  It was the first sign of trouble for the Cuban economy.  The cancellation of the sugar quota marked the beginning of the blockade of Cuba by America.  The Soviet Union was quick to buy up the surplus of sugar which the Americans had refused to buy.  Cuba became a cold war pawn, as the United States refused to trade with Cuba, and the Soviet Union picked up the opportunity, and then the United States admonished Cuba for trading with her cold war enemy.  The Cuban Government returned the favor by nationalizing foreign assets within Cuba, to include oil and sugar refineries which were owned by Americans.  It was a viscious cycle which led to the severing of all ties between America and Cuba, and the thrust of Cuba into the waiting arms of The Soviet Union.

Here Che's early criticism of the Soviet Union became apparent.  Taibo's biography tells of a meeting Guevara had with French economist Rene Dumont.  Dumont suggested, as Taibo puts it , that "nationalization and state takeovers [do] not necessarily add up to socialism" (Taibo, 306) that peasants did not feel like they owned the business that they operated, and this would lead to absenteeism and theft from the co-operatives.  Che's opposition to the co-operatives was voiced here, saying it would set up a system like America's in socialist nations, where workers work for material gain, rather for the benefit of society.  Che's notion of the "new man" spoken of before was developing here.  People were, according to Che's economic thought, to work for the benefit of society, and from that receive their benefit.  The co-operative then involved a heightened sense of individual ownership rather than work for the good of all, and it promoted a continued atomization of the workers (peasants included) for individual gains.  This is why there is theft, because there is individual greed and motivation.  This is why there is absenteeism, because workers don't see the benefit for all of society in their work, or they discount their work's importance.  This is why there is not increased production, because the workers are waiting for material incentives which will not come, which cannot come.  The Soviet system tries to incorporate worker ownership into its model, where what is needed is instead worker responsibility.  This notion of the "new" man had permeated Che's economic thinking by mid 1960.

By October 1960, a report was compiled showing the critical state of the Cuban economy.  It was with-held from Guevara's opinion.  This report stated that Cuba's economic reserves would dry up in four months (Taibo, 309). On October 13, the United States declared an embargo on all goods entering and leaving Cuba.  Cuba, in response, nationalized more sugar mills, banks and factories, giving Che's INRA a total of about 615 business to run, along with  160 sugar mills and all the mines on the island (Taibo, 309).  This of course caused predictions for shortages, due to a skyrocket of demand (due to increased real wages among Cuban citizens after the Revolution and inability to import) in eggs and razor blades.  This was the first sector to be hurt by the American blockade.  Consumer goods disappeared over the next few years, as the Cuban economy tried to shift emphasis toward manufactured goods that it still had to import but could not now.  Medicine was an early casualty of the embargo, and the United States turned a deaf ear to the fact that the embargo was killing Cuban citizens because the Cuban government did not have sufficient pharmaceuticals to treat people who were ill.

In late October 1960, Che was again abroad.  His first stop was in Czechoslovakia where he obtained  a sizable credit, and then he continued to Moscow, where the Cold War political game continued to be played out.  Moscow announced that whatever Cuba needs they shall have.  This declaration of close association was the start of several long term problems in Cuba's economy, the first and most notable being the Cuban Missile Crisis just a year and a half later and the over reliance of the Cuban Economy on the Soviet Union which collapsed in 1989, tearing the Cuban economy down with it and almost causing the end of the Revolution in Cuba.  Che went on to China and received a 60 million dollar credit from China, as well as a promise from the Chinese to buy Cuban sugar.  Guevara got guarantees from North Vietnam and East Germany.  Upon returning to the USSR, Che had found outlets for the entire harvest of Cuban sugar.

In late February, 1961, the Industrial Department (the INRA) became the Ministry of Industry, and Guevara was appointed its Minister.  He drafted a board of directors and set about to develop a centralized approach to governing the economy of Cuba.  This included centralized planning of the output and centralized control of the finances of the economy.  Immediately the ministry set about reorganizing the workforce so there was more people cutting sugar or picking coffee, and less people working in the surplus labor conditions of the factories.  The goal was to keep people in work, to keep unprofitable blockaded industries working.  This was done mainly through volunteer labor programs.  In March, rationing was declared for milk, meat, shoes and toothpaste (Taibo, 322).  Che insisted that even ministers of the government obey the ration.

At the end of April 1961, Che declared that all ministers will visit their factories twice a month or be docked pay.  About the same time he announced that Industrial output had increased, which was excellent news.  This included a 75 percent growth in steel and iron output.  He also outlawed interrogations in the workplace concerning political ideologies of workers, in the wake of the Bay of Pigs invasion.  However demand was fast outpacing supply and there was inflation.  There were problems installing machinery purchased from Eastern Europe because there was not factories to install the machines in.  The Cuban economy was traveling forward on what Taibo called "revolutionary momentum" (Taibo, 331).  Later in 1961, at a National Production meeting, Che harshly spoke of the lack of quality control in Cuba.  All the increases in production meant nothing if none of the products were any good.  He commented, as an example of how the Coca Cola tasted like cough syrup.  He sharply criticized the industries for considering quality counterrevolutionary.  Despite it all, living standards were 60 percent higher in 1961 than they had been in 1959 (Taibo, 340).

In early 1962, Guevara attacked the problem of wage discrepancies, which eventually led to the simplifying of the wage scales in Cuba, and leveled wages downward.  Further attempts to reorganize volunteer labor programs were made to make it more cost effective.  In 1963, Che announced a switch in tactics of the Cuban economy from making new investments to consolidation of those Cuba had already made.  Furthermore, a program for education of managers and workers was underway, at Che's insistence.  He also criticized the growing beurocracy that caused inefficiency in production.  At the beginning of 1964, Che unveiled the new industrial investment plan which was smaller than the previous year's, and included a higher emphasis on agricultural products.  This was the first step in Cuba's long plan to return to sugar manufacture being chief among concerns.  As well, Che continued (and put more emphasis in fact) to working volunteer labor.  Taibo quotes reports from the Ministry of Industry that say Che put in more then 240 hours of volunteer labor in the first half of 1964, among all his other responsibilities.  The Ministry of Industry combined had put in 1,683,000 hours (Taibo, 385).

In late 1964, Che Guevara went to New York to speak before the United Nations.  He then completed a whirlwind tour of Latin America and Africa, before returning to Cuba.  Upon returning, Che decided that he would go to the Congo to support the Revolution there and try to bring Cuban guerilla tactics to a nation struggling against an oppressive dictatorship.  He resigned all his offices and renounced his citizenship of Cuba and gave away all his property.  Guerilla was the vocation he decided he would return to and this is the vocation he had when he died.

The Cuban experience was one fraught with mistakes made because of inexperience.  Che was never one to hide facts, and he was always self critical.  But no matter what, one fact remains that no capitalistic critic of Che Guevara or the Cuban revolution will ever be able to erase.  The people of Cuba enjoyed a better life after the revolution than before it.  Illiteracy was wiped out.  Unemployment was eliminated.  Cuba became somewhat of an industrial power.  It may have hurt making the transition, but the pain was necessary.  In April 1961, the United States sponsored the failed invasion of Cuba, called in America, "The Bay of Pigs".  The invasion was aborted because the Cuban people did not raise up to greet the exiled invaders with open arms, as the American government expected they would.  The Cuban people instead, defended the Revolution, and formed militias which stopped the invasion on the beach where it had landed.  The Cuban people were in full support and in full defense of the Revolution at the place called Giron Beach.  Che summed up the Revolution, and the progress of the Revolution  to that point in History when he explained why there was no popular support for the invasion that America had looked for with the following words: "You can't expect that a man who was given a thousand acres by his father and just shows up here to get his thousand acres back won't be killed by a countryman who used to have nothing, and now has a terrible urge to kill the guy because he [the inheritor] wants to take his [the defender] land away from him." (Taibo, 327) .



Guevara, Ernesto:  Reminiscences of the Cuban Revolutionary War; Translated by Victoria Ortiz, 1968 Monthly Review Press, New York, New York

Rodriguez, Carlos Rafael: Che's Contribution to the Cuban Economy; from New International 8, 1991 Pathfinder Press, New York, New York

Taibo II, Paco Ignacio: Guevara, Also Known as Che; Translated by Martin Roberts.  1997, St. Martin's Griffin, New York, New York