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Title: Yugoslav self-management
Author: Juraj Katalenac
Date: October 3, 2013
Language: en
Topics: self-management, Yugoslavia, state capitalism
Source: Retrieved on 19th January 2021 from https://libcom.org/library/yugoslav-self-management-capitalism-under-red-banner-juraj-katalenac
Notes: Originally published in Insurgent Notes #9

Juraj Katalenac

Yugoslav self-management

All official and liberal science defends wage-slavery, whereas Marxism

has declared relentless war on that slavery.

Lenin

Yugoslav self-management is a unique historical experiment. Furthermore,

it is one of the most interesting formations of, so called,

real-socialism up to today, as Yugoslavia broke with the Soviet Union

and initiated its own specific economic, political and ideological way.

It was a system which publicly criticized “bureaucratic deviations” of

the Soviet Union, which shouted “workplaces to the workers,” which

“abolished” its own Communist Party and set its own path in Cold War

politics. But it was also a system of its own contradictions, a system

that criticized the bureaucracy of others while its own was growing, a

system that stood for workers’ self-management only on paper while

technocrats and managers ran the economy in practice, a system that

“abolished” the One Party by just renaming it and a system that raged

against imperialism while it took an active role in it. Also, if we take

a look at questions of federalism and centralism or the national

question(s) within Yugoslavia, we will get one really complex and

interesting picture. Still, self-management, especially with the new

social movements that spawned recently and that are attracted to such

ideas, remains a crucial and relevant topic. For the same reason, it is

a really big shame that in an era of the Fukuyamist “triumph of

democracy,” few people study Yugoslavia and, on Croatian faculties, it

is mentioned only through post-90s liberal-nationalist mythology.

The aim of this article is to give a Marxist critique of Yugoslav

self-management. I think that Marxism is not “defeated” and that Marx’s

critique of capitalism can be applied to so-called “socialist”

countries. Because of that, I consider “socialist” Yugoslavia as a

capitalist society. As a Marxist, I completely reject the Stalinist hoax

of “socialism in one country,” but also, I analyze economic and

political relations based on a Marxist analysis of capitalism instead of

mere proclamations and documents that these systems published. In my

critique of the Yugoslav economy, I’m relying on the works of Marxists

such as Raya Dunayevskaya and Paresh Chattopadhyay and their analyzes of

the Soviet Union, as there are a lot of similarities and useful

approaches. Using Marx’s method, I accept that the fundamental criterion

to characterize an economy is in its specific social relations in

production. They reveal the specific ways in which workers and the means

of production are combined for production—or in class society—“the

specific form in which the unpaid surplus labour is pumped out from the

immediate producer” (Marx in Chattopadhyay 1994:5). By using this

method, as Dunayevskaya and Chattopadhyay did in the case of the Soviet

Union, or as I’ll try in the case of Yugoslavia, we can notice specific

social relations in production on which society is based, i.e. the ways

of appropriation and use of surplus labour of that society. We can also

mention the need of these economies for “enlarged reproduction of the

relations of production that determined specific existential forms of

ownership, exchange, and distribution” (Chattopadhyay 1994:6). For an

analysis of capitalism, it is important to present the dual meaning of

Marx’s concept of capital: economic and legal, upon which we will

analyze relations within “socialist” Yugoslavia. Also, it is important

to tackle the revision of Marxism by Marxist-Leninists such as Stalin

and the Soviet intelligentsia, but also Yugoslav intelligentsia such as

Tito, Edvard Kardelj, Boris Kidrič and economist Branko Horvat (see his

book ABC of Yugoslav Socialism (1989).

In the discussion about workers’ self-management, I’ll also analyze its

critique by Yugoslav intellectuals around the philosophical journal

Praxis. In the #3–4 issue in 1971, Praxis presented its critique of

Yugoslavia that in some works, like in Rudi Supek’s “Contradictions and

ambiguities of Yugoslav self-managing socialism” (1971), marked

Yugoslavia as a capitalist society, but still stood behind

self-management as a path to communism.

This subject is too large to be adequately processed in such a short

form. A lot of “episodes” and “moments” of the Yugoslav system will be

left out. As this is my first serious article, I’m hoping that certain

mistakes will be pointed out in critiques and comments I’ll receive upon

individuals’ reading of this one. I’d like to thank all the people whose

comments helped me to shape this article. Also, I’d like to express my

gratitude to the editors of Insurgent Notes to allow me to contribute to

this issue.

BIRTH OF SOCIALIST YUGOSLAVIA

It is impossible to talk about Titoism or Yugoslav self-management

without knowing certain historical contexts which helped to spawn these

ideas. In order to do that, we need to analyze the politics of the

Communist Party of Yugoslavia (CPY) and its national branches, working

class self-activity, and the international official communist movement,

which was by then heavily infected with post-October, now Stalinist,

counter-revolution.

It is really important to state right away that communist revolution

never happened in Yugoslavia. The CPY won power because it came out on

the winning side after the Second World War, because of the strength of

Soviet imperialism, i.e. the Soviet Red Army, which it supported and

because it succeeded in securing its ruling position in the

inner-Yugoslav power struggles with the royalists. Furthermore, during

the Second World War, the CPY was the leading force in the National

Liberation Movement (NOP)[1], an inter-class anti-fascist popular front

movement, which allowed bourgeois and petty-bourgeois elements to enter

on an equal basis, unidentified with their old political banners. NOP

was a broad movement and the Party recruited most of their militants,

regardless of class affiliation, to form the cadre and the executive

apparatus for a new stage of counter-revolution (James 1986:89). Even

leftists like to repeat Yugoslav mythology about the NOP being a

revolutionary movement; its documents, such as the February 1943

Statement of NOV i POJ and AVNOJ’s HQ [2] , prove otherwise. In that

document, it is clearly stated how they consider “private property

sacrosanct” and advocate the “full possibility of self-initiative in

industry, trade and agriculture” (Petranović 1988:342).

One of the first tasks of the CPY was the reconstruction of Yugoslavia

and establishing full control over Yugoslav territory. The number of

victims of the Second World War was huge. The demographic loss was

1,706,000 people[3]; 3.5 million people lost their homes and production

was only at 30 percent of its pre-war capacity. 36.5 percent of industry

and 52 percent of railway tracks were destroyed in the War (Bilandžić

1974:16). Following the “Soviet model” of nationalisation and

establishment of state property, the CPY thought it could reconstruct

the economy and launch industrialisation which would help it to

accumulate a vast amount of means of production.

When I say that the CPY “copied” the Soviet Union, it is really

important to state that, back then, to most CPY members, the Soviet

Union meant “socialism,” which is a reason why the masses and the

rank-and-file of the CPY were really enthusiastic about the creation of

a new society. It is really important to state that most members of the

CPY did not actually know what was happening in the Soviet Union and

that they idolised it as a symbol of proletarian victory and salvation.

That cannot be said for the leadership of the Party which was very

familiar with events in the Soviet Union, especially since most of the

leaders of the CPY were agents of the NKVD[4]. According to various

Yugoslav historians, the CPY—as the most loyal follower of the Communist

International—thought that the Soviet Union had developed the “right

experiences” in building socialist socio-economic relations and a

political system which could be applied to all “socialist states” and

which could be accepted by all communist parties. The CPY thought that

the “Soviet model,” i.e., the “Russian way,” was the only possible right

way to socialism, in the sense of building state property and an

administrative-centrist system of managing society, especially the

economy. The Yugoslav leadership declared that nationalisation meant

socialism because all property was confiscated by the people’s authority

and because that confiscated property had passed into the hands of a

“working people’s state” which had become manager of that property. It

is really interesting to mention here Tito’s interview in Borba (eng.

Struggle ) from November 29^(th) 1951 in which he talked about the

development of the “revolution” in Yugoslavia. Through this interview we

can clearly understand the ideological paradigms of Stalinism which were

deeply rooted in the CPY’s policies. He talked about four revolutionary

actions of Yugoslav communists: (i) the uprising against the occupiers,

(ii) the struggle against domestic traitors, (iii) the destruction of

the state apparatus which served the occupiers by the people, and (iv)

the creation of a “popular government.” He also talked about the

national question of the Yugoslav people and about the transfer of the

means of production to the hands of “working people.” As we can read in

C.R. James’s State Capitalism and World Revolution (1986), where he

quoted the Yugoslav leadership, “nationalisation was well prepared

organizationally and was carried out in such way that sabotage and

damage were made impossible. All enterprises in the entire country were

taken over on the same day and almost at the same time without the

stopping of production” (James 1986:90). What we have here is classical

example of “socialism in one country,” i.e., Stalinist state capitalism.

Long before coming to power, the CPY tried to destroy working class

self-activity and to subordinate it under its banner. The CPY managed to

become the one and the only representative of the working class in

Yugoslavia and victory in the War only strengthened their position. For

example, in the press of the Internationalist Communist Party (PCInt)

from Italy, also known as Battaglia Communista, we can find interesting

“moments” from the time when Titoist forces entered Trieste. These

“moments” concern executions of anarchists and communists by Tito’s

forces, but also they also show how Tito’s forces did not allow the

Trieste proletariat to carry red banners, but only Yugoslav and Italian

national flags (Battaglia Comunista 1947, 2012; Erba 2012). This pretty

much demonstrates the anti-proletarian nature of popular front politics.

When it comes to the CPY’s actions “at home,” militant trade unions were

destroyed and sucked into the new state:

“Under the construction of the new Yugoslavia, after the nationalisation

of industry, and as a result of the quick tempo of socialist building,

the workers’ class is no longer a class of bare-handed proletarians

which must fight a daily political and economic struggle, which must

fight for more bread. This class today—in alliance with other working

masses—holds the authority—holds the greater part of the means of

production, and its future depends in the first place on itself, on its

work, and on its unity with other toilers, on the mobilisation of all

toilers in socialist building” (CPY in James 1986:80).

Also, one of the reasons for the destruction of unions was the

unification of manual and intellectual workers in the Labour Front of

the new “corporate state.” The new role of unions became to organise

“socialist competition and shock work, rationalisation and innovation

(…) fight for work discipline, to improve the quality of work, to guard

the people’s property, to struggle against damage, against absenteeism,

against careless work and similar things” (CPY in James 1986:81). They

became the guard dogs of the “new” system, whose task was to secure work

discipline and working class obedience. When it came to increasing the

speed of production, the Yugoslav leadership used Soviet methods which

had been proven in practice, such as Stakhanovism[5]. One such

experience is described in a book Prvi radnički savjet (eng. First

Workers Council; 1985) by Dragutin Grgurević, which describess how

workers who raised production levels were rewarded much in the same way

as Soviet Stakhanovites. Of course, production was organized on the

principle of hierarchy in production. This continued with the 1947 First

Five-Year Plan where Yugoslav leadership talked of “utilising working

hours (…) progressive payments for work over and above the norm, as well

as a system of premiums for engineering and technical staffs” (CPY in

James 1986:84), incentive pay for the bureaucracy in order to inspire

them to intensify exploitation of workers, etc.

In short, the CPY was a regular run-of-the-mill Stalinist party. And it

was really one of the finest examples of Stalinist parties. As C.L.R.

James put it, “Titoism has been able to achieve in a few short years the

counter-revolutionary climax which it took Stalin nearly two decades to

accomplish”(James 1986:79). According to him, Stalin had to struggle

against the remains of the revolutionary Bolshevik tradition, while Tito

and his followers had only to pledge their loyalty to him and they could

easily justify all the policies for which Stalin had to struggle for

decades. Good examples of that are the creation of “our people’s, our

socialist intelligentsia” (James 1986:83), which Stalin managed to put

into the 1936 Constitution of Soviet Union, while Tito did so after a

few years in power.

Still, even today, many Marxists and different kinds of leftists deny

the fact that Titosim was anything but a national version of Stalinism

implied to Yugoslavia, as Maoism was Chinese Stalinism or Hoxhaism was

Albanian. That pretty much puts the idea of “socialism in one country”

under the eyeglass—especially its inability to bring communism as it,

funnily enough, develops quite anti-communist sentiments. But to our

Marxists and leftists, Titoism is something special and inspiring,

because of the conflict between the CPY and CPSU in 1984 which resulted

in the CPY being expelled from the Cominform and developing its “own”

ideology of socialist self-management. In the next part of the article,

I’ll examine the Yugoslav conflict with Stalin and the reasons for

development of the ideology of socialist self-management which later

become known as Titoism.

CONFLICT WITH STALIN AND BEGINING OF “DESTALINASATION”

After the Second World War, the CPY wasn’t the only party which followed

the “Soviet model.” The Communist parties of Czechoslovakia, Poland,

Romania, Bulgaria and Albania followed the same policies after they

conquered power in their countries. In September of 1947, the CPSU, in

the absence of the Comintern which Stalin had shut down in 1940, created

an international political body which consisted of nine communist

parties called the Information Bureau of the Communist and Workers’

Parties (Cominform). At the founding congress of the Cominform, Andrei

Zhdanov made a speech in which he said that today’s world was divided

into two “camps”—the western imperialist, with the United States of

America (USA) as its leader and the socialist, with the Soviet Union as

its leader. When it came to the “other” side, the USA came out with the

Truman Doctrine in March of 1947, according to which the USA would give

to every country, which was threatened by communism, military, technical

and financial help. The same year, the USA came out with the Marshall

Plan, according to which the USA would give financial help to European

countries in order to help them develop their defensive capabilities

against the Soviet Union and in order to help them maintain stability,

i.e. to destroy working class resistance.

In this early political polarisation, Yugoslavia stuck strongly to the

Soviet Union. In the diplomatic battle for Trieste and Istria, the CPY

was counting on strong Soviet support, as was also the case with the

first Five Year Plan (1947–1951). The leadership of the CPY was so loyal

to the Soviet Union that Edvard Kardelj once said to the Soviet

ambassador that the Yugoslav leadership saw Yugoslavia as one of the

Soviet Union’s future states, of course through economic and political

contracts. This is why, when the CPY won power in Yugoslavia, the party

leadership forced integration with the Soviet Union much faster and

broader than the Soviet Union initially demanded. This integration had

its statist, political-economic and cultural aspects, and the beginning

of integration was confirmed with the Contract about friendship, mutual

aid and post-war cooperation of Yugoslavia and Soviet Union [6] signed

on April 11^(th) 1945. Similar contracts were signed with all Soviet

satellites. At the CPY’s demand, the Soviet Union had sent numerous

experts to Yugoslavia, both civil and military, which were placed in

important positions within the Yugoslav army, police, economy and state

apparatus. But soon this “Soviet-Yugoslav idyll” would come to an end.

Tensions first rose during the Trieste crisis, in which Yugoslavia was

in a dispute with Italy and the West on the delineation of borders in

Istria and Slovenia and for the town of Trieste. On March 18^(th) 1948,

Stalin had withdrawn the Soviet experts who were working on resolving

the dispute. Without Soviet backup, the Yugoslav political position was

incredibly weakened. The day after, the Tripartite declaration was

signed, in which the Free Territory of Trieste was assigned to Italy.

The second tensions were related to Yugoslav support for the Greek

partisans (1946–1949). Namely, the CPY wanted to create a so-called

Balkan Federation and it was discussing it with the CP’s of Albania and

Bulgaria. Greece was also supposed to be part of the Balkan Federation,

which is the reason why Yugoslavia supported the Greek CP and its

partisans in their uprising. This support was mainly logistical, but

also economic and military. In this struggle, Yugoslavia was also

counting on the help of the Soviet Union, but the leadership of the CPY

did not know about an agreement between the Soviet Union and Great

Britain from October of 1944. According to that agreement, Greece was

part of the British interest zone and the British government helped

Greek royalist forces in their fight against the communists. Also, this

agreement meant that the Soviet Union was supposed to give up on

“communist” Greece, by not helping the Greek communists—not even during

their uprising against British and royalist repression—in exchange for

other political and territorial compromises. Besides these two examples,

tensions between Soviet Union and Yugoslavia were growing because

Yugoslavia did not agree to create so called “associated companies.”

“Associated companies” were the main component of Soviet imperialism

towards its satellites. They were created from joint capital—i.e. Soviet

capital plus capital of the satellite country in which an enterprise was

opened—but most of the profits were sent for reconstruction of the

Soviet Union.

Because of its objections to Soviet wishes, the Soviet leadership

accused the leadership of the CPY of “lacking of internationalism.” This

conflict hit the ceiling with a Resolution of the Cominform from July

28^(th) 1948 which stated that Tito was “a champion of Western powers,”

that there was a need for changing the leadership of the CPY and a

return of the CPY to the line of Marxism-Leninism. In a state of quiet

shock, at the 5^(th) Party’s congress, the Yugoslav leadership gave its

support to Tito and his clique and voted against the Resolution. This

caused an escalation in the conflict between the Soviet Union and

Bulgaria and Albania, on one side, and Yugoslavia, on the other. Just a

few years after the Second World War, Yugoslavia found itself faced with

another possible conflict. But for Stalin, military intervention was the

last option. He tried to secure his hegemony through CPY cadre which

still pledged its loyalty to him and which opposed decisions from the

CPY’s congress and supported the Resolution. These people were known in

Yugoslavia as “ibeovci” and “Stalinists”[7] and they were repressed and

persecuted by the Yugoslav system, which culminated with the opening of

two concentration camps for them called “Goli otok” and “Sveti

Grgur”[8].

Conflict with the Soviet Union pushed Yugoslavia into isolation from the

rest of the “communist” world. Soviet experts withdrew from Yugoslavia;

the administrative system collapsed because of isolation; the economic

crisis intensified, and there were great dangers of social unrest

inspired by both ideological and economic reasons. The need for a

theoretical explanation of the conflict, along with the greater economic

and political crisis of Yugoslav system, resulted in what Yugoslav

regime historians called “reviewing of Marxism-Leninism and organising

of ‘socialism in one country’”(Bilandžić 1974). According to Bilandžić,

the CPY’s intelligentsia turned to the works of Marx, Engels and Lenin,

especially Marx’s writings on the Paris Commune and Lenin’s State and

Revolution. Through this, the CPY tried to “prove” how it was still on

“the line” of Marxism-Leninism and how it was criticising “Stalinism”

and the Soviet Union from that position. They argued that state

ownership of the means of production is the lowest form of public

ownership and it was really important to transcend it as soon as

possible because it can lead to bureaucratism, i.e. the bureaucracy

controlling surplus value and, by that, to the degeneration of

“socialist society.” They saw the biggest problem in the Soviet Union

precisely in bureaucratism, i.e., in the growth of a bureaucratic

machinery, which allows bureaucracy to form quickly and to usurp the

rights for which the working class struggled. To fight against this, the

CPY’s intelligentsia proposed decentralisation of state power and

repealing of hierarchical organisation inside of enterprises.

One of the first indications of the new ideological-political

conceptions was Edvard Kardelj’s report On peoples democracy in

Yugoslavia [9] (1949) submitted on May 28^(th) 1949 to the National

Assembly of Federal People’s Republic of Yugoslavia during the envision

of Peoples committee act [10]. In this report, Kardelj was wrangling

with the “Stalinist” understanding of power in socialist countries and

he was advocating further democratisation and a greater role of the

masses:

“There’s no perfect bureaucratic apparatus, no matter what kind of

genius leadership stood at the helm, which can build socialism.

Socialism can only grow from the initiative of masses of millions with

the right leadership role of a proletarian party. Thus, the development

of socialism cannot go any other way than the way of constant deepening

of socialist democracy in the sense of greater self-governing of the

masses of people, in the sense of their greater attraction towards the

work of the state machinery—from lowest organs to highest, in the sense

of greater participation in direct managing in every single enterprise,

institution etc.” (Kardelj in Bilandžić 1999:316).

Kardelj also emphasized Marx and Engels’ analysis of the Paris Commune

which pointed out the danger of bureaucratism after the proletariat’s

victory over the bourgeoisie in the revolution, but also the “methods”

which the proletariat can use to secure itself against bureaucratism.

These “methods” are electability and changeability of all officials, a

wage system which will prevent fighting for leading positions and about

attracting the masses towards the state apparatus, in the way, as

Kardelj paraphrased Lenin, that everyone will be a “bureaucrat” for one

period of time and by doing that nobody will be able to become a

bureaucrat. This report gave a sketch for the idea of socialist

self-management.

On November 23, 1949 Boris Kidrič and Đuro Šalaj signed Instruction on

forming and work of workers councils [11] in which it was said that

workers’ councils have to actively participate in the making of the most

important decisions. However, this document stated that self-management

should be introduced only in the biggest enterprises. On June 27^(th)

1950, workers’ self-management was introduced by law with the Basic law

on managing of state enterprises and higher economic associations by

workers’ collectives [12] , popularly called Law on giving factories to

workers to manage them or workers’ self-management act (Holjevac Tuković

2003:132) . The first section of this law gave us a vision of Yugoslav

self-management: “Factories, mines, traffic, transport, trade,

agricultural, forest, communal and other state enterprises, along with

other people’s property, in the name of community are managed by

workers’ collectives in the framework of state plan, according to rights

and duties identified by laws and other juridical regulations”

(Jugoslavija 1985a:1023). According to the law, worker collectives

exercised their right to self-management through workers’ councils and

steering committees of enterprises or so-called “higher economic

associations,” which consisted of several associated enterprises. The

council was elected on a one year mandate, while council members were

able to be recalled before the expiry of their mandate. The workers’

council consisted of between 15 and 120 members, except in the case of

enterprises which employed fewer than 30 workers, where the whole

collective was the council. It had an elected and revolving steering

committee, whose job was to run the enterprise and to answer to the

workers’ council and competent state organs. The director was an ex

officio member of the steering committee. Ana Holjevac Tuković claims in

her article “Socio-economical reforms 1950–1952 and their reflection on

administration of Peoples Republic of Croatia” (2003) that although the

Workers self-management act officially acknowledged factory councils,

their powers were still limited by the Party. Operational independence,

in this period, was exercised only in the field of technological and

expert questions, while all material questions were dependent on the

state’s policy.

One more step towards socialist self-management was established with the

General Law on People’s Committees from 1952. People’s committees were

defined in the first section of the Law as “local organs of state power

(…) organs of people’s self-management in boroughs, districts and towns”

(Jugoslavija 1985c:1025). This law established units of local

self-governance, so called people’s committees, which were supposed to

enable self-management on a local level. These people’s committees did

have certain powers, for example, they were able to make budgets on

their own (Section 14). The highlight of these legislative changes was

the Constitutional Law on Basics of Societal and Political Association

of Federal People’s Republic of Yugoslavia and Federal Organs of Power

from 1953. The Constitutional Law constituted the political order in

Yugoslavia which continued to develop in the next decades.

Self-management became a fundamental part of the state. Self-management

is mentioned in the 2^(nd) section of the Law, which says that power in

the FPRY belongs to “working people” who practice it through various

organs of self-management. The 4^(th) section states that the basis of

the socio-political organization of Yugoslavia is “public ownership of

the means of production, producers’ self-management in the economy and

self-management of working people in boroughs, towns and counties”

(Jugoslavija 1985d:1028). Producers’ self-management in the economy was

further defined in the 6^(th) section which states that working

collectives have the right to manage the economy directly and through

worker’s councils, agricultural cooperatives, assemblies, etc., and that

workers have a right to choose and to be chosen in worker’s councils. A

very interesting part is about the right of an economical organisation

(enterprise, cooperative etc.) to set its own economical plans, that,

after finishing its duty, it independently disposes of the

organization’s income (the law even sets a minimum which must stay in

the enterprise), that it can independently set the wages of its workers

(the law even sets a minimum wage). Self-management of “working people”

in boroughs, districts, towns etc. is established with the 7^(th)

section. Citizens choose and recall their representatives in the

Producers’ Council of the People’s Committee of every town. Every

citizen can choose and be chosen in People’s Committees and they have

right to participate in the “exercising of power” through referendums,

voters’ committees, citizen councils etc. Because of these two,

economical and municipal, forms of self-management, the Yugoslav Federal

National Assembly had two homes: the Federal Council and the Producers’

Council.

One of the best examples of the CPY’s theoretical explanation of the

“new path” can be found in Bilandžić’s article “Self-Management

1950–1974” (1974) where he claims that, because of following the

“Stalinist” model, the CPY found itself at a crossroads where it had to

choose between a bureaucratic and centralist system of management and

the “revolutionary enthusiasm of the masses.” According to him, the CPY

took the side of the masses with its idea of the transformation of

revolutionary socialist statism into self-managing socialism and with a

resurrection of Marxist positions on the state. He wrote how the “new

quality (…) was in the fact that the CPY switched from theory into

revolutionary praxis by saying that the process of withering away of the

state cannot be prolonged for the future—as Stalin used to say—but it

must start right away, especially in the field of managing the economy”

(Bilandžić 1974:23). Svetozar Stojanović, one of the members of the

Yugoslav Marxist-Humanist[13] group Praxis, stated in his article “From

Post-Revolutionary Dictatorship to Socialist Democracy” (1971) that

“there is no real evidence that the historical process of the withering

away of the state and transcending of politics as alienated power

dominated by professional groups started [in Yugoslavia]” (Stojanović

1972:385), and he continued, “it is really naive to believe in that the

state started to die out when the Party is still ruling” (Stojanović

1972:386). He claimed that the Yugoslav political crisis, which happened

in the 60s and 70s, was rooted in the inability to radically

“destalinise” Yugoslavia.

If we expand Stojanović’s critique with a little bit of Marxist class

analysis, we can notice a certain “Yugoslav oxymoron.” On the one hand,

we have the Yugoslav establishment’s attack on the bureaucratism of

“Stalinism” and the alienation of the Soviet intelligentsia from its

base, calls for de-professionalization of politics and the wider

inclusion of the masses in the political process, especially in the

economy, but at the same time the Party accumulated total political

power, which strengthened its state apparatus, especially its repressive

functions against the working class and political enemies. This

“Yugoslav oxymoron” will be examined in a future text, along with the

whole system of self-management and its class character.

YUGOSLAV SELF-MANAGEMENT IN PRACTICE

Charles Lindblom in his book Politics and Markets (1977) dedicates

entire chapter to “Yugoslav innovations,” i.e. so called market

socialism. Funnily enough, Lindblom explains why Yugoslavia developed

market socialism by using Tito’s explanation where Tito is actually

paraphrasing Adam Smith’s The Wealth of Nations regarding the division

of labour in which he found the fundamentals of market socialism:

“backward, weak and small enterprises cannot participate in the

international division of labour. That is why integration and complete

specialisation in production are necessary so that production can be as

inexpensive as possible, of the widest possible assortment, and of the

highest quality” (Tito in Lindblom 1977:339).

Furthermore, Lindblom explains Yugoslav political reforms since 1952

when the Yugoslav leadership started to replace central direction with

substantial central direction intermixed with market direction, until

1965 when a major reform was implemented. He claims that, since then,

central administrative control in Yugoslavia has been “roughly of the

same sort as is found in the market-oriented polyarchies[14]” (Lindblom

1977:340). Central administrative control is not achieved through a

central production plan but by “ad hoc interventions through taxation,

occasional subsidies, specific regulations binding on particular

industries and both central and ‘national’ (that is, provincial)[15]

control over major new investment” (Lindblom 1997:340). Yugoslav

enterprises produced what they found profitable to produce. The

enterprise bought inputs freely on the market – both national and

international. When it came to the national market, of course, there

were other enterprises which are selling certain commodities and inputs

which were used in the production of certain goods. The enterprise

rented land from the government, but also from private owners. Also, it

hired labour, but it is important to point that, above the minimum wage,

workers received income in the form of shares in profits, which, of

course, depended on their work. Like every other capitalist enterprise,

a Yugoslav enterprise must cover its costs, like the minimum level of

wages. It was free to look for new markets, to establish diversity of

production, to apportion its profits between wages, collective benefits

to its workers or reinvestment in the growth of the enterprise. New

enterprises could be started by any individual or a group; even though

usually they were mostly opened by units of local self-government or

existing enterprises. After founding, all enterprises – except those

small private ones with less than five employees – were turned to

“social ownership.” Also, certain Yugoslav enterprises were joined to

certain foreign corporations and had mixed partial “social ownership”

from the Yugoslav side and partial private ownership. To fight monopoly,

the Yugoslav government used a whole spectrum of different methods, such

as tariff reduction and removal of import restrictions. It is important

to mention how Yugoslav legal formalism equalized producers and

intermediary organisations (banks, markets, foreign trade companies),

i.e. “those that produce surplus value and those that manage the

disposal ofsurplus value in the shape of means of production” (Supek

1971:355). In conditions of market competition, that led to the monopoly

of intermediary organisations.

It is also important to mention agriculture. Formerly collectivised,

large parts of agriculture were now given to private holdings and

farmers. 10–15 percent of arable land was in possession of state farms

which were prominent in providing the supplies for domestic and foreign

markets. This sudden turnaround from collective to private farming was

justified, as Lindblom puts it, “as an expedient, necessary until such

time as the development of the communist new man would once again make

collective agriculture possible”(Lindblom 1977:341).

Trade unions were important participants in enterprises, often competing

with workers’ councils. Yugoslav historians and ideologues often liked

to emphasize, and so did Lindblom, that unions and workers’ councils

were instruments “through which employees can defend their own

occupational interests” (Lindblom 1977:341). Even Lindblom acknowledges

how these institutions were “still also an instrument of party and

government direction of enterprises and the work force” (Lindblom

1977:341). To justify this thesis, we can just take a look at statistics

he presented. Between 1958 and 1966, almost 1400 strikes were reported,

while none has been officially reported since 1968. Did workers’

struggles just stop because Yugoslav society reached the communist goal

of a classless society or did unions just fulfil their institutional

role in capitalist society—suppressing workers’ struggles?

Certain answers can be found in Tito’s text “On Workers’ Managing

Economic Enterprises” (1950), where he writes that the state influence

in the economy did not case to exist, but it was weakened and it calls

on workers to take on its functions. Tito emphasizes how the state will

wither away gradually and the speed of its withering depends on the

advance of cultural development. Cultural development is necessary

because before the “revolution” in Yugoslavia the working class did not

exist (sic!) and after industrialisation of undeveloped parts of

Yugoslavia was implemented peasants become members of the working class.

Because of that, it is important that the Party and state educate and

raise peasants according to “values of socialism,” so that they could

evolve into a new working class and self-manage production. The leading

role in this education of workers was up to the unions, which don’t have

to struggle for workers’ rights like before because workers now “own the

state,” but the new task of unions is to educate workers so that they

can manage society through workers’ councils. Self-management is

necessary so that bureaucratism could be avoided, because a system in

which technocrats are managing the working class is “the greatest enemy

of socialism” (Tito 1950:232). It is quite clear that the Yugoslav

leadership used unions, as mass organisations of the working class, to

establish systematic control deeply rooted in workplaces, so that any

kind of industrial or class unrest was prevented. Unions were also

allies of the political forces within the League of Communists of

Yugoslavia[16] which were fond of extensive liberalisation of the

market. For example, at 1957’s Congress, they’ve asked for removal of

state regulations, lower taxes, greater autonomy of enterprise for

investments, etc. Younger party cadres were also their strongest allies,

since they did not have the experience of the Second World War or the

revolutionary wave of the 20s and they were inclined to liberal ideas.

Hungarian anarchist Arpad Kovacs writes that behind the idea of

self-management was the belief that workers should set their own work

day and decide the ways they’d produce something, etc., because,

according to Tito, that was the right way to reach communism from

socialism. Kovacs also notes how the workers’ councils’ function was to

make decisions on most of the aspects related to management of the

enterprise, while managers were in charge of planning and implementing

the plan. The workers’ council was superior to managers and it could

choose and recall the steering committee or its individual members.

Steering committees were made of experts that had previous management

experience and the state would appoint them to certain enterprises.

Being a manager in a steering committee was permanent employment, while

workers’ councils exclusively consisted of workers employed in certain

enterprises. When it came to the process of managing companies, if we

look behind the ideological curtains unfolded by the LCY, enterprises

were managed by managers and not workers. Managers were subject to party

control and they were instructed to pursue profits. They were also

subjected to control trough local government, banks, industrial

chambers, professional associations and youth organisations. Even as the

Yugoslav leadership denounced the Soviet Union for its bureaucracy and

marked it as one of the biggest enemies of socialist development in

almost every text, bureaucracy in Yugoslavia flourished with the “new

course.” The workers’ council election of the steering committee was

nothing but a mere formality and while, on paper, the Yugoslav

leadership was calling for workers’ participation in the steering

committees, in practice, steering committees were professionalised,

employing only university educated lawyers and economists, making for

greater differences between workers and managers. Hierarchical relations

in productions still remained. Initially, wage differences between

managers and workers were 1:3.5 but from 1967 they rose to 1:20. In

spite of all this, Michael Lebowitz remained a fan of

self-management.[17]

I’d like to quote a worker from a self-managed metalwork factory from

the north of Croatia whom I interviewed regarding a struggle in which he

and his workmates participated. When I asked him about power relations

between the director and the workers’ council during Socialist

Yugoslavia, he replied:

“In terms of managing, there was a workers’ council. Members of the

workers’ council were elected from the list, and everything was

according to the dictate of the LCY and every work unit had its branch.

The League came with suggestions, which meant that nobody was allowed to

protest against them. I remember how, in 1987, I was the first who

protested in the front of workers against the League making decisions

about who would represent us in the workers’ council or in the central

workers’ council (…) It seemed that workers liked my protest so they

elected me for our workers’ council, because I wasn’t a member of the

League which until then were the only eligible people. Workers were

motivated by this statement of mine as some kind of rebellion against

the regime or who knows what, so they elected me and management had to

accept that. That was the first time that workers chose who would

represent them [in this factory]. It was presented to workers that they

are managing, but they did not. (…) The director was, of course, the God

– the law, and you couldn’t get to the director to complain, because the

pyramid was structured in that way. You could only see the director if

his driver drove by you, but otherwise they were Gods.” (ITAS 2012a).

All this is pretty much summarized by Susan Woodward:

“a primary goal of the introduction of workers councils in 1949–50 was

to deprive the unions of their bargaining power (…) Elected

representative of skilled production workers were to be consulted by

managers on how to cut labour costs. The aim was to have workers accept

limits on wages and benefits within enterprise net revenue, approve

capital investment even if they cut into incomes and sanction dismissal

of workers when required by budgets or modernisation programs. The

essence of self-management (…) was this attempt to enforce incomes

policies and financial discipline without state involvement or central

regulation” (Woodward 1995:261).

The LCY, in order to impose better control over enterprises, over time

evolved into an organization of managers and technocrats. That made

workers really sceptical about joining the party. In 1960, half of the

League consisted of bureaucrats while working class members were only

one third.

Introduced in 1952, self-management was followed by extremely rapid

growth and a rise of living standards. Between 1954 and 1964, GDP

increased almost 9 percent a year, which put Yugoslavia among the very

fastest growing economies in the world (Lindblom 1977:342). But what was

behind this rapid growth? It was a rapid increase in means of production

which was not followed by an increase in means of consumption. We could

compare the extent of this growth with the USSR during the New Economic

Policy (1921–1928). From the 60s, Yugoslavia was fully open towards the

Western markets and it made several trade agreements. It is also

important to note that Yugoslav decentralisation was highly supported by

the International Monetary Fund (Musić 2010:180).

One of the big problems of the Yugoslav economy was unemployment. In

1965, unemployment in Yugoslavia was 8.8 percent which was around

326.000 workers. To solve this problem, Yugoslav leadership allowed

workers to emigrate to Western Europe, mostly West Germany, which had

work force shortages.

The 60s marked the crisis of “Yugoslav socialism.” Until 1972, there

were big struggles inside Yugoslavia and attacks on Tito’s regime. The

regime was attacked from different fronts. For example, inspired by the

world’s revolutionary movements of 1968 and the writings of the Praxis

group, Yugoslav students denied the communist nature of Yugoslavia and

demanded “full communism”; in Kosovo, Albanians demanded to be treated

as a “nation”[18] and demanded that Kosovo be acknowledged as a Yugoslav

republic, instead of province; in Croatia, the 70s were marked by a

“Croatian spring” nationalist movement which demanded further

liberalisation and that more profits stay in Croatia, i.e., on the

republic instead of the federal level. After these events, the Party was

cleansed of nationalists, liberals and, more importantly, its left.

1974’s Constitution acknowledged the republics as the main body of

political and economical discussion and negotiations within the

Yugoslavia. This meant that, although rhetorically the Constitution made

some changes in favour of “real workers’ self-management,”

nationalist-liberals won a great victory in their battle for the greater

political liberalisation of country. The really important thing is that

unions and workers’ councils, especially in these times of great crisis

in Yugoslavia, always sided with liberal-nationalists who advocated

liberalisation of market. They did that because they were sceptical

towards the LCY’s bureaucrats and directors they had to deal with in the

everyday life of their enterprise and their attempts to reduce their

rights and wages. While liberal-nationalists promoted ideas of market

efficiency with their maxim “to each according to its work” (Musić

2010:185), workers believed that by giving greater economical autonomy

to the republics and with greater profit staying in their republic,

their wages would increase.

1980 was an essential year for Yugoslavia. Not just because of the world

oil crisis, but because Marshall Tito died. Already in 1981, the

Yugoslav government was on the verge of bankruptcy with more than 20

million dollars debt (Musić 2010:187). That led to “stabilisation

programs” that increased competitiveness in the world market, but also

led to a decline in wages of 30 percent. Considering “stabilisation

programs,” it is important to note that between 1979 and 1988,

Yugoslavia signed six arrangements with the IMF, which later called for

austerity measures, lowering of wages, a fall in production and in

living standards (Lončar 2012:12). In 1988, Yugoslavia managed to

retrieve its 1960s standard, but the crisis of the system was still

enormous. In an economy oriented towards efficiency instead of the

satisfaction of human needs, the Yugoslav elite saw a way out of the

crisis only in the sacking of two million workers, while Yugoslavia

already had one million unemployed. Since the elite had never made such

drastic measures before, the crisis caused industrial insurgency. In

1980, there were 247 registered strikes with 13.507 workers

participating, while eight years later, in 1988, the number of

registered strikes rose to 1851 with 386.123 workers participating.

These strikes were not merely products of economic struggle, but also

political ones, where workers were again allies of liberal-nationalists

demanding liberalisation of economical and political system.

Liberalisation of the political system, and consequently abandonment of

the “no-minority-no-majority” principle, together with the demand for

the greater economical autonomy of republics, lead to the disintegration

and finally collapse of Yugoslavia.

SO, WHY CAPITALISM?

To claim that the Yugoslav economy was nothing but capitalism is not

anything new. Stalinists all over the world were claiming that since

Tito and Stalin broke up in 1948. One of the most popular texts on that

subject is certainly Is Yugoslavia A Socialist Country (1963) written by

editorial departments of the Chinese papers People’s Daily and Red Flag

in 1963 after Nikita Khrushchev’s Soviet Union moved towards more

friendly politics when it came to Yugoslavia. The Chinese Stalinists

wrote that: “all Marxist-Leninists hold that Yugoslavia is not a

socialist country. The leading clique of the League of Communists of

Yugoslavia has betrayed Marxism-Leninism and the Yugoslav people and

consists of renegades from international communist movement and lackeys

of imperialism” ( People’s Daily; Red Flag 1963:1). While this text is

mostly directed towards the Soviet turn in politics and Khrushchev’s

calling Yugoslavia an “’advanced’ socialist country” (PD; RF 1963:2),

what makes Yugoslavia capitalist can be summed up in the existence of

private property and the abandonment of agricultural collectivisation,

Yugoslav dependency on US loans and US imperialism in general. While

these accusations make sense and certainly are reflections of

Yugoslavia’s capitalist nature, they represent a weak and superficial

critique, whose only purpose was to defend Stalinism as a political

ideology, but also, more importantly, as political praxis. In this

analysis, I intend to put forward a more fundamental critique of

Yugoslav capitalism, a critique that will also include other Stalinist

regimes.

Regarding ideological justifications of Yugoslav economic realities,

Yugoslav communists claimed that the “law of value was an ‘objective

economic law,’ influencing socialist societies as equally as capitalist

ones” (Musić 2010:176). According to them, every action against the law

of value leads to bureaucratism. Consequently, they believed that the

market played an essential role in “socialist distribution,” since

“exchange through the market, grounded in the law of value, together

with collective ownership (…) provided the only objective criterion for

socialist distribution” (Musić 2010:177). Because of “social property,”

the worker is no longer the one that gets a wage from the state, but he

is a part of the enterprise he works for. We can find these ideas

systematically developed in the works of Croatian economist Branko

Horvat who is considered, although he expressed strong disagreements

with Yugoslav development after 1970s, one of the most important

economic theoreticians of self-management and market socialism. In his

book ABC jugoslavenskog samoupravljanja (eng. ABC of Yugoslav

Self-Management, 1989)[19], he criticized Yugoslavia for being “too

statist” and proposed solutions for Yugoslavia to reach socialism.

According to Horvat, statism, or “Stalinism,” is based upon a monopoly

of political power and, in such systems, class exploitation comes mainly

through political means, unlike in capitalism where this power is based

on private property and class exploitation is mainly economic. His

solution is socialism, which he defines as:

“order in which concentration of economical and political power is

abolished and the possibility for abolishing economical exploitation is

created. In that sense, socialism is a society of equal citizens. In an

institutional sense, it means social property, a market controlled by a

plan and a political system without the Party, i.e., radical political

and economical democracy and division according to work” (Horvat

1989:12).

For Horvat, socialism cannot exist without self-management. In order for

self-management to exist, the market, commodity production, division of

labour, law of value etc. must exist or, as he puts it without any

attempt at argument, the “[market] is necessary because without a market

there’s no self-management, and without self-management there is no

socialism” (Horvat 1989:16). While discussing the “socialist market” he

claims that “commodity production is not creating capitalism, but the

reverse” (Horvat 1989:15) and how “every socio-economical formation had

its own type of market which generated socio-economical relations of

that formation” (Horvat 1989:16). According to him, we shouldn’t ask

ourselves if we should abolish the market, like old Marxists with “naive

views” did, but what type of market fits socialism. In self-management,

one of the most important things is the autonomy of workers’

collectives. The market is really important because it is a “tool”

against monopoly as healthy market competition destroys it. Still,

market competition produces a certain alienation, which Horvat sees as a

negative but inevitable outcome of a market system. Another “naive” and

“childish” idea is to abolish the labour market. In socialism, the

labour force is an economic input and workers “associate their labour

where it is the most productive, i.e. where is the biggest income”

(Horvat 1989:17). “In order for the market to function, the institution

of property is necessary, because the basic purpose of that institution

is to regulate the market of economic values” (Horvat 1989:38). Social

property is a form of property which is necessary for socialism. Horvat

writes that there are three reasons why social property does not exploit

the working class. First, “every member of society has a full right to

work” (Horvat 1989:29). Second, “every member of society has a full

right to compete for every workplace according to his capabilities and

qualifications” (Horvat 1989:29). And finally, “every member of society

has the right to participate in the managing of production” (Horvat

1989:29). Also, social property implies a division according to work

where income belongs to society and an individual can only appropriate

income from work. The worker is exchanging the fruit of his labour with

society for products of the same value as products he used to produce

that labour. The market is the mechanism which grades individuals’ work

contribution. But although a self-managing socialist system is based

upon social property, it doesn’t exclude other forms of property such as

private “property, partnership, cooperative property, contractual

organization of associated labour and communal and state property”

(Horvat 1989:29). Of course, profit is not anything alien to socialism,

because while the capitalist system tends to maximise profits, a

socialist system uses profit to satisfy the needs of its citizens. “As a

social category, profit is, the same as a market, defined by the

socio-economic system. Looking at it analytically, profit, or income, is

simply the difference between income and expenses, production’s value

and its costs” and “needs can be maximally satisfied only with

maximization of production” (Horvat 1989:17). Horvat’s maxim is

“maximization of democracy with maximization of efficiency” (Horvat

1989:21), i.e., it is necessary to make decisions in democratic way in

order to avoid sabotage and lower productivity. He is applying a liberal

definition of democracy according to which democracy is decision making

by the majority, but with the “acknowledgment of minority rights”

(Horvat 1989:21).

The difference between a “liberal capitalist economy” and self-managing

socialism lies in the existence of a social plan. The plan has four

functions: it is an instrument of predictions (its function is to make

the most economical movements accessible to producers); it is an

instrument of coordination of economic decisions (it makes directives

only for state companies while the rest can just follow it as an

economic direction); it is an instrument for the direction of economical

growth, and it is a commitment for body which made and it is a directive

for all its organs. The Plan adds cooperation and solidarity to the

market economy, limiting markets’ destructive functions. No wonder that

Ernest Mandel wrote how Horvat “is much more an adept of the Cambridge

school of welfare economics than a Marxist” (Mandel 1967).

But let’s compare the official positions of Yugoslav economic ideology,

which are certainly not anything new, with official Soviet ideas about

socialism in economic practice. In his text “Economic Problems of

Socialism in USSR” (1952), which was actually a sketch for a Soviet

economics textbook, Stalin debates with certain “comrades” who do not

share his opinions on certain economic laws and solutions. In this text,

Stalin claims that Engels’ formula from Anti-Dühring, according to which

“the moment that society takes the means for production it its hands it

abolishes commodity production and by that the rule of products over

producers” (Engels in Stalin 1981:707), along with the abolition of

certain economic laws, cannot be applied to the Soviet Union, because it

had not developed the industrial capacities for “socialist production.”

This is the main reason why the economic laws of capitalism, which

Stalin, much like Horvat, is trying to present as universal laws of

every economy, still exist in the Soviet Union. One of these laws is the

law of commodity production, which shouldn’t, according to Stalin, be

connected with capitalist production and which cannot be abolished.

“Capitalist production is the highest form of commodity production.

Commodity production leads to capitalism only if there is private

ownership of the means of production, if labour power appears in the

market as a commodity which can be bought by the capitalist and

exploited in the process of production, and if, consequently, the system

of exploitation of wageworkers by capitalists exists in the country.

Capitalist production begins when the means of production are

concentrated in private hands, and when the workers are bereft of means

of production and are compelled to sell their labour power as a

commodity. Without this there is no such thing as capitalist

production.” (Stalin 1981:710)

Also, since commodity production exists, the law of value also must

exist, because, as Stalin says: “wherever commodities and commodity

production exist, there the law of value must also exist. (…) It existed

before capitalism, and it still exists, as commodity production, after

the collapse of capitalism…” (Stalin 1981:713,727). In socialism,

however, the law of value is limited by the “social” property of the

means of production and by social planning of the economy. The law of

value is, before all, a basic law of commodity production. The

difference between capitalist and socialist commodity production is that

“monopolistic capitalism doesn’t demand any profit, but maximum profit”

(Stalin 1981:728), while the socialist law of value is defined by

“securing the maximum satisfaction of constantly growing material and

cultural needs of the whole society through continuous growth and

perfecting of socialist production” (Stalin 1981:729).

The point of using Stalin here is not to call out the most notorious

liberal boogieman, but precisely the opposite – to show the influence of

bourgeois economics of capitalism on both Soviet and Yugoslav systems

and their ideologies. In both cases, we face revisionism of Marx’s basic

concepts and ideas because, if we look at Marx’s analysis, we would

quickly conclude that both systems were capitalist. Or we could comment

using a bit of Marx’s wit on Proudhon’s account, which fits so well in

this case, “we may well, therefore, be astonished at the cleverness of

Proudhon, who would abolish capitalistic property by enforcing the

eternal laws of property that are based on commodity production” (Marx

1947:516). In opening a discussion about the class nature of both the

Soviet Union and – more importantly, at least for this article –

Yugoslavia (was it a socialist or capitalist society, it is also

necessary to comment on certain statements that come from the “Marxist

camp” about how it is not possible to use Marxist analysis when

analysing such systems. In his book Marxian Concept of Capital and

Soviet Experience (1994), Paresh Chattopadhyay looks back on comments

from theoreticians such as Louis Althusser, Paul Sweezy, John Roemer and

Charles Bettelheim. These theoreticians, in their own way, tried to

dispute the possibility of a Marxist critique of the Soviet Union and

similar regimes. Besides insisting on a division between “Marx’s

Marxism” and “Lenin’s Marxism,” as Raya Dunayevskaya has put it, i.e.,

the difference between Marx’s doctrine and the Eastern Bloc’s reality,

Chattopadhyay points out that Marx’s method is quite applicable in the

making of such analysis. Marx considered his method as dialectical. The

main criterion in the characterization of a certain economy, according

to this method, is an analysis of social relations in production—how is

surplus labour “pumped out” from immediate producers. It is popular to

use Cold War rhetoric about the division of the World into “communist”

and “capitalist,” but if we apply Marx’s criterion for analysis of

social relations in production, we don’t have reason to believe that

“Western capitalism” represents the only way of capitalist production.

Quite the contrary, “whatever the different forms of manifestation of an

economy, if the latter is based on labourers’ separation from the

conditions of labour, necessarily rendering labour as wage labour, then

the economy in question is capitalist” (Chattopadhyay 1994:6). Also,

unlike Roemer, and many more, who claims that “social,” i.e., state,

property of the means for production implies socialism, when Marx talks

about the abolition of private property he’s talking about the abolition

of class property, instead of individual property. There’s no

insinuation in Marx’s texts that, in the case of “social” property,

exploitation is eliminated. Exploitation will exist as long as capital

exists, and capital can exist under private and “social” property. This

view is also shared by Raya Dunayevskaya, who notes that, in the case of

“social” property, it is important to state that the means for

production are capital and how workers’ labour is still alienated from

them in the form of commodities and services which are available to the

bureaucracy. She concludes, “the Soviet Government occupies in relation

to the whole economic system the position which a capitalist occupies in

relation to a single enterprise” (Dunayevskaya 1941). The bureaucracy

did not create any new social mode of production – they’ve just

continued to reproduce capitalist class relations.

Chattopadhyay also draws our attention to Marx’s concept of capital and

its twofold existence—in a juridical and economic sense. When we are

talking about the economic existence of capital, we are talking about

social relations in production based upon the separation of labour from

conditions of labour that bind wage labour and capital. The economic

existence of capital has two sub-moments: an essential reality, where

capital is a social totality, and a phenomenal reality, where capital

exists as mutually autonomous individual capitals, i.e. fragments of

capital as social totality. When we are talking about the juridical

existence of capital, it is connected with proprietary relations of

capital. Capital is here defined negatively, as non-property of workers,

i.e. the private property of a class. This is a fundamental meaning of

private property for Marx, even though jurisprudence doesn’t acknowledge

it in that way. What jurisprudence acknowledges as private property is

individual private property, as a specific form of private property of

the capitalist class. Private property in its first, class sense exists,

as long as capital exists.

Let’s look at Yugoslavia more deeply. Did wage labour exist in

Yugoslavia? Surely it did. Workers were quite aware of the fact that

they are working for wages, that someone else was taking surplus labour

they produced and that the whole system was based upon wage earning.

They were also quite aware of workplace hierarchy and wage differences

between themselves and management and, in the end they saw themselves as

wage earners. They were also aware that in other capitalist countries,

such as West Germany where the majority of Yugoslav labourers immigrated

to work, workers earned more than in Yugoslavia. If we take that into

account, it is not so surprising that workers supported liberal

fractions in the LCY which wanted to turn the Yugoslav economy into an

image of the West. By recognizing that wage labour existed in Yugoslavia

and concluding that the working class worked for wages, we have to ask

the question of for whom did they work? Who paid the wages to workers?

If we ask ourselves that question, we are assuming that Yugoslavia was a

class society. This is of course the truth. The Yugoslav ruling class

came from the technocracy and other bureaucrats that constituted the

core of the LCY. Many leftists would say that we cannot talk about a

Yugoslav ruling class because there was no private property over means

of production. Well, they are quite wrong because private property, as

class property, existed in Yugoslavia under the name of social property.

The ruling class managed that property in the name of “working people”

and appropriated its surplus value. When it comes to forms of private

property, Yugoslavia is pretty much easier to analyze than Soviet Union,

because its capitalist nature is quite easy to notice. In Yugoslavia

different forms of private property existed, from social property, to

individual private property in small enterprises, to joint property with

multinational corporations, cooperative property in agriculture, etc.

What makes Yugoslavia easier to analyze is its dependence on the global

market and movements of capital. As any other capitalist country,

Yugoslavia was heavily affected by different capitalist crises (such as

the oil crisis) and, especially towards late 80s, the Yugoslav ruling

class responded to crisis much in the same way as other national

bourgeoisies of the West: with austerity measures, sacking,

privatization and bigger liberalisations of the market. Since Yugoslavia

wasn’t part of the Eastern Bloc it had to have deeper connections with

the West, not just because of military protection in case of possible

Soviet intervention (for example in early 50s), but mostly because it is

impossible to have a self-sufficient economy in capitalism. This is why

Yugoslavia participated in the world market in a full sense, just like

any other capitalist country.

If we have a class system, sooner or later there will be class

struggles. Yugoslavia did not lack for workers’ struggles which mostly

were economic struggles for better wages and work conditions. Even

though some workplace struggles, especially after the 70s, were

connected with support of the bourgeoisie and demanded more economic

liberalisation or other nationalist goals that would benefit their

position, workers’ struggles in Yugoslavia shouldn’t ever only be

reduced to that. A lot of workplace struggles were motivated because

workers wanted to have a stronger role in managing their enterprise,

especially wages, or because management tried to lower workers’ wages to

“save their skin.” Here it is once again important to say that, in every

industrial action, workers had to rely on themselves and on wildcat

strikes, because unions were part of the state machinery. Unions in

Yugoslavia were designed as institutions where the official ideology was

presented to workers and through which the Party could control

workplaces. In other words, unions had the same functions as they have

in other capitalist countries or in today’s countries of the

ex-Yugoslavia, or anywhere in the world for that matter. Workers’

councils also had similar functions. Since the LCY nominated managers

and even the workers who could be in councils, it is quite obvious that

they’ve tried to control them as much as possible.

Usually when leftists in their studies acknowledge certain mistakes or

oversights of Yugoslav self-management, they end up concluding how we

need “the real self-management” which would mark a successful

transformation from capitalism to socialism. Yugoslav self-management

always serves, if not as inspiration, but then at least as one of the

biggest examples of self-management in practice. We can see that in

works of Lebowtiz, Kovacs, but also in some of the works about economic

democracy and direct democracy that were products of student or Occupy

movements from 2009 onwards. Such positions were also advocated in

Yugoslavia at one time. Intellectuals from the Praxis group, although

they were critical of Yugoslavia, never rejected self-management as a

concept. For Rudi Supek, the concept of self-management is not wrong

because.“. man-producer has the right to decide about results of his

work, (…) state doesn’t alienate and arbitrarily disposes of surplus

labour created by working class (…) that all workers have the real right

of managing of work organisations in which they work” (Supek 1971:351).

For him, self-management is the only model that can be used in developed

Western countries—it is a balance between maximalism and statism; it is

accepted by Marxist intelligentsia and academics around the World; it is

the logical conclusion of working class offensives in Western countries

and the logical conclusion of democratisation of conditions in

production and chance for working class to get higher managing rights

(Supek 1971:348–350). He accuses the Yugoslav leadership of choking

self-management with a market economy and capitalist relations, for

being Proudhonist and here he engages in an academic discussion about

Proudhonist influences on the Yugoslav economy. But to attack the

Yugoslav model for being Prudhonist, while defending the idea of “real”

self-management at the same time, is an oxymoron. Is not the idea of

gradual evolution from capitalism to socialism through networks

self-managed workers’ cooperatives and enterprises the essence of

Proudhonism? Proudhonism is essentially the idea of “socialism in one

workplace,” an idea which proposes a local “solution” to a global

problem. Actually, we can apply some aspects of the old Marxist critique

of Proudhonism to Yugoslav self-management. Proudhon’s system was based

on individual exchange, market and the free will of buyer and seller

above all. In his critique of Proudhon, The Poverty of Philosophy, Marx

analyzed how such a system is not anything but an apologia for and

preservation of bourgeois economy. But, as Amadeo Bordiga notes, this

individual exchange leads to exchange between factories, workshops and

enterprises managed by workers and it is presented as a goal of

socialism that the factory is run by local workers.

The idea of workers’ self-management was never a part of the Marxist

tradition, but quite to the contrary, it was an ideology of various

reformist currents within the workers’ movement, from anarchism,

Bernsteinism, and syndicalism to the “new left.” Of course, behind the

Marxist rejection of workers’ self-management stands Marx’s materialist

analysis of the former, instead of “dogmatism” or “catechism” as

“critics” of Marxism like to point out all the time. As Marx once said,

and Engels and Lenin repeated so many times: revolution is not a

question of forms of organisation. Therefore, to put form above content,

to fetishise a certain form while neglecting its content, is one of the

most dangerous, but yet classical mistakes that leftists make.

The ideology of self-management is based upon the idea of “force which

struggles against the constituted power and asserts its autonomy by

breaking all links with the central State, and sometimes as a form which

manages a new economy”(Bordiga 1957). In the case of utopian socialists,

the idea was to build “revolutionary communes” that would later spread

to the whole society, while in the case of Yugoslavia, the idea was to

set up a new interpretation of Marxism-Leninism and a new path to

communism that would, in its opposition to the Soviet central state and

bureaucracy, end up in a decentralisation of society masked under

“withering away of the state.” Of course, this decentralisation, in an

economic and juridical sense, was marked by liberalisation and market

ideology, because there was no other mechanism to stick with, while real

political and economic power was still concentrated—like in the case of

any other class society—in the hands of its ruling class. A lot of

leftists here, like the Praxis group, while pointing out the mistakes

and defects of Yugoslav self-management, still advocate “the real

self-management” which is based on a real autonomy of producers and

where workers really manage production and their workplaces. But the

answer to the problem of capitalism was never in greater “autonomy” of

the working class through workers’ councils and management of

production. The problem with workers’ councils is much the same as with

trade or industrial unions, which are marked with rank-and-file

restrictions in dealing with problems of one small sector of production,

presented in a single enterprise, instead of society as whole.

Therefore, we cannot expect that changes in individual workplaces,

managed by workers’ councils, will lead us to a “latter stage” or

communism. Communist society is not marked by workers’ control, workers’

management or giving power to producers. In communist society, there are

no more producers or non-producers as there are no classes. The point of

communism is the disappearance of the proletariat as a class, along with

the wage system, exchange and in the end – individual enterprises.

“There will be nothing to control and manage and nobody to demand

autonomy from” (Bordiga 1957). Or in Marx’s words:

“In a future society, in which class antagonism would have ceased, in

which there will no longer be any classes, use will no longer be

determined by the minimum time of production; but the social time of

production devoted to different articles will be determined by the

degree of their social utility.” (Marx 1959:52)

One of the big problems of the idea of self-management is reducing the

historical conflict from national to local, communal or workplace level

instead of extending it onto an international scale—onto the problem of

the capitalist system as whole. In this moment, we can see the whole

idea of self-management constantly returns to its ideal form of

“autonomous commune,” the first capitalist form from the end of the

Middle-Ages. While in Marxist circles, the term “petty-bourgeois” is too

often used as an insult or denunciation in petty ideological

discussions, in case of self-management that term would go pretty well

with its class nature. Self-management is an ideology of the

self-employed, craftsmen and peasants that want a market system without

monopoly in which they can freely compete. Of course, in the case of

Yugoslavia there were quite obvious monopolies and the market wasn’t as

“free” as some would want. Also, the renaming of the CPY to the LCY

wasn’t accidental. Its essence is the movement of the focus from “class”

to “people,” i.e., declassing of the working class in the confusion of

the term “people,” which made ideological excuses for the existence of

classes, class society, but also of increasing nationalism. All

together, it is really interesting how, unlike most of today’s left, the

ultra-right neo-classical economist Ludwig von Mises, pretty much hit

the spot in his analysis, of course in his own way:

“The syndicalistically organized state would be no socialist state but a

state of worker capitalism, since the individual worker groups would be

owners of the capital. Syndicalism would make all re-patterning of

production impossible; it leaves no room free for economic progress. In

its entire intellectual character it suits the age of peasants and

craftsmen, in which economic relations are rather stationary.” (von

Mises 1983:199)

CONCLUSION

Yugoslavia was a capitalist society. As I’ve pointed out, we cannot

analyze an economic system by accepting its proclamations or documents,

but by materialist relations in production. Capitalist systems are

marked with the existence of class relations in production, wage,

exchange, commodity production, etc., while communism is a movement

which abolishes these relations. Yugoslavia had all the features of a

capitalist system; no matter how much time its ideologues spent on

masking them. For example, social property was nothing but property of a

ruling class that appropriated its surplus value. Also, there was no

socialist and/or communist revolution in Yugoslavia. Communist

revolution is marked by an uprising of the proletariat which, together

with its class Party, “abolishes the present state of things” (Marx). In

the case of Yugoslavia, the CPY won power after war while relations in

production didn’t change at all.

The idea of self-management was never part of the Marxist tradition and

it never was and never will be able to tackle capitalism and to replace

it. Quite the contrary, in the case of Yugoslavia, self-management only

increased the power of the ruling class and integrated the working class

into the state, just like the welfare state in the West. Furthermore,

Yugoslav self-management kept capitalist relations safe, declared the

law of value, commodity production and market exchange as mere “economic

tools” that exist in every economy, and solved every economic and

political crisis with broader liberalisation as the main austerity

measure. If self-management was supposed to show “another way” of

organization of a socialist state, it failed—as socialism in one country

is a wasted project. Communist transformation is only possible on

international scale.

Although one would have to be completely blind not to notice the

difference between basic living conditions in Yugoslavia and today’s

ex-Yugoslav countries, one shouldn’t fall into the trap of nostalgia or

calling for the refurbishment of Yugoslav relations. Yugonostalgia in

the political arena is nothing but an a-political populism or

superficial analysis. Instead of feasting on Yugonostalgia, one should

concentrate on understanding the conditions and relations that existed

within Yugoslavia, their dialectical development in the ex-Yugoslav

countries and how that affected the lives of the proletarians in order

to strive for a classless society of tomorrow. We have to be constantly

aware that struggle for a classless society involves understanding of

present day relations in production, class dynamics but also historical

lessons, where a resurrection of state socialist regimes isn’t a goal

but an obstacle.

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[1] Serb-Cro. Narodno oslobodilački pokret (NOP) was a Popular Front

movement in Yugoslavia during the Second World War.

[2] Serb-Cro. Izjava Vrhovnog štaba NOV i POJ i AVNOJ-a; NOV i POJ

stands for Peoples Liberation Army and Partisan Units of Yugoslavia and

AVNOJ stands for Antifascist Council of National Liberation of

Yugoslavia.

[3] In his book Samoupravljanje 1950–1974 (eng. Self-Management

1950–1974; 1974, ) Yugoslav historian Dr. Dušan Bilandžić claims that

1,706,000 Yugoslav people were killed in the Second World War, i.e.

every tenth citizen of Yugoslavia. Actually, he’s talking about

demographic loss, i.e. the number which marked how many citizens the

country lost. This number was presented as the number killed at the

peace conference in Paris, so that Yugoslavia could maximize its

sufferings.

[4] Rus. Народный комиссариат внутренних дел was the Soviet secret

police.

[5] Stakhanovism was a “trend” among Russian workers, called after

Alexei Stakhanov, miner which, inspired by Stalin’s speech from May

1935, excavated more than 102 tons of coal in just 6 hours, which was 14

times above his quota. Stakhanovists demanded that equal wages should be

abolished and that workers should be paid on their merits. Appearance of

this “trend” was followed with an increase in extreme wage differences,

surcease in rationalisation and the beginning of production of luxury

commodities. On November 15^(th) 1935, the All-Russian Conference of

Stakhanovists was held where they were declared, by Pravda, to be

“leaders of the people” (Dunayevskaya 1942). Increase in Stakhanovist

wages enabled them faster advance in society. Unlike them, regular

workers found themselves in situation where it was harder and harder for

them to buy goods they could afford during rationing. In Yugoslavia

Stakhnovists were called “udarnici” (eng. outstanding workers).

[6] The Serbo-Croatian title is Ugovor o prijateljstvu, uzajamnoj pomoći

i poslijeratnoj suradnji, Jugoslavije i SSSR-a .

[7] While in the most of the text I use Stalinism as another name for

Marxism-Leninism, when I refer to “Stalinism” in quotes I’m referring to

denunciations which the Yugoslav leadership used against Soviet Union’s

ideology and its followers in Yugoslavia. I’m using quotes because, in

the case of Yugoslav leadership, their denouncing of the Soviet Union as

“Stalinist” doesn’t have any material explanation or argument and it

does not question fundamental concepts of Marxism-Leninism, or

Stalinism, as I’ve done so far and as I’ll continue in this article,

since I don’t consider Marxism-Leninism as Marxism in the first place.

[8] “Goli otok“ (eng. Naked Island) was the most famous Yugoslav

concentration camp for leftist ideological enemies of the regime,

usually “Stalinists.” This camp was primarily for male prisoners, while

“Sveti Grgur” (eng. Saint George) was for females.

[9] The Serbo-Croatian title is O narodnoj demokraciji u Jugoslaviji.

[10] The Serbo-Croatian title is Zakon o narodnim odborima.

[11] The Serbo-Croatian title is Uputstvo o osnivanju i radnu radničkih

savjeta.

[12] The Serbo-Croatian title is Osnovni zakon o upravljanju državnim

privrednim poduzećima i višim privrednim poduzećima od strane radnih

kolektiva.

[13] Even if it is common to put the Praxis group in the

Marxist-Humanist camp, I oppose such a classification. For me,

Marxist-Humanism is a tendency which is based around works of Raya

Dunayevskaya, C.L.R. James and the so called Johnson-Forest Tendency,

which politically shares really little, if anything, with the Praxis

group. Even though members of the Praxis group were highly critical of

the Yugoslav system, they did not share the Marxist-Humanist analysis of

the Soviet Union and similar regimes, i.e. they did not support the

theory of state capitalism. Also, I believe that no-one can say that

there was political and ideological unity among members of the Praxis

group, which explains that while some were trying to articulate some

sort of Marxist critique of Yugoslavia, others turned to liberal ideas

of “democracy” and “democratisation,” completely abandoning historical

materialism and class analysis. The fact that the second current won can

easily been seen from the last issues of Praxis which were completely

dedicated to liberal “civil society” theories and which were dominated

by articles of Croatian liberal-nationalist philosophers.

[14] Polyarchy is a term invented by Robert A. Dahl, which he used to

describe forms of rule where power is in the hand of three or more

persons. Polyarchy is a nation-state which has certain procedures which

are necessary to implement the “democratic principle.”

[15] With the term “national,” Lindblom is actually referring to

individual Yugoslav republics, i.e. Slovenia, Croatia, Serbia, Bosnia,

Macedonia or Montenegro. It is a mistake to refer to them as

“provinces,” because Yugoslavia was a federation of “socialist”

republics, but also because that could cause certain confusion since

Serbia consisted of two “autonomous provinces”: Vojvodina and Kosovo.

[16] In 1952, the Communist Party of Yugoslavia renamed itself as the

League of Communists of Yugoslavia. The reason for changing the party’s

name was Tito’s idea that in socialism there was no need for a Communist

Party, since “working people” controlled the state. Once “working

people” controlled the state, the Communist Party had fulfilled its

historical task. Also, CP’s were vanguard parties of the proletariat,

while “working people” were not just proletarians, but also craftsmen,

peasants, etc—all of whom must participate in the construction of

Yugoslav society.

[17] Lebowitz argues that while the party was imposing directors,

workers’ councils had certain autonomy to accept or reject directors and

they used it. He also pointed to other bodies involved in managing

enterprises such as workshop councils and special commissions, stating

how certain researches showed how one third of workers in enterprise

participated in one of the councils or commissions, how people used to

rotate on their functions and how functions were limited to two year

mandates (Lebowitz 2004).

[18] In Yugoslavia, when it comes to the national question, the ideology

of “brotherhood and unity” and “no-minority-no-majority” prevailed till

its last days. Behind that policy was a division on “nations” and

“nationalities.” “Nations” were Slovenians, Croats, Bosniacs, Serbs,

Montenegrins and Macedonians, i.e. “nations” had their own republics.

“Nationalities” were actually national and ethnic minorities such as

Albanians, Czechs, Hungarians, Germans, Italians, Bulgarians, Turks,

etc. Kosovo Albanians were actually a really big “minority,” which is

why they have constantly demanded that Kosovo become republic, instead

of being an “autonomous province.”

[19] ABC of Yugoslav Self-Management is a book that Horvat thought of as

a short account on Yugoslavia for Yugoslavs as part of his greater study

Political Economy of Socialism (1983) published in English. Political

Economy of Socialism is probably the most important book when discussing

market socialism.