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

elite and technocrats, though predominantly members of the Party, did
not only endanger workers’ control but also threatened to deprive the
Party bureaucracy of political control. This threat, it appears, was the
most important reason for the counter reform.
By the early 1970s, the counter-reform began. Institutional changes
started with the Constitutional Amendments of 1970. They were to be the
blueprint for the so-called associated labour concept of the selfmanaged
economy. Although formally the basic elements of the socialist
market system were to be retained, changes were so far-reaching
that the market character of the Yugoslav economy was put into question.
The associated labour concept rejected two key concepts of the
market economy: the market as the basic mechanism for resource allocation,
and macroeconomic policy and indicative planning as the
means of indirect regulation of economic activities. It insisted that
these were to be substituted, to the greatest extent possible, by mechanisms
of social contracts, self-management agreements, and social planning.
In short, the lines of responsibility for making economic decisions
became blurred, a recipe for indecision and bureaucratic bargaining.
The changes in the 1970s were officially introduced to strengthen
the basic elements of the system of a self-managed socialist economy.
Actual motives can be grouped as economic, social, or political. Among
the economic motives, the developments following the 1965 reform
were important. However, more important were the social and political
ones. The economic reforms of the 1960s reached the Rubicon, the
crossing of which would lead to the land of democratic market socialism.
The counter reform was seen as inevitable if the political power of
the League of Communists of Yugoslavia (LCY) and its actual control
of social, political, and economic developments, especially at the enterprise
and community levels, were to be saved.
8.3 Contractual socialism, 1974–88
8.3.1 The normative setting
Jozae Mencinger 125
The solution was found by inventing a new version of a socialist economy,
one that would preserve its basic orientations permanently. The
new economic model was shaped by Edvard Kardelj, the politicianideologue
who dominated economic and political thought in Yugoslavia
for more than twenty years. Again, there was no problem in finding
the explanations in Marx’s teaching, and again, the Yugoslav social scientists
were quick in applauding these explanations. Doubts about its
functioning and performance were rare and were pushed aside. The