The Presidential Years 299
democratization of the party, supporting economic and administrative central-
ism in a more robust federation and deeper ties with the Soviet Union. They
believed that as LCY members they had right to a privileged position com-
pared to those who were not, and were therefore opposed to everything that
could threaten their status.^183
Since the Five-Year Plan for the period 1957–61 had been accomplished a
year in advance, this gave impetus to those who wanted an economic reform to
transform Yugoslavia into a politically stable state. CIA analysts were con-
vinced that this would be possible. In a paper dated 23 May 1961 they wrote: “It
is in the economic sphere that the Yugoslavs have departed most notably from
the practices followed by the other communist states. In the past decade, the
regime has successfully freed itself from a whole series of obsessions inherited
from the Stalinist period: that planning and administration must be completely
centralized; that the peasants must be forced into collective farming; that heavy
industry must be developed at any cost, preferably via very large investment
projects; that the economy must be insulated from the influence of world mar-
kets. In giving up these dogmas, Belgrade has experimented cautiously, gradu-
ally coming to adopt a distinctive type of mixed socialism which combines state
ownership and planning with many of the characteristics of a market economy.
This approach, made possible in part by continuous Western assistance, has
been singularly successful.”^184
The developments of the late fifties gave encouragement to those who con-
sidered the economy too dependent on the state. Tax revenues allowed for the
accumulation of resources with which the state financed a general investment
fund in order to aid factories and enterprises that needed financial aid for their
survival, and that were obviously engaged in a fierce competition to get a piece
of the pie. This competition intensified with more and more frequent state-
ments by reform minded politicians that the “working class, being the owner of
the means of production, has the right to decide by itself about the distribution
of the earnings.”^185 The factories, therefore, should dispose autonomously of
their money, and thus would acquire momentum for their growth thanks to
reduced pressure from the state. Yugoslav leaders began speaking about eco-
nomic reform at the November 1959 plenum, stressing that it was urgent to
increase industrial production and rationalize the bureaucracy’s control over the
economy. In some cases this would even have justified dismissals and tighter
control of the workers. At the plenum Kardelj affirmed that production would
rise only if workers had to queue to get a job at the factories. To those who
reproached such “capitalist methods,” he replied that sometimes even capital-
ism had something good and that there were “sensible people” among the cap-
italists who knew what was right and what was wrong.^186