Economics of Socialism in a Developed Country

What is happening in the political and economic arena in Jugoslavia today should not be haughtily dismissed as the result of disruptive ideological disagreement among self-righteous Marxist factions. Nor is it a reflection of the evil influence of foreign propaganda, Communist or anti-Communist. Nor has it grown out of mischievous activity of reactionary forces eager to achieve the restoration of the old régime.

Some of the problems facing Jugoslavia are particular to Jugoslavia, and in them history and geography speak. But many of the most pressing are those which every community of nations is experiencing today in both East and West, problems of international regionalism or of supranational centralism. Other countries, too, face problems such as inflation versus stability; maximizing growth or the standard of living; authoritarian discipline as a convenience of the few or democratic self-government as the responsibility of the many. And there also are many other problems which are specifically socialist. All the complexities of the modern world are bound to take a special form in a multinational commonwealth of 20,000,000 people seeking to build socialism beyond the present level of $500 national income per head per year.

The casual observer is often puzzled. Only a few years ago Jugoslavia was presented as an example of a country with one of the highest growth rates in the world; now the foremost aim of economic policy is to reduce investment. For more than a decade the socialist economy struggled against bureaucratic command; now an administrative price freeze has had to be introduced It was the first country in the world to initiate workers' management in factories and business enterprises and to abolish the wage system; now there is division about whether this means too much or too little democracy. The 1963 Constitution formally declared a one-party state; yet the top political leaders now emphatically demand that the economy be de-politicized. National problems were said to have been solved; and now the country is pregnant with increased tensions among the constituent nations, tensions newly created and socialist in origin. Efforts to find solutions to all these problems are now concentrated into two words: The Reform.[i]