The Return of Nationalization

Do you agree with the view that this latest period is no different than the socialist one that preceded it in that all reforms had ground to a halt the minute the time came to forgo state or quasi-state ownership?

Yes, or to put it differently, the market is a foreign body in socialism, and also in this particular system. The transition to private ownership has always been and still is a transition to a different system.

Are you speaking about two models of ownership or two types of power?

It's a clash between two systems. One is collectivist and proceeds from collective ownership and party ideology as the connective tissue of society, while the other is based on private ownership, competition, profit and personal prestige.

As long as economic decisions are taken on the basis of a logic of collective ownership and in line with it, the prospects are very poor indeed for substantive changes in the direction of democracy or in the manner of thinking. What we have now is a continuation of the same, an attempt to preserve the system by mimicry of different kinds. Like every delusion, it cannot last very long.

When you mention mimicry, do you also mean privatization up to the level of sales outlets, the current maximum permitted by law?

Private ownership is on the fringes of society, it has no political weight and exerts no influence. Large socially-owned firms are at the center of political decision-making. Owing to a drop in efficiency, many such firms are closer to the state than ever before, or have been actually nationalized.

The dispute between the Serbian Government and POLITIKA has caused a storm, but most people remain ignorant that a great many of large firms in Serbia have already been quietly nationalized. Their exact status, given the silence of the establishment, can best be gauged from the support for POLITIKA that came from the workers of "Crvena zastava" (motor company).

We have to respect their experience. The dispute over POLITIKA is only the tip of an iceberg, but could also be decisive in the further course of privatization in Serbia, all more so as the Federal Prime Minister has placed privatization at the top of his priority list, a commendable commitment. If the nationalization process succeeds in encompassing POLITIKA, I believe that no major privatization can be expected within a year o two. Next in line for nationalization are scientific institutions, sports organizations, other institutions. The aim is to form a fully-integrated social system that will be worse than what we had in the years following World War II, both in regard to economic and political liberties.

Could you comment on the official thesis that a distribution of shares among POLITIKA's employees would represent a theft of social property?

All I have to say is that there couldn't possibly exist a bigger theft than that committed by an inefficient and wasteful state. We cannot calculate, but only guess at the enormity of the damage we suffer on account of curbs on private initiative, the ban on entrepreneurship. The greatest theft that you can imagine is when your future is stolen, and we are now in a situation when the future of entire generations is uncertain, to say the least. POLITIKA cannot be exempted from a comprehensive program of privatization which must be based on law. It's only natural that government is also entitled to a share in the company, but only to that part of the property in which it made real investments and not on the basis of concessions and exemptions. The fact that the Government had special reasons of its own to exempt POLITIKA from various taxes does not give it the right to claim ownership on that basis. Given that it was the citizens who covered the tax exemptions, they are entitled to shares in POLITIKA. What the Serbian Government wants to do now contravenes its own laws, which I hold as very bad, as they indirectly restore and consolidate the position of state ownership in the economy. (...)

Apart from this, when the last reform was being toppled, I warned that the return to hyper-inflation would provoke a civil war. That is what happened in former Yugoslavia, and there is no reason why it shouldn't happen again in this Yugoslavia, since that is one of the ways of resolving economic problems.

Schumpeter has once written that sound currency is the biggest threat to the ruling party.

Precisely. The people's attitude towards currency is their attitude towards the authorities. If you have a convertible currency, if people are "running away" from it by buying foreign currency, you have a certain sign of confidence in the government and its policy. (...)

I simply cannot believe that anyone can think that there could be more altruism amongst civil servants than amongst employees. It's just impossible to prove anything of the kind. Employees of firms are creators by nature, while civil servants simply redistribute what others have previously created, a process often characterized by atrophy and parasitism. It's particularly amazing to hear claims that the same is being done in the West, as it is deliberately or unwittingly forgotten that Western governments operate within a totally different economic and political environment, in short, they are responsible and serious governments. (...)

On the other hand, the attempt to privatize socially-owned firms by selling them exclusively according to the one-by-one principle is in effect the postponement of genuine privatization. There exists no capital in the country for such acquisitions, so privatization could be drawn out forever, more precisely, until the total collapse of social ownership.

Who would be prepared to take such economic and non-economic risks?

No one, except in situations where an unusually rapid capital turnover would be possible, but that's usually on the verge of legality.

Would you then agree with the thesis that Serbian and Montenegrin governments are pursuing policies in total discord with what's inevitable, and thus in effect sawing off the branch on which they're sitting?

What we are witnessing is an illusory privatization - i.e. nationalization of the economy and everything else is under way. Hence the gradual erosion of the remaining part of socially-owned property, today worth perhaps 20 billion dollars. We are not yet able to comprehend that the value of capital is calculated on the yield it can accrue and not on basis of the number of desks and machines. All estimates of its value so far are completely arbitrary, and cannot show what should go to the scrap-heap and what is capable of generating profits. All that is certain is that the current privatization policy will bring no good to anyone.

Nevertheless, I hope the new Federal Government is on the right trail, in spite of enormous difficulties it will face. I also hope that Americanization of the Yugoslav government structures will result in speedier privatization of the economy. In short, we must privatize, privatize, privatize...