For many years Gary Becker wrote a blog with Richard Posner. In the last entry, shortly before his death at age 83, Becker wrote one entitled “The Embargo of Cuba – Time to Go.” The US embargo of Cuba, began in 1960, was designed to put pressure on Castro’s communist government, and if possible to persuade Cubans to overthrow it. It did not achieve that objective, but it did give Cuba a fig-leaf excuse to explain away the economic failure of communism.
In 1959 Cuban, exporting tobacco and sugar, was richer per head than Taiwan, exporting rice and sugar. Nowadays Taiwan has a modern, open market economy trading globally, and has a per capita income over five times that of Cuba, where tobacco and sugar are still important exports. Becker wrote:
Since Cuba no longer provides any significant threat to American interests, there is no sense in continuing to punish the Cuban people with an embargo on trade, nor to provide excuses to its leaders for the poor performance of the Cuban economy.
This is one of the main objections to embargoes: they punish the wrong people. General embargoes hit the living standards of poor people in countries subjected to them. Those people are denied access to global goods, and cannot sell what they produce on world markets. They also hurt the countries that impose them. The US International Trade Commission estimates that its embargo on Cuba costs America $1.2bn annually, largely through lost potential gains in tourism, agriculture and other industries.
Becker recommended that “free trade is a principle that the United States should follow except in extraordinary circumstances,” a sentiment most free market supporters would endorse. Richard Cobden thought that free trade between nations would eventually lead to peace, and it is true to a large extent that nations which trade with each other learn to negotiate with each other and settle disputes peaceably. Furthermore, trading nations begin to see each other as partners, to depend on each other for goods, and for their peoples to learn more about each other.
Becker is right. Raising the Cuban embargo would bring immediate benefit to the people there, and would probably speed up that country’s retreat from communism and its entry into the modern world.