Economy of The Socialist Federal Republic of Yugoslavia - 1970s

1970s

In 1970s, the economy was reorganised according to Edvard Kardelj's theory of associated labour, in which the right to decision making and a share in profits of socially owned companies is based on the investment of labour. All companies were transformed into organisations of associated labour. The smallest, basic organisations of associated labour, was roughly corresponded to a small company or a department in a large company. These were organised into enterprises, also known as labour organisations, which in turn associated into composite organisations of associated labour, which could be large companies or even whole industry branches in a certain area. Basic organisations of associated labour sometimes were composed of even smaller labour units, but they had no financial freedom. Also, composite organisations of associated labour were sometimes members of business communities, representing whole industry branches. Most executive decision making was based in enterprises, so that these continued to compete to an extent even when they were part of a same composite organisation. The appointment of managers and strategic policy of composite organisations were, depending on their size and importance, in practice often subject to political and personal influence-peddling.

In order to give all employees the same access to decision making, the basic organisations of associated labour were also introduced into public services, including health and education. The basic organisations were usually made up of dozens of people and had their own workers councils, whose assent was needed for strategic decisions and appointment of managers in enterprises or public institutions.

The workers were organized into trade unions which spanned across the country. Strikes could be called by any worker, or any group of workers and they were common in certain periods. Strikes for clear genuine grievances with no political motivation usually resulted in prompt replacement of the management and increase in pay or benefits. Strikes with real or implied political motivation were often dealt with in the same manner (individuals were prosecuted or persecuted separately), but occasionally also met stubborn refusal to deal or in some cases brutal force. Strikes occurred in all times of political upheaval or economic hardships, but they became increasingly common in the 1980s, when consecutive governments tried to salvage the slumping economy with a programme of austerity under the auspices of the International Monetary Fund.

From 1970 onwards, despite 29% of its population working in agriculture, Yugoslavia was a net importer of farm products.