Let’s just remind ourselves of the magnitude of this crisis. Between 1990 and 1993 Cuba lost 85% of its trading relations and GDP fell by 35%. As Soviet shipments of fuel, raw materials, machinery, spare parts and consumer goods slowed to a trickle, US imperialism took advantage of Cuba’s predicament by tightening its economic blockade.

Cubans watched as statues of Marx and Lenin were torn down in Prague, Munich, Leningrad – now renamed St Petersburg. As Cubans trudged for hours or rode bicycles to work and queued for hours for scarce rationed goods, a TV cooking show demonstrated how grapefruit rinds, dipped in flour and fried, could be eaten as a dubious substitute for Cuban’s beloved steak. Faced with such a crisis, the life expectancy of a capitalist government would have been weeks at most. The millionaire former owners of Cuba’s farms and factories packed their suitcases in Miami and waited for the seemingly inevitable, the imminent collapse or overthrow of Cuba’s revolutionary government. They are still waiting.

More than a crisis, the Special Period embodied a decision to resist. Cuba would preserve as much as possible of the gains of the revolution while putting on hold the building of socialism for the duration of the crisis period. Where unavoidable, concessions would be made, but the cardinal achievement of the 1959 revolution would be preserved at all costs: political power in the hands of the working people.

Cuba had no choice but to reintroduce elements of capitalism and market mechanisms in order to save the socialist revolution, such as the legalisation of the US dollar as a parallel currency; more joint ventures between Cuba’s socialist state and foreign investors; a surge in self-employment; the self-financing of state enterprises; the establishment of a network of hard-currency stores and the “free” agricultural markets; and a tourism-led economic recovery. 

During the Special Period, the revolution would have to walk a tight-rope between economic stagnation and the tendency of the market concessions to lead to growing inequality, the corrosion of socialist values and the restoration of capitalism. To protect all Cubans on the island from the worst effects of the crisis, rationing was extended to cover whatever essential consumer goods the state could afford to purchase on international markets and distribute at highly subsidised prices, while maintaining its commitment to free health care and education. No schools or hospitals were closed, nobody was thrown out of their homes and mass sackings were avoided by paying idled workers 60% of their salaries.

But as stores with non-rationed goods emptied, the purchasing power of the Cuban peso tumbled from a black market rate of 7 to the US dollar in 1989-90 to a low of around 120 pesos in 2004 – rendering  the peso almost worthless on the black market, where just about anything had a price in US dollars. With little to buy in Cuban pesos other than highly subsidized basics, the material incentive to work had collapsed – yet most workers heeded the revolutionary leadership’s appeals to keep working. The revolution had sowed the seeds of solidarity; now it was reaping the harvest.  

While the market concessions had the desired effect of stimulating the economy, which began a gradual recovery from the mid-1990s, they also led to a sharp rise in income inequality. An income stratification emerged based on access to hard currency from a variety of sources – remittances from family members living overseas, self-employment, tips from tourists, theft of state property, under-the-table bonuses from the foreign partners of joint ventures with the state, prostitution and illicit activities linked to the thriving black market.

The social impact of this stratification was mitigated by rationing, subsidises and the twin pillars of free health care and education, but over time a social divide has consolidated. For those who depend solely or largely on their salary, pension or student allowance, life is a daily struggle to make ends meet with wages still insufficient to cover all basic necessities.

Given this, most Cubans have had to turn to the black market to make ends meet. For some this has become a way of life; for most it’s just a way of getting by. The Spanish verb resolver, to resolve, has taken on a new meaning in Cuba. Though it may pain them, even committed revolutionaries sometimes find themselves having to break the law so that they or their dependents can live with dignity – an ethical dilemma Cubans call “double morality” – mostly in small ways, such as buying milk from a farmer that is supposed to be rationed to children under seven and pregnant women.      

The need to “resolve” has bred a generalised tolerance towards theft of state property and the flouting of public order. If workers pinch things from their workplace to sell on the black market, they are less able to point the finger at negligent or corrupt administrators without drawing unwanted attention to themselves. The people who live most comfortably are the ones who don’t work at all, because they’re too busy making money on the black market, or can choose not to work because they receive substantial remittances from relatives living overseas.

Not all those with high incomes are parasitic. A waiter in a tourist hotel may collect more tips in a single night than a surgeon earns in a month; peasant farmers and agricultural cooperatives can sell part of their produce in the farmers markets, where prices are much higher than in the ration stores; some workers now receive incentive payments in convertible Cuban pesos, which have replaced the US dollar as Cuba’s second currency. Some 60% of households now have access to at least some convertible pesos from one source or another.

But in a mockery of the socialist work ethic, parasites who spend their days “working” the black market selling cigars or other contraband stolen from the socialist state, or protected species such as sea turtles which fetch a high price for their meat, can flaunt their gold chains and designer clothes before humble workers and students for whom a new pair of US$20 Chinese sneakers, sold in the convertible peso stores, may be an unaffordable luxury.