The development of Yugoslavia’s consumer culture was powered by high rates of economic growth in the decades following the war. Real income per worker grew at a rate of 6.8 % between 1960-70 and private consumption in the period 1970-1977 had an average growth rate of over 6 % (Patterson 2011: 39). Concomitantly, the period from 1947 to 1985 marked an average annual growth in GDP of 5.2%, whereas industrial production grew at an average rate of 12%. Macedonia had a slightly above average growth rate in this period of 5.8% per year (Miljković 1986: 197) and much of it was owed to heavy government investments in the productive sector. In Shtip this resulted in the rise of the textiles and garment industries in the shape of Makedonka and Astibo that dominated the town’s economy throughout the socialist period.
Both Makedonka and Astibo were mainly the result of federal policies to tackle the issue of female unemployment in the southern regions. To this aim federal funds were channelled mostly in labour intensive, low paid branches such as textiles, electronics and tobacco processing (Mežnarić 1985: 216). All of these industries relied heavily on female workers as such work was seen as particularly suitable for women because it corresponded with “similar work within the family and household” (ibid: 217). Credits for these investments were received by the republic from a federal budget consisting mostly of foreign loans intended to boost the export sector (ibid: 279).
Makedonka (literally meaning “Macedonian woman”) began production in 1952 with 120 workers following the purchase of equipment from the UK. It quickly developed into one of the largest and technically modern textile factories in Yugoslavia, producing
yarn, fabrics and cloth for the domestic market. As production expanded a weaving plant was added in 1955, clothing manufacturing line in 1962 and a jeans factory in 1983. By the seventies it also included its own restaurant serving food to the workers, three discount stores, a library and a medical unit for emergencies. The enterprise also oversaw in the early seventies the construction of apartment buildings for its workers in nearby Shtip, which they could purchase through different types of credits, mainly from the firm itself. Funds had been allocated for the construction of holiday facilities for its workers, a hotel and a camp site, on Lake Dojran in southeast Macedonia4. By 1987 the total number of workers stood at roughly 6000. Inside the industrial complex one finds more than just a gritty textile factory. The various buildings that housed the different departments are designed to be separated by luscious lawns and greenery, speckled with fish ponds, fountains, roaming pheasants as well as art statues celebrating the men and women of socialism.
The fibres and cloth produced in Makedonka were used in the clothing production unit of Astibo, whose main business was the design, production and distribution of men's, women's and children's clothes. The number of workers in Astibo grew from 119 in 1962 to over 2000 in 1972, and was by this time the biggest producer of casual clothes in all of Yugoslavia, exporting half of its products to foreign buyers. The factory grounds were similarly arranged to improve the overall ambient and paid special attention to the needs of its largely female workforce by building a kindergarten on site and providing a healthcare unit offering gynaecological check-ups, treatment and advice on reproductive health (Bonfiglioli 2014: 11).
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However, the years of prosperity and economic calm that defined the sixties and seventies respectively were followed by the economic gloom of the eighties, ripe with inflation, unemployment and a mounting foreign debt, experienced by ordinary Yugoslavs as a dramatic reversal of the established trend of rising living standards (Pedrotty 2010: 340). The policy of borrowing western capital in order to fund growth through exports turned out to be disastrous when western economies entered a recession after the oil price shocks of 1973-4 and 1979 and blocked Yugoslav products (Gowan 1999: 85). The price of oil in 1980 was 28 times higher than it had been in 1971, whereas Yugoslav oil consumption rates had more than doubled in the same period (Miljkovic 1986: 166). At the same time, Yugoslav export industries that had absorbed the vast majority of borrowed capital experienced declining export rates. The end result was a huge trade deficit and piling foreign debt problem (Patterson 2011: 46; Jeffries 1993: 374).
This facilitated the turn to IMF supported austerity policies according to which the Yugoslav advantage in exports was in low labour costs (Woodward 1995: 281). The Kraigher commission, headed by the federal president Sergej Kraigher, was set up in 1981 to draft a stabilization program acceptable to the IMF. The report was released in 1983 and even though it recommended retaining the basic structure of social ownership it firmly concluded that increased efficiency and sustained profit levels were to become the only guarantor for employment (Jeffries 1993: 367; Hudson 2003: 59). The
guaranteed minimum wage was reduced by 1982 and two years later the revised income policy was signed by all republican governments. The government sought to increase exports and access to foreign currency as much as possible and reduce domestic consumption to a minimum along with all imports not critical for production
and public infrastructure all but ceased, resulting in an eighty percent increase in industrial action from 1982 to 1983 (Hudson 2003: 60). By 1984 overall consumption had dropped to levels of the pre-boom years of the late fifties (Miljkovic 1986: 133; Patterson 2011: 47). Shortages of basic goods and services became the new reality for a population that had only recently come to identify themselves as comfortable citizens of a prosperous modern country.
Fig. 4. Aerial View of Makedonia circa 1980
The vacation that once appeared to workers as another institutionalized hurdle were by this point an established part of consumer culture among workers. Already in 1984 the
Workers Daily was publishing articles lamenting that vacations are becoming too expensive for the working population and that it was “hard for our people to give up the habit of and need for summer holidays” (Duda 2010: 56).
By this time Yugoslav firms had resorted to subcontracting and making their production facilities available to foreign firms who sought to utilize the local labour force at sub- minimal wage levels (Schierup 1994: 84). The garment industry became a particular target for such arrangements with foreign suppliers dictating and supervising production that was for the great part seasonally oriented (Schierup 1994: 85). By the end of the decade the average length of work in a Yugoslav garment factory rarely exceeded six months, subject to the demands of the market, with subcontractors receiving few or no orders when markets went bust. With an average pay of 3$ a day, Yugoslav textile workers were by 1989 earning less than their Indonesian and South Korean
counterparts, their main competitors on the market (Schierup 1994: 85).
Schierup (1994) argues that from the late seventies onwards, Yugoslavia entered a process of “re-peripheralisation” by retreating to a level of relative economic
development vis-à-vis Western Europe that characterized the post-war period. As the economic decline slowly reached its apex in the late eighties, some sociologists began documenting the de-urbanization of the industrial working class and their retreat to traditional forms of peasant agriculture for their subsistence. The Croatian sociologist Vlado Puljiz expressed the irony with which “the individual peasant holding which the agrarian policy, during the whole post-war period, has endeavoured to beat down as a survival from past times, has today become the main cushion for the crisis, warding off social misery of huge dimensions” (in Schierup 1994: 83). The very things that were for so long dismissed as backward and disappearing now appeared most vital (Ferguson 1999: 250). Woodward adds that this was followed by resorting to older peasant norms of reciprocity and mutuality that supplemented the declining purchasing power of workers with “barter, gifts, friendships, political networks and connections and the reciprocal obligations of kinship and ritual kinship” which only increased “the
barriers to collective political action for change” (1995b: 56). In other words, economic decline was experienced not only in terms of diminishing material resources, but as a complete breakdown of the linear modernizing narrative of the socialist project. Much like Ferguson’s analysis of African industrialization, the achievements of
“development” it appeared, were clearly reversible (1999: 13).
The consumer culture that the Yugoslav leadership had carefully employed to deflect criticism of both socialist rule and regional grievances could no longer be relied upon. The economic crisis directly fuelled regional discontent among the republics and nationalist leaders were quick to capitalize on the highly unpopular austerity measures that were beginning to be introduced by the federal government (Pedrotty 2010: 340). The end of the Cold War signalled the loss of Yugoslavia’s international position as a link between the two blocs and Western support grew for separatist politicians in Slovenia and Croatia who were advocating that they should stop subsidizing the poorer republics’ ill planned economic projects (Ramet 2005: 56). Domestic economic liberals and nationalist leaders had been marked for support by Reagan’s policies ever since the early eighties in order to stimulate a “quiet revolution” to overthrow the Communist leadership with the use of economic instruments (Hudson 2003: 57). The demise of the Soviet Union only upped the stakes.
In 1989 the pro US Yugoslav prime minister Ante Markovic, led a series of attempts to salvage the economy by implementing an IMF sponsored economic shock therapy program that reduced available resources to individual republics and increased internal tensions (see Lampe 2000: 356). The following year however US congress cut off all aid, loans and credits to Yugoslavia, specifying that in order for aid to resume republics were to hold democratic elections under State Department supervision after which funds would be channelled only to those forces identified as “democratic” (ibid). A politically
and economically bankrupt Yugoslavia quickly slipped down the slope of war and disintegration that defined much of the decade of the nineties.
If the Soviet model was to favour power over legitimacy, the Yugoslav model
emphasized legitimacy over power. When political structures did actually impose tight restrictions on consumer goods it was mostly under the pressure of “market force”, IMF reform programs and concerns about the profitability and efficiency of firms. But even then, the question of profitability was highly specific given the social ownership of the means of production. Firms were expected to operate at a profit and accumulate surplus value which could be then redistributed in order to secure higher standards of living for the general population. Creating and accumulating surplus value was never “an end in itself” (cf. Weber 1992: 34) but a means for promoting the ideals of political
participation through production and fostering a middle class consumer culture among socialist workers.
This tension between the two poles of power and legitimacy defined internal debates within Yugoslavia for decades. Economic activity was periodically left to market regulation particularly during the sixties, only to force the state to start pulling levers whenever market behaviour exacerbated inequalities and failed to redistribute wealth in accordance with socialist morality (Estrin 1991: 189). This would spur liberal
pragmatists into reiterating that interventions designed to redistribute only decrease overall profits and diminish the total available goods for redistribution (Lydall 1989: 76, cited in Jeffries 1993: 389; Woodward 1995b: 49).
When I interviewed Joncho, a former manager of Astibo’s engineering department, he explained to me the irresolvable contradiction in these priorities. He resigned from his position in Astibo after a prolonged strike by the workers in 1988. Faced with rising
inflation, the strikers demanded a no less than 50% increase in wages. which the management had deemed an impossible demand if the factory was to stay afloat. They nonetheless yielded to the pressure after an intervention from the local CP branch. Joncho was incensed. In his words “we were the experts, the directors and it was our job to know what could or could not be done.” The ability of workers to wrestle this concession was seen as an illegitimate assault on the cultural (knowledge and expertise) and symbolic (capacity to define the terms of the debate) capital of the managerial elite.
As it turned out, the “experts” won the debate and by the end of the eighties the main obstacle to efficiency and profitability was firmly identified in the tendency of workers to scale up wages at the expense of reinvestment through the self-management system. The emerging consensus resulted the new Law of Enterprises in 1989 which virtually abolished self-management and social ownership and gave managers full rights to hire and fire in accordance with strict market dictates (Woodward 1995: 281). Enterprises were to be managed by private owners and creditors. The new Banking Law dismantled the country’s socially owned banks which froze all credits to the industrial sector. Huge numbers of industrial enterprises that had been struggling for over a decade were now being driven into outright bankruptcy (Hudson 2003: 60). Reflecting on these hard times, Joncho shared his thoughts on what he saw as a logical and inevitable outcome of an historical flaw:
“To be honest what happened to us would have happened anyway sooner or later. The inflation, the depression and so on ... Let me explain something. The mentality of today’s workers, of workers back then and workers in the Soviet Union is completely different. Those same workers during Tito thought that they were the vanguard, that the working class was the motor, you know this was in a way taken out of Capital and from Marxism as their currency. And they thought the working class was the vanguard of the country.
Now firstly, the very word “vanguard” cannot mean the majority, it can never be the mass of people. You cannot have ninety percent of the society being the “vanguard”. Even ten percent is too much for a “vanguard”. A “vanguard” is something that is absolutely unique with views different from its environment, and it is not accepted by the masses. That is why Galilleo was persecuted. Because he was that vanguard. You can’t have everyone being the vanguard. The rest can only be a rabble.”
Even though this narrative was captured in 2013, long after the collapse of socialism, Joncho still insists that it had been more than clear to him during socialist times that something was terribly wrong with the ideology of self-management. His views were hardly an isolated occurrence. By 1990 it became possible and commonplace for Yugoslav intellectuals to define the economic decline as “the problem of economic efficiency of self-management system in general” (Kavcic 1990: 834) and that enterprise success depended mainly on the “role of top managers” whose main
complaints were “that they do not have enough power” (ibid: 848). The decisive shift to market principles in 1988 only increased the unease with which the liberal technocratic elite experienced the formal submission of their authority as experts to the worker’s councils and the local commune. Although considerable, the political power of the technocratic elite was never completely removed from their legally defined obligation as managers to always “take into account the broader social interests of the working organization” (ibid: 837), an obligation that much of the technocratic elite found to be in contradiction with their primary task of running an efficient enterprise (ibid). Once the rules of the game began to break open many would eagerly participate in the unmaking of the historical and economical “aberration” that became the socialist state and the self- managing worker.