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University of Sarajevo – University of Bologna







13 OCTOBER 2015


Table of Contents




Theoretical Framework of Social Property, Nationalism and Robbery


1.1. Self-Management


1.2. Social Property


1.2.1. Marx on Social Property


1.2.2. Kidrič and Kardelj on Social Property


1.2.3. Different Schools of Interpretation of Social Property in Yugoslavia and



1.3. The Great Transformation



1.4. Theoretical









Nationalism as a Balkan Characteristic



1.4.1. Lie of the Serbo-Croatian Ethnic Hatred



1.4.2. Initial Accumulation of Capital and Nationalism: the Creation and Function of


Lumpen-Bourgeoisie or the Comprador Class



Privatization after Privatization



Role of the Croatian Government in Nationalism and Robbery


2.1. Politics of Franjo Tudjman


2.2. The Notion of Croatian Freedom


2.3. Croatian Democratic Union (HDZ)


2.4. A Couple of Examples of Nepotism and Conflict of Interest


2.5. Sanader and the Return to Power of HDZ



Croatian Opposition

and Other Critiques of Nationalism and Privatization Theft



Programs of Oppositional Parties and Social Property



Opposition to the Law of Transformation by the Representatives in Croatian




Branko Horvat and Privatization








“Nationalism is a fighting mode of the class enemy” Tito

Before the breakup of Yugoslavia, the citizens of Croatia owned such huge economic enterprises such as INA, Rade Končar, Borovo, Pliva, Shipyards in Rijeka, Pula and Split; Steel Industry Sisak, Vuteks, Cedevita, Frank, Podravka, Ledo, Maraska, Pik, Kraš, Zdenka, Gavrilović, Badel, Jugoplastika, Jugoturbina, Djuro Djaković, Riz, Digitron, Konstruktor, Petrokemija; to name just a few of the industries. This socio-economic right was guaranteed to them through the system of worker’s self-management and social ownership as its fundamental element. Today, however, the situation is very different. The process of democratic transition had brought reforms that have had effectively taken away this property of the masses and left it in the hands of few. All this was done in the name of privatization at the very delicate time period of creation of nation states, nationalist violence and propaganda saturation of the everyday life. The purpose of this research is to try to establish a connection between the privatization theft and nationalism in the process that follows the breakup of Yugoslavia and independence of Croatia; while doing this, this research will completely reject the idea of primordial ethnic hatred between the peoples of the Balkans while paying the necessary attention to the economic transformations of the society which follow this breakup. The theory of ethnic hatred had dominated the Yugoslavian space but also the international scene for some time but is now widely rejected by most of the scholars who show interest in this topic. For example, V. P. Gagnon explains how ethnic mobilization in Yugoslavia was a product of redefining the community from class to nation, a process which was enforced by the elites for their own interest. 1 The class identity and the class consciousness were, as a consequence of this change, put aside while national (ethnic) consciousness had taken its place. Another obvious problem with the theory of primordial ethnic hatred is that it does not explain the class restructuring of the society which is, if not the cause, than certainly the consequence of the ethnic divisions and the ethnic violence that follow the breakup of Yugoslavia. This research wants to pay attention

1 Gagnon, V. P. The Myth of Ethnic War Serbia and Croatia in the 1990s. Ithaca, N.Y.: Cornell University Press, 2004. 29.


exactly on this restructuring and to try to connect it with the usage of the ideology of nationalism from the side of establishment in the case of Croatia. Although the circumstances in Croatia are, of course, unique; this research does not find its purpose in showing how a phenomenon of robbery and nationalism is only Croatian or more Croatian than Serbian. This comparison is a topic for another research. Therefore this modest research is dealing with a Croatian case as important part of a wider process in the European East during the 1990’s. “The Homeland War” (Domovinski Rat) is often shown as the triumphant result of the rule of Franjo Tudjman or the first rule of Croatian Democratic Union (HDZ) while the economic transformation and the privatization theft seem to be their actual biggest results. These results are consistently put aside and still attempted to be shown as secondary by the mainstream media and even the former opposition. This robbery was, in the case of Croatia, executed in two main steps. The first step of this project was so-called “transformation” (“pretvorba”) of the social property into state property. It in effect dispossessed the citizens, that is the workers of Croatia, actual owners of that property, transferring this ownership to the state. The second step was further transfer of this seized property to the newly-established nationalist elites who sized the role in this HDZ nation building project. “The Homeland War”, as is popularly called the civil war in Croatia and the aggression by Serbia, or Croatian War of Independence, among everything else was a smokescreen behind which this property transferring process took part. Many people have died, were displaced or robbed as a direct consequence of this ethnic conflict, but as an indirect result of this conflict the entire nation saw a seizure of its property with little or no resistance since the class mobilization was completely suppressed in the name of national/nationalistic mobilization. The formation of national bourgeoisie, whose nonexistence was seen as a problem in the process of this “great transformation”, from the beginning had meant radical wealth redistribution or, in effect, the stealing from the workers and peasants in the name of nation, “Croatian cause”, religion and even capitalism. All of these were suppressed during the time of socialism as they were seen as reactionary and regressive but were resisting and trying to come back into the place of dominance. Two paradoxes of this transformation process could be easily detected. First paradox that follows this great social transformation that is based on the defense of “national interest” is that “national interest” had jeopardized the economic, and even the existential interests of great majority of the nation members. The fight for the “national freedom” had brought abolishment of


the socio-economic safety network to the wide masses as well as the accumulation of capital in the hands of newly-established bourgeoisie. The second paradox is that even this bourgeoisie does not enjoy any freedom of management over domestic economy nor does the political class enjoy any freedom in management of the state affairs since the state’s economic and political sovereignty is highly questionable. In fact both of those social classes, the owning and political class, find their purpose today in the service of the global capital or the “global over class” 2 . As far as Croatian workers go, and they were the majority in this process of nation building, their rights, which they had enjoyed under the old system, were abolished in three steps. The first “Law of Transformation” of the 1991 had abolished their right to property which leads to their property being taken away 3 . Social property is a very specific form of property that is very hard to privatize or to be transferred to anyone, as we will see later in the text, but is also a form of property that in no scenario can be legally seized by the state 4 . So the fact that the laws were enacted to follow this process does not make it legitimate. The second step of the abolishment of the workers rights was in the amendment to this infamous law in 1992 which had abolished the institution of workers’ council (radnički savet 5 ) 6 and effectively taken management rights from the workers. This had also meant abolishment of any kind of democracy and establishment of a dictatorship in the workplace, place in which workers spend much of their time. The third step and the final strike to the workersrights happens in the very company itself where newly-appointed owning class often dries companies out of their money and resources and shows no interest in any investment or production but only in some self interest that can quickly be satisfied by harming the company. This process is very well known to the workers of whole Yugoslavia and wider region and through company's bankruptcy it leads to the abolishment of the right to work itself, workers last mean of subsistence. All of this was only possible thanks to the nationalistic groups who were during Yugoslavia working very hard against the unity and against

2 Rorty, Richard. Philosophy and Social Hope. New York: Penguin Books, 1999. 73.

3 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 13/01 (2001). 287. For the text of the law see

4 In chapter one we will see Kardelj’s clear position on the relationship of social property and state who can not be the owner. In chapter three we shall also see Branko Horvat’s position on the question.

5 “Radnički savet“ is a form of workers' councl that exists only in the workers self-managing systems and has a function of managing the company so it should not be confused with the todays councils (radničo vijeće) which only have an advisory functon.

6 "Privatizacija U Hrvatskoj." Radnička Prava. May 1, 2014. Accessed October 5, 2015.


its socialist system. These groups rose into the power, most importantly in Serbia and in Croatia and had dismantled socialism in their wish for achievement of a nation state. Counterrevolutionary activities 7 of the nationalist elements had strong impacts on the actions of the League of Communists of Yugoslavia. These elements were compiled of militant fascist diaspora 8 but also various domestic groups such were Croatian Springers 9 , Serbian Academy of Arts and Sciences (SANU), The Young Muslims and others. It seems like these counterrevolutionary actions are exactly where we should look for the reasons of the extended party hand in the economy namely in the companies that were self-managing by law. This party rule is what had cost the self-managing socialism its legitimacy and maybe even its success. The constant fight against nationalism or nationalisms was, of course, the condition for the success of the revolution and every indulgence to the nationalists had definitely meant the defeat of socialism. This is exactly why it is no surprise that the nationalist groups have collaborated; that, for example, SANU had published „Springers“ in Serbia after they were banned from publishing in Croatia or that Vladimir Šeks, one of the future leaders of Croatian HDZ was the lawyer of Serb radical nationalist Vojislav Šešelj etc. This is because these groups had congruous counterrevolutionary goals no matter how opposed their nationalisms seemed. They obviously had common enemy. The infamous cooperation between Milošević and Tudjman, who had „as nationalists well understood each other“, engaged in partitioning Bosnia and building nation states for themselves is also well known example. Josip Manolić had told us how he was present when General Kadijević 10 had told Tudjman how he would not tear down Tudjman's governance in Croatia but on the other side how Tudjman should be careful to only talk to Milošević and nobody else in Serbia „because he was the boss over there“ 11 . Tudjman was, of course, good for the Serbian nationalists since his apparently opposite viewpoints have given legitimacy to their

7 The term was often misused during Yugoslavia to mean: against government. In this research counter revolutionary is considered to be against the socialist revolution and for the causes of nationalism, fascism or capitalism.

8 Josip Manolić, who had served for a long time in Yugoslav counter intelligence agency “UDBA” as well as Tudjman’s prime minister, claims that in the fighting between UDBA and just Croatian fascist diaspora from the end of WWII until the breakup of Yugoslavia some 40,000 people had died worldwide.

9 Croatian Spring was national movement in 1971 which was eventually crushed by Tito and had featured leaders such are Miko Tripalo or Savka Dabčević Kučar; while Franjo Tudjman did participate, he was not in the forefront of the movement. Croatian spring is arguably the precursor of the wide movemet that HDZ eventualy led through the changes in the 1990's.

10 This is the general who had led the Jugoslav People’s Army’s attack on Croatia and indirectly the infamous occupation of Vukovar.

11 Manolić, Josip. Interview by author. July 17, 2015.


own nationalist claims, but for Tudjman Serbian nationalists were the key allies as well since without them he couldn't break up Yugoslavia. This cooperation between nationalist groups had brought prosperity to the national elites while those who had to fight for this prosperity in the name of nation were cheated, robbed and left without rights. The relevance of this research is in the importance of the two problems which it is trying to connect. Nationalism is still considered by most to be the reason for the wars and the massive human rights violations of the 90’s and is still if not the largest, one of the largest problems of the Yugoslav nations. Privatization theft would be, if not equal, than the second main problem, and even more spread one since just about everyone was a victim of this gross violation of human rights. This research will than by trying to connect the two great violators of Human Rights try to offer an alternative view of the possible solutions. The significance of the study for me is in the fact that the country that I was born in was dismantled in a bloody war with massive human rights violations. Nationalism is still, today used as one of the main political games of the elites throughout the region. This may be because nationalism is connected to another problem which needs to be discussed as a package and not separately. The academic community will find significance in the expansion of this approach to the Yugoslav conflicts and maybe even find some inspiration for further research of the possible solutions. The main question of this research is: can we connect the problems of nationalism and privatization theft in a causal relationship? Does one lead to the other, or does one allow for the other? Is it in the nature of nationalism to support the raise of the national bourgeoisie? Did Croatian nationalist government abuse the nationalist violence in order to rob their own citizens? We expect to find the relationship between nationalism and privatization theft and to prove that there is a clear connection between the two and that there was a clear intent of the government who had planned the mass expropriation of the social property. The Croatian government had used the nationalist violence to saturate the political discourse and limit it to nationalist topics while restructuring the economy in the way in which most of its citizens will find themselves without shares of former social property. We will show in this research how nationalist ideology and violence were used as a smokescreen for this great theft of Croatian social property. The main hypothesis of this research therefore is: Croatian nationalist government of the 1990’s has used ethno-nationalist ideology against its own people in order to rob them off their social property in the quest for the creation of the new national bourgeois elite.


In the first chapter we will take a look at the theoretical background of socialist self management and social property as well as at the process of privatization and nationalism. For the purpose of this research we shall describe self management, the system which was abolished by the nationalist government. We shall also explain the concept of social property, what it is, but also what did it mean for the theoreticians and lawmakers in Yugoslavia. What did it mean at the breakup of the country and how could it be justly privatized. This type of property is what confuses the most people who are not familiar with the concept of self-management. Also understanding of this type of property is the key to understanding of the process of robbery which we are trying to connect with the nationalist elites. We shall also tackle the question of privatization and corruption, possibly being the same problem or the same phenomenon in the context of former Yugoslav economies and their transitioning. After this we will turn to nationalism and the critique of the approach of primordial ethnic hatred, and try to present some alternative argument which again can show to the utilization of nationalism for the purpose of privatization theft. The literature here was selected from socialist classic Karl Marx to Yugoslav theoreticians Kidrič and Kardelj. Self management was explained by Branko Horvat and Asim Mujkić. And in the part criticizing nationalist approach we shall look at the arguments of Professor V. P. Gagnon Jr. and his work Myth of Ethnic War. In the second chapter we shall examine the actions of the Croatian nationalist government of the 1990’s who had lead Croatia through the breakup of Yugoslavia, war and the great economic transformation. Firstly we shall look at the politics of Franjo Tudjman, the nationalist leader and the figure which held the absolute power in Croatia in the 1990’s. His political views from his own work “National Question in the Modern Europe” as well as from the numerous testimonies from the political figures form both HDZ and the opposition parties as well as the valuable testimony of the last American ambassador in Yugoslavia. For the purpose of this research 14 hours of interviews were conducted with current and former politicians Josip Manolić, Slavko Linić, Vladimir Šeks and Antun Vujić; University Professor Tonči Kursar and President of Ina labor bard Predrag Sekulić. In this chapter we have also relied a great deal on the newspapers interviews from the 1990’s and later because the privatization theft in Croatia remains a topic mainly investigated by the journalists and not so much by the legal investigators or academic researchers. Branko Horvat in his Ekonomika Brzog Razvoja also offers us some expertise on the economic processes as well as comments on Tudjman and Milosevic, Serbs and


Croats, testimonies which we have found valuable. In the third chapter we will see what the position was taken by the opposition parties regarding the ‘Transformation’ and also the position of Branko Horvat, a famous Yugoslav economist. We will see from the programs of the political parties in Croatia, how they intended to treat social property if elected or how much respect for the workers ownership they have shown. We shall also examine the discussion in the Croatian Parliament at the time ‘the Law of Transformation’ was being passes. The Parliament is the one who enacts the law and for the interpretation of a law we turn to the parliament discussion. For the purpose of this we have acquired the transcripts from the Croatian Parliament whose Secretary Lidija Bagarić had issued us a copy of transcripts on my name on the 17.8.2015. This chapter will show how opposition parties were well aware of the problems of the proposed transformation and how their concerns were ignored by the HDZ. This is because HDZ did not intend to do what it had claimed, to transform the social property into private property. HDZ had wanted to transform social property into state property and than, later on, to assign it to the new bourgeoisie. This new bourgeoisie is whom HDZ had planned to further use in order to keep lasting power. This study will contain the theoretical discussion as well as the data analysis and the literature overview. It is a combination of the desk and a field research. The field research in Croatia will be compiled of 6 interviews with relevant figures named above and the visit to the parliament which will provide us with the necessary data regarding the enactment of the Law of Transformation. The theoretical background will be crucial for the understanding of the terms but also of the nature of the privatized property as well as understanding of the utilization of nationalism for the purpose of goal fulfilment of nationalist elites and the creation of the new bourgeoisie.


1. Theoretical Robbery







Both concepts of self-management and social property have to do with the abolition of social monopolies. Self-management has a goal to abolish the monopoly over the decision making process of the few and to share the authority over this process within the collective which performs the labor. Social property has a goal of abolishment of monopoly over property of the few through empowering the workers with ownership of the means of production, thus enabling the self-management. Self-management has as its goal to abolish any kind of monopoly over decision making process, weather in the hands of a capitalist entrepreneur or a socialist state. Democracy in the workplace is seen as the main part of this system which considers it to be the substantial and alongside social property the cornerstone of democracy in general.

1.1. Self-Management

The organizational model of a capitalist enterprise is a pyramid model with the CEO on top of the pyramid, managers and clerks below and the workers at the very bottom. The decision making process is hierarchical, top-down directed and majority of the people make no decisions. The income distribution functions much in the same way thus the autocratic system of governing the enterprise creates besides social (order givers and order takers) also economic classes. This class differentiation is caused by the capitalist mode of production and is the fundament of this system of repression and exploitation. This class differentiation is exactly what self-management attempts to abolish. In the self-management, as Branko Horvat explains the enterprises “are made up of two pyramids (in the form of hourglass) connected by a dot in which the tips meet.12 The upper, upside-down pyramid is made up of the base of workers and the tip which is made up of the labor lawmakers. The bottom pyramid has a base which is made up of the same workers but here as labor professionals and the tip which is filled by the management. The flow of the order in the

12 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 13/01 (2001). 279.


upper pyramid is political while in the bottom one it is professional.13 This means that in the upper pyramid political equality is practiced in the decision making process while in the lower one professional hierarchy remains. The existence of the upper pyramid is what disables the creation classes. All of the employees are the owners of a self-managed enterprise and all of them participate in the election and monitoring of the workers’ council (WC) whose purpose is to see the workers’ will through. This is the political body of the company and it elects the executive manager (EM) who than appoints the executive council (EC) which are the two bodies who occupy the top of the bottom pyramid. EM will come up with the business plan which WC has to approve and whose mandate shall not be terminated before the plan is executed unless there is a great volition. However all of the major decisions, such are investments, acceptance of large loans, changes in salaries and so on, are made jointly by Workers’ Council and Executive Council. Besides this the Workers’ Council plays a comprehensive monitoring role of the company comparable to that of board of directors in capitalism. The big difference however is that Workers’ Council is made up of people who are familiar with the production from the bottom to top and who are deciding about their own interest. The greatest decisions however are not even made by the Workers’ Council. These decisions could be, for example about a change in income distribution or dramatic change in the number of the workers and have to be made by all of the workers in a form of a referendum. It is democracy which is the main principle of this mode of production. Hierarchy does exist in the professional manner but politically all of the workers are equal and making decisions jointly. This also guarantees that there will not be income inequality of a kind that we see in the capitalist mode of production. 14 Why is this democracy in the workplace this important? According to Professor Asim Mujkić the place of production and capital is the exact place of power and decision making. The confirmation of this comes even form the neoliberal order where all of the important “decisions are not made in the Parliaments and Governments, but at the ‘actual place of work’, in the narrow circles of investors, capitalist speculators or in other words, at the very source of power.” 15 The problem here is that this ‘place of work’ is not democratically organized but rather is a place

13 Ibid. 279.

14 Ibid. 278-281.

15 Mujkić, Asim. "Alternatives to Capitalism." Lecture, Open University, SARTR, Sarajevo, November 29,



which emphasizes the alienation since it only represents the elitist minority. Self-management, on the other hand, wants to establish a system with representatives which are easily replaced and which actually represent the interest of the people and not of the small elitist circle. This is why the socialist theoreticians have pointed to the connection between ownership and the political power which always go together. So if the ownership is monopolized, so will be the political power and other way around, if ownership is democratized, again, the political power will also be democratized. Bourgeoisie is seeking to gain all of the economic power, not because it needs more resources but because it wants to gather the political power in its hands. The fight against oppression or simply democratization has to be seen as the main gal of self-management. This is also where the critiques of the Yugoslav self-management have the most complaints. Asim Mujkić talks about the usurpation f the self-managing process in the Yugoslavia by the communist party. “But this does not tell us abut the defectiveness of the self- management but abut the defectiveness of the political party which imagines representing someone by ‘knowing’ the real interests of that group even better than the members of that very group. This is a typical mechanism of the usurpation of the political power by the political elites equally used by the bourgeois and the communist parties.” 16 As Mujkić further explains, the argument about the citizens being too tired of their political involvement which they did not in fact want does not stand. The citizens were tired of formal political participation which was exhausting to them since it did not have its promised meaning and all of the most important decisions were made by the party; citizen participation (in many cases) was just a formal procedure which had to ratify these already made decisions. 17

1.2.Social Property

In order for us to understand the changes that had happened in the structure of ownership, In Croatia and the rest of Yugoslavia, first we have to examine the phenomenon of social property or even better we should give an answer to a common question: what is social property? And also what did it mean for the people of Yugoslavia? Social property was the basis of the Yugoslavian self-managing socialist system. Through the concept of social property the workers

16 Ibid.

17 Ibid.


had owned the means of production just like through the concept of self-management they were the executive power in the companies they worked in. Self-management was the core of the Yugoslavian democracy 18 which had allowed workers to manage their own company through the labor council which made all of the important decisions including electing executives. Self- management in Yugoslavia was established by law in 1950 when labor councils were formed and empowered to manage companies 19 . The abolishment of the self-management comes to Croatia in 1991 and 1992 with the “Law of Transformation” and an amendment to it. According to Josip Manolić, whose very government had enacted this law and executed the “transformation” this abolishment was contrary to the interest of the workers, average Croatians, but was a requirement of the West or of the “surrounding” countries as Manolić would put it 20 . Actually this ‘requirement’ was phrased, as elsewhere in the Eastern Europe as transformation to parliamentary, multiparty democracy and free market society. Social property was not the only form of property ownership in Yugoslavia but it was the dominant one which had clearly shown the character of the entire society as socialist and self- managing 21 . Social property, as Edvard Kardelj, the writer of the Yugoslav constitutions and labor law would say, can not have one definition because social property is an evolving phenomenon 22 in a society which is not looking to set its rules in stone, but rather to evolve and always look for better ways to manage itself. Here is one example of the evolution of social property that we have imagined during this research. First step is the state ownership as pseudo- social ownership but a step that was widely considered as a necessary one. Second step is social ownership in which the workers take the means of production in their own hands in their enterprises. The third period is when the means of production belong to all of the members of society equally. And the fourth period of this vision of the evolution of social property is when the means of production cease to be referred to as property or in other words: when social property becomes non-property or when inter-personal relationships are in no way defined through any form of ownership. This is because in socialist humanism the belief is that the

18 Many would say that this is the exact place where Yugoslavian democracy had failed since the communist party had kept a grip of control over the enterprises. Others again testify that not only party members were in the labor councils (radnički saveti) and that even CEO’s of some companies were not in the party system while Branko Horvat also talks about the golden period of the Yugoslavian self-management 1952-1964 (Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 13/01 (2001). 113).

19 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 13/01 (2001). 289.

20 Manolić, Josip. Interview by author. Tape recording. July 17, 2015.

21 Fira, Aleksandar. Ustavno Pravo. 4. Izd. ed. Beograd: Privredni Pregled, 1987. 138.

22 Kardelj, Edvard. Slobodni Udruzeni Rad. Beograd: Radnicka Stampa, 1978. 22.


purpose of ownership is to establish hierarchical relationship between people, which is not possible in the case of even distribution of property rights, as we will see more in Kardelj’s part. When all of the property belongs to everyone equally and when that is not a subject of change, the property itself seizes to be the object of desire or the topic of the conversation and more importantly it seizes to be the ground for the establishment of relations of power and subjection.

1.2.1. Marx on Social Property

Looking from the todays perspective of a world dominated by neoliberal mode of production, social property seems like absurd kind of property which doesn’t have intention of further concentration and appropriation but to be instrumentalized as a tool for progress in

economic democracy and equality. For the purpose of this theoretical part and to get a better feeling what this social property had meant in Yugoslavia at the time of the breakup we will take

a brief look at writings of three authors: Karl Marx, Boris Kidrič and Edvard Kardelj. In the

Communist Manifesto Marx explains how capital can always only be put in motion by the action

of all of the members of society, not by an individual. “Capital is therefore not only personal; it is

a social power. When, therefore, capital is converted into common property, into the property of

all members of society, personal property is not thereby transformed into social property. It is only the social character of the property that is changed. It loses its class character.” 23 Marx explains how capitalists themselves refute the argument about the origin of private property which supposedly is in mixing personal labor and property. What we see in capitalism is very opposite to this and the property is being completely alienated from labor or, in other words, people who do all of the labor, do not own property and people who own property do not do the labor. This is exactly the problem with the capitalist production, the means of production are not in the same hands as the labor and the profit does not belong to the laborer but to the exploiter. This is why the concept of social ownership is introduced to bridge this gap and to put the ownership of the means of production into the hands of labor. In his essay “On the Jewish Question” (arguing about the necessary steps for the political emancipation of the Jews) Marx replies to the idea of Bruno Bauer who had proposed that the

23 Marx, Karl, and Frederick Engels. The Communist Manifesto. 27th ed. New York: International Publishers, 1988. 24.


state would make a progress with the abolition of the religion (and also expresses his view on property and “rights of man”). “Of course, in periods when the political state as such is born violently out of civil society, when political liberation is the form in which men strive to achieve their liberation, the state can and must go as far as the abolition of religion, the destruction of religion. But it can do so only in the same way that it proceeds to the abolition of private property, to the maximum, to confiscation, to progressive taxation, just as it goes as far as the abolition of life, the guillotine.” 24 If people are ready to kill in the name of the revolution, than what is the problem with the private property abolition? Marx thinks that abolition of the social categories of birth and social rank, which was the furthest accomplishment of the bourgeois revolution, allows the private property, education or employment to act in their way and further provide lines for the class separation of society. This is why bourgeois revolution doesn’t eliminate the class differences but rather replaces one way of social hierarchical classification for the other. This is why, regarding the emancipation, the bourgeois revolution was not enough. Further in the text Marx turns on the “Rights of Man” and confronts the bourgeois conception of rights, society, liberty etc. “The right of man to private property is, therefore, the right to enjoy one’s property and to dispose of it at one’s discretion (à son gré), without regard to other men, independently of society, the right of self-interest. This individual liberty and its application form the basis of civil society. It makes every man see in other men not the realization of his own freedom, but the barrier to it.” 25 So, man has his discretion over his goods and his income, his labor and so on, everything individual, egotistical and without socialization and solidarity. This is pure bourgeois metaphysics of an abstract, isolated subject, Robinson Crusoe. What Marx further notices about the rights of man is this: “None of the so-called rights of man, therefore, go beyond egoistic man, beyond man as a member of civil society that is, an individual withdrawn into himself, into the confines of his private interests and private caprice, and separated from the community. In the rights of man, he is far from being conceived as a species-being; on the contrary, species-life itself, society, appears as a framework external to the individuals, as a restriction of their original independence. The sole bond holding them together is natural necessity, need and private interest, the preservation of their property and their egoistic

24 Marx, Karl. "On The Jewish Question." February 1, 1844. Accessed October 6, 2015.

25 Ibid


selves.” 26 There is no society, like Margaret Thatcher said 27 , everyone is the world on his own, solely his own product, and this is the final result of bourgeois revolutions. The results of this revolution are that “man was not freed from religion, he received religious freedom. He was not freed from property; he received freedom to own property. He was not freed from the egoism of business; he received freedom to engage in business” 28 . Marx is infinitely disappointed with a view how these results are final goal of social revolution. This egotistical social system needs further changes, improvements and revolutions and the first hard step is the abolishment of the private property.

1.2.2. Kidrič and Kardelj on Social Property

In early works of Yugoslav socialist humanism Boris Kidrič writes how social property can not be seen as a right in the old sense of right to property because its social content is different. It is expectable to see some kind of residue of the old system in the process of production and exchange of goods and this is why workers or anyone would consider social property as actual property right. For the sociological and historical content of qualitatively new social relations, which are created through workersmanagement of companies, those residues are only important if we have to confront their reflections in the heads and topics of people whose consciousness is backwards” 29 In other words, property is only a topic due to some backwards thinking which will only stay around for a short while before permanently disappearing from the culture and even memory of the society. The worst thing for Kidrič is the idea that social property is somehow defined as private property, even if that of the workers themselves. This great thought however does not help us solve the problem of privatization of once established social property which is the path that Yugoslavian workers found themselves on in the process of creation of nation-states. This concept of non-property is a concept strictly tied to socialism. Once the socialism is abolished this concept has to be abandoned as well and the workers and all of the members of the society have to be able to claim their property right.

26 Ibid

27 Harvey, David. A Brief History of Neoliberalism. Oxford: Oxford University Press, 2005. 23.

28 Marx, Karl. "On The Jewish Question." February 1, 1844. Accessed October 6, 2015.

29 Kidrič, Boris. Socijalizam I Ekonomija. Zagreb: Globus, 1978. 173.


Edvard Kardelj was both the main Yugoslav theoretician and even legislation writer when it came to this issue. The last law regulating the social ownership, Law of Associated Labor was written by Edvard Kardelj and here is what the author of the law says in his “Free Associated Labor”. First thing is that social-ownership does not and cannot have one universal definition 30 since it is an evolving phenomenon so the shape and the content of it change over time. Since revolution is permanent society is always looking for better ways to manage itself. The first phase was the state ownership of the social property (means of production) which was clearly seen as temporary by the Yugoslav theoreticians as well as legislators, due to the fact that the state monopoly over ownership may bring state monopoly over decision making in the company that is supposed to be self-managing. In fact, such a deviation had occurred throughout the Eastern ‘Communist’ block where it established alienated relations not only between workers themselves but between working class and Communist Party nomenclature. This period (of state ownership) is seen as a necessary period but is still part of the ownership categories in which the ownership of the means of production is in the hands of one social group while ownership of the labor is in hands of the other 31 . Kardelj says that the concept of the social ownership is mainly here to explain the relations between the workers themselves and not between the worker and the state. “In that manner social-property is the collective property of all the working people, and according to that also a personal property of every working person to that extent and in that shape in which it allows the worker his right to work with the social means, together with all the other of his rights that are connected to this essential one” 32 . In other words, the social ownership is in theoretical as well as legal terms connected to the self-management and to the work itself. Ownership itself is not, therefore the purpose of the social ownership. The purpose of the social ownership is the labor so these phenomena cannot be studied separately since social ownership was created for the purpose of work. According to Kardelj, the right to work with the socially owned means of production cannot be taken away from the workers by anybody, including the state. 33 Coming from a man who wrote Yugoslavian laws and the constitution, this can add another dimension regarding the legality of state seizure of the social property at the beginning of the 90's. Another

30 Kardelj, Edvard. Slobodni Udruzeni Rad. Beograd: Radnicka Stampa, 1978. 22.

31 Ibid 22.

32 Ibid 24.

33 Ibid 25.


point to be made about state’s disability to legitimately seize this property is that Kardelj had clearly also stated that the workers have right to invest a share of their own income into the social property or into the means of production which are in their hands, if they wish to increase production. This is how workers of Yugoslavia had been investing for decades into the social property and even building social vacation homes or other institutions for the social benefit and only to see all of this taken away by the state before being given away to few. Analyzing Marx, Kardelj says that he believed how social property must belong to all of the working people as well as to all of the members of society. It is the first period of social ownership it has a class character and belongs to the workers, but it will eventually evolve to the point when it belongs to the entire population, first in a country and then internationally 34 . Kardelj gets to the similar point while explaining how the social property is there not to be someone’s property that he can claim for himself as opposed to the other one who cannot, but rather to be a means of production that enables people to work and make living for them and for the society. This period of social ownership Kardelj sees as just another step toward the abolition of ownership because of the fact that the “social ownership will, due to the advancement of production, bring a system in which the distribution of goods will be more and more based on the needs and less and less on the labor” 35 . Kardelj, just like Marx, does not want to give certain shares of the social property to the working people since that is seen as a backwards capitalist concept, the property is everybody’s until one day it can be nobody’s and we reach the main goal of this economic revolution in which right to property really becomes a freedom form property for all. It is very important to understand here why Kardelj does not clearly state that all of the workers, or all of the citizens are owners. This is not the case because he wanted ownership rights for the state or ever considered giving some to a private capitalist owner, no, it is because the whole concept of ownership is clearly seen as reactionary. The right to property is therefore tolerated only as a temporary measure just like the state monopoly over property was introduced when it was needed. So, when the time comes people will be freed form the concept of property ownership and individuals, society and state will not own property since there will be enough property there for everyone to enjoy according to his needs and ownership will cease to be a “conversation topic”.

34 Kardelj, Edvard. Slobodni Udruzeni Rad. Beograd: Radnicka Stampa, 1978. 26. Translated by the author.

35 Ibid 32.



Different Schools of Interpretation of Social Property in Yugoslavia and Conclusion

When it came to the discussions about the nature of the social property within the authors of Yugoslavian socialist humanism, both Kardelj and Kidrič have belonged to a “non-propertygroup, which believed how social property is not a proper private property. Another group of scholars, known as “property” group had believed otherwise. This group was grouped around Belgrade scholars and their claim was that “property without a subject is contradicto in adjecto. Positive determinations of the subject of social property are tied to: natural person, individual, worker of the associated labor, working class as a whole.” 36 Kidrič had died in 1953 so in 1979 when Kardelj had died as well, the space was opened for the change in the dominance in the dynamics of the “non-property” vs “property” group. As Professor Hodzić explains, the “property” school’s interpretation had become dominant in the 1980’s in which “attitudes which had prevailed were that subjects of the property rights are all of the subjects which appropriate a share of the income.” 37 According to this author by the 1985 this “property” conception had completely dominated the conferences in Belgrade and Skopje which had offered as a conclusion how “non-property” conception of social property is the cause of the economic crisis. This change in the dominant perception of social property had created favorable conditions for the introduction of the internal privatization process, also known as “Marković privatization”. Ante Marković, the last Prime Minister of the Federal Executive Council (1987- 1991), came to power through the help of the reformists from Croatia but also other republics, including Serbia. Marković had defeated Borisav Jović who was Milošević’s candidate and had a strong reformist vision, a vision that both Milosevic and Tudjman detested. 3839 He planed to introduce specific brand of privatization of socially owned enterprises by changing social ownership of the means of production with the private ownership by the workers who would then be ready for the abolishment of socialism which was expected. “Marković’s privatization” model was initiated in the second half of the 1980’s and was an attempt to transfer the socialist conception of social property into a private property of the workers and the management. As we

36 Hodžić, Kadrija. "(Re)Privatizacija I Globalizacija." Forum Bosne 22-03. 72.

37 Ibid 72

38 Gagnon, V. P. The Myth of Ethnic War Serbia and Croatia in the 1990s. Ithaca, N.Y.: Cornell University Press, 2004. 82.

39 Here we can also note that Warren Zimmerman reports how Marković had warned him not to think that Tudjman is better than Milošević (Zimmerman, 27).


will see, this process was stopped in Croatia by the Law of Transformation, which was rushed, according to Vladimir Šeks for the very reason to stop the “Marković privatization” 40 . Both models signify the return of the private property, which was at the time seen as inevitable, but the difference is great in the outcome as HDZ model had no intention to recognize workers property rights but, on contrary, to introduce the new proprietors’ class. What we have seen is that social property cannot be privatized justly, since it is a concept that is meant to go forward in the social evolution and not backwards. The process of privatization of social property is violent regressive process that amounted greatly to social injustice, first of all because it reversed the nature of property from a system within which that property was supposed to be a guarantee of advancement of general human condition. Social property is a form of property which is there also to be the guarantee for other two types of socioeconomic rights. These two rights are right to work and right to self-management or right to democracy in the workplace. This way denying the right to property to the workers also leads to the abolishment of these two rights. All of these questions present the theoretical difficulty of the process of privatization of social property, questions which can’t have satisfying answers because the process of socialization and further development of social property is not anticipated for the evolutionary setbacks of these proportions. Kardelj was clear that social property in Yugoslavia cannot belong to the state and that workers are to invest into it like if it was their own. Even if we accept the unconvincing argument about the society’s wish to abolish the advanced social systems and instead of them reinstall regressive capitalist relationships, than we still have to answer to the complicated question of the possible legal way to privatize this peculiar type of property. The best answers that we have found during this research were the ones given by Antun Vujić and especially Branko Horvat and as we will see in the third chapter.

1.3.The Great Transformation 41

By The Great Transformation we consider the process of change of the state system which was experienced by all of the republics of former Yugoslavia. The first part of this transformation is the abolishment of the socialist state and its ownership system as well as

40 Šeks, Vladimir. Interview by author. August 6, 2015.

41 Although the title is browed from Karl Polanyi the transformation discussed here is of a different nature.


rejection of the socialist values which became labeled as wrong, backward, totalitarian and anti- European. It is interesting how socialist thought, although springing from values and heritage of the European Enlightenment, just as liberal thought, has, during the Cold War been imagined and described as something un-European by the dominant Western ideology. Socialist state had the goal to provide its titular group (the proletariat) with the socioeconomic rights which are denied in capitalism. Now, this project had either failed in Yugoslavia or was abandoned for some other reason and the socialist state was abolished. The second part of this transformation is the establishment of the nation state and the bringing about of the new national elite which will rule and own this state. Nation state looks for its legitimacy in providing the living space to the titular nation or ethnic group, but it is a form of bourgeois state rather than its alternative because its economy is based on the same principles of capitalism. In other words, nation state does not safeguard the interest of all of its citizens equally, like its name would suggest, but it represents the “guardian dog of the property and the privilege of bourgeoisie class” 42 . In his critique of the bourgeois state Marx says how “The executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie43 . This bourgeois class manages the economy and therefore manages the state as well. According to Marks the state doesn’t represent anything more than the tool for enforcement of this class order. National liberations, of which anti-colonial movements are good example, were by definition also bourgeois liberations since they are based on the change in the ruling/owning class and not in its abolishment. National liberations do not change the relationships of economic domination but rather replace a foreign dominating group with a “national” one. Looking from this perspective, in Yugoslavia it was impossible to achieve national liberation which would not be regressive; the only possible progress for the benefit of the wider population, was in the reform and improvement of socialism and not in rising and supposed solution to some national question which had eventually lead to the abolishment of the socialist state and the return of the bourgeois rule. In fact, the first rallies of citizens against authoritarian regimes in the European East of 1989, gathered around requests for democratization that would transform the ‘real existing socialism’ into a ‘socialism with human face’.

42 Mujkić, Asim. "Etnonacionalizam Kao Politika Prvobitne Akumulacije Kapitala." Odjek 1-4 (2014).48

43 Marx, Karl, and Frederick Engels. The Communist Manifesto. 27th ed. New York: International Publishers, 1988. 11.


From its very beginning, the bourgeois state had clearly defined the position towards the workers and their rights. As Branko Horvat writes in his famous Political Economy of Socialism, the bourgeois revolution was fully afloat when the Chapelier law was adopted in 1791 and had banned labor organizing and meetings “aimed against the free running of the industry”. As Horvat states further in the text, Chapelier had hard time explaining how “nobody plans to prevent the businessmen to discuss about their mutual interest” 44 . Of course that the owners of the means of production were allowed to freely organize, plan and execute the exploitation, while the state function was to make sure this process can safely happen through guaranteeing safety and through abolishment of labor organizations. This is not very surprising at all considering the fact that bourgeois state, a nation state belongs essentially to the bourgeois class and not to all of its citizens. Labor organizing, on the other hand, is not seen as something that will further this development but rather as something that will harm it. The state, which doesn’t belong to the workers, will, at all cost, try to prevent them from organizing in the struggle for their interests. This is because the interests of the workers are not the interests of the bourgeois state since they are not the interests of the bourgeoisie that owns the state. The interests of the workers are the socioeconomic rights which could be provided with the profit accumulated by the labor performed by these very workers. But this is also the profit which the bourgeoisie wants to keep for itself in this endless process of the accumulation of capital.

1.4.Theoretical Framework of Ethnicity and Nationalism. Foisted Image of Nationalism as a Balkan Characteristic

1.4.1. Lie of the Serbo-Croatian Ethnic Hatred

The space where Serbo-Croatian language is spoken had seen a lot of changes of power and of borders, forced migrations, religious conversions and so on. Over time the religious identity had become the most important identification which determines one’s ethnicity. So Catholics who speak Serbo-Croatian will identify themselves as Croats while orthodox Christians will identify as Serbs or Montenegrins and Muslims as Bosniaks or just Muslims. Branko Horvat sees the historic development of these “different nations” as pure geographical coincidence. “If

44 Horvat, Branko. Politička Ekonomija Socijalizma. Zagreb: Globus, 1984. 22. Translated by the author.


Emperor Theodosius The Great did not have two sons, and because of that in 395 AD divided the empire in two, where later settled Croats have found themselves in the western half of the Empire, thus becoming Catholics, while Serbs in the eastern half had became orthodox, these two peoples would not have developed into two separate nations. They speak the same language, and this is what linguists have to explain and not look for different words and for that purpose invent national words.” 4546 This fluidity of identity was commonly understood in Yugoslavia and ethnic hatred was limited to a minority. Ethnic hatred that was expressed during the WWII was rejected by the Yugoslavs who were looking for prosperity in the unity and antifascism. As V. P. Gagnon argues it was exactly the lack of ethnic hatred that had shaped the beginning of the war in Croatia. If there was enough ethnic hatred the war would have looked much differently and Gagnon proposes two questions which need to be answered before we can understand these developments: “1. Why was there sustained violence, especially against civilian targets? 2. Why was the violence being carried out within the discourse of ethnicity? That is, why were the perpetrators describing it as a conflict that is essentially about ethnic differences?” 47 According to the author the violence was a result of the wish for proliferation of the ethnic fear and hatred and was meant to target especially the influential moderates and especially in the plural communities. These communities were seen as the worse problems for nationalists since they were disproving the claim about the impossibility of living together so they were especially targeted according to this author. This is how the Osijek chief of police got murdered by Nationalist Croats who did not like his peacemaking activities (which we will talk more about in the third chapter) or how violence in The Republic of Serb Krajina continued after the Croats have been expelled. “Indeed, even after Krajina was cleansed, the violence mounted, as moderate Serbs from the region who criticized the Belgrade-allied Krajina leadership were harassed, threatened, and even killed.” 48 The creation of nation states was taking place and the elites who came to position to execute the process did not find tolerance and peace building as particularly helpful in the process of ethno-national mobilization. HDZ could not tolerate an Osijek police chief who manages to calm down the “rebelled Serbs” since they needed those rebelled Serbs in

45 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 12/01 (2001). 155.

46 For further explanation of Serbo-Croatian language and nationalism see Language and Nationalism, Snježana Kordic

47 Gagnon, V. P. The Myth of Ethnic War Serbia and Croatia in the 1990s. Ithaca, N.Y.: Cornell University Press, 2004. 10.

48 Gagnon, V. P. The Myth of Ethnic War Serbia and Croatia in the 1990s. Ithaca, N.Y.: Cornell University Press, 2004. 5.


order to continue their own politics. The same way Krajina moderates were spoilers for the rest of the population which elites tried to radicalize. The ethnic heterogeneity was the standard of life in the Balkans and how is it possible now that we all of a sudden have this primordial ethnic hatred? Serbs and Croats have never fought against each others before the XX century and coexistence of all of the vernacular groups was the main characteristic of the Balkan relationships. Instead of thesis about ethnic hatred being a Balkan characteristic, Gagnon offers us a different approach: “Far from being the result of endemic hatreds or Balkan pathologies, they were the result of a reconceptualization of space along European lines, in effect, the Europeanization of the Balkans.” 49 The construction of nation states is a violent but liberal project and thus this is often not being discussed. However it is crucial to understand the ethnic cleansings and genocides not as being primitive Balkan phenomena but rather as being the part of European liberal tradition. The genocide against Bosniaks in Srebrenica was part of the process of creation of a Serbian nation state which borders, as it was imagined, should encompass all ethnic Serbs, a process to which Bosniaks were seen as misfits. Previous mass murders of Bosniaks by the Serbs in WWII were also committed by the nationalist army that was, alongside European values and heavily supported by the Great Britain, attempting to build a Serbian nation state. Similarly in Croatia the great extermination of the Serb population during the WWII was also committed for the purpose of creation of the first Croatian nation state. Also, as Gagnon points out, the Turkish genocide against Armenians was not done by the Ottoman Empire. The empire was maybe brutal in some ways but it was not genocidal. The genocide comes as a result of the Europeanization, or better put, nationalization, when Turkish new elites, bourgeois, and not feudal, decided to build a modern nation state. The Ottoman Empire was not homogenous nor was it attempting to homogenize in the modern liberal European sense 50 .


Initial Accumulation of Capital and Nationalism: the Creation and Function of Lumpen-Bourgeoisie or the Comprador Class

49 Ibid 18

50 Gagnon, V. P. The Myth of Ethnic War Serbia and Croatia in the 1990s. Ithaca, N.Y.: Cornell University Press, 2004. 20.


What had happened with the redistribution and accumulation of the capital in the hands of the few in Croatia and Yugoslavia in general, Asim Mujkić compares to the Marx’s “dramatic descriptions of the original accumulation of capital.“ 51 The way to privatize the common is through use of force and fraud and not in some legitimate romantic way like one that was described by Adam Smith as an honest endeavor of individual entrepreneur who acquires his wealth through hard work and effort. No, capital gets accumulated through fighting, murder, and bullying, stealing or any other use of physical or political force. Mujkić describes this process and the creation of the new political national elite, or bourgeoisie 52 in Bosnia and Herzegovina, a process similar to that of Croatia and definitely one which had the same starting point, Yugoslav socialism. Crystallization of this new owning class comes from its cooperation with the political class or from the political class actually cashing out its political capital thus making itself the new bourgeoisie. Another thing to be noticed is that this bourgeois class is not a typical entrepreneurial one which invests into the production to profit from it. No, the new bourgeoisie finds itself in a different, non-productive parasitical role. This new bourgeoisie is not a capable entrepreneurial class which engages in production but rather it is a comprador class or an intermediary of the foreign capital. Its political position has brought it into an undeserved economic position which it now enjoys. The capital which it collects does not come from production but rather from its position of a “middle-man” or a servant to the foreign capital which operates in a form of financial speculation and position of the property titular of valuable ex-socially owned real-estate. Exactly contrary to their nationalist, patriotic ideology of guardian of ‘ vital national interests’ this “new class” is in effect more like a ‘traitor’ to the local poor, former working class of that very nation, now in the new circumstances of the global class war. The neoliberal reforms they introduce as parts of the package of transition, in fact, destroy the welfare state while, at the same time significantly improve their own position. Their role is to deregulate the local economy, making it vulnerable and completely dependent on the foreign trade. This class is also there to ensure the installment of the foreign loans and to accept the “necessary austerity measures” which come as stipulation for these loans. This new class is also called lumpen-bourgeoisie which is the term coined to emphasize the

51 Mujkić, Asim. "Etnonacionalizam Kao Politika Prvobitne Akumulacije Kapitala." Odjek 1-4 (2014). 49.

52 Is, however, the term bourgeoisie obsolete, seems like legitimate question. If we could not talk about the class of Proletariat today, at least not in the context of industrial, Fordian type, can we then talk about bourgeoisie? I think we can, since the 'obsolete' paradigm of nation state still persists, and, as Roland Barthes points „the bourgeoisie merged into the nation“ (Barthes, 1991: 138), and therefore is a Nation.


peripheral role of this class and its impotence to represent the real bourgeois class which would

actually manage or even own the society and not just be the “middle-man”. Another characteristic

of this lumpen-bourgeoisie is that it engages actively with the mafia 53 and thus further corrupts

the system. This class is the most dependent on the nationalism and

Thus the “strength and the consolidation of a nation state begins with the consolidation of

its ruling class which can only be the bourgeoisie, because the nation state is a product of

capitalist social relations, with its (bourgeois) unity despite the ideological spectralisation.” 54 The

spectrums of ideologies from liberal socialism to the neoconservative liberalism does not

challenge status quo of the rule of the bourgeois class. Its dominance is part of the contract with a

nation state which provides living space for the dominant nation and secures the rule of the

nationally conscious bourgeoisie. Ronald Barthes notices how this national bourgeoisie is a class

which does not wish to be named. Talking about the changes in the set of bourgeois rulers,

without the change of ideology at a deeper level in France Barthes notices how

A remarkable phenomenon occurs in the matter of naming this regime: as an

economic fact, the bourgeoisie is named without any difficulty: capitalism is openly professed. As a political fact, the bourgeoisie has some difficulty in acknowledging itself: there are no 'bourgeois' parties in the Chamber. As an

ideological fact, it completely disappears: the bourgeoisie has obliterated its name

in passing from reality to representation, from economic man to mental man. It

comes to an agreement with the facts, but does not compromise about values; it

makes its status undergo a real exnominating operation: the bourgeoisie is defined

as the social class which does not want to be named. 55

If the bourgeoisie is the true enemy or at least an opponent of the working class, since it does not

want to provide them with the socio economic rights, than staying nameless seems to be an

excellent strategy. This is what Mujkić claims happened with the 2014 protests in Bosnia and

Hercegovina. People were revolted by outrageous social injustice, protesting, burning

government buildings and fighting police. While protesters were aware of the fact that the enemy

was not a particular person, a particular political party and definitely not a particular ethnicity;

protesters had a hard time determining who this enemy was. And this may be exactly because it

stays nameless. “It is exactly because there is no named center of the ideological and political

power (even though there is a center of economic power) bourgeois ideology is uncatchable, all-

53 Ibid. 49.

54 Mujkić, Asim. "Etnonacionalizam Kao Politika Prvobitne Akumulacije Kapitala." Odjek 1-4 (2014). 49.

55 Barthes, Roland. Mythologies. 25th ed. New York: Hill and Wang, 1991. 137.


encompassing. 56 ” This bourgeois strategy is spread into parliaments thus creating the biggest problem of the representative democracy. While no party claims to represent the bourgeoisie, they all do and depend on it for economic support. These dynamics have developed in Croatia in the 1990’s under the rule of the HDZ party and president Tudjman. The national state was proclaimed, new national bourgeoisie was appointed and national enemy was handled. National mobilization had replaced the class mobilization and the ruling class had managed to hide itself under the same Croatian umbrella where everyone else also is.

1.5.Privatization after Privatization

During the research for this paper it happened few times that our interviewees claimed how some case could not be considered as a case of privatization but rather as a case of corruption. Contrary to this opinion, we consider that privatization and corruption are two phenomena that cannot be looked at separately in the states formed after the breakup of Yugoslavia. Privatization is always presented to us as a legitimate process which is part of transition that supposedly occurs in the context of: democratization, human rights and freedom. In reality, privatization in the states formed by the breakup of Yugoslavia means nothing else than a new, socially unjust redistribution of wealth, or piling up of the people’s property in the hands of few, chosen or appointed new owners. The fact that the process of privatization is presented as legitimate as opposed to corruption, which is recognized as an illegal way of getting rich, doesn’t answer the question about the origin of capital. The privatization, just like the corruption, has only one source of capital in these new states (which includes Croatia) and this source is the property which belonged to the workers and the Yugoslavian society, so to the workers and society of each state that came to being in this breakup. In order for capital to become concentrated in the hands of ‘chosen’ individuals, newly formed bourgeoisie, after the abolishment of the socialist system, this capital had to be, in one way or another, seized away from its legal owners who were the only source of capital. One of the ways of this seizure is called privatization while other is called corruption.

56 Ibid. 52.


If, for example, in the process of “transformation”, through “managerial credits” or through any other method of privatization robbery 57 a socially owned company was assigned to a member of newly appointed bourgeoisie than the entire society is harmed for the sake of capital and profit of one person. The same way, if someone misappropriates large funds from the state budget the whole society is being harmed for the sake of profit and capital accumulation in the hands of one person. The first case is called privatization while the second is called corruption. It is important to notice here that acts of damage or misappropriation of social property or social funds disproportionally harm lower economic classes. The members of the bourgeois elite can always relay on private doctors, schools or transportation while the poor depend on state to provide them with services and pay for hospitals, schools, public transportation and the rest of the social infrastructure that is being financed from the state budget or from the social property. This is why we can also say how privatization as well as the high level corruption presents method of class war, war that stays in the shadow of the national/ethnic conflict in which the members of nations/ethnic groups are tricked into fighting against their own class interest. Another example on which we can show the same nature of corruption and privatization in Croatia is the case of former Prime Minister Sanader and the bribe that he had taken while privatizing Ina, large oil enterprise and the largest Yugoslavian firm. In this case the workers are harmed because their jobs are put in jeopardy because the new partner, Mol 58 is not interested in investments in Croatian refineries. Mol has modernized the two refineries it has in Hungary and Slovakia and plans to use Croatia as a market for its ready product while refineries in Sisak and Rijeka are planned to be used as mere storage facilities. 59 Now let us imagine another example in which a company is handed over to newly-appointed bourgeois elite through the method known as “managerial credit” and that this new owner has no interest in production or investment in the company but is rather looking to take out of the company as much capital as possible. In both of these situations the workers are put in the same position. Firstly their right to property, guaranteed by the UN Universal Declaration of Human Rights, the entitlement to property guaranteed by the Constitution of SFRJ, was simply erased without due democratic procedures,

57 There were many methods used in this process of privatization theft “Managerial credits” are the best known one and is executed when an old or new manager, who is approved by the ruling party, buys the company he manages with a credit for which he uses the very company as a collateral. Darko Petričić describes as amany as 10 methods of privatization theft in his Kriminal U Hrvatskoj Pretvorbi: Tko, Kako, Zašto. Zagreb: Abakus, 2000.

58 Is the Hungarian company which had bought part of Ina.

59 This claim was first told to us by Predrag Sekulić, president of Ina labor council and was later confirmed by Slavko Linić, former minister of finance in interviews they gave us.


such as referendum, required for such fundamental transformation of constitutional order. This right was simply erased by the adoption of the infamous Law of Transformation 60 . In both cases the system is not satisfied with that but attacks their only left mean of subsistence, their very job through jobs cuts or even company closure. So the right to work is being taken away form the former owners of the means of production who are now forced to rejoin the labor market where they will face if any, much worse offers. Corruption, the same way as privatization, leads to the result in which workers are harmed while the bourgeoisie accumulates wealth from that only source. In other words, the newly-appointed rich will, using one way or another pile up people’s wealth in their own, private possession. Calling this process privatization or calling it corruption, for the workers or for the damaged social system, makes no substantial difference. The social property which is being transformed, or better, robbed in the process of privatization is a limited source which will run out one day. On the other hand, the state budget is a permanent source for this privatization robbery through corruption. We have already said that the results of these two processes are the same and that privatization is also corruption, because it represents illegal wealth accumulation of the few at the expense of the society, that is, by dispossession of many, to put it in Harvey’s terms. At the same time corruption is also privatization because it allows piling up of the private capital also illegally accumulated at the social expense. In both processes the damage is made to citizens, workers, lower classes who are paying for this enrichment of tycoons, ministers and other members of the newly-appointed rich through their social property or through their high taxes. These same citizens will see their other socio-economic rights perish, one by one, in this process that had infamously started with the right to property abolished by the Law of Transformation during the first HDZ rule. Corruption, therefore, presents the continuation of the politics of privatization and violence against citizens and leads to the same results for both workers and the new bourgeoisie that manages to accumulate enormous capital which is not based on labor and whose only connection with labor is in the fact that it takes away other’s right to work. There is another mutual characteristic that these two processes have which is especially important to our topic, this characteristic is that in privatization robbery as well as in corruption we find many outspoken nationalists, 61 people who promise to defend national interests, who are

60 More about the law in 2.4. The Law of Transformation.

61 For example above mentioned prime minister Sanader came to power after a famous “splitska riva” speech where he used nationalist rhetoric to rally mases to vote for him.


also often ready to use violence for the sake of nation, people who precede with the hate speech and who are the actual organizers of the nationalist mobilization in the society. Careful examination of the privatization and corruption shows us that the real goal of this national mobilization is not protection of nation’s interest, like it is claimed, but on contrary, it is the accumulation of the private wealth of individuals while harming public interest. Those individuals who have accumulated all the wealth, as we will see further in this study, present the new bourgeoisie that has triumphed in the counter-revolution and this social grouping is the only true winner of the tragic events of the 1990’s.


2. Role of the Croatian Government in Nationalism and Robbery

Who exactly was Tudjman talking about when he said his famous “we have our Croatia”? It is clear that he was talking about the secession from Yugoslavia, but it does not precisely answer to the question who it is that now has Croatia and what it even means “to have a state”. Is it maybe all of the citizens of Croatia that now supposedly “have Croatia”? Can a bourgeois state, which is what Croatia has eventually become with the abandonment of socialism and breakup of Yugoslavia, belong to everyone, or is it clearly defined who does this state belong to? Croatian journalist Jelena Lovrić in a question for Ivo Banac in 1994 states how, while the war was ongoing, Croatia was getting sold out in dubious ways. Tudjman’s was one of the richest families. “Those who grabbed everything, will now, for decades rule those who were left without anything” 62 . Stipe Mesić, former highly ranking HDZ figure, while leaving the party because of, as he was saying, corruption, said how Tudjman’s family was the richest of all statesman families of post-communism (in the 1994) and that “those from the old regime were charitable sisters in comparison with the new regime” 63 . As Miko Tripalo, one of the leaders of the Croatian Spring said Tudjman “provides for his family all possible social and material privileges” 64 . Tudjman’s rule, like his family after his death, follow numerous economic affairs, but in order to put those in right context first we should look at the concept of “two hundred families”.

2.1.Politics of Franjo Tudjman

Tudjman had an idea of two hundred rich families, who should own and manage Croatian wealth and state, or commonwealth and still today are key persons in decision-making process. This idea also clearly defines economic views of the man who, through nationalist rhetoric and hate speech got the mandate to lead Croatia in the time of crisis in Yugoslavia. Those views are not necessarily only connected with the personal economic gain, which was definitely present, but with views of creation of the new economic class, an elite, a bourgeoisie class which was nonexistent in socialism. Although economic differences did exist in Yugoslavia they were not that large, nor politically significant, so that two hundred families could buy and manage the

62 Banac, Ivo. "Interview." Feral Tribune, January 4, 1994, 433rd ed. Translated by the author.

63 Mesić, Stipe. "Interview." Feral Tribune, April 25, 1994, 449th ed. Translated by the author.

64 Tripalo, Miko. "Interview." Feral Tribune, January 11, 1994, 434th ed. Translated by the author.


entire socially owned economy of Croatia. In order for this idea to be realized the new bourgeoisie had to be given, or put in the position to easily acquire the social property. The obvious question to be asked here is of course, what gives Tudjman the right to distribute the wealth of Croatian citizens at his will? His government, arguably, had a mandate to deal with Yugoslavia, which was more and more seen as Serbian imperial project rather than as mutual anti-imperial one, but it didn’t have a mandate to appoint the new bourgeoisie, to redistribute the wealth. At the referendum Croatian citizens decided to leave Yugoslavia, the way it was at that moment and with the help of nationalist propaganda and hate speech, but they didn’t express their stands on any economic issues, especially not about someone giving their wealth away. Josip Manolić claims how idea of 200 families managing the economy is actually an old French story which people used to tell “two hundred families were managing French economy so what Tudjman thought is that what was good for France would probably be good for little Croatia as well”. 65 Slavko Linić claims how concept had anticipated two hundred families running two hundred strong businesses. What had actually happened and what mister Linić sees as the main problem here is that two hundred families have not developed the businesses that they were given but rather have drained businesses out of money and they today don’t represent the core of strong Croatian economy like Tudjman had envisioned. 66 A larger problem, which Linić avoids to mention, is the problem of the act of giving away the social property to the few, regime friendly people in the name of creation of national elite. This process was unfortunately investigated and described only by the Croatian journalists and not by judiciary or academics. Croatian journalists have published the list of the 200 Croatian millionaires or the “two hundred families” as they named them. As stated in the text, some were close to SDP but great majority of them were HDZ favorites. 67 To understand Tudjman’s nationalist practice we will discuss briefly one of his closest allies Gojko Šušak. Gojko Šušak was according to Tudjman’s own words one of the creators of the “Croatian freedom” 68 . Šušak was Tudjman's key partner in the formation of Herceg-Bosnia, project that was secretly financed from Croatia and also project that had changed the views of the

65 Manolić, Josip. Interview by author. Tape recording. July 17, 2015.

66 Linić, Slavko. Interview by author. Tape recording. July 9, 2015.

67 Pandžić, Ivan; Rašeta, Boris. "Otkrivamo 200 Obitelji Koje Imaju Hrvatsku I Kako Su Se Obogatile." Express. April 30, 2015. Accessed October 10, 2015.


68 Franjo Tudjman speech at the commemoration for Gojko Šušak


international community about Croatia. As Stipe Mesić had testified “in the budget you can’t see that we are the ones who are financing HVO 69 , police, government, courts, healthcare system of Herceg-Bosna” but the truth is that Tudjman could end the whole project easily by simply cutting its finances. 70 The criminal project of Herceg-Bosnia 71 had changed the picture about Croats fighting for liberation and had informed the world that the appetites for the national expansion in Yugoslavia are not one-sided. Josip Manolić had told us how tribal sentiments have ruled Šušak and how he had wanted the largest possible territory for his tribe 72 . Stipe Mesić had claimed how expulsion of Josip Manolić form HDZ is the consequence of the conflict with Šušak about the violence in Bosnia 73 . Martin Špegelj testified that “Manolić was a consistent politician who stood against the partition of Bosnia and the war against the Muslims so it was natural that he got in a fight with Tudjman who was insisting on the division of Bosnia just like his minister Šušak” 74 . How it is possible that Tudjman’s closest comrades leave the HDZ while this former JNA general and Yugoslavian partisan stays strong with his “favorite minister” Šušak who was “greeting people with a fascist salute”? 75 Šušak has established a weapons company which was accused of smuggling guns but Mesić had also accused Šušak of smuggling drugs. According to Mesić testimony he had confronted Šušak about smuggling drugs and during this confrontation he was told how Šušak does it for the homeland. For his achievements Šušak was decorated with Grand Order of King Petar Krešimir IV in 1995, than Grand Order of King Dmitar Zvonimir 1998, Order of Duke Domagoj also in 1995 as well as Order of Nikola Šubić Zrinski, Order of Ante Starčević, Order of Stjepan Radić, Order of the Croatian Trefoil and Homeland's Gratitude Medal 76 . All of these were awarded by Franjo Tudjman who is also mentioned in The Hague’s judgement of Croatian aggression on Bosnia. Tudjman maintained specific brand of nationalistic welfarism heavily financial support for Veteran’s association that burdened weak state budget. That was corrupted form of welfarism designed to support what we could call, big standing reserve army, a guard of a new system that

69 Croat Council of Defense, ethnic militia of Croats in BiH.

70 Stipe, Mesic. "Nas I Rusa 300 Milijuna." Feral Tribune, July 22, 1996, 556th ed

71 Also judged by the ICTY as aggression on Bosnia and Herzegovina by Croatia.

72 Manolić, Josip. Interview by author. July 17, 2015.

73 Manolić, Josip. "Protiv Podele Bosne." Feral Tribune, April 4, 1994, 446th ed.

74 Manolić, Josip. "Protiv Podele Bosne." Feral Tribune, April 4, 1994, 446th ed.

75 Mesić, Stipe. "Šeksolov Na Vještice." Feral Tribune, February 5, 1996, 542nd ed.

76 "Odluka O Odlikovanju Gospodina Gojka Šuška, Posmrtno, Veleredom Kralja Dmitra Zvonimira S Lentom I Danicom, Redom Nikole Šubića Zrinskog I Redom Stjepana Radića." May 12, 1998. Accessed October 9, 2015.


would serve as faithful voters in peace time, yet as some kind of Praetorian Guard during crisis. This can be seen as the difference from clear cut neoliberal model, specific to nations that had armed national revolutions. Today in Zagreb’s Savska demonstrations of the veterans are taking place while it is obvious that Veteran associations still serve as HDZ militia, now representing the threat to society. Their purpose will be to bring HDZ back to power after which they will continue to enjoy their benefits which they have received form the very party that took them into war. One tent belonging to this protest is featuring a famous Tudjman’s quote about the leftovers of “Yugocommunisam which will ally with the devil himself against the Croatian freedom”. This freedom has only benefited a few. Besides the new bourgeoisie and the political elite, in this group arguably belong the veterans as well. Former Tudjman’s second man in command, Stipe Mesić claims how Mirko Norac was killing by the orders he had received from Zagreb. 77 Mesić also claims how he was present when one minister had reported to Tudjman how in eastern Slavonia Serbian villages are being burned in three shifts. 78 Again according to Mesić’s testimony Tudjman had calculated with the murders of civilians of Serb ethnicity but also with the destinies of the Croatian peoples where the case of Vukovar is very interesting. The city was devastated, the defenders were executed and numerous war crimes were committed and the destruction of this city had attracted the attention of the international community and today represents the symbol of Croatian suffering. However, Mesić claims how he was present when general Antun Tus had reported to Tudjman about the plan for the defense of Vukovar which Tudjman had rejected by saying “who commands in this war?” and “didn’t I command not to defend Vukovar?” 79 . According to this general’s report the city could be defended but Tudjman had his own reasons not to do it. One possible answer is that he was planning to sacrifice it in order to get the foreign support; we cannot prove this so we will not develop the idea too far. However, the truth is that the suffering of the people of Vukovar has become the symbol of national suffering while Tudjman has become a hero of the national liberation. This “hero|” was also the leader of the great economic transformation which was being executed by his government at the very time of this crisis.

77 "Mesić: Vukovar Se Mogao Spasiti, a Norac Je Ubijao Po Naredbama Iz Zagreba." February 13, 2010. Accessed October 10, 2015.


78 ` "Vekić: Priču O Paljenju Srpskih Sela U Tri Smjene Je Tuđmanu Rekao Mesić." February 13, 2010. Accessed October 10, 2015.


79 Ibid


Looking at the events of the 90’s and the entire life of Tudjman, what seems to be the most striking development of his political being is his betrayal of antifascism and the Croatian working class. Member of the communist youth, Tudjman had taken initiative against the newly formed Independent State of Croatia (NDH), which was a German puppet state. According to his biographer, Darko Hudelist, Tudjman was present at the formation of the first partisan brigade in Zagorje. In this brigade his role was that of a commissar. He had a political job, to spread the idea of antifascism and to connect the workers in Zagreb with the unit. He did not see the battle but was there to cheer up the fighters and to convince the hesitant. But the problem was his father, who was a “great Croat” and took until 1943 to join the partisans where his sons already were 80 . But Tudjman was not only a Tito’s partisan, and later on, his general, he also was “from 1961 through 1967, (Tudjman was) the Director of the Institute for the History of the Workers' Movement in Croatia, linked to the Central Committee of the League of Communists. He was a respected member of the Party and held a number of senior political positions” 81 . His involvement in the history of Croatian Workers Movement is especially striking considering the results that his rule has brought to the Croatian workers. The performed betrayal of antifascism by Tudjman is therefore a multilevel one. Tudjman’s partnering with the nationalist and fascist diaspora and nationalist-antisocialist groups in Croatia is what brought him to power. He had continued to pretend to “sit on both chairs”, left and right one, and tried to organize reconciliation of the WWII opponents but only of Croatian nationality. This reconciliation didn’t include Serbs and did not have a fascist repentance or even change of heart as its element. The reconciliation that Tudjman had organized was unconditional and had effectively brought fascists to the dominant position in the relation to antifascists. The two ideologies cannot reconcile. There can only be forgiveness for the crimes but not without repentance. Another thing is that the reconciliation of fascists and antifascists had to be organized at the level of Yugoslavia and not at the republic or even worse ethnic level. If partisans had decided to give unconditional abolition to fascists in Croatia the Serbs, who were a sizable minority at the time in Croatia, would obviously felt threatened by this coalition. Branko Horvat said how “this is a failed idea (reconciliation of fascists and partisans) which obviously only gives negative results. First one to come up with this idea 30 years ago was

80 Hudelist, Darko. Tuđman-- Biografija. Zagreb: Profil, 2004. 57-59.

81 McAdams, C. Michael. "Croatia: Myth and Reality." Studia Croatica. 1998. Accessed October 7, 2015.


the notorious war criminal Maks Luburić, and from there was extracted some 4-5 years ago by president Tudjman… This idea is often used for the rehabilitation of Ustaštvo 82 and with that we open space for new clashes and suspicion about the possible fascist character of the Croatian state. “ 83 Another example of the Tudjman’s betrayals of antifascism is the changing of the name of Croatian currency from Dinar into Kuna. This name, kuna was only used as currency in the time of fascist Independent State of Croatia (ISC), German puppet state, from 1941 till 1945, never before. Return of kuna in Croatia in 1993 was, as Ivo Goldstein writes for Feral Tribune the strongest identification of the new Croatian state with the ISC. Author also states how only one man could have made this decision and that was president Tudjman, who was at that time making a concession to the HDZ’s right wing. 84 This is of course part of the abovementioned reconciliation which again brings the fascists in the leading role. Tudjman’s partnering with Milošević was crucial for both of them. Warren Zimmerman, the last American ambassador to Yugoslavia claims how after Milošević and Tudjman stared meeting, Croatian anti-Muslim propaganda started to look very much like Serbian. It was certain that they were cooperating on division of Bosnia. Also Milošević and Tudjman were crucial for each other always providing with the material for the nationalist propaganda. 85 On another occasion while Tudjman was defending Milosevic’s position on Bosnia and Zimmerman was confronting him with question about the reason for the cooperation with Milošević, Tudjman said “Because I can trust Milošević”. Even Josip Manolić, who is surprisingly gentle when talking about Tudjman, had told us how they 86 have “negotiated with Milošević because he was the interlocutor for the execution of our goal of independent Croatian state.” 87 Milošević was not the enemy, the enemy was Croatian hesitant citizens who were questioning the creation of nation state and they are the main reason why the violence was necessary. Here is how Branko Horvat assesses Tudjman and Milošević:

Serbian Milošević was matching Croatian Tudjman. Tudjman is almost in all aspects different from typical Croatian politicians such were Strossmayer, Stupilo or Radić and presents some more civilized version of Pavelić. Tudjman had helped Milošević in every

82 Croatian WWII fascist movement responsible for creation of Nazi-satellite Independent State of Croatia in 1941 and for war atrocities and genocide against Serbs, Roma, Jews and other antifascists.

83 Goldstein, Slavko. "Druga Runda Zločina." Feral Tribune, March 20, 1995, 496th ed.

84 Goldstein, Ivo. "Interview." Feral Tribune, August 10, 1993, 421st ed.

85 Zimmermann, Warren. Origins of a Catastrophe: Yugoslavia and Its Destroyers -- America's Last Ambassador Tells What Happened and Why. New York: Times Books, 1996. 117.

86 The top HDZ officials at this time are Tudjman, Manolić and Mesic.

87 Manolić, Josip. Interview by author. Tape recording. Zagreb. July 17, 2015.


aspect. He had presented himself as an extreme nationalist (“My Croats” without Serbs and other citizens), with Milošević he was partitioning Bosnia, which had caused horrible slaughters, and he had attacked Yugoslav’s army’s bases in Croatia, which was proving Milošević’s claims, later publically proclaimed by Tudjman himself that Croats are against Yugoslavia. But Milošević had also helped Tudjman a great deal by calling his new state Yugoslavia and his nationalist party socialist. This is how he had made possible demonization of both Yugoslavia and socialism. As nationalists, Tudjman and Milošević have understood each other well. 88

Their cooperation was the key for the destruction of Yugoslavia, privatization robbery and the deterrence and the destruction of the welfare state. This is not to claim that a team of other two Serbo-Croatian politicians would not be able to do that but this symbiosis seems particularly unfortunate as Horvat explains. Tudjman’s project of creating a nation state was successful, and the “founding father”, as some call him, often gets recognition for “timely action in the right historic moment” even from those who were pretending to be his big opponents. 89 Milošević’s recognition of this kind is still not there and this is mainly for the fact that his genocidal nationalist project, unlike Tudjman’s is not finished. Tudjman had to give up Herceg-Bosnia but had successfully reintegrated the Republic of Serbian Krajina in a military operation which had effectively ethnically cleansed the region. Milošević, on the other hand had to give up Kosovo but his project will still be celebrated if Republika Srpska manages to join Serbia at some point in time. Tudjman’s example tells us how war crimes are still forgivable in the context of national narratives. What is even more striking is that, for the sake of some abstract national goal, people are even ready to forget their own economic interest and even accept the robbery, deprivation of rights and deterioration of the welfare state as necessary and unavoidable way of achievement of some suspicious abstract goal called nation state.

2.2. The Notion of Croatian Freedom

The notion of “Croatian freedom”, which can be considered as the main motif of the political philosophy of Franjo Tudjman, doesn’t encompass freedom in classical sense of the word neither at micro nor at the macro level. The economic freedom/security of the wide mases, which they have enjoyed in Yugoslavia through the social property and self management, was

88 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 12/1 (2001). 154. Translated by the author.

89 Plecas, Dusan. Deset Godina Socijaldemokratske Partije Hrvatske: 1990-2000 : Dokumenti. Zagreb:

Socijaldemokratska Partija Hrvatske, 2000. 5.


abolished at the beginning of Tudjman government starting with the Law of Transformation where “transformation” is a euphemism for unjust seizure of property while “law” refers to the fact that this horrible injustice which had robbed and harmed the entire society was legalized by the parliament. On the macro level we have the question of freedom of the Croatian state and its sovereignty which was won against Yugoslavia and against Tito’s concept of bratstvo i jedinstvo (Brotherhood and unity, two communist principles popular slogan of the Communist party of Yugoslavia, that was coined during the Yugoslav People’s Liberation War (1941-1945)) 90 . This sovereignty was given to the European Union which is in line with the politics of Franjo Tudjman who believed that the sovereignty only means independence from Yugoslavia. Professor Stefano Bianchini says how Croatia (as well as Serbia) exercises much less sovereignty than Yugoslavia did. 91 Today’s countries that became in the process of Yugoslav dissolution perform much in a vassal way towards the international community. Branko Horvat goes a step further and says how unlike Yugoslavia, which was an “international factor and in the top of the world politics” her “ now separated parts have lost their independence and national sovereignty” and “no one important decision they can make on their own, they have become toys of the great powers which intervene whenever they find suitable”. 92 This is why the project of “Croatian freedom” (as well as Serbian) is completely suspicious, if not by the intention than definitely by the results. This “freedom” that Tudjman goes on about and for which he had mobilized wide masses in reality comes down to hostility toward the East and toward the brotherhood and unity (which also was the first target of Serbian nationalism as well as so called economic nationalisms in both peoples). It is also necessary to mention how this freedom brings no results to the Croatian people or to the everyday living of Croatian workers (although Serbia is not the topic of this research, here we can draw another parallel between the two). By insisting on the fact of loss of the “national sovereignty”, and not on the myth of winning one, Horvat mercilessly breaks the fairytale which is used to trick the masses of Yugoslavia from the end of 1980’s till today. He directs our attention to the fact that Croatians (like Serbians) had not only more national sovereignty within Yugoslavia but also that their national interests were better protected when “nobody was guarding them” and that the so called freedom that is supposedly won in the name

90 Gow, James, Cathie Carmichael, Slovenia and the Slovenes: A Small State in the New Europe (Revised and updated ed.). Hurst Publishers Ltd. 2010, p. 48.

91 Bianchini, Stefano, ERMA lectures, 2015

92 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 12/01 (2001). 157.


of the nation is actually something exactly opposite of freedom: slavery and vassal relationship to the “international community”.

2.3.Croatian Democratic Union (HDZ) 93

Antun Vujić says how HDZ had come to power through the nationalist rhetoric and the “agitation of anticommunism, with all of the possible promises of privatization and denationalization, according to which in the coming capitalism, everyone would be a capitalist” 94 This was matched with the interests of the growing nationalist sentiments but also of the global interests who are anti-social “which is often forgotten” 95 . For the HDZ to came to power by mobilizing for national cause the great help came form nationalist Diaspora who had provided for, in the terms of needs, unlimited funding. This diaspora that lived in foreign nation states and capitalist economic systems had naturally lacked understanding for socialism and brotherhood and unity. If we take in consideration the radicalization of diaspora with the influx of fascists after the end of WWII who were fleeing the partisan revenge as well as anticommunists who are leaving during socialist Yugoslavia, and to all that we add the growing Serbian nationalism and calls for the solution to the "Serbian national question”, it is not surprising that Croatian diaspora was able to raise large sums of money for the final solution of, now, Croatian national question. Where did all this money end up is a different question. HDZ is infamous for its proliferation of nationalism and hate speech but also for corruption. About the destiny of this money that the diaspora was collecting for Croatian independence in 1994 Mesic had said: “First it was in Switzerland, than in Austria, and those who conjure the most in Croatia, keep the money, which diaspora had collected for defense and reconstruction of Croatia, on their personal foreign accounts.96 So Mesic points to the trail of this money which is being transferred form country to country and kept on personal accounts instead of used for the purpose which it was collected for. And this is done by people who are actually running the nationalist propaganda and advocating violence.

93 Croatian Democratic Union originally Hrvatska Demokratska Zajednica (HDZ hereinafter).

94 Vujić, Antun. Hrvatska I Ljevica: Prilog Socijaldemokratskom Gledišnu. Zagreb: Naklada Ljevak, 2014.


95 Ibid. 227.

96 Mesić, Stipe. "Interview." Feral Tribune, April 25, 1994, 449th ed.


The party was run in a strictly hierarchical way as a top-down authoritarian organization with the Franjo Tudjman making all of the important decisions and always having the right of veto. As Mesić had claimed: “President’s palace has become a place where all and I mean all decisions were made, even the smallest ones, from the change of a football club name to what can and what cannot be voted for in parliament.97 The Judicial system was also under the strict control of the HDZ’s vertical structure with Tudjman on the top. Vladimir Primorac, judge of the Supreme Court of Croatia “Council of national and military security and defense had decided to gather a group which would be put in charge of determining how much progress was made with the task of foundation of State Judicial Council. The head of this group is Ivić Pašalić…Pašalić commission is a branch of the president’s advising body, so, parastate body similar to the government coordination is a typical example of the parastate body inherited from the old regime. This commission will, with the presence of the top leadership of HDZ Ivan Milas, Vladimir Šeks, Ivić Pašalić and others, name by name discuss which persons are suitable for this Judicial Council” ….”One party is forcing on Croatian state a Judicial Council the way it finds suitable. This council will, therefore, implement the policy of the state, which means HDZ politics, because HDZ had equalized itself and the state. This is completely clear”. 98 This means that the party cell is there to control every part of the state and there is no division of power. Now, this may be something that was inherited from the old regime but the question we have to raise than is why do social programs and issues of social justice remained the only victims of transition. The mechanism of rule which had enforced socio-economic rights in the previous regime was now being used by the Tudjman, Šeks, Pašalić and others to take away the economic rights that people have acquired during Yugoslavia. The communist party of Yugoslavia is constantly criticized for its autocracy while the new, national autocracy is implemented and the benefits of the socialist regime are being abolished. The only beneficiaries of the new regime are nationalist political elite and the national bourgeoisie. HDZ was also keeping the hard grip on the media. Božidar Novak, Vice-president of Croatian Journalists’ Association and Croatian Helsinki Committee claimed how “HDZ always tends to keep all of the media under its control” “The fact that the most nationalist authors are being labeled as traitors is only explained by crisis, recession, lower production, pension cuts,

97 Ibid.

98 Primorac, Vladimir. „Pravdu će Dijeliti HDZ“ Feral Tribune. June 6, 1994, 455th ed.


labor strikes… and in these circumstances it is the easiest to create enemies and cause fear, this is a standard procedure”. 99 This ‘standard procedure’ is the known procedure where everyone who is not on the side of the autocratic party will simply be labeled as anti-Croatian, regardless of how nationalistic or antinationalistic this person may actually be. The government was determining how much of a good Croat someone was by how loyal he/she was to the HDZ and that is how the social property was being redistributed. Mladen Vedriš was a deputy prime minister for economy in 1992 and the president of the Chamber of Commerce in 1993-1995 when he had left HDZ and politics in general. He had left the party because as he had claimed there was no dialog and there was no respect for argument. His testimony upon leaving suggests how HDZ had purposely created the economic elite hoping to use the economic system to keep the political power. He also claims how this nationalist government which insists on Croatian state, protection of national interest and so on actually doesn’t care about the members of the very nation they are trying to protect. “The creation of economic classes is necessary for the Croatian government because it finds important for itself to control those 10 or 50 businessmen and ‘businessman’, while at the same time it doesn’t care that almost 2 million people live on the edge of existence.” 100 Protection of national interests therefore is not the protection of people who are members of this nation but rather protection of some abstract interests of a ‘nation’ which can only be labeled as national bourgeoisie as previously suggested by Roland Barthes. Now this is not a case just in Croatian capitalism, as we have already said, nation states are bourgeois states based on capitalist economy. What is different in the case of Croatia (and most “transitioning” countries) is that the Croatian ruling elite had the power to appoint the bourgeoisie and therefore keep the position to, if playing smart, stay in power for a long time. This is exactly what had happened in Croatia where the HDZ party which had devastated the country keeps coming back to power if it loses it at all. 101 Božo Kovačević form HSLS said how “HDZ is behaving as if they got the mandate to manage the Croatian property. We are against the law which would write-off the debt of the small share holders until it is investigated who had bought all those shares, because we will be brought into situation to write-off debt of people who own shares worth several millions of Deutsche

99 Novak, Božidar. "Interview." Feral Tribune, January 16, 1995, 487th ed.

100 Vedriš, Mladen. "Zbogom Arijevci." Feral Tribune, January 8, 1996, 538th ed.

101 HDZ was originally in power from 1990 till 2000, than 2003 till 2010 and at the moment is leading in the polls for the election at the end of this year (2015).


Marks. 102 Now, this is one of the examples of techniques used for the fast enrichment of individuals and the creation of these national bourgeois elite. The tycoons would for cents on a dollar buy shares from the small shareholders, who had gotten those as part of their right to discount and deferred payments. Workers would often sell this right in order to acquire a bit of spending money. Than the government would write off the debt of “small shareholders” but the fact is that, since shares have already been piled up in the hands of tycoons the debt forgiveness that was supposed to benefit the poor is actually reinforcing the position of the rich.

2.4.A Couple of Examples of Nepotism and Conflict of Interest

Conflict of interest happens when an individual who is acting as a public servant uses the opportunity to provide profit for himself or people close to himself through the empowerment of his public service mandate. So for example Tudjman’s family still today lives in a mansion which was bought after Tudjman came to power under suspicious circumstances and with money of unknown background. This mansion is not an isolated case but there are numerous cases of HDZ officer’s usurpations of social property. Stipe Mesić, who left HDZ because of corruption, said:

“In 1991 HDZ was using an old 1986 law in order to assign public apartments to its heads; law which could not still be valid. Those who have taken apartments worth half a million deutsche marks and only paid thirty thousand for them have committed robbery.” 103 In another affair, a bank clerk Ankica Lepej had leaked information about the amount of money on the account of the first lady Ankica Tudjman, money that wasn’t listed on the president’s property card. It was a large amount of money in foreign currency and the court had infamously decided how this money is not property and how no law was breached. The only result of this affair was that whistle blower had lost her job for the act of disrespecting ‘customer privacy’. Cases of nepotism are cases in which people that are in power positions use that power to provide prosperity for their family members. A good example of nepotism in the process of privatization and misappropriation of public money in Croatia is the case of Tudjman’s grandson, Dejan Košutić who had founded Kaptol Bank in 1996 with the credit that he got from the bankrupted Croatia Bank. Košutić’s bank had costed Croatian National Bank in 1999 about 3

102 Kovačević, Božo. Feral Tribune, October 31, 1994, 476th ed.

103 Mesić, Stipe. "Interview." Feral Tribune, April 25, 1994, 449th ed.


million kunas after which its operating permit was annulled. After this Kosutić had emigrated form Croatia to Serbia, where he lives in Belgrade and Bankruptcy Court had approved his 120 000 kunas request. 104 Croatian daily Slobodna Dalmacija had reported how Košutić was appointed on the managing board of the Croatia Bank although he had no banking or financing experience before that, this very board was also who had than approved his credit with which he had started the Kaptol Bank. 105 This case is especially interesting because we can see the logic of nepotistic protection as well as the irony of Croatian nationalist leader whose grandson lives in Serbia after he had robbed Croatian public. While Milošević had executed his political goals of Greater-Serbia without openly defining the goal of Greater-Serbianism, Tudjman’s idea of expansion of the Croatian state was no secret at all. Tudjman had publically talked against the AVNOJ 106 established borders from the 1982 when in his work National Question in Modern Europe he talks about the Socialist Republic of Bosnia and Hercegovina (Yugoslavian federal unit) as “historically Croatian land” which “should have been part of the state of Croatia the same way that Vojvodina is part of Serbia107 . Tudjman openly talks about Serbian minority and Croatian majority in Bosnia since he counts Bosniaks, the largest Bosnian ethnic group as Croats, who are the smallest group but through this math could become majority. Tudjman’s remorse feeling for the Croatian nation is a repeating motif in this book but is also commonplace in nationalist culture and literature as well as a tool that nationalists often use in order to create an emotional response of the audience. This kind of nationalist rhetoric was, of course, a great challenge to the politics of socialism as well as of brotherhood and unity this is why Tudjman was prosecuted for this book which he had published abroad. It is interesting to notice how Tudjman in this work, while discussing history of national struggles in Europe, doesn’t mention at all the Pan-Slavic movement or the Serbo-Croat nationalism or Yugoslavianism, all of which were national programs for national liberation but are mutual force developed in unity against the colonial occupiers. At the same time he talks about other, similar movements which were regional at the time like Mazzini and his Young Italy

104 "Tudjmanov Unuk će Biti Nagrađen Sa 120000 Kuna Jer Je Upropastio Banku." November 17, 2005. Accessed October 9, 2015.


105 Ibid.

106 The revolutionary convent of Yugoslav anti-fascist movement that laid foundations of socialist Yugoslavia on the convention that was held in Jajce, Bosnia and Herzegovina, in November 29 and 30, 1943.

107 Tuđman, Franjo. Nacionalno Pitanje U Suvremenoj Europi. 2. Izdanje, Ispr. I Dop. ed. München: Knjižnica Hrvatske Revije, 1982. 140.


project which had a purpose in uniting all of the Italian lands and which Tudjman gives as a good example. In the case of Italy regions had accepted loss of sovereignty and the standardized Italian language, so how come this was a bad solution for Yugoslavia?

2.5.Sanader and the Return to Power of HDZ

The case of Sanader is especially important for our topic of robbery and nationalism. This is because he had acquired power through nationalist HDZ party, with cooperation with war criminals and through the use of hate speech and nationalist propaganda. His Splitska Riva speech, in which he yelled about Croatian national interest, is one of the classics in the Croatian political culture. However, Sanader is the highest ranking official to end up in prison in Croatia and the court evidence had proven his war profiteering and bribe taking in the process of sale of Ina, former strongest Yugoslav company. Sanader came to power with the support of Slavonian leaders Branimir Glavaš and Vladimir Šeks. Glavaš is a convicted war criminal, guilty of heinous crimes of torture and murder of civilians in Osijek. These two were important to provide support but also security because Sanader was going against the very powerful leader of the extreme right Ivić Pašalić. His rule was that of a tyrant, just like Tudjman, he did not tolerate confrontation. “Explanations that he would give were taken for granted; his loyal “army” would attack everyone who doubts to be a hater of everything Croatian and would be beating their, most Croatian chest.” 108 How crucial was Sanader’s bribe in the process of sale of Ina shares to Hungarian Mol we have heard from Predrag Sekulić, president of Ina’s labor board who had explained to us these dynamics. Croatian government was selling a package of Ina’s shares to Mol and Sanader, the prime minister, was personally negotiating the deal. The result was that the purchase of a package of shares was accompanied by the surrender of the managerial function and management of all of the “most important resources” to the partner who owns less than half of the shares. “There is no partnership of any kind and all of the important departments are in the Hungarian hands and all of the important decisions are made in Hungary109 . The new executive board of Ina is directly appointed from Mol who then sends “suggestions” to this board which it adopts. This is the result

108 Popović, Jasmina. "Sanader Kao Pašalić." Večernji List, October 9, 2010.

109 Sekulić, Predrag. Interview by author. July 2, 2015.


of the bribe of 10 million euros which Sanader had received during the negotiation. Sekulić also says how he had watched the video of the sale and how it was obviously an arranged meeting because Sanader announces the surrender of managerial position with no proper explanation, no explanation of any kind for this extremely unusual and self-damaging favor 110 . Now Mol has a plan to close Ina’s refineries, first the one in Sisak and later one in Rijeka as well. This can be seen in the dynamics of the meeting of labor council with the management and CEO Zoltan Aldott. As Sekulić claims both refineries in Croatia are planed for closing and will be used as storage space for the ready made product from Hungary. This would mean further layoffs till the whole company, which had 33000 employees in 1990 and today (July 2015) already has under 8000, and would be left with a couple of hundreds of employees 111 . The moves that Mol makes are pretty easy to understand. The promise of investment in the refinery Sisak was forgotten and the coking process was not introduced in Sisak but in the two refineries in Hungary and Slovakia. Sekulić has visited these two refineries and says how great investments were made, investments which require work at 80% capacity in order to be profitable. So this “partner” company produces at about 90% capacity in its refineries and than imports and sells its product in Croatia at Ina’s gas stations while destroying the domestic production. This is only possible because Mol was given the right to make decisions due to the bribe that Sanader had received. Before the war, as Sekulić continues the story, Ina’s fields were producing about 3 million tons of domestic crude oil, which went down to two million during the war and in the last ten years down to 500, 000. The Executive Director of the research department had wanted to increase the extraction for 30%, as a first step, but the management (Mol) had blocked him. According to Sekulić, this is because they want to close the refinery first, than raise extraction. Ina is also forbidden from importing crude oil which in combination with inability to extract is completely paralyzing the domestic production in Croatia and also creating a market for the Hungarian “partner”. Refinery in Sisak works at the minimal capacity about 35 to 45 days a year and refines these 500,000 tones of domestic crude oil. It has been almost 3 years that this management doesn’t allow imports while also not allowing the expansion of the extraction of domestic crude. What Mol is waiting for now, Sekulić concludes, is for workers and the state to give up completely, so that they can close and fully take over the market. 112

110 Ibid.

111 Ibid

112 Ibid.


“We have lost all of the markets”, continues Sekulić and talks about times when Ina’s trucks, only a few years ago, would pile up at the Bosnian border. Those days are over. There are also concrete examples of sabotage that Sekulić had payed our attention to. The bid to get a contract with the Croatian national rail company was made ten minutes late which Sekulić believes could not happen on accident since the job was worth tens of millions. Second example is rejection of the contract with the Slovenian Petrol who had a demand of million tons of ready made product which alone is enough to keep the Rijeka refinery busy all year. Mol has of course rejected, again, because it wants to stop the production and close Ina’s refineries. Another example is rejection of contract with Zagreb Holding, a large company which is according to Mol “not paying on time” Sekulić claims how Ina can easily wait for the payment for hundred necessary days but the Hungarian partners don’t want Ina doing contracts. 113 Sanader had reformed HDZ from a completely nationalistic-populist party to just bourgeois-client party with preserved nationalist rhetoric. This client servicing characteristic of HDZ is the main characteristic of many other ruling and opposition parties in the region. It is less and less politicians and more and more bourgeoisie who rule in Yugoslavian space. The nationalist rhetoric seems less and less convincing and cannot be justified with the wish for the creation of a nation state anymore. Nation states are here, but the welfare and freedom are absent or were brought to the small circle of privileged members of the national bourgeoisie. Leftists in Croatia today have to be more progressive than ever since their cause is in a constant decline and the inequality is more and more visible. The corruption within the nationalist elite is brought to the perfection of functioning and rarely someone dares to raise the voice against it. Corruption in the privatization process, of many companies was not revealed or investigated and was executed, just like during Tudjman rule, by the top state officials. 114

113 Ibid.

114 Rajković, Dražen. Kako Je Ivo Sanader Ukrao Hrvatsku. Zagreb: Naklada Jesenski I Turk, 2011.


3. Croatian Opposition and Other Critiques of Nationalism and Privatization Theft

HDZ as the party that had all of the state power in the 1990’s and had initiated and performed most of the “transformation” of social property had a greatest opponent in the Social- democratic party. This party went through few name changes and merges with smaller parties but was the only one who would threaten (even if modestly) to the election victories and complete political domination of HDZ. In this chapter we shall examine the social-democratic nature of this party and its views on the change of the structure of ownership and the infamous Law of Transformation. After that we will take a look at the programs of the parties as well as at the discussion in the Parliament during the enactment of the Law of Transformation.

3.1. Programs of Oppositional Parties and Social Property

SDP’s first version: League of Communists of Croatia-Party of Democratic Changes (SKH-SDP), which had entered the first democratic elections lead by Ivica Račan, had a clear position about necessity for the reform of the social property. One part of the companies in social property, which were of vital interest, should become state owned while the rest should be privatized. 115 According to this suggested way of transition “those employed in the companies can have a partial recognition of their property rights or discounted purchase of shares which would also take in consideration number of years spent in companies”. This language clearly states that there is no guarantee of the right to property to the current owners of the means of production, but that shares would be sold to them with some benefits included and probably preventing workers from becoming owners of a majority package of shares. Here we can clearly see how the program of reformed League of Communists of Croatia, as second major party was not very different from that of HDZ and similar principles have ended up in this infamous Law of Transformation. SKH-SDP in its first critique of The Law of Transformation talks mainly about the crime in the process but also states its support for the necessary “transformation” and abolishment of the social property for the sake of the greater efficiency in its use and necessity

115 Plecas, Dusan. Deset Godina Socijaldemokratske Partije Hrvatske: 1990-2000: Dokumenti. Zagreb:

Socijaldemokratska Partija Hrvatske, 2000. 33.


for the mobility of capital 116 . Some authors claim how efficiency in Yugoslavia was absent due to the fact that self-management was false and that republic parties (and federal in the case of energy industries) had kept a strong grip on the companies. From this opinion we derive an idea about necessity of reform which was replaced by the complete abolishment of self-management and social property as its guardian instead of finding ways how to deal with such strong grips and interferences. This opinion however was labeled as anti-European and backwards. As far as mobility of capital goes, this is exactly the characteristic, along with lack of good laws and enforcement, which had allowed social capital to pile up in the hands of few. This is the practice present in Croatia but also throughout Yugoslavia, Eastern Europe but also part of a world-wide neoliberal trend. Another party which had merged with the SKH-SDP in 1994 is Social Democratic Party (Socijaldemokratska Stranka, SDSH) and formed today’s Social Democratic Party (Socijaldemokratska partija, SDP) was led by Antun Vujić. On its first congress in 1991 SDSH had adopted a program which among other states how “civil revolution must be democratic in the economic sense as well and must preclude robbery and the excess concentration of wealth”. 117 According to this we come to conclusion that social property cannot belong to individuals, nationals or internationals and that “there is only one solution that is just, radical and rapidly enforceable and that is division of existing social property in the form of shares to the individuals who have socially acceptable claims to the property”. 118 The above mentioned “just” solution is also, which is not stated in the text, the only legal solution. The introduction called “De- collectivization of the social property” also fails to mention the difference between the social property in Yugoslavia, which belonged to workers and all the working people and the state property of the Soviet block of countries. The program still presents “radical” and also “just” alternative to the programs of HDZ or the SKH-SDP and the privatization “robbery and excess concentration of wealth” which did follow. The program also states how “this solution avoids the dangers of the new state confiscation and further step away from the self-managing system, transforming the self-management rights into the ownership rights” 119 This way the SDSH had clearly informed the citizens how their option would, if only for a while, safeguard their right to

116 Ibid. 169.

117 Ibid. 59.

118 Ibid. 60.

119 Ibid. 60.


property. The SDSH had very modest results in the first democratic elections and this can only be explained with the hate speech, scarcity tactics and nationalist propaganda which were all used to make people vote against their own economic interest to the point that their social property be taken away practically without any resistance. Profesor Alex Demirović says how in the whole Europe it is the case that people don't vote for their economic interest, some 20% of the poorest citizens do not vote for the parties on the left but rather for some nationalist parties. 120 This is seen as one of the main reasons why the economic interest of the poor is not on the agenda. The position of SDSH was exactly to the contrary to those of HDZ since they believed that the very problem of Yugoslavian socialist economy is the involvement of the state apparatus in the functioning of the companies. This is why SDSH had proposed giving shares to the workers and taking the state out of the whole process. HDZ, on the other hand had robbed the workers and taken property rights into its own hands before appointing the new owner. The problem that even SDSH doesn't address is the fact that small share holders often prefer some spending money to shares so the companies often end up sold and in possession of individuals unless workers are properly educated about the value of retention of shares. Slovenian case shows this well since in Slovenia social property was respected a great deal more, workers were allowed some shares but a lot of them were quickly sold. 121 As Filip Balunović had said once in a private conversation, the widespread benefit of privatization is an oxymoron. This is because privatization is not done for the greater or public good, but for the private just like the name says. Social property was, on the other hand, unacceptable from the position of European Union and the United Sates of America who have wanted the privatization and the assimilation of the Yugoslavian market into the neoliberal world. 122 The critique of “transformation” had continued after the merge of SDSH and SCH-SDP in 1994 when, now united SDP publishes a “Declaration about Privatization of State and/or Social Property”. The first objection is about the transformation not reaching the economic goal of growth. Second objection is a political one and says how citizens do not accept transformation since it has allowed for redistribution of social property which had brought profit to the state and a small number of citizens. And only the third objection is social one and states how privatization

120 Demirović:, Alex. "Je Li Koncept Klase Još Uvijek Održiv?" Slobodni Filozofski. June 22, 2015. Accessed October 10, 2015.

121 For Slovenian case see Mencinger, Joze. "Privatization in Slovenia." Pravna Fakulteta Univerza v Ljubljani.

122 Radoš, Ivica. "Stranci: Dajte Vi to što Brže Obavite! Šok-raspodjela!" Večernji List, July 9, 2013.


“did not achieve expected minimal level of justice for the majority of citizens”. The selection of such a soft language informs us about the nature of the opposition that we are dealing with here. While the extreme right, which, if not before at this point HDZ certainly was, is robbing the workers of Croatia, Social Democratic Party is supposed to be out on the streets rallying and in confrontation with the police instead of publishing statements full of euphemisms such is “expected minimal level of justice”. The real violence was present, very bloody one, but only ethnic. This is how the nationalist rhetoric has prevailed and is still prevailing many years after the war. This conflict and the nationalist hysteria were the prerequisite for this class war against the Croatian working class to happen with the almost complete surrender of the workers. If this declaration of SDP was the strongest hit that was launched from the Croatian left, than the results of the “transformation” should not be that surprising. It is also worth mentioning how SDP in its “Ten years of Social Democratic Party of Croatia” has a whole chapter called “The SDP’s contribution to the creation and the defense of Croatia” in which it tries to prove its role in the process of creation of the nation state which can be called a counterrevolution and which is not something that a Social Democratic Party should be proud off. In the text also recognition is payed to HDZ: “without truing to undermine the merit of HDZ and Tudjman for having organized a nation wide movement in a timely manner and used the favorable historic chance for the creation of independent and sovereign Croatia”. 123 This clearly illustrates how SDP is not trying to lead the country in a radically different way than the HDZ but is also ready to play the nationalist card to an extent. This is almost as if there was a minimum of nationalism that you have to show in order to practice politics.













This unfolding of the “transformation” where the state will become the owner of the means of production was well predicted by the representatives of numerous opposition parties as well as by some of the HDZ in the Croatian Parliament when the law was being discussed in 1991. At the end of this research let us take a look at the warnings that the Representatives of the

123 Plecas, Dusan. Deset Godina Socijaldemokratske Partije Hrvatske: 1990-2000 : Dokumenti. Zagreb:

Socijaldemokratska Partija Hrvatske, 2000. 13.


Croatian people were expressing to the government who had a majority and who had disregarded all the concerns, predictions and advices. The discussion is completely quoted from the transcripts which we have gotten from the Croatian Parliament whose Secretary Lidija Bagarić had issued the copy of transcripts on my name on the 17.8.2015. Firstly we should notice how HDZ did not need any support from the opposition (due to the winner take all election system) but had rather needed just to sit through the discussion and vote its law into effect. The deputy prime minister, in charged for the economy, Franjo Gregurić had presented the law in front of the parliament and here already we can see fallacy at a very important place. Talking about the reforms which were started under Ante Marković and which were leading towards labor owned privatized companies, Gregurić said how the reforms did not solve the non-property conception of the social property and how, therefore this “transformation” is necessary in order to transform “social ownership into real ownership”. This transformation is as we have seen underway but his government had stopped it and instead passed a law which had made government the owner of the social property. 124 The deputy prime minister is engaging in misinformation since their law will only prevent the workers from getting their share of the property while the actual privatization will have to wait for the state firstly to takeover the property and then to give it to the newly forged bourgeoisie. SDP, as the biggest opposition party, had challenged this law and its many miss- presentations of reality. So Medarac Ivan, speaking in the party’s name first states how the law is misleading in its claim to be the law that brings privatization. It will, due to the short deadline for the “transformation”, bring Croatia back 40 years to state ownership of the means of production. The law will bring the nationalization of the economy and “workers collectives would be deprived of any possibility to influence the management of the social capital in whose creation they have participated for years” 125 So the workers’ rights are put in jeopardy but, as Medarac also points out, the declared prosperity goals of the “transformation” will in no way be met since the process is not designed to lead to an economic prosperity. The process was designed, according to SDP to create ties between the political and economic elites which will then bring about long term negative economic and political consequences. Here SDP had offered some

124 Croatian Parliament. “Joint Session. Discussion of the Law of Transformation” Zagreb, 17. 4.1991.


125 Croatian Parliament. “Joint Session. Discussion of the Law of Transformation” Zagreb, 17. 4.1991.



concrete suggestions which would protect the health of companies if not really the social property of the workers. These suggestions, in the form of law amendments, were among else stating how companies should apply different models of privatization and not just one and how workers collectives should keep in their own property company’s un-privatized part as well as their managerial rights that follow the ownership of the shares. SDP, as the second strongest party, had also the most to lose with this law, because the law was about to establish a permanent tie between the HDZ and the class of new proprietors. This did in fact happen and the rule of HDZ was even characterized as one party rule by some. Needless is to mention that SDP did not use hate speech, did not hide behind “national goals” and did not participate in the perpetration of violence against civilians. At the same session, Gordana Ajduković had presented the views of the Socialist Party. She said how this law presents new government seizure of the property and the violence against all existing economic subjects. The law will make the rich richer and the poor poorer and jobless. According to her, the main rule of any “clean privatization would be in the determination of the contribution of all natural and legal persons in the creation of the company’s wealth.” All this law plans to give to those who have invested for years into their socially owned companies is the right to a discount to buy shares of the company in which they have already invested all of their money. 126 Ajduković same as Medarac previously, presents a spotless account of the illegalities in this law as well as the economic problems that it is about to create. HDZ did not believe that it is a problem if few people become extremely rich as long as they could choose them and than hope for a long term friendship and cooperation in the dominance of the political and economic affairs of Croatia. While this unfolds the attention of the public will be diverted to the economic conflict which HDZ had help foster. This is definitely not a vision which Gordana Ajduković could share since she had believed in the workers property rights as well as in the prevention of ethnic violence as she was trying to work with the Josip Reihl Kir 127 . Kir was the commander of the Osijek police who came to prominence with his successful handling of the ethnic Serbs and their rebellion. However he was very unpopular within HDZ since HDZ’s plans and position had heavily depended on the

126 Croatian Parliament. “Joint Session. Discussion of the Law of Transformation” Zagreb, 17. 4.1991.


127 Hedl, Drago. "Ne Smije Se Suditi Samo Gudelju." Feral Tribune, March 28, 2007.



creation and proliferation of the ethnic violence. One of the Slavonian leaders of HDZ, Branimir Glavaš, known for war crimes against civilians, had at that time asked citizens to report all the suspicious activity to him and not to Kir, who was the legal authority. Kir was murdered during the efforts to pacify the Slavonian people, and according to minister of police at the time, Josip Bojkovac, Kir had known that he was going to be killed and had named Vladimir Šeks and Branimir Glavaš as the people who had threatened him 128 . The violence in Slavonia was crucial for the development of the nationalist sentiments and the nationalist domination of the political discourse. This is why Kir, the peace maker, was the enemy of the establishment. Later in the discussion a HDZ representative, Ivan Bobetko came out strongly against the law saying how it was endangering Croatia to become a colony in the short time. “When we fought for democracy, we did not fight for the sale of the Croatia which even communists did not sell”. Then Šeks had warned him to stay loyal to the party decision, or to publically state that he is not loyal to the party (HDZ). Here Bobetko, states how he is “for the party loyalty but not for the party stupidity.” 129 The chair Ivan Vekić breaks up the discussion about the HDZ loyalty, saying how Bobetko was supposed to express his opinion at the HDZ meeting. It seems like Bobetko was not informed about the plan to appoint new owning class which will take over the social property so he was afraid that foreigners would rush to buy out Croatian economy and the seaside. Manu more representatives have expressed concerns. Nikola Zigfrid, for example, had stated support for the Bobetko’s ‘thinking outside of the party lines. Zigfrid had also called for the minimal recognition of the rights of those who have invested their money into social property for years. 130 We should notice here an important addition to the humiliation of the working class; those who were building the social property were not only robed off it but since it was handed over to lumpen-bourgeois entrepreneurs with no interest or knowledge of business. So the Croatian citizens have not only gotten nothing form the privatization but they have actually, “through taxes, paid for all of its expenses and failure, including the implemented robbery and the

128 Zebić, Enis. "Tko Je Naredio Ubojstvo Reihl Kira?" Radio Slobodna Evropa, September 28, 2010.

129 Croatian Parliament. “Joint Session. Discussion of the Law of Transformation” Zagreb, 17. 4.1991. 52/1/JT.

130 Ibid. 54/2/JT


ignorance of the new owners.” 131 So this process of robbery of Croatian citizens is never ending

since the elites continue to drain the public wealth through now public budget.

Croatian Social Liberal Party (HSLS) was a parliamentary party which was second

strongest in Croatia for a while under Dražen Budiša and its first president was Slavko Goldstein.

Budiša had attracted attention with his critique of Tudjman’s supposed soft handling of the self

proclaimed Serbian Republic of Kraina. When the discussion about the Law of Transformation

was ongoing in the Croatian Parliament member of HSLS, Jadranko Mijaličić argued in The

Council of Associated Labor how “the most acceptable for him in this moment is distribution of

the property rights equally to all citizens for free” this he explains not with the right that members

of society have when it comes to social property but rather with the lack of domestic capital

which would buy out the companies so this way the property would not fall in the hands of

foreigners. 132 Here we have an interesting argument of a nationalist who also wants to give the

social property to the people but exactly because he is nationalist.

3.3. Branko Horvat and Privatization

At this time already completely marginalized in Croatia, but in the world the most known

Yugoslavian economist, Branko Horvat, had truly put up a dignified fight against this tyranny. He

had led a marginal political party Social Democratic Union. This known economist was still

active when the “transformation” was ongoing. He was living in Zagreb where he was still

writing about economics but he had also taken up legal battles against the government whose

actions he had deemed illegal. His resistance could not have succeeded due to the lack of

independent judiciary in Croatia at the time and to the absolute power which HDZ was holding.

Due to his expertise and presence in both systems as well as in the transformation, his arguments

are the key in proving the robbery that was executed by this nationalist government. The entire

process from the beginning of social property until the robbery Horvat summarizes this way:

In 1950 state property had been transferred into the hands of the workers collectives. This act had established social property whose integral part is workers

131 Družić, Gordan. Hrvatska Obratnica: Stanje I Perspektive Hrvatskoga Gospodarstva. Zagreb: Golden Marketing-Tehnička Knjiga, 2004. 64.

132 Croatian Parliament. “Allied Labor Council. Discussion of the Law of Transformation” Zagreb, 22. 2.1991.



self-management. Since then self-managing workers collectives have, by investing from their own income, increased the value of the social property twelvefold. With The Law of Transformation the state seizes it and sells, actually gives it away. At the same time, self-management is being abolished. Seizing the

The state can give its

property of the others is, legally considered stealing [

property (like it did in the 1950), but once given property it cannot take back, especially not the twelve times larger value.” 133


The state had taken social property for itself by law which clearly violates the constitution and

the international law. Workers were investing and increasing their social property over the forty

years and the state now just comes and takes it away by decree.

Further in the text Horvat explains how the first step in this criminal “transformation“ or

distribution of social property was to just declare it as owned by the state. Identifying the social

property with state property brings identifying the society with the state, which is a characteristic

of totalitarian systems, and not democratic countries such as Croatia supposed to be with its

democratic constitution. HDZ had won just over a third of all of the registered voters and

according to Horvat that was not a mandate for this kind of “transformation”. For the legitimacy

of that kind of law, referendum would be necessary beside which the state would have an

obligation to payout the individual share of social property to all of the members of society who

refuse to give up their right. 134 In the lawsuit filed to The Croatian Constitutional Court on the

2/2/1993, Horvat states the articles of the constitution which guarantee the right to compensation

in the case of the state seizure of property for the sake of public ownership. Article 3 states

“Sanctity of property is included into the greatest values of this constitutional order”; than article

48 says “Right to property is guaranteed and article 50 states how “It is possible by the law and in

the interest of the republic to limit or to seize property, with the compensation of the market

value.” 135

The property clauses in the constitution are obviously only applying after the robbery of

the social property. The new private property will see its sanctity respected but the sanctity of

social property was to be dismissed since the ability to appoint bourgeoisie was the key element

that had kept HDZ in power. Horvat’s lawsuit had failed and the constitutional court had not

replied to any of his arguments about the illegal seizure of property but had rather written

explanations about the government being able to regulate the economy. Horvat does not believe

133 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 13/01 (2001). 289.

134 Ibid. 289

135 Ibid. 287.


that government should regulate the economy but rather that it cannot retroactively decide on the ownership rights of workers thus putting them into jeopardy and effectively depriving them of their right to property, to management and even the right to work itself. Horvat also challenges the very idea of transformation into the “market economy” claiming how this form of economy had already existed in Yugoslavian self-managing socialism. Yugoslavia did not have central planning or the state ownership of the means of production. The companies were, for the most part making their own decisions and were also competing on the market. “Self-management is, like private property compatible only with the market economy. In both cases the economic independence of the companies is what generates the market institutions. This is why the transition from a market economy into a market economy is clearly nonsense.” 136 According to Horvat, the system could have been reformed but not transitioned into the market economy since it already had market economy, unlike the countries which had central planning and state ownership of the means of production. The so-called “privatization” was nothing more than the usurpation of the independence of the enterprises by the state as well as the usurpation of the property rights of the Croatian workers. The “transformation” law was created in the way that the “transformation” would not be possible and that the state will end up owning the previously socially owned enterprises. One the of leaders of the Croatian spring, Miko Tripalo said how the people’s property which was created during socialism is now being taken away from them and how “it is not a surprise that the abolishment of the social property is called “transformation” and not privatization because what is actually happening is the wholesale transformation into state property, with the robbery and the usage of the governmental and party positions. 137 The government seizes the property of the citizens through a law that is designed to fail to transform it into private property because the workersrights are not respected. Than, the government gives this property to whomever it wants through one of the methods of capital concentration.

136 Horvat, Branko. "Ekonomika Brzog Razvoja." Forum Bosne 12/01 (2001). 275.

137 Tripalo, Miko. "Interview." Feral Tribune, October 19, 1993, 426th ed.



With this thesis I have shown the clear existing connection between two of the main social problems in Croatia nationalism and privatization theft. The aim was to show how these two problems should be treated jointly rather than individually since they are connected and since existing economic order, a product of this great theft, depends on the nationalism in order to justify itself. The standing point with which we have started and conducted this research was that the nationalist discourse, hate speech, nationalist violence and overall nationalist saturation of the political life was used by the political elites in the process of economic transformation. What the elites did is to establish a national bourgeois class, non-existent in socialism, and to, by being able to practically appoint them, stay in power together over a lasting period of time. The connection between the national bourgeoisie and the political elite is what keeps the politicians in power and the elites of the transitioning countries had a unique opportunity to appoint their own bourgeoisie. This is all especially clear if we take off the ethnic lenseswhen dealing with the Croatia of the 90’s and instead put on the ‘class lenseswhich can clearly point us in the right direction. Firstly, I have presented the theoretical framework which had shown the nature of the property which was being expropriated and the nature of the self-managing system which was being abolished. The social property had a meaning of the means of production in the hands of the labor. It was the guarantee of their right to work, right to manage and, even if only collectively, right to property. This property cannot become state’s property as Kardelj explicitly claims how: the state does not have a right to seize it; but also over the years workers collectives have increased the value of the social property twelvefold by investments form their own pockets. I have also shown how a nation state, which is what Croatia became after independence, is not a state which safeguards the interest of all of its citizens equally but rather is a state which safeguards the property rights of the rich and their right to freely practice business. I have also shown how it was exactly the lack of ethnic hatred which had produced ethnic violence since elites had to turn to extreme methods in order to get the masses rallied up for the national causes. The new bourgeois class as I have shown is not there to defend some abstract national cause, but


rather its own position and in the globalized world functions as a form of a traitor to the local working class while serving the interest of the “global over-class 138 ”. After the theoretical debate I have given the evidence to show how the nationalist HDZ government of the 1990’s has used the nationalism to execute the privatization theft and the formation of the bourgeois class of its choice. Firstly we have looked at the politics of Franjo Tudjman who, was maybe ‘a real nationalist’ who “advertised his militancy in the cause of nationalism in a way the more devious Milošević would never have done” 139 but whose idea of two hundred families was a terror against Croatian citizens who were deprived of their property for the sake of creation of national bourgeoisie. Furthermore his nationalist project was completely dependent on the support of the leader of this, supposedly enemy, nation. His ‘trust’ for Milosevic and their joint plans were what raised the question of classes. If the elites are cooperating well, why should lower classes fight? Exactly because of the elites, in order for elites to stay in power, to create a nation state with a dominant ethnic group and more importantly with the ruling economic elite, conflict along the ethno-national lines was necessary. I have also shown how Tudjman’s concept of “Croatian freedom” is meaningless for most of Curtains, it is a at best a formal independence for a state. It only refers to independence form Yugoslavia while it completely covers up the vassal relation to the international community. It also doesn’t answer to the problems of Croatian working class; as a matter of fact ‘Croatian freedom’ had created numerous problems for the Croatian working class which was deprived of its rights, starting with the right to property and all in the name of some abstract ‘national interest’. I have also demonstrated how the privatization theft could not have happened without being planned. Croatian opposition was well aware of all of the threats that the infamous law of Transformation was bringing along. People were being robbed of their social property in the time of the rise of ethnic violence. This was the concern of some of the opposition parties, coming form the left. We have also seen that even some politicians from the right were for the equal distribution of social property since there was no better solution. It was not just the people’s right to social property which was the concern it was also the fact that the ‘transformation’ was designed to fail to produce private property. Many representatives in the parliament were pointing to the fact that transformation will actually bring social property into the hands of the

138 Rorty, Richard. Philosophy and Social Hope. New York: Penguin Books, 1999. 73.

139 Zimmermann, Warren. Origins of a Catastrophe: Yugoslavia and Its Destroyers -- America's Last Ambassador Tells What Happened and Why. New York: Times Books, 1996. 76.


state. But as we have seen, this was exactly the idea. HDZ had seized the property so it could hand it over to its chosen new bourgeoisie. HDZ was sued for this theft by Branko Horvat, whose arguments did not stand a chance in the judicial system which, as we have also seen, was not independent. Nationalism as Ideology behind Privatization Theft, as we have shown in this research is a justified title for this study. We have not shown how Croatian nationalism was invented for the purpose of privatization theft, but this was not the goal either. Croatian nationalism, as ideology of the ‘national liberation’ was merely abused by the political elites to pursue their own goal of remaining in power and through privatization theft, be in position to appoint the new bourgeoisie, thus hoping for a long term cooperation. Nationalist usurpation of the media and the entire society has put aside the questions of class to that extent so the working class would not rise if their property or other rights are being annulled. The redistribution of capital, which should be rendered as countrywide class violence of unseen proportions, went by without a lot of noise and without provoking sizable mobilization of the robbed lower classes. The response of the lower classes will come only when they reject the national ideology as “the class enemy’s way of fighting”, when they choose not to be Croatians (or Serbs) and turn to their class problems. The main hypothesis than, stays the same: Croatian nationalist government of the 1990’s has used ethno-nationalist ideology against its own people in order to rob them off their social property in the quest for the creation of the new national bourgeois elite. The question for some further research can be the same old question: how to reverse this process and to “tighten the belts of the richest so the belts of the poorest can be loosened a little”?



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Conducted Interviews:

Kursar, Tonči. Interview by author. Tape recording. Zagreb. July 25, 2015.

Linić, Slavko. Interview by author. Tape recording. Zagreb. July 9, 2015.

Manolić, Josip. Interview by author. Tape recording. Zagreb. July 17, 2015.

Sekulić, Predrag. Interview by author. Tape recording. Zagreb. July 2, 2015.


Šeks, Vladimir. Interview by author. Tape recording. Zagreb. August 6, 2015.

Vujić, Antun. Interview by author. Written notes. Zagreb. July 28, 2015.

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