And don’t forget in Communism, there was no reward for working hard vs. hardly working. Look up the old joke, “We Pretend To Work, They Pretend To Pay Us”.
Obviously there is quite a bit of truth to this, and Cuba is experiencing this at this very moment. The old joke was made up by Russian workers in the USSR. However, I have also read interviews with the same workers who said “We pretend to work, they pretend to pay us,” and those workers also said, “Look, we don’t have to worry about a thing. We can’t get fired and there’s no unemployment. We will always have a place to live, food to eat, access to transportation, medical care and cultural activities no matter what.” They no longer had to worry about basic survival.
However, it was never 100% true, and it is certainly not true anymore. Material incentives were introduced early on even in Maoist China, appearing as early as the 1950’s. Those who worked harder than others received monetary bonuses. This was one of the things Mao was trying to get rid of with his Cultural Revolution.
Further, from the very start of Mao’s revolution, the peasants were organized into cooperatives, not communal farms. The excessively rapid effort to turn cooperatives into communal farms resulted in the catastrophe of the Great Leap Forward. However, in only one year of GLF was the death rate even a bit higher than it was in 1949. So even during the GLF famine, the death rate was considerably lower than it was pre-revolution. If you want to know why so many Chinese peasants have Mao portraits in their homes, that’s your reason right there. Yes, people died, but even more people would have died if they kept the pre-revolutionary system, so people did not see it as such a bad thing.
The GLF was so catastrophic that reformists in the Chinese Communist Party (CCP) tried to switch a lot of communal farms back to cooperatives. Even under Mao, peasants had to turn over a certain amount of the harvest to the state – the quota. Anything above that quota, they could keep to eat or even to sell.
Under the present Chinese system, even in the state enterprises, your check depends on how much you produce. Most state firms are actually run by small municipalities, and all state firms are still formally owned by the workers who work in them (a Maoist achievement). So the more money your enterprise makes, the bigger your check. The state gives each worker a slice of 100% of the proceeds from the enterprise, but then it deducts 95% of that for running the enterprise and as income for the state to be distributed all around. So you get back a slice of 5% of what the enterprise earned.
The state enterprises that are the most successful build sort of “company towns” where workers are provided with housing, education, health care, etc. for free simply for working for the enterprise. The more successful enterprises are able to build nicer housing and provide more amenities for their workers, so workers tend to move around looking to work at the most successful enterprises. And I believe state firms even compete against each other.
In Cuba, there were eight different levels of pay grades even under the hardcore Communist system. At the moment, the differences are even more stark. Your average Cuban takes home only ~$20/month, but it doesn’t really matter because everyone owns their home free and clear, and everything is so cheap. For instance, a bowl of ice cream at a state shop costs maybe 2 cents, and it’s not bad.
Even during hardcore Communism, only 12% of Cuban farms were state farms. Most were cooperatives and many of these now operate for a profit I think. And Cuba has always allowed maybe 20% of the total farms as private farms where the farmers either owned or rented the land. These private farms were also the most productive of all. However, they were limited in size to 150 acres.
In Cuba now, although the average wage is $20/month, the state pays IT workers an incredible $1,500-2,000/month, which is almost 100X the average wage. Furthermore, many people are running their little restaurants and food stands or selling this, that or whatever, and they can make however much money they are able to make. However, as they start making more and more money, the tax rate rises. Nevertheless, owners of small restaurants say it is still worth it to bring in more money even as the tax rate goes up.