Hal Draper


Economic Drive Behind Tito

Issues in the Break Within the Stalin Empire

(October 1948)

From New International, Vol.14 No.8,October 1948, pp.230-232.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The general driving motivation behind the Tito-Stalin split is fairly clear now – though naturally not to everyone.

It was not merely a personal spat between tinseled marshals, as some of our contemporaries put it in first reaction. It did not mean that the Yugoslavs were going over to Wall Street. There were other attempts at the “real lowdown” on Tito, ranging from the merely ignorant to the fantastic.

There was Henry Wallace (at his press conference in Philadelphia on July 23) who opined that Yugoslavia had been suffering from a “semi-feudal” land-ownership system and that the Cominform was wroth because Tito was slow in reforming it. This congenital blunderbuss simply did not know that well nigh the last remnants of feudal relations had been wiped out after the First World War, even in Croatia where they hung on longest.

There was Louis Adamic, the Stalinist bedfellow who before June 29 was Tito’s chief horn-tooter in the US. Torn between his Stalinoid fellow-traveler mentality and his Yugoslav nationalism, the best Adamic could do was this:

Then, what is the rift? On the one side, poor manners which go with the idea on the part of some Soviet and/or Cominform leaders that Yugoslavia ought to do so-and-so and thus-and-thus; on the other side, resentment of such manners.

... Essentially, the crisis between the Cominform and the Yugoslavs is not political but in human relations. [Trends and Tides, July-Sept. 1948]

There was the egregious Rebecca West, whose recent concern with world affairs has sadly deprived the literary world of her contributions without any visible benefit to politics: her theory was that the split was a jointly staged affair designed to give Stalin an excuse to march troops through Yugoslavia to Italy’s gates ...

There was the Spanish Anarchist underground radio which figured out on July 1: “Tito ... was in the Spanish [civil] war, and may well have constructed the shortcoming of classical Spanish indiscipline.” We admit to throwing this in for comic relief.

In the first issue of Labor Action after the news broke, we put the spotlight on the general driving force behind Tito’s apostasy: his aim “to blackmail Russia into accepting him within the Russian war bloc with a status similar to that which, for example, Churchill hopes to attain for a Western Union within the American-dominated war bloc.”

“Tito is in reality asking for promotion from the status of branch manager to that of junior partner with Stalin,” The question of national independence involved – and it is involved – is for him the independence of the native Yugoslav ruling bureaucracy from control by the Russian; the conflict between the Yugo and the commissar is over who is to benefit from the exploitation of the masses.

Essentially, this is the same kind of impulsion that drives the rising bourgeoisie of a colonial country to seek increasing independence from the bigger capitalist nation that rules it. It has been demonstrated once again that this is not the era for the building of new stable empires over the bent backs of the peoples, and that Stalinist imperialism falls heir and victim to the same disintegrative forces which are also tearing capitalist imperialism apart.

This general impulsion means that there is an inherent conflict of interests between the Russian imperialist colossus and its satellites – an inherent contradiction leading to national resistance, which opens the door to the revolt of the masses against both the foreign and the home-grown oppressor.

But in what form did this general conflict concretize itself in Yugoslavia? It is precisely when we seek to inquire into the more immediate wellsprings of the Yugo-Stalinist heresy that the view clouds; the materials for an analysis are fragmentary and misleading. I certainly do not have the intention of putting forward any all-embracing hypothesis under the now-common title The Real Truth Behind the Tito Break.

It is possible, however, to throw a spotlight on one aspect of the struggle as it took shape in Yugoslavia – its economic basis, the economic issues underlying the general motivation of national autonomy.

This is not the economic question which has come into most notice in the charges pro and con – the dispute over collectivization of agriculture – although there is a relationship. The issue in Yugoslavia was and is: the industrialization of the country.

Since this is by no means obvious from the fragments of information published in this country we are forced to ask the reader to bear with a detestably statistical but necessary preliminary.


Yugoslavia, according to Robert St. John’s books, is “The Land of the Silent People”. The “silent people” are the peasants, it is their land par excellence.

Yugoslavia is the most agrarian country of all Europe, the most thoroughly peasant land on the continent. Here in a mountainous area about the size of Oregon, 77-80 per cent of the population is engaged in agriculture. (Significantly as we shall see, the runner-up – Bulgaria with 74 per cent – is the other country in Stalin’s empire which first publicly raised the proposal for Balkan federation.)

This was the picture at the time Tito took over:

Now pre-1917 Russia, as is well known, was also a predominantly peasant land, but it would be deceptive to equate the two. Russia had its sector of big industry, its giant plants, in which the revolution incubated. Yugoslavia does not.

In all Yugoslavia there are only 475,000 industrial and transport workers, a majority of whom are in Croatia and Slovenia. In 1929 Charles A. Beard wrote that “according to recent figures only twenty-two [factories] employ more than one thousand workers.” Ten years later the figure would be somewhat higher but not enough to change the picture. What manufacturing industries there are engage in producing mainly consumers goods, but 75 per cent of the manufactured products required are imported.

Zagreb in Croatia is a big Balkan banking and financial center, but “the organization of domestic commerce in Yugoslavia could be compared more or less to that prevailing in the smaller communities or rural districts of the United States.”Of the less than a half million industrial and transport workers – constituting less than 8 percent of the population – perhaps 63,000 belong to trade unions, (That was 1940; even today Tito’s compulsory “trade unions” claim a membership of only 622,000.) And of this number a large proportion work in small family shops, or at handicrafts; others are semi-proletarians eking out miserable peasant incomes with miserable factory wages. [1]

This then is the face of Yugoslavia, the country whose people first took up arms against the Nazi Conqueror and which now is also the first to revolt against the new Russian conqueror.


It might seem that in this, the most economically backward country of all Europe, the question of industrialization is the most utopian or at least furthest removed from the top of the agenda, at any rate least pressing.

The contrary is true for three reasons which point to a single end. The first of these reasons applies to most peasant countries; the second applies especially to a peasant country on the European continent; and the third applies to a European peasant land within the Stalin empire. All three are not merely “objective forces” at work but consciously held drives and motivations.

(1) Industrialization is the only basic solution of the key peasant problem of this peasant country.

Western Marxists tend to think of the peasant question in the old world in terms of the slogan “Land to the peasants” – the breaking up of the large estates – as a result of the revolutions in Russia and Spain. But this program is almost irrelevant in Yugoslavia.

The peasants already had the land. Yet they sank deeper and deeper into poverty and misery.

The operative cause is the phenomenon of agrarian overpopulation which “has been recently the most important economic problem of Yugoslavia ... [and] agrarian overpopulation ... will remain the central economic problem of Yugoslavia in the near future. [2]

This phenomenon common to backward peasant economies, arises from the tendency for the increase of population on the land to outstrip the capacity of the land to support them under the given technological conditions. Even where an excess can still be fed, they are not needed for production and depress the standard of living proportionately. Where the excess grows huge, the problem assumes overwhelming importance.

In Yugoslavia the problem is huge. The situation is exacerbated by two conditions:

  1. Yugoslavia’s high rate of natural population increase. Taking the 1935 birth rate in all European countries – the figures being available for that year – next to Russia’s 44.1 per thousand comes Rumania’s 30.7 and Yugoslavia’s 29.0; but because of the higher death rate in Rumania, Yugoslavia’s natural increase of population is higher.
  2. Because of its mountainous character, Yugoslavia belongs among those countries of Europe which have the smallest percentage of arable land (about 46 per cent of the total area). This sharply limits extensive expansion of agriculture to take care of the excess.

In Yugoslavia over one third of the agricultural population is surplus, 4.5 million. This is the highest percentage in Europe, four times as high as neighboring Bulgaria, for example.

The effects are devastating. Yugoslav economist Bicanic traces them; of his list we shall mention only two:

  1. The standard of living is low because 100 hectares [less than 250 acres] of cultivated land has to support 90-150 peasants in Eastern Europe, whereas it does not provide a living on an average for more than 16 in USA, and 20 in the Argentine ...
  2. The great rural overpopulation represents in fact a “hidden unemployment” which becomes manifest in a great pressure of the rural population on the labor market in towns and industries. This pressure keeps the wages low [3] and is one of the reasons for the small purchasing power of the working class in Eastern Europe. [JPRP, Vol.1, No.3]

Industrialization the Solution

What is the way out of this automatic poverty-producing mechanism? The Yugoslav economic study we have quoted comes to the conclusion that it lies only in intensified industrialization, other solutions being very limited in effect.

Agrarian overpopulation came to an end in the countries of the Northwest only when they became strongly industrialized, Yugoslavia will have to look for a lasting solution in the same way. [JPRP, Vol.3, No.5]

The durable solution of the economic problems can be found only in the widening of the urban and industrial sector of the economy. [Ibid., Vol 1, No.1]

This conclusion was the acceptation among the bourgeois specialists even before the war; it is not new. The fierce economic drive behind industrialization is therefore, from this point of view, not peculiar to the Tito bureaucracy. The latter inherited it.

On it, however, are superimposed two others.

(2) Industrialization is the key to national sovereignty.

The important point is not merely that this is true but that the truism plays a leading role in the thinking of the Yugo-Stalinists. Naturally they must recognize that even an industrialized country can enjoy only a limited national sovereignty in Europe today, but an agrarian backwoods can enjoy little if any.

Back in 1944 Edvard Kardelj, No.2 man in the Tito apparatus, was already laying stress on: this point as a guide to post-war reconstruction. In an article in the then Tito organ New Yugoslavia he gives it first place among the “general questions concerning the present position of small nations.”

Nationalist Dynamics

The Nazis’ economic penetration, he explains, meant –

the “reorganization” of the economy of the small nations in accordance with the economy of the larger industrial countries such as fascist Germany. In practice this meant preventing the independent development of the industrialization of small countries and transforming the existing industries of the small countries into mere appendages of the industry of fascist Germany.

Such a plan means

keeping us down to the level of agrarian countries available to feed the industrial countries, and in the first place Hitlerite Germany. According to this plan, therefore, the whole of Southeastern Europe would have become a sort of agrarian appendage to Germany.

This means, he concludes, reducing us “to the level of colonial countries.”

Change “Germany” to “Russia” and we have (as we shall see) the underlying economic basis of the dispute which later proved irrepressible. The general motivation of national independence is translated in economic terms into the aim of industrialization; and contrariwise, opposition to industrialization will raise fundamentally the question of national independence.

A year before the break with the Cominform, a British fellow traveler testified to this tie-up. Speaking of “the enthusiasm, the almost fanatical zeal” with which the Tito government was pursuing the industrialization plan, he explains that

the real dynamic which is driving the Plan forward is the determination that Yugoslavia shall never again be dependent on the capitalist Powers of the West ... the key point in the government’s policy is that only by large-scale industrialization can the standard of living be raised and assurance found that Yugoslavia will finally emerge from the inter-war phase in which she was a backward, semi-colonial dependency of Western capitalism. [Aylmer; Vallance, in New Statesman and Nation, July 26, 1947]

This Stalinoid did not suspect, of course, that this same dynamic was operating against Russia. [4] Yet the reader will have to keep this in mind in order to understand that the role this question played in the later break was not peripheral but central.

Nature of Tito Bureaucracy

The third reason behind the dynamic of Yugoslav industrialization concerns the nature of the new ruling group of Yugoslavia, the Titoist bureaucracy. We shall have more to say about this later, At this point however, it is necessary to point out that the relationship between the bureaucratic-state economy and the goal of industrialization cuts both ways. Just as the bureaucratic collectivism of Titoist Yugoslavia makes possible a perspective of rapid industrialization as compared with private capitalism, so also the objective necessity of industrialization pushed even the pre-Tito bourgeois governments in the direction of the bureaucratization of economy (statification specifically).

Thus Mirkovic, the bourgeois editor of the Jugoslav Postwar Reconstruction Papers, concludes his Problems of Industrialization:

The public (the State in the first place) has played and will play an increasingly important role in all industrialization schemes (which is true of all countries of the East). Thc State (the public in general) remains the only significant investor in an economy where private savings are relatively insignificant and where the role of foreign investment is as yet uncertain. [Vol.4, No.1]

The bourgeois state recognized that the road to industrialization lay through statification:

Public planning will have to play an essential role in postwar reconstruction of the region. The fact that Eastern Europe is just at the beginning of its industrialization process will help toward that effect. Even prior to the war most of the essential enterprises (posts, telegraphs, railways, power plants, steel mills, forestry resources, steamships) were in the hands of the public (state, communities, cooperatives). [Vol.1, No.6] [5]

If for the bourgeoisie industrialization meant statification, then for the bureaucratic-collectivist ruling class under Tito, the terms of this equation are multiplied and transferred right to left: thorough statification requires thorough industrialization.

Otherwise the ruling bureaucracy can never transform itself into an indigenously rooted ruling class but is doomed to remain merely a proconsular apparatus for the foreign exploiter – even if the foreign exploiter is a bureaucratic-collectivist state.

When the Tito machine took power, it was not yet a class in its own right. What we are witnessing are its strivings to achieve the status of the ruling class of Yugoslavia, to become a Yugoslav class in the first place. It can achieve a distinctive role in the process of production only in proportion to the industrialization of the country. The rulers of a land of small-holding peasants can be either bourgeois or tax farmers for a foreign conqueror.

The dynamic social forces behind the question of industrialization should be clear. In this single economic question are wrapped up –

  1. the solution to the overriding economic problem of the country;
  2. the key to Yugoslav national-independence sentiments;
  3. the sine qua non for the transformation of the bureaucracy into an indigenous ruling class.

We shall be prepared, then, to see in its proper light the actual industrialization program which the Titoists put into effect leading up to the split with the Cominform.


The Yugoslav Five Year Plan was adopted on April 28, 1947. Its sweep and scope were unexpected.

The Stalinist Doreen Warriner (a British version of Louis Adamic) writing in the New Statesman and Nation for April 11 on the eve of its unveiling, rhapsodizes about the bold goals set by the Polish Three Year Plan - why, this writer exclaims, it aims at increasing the total national income to sixteen per cent higher than pre-war, “a very ambitious target.”

And in contrast –

Yugoslavia’s industrialization will be a long process, for 75 per cent of the population are still in agriculture, as against 60 per cent in Poland and 50 per cent in Czechoslovakia.

Three weeks later Yugoslavia announced its own target – an increase of the total national income over pre-war of 93 per cent!

Later, writing in the British Stalinist Tito-tooting quarterly Yugoslavia Today and Tomorrow, the same author rhapsodizes about the way in which Yugoslavia’s plan is different from those of the other satellites:

... of all the East European plans, is the most ambitious. It aims, not as the other plans in the main do, at the restoration of production to pre-war levels, but at the complete transformation of the country from a backward and undeveloped are a to a modern industrial economy. [Winter 1948]

This distinction is correct. The best way to underline it is to glance at the following comparative table of the economic plans adopted by the Stalinist satellites. The figures are percentages representing the proposed increase at the end of the plan over the prewar level (remember that in all cases the plans start at a level below – in most cases far below – the prewar level). The number after the country’s name is the number of years the plan runs.





Bulgaria (2)




Czechoslovakia (2)


−  9


Hungary (3)




Poland (3)




Yugoslavia (5)




What stands out is that Tito’s plan is way out of line. To be sure, it is (unlike the others) to run for five years, but it is still proportionally the “most ambitious”; and the difference in range itself reflects the feverish vaulting ambition behind it.

Here are some details: The total capital expenditure will be $5.57 billion. The value of industrial production is to be raised almost five times. The share of industrial production in the total national income is to be increased from less than 20 per cent in 1939 to almost 50 per cent in 1951. Among the main industrial targets are: increase in electric power by almost 300 per cent; coal and coke by 175 per cent; iron ore 150 per cent; steel by 223 per cent ...

Let us admit for the sake of argument that the Cominform’s charge of “adventurism” is justified – still, the Cominform did not break with the Yugoslavs because of their adventurism. Rather, this adventurism is like a reading glass magnifying and exaggerating the drive behind Tito until it becomes visible to the naked eye even from this distance from the Iron Curtain.


It is clear that Russia set its face against this perspective for Yugoslavia.

It thereby fell afoul of the feverish ambitions and boiled up by the forces we have described, and unleashed the full fury of Yugoslav nationalism as filtered through the special needs and aims of the Yugo-Stalinist bureaucracy. (Like other national resistance movements and tendencies today, this is not the continuation of the “old” Balkan nationalism but is the old spirit of nationalist resistance given new forms, motivations and drives.)

Leaving aside temporarily the reasons why the Russians took this line, let us see how the question figured in the actual dispute, both openly and incognito.

Like many other things, it can be seen in the resolution itself as in a glass darkly; but we are frank to admit that there is scarcely an hypothesis to be invented which cannot be read into that dark glass. The resolution is written in the spirit of the Book of Revelation, the verses of Nostradamus and the Delphic oracle; and any conclusions from it must be independently checked by other evidence.

No ingenious interpretation can possibly eliminate the notorious contradictions between Point 3 and Point 6 of that document (the only points dealing with economic questions ; but if we cancel out the irreconcilable accusations, what is left adds up to this:

And this much is not contradictory. Both reflect – not disinterested advice to the Yugoslav government on its planning, to be sure, but – a single motivation of Moscow’s planning for Yugoslavia itself.

Case of Zujovic and Hebrang

Point 6 is the section discussing industrial policy which is what we are concerned with. And this passage of the resolution begins by accusing the Yugoslavs of “concealing from the party and the people the real reasons for the brutal measures against comrades Zujovic and Hebrang.”

The case of these two men is a key to the split that has been clear from the beginning. The first was the minister of finance in the government and the second was the minister of light industry up to May 5 when both were kicked out (and later jailed). With the split, it immediately became evident from the fulminations of both sides that these two were the leading mouthpieces of the Russians (the Cominform) in the internal fight.

The Cominform resolution itself, characteristictally, says nothing more about “the real reasons” for the Zujovic-Hebrang crackdown, not directly. But in the speeches at the Fifth Congress of the Yugoslav CP and in long articles in Borba, the CPY organ, the Titoists obliged with more detail.

What emerges from this side, in long invectives is the accusation that: these spokesmen for the Kremlin opposed and sabotaged the policy, and particularly the tempo of industrialization and “socialist construction.” [6]

When the pair were expelled from the National Front on June 19, Minister of Agriculture Stambolic reporting on reasons, explained that they were

“... double-dealers, who camouflaged their destructive activities with the theory that the Five Year Plan was unrealistic and could not be implemented; therefore a brake must be applied to the building up of socialism in Yugoslavia ...”

At the Fifth Congress the main economic report made by Boris Kidric, included a whole section devoted to Zujovic and Hebrang [7] and how “they endeavored to retard the socialist construction of our country.” His formulation of their crime makes the issue patent:

Their struggle against the increase of the productive forces of our country, against the abolition of contradictions between our inherited wealth [resources] and the backwardness of our techniques inherited from pre-war semi-colonial Yugoslavia – this struggle of theirs could be reduced to a policy of economic dependence of our country on abroad – that is, on imperialism.

It is of course absurd to consider that these men, looked on by both sides as Kremlin agents, are really being charged with desiring Yugoslavia’s dependence on Western imperialism. And the Cominform’s charge, that the Titoists were speaking sotto voce about Russia’s imperialism, is quite believable.

Russia’s “Higher Interests”

But no one at the Congress hit home any closer than Kidric in openly pointing the finger in the right direction. In the next paragraph of his speech Kidric accuses them of masking their “wrecking” policies with references to “Soviet experience,” and even quotes Zujovic as justifying his opposition with talk of the “higher interests of Soviet policy”! For public consumption the curse is taken off this revelation by the immediately following assurance that Zujovic thus “shamefully slandered” Russia.

While it was Kidric who pointed most openly, the explanation of the nature of the conflict is to be found put down in the plainest language elsewhere. The Fifth Congress was preceded by the publication in Borba of a series of long articles by party leaders, each devoted to a different, phase of the Cominform attack (“pre-convention discussion”). The article dealing with the defense of the industrialization plans was written by Vlajko Begovic (Construction or Treason to Socialism, Borba, July 20). Begovic writes:

Until recently there was [this is a reference to Zujovic and Hebrang – H.D.] and there still can be found, the opinion that Yugoslavia is an agrarian country and would remain such; and that it should deliver to industrially developed countries raw materials and food, and they to Yugoslavia finished industrial consumer goods. This for us would mean renouncing industrialization of the country. We know that without industry and with the old-fashioned technique, socialism cannot be constructed. We know, as Stalin teaches us, that industry leads the whole national economy, including agriculture as well. This is why we cannot renounce industrialization of our country ... Ours is the historic, path of development from which nobody can hold us back. [My emphasis – H.D.]

The italicized words describe Russia’s plan for its Yugoslav satellite.


(Continued next month)


1. Bogdan Daritsa, a former press service director for the Tito government and also for the pre-Tito government-in-exile, claims that “as a matter of fact, the working class was far from being a vital factor in the resistance, as the Communists allege in their propaganda. For the workers remained in the Big City factories or were sent into Hitler’s labor camps.” (New Republic, Sep. 16, 1946.) It is indeed likely that it was largely the peasants who took to the hills they knew. This is not because the workers were any less anti-fascist to be sure! An urbanised proletariat is not conditioned to carry out the class struggle as guerrillas in rugged mountains.

2. Jugoslav Postwar Reconstruction Papers, Vol.3. No.5, ed. by Nicholas Mirkovic; published 1942-43 by the Office of Reconstruction and Economic Affairs of the pre-Tito bourgeois Yugoslav government-in-exile; a 4-volume collection of studies of Yugoslav economy as a guide to post-war economic planning.

3. In 1939 the average monthly earning in industry was $24.58 (1229 dinars.) According to the government in 1937 the minimum cost of living for a working class family of four was 1500 dinars a month. Only three out of twenty-one industries reported paid wages equal to this minimum. By 1940 wages had risen 26 per cent above the 1937 level but the cost of living was up 47.5 per cent.

4. Taking space for only one more reference on this point it is interesting to read Ella Winter’s account of an interview with Tito. “I asked naturally about the Marshall Plan,” she writes and equally naturally the reader expects the answer that the Marshall Plan threatens small nations’ national sovereignty. But Tito’s reply does not even use the phrase “national sovereignty” – he translates into Yugoslav:

“He [Tito] said that ... they want to develop their own industrialization and under the Marshall Plan they might be forced not to, because the Marshall Plan might require them to develop only their agricultural production They want their industry developed.” [Yugoslavia Today and Tomorrow, Spring 1948]

To Tito national sovereignty and industrialization are interchangeable concepts.

5. In Yugoslavia specifically, statification under the pre-Tito bourgeois governments had already reached substantial proportions. Though timber constituted one of the major industries, only a third of the total forest area of the country was private property – the state owned 37.8 per cent and communities 27.9 per cent. And the state had a very large share in the lumber industry (the “Sipad,” which is one of the largest of its kind in Europe). It owned thirteen coal mines yielding about a quarter of the total coal output: all the salt mines ; most important of all, the two iron mines yielding some 90 per cent of the total output. It owned completely the tobacco, salt and railway raw silk industries. It controlled the production of iron and steel (through the Jugo Steel Company) and armaments. It had a very large share in the cellulose and sugar industries. In 1938 a company formed by the state erected a number of storage elevators for agricultural products. In 1939 a ministerial decree looked toward extensive participation by the state in the future erection of electric power plants. In addition (this according to R.H. Markham) the state owned the railroads and telephone and telegraph systems and public utilities were owned by the cities.

6. In the vocabulary of the Jugo-Stalinist speakers and writers, Socialist construction is a locution standing for the current policy of rapid nationalization and rapid industrialization and is to be regularly thus translated.

7. For that matter, scarcely a speech went by without a kick in their direction. At this congress devoted to counter-attack, this duo were set up as whipping boys for the Cominform. There was one whole speech devoted to them alone, made by Radosavijevic, along the same lines of accusing them of preventing the strengthening and broadening of the socialist sector of the economy.

Last updated on 31.1.2009