Transferencia • Descripción de las

In the second half of the 1960s, when the general trend toward a market economy in Yugoslavia occurred, the replacement of self-management by workers’ shareholdings was proposed. The idea was initiated by the premier of Slovenia Stane Kavcic, but politicians and economists in other federal republics of the former Yugoslavia expressed the same understanding of how to reform self-management. Kavcic concluded that financial reforms should open opportunities to employees and citizens to place their “surplus money” into “an enterprise which could invest it, return interest and perhaps a little more, according to the net profit realised” (Antic 1971). It should be noted that the “surplus money” that was found among

individuals and inside companies was referred to as “past labour”. Ideologically, this was very important since communists usually claimed that the source of all wealth was labour and not capital. Now the origins of capital were found in labour, but “past labour”. Kavcic was particularly concerned with surplus money in successful companies that they were willing to invest in other companies but where the regulations prevented them from acquiring control of their investment by means of any form of ownership. Kavcic concluded that socialism should create instruments for the integration of companies; among these instruments “should be the investment of private capital in the socialist sector and the participation of private capital in realised returns” (Antic 1971).

Kavcic’s ideas were harshly rejected, critics claiming it was an expression of a managerial tendency to form an alienated “group ownership” (Likic Brboric 2003, pp. 109-112), which in this understanding would be opposed to workers’ interests. In fact, the Party leaders were afraid of losing their influence in the economy if a class of managers of big companies should be formed. The question remained how to motivate collectives to save and invest, and to refrain from maximising wages at the expense of investment and to postpone consumption.

Discussion was conducted in ideological language - about the relative importance of labour and capital in the creation of new value, according to Marxist teaching. The proponents of pro-market reforms insisted that socially owned assets could not be used rationally without the recognition of “value in past labour”. Former workers of a company, who had had deductions made from their wages to invest in the company, were under the system of that time prohibited from “using the fruits of their efforts”. It meant that the workers who left the company were prevented from enjoying the benefits of the investment in which they participated while they were employed in the company. Victory in the debate went to the advocates of the proper valuation of past labour (Uvalic 1992, pp 157 – 161), but the outcome was that workers with a longer employment period in the firm obtained a higher salary (bonuses per year of employment). Such an outcome did not solve the problem how to motivate workers to invest.1

During the 1980s a lot of initiatives to improve the financial market were undertaken. Several investment instruments suitable for the system of self-

1 _{Bonds as a form of rewarding past labour were proposed many times, among economists and}

even among leading politicians. Transfer of claims based on past labour to pension funds was also proposed but never seriously discussed (Dubravcic 1970).

management were introduced, but success was very modest. Joint investments and private investments were over-regulated. The investment that private investors could make was usually limited in time: when the initial investment by a private investor was repaid (with interest) workers that were engaged in this enterprise had the right to take over ownership. If one company invested in the capital of another, also employing workers of the company invested in, priority in income distribution belonged to the company invested in. The possibility of a permanent share in the income of the enterprise invested in was explicitly excluded, which discouraged such investment.

From the beginning of 1970 there were sporadic attempts by companies and local communities to issue bonds. In the 1980s, the possibility for public persons to sell fixed income and profit related financial instruments was regulated, but these attempts weren’t successful due to the absence of a secondary market for securities. The opinion that a secondary market for securities was “directly in conflict with the self managed economic system” prevailed. It was claimed that an efficient capital market must be liquid and it was deemed that this implies that speculators will dominate it and that their interests would prevail over the interests of the labourers (Uvalic 1992, pp. 172 – 173). This was considered unacceptable. An efficient market for securities also requires an autonomous banking system. But banks under socialism were considered “a service of associated labour”; that is, they were under the control of the companies that were their founders, and therefore they never took up the role of independent financial intermediaries. Since private ownership was restricted, the possibility of the establishment of a bank that was owned by individual depositors was not allowed. The power of ideology is notable here.2 _{These failed attempts to modernise socialism formed}

the immediate background for the discussion of privatisation.