Yugoslav self-government was much more than workers' resorts and opportunities to solve the housing issue. It was an example of collective autonomy in a domain where it is rarely seen - the workplace. Here we are with a new documentary film, Blum - Masters of your future, reminds director Jasmila Žbanić, known for Bosnian-Herzegovinian Oscar nominee Quo Vadis, Aida?.
Through the biography of Emeric Blum, the long-time director of the Yugoslav giant "Energoinvest" and the mayor of Sarajevo, the film tells about the golden age of self-governing socialism in which, according to the protagonist, workers were "masters of their future". Numerous insiders from "Energoinvest" appear in the documentary, including Jokob Pinzi, representative for Kenya and Ethiopia. Speaking about the different degree of autonomy of employees among socialist societies, Pinci contrasted the authoritarian, Soviet "red socialism" with the Yugoslav "pink socialism", characterized by workers' self-management.
Due to growing inequalities, capitalism shares a democratic deficit with Soviet-style socialism. We often hear that rising inequality should not worry us as long as poverty is decreasing. People's inability to meet basic needs is the real problem, not whether someone has a million (or even a billion) more than others, right?
With this view of economic inequality, the fact that differences in wealth entail inequality of opportunities in directing investments is ignored. The character of investments determines the future of a society. In societies with high economic inequalities - such as Serbia, where income inequality is one of the largest in Europe, and the difference in wealth is nine times greater - the rich determine what will be produced and under what conditions, while insolvent citizens are left with the role of silent observers of economic processes that may not reflect their vision of a good life at all. Economic inequality is not undesirable only because in practice it leaves a certain segment of society in poverty. It also undermines political equality because it does not allow equal participation of all in making decisions that concern them.
Following Tito's "no" to Stalin, could we today say "no" to capitalism in which power is concentrated in an equally small number of hands? If we use the color pink as a signifier for equal participation in the economy, regardless of the economic system, what would that new, more democratic "pink capitalism" look like?
SOCIAL DEMOCRACY VS.. ECONOMIC DEMOCRACY
The welfare state is usually thought of as a combination capitalism and socialism. After World War II, Western European social democrats attempted to reduce economic inequality through redistributive policies—comprehensive social welfare programs financed by progressive taxes on property and income. However, even at the height of social democratic efforts to achieve economic justice, welfare states undermined the fundamental political values of freedom and equality due to the inherent contradiction of redistributive policies: due to the high concentration of wealth, the wealthy have more influence on political processes, which allows them to block the transfers necessary for fair economic distribution. Given the failure of redistributive policies to ensure economic justice, we need a turn towards redistribution - solutions that prevent economic inequality from arising at all. Economic democracy represents a pre-distributive alternative to authoritarian capitalism. It is a form of market economy in which workers own and control the companies they work for. Economic democracy implies private ownership of companies, but it is conditioned by working in them. This means that workers cannot sell or bequeath their shares in the company to persons who are not employed by the same company. By limiting ownership exclusively to employees, economic democracy ensures that businesses remain under the control of workers, thus avoiding concentration of ownership.
LESSONS FROM THE PAST
When a company makes a profit, it can either pay it out to owners or reinvest it in further production, increasing the company's capital value. The horizon problem occurs when the ownership structure encourages the immediate payment of profits through higher salaries or bonuses, which leads to a lack of investment and the creation of debt that negatively affects the company. Given that they are in Yugoslavia companies were socially owned, the workers as individuals did not have a share in them and thus were exposed to the horizon problem. Contrary to the widespread belief that the democratization of management led to the collapse of the Yugoslav economy, the reasons should be sought in the ownership structure, which did not create sufficient incentive for workers to increase the productivity and competitiveness of the companies they worked for through reinvestment of the realized surplus.
Thanks to the individualized structure of workers' ownership, economic democracy avoids the problem of the horizon. A share in the ownership of the company creates an incentive for investment because the workers know that they will be able to recover the invested funds by selling their share.
ECONOMIC DEMOCRACY IN ACTION
When workers are also owners of the companies they work for, their interests are aligned with those of the companies and they contribute more to their long-term success. Experiences from America show that companies that are owned by employees achieve significantly better results than those that are not: they are more productive, more efficient, more stable, more resilient, and the workers are more loyal, more motivated and better paid. Workers who are business owners have 92 percent higher median household wealth, 33 percent higher median wages, and 53 percent longer average tenure compared to non-owner employees. At the same time, employee-owned companies create 2,5 percent more new jobs per year and are even six times less likely to lay off workers, while their probability of survival is 24 percent higher.
The stability of individual companies directly contributes to greater economic security for the local population, which is especially important during crises. In a recession, stability and resilience mean less strain on local social services, faster economic recovery and savings in public funds that would otherwise be spent on unemployment benefits or attracting new investment. In addition, worker ownership also drives the "local multiplier" phenomenon: local consumption supports local businesses, which generate income that is shared with local worker-owners, who then spend more and invest locally.
INCREASING SUPPORT
In addition to the concrete results achieved by companies owned by employees, the profitability and efficiency of economic democracy as a strategy for sustainable development is reflected in the increasing institutional support in Europe and North America, as well as in the success of legal and regulatory incentives so far.
Let's start with the USA, where the idea of worker ownership was born in the form of giving shares to employees. Although the beginnings date back to the 19th century, the mass practice of worker ownership in America began in 1974, with the passing of a law that, among other things, granted tax breaks to employee-owned firms. Today, about eight percent of the private workforce in America participates in the ownership of the companies they work for, which is about 10,8 million people in nearly 6500 companies.
In the UK, a key moment for worker ownership occurs in 2014, with the introduction of legislation that brings attractive tax benefits. Today in the UK there are around 2100 businesses owned by 150000 employees, selling businesses to employees is the second most frequently chosen exit strategy for owners and around six percent of all ownership transfers involve transfers to employees. Canada introduced a similar law in 2024. In Spain, Italy and France, worker ownership is often linked to the cooperative tradition. These three countries have a long history and developed legal frameworks that support this model. In Slovenia and Denmark, new laws encouraging worker ownership have government support and are expected to be passed in parliament this year. It is expected that they will be adopted and enter into force at the beginning of 2026.
Although laws and tax incentives differ from country to country (as do the models themselves), the fact is that a growing number of countries recognize worker ownership as a sustainable development model and as a response to major socio-economic challenges. The world, which is facing growing inequality and instability, and Serbia in particular, needs just that: a proven solution that can be implemented within the existing system, which enjoys the support of a wide political spectrum and allows us to become "masters of our future".
Miloš Kovačević is from the Faculty of Philosophy, University of Belgrade
Andrej Pavićević is from the Institute for Economic Democracy of Serbia
