This is Richard Wolff from Democracy at Work with another response to an Ask Prof. Wolff
question from our Patreon community. This one comes from Amilcar Frasie from Argentina.
I welcome him as I welcome everyone around the world who's joining in that
community that means so much to us for its interest, its support, and such questions.
Mr. Frasie wants me to talk about the Yugoslavian
experience in socialism—a topic that has come up fairly often from members of our audience.
So let me talk about it first of all, as a kind of market socialism. What does that mean?
It means that you have socialistically reorganized your enterprises,
but you have them interact with one another to arrange for the movement of goods and services,
inputs and outputs, by means of market exchanges. So that the exchanges are among the co-ops
and between them on the one hand and the ultimate buyer (consumers, government, and so on) on the
other. This is an old issue, this question of socialism and markets. So let me explain how I
understand this, and then we'll go to the Yugoslav story. Markets have been used by all different
kinds of economic systems. For example, it is a mistake to think of markets as somehow peculiar
to capitalism. They aren't. Slaves were bought and sold in a market. The product of slave
labor (cotton, for example) was bought and sold in a market. So we know that slavery coexisted
with markets as a way of distribution. True enough, on the slave plantation you didn't
use a market. There wasn't an exchange between the slave owner and the slave because slavery doesn't
work that way. So there were some markets, and then there were absent markets, and in every case
the market had to work out a relationship of coexistence with the economic system.
Likewise, feudal plantations (lords and serfs) sometimes existed without markets involved,
and somehow, sometimes they did. And when that happened you had a different kind of
market arrangement, because, in every case we know of, markets had to accommodate the
economic production system they coexisted with. So it's really correct to talk about a slave market
that has certain differences from a feudal market. And yeah, here we go, that has certain differences
from a capitalist market, and that would also have differences for a socialist market.
What am I talking about? Every different economic system that uses a market wants the market to be
consistent with itself. That is, the slave owners didn't want to buy and sell slaves if a market
in slaves undid slavery, so they made sure it didn't. Capitalism worries about markets. Why?
Because the very market that you buy and sell into can get out of whack. Like in a great depression,
nobody buys anything, even though they need it and the market then disrupts your production. Or,
to take today's example, if markets break down (and we call that “supply chain disruptions”)
it'll mess up your production system. So it's the reality that, of course there can be socialism and
markets, and of course the socialism will try to make sure the markets work to reproduce socialism,
just like capitalism controls its markets: having the government come in with monetary
and fiscal policy, putting a floor under wages of minimum wage, putting a cap on
interest rates in many parts of the United States so that banks can't gouge, and lots of controls
so that the market doesn't undo the system. Socialism will try to do the same.
Yugoslavia tried to put the workers in charge of the factories, to use the market among them
and between them and the public, but control that market so that it doesn't undo the workers
being their own managers in the factories. That’s what makes it a distinctive effort.
It had a lot of problems. Some of those problems had to do with a transition from the capitalism
they had before to such a new organization of the workplace with the workers managing themselves.
Here was another problem: they were part of the cold war. Yugoslavia was allied with Stalin and
Russia. That meant that the United States and Western Europe were constantly trying to undermine
what was going on in Yugoslavia, and that gave the government their great anxiety. Why is that
important? Because with that anxiety they were very concerned to control what they had done.
They had turned the factories over to the workers, but they wanted to make sure all of this was
coordinated in such a way as to strengthen the ability of the communist party under Marshal Tito
to save the Yugoslav experiment from the efforts to undo it. That meant that the
communist party and the government of Marshal Tito in Yugoslavia exercised a pretty heavy hand
on these worker enterprises, so that it became unclear in many cases who ran the enterprise.
Was it the workers who were supposed to, or was it the communist party and indirectly then the
government, which had such a stake in how it all came out? Is it an experiment we can learn from?
Absolutely. And there were many who studied it. Is it an example of worker co-ops able to function?
Absolutely. They functioned very well in many parts of Yugoslavia, and for many decades. But
they were ultimately unable to survive, but that was less to do with their intrinsic difficulties
and more to do with the collapse of the Soviet Union at the end of the 1980s and the reversion
of all of Eastern Europe back to the capitalism they had had before. So yes, you have to admit
(because it's the historic truth) that that experiment in worker control didn't last,
but it lasted a lot longer than others did and, like the transition from feudalism to capitalism,
or from slavery to feudalism, there were lots of experiments, some lasting weeks,
some months, some years, some decades before they figured out how to handle the problems
and create the context that would make the experiment successful. The Yugoslav experiment,
like the Kibbutzim in Israel, like lots of others, was an experiment along the way of how to develop
an enterprise organization that is democratic, self-managed,
self-controlled, as an alternative to the hierarchical, undemocratic, capitalist model,
and for that reason Yugoslavia is an important issue, and I thank you for bringing it up.
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