“No, it can’t be done that way. Someone has to lead it.”
By Stefan Stefanović – Secretary of the Workers’ Youth and member of the Party of the Radical Left of Serbia (PRL)
These were the words of a colleague after I presented self-management in a conversation. After the breakup of Yugoslavia, the idea of workers running the enterprise was lost in the whirlwind of war, transition and the new system, reduced to a ‘relic of the past’, mentioned in the nostalgic memories of older generations. Alternatively, a voice could be heard, saying that Yugoslavia and its system were doomed from the beginning. How a system in which the worker is also a collaborator in a joint venture, whose voice can be heard in general, and not only when they are fired, is inefficient. That a collaborator is better as a servant, whipped figuratively and literally throughout their life, and that it is ‘more efficient’, ‘more natural’, and ‘simply better’ that way.
Much can be said about the problems that the ‘servants’ and the system face, and numerous books and articles have been written over the years. However, talking about the problem serves no purpose if one does not also work on a solution. Even without a single written text, man feels powerless, maddened, and alienated. How the system chains him and forces him into obedience. How it convinces him that he is free. How man loses touch with people and with himself. This is the best, he hears. There is no other option, everything else is doomed to failure.
Is it? What if self-management is more efficient? What if cooperatives are more natural? What if it is simply better for the servant to be a collaborator?
“The form of association, however, which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves.” – John Stuart Mill, “Principles of Political Economy”
As long as capitalism and private property have existed, there was something different. From dreams of Utopia to the most influential economists, voices could be heard about self-management, advocating that the worker not only decides in politics, but also in the workplace. Socialist thinkers from Proudhon to Gramsci wrote about the superiority of enterprises where workers decide, along with attempts in Paris, Catalonia, Turin and beyond.
Long before workers and peasants liberated Yugoslavia from the Fascist yoke, they joined together in cooperatives. Although they did not manage production together as they would in the following decades, through cooperation they achieved better conditions for themselves in the ruthless conditions of capitalism on the periphery, much like the situation today. A peasant is forced to pay a premium for equipment and borrows from loan-sharks. The peasants together acquire equipment more favorably and process what they produce. That was the cooperative. That was the beginning of self-management in Yugoslavia.
After the victory of the partisans, with the new system, a new economy resembling the USSR is established. Plan and the State at the center. But that did not last long. Due to a series of circumstances worthy of a separate text, Yugoslavia was cut off from the rest of the socialist world, left to die. It is often said that in such conditions, the greatest ideas are born.
“Nothing that has been created must be so sacred to us that it cannot be surpassed and that it would not give way to something even more advanced, even freer, even more humane.”
These words end the Program of the newly created League of Communists of Yugoslavia, written in 1952. Two years earlier, the Law on Factory Management was introduced, beginning a transformation never seen before. Companies were now in the hands of workers and society. “Social ownership” was introduced as a new concept, where society was the owner instead of the state or private individuals, while workers managed it through workers’ councils, elected and replaceable. The director, elected from among the workers, was not an absolute leader like in a private company. On the contrary, they depended on both the Party and the Council, to the point that it became the “most hated position” in the entire country, constantly under pressure from both sides. As an independent regulatory body, there were Workers’ Controls. The Party continues to exert influence over the direction of the economy, mostly in the form of five-year plans and goals for enterprises.
The new organization faced skepticism both from within and without. After theoretical considerations and small-scale attempts, Yugoslavia decided to establish self-management at the state level. Economists at that time, especially foreign ones, were skeptical, believing that enterprises in the hands of workers would collapse, that all the money would be sucked out of them through pay raises, while unemployment would increase sharply so that the employees could keep as much of the pie as possible for themselves. Domestic economists, although more optimistic, had numerous questions and discussions about the future of the new system.
What are the results of self-management? In the new decade, Yugoslavia would develop drastically. Numerous enterprises were opened during this period, and in the following decades some of them would become giants in their fields, some with international reach. Energoprojekt, Gorenje, EI Niš, Merkator, Geneks to name a few. The Gross National Product, a measure of the total production of goods and services, grew by as much as 10% per year, which was unprecedented until then, and was only achieved by the People’s Republic of China since. That much was Yugoslavia developing under self-management.
In the 1960s, a turning point occurred, both with the new Constitution after only a decade – the Charter of Self-management, and with a new plan for the economy. The League of Communists, with the aim of deepening self-management and decentralization, decided on a controversial move and switched to a ‘laissez-faire’ approach. Companies gained greater autonomy, along with the economy in general. Let the market dictate! Within a year, the new approach showed signs of failure. Uneven development, sudden transformation without preparation, unfocused investments along with numerous other reasons led to a crisis, culminating in the student protests of 1968. Unemployment and Inflation, concepts closely related to the topic of Yugoslavia, became relevant in this period, but far from the crisis of the 1970s and 1980s.
After overcoming the crisis of the 1960s and early 1970s, the party decided on another transformation after less than a decade, and introduced a new Constitution in 1974. For some, this was the beginning of the end. With the new constitution, Yugoslavia became six states in one, closely linked to a powerless government dependent on Marshal Tito, the president. Six states also meant six economies, in conflict with each other, forced to produce everything for themselves, even if it were less efficient, even if they were kept alive by subsidies. The question is to what extent was the potential of Yugoslav enterprises hampered by these circumstances.
The constitution, together with a law introduced two years later, introduced another innovation. The Basic Organization of Associated Labor(OOUR), enterprises were divided into even smaller units that voluntarily joined together. Often called the „agreement economy“, the new organization quickly became a nightmare for enterprises, often paralyzed by internal disagreements, requiring help from the ruling party.
However, the paralysis became ubiquitous. With the Oil Crisis of the 1970s and the hiking of interest rates in 1979, Yugoslavia, divided, beheaded and weakened, is rapidly falling into a deeper crisis. Interests, both domestic and foreign, see an opportunity for the last, bloodiest transformation of Yugoslavia.
During the crisis, workers resisted, trying to survive at all costs. Contrary to economists‘ expectations, they sacrificed their salaries in order for their enterprises to survive. They organized themselves, guided by the experiences of previous decades, to survive in the worst conditions.
At the end of the 1980s, the new government headed by Ante Marković, in an effort to join the European Community, decided to completely break with self-management, advocating worker shareholding and the abolition of social property. The ultimate goal was to establish an economy similar to the West. Over the following years, self-managed enterprises became state-owned, were privatized or survived in the form of worker shareholding. At the same time, the bloody disintegration of the entire state begins, accelerating the process of transforming the self-managed, sovereign state into what we have today.
From collaborators in a common state, the young republics, much like their workers, are reduced to servants, offering cheap labor, factories for a pittance, and even their own land to the first buyer.
To emphasize. Self-management did not collapse. Self-management was ended by force.
What does this mean for us?
The survival and development of self-managed enterprises, to the point that their end was imposed by force, demonstrates their power. Even today, one can find self-managed enterprises that survive and shine like stars in the night sky of capitalism. Mondragon, ITAS Prvomajska and many others are guided by the principles of self-management, and some proudly remember Yugoslavia and its heritage. Self-management, brotherhood and unity.
Our answer is therefore clear: Centuries-old theory. Decades of experience. Multitude of examples.
Someone has to lead it.
We, the workers, will lead it.
