• Open Markets in Cuba

      Cubans gear up for change. According to this week's New York Times, buying and selling homes in Cuba will be legal by the end of the year. It's about time.

      In 1959, the Cuban government banned private property sales. The economy remained stagnant for five decades.

      What will this reform mean? The NYT says:

      Sales would encourage much-needed renovation, creating jobs. Banking would expand because, under newly announced rules, payments would come from buyers' accounts. Meanwhile, the government, which owns all property now, would hand over homes and apartments to their occupants in exchange for taxes on sales - impossible in the current swapping market ...

      This must shock the New York Times community.

      Private property is the nucleus of capitalism, of course, so the plan to legitimize it here in a country of slogans like "socialism or death" strikes many Cubans as jaw-dropping.

      I suspect it was the writer's jaw that dropped. "Cuba, of all places, rejects the advice of the Times Editorial Page. How could they?"

      For now, though, Cubans are trying to grasp basic details. How will the mortgage system work? How high will taxes be? What's a fair price?

      More importantly: Will there be rule of law? Will Castro undo the rule in six months? If I buy something, who do I know who I can sell it to? Will they give me a deed that says it's mine? Will people honor that in ten years?

      The steps to a genuine free market are many. I hope Cuba gets all the way there.

      Free Market
      New York Times