Margaret Thatcher once said, “The problem with socialism is that you eventually run out of other people’s money.” During my week in Cuba, I saw firsthand the truth of her case.

Havana, a once-glorious architectural gem, is falling down — literally. Much of the central city is crumbling and building collapses are common because there is no maintenance. Many people live without running water, and roosters can be heard crowing a block from the nation’s capitol, which is shuttered for “renovations.”

The sight of American cars from before 1959 plying the streets is charming but an indication of chronic stagnation. Going to the rural areas is like boarding a time machine to the 19th century. Farmers plow by walking behind two oxen, and horses provide basic transportation. Public “buses” consist of horse-drawn wagons.

Fidel Castro’s “revolución,” now in its 54th year, as spray-painted slogans constantly remind you, is running out of other people’s money. First the Soviet Union propped up the Communist takeover, and after its collapse, Hugo Chavez of Venezuela came to Castro’s rescue.

It’s a devil’s bargain. Castro barters young Cuban professionals for oil, with Chavez delivering a reported 100,000 barrels a day. In exchange, Cuban doctors and teachers are sent to Venezuela. Chavez went to Cuba for cancer treatment last year.

Castro himself almost died in 2006, although of what remains a mystery. He still heads the Communist Party, but is rarely seen and there are rumors he suffers from dementia. His brother, Raul, runs the government, though it’s not clear he could survive Fidel’s death.

The brothers’ scramble to keep 11 million Cubans sullen but not mutinous is leading to a patchwork of liberalizations. Tourism is growing, bringing in foreign investment and the dreaded C-word — capitalism. Large collective farms are being divided, with farmers getting plots to use for 10 years and permits to sell their produce.

Some houses can be bought and sold, though the rules are subject to bureaucratic whim. Except for the prerevolution Chevies and Cadillacs, “ownership” remains an elusive concept. The state holds all power, and harassment by the police and military is a reminder that any freedom can be canceled without notice.

A member of the revolutionary generation told me he sees Cuba as “an aging police state.” He said with sadness that the grandchildren of the revolutionaries have fled to America and elsewhere.

Young people who can’t leave largely are cut off from the world. I saw only a few cellphones and not a single iPhone. The Internet is a stranger and Cuban TV is limited to four or five channels.

Still, the world is coming to Cuba. Modern Chinese buses ferry European and American visitors around the country, and whole towns reportedly house Chinese engineers. A Spanish chain has built dozens of hotels, including coastal resorts that cater to Germans, Brits and Argentinians.

America isn’t in the game, thanks to the US boycott, which dates to JFK’s time. Even tourism is forbidden, though President Obama has eased restrictions on family and cultural visits. I was part of a group admitted under an arts foundation program.

Whether our policies will change is up in the air. Republicans Mitt Romney and Newt Gingrich, seeking support from the Cuban exile community in Florida, oppose trade with Castro, arguing that doing so would prop up his rule.

The contradiction — we trade with other totalitarian states, such as China — gives rise to charges that the boycott is outdated, that the exile generation has too much power, and that America is being left behind as Cuba modernizes.

All true, but the charges overlook another fact: The Castros and their cronies are not eager to trade with us. Given geography and history, they know their grubby business of suppression can’t compete with the democracy appeals America wears like a second skin.

Their arrest of Alan Gross, an American working with the State Department to help Cuban Jews connect to the Internet, was a chilling illustration of who they are. Gross is serving a 15-year sentence.

Moreover, Cuban military leaders and other connected families are getting rich under the status quo through black-market gasoline, monopolies and government contracts. Any opening with America could doom their scam.

So don’t expect a Cuban Spring anytime soon.

Michael Goodwin is a Fox News contributor and New York Post columnist. To continue reading about his recent trip to Cuba, click here.