Who needs the enterprise?
Borovo 1988-1991

Self-management

Understanding the scope and potential of self-management institutions in Yugoslavia demands much more research work and space than we can currently offer here. Nevertheless, the analysis of the turbulent times of SFRY in Borovo gives insights into understanding the self-management system in the moment of crisis.

The 1988 summer strike, the turning point in the lives of Borovo workers, temporarily suspended self-management organs, and set up a strike committee as a working body for negotiations with the management. This information could mislead us into thinking that self-management institutions in SFRY were not serving their function. However, this is only partly true. Awareness of the growing futility of workers’ decision-making through self-management within the context of structural federal reforms is probably the reason Workers' Council meetings frequently lacked quorum in the last months of 1988. Already in early 1988, Workers' Council members complain about the fact that their decisions are often overturned by orders from the top, bringing the meaning of their work into question.

Discussions on business activities and wages take place at the moment when decisions have, de facto, already been made outside the self-management circle. Namely, the influence of workers’ decision-making was very limited during the economic crisis: limits are set by political decisions related to legislative changes and the decisions made by financial institutions. Workers cannot influence any of these two spheres - political or financial - by means of self-management organs, and there are no other institutional mechanisms through which they could influence politics. In these conditions, instead of accepting the limited range of self-management institutions, they form strike committees as the platform for articulating authentic demands.

In the following period, it was necessary to make a decision on how to reorganize the enterprise. Despite the fact that objectively, the situation seemed hopeless, and self-management decision-making appeared to be a mere formality, discussions about the reorganisation of the COAL (Composite Organization of Associated Labour) and reaching a new self-management agreement were very intense, and the executive management invested a lot of energy into them. Two referendums on the new self-management agreement, determining the distribution of income and labour cost, were unsuccessful and were repeated. In the discussion about the reorganization and distribution of income, leaders started from the assumption that the state of “unlimited social responsibility” is untenable within the Combine, that it is necessary to distinguish “effort from idleness,” to reward “quality work,” to discourage work that “lacks quality” etc. In December 1988, after two failed referendums on the new self-management agreement (SAS), the Factory paper writes: “There is no need for a new referendum on the SAS and the SOUR income, because from this year on, new laws will be adopted, followed by reorganization and other changes related to overcoming the crisis and implementing new economic policy measures”.[1] In late 1988, after an enormous effort by the trade unions, the managing directors and politics, the referendum on reorganization finally passed. Let us mention that already the following year, such efforts are far less frequent, since the workers have largely lost the possibility of influencing the decision-making processes with the adoption of new laws. Before self-management was gradually abolished, in late 1988, the workers’ influence still presented at least some obstacle to the reforms planned on the level of the enterprise, although it does not offer a solution to objective economic problems.

Therefore, it is not that the reorganization of the Combine or the new distribution would in itself be wrong; actually, the workers themselves perceive the need to reorganize the enterprise and introduce a new model of remuneration. The problem is that simultaneous to “self-management decision-making”, processes take place which deteriorate the position of the Combine and limit the sphere of the workers' influence: more and more experts leave the Combine (sometimes starting their own companies), there are disagreements among workers' organizations with regards to the distribution of debt and income, and the new mode of distribution creates tension between the workers with different professional qualifications.

The trend of excluding workers from decision-making continues in 1989 as well. The article “Who we are, where we are going – after the changes,”  illustrates how registering Borovo as a complex enterprise (July 1, 1989), in line with the legal changes that marked the demise of Yugoslav socialism, and passing the Law on Amendments to the Law on Enterprises (July 7, 1989), creates conditions for abolishing self-management and strengthening the authority of business management. For managing directors, changes are manifested as the shift from a “decidedly coordinating role” to a managerial one. They are granted greater freedom and authority in both the work process and on the market: the managing director “does not need to, as earlier, be granted a series of approvals”, but at the end of each year, they have to present business results to the workers' council. As the result of these changes, the Workers' Council is excluded from decision-making, and its function is reduced to a yearly analysis of the executive management's business success. Interestingly, in the article this is presented as the “ultimate goal of self-management”.[2] This points to another phenomenon. Namely, while legislative reforms are gradually abolishing self-management, the term itself still remains and is used to legitimize the reforms, as the example above illustrates. Self-management, a word so often used by the authorities, now becomes void of meaning. Another article, tellingly entitled “Market does not hamper self-management”, says that “the management of the company must be relegated entirely to the technostructure, meaning the executive director, executive management, individuals assigned to the job, investors.”[3] Abolishing self-management is ultimately presented as its desirable adjustment to the new, market conditions. The economic reform, i.e. “the process of social reconstruction and innovation”, is thus compared in significance “only to the historical moment” of introducing self-management.

Another important issue that needs to be emphasized is the danger of reducing the democratic potential of workers' self-management - which was never fully realized in Yugoslavia - to the narrowly, technologically understood economic sphere. The following example illustrates the scope of possible implications of gradual abolishment of self-management in SFRY. The Factory newspaper reports on the event in the late 1989, when the manager of one factory decides to shift a portion of the existing paid vacation from the Day of the Republic to “around New Year's Eve”, adding that legally, he could have made the decision without 'self-management decision-making,' but he wanted to persuade the Workers' Council “with arguments”. Business management provides economic justification for this decision by claiming that demands of foreign buyers need to be met.[4] The Workers' Council delegates are not content with this explanation, and believe that the decision will inevitably cause divisions in the Combine’s multi-ethnic and multireligious collective, especially with such violent rise of nationalist rhetoric in the country. Namely, depending on whether the newly freed days be distributed before or after New Year’s Eve, the situation would effectively allow either Catholics (i.e. Croats), who celebrate Christmas before New Year, or Orthodox Christians (i.e. Serbs), who celebrate it at a later date, to get days off work. “Now we are being divided through religious holidays,” says one of the worker delegates.[5] Still, despite the Workers' Council's pronounced opposition, and owing to the recent distribution of authority, the director’s  decision is upheld. Similar decisions would have been more difficult to implement at a time when the Workers' Council as a collective decision-making organ had more power, simply because an agreement had to be reached in order to make a decision. In this episode from the transitional period, the market logic promoted by the executive management succeeds in prevailing over the social one, which worries the delegates from the worker’s ranks, thanks to a political decision (to abolish self-management) that is completely out of the workers’ reach. Examples from our archives in which workers’ councils go beyond the role of the mere mechanism of transmitting imposed decisions seem to suggest that these institutions have a certain democratic potential, especially in the late 1980s, when existing political relations are in any case destabilized. The democratization of a narrowly understood political sphere - introducing party pluralism - happens simultaneously with abolishing the last remnants of economic democracy.[6] The existence of self-management as a form of industrial democracy complicates the narrative of the inseparability of democracy and capitalism: in our example, the democratic body defies market logic, but is unable to act. It means that clear-cut distinctions between purely “political” and merely “economic” are hardly sustainable, and that the effects of the democratization of the working sphere - interventions into the wider, complex social sphere - move beyond purely economic concerns. Besides, it is clear that the workers and their delegates recognize at this time the danger which ethnic and national divisions pose to the realization of their interests.

Bibliography:

Cvek, Sven, Ivčić, Snježana, Račić, Jasna. 2015. “Jugoslavensko radništvo u tranziciji: ‘Borovo’ 1989.”, in: Politička misao 52, (2), pp. 7-34.

Pauković, Davor. 2008. “Predizborna kampanja u Hrvatskoj 1990. u svjetlu hrvatskog i srpskog novinstva”, in: Časopis za suvremenu povijest (40), 1: pp 13-32.