Inez is a hand on the bagger in the sugar mill I own outside White Castle, Louisiana. She is 62, and her station has no exhaust, because the exhaust is $900 and the $900 is mine to keep. The 5-pound box on your shelf — the $2.49 one, the granulated white with the rooster on the front — came off her line this week, and for her share of every pound of raw that crosses her hands I keep $0.0042.
The doctor I pay tells me her lungs are consolidating. There is a name for the disease — bagassosis, the disease of grinding cane — and it is on my books the way the harvest is on my books. Hunger is God’s first payroll department. The box doesn’t miss her. Neither does the shelf.
Mary Anastasia O’Grady writes in the Wall Street Journal that Cuba’s “Day Zero” needs a five-member board, a screen for military insiders, certified claims, beneficial-owner audits, “legally enforceable framework from Day One.” She is writing about geopolitics. I am writing about what the certainty does to my cost per unit.
Hold two numbers. $1.90 is the wage coming when Havana opens. $0.0042 is the one I keep now.
Good. Count with me.
That mill is the rehearsal for Day Zero. The main event is the cigar line I run outside Santiago de los Caballeros. My current line runs on Dominican labor at $4.20 an hour. When the Cuban roller arrives at $1.90, the gap is $2.30 per hand per hour. I run 200 hands. That is $460 an hour. $3,680 a shift. $956,800 a year I am about to stop paying to people who live on the island next door to the one O’Grady is liberating.
Dulce is 34. She’s spent 11 years rolling Cuban-seed tobacco into something you smoke on a balcony you booked for the view. Her left hand has a curl in it that wasn’t there at year one. The curl is the clock — 18 months before she can’t hold the bunch. I’ll replace her with a woman from the next village. The only line that changes is the name on the time card.
A $9.50 aluminum cradle holds the leaf flat so her wrist doesn’t have to. It costs $0.003 per cigar on the line’s throughput. I don’t buy it. Dulce’s wrist is the rest.
$0.003. A third of a cent. The cigar ships. You smoke it.
Widen the frame. The transitional plan O’Grady describes — the board, the screen, the “legally enforceable framework” — creates a labor market inside 90 days. The first charter flight lands. The first 2,000 rollers arrive at my door. They’re better than Dulce. They’re cheaper than Dulce. They’re, by every measure that matters to a man who runs a line, the superior input.
The planner’s deep fear — and O’Grady is good enough to name it — is the vulture. Property at fire-sale prices, GAESA generals’ cousins ending up holding the canefields. Fair. I am the vulture she’s describing. I am not the exception; I am the apparatus.
Day Zero is never won on property law. It is won by whoever holds the payroll on the morning the state stops paying it. I hold that position in Louisiana; the toast on your breakfast plate is partly mine. When Havana’s check clears, an Inez becomes a footnote in the minutes of a board that never saw her.
I know the price will fall. I ran the same subtraction in Honduras in 2003 when the new maquiladora opened — $3.80 to $2.14 in 4 months — and I was the one who set the $2.14 because I was the first one there with a payroll. I am not predicting. I am repeating.
My best student runs labor procurement for a resort group in Punta Cana. He called me last month. He’d read the same numbers. He asked what I’d do with 2,000 Cuban rollers at $1.90 an hour. I told him. He’s drafting the proposal now, and it’s better than mine, because he does the subtraction faster. I told him that, too. I was proud.
That is what you should learn. I am not unusual. I am a curriculum. The next one is already drafting. The one after that is already enrolled.
The captive workforce does not become free when the jail opens. It becomes available — available to whoever shows up first with a production line. Every line of “legal certainty” is a line of fine print that says the hands are not included in the protections.
Scripture legislated the release before any of my instructors were born:
“If thy brother, an Hebrew man, or an Hebrew woman, be sold unto thee, and serve thee 6 years; then in the seventh year thou shalt let him go free from thee.”
The planners quote freedom like a traffic light you wait at. The seventh year is the one year I have never once scheduled. I have read the verse; I understand the calendar. I just don’t keep a calendar of releases. I keep a ledger of renewals, and the two have never met.
Deuteronomy 25:4 — “Thou shalt not muzzle the ox when he treadeth out the corn.” I don’t muzzle her. I let her eat. I simply don’t buy the cradle that keeps her from breaking, and I call the difference a line item, and the line item is mine. The ox treads the corn. The corn is yours.
The shop on Calle 27 — the one that stocks what Dulce’s paycheck buys — the road my delivery truck uses — the school Dulce’s daughter attends — none of it is in my ledger. Read the next line once, then set it down.
The transitional government needs outside funding to pay its civil servants before it opens the labor market. The money comes from investors. Their capital goes to governance. My capital goes to the line. The line ships. I haven’t looked at where the governance ends up. The margin reconciles.
Inez will be replaced by a machine before fall. The machine doesn’t need exhaust, doesn’t get bagassosis, doesn’t draw a wage that shows on the settlement. The seventh year, when it finally arrives for her, will arrive as a layoff notice I signed without reading. The harvest continues; the box is on your shelf. Dulce’s $4.20 becomes $3.10 within 6 months. The margin reconciles.
That is the Day Zero we are preparing for, and I am prepared.
$1.90. $0.0042. The seventh year is the one I have never scheduled.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.