Mladen Lazic asks: how have the processes of systemic transformation in Serbia and Croatia affected the lives and livelihoods of workers? Has the postcommunist abandonment of the "worker's state" led to social change? And how has this change affected the speed of systemic transformation.
1. Introduction
By the end of the 1980s the (ideological) idea that workers were the ruling class in socialism was abandoned together with the rest of the dominant mode of the system’s legitimization, to be replaced by another legitimization axiom: that the economic position of all social strata – including workers – would strongly (and permanently) increase in capitalism. Both claims were proven to be false. Sociological surveys demonstrated that workers were powerless even in the self-managerial system established in the Socialist Federal Republic of Yugoslavia/SFRY (Zupanov, 1983). On the other hand, the process of postsocialist transformation brought about an extensive spread of pauperization and rising economic differentiation, putting manual workers among the principal losers of socio-economic changes (Milanovic, 1999). This was especially true in Serbia, where economic hardships (as a consequence of transformation) were very much aggravated by a decade of civil wars and international economic and political isolation during the 1990s.
Even if workers in the socialist SFRY did not manage enterprises, their economic position was relatively protected by the nomenklatura. Furthermore, although workers were not a politically dominant group, the real power holders (nomenklatura) proclaimed their rule in the name of the working class. The dominant place of workers in the ruling ideology in socialism was never questioned, and in the SFRY this place was additionally stressed by widespread scientific interests in studies of the workers’ management. The working class lost all these advantages after the start of capitalist transformation: job security, wage protection, political and ideological representation, and even the attention of researchers. Public interest for the class arose only when severe economic hardships of its members forced them to organize protests (which were, as a rule, fragmented, short-lived, and unsuccessful).
Some elements of the changing socio-economic and political position of the working class during the capitalist transformation will be studied in this paper. Its specific aim will be to show the ways in which the processes of transformation in Serbia and Croatia led to the working class’ fragmentation, considered to represent one of the main causes for a severe deterioration of all elements determining the social position of this class. Transformation in Serbia and Croatia started from the same model of “liberal socialism” and the two countries were actors in the war that took place during the 1990s. Both countries had authoritarian regimes based on nationalist mobilization, and transformation was, in both cases, under the complete control of the ruling political oligarchies. In parallel with these similarities, however, there were important differences between the two countries that undoubtedly influenced their transformation. Croatia started its modernization processes earlier than Serbia and was economically more developed at the end of the 1980s. It also enjoyed international political support (being consequently more prone to outside influences) and was economically more open toward the world than Serbia, which was under international sanctions and economically and politically isolated during the large part of the 1990s. As a consequence, Croatia economically recovered faster and has advanced further in the process of EU integration.
Class fragmentation is defined as the existence of deep and intersecting divisions inside a class, following different dimensions – including economic positions, recruitment patterns, organizational forms and value orientations – because of which collective class action for the protection and promotion of common class interests is unattainable or seriously limited. In this sense the concept of fragmentation opposes the concept of class homogeneity, defined as the essential unity of characteristics of members belonging to a social group, constituted on the basis of its position in the reproduction of a social system, and is a precondition for the group to act collectively in the process of social change. In the present paper the concept of the working class is taken in a more narrow sense, so that it includes manual workers only – unskilled, semiskilled and skilled – who have no authorities, or have very limited authorities in the work process, in private and public firms and in all economic branches: agriculture, industry and services (see Lazic, Cvejic, 2007).
2. Homogeneity of the working class during the time of Yugoslav socialism
All social subsystems, including economy, politics and ideology, were under the command control of the nomenklatura during socialism. Atomization of all social groups (with the exception of nomenklatura) was a direct consequence of such totalizing control. The same general “pattern” of socialism was also characteristic of the SFRY, although its system had some specifics resulting from significant reforms which started during the first half of the 1960s. Because of these specifics the Yugoslav society was described as “market”, “self-managerial”, “liberal” and “open” (Lazic, 1994).
There were two basic limits of the “workers self-management”. Firstly, the amount of managerial authorities transferred to enterprises was determined by arbitrary decisions of the upper part of the nomenklatura, it was changeable (depending on political conflicts inside the ruling strata and on conditions of the economy), and always essentially limited (since nomenklatura kept ultimate control over financial and cadre resources). Secondly, the power inside the firms was concentrated in the hands of managers, while “workers’ councils” (and especially their members who were manual workers) had negligible influence in decision-making (Arzensek, 1984; Rus and Adam, 1989). Consequences of two contradictions – between the centralized system of power and decentralization, and between the command character of the system and self-managerial legitimization – were manifold. For the present argument, however, the effects which influenced the position of the working class are of primary interest. New (self-managerial) legitimization pattern, together with economic decentralization, changed the basic economic goal-orientation of the Yugoslav socialism, so that consumption was made equal to accumulation as the primary motif of production (on primacy of accumulation in socialism see Berend, 1996). This led to a significant increase in the living standard of all basic social groups, including manual workers. However, (quasi-market) decentralization also increased economic inequalities at different levels, between: the ruling, middle and lower strata (Lazic, 1994); territorial units (Berkovic, 1986); economic branches, and different firms within the same branch (Korosic, 1983). In this way, the working class, which was systemically atomized, became additionally fragmented in multiple ways, since its economic position and interests were fundamentally dependent upon the specific working place of each sub-group (upon firms, branches, republics, etc.). Furthermore, reforms were particularly advanced at the labor market during the 1960s, allowing managers to dismiss a large number of “surplus employees”. This led to a dramatic increase in the rate of unemployment, as well as to massive emigration of workers to Western Europe. In this way a new form of fragmentation appeared, based on employment status – between the employed and unemployed.
Effects of fragmentation were especially visible in the case of workers’ strikes, which became quite numerous during the second half of the 1960s. The lack of real institutional possibilities for workers to “manage enterprises” was demonstrated by the necessity to organize strikes outside the institutional system, in order to protect their interests. Fragmentation was here revealed in the fact that the large number of strikes did not bring about the aggregation of individual conflicts into a wider workers’ movement. Employees in one firm did not express solidarity with strikers in another (in the same branch, or territorial unit, e.g.), and most often went on strike in one part of a firm only, while non-manual routine workers (clerks) almost never joined in, even if they also had very low salaries (Jovanov, 1983).
Finally, the structurally based fragmentation of workers in the SFRY was accompanied by deep inconsistencies inside the value system. Widespread presence of traditionalist values (authoritarianism, patriarchalism, collectivism, egalitarianism, closure toward the world) was a consequences of late capitalist modernization of the country (that started only after the First World War). The socialist order, whose value patterns were in many respects homologous to traditionalism, was build on this historical heritage (Lazic, 1994). Later on, rapid socialist modernization that took place inside the specific liberal Yugoslav model (opened toward the West), brought along value orientations that were in contradiction with dominant values (materialism, achievement, trust in science etc.). In this way an ambiguous value mixture was produced among the majority of the population, as registered by many surveys (Pantic, 1989). At the end of the 1980s, two processes which deepened the already existing ambiguities followed: a rise of nationalist mobilization by the political elites, which supported traditionalist-collectivist patterns; and a breakthrough of democratization and market economy (brought by “transition”), that externally and internally carried in the opposite patterns. It is, therefore, no wonder that in Serbia, e.g., in addition to a deep value confusion which existed in all social strata (Lazic and Cvejic, 2007), it was the workers who, although the biggest losers in the transformation, were at the same time (together with small farmers) the strongest supporters of the regime which blocked it and waged the wars.
3. Working class in Serbia and Croatia in the process of postsocialist transformation
It was already mentioned that there were many similarities, and at the same time important differences, between the transformation in Serbia and that in Croatia. Differences in the paths of transformation should be mentioned first. In Serbia the path could be divided into two periods: “blocked” and un-blocked transformation (the first started in 1989, while the second started in 1996 and was accelerated in 2001). The term blocked transformation obviously implies a contradictory character of the process (Lazic, ed. 2000). In Serbia, namely, systemic changes – by which political pluralism was introduced, and market economy based on private property made legal and legitimate – started soon after the fall of Berlin wall. However, these changes came as an “investiture” from above, made by the former nomenklatura which controlled them (keeping the political power), so that its members were able to convert their monopolistic positions into private property. The civil war and international isolation, which accompanied the transformation, obviously represented very favorable conditions for that form of systemic change.
In Croatia, on the other hand, although the Social Democratic Party (former Communists) lost the elections in 1989, the new regime had characteristics similar to the on in Serbia: the authoritarian power was based on nationalist mobilization. The unavoidable openness toward the world forced the country’s leaders to make more decisive steps towards economic transformation (privatization, restructuring, monetary stabilization, etc.), but all these steps were taken under the strict control of the authoritarian regime (Sekulic, 2004). “War rewards” (instead of former positions) secured the largest benefits of privatization to the new elite, whose merits were seen in their service to the regime. Briefly, instead of two relatively separate phases of change, characteristic of Serbia, there was a continuity of change in Croatia that took place very slowly during the 1990s. This continuity enabled a peaceful change of the regime at the 2000 elections (following Tudjman’s death) and speedier economic and political transformation.
The factors mentioned above – civil war and strict state control of systemic change (in Serbia and Croatia), together with international isolation and sanctions (in Serbia) – give the clue for understanding the transformation of the working class in the two countries during the 1990s. Namely, the initial systemic change removed the mechanisms of monopolistic political, economic and ideological control, which during socialism led to the forceful atomization of the class. However, market and pluralist regulative instruments were not promptly introduced in the economy and politics in Serbia and Croatia. In both counties privatization was very slow (especially in Serbia). Moreover, the economic role of the state(s) was much more evident and important than its share in the GDP.
Namely, a huge and almost general drop in incomes of the population made a redistributive role of the state in Serbia a necessary tool for survival. Rapidly decreasing wages, salaries and pensions were followed by a substantial increase in the number of the unemployed. All three groups (employed, unemployed and pensioners) had to find additional income in order to survive. There were two sources of such income in Serbia: full or partial return to agriculture; and engagement in the gray or black economy (Cvejic, 2002). In this way, a specific system of “triple economy” was formed in Serbia in the 1990s, consisting of the public sector (where the state dominated not only as the owner but even more as the agent of regulation and redistribution), slowly advancing private sector, and dramatically increasing sector of the gray and black economy.
In Croatia, on the other hand, the processes of restructuring and privatization advanced in such a way that, together with massive layoffs a large number of “surplus employees” was sent to early retirement (with largely decreasing pensions; Franicevic, 1999). Also, in addition to huge “war rewards” for the new elite, a large number of (real or imagined) war participants started to receive economic benefits from the state. In this way, pension and war-veteran funds secured the huge redistributive role of the state, while pauperization of the population (unemployed, pensioners etc.) created a precondition for the increase in the gray economy by the second half of the 1990s.
The systemic atomization of the working class in Serbia and Croatia got a powerful impetus from concrete historical circumstances: focusing on individual survival strategies strongly affected the possible collective actions by which class members could protect and promote their common interests. The existence of authoritarian regimes, which controlled workers unions in both countries, worked in the same direction. In Serbia, old union organizations kept the central role, while the newly formed unions were oriented much more toward political tasks (to confront Milosevic’s regime, together with opposition parties) than the recruitment of new members, or defense of economic interests of employees (Arandarenko, 1997). In Croatia many new unions were formed, but, with submission to the authoritarian regime as their most important joint characteristic, they were unable (and unwilling) to organize wider collective actions in order to defend the workers interests (Hodzic, 2005: 570). Naturally, the inability of unions to mobilize collective actions led to a huge decrease in the number of unionized workers (to a quarter of work-force) in both countries.
Considering political organization, it appears that the left wing of the party spectrum was monopolized by the former communist party in Serbia, which retained its control over the repressive and mobilizing state apparatuses, so that attempts at forming social-democratic parties to advance the workers’ interests were completely futile. In Croatia, the difference was made by the fact that former communists were in opposition during the 1990s, so therefore could present themselves as (social-democratically oriented) defenders of the workers’ interests. Of course, when they came in power, it turned out that their basic goal was to implement a neo-liberal program of economic transformation, while their leftist slogans successfully marginalized attempts at organizing other left-wing political parties.
Finally, a sudden and dramatic deterioration of the workers’ economic position, followed by the lack of instruments that might form and express their collective interests (unions and political parties), could not provide a fertile ground for the rise of new (democratic, liberal) value orientations in either Serbia or Croatia. Also, the nationalist mobilization by the ruling regimes was inevitably very efficient under conditions of civil war (and international sanctions, in Serbia). In this way very favorable settings for the reproduction of collectivist orientations, as well as of authoritarian and traditionalist values (this time based on ethnic grounds), were formed in both countries.
The process of economic transformation in both countries became more rapid after 2000, following the mostly neo-liberal pattern characteristic of other postsocialist countries. This increase of speed was particularly pronounced in Serbia, because of its earlier huge delay. Privatization, economic restructuring and foreign trade gained momentum and international companies started to invest. The withdrawal of the state from the economy was accompanied by the establishment of a new normative order. All these factors led to a decrease of the informal economy, but also to an increased unemployment. Similar processes – increase in the GDP, continuation of privatization and restructuring, and a decrease of the gray economy followed by increased unemployment went on in Croatia. Briefly, market economy in both countries got to the forefront in the sphere of property relations (because of privatization, and the mushrooming of domestic and foreign private firms) and as a regulatory instrument (because of a significant reduction of the redistributive role of the state and legal protection of the autonomy of the market). Still, the role of the state has remained large in both domains (many big firms in Serbia have not been privatized, and have been only partially privatized in Croatia – cf. Transparency Srbija, 2004; Franicevic, 2005). The increase in unemployment was followed by growing wage inequalities and general economic differentiation. That way, the rise of the living standard was not recognized in the perception of the majority of workers, because of job insecurity and growing inequalities inside the working class and among social classes.
In neither Serbia nor Croatia were the disintegrative forces (labor market, economic inequalities) matched by an increase in opposite factors. The unions, which became more visible in Serbia after the change of the regime in 2000, almost vanished from the public scene after the elections in 2003. In Croatia, the unions remained partitioned and suffered from a low level of coordination and occasional stark internal conflicts. In the political sphere, the Socialist Party lost most of its influence in Serbia, but a new social-democratic party which could represent working class interests did not appear. The SDP in Croatia was accused of completely neglecting the workers’ interests during its rule (2000-2003), and did not publicly appeal to its workers’ constituency until the beginning of new electoral campaigns.
4. Social mobility and material position of working class in Serbia and Croatia, 1989-2003
In the following section of the paper the previous general considerations will be corroborated by empirical data colleted in surveys mentioned before. Research on class mobility in Serbia and Croatia (in 1989) showed the existence of a growing trend of social closure since the end of the 1970s, putting the structures of these societies among the most rigid in Central-Eastern Europe. Self-reproduction of the working class, together with self-reproduction of the middle class, was the strongest factor of this rigidity (Cvejic, 2006).
Findings of our recent research on inter-generational mobility showed that during postsocialist transformation factors leading to de-homogenization of unskilled workers were gaining strength in both countries (the most important among them was inflow of farmers, both in Serbia and in Croatia; Lazic, Cvejic, 2008). In the case of skilled workers, contradictory tendencies were recognized: increasing homogeneity due to a rise of self-reproduction, but also a significant enlargement of outflow to routine non-manual positions. As for intra-generational mobility, contradictory tendencies regarding class homogeneity in both countries were noticed, too: homogeneity inside both stratums decreased to a certain degree, but it could also be said that homogeneity of the working class in general increased, because mobility mostly remained restricted precisely to shifts between these two groups of manual workers.
In order for career paths of a large number of workers who exited the labor market to be more precisely analyzed, occupation of respondents in 1989 should be compared with their social position in 2003. F indings obtained in the 2003 survey clearly show (Lazic, Cvejic, 2008) what the years of transformation have brought to intra-generational mobility. The most important finding is the one telling us that a large number of manual workers (unskilled and skilled) had to change their social position, compared to the beginning of the transformation, and that, in both countries, many dropped into disadvantaged positions (depending on the state, like unemployed and retired, or on informal employers and whims of the informal labor market). Data also reveal that skilled workers keep better positions than the unskilled, not only because more of them managed to retain their social status, but also because they were less exposed to unemployment than unskilled workers (in Serbia) or retirement (in Croatia).
The h omogeneity of the working class’ economic position was investigated in the researches via the presence of inequalities. Economic inequalities were analyzed through the scale of material position. This scale summarizes household scores on several components: total income; ownership and value of real estate; equipment in residential space, and of the farm (for farmers); vacation destinations; and possession of automobile(s). According to the data obtained, in 1989 the economic position of both categories of workers in Serbia and Croatia was below the average of the national sample, with unskilled workers in Croatia clearly lagging behind. Although differences between the two strata of manual workers in both cases were statistically significant, it was apparent that the redistributive role of the state in Serbia was already emphasized at that time (relatively improving the position of unskilled workers; see detailed data in Lazic, Cvejic, 2008). Similar relations persisted in 2003, but with skilled workers in both countries being at the national sample average level (differences between the two strata remain significant). The steadiness of a significantly better economic position of skilled workers therefore confirms the existence of the basis for fragmentation of the working class into skilled and unskilled groups.
5. Trade union membership, political alignment and value orientations
Trade union membership as a precondition for class action based on economic interest was not relevant in 1989, for a simple reason that all employees were formally enrolled in the unions. This is, today, different to the extent that membership in trade unions is not obligatory. Several trade unions exist in both countries, but they are still unsuccessful in shaping the collective interests on a large scale and in protecting them through collective actions. The clear indication of this is a huge decrease in formal union membership of manual workers. Namely, in Serbia today, based on research findings, as little as 15% of both skilled and unskilled workers are members of unions, while in Croatia these figures are 23% and 21%, respectively.
If trade unions are not capable to overcome structural fragmentation of the working class, the question remains if there is a political party that could express its collective interests. According to research findings, it is difficult to recognize such a party both in Serbia and Croatia. What kept the workers in both countries together in political sense, regardless of their skill, was the fact that they had recognized nationalist and populist parties as the best representatives of their interests. This is demonstrated by data obtained in the 2003 research, according to which both groups of workers in Serbia most frequently supported the Serbian Radical Party (among unskilled workers who gave the answer about political orientation, some 40% supported this party, and among skilled workers 30%). In Croatia workers mostly supported the Croatian Democratic Community (35% of unskilled and 25% of skilled workers who gave the answer about political orientation).
However, even in this field the trend of differentiation is apparent. If, for the sake of analysis, all political parties are merged into a “nationalist-populist block” (in Serbia: the coalition of the Serbian Radical Party, Socialist Party of Serbia and Party of Serbian Unity; in Croatia: Croatian Democratic Community, Croatian Party of Law and other parties that support CDC), and a “civic-democratic block” (in Serbia: the coalition of the Democratic Party, Democratic Party of Serbia and G17 that made the basis for political dominance after 2000; in Croatia: members of the coalition government in the period 2000-2003 – Social Democratic Party, Croatian People’s Party, liberals, etc.), the following difference in the distribution of two strata of manual workers into these two political options could be observed: the “nationalist-populist block” dominates in Croatia among both categories of workers and in Serbia among unskilled workers; also, in Croatia skilled workers more often than the unskilled ones support the “civic-democratic block”. In this way it appears that political fragmentation of workers is unfolding in both countries, although based on slightly different mechanisms. In Croatia, ethnic mobilization as a totalizing mechanism atomizes workers, surviving as the absolute core of political action and reducing support to the Social Democratic Party which, at least formally, presents itself as the representative of the specific class interest. In Serbia, on the other hand, political axis has been set around the problem of constitution of basic national and democratic institutions (because of the unsolved state problem and belated transformation), so that there is no party in the political field which would articulate the specific workers’ class interests. Finally, large differences in political orientations of unskilled and skilled workers, especially in Serbia, show that in the realm of political representation there is no tendency that would possibly lead to the creation of a unique social actor out of the two groups of workers.
Naturally, in order to interpret the possibility for collective action, in addition to the analysis of structural/interest and institutional (organizational) aspects, we also need an insight into the basic value orientations of the working class. Earlier researches of value patterns of different social classes in Serbia showed that there was huge confusion in this sphere. Members of the working class expressed below average tendency to accept liberal values and above average tendency to support traditionalism, authoritarianism and nationalism (the findings were similar for Croatia in 1989 – see Lazic, ed. 1991).
To measure value orientations in the present analysis the scale of statist paternalism was constructed. This value pattern shows inclination towards egalitarianism and assumes that state intervention should secure a decrease of economic inequalities and permanent employment. This pattern therefore directly confronts the declining role of the state in economy and society, and may serve as the basis for social action that slows down social changes, and especially makes difficult the delineation of the new role of trade unions (establishment of collective bargaining as the new form of social dialog, which should replace centralist concepts inherited from socialism).
Research findings show the following. Although during the 1989-2003 period the attitude that government should intervene in the economy as little as possible was getting larger support inside both strata of the working class in Serbia, on the other hand, the belief that private ownership necessarily had an advantage over state (or social) ownership in terms of the economic growth was declining. And while at the first statement unskilled and skilled workers were equal in 2003, at the second statement it turned out that skilled workers a bit more frequently supported the concept of private ownership, but still stayed below the national sample average. Based on this data it can be concluded that, regarding the basic value orientations, the working class is different from other groups in the society, but at the same time it is too divided internally to efficiently define a common goal for political action.
Concerning the paternalist/statist value pattern, workers accept it to the largest extent in Croatia, too. In the 4-20 range, where the lower score means higher acceptance of the pattern, both in Serbia and Croatia they scored 7 on average. It seems that such a high level of acceptance of the paternalistic value pattern, equal in both countries, does not leave space for fragmentation, but rather confirms atomization of the working class and the necessity for its external homogenization (which in this region still means the one accomplished by the state).
6. Conclusions
Generally speaking, it can be concluded that, considering postsocialist transformation and fragmentation of the working class, there are certain differences between Serbia and Croatia, even if common elements prevail. In both cases systemic change is paired by transition of the working class from the stage of atomization, typical for socialism, to the stage of significant fragmentation. In this sense, skills in Serbia represent the basis for the differentiation of the workers’ economic positions. However, the question remains if the spotted difference would be an insurmountable obstacle to homogenization, if common value orientations as a framework for united class action were built. A condition which is missing for building this framework is a more efficient organizational base. Marginalization of trade union activities orients all social goals of the working class to the political field. In this field, however, most workers, especially those with lower skills, support parties with egalitarian programs and populist rhetoric (in accordance with their value orientations). The problem remaining here is that these parties build their strength on national mobilization, and are almost completely turned away from the future and modernization of the country. Consequently, the political support they get from the working strata constantly slows down and endangers the process of transformation in Serbia and its firmer integration into European and world institutions.
The biggest step forward in the systemic transformation In Croatia, compared with Serbia, was made in sizing down the informal economy and wiping out large differences in economic positions between employees in private and state sectors. Besides that, membership in trade unions is somewhat more frequent and political divisions are a bit smaller than in Serbia. However, concerning the fact that workers in Croatia give stronger support to the nationalist-populist block than to the civic one (including the social-democratic party), this firmer unity is more of a source of atomization than a means of class homogenization based on common interests. In this way it becomes evident that, in Croatia as well, there are many factors that intensify fragmentation of the working class: together with problems of value and political orientations, higher exclusion of workers from the labor market than in Serbia is found here, along with a smaller inter-generational and intra-generational self-reproduction.
In a word, not only have the processes of systemic transformation in Serbia and Croatia failed to contribute to the class homogenization of workers, but, by disturbing it, they have probably been slowed down themselves. Finally, it may seem reasonable to suppose that the process of European integration will accelerate social change in both countries: it should stimulate (from the outside) both their postsocialist transformation and the basic class homogenization. The key ingredients of this homogenization should be: the strengthening of the labor market; the increase of employment; substantial reform of trade unions, which might make them capable of actively taking part in collective bargaining in order to protect the common economic interests of employees; and political “normalization”, which puts the national-populist parties at the margin of the political spectrum and makes room for a possible class-wide interest representation.
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All rights reserved. This paper was prepared for the Workshop “The ‘Brave New World’ after Communism. 1989: Expectations in Comparison” in Vienna, Austria, June 15 and 16, 2009. Please do not cite, copy, or use otherwise without the author’s permission.
