Guest Post: Social Ownership
By Michael Suede of Fascist Soup
In listening to some old lectures by Rothbard, I heard him bring up a
concept called “social ownership” that was being pushed by communists
in the former country of Yugoslavia as a way of managing the ownership
In Yugoslavia there was a communist general named Josip Broz, who
commonly went by the name Marshal Tito (how can you not love a guy that
walks around calling himself Marshal Tito?). Marshal Tito is not your
average run of the mill commie hahaha. I actually somewhat like this
From his biography:
From 1945 to 1953 Tito acted as prime minister and
minister of defense in the government, whose most dramatic political
action was the capture, trial, and execution of General Mihajlovic in
1946. Between 1945 and 1948 Tito led his country through an extreme form
of dictatorship (rule by one all-powerful person) in order to mold
Yugoslavia into a state modeled after the Soviet Union. [that last part
about wanting to model Yugoslavia after the Soviet Union is not true] In
January 1953, he was named first president of Yugoslavia and president
of the Federal Executive Council. In 1963 he was named president for
By 1953 Tito had changed Yugoslavia’s relationship with the Soviet
Union. He refused to approve Soviet leader Joseph Stalin’s (1879–1953)
plans for integrating Yugoslavia into the East European Communist bloc
(a group aligned for a common cause). He now started on his own
policies, which involved relaxing of central control over many areas of
national life, and putting it back into the control of the citizens. Although
relations between the Soviet Union and Yugoslavia improved when Soviet
leader Nikita Khrushchev (1894–1971) visited Belgrade after Stalin’s
death in 1955, they never returned to what they were before 1948.
Marshal Tito is one of those guys that accomplished a tremendous
amount of good for his country, which is why you’ve probably never heard
his name before.
You see, Tito came to recognize that while the Marxists constantly
called for the ownership of industry “by the people,” they never
actually got around to making this happen. Tito believed that
“ownership by the people” must obviously preclude the ownership of
industry by the State. In Tito’s view, communist social ownership
should consist of the factory workers owning a share of the company they
The communist followers of Tito were inherently anti-statist. They
made a clear distinction between State ownership and social ownership.
They saw that the two were not related to each other in the slightest.
When Tito gained political control over Yugoslavia in 1945, he began
aggressively implementing his policies of social ownership. Those
sectors of the economy in which the public assumed ownership of industry
soon began to prosper. This lead to increased reforms and greater
public control of industry.
The communists ran into some problems though. The workers wanted to
be able to retain their ownership in a company as their own private
property. This caused some tension between the old hard-line Marxists
and the general public. The workers began calling for what amounted to
a stock exchange so they could trade their shares of ownership with
each other and pass them on to their children.
By 1952 the new system was in place. It had a price system between
plants, and a profit and loss system in the plants. The banks were
decentralized and consumer co-op banks (credit unions) took the lead
role in lending. This lead to success after success as the economic
problems the country was facing resolved themselves.
By 1967 a third phase of reforms were implemented that were much more
free market. The price system became completely free, profit and loss
tests for all firms were implemented, firms could go bankrupt, and State
control of investment was reduced. By the end, the State took only
20% of industrial profit in taxes – less than the United States.
The Slovenians and Croatians became the most industrialized as they
were the most accepting of the “social ownership” concept. The Serbs
remained the most statist in their economic views so they tended to lag
far behind the economic growth of the Slovenians and Croatians. By the
end, the Slovenian or Croat communists sounded like Barry Goldwater or
Ronald Regan. They were even saying things like, “The individual should
not have to sacrafice himself for the social welfare.” They even
wanted a gold standard and a freely convertible Dinar.
Rothbard’s lecture ends without him getting into the specifics of the
civil war that led to Yugoslavia’s break up, but the reasons behind the
conflict should be obvious.
Croatia declared independence from socialist Yugoslavia
in 1991. War broke out in 1991 with Yugoslav National Army open attacks
on Croatia. At the end of 1991 there was full-scale war in Croatia. The
war was between the Serbs, in what had been the Republic of Serbia in
the former Yugoslavia, and Croats in the newly independent Croatia. The
reasons for the war are quite complex. To greatly simplify, while
Croatia and Slovenia wanted to separate from Yugoslavia, Serbs were
largely unwilling to allow this to happen, probably largely for economic reasons.
At the 14th Extraordinary Congress of the League of
Communists of Yugoslavia, on 20 January 1990, the delegations of the
republics could not agree on the main issues in the Yugoslav federation.
As a result, the Slovenian and Croatian delegates left the Congress.
The Slovenian delegation, headed by Milan Ku?an demanded democratic
changes and a looser federation, while the Serbian delegation, headed by
Miloševi?, opposed it. This is considered the beginning of the end
Moreover, nationalist parties attained power in other republics.
Among them, the Croatian Franjo Tu?man’s Croatian Democratic Union was
the most prominent. On December 22, 1990, the Parliament of Croatia
adopted the new Constitution, taking away some of the rights of the
Serbs granted by the previous Socialistconstitution. This created
grounds for nationalist action among the indigenous Serbs of Croatia.
Closely following the adoption of the new constitution, Slovenia and
Croatia began the process towards independence, which led to a short
armed conflict in Slovenia, and all-out war in Croatia in areas with
substantial Serb populations.
You see, statist socialists always come to depend on the economic
success of freedom in order to support their statist programs.
Socialist nations always have an incentive to violently attack the
productive members of their society if those productive members attempt
to leave the tax system.
There are tremendous parallels between the Yugoslavian civil war and
our own Civil War. The causes of both are nearly identical. The South
wanted to withdraw from the Union because the North had nullified the
fugitive slave act. By nullifying the fugitive slave act, the North had
removed the only remaining economic incentive for the South to remain
in the union.
The southerners were putting up with high levels of federal taxation
and tariffs, without any return on those tax dollars, simply because
they needed the North’s cooperation in keeping slavery in place.
Without the cooperation of the North in returning fugitive slaves, the
South had no remaining economic incentive to remain in the union.
The South viewed themselves as nothing more than tax slaves to the
North. The money that was collected in federal taxes was almost
exclusively spent in the Northern states. Since the South didn’t want
to be tax slaves to the North, they withdrew from the Union.
In so doing, the South did not want to invade and conquer the North,
they simply wanted to be left alone. The Northern states had made it
quite clear to the South that if they attempted to leave the union, they
would be attacked. This is what caused the South to fire the first
shots, since the South was dead set on leaving the union, they figured
they might as well position themselves in an as advantageous a position
as possible before the North could muster an invading Army.
If the North had simply let the South walk away, there would have been no Civil War in America.
However, the North could not stand for this loss of Southern tax
revenue, which is why they violently attacked and invaded the South.
Lincoln made it clear why aggressed against the South in his letter to Horace Greeley:
My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If
I could save the Union without freeing any slave I would do it, and if I
could save it by freeing all the slaves I would do it; and if I could
save it by freeing some and leaving others alone I would also do that.
What I do about slavery, and the colored race, I do because I believe it
helps to save the Union; and what I forbear, I forbear because I do not
believe it would help to save the Union. I shall do less whenever I
shall believe what I am doing hurts the cause, and I shall do more
whenever I shall believe doing more will help the cause. I shall try to
correct errors when shown to be errors; and I shall adopt new views so
fast as they shall appear to be true views.
Lincoln was an ardent racist, as is evidenced in numerous speeches
and writings. He even proposed sending all the blacks back to Africa at
one point. The US Civil War was strictly about maintaining the flow of
tax revenue from the South into Northern coffers. This
cause parallels almost exactly with why the Serbian military attacked
Croatia after it declared its independence.
History repeats itself, only in Yugoslavia, the South won.
Yugoslavia commentary starts at time 1:07:30
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