Market Socialism

Yugoslavia was a socialist nation that arose from World War II. It was unique in many ways.It had one of the largest militaries in the world at its height, had relations with both the capitalist west and socialist east, and had a unique system, Market Socialism. Market Socialism, also known as Titoism is the implementation of socialism in Yugoslavia under Marshal Tito. It is characterized by its use of cooperatively owned worker enterprises competing against each other in a market based system. In the following paragraphs, I will describe the tendency as well as the arguments for and against it, as well as its achievements. (From henceforth I will just refer to it as Market Socialism)

Market Socialism developed in Yugoslavia after a phase of centrally planned economy. This short period was characterized by five year plans, and other aspects that were typical of what occurred in the USSR. This was not to last however, as not too long after they started, the Yugoslav-Soviet split occurred. This also resulted in a change in economics. This change is what became Market Socialism. As stated previously, the most important aspect of Market Socialism is cooperatively owned worker enterprises which compete against one another in markets. This is interesting as it is a decentralized system. One thing which comes as a result of this is more commodity production. Historically, there has been less commodity production in socialist states to instead produce more capital goods and goods necessary for life. This led to Yugoslavia being one of the nations in Eastern Europe with fair living standards. (This varied depending on geography) Keep in mind, this was a Eastern European country pillaged by the Nazis with a vast mix of different ethnic groups living inside of its borders. The ability to hold Yugoslavia together was an admirable achievement by Marshall Tito. Many consider Yugoslavia’s ability to remain unaligned, fairly prosperous, and altogether successful. Tito himself contributed to this directly, as after his death, the unity between the many ethnic groups in Yugoslavia split and civil war ensued.

While Yugoslavia and the system of Market Socialism had many positives, various critiques have come out against Market Socialism. One of the most vocal came from Albanian leader, Enver Hoxha. Hoxha said ”The views of Tito and his associates showed from the very beginning that they were far from being “hard-line Marxists”, as the bourgeoisie calls the consistent Marxists, but “reasonable Marxists”, who would collaborate closely with all the old and new bourgeois and reactionary politicians of Yugoslavia”. What Hoxha is stating here is the criticism that Market Socialism creates Bourgeoise from its market based system. Interestingly, in the 1940s, Hoxha and Tito had thoughts of Albania joining into Yugoslavia, but it was not meant to be, as the two fell out later on. Hoxha also states ”Capitalism has been fully restored in Yugoslavia, as is well-known, but this capitalism knows how to disguise. Yugoslavia portrays itself as a socialist state, but of a special kind, as the world has never seen it before! The Titoites even boast that their state has nothing in common with the first socialist state which emerged from the socialist October Revolution and which was founded by Lenin and Stalin on the basis of the scientific theory of Marx and Engels.” Hoxha carries on his prior criticism here further stating that it distances itself from the October Revolution. While Hoxha may have been the largest critic of Market Socialism, other critiques exist. Many point out that Yugoslavia incurred many debts and attribute this to its higher standard of living. They also point out that many Yugoslavians were exported as a labour force. (I don’t really know how to put this, it sounds way more authoritarian than I meant to make it sound) And finally, the most obvious critique, the collapse of Yugoslavia and the resurgence of nationalist sentiments directly after Tito’s death.

Market Socialism is a tendency which I believe has reasons to support it, but like all systems there is room for some sort of improvement. We must remember that our goal as leftists should be to unite under the banner of anti-capitalism so as to bring on a socialist revolution. And as always, remember that every tendencies’ goal is the achievement of Communism. I hope that you learned more about this tendency, and will continue to support non-sectarianism and left unity.


  1. Hoxha, E.H. (1978). Yugoslav “Self-Administration” - A Capitalist Theory and Practice. Tirana, Albania: 8 Nëntori.

  2. Mandel, E.E. (1967). Yugoslav Economic Theory. Monthly Review, 18, 40-49.

  3. Tito, J.P. (1950). Workers Manage Factories in Yugoslavia. Belgrade, Serbia.

  4. Tito, J.P. (1963). Tito: Selected Speeches and Articles 1941-1961. Belgrade, Serbia: Naprijed.