Figure 1.--This photo was taken on September 15, 1959 in Velenje, northeastern Slovenia. Two children are going back home with the bread they bought for the family. At the time many Slovenian children commonly went barefoot even to school. In the photo we can see only a car. It is a Fiat 600, a city car manufactured from 1955 to 1969. Notice the bicycles. People in the vibrant ecomomies of the West were driving cars as a result of capitalist economic miracles.

The Communists who seized control of Yugoslavia at the end of World War II put an emphasis on heavy industry during the post-World War II era. The Yugpslav Coomunist uhorities ascin other Comminist countries called for massive investment in heavy industry. It was the Stalinst model. Coal mining to fuel the new heavy industries became important. While the Stalinist economic model called for priority investment in heavy industry, no comsideration was given to profitability. As a result there was a huge mislocation of resources. These big enterprises were all state owned. Coal resources helped fuel the news heavy industries. Economic development continued after Tito's break with Stalin (1948), but with a degree market-oriented 'self-management' form of socialism for smaller enterprises not permitted in the rest if the Soviet empire. While the Yugoslav economy was not as efficent as market capitalism, it was more efficent than the economies of the East Bloc countries. Yhis while Western Europe experienced a series of economic miracles, the Stalinist ecomomies of Eastern Europe languished. The Slovene economy, however, proved to be the star of the Yugoslav federation. Slovenia was a small part of the Yugoslavia, less than 10 percent of the country's population. But with its well educated population, Slovenes 20 percent of the country’s GDP and 30 percent of its exports. Gradually Slovenia dominted by Serbian Communist leaderhip began to stagnate economically. Communist controls limiting market forces and rising debt levels caused increasing problems. Especially galling to the Slovenes was the Communist central government’s policy of distributing subsidies from the more prosperous northern market-oriented republics to the less-affluent and often corrupt southern republics. This essentially was a policy punishing economic efficency and rewarding coruption and inefficency. As a result, very few industrial enterprises in the Soviet Union and the Soviet Eastern European empire survived the fall of Communism, they all quickly went bankrupt.

Created: 2:21 PM 9/4/2021
Last updated: 2:21 PM 9/4/2021