The Presidential Years 383
secondary personalities were incorporated to stress the importance of Tito’s
role.^655 At first, the conference condemned the laissez-faire policy that had
threatened to remove control over the economy from the party, reducing it to a
spare tire. On trial were mostly the banks and the export enterprises accused of
accumulating capital to the detriment of the workers and enriching themselves
with the fruits of their labor. This was, in essence, the opinion already developed
by the Croat leaders, although in a national rather than a class variation. Tito,
Kardelj, and Dolanc used those beliefs to challenge the concept of a company
based on profit and competition with arguments totally foreign to economic
logic, proposing to replace that concept with a new structure, “the organization
of associated labor,” based on proletarian solidarity. Tito closed the conference
stressing the need to strengthen the LCY “as the most conscious power in our
society, able to cope with everything that challenges it.”^656
This reasoning was opposed by the Serb and Slovene liberals, who empha-
sized the need to continue the reform and emancipate the economy from the
party’s tutelage. In particular, they warned that there was the danger of a “con-
centration of power” at the political top (which they wished to avoid), imply-
ing that the conservative forces were the main obstacle to development. Their
weakness, however, was that they relied on the managers; this “new class” specu-
lated in real estate, amassing substantial wealth, hording some of it in banks, and
blowing the rest of it on fancy and conspicuous villas on the Dalmatian coast.^657
Among the managers corruption reigned supreme, since many had transferred
funds abroad (an estimated $4 billion worth) on behalf of their enterprises to
create companies that they would own, although they were created with money
that was not theirs. These operations, which the managers justified by the need
to improve Yugoslav industry, gave rise to all types of embezzlement and “dirty”
dealings. The “socialist market economy,” less controlled in many respects than
the capitalist one, inevitably resulted in less discipline and theft on a level un-
known in Yugoslavia since the time of the Karadjordjevićes. Enterprises took
on debt without hesitation, creating an enormous foreign trade imbalance and
the worst inflation in Europe.^658 Not coincidentally, sensing the danger from
1971 onwards, more than 130 managers cut their ties in Yugoslavia to manage
“their own” companies abroad, beyond the reach of the domestic authorities.
This, of course, provided the conservatives with an opportunity to pose as the
guardians of morality and progress.
The Ustaša TerrorOn 5 April 1972, Vjesnik published a rare interview with General Ivan Mišković,
secretary to the Security Council of the SFRY presidency, in which he drew
attention to the dangers that threatened the country from the right and the