THE UNIVERSITY OF HULL

                           DEPARTMENT OF POLITICS

                       The Politics of Eastern Europe

                        WHAT WAS TITO’S SEPARATE WAY?

Jonas Daniliauskas

Terence P McNeill

16 May 1995


      The aim of this essay is to show  how  Josip  Broz  Tito  created  and
maintained the socialist system in Yugoslavia, which was some  kind  of  way
between the Soviet socialism and  Western  capitalism.  The  main  attention
will be focused on the reasons of the  Tito’s  break  with  Stalin,  on  the
origins of the separate way, and the developments of this way.

The Situation in 1945-1948

      Early in November  1944,  Tito,  who  was  supreme  commander  of  the
National Liberation Army and Secretary-General of  the  Communist  Party  of
Yugoslavia (CPY)  and  Subasic,  who  was  a  representative  of  the  Royal
Yugoslav Government concluded a draft  political  agreement  that  elections
should be held to a Constituent Assembly which would decide  on  the  future
form  of  the  government  in  Yugoslavia.[1]A  new   Yugoslav   Provisional
Government was created on 7 March 1945. Tito became the last Royal  Yugoslav
Prime  Minister  and  Minister  of  Defense.[2]  The  new   government   was
immediately recognised by the British, American and Soviet governments.
      In August 1945 the People’s Front was  formed.  It  was  an  ‘umbrella
organisation’ in which those non-communist parties that still existed  would
collaborate with the CPY.[3] It organised a single list  of  candidates  for
the elections held on 11 November 1945 for  a  Constituent  Assembly.  About
90% of the electorate voted for the official candidates.
      The first act of the Constituent Assembly was to abolish the  monarchy
and declare Yugoslavia a Federal People’s Republic.[4]
      Even before that  the  centre  of  political  power  already  was  the
Politburo of the CPY. From April 1945 currency reform, confiscation  of  the
property of former  collaborators,  the  nationalisation  of  most  existing
industry, and the strict control of rents were put into force.[5]
      The new Constitution of 31 January 1946 was based largely on the  1936
constitution of the SU. It had nationalised all industrial,  commercial  and
financial enterprises, limited  individual  landholdings  to  60  acres  and
organised the surplus agricultural land into collective farms.[6] About  1.6
million hectares of land were expropriated.
      So, in the first years of Tito’s government Yugoslavia  was  a  highly
centralised  one-party  state.  The  centre  of  political  power  was   the
Politburo of the CPY. The first Five Year Plan for 1947-1952  was  published
and put into effect early in  1947.  With  the  reorganisation  of  federal,
republican and local government to cope with the first Five Year  Plan,  the
Yugoslav political-economic system came even closer to its Soviet model  and
became a single, giant, countrywide and monopolistic trust.[7]

The Origins of the Separate Way

      A few important factors and differences could be named as the  origins
of the Tito’s break with Stalin and of  the  evolution  of  Tito’s  separate
      The biggest difference between Yugoslavia and the other East  European
countries was that in  Yugoslavia  -  and  only  in  Yugoslavia  -  had  the
Communists established themselves  in  power  without  important  assistance
from the SU.[8]Secondly, Stalin did not want to help Yugoslavia to build  up
a  balanced  economy.  It  suited  for  him  better  to  conclude  long-term
agreements under which Yugoslavia bound itself to sell raw materials at  low
prices, and ceased to  process  them.[9]  Thirdly,  Stalin  failed  to  give
Yugoslavia full support in its demands  for  the  cession  of  Trieste  from
Italy.[10]Finally, Stalin’s aim was to create a  monolithic  socialist  bloc
under firmer Soviet control.[11]Stalin wished  to  secure  in  Yugoslavia  a
regime as obedient as any other in East Europe.[12]
      The basic issue was very simple:  whether  Tito  or  Stalin  would  be
dictator of Yugoslavia. What stood in Stalin’s way was Tito’s and hence  the
Yugoslav regime’s autonomous strength.[13]
      The first sign the Yugoslavs had that  their  relations  with  the  SU
were moving towards a serious crisis came  in  February  1948,  when  Stalin
abruptly summoned high-level Yugoslav and Bulgarian delegations  to  Moscow.
Tito sent Kardelj and Bakaric to join Djilas,  who  was  already  there  for
talks about Albania and Soviet military aid  to  Yugoslavia.  But  the  only
treaty signed was a Soviet text binding the Yugoslav government  to  consult
with the Soviet government on all foreign policy issues.[14]Soon after  that
Stalin postponed negotiations for a renewal  of  the  Soviet-Yugoslav  trade
agreement which was the keystone of Yugoslav economical  policy.  It  became
clear to the Yugoslav leaders that there was no prospect  of  healing  their
rift with the SU except by accepting total subordination.[15] At this  point
Tito took the conflict before the Central Committee of the CPY, on  1  March
1948. There the Politburo received a vote of confidence for their  rejection
of Soviet demands.[16]
      The Soviet responded after a few weeks.  On  18  March  they  informed
that  Soviet  military  advisers  and   instructors   in   Yugoslavia   were
‘surrounded by hostility’ and would therefore all be withdrawn  immediately.
On the next day, a similar  announcement  was  made  in  respect  of  Soviet
civilian advisers.[17]
      In April Yugoslavia refused  to  attend  the  Cominform  meeting.  The
Cominform met without the Yugoslav delegation on 28 June 1948. The  CPY  was
condemned and it was declared that by refusing to  attend  the  meeting  the
Yugoslav Communists had placed themselves ‘outside the family  of  fraternal
Communist Parties, outside the  united  Communist  front,  and  outside  the
ranks of the Cominform.’[18]
       Stalin  took  further  economical  and  political  steps   to   place
Yugoslavia outside the Soviet Bloc. By summer 1949 deliveries to  Yugoslavia
had been slowed down or stopped, and by the  end  of  the  year,  all  trade
between Yugoslavia and the Soviet Bloc has ceased.[19] From August 1949  all
countries of the Soviet Bloc denounced  their  treaties  of  friendship  and
mutual aid with Yugoslavia. The  CPY  as  well  as  Tito  had  been  finally
excommunicated and outlawed.[20]

The Separate Way

      After the break with the Soviet Bloc there  was  a  need  to  find  an
ideological basis for the unique Yugoslav position  as  a  Communist  nation
outside the Soviet community.[21]The Yugoslavs contended  that  the  SU  had
deviated  from  ‘true  Marxism-Leninism’  as  a  result  of  an  independent
Communist bureaucracy created by Stalin which transformed  the  dictatorship
of the proletariat into a dictatorship over the proletariat.[22]
      The essence of the new  doctrine  was  that  the  state  must  ‘wither
away’. The key to this development was decentralisation of  the  government,
of the economy, and, later, of the CPY.[23]
       The  essence  of  the  decentralisation  in  the  economy   was   the
introduction of  self-management  system.  First  real  step  towards  self-
management  was  the  Basic  Law  on  the  Management  of   State   Economic
Enterprises and Higher Economic Associations by the Work  Collectives  which
came  into  force  in  June  1950.  In  fact,  this  law   remained   purely
declaratory, until the initial operational provisions were passed  in  1952-
1953. Then followed an endless zigzag of  constitutional,  legislative,  and
other  changes  and  reversals.[24]  In  April  1951  the  Federal  Planning
Commission was abolished. At the end of  1951  a  new  Law  on  the  Planned
Management of  the  National  economy  took  force.  The  Soviet  system  of
planning was abandoned. In its place the Yugoslavs  introduced  annual  (and
later medium-term) ‘Social Plans’, which at the  enterprise  level  were  no
longer directive and compulsory, but indicative.[25]
      In 1951-1952 there were several efforts to free  prices,  and  several
devaluations of dinar.[26]
       The  economical  reforms  were  followed  by  the  crucial  turn   in
agricultural   policy   in   early   1953,   when   the   movement    toward
collectivisation was reversed and the peasants were permitted to  leave  the
collective farms. Ever since that turn the  Yugoslav  agriculture  has  been
predominantly based on individual farming.[27]
      The  law  of  May  1949  on  People’s  Committees  had  given  greater
political and economical powers to the district, as  opposed  to  republican
or federal, levels of government. An administrative reorganisation of  local
government units was designed to strengthen them  through  enlargement.  The
existing 7,104 local people’s committees were  replaced  by  3,834  communes
grouped in 327 counties, plus 24 cities without county affiliations.[28]
      Administrative decentralisation  was  carried  further.  Many  of  the
Federal Ministries responsible for the  direct  management  of  the  economy
were abolished. In general, the number of ministries was reduced to 19  from
      The role of the CPY was also reformed. The 6th  Congress  of  the  CPY
met in November 1952. The redefinition  of  the  CPY  was  symbolised  by  a
change of name. The  CPY  became  the  LCY,  the  League  of  Communists  of
Yugoslavia.  The  Resolution  and  the  Statute  adopted  by  the   Congress
redefined the role of the Party. The ‘basic duty  and  role  of  Communists’
was ‘political and ideological work in educating the masses.’  The  LCY  ‘is
not and cannot be the direct operative manager and  commander  in  economic,
State, or social life.’[30]
      The conclusions  of  the  Law  on  People’s  Committees  and  the  6th
Congress of the LCY were formally embodied in the new Constitutional Law  in
January  1953.   Article   3   pronounced   the   People’s   Committees   of
municipalities and districts to be ‘the basic  organs  of  state  authority’
and limited the powers of federal and republican governments to  the  rights
(admittedly still considerable) specified  by  the  Federal  and  Republican
Constitutions.[31]So, the devolution of economic power  to  the  enterprises
was matched by a devolution of political power to the communes.[32]
      But as the reforms begun, the economic  situation  was  becoming  more
and  more  complicated.  After  the  beginning  of  the  economic  blockade,
Yugoslavia found itself in dangerous economic situation. Tito felt bound  to
turn to the West for economic  aid.  In  late  summer  1949  Yugoslavia  had
applied to the World Bank and the US Export-Import Bank for credits of  $250
million. The first formal request by the Yugoslav  government  for  American
foodstuffs was made in October 1950.
      On 18 November 1950 President Truman recommended the Congress a large-
scale scheme of aid to Yugoslavia, and on 29 November, an  American-Yugoslav
Aid Agreement was concluded.  By  the  end  of  January  1951,  the  sum  of
American aid had reached $17 million, with a further $35  million  promised,
and a further  (2  million  from  the  British.[33]In  summer  1952  the  US
administration made a further $30 million credit available, and by  the  end
of the year Yugoslav foreign trade had again  reached  its  total  level  of
1948, with the main Western powers taking the place of the Soviet Bloc.[34]
      The other result of American aid was the beginning  of  a  pro-Western
Yugoslav foreign policy.[35] On 14 November 1950, the US-Yugoslav  agreement
on the re-equipment of the Yugoslav Army was signed.[36]
      The American aid led to the boom of the  Yugoslav  economy  which  had
been  achieved  in  party  by  means  of   a   high   rate   of   investment
expenditure.[37]But by the end of 1961 the boom had turned  into  recession.
The growth rate for industrial production,  which  had  been  15%  in  1960,
declined to only 7% in 1961 and an annual rate of 4% in the  first  half  of
      In January 1961 a number of economical reforms were introduced.  Banks
were made more independent, dinar was devalued.  But  this  mini-reform  was
unsuccessful.[39]Yugoslav  economy  needed   greater   reforms.   Yugoslavia
already was living beyond its means. In 1964 and the first half of 1965  the
country was incurring a balance-of-payments deficit at a rate of  more  than
$200 million annually.[40]
      All these problems led to the introduction of the Economic  Reform  in
1965, which had two principle aims: to make Yugoslav  goods  competitive  in
international  markets,  and  to  modernise  the  economy   by   eliminating
uneconomic investment  and  production  and  by  compelling  enterprises  to
respond to the forces of supply and demand.[41]The  Reform  had  five  major
      1. Lower taxes;
      2. the role of the state in investment  allocations  was  henceforward
to be limited;
      3.  very  large  adjustments  in  product  prices  designed  to  bring
relative domestic prices designed to bring relative domestic  prices  closer
to world parities;
      4. the dinar was devalued from 750 to 1,250  to  the  dollar;  customs
duties, export subsidies and  the  range  of  quantative  restrictions  were
reduced; and Yugoslavia become a full member of GATT;
      5. private peasants were given the right to buy  farm  machinery,  and
the opportunity to obtain bank credits for this purpose.[42]
      But the immediate economic results of the Reform were  minor.  In  the
first years of the Reform Yugoslavia was facing rapid inflation,  a  serious
recession and growing unemployment.[43]The major effects of the Reform  were
in the sphere of banking and trade. The foreign trade was expanded.[44]
      The economic problems led to a rise  of  nationalism  in  Croatia  and
Slovenia. The most  productive  enterprises  were  located  in  Croatia  and
Slovenia, and it was in the interests of Croats and Slovenes to have a  less
centralised country. In Croatia agitation for  more  autonomy  went  to  the
length  of   demands   for   sovereign   independence   (but   in   Yugoslav
confederation) and a separate seat in  the  UN.[45]Tito’s  response  to  the
‘national excesses’ was to force the  resignation  and  replacement  of  the
highest-level Croatian leaders  in  December  1971.  During  1972,  the  LCY
leadership   structure   throughout   the   country   underwent   a    major
      In general, the 1970s were marked by the two major developments -  the
reconciliation with the SU, and the introduction of  the  ‘delegate’  system
by the Constitution of 1974.
      Brezhnev’s visit to Belgrade in August 1971 symbolised the end of  the
period of acute suspicion. Tito returned Brezhnev’s visit in June 1972,  and
negotiations were duly begun in September for the  huge  new  Soviet  credit
($1,300 million) for the construction  of  new  industries.[47]  In  October
1973, during a visit to Yugoslavia, Soviet Prime  Minister  Aleksei  Kosygin
and Yugoslav Prime Minister Djemal  Bijedic  agree  to  non-interference  in
internal affairs, industrial co-operation, and better understanding.[48]
      The major development in the domestic politics  was  the  promulgation
of the new Constitution in 21 February  1974.  There  were  three  principal
aims of this Constitution:
      1. to break down larger enterprises into smaller components;
      2. to eliminate direct elections;
      3. to introduce a new system of ‘voluntary social planning’.[49]
      Since 1974  Yugoslavia  was  ruled  by  ‘delegates’,  who  were  given
mandates by ‘delegations’, who in turn were mandated by the voters.[50]


      Tito has  proved  to  be  a  remarkable  statesman,  whose  deliberate
policies, pragmatic leadership have enabled his  country  to  survive  great
dangers and to build a system which had no analogue.[51]When  Tito  died  in
1980 Yugoslavia was unique.  It  was  the  only  communist  neutral  in  the
      The Yugoslav system differed from both the capitalist system  and  the
Soviet-type socialist system. On the one side there was very little  private
ownership of productive assets except in agriculture;  on  the  other  there
was  no  complete  system  of  central  planning.  Yugoslavia  shared   with
capitalism a market economy; and it shared with the SU  a  monopoly  Marxist


1. G.K.Bertch, ‘The Revival of Nationalisms’, in Problems of Communism,
1973, vol. 22, no. 6, pp. 1-15
2. P.Calvocoressi, World Politics Since 1945 (6th ed., London and New York:
Longman, 1991)
3. K.Dawisha, Eastern Europe, Gorbachev, and Reform: The Great Challenge
(2nd ed., Cambridge: Cambridge University Press, 1990)
4. R.Lowenthall, ‘Development vs.Utopia in Communist Policy’, in Ch.Johnson
(ed.), Change in Communist Systems (Stanford: Stanford University Press,
1970), pp. 33-116
5. H.Lydall, Yugoslav Socialism: Theory and Practice (Oxford: Clarendon
Press, 1984)
6. Fr.W.Neal, Titoism in Action: The Reforms in Yugoslavia after 1948
(Berkeley and Los Angeles: University of California Press, 1958)
7. Fr.W.Neal and W.M.Fisk, ‘Yugoslavia: Towards a Markat Socialism’, in
Problems of Communism, 1966, vol. 15, no. 6, pp. 28-37
8. A.Z.Rubinstein, ‘Reforms, Nonalignment and Pluralism’, in Problems of
Communism, 1968, vol. 17, no. 2, pp. 31-41
9. D.Rusinow, The Yugoslav Experiment 1948-1974 (London: C.Hurst & Company,
10. C.A.Zebot, ‘Yugoslavia’s “Self-Management” on Trial’, in Problems of
Communism, 1982, vol. 31, no. 2, pp. 42-49
11. D.Wilson, Tito’s Yugoslavia (Cambridge, London, New York,
Melbourne:Cambridge University Press, 1979)

[1]D.Wilson, Tito’s Yugoslavia (Cambridge, London, New York, Melbourne:
Cambridge University Press, 1979), p. 33
[2]D.Rusinow, The Yugoslav Experiment 1948-1974 (London: C.Hurst & Company,
1977), p. 12
[3]D.Wilson, op. cit., p. 38
[4]D.Rusinow, op. cit., p.12
[5]D.Wilson, op. cit., p.38
[6]P.Calvocoressi, World Politics Since 1945 (6th ed., London and New York:
Longman, 1991), p.266
[7]D.Rusinow, op. cit., p.22
[8]F.W.Neal, Titoism in Action: The Reforms in Yugoslavia after 1948
(Berkeley and Los Angeles: University of California Press, 1958), p. 2
[9]D.Wilson, op. cit., p. 47
[10]H.Lydall, Yugoslav Socialism: Theory and Practice (Oxford: Clarendon
Press, 1984), p. 60
[11]D.Rusinow, op. cit., p. 23
[12]P.Calvocoressi, op. cit., p. 237
[13]D.Rusinow, op. cit., p. 25
[14]Ibid., pp. 26-27
[15]H.Lydall, op. cit., pp. 61-63
[16]D.Rusinow, op. cit., p. 27
[17]D.Wilson, op. cit., p.54
[18]D.Rusinow, op. cit., p. 29
[19]H.Lydall, op. cit., p. 63
[20]D.Wilson, op. cit., pp. 63-64
[21]F.W.Neal, op. cit., p. 7
[23]Ibid., p. 8
[24]C.A.Zebot, ‘Yugoslavia’s “Self-Management” on Trial’, in Problems of
Communism, 1082, vol. 3, no.2, p. 43
[25]D.Rusinow, op. cit., p. 63
[26]H.Lydall, op. cit., p. 71
[27]R.Lowenthall, ‘Development vs. Utopia in Communist Policy’, in
Ch.Johnson (ed.), Change in Communist Systems (Stanford: Stanford
University Press, 1970), pp. 102-103
[28]D.Rusinow, op. cit., p.69
[29]K.Dawisha, Eastern Europe, Gorbachev, and Reform: The Great Challenge
(2nd ed. Cambridge: Cambridge University Press, 1990), p. 256
[30]D.Rusinow, op. cit., pp. 74-75
[31]D.Wilson, op. cit., p.81
[32]H.Lydall, op. cit., p. 73
[33]D.Wilson, op. cit., pp. 74-75
[34]Ibid., p. 84
[35]F.W.Neal, op. cit., p.7
[36]D.Wilson, op. cit., p. 75
[37]D.Rusinow, op. cit., p. 108
[38]Ibid., p. 111
[39]H.Lydall, op. cit., p. 79
[40]A.Z.Rubinstein, ‘Reforms, Nonalignment and Pluralism’, in Problems of
Communism, 1968, vol. 17, no. 2, p. 32
[41]Fr.W.Neal and W.M.Fisk, ‘Yugoslavia: Towards a Market Socialism’, in
Problems of Communism, 1966, vol. 15, no. 6, p. 29
[42]H.Lydall, op. cit., pp. 81-82
[43]Ibid., p. 89
[44]Ibid., p. 90
[45]P.Calvocoressi, op. cit., p. 267
[46]G.K.Bertsch, ‘The Revival of Nationalisms’, in Problems of Communism,
1973, vol. 22, no. 6, p. 4
[47]D.Wilson, op. cit., p. 209
[48]K.Dawisha, op. cit., p. 271
[49]H.Lydall, op. cit., p. 91
[50]Ibid., p. 103
[51]D.Wilson, op. cit., p. 262
[52]P.Calvocoressi, op. cit., p. 269
[53]H.Lydall, op. cit., p. 150