As the Cuban government continued expropriation activity, it was forced to assume responsibility for managing production, resources, and distribution. In the past, these duties had been handled by foreign capitalists.
The state subsequently consolidated control over almost all key sectors of the Cuban economy.
By late 1961, approximately 85 percent of the total productive value of Cuban industry was under state control.
Given the American trade embargo, the state was faced with the need to integrate Cuban trade with that of the Soviet bloc. This placed new infrastructure demands on the economy, including a need for expanded port facilities.
The economy was transformed and the structure of employment changed.
Entire employment sectors disappeared and thousands of jobs were lost, disproportionately affecting the capital city Havana.
For the nearly 150,000 Cuban employees of North American enterprises, the expropriations were traumatic. Many experienced an immediate decline in their standard of living. Others realized the importance of political loyalty.
Thousands were dismissed overnight and replaced with more loyal supporters of the revolution. At the same time, insurance services, real estate agencies, law firms, rent collectors, travel agencies, gambling casinos, and middlemen and brokers of all types were abolished.
Classes economically dependent on the United States collapsed.
As the changes transformed Havana’s economy, Castro was able to argue that — unlike its past relationship with the United States — Cuba and the Soviet Union had embarked on a mutually beneficial alliance characterized not by dependency, but justice.
For many, Cuba’s more formalized relationship with the Soviets was the last straw.
By late 1960, urban sabotage had again become commonplace.
Havana was literally “burning” as political disaffection found increasing expression in armed conflict. Fire damage in the commercial districts of Centro Havana — especially the burning of the famous department store El Encanto — was blamed on ‘anti-communist’ forces.
At this time, large sectors of the middle class were moving from political support of the revolution to armed opposition, and anti-government elements armed themselves and launched guerrilla operations.
Other members of the middle and upper classes chose not to participate in anti-Castro activities, but, instead, to leave the island.
For Castro, the flight of hundreds of opponents to his regime was a political advantage.
Most of those leaving the island ended up in the United States. However, this was not an unusual phenomena.
Exile in the United States was not new for Cuban elites. The United States had often served as a temporary sanctuary for political dissidents during periods of social unrest on the island. Some of Cuba’s most noted political leaders including Jose Marti, Tomas Estrada Palma, Gerardo Machado, Fulgencio Batista, Carlos Prio Socarras, and Fidel Castro himself operated from the United States until the political situation in Cuba became more propitious for their return.
Photograph by Lisa Reynolds Wolfe.