Learning (Non-)Planning from Yugoslav Socialism

The advancement of democratic economic planning theory depends crucially on improving our understanding of how technically feasible planning methods and instruments can be embedded in institutionally viable incentive structures, developing a coherent incentive-compatible as well as feasible planning procedure. Our contribution draws lessons for democratic economic planning from the historical experience with Yugoslav socialism, and especially its post-Stalinist, “contractual” phase. From the mid 1970s onwards, workers in Yugoslavia were empowered to plan their activities from the ground upward. Intended to re-energize worker participation in the construction of socialism, this experiment with economic planning from below provides useful insights for the contemporary debate. One key insight we draw from the Yugoslav failed experience is the critical importance of avoiding institutional entanglement of responsibilities for material incentives to produce their intended effects. We examine four main current models of democratic planning - Gindin’s “socialism for realists” and Devine’s similar model of “negotiated coordination,” the Cockshott-Cottrell model type, Laibman’s “multilevel iterative democratic coordination,” and Albert and Hahnel’s “participatory economics.” Our examination reveals that all of these models incorporate features of the Yugoslav contractual model without apparent awareness of their problematic historical record, i.e. without ensuring a clear division of responsibility. As long as this condition is not met, current advancements with regard to technical feasibility of planning will be insufficient due to lacking incentive-compatibility.