Branko Horvat has written an impressive blueprint for socialism which raises more questions than it answers. “In a sense,” he writes on the first page,

this book represents a life’s work…. I have been thinking about its content throughout my life. Ever since my class left the secondary school of a small provincial town in Croatia to join the partisans in the Yugoslav Revolution, socialism has been my predominant concern. My generation undertook to accomplish what Marx called for in his famous thesis on Feuerbach: to change the world, not just to explain it….

It turned out that changing the world was not at all a simple or easy affair. Contrary to our original views, socialism proved to be rather elusive and far from obvious…. Many of our “scientific” explanations did not survive the test of societal praxis. They were exposed as naive and simpleminded, occasionally as obscurantist and just simply wrong. Very soon—hardly three years had passed since the end of the armed struggle—the need for a thorough rethinking of the received socialist theory became obvious. Since then, I have been thinking about this book.

Horvat is today an internationally known Yugoslav economist, familiar as a scholar with Western political and philosophic, as well as economic, thought, and experienced as a working planner in the gritty realities of socialism in his own problem-ridden and still repressive country. Hence he is well placed to write a book that touches our lives as well as his. For the collapse of the vision of socialism is one of the great intellectual traumas for the West, not just for youthful Yugoslav partisans. As inefficiencies and indecencies have become evident in the Soviet Union, Cuba, China, East Germany, Poland, not to mention Yugoslavia itself, the once hallowed word “socialism” has become emptied of content. Moreover as we look at the ideas of socialism apart from the forms it has taken in specific countries—ideas of central planning, nationalization, the “dictatorship of the proletariat”—we find the same sickening sense of vanishing ideals, empty slogans, terrible mistakes.

It is this inability any longer to describe what socialism is supposed to be, or to explain why a country that achieved a realistic socialist identity would be preferable to an advanced welfare-capitalist society such as Sweden or the Netherlands, that gives importance to Horvat’s political economy of socialism. A complex work, by turns analytic, programmatic, historical, and theoretical, and supported by 135 pages of data-laden footnotes and citations from literally hundreds of authorities, Horvat’s book is taxing and at times tedious. Nevertheless, a reader who perseveres will find it coherent and I think plausible. For all the reservations that I shall presently state, Horvat convinces me that if socialism is to revive as an idea and an ideal among thoughtful people in the West, it will be along the lines, and for the reasons, that he has set forth.

Socialism, for Horvat, is above all a society that encourages self-determination. Its enemy is not therefore to be identified through a recital of capitalist inequities and malfunctions, although Horvat discusses these at length. The real enemy is the effect of both capitalist institutions and their disconcertingly similar counterparts in “etatist” countries—Horvat’s term for Soviet-style socialism—in diminishing the capacities of ordinary people to take charge of their own destinies. What repels Horvat about life in the United States and in the Soviet Union is the distance between power holders and everyone else, whether those power holders are located in corporations, ministries, democratic party “machines,” or Communist Party “apparats.”

What depresses him more than economic exploitation is the manipulation of people’s lives, the spectacle of men and women turned into insatiable worshipers of commodities or into obsequious servants of bureaucracy, or both. These are certainly not new indictments against capitalism or etatism, but they indicate that Horvat’s effort to create an imaginable socialism takes off from a different ground from the visions of capitalist hell and socialist heaven on which earlier proposals for radical change have come to grief.

The central task, then, is to break the domination of economic and political power that cramps the lives and stunts the minds of too many men and women today. How is this to be done? Horvat proposes two far-reaching changes, one affecting economic life, the other political life. The economic proposal requires the construction of a system that will enable people to determine as far as possible the terms and conditions of their working lives. This entails an escape both from the inertia and heavy-handedness of etatist bureaucratic planning and from the waste, disruptions, and pervasive distortion of values characteristic of capitalist systems. Horvat therefore underpins the economic life of socialism by a combination of plan and market—the plan directed against the faults and commercialism of capitalism, the market against the dead weight of etatism. Through a planning bureau, a national bank, a development fund, and an arbitration board for incomes and prices the system will establish its goals and its limits. Through the interplay of enterprises competing in the market-place, or investing their profits in more plant and equipment as they decide, it will maintain its efficiency.


At first glance this prescription for a socialist economy does not appear unrecognizably different from that of a number of capitalist nations. Indeed, some left-wing critics have scornfully called this image of market socialism a “peaceful transition from socialism to capitalism.” But at second look a deep difference emerges. This is the transfer of ownership and control over enterprises from the hands of a capitalist class or a state bureaucracy into the charge of the men and women who work in these enterprises. The crucial identifying economic aspect of socialism is therefore the direction of their own working lives by working people, just as an identifying element of both capitalism and etatism is the exclusion of working people from most decisions affecting the enterprises in which they work. In Horvat’s schematic organization, everything that happens at the workplace is directly or indirectly open to the scrutiny and determination of employees, from the smallest details of job specifications to the largest questions of investment policy. Professional management of course remains, but it is management appointed by, answerable to, and dismissible at the decision of the appropriate level of the workers’ councils and committees that make up the self-governing whole.

Can such self-management possibly work? Horvat makes no effort to gloss over its difficulties. Having taken part in Yugoslav planning, he knows at first hand what it means to have workers’ councils breathing down the necks of managers, and to have managers cheating, or kowtowing to, workers’ councils. He must be aware of, although perhaps from political prudence he does not discuss, the ways by which a communist party can interfere in the designation or decisions of workers’ councils. He patiently deals with problems that are likely to arise—the unwillingness of workers’ committees to assume responsibility or to take risks, the difficulties of distinguishing between technical decisions where ordinary people should not intervene and political decisions where they must intervene. The seriousness with which he takes these matters could not be more clearly stated:

If managers form cliques, injustices are not corrected, economic units fight each other, and meetings last ad nauseam, then workers’ management will not be very idyllic. Far from disappearing, alienation may in fact increase. Human relations will markedly deteriorate. Efficiency will decline. Faith in self-management will be shaken. Workers will spontaneously turn toward government…. Unsuccessful socialism degenerates into etatism.

What makes Horvat believe that these pitfalls can be avoided? He gives a great deal of attention to the boundaries between organizations and to defining duties and responsibilities. But in the end I think that Horvat would admit that the success of self-management is a wager. It does not depend on the intelligence of ordinary people. Is the intelligence of the managerial elites of etatism or capitalism so remarkable? The bet, rather, must be placed on the willingness of people to assume the weights and worries of responsibility rather than delegating them to others. Horvat does not try to insist that most people will rise to this challenge. He only says that “workers’ management is the most powerful instrument of social transformation at our disposal.” His is therefore a prescriptive vision of socialism, insofar as self-management is what must be learned if socialism is to be created.

Economic self-determination is not, however, the only thoroughgoing change that Horvat proposes. A second, even more radical, prerequisite is to make political life itself radically more democratic.

As with the economic system, Horvat’s account of the political system of socialism bears a considerable resemblance to that of advanced capitalism. With various alterations—for example, a two-house parliament in which one house is elected on a regional basis, the other on a basis of industrial representation—Horvat’s proposals would hardly constitute a wrenching change for the political structures of liberal capitalism, although they would be utterly incompatible with the monolithic architecture of etatist systems.

The radical change again involves the role of the ordinary person, this time as citizen rather than as worker. Here I had best let Horvat speak for himself:

The central category of a political system is authority, just as that of an economic system is property. Under socialism both must be socialized. I have defined social property as free and equal access to the means of production. We can define political authority (where authority means the “right to invoking binding obligations”) on the part of citizens as free and equal access to positions of political power. That, of course, implies the elimination of political parties. Since they provide obvious advantages to political leaders, parties are not likely to disappear of their own accord. Hence, they must be forbidden. Is this possibly a restriction of liberty? Joseph Schumpeter aptly defined a political party as “a group whose members propose to act in concert in the competitive struggle for political power.” Replace the term political power by the term profit and you get the definition of a cartel. It has been universally accepted that cartels of businessmen must be forbidden. And they are, at least legally. Yet cartels of politicians are left free to operate. Why? Is it not because politics, rather than economics, is really crucial for the perpetuation of class rule? In other words, not the expropriation of private property but the expropriation of political authority is the necessary and sufficient condition for socialism…. [Horvat’s italics.]

The elimination of political parties does not imply the elimination of politics, just as the eradication of cartels does not kill the economy but renders the market more efficient. All that need be done is to forbid donations and the selection of candidates by party bosses. In other words, the party machinery and its political monopoly must be destroyed. The disappearance of political parties will not leave a political vacuum. On the contrary, it will make possible intensive political participation…. One, two, or several parties will be replaced by a multiplicity of political associations…. Because of [the multiplicity] it is unlikely that permanent political coalitions…would be formed. Thus, after some time the prohibitions of political parties will cease to be felt as a political constraint, just as the prohibition of slavery in contemporary society is not considered as a limitation of private or market freedom.

Needless to say, this is a highly contentious position. Horvat calls for a written constitution with formal and far-reaching guarantees of liberties of press, speech, and movement, as well as an independent judiciary and other protections of rights against the state. But Horvat does not say who will “eliminate” political parties, or how this will be done consistent with the liberties he advocates. He does not inquire into the dynamics of political life without the stability of organized semi-permanent party structures. He does not speculate about the possibility of power drifting into the hands of the civil service bureaucracy in the absence of regular political organizations. Perhaps most important of all, he does not explore the consequences of a failure of “extreme” democratization. In the case of badly operating workers’ management, he candidly admits the possibility of sliding toward etatist economic structures. But if extreme democratization also fails, in what direction will things move?


So it is very easy to criticize Horvat’s prescription for socialism as utopian at best, and recklessly dangerous at worst. (To compare the effects of eliminating parties with those of abolishing slavery is hardly a convincing analogy.) But I think it would be a great mistake to take a wholly negative attitude toward Horvat’s ideas. If we project the broad direction of movement over the last 150 years into the foreseeable future, it seems very likely that many countries in the world will be lurching in the direction of an organization of political and economic affairs that will be called “socialist” whatever their institutional arrangements. For the etatist countries, as Horvat recognizes, this movement is not likely to produce much more than some loosening of the straitjacket that now binds political life; for many underdeveloped countries it seems to offer little more than the formation of authoritarian regimes following “modernizing” policies of one sort or another.

It is mainly in the West that socialism offers many different political and economic arrangements, and it is precisely in the West that a half century of disillusion with millennial notions has robbed socialism of virtually all programmatic clarity. To my mind, Horvar’s book establishes the basis for a reclarification of what socialism hopes to achieve. In the image of a society whose principal objective is individual self-determination, to be realized partly through the self-management of enterprise and partly through the widest possible democratization of political life, Horvat has outlined a program that avoids salvationist visions or mechanical formulas, while projecting goals that are sufficiently audacious, difficult, and yet imaginable to serve as lodestars for the present. Socialism for Horvat becomes a series of extremely demanding lessons that have to be learned, however painfully or gradually; or to put it the other way around, Horvat describes those lessons whose gradual mastery will itself comprise the central task of creating socialism. To restore coherence and substance to the overwhelmingly important question of what humanity wishes to make of itself seems to me an achievement of the highest importance.

This Issue

June 10, 1982