The Scream Of The Downtrodden

Last Wednesday (August 18), the Federal and Republican governments finally announced a package of measures aimed at ``radically curbing the chaos on the market.'' Those who expected miracles did not find anything new. Briefly, the package contains a new division of competencies between the federal state and the republics with regard to a control of prices, in which the responsibility for the high cost of a consumer's basket has finally been laid at the doors of the authorities in Serbia and Montenegro. In this way, Yugoslavia has been absolved of responsibility for the misery of the masses. Serbian Prime Minister Nikola Sainovic and Montenegrin Prime Minister Milo Djukanovic are probably convinced that by taking over control of foodstuffs and the infrastructure, they have kept the main levers of power in their territories, while Federal Prime Minister Radoje Kontic can now breathe more easily, since he will continue to be powerless, but at least he won't be the guilty party.

The Serbian and Montenegrin governments took advantage of their competencies to freeze prices at the level of August 17, and to ``correct the disparity'' in prices, i.e., to hike prices. For example, the price of meat has gone up five times since the federal government's July price freeze. The price of bread has gone up by 30%. It remains to be seen how long meat will be available at 2 DM/kilo, a question which can easily be answered. There won't be any, just as there hasn't been any so far. There will be bread, because the wheat has been bought up in Vojvodina (a Serbian province). However, Montenegrin Prime Minister Djukanovic announced that he would send a policeman and two inspectors to each bakery, to keep watch by the ovens, thus implementing a macro-economic policy.

The devaluation of the dinar from 49 to 105 million for one US dollar, would have been a novelty, if things hadn't continued as usual--with the overestimating of the weak domestic currency. The initial price of the Deutsche Mark at 62.075 million dinars, is already 100% less than the average black market price.

What the public had expected to be some sort of an ``anti-inflationary program,'' does not contain practically anything linked to the budgetary deficit and the printing of money without cover. Specifically, it contains announcements which are contradictory to all anti-inflationary policies. National Bank deputy governor Zarko Trbojevic was forced to announce that the ``independent'' central bank had approved a primary issue of 26 million billion dinars (currently around 260 million DM) for the third quarter. As much as 64% of this issue is earmarked for the ``monetization of the budgetary deficit.'' When this primary issue is ``faced'' with the allegedly ``controlled prices,'' it will become clear that only two outcomes are possible: an (un)controlled rise in prices, or the disappearance of all goods from the market. We can expect both variants.

This policy concerning the issuing of money is not without meaning and significance. It is absolutely compatible with the basic political strategy at the center of the economic policy being followed. This strategy can be termed as an accelerated return to ``early Socialism.''

The main characteristics of ``early Socialism'' are an economy in which there are no ``business subjects.'' Major economic decisions such as those pertaining to prices are made by the state. The ``balance'' of all goods is made by the state leadership, the shops are empty, and the infrastructure does not work. Serbian Prime Minister Nikola Sainovic did not conceal the fact that decisions concerning ``obligatory production'' had been made the ``night before,'' along with those on ``guaranteed salaries'' for the employed and ``guaranteed social protection'' for the unemployed and pensioners. Therefore, decisions concerning a return to ``early Socialism'' have already been made, and when all that Sainovic has announced is realized, we will go even further back, to the ``communism'' of primal societies.

According to what VREME has managed to learn, this ambitious package of measures adopted by the federal and republican governments was made without the participation of experts sitting on ``economic councils.''

The old story that the package will ensure employment for those who wish to work, has been put into circulation once again. It would be worthwhile to check the list of changes in the tax laws which the Serbian government is now pushing through parliament. There seem to be some rational measures which could motivate the state administration to a better securing of finances by taxing financial transactions and property, rather than forcing the primary issue, and counting on gains from it.

Taxation policy, however, cannot do much with a monthly inflation which in August passed 1,000%, and the further uncontrolled printing of money. Prime Minister Radoje Kontic, in an effort at finding some thread in his policy, said, during the promotion of the new measures, that the aim of the package was to decrease monthly inflation to 50% (in December). In other words he is behaving like a surgeon who promises a man that after a year of therapy he will not be losing 2 liters of blood per day, but just one. This economy cannot take the current rate of bleeding, i.e. the loss of substantial capital until December, nor can the people.

On state television Prime Minister Sainovic received a lot of support from the program's host. It remains to be seen if the trio of prime ministers can survive after September 15, the deadline made by Serbian Radical Party (SRS) leader Vojislav Seselj, until which the authorities would have his support in parliament. The package overflows with solutions a la Seselj. The police have been warned that they must work in ``three shifts,'' and the people have been called on to report all those who are ``muddying the water'' (dealers, black marketeers and idiots). A distributive economy still has to be introduced. Seselj may not wait for the Socialists to do what he knows better.

The economic situation is hopeless, but the authorities are not deluding themselves with the widespread belief that misery among the Serbs does not give rise to social rebellion. They already fear the ``desperate scream of millions of the downtrodden'' (Alfred Rosenberg, German Nazi and writer), because the ``ethic of herbivores'' (Oswald Spengler, German philosopher) is not developed here. Apart from Seselj, there are other candidates for the leadership of this ``heroic realism.''

The problem raised by the package which turned up last week does not lie in the fact that it is confused and contains a bit of everything, but in the fact that the state has taken everything into its hands.