At the dawn of the 1960s, Yugoslavia was run by a small circle of functionaries. Aside from President Tito, this circle included Aleksandar Ranković (a Serb), head of the secret police, who became vice president of the country in 1963; Edvard Kardelj (a Slovene), vice president of the federal Executive Council, president of the Committee for Legislation and the Building of People’s Power, and the chief architect of the social system; Mijalko Todorović (a Serbian liberal), who exercised leading authority in the economic sphere after 1958; Svetozar Vukmanovic-Tempo (a Montenegrin), president of the Labor Union; Ivan Gošnjak (a Croat), state secretary for national defense; and Koča Popović (a Serb), state secretary for foreign relations. To this group, one might add the name of Vladimir Bakarić (a Croat), secretary of the League of Communists of Croatia. Although Bakarić eschewed removal to the center, he was nonetheless a senior figure in the party and played a larger role than other regional barons. Although these figures presented a unified front to the outside world, they were torn by serious internal differences. Kardelj, in particular, was the leading advocate of political reform, and, under his influence, the federal Assembly passed a series of laws in March 1961, setting up, at the same time, joint commissions of representatives of several federal bodies to carry out reforms in the economic sector.¹

In mid-March 1962, the executive bureau of the LCY central committee held a closed session to discuss the political directions of the system. The session saw sharp political conflicts but ultimately produced a decision to take concrete steps to address certain problems and shortcomings. Among these problems were localism, chauvinism, and national particularism.² The session unleashed an ideological-political campaign against these and other problems, and party members were placed on “alert.” On May 6, 1962, Tito delivered an important address in Split, highlighting the dangers associated with localism and telling his audience that there was a real danger that each republic was just out for itself, ignoring the interests of the Yugoslav community as a whole.³

The importance of this early evidence of internationality and interrepublican frictions cannot be overemphasized since it gives the lie to claims by later advocates of recentralization that these problems were “created” by decentralization. On the contrary, decentralization was undertaken in order to address this issue, and in this regard, decentralization was partially successful. Ultimately, the stronger pressures have been for continued and deeper decentralization rather than for the reverse.

Tito and Kardelj warned about corruption in economic management and about the diversion of investment funds into politically motivated projects. Commissions and committees were set up, and work on “the Reform” began.

The reform began as a series of ad hoc adjustments to the economic administrative mechanism and blossomed in 1965 into a full-fledged assault on economic inefficiency, unprofitable enterprises, inflationary development, and distorted prices. “Centrally planned investment [had become] impossible in Yugoslavia because it was no longer possible to agree politically about such planning.”⁴ The alternative adopted was to reduce the role of the federal government, scrap central planning, and allow greater say in economic planning and administration to the local decision makers, that is, the federal units, opštinas, and enterprises. The chief beneficiaries of this devolution were the federal units.

The motivations for the reform were, at first, purely economic. The overriding issue was that of efficiency, and partisans of all sides addressed this key issue, marshaling pertinent economic arguments. The debate quickly took on an ideological character, however, when the loose alliance of liberals, technocrats, and enterprise managers met more ideologically conservative opponents, who appealed as much to socialist values as to economic criteria. Liberals considered it “an illusion [to think] that it is possible to build socialism in an autarkic fashion.”⁵ Some even dared to summon Adam Smith in defense of the proposition that every nation and every republic should produce whatever goods and services it can produce best and most cheaply and import whatever it cannot produce well, cheaply, or efficiently.⁶ Moreover, as opinions hardened on each side, the controversy surrounding the reform took on interrepublican characteristics, with Croatia leading the proreform coalition and Serbia the most energetic opponent of reform.

The Eighth Congress of the LCY, held in December 1964, had the task of assuaging the surfacing tensions in interrepublican relations. The Eighth Congress was the occasion for the first open discussion of the national question and for a somewhat nebulously worded agreement to undertake economic reform. The Croats began arguing the case for economic “optimalization,” that is, the use of profit criteria in investment, and questioned the lack of circumspection with which General Investment Fund (GIF) resources had been funneled into the south. Drawing on support from Slovenia and Macedonia, the Croats achieved a partial victory at this congress. But the consensus reached was flimsy and even superficial, since, in practice, rival and contradictory economic orientations were incorporated into resolutions adopted at the Eighth Congress.⁷

The reform and the subsequent political devolution, along with the resultant institutional configuration of Yugoslavia, were, to a considerable extent, the handiwork of the liberals, who won them by wrenching control of the system from the old-style conservatives. In time, however, the liberals lost the reins of power to a coalition of new-style conservatives and party centrists (“Titoists”).

The Yugoslavs in power from 1971 to 1980 did not refer to themselves as “conservatives” any more than they called themselves “unitarists” (a term of abuse in Yugoslavia since at least the mid-1960s). The regime had a tendency to concatenate the label “liberal” with another one—normally considered unrelated in Western thought—namely, “anarchist.” This produces the hybrid “anarcho-liberalism.” Although in Western usage anarchists are usually considered to occupy a niche far to the left in the political spectrum, the Titoists condemned anarcho-liberals for right-wing deviationism. Anarcho-liberals were said to favor the establishment of a multiparty system (though anarchists, of course, propose to do away with all government) and were said to be hostile to self-management on principle.

A related difficulty is that the meaning assigned by the Yugoslavs to the word “liberal” is fluid. In 1970 and 1971 the term was generally applied to the programmatic current represented by Croats Miko Tripalo and Savka Dabčević-Kučar, Slovene Stane Kavčić, and Macedonians Krste Crvenkovski and Slavko Milosavlevski, as well as by Serbs Marko Nikezić and Mirko Čanadanović. It was considered respectable at that time to be liberal, and such liberalism distinguished its adherents from the more centralistically oriented line that “conservatives” had favored. By the late 1970s, however, the term “liberal” was more often applied to dissident intellectuals, including Ljubomir Tadic, Milovan Djilas, and others. The identification of liberalism with dissent was obvious from the title of the two-volume work Liberalism from Djilas to Today (Liberalizam od Djilasa do danas). By the time of the Twelfth Party Congress (in June 1982), liberalism had once again become a respectable, even fashionable, epithet, and a leading hard-liner was so bold as to inform me, two weeks after the congress, that “we liberals won a great victory at the Twelfth Party Congress.”

Every selection of terminology involves a compromise. Some terms may be more precise but suffer from unfavorable political overtones. Other terms may be more neutral but also less precise. I have decided to use the terms “liberal” and “conservative” to identify the principal currents in Yugoslav politics in the 1970s and 1980s, realizing that these terms may call forth associations irrelevant to the Yugoslav context.

By “liberal” in the Yugoslav context I mean someone who favored (1) decentralization and the deepening of federalism, (2) emphasis on profitability in investments, (3) a more open society with greater respect for human rights, (4) loose party supervision of society, (5) pluralism within the party, and (6) the placing of priority on the needs of one’s own republic. This is not to say that everyone I identify as “liberal” necessarily favors all six liberal planks. But it does presume that she or he identifies with at least three or four of the six liberal stands and that she or he cooperates with other liberals, some of whom advocate the other liberal planks listed.

By “conservative” in the Yugoslav context I mean someone who favored (1) a strong central government or party, (2) emphasis on the political goals to be accomplished through investments (e.g., equalization of living standards), (3) a less open society with tighter censorship and social controls, (4) tight party control of all sociopolitical organizations, (5) democratic centralism (operational party discipline), and (6) the rendering of priority to federal needs (or the needs of the LCY) over the needs of individual federal units in all cases.

Not all party officials fall into one of these two categories, however. In addition to these two groups, there is a fluid group of “brokers” who may hold the balance and who attempt to find a middle ground between the liberals and the conservatives. Tito, Vladimir Bakarić, and Branko Mikulić were all prominent brokers. In practice, the brokers were usually closer to the conservatives than to the liberals, though most brokers, Tito included, identified with the liberals during the 1966-71 period.

Economic Reform as a Stimulus of System Change

It is a cliché among Marxists that political development tends to lag behind socioeconomic transformation and that changes in the latter sphere create irresistible imperatives for changes in the former. Whether universally true or not, the axiom appears to fit the Yugoslav case in the mid-1960s. Prior to 1963, Yugoslavia was a centralized state with a federal veneer. After 1963, however, changes began to take place in the behavior of the federal units, changes that bubbled up from the realm of economics into the political world and impelled ultimate institutional overhaul. By 1971 various observers, both Yugoslav and American, believed that decentralization had gone so far that Yugoslavia was on the verge of reconstituting itself as a confederacy. The economic reform, by unleashing certain political forces, proved a stimulus of system change.

More significant than the occurrence of system change is the fact that its essence was depolarization. As the triplex program of “de-etatization,” decentralization, and democratization advanced, four important changes took place in the system: (1) the Serb-Croat rivalry ceased to be the lodestone of intraYugoslav politics; (2) the north/south split ceased to provide a reliable basis for predicting the alignment of federal units in issues; (3) the other six federal units, though demographically and (aside from Slovenia) economically outgunned by Croatia and Serbia, began to mobilize in the political arena and to assert their demands; and (4) the republics began to oppose the federal government in areas where their interests were threatened. Slovenia was the first republic to openly oppose a federal decision (in the Slovenian road controversy of 1969), but the phenomenon would later become quite common in Yugoslav politics.

The years immediately prior to the economic reform of 1965 were riddled with difficulties. Industrial plants had often been built more for political, that is, cosmetic or palliative, reasons than with an eye to economic rationality, and inventories of unwanted goods were rising. Unused capacities in industrial production were accompanied by the unprofitable records of many “political factories.” All this was aggravated by growing inflationary pressure and by perennial balance-of-payment deficits.⁸ When the economic reform began, it was conceived, as such things usually are, as a simple adjustment to enable the existing system to function more smoothly. Its origins were piecemeal adjustments that prompted further adjustments. Three reform measures were introduced in 1961: opening the Yugoslav economy to the world market, reorganizing the financial markets, and relaxing wage controls. “The reform measures were, however, insufficiently prepared and hastily implemented,” as a World Bank report notes.⁹ Economic problems continued to mount, with inflation quickening after 1962, and they compelled a major reexamination of the premises of the system.

Between 1964 and 1965, a series of policy decisions were made that reflected the outlook of the economic liberals, that is, the system’s discontents. Among the chief elements of this reform were

(1) the transfer of considerable responsibility for administration of the economy from the federal government to the republics;

(2) the repudiation of the concept of regional autarkic development (the concept that every Yugoslav republic should be self-supporting);

(3) the adoption of a more realistic exchange rate, permitting greater participation by Yugoslavia in world trade;

(4) the complete revision of price ratios, marked by steep hikes in the prices of raw materials, agricultural goods, and certain other commodities and services;

(5) the aggrandizement of the role of banks and economic enterprises (susceptible to republican pressure and manipulation), at the expense of the federal government; and

(6) the abolition of the federally controlled General Investment Fund (GIF).

The reform had an unmistakable devolutionary character: its main features were the strengthening of the role of the periphery (the republics and enterprises) at the expense of the center (the federal government and the Belgrade banking monopoly). But by turning the resources of the defunct GIF over to the large central banks, the reformers failed to carry the reform through to its logical conclusion. Thus, they aggravated certain latent antagonisms in the system, stimulating a growing conflict between the central banks, insurance companies, and foreign trade organizations on the one side and their republican counterparts on the other. This conflict increasingly took on political overtones and in time assumed nationalist garb as a conflict between the assimilationist conservatives gathered around Ranković and the partial and egoistic interests of the national communities, especially Croatia.¹⁰

As Crane Brinton has noted in his classic study of revolution, collective cognitive dissonance does not set in during a period of sustained oppression or exploitation but, rather, as a formerly oppressive or exploitative regime begins to reform itself.¹¹ Once given better conditions, citizen-subjects inevitably ask why conditions could not have been better sooner and why they could not be better yet. In Yugoslavia, the suppression had been perceived in regional terms and, therefore, the heightened consciousness produced by the relaxation of federal control was also framed in regional-ethnic terms. Cognitive dissonance (CD) was expressed in group terms—as Croatian CD, Montenegrin CD, or Kosovar/Albanian CD, but never as Yugoslav cognitive dissonance per se. Miko Tripalo, then a member of the executive council of the presidency of the LCY, recognized this when he told Borba in 1970 that “nationalism of all sorts is one of the negative reactions to unitarism. Its essence is etatism, but at the level of the republic.”¹²

The Croatian crisis was, in fact, revolutionary in character and signaled the surfacing of long-repressed resentments. It was natural, therefore, that this sentiment should carry over into the political realm, that is, Croats, perceiving themselves to be economically exploited, should champion not only further economic liberalization but also political reform. Some Yugoslavs recognized this tendency quite early; shortly after the fall of Ranković (July 1966), one disgruntled conservative pointed to the futility of trying to contain reform in the economic sphere. At the same time, this revolutionary character impelled the Croatian leaders to pose as leaders of the Croatian Volk and as progressive leaders of the Yugoslav community. In the process, the transformation of intergroup behavior made system change not only necessary but possible.

Politicization of the Reform

If the recession that struck Yugoslavia in 1961-62 served as a spur to economic reform, it was also the irritant that inflamed Yugoslav politics. Slovenes and Croats argued that central planning was no longer relevant to their level of development. But the Yugoslav south lagged considerably behind this standard, and some argued that the use of a centralized mechanism to distribute resources was still a boon to the less developed parts of the country. The northerners complained that gross investment figures disguised the true advantage enjoyed by the south, since large sums had to be spent in the north for maintenance and replacement of existing equipment, while the admittedly lower gross amounts for the south could largely be funneled into new projects and direct expansion. The southerners replied that development of the south was the most rational strategy over the long run, because the wealth and natural resources were there and it would be cheaper to process natural resources in the south than to transport them elsewhere.¹³ Kosta Mihailović, for instance, in a 1962 article for Ekonomist, claimed that the eastern republics (the “Danubian zone”) were more suitable targets for Yugoslav investment, that that region was economically more dynamic, and that for the next thirty years it would not be necessary to build anything on the Adriatic coast!¹⁴ But, as Deborah D. Milenkovitch has pointed out, “few really believed that rapid development of the less developed regions was also a maximum growth policy for the nation, and fewer still believed that their rapid development was economically more beneficial to the already advanced areas than an equivalent amount of investment in the advanced areas would have been.”¹⁵ The northerners complained of excessive waste in southern investment and noted the higher marginal capital coefficients (i.e., the greater investment necessary to produce a given income) and the lower labor efficiency prevailing in the underdeveloped areas.¹⁶

Šime Djodan, then a prominent Croatian economist, outlined three alternative models of economic development applicable to a country with heterogeneously developed zones: accelerated development of the underdeveloped areas to equalize all areas, concentration on further development of the better developed areas, and development according to the principle of economic rationality. We have already seen that the first approach was associated with the so-called Danubian concept of development and that the third model was espoused by advocates of the “Adriatic concept.” Conservatives like Stipe Šuvar unfairly attempted to identify the liberals with the second model. But, in fact, there was another faction, small and not very vocal, that believed the second model to be a suitable framework. This faction espoused a “Slovenian concept” that called for the intensification of investment in the most advanced areas: not surprisingly, advocates of the “Slovenian concept” tended to be Slovenes.¹⁷

Under the third (Adriatic) model, optimal economic results are the guiding criterion; for example, it would favor development of nonferrous metallurgy in Serbia, Kosovo, and Macedonia and of aluminum, bauxite, and hydroelectric industries in Croatia and Bosnia. In a key argument, Djodan claimed that the less developed republics suffered as much from the errors of the Danubian concept as did the Adriatic republics. If the development of Slovenia, Croatia, and Vojvodina had not been hindered by advocates of the Danubian concept, he argued, “the development of the underdeveloped districts would be a far more tractable problem today than it is.”¹⁸ Unfortunately, charged the Croatian liberal critics, Yugoslavia had operated on the basis of the first model. Too many factories had been built in the south without economic justification—and the phenomenon of the “political factories” was said to be worst in Kosovo and Bosnia-Herzegovina.¹⁹ Djodan, like many other Croats at this time, concluded that “if one considers regional development on the territory of Yugoslavia as a whole over the preceding period, one must confess that it was understood as the development of the insufficiently developed regions.”²⁰ Some demanded that a federally appointed agency be created to supervise investments in the south and assure that funds were sensibly spent. (Djodan’s arguments will be taken up at greater length in the following chapter, in the context of the Djodan-Šuvar debate.)

The LCY tried to hold the line against the growing criticism. Answering the charge that northern money was being squandered on the construction of “political factories” in the south, Kardelj asked a Slovenian audience:

But is it really true that there are no irrational investments in Slovenia and Croatia? I will not cite instances of such failures and misses, because you yourselves know them well, but I would pose the following question: what would be the reaction in Slovenia if someone were to demand that predetermined federal organs should evaluate the rationality of Slovenian investments and the economic policies of the organs of the republic of Slovenia? There is no doubt that such a demand would be bitterly repulsed and that it would be viewed as an attack on the independence of the Slovenian nation. I think that such a reaction would be legitimate. Is it not clear, then, that the same things cannot be measured with different measures? And is it not clear that the use of such different criteria [for Slovenia and Croatia on the one hand, and the underdeveloped areas on the other] would lead not only to the undermining of the equality of the Yugoslav peoples, but also—in that event—to the economic and political dependence of the economically less developed nations and republics on the more developed?²¹

But the underdeveloped republics showed no sign of catching up with the developed republics, and, thus, it could be (and was) convincingly argued that, if equalization was indeed the aim, a new approach was necessary.

These arguments, and the presence of liberals like Crvenkovski in the leaderships of the underdeveloped republics, converted this rich-poor debate, which might have produced a simple economic polarization under other circumstances, into a political question. It provided the basis for an anti-Serbian coalition, as we have seen in chapter 1 (see, in particular, tables 1 and 2). Bakarić was instrumental in bringing about a change in Croatian tactics, designed to appeal to the non-Serbian underdeveloped areas. The Croats actively began to woo the south and, as early as 1961, Croats began to talk of deetatization rather than decentralization. Evidently, Bakarić indeed believed that the underdeveloped areas could profit economically from decentralization and de-etatization; he was staunchly antinationalist and consistently opposed expressions of ethnic particularism, especially in his native Croatia.²²

The liberals (the decentralists) and the conservatives (the centralists) now began to look about for allies. The liberals’ identification with Croatian-Slovenian interests and conservatism s association with the interests of the Serbian republic became a complicating factor. Macedonia and Croatia both had a stake in federalism and had resisted suggestions made in the early 1950s, during the Yugoslavism campaign, that nominal federalism be dumped and replaced by open unitarism.²³ Croatian and Macedonian elites, both motivated by the desire to maximize republican autonomy, reached a working understanding. The Serbs concentrated on courting the underdeveloped republics and, in the case of Montenegro, had some success: in December 1963, Serbia and Montenegro announced the integration of their respective industries; cooperation in communications, foreign trade, and long-term joint planning; and the conclusion of an agreement to complete the Belgrade-Bar railway. In the course of 1964 and 1965, the Serbian and Montenegrin parties signed additional protocols for economic and cultural cooperation.²⁴ These actions collectively constituted the domestic equivalent of a treaty. They also signified the abandonment of any pretense to neutrality on the part of the Serbs. (It might be recalled, in this connection, that Šuvar, among others, had at one time claimed that the Serbs were uniquely “internationalistic,” that is, culturally neutral, and that Serbs were ready to become “Yugoslavs. “) The Serbo-Montenegrin protocols and Serbian wooing of other underdeveloped federal units signaled Serbian identification with the conservative southeastern bloc. But the simple polarization that the Serbs envisaged did not materialize; instead, the situation proved much more complex. A stable national-liberal coalition began to take shape, composed of Slovenia, Croatia, and Macedonia, with Vojvodina as a kind of associate partner.²⁵

This national-liberal coalition, applying pressure both through its representatives in Belgrade and through vigorous self-assertion within the areas of its collective geographic jurisdiction, was able to push the reform forward between 1965 and 1966, dramatically reducing the prerogatives of the federal government in the economic sector. Federal subsidies to industry were slashed—a clear victory for Croatia and Slovenia and an unmistakable setback for the centralists, whose strongholds lay not only in Serbia but also, at that time, in Kosovo and Montenegro. Profitability became the chief criterion for the allocation of resources. The market reform of 1965 effectively ended the golden age of “political factories,” and central investment planning was abandoned. Yet the Serbs were not unconditional losers in this round of battle, since they continued to dominate the national banks and since the reforms were not inimical to Belgrade’s larger corporations. Moreover, the distinction between advocacy of pluralistic decision making through syndicalist mechanisms or along territorial/ethnic lines was blurred by the temporary alliance of proponents of both approaches in the fight against unitarism.²⁶

At the same time, concern over the slide toward political pluralism was growing among Serbs. The Serbs were sensitive to accusations of Serbian hegemony and harbored lingering resentment against the Croats for the establishment of an independent Croatia in World War II and the concomitant Ustaše massacres of Serbs. It is important to remember that the LCY established itself on the wreckage of the Serbian Chetniks, who had waged rather lackadaisical guerrilla warfare against the Germans, actually collaborating with them in the end. This commixture of historically rooted emotions is combined with the conviction of many Serbs that centralism provides the greatest good for the greatest number—shades of Jeremy Bentham—and that Serbs, the only true internationalists in Yugoslavia, have been abused and exploited by the other nationalities.²⁷

Passage of the reform did not, therefore, signify the end of the issue. For one thing, the Macedonian League of Communists (LCM) was internally divided. Many in the LCM were as bitterly opposed as their colleagues in the LC Serbia to the decision, made by the Third Plenum of the LCY central committee in early March 1966 to reduce federal investment, support economic reform, and permit enterprises to invest throughout Yugoslavia. For another thing, the centralists, still in control of many of the levers of command, were sabotaging the reform through a combination of studied perversion, perfervid Švejkism, and outright noncompliance. “Individual measures were frustrated, sometimes mysteriously, or else pushed to ridiculous extremes. . . . There were always sound reasons for deviations, vehemently and sometimes apparently unwittingly argued by politicians and an increasingly disputatious and regionally or functionally partisan press.”²⁸ By midwinter 1966, the liberals were dispirited. “It’s like punching a rubber wall,” one despondent liberal confided to an American observer, “you seem to make an impression, but then it’s just like it was.” Another reformer was even more disheartened and announced grimly in January 1966: “the Reform is dead.”²⁹

The Serbian party was taking a hard line. Men like Jovan Veselinov and Vojin Lukić, both party secretaries and the latter a close confidant of Ranković, were determined to block devolution and reform to the furthest possible extent. Ranković, as head of the state security service, had carved out a small empire for himself and had long opposed Kardelj’s more liberal, polycentric visions with his own neo-Stalinist centralism.

In March 1966, Komunist reported discussions (of March 10) “of a markedly political character” between representatives of the executive committees of the party central committees of Macedonia and Serbia. Though the parties met in part to explore possibilities for widening bilateral interrepublican cooperation in the fields of economics and culture, the contacts also represented an effort to dampen lingering Macedonian suspicions toward Great Serbian chauvinism (the kind that had labeled the Macedonians “South Serbs” during the interwar period). The discussants hoped to lure Macedonia away from the liberal and back into the conservative orbit.³⁰ This gambit failed, however, and Macedonia clung fast to its coalition with Slovenia and Croatia. Note, however, that this kind of direct contact between the Serbian and Macedonian parties, like the earlier contact between the Serbian and Montenegrin parties, is exactly what is expected within the framework of the model.

The Fall of Ranković

In 1959, there was an attempt on Kardelj’s life. Kardelj was seriously wounded but survived. Although nothing was proven, Kardelj’s wife, Pepca, let it be known that she blamed the Serbian leadership, that is, Ranković, for the assassination attempt.³¹ Her suspicion makes clear the depth of enmity existing between the two men. They were not merely rivals—they were deadly enemies. The incident was passed over but not forgotten.

Meanwhile, Ranković was making enemies in other ways. His use of methods of intimidation and his surveillance of leading party functionaries, including the collection of intimate details of their lives, angered many.³² Kardelj and his liberal allies prepared the field of battle in early 1965, when they obtained the reassignment of Ranković’s loyal ally, Vojin Lukić, who was now moved from his post as federal secretary for internal affairs to a less sensitive job as organizational secretary of the Serbian party.³³ By spring 1966, the liberal bloc had finally persuaded Tito that Ranković had to go. The final decision seems to have been made suddenly, and the “investigation” of Ranković was rushed through in order to deny him any possibility to respond.

Only on June 16, 1966, was a special commission appointed by the executive bureau of the LCY central committee, with the task of preparing the case against Ranković. The commission was chaired by Krste Crvenkovski of Macedonia. Its other members were Blažo Jovanović, Djuro Pucar, Dobrivoje Radosavljević, and most interestingly, Miko Tripalo (of Croatia) and France Popit (of Slovenia). The commission worked in secret, with the responsibility of producing a full report within six days.³⁴ Although not members of the commission, the powers behind this commission were liberals Kardelj, Vladimir Bakarić, and Petar Stambolić (of Serbia).³⁵ They would be among the chief beneficiaries, ultimately, of Ranković’s removal. Crvenkovski and Tripalo would also soon show liberal colors.

Ranković was kept in the dark about the commission’s work until the last minute and only received the documentation amassed against him on the eve of the Brioni plenum, at the same time that this documentation was also made available to the other delegates invited to the meeting.³⁶

In session, Tito accused Ranković of deviating from party policy as early as 1964 and of forming a political clique with the objective of taking power. Rankovic and his adherents were specifically accused of “dragging their feet in carrying out the decisions of the Eighth Congress—in fact, they have as much as completely forgotten about the decisions altogether. “³⁷ Ranković was stripped of his posts and expelled from the central committee. His deputy, Svetislav Stefanović, was likewise stripped of his posts and expelled from the party, as was Vojin Lukić.

Serbs reacted to Ranković’s ouster as though the Serbian nation itself had been defeated. Borba (September 15, 1966) cited lamentations that LCY policy had become anti-Serb and that the Serbs no longer had anyone to defend their interests. UDBa itself was shaken up, and many key security personnel were transferred to large trading corporations in Belgrade.

Although Ranković’s fall in July 1966 essentially ended the crisis, there was an interesting sequel—interesting, that is, from the perspective of coalition theory. The provincial committee of Kosovo was angered by the revelations of UDBa misconduct and by the “gentleness” with which the Great Serbian unitarist Ranković was being coddled. Alienated from its former “protector,” Kosovo demanded his expulsion, also, from the LCY—a demand seconded by the central committees of the LC Montenegro, LC Bosnia, and LC Macedonia and passed by the Fifth Plenum on April 10, 1967. The composition of this antiRankovic group seemed to symbolize the solidarity of the underdeveloped republics with the Croatia-Slovenia axis and betray a certain amount of opportunistic maneuvering. Possibly it also indicated a postreform switch of Montenegro from the conservative to the liberal camp. The establishment of this broadly based, anti-Serbian coalition suggests to me that Yugoslavia was transformed, in the course of this crisis, from a loose bipolar system, polarized along economic lines, into a balance-of-power system.

Ascendancy of the National-Liberal Coalition

At this juncture, there were three obvious alternative paths of development: recentralization, further devolution culminating in the transformation of Yugoslavia into a loose confederation, and shoring up of the status quo on the basis of interrepublican consensus. Such consensus was lacking. Throughout this period the national-liberal coalition (Croatia-Slovenia-Macedonia) concentrated on further decentralization and “democratization” both of the LCY and of society. A key issue was federal control of the greater part of earned foreign currency. In championing the federalist principle, the Croatian party was supported by the Slovenes, who had common economic interests and favored currency reforms; by the Macedonians, fearful, above all, of a revival of Serbian chauvinism; and even by some members of the new Serbian leadership who were hostile to centralism.

There was some support for centralism throughout the less developed regions, but all of these areas, especially Macedonia, saw the Serbian republic as minatory to the autonomy of the other republics. Serbia, it was thought, viewed its own interests as tantamount to the interests of the whole and tended to benefit disproportionately from centralism. The disjunction of the LCY from Serbian interests, if not its actual neutrality in the controversy, was attested by an article in Komunist (February 3, 1966) that referred to Serbia as the center of antireform resistance.

Throughout 1967 and 1968 there was considerable furor over whether republican delegates to the Chamber of Nationalities ought to be free to act on their own opinions (thus allowing for compromise with opponents and a possible failure to assure the interests of their respective federal units) or whether delegates ought to be bound by an “imperative mandate” to observe the strictures and instructions of their republics and autonomous provinces. In vain Milos Žanko, a Croatian representative in the chamber and vice president of the federal Assembly, urged deputies to transcend the parochial interests of their respective republics and to adopt policy stances consonant with the interests of Yugoslavia as a whole. Žanko was reported to have said that “deputies in the Assembly [must] make decisions according to their own convictions. . . . No deputy is answerable only to his own [republic]. Every deputy is answerable to all the peoples of our country.”³⁸ For this, and for openly criticizing the laxity of Zagreb in dealing with Croatian nationalism, Žanko was recalled by the Croatian party and relieved of his posts.

This was the period of liberal ascendancy, which reached its high-water mark in the summer of 1971 (i.e., after the national-liberal coalition had fallen apart) with the passage of a series of amendments to the constitution. Together, these amendments amounted to the reconstitution of Yugoslavia as a confederative republic. They included the conversion of the office of the presidency into an interrepublican collective presidency, albeit still presided over by Tito. Throughout this period there was a tendency for liberals to identify centralism with Great Serbian assimilationism, resulting (as forecast under hypothesis 3) in the formation of a stable anti-Serbian coalition.

This was also a period in which various circles indulged in what, under the circumstances, can only be judged to have been idle fantasies. Stevan Vračar, for example, seeing in the breath of liberalism an opportunity to dismantle the dictatorial superstructure altogether, openly advocated installation of a two-party system in Yugoslavia, his only proviso being that both parties be committed to socialism—a notion Crvenkovski was said to have favored.³⁹ Certain unnamed individuals allegedly tried to seize control of SAWPY in order to use it as the nucleus for an opposition party parallel to the LCY.⁴⁰ Milosavlevski, in a 1966 article for Gledišta, urged that SAWPY be empowered to reach its own conclusions independent of LCY direction and even to differ with the LCY over policy matters.⁴¹

Not even the LCY appeared, at first, to be immune to the reformist contagion. A commission was set up as early as September 1966 to consider the possibility of a reorganization of the LCY throughout the country, with the Macedonians perhaps in the forefront of the campaign. Even the official party journal, Socijalizam, published an article by Tomislav Čokrevski in October 1967 that argued that the Leninist conception of democratic centralism had been devised to meet the needs of an underground party in tsarist Russia and that Yugoslav party organization had to reflect changed historical and social conditions.⁴² Party reform appeared, for a while, to be a logical extension of the reform, and, indeed, party structure was reorganized in October 1966. Even Radio Belgrade would state, in June 1967, that “the reform of the League of Communists is a component part [of] and vital presupposition for the implementation of economic and social reform goals.”⁴³ It soon became clear that what the reformers wanted was no less than the complete and official federalization of the party. The LCY could not be satisfied with the faithful representation of the “general interest” of the working class, the reformers argued. According to Stojan Tomic, a high-ranking party member in the LC Bosnia, “the League of Communists must also realize partial interests,” and, accordingly, the LC Bosnia was obliged to represent specifically Bosnian interests just as the LC Macedonia ought to represent specifically Macedonian interests.⁴⁴ Tomic added the understandable qualification that the “partial interests” of the republics should not be pursued at the expense of the general interest of Yugoslavia. Seeking to strengthen the ability of the republican parties to defend precisely such partial interests, Macedonian Mito Hadži Vasilev tried to obtain for the republican parties ° veto power over the decisions of federal party organs. In a daringly blunt repudiation of the concept of democratic centralism, Vasilev argued that “no majority, no matter how overwhelming, can, in and for itself, justify a decision—we say within the League of Communists of Yugoslavia—when it is clear that even a single republican organization cannot accept and implement this decision.”⁴⁵ That this demand was no idiosyncratic fluke was clear from its subsequent reiteration at the Fifth Congress of the LC Macedonia (Skopje, November 1820, 1968), when Milosavlevski unreservedly came out in favor of the extension of federalism to all political sectors, including the LCY. Among the Montenegrins, the anti-Serbian faction also appeared to be ascendant in the postRankovic phase. Budislav Šoškić, candidate member of the LCY presidium representing Montenegro, fully expressed the waxing federal spirit when he declared, in December 1968, that the republican party organizations were no mere “transmission belts” for LCY policy.⁴⁶

This anti-Leninist talk elicited resistance from those unwilling to equate party democratization and party federalization. Dragomir Drašković, denouncing such talk of federalization on behalf of the Serbs, declared that communism must be proletarian, not national, in content and that proletarian interests would only be diluted, fractionalized, and prejudiced by allowing the ethnic factor into the political calculus in this respect.⁴⁷ The issue was still a live one when the Ninth Congress of the LCY met in March 1969, and the participants carried the debate into the halls of that congress.⁴⁸ Yet, while the national-liberal coalition showed itself to be all for democratization of the party as long as this strengthened the autonomy of the republic organizations, once that process threatened to factionalize the republican party organizations, the coalition resurrected the old dictum of democratic centralism.⁴⁹ Neither side, thus, challenged democratic centralism per se; the dispute raged over its appropriate application. And, though the Ninth Congress ended up being purposefully vague in some of its resolutions, republican party congresses were empowered to select members of the LCY presidium and to draw up their own party statutes. The more active role that the national-liberal coalition was claiming for the republican party organizations was accorded a degree of legitimacy when the Ninth Congress resolved that “instead of binding them in a centralized fashion, the League of Communists of Yugoslavia realizes a creative ideopolitical synthesis of the conceptions, opinions, activities, and initiatives of the Leagues of Communists of the socialist republics.”⁵⁰ Although Aleksandar Fira, then a professor at the University of Novi Sad, fired back that “the League of Communists is not a league of leagues of communists, but a league of communists of Yugoslavia,”⁵¹ the tethers seemed to be slackening, the transformation was complete, and the movement for economic reform had been metamorphized into a movement for political reform.

Disintegration of the Coalition

The Ninth Congress was perhaps the highpoint of the national-liberal coalition. Within a few months, the Slovenes became enraged at their coalition partners for pusillanimous support or outright desertion on an issue of vital importance to the republic of Slovenia, the Croatian and Macedonian parties were engaged in open polemics, and the coalition drifted apart.

The Third Session of the LCY presidency, held on May 29, 1969, just two months after the Ninth Party Congress, signaled the first crack in the national-liberal coalition. The session highlighted the inner tension in the alliance of actors with divergent economic interests. Serbian liberal Mijalko Todorović had already thrown the issue into relief by venting his concern over expressions of exclusivist nationalism in the publications of Matica Hrvatska (the Croatian Culture Society). More potent yet was Crvenkovski’s denunciation of Croatian economic nationalism as a kind of separatism. Crvenkovski called for a retreat from economic decentralization, arguing that the persistence of Yugoslavia’s economic woes was due to the inadequate integration of the Yugoslav economy. Tripalo, speaking on behalf of the Croatian party, rejected Crvenkovski’s analysis and insisted that economic troubles could best be cured by more thorough decentralization.⁵²

The strains in the alliance were subsequently exacerbated by the Slovenian road affair, during which alliance partners Croatia and Macedonia declined to share the cuts in highway construction that Slovenia was expected to shoulder. Generally, by the time a foreign credit or foreign aid package is formally tendered to Yugoslavia, the republics have already agreed on the dispersal and disposal of the funds, and project work can therefore proceed without a hitch. In the summer of 1969, however, after the World Bank had announced the award of extensive credits to Yugoslavia for structural development, including road construction, the Yugoslav federal Executive Council (SIV) revised its project package, provoking sharp Slovenian reaction.

In July 1968, Belgrade had applied to the World Bank for assistance in financing a highway construction program. A World Bank appraisal mission visited Yugoslavia in October and November of 1968 and agreed to finance three road projects (one each in Croatia, Slovenia, and Macedonia) and to consider the financing of further roads in Serbia and elsewhere at a later date. The Slovenian sections, which would link that republic with Austria, were deemed by bank experts to be an economically wise investment in view of the potential for developing the tourist industry in the northeast.

On June 5, 1969, Yugoslavia signed the agreement with the World Bank for a loan of $30 million (the so-called Third Highway Project) and allocated the funds according to a formula acceptable to all concerned parties.⁵³ In mid-July, however, the SIV unilaterally decided to shelve construction on the Šentilj-Nova Gorica road temporarily, in order to apply the funds designated for that stretch of road against works in other republics. This meant that the Hoče-Lovec and Postojna-Razdrto segments were temporarily being scrapped and that Slovenia would have to wait. The decision sent a shock wave through Slovenia, and citizens of that republic convened meetings to protest the decision. The Slovenes had counted on support for what all concerned recognized to be a high priority project. Instead, their project had been trimmed back in order to fund projects that the Slovenes deemed to be of lesser consequence. Since these other projects included a stretch of road that would ultimately link Croatia and Serbia, the Slovenes concluded that a Serbian-Croatian deal had taken place. The executive council of the Slovenian assembly took up the issue that same day and issued an acerbic protest, insisting that the project was of “extraordinary significance.”⁵⁴ The executive council declared that the project would constitute the optimal road connection between Yugoslavia and the West and requested that the project be restored to the agenda. The following day (August 1), the secretariat of the central committee of the LC Slovenia, chaired by Andrej Marinc, convened again to consider SIV’s road decision. The Slovenes complained that the decision was contrary to the spirit of the Ninth Congress insofar as the decision was made unilaterally, without any consultation with the republic. Indeed, the Slovenes had not even been told that SIV would take up the question of the road project and the bank loan at its July meeting. The Slovenian central committee warned of negative consequences for relations between the republics and the federal government if this decision were not reversed and once more asked the federal Executive Council to reconsider.⁵⁵

The move was unprecedented. As Bilandžić has noted, this was the first time that a republic had dared to remonstrate against a federal decision.⁵⁶ Croatia quickly lent its support to the Slovenes, despite the Slovenes’ heated allegation of a deal between Serbia and Croatia. Not so sympathetic were the Serbs, whose condemnation of the Slovenian protests came as a surprise to no one. The harshness of Crvenkovski’s castigation of the Slovenes for “republican egoism” and weakness of Yugoslav socialist patriotism was unexpected and produced another fissure in the national-liberal coalition.⁵⁷ The federal Executive Council responded, finally, on August 7, when it sharply upbraided the Slovenes—embittering them—and adamantly refused to revise the new disbursement schedule. The secretariat of the central committee of the League of Communists of Slovenia was still discussing the “road affair,” as it came to be called, at its meetings of August 25-26, but there was nothing more to be done. Still, Slovenian tempers had become so inflamed that France Popit, president of the LC Slovenia, felt compelled to explain that Slovenia had no intention of seceding from the Yugoslav federation—a sure sign that the subject had been raised unofficially.⁵⁸

The project, as it was finally carried out, involved the following sections: (1) in Croatia, a highway from Zagreb to Karlovac with access roads in Zagreb and Karlovac, which accounted for 34 percent of project costs; (2) in Slovenia, a highway from Vrhnika to Postojna, which accounted for 54 percent of project costs; and (3) in Macedonia, a highway from Gostivar to Kičevo, which accounted for 12 percent of project costs. Thus, although the losers in their struggle with the federal Executive Council, the Slovenes still garnered the lion’s share of the loan. Ironically, the Croatian and Slovenian roads, segments of the international highway system that had been expected to see considerable use, actually had less traffic than anticipated, largely because they were operated as toll roads. The Macedonian highway, however, which replaced a low-grade, mountainous road, experienced greater traffic than anticipated. (By way of a footnote to this episode, it should be noted that the Slovenes did get credit support for the two outstanding stretches of highway under a World Bank loan contracted on June 18, 1971 [the “Fifth Highway Project”], which were completed by the end of 1977. )⁵⁹

Thus, in terms of what roads were ultimately constructed, the crisis had no effect whatsoever. But it had moliminous ramifications in the political system in two respects: (1) it changed expectations of republican behavior and, despite Belgrade’s sharp condemnation, set a precedent that expanded the realm of legitimate action, and (2) by stirring Slovenian resentment against the Croats and pitting the Macedonians against the Slovenes, it effectively shattered the erstwhile trilateral coalition. After the Slovenian road affair, the Slovenian leadership became increasingly tepid in its support of Croatian demands for reform, even if their interests were similar. The national-liberal coalition had become a Croatian-Macedonian alliance, and that nexus was itself increasingly strained.

There were other changes in republican orientations. Vojvodina, which had been associated with Croatian and Slovenian demands for further decentralization of the banking system and reform of the foreign currency exchange systems, began to back off in mid-1969. Montenegro—as we shall see in the following chapter—steadily took on a more clearly anti-Serbian, if not exactly pro-Croatian, hue. And Croatia, shorn of support to the north and east, began actively courting Kosovo.

The Slovenes had been more or less cowed by the response to their own half-conscious bending of the rules of the system. The Croatian leadership, however, set out to change those rules. Tripalo, already at the head of this movement, published an article in Socijalizam in November 1969, in which he cautioned:

Social praxis, events, and experiences since the Fourth Plenum of the central committee of the LCY up to now clearly show that our system cannot work without a reorganization of the League of Communists. . . . The League of Communists cannot realize its vanguard role if it plays the lackey of corporate management or some sort of propaganda machine for higher organs of power and representative bodies. But, in the same way, the League of Communists must have the powers to resist demagogic, petit bourgeois, and primitive conceptions of one section of the working class and of working people in general.⁶⁰

At the Tenth Session of the Croatian central committee, amid criticisms of unitarism—which was said to underestimate the seriousness of the national question—the Croats launched a campaign aimed at further devolution of authority to the republics.⁶¹ The Croats became the primary advocates for adoption of the principle of unanimity in decision making in governmental and party organs. They inherited the task that the Macedonians had earlier pursued with such vigor and that the Slovenes had given up after the road crisis. In this they were successful, moreover, and, in April 1970, the LCY party presidium accepted the principle of unanimity in decision making, effectively granting the coalition’s demand for a veto power.