Unity and Brotherhood - A surviving Yugoslavia timeline

[Manfr]

Hello folks !

I'm currently studying for my Post-Communist Transition and International Politics exam, however as soon as I'm done (this should happen in two weeks) as I'll have lots of free time (gotta love having lessons only on Monday and Wednesday ), I'll start working on my first TL: What if Yugoslavia recovered from its dramatic political and economic crisis post-Tito's death, eventually managing to reform and enter the European Union ?
Stay tuned !

Prologue: Opening Lecture​

Preface to "Sarajevo: From hate to hope", Stefano Bianchini, Edizioni Associate-Edizioni Internazionali-Third Edition, May 2003

"Once upon a time, there was an old farmer who, walking along a river, had found a lost golden lamp, old and dirty. He cleaned it, paying much attention to bring it back to its former splendor. And then, a spirit, trapped there from ages, finally broke free. Grateful, he asked the elderly man to tell its three greates wishes, for he would then be blessed with them. After a while, the farmer replied - I want to be rich, I want to be young again, and I want a beautiful wife-. In a moment, he had come back to the days of his youth, sleeping in a lushful bed in the middle of a fantastic palace. And then his wife, a woman of astonishing beauty, told him softly - Wake up, Ferdinand, we're late, we must go to Sarajevo."

This keen joke was very famous in the Balkans and in the Danubian basin before and after 1989. To many, this folk story seemed a grim picture of what could well happen in a few years, or even months: an "unexpected spirit" had swiftly realized their wishes, ending a long age of communist rule. The world was again young and hopeful. But the price for this fast trasformation seemed extremely high, paving the way for new tragedies. [...] Many neo-nationalists thought that transition would reaffirm the impossibility of pacific ethnic cohabitation within one State-framework.

And yet, the city of Sarajevo, abandoning its bloody past, has become a shining example of how ethnic strife and violence aren't the necessary destiny of multiethinic communities [...] The "fridge" image of buried tensions, hidden behind communist conformism and ready to destroy years of civil convivence was disproven by facts. The rude historical theory which called states such as Yugoslavia and Czechoslovakia as "accidents of history which deviated its natural course" has clearly become an untenable over-simplification of historical processes.[...]
And while countries such as Bulgaria, Albania and still today Romania were bound to "Regime's truth" well into the 90's, Yugoslavia's open and dynamic social relations, which came into existence after the 1965 reforms proved solid enough to serve as the base of a new social contract, which eventually allowed a swift EU accession and revolutionized political relations in Eastern Europe. [...] Serbo-Croatian collaboration stopped talks of Serbian "hegemonism" and Croatian "separatism", burying them after a joint effort to stop the economic crisis and a common knowledge that divided Balkan states would merely be the pawns of foreign powers.
[...] The nationalizing factor, which was often used by Eastern Block leaders to present themselves not only as Moscow's puppets, has took a completely new path in South-Eastern Europe, where "Yugoslavism" is today the most advanced example of multicultural identity."

MIREES Conference:

"The influence of Yugoslav -soft- revolution on the political evolution of Eastern Europe"

International round table, 18-19 november 2005,

Forlì, Hotel della Città, Corso della Repubblica 117, Garzanti Hall

Introduces:

Professor Stefano Bianchini, "Roberto Ruffili" University

Participants:

-Milka Planinc, former Yugoslav Prime Minister and Yugoslav Federal President

-Janez Drnovsek, former Prime Minister of the Yugoslav Federal Republic

-Slobodan Milosevic, former General Secretary of the Yugoslav Socialist Party, Prime Minister of Serbia

-Ante Markovic, former Minister for Economics of the Socialist Federative Republic of Yugoslavia, former Prime Minister of Bosnia-Herzegovina.

 

[Aelita]

Subscribed

I look forward to seeing how this turns out

 

[Manfr]

Wow, that's a honor, yours is one of my favourite timelines !

 

[FDW]

I like this, consider me subscribed.

 

[Giladis]

I will be keeping an eye on this. You sure have your work cut out for you.

Good luck

 

[beer kaiser]

That would mean there would be motorway from austrian border to sea??
Make it happen!!

 

[Dialga]

Interesting, but probably ASB unless you remove Milosevic from the picture. I'd love to see the POD.

 

[Manfr]

Interesting, but probably ASB unless you remove Milosevic from the picture. I'd love to see the POD.

Well, Milosevic will be ***partly*** removed. Let's not forget that before being an hard line communist, before being a Serbian nationalist, before being anti-Albanian, before being everything, he was a tremendously ambitious technocract ! This might damage his career in the short run, but also give him some good options of re-aligning after some time ...

 

[Aelita]

Interesting, but probably ASB unless you remove Milosevic from the picture. I'd love to see the POD.

Milosevic's role in the events that followed is way overstated. He was a replaceable cog in the machine, more or less. What will be important is to create the socio-economic conditions that can maintain a unified Yugoslav identity, and prevent the rise of ethnic nationalisms.

 

[Giladis]

An keep the people from SANU from realy sparking the tensions in 1985/86. with their memorandum.

 

[Manfr]

An keep the people from SANU from realy sparking the tensions in 1985/86. with their memorandum.

This will show up anyway, but will face quite a different political landscape, thus diminishing its weight ...^^

 

[Manfr]

Introduction:​

"The Death of Tito and the Yugoslavian Phoenix" *1​

Raif Dizdarevic, 2001, A. Longo Editore, Ravenna, Italy​

Preface by Professor Stefano Bianchini​

"[…] Not hiding his concern for the near future, in the case economic difficulties were to worsen, [Tito] spoke fearfully how what would follow his death. To our astonishment, he said he didn't know for how much he could keep to its duties. […] “I wouldn't like that, after me, it will be said: when He was there everything worked, and now nothing. […] Sometimes it seems that, in economy, we behave as we were gambling, as we were playing with every dinar we gain, with an unresponsible behaviour. […] The fundamental cause of these problems is the lack of responsibility, as no one answers if the policies on which we reached consensus aren't implemented.”
[…] We [Raif Dizdarevic and Branko Mikulic, two prominent Bosniak politicians] then told him that we were ready to face open and stronger discussions on the evident deviations shown by economic policies. […] We had even decided to propose, just before the parallel meetings of the two Federal Presidencies (the Yugoslavian and the Communist League's ones) a new Congress of the Self-Managed Workers, whose main issue would have been economic stabilization of Yugoslavia as a key point of medium term (1980-1985) development.
[…] Later, at the two meetings, I tried to present the fundamental points of those discussions, without directly speaking of the President […]: the convened expressed different opinions on the possible future escalation of our bad economic conditions, and differences were especially marked when speaking of the best possible solutions.
[…] The last drama of Tito's life was 4-months long, and started in december 1979. […] We were told that Tito was to be hospedalized in the Lubiana Clinical Centre, to follow a “serious therapy” in the most modern clinic of the country. In the first days of 1980 […] Tito's agony had started. […] He died on the 4th of May 1980 […] : its long suffering was finally over. […] 38 representatives of the Non-Aligned Countries thus wrote “He was the first in war, the first in peace, the first in the hearts of his citizens: the only exception is that Tito's country was Mankind.” […] At his Belgrade funeral […] there were 4 kings, 6 princes, 31 presidents, 10 vicepresidents, 22 prime ministers, 11, presidents of parliaments, 47 foreign ministers … […]
In the first months after Tito's death we, along with the new Prime Minister Milca Planinc, decided to finally summon the meeting of the Self-Managed Workers *2

***
Graduation Paper,
Subject: History of Economic Thought
Class: Political Science and International Relations
Title: “The historical perspective of the Minister of Production”
Submitted by
Manfredi Mangano,
Camerino University *3​

Yugoslavia, from Statism to Self-Management​

The beginning of this experience surely isn't much consistent with a similar line of thought: victory in World War II by the partisan movement under Josip Broz "Tito" Communist Party's hegemony moves Yugoslavia directly into Soviet orbit. In just two years, the country is turned upside-down, in what is, apart from Mongolia, the first attempt to export the revolution after the Red October.
A stalinist Constitution is rapidly adopted, modeled on the 1936 Soviet one, which deals with economic management in Articles 14-20: The first of these assigns ownership of the means of production to the people, ie 'the property in the hands of state or social organizations" with some conceptual confusion that will soon turn ideologically useful; Article 15 prohibits the creation of monopolistic cartels, and allows expropriation, paving the way for mass nationalization and land collectivization.
Apart from banking and transport, already controlled by the royal government, Tito nationalizes about 80% of domestic industries, with owners payed by the Treasury . After the first democratic, theoretically pluralist but boycotted by the opposition and won with 88% by Tito's Narodni Front, the government drastically purges monarchist officials, and starts the first five-year plans, looking for accelerated development of the industrial base as the first step towards increasing productive capacity.
The first battle faced by the Yugoslav economic system is reconstruction of the country, severely damaged by the Second World War: it could not have been otherwise, after the destruction of the rail network by 50%, 45% of telephone and telegraph equipment, 65% of ships , 30% of the chemical factories, 40% of the spindles of cotton, 20% of the spindles of wool, two major steel mills and all the cars and trucks in the country.
Yugoslavia had to rely on massive foreign aid through the UN program UNRRA, which covered 60% of the demand for food grains and 100% of the demand for clothing and cotton. Between three and five million people out of 8 that live in the former Yugoslavia, were fed only through the UN aid, while the remaining still received subsidies of $ 28 per day.
Alongside UNRRA aid, there was also active economic cooperation with the USSR, through the establishment of joint ventures (the Justa Aviation and Juspad for river navigation) that organized links between the two countries, and a strong mobilization, especially for the reconstruction of railways, sponsored by the Popular Front (a mass, umbrella organization formed by women's associations, the Sokol association of gymnasts, and some "neutralized" political parties, such as farmers groups, the Christian Socialists and the liberal newspaper "Slobodna Sun") and trade unions, which soon organized 80% of workers.
In 1946 a law re-organized State management: companies were legal entities which would then have developed with the economic plan and were controlled by the AOR, a technical and administrative body. Companies were also classified according to the geographical level in which their production took place, and management was completely entrusted to directors appointed by the Government. The real control was, however, evidently in the hands of the state inspectors of the AOR, which enjoyed important decision-making powers over the production process.
The first Titoits five-year plan Tito dates from the same year, and is identified by the colossal symbolic reconstruction of the railway Samac-Sarajevo, involving 65,000 student volunteers, and by campaigns for mass alphabetization: although Stalin didn't see the autonomous Yugoslav industrialization with a good eye, the model adopted was fully Stalinist.
It relied heavily on "voluntary" work days in "assault groups", with the participation of 95.5% of Popular Front's members, which lend themselves a contribution of 2.3 million labour hours. Immediately, industrialization was marked by difficulties, in poorer regions, to maintain the accelereated pace, along with the problems of agricultural collectivization, then the leading sector of Yugoslav economy.
According to the pattern decided by Tito's planners, the new agricultural economy had three allowed models of zadrugas, "social" farms: 1) peasant cooperatives, giving the State a rent, based on variable revenues or fixed value of the land (respectively 8, 4% and 27% of companies in 1949)
2) peasant members of farmers' cooperatives, but also land owners (53.5% of cases)
3) lands in common, without the possibility of withdrawing from the cooperative (11.6%).

Following an indictment of the Cominform on alleged "tenderness" of Tito to the kulaks, in 1948, Yugoslavia was the Eastern bloc country with the greatest percentage of collective land, excluding the USSR.
The transition was so abrupt as to consider Tito the most zealous pro-Soviet leader, but after just three years the relationship between the two countries collapsed, as Tito's moves in foreign policy and its suspicious tendency to paint Yugoslavia as an autonomous centre of international socialism aroused Stalin's paranoia.
After having received a generic clearance from Stalin to annex Albania in January 1948, Tito had sent two divisions to the border, to Stalin's dismay. His anger was enhanced by Tito's refusal to bow to diktats of confederation with faithful Stalinist Bulgaria: quickly, mutual accusations of imperialism and Trotskyism followed, even though the cult of Stalin in Yugoslav newspapers resisted for some months and Yugoslavia remained in the Cominform up to its expulsion. Soon "territorial defense militias" were organized, with the obvious aim of creating resistance centers in case of invasion, as border incidents had skyrocketed. Meanwhile, trade with Eastern bloc, which accounted for 56% of imports in 1947, dropped to 14% in a six months and to zero at the beginning of 1949, with severe damage to the federal economic system, estimated at 430 million dollars at the time.

The Yugoslav federal President and partisan leader, Josip Broz Tito

Raif Dizdarevic, a prominent Bosniak politicians, whose memories will serve as the basis of our future narration ...

Stefano Bianchini, University teacher and renown Yugoslavia expert

*1OTL, "The Death of Tito, the Death of Yugoslavia"; BTW, Stefano Bianchini is one of my University teachers, even though I'm not a MIREES student - too damn costly !​

*2 And here it comes a POD ! OTL, the meeting was cancelled after Tito's death, and the government appointed a State committee, led by the Croatian economist, and member of the State presidency, Sergej Krajger to deal with the incoming crisis; the Committee, however, was unable to deal with the Republican burocracies, and his proposals thus were effectively weakened in application.
*3 Actually, this IS my degree paper , I'll use it to present the peculiar Yugoslav economic system !

 

[Aelita]

An excellent start. I like the use of background reference to set up the TL; most people are not going to be very knowledgeable about the trials facing Yugoslavia, so giving a decent primer is a great way to begin.

 

[Manfr]

I got the highest mark in my Post Communist Transition exam, so ... (COMMUNIST) PARTY !

And third installment, too

*** The ideological premises of Yugoslav "Diversity" ***​

The first reaction of the Yugoslav Communists, facing international isolation, was accentuating the "collectivist" traits of the regime, to avoid accusations of "heterodoxy" and avert the risk of military action, but soon the PCJ chose to progressively emphasize its distinction from the Soviet Union, and in 1949 the ideologist Edvard Kardelj proclaimed Yugoslavia the first real alternative to "Soviet state capitalism and its bureaucratic tendency", starting an innovative line of thought focused on political and economic participation of labour collectives.
This theory had distinctly Yugoslav roots in the tradition of the Serbian socialist Svetozar Markovic, who had theorized by the end of '800 'full self-government "of society and the productive forces", a slogan adopted even in the first strikes of 1876.
At the same time, the Hungarian and Austrian Social Democrats conveyed these ideas in the emerging working classes of Croatia and Slovenia, and similar trends were also raised in the discussion of "Christian Socialists" in Ljubljana, even though this party was more motivated by corporatism rather than by Marxist thought. Embryos of the theory focused were also found in the guild socialism opposed by Mises, as shown by various initiatives of the Spanish anarchists and the Industrial Workers of the World U.S., as well as by the workers 'councils born a bit' everywhere in Europe after the First World War, following the enthusiasm aroused by the October Revolution, and immortalized by the work of Italian communist Antonio Gramsci.
This latter political theorist particularly represented a living, breathing example, both for its geographical proximity, both for its greater "ideological portability" to Communist parties abroad. The attention of the Yugoslav theoreticians was then fixed on the new councils, elected by all the workers of each department, and that then appointed commissioners who chose between them a Executive Committee, also coordinated at the city level; their function was distinct from the trade unions, called "to deal with bourgeois prices in the field of competition", while committees were charged with "administering the means of production and the masses of men" preparing "to replace capitalist property, to frame a new discipline in social life. "
The experience resurfaced with Liberiation after WW2, even though it faded in the 50's after the Trade Unions' split over party loyalties and the Scelba repression: reconstituted Workers' Management Boards performed many functions, including shape strategies to modernize th industries, to oversee safety at work, judging the feasibility of workers' economic demands. Curiously, although these were generally hegemonized by the Italian Communist Party, the Boards of Management of post-war recovery included in their platforms classic liberal battles, such as against monopolies.
These initiatives, however, weren't defied only by the violent offensive of the "Confindustria" and the government, but also by a number of structural limitations to their action: first, the quest for "immediate power" that led many councils to extremist positions, almost trying to accelerate rapid transition of the management in their hands, their over-classification in legal forms, however, unclear and constantly waiting for an organic reform, the electoral defeat of their political communists and socialists in the elections of 1948, a certain distrust of Trade Union hierarchies towards direct and spontaneous commitment of workers.
But the determining factor was surely the division that this Council had set up between workers and technical staff of the company, who were then forced back towards the protection of entrepeneurs' interests.

The push towards a change of perspective was however also a pragmatic observation of the effects of a centrally planned economy: not only "equality of pay and the stomach" and obedience to the "pyramid of the bureaucratic system," were eroding the critical sense and the ability to judge of the workers, but in the long term governing economy through direct administrative methods reduced labor productivity, inefficient distribution of resources and generally lower product quality.
As the worker still had perception of his individual contribution of surplus value, a participatory economic system would thus stimulate "individual and collective interests to improve the production, streamline management, to ensure that the amount of the rate of surplus value was as large as possible "
Most curious element of this new ideology was its "minarchist" trait: "From the foregoing it can be seen as in our practice to start the extinction of the state ". Certainly police repression and the single-party monopoly were not to fade: however, Yugoslav economy and society were effectively traversed by a markedly "anti-statist" ferment, which suggests a lasting influence of the tradition of radical and libertarian Marxism: the subject of property rights wasn't the single worker, a fact that would have brought to the notorious "syndicalism" aversed by Mises, neither the State, but the company, an entity "gradient" from the synthesis between these two stances.
The party ipso facto ceased to be identified with the State, the Socialist Alliance of Working People (formerly the Front) earned margins of maneuver, magazines, political and cultural debate began to move outside orthodoxy. Even more significantly, the market became a mean to exploit pragmatically: as stated with a hint of concern, by Italian Communist and statistics professor Paolo Fortunati, "[...] I got the impression [...] that the distant prospect of their approach is about the construction of a type of socialist society in which economic laws would be used so that any kind of economic planning would be almost irrelevant." The danger was, according to more loyal Communists, to" speak only in short-term steps " at which point we surely couldn't " speak of socialist planning: it is in these cases, interventions that today we have in any capitalist state, and forming part of the Keynesian policy approach [...]".​

Svetozar Markovic, founder of the Serbian Social Democracy​

Antonio Gramsci, philosopher and journalist, founder of the Italian Communist Party​

Riccardo Lombardi and Rodolfo Morandi, Italian socialist politicians, and prominent advocates of economic planning and workers' partecipation​

​

Edvard Kardelj, the ideological father of Yugoslav Self-Management economy.​

 

[Dialga]

Great job using your OTL degree paper in an ATL. Adds a certain degree of authenticity to things. I'm impressed.

 

[Manfr]

Thank you !

Here it comes a slight preview of things to come ...



The Rebirth of Serbian Communism

by Slavoljub Ðukic


Draža Marković (1920-2005) and General Nikola Ljubičić (1916-2005), once two of the most powerful Serbian politicians, died this year. Of the leading Serbian Communists who outlived Tito, there remain only Petar Stambolić (1912- ), Ivan Stambolic ( 1936- ) and Dušan Čkrebić (1927- ). Tihomir Vlaškalić, Dobrivoje Vidić, Miloš Minić and Petar Gračanin died of old age. In this essay Slavoljub Đukić looks at some of the individuals who in their various ways ensured the survival of the Serbian League of Communists, and its renewed success as a part of the Yugoslav Socialist Party.


April 1982

A meeting took place at Petar Stambolić’s home on Dedinje in the middle of April 1982. Those present included, apart from the host, Draža Marković, Dobrivoje Vidić, Dušan Čkrebić, Ivan Stambolić and Špiro Galović. The meeting was to decide who would be ‘chosen’ for leading posts in forthcoming elections to the central committee (CK) of the Serbian League of Communists (SKS). The ranking order was always decided beforehand, sometimes several years in advance. The current SKS president Tihomir Vlaškalić was not invited to the meeting. He was a compromise solution after the purge of the Serbian ‘liberals’, not intended to last; but he had nevertheless remained in his post for ten years (1972-82) - longer than any other Serbian party leader. This could be explained by his skill in adjusting to the prevailing political wind. Throughout this time the real power in Serbia lay with Draža Marković and Petar Stambolić. A man who liked his comforts, Vlaškalić preferred dinner-time company to that of the CK. He subsequently slid into a desired obscurity and died, politically forgotten, at the age of 83.

Draža Marković was the main speaker at the meeting. Next to him sat Petar Stambolić, nodding his head. There was no need for Petar to speak, given that for years the two had worked in complete harmony. It was decided that Čkrebić would lead the SKS for the next two years, after which he would be replaced by Ivan Stambolić, who in the meantime would head the Belgrade party branch. P. Stambolić, Marković and Vidić, on the other hand, would take posts in the top federal bodies. The biggest surprise turned out to be the selection of General Ljubičić as Serbia’s president. Everyone had thought that the political career of this retired general and former minister of defence was over, but Marković summoned him back. He and P. Stambolić agreed that the general, widely perceived as a ‘Titoist’ and a Yugoslav, would improve Serbia’s dented image in the federation.After Ivan's promotion,it would have been Špiro Galovic's turn to lead Belgrade's Communists.

They could not dispense completely with Miloš Minić, however, even though he was no longer one of them. A leader of the Serbian wartime resistance, Minić made a brilliant political career. [...] But although he enjoyed Tito’s confidence, he never became a leading political personality in Serbia, due mainly to his long-standing feud with Petar Stambolić. Miloš and Petar had met in 1936, when they were young Communists and students at the University of Belgrade. They swore ‘eternal friendship’ then. Petar was best man at Miloš’s wedding. But their friendship at some point turned into animosity and open warfare. [...] For some unknown reason he lost support among Serbian politicians at this time [during the liberals' purge in 1972], but won esteem in the rest of Yugoslavia, particularly in Vojvodina. This despite the fact that in 1963 he had sided with Aleksandar Rankovic [...] .


June 1982

The 12th congress of the Yugoslav Communist party, the first since Tito’s death, was held under the slogan ‘After Tito - Tito!’, i.e. under the banner of continuity. Things could then have gone terribly wrong, had not been for Prime Minister's Planinc careful manevuers to keep the Party as united as possible. Of the fourteen names submitted, Draža Marković got the necessary two thirds majority in the secret ballot conducted among the CK’s 159 members only by a narrow margin. The provinces had clearly voted against him (29 votes), but so too must have delegates from other Republics. In its memories, Bosniak communist leader Dizdarevic mentioned that many, in the Yugoslav leadership, favoured Minic, and that it must be credited to Prime Minister Planinc that her decision to appraise the Serbian leadership prevented a serious split within the League's ranks.

Minić’ seriously risked to end there its political career, even though he eventually came back in popularity after 1986. He died in 2003, at the age of 89.

This left Petar Stambolić, Marković, Ljubičić, Ćkrebić, Vidić and Ivan Stambolić to rule in Serbia. They appeared a stable team at first, but not for long. Marković came from an old socialist family turned Communist. His father, a teacher and a decorated soldier from the Balkan Wars, was a member of the Serbian Social-Democratic Party who took part in the famous Vukovar conference at which the Yugoslav Communist Party was founded. When the war came, his two sons and a daughter left the university and joined the Partisans. Despite seemingly good credentials, however, Draža did not make it to the very top in Serbia until after the purge of Nikezić’s ‘liberals’, in which he played a key role.

[...] Fifteen years later Marković would feel ‘closer to the positions of the "liberals" than to my own’; but he continued to defend his stance at the time, citing internal party politics, Serbia’s position, the alleged naivete of the ‘liberals’, etc. Marković was something of a political maverick, an abrasive and high-handed man who greatly enjoyed local hospitality on his travels through Serbia. His open opposition to constitutional changes prompted Tito in 1971 to ask Nikezić for his removal, but Nikezić had then refused [...] A year later Draža acted as Tito’s right hand in the removal of Nikezić and his co-thinkers.


26 January 1986

The situation in Serbia changed in 1984, when Ivan Stambolić became party leader. The prestige of the older generation had declined in the meantime, due to their open squabbling as well as to their advanced age. Ivan was well received. The fact that Petar was his uncle was certainly a recommendation, but it was his own efforts which earned him support among the younger party cadres. When Ivan Stambolić became Serbia’s leading politician, he appeared not to have any opposition, even though Draza Markovic became increasingly distanced from the young cadre, seeing him as too weak. He was eventually able to keep him away from controlling the whole of the Party by convincing Minic's "Yugoslavists" and "Liberals" to support Špiro Galović as new head of the Belgrade party branch, with a good prospect of succeeding Stambolić as party leader, at the 26 January 1986 meeting of the Serbian CK. Unity was ensured by placing well-received centrist Radisa Gacic as a leading candidate for a federal ministry place, and the young technocrat Slobodan Milosevic, favoured by Stambolic, on the board of the then-to-be-reformed Yugoslav Central Bank.
In that historical meeting, Marković unexpectedly opened to a broader list of candidates for Party and federal position, as well as for democratisation of the party’s cadre policy. [...]



* Original is " The twilight years of Serbian communism"; the ATL's article is longer, as is the original, however I won't spoil too much ; It is fully readable at
http://www.bosnia.org.uk/bosrep/report_format.cfm?articleid=3033&reportid=169

 

[Manfr]

Enters Self Management !

*** Self Management arises ! ***​

The new course is effectively born when a set of laws enacted in 1949, allows for the consultation of "best employees" on company's management, while thinning the bureaucratic apparatus, with 100,000 civil servants transferred from peripheral administrations or farms.
Quickly, a package of constitutional reforms launched between 1950 and 1952, during the Sixth Congress of the Party reshapes the country. Several ministries are joined (from 34-36 federal ministries, replicated at the Republican level, the new Constitution goes for 5 secretaries of state and a equal number for Republics) or replaced by collective bodies. There are also two new assemblies, the National Council and the Council of Producers: this is composed by delegates of state enterprises in all sectors, with the aim to involve employees in the management of the state (even though the proportion of the peasants in the Council is lowered downward, as they are 61% of the population with just a third of delegates). In this task, they are to be supported by the workers' councils set up in every public company or cooperative with the right to decide on basic choices of production and conduct of business, and 15-20 members, renewable for a maximum of three mandates.
These organs are also tasked with electing Management Committees of 3-10 members, with executive powers and that hereby replace the old "labor inspectors", commissioners and representatives of production supervision, having decision-making powers over economic plans and work regulations, the allocation of profits and the appointment of middle-level cadres. The board members are protected from dismissal for the duration of their term, and continue to work in the company, perceiving refund only for meeting hours.
A first limit to workers' autonomy derives from the obligation to allocate resources in a fund for technical modernization of production, and in another one for social houses. At this early stage of self-management, wage rates are fixed in a tripartite agreement between the workers' councils, trade unions and people's committees (town councils), representing consumers, in order to harmonize the structure of prices and wages. There are also rules providing for redistribution to the workers of a fixed proportion of earnings, and the possibility of allocating an extra reward with criteria to stimulate productivity.
Participation is also extended to small and medium enterprises: those with fewer than 30 employees, keep the management committee, while the workers' committee is identified with the workers' collective. In micro-enterprises of less than 6 employees, this also carries out executive tasks. All organs are accountable for their actions from workers' assemblies, to be held at least every three months, which can also submit proposals to the relevant bodies by referenda.
The right to vote is granted to all employees of the company, is secret and takes place on multiple lists of candidates submitted by the trade union or by at least a tenth of the employees. Candidates with most voter are elected, regardless of list membership or position. In the new scheme, a special role is taken by the director, which "organizes the work process and directs the company's business" but under the "conclusions and guidelines of the Workers' Council."
Despite this limitation, he is the only direct executor of the decisions of boards and committees, of which he's a de jure member, with the power to suspend the application of their decision if deemed illegal; he also has the power to impose penalties and disciplinary measures for less serious offenses, but is forced to defer most serious problems to a parithetic committee. His appointment is decided by the city council on a list proposed by another committee, half appointed by the workers of the company, and the same committee is eventually tasked with the power to dismiss the director.
The reform also changes the structure of property rights: the tools of production are granted on ius utendi to factories, under direct control of collective labor, which pay in exchange a fee of 6% of their value; these resources can't be sold or changed without adequate compensation, and the company is the sole responsible of losses (in theory at least, given the difficulty of closing down unproductive factories), with the personal involvement of responsible managers ( "the individual can make mistakes, not the community ").
From this point of view, the Yugoslav solution is politically brilliant: other socialist Constitutions do in fact refer to social ownership, but, as the company is considered more or less a legal fiction, this is referred to the State or where there is a distinction, to certain social organizations, such as the Party or trade unions.
In contrast, in Yugoslavia, under the category of "social property" laws place both the collectively-owned, the cooperative-owned and the sel-managed assets, completely eliminating the concept of state ownership even in respect of State Property: "the company" in theory "has no real right over the good that it intends to dispose of, can not transfer any rights to the purchaser accordingly". Consequently, sale is not the transfer of a property right, but only of an economic good, from one entity to another, even though in fact the firm was entitled to use at its discretion the fruits of its work : the Yugoslav legal system thus find a convenient loophole to bring into reality Marxian ideas such as the "joint use of all instruments of production and distribution of all products through a mutual agreement".
A radical change also invests the role of AORs, which lose their inspective powers, ending up with mere coordination tasks,even though adhering to five-year plans is still mandatory. The declared objective of the maneuver is to support the government's macroeconomic efforts, aimed at rapid growth in order to eliminate significant regional differences: at this stage, the State still hasn't give up much in terms of real economic direction powers, since two thirds of the resources remain in the hands of central government and management is basically under Communist Trade Union's auspices.
In particular, government control remains unique in the fields of national defense and infrastructure investments, regional development, scientific research, the pricing policy, and in the management of foreign trade and exchange of currency, even though decentralization brings forth a measure uf public debt for local governments.
The main sources of state revenues, are the 6% tax on capital, the shares of 2-2.5% for investment funds, Republicans, income taxes (which fund public administration and culture), and social contributions.
​

***​

The ideological system thus born receives its consecration by the name of "self-management" (Samoupravljanje), and is the foundation upon which rests the very rapid growth of Yugoslavia: between the years of reform and 1961, industrial production grows beyond all limits (+11% in 1953, +14% in 1954, +10% in 1955, +17% in 1956, even a +45.8% aggregate in the period 1957-196060) while employment increases of 550,000 units and individual consumption by 21%. There are still some problems with fuels and light industries, but heavy industry, infrastructures and energy production know a real take-off, together with the transport network, despite the low number of car (1 per 680 inhabitants).
The hopes of i workers' participation are more than fulfilled: from an initial group of 215 factories, self-managed enterprises grow to 520 in mid 1950, covering about 14,000 workers, 4106 employees, 432 engineers and 934 technicians. The first general election of the committees follows the final promulgation of the Law on participation, dated 27 July 1950, leading to the election of 114,313 delegates representing more than 6131 industrial establishments with more than 30 employees and 34,770 other smaller factories.
The number of delegates coming from a working-class extraction remainst a stable 76-78%. The percentage of re-election of the delegates, after the first year in office, is 31-38%, a sign of significant participation from the bottom to the scale, which gradually involves even the youngest workers and women.
​

***​

Even in agriculture, the turn is sharp, with the abandonment of the failed collectivisation attempts and the adoption, in March 1953, of a complex model of cooperative enterprises: horticultural, farming and fishery cooperatives enjoy preferential access to equipment and buy products from their shareholders by selling pesticides, seeds and clothing, with the redistribution of approximately 20% of the profits collected at year's end. Agrarian private property, up to 10 acres (15 in the mountainous areas such as Bosnia), is again authorized, achieving immediate success: by the end of 1953, more than 80% of agricultural cooperatives is disbanded, with the remaining 1250 operating on just 8,7% of the land.
Ironically, Yugoslavia has now become the socialist country with the least number of collective lands, despite strong opposition from orthodox wings of the Party (up to mid-60s, farmers can acquire cars on credit from the state, but no tractors or other farm vehicles). Agricultural reform is in any event a success in terms of "distribution", increasing the number of owners of 630,000 people compared to 1931, but does not obtain the expected results on the side of productivity: investment are still about 7% of the product nationwide, with an average production growth of 3% and the country, a net exporter before WW2, is forced to import food goods from abroad, despite the very high returns of rural cooperatives (on average tripled in the '40s and ' 80s, the only succesful experiment of socialized agriculture in the Eastern bloc).​

 

[Manfr]

*** The first take-off ***
​

​

As destalinization prompted more civilized relations with the USSR, the subsequent years saw a huge decrease in military spending, from 22% in 1952 to 8, 5, 1957, and the opening up of important lines of credit abroad, allowing an investments' recovery. At the same time Tito got major diplomatic achievements as leader of the newborn Non-Aligned Movement, by advancing UN motions on disarmament and decolonization: this equilibristic effort allowed to simultaneously accommodate westernizing drives from Slovenia and Croatia, resulting in credit access and western consumer goods' inflows, and preserving traditional Serbian-Russian relations, which also expressed themselves in international trade's clearing operations. The role of central planning was progressively eased and replaced by the so-called social planning, less ambitious and focused on management of the overall economic system and investment flows, with forms that we could actually define as Keynesian.
An important role in the new decentralized planning was that of the municipalities, to which the federal annual plans didn't put any limit anymore, allowing them to overcome, if necessary, the objectives set by the center, and to direct their own funds and budgets, through "parameters of action " within which they were free to use local productive units. This was intended as complementary to business planning, carried out on by individual industries, and also coordinated with the rest of the sector, despite the many failures of the system: many municipalities had autarkic impulses, which quite often led to direct confrontations with expanding companies, resulting in multiple, often radically different, development plans.
In the new system, the central bank was tasked with funding activities according to certain criteria which privileged vested basic skills projects that could bring to repay the loan within 5 years, those bootable within a year and a half, investments undertaken in areas with electricity, and projects for consumer products. The interest rate was determined depending on the conditions offered by each potential candidate. However, the ban on monetary exchanges survived for enterprises of the public sector, and the State supported the birth of various "business associations", cartels that combined companies in various sectors of the economy. Despite these resistencies, self-management had been extended to railways, communications and partly to public services (1952-1954).
The government still maintained a set of tools that enabled it to directly intervene in market mechanisms, such as maximum prices, production quotas, the imposition of standards or special allocations, and direct incentives to both businesses and consumers: generally, prices of investment products continued to be fully "controlled", partly to ensure full employment, with the number of active workers increasing annually by about 12% .
1957 was a critical year for self-management, whose role was further underlined by the concession to appropriate committees of the workers' councils of the powers to hire and fire new employees. In the same year, i the first National Congress of Workers' Councils was held in Belgrade, with calls for a more equitable taxation, and greater freedom in the use of equipment and availability of funds. Workers' councils also requested the start of a functional decentralization within the factory itself.
In the companies were thus created new bodies even at the level of individual production units, for now with advisory powers only: the result was the progressive dilatation of decision-making times.
It also brought, at redistributive levels, a tendency to delegate the determination of wages directly to the vote of the workers' collective. The Councils also gained control over most economic resources of the company, obviously after funds had been deduced to compensate for depreciation, charges and other taxes (imposed on the "operating fund", ie fee for capital's rent, water tax, turnover tax, public land, social security, special contributions such as those for the earthquake in Skopje). Net income of workers was then determined by subtracting from the individual share a number of pension, health, family, education and unemployment insurance contributions.
However, in 1958, the Seventh Party Congress, renamed the League of Communists of Yugoslavia in order to emphasize the role more "cultural" that controls, was faced with the thorny problem of regional differences, brought to the fore by the long strike of the Slovenian Trbovlje miners. Broad trends of reform, strong in Croatia and Slovenia, were concerned by the exclusion from the European Community, and by the government's refusal of American economic aid, calling for an emphasis on technological modernization, if necessary by importing from the West, and the end of centralized planning and of its blatant wastes, such as the infamous Montenegrin Niks steel factory, built in the absence of roads and railways.
The most conservative groups, rooted in Serbia and Bosnia-Herzegovina, pointed fingers at the trade deficit caused by food imports, calling for autarkic and protectionist policies and an end to self-management: "planners" believed, in fact not without reason, that leaving workers to choose between wages and investment was a gamble potentially able to forestall economic development. Reformers' response was focused on linking wages to productivity, and on the identification between worker and company. Adjusted for inflation, between 1957 and 1961, wages actually had risen by 5% (8 to 13% gross), although they had retained a certain homogenization: the rise of living standards was nonetheless reflected by the improved quality of both food and consumer goods. However, it should be noted that only 54% of family expenditure was covered by the main job, with family allowances which accounted for 28% and the remaining 16% obtained by multiple jobs.
The Congress started a complex process of decentralizing decision-making, particularly pronounced in the educational, cultural and scientific sectors, through the introduction of "social management", collaboration between users and service providers, and which was introduced for the first time in the field of social insurance with a decision dated 1952 which gave management control directly to the insured; a year later, the field was extended to culture and education, health, social welfare and public housing. Similar institutions were created for the retail, publishing and even the professional bodies, starting from 1957.
Their effectiveness was, however, significantly weakened by the limitations of a staff working under state contracts, rather than individual's, and disputes over funding mechanisms gave large discretionary powers to local authorities. Still, Decentralization had generally good effects: economic resources were at the 61.7% still Stae-held, but 52% of them was directly allocated to peripheral organs, compared to a 29.5% available to the workers' collectives, 7.9% controlled by an independent state institutions and 0.9% managed by banks. However, there were also new problems, such as concentration of population in cities, thanks to the growth of the industrial workers (from 25 to 52% of active citizens) and by low rents, which didn't cover even the costs of maintenance (this should be added to the delays and inefficiencies of the bureaucratic process of houses' allocation).
The government response was radical, with an increase of two and a half times the rent, under recognition of a compensation to citizens and, above all, liberalization on the real estate market, through the permission to individually use the Social Fund for construction, through public auctions: even if it partially filled the housing emergency, the measure failed to eradicate widespread cronyism in property policies. To reduce costs, there was also widespread use of housing cooperatives in construction, which generally provided lower costs up to 50% of the market value. Housing property laws were also relaxed, allowing each citizen to own either: 1) a standard building of two apartments, or three smaller apartments 2) a house and a separate apartment 3) two separate buildings, with a limit of two flats of medium size and one small 4) two separate flats. Later, they would include in limits even the holiday house, while authorizing the possession of modern buildings for residential and commercial use if not exceeding 70 square meters.
But other problems came out also, paradoxically, by the strong economic growth, which soon led to the first tensions between poor and rich regions: the five-year plan of 1961 was launched only after Slovenia and Croatia managed to gain a loosening of bureaucratic constraints, specified by a Kardelj-drafted decree which fully liberalized prices of goods and services, while moving towards dinar convertibility and a thorough restructuring of the tax credit structure and, with more leeway for businesses.
The Slovenian theorist and economist then obtained the abolition of tax on corporate income, by introducing a common value added tax. The tax on assets, which simulated now (as expected at the time by Bohm, Pareto and Barone) the rate of interest on capital, was lowered to 4% while the share of profits directly going to firms went from 47 to 58% .95
The result, unintended but predictable in the transition from a regime of controlled prices to a free one, was a generalized rise of prices, with peaks of 30% in the fields of postal services, transport and agricultural products, coupled with an increase in unemployment. Popular protests resulted in wage increases largely disconnected from productivity, with a collapse in economic growth from 15 to 4% determined also by the exhaustion of foreign loans for the purchase of intermediate products.

 

[Manfr]

Another preview of things to come :

*** Map of the People's Democratic Federal Republic of Bulgaria, year 2000 ***

In Red: Autonomous Macedonian Region of Pirin

Light Green: Autunomous Pomak Region of the Western Rhodopes

Dark Green: Autonomous Turkish Region of Rumelia

Blue: Autonomous Tatar-Turkish Region of Dobrudja​

 

[Manfr]

*** Reformers and Conservatives ***​

In December 1961, Conservatives within the League thus seemed to have regained the 'upper-hand ", eentually managing to freeze the newly enacted rules and setting strict rules on distribution of profits in industry. The "orthodox" faction then went on attack with the Interior Minister, Alexander Rankovic, who in spring 1962 accused the Croatian and Slovenian leaders to disregard social problems. Hoping to reach a compromise, a new constitutional charter was launched in 1963, which however failed to solve problems of power management at the federal level: out of this last attempt, only open warfare reimained.​

***​

Reformers, backed by union member, eventually prevailed due to a platform of increasing individual consumption, integration with world markets, less "wild" urbanization and investement practices. The new policy was also accompanied by a strong rejuvenation of the leadership, with the complete renovation of 50% of the members of the Central Committee of the League. From here, the move towards economic reforms was short: already in 1963 social investment funds, the heart of central planning, had been abolished to assign full control to banks, which were divided in commercial banks, investment banks and consumer credit banks, with limits on political interferences in their management, such as a maximum of 20% public share control. The banking sector was also supported by the creation of a system of institutes involved in financing foreign trade.
Noteworthy, the self-management system wasn't extended to lending decisions, with workers' representatives "coexisting" with City council representatives and a board of directors dominated by client industries (although limited to a maximum quota of 10% each) , which is unique in the economy in general in the Yugoslav and socialist systems, as they could receive profits from their shares. This was a historic turning point: even though the state maintained firm control over monetary policy, companies were free to procure themselves the economic resources, although it remained forbidden to issue company bonds.
In 1964 self-managed organizations' electoral law was amended, introducing the practice of directors' re-election, so as to ensure as far as possible continuity, while the constitution had in the meantime ensured that every labour collective could amend its own Statutes to further decentralize powers within industries.
Two years later, in the summer of 1965, Parliament approved a packet of proposals coming from Kardelj, Slovenian economist Borjs Krajgher and Croatian leaders Bakaric, based on the role of the market as a neutral arbiter of the production system in an international context of economic expansion. Considerable effort for a socialist country, Yugoslavia definitely abandoned the fixed exchange rate system for a courageous devaluation of the dinar that allowed the later introduction of the "heavy dinar" (100 old dinars = 1 new dinar) and the achievement of full convertibility currency with an exchange rate against the dollar of 1250:1.
This measure was accompanied by the end of centralized currency trading and the adoption of international prices as a reference for both the foreign trade and the Internal Market: already in 1965 Yugoslav economy reached an account surplus while membership in the Non-Aligned Movement allowed the signing of profitable contracts with many Third World countries, decreasing traditional dependence on coal in favor of more massive use of oil (from 71-21 to 51-36) and so starting a fundamental restructuring of the economic system, based on chemistry, electronics and new technologies, with record rates of development (the chemical industry will touch a 22% annual growth in 1969).​

***​

After the 1965 reforms, businesses, now released from all municipal planning, could be formed by communities, unions, associations of citizens, political groups or by at least 10 individuals, provided they met the "essential economic assumptions": To this end they had to present a justification for opening activities, develop an investment program and provide the necessary financing to start-up, also fulfilling all obligations in technical or legal circumstances.
It must anyway be remembered that the activity of individuals was still influenced by some additional prerequisites, such as the prohibition of wholesale services agency or brokerage, and the need for municipal approval. The closure of a company or not was usually decided by local governments who also had some alternative options to avoid fallimento. Taxation on companies was also further lowered, so as to bring the share of profit managed directly by the companies up to 70%.
Workers once again had full sovereignty on prices, investment / wages and hiring, even within the constraint of productivity limits: companies were also allowed to trade with foreign countries to procure technology and semi-finished products and vice versa, eventually allowing foreign companies (mainly German and Italian car manufacturers) to form joint ventures with Yugoslav companies, with a share limit of 49%, and other, very strict, obligations, as a 33% tax on profits and the requirement to reinvest in local territory 20% of them. Soon, 25% of Yugoslav goods was exported abroad (thanks to generous subsidies from the republics after the removal of federal ones, and which remained on a 10% of public expenditure), while one third of the assets of overall consumption was imported. The decision to encourage as much as possible market forces was also grounded in hopes of halting the progressive galloping inflation, given the high level of investment (33.4%) compared to consumption of goods.
Between '66 and '67, these structural measures were joined by the closure of many "political factories" born from the concern of ensuring employment in less developed regions, but also marked by the phenomena of clientelism. The link between wages and productivity, on the other hand, couldn't prevent the spread of unemployment and eventually caused the formation of larger wage differentials between regions, also gradually discouraging the refinancing of means of production, and their technical development, which fell by 7 % between 1964 and 1967, reversing what had been a rather established trend in the early years of self-management.
Market opening also affected the agricultural sector, with the "liberalization of tractors", of small business and tourism, determining the emergence of a sector of small private enterprises, even if limited to 5 employees, which soon represented about soon 14% of the social product, but up 40.1% of the workforce. Tourism, with the gradual opening of borders, particularly flourished: in the second half of the '60s, investment in tourism rose from 2.5 to 7.4%, with huge investments on the Dalmatian coast (which were implemented with an incipient attention to environmental issues). An average of 255 beds for hotels, compared to 40-50 in the Italian Adriatic coast, provided for huge receptivity; also small business was encouraged woth Thirty-year loans at 1% interest, which in 1965 toched 200 million dinars.
Compared to 1945, with 6137 total tourists, in 1965 Yugoslavia reached 2,658,000 foreign guests, doubled in the next decade, with growth rates of 27% per year, concentrated on the coast and on the summer.
A characteristic feature of the Yugoslav tourism was the role of room-renters, who accounted for 40% official (probably the real figures are higher, given the lack of control over the record) housing supply, using this opportunity as a supplementary income: the Yugoslav coast stayed however quite poor in terms of facilities and recreation, bringing the daily expenditure of tourists in one of the lowest levels of Mediterranean tourism. The treasures of Dalmatia represented, however, a formidable driving force for Yugoslav economy, leading the modernization of roads, air transport and links with the islands, and the birth of taxi services as well as being obviously an engine of cultural modernization.
The opening outside coincided with one inside: Yugoslav workers were allowed to travel abroad for leisure travel, carrying up to 1,500 dinars, or to look for a job (thus decreasing the number of unemployed). Flows were directly organized by Western companies, using "head hunters", along with local and state labor offices, which tried to avoid excessive exodus of skilled labor, authorized only under "sponsorship" of a foreign company despite the wide use of circumventing the law with tourist visas.
The trade off of emigration is difficult to quantify: if workers abroad provided hard currency through their remittances, brain drain and wasted welfare (strong discontent was aimed to families of migrants, which enjoyed higher incomes due to remittances in foreign currency, but also continue to enjoy generous Yugoslav welfare benefits) were a open wound on Federal Budgets. Conservatives under Rankovich thus once again attacked the market policies, but the powerful Minister was politically killed when it was revealed that its secret services had filed up to 1,300,000 Yugoslav citizens, mostly Slovenes and Albanians. The decisive battle came in 1966 when Kardelj and Bakaric, backed by Tito, accused Rankovic of aiming at the presidency and, after an investigation over his abuses, forced him to resign.​

Serbian Communist hardliner Aleksandar Rankovic, Minister for Interior, and feared leader of the Yugoslav Secret Services.

Vladimir Bakaric, partisan, economist and mentor to a generation of Socialist Croatian politicians.

On the left, Boris Kraigher, famed Slovene economist and dedicated reformist.​