File spoon-archives/marxism-international.archive/marxism-international_1996/96-11-13.154, message 93


From: "Rosser Jr, John Barkley" <rosserjb-AT-jmu.edu>
Subject: Re: M-I: Re; Socialist Unemployment in Yugoslavia
Date: Tue, 12 Nov 1996 18:11:58 -0500 ()


     I have already agreed with Louis G. that Yugoslavia's 
record on unemployment was bad, and that after 1980 its 
record on both growth and inflation was bad.  But the rest 
holds.
     Up to 1980 its real GDP growth rates were above 6% per 
year, and in some years in double digits.  This was 
comparable to the CMEA countries, and, given the 
falsification of data in them and their after-the-fact 
devaluation, probably Yugo beat them in this regard (see 
Rosser and Rosser, already referred to, Chaps 10-14 for 
detailed data sources on that). Slovenia, in particular, 
ended up with the highest per capita income of any 
post-Communist state, although it was behind such places as 
Czechia and the GDR in 1945.  Slovenia also managed to keep 
unemployment below 2%.
     Generally the environmental record of Yugo was far 
superior to that of the CMEA countries, although not 
necessarily as good as Western Europe's.
     As I already noted, its income distribution was 
overall about the same as Sweden's, although there were 
regional inequalities that worsened over time .
     For 1970-1987, total factor productivity in Yugo grew 
more rapidly than in any CMEA country (see, Frederic L. 
Pryor, _The Red and the Green: The Rise and Fall of 
Collectivized Agriculture in Marxist Regimes_, 1992, 
Princeton U. Press, pp. 29 and 250).
     There is every reason to blame the high unemployment 
rates in Yugo on something that such advocates of the 
worker-managed economy as Jaroslav Vanek have longed warned 
against:  restrictions on entry by new firms in such an 
economy.  These were in place in Yugo and many observers 
cite them as the main source of the unemployment.  
     More broadly, this and the hyperinflation were 
exacerbated by the interrepublican conflicts which consumed 
the nation in the 1980s and 90s.  That these were 
responsible for many of the macro problems rather than the 
system itself is argued in Janez Prasnikar and Jan Svejnar, 
"Workers' Participation in Management vs. Social Ownership 
and Government Policies: Yugoslav Lessons for Transforming 
Socialist Economies," _Comparative Economic Studies_, 1991, 
vol. 34, pp. 27-46.  There are other sources on this.
     Again, Slovenia worked better than any of them and 
with more civil liberties than any of them.  It remains the 
model that shows that worker-managed market socialism can 
work, and it is still such a system.
Barkley Rosser
On Thu, 7 Nov 1996 20:22:49 -0500 (EST) Louis R Godena 
<louisgodena-AT-ids.net> wrote:


>         
> 
> Barkley Rosser writes:
> 
> >Up to the 1980s the overall performance of the 
> >Yugoslav economy easily matched that of CMEA economies, and 
> >in many areas was better.  
> 
> I don't know what Barkley Rosser has been eating lately,  but I can only
> regard that statement as fantasically untrue.     Both in the areas of
> development strategies and employment models,  Yugoslavia remained far
> outside the norm for eastern Europe.
> 
> Yugoslavia from the beginning of the Socialist era was a country plagued by
> inadequate demand (a problem originating from the underdevelopment of
> productive resources),   a fast-paced rural exodus,  and an increasing
> oversupply of labor.   Its development followed a trajectory far different
> than that of other CMEA countries,  both for reasons of politics (Tito's
> early relations with Stalin on the one hand, and the West on the other) and
> nationalities (the liberal Marxism of the north co-existing ambiguously with
> the more orthodox models and strategies of the south).    Additionally,
> Yugoslavia was technically a "socialist" economy,  whose Communist Party
> deliberately eschewed central planning.    The planning system that emerged
> after the reforms of 1951-52 was really only a set of policy goals for
> production and investment in the coming plan period that were supposed to
> define credit,  price and foreign trade policies,  as well as a forecast of
> the actual growth of economic aggregates based on the production plans of
> firms and development plans of localities and republics.    It was not a set
> of commands,  quantity controls,  or directed allocations,  nor was it the
> apparatus to effect them (Susan Woodward, *Socialist Unemployment: The
> political economy of Yugoslavia* [Princeton,  NJ,  1995: Princeton
> University Press])
> 
> The most salient feature of the Yugoslav economy,  however,  was its rate of
> unemployment.       Yugoslavia,  after the late 1950s,  had an unemployment
> rate higher than most countries in western Europe.    Officially the rate
> was around 6% in 1958,  and rose steadily to more than 15% by 1985.
> However,  as is the case in the West,  official figures tell only half the
> story.    In Yugoslavia,  only those registered were actually counted as
> unemployed.    The reason for registering was to obtain health insurance and
> child allowances,  some cash assistance,  and access to retraining programs.
> Unemployed workers who did not need or were ineligible for those services
> would not register.    Over the entire postwar period,  the employment
> bureaus found work,  on average,  for only 22 per cent of people newly
> employed each year,  and this number declined to 8.3 per cent a year by
> 1973-80.    The growing ineffectiveness of the government's unemployment
> bureaus caused a further drop in registration, so we can say with some
> confidence that the actual unemployment rate was higher,  and perhaps
> substantially so.             
> 
> It seems to me,  Professor Rosser,  that,   far from being comparable with
> others in the CMEA,  Yugoslavia was simply the earliest (and,  as it turned
> out,  the most painful and traumatic) example of a process that other states
> would eventually undergo,  confronting the same unintended consequences of
> economic reforms required to bring socialist states into the world economy.
> 
> Louis Godena
> 
> 
> 
>         
> 
> 
> 
>      --- from list marxism-international-AT-lists.village.virginia.edu ---

-- 
Rosser Jr, John Barkley
rosserjb-AT-jmu.edu




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