15 years laterearlier

Ante Marković - Wikipedia, the free encyclopedia

When LCY broke up in January 1990, Marković had only his popularity and the apparent success of his programme on his side. In July 1990, he formed the Union of Reform Forces (Savez reformskih snaga), a political party supporting a reformed Yugoslavian federation. According to a poll conducted by the Federal Executive Council (SIV), this party had support of 14% of the people in Bosnia, and less than 5% in other republics.^[4]

This decision was not well received. Borisav Jović, then the President of Yugoslavia, commented

The general conclusion is that Ante Markovic is no longer acceptable or reliable to us. No one has any doubts in their mind any longer that he's the extended arm of the United States in terms of overthrowing anyone who ever thinks of socialism, and it is through our votes that we appointed him Prime Minister in the Assembly. He is playing the most dangerous game of treason.^[5]

Jović's conclusion on Marković's role

He was no doubt the most active creator of the destruction of our economy, and to a large extent a significant participant in the break-up of Yugoslavia. Others, when boasted of having broken up Yugoslavia wanted to take this infamous role upon themselves but in all these respects they never came close to what Marković did, who had declared himself as the protagonist of Yugoslavia's survival^[5]

Later, his programme was sabotaged by Slobodan Milošević who

had virtually sealed Markovic's failure by December 1990 by secretly securing an illegal loan woth $1.7 billion from Serbia's main bank in order to ease his reelection that month. The loan undermined Markovic's economic austerity program, undoing the progress that had been made toward controlling the country's inflation rate.^[6]

Or, as Christopher Bennet tells it in Yugoslavia's Bloody Collapse^[7]:

Quite simply, the bank printed whatever money Milošević felt he needed to get himself reelected and the size of the 'loan' became clear a few weeks later when inflation took off again throughout the country. As the economy resumed its downward slide, Marković knew his enterprise had failed [...]

Under Tito, Yugoslavia ran a budget deficit that was financed by printing money.  This led to a rate of inflation of 15 to 25 percent per year.  After Tito, the Communist Party pursued progressively more irrational economic policies [...] By the early 1990s the government used up all of its own hard currency reserves and proceded to loot the hard currency savings of private citizens [...]

All of the government gasoline stations eventually were closed and gasoline was available only from roadside dealers whose operation consisted of a car parked with a plastic can of gasoline sitting on the hood.  The market price was the equivalent of $8 per gallon. Most car owners gave up driving and relied upon public transportation.  But the Belgrade transit authority (GSP) did not have the funds necessary for keeping its fleet of 1200 buses operating [...] Despite the government's desperate printing of money it still did not have the funds to keep the infrastructure in operation.  Pot holes developed in the streets, elevators stopped functioning, and construction projects were closed down.  The unemployment rate exceeded 30 percent.

The government tried to counter the inflation by imposing price controls.  But when inflation continued, the government price controls made the price producers were getting so ridiculous low that they simply stopped producing.  In October of 1993 the bakers stopped making bread and Belgrade was without bread for a week [...] When farmers refused to sell to the government at the artificially low prices the government dictated, government irrationally used hard currency to buy food from foreign sources rather than remove the price controls.  The Ministry of Agriculture also risked creating a famine by selling farmers only 30 percent of the fuel they needed for planting and harvesting.

Later the government tried to curb inflation by requiring stores to file paperwork every time they raised a price.  This meant that many store employees had to devote their time to filling out these government forms.  Instead of curbing inflation this policy actually increased inflation because the stores tended to increase prices by larger increments so they would not have file forms for another price increase so soon [...] In November of 1993 the government postponed turning on the heat in the state apartment buildings in which most of the population lived.  The residents reacted to this by using electrical space heaters which were inefficient and overloaded the electrical system.  The government power company then had to order blackouts to conserve electricity.

[...] The pensions were to be paid at the post office but the government did not give the post offices enough funds to pay these pensions.  The pensioners lined up in long lines outside the post office.  When the post office ran out of state funds to pay the pensions the employees would pay the next pensioner in line whatever money they received when someone came in to mail a letter or package.  With inflation being what it was, the value of the pension would decrease drastically if the pensioners went home and came back the next day [...] About this time there occurred a tragic incident.  As usual, pensioners were waiting in line. Someone passed by the line carrying bags of groceries from the free market.  Two pensioners got so upset at their situation and the sight of someone else with groceries that they had heart attacks and died right there.

This change to the market economy appears to be especially inept and traumatic. Savings got wiped out through all Eastern Europe. It is asif all your labour and savings were declared worth only so little. Was is that the communist leaders suddenly forgot all social duties and grabbed the wild chances of the new order? Or were the socialist economies so run down (either with austerity or profligation) that there was no alternative but to pull the utopia plug out? (Or was it a self-interested welcome of Western ivestors?)  

It's just that some countries started out with a better standard of living than others.

Increasingly it looks to me that the capitalism then is more different from the capitalism now than from socialisms then. If economic deterioration for the masses will continue everywhere, the 1970s will look like a golden age for any country. That does not necessarily mean that socialisms were keeping up with improvement of living standards by themselves, as Western technologies "found" various discount ways to the socialist block. But living standards were indeed improving basically everywhere (except perhaps South America), dynamically or "slugishly", sustainably or not.

Do the North Koreans know they're being lied to? Are they brainwashed or do they act the part for self-preservation?

Economics is politics by other means