Re: Milosevic and privatization

[Michael Hoover <hoov@xxxxxxxxxxxxxxxxx>]

> [These are typical results of a Lexis-Nexis search done on "Serb" AND
> "privatization" for the years 1996-1997].
> Christian Science Monitor, June 6, 1996
> Milosevic
> is revoking some privatization and free-market measures.
> Louis Proyect

Belated response due to bad habit of placing messages in stored file
and forgetting about them.  Of course, it is only "hyper-time" of
internet that makes week-old comments dated.  In any event...

I've posted a number of times on this and couple of other lists I sub to
about Yugoslav socialism.  Interested listers (if there there any) can
check list archives for fuller commentary.  In sum, I've pointed to costs
of "market socialism": mass unemployment that would have been even higher
were it not for migration of "guest workers" to West Germany/Sweden/
Switzerland, reintegration into international capitalist market leading to
chronic inflation tied to inflation of western economies, growing foreign
debt related to importing western goods/technologies, profit-making as
indicator of success in large enterprise, decentralization's role in
reviving nationalist  rivalries.  I could cite what I consider positive
features of workers' councils but pro-con comparison is not point of this
post.

Origins of Yugoslav privatization (private sector always existed to some
degree in agriculture, tourist, service economies) date to 1983 government
report about long-term structural "reforms."  Actual privatization of
social property was  initiated in 1989-1990 (which, as Milosevic liked to
point out in early 1990s, preceded other Eastern European socialist states)
and by 1991 about 33% of social firms had changed.  Government also made it
easy to establish private businesses and by 1991 about 75% of firms in
Serbia were under private ownership (admittedly, most were sole-proprietor
type employing few people and with limited capital so percentage overstates
degree to which economic property relations had changed)  And government
sought increased foreign investment by relaxing restrictions on profit
transfers and offering management rights.  Growing political crisis would
both limit international capital's interest and slow pace of privatization.

Significantly, state banks were not privatized and they often became
controlling shareholders in privatized firms in debt for share trade-offs
that also placed bank managers on executive boards.  Then, in 1994,
Serbia's Socialist Party legislative majority passed Property
Transformation Reevaluation Act (proposed by opposition party) to "roll
back" privatization.  Former social property that had been privatized
would now become state property.  While not hard to understand given war/
sanctions and (belated?) recognition of likely consequences of placing
"economics in command," transformation (call it "war socialism") did not
mean return to worker self-management.  Biggest beneficiaries were state-
appointed managers.

Point of all this is to suggest that anti-privatization stance and move to
control "commanding heights" in recent years was more a pragmatic
response to circumstances than an indication of commitment to socialism.
Milosevic or no Milosevic (and I agree with Yoshie that too much of
debate has revolved around SM), government policy twists - recall that
privatization was initially met with hostility by working class supportive
of public property and working class was later denied self-management
rights when private property was statized (a word?) - contributed to
declining popular support.   Michael Hoover