Primitive Accumulation in the Post-Socialist Transition and the EU Accession Period (Bembič, Becker, Musić)

It is very symptomatic that the story of the great historical break of 1989 in Eastern Europe is usually articulated in purely political terms, often with obvious romantically-nationalistic overtones: winds of change have swept away old curtains and walls of the obsolete system, bringing about a second spring of nations that were at last able to breathe freely and democratically. Topics of the concurrent economical and social transformation are usually given much less attention and tend to be very briefly subsumed under the vague notion of ‘liberalisation’. In any case, all these transformations were also supposed to have a determinate final goal: the accession to the EU, which would gladly extend its hospitality to the newly independent neighbours and guide them in the task of constructing democratic institutions.

However, if we assume a more sober perspective it quickly becomes obvious that, given the new political and economic reality,  the absolutely crucial social ‘institution’ that the Eastern European countries certainly lacked was a proper capitalist class. The purpose of this panel is therefore to trace the patterns of socio-economic transformations in Eastern Europe between the collapse of Soviet Union and the accession of the new countries to the EU. What was the interaction between former state property, foreign capital and the newly emerging capitalist class? Did the latter truly emerge – as many perhaps were hoping for – smoothly and spontaneously, simply by the force of the newly unleashed entrepreneurial energy? Or did a shadier process take place, one much closer to Marx’s description of ‘primitive accumulation’, namely a process of violent expropriation?

This discrepancy between the harsh reality of the transition in Eastern Europe and the accompanying Western naivete is perhaps best expressed in the statement that a US treasury official gave regarding Russia as early as 1994: ‘We had a belief that the first generation of Russian capitalists would be nice guys, but they are ruthless motherfuckers.’

Joachim Becker – Primitive Accumulation and Integration/Disintegration Processes in Eastern Europe

The transformation from state socialism to capitalism ushered a new phase of “ursprünglicher Akkumulation” – i.e. “primitive” or “original” accumulation – in Eastern Europe. This process was shaped by both internal and external actors. In countries with high external debt (like Hungary), international financial institution played a crucial role from the very beginning pressing for privatisation practices that would favour foreign capital. In a number of East European countries, however, national governments attempted to create a domestic bourgeoisie. In Yugoslavia and the Czech Republic, the scramble for control over the primitive accumulation was a major factor in the ensuing disintegration as the political leaderships of the individual Yugoslav Republics respectively the main Czech and Slovak political forces wanted to gain control over the privatisation process.

A second phase of primitive accumulation was initiated with the accession talks with the EU. These talks coincided with an acceleration of the expansion of West European capital into Eastern Europe. The European Commission established privatisation as one of the major standards for measuring the advance towards accession. In most East European countries, West European capital gained control over the key sectors of East European economies – finance and manufacturing – in the years of the accession talks. Slovenia was a certain exception to the rule as the state retained a very substantial state in banking and domestic capital continued to play a relevant role in manufacturing. In Poland, domestic capital has continued to play a larger role than in the other Visegrád countries.

A third phase of primitive accumulation has been entered in some East (and many West) European countries with the present global crisis. Neo-liberal forces use the crisis as an opportunity to radicalise neo-liberal policies and advance in the process of primitive accumulation. The European Commission, the European Central Bank, governments of core EU countries (particularly Germany) and the International Monetary Fund (IMF) play politically a key role in this new phase of accumulation. In some countries, the local right wing forces are eager to invoke the EU/IMF “aid” in order to facilitate policies that advance processes of primitive accumulation. With the Janša government, this tendency was clearly at play in Slovenia. Important steps towards privatising banks have already been taken in Slovenia.

Joachim Becker is Professor of Economics at the University of Vienna. His research interests include political economy, regulation theory, international development and regional integration.

Goran Musić – Deindustrialisation of Serbian Economy, 1991 ̶2012

The process of deindustrialisation is emerging as one of the main concerns for labour activists in the region of former Yugoslavia. After more than twenty years of transitional restructuring, Serbia still has not reached one half of the value of industrial production it had in the final years of workers’ self-management economy. The restoration of capitalism marked a steep fall of civilisation standards that had been reached under socialism. The paper will describe the destruction of social property during Serbia’s peculiar first transitional decade, under the rule of Slobodan Milošević, and during the latest wave of privatisations under neoliberal governments. Finally, the paper will examine the relevance of the concept of ‘primitive accumulation of capital’ for an analysis of this process.

Goran Mušić graduated in Economy at the University of Belgrade. He is conducting a research on worker strikes during the last years of Yugoslav socialism in the Department of History at the European University Institute in Florence. He is an active participant in various initiatives for student and workers rights in Serbia, and a member of the editorial board of the ‘Crvena kritika’ web portal.

Branko Bembič – Can a ‘Social Partner’ Put Up a Fight?

In the process of transition to capitalism, two élites emerged in Slovenia: the neoliberal (comprador) and the national bourgeoisie. In contrast to other transitional countries in Eastern Europe, the national bourgeoisie prevailed, but its success hinged upon the political exchange between the state and the organised labour, which was in turn, due to its strong mobilisation at the outset of transition, able to influence considerably the process of building the institutional framework of the economy. The accession to the EU and EMU brought some changes, most notably in macroeconomic policies, but the basic institutions of Slovenian economy such as the industrial relations system, the labour market regulation and the role of the state in the economy were more or less preserved. However, with the eruption of the eurozone crisis, which the comprador bourgeoisie immediately interpreted as an opportunity to annul the achievements of organised labour, a quite successful attack on the prevailing system was launched. With the national bourgeoisie in ideological retreat after the eruption of the fiscal crisis, the organised labour can withstand the pressure only by forging new alliances and expanding its base by changing its identity from ‘social partnership’ to ‘class unionism’.

Branko Bembič has a BA in Philosophy and an MA in Economics, both from the University of Ljubljana. He is a junior researcher and doctoral student at the University’s Department of Sociology.

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