Equality, Participation, Transition: Essays in Honour of Branko Horvat

122 Market Socialism in Yugoslavia
western scholars, the reform was contemplated by the Yugoslav political
leaders long before the break with the Soviet Union. The opinion that
workers’ self-management was ‘in the air before it was officially introduced
by the government’ (Gurvitch, 1966) can hardly be proven by
actual developments before or after the break. On the contrary, the
organization of the economy, the overwhelming nationalization of
practically every economic activity (including non-capitalist forms of
production) and the increased pressure for forced collectivization in
agriculture after the break with the Soviet Union, all suggest the opposite.
Yugoslav political leaders were fully engaged in recasting the
Yugoslav economy into a Soviet-type planned economy until the time
of the break. To Boris Kidrica, who dominated economic thought and
was one of the architects of the administrative system, state ownership
was, up to 1950, ‘the highest form of the ownership of the means of
production, and planning was the fundamental law of socialist development’
(Kidrica, 1949 and 1950a). In less than one year, the standing of
state ownership became ‘only the first and the shortest step of the
socialist revolution; the building of socialism requires the transformation
of state socialism into a free association of direct producers’ (Kidrica,
1950b). Very soon, similar statements were repeated by practically all
Yugoslav social scientists. The ability of both Yugoslav politicians and
social scientists to reread and reinterpret Marx according to daily needs
was thus established for the first time and certainly not the last.
A convergence of circumstances – such as the fact that the war for
liberation was in large part an independent effort and that the Soviet
model was voluntarily adopted – did exist, making rejection of the
Soviet model feasible. Bad economic results and the need to adapt to
the new environment were certainly important, but ideological and
political factors were decisive in searching for new, non-Soviet, forms
of socialism. The opinion that something had to be invented quickly
to give the break a symbol rather than, at least at first, to engage in a
full-fledged systemic reform (Rusinow, 1977) appears to be close to the
truth. It might also have been a way for the regime to build popular
support during difficult times.
At first, self-management was rather limited even in the normative
setting, and much more so in practice. In principle, workers were to
take over the managerial function, but in reality both the distribution
of enterprise income and the investment decisions remained centralized.
Self-management as such had little impact on resource allocation.
The development strategy remained essentially of the Soviet-type, that
is, based on a high share of investment in GNP and priority given to