Ask Prof Wolff: Yugoslavia's Experiment with Worker Co-ops

A patron of Economic Update asks: "Tito ruled Yugoslavia with an iron fist for nearly 40 years after WW2. He implemented 'self-management' Socialism and despite some initial success, by the late 80s the entire economy collapsed and soon after the country descended into a bloody civil war. I lived in Croatia from 2005 to 2011 and was surprised by the nostalgia for Tito and Communism. They remembered fondly secure work and cheap housing. They had more freedom than the USSR. You are promoting Worker Democracy. How is that different from Worker Self Management that was tried, tested and ultimately failed in the former Yugoslavia."

This is Professor Richard Wolff's video response.

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“A magnificent source of hope and insight.” Yanis Varoufakis, Greek economist, academic, philosopher, politician, author of Talking to my daughter about the economy.
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[Mirda]

Yuga (our nickname for her) was the happiest time of my life. Destroyed by the idiocy of nationalism. When Americans ask me "didn't you come here to escape socialism?", I always tell them, no I came here to escape the misery caused by those who opposed socialism!!! Btw, I'm from a mixed marriage, mom is from Serbia, dad is from Bosnia. I'm a product of the kind of unity promoted by Titos government. Encouraging the people to only see themselves as Yugoslav.

[rokarnus]

Hi from Slovenia which was part of Yugoslavia. I talked a lot with my grampa how companies were run in the 60s and 70s. Workers did decide a lot of stuff, like what to do with the profits and what the wages would be. A few times a year representatives from different companies would meet and decide where to invest a portion of the profits. Building roads, hospitals, parks, apartments, playgrounds etc.

The problem was if the ruling communist party didn't like the decisions, they could and would overrule them. So it was more like the workers "owning" 49% of the companies. The party would also appoint many of the top management. So it was worker co-managed not self-managed.

That being said it was far better than capitalism. Profits were shared far more equaly. For example big companies would invest into holiday homes, which the workers could then rent for a small fee.

There was also a private/capitalist sector which was limited to 10 employees. So the capitalists had to offer compareable wages and working conditions.

[enzopenzoo]

Finally! My parents are from Yugoslavia and flew to Sweden when the genocide started in Bosnia in the 90's. Been waiting for this moment for awhile now. Let's go Wolff!

[karljemarks]

Online platform workers in Serbia have mobilized to form something similar to a union, and they had rally to demand legal status and a fair tax rate. After the rally, the authoritarian governemnt immediately asked for meeting with the union leadership to negotiate. This has shown that the real power in society that can enact meaningful change is the working class.

[PatrickPatrick-nipq]

Just a point. If l am not mistaken, for 20 years, the average annual economic growth rate in Yugoslavia was 4.8 % until about 1970.

[numenoreaneternity]

Your premises and wells of information are substandard, but not to digress. During its worst year, Yugoslavia was the world's 24th economy, a globally competing exporter of metallurgy, machinery, and equipment, petroleum, chemicals, textiles, wood processing, food processing, pulp and paper, motor vehicles, building materials, and had established an infrastructure-building, and weapon's exporting monopoly across the whole body of the Non-Aligned Movement, with a pioneering digital electronic and robotic industry. Prior to the war, Yugoslavia was the EEC's second-largest trade partner in the Mediterranean area, just after Algeria, with 90% of industrial imports from Yugoslavia to the EEC not subject to any duty. The only problem was the way the monetary policy was managed, especially during the oil crises in the 70s and 80s. But this could have easily been fixed with a pegged currency. But when Ante Markovic did that in 1990, it was too late - as he had “nationalists” working against him such as Milosevic, sabotaging the central bank by taking out loans and giving them to their constituents as gifts for votes, while at the same time printing money in insane quantities - causing another series of hyperinflation. Not to mention all services such as free healthcare, education, and so on were cut. All this is under the subversions of the IMF. Further on, in the 1970s, Yugoslavia transitioned from being a developing economy to a developed economy, thus the drop in growth parameters.

The assertions made regarding unemployment are even more substandard than the former. What needs to be understood is that one family needed only one full-time provider, whereas the rest did not have to work. There's also the matter of a substantial number of people living off of benefits paid by the state, Yugoslavia had exemplary welfare that was, admittedly, taken advantage of, and the percentage of those who could not find work was but a portion of the total number of the unemployed. What destroyed Yugoslavia and its economy was not its Socialism or its "massive debt", which in 1991, comprised only 15% or so of Yugoslavia's GDP and is lower several times than the debts of nearly all of its INDIVIDUAL successor states, but the aforementioned subversions of the IMF, the wars, and the shifty privatizations that have spiraled a formerly developed economy into a subset of underdeveloped economies that are being neo-colonized by the West and the East as we speak. Yugoslavia was an example of the successes of Socialism and the failures of Capitalism. In summary, Titoism doesn't have a lot to do with the economy, but ideology and foreign policies - it had inspired and heavily influenced Xiaoping's foreign policy and Gaddafi's Third International Theory, furthered sovereignty, Non-Alignment, and anti-Imperialism in the whole body of the Third World, ideas rather opposed to both the West and the East during the Cold War, the unipolar, USA-dominated world, and the professor, apparently.

[therevolutionwill]

I'm interested in coops and would be interested in knowing more about coops in Nicaragua. I hear they have a lot.

[realjickso]

Thank you. I was waiting for a video on Yugoslavia.

[jazzforever]

Ah finaly, ....Yugoslavian Constitution declared "Factories to the wokers" law in 1950. So every company of any field of economy and institutions were managed by directors (politicaly loyal to the Communist Party) and worker cauncil made from elected persons employed as workers in manufacturing process and some other (administrative) professions. That model was very efficient in many casses (not of all, there was many as well negative examples). Yugoslavia productions were not only tiny "Yugo" car. But also extremely advanced and in real life confirmed military airplanes (including light supersonic fighter "Novi Avion" 1, 88 Mach, ready for serial production in 1990), LSA airplanes, engineering projects ( Kuwait capital was completely built by Yugoslav "Energoprojekt" company), ...Especially some factories in Slovenia ("Iskra", "Elan" (who sponsored and equipped Sweden World ski champion Ingemar Stenmark), or "Gorenje" who owned German Consumer Enectronic Co "Korting", ...Or "Podravka" well known food product exporter in Croatia, and some factories in Northern Serbian Province of Vojvodina, .... In 1986, Prime Minister Ante Marković through new federal law, materialised the Workers Co-Ops by giving the stocks to the employees of their companies. So workers have been stock owners of the companies they are employed. But, whole project collapsed by collapsing the federal state as victim of Secret State Security Service, playing on card of extreme nationalistic setaratism rather than Proletarian Internationalism, ....

[markuspfeifer]

Yugoslavia should make clear that macroeconomics matter. You know what the dividing line between the regions in Yugoslavia was? It was trade. Part of Yugoslavia was very competitive and exported stuff successfully while other parts of the country never got a chance. There need to be mechanisms to work this out in the future.

[CounterTheAnimatorocn]

A problem with Yugoslavia was when the federal state didn't have plans for the economy anymore (not taking about a fully planned economy type of plans, just "guides" I'd call them). This led to the republics competing against each other for the richest industries and in the end they started hating each other. The first workers' strike in Yugoslavia was against federal funds being given to poorer republics.

[GarrettFruge]

I've commented on this before in other vids where Prof. Wolff has addressed this subject, but because it's always good to recap, but also due to the fact that his commentary was a bit too broad-brushed and general, I'll provide a brief overview of Yugoslav socialism with a little more insight.

Essentially, Yugoslavia (chiefly from the years 1951 – 1979) can be broadly characterized as a hybrid quasi-market/planned economy where semi-autonomous, worker-controlled enterprises collaborated with partial central planning from both the federal government along with input from the Republics. Overall, it can serve as an example of socialist economic development and workers' control that was actually positive and somewhat democratic. There were certain deficiencies of course. Specifically, the role the local governments played in the appointment of enterprise directors, as well as the allocation of capital and the division of profits. Despite sincere efforts at decentralization on the part of the governing Communist Party, these were elements the government enacted as a vestige of central control, and so in that respect the workers' organizations lacked real self-government. There's more I could go into, but that's the basic gist.

For more info on the economic experimentation in Tito's Yugoslavia, I'd suggest reading: “Titoism: Pattern for International Communism”, by Charles P. McVicker”, and the chapter on the economy from “Yugoslavia: a Country Study.” Additionally, I'd also recommend the chapters on Yugoslavia in “Class Struggle in Socialist Poland”, by Albert Szymanski which deal specifically with some of the failings of Yugoslav socialism, particularly the decade of market-oriented reforms throughout the 60s and 70s.

[tickedoffsheikh]

Guyana 🇬🇾, during it heydays in the 70s operated on a system similar to this.Hence, it's official name The Co-operative Republic of Guyana.
As matter of fact, many co-operative unions are still in existence.
I read the Serbian company - #Energoprojekt were to build our large hydropower dam- the Upper Mazaruni Hydropower Project. But that was short-lived due to American Foreign Policy intervention!
It was during this set back that our late President Forbes Burnham took this loan and bank it in his name at a Swiss bank! Coincidentally, that very year the Swiss government decided to nationalized all banks!
As such, onto this very day, I am told the money is sitting there in the bank!
So yes coming back to the point, Guyana is a signatory to the Non-Aligned Movement. History recorded Guyana commemorating the Non-Aligned Monument at the 1972 Conference held on August 8-11of Foreign Ministers of Non-Aligned countries, the first of its kind to be held in Guyana.
The monument is a sculptural piece of the busts of its founders:  the Presidents of Egypt, Ghana, India and Yugoslavia
However, sadly enough Guyana suffered tremendous setbacks in its political and economic development since it's independence from Great Britain in 1966. The country is divided along ethnic line: blacks vs Indians even though there are the ethnicities of Portuguese, Chinese and First People - the Amerindians. In addition, there is a growing 'mixed' ethnic group. But the two largest groups are the Indians and Blacks.
The country is mineral rich and has an abundance of sweet crude oil besides being the only English speaking country on the continent of South America.
Love your videos Professor Wolff.👍🇬🇾 .
Edit: 2021/01/19

[aja]

Prof Wolff, in Yugoslavia, there were three types of property:
state property, national property
and private property. Factory directors were elected by the so-called workers' council, most often from among economic experts or engineers already working in the factory.

[ImXspr]

Professor Wolff, could you address issues with co-cooperatives from a Marxist perspective? Namely 1. Anarchy of Production in a market based system --> boom and bust cycle 2. Production for profit (exchange value instead of Use value) --> externalities 3. uneven development of productive forces (market competition) ---> superprofits 4. Imperialism by cooperatives, worker directed corporations continue to exploit the global south. 5. Petty bourgeois ideology and individualism --> greed, fucking over other coops. 6. monopoly formation through competition.

[lu.quit.a]

Very nice and rare content! I would love to read more about these experiences, not just from yugoslavia, but other East European Countries in the 20th century too. Can professor recommend some reading material to us?

[TimoDcTheLikelyLad]

Id really like to watch a video about anarchist communism by you. (When money is abolished)

[guyincognito]

Yugoslav workers didn't owned companies and factories they managed them via worker council's.

[robertalexanderho]

Dear Professor Wolf,

Our organizational in the Philippines, employ 60, 000 colleagues. We are in the maritime service industry and logistics..

30 years ago we started a cooperative to which everyone have one share and are members.

We experienmentes this because the pension systems in the country can never be trusted.

The name of our organisation is called "Magsaysay".

It might interest

[princeofchetarria]

Big fan of worker self management and direction. One problem in Yugoslavia though, was that businesses raised wages above profits and so they became unviable enterprises and the government had to bail this out. And then businesses started to rely on government bailouts to sustain their profits (and the Yugoslav gov started to rely on the Soviet Union to sustain this). We would need governments to put more restrictions in place to prevent this kind of thing.