Restoration of Capitalism and Class Re-composition: The Cases of Croatia and Bosnia & Herzegovina (Mihaljević, Marković)

The disintegration of the Socialist Federative Republic of Yugoslavia resulted in its constituent members splitting apart and individually entering the welcoming markets. The cases of Slovenia, Croatia and Bosnia & Herzegovina, despite the countries having taken different paths, are nevertheless similar: they all experienced the changes in the ownership of the means of production, the weakening and fragmentation of the former ‘ruling’ class (that is, the working class), the formation of the national and comprador bourgeoisie, and the ideological shift from brotherhood and unity to individualisation and survival of the fittest. Moreover, these countries are all on the same track to a ‘successful’ integration in the European markets.

The purpose of this panel is to investigate the different circumstances surrounding the countries on their way to fully restored capitalism. We will address the changes in the economic, political and social structures, see how they affected the class re-composition, and look for answers to several crucial questions regarding the position of the working class in the class struggle today, such as: Which classes exist on the periphery? How does the comprador bourgeoisie ensure its reproduction and where are its weak points? Which elements constitute the working class today? How can the working class avoid further fragmentation? How to form new or penetrate the existing institutions in order to advance working-class consolidation?

By trying to answer these questions and exchanging the experiences from these countries, a related aim of the panel is also to equip the existing anti-capitalist struggles on the periphery with invaluable theory.

Domagoj Mihaljević – Socio-economic Structural Transformation and Class Recomposition in Croatia

In the early 1990, the privatisation process in conditions of war restored private ownership of the means of production. The sale (more precisely, bestowal) of companies to loyal political cadres established a clear class differentiation between workers and newly formed capitalists who in many case were former managers who supported the new nationalist political leadership. The elimination of stratification fluidity characteristic of a socialist society without private owners of the means of production opened a class front between workers and capital. However, the workers’ organised struggle against the destruction of factories was prevented by the war and the rise of rigid nationalism (in the first half of the 1990s), and was followed (in the second half of the 1990s) by the disappearance of unionised factory jobs under the influence of the neoliberal restructuring of the economy. The industrial structure of the economy gradually gave way to service-based economy, especially retail trade and tourism. This structure was strengthened by the sell-out of banks, trade companies and telecommunications to the European capital in the late 1990s and early 2000s, which accelerated the financialisation of the economy. This also transformed the national bourgeoisie into comprador bourgeoisie. At the same time, the heterogeneous structure of the middle class, which was primarily tied to the public sector, was transformed into a clientalist network of individual groups tied to the budget or public companies. Since the destroyed economy could not absorb the relative growth in surplus population, political elites used the budget resources to mitigate a potential manifestation of discontent. This turned the middle class into the political base for the ruling parties, so that the support given to the parties during elections and thorough various compromises is repaid by the social privileges of the middle class.

Domagoj Mihaljević received his BA from the Faculty of Economics and Business, University of Zagreb. He is active in the Zagreb-based Organization for Workers’ Initiative and Democratization (BRID). His research interests focus mainly on economic and social history.

Goran Marković – The Interrelation between The Bosnian Type of Transition to Capitalism and the Political Potency of the Working Class

When it comes to capitalist restoration, Bosnia and Herzegovina shares the fate of other Yugoslav republics. However, in this case, the transition does depend on two specific facts. First, Bosnia and Herzegovina has been an underdeveloped Yugoslav republic whose economy was based on the industry that has been destroyed during the civil war. And second, the economy of Bosnia and Herzegovina has been destroyed not only due to the war, but, during the same years, also due to the emerging process of capitalist restoration.

After the war, a new class composition of society, whose base has been set up during the war, has been completed: the new dominant class has been created out of war profiteers, the main beneficiaries of the process of privatisation. A part of the new bourgeoisie was created by the people who at the same time belonged to the political elites.

It is often said that the working class does not exist anymore because large industrial and agricultural enterprises have been destroyed. However, the destruction of socially owned enterprises does not disintegrate the working class but only changes its structure. With mining and other heavy industry collapsing during the war, the working class in Bosnia and Herzegovina is mostly concentrated in public institutions and in small-size enterprises of the service sector.

Bosnia and Herzegovina is ‘successfully’ integrated into the European economy in two ways. Export of foreign capital, especially in the banking sector, is completely free, as is the possibility for the export of commodities. This additionally undermines efforts of domestic economic subjects who, first and foremost, do not have enough capital at their disposal, while at the same time domestic production is not protected or encouraged in any way.

All this strongly influences the potency of the working class. The dominance of nationalist ideology and the highly decentralized state structure hinder any consolidation of the working class, which remains divided along territorial and ethnic lines. For example, workers in the public sector organise most of the strikes and they have the strongest position in negotiations with the government and employers. They are better paid and have better working conditions than other parts of the working class. This often leads workers in the private sector to refrain from demonstrating solidarity with the workers in the public sector. The problem is sharpened by the fact that Bosnian laws do not recognise solidarity strikes. Trade unions are week and, moreover, ridden with internal differences. Both in Republika Srpska and the Federation of Bosnia and Herzegovina trade union federations are usually unable to coordinate the efforts of trade unions and organise wider strike actions.

Goran Marković is Assistant Professor at the Faculty of Law of East Sarajevo, where he teaches Constitutional Law and Theory of Law and State. He has obtained a PhD in Law from the University of Belgrade. Marković has published a book on Perspectives of Participatory Democracy (Left International Forum, 2007). His fields of interest in research include the constitutional system of Bosnia and Herzegovina, political parties, participatory democracy and self-management. He is a member of the International Institute for Self-management and a co-editor of Novi plamen, a Zagreb-based magazine for social, political and cultural issues.

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