7/18/2017 The Life and Death of Yugoslav Socialism

07.17.2017

The Life and Death of

Yugoslavias self-managed socialism appeared to be a real alternative to the Soviet

D
uringtheColdWar,theSocialistFederativeRepublicofYugoslaviarepresentedto
manyaviablealternativetotheSovietmodel.Groundedbyworkplaceself-
management,theYugoslavsystemseeminglygaveworkerstherighttoexercise
democraticcontrolontheshopoor.

ThedistinctYugoslavpathtosocialismfoundadmirersaroundtheworld.In
EasternEurope,thecombinationofmarketsocialismandself-managemento eredamodelforanti-Stalinist
reformers.InthecapitalistWest,democraticsocialistshopefullyviewedtheexperimentasamorehuman
socialism.AndacrossmuchoftheThirdWorld,YugoslaviaaleadingmemberoftheNon-Aligned
MovementdemonstratedtheviabilityofathirdwaybetweenthecapitalistUnitedStatesandthe
communistSovietUnion.

InthenaldecadeoftheColdWar,however,thecountrydescendedintocrisis.Theself-managementsystem
collapsed,leavingacrippling$20billionforeigndebtinitswake.Amideconomiccrisis,republicanpoliticians
inSerbiaandCroatiabrokepartyranksandlaunchednationalistcampaignsinhopesofsalvagingwhatthey
couldfromtheircrumblingefdoms.Aseriesofbrutal1990scivilwarstorethroughCroatia,Bosniaand
Herzegovina,andKosovo.

YugoslaviatransformedfromabeaconofprogressivehopetoasymbolofBalkanbackwardnessandancient
ethnichatreds.

ButYugoslaviasproblemsdidnotbeginattheendoftheColdWarthecountrysleadersinadvertently
createdtheconditionsforthemwhentheyorganizedthisalternativesocialism.Yugoslavself-managementwas
nottheviablesystemmanyhadhoped.

The Soviet Obstacle

Y ugoslavcommunistssetoutontheirindependentpathafterbreakingwiththeSovietUnionin
1948.Thissplitwasariskyproposition;thoughtheleadershipenjoyedwidedomesticsupport,
severingtieswiththeSovietsmeantlosingvitalmilitaryaidandforeigntrade.

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SeparatedfromtheSoviet-alignedbloc,JosipBrozTitoandhispartyneededtoradicallyrethinktheir
revolutionsgoalsandndnewwaysofsecuringthecountrysdefenseanddevelopment.Overthecourseof
19491950,leadingpartytheorists,includingEdvardKardelj,Milovanilas,andBorisKidri,laidthe
ideologicalfoundationsforYugoslavsocialism.

First,theydevelopedaMarxistcritiqueoftheSovietUnion.YugoslavshadlittletroubleidentifyingtheSoviet
systemsdefects;indeed,dissidentleftistvoicesinandoutsideRussiahadbeenwarningofproblemssincethe
1920s.

UnderStalin,theSovietUnionhadbecomeadespoticbureaucracy.Theworkerscouncils,whichLeninonce
identiedastheembryoofcommunistgovernance,hadbeenintegratedintoahighlycentralizedstatesta ed
byanarmyofpartyoperatives.Rapidindustrialization,forcedagriculturalcollectivization,andthepurgesof
193638killedmillions.

Then,innegotiationswithotherAlliedpowersduringWorldWarII,theSovietsbehavedlikeanimperial
power,carvingouttheirsphereofinuenceandimposingtheirhegemonyacrossEasternEurope.

TheYugoslavcommunistsnoticedthesewarningsigns,but,intheturbulentconditionsofwarand
reconstruction,theyturnedablindeye.Comingtopowerattheendofthewarwithalargeandmultinational
base,thecommunistsimaginedasocialistrevolutionthatwouldmodernizethecountryandsecureits
independence.ThisprojectrequiredlargeamountsofSovietaid.

ButtensionsbetweentheYugoslavsandtheirSovietsponsorsquicklyemerged.Alongwiththepartisansin
Albania,TitosgovernmentwastheonlycommunistmovementinEasternEuropetocometopoweronawave
ofpopularstruggle,ratherthanonthebacksofRedArmytanks.AlthoughloyaltotheSoviets,theYugoslavs
weredeterminedtoremainautonomousfromMoscow.

Thiswasmostclearintherealmofforeignpolicy,wherethenewYugoslavgovernmentpursuedamoreradical
linethantheSoviets.Overtheyears194647,asStalinsoughttoallayWesternfearsandpromotetheSoviet
Unionasaconstructivepartnerinpostwarreconstruction,TitoopenlychallengedtheAtlanticpowers
interferenceinEurope.AgainstStalinsorderstheYugoslavssuppliedaidtoGreekcommunistrebelsand
threatenedwarwithItalyoverthedisputedTriesteterritory.

TheseconictsquicklydrewStalinsireandinJune1948theCommunistInformationBureauexpelledthe
Yugoslavs.

The1948splitandthesubsequentthreatsagainstYugoslaviafromtheMoscow-alignedblocconrmed
manypeoplesfearsabouttheSovietUnion.Intheyearsthatfollowed,partytheoristsrevisedtheirviewof
socialismsmotherland.Forilas,theSovietUnionwasnotasocialiststatebutastatecapitalistsystem,in
whichabureaucraticcasteruthlesslyexploitedtheworkingandpeasantclasses.

Thissystem,heargued,borestrikingsimilaritiestotheKeynesian-inspiredmonopolycapitalismthen
developingintheWest.Furthermore,asYugoslaviacouldtestify,theSovietsimposedtheirhegemonyontheir
neighboringstatesasruthlesslyastheirideologicalopponents.

TheSovietUnion,jilasconcluded,hadbecomeoneofthechiefobstaclesontheroadtoaninternational
socialistrevolution.

An Independent Path

C riticizingtheSovietUnionsbureaucratic,state-capitalistsystemnotonlygavetheYugoslavsa
MarxistjusticationforsplittingwiththeRussians,butitalsoprovidedapointofdeparture
fortheiralternative.Toavoidbureaucratizingtheirrevolution,Yugoslavtheoristsdevelopeda
socialismthatcalledforthewitheringawayofthestateandthecreationofsocietyasafree
associationofproducers.

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Therststepwasdecentralization.InMay1949,theparty-statecededgreaterautonomytolocalcommunal
governments,whosepowerhadbeenerodedsince1945.SloveneleaderEdvardKardeljexplainedthatthese
reformspromotedthesenseof[themasses]greaterinclusionintheworkofthestatemachineryfromthe
lowestorganstothehighest.

Greaterworkerparticipationintheeconomicspheresoonaccompaniedthispoliticaldecentralization.InJune
1950,theNationalAssemblypassedlegislationintroducingtheself-managementsystem.Allenterpriseswould
nowhaveworkerscouncilsconsistingof15to120democraticallyelectedrepresentatives,restrictedtotwo
one-yearterms.

Thenewlawaimedatdemocratizingtheworkplace,givingworkersadirectvoiceinkeymanagementdecisions.
Atthisearlystage,theworkershadlimitedpower,andauthorityattheenterpriselevelstillbelongedtostate-
appointeddirectors.Butthecouncilspowersweresettoexpandintheyearstocome.

Twoyearslater,attheSixthPartyCongress,theYugoslavcommunistsseveredthepartyfromthestate,
openingupthegovernment.Now,partycadrewouldhavetocompeteforideologicalinuenceacrossthe
di erentorgansofself-management.

Thesereformsweredesignedtopreventtheriseofthecentralized,statebureaucracythatmanybelievedhad
pervertedtheSovietrevolution.Decentralizationthroughlocalself-government,grassrootsparticipation,
workerscouncils,andamoreopenpartyculturewouldserveasthebasisforYugoslaviasindependentpathto
socialism.

A Contradictory Formation

D espitee ortstoincreaseparticipationinpoliticalandeconomicdecisionmaking,however,
Yugoslaviaexperiencedmuchsocialconict.Inthewinterof195758,minersinSlovenia
struckoverdeclininglivingconditions.Thestrikeinauguratedanewageofdiscontent,which
climaxedinthemassstudentprotestsof1968.

Thedissentbegsthequestion:whatwentwrongwithself-management?Whatpromptedworkersandstudents
toprotesttheveryinstitutionsthroughwhichtheyweresupposedtogovern?

Despitethepartytheoristsidealizedrhetoric,recentscholarshipsuggeststhattheleadershipintroducedself-
managementnottoempowerworkers,buttomoree ectivelyrationalizeanddisciplinethem.Unlikethe
SovietUnion,whichusedadministrativecommandsandmassmobilizationstoreacheconomicgoals,Yugoslav
communistssoughtlesscoerciveinstrumentstoimplementtheirpolicies.

Theworkerscouncilswereintendedtotransfereconomiccontroltotheenterpriselevel.Workerswouldnow
beresponsibleforkeepingthebooks,increasingproductivity,enforcingwagerestraints,anddecidingwhomto
layo .Inexchange,theywouldearnmoremoney,withwagessupplementedbyprotsharing.

Thisredistributionmeantthatworkershadavestedinterestintheircompanyssuccess,butitalsodemanded
thattheyparticipateinacompetitivemarket,whereeciencyandproductivitywouldberewarded.Self-
managementthereforewentintandemwithmarketreformsthatpittedworkersagainstotherenterprisesboth
inthefederationandforeignmarkets.

Thissystemhadcontradictoryresults.Ontheonehand,self-managementopenedthecountryuptothewider
world.AstheWesteagertopropupanindependentYugoslaviaprovidedaidandinvestments,tradewith
foreignmarketsourished.

Thecountryseconomicintegrationintoworldmarketsfacilitatedtheculturalexchangesthatgavesocialist
Yugoslaviaitsdynamism,asevidencedinthephilosophyofthePraxisSchool,YugoslavNewWavecinema,
artistssuchasMarinaAbramoviandRaaTodosijevi,andLaibachsmusic.

Ontheotherhand,self-managementandmarketreformsunderminedthesystemseconomicpromises.

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Ironically,Yugoslavworkerscouncilstendedtoempowermanagers,engineers,andwhite-collarworkersover
thelower-skilledworkingclass.Asthecouncilstookovercomplicatedaccounting,marketing,andmanagement
decisions,themoreeducatedandhigher-skilledworkersconsolidatedtheirauthority.

Combinedwiththepressuresofmarketcompetitionandacommitmenttowagedi erentialsinordertosecure
skilledlabor,self-managementactuallyincreasedinequality.GoranMusi,forinstance,notesthatwagesinthe
earlyyearsoftheplannedeconomymaintained...aratioof1:3.5....By1967,theyhadreachedadisparityof
upto1:20.

Further,anxiousnottoerodetheirpopularsupport,thecommunistleadersrejectedSoviet-style
industrializationandcollectivization.Instead,theypromotedgradualandstabilizedindustrialgrowththat
requiredthestatetorestricttheowofworkersintothefactoriesandtoconcentrateonbuildingtheexisting
laborforceseciency.

Thispreferenceforintensivegrowthproducedhighratesofunemployment.AccordingtoSusanWoodward,in
1952,theocialunemploymentrateinYugoslaviawasatleasttwopointsabovethe5percentthenconsidered
thenormalrateinWesternEurope.Thirtyyearslater,theratesurpassed15percent,rangingfrom1.5
percentinSloveniatomorethan30percentinKosovoandMacedonia.

Inequalityandunemploymentwerenotjustunfortunateside-e ects:self-managementsecacyactually
requiredthem,atleastintheshort-tomedium-term.

Core and Periphery

M oredangerously,theregionalvariationsininequalityandunemploymentreectedthe
countrysuneveneconomicdevelopment,whichgrewoutofthedi erenthistoricallegaciesof
thefederatednations.

PriortoWorldWarI,thenorthwestrepublicsofSloveniaandCroatiahadbelongedtotheAustro-Hungarian
Empireandhadbenetedfromthewidereconomicmodernizationtheempireexperiencedoverthenineteenth
century.Theserepublicsenteredthesocialistperiodwiththetoolstorapidlydeveloplightindustry.

Incontrast,thesouthernrepublicsBosniaandHerzegovina,Montenegro,Macedonia,andthesouthern
partsofSerbiahadeitherbeenpartofordependentontheOttomanEmpireandhadremainedlargely
agrarianandundeveloped.InYugoslaviassouth,socialismpromisedachancetocatchupthroughstate-led
industrialinvestment.

Thesedi erenthistoricallegaciesinfusedthepostwardebatesoverdevelopmentwiththenationalquestion,
makingeconomicdecisionsdeeplydivisive.Marketreforms,inparticular,sparkedcontroversy.

Inthesouthernrepublics,party-stateleadersfearedtheturntowardthemarketsystem.Theincipient
extractiveindustriesandheavymanufacturersinthesouthrequiredhighlevelsofstateinvestmentand,inthe
shortterm,greaterprotectionistmeasures.Theserepublicanleadersalsosupportedthefederaltaxsystem,
whichaimedtofundsouthernindustrialgrowthbyredistributingprotsfromthewealthiernorthwest.

Incontrast,leadersinthenorthwestwantedtoimplementanexport-ledgrowthmodel.Consequently,they
supportedgreatereconomicliberalizationandintegrationintoforeignmarkets.Theyalsoopposedthetaxplan,
arguinginsteadthatmoreprotableenterprisesshouldthrive,unhinderedbystateintervention.

Forthem,thesoutherndemandsforgreaterstatecontrolandcentralizedplanningsoundeddisturbinglylike
theSovietsystem.Whocouldguaranteethatsuchdemandswouldnotrecreatethebureaucraticmonoliththat
Yugoslavshadfoughtsohardtoescape?

Bytheearly1960s,themarketreformwing,withitsbaseinthenorthwest,hadwononseveralfronts.Self-
managementdeepened,andthecountryfurtherintegratedintoforeign,western-dominatedmarkets.

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Yugoslaviasdevelopmentpathexport-ledgrowthlargelynancedthroughwesternloanswouldprove
unstable.Inhisrecentbook,VladimirUnkovski-Koricahighlightsthelong-termweaknessesofthisstrategy:

Asexternalpressuresintensied,therepublicsclosedo againsteachothermoreandmore.Notonly
didtheythereforedevelopdi erentspecialisationswithdi erentmarketsintheColdWar,but
superpowercontestationalsomadetherepublicsaprimarysiteofthesuperpowerstrugglefor
supremacy....TheendoftheColdWarpresentedYugoslaviawithanexistentialchallengethatits
institutionaldesignprovedill-preparedtomeet,asitsdebteconomyfounditdiculttore-nance
withthethreatoftheUSSRgone.

By1989,whenAnteMarkovisreformgovernmentabolishedself-management,thecountrywasalreadyin
freefall.Cripplingforeigndebt,structuraladjustmentmeasuresenforcedbytheInternationalMonetaryFund,
andeconomiccollapseampliedthecentrifugalpullsofforeignmarkets.SlobodanMiloevisnationalist
movementinSerbiasparkedsimilarreactionarycampaignsinneighboringrepublics,breedingdistrustand
feedingseparatism.

Socialismsnalcollapseintheearly1990scamewithaseriesofdevastatingcivilwarsthatfracturedtheregion
alongethniclinesandallowedWesternmilitarypowerandcapitaltomoredeeplypenetratetheformer
federation.

Still,inrecentyearsthephenomenonofYugonostalgiahasemergedacrossthenow-independentstates,
especiallyamongyoungergenerations.Thelegacyofthecountrysindependentpathtosocialism,withits
emphasisonworkersself-management,playsakeyroleinthisretrospectivelonging.

Comparedtocivilwar,ethniccleansing,andforeignmilitaryintervention,itcomesaslittlesurprisethatpeople
lookbackfavorablyontheperiodofstability,growth,andpeaceoverwhichYugoslaviascommunistspresided.
Butthecatastrophiceventsofthe1990scannotbeseparatedfromthecontradictoryfoundationstheseleaders
built.

ThepresentcrisisoftheEuropeanUnion,whichhasbeenmostpronouncedintheBalkans,hasthrowninto
doubtthestrategiesofgrowththatmanyleadersofthepost-Yugoslavrepublicshavepursuedsincethe1990s.
Thiscrisisopensimportantopportunitiesforsocialiststoarticulateanalternativevision.Undoubtedlythe
Yugoslavexperience,withitspowerfulsymbolismofanti-imperialstruggleandopen,experimentalculture,will
informthisvision.ButthenegativelessonsoftheYugoslavpathtosocialismshouldalsobelearned.

Chiefamongtheselessonsistheroleoftheinternationaleconomicorderinlimitingthedurableandstable
growthofperipheraleconomies.Arguably,postwarYugoslavsocialistsmaneuveredasbesttheycouldwithin
theconditionssetbyaglobaleconomythatprioritizedtheinterestsofWesterncapitalisteconomies.Buttheir
compromisewiththisglobaleconomyexacerbatedthecontradictionsofYugoslavsociety.

Anygenuinestrugglefordevelopmentandself-determinationwillneedtoreckonwiththelimitationsofthe
individualnationstate.Largereconomicunitsbasedonregionalcooperationwillneedtobesought.Such
argumentsarenotuniquetotheLefttheyhavelongbeenusedintheregiontojustifytheliberalstrategyof
Europeanintegration.However,asthefateoftheSyrizagovernmentinGreecedemonstrates,theEuropean
Uniondoesnotshieldtheperipheryfromthepressuresofglobalmarkets;rather,itrestructuresthemona
Europeanplane.

DevelopmentoutsideoftheEuropeanprojectwillnecessatateaprogramofregionalcooperationandfriendship
betweenthepost-YugoslavnationsandacrosstheBalkansmorebroadly.This,inturn,willrequireanuanced
appreciationofthewaysinwhichthenationalquestionintersectswithproblemsofeconomicdevelopment.

Itwillcallforanewcommunitybroughtintobeingthroughcooperation,collaboration,andstruggleinsociety,
notthroughtop-downinitiativesbythestate.

ABOUT THE AUTHOR

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James Robertson is assistant professor of politics and history at Woodbury University and is a
member of the editorial board of LeftEast.

Catalyst, a new journal published by Jacobin is out now.

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