Labour Relations in Transition in Eastern Europe [Reprint 2017 ed.] 9783110854930, 9783110126488

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de Gruyter Studies in Organization 33 Labour Relations in Transition in Eastern Europe

de Gruyter Studies in Organization International Management, Organization and Policy Analysis A new international and interdisciplinary book series from de Gruyter presenting comprehensive research on aspects of international management, organization studies and comparative public policy. It will cover cross-cultural and cross-national studies of topics such as: — management; organizations; public policy, and/or their inter-relation — industry and regulatory policies — business-government relations — international organizations — comparative institutional frameworks. While each book in the series ideally will have a comparative empirical focus, specific national studies of a general theoretical, substantive or regional interest which relate to the development of cross-cultural and comparative theory will also be encouraged. The series is designed to stimulate and encourage the exchange of ideas across linguistic, national and cultural traditions of analysis, between academic researchers, practioners and policy makers, and between disciplinary specialisms. The volumes will present theoretical work, empirical studies, translations and 'stateof-the art' surveys. The international aspects of the series will be uppermost: there will be a strong commitment to work which crosses and opens boundaries. Editor: Prof. Stewart R. Clegg, University of St. Andrews, Dept. of Management, St. Andrews, Scotland, U.K. Advisory Board: Prof. Nancy J. Adler, McGill University, Dept. of Management, Montreal, Quebec, Canada Prof. Richard Hall, State University of New York at Albany, Dept. of Sociology, Albany, New York, USA Prof. Gary Hamilton, University of California, Dept. of Sociology, Davis, California, USA Prof. Geert Hofstede, University of Limburg, Maastricht, The Netherlands Prof. Pradip N. Khandwalla, Indian Institute of Management, Vastrupur, Ahmedabad, India Prof. Surendra Munshi, Sociology Group, Indian Institute of Management, Calcutta, India Prof. Gordon Redding, University of Hong Kong. Dept. of Management Studies, Hong Kong

Labour Relations in Transition in Eastern Europe Editor: György Széll

W DE

G Walter de Gruyter • Berlin • New York 1992

Editor

Professor Dr. György Széll Universität Osnabrück, Fachbereich Sozialwissenschaften, D-4500 Osnabrück, Germany

With 9 figures and 18 tables ® Printed on acid-free paper which falls within the guidelines of the ANSI to ensure permanence and durability.

Library of Congress Cataloging-in-Publication

Data

Labour relations in transition in Eastern Europe / editor, Gyôrgy Széll. (De Gruyter studies in organization ; 33) Includes bibliographical references and index. ISBN 3-11-012648-6 (alk. paper) 1. Industrial relations —Europe, Eastern. 2. Management —Europe, Eastern — Employee participation. 3. Tradeunions —Europe, Eastern. I. Széll, György. II. Series. HD8380.7.L33 1991 331'.0947—dc20 91-31137 CIP

Die Deutsche Bibliothek — Cataloging-in-Publication

Data

Labour relations in transition in Eastern Europe / Ed.: Gyôrgy Széll. - Berlin ; New York : de Gruyter, 1991 (De Gruyter studies in organization ; 33) ISBN 3-11-012648-6 NE: Széll, Gyòrgy [Hrsg.]; GT

© Copyright 1991 by Walter de Gruyter & Co., D-1000 Berlin 30. All rights reserved, including those of translation into foreign languages. No part of this book may be reproduced in any form — by photoprint, microfilm, or any other means nor transmitted nor translated into a machine language without written permission from the publisher. Typesetting: Knipp Textverarbeitungen, Wetter — Printing: Offsetdrukkerij Kanters, Ablasserdam. — Binding: Dieter Mikolai, Berlin. — Cover Design: Johannes Rother, Berlin. — Printed in The Netherlands.

Acknowledgements I am very thankful again for the help and understanding by Bianka Ralle from de Gruyter Publishers who supported me fully also with the publicatiojn of this volume. As language editor Micheline Sauriol from Montréal did an excellent job in the "Englishing" of the texts. Renate Aumann was helpful in scanning, printing out the manuscripts, and other related activities; Carsten Quesel produced the indexes. Not to forget are the colleagues at my Department of Social Sciences at the University of Osnabrück who retyped the manuscripts on word processing so perfectly and in good humour: Elke Albrecht, Vera Bröcker, Gabriele Meyer, Gabriele Teepe, and Ilse Tobien. I hope they are as content with the results as I am. Everybody who cooperates in this period with colleagues from Eastern Europe knows how difficult it is to communicate over the frontiers where there is no Iron Curtain any more but still exist many obstacles. That we could accomplish this publication in less than a year is only due to the quick response of all collaborators. A big thank to all of them. The situation in each country is so quickly changing that when you write something down it is already history. Nevertheless I hope that this volume is more than just a piece of our recent history.

Osnabrück, Autumn 1991

György Széll

Contents Introduction György Széll

1

I. General Frameworks for the Restructuring Labour Relations in Transition in East and West György Széll Social Spaces and Acting Society Csaba Makó and Agnes Simonyi

9 29

Patterns of Work Identity in the Firm and Plant: An East-West Comparison Akihiro Ishikawa

85

Payment by Results in Transition: Capitalist and Socialist Restructuring Marcel Bolle de Bal

93

Technical Progress and Decentralization of Socialist Economies . . . Anatol Peretiatkowicz

Ill

Capitalism, Socialism, and Business Organizations Monir Tayeb

123

II. Self-Management: From the Idea to Reality? Incompatible: Bulgaria — From Managed Self-Management to Managerial Management Chavdar Kiuranov

139

Radical Economic Reform and Democratization Process: A New Challenge for the Sociology of Work Natalia Chernina

147

The Role of Self-Management in Polish Enterprises Maria Jarosz and Marek Kozak

156

III. New Forms of Management and Labour Hungary's Changing Labour Relations System Lajos Héthy

175

A Small Factory Working on a Lease Basis in the USSR Natalia Chernina

183

Vili

Contents

Collective Forms of Work Organization in Czechoslovak Economic Practice Ludovit Cziria

187

Intraorganizational Activity Jolanta Kulpinska

201

Determinants of Worker's

Self-Management

IV. The Change of Trade Union Structures Business Democracy: Work Collective Councils and Trade Unions . Vladimir Gershikov Current Reform Trends in Yugoslavia — A Challenge for Trade Unions Aleksandra Kanjuo-Mrcela On the Road to Autonomy: The Case of the Hungarian Unions . . . Csaba Mako and Agnes Simonyi Participation and Technological Alternatives in the German Democratic Republic: The Dilemma of Scientific Predication and Co-Management by Trade Unions in the Past and Present Volkmar Kreißig and Erhard Schreiber

219

230 239

249

V. Legal and Political Restructuring Toward a Social Market in Communist Nations Severyn Bruyn

263

Labour Legislation in a Socialist Country: Bulgaria a Case Study . . Erik Sundberg

280

Industrial Democracy and Power Structuration in the Polish Economy Witold Morawski

299

Transition to Free Market Economy and Romania in the Year 2000. A Manpower Prospective Approach Oscar Hoffman

322

Effects of Workers' Profit Sharing Revisited: Some Methodological and Substantive Reflections Jaroslav Vanek

328

Perspectives of Self-Government and De-Alienation in Business in the USSR Natalia Chernina

335

Contents

IX

VI. Instead of a Conclusion Dismantling the State and Creating Civil Society

343

Severyn Bruyn On the Authors

355

Name Index

359

Subject Index

363

Introduction

It is quite a daring experience to publish a volume on Labour Relations in Transition in Eastern Europe at this very moment. We have witnessed over the last year the most fundamental changes in European post-war history which have left also Labour Relations not without marks. When the authors and I discussed the idea of this volume in autumn 1989 these changes were nearly inconceivable, though they did announce themselves already also in the realm of work. The contributions have been revised during the last couple of months so that they are effectively as up-to-date as possible. Still - as any publication - also this one has become a historical document. All articles are original contributions and have not been published elsewhere. The focus is not on the political sphere. I have tried to assemble contributions from all Eastern European countries. I was successful with the exception of Albania - what may be excused. But here a question is raised: what is Eastern Europe? Is it not a Stalinist term? Effectively it is difficult to draw clear lines, and many speak today again of Central- and Eastern Europe which would include Germany and Austria. On the other hand designations of this area as C O M E C O N countries, countries of "really existing socialism" do not seem appropriate anymore for me. Within the Cold War, the systems-confrontation of East and West there seemed to have developed two different models of society. The capitalist and the so-called socialist. The capitalist model did not name itself as capitalist but as the one of free market confronted to a command-economy. But this dichotomy was never true. Also within the so-called command-economies there was always partially a market, and we had permanently a struggle of different groups for more or less market. What has been true was the difference in ownership-forms. The dominance of state-ownership in the East held true though we had many forms of co-operatives, and in countries like Poland the agriculture was never socialized. Still we may speak of a state-capitalist system or even better of non-capitalist economies as the law of value had been abolished. This abolishment came much too early without having fulfilled the necessary objective and subjective preconditions, i.e. the highest possible technological and economic development and the consciousness within the leadership and the masses.

2

Introduction

On the other hand we should look more closely to the reality in Western Europe as well where nearly fifty percent of the economy are state controlled. So famous economists like Jan Tinbergen prophesized in the early seventies the convergence of the systems. I will stick for simplicity and clearness to the term "Eastern Europe" though it may be biased. I have also to say a word in regard to the term Labour Relations instead of the more widespread Industrial Relations. Labour Relations is to be said a Marxian term. I do not fully agree and will not discuss here this issue more profoundly. But it seems to be clear that industrial relations is too narrow a term excluding the growing importance of the service- and administrative sector. Especially in Eastern Europe with its state dominance industrial relations do not seem to fit very well. And even the International Industrial Research Association has published - also with de Gruyter in 1989 - the proceedings of their seventh world congress under the heading "Current Issues in Labour Relations: An International Perspective". The following contributions make it clear that we find quite distinctive strategies of transformation of Labour Relations within the different countries. Poland has a unique history with Solidarnosc as a trade union and a social movement which finally wiped out the hegemony of the communist party. Very early already in 1956 a movement for self-management in the enterprise started and after several set-backs and revolts realized in 1981 the law on self-management. Maria Jarosz and Marek Kozak give an account of this experience based on large empirical material. This is complemented by the two articles by Jolanta Kulpinska and Witold Morawski. Also the Hungarian experience is very much influenced by its failed revolt in 1956. After this a historic compromise named "Kadarism" made slow changes over thirty years possible which finished in new forms of work-organization and ownership, and the end of the one-party system as well. Lajos Hethy gives an overview over the different phases of Labour Relations in the last four decades. Agnes Simonyi and Csaba Mako analyze in two articles different aspects. The first one on social spaces is a comparison with Italy and is also theoretically very demanding. The second focuses on the fate of the unions. Another economic and political experiment which largely failed due to the military intervention of Soviet and allied troops in 1968 was the Prague-spring. Ludovit Cziria describes the elements of new workorganization as they developed already timidly under the old regime. In 1978 Bulgaria started its own self-management system based on brigades and elections. It proclaimed itself as the leader in "perestroika"

Introduction

3

which was only copied by Gorbachev and the other Soviet leaders. Chavdar Kiuranov one of the leading intellectuals and critics of his country makes the process of this period. From outside Erik Sundberg completes the picture with self-critical remarks on the possibilities and limits of external observers and researchers. Romania's recent history was dominated by an outrageous dictatorship which reminded the worst Stalinist periods. The bloody break-down seemed therefore to be appropriate. Still also in Romania in the seventies there was a discussion on participation and self-management - a moment where the Romanian leadership presented itself as liberal and unorthodox against the Brejnev-leadership and open to the West. Unfortunately reality was never on par with the propaganda. Oscar Hoffman describes this specially difficult transition. The news are these days full of the break-down of the economic system of the Soviet-Union. Has Perestroika liberated not only the intellectuals, critics but also the mafia? It seems that as in most other countries and cases much of what has been covered over the last decades breaks only up today. Natalia Chernina and Vladimir Gershikov from Novosibirsk present the results of long-term empirical analyses of the new forms of businesses. Novosibirsk has been since more than ten years the "thinktank" for perestroika. It is very improbable that the Soviet-Union will survive as such. What solution will be found seems to be open. Is there still a third way? Yugoslavia has always been a very specific case due to its self-management system. It is certainly also the best covered system so far. The article by Aleksandra Kanjuo-Mrcela just gives an evaluation of the most recent changes from the perspective of trade-unions. Already the introduction of the law of the enterprise at the end of 1988 replacing the one on self-management announced the fundamental change. Perhaps when this book is delivered Yugoslavia even does not exist anymore - at least not as one state, but perhaps only as a confederation. Similar to the SovietUnion. The short history of the German Democratic Republic is documented through the article by Volkmar Kreißig and Erhard Schreiber. It was always difficult for Western and Eastern researchers to get reliable material on labour relations in the G D R . There was also nearly no cooperation between Eastern scientists in this domain. In the many comparative projects between "socialist countries " the G D R practically took never part. Even scientists from the G D R were rarely allowed to conduct empirical research within GDR-enterprises. So this is one of the rare documents. The problem of the crises in Eastern Europe seem to be due to a complete lack of an appropriate economic, social theory and praxis. In the

4

Introduction

first decades after the Second World War the existing machinery and know-how could be exploited, coupled partly with real enthusiasm of anti-fascist and national rebuilding. But in the seventies this capital in its very sense was finished. Now a phase of crediting in the West started. The Western economies and companies looking for new markets within the world-wide crises were very eager to finance these economies. But these financial and technological injections could only postpone the inevitable break-down for another ten or fifteen years. This is what happened right now. The only democratic alternative was and is perestroika. Severyn Bruyn from Boston analyzes this complex relationship in his article toward a social market in communist nations. The deep lying problem may be illustrated by an anecdote. In Poland a worker was asked what is the difference between the period before and after World War II? The answer was: "Before World War II capital exploited labour, now it is vice versa: labour exploits capital." By the way in this same series "Organization Studies" by de Gruyter an excellent study by Witold Kiezun from Poland has been recently published under the title "Management in Socialist Countries". It complements as well as the one by Krustyu Petkov from Bulgaria and John E.M. Thirkell from England on "Labour Relations in Eastern Europe - Organisational Design and Dynamics", which appears also these days with Routledge, the studies presented here. But it is impossible to understand the recent developments without a more general theoretical framework. Especially as the very existence of the Eastern economy and system - as long as it was a system - and its break-down is not to explain without including and contrasting with the developments in the West. A comprehensive view in form of an empirical study within the power-industry is given by the Japanese Akihiro Ishikawa who has specialized since long on Eastern Europe. He reports on a ten country study including Hungary, Poland, Yugoslavia from Eastern Europe, and France, the Federal Republic of Germany, Italy, Sweden and the United Kingdom from Western Europe, and Hongkong and Japan from Asia. Jaroslav Vanek, an emigrant from Czechoslovakia, teaching now at Cornell University in the United States, one of the leading economists of self-management, discusses the possibilities of Western profit-sharing experiences for the development of the Eastern economies. Marcel Bolle de Bal from Belgium has studied over the last years with the European Foundation for the Improvement of the Quality of Working Life problems of financial motivation and participation in capitalist and socialist organizations. And Anatol Peretiatkowicz from Poland relates technical progress with decentralization in socialist economies. Severyn Bruyn gives at the end some hopeful perspectives for a social economy in East and West.

Introduction

5

In my view future research has to be concerned with the autonomy of the enterprise in East and West. Because this relationship is full of illusions. This is the main focus of my own following introductory article. Osnabrück, January 1991

György Szell

I. General Frameworks for the Restructuring

Labour Relations in Transition in the East and the West Gyôrgy Széll

Introductory Remarks Since the seventies there have been a new debate and new developments in Labour Relations world-wide. In the first part of my paper I will sketch the trends and issues of that debate in the West. In the second part I will present some key elements of the developments in Eastern Europe, in the third section then I will discuss the main theoretical positions and finally, will come to some conclusions with regard to the future, based on the fundamental changes over the last twelve months.

Main Issues of the Labour Relations-Debate in the West In Western Europe and North-America, the recent debate has centered around the following topics: * * * * * * * * * * * *

Quality of Working Life qualification new technologies participation market flexibility new management strategies identity Trade Unions the State equality environment

During the sixties, as the productivity increased through the mechanization and intensification of labour, the quality of working life massively

10

Gyórgy Széll

decreased at the same time. Movements in many countries started. Mostly touched was the automobile industry, where Taylorism and Fordism were the most developed. Absenteeism, fluctuation, sabotage were daily problems which hit at the cost side. In West-Germany, the new demand expressed itself as "humanization of working life" (HdA), in the U.S. and Scandinavia the term was "Quality of Working Life" (QWL). Many companies - mostly the leading ones - and the State took action. In West-Germany, since 1974 the Minister of Research and Technology, the former Trade Union official Hans Matthófer, launched the most important research program on QWL with some 100 million DM yearly. In the U.S. the President commissioned the report "Work in America". These activities were meant to improve the working conditions through preventive measures in the fields of ergonomics, health, safety, education etc. "New Forms of Work Organization", which had already their roots in the Human Relations experiments in the 30s and had been refined in the 50s, were rediscovered and largely introduced: work enlargement, work enrichment, job rotation, autonomous working groups. But the discussion was abruptly stopped at the end of the 70s when large-scale unemployment in the Western societies, after two so-called oil-shocks - but in reality world-wide economic crises - made it superfluous to invest into these kinds of new work-organization. Most working people were then ready to accept any job. Scandinavia remained some sort of exception: because of the closed labour markets the unemployment rate remained low here and therefore the pressure on the companies to create attractive workplaces remained high. This was the case, for example, in Volvo's new Uddevalla-factory which was put into operation in 1989 - where the autonomy of the working groups was increased even further. The Quality of Working Life may have something to do with qualification. The term qualification became fashionable also in the sixties. It was thought that new technologies would demand a better qualified personnel in production and services. Also the Sputnik-shock of 1957 had an effect in regard to investments in qualification. The economics of education explained up to 40 percent of the differences of national or company performances to qualification, man-power, human-resources. "To use the Human Capital" became the slogan for managers and politicians. But soon again the economic crises and the "over-qualification" of a large part of the workforce made it unnecessary for management to continue on this path. Especially as demands from the unions came up that workers should be paid according to their qualification, in order to incite management to create more qualified jobs.

Labour Relations in Transition in the East and the West

11

The most fundamental changes - it is said - have been created through the second or third industrial revolution - whatever you name it - , i.e. the introduction of computers into the labour process. The division of labour has been completely reorganized. This micro-processor revolution had many effects, of which I can only name some here: the productivity increase which led in most cases to redundancies; dequalification processes, namely in the printing and metal-working industries; increase of control; increase of shiftwork; concentration processes, etc. It may be argued that new technologies had to be largely applied besides their military use and origin - in the US-industry and administration because of the low skill and motivation of their blue and white collar workers. The cost-saving effects have only partly benefited the labourers. Some of the productivity increase - of an average of three to four percent yearly - could be transformed into wage-increase and the shortening of working time in its different forms (holidays, early retirement, weekly, daily etc.). We are facing now the fifth generation of computers, the artificial intelligence. Even more tasks which require high qualification will be taken over by the machines. On the other hand the dream of the wo/man-less factory has not been realized so far, and will still take a long time - if it is ever possible. In the context of the Quality-of-Working-Life debate, some aspects of participation played a central role too. But here we are at the very core of power relations within our societies, i.e. the decisions on what is produced, where, when, how and for whom. Participation is a historically long-term process (Szell 1988a), and has taken different forms in different societies according to their specificities. The German unions tried to export the German codetermination-model to other countries, to make it a European model within the EEC. They failed though the Bullock-report recommended it in 1977 for the United Kingdom and the EEC decided in favour of the directive V. The reasons for the non-transferability may have been that we find in Europe at least three different patterns of industrial democracy: the Northern, the Southern and the Eastern/Yugoslav one. The studies of the international research group Industrial Democracy in Europe demonstrated that picture, and in 1981 the IDE-group summarized by saying that to work in Yugoslavia would have given most participative rights de jure and de facto. Slater and Bennis declared already in 1966 "Democracy is inevitable!" The Welfare State - a product of unions and socialdemocratic governments - seemed to realize an ever lasting dream of prosperity. With the help of neo-Keynesian politics the steady economic growth seemed to

12

Gyórgy Széll

allow for a permanent "economic miracle". But it was a short dream, as the German sociologist Burkart Lutz stated in 1984. Since the seventies we speak of the "crisis of the unions". Apparently, the degree of organization has been drastically reduced in the U.S., France and some other countries. The old model of the defence of workers' interests through collective bargaining and strikes does not work any more in a two-tier society with a high rate of unemployment. General Motors' Saturn-project opened new forms of co-operation between management and workers' representatives even in the United States. The traditional division of responsibilities between management and workers was weakened, as the value of the machinery increased steadily and any stand-still, or break-down has enormous financial consequences. On the other hand the machines are not as reliable as has been promised by the producers. The role of supervision and maintenance grew. So motivation has become an important aspect within the international competition, within the economic warfare. Participation in the decisions on the products and the production process became a central issue in the context of arms conversion in the seventies. It all started with the Lucas-Aerospace Combine in 1975 in the United Kingdom. Engineers and workers were ready to cooperate with management on alternative products to prevent rfedundancies through the reduction of government armament spending. The slogan created was the one of "socially useful goods and services". That meant also the negation of the world market as the only criterion for decisions within the companies, a regionalization of markets (Cooley, 1980). All over Western Europe we now find within companies - mostly in military production and in close cooperation with the shop stewards or/and the works council - groups which develop alternatives for civilian purposes. The influence of markets has been increasing over the years. Since we left behind a situation of many unfulfilled needs and entered the stage of affluence in the West (Galbraith) producers had to fight more and more for their market shares. As Marx already put it more than one-hundred years ago: accumulation or decline. The internal pressure on cost-reduction on the one hand - often exercised with the help of company-consultants - and the increase of quality, diversity, reliability, maintenance, expansion into new markets and other countries on the other hand, had severe consequences for work organization and the internal structures. As a result, the autonomy at the workplace as well as the autonomy of the company have been reduced. This may be tentatively visualized by figure 1. Flexibility has become another central topic. With new technologies, a rapid change in regard to changing demands has become possible. But this means that the workforce has to adapt itself to these permanent fluctua-

13

Labour Relations in Transition in the East and the West

Influences on the enterprise through associations oiaic

Influences through the enterprise on

(local, regional, national, international)

associations

Enterprise

banks

banks enterprises

(national/international)

enterprises

Figure 1

tions. The increase of shift-work, overtime, irregular working time is one of the results. Management offers wage increases and the shortening of working time as compensation for an agreement to more flexibility. Here we are confronted with the so-called new management strategies. Since the experiments of Elton Mayo in the thirties a number of new forms of work organization have been proposed and experimented. The Taylorian Scientific Management has been declared dead many times, but had well established itself since Lenin in the socialist countries. In the U.S., since the sixties, new participative management styles have been developed by Likert, McGregor and others. They needed more than ten years to be accepted. (Lammers/Széll 1989) Peters and Waterman are striving for excellence, "Theory Y" is followed by Ouchi's "Theory Z" etc. Against the expectations of the wo/man-free factory and office - as stated above - more responsibility is needed to handle carefully the expensive and fragile equipment. Therefore different forms of participative management were developed, like Organizational Development, Quality Circles, etc. New production concepts are proposed for a new relationship between capital and labour, between management and Trade Unions. (Kern/Schumann, 1984) But at the same time these concepts are questioned. (Malsch/Seltz, 1987) The new production concepts mean a rationalization pact between management and unions for the survival of the company. But it is mostly middle-management which opposes these new forms of participation, because their own role is questioned and they are afraid of redundancies in their own rows. One result of the described processes is a differentiation of the workforce into core personnel, temporary personnel, and marginalized personnel - very similar to Japanese conditions. (Bernoux, 1982) The

14

Gyórgy Széll

labour market contains a growing group of permanently unemployed besides these groups mentioned. Under conditions of growing competition, it becomes more and more necessary and difficult at the same time to develop an identity at the workplace, within the company. (Sainsaulieu, 1985) Corporate identity is launched - again copying Japanese examples. What is certainly true, as Hofstede proved in his comparative studies in the seventies, is that we have different national - and even regional cultures in Europe and overseas, where it is not easy to transfer management styles. Identity is a contradictory phenomenon which presupposes a "we" and "they" feeling, an "inside" and "outside". Under these conditions solidarity with the unemployed is decreasing. Individual egotism and group egotism are growing. Here comes in the growing role of State intervention. Conservative authors like Milton Friedman and their disciples, the so-called "Chicagoboys", argued that the crises we are faced with are not due to having not enough State, but too much State. So they proposed to reduce the part and the role of the State in the economy. In theory "Reagonomics" and "Thatcherism" - even recently applied to Poland - followed this path with the great exception of military spending. Nowadays all Western economies, after the world-wide crises of the seventies, have severely reduced their welfare budgets; however, through unemployment, increasing health problems due to environmental harm and stress, the demand for it is growing. New topics of the seventies and the eighties in the context of labour relations were the demand for more equality between the sexes and the rising awareness of environmental issues. Women's liberation movements, emancipation, feminism put the finger on the non-realization of equality between the sexes in the working sphere. Equal pay for equal work, equal work and career possibilities came to the fore. Women went successfully to the courts. And the unions themselves were not always a good example in this struggle for equality, as they are until today mainly dominated by the skilled male blue collar worker, often with male-chauvinist attitudes. So when we look into the rows of managers and trade union officials on all levels it looks like a long way still to go until full equality is realized . Finally I am coming to the problems of natural environment. Until recently, we all thought that nature was free, since it had no price, and as it is written in the Bible: man has to subdue the earth. The North and the Baltic Seas are already heavily polluted, tropical forests in South-East Asia and the Amazonas are continuously destroyed to make table sticks for Japan or cattle farms for hamburgers; acid rain, the greenhouse-effect, the ozon-hole have entered the common language. Seveso and Tchernobyl, Three-Mile-Island and Bhopal are now well-known places.

Labour Relations in Transition in the East and the West

15

Without any doubt the biggest challenge for the survival of wo/mankind is the ecology. Gro Haarlem Brundtland as president of the commission for the United Nations has very drastically expressed this need in the report "Our Common Future". The only perspective is a sustainable development. This challenge has only partly been understood by managament and unions so far.

Labour Relations in Transition in Eastern Europe In the following section, I will try to analyze the reasons for the breakdown of the Eastern European system of labour relations, and to find out what has remained and may give us some hope and ideas for the future of democracy in the East and the West. The sudden implosion of a system which a couple of years ago was called by the American president Ronald Reagan "the Empire of the Evil" surprised most observers, decision-makers and even victims of this system. Today, looking back, the whole system seems to have been more a Potemkin's village than reality. Unfortunately it is still reality, a very sad one in some parts of the world. The traditional approaches which proclaim an insurmountable difference between the systems in the East and the West have long become obsolete since long. Most capitalist countries are mixed economies between state regulation/state ownership and private ownership (the state part is mostly above 40 percent of the G.N.P.). This holds true - though the other way around - for all Eastern European countries as well. Only in the GDR and the Soviet-Union the state ownership had risen - for different historical reasons - to never known heights. But this is certainly also the reason or the necessity of "perestroika".(Dorow 1987) Was it a competition of systems until last year? I doubt it. I think that this competition, as many other discussions, was a fiction. It is true that the private ownership of capital had been abolished in Eastern Europe, and was replaced mainly by state-ownership and an overall state-control. It is also true that profit and market were not regulatory mechanisms anymore. A permanent war economy was established - largely against the majority of their own population. On the other side, exploitation, alienation, hierarchical decision making was not abolished, on the contrary it took even sharper forms than in the West. So socialism as a societal structure has not yet existed, therefore it cannot have failed. That what called itself really existing socialism was really existing, but not socialism. It had more in common with state-

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capitalism or whatever you name it. Nonetheless, part of the Left in many Western and developing countries took it for granted - though sometimes with severe critique. Part of the left argued that, due to the pressure of the imperialist U.S., socialism could not unfold itself, and that the apparent problems of lack of democracy, efficiency etc. would be overcome in the future. This argument may have been partly true, but the problems lay much deeper as we know now, and should have known earlier. The social and economic structure within Eastern Europe is certainly as diversified as in Western Europe. So it is not easy to generalize. Apparently the primitive accumulation of capital has been done in such a primitive way that it was likely to fail. It is doubtful if the destruction of humans and nature in the East is not even higher than the values created. The fundamental misunderstanding was the equation of market and capitalism. Market and capitalism are not identical as has been proved by Braudel and others. It was probably one of the most serious faults of dogmatic Marxism-Leninism to equalize them and to fight the market. Is there anything to learn for our future from this big political, social and economic experiment? Is it the only lesson to learn, that Bolshevism was the wrong way to improve our economies and societies? At least one of the lessons to be learnt in my view is that a proper Marxian analysis is more valid than ever: i.e. the dominance of the Basis (base) against the Uberbau (superstructure). Also in regard to the false consciousness, nothing has to be rewritten. The drama seems to be that most people do not read Marx properly or do not understand or do not want to understand him. And it is out of question that to fight the laws of economics will lead to disaster. The primacy of politics over economics, without an appropriate social and economic base cannot be successful. The Soviet system was much more dominated by an Asian mode of production than by any pther standard. (Dutschke, 1974) If we include the Tsarist central state and the semi-colonial dependence of the countries of the Soviet block we have some elements of an explanation. The Soviet occupation of Eastern Europe has thrown these countries a couple of decades back. The non-capitalist character of society led to a proletarization of society. What existed in these societies as nuclei of a bourgeois society - the public sphere, productive work, entrepreneurship, individualism, Enlightenment - was destroyed by and for a nomenklatura. So these societies could rightly be characterized as ones of "organized irresponsibility". The professional revolutionaries, the apparatchiks who took over the power, were completely incompetent in economics - and aesthetics. They believed and wanted to believe in hardly understood prophecies of the break-down of capitalism. The leaders thought in nineteenth-century categories, as Marx did, and that capitalism had already reached its most

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developed form at the beginning of the twentieth century. The attempt to by-pass capitalism on the "left lane" was a failure. There seems to exist only one "lane" - through capitalism. Something which already most socialists and socialdemocrats have long realized. The Soviet system lived from the substance which it inherited, from the rich natural resources which it overexploited as well as from the human beings. Eastern Europe is in dissolution as the Warsaw pact is, but what does it lead to? I think we can learn a lot - as we can only learn from mistakes. Interestingly nearly nothing of the transformation in labour relations which happened in West happened in the East: no debate or action in regard to the Quality of Working-Life, qualification, new technologies, market, flexibility, new management strategies, identity, trade unions, and environment. The brigade system with elected leaders - if it is done democratically has been an interesting experience which should be followed as it combines elements of the (semi-)autonomous working groups and political democracy. Also the self-management experiences in Yugoslavia and Poland are worthwhile to be studied. Job security has been a major item, although it has largely been hidden unemployment. Still it is a fundamental right for a decent living. Society has to guarantee a decent job for everybody who wants it. Otherwise we do not need politics if they are only fulfilling what happens anyway in the interest of the dominating forces in the economy. Unfortunately the proclaimed equality of sexes existed more in regard to equal exploitation than within the politbureau or the leading positions in the economy. Still the ideal stands, and is defended by a large number of women. Most important for the future of democracy in the East and the West are in my view the democratic social mass movements which brought the authoritarian structures down like dominos - just the contrary of what the Americans were afraid of. If they continued into working life, we would be a step further in the general democratization process.

Some Explanations In most Western countries we speak more and more of the end of mass-production (Piore/Sabel, 1984), the end of the division of labour (Kern/Schumann, 1984), the crisis of the wage incentives (Lutz, 1977), the end of the work society (Dahrendorf, 1987), of the beginning of the

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information society: the post-industrial or post-modern society is announced. These analyses remain in our view on the surface of the fundamental structural changes of modern industrial societies. The dramatic transformations in Eastern Europe during the last months give us a chance and the possibility of more profound reflections and research in regard to the structure of the enterprise in the twenty-first century. Already since the early sixties the largest single trade union in the world, the German IG Metall, organized international conferences on automatization and the future of work. From the seventies on important social science research programmes about the quality of working life have started in many North and West European countries. How far have industrial relations really changed through them? In Uddevalla, Volvo created in 1988 the most modern car factory of the world, replacing the chain. In Japan the Quality Circles are still en vogue. In 1982 France has passed a law instituting so-called "Direct Expression Groups" at the workplace. (Széll, 1992) Are there fashions in management circles? (Lammers/Széll, 1989) Will there be, after the American wave in the fifties and sixties, the Scandinavian one in the seventies, the Japanese one in the eighties, a French wave in the nineties? Or are there European peculiarities which encompass Eastern and Western Europe alike? Over the last couple of years we have witnessed an inflation of "posts-": post-Taylorism, post-Fordism, post-industrialism, post-modernism. As already mentioned above Taylorism and Fordism have been declared dead many times. But if we regard more closely they even entered in the last years new spheres in administration and services, where they had not been applied before. On the other hand it is true that in some sectors, we have witnessed the reduction of Tayloristic and Fordist division of labour. But we are far away from self-determined forms of work. The end of the "work society" and the beginning of the "information society" have been announced at the same time. Both theories are not very substantial. Work still is and will always remain the material and power base within any society, as we are no immaterial angels who can live from air and love. We have to reproduce our food and all other items for our daily living. And who controls the labour process controls also the power relations in society. Formally the part of industry and blue collar work has been reduced within the G.N.P. This is largely due to the restructuring of industrial work, whereby part of it (construction, research and development, maintenance, computer-services, work-preparation) has been reorganized in separate companies or sectors. Part of the service sector was transformed into industrial activities (e.g. food preparation) without being counted as such. But large parts of clerical work have not yet been as rationalized as

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the industrial work. (Cf. above Taylorism and Fordism) So it is much too early in my opinion to speak of post-industrial societies. On the contrary the economically successful societies such as Germany, Japan and the four South-East Asian "tigers", are still industrial societies. The most radical "post" is "post-modernism". It proclaims the end of modern society as such, the end of reason and Enlightenment. Reason and Enlightenment have brought, against their own claim, totalitarian structures and thinking. (Baudrillard) The only alternative to this are individual anarchism, "everything goes", "no future attitude". The change of the division of labour has been in the foreground since the fifties. In the East and the West there was a general expectation of a trend to higher-qualification as discussed above. Marxist-leninists spoke of the technical-scientific revolution. It happened - but not in the East. And this scientific-technical revolution had not the expected effects. Braverman observed for large sectors a dequalification tendency. Probably it is more just to speak of polarization tendencies, i.e. part of the labour force is needed for more complex and demanding jobs, the large majority is dequalified or even not needed anymore at all - except for the repair of the human, social and natural destructions we provoke. ' The reasons given by Bj0rn Gustavsen and Lajos Hethy for the introduction of new forms of work organization were: job satisfaction, participation or democracy at work, productivity, and work environment. (1986: 2) In the meantime the concept of job satisfaction has very much suffered. It has become evident that jt is nearly impossible to measure "job satisfaction". Job satisfaction is dependent on so many variables; especially in international comparisons this category is nearly useless. Still job satisfaction is an aim for managers and for the individual to be realized. And participation, productivity and work environment are closely linked with it. But we should not forget the priorities in this enumeration: productivity, i.e. profit is the dominant and only clear measurable variable - also internationally. Buroway, Dubois, Durand et al. have compared Hungarian, Bulgarian and Western companies in regard to decision-making and innovation. They noticed fundamental differences in the line of arguments cited above, and at the same time convergence-trends. What are the reasons for convergence-trends? Are they technological or economic? Is there only one common economic logic? The crisis of the Welfare State has already been mentioned. But the corporatist model of coordination between the State, employers and 1

The German economist C. Leipert found out for the developed countries that in the last years three quarters of our economic growth was used to compensate these destructions.

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unions for a common national strategy has worked for a couple of decades and is still working in many Northern countries quite successfully. Under the pressure of the world-market this cooperation is under critique mainly from the side of the employers and the State. The economic growth does not automatically provide sufficient means to finance the welfare sector anymore. And the growing state control and bureaucratic apparatuses became often dysfunctional as they developed their own interests in the sense of Parkinson's law. The professionalization of most social activities is perhaps the wrong way to human happiness. Not only conservative but also green and social movements opposed, against this corporatist model, the principle of subsidiarity. One of the most powerful explanations of the problems of economy and also ecology has been the systems theory. The best representative is the German Niklas Luhmann who has published in 1984 his general systems theory. The main feature of his approach is characterized by its selfreflexiveness. This signifies the dependence of each sub-system from all other sub-systems. In contrast to Marx the economy is not regarded by Luhmann as a dominant system but as one like others as education, the legal system, etc. The fundamental message is that we have only a very limited scope of action. The nature of things ("Sachzwangthese") makes radical transformations nearly impossible. Against this probably very pessimistic approach we can set the 1984-publication "Second Industrial Divide" by the East-coast Americans Piore and Sabel. It had a great impact on the discussions of the left in the U.S. and abroad. The argument is that, at the end of the last century, we had a first industrial divide between craftsmanship and control of the labour-process through the workers against Taylor and his "Scientific Management". The result is known. Today we have a similar situation. In Italy and Germany Piore and Sabel found examples, within the textile and shoe production, in the automobile and machine-tool sector, of selfdetermined work organizations. The authors see the possibility of a democratic restructuring of the economy. In the same direction argues Peter Brodner, another German. He sees two development alternatives within labour relations: an anthropocentric against a technology centred development path. This concept lies parallel to the idea of Mike Cooley's "human centred technology". Is it probable, if we have a second industrial divide, that we will have a second labour division? A r e we already in this transition phase? Is it up-to-date again what has been asked for in the hot autumn 1969 in Torino and elsewhere, that is to replace the hierarchical, vertical division of labour through a horizontal, democratic one? I am convinced as our own empirical research has demonstrated with the examples of the introduction of computers that there is a scope of

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action, there is place for democratic organisational design. There is not just one logic, but we find divergent interests and therefore contradictions (Hartmann, 1984) Organisational Design is the paradigm which is proposed by Krustyu Petkov and John Thirkell in their publication "Labour Relations in Eastern Europe". Labour relations in their view, are concerned with subjects, contents, and structural levels. It has to be done in a historical perspective. They found out that the interrelationships in the East have four parties as actors against three in the West: the workers, the enterprise, the trade unions and in difference to the West the workers' collective. But in the West and the East there is still another powerful actor: the State. In recent years an international group has centered around the concept of Organizational Symbolism (B. Turner, 1990) The idea behind it is that we cannot explain national, regional, local, departmental differences in companies just by economic or technological criteria. This kind of determinism is obsolete. Cultural factors as they express themselves in symbols are becoming more and more important. The economy has been globalized. The world market is intervening in more and more companies, administrations and regions. Through massmedia culture has been globalized as well. Environmental issues have a global effect too. It may happen that in a couple of years - if the concentration processes of capital through the banks are continuing as right now - we will have nothing to decide anymore at the workplace, in the enterprise, in the union, in the region, in the nation and even not within the European Community. Brave New World? Can we retain a theory from all that, or at least some elements of it? There is no successful praxis without a good theory. Or the other way around: the practical failures are mainly due to a lack of appropriate theory. For me personally, an understanding of the fundamental transformations in labour relations is based on materialist, historical and dialectical relationships. Labour is and remains the fundamental social relationship. Ownership relations, as they have been put forward by traditionalists and dogmatics on the left and the right, have become less important. Cultural features and differences have grown. But a societal theory which neglects our relationship to nature will not suffice anymore. As a result of the above discussion I am proposing ten hypotheses for further discussion: 1. Due to the technological development ever growing concentration and centralization processes are possible. From there the social control and orientation of technology becomes crucial.

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2. The financial capital in the West and the East becomes the determining factor for decisions about investments, production and participation if this capital is not socially controlled and no alternatives are presented. 3. The systemic integration between the enterprises grows steadily. That means that the integration between different parts of the enterprises and between different enterprises is advancing. (Kan-Ban in Japan and Just-in-Time) 4. The decision for a well conceived democratization of the economy depends on the question of how far the dependence from "worldmarket laws" is overcoming local and regional needs. 5. Decentralization, if it has not just a formal character but includes real participation, increases the quality, the efficiency, the productivity and the autonomy of the individual and of the whole economy. 6. Autonomy at the workplace is the precondition for self-realization. Examples in Sweden and elsewhere demonstrate that the hierarchy of needs by Maslow is perhaps not a mere speculation. 7. Growing participation is a precondition for further democratization and is a necessary element of economic success. There are alternatives to the existing structures. 8. The other preconditions are competence and consciousness of an ever growing part of the citizens to take over real responsibilities. 9. From the three central ideas of the French Revolution only Freedom has been partly realized. Equality and Fraternity remain unaccomplished. 10. Environmental issues are having more and more impact on enterprise decisions. The man-made crises are growing in relation to natural crises. And the effects are more and more global. We need other criteria of success and well-being than G.N.P. income/per capita. The UN has started working into this direction with a new comparative scheme in 1990.

The Future of Labour Relations in Europe We are in a crucial situation. History is - fortunately or unfortunately open. Though the danger of a military, even atomic East-West conflict has diminished, the main division now is the social one, between North and South, between East and West. But perhaps the division is now much deeper as before. The social division makes again two Europes: a relatively rich one and a poor one, which is in many aspects nearer to the

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Third World - especially if we regard the Soviet-Union - than to the West. The so-called super-powers, i.e. the United States and the Soviet-Union, have much in common - not only their respective mafias. Through their overarmament most of their productive capital is wasted. They are not competitive anymore in many areas of the world market. The decline of the American empire is as certain - if there is no radical change - as is the decline and dismantlement of the Soviet-Union. Today the United States is the only nation which consumes more than it produces: per year some 400 billion US Dollars which are mainly financed by imports from Germany and Japan. A hegemonial situation like in ancient Rome. One result of the recent developments is that there is certainly no third way. But differently as has been argued so far. The second way has disappeared. Fundamentally I am convinced it was always a question of two ways. The debate on the Third Way is a result of Marxism-Leninism, i.e. Stalinism. The only valuable point of reference is democracy. And there you might have more or less democracy - including the economy. Self-management has been proposed by Yugoslavs as a third way between Stalinism and capitalism. But it has been shown by many authors that it was out of a specific historic situation which did not give the best conditions for the realization of such a model 2 . So the primacy of politics and a single-party system remained and hindered further progress as we can see right now. (The same is valid for Czechoslovakia in 1968.) From these descriptions we may derive the main questions with regard to the future : What are the boundaries of the enterprise and of the internal organization structure? What are the financial restrictions for the further development of the enterprises and the workforce, the welfare and democracy? What rights will have the individual, the unions, the state? I have no clear answers. I only can name a few preconditions for more economic democracy: * * *

more autonomy at the workplace more decentralization of organizations and decision-making an increasing importance of competence due to the increase of complexity within and around organizations * a strengthening of collective interest organization * an enlightened management * an increasing role of the - local and regional - state and supporting organizations 2

e.g. Dusko Sekulic in G. Szell et al. (eds.), The State, Trade Unions and SelfManagement, 1989.

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* the taking into account of cultural factors * the social control and orientation of technologies The future of economic democracy is in danger. There will be no democracy, if democracy is not realized also at the working place, within the enterprise or administration. The danger comes from two sides: through the process of centralization and through the internationalization of capital, where democratic control becomes nearly impossible. The only alternative to internationalization and centralization seems to be the socialization of that capital which is just the contrary of nationalization. It means the real ownership and direct control of those who are producing the societal wealth. But on the other side, the precondition for democratic control is the competence and consciousness of the citizens. Increasing individualization, egotism, consumerism - as shown in the recent experiences in Eastern Europe as well as in the West - make it quite difficult to build on alternatives to the power of big business. But it is not impossible. Some hope may be found in Scandinavia as well as in Italy. I found in Italy the most extraordinary new forms of reorganization of work in the Emilia Romagna. There the Metal-workers unions have concluded agreements with the employers that the restructuring - i.e. "perestroika"! - of the companies will be done by the workers and the management together. The exercise of common responsibility - as in codetermination - is a learning process. We do not yet have democracy, but only democratization-processes. Probably we will always remain with this. Paradise remains a utopia, but a utopia worthwhile fighting for. More than two-thousand years of common history may give us Europeans some self-confidence that we still may proceed into the direction of more quality of working-life, and life at all, more democracy and solidarity versus nature and fellow human beings. Our humanitarian heritage and our humanism can overcome the alienation, in its different forms we are confronted with. But it may take another one thousand years - if nature leaves us this time-span - as the now existing economic and social system, i.e. capitalism, needed to unfold itself to the now reached heights. Francis Kujama has declared in 1989 "The end of history". It would be a pity if the stage which wo/mankind has reached so far could not be improved anymore, so that no progress and no alternatives would exist. 3

3

Or are we today - as in Orwell's "1984" - in a prison without walls where we are our own wardens - as the late Swiss poet Friedrich Diirrenmatt recently put it? D o we therefore feel free?

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References Altmann, N.; Deiss, M.; Döhl, V. & D. Sauer (1986): 'Ein "Neuer Rationalisierungstyp": Neue Anforderungen an die Industriesoziologie, Soziale Welt 2/3-1986: 189 ff. Bahro, Rudolf: The Alternative in Eastern Europe. London, New Left Books, 1978. Bernoux, Philippe: Un travail à soi. Toulouse, Privat, 1982. Braverman, Harry: Labor and Monopoly Capital. New York, Monthly Review Press, 1974. Brödner, Peter: Fabrik 2000. Berlin-West, Edition Sigma, 1985. Brundtland, Gro Harlem et al.: Our Common Future. Oxford University Press, 1987. Buroway, M.: The Politics of Production. Factory Regimes under Capitalism and Socialism. London, Verso, 1985. Castells, Manuel: The Informational City. Los Angeles, 1986. Clegg, Stewart R. (ed.): Organization Theory and Class Analysis. New Approaches and New Issues. Berlin/New York, de Gruyter, 1990. Cooley, Mike: Architect or bee? The Human/Technology relationship. Slough, Langley Technical Services, 1980. Coriat, Benjamin: Science, Technique et Capital. Paris, Seuil, 1976. Daedalus: 'Eastern Europe ... Central Europe ... Europe', vol. 119/1, Winter 1990. Dahrendorf, Ralf: 'The Dream of Workless Society', in Revue Internationale de Sociologie 3/1987: 117-130. Dorow, Wolfgang (ed.): Die Unternehmung in der demokratischen Gesellschaft/The Business Corporation in the Democratic Society. Berlin/New York, de Gruyter, 1987. Dubois, P.; Durand, C. & C. Gilain: Le processus de prise de décision dans les entreprises industrielles. Enquête comparative. T. I: L'industrie dt l'habillement; L'industrie de la construction mécanique {France, Bui garie, Hongrie); T. II: Les télécommunications en France et en Bulgarie Paris, Université Paris VII, Groupe de Sociologie du Travail, 1986. Dubois, P.; Koltay, J.; Mako, C. & X. Richet (eds.): Innovation et emploi i l'Est et à l'Ouest. Les entreprises hongroises et françaises face à li modernisation. Paris, Éd. L'Harmattan, 1990. Dutschke, Rudi: Versuch, Lenin auf die Füße zu stellen. Über det halbasiatischen und den westeuropäischen Weg zum Sozialismus. Berlii (West), Wagenbach, 1974. Edwards, R.: Contested Terrain. London, 1979. Friedman, Andrew: 'Managementstrategien und Technologie', in: E Hildebrandt & R. Seltz (eds.), 1987: 99-131.

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Gladstone, A. et al. (eds.): Current Issues in Labour Relations: An International Perspective. Berlin/New York, de Gruyter, 1989. Gorz, André: Les Métamorphoses du Travail. Critique de la raison économique. Paris, Galilée, 1989. Gramatzki, Hans-Erich: 'Partizipationschancen in sowjetischen Unternehmen' in: W. Dorow 1987: 359-386. Grootings, P.; Gustavsen, B. & L. Héthy (eds.): New Forms of Work Organization and their Social and Economic Implications. Budapest, Labour Research Institute, 1986. Gustavsen, B j 0 r n & Lajos Héthy: 'New Forms of Work Organization: A European Overview', in . Grootings et al., 1986:1-30. Hartmann, Michael: Rationalisierung im Widerspruch. Frankfurt/New York, Campus, 1984. Heidenreich, Martin & Gert Schmidt (eds.): International vergleichende Organisationsforschung. (Forthcoming) Héthy, Lajos & Imre V. Csuhaj: Labour Relations in Hungary. Budapest, Labour Research Institute, 1990. Hildebrandt, Eckart & Rüdiger Seltz (eds.): Managementstrategien und Kontrolle. Eine Einführung in die Labour Process Debatte. Berlin, Ed. Sigma, 1987. Industrial Democracy in Europe (IDE) international research group: Industrial democracy in Europe. Oxford, OUP, 1981. Industrial Democracy in Europe (IDE) international research group: European industrial relations. Oxford, OUP, 1981. Kern, Horst & Michael Schumann: The End of the Division of Labour? London,. 1989. Kiezun, Witold: Management in Socialist Countries. Berlin/New York, de Gruyter, 1991. Lammers, Cornelis J. & György Széll (eds.): International Handbook of Participation in Organizations. Vol. I: Taking Stock. Oxford, Oxford University Press, 1989. Lawler III, Edward E.: 'Participative Management in the United States: Three Classics Revisited', in Lammers/Széll 1989: 91-97. Leipert, Christian: Die heimlichen Kosten des Fortschritts. Wie Umweltzerstörung des Wirtschaftswachstum fördert. Frankfurt/M., S. Fischer, 1989. Likert, Rensis: The human Organization. Its management and value. New York, McGraw-Hill, 1967. Lipset, Seymour Martin: 'No Third Way: a Comparative Perspective on the Left', in Daniel Chirot (ed.), The Revolutions of 1989: Emergence of a New World. Seattle,University of Washington Press, 1991. Littler, Craig R.: 'Theorie des Managements und der Kontrolle', in: E. Hildebrandt & R. Seltz (eds.), 1987: 27-76.

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Luhmann, Niklas: Soziale Systeme. Grundriß einer allgemeinen Theorie. Frankfurt/M., Suhrkamp, 1984. Luhmann, Niklas: Political Theory in the Welfare State. Berlin/New York, de Gruyter, 1990. Lutz, Burkhard: Die Krise des Lohnanreizes. Frankfurt, Europäische Verlagsanstalt, 1977. Malsch, T. & R. Seltz (eds.): Die neuen Produktionskonzepte auf dem Prüfstand. Berlin, WZB/ed. sigma, 1987. Marx, Karl: Grundrisse der Politischen Ökonomie. Wien/Frankfurt, Europa Verlag, 1968 (1857/58). McGregor, Douglas: The human side of enterprise. New York, McGrawHill, 1960. Meier, Artur & György Széll: Neue Technologien und Betriebliche Demokratie. Berlin/DDR, Humboldt-Universität & Osnabrück, Universität, 1989 (Ms.). Messine, Philippe: Les saturniens. Paris, Ed. La Découverte, 1987. Ouchi, William: Theory Z: How American business can meet the Japanese challenge. Reading/Massachusetts, Addison Wesley, 1981. Peters, Thomas J. & Robert H. Waterman, Jr.: In Search of Excellence. Lessons from America's Best-Run Companies. New York, N.Y., Harper & Row, 1982. Petkov, Krustyu & John E.M. Thirkell: Labour Relations in Eastern Europe. Organisational Design and Dynamics. London, Routledge, 1991. Piore, Michael J. & Charles F. Sabel: The Second Industrial Divide. New York, Basic Books, 1984. Sainsaulieu, Renaud: L'identité au Travail. Paris, Presses de la Fondation Nationale des Sciences Politiques, 1985 (2è éd.) Slater, Philip & Warren G. Bennis: 'Democracy is inevitable', Harvard Business Review 42/1964: 51-59. Széll, György: Participation, Workers' Control and Self-Management. Trend report and bibliography. Current Sociology, SAGE, London 36 # 3/1988a. Széll, György: 'Changements technologiques et modernisation: La culture du travail', in A. Gonçalves et al. (dirs.), La Sociologie et les Nouveaux Défis de la Modernisation, Secçao de Sociologia da Faculdade de Letras do Porto, Porto 1988b: 2ol - 210. Széll, György: '2000 AD: X Goes to Work', European Labour Forum 1990a/l: 27-29. Széll, György: 'Democracy, Technology, Social and Natural Environment', Proceedings of the International Conference Man and Work at the Threshold of the Third Millenium, Bratislava 30.1.-1.2.1990, Bratislava, Videopress, 1990b: 437-445.

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Széll, György: 'Participation, Worker's Control and Self-Management in a Global Perspective', in: O. Shkaratan et al. (eds.), Self-Government and Social Protection in the Urban Settlement and at the Enterprise. Moscow, Institute of Sociology USSR Academy, 1990c: 434-443. Széll, György: Identities for collective action - class, nation, ethnicity, gender. Symposium V, session 3, ISA XHth World Congress of Sociology, Madrid, July 1990d Széll, György: Nationalsocialism, Socialism and Stalinism. Invited paper Ad-hoc group "Models of Socialism and Stalinism", ISA XHth World Congress of Sociology, Madrid, July 1990e Széll, György: Concise Encyclopedia of Participation and Co-Management. Berlin/New York, de Gruyter, 1992. Széll, György: 'Democracy, industrial', in W. Outhwaite & T. Bottomore (eds.), The Blackwell Dictionary of Twentieth-Century Social Thought. Oxford, 1991b. Széll, György: 'Workers' Council', in W. Outhwaite & T. Bottomore (eds.), The Blackwell Dictionary of Twentieth-Century Social Thought. Oxford, 1991c. Széll, György, (eds,): Social Needs, Ownership and Trade Unions. (Forthcoming) Széll, G.; Blyton, P. & C. Cornforth (eds.): The State, Trade Unions and Self-Management. Issues of Competence and Control. Berlin/New York, de Gruyter (Studies in Organization 17), 1989. Turner, Barry (ed.): Organizational Symbolism. Berlin/New York, de Gruyter, 1990. United States of America: Work in America. Report of the Speial Task Force to the Secretary of Health, Education and Welfare. Washington, D.C., 1973. Vanek, Jaroslav: Crisis and Reform: East and West. Ithaca/N.Y., Cornell University (ms.), 1989

Social Spaces and Acting Society Csaba Mako and Agnes Simonyi "A widely spread belief in modern social science is that continuity needs no explanation. Change is considered as a problem to explain. This approach makes the researcher blind to perceive the social dimension of decisive importance" (B. More, 1969, C. Trigilia, 1986)

Emerging Interpretation of the Changing World of Labour More than four decades of peaceful development in the highly industrialized countries of the world were devoted to observe economic and social processes as well as to forecast their fulfilment or revision. Sociologists tried to identify the social expectations as well as the possibilities and the conditions of adjustment to change in the background of such new phenomena as welfare and migration, powerful trade unions, alienated workers and massive strikes, declining and rising industries, emerging and vanishing trades, revolutionary technical inventions, changing workorganizations and human relations. In this paper we try to sum up the latest experiences of sociology collected within the labour-economy and society triangle. We analyze how and why sociology is recriminating its questions and, instead of giving answers, redesigning not its answers but its relation to an acting society. Together with our French, British, Italian, Swedish and German colleagues, we have been surprised by the fact that in recent years, the opportunities of forming autonomous work groups and the right to participate were not seized by masses of workers. We had to acknowledge that new technologies opened room for both the individualization of labour and the emergence of the network systems of hundreds of small enterprises. Our sociological imagination was moved by militant and leftists when trade unions in some countries began to loose their members, while in other countries masses were supporting there trying to revitalize organizations hardly showing any "sign of trade union life". (Maurice, 1988; Kasvio, 1985; Reyneri, 1987; Kalleberg, 1988; Dubois, 1985; Van Hoof, 12984; Lutz, 1981). At international conferences of the 1980s (Lake Balaton in 1984; Amsterdam in 1985; Bologna in 1986; Paris in 1988; Kecskemet in 1988, etc) it has been pointed out in various ways that the development of social reality follows schemes different from those predicted. While the socially

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conditioned nature of productive innovations has been increasingly emphasized, social sciences are hesitating to identify the nature of developments. Analyses of work organizations, of informal relationships, of the hidden economy and of the world of undertakings have called attention not only to the persistence of professional and cultural traditions, family ties and bonds of local "microsocieties", but also to the indispensability of such premodern patterns for the functioning of modern structures. So we must distinguish between modernization and ruining down the old. Our conception of development must be revised. Our evolutionist sense of security must be abandoned and we have started to discover within different social and organizational forms, those types of mutations that in some elements, point towards new social alternatives. It is a difficult task because instead of recognizing hierarchical and horizontal relations forces and counter-forces within a dominant model, the researchers must have a comprehensive view of the segmented systems of social relations which are the fabric of various and heterogeneous networks. Moreover to deal at the same time with the complexity of the present and the emerging alternatives needs scientific imagination. Our thinking has been encouraged in that direction by the fact that the need to break with the various types of determinism was made evident at the end of the 1980s by industrial sociologists of different countries. Neither organizational and technological determinism nor the determinism of the given social and political relations would enable us to understand the vitality or inadaptability of different nations, regions, enterprises or social groups. At the same time the more intense and complex studies of different social phenomena and, last but not least, the debates about the various "types of determinism" have made researchers aware that in both time and space the individuals are acting in several social formations. Human relations established simultaneously in several economic forms and social fields serve to sustain already existing institutions and structures while forging new ones as well. In one's life and working experiences, the different social and economic formations are continuously linked during the processes of decisions and mobility, thus creating bonds between social institutions, structures and spaces. The spread of network analysis reflects that approach already in sociology (Szociologiai Figyelo, no. 3 of 1988). Some of the related works (Granovetter, 1988) have revealed dualities like social stability and change or cultural determinism of behaviours and the freedom of autonomous actions in the social networks. The different types of relations, with varying intensity, among the individuals and their groups belonging to overlapping networks, are the guarantees of social stability on the one hand and allow some scope for personal freedom and manipulation of the structure on the other (Angelusz/Tardos, 1988: 12).

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Debates Among Industrial Sociologists in the 1980s: New Forms of Determinism By the end of the 1960s, analyses of the social impact of technological progress appeared to have definitively disproved both the optimistic and pessimistic versions of the concepts of technical determinism. The highstandard engineering work has not become general through the scientifictechnical revolution nor did automation reduce man to the status of robot. Research disclosed combined effects of management systems, organization of work, and social and political environments in the most diverse cases of technical development (Kasvio, 1986). However, by the 1980s, the long-standing dispute flared up again, this time on the social impact of the industrial application of microelectronics, when through the "third industrial revolution" radical changes in employment and skill level have been expected. The following quotation from a Japanese study reflects the view of many other research workers, including Hungarians: "Industrial robots, machine tools of digital guidance, computerized planning and manufacture, flexible production systems and the automation of clerical work serve to radically change the content of work, the work organisation and the structure and strategy of management" (Okubayashi, 1986: 7). The social and human perspectives opened by the use of new technologies were outlined in rather simplified form also by the international conferences on automation which took place in Hungary in the mid-1980s: "those qualified and prepared to occupy the position of 'rising man', i.e. accepting the challenge of ever higher levels of decision-making, generally welcome the expansion of opportunities, but those who, by reason of their situation (perhaps their unresolved problems in life), feel their existence jeopardized, try to put strong brakes on the advance of mechanization, often indulging in "pseudo-socialist" rhetoric to that end" (Sos, 1984).

The social and cultural effects directly attributed to the application of new technologies based on microelectronics are treated more differentially by those who speak of a "new model of production" (Kern/Schumann, 1984), pointing out that the earlier models of the division of labour and specialization are called into question even as regards the efficiency of capital utilization and that the role of qualification is upgraded in the advanced sectors of production (manufacture of automobiles and machine tools, chemical industry). The substance of highly influential postindustrial approaches consists in showing that, given the increasing sophistication of new production technologies, the appropriate operation of the production apparatus requires workers to reinforce their commit-

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ment and to acquire higher levels of skill and requires management to abandon the practice of restricting the utilization of workforce abilities. However, approaches of this type 1 suggest that the very emergence of new technologies is bound to evolve new sets of social relations (Riesman, 1981). In the course of debates, rather strong objections were formulated to the neo-deterministic views. One class of objections relates to the interpretation and measurement of qualification (Bernier-Cailloux, 1985). Analyses of the relationship between qualification and new technologies often use identical terms to designate quite different processes. A most frequent source of confusion is the failure to differentiate between the formal and substantive aspects of qualification. The formal and quantifiable criteria indicate the level of workforce qualification (schooling, education, practice) and support descriptive analyses of workforce structures, with the typical questions formulated in the following way: "What occupations are needed? What occupations are to be expected to disappear? What professional requirements are raised by an effective operation of different forms of new technology? What system of training is able to turn out labour of the required structure?" On the other hand, the substantive criteria of qualification refer to the pattern (structure) of the tasks actually performed, with the questions formulated trying to grasp the degree of specialization of the tasks and the totality of aptitudes and skills required by the work tasks. The following combination of activities, for instance, proved to be of advantage in identifying the substantive dimensions of qualification in the analysis of the relationship between technologies and qualification (Simonyi, 1987a): 1. 2. 3. 4.

Transformation of objects and materials, Treatment and transformation of information, Operative activities, Tasks involving the managing and organizing of cooperation.

However, similar research on automation or on new work organizations during the 1960s and the 1970s has disclosed the role of transmission played by the aspirations of the enterprise management and of the workforce and their conflicting interests. The fact that, along with techno1

The idealizing and simplifying predictions connected with such characteristics of the so-called second industrial revolution of post-industrial society as the rapid spread of industrial robots, the appearance of computer integrated management systems and the increasing use of NC/CNC technologies and with their social impact can best be likened to the neverfulfilling prophecies of futurologists of the 1950s concerning automation (Riesman, 1981: 285-302).

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logical development "governed by its own laws" and even conditioned by the management models of labour utilization, the mechanisms and traditions of managers' selection and the specific features of the internal and external labour markets bear considerable influence on the way the skills and experience of workforce are used (Braczyk, 1984). During the introduction and spread of new technologies, the values and endeavours of designers coincide with the ideas of the enterprise management and employees. Organizational bargainings, negotiations, and processes of interest representation going on in different institutional settings - embedded as in concrete sets of socio-political relations and following different models of cooperation - are shaping new patterns of work, responsibility and distribution of power. The following statement by a professor of the University of California concurs with the experience of many: "The power structure of the organization which provides an environment for the operation of information technologies does not tend to change in the short run and can only be supposed to change even in the long run" (Spitzchen, 1986: 3). Research in Hungary, too, has shown that the new technologies integrated into the traditional enterprise organization have not evolved a more up-to date pattern in the division of labour: skills and control of the labour process have been produced along the former power structures and have thereby failed to lead to new, economically more efficient uses of labour and to bring about an organizational consensus for greater social advantage (Nagy, 1987). However, where information technologies had been integrated into enterprise structures that have traditionally recognized special skills and practice and have long provided strong incentives for their utilization (e.g. at VOLVO of Sweden or Scandinavian Airlines/ SAS), 2, it became possible even in a shorter period to profit from the human and organizational advantages of technological innovations (Holtback, 1988: Edstrom, 1988). The sceptics about predictions of the "end of the division of labour" raise even the problem concerning the scope of the new production models. For the time being, some studies have found certain new models of labour utilization operating in the central and economically strong 2

Ever since it was established (in 1924), Volvo has based its continuous and systematic technological and organizational innovations on the fact that both the management and workers, together with their institutional representation (the activities of Swedish trade unions have been legally recognized since 1930), have supported and highly appreciated the acquisition and the utilization of professional knowledge and expertise. The strategy to obtain quality utilizing human resources is represented by enterprise management and trade unions alike (Holtback, 1988: 4-5).

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sectors in the advanced capitalist countries, but there exists no reliable empirical basis for generalizations even in those sectors. At the same time, management and labour endeavours to establish new structures of work and cooperation can be observed also in declining industrial sectors. Such endeavours are able to surface in some cases, e.g. through decentralization or internal undertakings, and to result, even formally, in new models of labour utilization and cooperation (Berki/Makó, 1986; Neumann, 1988; Neumann/Simonyi, 1988; Kasvio, 1986; Dubois/Makó, 1988). In other cases, however, under conditions of "enforced innovation" or "enforced autonomy", the forms of cooperation and labour utilization tolerated but not legitimized by the enterprises remain concealed in the world of formalities, generating contradictory social and economic consequences (Fazekas, 1980; Laki, 1984; 1985; Ladó/Tóth, 1982; 1985). In addition to flexible forms of work organization attributed to new technologies and to the upgrading of skills in the leading sectors of industry, reference should be made to trends detected in other spheres of the economy. Rather different social and organizational developments can also be observed in numerous areas of services. The organization of work in the spirit of the Taylorian and Fordian organizational techniques is spreading in, among others, tourism, financial institutions and health care. Combinations of organizations designed to ensure a relatively rapid integration of labour requiring a minimum of qualification with new technologies are found with increasing frequency in the entertainment industry as well (Walton, 1985). At the same time, in the process of introducing technological and organizational innovations, the third sector has been strengthened and expanded by small businesses which, providing various technical, financial, marketing or legal services for the enterprises, have followed models radically different from those formerly evolved within the framework of large enterprises (Simonyi, 1987 b). Thus, debates both before and during the 1980s tend to support the experience that the emergence and spread of new technologies, organizational methods of innovative management and new models of labour use are processes far from being parallel and necessarily interlinked. On the other hand, it is justified to distinguish technical-technological and socialorganizational innovations as they are likely to force their way independently of each other. Research findings and the lessons of scientific debates point, just as they did in the 1960s and the 1970s, to social interrelationships that are wider than the man-machine and man-work organization relationships. Assessment of the substance of technical and organizational change in the labour process has been found even today to require a combined analysis of the operation of processes at the plant or enterprise level and in the social and economic institutions. The methods and theoretical frameworks of such a

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"complex analysis" are yet to be elaborated, however. Disclosure of wider interrelationships often leads to new determinism: to descriptive analyses of higher hierarchical levels above the enterprise "micro-world" or of the widening concentric spheres of the economic and social environments, contributing to both domains' decisive influence. Studies during the 1970s were started on a double track to deal with two sets of problems: industrial relations and representation of workers' interests, participation and shopfloor democracy on the one hand and the second, or black informal economy on the other. The line of research concerned with industrial relations analyzed enterprise processes, i.e. the political and legal possibilities, frameworks and limits of interest and power struggles relating to technological development projects, and revealed essential social interrelationships connected with political struggles. Whereas research on the second, or "black" economy, studied more thoroughly the relationships existing between enterprise processes and society and the economy outside the factory gate, regarding the interests and behaviours of both labour and management. At the same time, labour utilization as well as the possibilities and limits of technological and organizational change were analyzed in the context of the segmentation of the labour market. Indeed, technological or organizational determinisms have been disproved by integrated analyses and assessments of the labour process and the set of industrial relations. Studies limited to relationships within the labour process could not explain, among others, why workers in Japanese large enterprises do not react with work stoppages or some form of restriction of output to managerial methods of increasing labour intensity, such as planning production with a minimum of workforce and stock (Dore, 1987). In Hungarian industrial practice, such methods would give rise to individual and collective action interrupting production rather than increase individual and collective performance and strengthen cooperation within the given group of workers. The lack of different reserves serving to secure the continuity of production would tend to strengthen the position of workers versus management (Simonyi, ed., 1983). Opposite managerial and labour reactions to identical phenomena affecting the labour process cannot be understood from the labour process alone, to understand them requires a combined analysis of the internal relations of the enterprise's organization and the social methods of resolving conflicts. In that process, however, the researcher cannot stop at tracing interest relations at the workplace and the outcome of power struggles back to the existing set of industrial relations, for in doing so he is lured into the trap of another determinism still wider than the technological or organizational ones.

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Such was the case in, e.g., the Italian trade union movement when in the early 1980s struggles were launched in defence of the workers' interests. Those struggles embraced the interests of a very narrow range of workers even within the industry, while developments in other social spheres beyond the world of labour (welfare system, regional arrangement) called for an institutional system of interest representation and a type of action different from the traditional trade union strategy. Studies of extra-firm channels or action, research on the movement of the labour market and even analyses of family, cultural and community interlinkages of informal relations have all demonstrated that the means and methods of conflict management and the mechanisms destined for resolving conflicts are not confined to representative institutions established in the course of social struggles and/or out of political wisdom nor to forms of negotiations between social partners that are institutionalized and legally regulated. Individuals or social groups reacting in the context of a specific problem and of efficiency of their actions cannot be understood merely in their direct social space, i.e. in their immediate environment of action. But in relation to and in combination with the conditioning role of norms, patterns of behaviours, interests and possibilities or their representation existing in all other spheres of society. Reactions of different social groups are to be observed in several dimensions and carry social contents that cannot be interpreted in one single development model.

Arising Theoretical Approaches of Social Changes Different Regulations and the Articulation of Social Spaces Before discussing changes in the models of social and economic development, it is necessary to clarify certain terms, namely the category "regulation" as an expression for the means of policy makers to distinguish that from the notion of "regulatory mechanisms" which refer to the different forms of social dynamism for its own reproduction (Piore/Sabel, 1984; Bagnasco, 1985; Reynaud, 1980). Our aim is not the analysis and the systématisation of the methods or techniques of social policies. We suppose that the use of unclarified and often overlapping terms give rise to confusions that exclude understanding of the real nature of social changes, and hence leave no room for exploring the possibility and means of directing it.

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The Notion of Regulation In Hungary the advocates of liberal economy, just as the technocrats of state dirigism, mostly fail to distinguish the regulatory activity of the State from social regulations through the complex interplay of social relations and human actions. On the contrary, French social scientists draw a distinction between "régulation" as denoting the self-regulation of different systems and "réglementation" as denoting state intervention. In the most general sense, regulation, or "balancing mechanism" or "equilibration", means self-organization of a system. This term is used in several branches of sciences such as biology or thermodynamics. In sociology, it means the sum of correctives aimed at maintaining some organizational form of social reproduction (e.g. production, family, community). In contrast to biological or physical systems, social systems are more open, because the individual or group assessments about the social process influence and thus make the rules governing the pattern of social relations more "vulnerable". But paradoxically they serve to secure the specific adaptability of societies as well. The notional confusion was further increased by the "deregulation movement" which started in the USA from the second part of the 1970s on and sought to restrain the role of the State in the economy. Under our sociological concept of regulation, greater or smaller reliance on regulation is not an object of movements or policies, for regulation is understood to mean objective mechanisms which evolve and operate in the field of social relations and cannot be characterized by quantitative terms. Deregulation as formulated in the ranks of employers and liberal intellectuals or in state administration on behalf of different interests or values was a reflection of the struggles to establish a new kind of balance between various regulatory mechanisms. In certain cases, it meant or may have meant efforts to ease trade union constraints in connection with employers' decisions or/and, in other cases, to reduce state intervention in the economy. In our concept, regulation by legal means, for instance, may serve either to widen or to narrow the sphere of action of state direction. The pattern of active and conscious intervention by the State or other collective institutions, parties, associations or alliances can best be described by "regularization" as the equivalent of the French réglementation. In Hungary, for instance, the Act on Association and Assembly, which is designed to improve the system of political institutions, seeks to influence the systems operating in different spheres of society and to determine the limits, means and possibilities of intervention. Legislative activity of such intensity, which we understand as regularization, may mean either limiting or increasing the role of a social sphere, namely the State in our case, but it

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is most likely to reflect shifts in the emphasis o n state policies, i.e. transformation, in our view, of one regulatory mechanism and its synchronization with the rest of the society's regulatory m e c h a n i s m s . 3 C o n f u s i o n in analysing social and e c o n o m i c processes o f t e n stems from the fact that the e x p o n e n t s of both the market's self-correction and bureaucratic central direction blur the terms "regulation" and "regularization", namely societies' regulatory mechanisms as they appear in objective processes and regulation by the State, disregarding the fact that the regulatory activity of the State (regularization) is socially conditioned just as the e m e r g e n c e , functioning and e c o n o m i c regulatory functions of the markets are. 4 ( S o the concern of analysis should not be with m o v e s b e t w e e n the t w o extremes of the spectrum from "arbitrary intervention" to "spontaneous self-correction". This mistake confines analysis to dic h o t o m i e s like "State or market" and "State and market", excluding from

3

4

Piore and Sabel distinguish two significant regulatory crises in the development of modern, mechanized industrial production. One is linked with the spread of large enterprises emerging at the end of the 19th century and with the Keynesian welfare state of the 1930s. The other, a less visible one, - in their view - cannot be simplified to the inequalities in incomes and in power coupled with industrial technology and the organizational system in industry. According to them, the second type of crisis is related to the choice of technology itself. Industrial technology cannot be deduced from the sole logic of science or from the technological requirements, but its birth and realisation, depend on the structure of the market of products and of services. However, market structures are influenced by basic political conditions like distribution of property rights and wealth. Thus, in simplified terms, machines are not mere motors, but also mirrors of social development (Piore/Sabel, 1984). The social aspects of industrial innovations are highlighted by Tibor Kuczi as well: "Home-made small tractors and rotary hoes today have their regional peculiarities, just as the peasants' traditional implements have. He who fabricates a rotary hoe on a do-it-yourself basis today is most likely to choose one of the technical solutions known to local "experts", all the more so since those solutions may also have a certain local advantage (e.g. the possibility that metal component parts available in a nearby factory may be turned into ones of a rotary hoe or the accessibility of a piece of iron on the local market") (Kuczi, 1987). This is particularly true under conditions of state socialism, which previously paid little or no attention to market forces operating as a resource-allocating mechanism. The emergence of a market economy is inconceivable without resolute and clear government measures. For instance, a lasting evolution and operation of market relations cannot be imagined without support for undertakings relying on the expertise and social traditions of potential entrepreneurs enjoying concessionary financial terms and conditions in establishing businesses, and without a network of educational and representative institutions.

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the scope of both political and scientific thinking the other social phenomena that reflect the influence of other social processes or regulatory mechanisms both in the functioning of the market and in the formulation of state policies. If, on the other hand, one is compelled by facts to become aware of the unquestionable presence of mechanisms existing parallel to the market and state interventions, the autonomy of this different type of regulation, governed as it is by its own laws, is often disputed, accepted only in subordination to other social regulators, or as forming subsystems of, either the State's or the market's regulatory mechanisms. A case in point is the fact that, as often, the very spread of small undertakings is often seen as simply a rational managerial reaction seeking decentralization. Or in other context as a phenomenon brought about by state intervention through regulatory acts to create a "background industry", a "protective net" for employment, or means of easing wage constraints. Whereas studies of the specific features of cooperation between small undertakings or of zones of small enterprises found in different countries have disclosed special regulatory mechanisms, based on reciprocity of various small interlocking communities, family, ethnic and local. But this may also be illustrated by efforts to explain the organizational autonomy of large enterprises either by reactions to market conditions or by links to state policy or by a combination of both, failing to understand the varied social configuration of these autonomies, embedded as they are in historical, developmental and regional systems of relationships and often differing even within one and the same country. 5 Though organizational sociology calls attention to this from time to time, economic sociology concerned with a comprehensive analysis of the economy is still experimenting to group the relationships between the "relative autonomy of organizations" and other social dimensions of the economy (Hethy/Mako, 1972, 1978; Butera, 1979; Gyenes/Rozgonyi, 1981). Similarly, regional studies have long disclosed the existence of local autonomies and their effects, and, indeed, the factors responsible for the socio-economic lag or the rapid progress of different regions cannot be understood solely in the context of state policies and/or market relations. 5

In connection with the changing mechanisms for market regulation Katalin Szabo calls attention to the category of "vegetative" regulation, a term coined by Kornai and Martos: "An important distinguishing mark of vegetative regulation consists in its local character, in its taking place largely within particular economic units or at most in the interactions of a few 'parallel' economic units (e.g. enterprises in contract with one another). According to the economists cited, the significance of such regulatory processes increases with the growth of economic units and with their 'direct dependence'" (Szabo, 1986: 129).

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For an interpretation of autonomous economic organizations at the regional level, the social shape of development is likewise to be subjected to a comprehensive analysis (Piore/Sabel, 1984; Sabel, 1987; Bagnasco, 1985; Trigilia, 1985; Becattini, 1985; Enyedi/Weldman, 1986). A new theoretical approach to regulatory mechanism is called for not only by a scientific need to recognize the variety of regulations interacting in a heterogeneous society as set out above, but also by the necessity overcoming the schematism which, by exaggerating the importance of political intervention; overemphasizes hierarchical relations, the power of the "rulers" and the subordination of the ruled. Under a technocratic approach, society's regulation is inconceivable without those who govern. Moreover, for the exponents of that approach, the State is the only "neutral regulator" standing above group interests, and they try to change customs interweaving social cooperation into instructions or directives. In their practice, directing activity occupies a higher rank of the hierarchy than the activity directed. At the enterprise level, they overestimate employers' or managers' room for action. Thus, in combination with other effects, this leads to the "lack of sense of reality among managers" (Crozier, 1987). To influence and to govern by regulations of course, one cannot avoid the dynamic and complex human and social relations, but this cannot mean, nor does it objectively mean in view of the facts and historical processes, the actual dominance of a single type of regulation such as state regulation or its bureaucratic centralized variant alone. Our concept of regulatory mechanisms operating in different spheres of society and the economy is not without precedent in Hungarian literature. Gyula Teller's categories of mechanisms, such as those of command economy, market and ideological integration (Teller, 1985), can be used to great advantage in interpreting the nature of the Hungarian cooperative movement. Janos Kornai's distinction of the types of market, ethical and altruistic coordination has offered a new perspective for analysis in understanding the nature of economic systems (Kornai, 1980; 1983). His types of regulation conceived in other categories are close to Karoly Polanyi's method of analyzing forms of economic integration as applied to understanding how social unity and stability are maintained through change: "The basic schemes capable of empirical discovery are constituted by reciprocity, redistribution and commodity exchange. Reciprocity is indicative of movements between mutually appropriate points of symmetric groupings, redistribution refers to movements of expropriation directed toward a centre and then starting therefrom, exchange relates to two-way movements between "persons" of a market system. ... As can be seen, different schemes of integration presuppose different institutional formations" (Polanyi, 1976: 241). Proceeding from Polanyi's regulators,

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Robert Manchin and Iván Szelényi try to describe modern societies by various combinations of the market and redistributive schemes (Manchin/ Szelényi, 1988). A. Bagnasco, the Italian sociologist, distinguishes four main mechanisms for the regulation of economic activities. The first is held to be reciprocity, which regulates economic cooperation in family relations, relations of friendship and logical communities, such as dwelling construction under self-help schemes The second regulatory mechanism is deemed to be the market emerging in specific relations of production. The third mechanism emerges within large industry organizations to eliminate market uncertainties and is manifest in the relative autonomy of organizations. The fourth regulatory mechanism is political, or state intervention aiming to offset the negative social impacts of the market, including the rigidity of the labour market. In Bagnasco's analysis, the regulatory mechanisms of the large enterprise and political intervention during the crisis of the 1970s showed signs of exhaustion like the stiffening of hierarchies, the lack of motivation of economic actors, and delays in conflict management. The decentralization of large enterprises is thus seen as an effort to enhance the role of market mechanisms in regulating society and the economy, while there is also evidence of deregulation or regulation within enterprise organizations, whereas the specific autonomous system of relations in small enterprises is seen to be governed by a mix of the market regulation and the regulation in small communities on the basis of reciprocity (Bagnasco, 1985).

A n Integrative Analysis of Social Change Both empirical and theoretical analyses of the regulators that condition the different forms of individual and collective actions offer the general lesson that the substance and components of social phenomena cannot be grasped in subordination to a single "rationality", a single "social regulatory principle" or a dominant "regulatory mechanism". This means further that there may coexist, in time and space, structures, values and behaviours of cooperation which, by the nature of regulations, belong to different forms of social and economic institutions. Therefore society should be viewed in its complexity, as a heterogeneous and segmented formation rather than as a unit following a continual and trendlike course of development. In their motion and change, the different formations overlap and may strengthen or weaken one another's social reproductive force and economic efficiency. The fact, for instance, that technological or production innovations do not by themselves determine either the new forms of work

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organization or a new consciousness of identity or new patterns of behaviour is susceptible of such interpretation. As concerns innovations, if they make their effects felt in only one sphere or in just one segment of an organization, the results of change are to be weakened just as they are likely to be strengthened if they are able to embrace different other dimensions operating under various logics within organizations (Butera, 1984). Similarly, this helps us understand why the development of work organizations as observed in industrial practice shows a diversity of relationships in the division of labour and in specialization. Accordingly, attempts at categorisation to identify change in the world of industrial work with the traditional or modernized forms of Taylorism or Fordism/ neo-Fordism or post-Taylorism/-Fordism are prone to misleading simplification in the description of production systems. The efforts at a general and overall interpretation of the development of the labour process were called into question by the differences revealed by industrial sociology research under the differentiating impact of cultural and ideological interrelationships (Maurice, 1988; Kasvio, 1985). Regardless of whether one considers state interventions/normative instructions, incentive policy, etc (or market effects) labour demand or supply, shortage, etc., no direct link can be established in the different manifestations of workplace behaviour (level of performance, innovation, cooperation, etc.). Research has disclosed an often determinant role of transmission professional and cultural traditions local and workplace "informal" relations. As early as the first decades of this century, research concentrating on the functioning and practice of enterprises called attention to the role of informal organizations. This trend of research prevailed in schools of organizational sociology, whose best known followers include Crozier of France or Etzioni of U S A (Crozier, 1981; Etzioni, 1975; Gross/Etzioni, 1985). During the 1960s several Hungarian studies tried to extend analysis to social and organizational factors exercising influence on work performance. Such empirically based studies clearly affirmed the inability of structures of the official organization and management to have overall influence on such forms of individual and collective behaviour as work performance (Héthy/Makó, 1972; Kertesi/Sziráczki, 1983; Kóvári, 1984). Later the 1970s witnessed, in both Hungarian and foreign research projects, attempts to systemize broader social interrelationships influencing the reproduction of the enterprise organization, going beyond the scope of the duality's of official-unofficial organization and seeking to gain a better understanding thereof (Kólló, 1981). Some of those attempts laid emphasis on the role of cultural and historical variables, called "effect societal approach" by M. Maurice 6 (Maurice/Sellier/Silvestre, 1986), while 6

The term "social effect" (effet societal) denotes a sociological approach which

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others made a combined analysis of the labour process and industrial relations (Dohse/Jiirgen/Malsch, 1987). It was among the advocates, holding different political views, of such approaches to research that the so-called labour process dispute, one of the debates in labour sociology that found the greatest echo, came unfolding from the second part of the 1970s (Wood, 1982; Buitelaar, 1988). The main scientific result of this line of research consists, in our view, in calling attention to the political dimensions of social reproduction in connection with control exercised in the labour process. It similarly demonstrated the fact, that the emergence and persistence of principles governing human cooperation in the labour process are linked to the political sphere through an independent system of institutions and relationships, such as values, norms and traditions. The related studies brought into focus the internal heterogeneity of organizational relationships and the differentiation of environmental factors. The drive for economic restructuring, from the mid-1970s on, raised with elementary force the need for understanding the mechanisms and conditions of social and organizational adaptation. Social sciences therefore tried to move in a direction that would allow interpretation and analysis of essential relations between organizational heterogeneity evolving in the course of adaptation and the differentiated "social fabric" providing a background for the former. In our view, this calls for the renewal of theoretical analysis not only to understand organizational heterogeneity and social differentiation but to identify and systematise "horizontal" relationships which generate and operate the former. The conceptual change consists not simply in the recognition of organizational and social diversity, but what we intend to make a core element of our approach is the need to survey the "pathways" between various social, organizational and cultural spaces in understanding the emerging opportunities for individual and collective action. This need was formulated also with respect to organizational sociology. The use of new technologies, the changing requirements of qualification and the planned and natural modifications of work organizations made it urgently necessary to develop such a concept of organization that is apt not only to grasp interactions between an organization and its environemphasizes the importance of interactions of social-organizational and cultural structures/spaces constituting the environment of different categories of "social actors" and their interactions.Under this approach, the contents and effects of relationships between technology and work, for instance, are transmitted by organizational and professional spaces in the entrepreneurial society. The diversity of these "spaces" is conditioned by the economic and social context in which the enterprises are functioning (Maurice, 1988).

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ment, but also to perceive links and overlaps between different internal levels, groups and strata within the organization, their interconnection by social relations, their linkages to extra-enterprise social spheres and institutions, and avenues people find for action. A growing number of enterprise case studies have accumulated ample experience, both in Hungary and abroad, of different (organizational, developmental and incentive) types of intervention which cannot be fitted into theoretical frameworks based on the duality of formal-informal organizations. But a more differentiated concept of organization is also needed for enterprise management, since their intervention can only succeed if they are able to establish, through the contemplated changes, a new equilibrium, a new type of cooperation within the organization, for which knowledge of intra-enterprise processes and sets of relationships is also indispensable. Butera (1984) distinguishes seven coexistent dimensions overlapping to varying degrees, within industrial organizations, each segment having its own members and boundaries which do not always coincide with the organizational unit under review. Each of theses segments has its own internal coherent model, with different processes of communication, different arrangements for decision-making, negotiations and transactions, with different power groups and different ways of exercising their influence. Some segments are more developed than others in organizations belonging to different sectors and subserving different functions. This concept is capable of projecting a differentiated and complex set of social relations existing in work organizations, without resulting in a simplified uniformity. The organizational segments distinguished by Butera are the following: 1. The formal organization, which is the sum of instructions regulating the relations among members of a given unit and their activities. Through legal means, it legitimates the power of management. Its boundaries always coincide with those of the enterprise, but its influence varies widely in different organizations. In state institutions it is generally the dominant organizational segment, but in R + D activities for example it influences only the smaller part of social processes. 2. The technical organization, which evolves in line with the rules of technical procedures in productive activities. It is sometimes wider sometimes narrower than the given enterprise, depending how far reaching are the effects of a particular cycle of work. According to Butera's concept, this organizational segment stems from technical power exercising its effects in a sphere varying between economic constraints, management normatives, cost ceilings and available resources. "This organizational segment enjoys the advantage that

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technical objectivity is legitimated by our society at a high level" (Butera, 1984: 242). 3. The "local representation" of institutions as an organizational segment may be illustrated by the intra-enterprise presence of professional communities. Thus this organization is the scene of activity of different social formations, e.g. an occupational group, following identical norms and values and governed by rules accepted as legitimate by a given social group. This segment comes into being on the basis of extra-enterprise norms within the organizations, e.g. rules, or habits of various trades such as lawyers, physicians, scientific research workers, organizers etc. Within certain organizations, dominant professions may exist whose norms may act as principal regulators of the organizations as, e.g., in the case of a research laboratory or a hospital. So what we have is not "local" rules, but "cosmopolitan" norms within an organization. In countries introducing new technologies on a wide scale, for instance, frequent mention is made of the "invisible college" of informaticians as an influential organizational segment reaching beyond the boundaries of their own enterprises. 4. The actual organization embraces such practices, operational procedures, rules and customs which, though unwritten, are clearly discernible and observed. This organizational segment is called into being by special local circumstances, traditions and professional experiences, its space is delimited by the flexibility of formal and technical organizations, it may be determinant in, e.g., maintenance or steel casting and rather limited on an assembly line. Its mostly invisible output becomes visible in cases of social and technical dysfunctions in the labour process. It is a segment regulating the ways to fulfil the tasks, the identification with roles, the flow of information, and the decisionmaking procedure alike. Its boundaries coincide with those of the given unit, professional competence being the main source of power in it. 5. The perceived organization, whose existence is based on the fact that groups with certain social and cultural attitudes form different judgements about organizations. The perceived organization is built of different subcultures, is composed of a series of coherent systems based on values, views and cultures. It makes its effect and determinant roles felt particularly at times of change, in the course of adaptation. 6. The informal organization, once defined by Butera in a much narrower sense than the generally held view, which so designates any organization born to attain another goal than the one officially institutionalized. By informal organization Butera means structures evolving in connection with the labour process and trying to influence certain special aspects of operation, structures that are not officially planned and whose norms, goals, membership and management differ from those of

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the formal organizations. Accordingly, he does not consider organizations whose sphere of activity goes beyond the scope of the labour process (e.g. cells of parties, trade unions) to form part of the segment of the informal organization. 7. The complex organization, which is integrating the various organizational segments, but represents more than their sum, ensures at the same time the internal coherence of the different segments. It is thus an expression of the "interplay" of different organizational segments jointly evolving the rules of behaviour that serve to cement technical and human resources together. Thus, under this approach, the social process of organizational adaptation can be conceived as a series of cumulative changes taking place in the different organizational segments, in which innovations may be introduced, new sets of relationships may be forged and new managerial strategies may be articulated without alterations in the organizational model. At the same time, the positions, the relationships emerging in the various organizational segments as well as orientation among them allow workers to explore channels for their moves. Similar conclusions have been drawn by several researchers engaged in network analyses. Granovetter, for instance, pointed out that the "weak ties" within networks established by strong ones in society and organizations are functioning as a "bridge" securing integration and mobility. On this basis he sees the channels for autonomous action on the part of the individual as belonging to several sets of relationships. "The fact that the individual is capable of meeting others' expectations at different times and places allows him to preserve an inner core, internal attitudes, while adapting himself to different expectations" (Granovetter, 1988: 41). Organizations that are both stable and innovative are described as constituting a system of sub-networks largely overlapping one another, with "a great number of weak ties performing a bridge-like function" between closer groups; so groups and cliques do not cut themselves from one another, but are open to receive and transmit informations and innovations (Granovetter, 1988: 51-55). In recognizing, interpreting and exploiting the emerging or disappearing possibilities of acting, the individuals or their different social-organizational groups are oriented by their earlier experiences of treating social and organizational relationships during their "prior history". The formulation of strategies for individual and collective actions, or life strategies in the longer run, is based on professional, ideological and cultural values different in content, composition and level - emerging in the different types of learning processes. On the other hand, the processes of "professional" and "social" learning necessary for the mobilization of interest and

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the power relations that secure exploitation of the channels for action are far from following one another automatically. According to research experiences on social and organizational change, the "social appropriation" of the channels for action is more tiresome and more time-consuming and even more risky than the acquisition of professional competence. The explanation lies in the fact that the possibilities of acting are never influenced and shaped in a social vacuum and cannot be considered as a simple summary of individual actions, but a series of human and social interactions based on and presupposing collective knowledge. At the same time, exploiting the alternatives for action means mutual observance and acceptance of the "rules of the game" binding on the actors and influencing their manoeuvre (Makó, 1985: 108-109). In the different forms in which human and social relations are organized, in the different social "spaces", the regulatory mechanisms exert their effects by transmitting values, norms and models generated by the experiences which social actors have gained and anticipate for the future, thereby influencing the form and direction of actions (Reynaud, 1980). This is an ulterior reason why changes taking place in technological, organizational and managerial systems do not mechanically alter the way of thinking of those concerned (managers, workers, employees) and do not directly determine the forms of treating the conflicts and the degree of organizational integration. The effect of change occurring in the sets of conditions for human cooperation within the enterprise organization, such as technology or the organizational, management structure are transmitted by the experiences of workers' socialization, by the traditions of management. The problems of establishing cooperation in the process of production are obviously inseparable from the models used by partners, state, employers, employees, in industrial relations and from the general difficulties of changing the economic structure, and cannot be understood without them. Studying the mechanisms through which the system of industrial relations exerts its effects in enterprise organizations and labour processes without taking care of their changing patterns in time and space, amid different historical traditions and under different local conditions, can only take us to a broader determinism with the danger of generalization. A natural presentation of interactions between the different social spheres is therefore insufficient. In each particular case, research should also inquire into what economic and political goals and socially accepted values are enhanced, upheld or set back by the mutually reinforcing or weakening mechanisms of the differed regulators of social relations, which combine to encourage or to hinder, through cooperating, the use of certain channels for action in cooperation. The "scientific imagination" of sociolo-

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gists is required to identify, among the most diverse attitudes capable of grasping the social, economic and organizational advantages of various types of change, the social differences between the mutations that might conserve, save, develop or surpass the existing structures. Even more, one must discover how these mutations are links to transformations in other social and economic spheres, in order to correctly interpret whether they result in social stability or merely serve to perpetuate a status quo pregnant with constraint. In what follows we shall illustrate by some examples how this view of social heterogeneity and the regulatory mechanisms of society makes it understandable that individuals and the different groups of society are not "passive parties", but "real partners" in generating change. We shall try to illustrate the factors opening alternatives for autonomous actions for people living and acting under the conditioning but not determining effects of different structures, thus preserving and renewing, by their constant adaptation, social continuity.

Managing Adaptation and the Autonomy of Actors Next we shall outline ways through which the supportive, resisting, opposing or indifferent attitudes of the agents of social, economic and organizational change influence the results of collective action, namely how people living, moving and acting in different forms of social institutions like families, small communities, regions, enterprises and political organizations, bring about the networks through which they are capable of responding to challenges of different types. The most prominent network analysts, too, expect their methods and theory to move away from a static analysis of the sets of relationships to "a more methodological description of how such relationships develop and change. It is only by devoting greater attention to the problem of dynamism that social network analysis can fulfil its promises to be an efficient means of analyzing social life." (Granovetter, 1988: 60) The examples will illustrate our concept that the governability of social-organizational change cannot be imagined in terms of only one formation, however thoroughly analyzed it may be. This means that the scope for action by the agents of social change - those governing and governed may be limited in a given sphere, but may also be widened in time and space, by the diversity of society's regulatory mechanisms. The success of efforts at modernization and of reform endeavours is also largely dependent on the extent to which the activity of those managing

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and regulating changes can be brought into line with the self-regulating mechanisms of society, on the extent to which hidden sets of social relationships brought into action against this or that type of regulating intervention or, on the contrary, to intensify this or that type of intervention are recognized and separated from one another, and on what social forces can be expected to follow or to suppress which values. Here we refer, not to a schematic "process from below", but to the fact that those governing a society, its reformers and modernizers have the joint, if not shared, task to recognize the move of society, the forms of social movements and to open room for utilizing social resources embodied in human expertise, organizational experience and cooperation.

Search for Alternatives in Different Spaces In response to the requirements of increased competition in the industrialized countries since the mid-1970s, higher quality and more adaptive production, more economical use of materials and energy, more varied and flexible use of labour have risen to be new goals which the existing social mechanisms, though functioning relatively well, proved incapable of attaining. The reactions of capitalist countries in the sphere of economic policy, the changes in industrial structures and technological development projects in the second part of the decade, have testified not simply of economic or industrial adaptation, but also of the crisis, transformation and possibilities for renewal of the social mechanisms regulating social cooperation earlier. The search for alternatives is under way in different spheres of society. State economic policy is one such sphere of the social processes of adaptation. The economic crisis urged national States, governments and political institutions to evaluate their economic policy priorities. The social problems calling for and attending economic adaptation appeared in the political scene with elementary force. Both employers and employees tried to assert their interests in economic policy shifts through their representative and political organizations. It would be a mistake, however, to attribute the successful economic adaptation of the advanced capitalist countries to the retreat of trade unions under the pressure of market conditions, and to the strengthening position of employers or to believe that the economic policy shifts and their substantiation resulted solely from the struggles waged in the political sphere. The changes taking place in the highly industrialized countries, the appearance and rapid spread of new technologies, the phenomenon of productive decentralization, the revival of modern small plants and businesses, are rooted in the 1960s, sprouted from employer and employee

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strategies called forth by the n e e d for social renewal in that period, and were accomplished with incipient shifts in industrial relations, through n u m e r o u s contradictions and socio-political clashes, with social m o v e ments full of strains resulting in the loss and recovery of advantages under the e c o n o m i c pressure growing from the mid-1970s. T h e e c o n o m i c requirements of adaptation w e r e formulated during the crisis of the 1970s, but its social requirements had b e e n expressed already by the m o v e m e n t s of the late 1960s (Touraine, 1968). T h e alternatives of adaptation can only b e regarded as successful if they ensure not only recovery from the e c o n o m i c crisis, but, in the longer run, the renewal of the patterns of industrial production and the lasting and long-term possibilities of acting for e m p l o y e e s and e m p l o y e r s as well as their widening. It is in various directions, i.e. in favourably influencing state policies, in renewing productive, financing and marketing structures and in changing the sets of relations affecting the labour market (technology, organization, division of labour) that enterprise m a n a g e m e n t is s e e k i n g ways and m e a n s of flexible adaptation. 7 Technical-technological social and organizational

7

Until the mid-1970s, when the world economic crisis reached an international dimension, the flexibility of manpower utilisation had not been regarded as a priority issue by the social actors of industrial relations at different levels and types of bargaining. It is therefore not accidental that the notion of flexibility, referred to as a slogan in the present economic practice, is still unclarified. We should like to draw attention to the individual and structural dimensions of its study and interpretation. The former dimension refers to the ability, qualification and aptitude of manpower, while the latter means the complex of economic, social, political and cultural conditions assisting or impeding acquisition, utilization or mobility of the personal characteristics enumerated. Also, we wish to stress that flexibility in certain characteristics of manpower utilization (job mobility, performance of work on the basis of commitment and initiative) not only fits in but also presupposes the stability of other aspects of employment and manpower utilization (guarantees for employment, prospects for promotion, etc.; Bruno, 1986). The flexibility of manpower utilization and the security of employment are methods far from mutually exclusive; their combined application is clearly noticeable in the present-day practice of enterprise management. On this score, we agree with the statement that "... functional flexibility presupposes basic job security, but requires employees to be prepared to change job and occupation if necessary. In many countries, notably in Europe, obstacles to internal mobility are no less serious than those to external mobility. Rules governing functional changes, the absence of effective arrangements for re-training, and attitudes which are characterised by fear of change combine to bring about internal rigidities which prevent both technological and structural adjustment. The problem is above all European: in Japan, functional mobility in large firms is pronounced, and in the United States, to the

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innovations point in two directions. On the one hand, they renew mass production, the hitherto dominant production model in the highly industrialized countries, and make it capable of adaptation. On the other hand, with the strengthening of small plants and businesses, these marginal productive organizations formally in the background result in a new alternative model. The two directions appear interwoven in degrees varying by country and industry. The development or modernization of the existing mass production model through the introduction of high technologies is based on technological innovations, on various enterprise and work organization reforms experimented during the 1970s, and on increasing workers' responsibility and commitment to the enterprise through new norms of cooperation between employers and employees. In several industries from the motor to the garment industry, these efforts are also linked to global enterprise strategies 8 which ensure both the reduction of costs and the organizational and social flexibility of production by making use of the possibilities inherent in the international division of labour (Frobel/Heinrichs/Kreye, 1980). Whereas earlier, until the early 1970s, work organization reforms were aimed at softening up rigid automation, the high technologies spreading from the mid-1970s onwards have allowed scope for both technological and organizational flexibility.9 However, considering that micro-electron-

8

9

extent that is absent it is compensated by external mobility. In Europe, this may well be one of the two or three major issues" (Dahrendorf, 1986: 16). The so-called World Car model can be summarized in the following: the car is designed in few centres, but manufacturing is organized in newly industrialized developing countries. This model entails the liquidation of a considerable number of jobs in the traditional car-making centres, with a parallel concentration of unskilled jobs in countries like Spain, Mexico or Korea. The efforts of enterprise management in developing countries to gain control of the markets however hinders implementation of the outlined development strategy of the car industry, where Fordism was born, as an extremely competitive, international industry. These efforts set a limit, by raising the level of qualification of the workforce in the developing countries, to unlimited exportation of jobs requiring minimum skills. (Wood, S., 1988) The neo-Fordist or neo-Taylorist experiments of mass-producing large enterprises seeking flexibility and invariably keeping adaptation, technologically and/or bureaucratically, in the hands of enterprise management include: - flexible automation through application of microelectronics - computerized systems (CAD-CAM, CIM, CIMS) capable to assure changes of different parameters of the products in a minimum time, modifying overall processes from design to manufacturing. - organizational innovations which, in the case of more or less rigid technologies, try to meet special and rapidly changing market demands by management methods (varied forms of autonomous groups of workers - QC, TQC,

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ics and computerization laid the technological groundworks for productive processes flexible by themselves, the organizations built on a rigid division of labour were also able to become efficient by new standards (Maurice, 1986). Indeed, labour processes based on flexible technologies can also be integrated into hierarchical,'authoritarian large-enterprise structures as is illustrated by the FIAT of Italy, and at the same time, they have come to form the basis of flexible organizations and systems of autonomous work units such as "satellite" enterprises or networks of small businesses (Simonyi, 1987). In our days, however, we can also witness, in a wider area than the leading branches of solid capital, the emergence of a production model differing from what is allowed by the technological-organizational renewal in mass-production within the large-enterprise organizations. Under a worsening set of economic conditions, the adaptation of large enterprises excludes some segments of labour from mass-production, other groups reject the prospects opened by change, yet others rely on their experience for improving their positions. The different segments, guided as they are by various motives, find work, means of living and perspective in previously hidden forms of production. Models of production like small plants and small businesses, which had been consigned to oblivion by massproduction, became widely "reusable" under the altered conditions of the economic crisis and in a different technical-technological environment. With the reform of the existing organizations of mass-production in the big firms, the partly spontaneous, partly state-supported revival of the system of small enterprises, which for a long time had been regarded as outmoded, contributed - in degrees varying by country, to the stabilization of the economic situation and the success of adaptation in all advanced capitalist countries. This alternative in industry is also encouraged by technical progress based on micro-electronics and by the technical possibility for efficient production in small series independent of the size of enterprises. Given the change in workers' demands and the need for larger autonomy and more complex work tasks, industrial development has also accumulated considerable professional and practical knowledge as well as organizational and social experience in the affirmation of interests in some segments of workers. All this combined not only to create conditions for innovative economic adaptation in the sphere of small plants, but also to renew the human and social relations of production.

etc. - developed to increase workers' autonomy based on individual and collective participation).

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Rediscovering Localism as a Special Regulatory Mechanisms: T h e Case of Central Italy In some analyses, it is regarded as almost automatic how mass-production in the large enterprises has regained its lost flexibility by decentralizing and avoiding trade union pressure, "organizational structures ... which, once evolved, will be able to secure enterprise flexibility" (Dallago, 1988). However, neither the revival of autonomous, independent small enterprises producing for the market nor the network of small enterprises established by large companies or producing on their orders can be considered simply as automatic responses to changes in the world market of the 1970s, nor can they be produced by a single administrative act, as is shown by, among others, the existing results of Soviet measures (Gorbachev, 1987). The development of the sphere of small enterprises from China to Japan and from Italy to the United States has its roots in longer social and political processes and has also needed specific social conditions and lasting and manifold political support everywhere. The "industrial districts" of Middle Italy may be cited as good examples to study the model of industrial production differing from that of large enterprises not only in terms of work organization and enterprise structure, but also in the pattern of social relations. The term "industrial districts" as used here is not identical with that of industrial regions showing a concentration of large industrial enterprises and revealing dissimilarities rather than similarities to industrial regions like the Ruhr region, Manchester and environs, or Milan and environs. It is more like the classical concept which Charles Sabel recalls in these words: "Until the middle of the 19th century, a region was the self-evident centre of economic activities and analyses. Sheffield and Solingen were noted for their knifes, Lyon for its silk, Birmingham and St. Etienne for their firearms. ... For consumers, a product was denoted by its 'origin', its place of production, rather than by the enterprise" (Sabel, 1987: 7).

Here are a few Mid-Italian examples in illustration of their revival in the 20th century: half the quantity of carded textiles produced in the Common Market is made by a total workforce of 50,000, in textile workshops with a staff of 5 on average, in and" around the city of Prato in the Province of Toscana. A firm in the Province of Emilia turns out 5,000 motorcycles a year from a workshop employing as little as 100 workers and subcontracting with dozens of smaller workshops. The plants of Reggio Emilia manufacturing fruit-collecting machines employ over 10,000 workers, but the number of workers exceeds 500 in only two firms. The Benetton firm in the Province of Veneto owes its worldwide reputation to its own staff of 1,200 to 1,300 workers while incorporating, through a network of home-

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workers and subcontractors, the labour of the region's 10,000 to 12,000 people into its products. In those regions, where a small town or a chain of them specializes itself in one or two products or one or two industrial branches, the local economy is capable of growth by simply using the method of following or copying others. To be launched, an undertaking requires a small amount of capital input, because know-how is familiar to local people. Growth results not from the swelling of a firm, but from outward expansion, from an increase in the number of production units, a special means of reaching an optimal size of series. Accordingly, in larger enterprises organizing the production cycle and turning out the finished products, production takes place in complex, labour-saving systems of smaller enterprises producing with modern machinery (NC lathes or laser-based sewing machines), with a simpler administrative apparatus, which allows for the integration of local labour in the most diverse forms of employment. There are two historical peculiarities that help us understand this type of Mid-Italian development: first, the centuries-old urbanization, which acted to spread industrial, commercial, financial and cultural traditions to wider regions, and, second, the spread of autonomous forms of agricultural production, i.e. métayage and small plants that evolved within it. The basic unit of the agrarian small plant of the métayage type was the family, which was, for the most part, "large enough to form an organization capable to control its own life and autonomous enough to experiment with innovative and organizational abilities; it lasted long enough to see the changing conditions of general development, thus releasing labour for the labour market and compensating its members switching to industrial trades for the initially low and irregular earnings" (Bagnasco, 1987: 41). Within this system, the head of the family has been in charge of rationally distributing time, energies and the activities of family members while minimizing losses and risks. During the 1960s and the 1970s, the families with a more differentiated pattern of internal relationships, in which one member was perhaps still engaged mostly in agriculture, but together with the younger ones with their already acquired secondary or higher schools, were able not only to provide a state background for their members or to compensate them for the eventually irregular earnings, but to function at a higher level as independent entrepreneurial units. These families were able to pool human and material resources in such a way as to create the financial and organizational basis of independent small undertakings. 10 10

The possibility of tax evasion, allowing increases in income available for consumption, naturally formed part, but was not the only motive, of this effort (Dallago, 1988). A s against redistribution of incomes uncontrollable by politi-

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Another factor along with the existence of needs, traditions, infrastructural and social conditions relating to work and its organization, a factor decisive for the survival and then responsible for the growing momentum of small undertakings in Central Italy, was that the Italian national market was not rebuilt through the standardization of the various local needs; subsisting with mass-production, expanding capacities remained to supply a variety of traditional internal needs and to meet the differentiated demands of foreign markets. This is well illustrated by the light industry, the constructing materials industry or the manufacturing of vehicles in Italy (Piore/Sabel, 1984; Simonyi, 1987). All this had its effects on the coexistence of enterprises differing by size and organizations. When the vertically integrated large organizations, producing series of uniform products, came to be incompetitive, entrepreneurs, middlemen, merchants and workers gradually switched to production based on a technological optimization and decentralization of the different phases of production. The new units neither followed previous models of production nor imitated their parent companies, but became specialized in some phases of production or its services. This arrangement resulted in efficiency gains for new firms and saved costs for existing ones. Hundreds and thousands of small and medium-sized companies in Central Italy, occasionally linked to their "parent companies", apparently did the impossible: turned out mass products, yet diversified from time to time for large oligopolistic markets. All this is a network of intermediators and merchants reaching all producers and keeping them as well as collaborators and buyers fully informed of demands, requirements, capacities and possibilities alike. It was that network which was capable of canalizing the products of decentralized, dispersed productive networks towards the national and international markets and of ensuring optimal series of production in the given unit (town or district). The emergence in this way of industrial zones would naturally have been inconceivable without the rapid development of transport, roads and vehicles as well as communication facilities. As against this type of industrialization, frequent references are made to the vulnerability of the system of small businesses, the lack of a stable big industry, the preponderance of traditional industrial branches, and the exploitation through "blackwork". This reasoning is mistaken when it does not consider an "industrial zone" as a "territorial system of enterprises", as an integral unity. The term "territorial system" refers to the characteristic of the network of small firms in a given zone, capable of cai means, it left room for retaining resources for local employment and development, but local societies kept their influence on them, even though by other than formalized means.

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surviving and developing regardless of possible uncertainties about its component elements. Security means not only the survival of an industrial branch, but also the fact that the eventual failure of one or another enterprise does not leave either the entrepreneur or his employees without means of subsistence, because they can find jobs appropriate to their practice and qualification at other units in the zone (Sabel, 1987; Ekstedt/Henning, 1988). The social relations of Italian regions following this line of development are usually described as having a low degree of polarization, which is understood to mean partly the lack of classical proletarian masses in the big industry, partly less sharp dividing lines and a high-level mobility between segments. "There is no sharp difference in attitudes between workers and employers, family ties are frequent, and careers are open both ways, with the attitude towards work acquired in craftsmanship and in family arming encouraging people to seek cooperation" (Fua/Zacchia, 1983: 18) Cutting through the not too marked class-structure, the catholic and socialist movements which had developed in these regions since the end of the last century embraced wider community dimensions. In the phraseology of network analysis we might say that the different social segments and groups in these regions of Central Italy are bound together by numerous "weak ties", which make it possible to maintain and exploit close local community and family relations in such a way that these communities are not isolated from other social groups nor cut off from their informations, ideas and innovations. "Small groups active in spreading culture are not so coherent as to be completely closed, but rather they are penetrated with ideas of other groups through weak ties" (Granovetter, 1988: 50). Thus the close social bonds and the "weak ties" of overlapping networks were together capable of stabilizing and renewing the societies and economies of these regions. Since the beginning of capitalist development, the "subcultures" of Central Italy have served to protect local societies partly from the market, partly from the central government or the State by trying to restrict social disintegration and emigration and to influence local relations ensuring industrialization without sharper conflicts and without compelling inhabitants to move to other regions (Ascoli/Catanzaro, 1987; Trigilia, 1986). A common political feature of the Italian regions where small businesses are preponderant is the fact that, by the force of specific political traditions, local affairs have been firmly controlled by the same forces for decades, namely by the Christian Democrats in the North-East and by the Communist Party allied with the socialists in Central Italy. Thus, governments which, unlike other regions of Italy, are not exposed to unstable coalitions often incapable of decision or implementing long-term concepts,

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facilitated, by both economic and political means, the so called "diffuse" industrialization based on the networks of artisans and small businesses, providing infrastructural facilities and thereby securing properly supplied regions for entrepreneurs, supporting vocational training, and helping to establish consortiums, cooperatives and other forms of cooperation for the marketing of local product and the strengthening of local cooperation. Industrial representation of interests bears the characteristics of the specific social relations in these regions as well. The ratio of unionized workers in these provinces is the same as the national average, which did not exceed 40 percent of those employed even in the most successful years of trade union struggles and is about 30 percent at present. Understandably, it is not an aim of trade union activism to weaken local political relations, and local political direction is also strongly committed to early settlement of industrial conflicts to the advantage of both entrepreneurs and their employees. Social and political pragmatism calls into life widely different forms of production and representation of interests. Women homeworkers, for instance, have formed several homework co-operatives to control earnings and time and to get rid of middlemen. Coordination of local interests owed its efficiency among others to the fact that most artisans and small entrepreneurs were also members of local chambers, so the local leadership did not have to intervene in individual cases, but could negotiate with committees of entrepreneurs. In order to win recognition and to have their material demands and their demands for classification in wage categories accepted, the trade unions agreed in most cases to ease restrictions on manpower utilization. At the same time, the local political organs often intervened with banks or government authorities to save bankrupt firms. At the pole opposite to the network of small enterprises enjoying trade union "protection" are to be found the very small firms and artisan workshops, mainly with staffs of 3 to 10, which were called into being and are maintained by large enterprise efforts at decentralisation. There the trade unions are not present and "there the industrial sector is able to redeem part of the costs incurred by trade union presence" (Trigilia, 1987: 230). At the same time, however, the family background and community constraints are able to lessen disadvantages in earnings and to reduce the irregularity of employment for people employed there. In this sector, mostly wives and children of organized workers employed at industrial enterprises are engaged. Thus, while the independent sphere of small enterprises gives rise to a specific type of local corporatism, the small firms and their employees dependent on large enterprises remain outside that sphere. Nevertheless, in view of local community and family relations as well as of channels for employment and mobility, this latter sphere cannot be interpreted in itself either, but in the context of local society as a whole,

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as a form reflecting specific workers' channels for the utilization and reproduction of human resources. This path of economic development and adaptation has, with its own set of social conditions, called attention to the fact that, under the impact of the market's regulatory mechanisms and under the influence of state or managerial intervention, beside the rational interest of large enterprises, the world of small market, the State and the large enterprises, but follows a separate path of development in shaping individual and collective behaviours and "assimilating" community, market, state and political effect. Regulation of social and cooperative relationships based on reciprocal services can be observed in family or small community relations. Such regulations in turn, along with the regulatory mechanism of the market and state intervention, exercises an influence of its own and, in combination with the other two and mutually conditioning one another, provides a background and a perspective of action for the individual and collective actors of the economy, with advantages to technological and organizational development, economic adaptation and social reproduction. Within smaller communities, "local societies", the regulatory mechanism based on reciprocity is a specificity capable of appearing even in the political relations of local or regional direction, providing some scope for autonomy independent of national or state politics. Relying on this and assisted by local resources the local or regional direction is capable of becoming autonomous and taking charge of dealing independently with the economic and social problems of its own district. The pressure for cooperation is direct at the local level and stronger than in nationwide party politics and in the state economic policy articulated through several transmissions and a more complicated institutional system. The characteristics of regionalism, regional social, economic, local and family traditions, give specific social substance even to market relations, to the norms, goals and tools of management, to the relationship of employers, entrepreneurs and workers, and to the functioning of the institutions of industrial relations. At the same time, the described model of Italian industrialization, based on a network of small enterprises and called diffuse, undoubtedly affected Italian industrial relations in their entirety, though not immediately and directly, not to weaken workers' organization in the big industry- and the efficiency of representation of their interests, but rather by easing, through its growing vitality, the economic and social strains of Italy and considerably separating their treatment from an uncertain national consensus between trade unions and large enterprises. This model of production made it easier for the government and large enterprise management as well as for considerable segments of workers to find an intermediate arrangement between the coordination of interests at the national level,

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rather costly in social and economic terms, and the maintenance of social and economic strains threatening with consequences that were increasingly difficult to control from the mid-1970s onwards. In the sphere of Central Italy's small enterprises neither employers nor trade unions were opposed to the coordinating of interests at national level and, whenever their interests so required, they even tried to replace local agreements by adjustments to central ones. In general, central agreements honouring social needs, demands for pay rise, and assignments to wage categories resulted in benefits to local trade unions. The situation changed somewhat from 1978, when, during the period of the policy of national solidarity proclaimed by the Left in the interest of combating terrorism and the economic crisis, the trade union centres called on workers to moderate their wage demands. Afterwards, central agreements provided protection for, e.g., entrepreneurs against local trade union demands which were out of line with, and even in excess of, the norms adopted by their own top organs. Nevertheless, the existence of the small enterprise sphere, its mode of operation and described set of industrial relations were not inconsistent with efforts at renewing central bargaining. With its specific relations of cooperation and local regulatory mechanisms, the small enterprise sphere served to offset the economic and social disadvantages of inefficient and unstable agreements resulting from bargaining n , while calling the attention of both researchers and national, political leaders to the ability of society to mobilize, in giving responses of social adaptation to crises, such resources and cooperative mechanisms that cannot be substituted for either by means of state intervention or by "market coordination". So what the state direction has to do is not only to redefine its role in respect to the market, but also to recognize and encourage political, economic and social innovative capacities inherent in local conditions.

11 At the same time, the system, institutions and regulatory mechanisms of national bargaining failed to be renewed in the longer run. The consequence is already visible: a reduction in employment in large enterprises that is increasingly difficult for the sphere of small enterprises to counterbalance. Moreover, even small enterprises would need support, exceeding by far the resources of local management, to ensure infrastructural, training, financial and other conditions for continued modernization. Therefore, Italian sociologists argue in favour of social and political reforms which, on the one hand, would allow the basic issues of the economy to be successfully influenced and the social and regional inequalities lessened by the means of a national policy while on the other hand the reforms could rely on political and economic innovative capacities inherent in local conditions (Butera, 1984; Reyneri, 1987; Bruno, 1986).

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T h e Process of Collective Learning in the H u n g a r i a n Enterprises: T h e Social Message of "Inside Contracting G r o u p s " During the past two decades Hungarian enterprises have exerted wideranging efforts at adaptation affecting smaller or larger masses of employees as regards the organizational set-up and managerial methods. The relevant initiatives came in part from central economic management organs, in part from enterprise management. Moreover, research conducted at enterprises found that several innovations, officially unproclaimed but tolerated, had been introduced in work organizations. Looking as far back as the early 1960s, we can refer to various initiatives by economic management concerning drives for centralization and decentralization, encouragement of emulation and brigade movements, development of bargaining institutions, and measures to create wider possibilities for workers' participation in enterprise management (Voszka, 1988; Bogdán, 1981; Dózsa, 1971; Héthy, 1983; Bossányi/Nyikos, 1987). On the waves of these central measures but often independently of them, some enterprises set in motion processes of renewing structures of management and direction, several enterprises experimenting with, e.g., refining incentive systems, adopting techniques of organizing work and plants as applied in the highly industrialized countries, and introducing structures of wider workers' autonomy with a view to increasing workers' motivation (Horváth, 1975; Héthy/Makó, 1972; Nagy/Simonyi, 1982; Berki/Makó, 1988). Parallel to these processes started by central and enterprise management, often in objection to or in support of them, various professional and occupational groups have themselves evolved specific forms of cooperation within the enterprises. We refer to the widespread practice of wage distribution replacing the official incentive system and based on independent decisions of team members, or to arrangements for the organization of work to eliminate the malfunctions of the official organization. Such spontaneous initiatives by workers have often led to technical-technological innovations, but have also demonstrated that some groups or segments of employees have a notable social ability to organize their interests or to influence decision-making (Laki, 1984-85; Farkas, 1983; Burawoy/Lukács, 1980; Makó/Simonyi, 1985). As can be seen, the past period of two decades, characterized by swings in the economic reform (Társadalmi Szemle, 1989), has witnessed diverse processes in the world of labour thus immensely enriching the individual and collective (technical-professional and social-organizational) experiences of their participants. After this sketchy outline of change induced by different motivations, we shall try to present a process typical of the 1980s

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in order to illustrate the degree of autonomy that can be gained by collective action in the labour process. Initiated by the central economic organs and forming part of a package of programmes for small undertakings from the early 1980s on, the changes that took place in the Hungarian system of enterprise management have offered lessons which must be reappraised and turned to good account in an effort to improve society's self-knowledge and guidance. The greatest interest and dispute were aroused by "inside contracting groups" (hereinafter referred to as VGMKs, the Hungarian acronym), as one of the forms of undertakings authorized in 1982. It was for the first time in the history of four decades of Hungarian industrial practice that we could be witness to an organizational innovation, relatively well documented by empirical research, which was supported and moulded by nearly 200,000 employees and met with relative little opposition. In the mid-1980s, "... 11.5 percent of the full-timers in industry participated in VGMKs, but this ratio varies widely by sub-sector" (Neumann, 1987: 5). That initiative, mobilizing so large masses and relying increasingly on workers independent organizations, can perhaps be compared to the scale of ace-workers emulation or the socialist brigade movement (Kresalek, 1988: 206). The "insider labour contracts" destined for overwork and relying on a greater autonomy of the participants in the organization of production and on increased inducements for their performance as compared with earnings on full-time jobs, are stated in most reports to have been a unilateral initiative of enterprise management for the integration of workforce: "a large part of the enterprises have switched to a purposive manpower management granting privileges for participation in VGMKs, to better qualified workers with a longer period of service in the enterprise and capable of better adjustment to local power apparatuses..." (Csillag, 1988: 52). This quotation is an adequate expression of the fact that enterprise management was willing to widen the scope of action for segments of workers playing a determinant role in the maintenance of its power 12. In enterprise practice, such endeavours were induced not simply by a "willingness" for opening but by the pressing necessity for securing the order of the labour process, for organizing production. 12 What we have here is far from a new method of manpower utilization characteristic of enterprise management practice in our days (Friedman, 1977; Naville, 1971). The special positions enjoyed by some groups of employees in comparison with managers and other segments of workers allow for the former a relatively wide scope of independent action and initiative. All this might be, if not aimed at, impeding united action of the workers and dividing their ranks (Dubois, 1988).

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The considerable difference between groups of workers in terms of their position in production and local labour markets is well illustrated by glaring inequalities in admission to VGMKs. The possibilities to live with the different channels for action objectively present in the labour process could be largely facilitated by living in the same residential district or community as well as by belonging to the same ethnic and cultural affiliation (Héthy/Makó, 1978). Qualified workers had several times greater chances than unskilled ones to join a VGMK. In like manner, workers in the capital had considerably greater chances than those in a remote county, for instance (Berki, 1984). In early 1986 "... more than half of VGMK members were skilled workers, 18 percent were semi-skilled, and 2 percent were unskilled" (Neumann, 1978: 14). Inequalities in admission to VGMKs can also naturally be observed in other important dimensions like length of service, sex, nature of jobs. Autonomous action by groups of workers capable of collective action was appreciated or tolerated by enterprise management in Hungary, which used varied means of securing overwork, premia for special achievements and extra earning during the 1960s and the 1970s and could, in return, count upon support from different segments and groups of workers. Some groups of workers exercising nearly "self-managing" functions in the labour process played an almost irreplaceable role in the short term by performing even some functions of management and direction. To maintain the continuity of production, workers and particularly those belonging to the centre had to contribute a disproportionately large share to the organisation of the productive processes. What is involved is naturally more than the unclear situation and functions of the enterprise techno-structure. It is a general feature of the Hungarian economic environment that "... enterprises, helpless as buyers, must apply special forms of adaptation even to ensure the manufacturing of their accustomed products by processes far from being continuous and regularly departing from production plans or programmes. Given the known difficulties in materials supply, slackness in delivery and cooperation, quality problems, labour shortage and long deadlines for procurement of machinery, unprotected buyers try to improve their situation, to overcome their difficulties by a variety of means." (Laki, 1984-85: 46). These specific solutions, the so-called "enforced innovation" and "enforced autonomy" play a disproportionately large part in maintaining the continuity of production and thus upgrade the role of workshopspecific abilities and skills, technical-technological as well as cooperative. 13 13 This is corroborated by research findings on the selective mechanisms of the economic management: "The chances of someone getting elected manager are

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Enterprise top management which failed to think in terms of making use of the "tacit knowledge" of the workforce and which underestimated the significance of human resources has regarded VGMKs as a means of promoting the fulfilment of targets (surplus production, export plans, etc.) and as global indicators of enterprise activity. The extra performance under "internal labour contracts" for overwork and the excellent quality of work done on schedule were explained very often by changes in planning and accounting techniques and by motivation for notable extra income payable from the productive cost funds. Consequently the "only" problem facing management concerned ways and means of easing social strains arising from the relationship between participants in VGMKs and workers remaining outside them. On the other hand, enterprise top management was less aware of changes occurring under the impact of VGMKs in the existing structures of management and direction. With the introduction of VGMKs, "... management got rid of almost all human problems of directing production, particularly of performing functions, psychologically and socially the 'costliest', like the organization of work and the maintaining discipline at the workplace" (Makó, 1985: 62). Managers saw their workloads reduced even in quantitative terms, for VGMKs turned out products at less cost, in higher quality, and with more reliable planning than external cooperating partners did. Thus, plant and workshop managers daily facing technical and human difficulties in production became interested in the operation of VGMKs in the hope of, and with a view to, actually reducing these problems. Owing to the decisive influence gained in determining tasks and concluding inside contracts, the existence of VGMKs gave even the major tool of inducement into the hands of lower and middle-level managers. As a result, there was a reduction in the burdens imposed on them by the need to finance from their own resources "workers' expected wages" under conditions of strict wage regulations and the bureaucratic system of determined not so much by professional performance but rather by aptitude, tactical sense, ability of self-management, and criteria of loyalty" (Lengyel, 1984). Managers working at different levels and in different areas refrain from introducing radical change involving sharp conflicts. Efforts at "security" play a decisive role among the values of managerial action. Such a system of management and direction is characterized by "residual" change supplementing, correcting and "doubling" rather than questioning the organizational status quo. Taking this in consideration the introduction and functioning of internal subcontracting groups proved to be an ideal arrangement as they did not compel enterprise top management to take radical steps, to revamp the prevailing official structures. Instead "organizational reserves" were integrated into existing systems of management that served to put off radical change, but made it possible to secure flexibility indispensable in manpower utilization.

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motivation, while VGMKs themselves played a part in regulating wage rates within and among VGMKs and having them accepted by members. The delegation of such important responsibilities in respect of stimulation, contingent as they were on compliance with contracts and acceptance of tasks on the "line of production", strengthened the position of production managers even in comparison with those of the functional sections of enterprise management. This rearrangement served to reinforce coalitions of interest between production managers and workers. The inside labour contracts for overwork might even be said to be "collective products" of groups of workers occupying a central position in the labour process and of cooperation between the workshop and plant management. 14 Of course, the activity, composition and autonomy of VGMKs were rather varied as they emerged in work organizations, with strong differences in levels of technology and organization in the most diverse branches of industry. Thus there were marked, though varying, differences between the functioning of inside contracting groups formed for doing overwork and the logic of full-time work organizations. As contrasted with the practice characteristic of the latter, VGMK members select one another on the basis of actual abilities and aptitudes as well as of human qualities appreciated in smaller communities. It is often they who take care of ensuring coordination with the planning of production and other aspects of preparations therefore. This means that in the VGMK practice of manpower utilization, patterns of behaviour and methods of cooperation which were not usually applied on full-time jobs, except in temporary and extraordinary situations, came into general use. To build, operate, and explore a set of relations, differing from the clearly defined hierarchical organizational structure of full-time employment based on maximum specialization of individual jobs, required considerable efforts on the part of VGMK members, a large part of whom acquired in turn an "organizational aptitude" (culture), a logistical knowledge concerning the organization of production. That enabled them to compare, evaluate and criticize different models of the division of labour and human cooperation, namely those prevailing on full-time jobs. It was widely recognized, for example, that clear boundaries between certain 14 It is not only for economic considerations that lower- and middle-level management and the workshops' supervision find it essential to win the cooperation of the workforce important to ensure the smoothness of the labour process. As a supervisor put it on this score, "... we need qualified labour. Even if the homeworkers' cooperative is cheaper ..., the social aspect should also be taken into account in the case of VGMKs: workers are accustomed to have extra income" (Neumann, 1989).

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sectors of production (manufacture, internal material transport and handling, quality control, maintenance, programming) were only of administrative relevance and did not exist in reality. VGMK members organized their activities within organizational networks, integrating both horizontal and hierarchical relations different from those of the formal-hierarchical management system and within the frameworks of amorphous relationships of mutual dependence. However, the operation of inside contracting groups, though governed by the principle of maximum trust, based on thinking in terms of the "entire" production process, professional skill, mutual allowance for one anothers' interests and aspirations, mutual tolerance of chances for action and thereby on stable rules of the game, is far from free of internal contradictions and strains. The source of disagreements and differences of view was constituted primarily by assessment, qualification and treatment, before the publicity of the workshop and the plant, of attitudes manifesting themselves in questions of performance and income. The professional-technical and social-managerial aptitudes of those collaborating in VGMKs - considering that they have been socialized in the diverse types of work and management cultures - have developed unevenly. In setting up inside contracting groups, the participants have selected with comparative ease their colleagues with appropriate professional competence and records of high performance, but the ability to "deal with" human relations has come to light with greater difficulty in the process of selection. The "visibility" of such aptitudes is made difficult by patterns of division of labour and socialization typical of full-time jobs. The so-called articulated type of cooperation in general use made it mostly superfluous for workers to help one another and to assume responsibility for their colleagues. The methods of wage determination and the prescriptions of performance requirements down to individual jobs made it difficult to recognize one another's aspirations and needs. Performances exceeding the scope of individual jobs and collective actions are needed only in critical situations, and the ability to have them recognized was possessed only by segments of workers with exceptionally strong positions in the labour process. Thus collective autonomy became gradually legitimized, and the easening of direct dependence on the official managerial hierarchy threw into sharper relief the participants' ability to build and control human relations. The collapse of several VGMKs, otherwise consisting of highly qualified members, can be explained by the unequal development of the participants' social knowledge or, put another way, organizational culture.

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There developed an instructive dispute between David Stark and László Neumann about the interpretation of the experiences concerning the operation of VGMKs and about the assessment of their social consequences. The American sociologist Stark looks on the formation and operation of VGMKs as a managerial initiative for reducing uncertainties arising from the bureaucratic environment by leaving the allocation of and inducements for the workforce to internal mechanisms basically governed by market principles: "... in economies in which the firm operates in a market environment, systematic uncertainties regarding labour are reduced through internal bureaucratic rules. In the socialist economy, by contrast, where systematic uncertainties are produced by bureaucratic environment, the firm responds through internal market transactions. The use of internal market transactions to reduce the effects of systematic uncertainties in the socialist firm is brought into sharper relief in a recent organizational innovation in Hungary - the formation of semi-autonomous subcontracting units inside the enterprise." (Stark, 1986: 493).

According to Neumann, however, the functioning of VGMKs cannot be understood as a mere phenomenon of the enterprise's internal labour market. On the basis of his research he pointed out that enterprise wage bargaining was governed by what he called coordinative mechanisms, as regards both the attitude of VGMK members and the actions of representatives at different levels of management, which "suppressed the classical price-regulating effects of the market". (Neumann, 1988: 65) His findings are noteworthy for the very reason that he conducted his inquiry in a large enterprise where VGMKs had actually to compete for their jobs, and they agreed with the enterprise after internal "tenders". However, the monopoly positions, based on organisational relations, practice, special local knowledge and expertise, set a limit to competition "on the market" in the same way as the "cartels" of VGMKs did, in which action against knocking down prices was seen as a collective interest of all the inside contracting groups connected by everyday work and possessing common systems of norms and values. At the same time, the mechanism of submitting bids was devised by enterprise management "under the resource-allocating practice accustomed in a hierarchical organization". "Each works manager wanted to submit for bids as many jobs as possible in his own area, because the additional resources of VGMKs facilitated the performance of his tasks and allowed him to offer extra income to his workers . . . . In reality, biddings resulted from cooperation between managers and some VGMK representatives ... ." (op. cit.: 69). As can be seen, a special situation in the market of VGMKs subjected to competition is brought about, not only by monopoly positions or cartel agreements, but also by coalitions of sellers (announcers of jobs) and

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buyers (VGMK contractors). In Neumann's statement, what can be formally disclosed are market features, bargains, accords, prices, but it is "precisely the regulatory, coordinative function of the market that cannot be observed" (op. cit.: 70). Demand and price reflect in the first place the balance of forces between partners, which is influenced by wage payment possibilities in full-time employment and the effect of the local labour market, just as by changes in the social and political environment. Consequently the use of market categories in enterprise wage bargaining has a special meaning, implying that through direct or indirect bargaining the participants come to agreement in accordance with the balance of forces. This concept can be correctly interpreted if "contrasted with the earlier concept of industrial relations", because it accepts bargaining as justified and "does not qualify as blackmail the behaviours of workers enforcing pay rises by reliance on bargaining positions" (op. cit.: 71). Nevertheless, the nature of VGMK bargaining, differing from the market's in the original, economic sense of the term, does not mean that the functioning of the internal contracting groups is characterised by the forms of bureaucratic coordination shown by Kornai as an alternative to market regulation. Even infraction or evasion from a considerable part of enterprise regulations (e.g. restrictions on earnings or manager's incompatibility) became subject of bargaining. From the absence of the market's regulatory functions and the practice of regular infractions of bureaucratic rules, we might deduce some sort of disorderliness of relations between enterprise and inside contracting groups. Prices, or member's incomes, are completely uncoordinated. VGMK incomes appear unregulated even to state economic management: payments to VGMKs open a channel for wage outflow evading actual wage regulations. Still, the case of VGMKs in competition shows that "manipulations" by managers and reactions of inside contracting groups form a more or less effective set of rules (op. cit: 72-73). Neumann thus comes to the conclusion that in the enterprise organization and the VGMKs' operation there is a mechanism which, "functioning horizontally", is "capable of regulating the allocation of jobs and earnable incomes". He considers that this regulatory mechanism is more dominant than the limited effects of the market or the bureaucratic prescriptions and calls it "compensatory"; similar is such regulatory systems as Manchin/Szelényi's institution of family self-help schemes which, enclaved between the roles of the State and the market in sharping housing conditions, "cushions" their effects (op. cit: 74, and Manchin/Szelényi, 1988). Neumann nevertheless mentions the term "deal" or "transaction" already used in the early 1970s to characterize relations between or among interest groups within the enterprise (op. cit: 77, and Héthy/Makó, 1972),

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terms which, based on and reproducing reciprocity, serve to integrate micro-units of the enterprise. The varied experience offered by the emergence and operation of VGMKs reinforces conclusions, drawn from other analyses, that segments of workers with high qualifications and organizational-social experience have a significant collective ability to affirm their interests at their work places, exerting their influence in a coalition of interests with the lower and middle levels of management. All this was signaled by previous analyses tracing the fate of some initiatives concerning work organization, technological development projects and incentive systems. The experience of VGMKs - given their spread and the large mass of people participating in them (nearly 200,000 employees in the mid-1980s!) - is of greater significance than was shown by earlier sociological case-studies, because inside contracting groups are of general relevance to understanding the nature of social change. Their experience demonstrates that considerable masses of workers are able to legitimize, in the longer run, their demands for higher pay, professional skills and practice, local knowledge and cooperative relations within the framework of VGMKs, despite the rigid hierarchical and bureaucratic organizations and central wage regulations. The same possibilities however though yielding different incomes, left different segments of workers, including unskilled and semi-skilled as well as organizationally and/or socially marginalized ones, with a new option, allowed them a scope of action, gave them a chance of earning extra income and last but not least, an opportunity of social learning. The incomes of workers in large enterprises came closer to the income level in the second economy. There are two trends that can be observed to be at work simultaneously in this process: VGMK incomes increased income differentials on full-time jobs, while opening a perspective, for several groups or segments of enterprise workers at a disadvantage, to earn more (Neumann, 1987: 34). The VGMKs allowed higher-income groups to earn even more and certain marginal groups to earn extra income. Thus, to eliminate shortfalls on performance which had been accumulating over the past decades, enterprise management not only entered into separate deals with some central segments of workers, but also had to mobilize the unutilized or underutilized performance capacities of marginal groups, so the continuously swelling of the ranks of well-paid enterprise workers and improvements in the situation of lower-income groups were mutually intertwining processes, one presupposing the other, even though they entailed increased differentiation. After seven years of experience gained from these inside contracting groups, we should like to draw some important conclusions of relevance to

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understanding and shaping the learning ability and adaptability of Hungarian society. First, cooperation is generated not only by hierarchical/bureaucratic or market mechanism, but also by social relations which open channels for action on the basis of mutuality/reciprocity.'5 Second, all society has grown aware that the participants in the labour process are mutually dependent, with none of the partners possessing all the competence and resources required for success in bringing about change. This means that initiatives for change do not come from representatives of enterprise management and/or of central governing organs alone. Different groups of those directed have notable though unequal degrees of autonomy, that is perceivable only in the long term, in moulding and influencing social relations in the labour process. Third, the existence and operation of VGMKs amounts to a most obvious criticism of the work of considerable groups in enterprise management. With their records of performance, these groups have questioned the raison d'être of certain functions and structures of management and have, even if transitorily, reinforced the social legitimacy of certain other managerial jobs which had been "downgraded" for decades. Fourth, the experience of the internal contracting groups, with regard to the incentives, has impelled not only enterprise management, but also the government bodies concerned with wage and income regulation, to adopt innovative measures. Finally, negotiations between representatives of these inside contracting groups and enterprise management about performance and wages brought into sharper focus the low efficiency of trade union representation of interests. The pragmatic duality in the practice of manpower utilization has 15 Even in extreme situations human cooperation is able to open room to survive and to act. This is perfectly illustrated in Solzhenitsin's classical short story. A "Day of Ivan Denisovich", from which we quote the following passage: "'... the brigadier says to Pavlo in a low voice: 'You stay here, but crack on it! Meanwhile I am going to squeeze the percentage out of them.' Much depends on percentages, much more than on the work itself. If a brigadier has brains, he goes the percentage tooth and nail. Food supply depends on it. Prove that you have done what you haven't; where the norm is high, try to knock it down, but to do so the brigadier must have a lot of finesse. And be in cahoot with the task-setter. His palm must be oiled, too. All things considered, who needs those percentages after all? The camp does. This is the only way the camp can pocket from the construction works thousands of superflous roubles, to give bonuses to its own men. To the kind of Volkovoy with the whip. And you can get 200 grams more of bread for supper. And these 200 grams may well mean life!" (Solzhenitsin, 1989: 58-59).

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raised strong doubts about the goals of the working-class policy as officially represented by political organs official ideology. Mistrust in the guidance of society, however, is not necessarily destructive or destabilizing, for social change is inconceivable without a certain measure of mistrust, manifestation of doubts being the first step towards increased control over the institutions governing society and a renewal of representative organs. Still, collective actions performed by V G M K s not only "challenged" the existing structures of management and direction, but also enriched the process of social learning, signaling possibilities of building trust after having proved a success in the participants' pursuit of their aspirations. 16 With the emergence and spread of V G M K s , the models of interest coordination and agreements emerged from the world of hidden and informal bargaining and left room for broad masses to learn how to shape the pattern of social relations prevailing in the labour process.

16 It was not until recent years that the concept of trust in public opinion was given a social content in addition to the individual and psychological ones. In its individual aspect, trust instills into human beings a sense of permanence, order and firm balance in their daily activities and moral world. So does it in every society: the sense of predictability, lasting security and continuity are, when there are frequent changes often unfavourable, indispensable for maintaining cooperation and social solidarity. It is the least visible tool of integrating society, but is also a factor of social control that makes its effect felt in the long run. It is usually said to have two components: one is technical competence, or professional skill, and the other is moral competence, i.e. assumption of responsibility for the community, toleration for one another's values and interests, and action in accordance with mutually observed norms. Beside increasing the technical competence of the self-regulating social subsystems, securing moral competence appears to be the more difficult task, though it is precisely trust based on moral competence that can forge cooperation and create stability in reducing mutual losses caused by sharp competition and tensions arising from the diversity of social and organizational relations (Mako, 1980).

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Borning and Inherited Patterns of Cooperation as Indispensable Basis of Securing Social Stability and Renewal - General Conclusions From an analysis of the components and content of actions in the "trias" of labour, economy and society, there can be derived experiences of theoretical, methodological and practical nature. First, an important lesson for the methods of our own research on labour and organizational sociology is this: suitable for disclosing the social aspects of the labour process is an analysis, not simply complex but multidimensional, of the internal relationships of the enterprise organization and the institutions that have to resolve conflicts in industrial relations. That analysis must consider, parallel to the social relations of the labour process as the immediate environment of action, the effects of other spheres of society, because individuals act, both in time and space, in several social formations, are actors and agents of several sets of social relations. We cannot interpret social processes, maintenance of stability, adaptation or conflict management, if we keep track of them in only one social formation and judge them by the criteria of a single rationality. Participants in the labour process pass from one formation to another and, in taking decisions, bind together the "social spaces" of their daily lives. We have to learn to interpret human relations in terms of various sets of social relations carrying different contents rather than under an approach to a dominant form of production considered in terms of hierarchical and coordinative relations, forces and counter-forces. Second, unsocial relations exolving in the labour process, there may accordingly coexist patterns of behaviour, values and cooperative structures which, in the spirit of the evolutionist concept of society, are said to belong to social and economic formations representing different stages of development to the so-called premodern forms of cooperation are present and at work even in the most modern structures, a afct which has questioned the validity of the paradigm that "modernization means abdition of the old society and the old models of community organization". "The strength of an alternative is determined by convention and invention (or, in the words of Miklós Radnóti, tradition-and ingenuity). Its stabilization is proved by the fact of an emerging new equilibrium, when a tradition is coming within reach again. But recurrence presupposes a new approach" - wrote Sándor Radnóti in one of his studies (1988:150).

We should form a new image of modernization and its conditions, reliance on traditions, governability, and the possibilities as well as limit of human action. Third, cooperation within and among various spheres is regulated by

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several mechanisms in the reproduction of society, understood to be a discontinuous and heterogeneous formation. We consider the regulators present and acting in society as a corrective type of mechanism which is destined to maintain the reproduction of society in different spheres (family, production and services, settlement, etc.). Thus the motives and contents of social phenomena cannot be understood under the logic of one or two regulatory mechanisms. Thinking in terms of state (bureaucratic vs. market regulation, for instance, precludes understanding and mobilizing the mechanisms through which other social regulators exert their effects. The relationships governed by regulators cannot be arranged into a hierarchical pattern. They are amenable to separation only for purposes of scientific analysis, but are inseparably present in human activities. The effect of one or another social regulator is over-emphasized by different ordinary or political - ideologies enclaved between science and daily practice. Previously state intervention was considered to be the decisive integrative force of society, now it is rather market regulation, which is considered to be. Although in the light of international and Hungarian experience one comes more often upon expressions like "community market" (mercato communitario) or "market of life", which are joint products, an interplay, of the resource-allocative market in the economic sense and of the mutuality of human and social relations permeates both the interrelationship of enterprises/entrepreneurs and relations between partners cooperating in the enterprise organization. The operation of a market conditioned by social relations calls into being bargainings like "relational contracting" in the economic practice of Japan (Dore, 1987); in those, account is taken not only of economic efficiency, but also of the existential security of community members, or partners in cooperation. Market relations thus permeated with relations of confidence may in this way operate systems like "just-in-time" production, a practice of enterprise management organizing production with a minimum of reserves and manpower. A market permeated with effects of social and political relations can similarly be shown to exist in the operation of inside contracting groups set up at Hungarian enterprises. Relations between contracting parties, engaged in such bargaining on the market, cannot be interpreted by means of either bureaucratic or market regulators. This implies not only that the introduction and application of market regulators come from immense collective efforts rather than from automatic change or from change ordered from above, but also that markets are of several kinds, with their structure and relationship to mechanisms regulating other social relations likely to vary considerably by the historical and political-cultural traditions of individual regions or countries.

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Fourth, since individual and social action cannot be interpreted safely in the "social space" constituing their immediate environment, and the reaction of various social groups may also appear in several speres, preocesses of social adepstation can be regarded as series of cummulative change brought about by various mechanism regulating human cooperation. There may take place, without radical changes in the dominant regulation or one considered as such, significant technological and organizational innovations carrying the germs of potential social innovations. The contrary is equally true: spectacular changes in the institutions of society's direction are in themselves incapable to reconstruct mechanisms regulating the utilization or wasting of human resources. Central governing organs should be responsible to coordinate regulators operating in different spheres of society rather than to replace any one of them. (The use of complicated administrative techniques is a typical technocratic response to the guidance of complex societies in a state of flux, although simple responses are usually more effective, yet finding them requires much more experiences to be gained from human resources inherent in different subsystems of society). An ideal political, governing strategy can base itself on mechanisms already existing in, and regulating, human and social relations, but the ideological-conceptual obstacle to its doing so consists in our failure to "respect" society together with its characteristic patterns of functioning and with the specific features assuring its reproduction and survival. The special processes of Hungarian society's adaptation to the market as well as to social and political changes similarly stem from longer historical processes and from social and cultural traditions. The historical roots of the second economy, for instance, are analyzed by researchers in economic geography in connection with the spread of small-scale agricultural production and household farming in Hungary, with these conclusions drawn: "The dual organization of Hungarian agriculture is not exceptional in WesternCentral Europe, but, just the contrary, derives from a century-old tradition. The capitalist development of agriculture took this special form from Prussia through Poland to Hungary and Rumania, that is to say that large estates were growing grains and industrial plants for external markets, while small subsistence peasant farms appeared on the market with labour-intensive products and livestock. This dual organization which had evolved under special and historical and economic conditions was disrupted twice over the past decades: first in 1945, when the land reform liquidated the system of large estates, which was a politically necessary step, but damaged agricultural production (its consequence being the introduction of the compulsory delivery system to secure supplies to the population), and later in the 1950s, when collectivization did away with the system of the labour-intensive small-scale production as well. It was from the 1960s that, under a new set of social conditions, Hungarian agriculture recovered its dual organization, in which grains

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and industrial plants were grown by large farms, while labour-intensive plants, and animal products from honey to eggs came from small producers and household plots" (Csatari/Egyedi, 1986: 103-104).

The centuries-old traditions of agrarian development, on the strength of which producers adapted themselves to objective conditions like the feudal character of land tenure, market demands, geographical and climatic conditions and the degree of technical development, served as a model in the course of change amid such conditions and signalled avenues of autonomous action by peasants vis-a-vis collectivization. Moreover, these avenues reproduced themselves for commuting workers living in rural areas. Labour sociology studies of worker behaviours and organizational relationships during the 1960s and the 1970s pointed out to the presence of "dual strategy" in actions at the enterprise level and the differentiation of workers in terms of regular extra income from household farming or gardening (Hethy/Mako, 1969; 1972; 1978). The duality of work at large agricultural and auxiliary/household farms as a centuries-old tradition has obviously exerted a strong influence on industrial workers as well. The effect of this socialization can be observed in tolerating and managing conflicts within the enterprise as much as in small undertaking of auxiliary activities in industry. Fifth, individuals and groups of them naturally do not have uniform faculties and abilities for assimilating and exploiting the effects of different social regulatory mechanisms and maintaining and building sets of social relations subserving the former. Consequently the emphasis is laid, not on inequality, but on diversity, because it is the analysis of such diversity that can provide a real basis for encouraging human and social adaptation. In like manner, the sociological concept of "equal opportunities" is far from a formal, narrow and mechanical notion of equality. Such heterogeneity is suggested by sociologists formulating the goal of creating various possibilities for rise from different social situations, possibilities that can be influenced by a variety of social means. In given situations, for instance, only a part of the engineers of economic and technological change in enterprise organizations are able to become "actual partners" in influencing the results of change, namely those who in the various spheres of their work and activity have acquired professional-occupational and socio-political skills. In this "process of social learning" the enterprise organization itself functions as an "educational system". The character of technology, the structure of work organizations, the models of employment, the managerial methods, the mechanisms of one's progress, encouragement to and recognition of expertise,

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loyalty, competition and cooperation combine to orient and to educate the actors of enterprise organizations. Within particular organizations, certain segments become capable of and interested in dealing with and manipulating organizational relationships, while it may be more "remunerative" for other segments to exploit in other formations the skills and relationships they have built in certain productive spheres, where they however cannot profit by them. Therefore, the model of manpower utilization used by society and enterprise management as the only profitable one in the longer run should give encouragement to the accumulation of professional, organizational and social knowledge. Attention should be devoted primarily to non-privileged segments whose organizational positions as well as human and social relationships afford them little possibility to participate regularly in the processes of social learning. However, the failure of misrepresented efforts to affirm their interests in some organization or set of relationships does not automatically entail complete existential collapse for people belonging to several different communities or "networks" in or outside the direct environment of their work, but may even turn, in the long term, earlier risk into a useful experience in another social space, whereas people belonging to an isolated organization or community are apt to become loosers of change. Social processes, aiming at diversifying forms of production 17 and it preserving diverse small communities - which support the heterogenization of property relations and political pluralizaron should be regarded as guarantees for society's adaptation, renewal and stability.

17

D e e p e r statistical analyses can give a more realistic idea of the Hungarian industrial organizations as well. Although the sphere of small and medium-sized industrial enterprises represents a lower ratio than in the advanced capitalist countries, "it is already of a decisively significant weight" (Romany, 1988: 20-21). Out of 1,007 state-owned industrial enterprises recorded in 1986, 440 units had a staff of less than 500 employees. The public sphere of industry consists of a total of 4,746 units, of which "as little as 490 had a staff of more than 500 employees, albeit the latter employed 61 percent of the total workforce" (op.cit.: 24). Also, the majority of the 1,107 industrial cooperatives consists of small and medium-sized units, with only 48 having a staff of more than 500 physical workers. A m o n g the smaller industrial production units we can count with those too which provide employment for some 200,000 people in other than industrial sectors of the economy, for two-thirds of that number in agricultural organizations. "A great majority of them enjoy almost complete autonomy in daily operations and are in a dependent position only in matters of development" (Romany, 1988: 24).

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There is ample experience to show that in grave crisis situations of particular organizations and regions, the professional and organizational knowledge acquired and the sets of human and social relations built in the course of social learning can be mobilized not only for a concrete arrangement, but as a social capital used for stabilizing and renewing society, also for opening new alternatives for human action in other than conflict situations, evading and relaxing (perhaps eliminating) the frameworks of conflict. It is in this sense that periods of crisis, protests and mistrust make it clear that there are, present in society, resources that not only sustain conflicts, but are also capable of removing them. Behind the "resistance" ore passivity of society's actors, manifest in a given situation or social space, one finds their "collective" knowledge acquired in other spheres or formations. Such collective knowledge is a human and cultural capital hard to gain and easy to loose, one that is capable of renewing society more profoundly than many of the large investment projects and institutional reforms.

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Teller, Gy.: 'Omechanizmus, ujmechanizmus, ipari szövetkezetek (Old Mechanism, New Mechanism, Industrial Cooperatives)', Medvetänc, No. 4-5,1984-85. Teller, Gy.: Adalekok a szövetkezetek gazdasägi es jogi reformjähoz (Glosses on the Economic and Legal Reform of Cooperatives)?. Budapest, MTA Allam- es Jogtudomänyi Kutatäsok Programirodäja, 1987. Trigilia, C.: 'La regolazione localistica: economia e politica nelle area di piccola impresa', Stato e Mercato, No. 2, 1985. Voszka, E.: Reform es ätszervezes a nyokcvabas evekben (Reform and Reorganization in the 1980s). Budapest, Közgazdasägi es Jogi Könyvkiadö, 1988. Walton, R.: 'From Control to Commitment in the Workplace', Harvard Business Review, March-April, 1985. Wood, S.: The Degradation of Work? Skill, Deskilling and the Labour Process. London, Hutchinson Publishing Group, 1982. Wood, S.: Toward Socialist-Capitalist Comparative Analysis of the Organizational Problem. London, London School of Economics, Department of Industrial Relations, 1985. Wood, S.: 'From Braverman to Cyberman: A Critique of the Flexible Specialization Thesis', in W. Buitelaar (Ed.), Technology and Work: Labour Studies in England, Germany and the Netherlands. Aldershot/Hampshire: Gower Publishing Group, 1988: 28-42.

Patterns of Work Identity in the Firm and Plant: An East-West Comparision Akihiro Ishikawa

Introduction Since the political "revolution" occurred in East European countries towards the end of the 1980's, I have heard, directly or indirectly, many colleagues from those countries and from the USSR expressing exclusively negative views against the preceding system, labelling it "Totalitarianism", "Bureaucratism", "Stalinism", etc. They seem to refuse any elements of the preceding system and be enthusiastic to transplant the Western model into their society. However, the socialist practices, taken up in the past years, have brought about specific realities in their social and cultural structure, realities that are different from those of the West and from which people could not escape in daily life practices. It would be necessary for social scientists and activists not to follow urgently the Western model, but to examine carefully the realities of their society to find in them any positive elements to be used successfully for the future development of their society. From this view-point, I would like to raise in this paper one of the elements which have been produced in industrial relations in East European countries that I suppose meaningful to be inherited and developed. The modern industrial organization is composed of two groups of people, management and labour, assumedly opposing each other in terms of values and interests at work and in the society. This assumption leads to the following hypothesis: the workers' attitudes cannot be differentiated into pro-management on one side and pro-labour on the other. It means that the workers who would identify themselves with management would be indifferent or opposing to labour, and vice versa. In the Japanese case, however, this hypothesis has been overthrown by K. Odaka and his research group in their survey in large-scale enterprises 1 . 1

Odaka, K. (1953), Sangyoo-ni-okeru Ningenkanei-no Kagaku (The Science of Human Relations in Industry), Tokyo: Yuhikaku.

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Their research result revealed that the workers who identify themselves with the management tend to have simultaneously the identity with the labour, while the workers who lacked the identity with the management did not have identity with the labour either, and the majority of Japanese workers are the case of the former, namely pro-management and at the same time pro-labour; those attitudes were characterized by the researcher as "dual-identity" or "dual-loyalty". The prevalence of "dualidentity" has been regarded as the subjective basis of the labourmanagement cooperation and collectivistic behaviour, which is supposed to be one of the essential factors accounting for the Japanese economic success. Then, what about the case of East-European workers? The aim of this paper is to figure out the traits of their attitudes in terms of identity with management and/or labour, by comparing with those of West-European and Japanese workers, in order to raise some implications for the transformation of industrial relations in East-European economic and political reform.

Comparison Between the East and the West The data presented here for discussion are drawn from an international survey on workers' views in the electrical machine industry, organized by the Japanese Federation of Electrical Machine Workers' Unions (Denki Roren) in 1984-85. Ten countries participated in this survey: five West European countries (France, F R G , Italy, Sweden and UK), three East European countries (Hungary, Poland and Yugoslavia), Hong Kong and Japan 2. The questionnaire used in this survey contained some specific questions appropriate for the measurement of identity with management and the labour.

2

The observation and analysis on workers' identity in France and Hong-Kong were dropped due to the shortage of data. The representative participants from each country are as follows: P. Chen, F. Consoli, W. Fricke, T. Ishigaki, Cs. Mako, M. Morawski, V. Rus, B. Sandkull, T. Shiraishi, K. Thurley, and the author of this paper played the role of the coordinator of the whole project.

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Solidarity or Confrontation in Interests in a Plant There is a question in the questionnaire concerning the workers' perception on solidarity and confrontation between manual workers themselves and between manual workers and the director in their plant. T h e respondents were requested to give an answer to the question " D o you believe that the plant manager (manual workers in the plant, respectively) has(have) the same interests as you or not?", by choosing one from five alternatives: " T h e same interests", "Similar interests", "Partly different interests", "Mostly different interests" and " O p p o s i t e interests". T h e average point for each country surveyed from the answers given by manual workers, is pictured in Figure 1. With t h e d i r e c t o r of o p l a n t (Common

Interests)

(Similar) - Hungary) • Yugoslavia (Opposing)

-^Similar)

(Different)

(Common/interests)

JaparT~^Mandy Sweden *

,,* . Hongkong

-with manual workers ¡n a p | Q n

t

(Different)

(Opposing)

Figure 1

From this picture we can classify the countries into three groups: one is composed of three East European countries, the second, contrasting to that, is formed by the West European countries, and the third, intermediate group, consists of Japan, H o n g - K o n g and Sweden. T h e difference between East and West is here very clear-cut. A m o n g Eastern countries, Poland deviates a little, probably because of the depressive and conflictual situations under the Martial L a w when the survey was conducted, but generally speaking in contrast with Western countries, manual workers in Eastern countries identify their interests as more similar and common, not only with those of manual co-workers in their plant, but also with those of the director of their plant. It is contrasting to manual workers in the West, where they identify their interests with those of co-workers but not with

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those of the director, regarding the latter as different or opposed to their own interests. In other words, the director of a plant is perceived by workers in the East as part of the "We-group", while in the West as part of "They", as far as interests relations are concerned. Therefore, the workers' identity with the firm in the Eastern context means the identity with the whole collective of the firm, including all the level of the plant from top to bottom, whereas in the West the identity with the firm is exclusively with management and is separate from the identity with co-workers. This finding may be in coincidence with the statements of the character of directors in socialist firms as "Benevolent boss", "Substantial representative of employees in fact" and the like.3 Under "State Socialism", the director of a firm and plant used to be officially a subordinate of the state supposed to control workers, but his/her unofficial behaviour was rather to take care of the workers' daily interests against the above. Therefore, as W. Wesolowski once mentioned, when the crisis attacked the workers' living conditions, they were likely to revolt against the government outside the firm, but not against the management in the firm 4, though exceptional cases would occur due to the attitudes of some managers towards the workers' actions. It may be said summarizingly that, contrasting with West European workers whose solidarity is mostly class-based, East European workers are not confronting against management so much and that an intra-plant solidarity is wide-spread among them.

Identity With Management and the Union There are some other questions related to workers' identity with the management and the labour. Next, by selection some of them, let us try to examine the relationship between the identity with the management and with the labour union to compare the East and the West. For this purpose I have picked up the following questions with answers on a five-point scale. After a statistical test they were proved to be usable as an integrated index to measure the degree of identity with the management and with the union. 3

4

Andrle, V. (1976), Managerial Power in the Soviet Union, Farnborough: Saxon House; Majkowski, W. (1985), People's Poland: Patterns of Social Ineguality and Conflict, London: Greenwood Press; etc. Wesolowski, W. (1967), "Social Stratification in Socialist Society", Polish Sociological Bulletin.

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1. Management Identity Index (M-scale) 1) Perceptions of the similarity/difference of interests with a plant manager. 2) Perceptions of the degree of acceptance of managerial decisions at the plant. 3) Satisfaction with the degree of trust between managers and workers on the shopfloor. 4) Satisfaction with the competence and ability of the management. 5) Satisfaction with the communication between workers and management. 6) Satisfaction with the opportunity to participate in decision-making at the shopfloor level. 7) Willingness to devote oneself to the development of the enterprise. 8) Attitudes towards staying in the employment of the present enterprise.

2. Union Identity Index (U-scale) 1 ) Perceptions of the similarity/difference of interests with shop stewards. 2) The degree of actual participation in union activities. 3) Perceptions of the degree to which workers' views are reflected by the union. 4) Evaluation of union activities in terms of representing workers interests. 5) Satisfaction with the present activities of the union in general. The result of measuring and analysing the answers illustrated two types of distribution of the sample workers, in terms of identity with the management and the union, which can be summarizingly pictured in Figure 2. Type A is the case of the F R G , Italy and U K (West European countries), whereas Type B is the case of Hungary, Poland and Yugoslavia (East European countries) as well as Japan. The Swedish case is in between. In Type A, the workers' attitudes are polarized: pro-management or pro-union. In this case, white collar workers are apt to be promanagement, while blue collar workers are pro-union. In Type B, on the other hand, sample workers are distributed mainly in two groups: both pro-management and pro-union, or neither pro-management nor prounion. And there is no big difference between white collar and blue collar workers in this respect. There is another finding. In Type A, the pro-management attitudes do not have any positive correlation to the identification with ordinary

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Type B

Type A Management

Management

(+) White Collar Í

White Collar

" \

\

\

\

A

/Labour (+)

Labour union

=Nr-(+)

Blue Collar

union

Blue Collar

Figure 2

shopfloor workers. In other words, those who identify themselves with the management are apt not to regard ordinary blue collar workers as part of their circle. In Type B, on the contrary, the pro-management are significantly correlated to the identity with ordinary workers. In this case, those identifying themselves with the management regard ordinary blue collar workers as part of their circle, sharing common feelings. Their identity is not simply management-sided, but devoted to the collective of the plant as a whole. That is coincident with the finding mentioned before. From the above, two patterns of workers' identity with their organizations can be figured out: The Western pattern in Type A and the Eastern pattern in Type B.

Explanation of the Difference From what conditions does the difference between the two patterns stem? The following conditions could be assumed. First, there is a difference in the background of industrialization. In the West, the capitalist industrialization brought forth a clear-cut social differentiation and stratification, splitting a society into two classes which are not only opposing each other in economic interests but also have developed different cultures and values. This is assumed to be a ground for the polarization of workers' identity. In the East, on the other hand, the socialist industrialization was carried out with egalitarian ideology and measures, which produced a relatively homogeneous structure in society. These managers are apt not to be regarded by the workers as an "enemy" but as a member of their circle, sometimes as bosses representing and guarding their interests, except in some special occasions. In such situa-

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tions the elements of identity would not be much differentiated but rather overlapped. Second, there is a difference in social structure, following from the above. In the West, there is a remarkable difference between middle classes and working classes in various respects, who have their own society separately. Such structure is reflected in the social relations within the enterprise or plant, differentiating employees into two groups. In the East, the social distance between strata in the enterprise or plant is not so large, reflecting the relative homogeneity of working people in society, who are in common against "Nomenklatura". It can be outlined as below. West (Society)

East (Organization)

(Society)

Manager

Manager Middleclass Workingclass

White Collar

White Collar Blue Collar

(Organization)

c o CS

3

e 'c 3

Blue Collar

Figure 3

The third is a difference in union organization and activities. West European labour unions are organized outside the enterprise, paying effort to increase their political influence, while conventional unions in East Europe, and even the new unions emerging in the wave of democratization, locate their organizational unit at the enterprise or plant level, focussing mainly on in-house activities for job security (in recent) and improvement of the employees' welfare, through negotiation and consultation within the enterprise. This characteristic of unions is assumedly a source of the phenomenon of "dual-identity" among East European workers.

A Concluding Remark In order to overcome the economic crisis as well as for the further development of industry in East European countries, it is indispensable to maintain a harmonious relationship and productivity cooperation between

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management and workers. Noticeably, there is a favourable basis for developing such relations in the East European context: the specific pattern of the workers' attitudes towards the enterprise, conditioned by the specific features of their social structure, can be regarded as a positive inheritance from socialism to be kept for the future. It may be urgent for East European economy to create a new model of industrial relations, but it would be without sense to follow the Western model originated from background and structure different from the East, thus neglecting its own specific favourable conditions for developing a cooperative and consultative model, different from the conflicting model developed in the West.

Payment by Results in Transition: Capitalist and Socialist Restructuring Marcel Bolle D e Bal

In his famous address to the XXVIIth Congress of the Communist Party of the USSR, Mihail Gorbachev insisted on the necessity to link workers' salary to the economic results of the firm. This concern was in that respect more or less the same as that of western managers and politicians arguing about the need of flexibility and de-regulation: the general socio-economic crisis, the growing implementation of new technologies, the overwhelming role to the welfare state, the apparently irresistible development of bureaucracies are feeding this search of the autonomy of social actors, and of management tools helping to develop such an autonomy. So, the "perestroika" (restructuring) policy is looking towards the way capitalism is structuring the economic system and mechanisms. In that perspective, one may imagine that these factors may well give rise to a renewed interest for wage incentives and all kinds of payments by results, especially in Eastern Europe (Rimashevskaya, 1986; Serebrennikova, 1988) as this was the case around the sixties, in Western Europe. During the period 1955-1970, we have been participating in many Belgian and European studies on the influence of new technologies on wage systems. In 1972 the ILO in Geneva asked us to prepare a report on the subject which was - for financial reasons - published only in French (Bolle De Bal, 1972). That report was a tentative synthesis of the European studies in capitalist organizations, and of documentation available about socialist organizations, as far as financial motivation and participation was concerned. In this contribution ' we will summarize the main informations and conclusions included in that report, from a theoretical and pragmatic point of view. We will complete them by more recent informations, as exposed in a recently published book on that subject (Bolle De Bal, 1990).

1

This contribution is constituted by the development and actualization of ideas exposed in two former articles: cf. Bolle D e Bal, 1969 and 1988.

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Theory of Financial Motivation and Participation Historically, money has been the chief means of stimulating the energies of workers. For example, piece rate systems were introduced to remedy the shortcomings of time rates which did not give an incentive to greater effort. Gradually, with technical, economic and social evolution, simple piece rate systems gave way to more complex bonus payment systems. Finally, the principle of worker stimulation was replaced, or at least amended and complemented, by that of worker participation. The objectives of the different bonus systems in operation make possible a twofold theoretical classification: 1. stimulating bonuses, designed to persuade workers to increase their production. 2. participation bonuses, aimed at interesting workers either in their firm or in technical progress in general. In practice, stimulation and participation are often confused. It is, however, important to distinguish them as clearly as possible, for the system of payment adopted by an employer will, or should, vary according to the objective he is pursuing. How can these two objectives be distinguished? In order to ensure that a bonus will stimulate, two conditions must be satisfied: 1. time: the bonus should be paid as soon as possible after the effort, e.g. each pay day. 2. space: the field of application of the bonus must be as small as possible, since in order for it to be stimulating the bonus must translate the workers' effort directly and concretely into an increase of pay. It must, therefore, be limited either to the individual job, or to a small number of jobs. Unless the field of application of the bonus is small, the personal effort of the worker may be nullified by elements beyond his control. In theory, a bonus will only be stimulating if it is paid as part of the normal wage and if its field of application does not much exceed the job of the worker or the team which immediately surrounds him. Participation bonuses, on the other hand, are paid either occasionally or regularly, but at intervals greater than one month (quarterly, six monthly or annual bonuses), and linked to production by large groups of workers. Many bonuses are aimed at both stimulating and involving the worker. However, depending on the circumstances, the one or the other aspect is

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predominant. A production bonus directly induces the worker to increase production, while a participation bonus looks towards an increase in productivity as an indirect result of involvement.

Practice of Financial Motivation and Participation The goal of wage incentives is different according to the type of incentive. Therefore an examination of the functioning of stimulation and participation bonuses is necessary.

The Practice of Stimulation Bonuses When the psychologist talks of stimulation bonuses, the organization expert or the engineer thinks of payment by results. Payment by output once occupied pride of place in the recommendations of experts in scientific management, but today this era seems to have passed. Doubts are raised on all sides concerning the validity of payment by results, or at least its practical effectiveness. The new thinking arose from psychological and sociological studies but is echoed today by management consultants. An abundant literature has described the classical phenomenon of restrictive practices arising from modifications to bonus rates. One of the first experiences of Taylor himself, as a metal worker, was the pressure exerted upon him by his work-mates to respect the norms of production recognized by their groups. The famous psycho-sociological experiments at Western electric by Elton Mayo and his colleagues, especially the study of the Bank Wiring Observation Room, provided a detailed analysis of work restriction in the face of, and because of, the pressure for production (Roethlisberger & Dickson, 1939: 379-380). Many other researches have confirmed, qualified and added to these first descriptions (Collins, Dalton & Roy, 1946: 3; Whyte, 1955; Marriott, 1957; Behrend, 1957; Baldamus, 1957; Shimmin, 1959). These studies are basically concerned with the enrichment and elaboration of findings that are now well known. They do not question the principles of payment by results, but such a question has arisen out of the international research sponsored by the High Authority of the Coal and Steel European Community (C.E.C.A.) and carried out in six countries of the Common Market. This research gave rise to six national reports and a summary report whose authors, Burkart Lutz and Alfred Willener, have advanced the idea of a real crisis in payment by output. Their argument

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was based not only on the observation of local restrictive practices, but on a series of varying and concordant facts obtained in different places, in different countries, and in different types of production unit (Lutz & Willener, 1960).

The Payment by Output Crisis The researches sponsored by the High Authority of the C.E.C.A. had as their subject modifications in the influence of the worker upon his work arising out of the development of mechanization and re-organization of firms, and also the examination of the possible links between the evolution of worker influence and methods of payment. One of the functional principles of payment by output can be stated as follows. In so far as the worker can exercise an influence on his work, he is able to increase or diminish production in quantity and quality, and also to improve, or cut, his production. Therefore his method of payment, in order to stimulate, needs to be structured so as to induce him to exercise influence in a constantly positive direction. However, the more the process of production is mechanized and the more complex the organization, the less the worker is able to influence output, for he must follow the rhythm of the machine and the instructions of the planning office. The research team was able to make comparative studies both within and between countries. In each country, production units within the same manufacturing sector (rolling mills) at three stages of mechanization (old, intermediate and modern installations, and manual, semi-mechanized and mechanized machinery) were selected and compared. This comparison of results, especially at the international level, indicated that payment by output was in state of crisis. The Belgian study, which did not lend itself to such clear conclusions as in the case of the other countries, compared the functioning of systems of payment in three rolling mills at different stages of mechanization: a hand-operated rolling mill, a semi-mechanized rolling mill, a mechanized and almost continuous-operation rolling mill. The pay of the workers was made up mainly of a relatively low basic wage, a large production bonus, and a "record" bonus. The production bonus was a collective production bonus, paid weekly. In principle it was a stimulant but it varied very little from one week to another and did not induce workers to produce except when it looked like being too low as a result of prolonged stoppages. This led us to distinguish two functions of payment buy output: a) The stimulation function, which is to push workers to produce. The importance of this function decreases with mechanisation.

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b) the regulation function which aims at the maintenance of a certain minimum level of production necessary to ensure the profitability of ever more costly technical investments. This regulatory function of the bonus prevents workers from neglecting production, and output falling below a certain level. With mechanization, there appears to be a tendency towards a flattening of bonus curves and a development of the regulatory function of payment by output. On the other hand, in this same rolling mill, the "stimulative" nature of the payment system was in practice ensured by the "record" bonuses which were given when one team, or all three teams, exceeded the production maximum. The hope of beating the record transformed the whole workshop and a team spirit was created as well as an exceptional co-operation between workers. But they carried within them the seeds of their own decay. On one hand the records rapidly reached a level difficult to exceed except by the introduction of new machines, and on the other hand disappointments arising from failure engendered a rapid deterioration of the social climate. The Belgian study had shown an undeniable decline in the stimulation function of the bonus in favour of its regulatory function. When these results were compared and integrated with those of the five other countries of the C.E.C.A., and particularly with those obtained in France and Germany, it appeared that the trend was more general and perhaps fundamental than the individual national studies had indicated. The authors of the summary saw this development not merely as an adaptation of payment methods to new technical conditions, but as a real crisis. This crisis presented a double aspect: *

a "dynamic" aspect: payment by output would lose its efficiency with time and was at present functioning less well than before; * a "static" aspect: there was a gap between the theoretical principles and the practical achievements of this method of remuneration, and a distortion between its ideal functioning and its real functioning. The report underlined the contradictions between the theoretical functioning and the real functioning of production bonuses. The distinction made in the Belgian report between the stimulative function and the regulatory function of these bonuses applied to the situation encountered in German, French and Dutch rolling mills. The authors found that there was a common tendency to dissociate pay from production. Efforts were made by workers to prevent rises and falls in their pay by maintaining a steady output thus neutralizing both the regulatory function and the stimulative function of bonuses.

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These situations, considered in themselves as obvious symptoms of a crisis in payment by output, may be regrouped into two major categories: (1) the "provisionally" fixed pay packed and (2) the "adjustments" at the moment the pay is calculated. In the second category there were more frequent cases of what the French researchers called "touching-up" - that is subsequent correction of the results of the payment by output with a view to correcting oscillations in the bonus where these were judged to be too large. The situation examined were far from the classical and relatively simple cases of restrictive practices. There, not only were workers not responding "normally" to financial stimuli, but the managements of firms were themselves breaking the rules, since they did not stick to the strict application of the production formula. In Germany, in certain cases where production was high, it was the worker representatives on the management board who proposed that the board should not distribute directly the total of the bonuses since they preferred to obtain an assurance of compensation for the workers in period of low production. The authors of the report summarized the situation in the steel industry as follows: "The curve of the bonus is more and more gradual, waiting time is submitted to a regulation which is more and more favourable, the calculation of production and pay is submitted to last-minute "touching-up", the functioning of payment by output is "provisionally frozen". In one way or another, personnel in the factories tend to find themselves more and more sheltered from the repercussions of variations in production and pay tends to be transformed into a fixed amount, which is independent of the effort provided and the economic product of their work."

These trends, which might be considered specific to the steel industry, are recognizable in almost identical form in other industrial sectors. This is the conclusion of later investigations made in the "Centre de Sociologie du Travail" in the Institute of Sociology of the Free University of Bruxelles. They are also pointed out in different socio-economic systems. Empirical researches in Hungary have analysed similar phenomenons - for instance production "restrictions" by the workers, and "adjustments" by the employers - in socialist organizations (Héthy & Makó, 1970; Haraszti, 1976; Bolle De Bal, 1990:112-113). • Whatever it is - crisis in payment by output or adaptation of payment by output to new conditions - there is undeniably a tendency towards the stabilisation of bonuses. This phenomenon appears to be due to two principal causes: 1) to technical evolution, to the development of mechanization and automation, which transforms the role of the worker in the production

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process. One does not ask the worker to push production but rather to ensure its regularity and to avoid sudden stoppages. 2) to social and economic evolution of the needs of the workers, especially the development of hire purchase, once a certain level of income is achieved. What matters above all is the stability and regularity of the pay packet. In these conditions the problem of the future of payment by output cannot be avoided. Should this method of payment be abandoned, or should it be retained but transformed by giving it new functions better adapted to the new technical, economic and social conditions of production?

T h e Transformation of Payment by O u t p u t The information at our disposal, although scant and occasionally contradictory, indicates the maintenance and even extension of payment by output as a universal payment practice. In the USA, for instance (Bolle De Bal, 1990: 108), the percentage of workers paid by output is the same in 1980 than in 1961, at least in two industrial branches: confection (75 percent) metallurgy (18 percent). In some other branches it has even been growing during the same period, from 67 to 80 percent in the steel industry, from 70 to 73 percent in the shoe industry. In the UK, a similar evolution has been taking place: from 48 percent (1973) to 51 percent (1979) in the textile industry; from 38 percent (1973) to 59 percent (1979) in the rubber industry. Undoubtedly the link between pay and production has not disappeared and looks quite vigorous in capitalist countries. In socialist countries also, the payment by results has not disappeared. In the Soviet Union 55 percent of the work force had in 1979 a part of its income linked to the production (output or productivity), 62 percent in the coal industry and 71 percent in the cement industry (1960). However, this importance of payment by results in the soviet industry had declined after the economic reforms of 1957: before it, the similar percentages where respectively: 77 percent, 74 percent and 80 percent (Lion, 1965: 72). In the technologically most advanced industries, the trend is towards fixed wages: 92 percent in the electricity sector, 63 percent in the chemical industry, 85 percent in the oil industry (Chourko, 1964: 408). But this trend has been slowed down by the economic reform of 1965 (Bolle De Bal, 1972: 46) and probably - we have no recent statistics at our disposal - by those linked to the Gorbachevian perestroika. Looking at the evidence it must be admitted, with R. Marriott, that the use of payment by results as a means of increasing productivity has not

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disappeared, and that it still presents to its users, whatever certain sociologists think, more advantages than disadvantages (Marriott, 1957). Where does the truth lie? How can this contradiction between two objective sociological statements be explained? The symptoms of crisis in payment by output on the one hand, and the "vitality" of this method of payment and the support that it continues to receive from practitioners on the other? An immediate reaction is to blame the existence of myths, cultural lags, strength of tradition, or plain ignorance of social factors. A more adequate explanation of the apparent contradiction can be found by defining more carefully the fundamental concept, "payment by results". Experience shows that under this term are often confused three types of wage incentives which can be defined either by their function or by their methods of operation: 1) payment by output in the strict sense of the word. That is, in terms of structure, bonuses paid at each payment day and linked to the production of an individual or a small group of individuals; which are, in terms of function, stimulation bonuses. 2) payment by output in the broad sense. That is, in terms of structure, bonuses linked to the production of medium-sized groups, e.g. a large workshop or department of a factory; which are, in terms of function, regulation bonuses. 3) productivity payments. That is, in terms of structure, bonuses linked to production or to the performance of large groups, e.g. a factory or a firm; which are, in terms of function, participation bonuses. There is a crisis in payment by output in the strict sense, since it does not fulfil the function of stimulation assigned to it. As this technique of payment is being eroded by technical and social evolution it is gradually disappearing. However, this does not mean the unconditional abandonment of the link between performance and wage but the transformation of this method of payment to suit new conditions of production. Payment by output in the strict sense of the word has gradually given way to payment by output in the broad sense. There has been an evolution in the function of payment by results: stimulation has given way to regulation (Bolle De Bal, 1990: 150-155; Chourko, 1964: 178-181). With this change has come an evolution of the structure of the payments system, notably in the broadening of the field of application of bonuses (Bolle De Bal, 1990: 138-139; Chourko, 1964: 408; B.I.T., 1985: 157; Levcik, 1967: 348), the flattening of the curves of bonuses and the neutralization of waiting time not imputable to the workers (Bolle De Bal, 1990: 122-123, 140-141). There has been a marked shift from simple systems (piece-rate

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or time-rate) to complex systems (time or piece wages plus a bonus). In the USSR, for example, the proportion of workers (piece-rate and time-rate workers combined) benefiting from such bonuses was 86,6 percent in 1977, as compared to 67,2 percent in 1962. In 1975 the system of time wage plus a bonus covered 98 percent of workers in the production of electric power, 87 percent in oil production, 63 percent in the chemical industry. Similar changes in payment systems have occurred in other Eastern European countries, as the German Democratic Republic, Poland, and Hungary. As new technologies are developing, it is expected that moves will take place towards group payment and to establishmentwide forms of incentive payment, because this makes central control easier, as fewer units are involved and wage drift may be better avoided (I.L.O., 1984: 144-147). Taking account of this evolution, especially on the level of functions to be fulfilled, a diagnosis of the crisis founded on the loss of stimulation effect loses much of its value. Without inducing the worker to produce more, these bonuses can create an atmosphere of productivity, and place upon him a penalty should he allow his productivity to fall beyond a certain point. At the end of this evolution we find a third type of payment by results, which is the domain of participation bonuses.

T h e Practice of Participation Bonuses Stimulation bonuses have as their main object an increase in the involvement of the individual in the job he is doing. Participation bonuses are aimed at increasing involvement of the individual in the activity of the firm. Their theoretical objective consists in increasing the degree of worker satisfaction, attaching him to the firm, creating attitudes favourable to the firm, giving form and substance to the "community" of enterprise and integrating men into it. Participation bonuses have the further objective of interesting the worker in technical progress, by giving him his share of the fruits of the increase in productivity. The general satisfaction provoked by this bonus will be a sort of indirect stimulation to increased effort but the direct effect on output will be weak. This point is apparently ignored by many industrial managers who, thinking only in terms of stimulation, declare themselves disappointed with the results obtained from bonuses of this kind. The fundamental philosophy of participation bonuses is entirely different from payment by results bonuses. It is aimed at creating a feeling of community of interest in the heart of the enterprise, a spirit of cooperation in the pursuit of common interests. Participation bonuses at the payment level correspond to "human relations" policies at the

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personnel administration level. Research in several Belgian firms was undertaken to measure the influence of participation bonuses on different forms of worker participation in the life of the firm and on the various dimensions of the achieved satisfaction, integration and attachment (Bolle De Bal, 1967).

Participation Bonuses and Satisfaction It would appear that, contrary to popular ideas, satisfaction does not constitute an essential dimension of participation. This runs counter to the so called human relations school, whose implicit assumption is that the more the worker is satisfied (informed, integrated), the more he will "participate" and the higher will be his production. This was certainly one of the major conclusions of the Western Electric investigations, but research experience soon revealed that this conclusion was dangerously partial. In so far as satisfaction depends principally on the level of aspirations, one often finds that the workers who are most satisfied are those who "participate" the least, because their level of aspirations is lowest and therefore the most quickly attained. A personnel policy predicated exclusively on the notion of "satisfaction" may lead to the development of attitudes of conformity and passivity rather than to attitudes of active participation. The social ethic of the "organization man" is then substituted for the individualistic ethic of success and personal initiative (Whyte, 1956). Satisfaction is high, but participation is low. In reality, satisfaction is both more than participation: more because the satisfied individuals are occasionally non-participating, and less because participating individuals may be unsatisfied. In practical terms this does not of course imply that one must try to develop dissatisfaction, but rather that it is important to look for people with high aspirations and tend to increase their satisfaction.

Participation Bonuses and Integration To participate in the life of a company may mean participation in order to ensure the prosperity of the firm, or participation with a more limited aim, for example to defend the interests of the whole mass of workers or of some professional category. The employer who introduces a participation bonus is himself implicitly seeking to achieve the first of the two alternatives. He assumes that the workers accept the values of the enterprise and that they should be well

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integrated (integration being defined as the fact of considering the norms of the group as one's own, of being accepted by the group and of accepting the group). This assumption is not necessarily in itself a mistake, but it might be asked whether the integration thus sought constitutes for management a reasonable objective. Even from the point of view of the employer, "conflict-based" participation {participation conflictuelle), concerned not with the integration of the individual, but with the co-operation of his union, could prove to be profitable in the long term. However, in practice, the aim really sought by employers who introduce participation bonuses is simply to strengthen the attachment of workers of their firm. The extent to which a participation bonus has the effect of strengthening this attachment of a worker to the firm depends on the prevailing conditions of service, and the existence of similar provisions in other firms that might provide alternative employment. It is often suggested that participation bonuses weaken loyalty to the union. Our research has shown that, on the contrary, the existence of large participation bonuses tends to reinforce rather than menace the prestige of the union. For example, the great majority of the workers interviewed thought that the union played a positive role regarding the level of participation bonuses. On the other hand it was found that the majority of union representatives estimated that participation bonuses, far from being an "anti-strike" weapon, as some have said, were "the starting point of a wage demand" and to this extent were strike stimulants.

Conclusion: A new Look at Financial Incentives It is materially impossible to dissociate wage incentives from the pay policy of the firm and the pay policy from the personnel policy of the firm. Such a dissociation would, if it were possible, constitute a sociological error. Our study, which confirms the experience of all practitioners, has shown that the effectiveness of any type of wage incentive depends fundamentally on the general climate of the firm. Beyond these difficulties of measurement, we have also the complexity of worker motivation. In fact, wage incentives have been based on the assumption that all workers wish to participate in their work (produce more) and in their firm (be integrated), and that they all wish to participate in the same way and to the same extent. This assumption may be seriously questioned. There are workers who do not wish to participate. Wage incentives have no effect on them. There are workers who wish to earn more and these will be sensitive to stimulate bonuses. There are workers who like to participate in group

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life (Kozdroj, 1986) and these will be réceptive to participation bonuses. Finally certain workers demand participation in management and for them wage incentives will represent essentially the occasion for a dispute within the framework of a strategy of social conflict. In other words, attitudes and worker behaviour will only be influenced in the sense desired by management, in so far as material stimuli are adapted to the motivations and aspirations of those to whom they are addressed. Given the complexity of worker motivation, only a very complex policy of wage incentives appears likely to increase participation in all its forms and at all levels. But any appreciation of the effectiveness of wage incentives must take into account a supplementary reality, the complexity of functions fulfilled by these stimulants. We have in fact been able to show that stimulation bonuses fulfil functions other than participation alone. Both sorts of bonus fulfil in varying degrees the same function, that of "payment by results", a more general category of which these two types of bonus only constitute particular sub-categories. The tables of functions and dysfunctions of payment by results drawn up during the research mentioned above are shown in appendixes 1 and 2 (for more detailed explanation of the contents of these tables: Bolle De Bal, 1990: 223-225). The hierarchy of importance of these functions and dysfunctions varies not only according to the type of payments by results, but also according to the degree of technical, economic and social evolution. Thus stimulation gives way progressively to regulation and to participation, payment for effort gives way to remuneration by responsibility, improvement of work methods gives way to improvement of budgetary control methods, and the struggle against union influence gives way to the challenge to management. Concerning this evolution, it should be noted that in the tables annexed, the methods of remuneration are not longer looked at entirely from the point of view of the employer, but also from the point of view of the worker and of the union. When wage incentives were seen only as a management tool they were an important element in the strategy of social struggle between employees and unions. Techniques of individualization of work relationship, of atomisation of negotiation and of undermining worker solidarity and friendship, constituted for the employer a method of fighting against union influence in his firm. The unions did not take this passively. Excluded from power at that time, forced into opposition, they fought against this method of "intensification" of work and "exploitation" of the worker. They tried to substitute collective bargaining for individual negotiation. In this situation, they had to be, and were, against wage incentives and in favour of the fixed wage,

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which could be a field of collective bargaining and thus a recognition of the reality of trade unionism. This traditional situation has greatly evolved. Today, in the industrialized countries of Western Europe, the union is recognized as a useful institution and it has acquired a certain power and assumed certain responsibilities. Employers now see the union as a stabilizing influence and as a factor for social peace. In this new light, the two parties look for negotiation and compromise. The link between pay and results through bonuses therefore constitutes a way of reaching necessary compromises. The employer finds in this situation a means of satisfying, at least cost, certain union demands, which are potential sources of tension, conflicts and interruption of work. Confronted with demands for pay increases, and wishing to avoid the consequences of a categorical refusal, he will grant the increases demanded, but in a temporary and conditional way and in return for a more intense contribution on the part of the personnel. T h e union wishing not to "cut itself off from its base" pushes for pay increases. During negotiations and in order to avoid a total failure, the union may be led to accept a formula or compromise, a formula against which management resistance is less strong. The increases may be granted in the form of bonuses, leaving the union free to take later action to integrate the bonuses into the basic pay structure. In many ways the persistent vitality of wage incentives appears to be explained by the growing importance of payment by results as a tool of compromise, especially now that permanent negotiating action leads to demands by the union organizations for facilities to control the application of bonus systems. This conclusion, which is true in western capitalist societies, might be valid, with some adaptations, for the socialist systems and organizations. In these countries, for many decades social conflicts were not any more a basic data of the industrial relations system owing to the economic and social "revolution", however a new tendency has appeared - as early as in the 60's (Chourko, 1964: 408) but much stronger now - which takes part in the same evolution: a decentralisation of decisions, especially in the field of wage policy, in order to develop the autonomy of the firm, and encourage the negotiations of stimulation and participation bonuses. H e r e appears, in that specific socio-economic system, trying to come back towards a kind of market economy (Héthy, 1988), a new function for wage systems: the adaptation of the firm to the local market, and to the needs of modern industrial management (Liberman, 1968: 2). In other words: a function of compromise between social solidarity and economic efficiency, planning and market (Héthy & Makó, 1970: 169), quantitative and qualitative targets (Levcik, 1967: 348).

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In these structures however, the functional efficiency of payment by results is limited by the centralized determination of prices and subventions (Kabaj, 1966: 28; Chourko, 1964; 415; Roussenova, 1986; Héthy, 1988; Borkowska, 1988). When these centralized decision-making processes are suppressed, a new problem arises: who will be the social actors (employers' and employees' representatives) able to negotiate collective agreements? This appears today as a crucial issue in the present evolution of most ex-socialist countries (Uhan, 1990). Participation bonuses might subsequently appear as tools for social reform: in both types of countries they aim at greater workers' participation, which is an economic and social necessity insufficiently taken into consideration by capitalist enterprises and socialist bureaucracies. Finally wage systems should be considered not only as management tools or bargaining tools, but as development tools (Bolle De Bal, 1990: 274-278). They are able, under specific circumstances, to stimulate and to regulate three kinds of development: technical development (stimulation of creativity, acceptation of new technologies), economic development (efficiency of individual and collective work), social development (level of incomes, participation in management decisions). They may contribute to the emergence and growth of development as a cultural value (capitalist or socialist structuring) ... if the possible cultural resistances are well taken into account. Paradoxically, by juridically de-regulating (de-structuring) the wage determination, they open the way to new sociological regulations (re-structuring the realization of social compromises necessary to the system survival) and to new labour relations in (counter-) revolutionary socio-economic transition. Table 1 : Functions of Payment by Results Nature

Manifest functions

Reference Units Employer

Worker

Economic

Cost reduction

Increase in income

Psychological

Stimulation

Reward for personal contribution (effort or responsibility)

Economic

Cost control Price of labour Autonomy of the firm

Control of income High income during a wage freeze

Participation

Interest

Organizational

Psychological

Union

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Table 1 : Functions of Payment by Results (continued) Nature

Latent functions

Reference Units Employer

Worker

Union

Socioeconomic

Compromise

Compromise

Psychologica

Regulation

Sharing the fruits of technical and economic progress Liberation from the authority of the employer (from hierarchic control and arbitrary decisions)

Sociological

Struggle against union influence

Control and challenge to management

Table 2: Dysfunctions of Payment by Results Nature

Manifest Dysfunctions

Reference Units Employer

Worker

Economic

Cost of installation and operation

Insecurity and variability of income

Economic

Reduction in quality of work

Economic

Deterioration of equipment Reduction of working capacity

Sensitivity of income to bad economic conditions Insecurity of job Speeding-up (overwork and latigue). Neglect of security rules Tensions due to feat of not making the rate

Physiological

Psychological

Worker distrust (worker fixing)

Union

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Table 2: Dysfunctions of Payment by Results (continued) Reference Units

Nature Employer

Worker

Union

Psychosociological

Distortions in the hierarchy

Deterioration in worker solidarity and friendship

Obstacle to a fair wage policy

Psychosociological

Imbalance in interdepartmental pay scales Tensions due to individual pay scales

Psychosociological

Atomisation of pay increases Individualizatior of work relationships

Socioeconomic Sociological Latent Dysfunctions

Economic

Technicoeconomic

Psychosociological Sociological

Cumulative effect of increases in basic pay Obstacle to modernization of work methods Deterioration of worker motivation Distrust of union

Reduction in real pay

Discouragement from personal training

Tensions within union organization Weaking within union organization Weakening of union consciousness Atomization of bargaining Management manipulations Weakening of bargaining power

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Bibliography Baldamus, W.: 'The relationship between wage and effort', The Journal of Industrial Economics, (3), July 1957: 196-201. Behrend, Hilde: 'The effort bargain', Industrial and Labour Relations Review, vol. 10, no 24, July 1957. B.I.T. (Bureau International du Travail): Les systèmes de rémunération liés aux résultats. Genève, B.I.T., 1985. Bolle De Bal, Marcel: La vie de l'entreprise. Suppléments de rémunération et participation ouvrière. Bruxelles, Institut de Sociologie Solvay, 1967. Bolle De Bal, Marcel: Les salaires aux résultats. Tendances évolutives. Aspects psychosociologiques. Genève, B.I.T., 1972. Bolle De Bal, Marcel: 'Anyagi ôstônzés és részvétal a tôkes a szocialista szervezatekben', Minka iïgyi Szemple, Budapest, 1988: 114-129. Bolle De Bal, Marcel: Les doubles jeux de la participation. Rémunération, performance et culture, Maastricht, Presses Interuniversitaires Européennes, 1990. Borkowska, Stanislawa: Directions of restructuring the wage policy in East-European countries. Roneotyped paper, 1988. Chourko, A.S.: 'Le système des salaires dans l'industrie soviétique', Revue Internationale du Travail, octobre 1964. Collins, Orvis; Dalton, Melville & Donald ROY: 'Restriction of output and social cleavage in industry', Applied Anthropology, vol. 5, no. 3, 1946. Haraszti, Miklos: Salaires aux pièces dans un pays de l'Est. Paris, Seuil, 1976. Héthy, Lajos: Wage determination in Eastern Europe: a shift towards the market economy model? Budapest, 1988 (Roneotyped paper). Héthy, Lajos & Csaba Mako: A teljesit menyely érvé nyesikése és az iizemi érdek - és hatalmi viszonyck. Budapest, Hungarian Academy of Sciences, 1970. I.L.O. (International Labour Office): Payment by Results. Geneva, I.L.O., 1984 Kabaj, M.: 'L'évolution du système de stimulants matériels dans l'industrie de l'U.R.S.S.', Revue Internationale du Travail, juillet 1966. Kozdroj, Alicia: Work group in socialist enterprises. 1986 (Roneotyped paper). Levcik, B.: 'Problèmes de salaire et d'emploi dans le nouveau régime de gestion planifiée de l'économie en Tchécoslovaquie', Revue Internationale du Travail, avril 1967.

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Liberman, E.: 'Le rôle du projet dans le système de stimulants de l'industrie soviétique', Revue Internationale du Travail, 1968. Lion, Bernard: La planification des salaires en Union Soviétique. Lyon, Édit. A.G.E.L., 1968. Lutz, Burkkhart & Alfred Willener: Niveau de mécanisation et mode de rémunération, Luxembourg, C.E.C.A., 1960. Marriott, R.: Incentive Payment Systems: a Review of Research and Opinion. London, Staple Press, 1957. Rimashevskaya, N.: 'Restructuring of the economic mechanism. Income distribution and justice', Ekonomicheskaya Gazeta, no 40, octobre 1986. Roethlisberger, F.S. & W.J. Dickson: Management and the worker. Cambridge, Harvard University Press, 1939. Roussenova, Lena: Innovation financing and crediting as one aspect of innovation management in Bulgaria. 1986, Roneotyped paper. Serebrennikova, T.: 'Economic and Social function of economic distribution', Ekonomicheskaya Gazeta, no. 41, October 1988. Shimmin, Sylvia: Payment by Results: a Psychological Investigation. London Staple Press, 1959. Uhan, Stane: 'Foreword' to Marcel Bolle De Bal, Placeto za uspesnot v., sodvbni druzbj, Kranj, Universa v. Mariboru, 1990. Whyte, William F.: Money and Motivation. New York, Harper Press, 1955. Whyte, William H.: L'homme de l'organisation. Paris, Pion, 1956.

Technical Progress and Decentralization of Socialist Economies Anatol Peretiatkowicz

Introduction There are several different attitudes towards correlations between technical progress and the distribution of economic power. Some authors focus their attention on the level of enterprise or even on a lower organizational level. This is mainly the case with all participatory projects in the form of group work-organization. In Poland this direction of thinking has been for a long time represented by a group of theoreticians and practitioners cooperating with the editorial staff of a newspaper "Workers' Creativity", like S. Rudolf (1984), or R. Paciok, A. Duboniewicz and others.1 Their activity, concentrating around the creation of semi-autonomous groups or "partner groups", as they are called in Poland, is inspired by modern forms of work organization both in developed capitalist ¿ountries (like the Volvo experiments in Sweden) and by the Soviet New Brigades System (Tscherkasov et al., 1984; Peretiatkowicz, 1988). Some others, like S. Gomulka (1985), deal with the problem of the compatibility of socialism with rapid innovation. In this article I would like to present some considerations about another problem: the impact of acceleration of the pace of technical progress in the world economy on the shape of changes in socialist countries: their economies, political systems and ideas of work organization.

Changing Evaluations of Central Planning in Socialist Theory and Practice. In the near past almost all the economic theoretical works in socialist countries praised administrative central planning as one of the main instruments of achieving macro-economic rationality and social justice. 1

Names of very active people in the social movement promoting semi-autonomous groups among Polish State factories' workers.

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Many theoreticians even took for granted the existence of an objective law of "undisturbed and dynamic constant development of the socialist economy" (Volkov, 1978). These positions were in the last two decades undermined by repeated failures of several socialist economies in their efforts to achieve acceleration of their development and rapid modernization of economic structures. The example of Poland, where these programmes led to a dramatic crisis in the period 1978-1982, when its national gross product fell by the rate of a total of 25 percent, bringing great social and political tensions, was most spectacular. The economic system, in its shape formed in the past, proved ineffective in conditions of rapidly changing structures of the world economy in the post-1973 period. Even essential loans from developed capitalist countries could not prevent the widening of the technological and economic gap between Poland and her Western neighbours. The conclusion of Gomulka, that in spite of "a high resistance to innovation in those (CP) economies ... high innovation rates have been achieved" 2 was only partly true, though it was based on a solid scientific analysis. That was correct as far as the so called great innovations are concerned, and when one abstracts from the range of their implementation. Although all great inventions have ben quite quickly adopted by socialist economies they, as a rule, have not spread to all the sectors of the economy and have not influenced most of the market products. To give an example, I would like to recall the importation of a modern West-German automatised production line to one of the big Polish furniture factories in the 1970s. That innovative investment did not bring the expected progress in work productivity or in the product quality because of very simple reasons. This island of automatization had to cooperate with outdated enterprises participating in preparatory phases of the production processes: wood mills that produce semi-products with greatly differentiated parameters or metal factories which were not able to supply screws of the type necessary to be used on an automatic line. Finally the furniture factory had to limit the use of modern technology, going back to hand work, and it had to import screws by air from Japan. What is necessary to stress here is the fact that there was traditionally a minor quantity of middle-sized and small innovativeness in socialist economies and that the technical progress was very differentiated by sectors and phases of the production process. This is usually one of the cases why even the best designed products and technologies do not result in the high standardisation and the quality of final goods. The danger is growing proportionately with the growing complexity of final products and the widening cooperation in their production process. 2

Gomulka: 'The Incompatibility of Socialism and Rapid Innovation', in: Gomulka et al., 1985: 29.

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The economists in socialist countries have been for many years already aware of the fact of the systems limitations in generating innovations. However, that fact has not led them to a common answer to the question of how to eliminate them. For a long time, up to the last two decades, there prevailed an opinion that a bigger innovativeness should be brought about by an improved system of central planning. The representatives of this way of thinking often recalled quotations form K. Marx or W. I. Lenin, like the definition saying that "communism means the maximal possible centralization of production in the whole country" (Lenin, 1977: 392) arguing that optimal technical and organizational progress is manageable and should be centrally planned and coordinated to avoid unnecessary losses and to make possible the concentration of limited means on leading directions of progress and deciding in socio-economic development branches. This point of view, typical for some period of the Marxist-Leninist economy, is still supported by many scientists. A well known Soviet author, W. K. Wrublevskij, in his book published in 1984, argued that planning on a society scale, dealing with all the levels of "creation of organizational forms of economic management", was an objective tendency of development and a synonym of socialisation of the entire economy (Wrublevskij, 1984: 58). Such a theoretical stand is not only supported by some social scientists, but it also still forms a part of the political platform of some ruling communist parties. In the German Democratic Republic, the central planning of development and the implementation of so called "key technologies" were strongly stressed in the documents of the latest Xlth Meeting of SED, and this idea was widely supported by East German economists. (Ebel, 1987) This stand-point is only partly correct and could to some degree be proven only as far as key innovations and organizational changes in the economy are concerned. This type of progress under contemporary conditions is certainly impossible without long-distance planning and the concentration of great financial and human potentials. This fact is realised also in most countries classified as market economies, where governments organize and finance great research projects in many branches of social and technical sciences. These researches, some of them very controversial as SDI, are seen as potential instruments of speeding up innovation in key directions. However, there is also a very important other side of technical progress and organizational innovations: In no case great innovations alone, without their economy-wide implementation and without supporting them with constant small progressive changes in technology and in the organization of management, can bring a constant, dynamic economic and social progress. To support this I must recall here the measures of effectivity, comparable between different economies. The typical centrally planned econo-

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mies, after decades of administrative management of innovative processes, are in a situation, when their producers use much bigger quantities of labour, energy and raw materials, to produce the same types of goods that are manufactured in geographically neighbouring market economies. In Poland for example, the norms for energy and materials are twice to three times higher, according to most types of products, than they are in Western Europe, but also in South Korea or Brazil. That is not because of a general distance in great innovations. Poland produces almost all modern products, including laser sophisticated equipment or complicated electronics. This, however, does not reach most branches and most levels of the production process, where one can still see anachronistic technical equipment and museum technologies. Everyday, constant, small progress demands its integration with the real interests of single producers and their collective organizations or enterprises. One can expect a society-wide activity concerning the search for new, more effective and cheaper solutions of production problems only if individuals, their groups and the managers of economic organizations, by finding and implementing them, could realise their own economic and social goals. Centrally planned systems, with their traditionally understood role of state administration in managing the socio-economic progress, created instead strong barriers against those grass-rooted processes. The individuals (including managerial staff at the factory level) lacked either the freedom of making innovative decisions in their economic organizations or the possibility of achieving any profit from this. The same system of administrative planning of technical progress, which assured the implementation of all the biggest world inventions in a comparatively short time and sometimes produced great inventions (mainly in military technology), put itself effective limits to the possibility of making any important decisions on the factory or lower level. The people in factories had no freedom of changing any essential centrally planned targets on the terms and means of their realisation. That meant that a manager had no possibility to slow down a production process temporarily or to change the technology to get some savings in inputs without the permission of his superiors outside the enterprise and without their decisions about changes in supplies of raw materials and semi-products, necessary to make any essential change in the technology or construction of the final product. This fact, supported by the observations of the slowing down socialist centrally planned economies, woke growing criticism about the traditional methods applied to assure technical and organizational progress in this system. Most of the leading economists began to agree that the method of ruling socialist economy must be changed in a dramatic way. There were two main reasons for that: first that the pace of economic growth in the socialist countries had begun to fall down rapidly, which caused growing social and

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political unrest, and that the factors of development which were traditionally moving these economies had been decisively exhausted. The group of social scientists who formerly had criticised the principles of administrative ruling of the economy, like W. Brus, L. Kolakowski or J. Kuron, 3 who had been considered "revisionists", was joined by a growing number of scientists and now this tendency is represented, for example, by leading Polish economists like: Z. Fedorowicz (1988), M. Nasilowski (1987), M. Mieszczankowski (1987), Z. Bombera and others, or Soviet authors like A. Zaslavskaja or L. Schevtsova (1988). In fact, the majority of authors in Poland, the Soviet Union, Hungary and Bulgaria at least write critically about traditionally understood central planning and its prospects. Very symptomatic was the fact that when in the years 1980-1981 more than ten various collectives prepared complex projects of economic reforms, although they represented different political and theoretical stands, all the propositions postulated a far-reaching decentralization of management up to the complete elimination of administrative central planning. This opinion was common in all the teams: starting from the Government and the Party Commission and ending with the experts of "Solidarity". (Krawczyk, 1981) That general unanimity was a rational response of science to the challenges of the present economic and social problems. It its widely understood now that socialism without a wide social support for innovations and without waking strong individual and group motivation for search and implementation of labour and capital saving methods is bound to lose its historical chances of creating a freer and more just society and to fade away as one more, but unprecedentedly expensive, social experiment. Market conditions for enterprises, with a demand driven of economic activity, are considered to be a basic condition of the system's survival and competitiveness against other systems. The introduction of a socialistic market could be considered as step towards démocratisation of the economy by itself. As compared with bureaucratic management of supply and demand the market means some sort of démocratisation at least in two economic respects: widening the circle of people taking part in making decisions about production and increasing the sovereignty of workers and consumers as individuals. In market conditions the decisions about what to produce, how to do it, what resources to use, where to sell the products, how to dispose of the profits after tax, etc., are made at the enterprise level and that opens new possibilities for the sharing of this economic power by the groups that act

3

W. Brus, Social Ownership and Political Systems, London, Boston 1975; J. Kuron & K. Modzelewski, Open Letter, "New Politics" 1966: 3.

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at this level: workers and their trade-union or/and self-managerial organs, low, middle and top-level management. To make some wrap up of the problem of the connection between new technologies and changes in the socialist economic relations it is necessary to say that it leads to some sort of democratization in two ways: firstly by increasing the level of sophistication of many sorts of jobs and thus giving this type of participants in the production (and service) processes a bigger degree of autonomy in making economic decisions, 4 and secondly by making it entirely necessary to decentralize supply and demand creation in the centrally planned economies. The fact of freeing the state enterprises, as well as of creating more favourable conditions for cooperative and private ones, does not mean that a démocratisation of industrial relations would be automatically developed. There are more theoretical possibilities for the socialist economies and enterprises. Bureaucratic relations may survive even after eliminating its forms traditionally identified as centrally planned economy. The former forms may be substituted by new ones, well known also in capitalist market economies: by bureaucratic structures at the enterprise level. Economically independent enterprises are not necessarily managed in a democratic way. They may act according to a scheme, to use the typology of J. Rothschild-Whitt (1979:519), such as bureaucratic type or collectivistic-democratic type organizations. It is not definitely or empirically proven that new technologies and market relations must lead objectively to the development of democratic industrial relations and to the humanization of work on a nation-wide scale. It is also possible that they could produce jobs where people are only mechanical supplements to modern automatic production lines and where independent organizations are managed undemocratically. There are good bases to agree with the opinion of K.O. Alexander that "authoritarian hierarchies could result from bureaucracy, like ... from capitalism". (1985: 339) The democratization of the economy in decentralized socialism will be assured provided presence of a strong political will is in accordance with social support this direction of changes.

4

the for

E. Lipinski, 1969: 112; 'A Modern Alliance, Editorial', The Economist 1987, Jan. 31/Feb. 2: 18.

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Decentralization and Democratization in Socialist Enterprises At the present stage of development of the socialist system, it is quite clear that without introducing market forces and changing the methods of state economic policy making, this model is unable to survive. Even for those theoreticians and politicians who are well aware of that fact, there still remain two completely different options for the future model. One is based on an assumption that the safest and most promising way is to give up all the socialist experiments and try to reconstruct something similar to the model developed in the capitalist European system, the other means looking for more efficient ways of realisation of the socialist social values in the present conditions. In the first case there is a growth of theoretical and political movements observed tending to restore capitalism with private ownership and autocratic management in the enterprises. Another approach is of a different ideological origin, though its representatives also see autocratic management as the best model in the future enterprise. These are authors like J. Tittenbrun, who wrote that "giving the right to manage state enterprises to workers-managements ... limits the social character of the ownership and leads to its transformation to a group one" (1986: 50), or like K. Doktór, who identifies the supporters of self-management economy as adversaries of central management, "planned cooperation and coordination". (1984: 49) These two directions have not found, by now, any stronger support in the communist parties of Bulgaria, Hungary, Poland and the Soviet Union - the socialist countries that are most advanced in changing their political vision of future socialism. The Polish economic reform and the Soviet perestroika follow another pattern of thinking. The declaration of this will could be found in party documents, where, like in the resolution of the 9th General Meeting of The Polish United Workers' Party, one can read that the "creation of workers' self-management in enterprises, self-management with final decision rights and the right of control, which correspond to the expectations and needs of workers", (p. 113) Also in the speeches of the leaders and legal regulations this tendency was many times exposed. M. Gorbachev in many places has often repeated that one of the main targets of perestroika is to "democratize management, to increase the role of working teams in it and to develop workers' control". (1986: 390) Such opinions were also repeated by other party leaders: W. Jaruzelski, T. Zhivkov and others. In my opinion, in spite of the much advertised political support of the communist parties for workers' self-management, the future of this form of democracy in socialist economies is not determined yet. It will depend on the practical

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economic and social results of its implementation and, resulting from it, social support of resistance. Without attracting big social groups, selfmanagerial forms will lose their competition with managerial systems in all forms of ownership in. enterprises: state, cooperative and private, or, at least, will not be able to dominate in any of these sectors. The visions of some authors, who like L. Gilejko predict that in future socialism "there will disappear all forced forms of work in both economic and social respects" (1979: 261), could be sure realized only in one case, that is if self-management proves to be economically a more efficient form of making decisions than its authoritarian alternatives. If authors like J. Vanek (1977: 29) or the Polish T.B. Jaworski are right in arguing that motivations created by the possibility of making decisions is stronger than that, which comes out of egoistic economic interests (1987: 43-44), then the future of industrial democracy in socialist countries is promising. Self-management will develop in that case together with the decentralization of economy, with the growing economic independence of enterprises and the changing character of central economic and social policy. Alas, the present experience gives not too many reasons to be optimistic. According to many researches, social support for self-management in Poland, for example, is of a more declarative than active character. In my own research in 1985 and 1988, where I have questioned hundreds of workers in three state enterprises, I have observed that while the big majority of respondents supported the idea of self management (more than 70 percent of workers in all investigated enterprises), only a small part of them expressed an unconditional will to take part in decisionmaking processes at the enterprise level. Other wider observations prove that only about 20 percent of all the 12,115 elected workers' councils in Polish state enterprises played in 1986 "an active role" in their enterprises. (Dryll, 1987: 2) Some researchers even conclude that "self-management does not reach the department level" in Polish enterprises and that it even "strengthens the hierarchical structure of management" instead of its democratizing, not leading to any "qualitative changes at the work-place level". (Grela, 1987: 26) All these observations seem to prove that the question of whether the future of socialism is in self-managed economy still far from being answered.

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Some Conclusions According to my opinion it is possible to observe such unquestionable correlations between technical progress and the acceleration of innovative processes and socialist economies as: -

-

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a growing necessity of decentralize management of enterprises and to give their managers full independence in economic decision making with respect to socio-economic forces such as: the interests of working teams, market needs, etc.; these changes may open ways for the development of really democratic industrial relations in socialist enterprises; the present political will favours self-managerial economic solutions at the enterprise level in a number of socialist countries; the future shape of managerial structures inside socialist industrial enterprises is not yet finally decided and it will depend on practical experience and competition between various forms of management and various social values; the present social support for self-management is not strong enough to lead to any decisive changes in this sphere.

To finish, I would like to say that in my conviction new technology must bring some démocratisation in socialist economies, at least by substituting bureaucratic systems by more decentralized and more autonomous market oriented enterprises. That does not mean that technology will inevitably force the implementation of a real, deep economic democracy and will guarantee the realization of social values that form the basis of socialistic ideology, although they seem to increase the chances for that.

A Postscript The time runs very fast. Many theoretical stands quoted in this paper may be considered at present as evidently anachronistic. However, they illustrate the state of social sciences in the period preceding a deep crisis and, quite possibly, the definite fall of the centrally planned economic systems. As such they are still of a certain historical importance and may be interesting for some readers. The main idea of the paper seems still correct and the incompatibility of central planning and quick technical

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progress which is underlined in it was by no means the least important reason of the crash of the socialist economic and political system.

Bibliography Alexander, K.O.: 'Worker Ownership and Social Change', The American Journal of Economics and Sociology, 3/44/1985. Brus, Wodzimierz: Social Ownership and Political Systems. London & Boston, 1975. Doctor, Kazimierz: 'The Party Organization in a System of Self-Managed Enterprises', in W. Masewicz (ed.), The Party, Trade Unions, Self-Management in an Enterprise. Warsaw, 1984. Dryll, Irena: 'Only or So Much', Zycie Gospodarcze 43,1987. Ebel, Herbert: 'Revolutionary Changes of Productive Forces and the Economic Strategy of SED', in Factors of Implementation of Technical Innovations. A Conference Book. Technical University Cracov, 1987: 25-34. Fedorowicz, Zdzislaw: 'Problems of Ownership of Means of Production and of the Economic Efficiency', Ideologia i Polityka, 7/8 1988. Gilejko, Leszek: 'The Principles of Communism. The Development of The Communist Formation', in L. Gilejko, R. Rudzinski & T. Stepien: The Socio-Philosophical Ideas of Marxism. Warsaw, 1979. Gomulka, Stanislaw: 'The Incompatibility of Socialism and Rapid Innovation', in S. Gomulka et al., Socialism and Rapid Innovation. London, 1985. Gorbachev, Mihail: 'The Political Referate of the CC for the XXVI Ith General Meeting of the CPSU', in M. Gorbachev, Articles and Speeches. Warsaw, 1986. Grela, Lucjan: 'Workers Self-Management and Collective Forms of Work', Nowe Drogi, 8/1987. Jaworski, Tadeusz B.: 'The Problems of Workers' Self-Management', Ideologia i Polity ka, 4 1987: 43-44. Krawczyk, Rafal (eds.): Economic Reforms: Propositions, Tendencies, Directions of Discussion. Selected Documents. Warsaw, 1981. Kuron, Jacek & Karol Modzelewski: 'An Open Letter', New Politics, 2/1966, vol. 5:3. Lenin, Vladimir I.: 'Managing and Ruling of Nationalized Enterprises', in V.l. Lenin, All Works, vol. 36, Moscow, 1977. Lipinski, Edward: K. Marx and Contemporary Problems. Warsaw, 1969.

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Mieszczankowski, Mieczyslaw: Political Economy. A Popular Sketch. Warsaw, 1987. Nasilowski, Mieczyslaw: The System of Socialist Economy in Poland. Warsaw, 1987. Peretiatkowicz, Anatol: 'New Brigades in the Soviet Union', Zarzadzanie 3/1988: 50-51. Rothschild-Whitt, Joyce: 'Collectivist Organization: An Alternative to Rational Bureaucratic Models', American Sociological Review, 4/44/1979. Rudolf, Stanislaw: Series of articles, Przeglad Organizacji, 2, 3, 4, 5, 7, 8/1984. Schevtsova, Lidia: 'The Imperative of Modernizing the Socialism', Workers Class and Contemporary World, 3/1988. Tcherkasov, G.N.; Grigorieva, L. A. & V. S. Vieretiennikova: The Brigade Organization of Work. Moscow, 1984. 'The resolution of the IXth General Meeting of PUWP', in IXth Meeting of PUWP. Main Documents and Materials. Warsaw, 1981. Tittenbrun, Jacek: 'What Kind of Socialization, What Kind of Self-Management?', Ideologia i Polityka, 12/1986. Vanek, Jaroslav: The Labour-Managed Economy. Essays. Ithaca & London, 1977. Volkov, Mihail I.(ed.): Political Economy of Socialism. Warsaw, 1978: 115-119. Wrublevskij, Valerij K.: The Advanced Socialism: Work and Technical Progress, Moscow, 1984.

Capitalism, Socialism, and Business Organizations Monir Tayeb

Introduction The political and social revolutions that have occurred in Eastern European countries since 1989 have moved them away from a socialist command economy towards a market-oriented capitalist system. The extent and speed at which this move is implemented and completed varies from one country to another. Hungary and Poland, for instance, are keener and have been quicker to take necessary measures to install a market economy, some others, such as Rumania and Bulgaria, are more cautious. Albania is as yet unaffected. Non-European socialist countries, such as Cuba, have no intention of abandoning their existing political economic systems, and China has been experimenting only with limited relaxation and decentralization of economic activities. The political economic changes in Eastern European countries have profound implications for, amongst other things, business organizations. It is, of course, too early to observe any noticeable changes in the way that business organizations are managed and structured. One can only speculate as to what might happen in the process of transition from one system to another. At the time of writing this paper (August 1990) the political and economic situation across the socialist world is in a state of influx and unpredictability. The arguments and speculations presented here might well have been over taken by events by the time this paper is published. It might be useful at this stage to highlight the nature and direction of the move away from the socialist political economic system at the macro level. There are at least five major aspects on which capitalist and socialist societies differ fundamentally from one another. These are: ideology and value systems, management of economy, the role of the state, ownership and control of means of production and characteristics of class structure. A change from socialism towards capitalism is likely to occur strongly along these five aspects.

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Ideology and Value System There will be a shift away from an ideology and value system, in which emphasis is placed on the collective interest, towards one which appeals to the notion of economic betterment through individual initiative and self-help. The role of the Communist Party as the bastion of the interests of the working class as a general collective will in many of the socialist countries disappear.

Management of Economy Most socialist countries were structured on the basis of a command economy. The system involved centralized controls over many aspects of economic life: prices and wages, investments, products, choice of production technologies, suppliers of raw materials, and foreign trade. Most enterprises were nationalized and they did not need to exercise effective financial control over their own activities, neither did they need to market, distribute and develop own production lines. The command economy in many socialist countries has now collapsed, and although a new system has as yet to emerge, a free market economy seems to be the common and desirable goal. Currently the significance of market-based structures in socialist countries varies from Poland and Hungary, which had in the past some market-oriented structures, to Rumania, Bulgaria and the former East Germany, which had very few. China today no longer has a planned economy and indeed by the more demanding standards of Soviet practice, never had one. In both the commercial and the light industrial sector, modest moves toward market governance seem to be taking place. A shift towards a market-oriented economy, which operates to maximise profit, will replace centralized planning and control by the decentralization inherent in the use of market mechanisms. Different countries have, however, approached the task of decentralization of the economy, especially with respect to pace and methods, differently. Poland, for instance, has been applying 'cold-shower' treatment, plunging directly into the harsh realities of competitive capitalism. As a result, an internal free market has opened up in many commodities, prices have sky-rocketed, and wage increases have been pegged to.productivity. Other East European leaders have moved more cautiously. For instance, while the Czechoslovak government is sketching out a new

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economic programme, subsidies remain in place for a wide range of goods, and opening a private business remains a cumbersome process. Rumania's leaders have promised to reform the country into a social democracy with a mixed economy, pointing to Sweden and Austria as possible models. But they have also insisted that the state must maintain control of collective farms and "strategic industries". In Bulgaria, opposition parties have been legalised, and many restrictions on the press have been lifted. The government has promised to turn land over to the peasants and guide Bulgaria toward a free-market economy. The former East Germany is a special case. It was unified with West Germany on 3 October 1990. A draft treaty signed by the two governments, which took effect 1 July, 1990, is a capitalist manifesto that specifies the demolition of East Germany's 40-year old economic system and its replacement with one identical to West Germany's "social market" economy with private property and free competition.

The Role of the State In a socialist system the state is responsible to a large extent in determining who gets 'what, when and how': the political process decides the distribution of resources between various social groups and interests (Lane, 1977). In future the type of activity performed by the government will be limited. The diminished role of the state and the absence of its subsidies and other protective measures will have profound consequences (Time, 1990d). The new non-interventionist policies of Poland's government have created hard times for many of the country's 40 million citizens. Unemployment, virtually unknown under communism, has sharply increased. Rising prices and tight curbs on wages have reduced the purchasing power of some families drastically. For the first time people can remember, farmers and factories cannot sell everything they produce. On the positive side, inflation, which reached 54 percent last October, sank to b percent in April. Absenteeism in industry has been halved during the past five months, as layoffs have increased. In Yugoslavia, the austerity package of wage and price freezes has brought down inflation from an annual rate of 2000 percent to virtually zero. Credit restrictions have, on the other hand, helped cause a 10 percent fall in manufacturing output during the first quarter of the year,

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and more than 200 firms are in bankruptcy proceedings, threatening tens of thousands jobs. In former East Germany, even though the ex-West Germany is setting up a 70 billion $ "unity fund" to help finance the impending economic transition, the immediate social costs will be borne by East Germans. Unemployment and inflation could soar as a result of unification. There might be mass migration from collective farms to cities, from the public to the private sector. Enterprises might go bankrupt, savings could dwindle, and rents are expected to rise as much as tenfold (Time, 1990c).

Ownership and Control of Means of Production A distinctive characteristic of a socialist system is the ownership and control of means of production by the state. The change to a marketoriented system will involve the privatisation of state-owned businesses, which amount to about 90 per cent of the economy in most socialist countries. This, however, might prove to be the most difficult phase of the economic reforms in Eastern European countries. For example, agricultural land, nationalized in Hungary from 1947 on, is unlikely to be returned to those from whom it was confiscated because of fear that such move could cause a disastrous fall in food production. Nor will such acreage be given back in Czechoslovakia or Rumania, at least for the moment. In Bulgaria, by contrast, all the major political parties support an immediate return of farm land to private ownership (Time, 1990a). In the Soviet Union, legislation allowing the creation of cooperatives or small privately held companies has introduced just enough free enterprise to let a few citizens get rich, but not nearly enough to alter the system as a whole. Individual ministries and the State Planning Commission, though subject to criticism from below and new regulations from above, have stayed in business and are determined to protect their prerogatives (Time, 1990b). Moreover, there is the problem of finding buyers for the state-owned enterprises. In Poland, when shares in a profitable import-export company were offered to the public recently, only 20 percent were purchased (Time, 1990d). Also, although private ownership and private enterprise have been creeping in for quite some time, particularly in Hungary and Poland, capital markets are at best in an embryonic stage, and most of the privately hired labour is in rather small businesses. It takes time to

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establish new traditions (Wallace, 1990). Czechoslovakia, for instance, in order to implement its privatisation programme, is trying to create a capital market by giving shares to each citizen. The shares could later be traded on a stock exchange (Time, 1990d). Another problem as Wallace (1990) points out, is that there are few managers trained to operate in the private sector. Foreign investors are being encouraged and conditions for them made much more attractive. But poor infrastructure and lack of essential services pose serious obstacles.

Class Structure Many East Europeans, though they renounce socialism, find unfettered capitalism, especially its class structure, equally repugnant. These countries are single-class societies or workers' states, where the working class is the dominant class for whom the state rules. The fundamental principle underlying the society, on the paper at least, is, under socialism, to each according to his work; under communism, to each according to his needs; and under both, from each according to his ability. A change to a capitalist system will bring its inherent conflict of interests and inequality between the dominant owning and/or controlling class and the working class. There are already signs of resentment toward this prospect among people. East Germans, used to a non-assertive collectivist system, are worried about being overrun by aggressive individualistic behaviours inherent in capitalism. In the Soviet Union people are reluctant to allow some to get rich faster than others. In Hungary, there is a growing disgruntlement at the disparity in life-styles between the small class of entrepreneurs who have sprung up in the past decade and the still poor majority. The government is willing to keep uneconomic industries and businesses running in order to protect jobs. In Czechoslovakia, a worker backlash against the government may occur when economic reforms begin to bite. In Bulgaria, conflict between rural and urban areas is slowing down the pace of reform. Workers in these countries, fearful of losing their jobs, may rally around a party that promises job security regardless of the larger economic consequences (Time, 1990f).

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Implications of Political Economic Changes for Organizations C o m p a n y Objectives In principle, the objectives of the capitalist economic organization are directed towards profit maximization and the strategies for attaining these are formulated in the light of market conditions governing the value secured for products when these are exchanged. Moreover, these objectives are set by organizations themselves. In contrast, the objectives of the socialist economic organization are set by the state, and are seen to be directed at achieving a planned social product with whatever inputs of labour, plant and materials are required. The priority is given to such social goals as full employment and welfare. For example, as Boisot and Child (1988) point out, the Chinese state-owned enterprise, is something of a total institution to its members, offering housing, health, and schooling services for employees. This may seem similar to a large Japanese enterprise. A key difference between the Chinese company and the Japanese firm, however, is that whereas the latter offers these services on a voluntary basis in order to secure the loyalty of long-term employees, the Chinese firm has the provision of such services imposed on it by its supervising authority: a city, a provincial, or even the national government. In this way, many services that in capitalist countries are delivered directly by a municipal authority are in China delivered through enterprises that in a sense are "owned" by their supervising authority. Thus Chinese firms pursue a broader and vaguer, less codified, set of objectives than a profit-maximizing capitalist enterprise. With the shift away from a centralized state-managed economy to one based on free-market mechanisms, enterprises' main objectives will primarily be making profit, maintaining growth and capturing markets.

A u t o n o m y in Decision Making Capitalism is conducive to organizational decentralization through the establishment of internal market-allocation mechanisms on a semi-autonomous profit-centre subsidiary basis. Socialism appears to be difficult to sustain without a high degree of central direction (Child and Tayeb, 1983). Kuc et al. (1981) found from a comparison of Polish, British, Japanese and Swedish factories matched for size and type of product, that the

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centralization of decision making within the Polish organizations was considerably higher than in organizations from the three capitalist countries. They attributed this difference to the nature of direct central State involvement in enterprise planning in Poland, whereby the State establishes the long term norms for investment, pricing and resource allocation, and the manufacturing enterprises work within these norms. In the past the managements of the enterprises were directly regulated from the Central Planning Commission. Consequently the level of centralized decision making in and above the enterprise was extremely high. However, recent reforms have changed all that. The new Polish government has abandoned its protective policies, subsidies have been stopped, prices are now determined by the market, and managers have to face competition in both raw material and finished products and services markets. In the Soviet Union, even though industry will still have to adhere to five-year plans, the clear intention is to grant enterprises greater independence. Now economic management is to be based on market forces and financial credits, and cooperative and private enterprises will be allowed as well as state ones. The monopoly in production has been abolished, and competition between enterprises is being encouraged, which is intended to lead to an improvement of products. The principle of self-financing will come to the fore. Enterprise directors will have more responsibility for decision-making and financial autonomy, and their concerns will have to operate on a profit-and-loss basis. Those who are efficient and more successful at meeting customers' needs will be able to plough back their profits (Channon, 1990). In China, although there have been occasional experiments with decentralization, things have not changed much. As Lockett and Littler (1983) and Laaksonen (1984) report, in Chinese organizations there are three centres of influence: top management, party committee and government body above the enterprise. The main source of power in this coalition has been the party because the party system selects or approves the nomination of the general manager. On the other hand the government body above the enterprise is also subordinated to the party. In principle the party committee of the enterprise is the most powerful unit in the firm. If the general manager of the firm is at the same time the first secretary ('chairman') of the enterprise party committee he has concentrated influence very much in his hands. Between them the Party committee of the enterprise and the government body above the enterprise make all the decisions related to personnel matters. This power can be used as an instrument for controlling the use of ideological resources in enterprises to train, reward and promote those who are ideologically 'pure'. Further, the influence of the govern-

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ment body is also higher than that of the top management of the firm in the two decision areas concerning major investment and hiring procedures. Thus in comparing the power areas of party and government, governmental bodies control economic resources. Decisions concerning hiring procedures and improvements in working conditions are also considered to be economic investment.

Workers' Participation Free and independent trade unions did not exist in most of the socialist countries before the recent revolutions, and the workers who did organize themselves as such were quickly suppressed and dispersed by the ruling Party. However, it was regarded as appropriate that the collective view of workers in an organization, and possibly its local community also, should guide its administration and operations. Provisions were therefore made for workers' participation in the management of the organizations in these societies. In China there were, and still are. various forms in which workers participate in the management of their work organizations. 'Election of managers' and 'workers' congress' are two such forms. In 1978, Deng Xiaoping announced that 'workshop directors, section chiefs and group heads in every enterprise must in future be elected by the workers in the unit' (Beijing Review, 20 October 1978: 7). However, as Lockett and Littler (1983) report, there are variations in the extent to which factory management elections take place and, where this happens, in the degree to which nominations remain under the control of the factory director. Workers' congresses, which have existed in Chinese industry in various times, are empowered, in accordance with the Party's principles and policies, to scrutinize the directors' production plans and budgets; to discuss and decide on the use of the enterprise's fund for labour protection, welfare and bonuses; to decide about any proposed changes in the structure of management, the payment system or training; and to supervise leading cadres, to the extent of making reports to the higher authority (Lockett, and Littler, 1983). In Yugoslavia workers' participation is institutionalised in the form of self-management. Self-management depends on a comprehensive system of rights and obligations which, formally, do not differ greatly from one firm to another. The essence of these rules is that the highest authority of a firm is given to the organs of self-management (workers' councils), while the managerial staff and the management fulfil, respectively, the functions of providing services and carrying out policy. However, in practice, the

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management has by far a greater degree of influence and power in policy making than the organs of self-management (Ramondt, 1979). While formal channels for workers' representation are not by any means unknown in capitalist societies, and have become legally institutionalized in some, these do not have the same ideological standing in terms of providing a voice for members of the owning working class with consequences that derive from that standing such as the right to discuss and make managerial appointments. Under capitalism, these and other decisions are much more likely to be claimed as managerial 'prerogatives' deriving from managers' claims to be representing ownership (Child and Tayeb, 1983)). A shift away from socialism may mean that the workers will lose much of their privileges and right to participate in the management of work organizations. This prospect, together with the increasing rate of unemployment, has prompted the workers in Eastern European countries to organize themselves in independent unions. But it remains to be seen how far they can maintain those privileges and rights.

Organizational Hierarchy In capitalist societies, economic organizations are normally supervised by one or two-tiered boards which legally represent the interests of ownership: either private shareholders or the state. In some cases, workers have a minority representation on such boards. This focal point of responsibility, which has charge of strategic policy and planning in a decentralized capitalist system, provides for a single hierarchy of executive accountable through it to the owners of capital. In contrast, socialist enterprises may be characterized as having dual hierarchies. There is a managerial hierarchy responsible for plan fulfilment to a planning centre located above the enterprise. A party hierarchy parallels the managerial line within enterprises and itself reports to local and central party organizations. The Party is considered as having a legitimate role in the hierarchical structures of organizations. With the collapse of communist parties across Eastern Europe, its presence in work organizations will be a thing of the past. However, other socialist countries, notably China, have not abandoned this practice. During the Cultural Revolution (1966-1976) revolutionary committees were created at several levels of organizations. These committees consisted of 20-50 members depending on the size of the firm. The members did not all need to belong to the party, but the chairman and the vice-chairman in many cases certainly did.

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In more recent times, as Boisot and Child (1988) report, in order to ensure that the various duties they have set their firms are properly carried out, local authorities have set up their own offices on the spot. One medium-sized textile firm surveyed in Guangdong province, for example, is required to provide offices for 22 different municipal agencies and to cover the salary costs of over 400 officials that perform no useful function for the firm itself but work there as representatives of the supervising administration. The director of this firm complains that these officials constantly interfere with day-to-day activities and take up a great deal of scarce managerial time in meetings. Moreover, their presence prevents him from developing an organizational structure better adapted to operational needs.

Planning and Resource Allocation In most socialist countries until recent events, the management was understood to be the executor of the political and strategic decisions made by the state and the party authorities. In Poland, for instance, Kuc et al. (1981) observed that the official resolutions worked out by the party authorities carried leading imperatives for the business and industrial managers. Further, the effects of central national planning, under government direction, were transmitted to each through group headquarters in the form of varying pressures and constraints on supplies, on production, and on markets, distribution and selling (Kuc et al., 1980). With the adoption of non-interventionist policies, plans or targets for such matters will in future be established within, not above, the enterprise.

Capitalist Companies in Eastern Europe In the wake of the collapse of socialist regimes in East, companies from Japan and Western capitalist societies are rushing to the region to cash in on the new opportunities. There are, however, difficulties and problems as well as opportunities for both the countries involved and the foreign investors. The process of privatisation of ownership of property and means of production is not as yet completed. Also, many of the Eastern European countries are reluctant to allow foreign companies into their economies as the sole owner and controller of whatever enterprise they want to set up or take over. As Time (1990e) puts it, while most East Europeans welcome

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the torrent of Western investment, they often have mixed feelings about the changes that it brings. Some fear that the capitalist invasion may replace communism with a new and more subtle form of economic domination. "There are still doubts in may people's minds about selling off parts of their national patrimony to foreigners", says and American director. These doubts and fears appear to be well-founded, in some cases at least. For instance, according to a recent report published by the Organization of Economic Co-operation and Development (OECD), Eastern Europe risks being asset-stripped by Western investors rather than by receiving the long-term investment it needs. In its first report on the region, contained in the latest OECD Economic Outlook, (OECD, 1990) the organization warns the emergent democracies that there will also be a substantial lag between pledges of direct investment and funds coming on stream. Large-scale onward investment is seen to depend on the pace of reform, especially in the area of property and ownership rights: "Given the extremely imperfect asset markets in the region, there is a risk that private foreign direct investment into these economies will be characterized by predatory manoeuvres rather than longer-term development considerations," it says. The OECD also notes that the need in some countries for hard currency and inadequate information about the value of state assets also makes them vulnerable to "asset-stripping and transfer-pricing practices". Many capitalist companies are likewise cautious as they weigh the benefits and risks of venturing into Eastern Europe. These investors are lured by low wage rates, an educated labour force and a pent-up market of nearly 140 million consumers in the heart of Europe (Time, 1990e). However, they cannot count on wages remaining low for a long time, given the expected high inflation rates. Also, they will need to retrain the local workforce to learn new skills, e.g. Western-style bookkeeping, working with complex high technologies. Inconvertibility of East European currencies, and under-developed infrastructure, especially in the areas of transport and telecommunications, are some of the difficulties that might dampened the initial enthusiasm of foreign investors to go East. There are, however, obvious advantages for both sides in Western and Japanese multinationals' increased investment in Eastern Europe. The former, for instance, not only can expand their market in East Europe but they can also ensure a greater foothold in the post-1992 West Europe. The following report in Time (1990e) illustrates this point. "GE had Western customers in mind when it acquired a majority stake in Tungsram [Hungary] in the largest direct investment in Eastern Europe since W.W. II. The transaction gave General Electric control of a respected 100 year-old

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company that last year exported nearly two-thirds of its input, or $ 180 million worth of bulbs, to West European countries, which pay in hard currency. The deal boosts GE's meagre 1 per cent share of Western Europe's lighting market to 9 per cent. That share could prove particularly valuable if the European Community decides to impose quotas on non-Community products after it becomes economically unified in 1992" (pp. 46-47).

On the other hand, foreign companies and the ancillary industries which they will subsequently spawn have enormous implications for the economy and the country as whole. For instance, these companies will bring with them their sophisticated technologies and know-how, and in order to facilitate the movement of their supplies and products, they will act as impetus to building a better infrastructure in the host countries. However, as was mentioned at the beginning of the paper, it remains to be seen how far speculations of this kind will match the reality in the years to come.

References Boisot, M. & J. Child: 'The Iron Law of fiefs: Bureaucratic Failure and the Problem of Governance in Chinese Economic reforms', Administrative Science Quarterly, 1988/33: 507-527. Channon, J.: 'Industry' in Soviet Spring. Booklet produced by Channel 4 Television and New Statesman and Society in association with the School of Slavonic and East European Studies, 1990. Child, J. & M. Tayeb: 'Theoretical Perspectives in Cross-National Organizational Research', International Studies of Management and Organization, 1983/XII: 23-70. Kuc, B.; Hickson, D. J. & C. J. McMillan: 'Centrally Planned Development: A Comparison of Polish Factories with Equivalents in Britain, Japan and Sweden', in D. J. Hickson & C. J. McMillan (eds.), Organization and Nations. Farnborough, Gower, 1981. Laaksonen, Oiva: 'The Management and Power Structure of Chinese Enterprise During and After the Cultural Revolution', Organization Studies, 1984/5: 1-21. Lane, David: 'Marxist Class Conflict Analyses of State Socialism', in R. Scase (ed.), Industrial Society: Class, Cleavage and Control. London, George Allen & Unwin, 1977. Lockett, M: & C. R. Littler: 'Trends in Chinese Enterprise Management, 1978-1982', World Development, 1983/11: 683-704. O E C D : OECD Economic Outlook, Organization of Economic Co-operation and Development, reported in Times, June, 1990: 21.

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Ramondt, J.: 'Workers' Self-Management and its Constraints: The Yugoslav Experience', British Journal of Industrial Relations, 1979/XVII: 83-94. TIME 1990 a 'What Way to the Free market', 30 April: 24-26. 1990 b 'Painful Prescription', 7 May: 40-45. 1990 c 'Now a Capitalist Manifesto', 28 May: 18-21. 1990 d 'Living with Shock Therapy', 11 June: 27. 1990 e 'New Kids on the Bloc', 2 July: 46-48. 1990 f 'A Question of Class', 9 July: 22-23. Wallace, W.V.: 'The Soviet Union and Eastern Europe', Future, June 1990: 451-461.

II. Self-Management: From the Idea to Reality?

Incompatible: Bulgaria - From Managed Self-Management to Managerial Management Chavdar Kiuranov

Self-management could be analyzed from different aspects: as an institution, as a decision-making process, as a form of management. However, its essence is a structure of socio-economic relations, under which the workers' collectives themselves decide on the working process and the working relations, on the production and distribution of the product - its value and surplus value. 1 However, such self-management, not considering the experience of its development in different socialist countries (including Yugoslavia where the theory and practice of self-management has a history of more than three decades) such self-management, I repeat, has hardly existed. In fact, to a higher or lower degree, self-management was - or is being introduced in these countries as a form of managed self-management. At least, this was the case in Bulgaria - with which I am going to deal in this paper. During its post-war history, Bulgaria went through a long series of changes of the socio-economic mechanism. But I shall concentrate my attention on two of these changes: the New Economic Mechanism during the period 1982-1988 (or, more precisely - 1986-1988 - since the adoption of the new Labour Code) and the period after 1988, which is now continuing. Whereas the first one was characterized by an attempt to achieve self-management of the workers' collectives, the second one is a period of introduction and development of firms. The ideas of the new economic mechanism was to create a possibility: the production relations, built on the basis of administrative command, were to be transformed - at least in a more distant future - into democratic socialist production relations, based on the principle of self-management. Juridical expression of this idea, although not fully, became the new Labour Code. The central actor according to the new Labour Code, was the workers' collective - the primary collective (i.e. the workers who make a work 1

See also P.E. Kandel: "Sozialisticheskoe Samoupravlenie", Filosofskie Näuki, Nr. 6, 1989 and T. Rakadjiiska "Preustroistvoto na Ikonomikata prez Pogleda na Sociologa", S., 1989.

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team-section, office or any other lower level organization unit - art. 12.2) and the basic collective (i.e. all workers within an enterprise). The workers' collective has very important rights: a) it elects the team foreman; b) it adopts the plan of the brigade (which is its form of work organization); c) it decides on the wages of every member of the collective, by distributing among them the lump sum wages in accordance with every member's personal contribution; d) it has the right to reduce the number of the members of the work team, without reducing the volume of its work or the quality indices for its performance. These similar rights of the workers' collective are extremely important constituting parts of self-management. For its functioning, the workers' collective elects a work team council, whose main task is to organize the implementation of the decisions of the general assembly of the primary working collective. It should be mentioned that, in spite of some scepticism, self-management was met positively by the working class and the bureaucracy reacted differently to self-management. The workers' collectives liked the elections of the work team foremen and of the directors. But they felt that in enterprises with obsolete technology and ineffective output the state in fact wanted to get rid of donations and let the collectives find the solution, they would have approved of a gradual self-management, waiting for the state to modernize the enterprises, to make investments for new technology, and then pass to self-management. Otherwise they felt that the state was socializing the risk - but the workers' collectives did not feel responsible for the obsolete technology, and with good reasons. The workers in old enterprises felt discriminated compared with workers in modern enterprises. The administration was against the elections, feeling that it might shatter acquired privileges. It approved the comparatively higher freedom of management, but also felt that the more modern enterprises would have advantages. May be the position of the technocracy was the most difficult. It felt serious pressure both from below and from above. The constant shortage or uneven inflow of raw materials, the high degree of depreciation of the machines, the obsolete technology would arouse the criticism of the workers, while the managers, i.e. the technocracy put them under pressure for low quality of the output. And all of these and similar complaints were increasing in a system of self-management, where the responsibilities of the technocracy became more apparent. Self-management did not flourish in Bulgaria. This difficult, but most democratic form of management and self-government, did not reach its ripeness. For the short period of its existence it could not demonstrate its lasting pluses, but the time that elapsed was enough to show its temporary minuses. The latter were the formal argument for its official discreditation.

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The deficiencies were deepened by a pseudo-transfer of ownership of the means of production in the hands of the basic workers collectives. A strange formula was proclaimed: "transfer of the ownership of the means of production to the working collectives for management". This in fact did not mean neither transfer of ownership, nor real self-management. The transfer in such a form and with such a content did not meet the approval of the workers' collectives. But the declared "self-management" did not meet the approval of the administrative-command system either. The election of the directors of the enterprises began to be considered as demagogy, it was said that the workers' collectives are not mature enough for self-management, that discipline is falling, that funds are being wasted, that efficiency is falling in other words, a stock of "classical arguments" of the ruling elite was forwarded to discredit even the modest attempts of self-management that were made. Evidently, the power elite became afraid of self-management. Because, in spite of its minuses and the handicaps in front of it, self-management is by its essence a democratic system of socio-economic relations. And it was not this that the power elite was after. It must be pointed out that the waves of re-organizations that flooded the Bulgarian socio-economic structures 2 during the last decades were in fact an attempt to prevent or to overcome a crisis of an economy of deficit. But every socio-economic crisis has at least two possible solutions - a democratic solution or an autocratic solution. The introduction of selfmanagement, no matter how deficient it was, was a step forward towards a democratic solution, but more deep, more lasting, more responding in the long run to the lasting interests of the workers collectives. However, already in the beginning of 1989 all of a sudden, without any analysis of the "self-management" system, without any public discussion, not even in a formally existing National Assembly, this system was dropped and replaced with the Decree of the State Council on the Economic Activity (DSCEA Nr. 56,1. 1989) by a system of firm organization. Why was the system of self-management not able to give fully positive results? Because it was a system of pseudo-self-management. In every respect it met the opposition of an authoritarian decision-making system, known as the system of administrative command. In most cases the elections of directors were elections with one candidate. I often say that in our countries we have invented a specific form of election - the election "among one" and always the candidates had to be previously approved by the higher level party committee. The ownership of the means of produc2

The anecdote goes as follows: "Where are you working?" - "In a re-organization".

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tion was not transferred to the workers' collectives. The whole managerial process remained autocratic. In practice, the brigades (as a form of labour organization on the grass root level) began to include whole sections, even whole plants, because of the technocratic argument that the brigade must ~nglobe the whole technological process. Consequently, the labour remuneration for each worker was not decided by the primary collective, but by a council of representatives, thus cutting the direct links between real labour inputs and wages. The constant shortage and uneven furnishing of raw materials did not encourage the workers collectives to get rid of the superfluous labour force, thus keeping or even increasing concealed unemployment. These were the results of a centrally managed "self-management". And, I repeat, instead of taking the necessary measures to create conditions for real self-management, the whole system was abolished and replaced by a system of firm organization. According to art. 10 of the DSCEA, the firm is an economically, socially and organisationally specified participant in the economic activity with its own name, working on its own self-account. The firms may be: state, municipal, cooperative, belonging to different societal organizations, belonging to companies or to individual citizens. Different kinds of firms may be organized: stock companies, limited companies, companies with unlimited responsibility. The firms of citizens (individual, collective or companies) may hire - on the basis of a labour contract - up to 10 workers and employees, while for seasonal works the number is unlimited (art. 63, 1.2). Foreign firms and firms with mixed - foreign and national participation may be organized. Their profits are taxed from 30 to 40 per cent, while the profits of the national firms are taxed by 60-70 per cent. The firms may issue bonds and stocks. Shares can be owned only by persons who have been working with the firm already not less than one year, that is why they are named "labour shares", whose nominal value is 50 leva, giving the right to a dividend from the yearly profit. The stocks are of a "closed type" - they cannot be sold, a member of the working collective cannot have more than 200 shares. There is no stock market. Shares can be inherited only by inheritors working in the firm, otherwise the firm buys them. Pensioners may keep their shares if they had been working for ten years with the firm before pensioning. It is expected that the firms will bring many advantages to- economic development. The shares will be an incentive for the shareholders to put in circulation a part of their savings and thus decrease the amount of state capital investments and also, help curbing inflation. It is expected that the shareholders will be much more interested in the increase of the profit and in the quality of their own labour inputs, being co-owners of the firm. All this is possible. But already now it is clear that there are important negative aspects of the firm organization, which have to be borne in mind.

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a) The formation of a firm should be a natural process. Historically, firms have emerged from below, which is not our case. The new firms in Bulgaria are being created by a decree, from above. b) Ideally, the firms should replace the monopoly structure of the economy. They should compete on the market and consequently, be able to overcome the deficit of goods and services. But it has been decided that there will be about 300 firms - i.e. their very number will not be the result of a competitive process, but of an administrative decision. In addition, there is a tendency to built very big state firms, which most probably will lead again to monopoly in certain branches. It is characteristic that high administrative bodies are discussing how many firms should exist in some branches, so that there will be competition. Instead of a natural process, competition is becoming an administratively prescribed process. c) I already mentioned that a free movement of stocks will not be allowed. Such a closed system of stock circulation is contrary to the very essence of the stocks. d) The owners of labour shares are in fact tied to the respective firm, whose shares they are proprietors of. The very high rate of labour turnover, which is characteristic of the Bulgarian economy and which was never stopped in spite of all kinds of decrees and decisions (and which cannot be stopped, because turnover is only an inevitable expression of the law of supply and demand) is a serious worry for the authorities. Obviously, their expectations are that the "labour shares" will help stopping the turnover. But this is doubtful. What is not doubtful is that through the shares - because they are not alienable the administratively restricted attachment of the workers to the enterprises will be replaced by economically restricted attachment to the firms. However, it is extremely important to analyse the state regulation of the economic activity under the Decree Nr. 56, the relations "state - firm". a) The State, in fact, has the right to decide on the formation of the firm, because for the State, co-operative, municipal and societal firms registration in front of the court is mandatory. Obviously, such registration may be denied by the court. Nowhere is there an obligation for the court to register the firm, if it has fulfilled the necessary legal requirements. b) The participation of a firm in the fulfilment of the overall state plan is decided "in a dialogue" with the Ministry of Economy and Planning. Presumably, both sides have equal rights. But according to principle when both sides have equal rights, the more powerful is the one

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deciding. The Ministry of Economy and Planning is a huge giant, which includes planning (i.e. elaboration of the State Plan), economic and technological development, finance (the country is - may be the only one - without a Ministry of Finance) and price formation. No matter how important a firm is, it is a pigmy compared with this ministry. c) The taxation is extremely high: from 60 to 70 per cent of the profits, as I mentioned, go to the State, the municipalities and the higher level management, because the firms are united in associations, whose manager's salaries are not on the State budget, but are assured by the member-firms. As an illustration: taxes in the FRG come to 50 per cent, in Holland 42 per cent, in Switzerland 11.1 to 30.2 per cent, in U S A 39,9 per cent in Austria 30,5 per cent, in Belgium 43 per cent, in Denmark 50 per cent, in Spain 35 per cent, in Greece 49 per cent, in Italy 46,6 per cent. 3 d) The interference of the State in the management of the firm is considerable. - According to the Decree Nr. 56, in the state firms half the members plus one of the Governing Board and of the Control Board are nominated by the State. However, because of serious criticism, the Ministry of Economy and Planning has issued a Regulation (91-00-395; 23. III. 1989), changing the Decree (!) in the following way: if the Governing Board is composed of seven members, the State nominates one; from 9 to 11, two; if 13, three; from 15 to 17, four. The rest are being elected by the General Assembly of the firm, which otherwise has only consultative functions. 4 - A very important mechanism of state influence on the firms are the State orders, which may reach up to two thirds of the production capacity of the firm. In principle, state orders are given on the basis of competition. But I already mentioned that such competition might become a fiction. Prices, in principle, shall be decided in concordance with international prices. But for given commodities, of special importance for the standard of living of the population, they will be state-fixed. However, if this procedure may be justified on the basis of social justice, wholesale prices for raw materials, material and transport services will be fixed according to a specified list, by the Council of Ministers. In many cases this will mean a restriction of the market, a restriction based on non-economic considerations.

3 4

Ikonomicheski zivot, 5. 4.1989. Article by V. Stoyanov. See T. Rakadjiiska, op.cit., p.24.

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And what about self-management? As an echo, coming from far, the term emerges here and there in the Decree of the State Council and the Regulation for its Implementation (II. 1989). a) The Decree mentions (art. 16) that the firms decide by themselves on the intra-firm organizational and production structure; on the rights, obligations and responsibilities of the branches of the firm and the ways of interaction between them; on the intra-firm management. And it explicitly states that "the branches of the firm are built and function on the principles of self-management and self-account". b) The head of the firm creates conditions for the spreading of self-government, based on the initiative and the proposals of the working collectives...(art. 12.1 of the Regulation for the Implementation of the Decree on the Economic Activity). But at the same time the Decree itself states that the head of the firm organizes, manages and controls the activity of the firm, based on the principle of his own authority, the principle of one-man decisionmaking. The man, of course, is the Director General. Thus the firm system is a system of managerial management. c) What about the role of the General Assembly? Compared with the system of self-management, which preceded the firm organization, the power of the General Assembly (all workers and employees of the firm) is greatly weakened. The General Assembly is convened "not less than once per year" - which means that it may be convened only once a year. What self-government would it be able to achieve? According to the previous system of self-management (in spite of the fact that it was managed from above "self-management"), the workers collective had the right to adopt the state plan for the enterprise. Now, under the firm system, the General Assembly has the right to discuss the state plan for the enterprise. Adoption means decision. Discussion means opinion. Obviously, this makes a difference. Other facts may be added. But even the ones already mentioned show that self-management and the firm system are incompatible. Mentioning self-management in the documents for the firm organization is either anachronistic or demagogic. Things, however, lie much deeper. Why did it happen that self-management was not really implemented in Bulgaria? When proposed by the leadership of the highest level, it was proclaimed as the most democratic solution of our problems. But very quickly it was dropped. Why? I think that the main reason lies in another incompatibility. Self-management presupposes an enormous variety of managements, different, alternative structures and solutions. Self-management is pluralistic by its very essence.

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But its real implementation, and even its lame implementation, went in contradiction with a system of power which did not have and does not have a pluralistic structure. Such a system could not produce, even if it wanted to (which is dubious), a democratic solution to the problems of economic and social development. It could only produce an autocratic solution, or, may be more precisely, as Gordon and Nazimova put it, a solution of authoritarian modernization.5 "In this case it is presumed that at the beginning changes must be achieved, creating conditions for economic development of a planned-commodity type, which assure qualitative growth in the effectiveness of production, increase in the wellbeing - and only then will begin a transition to broad democracy, pluralism and a genuine based on the law state." 6 I think that the underlying idea both of self-management and of the firm organization, such as they were and are being introduced in Bulgaria, is precisely the same: first economic change, then political change. But such a solution will hardly achieve its goals, because not only self-management, but the firm organization also will meet the wall of an authoritarian, totalistic power structure. And this in spite of the fact that the two systems, self-management and firms, are founded on different forms of ownership. What do I have in mind? Self-management was declared in Bulgaria while the system of ownership remained the same as before, state ownership of the means of production. I already explained that the transfer of ownership to the working collectives was fictitious. It had as one of its real aims the transfer of the indebtedness and the ineffectiveness from the State to the workers' collectives, and even so not for real ownership but for management. The situation with the firms is different. They may be owned either by the State (the biggest and the most important) or by co-operatives, or by private proprietors. The Decree Nr. 56 makes legal all forms of ownership, state, co-operative, personal, private. So there is already a pluralism of ownership, which is expected to develop. But this pluralistic structure does not have as a correlate a structure of political pluralism. In spite of some good intentions, the firm organization will also meet the hurdle of the authoritarian modernization and probably will not be able to overcome it.

5 6

L. Gordon & A. Nasimowa, "Perestroika wosmochny varianty", Kommunist, No. 13,1989: 40. The authors describe four strategic restructurings: democratic restructuring; strategy of the method; strategy of politic democratization on the surface; authoritarian modernization.

Radical Economic Reform and Democratization Process: a new Challenge for the Sociology of Work Natalia Chernina

The radical economic reform and the society democratization now under way involve a need for revision of the social policy in the sphere of work (SPSW). Viewing SPSW as the policymaker's activity aimed at the attainment of certain goals with a certain set of means, we undertake to analyze its chief aspects and there-after test our conclusions in practice. The SPSW goals and their hierarchy have been specific at each major stage in the history of the Soviet society. This specificity is manifested, first, in the support it gives to the governmental economic policy and services to such economic agents as ministries, enterprises etc.; second, in the introduction and maintenance of justified social inequalities stemming from differential rewards according to different work contributions, i.e., from the principle of social justice; third, in promoting the strategic classical goal which is to turn labour activity into a paramount human need. The goals of the renewed SPSW should reflect current economic and social goals, at the same time not deviating from the fundamental goal of socialism - providing all society members with social security and opportunities for personal growth.

The Goals of Social Policy in the Sphere of Work The economic goal is to provide the national economy, regions, enterprises, institutions with adequate manpower. Within this goal the individual has been conventionally treated only as a worker, as a labour resource but not as a goal in itself. The subordination of the social policy to narrowly defined economic objectives has led the policymaker to concentrate his efforts only on labour provision for the economy. Social measures serving this purpose - working conditions improvement, welfare facilities - were the dominant directions in the SPSW. In contrast to this, we can identify such a social-economic goal of the SPSW that cannot be reduced to compensation for spent labour power but should secure the development of the worker as an integral personality.

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The essence of the SPSW is reflected in its social goal. In general, three separate goals can be distinguished. The first is the introduction of democratic transformations in the world of jobs in order to develop in workers the appropriate habits. This is needed because in the eyes of the overwhelming majority the social participation amounts to no more than job performance. The social policy should do its best to develop in the worker the sense of being a partner instead of a hireling, or, as K. Marx puts it, "to develop human beings into integral personalities". The SPSW has at its disposal not only financial and material resources but various patterns of people's self-government and self-organization in the economic sphere. The second social goal is to give a chance of employment to all who want it. It is meant here, in view of the forthcoming acceleration of technological change and switch-over to the full self-accounting pattern, to create two systems of jobs: one system according to criteria of economic efficiency (labour productivity, full utilization of equipment) and the other according to social criteria of employment. 1 The government should provide to workers able to work but "difficultto-place" an opportunity to be employed according to their abilities. This solution by which they are not displaced from the world of jobs seems more acceptable for socialism than unemployment reliefs which, being a kind of social charity, may appear humiliating to personal dignity. The third social goal is to provide, within the socialist way of life, a great diversity of employment patterns. This presupposes: abolishment of restrictions (legal aspect); openness and accessibility to jobs in economic units; availability and accessibility of resources (credits, market of production means, rent of equipment, transport and buildings); a choice available to different demographic, social groups so that they can have their individual types of work life according to their interests, needs and circumstances. The above mentioned plurality of work life styles can be assured mainly by plurality of ownership relations and by introduction of more democracy into the relations between official bodies and private persons. At present legal barriers to cooperative movement have been removed.

1

These two systems were suggested by Prof. Ch. Kiuranov (Bulgaria) at a session of the Working Group of the International Problem commission of the Academy of Sciences of Socialist Countries in Warsaw, 1988.

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Traditional SPSW View Now Being Revisioned It is appropriate here to enumerate premises by which the social policy in the sphere of work was guided before perestroika. 1. The worker should be steady, attached to his workplace. This objective was promoted by the existing stimulation system. 2. Unhealthy and heavy work conditions are compensated by attractive wages thought of as the principal way to secure normal manpower replacement. 3. There exists only one model of employment which is considered to be of socialist nature, i.e., a compulsory full-time job with rigid working hours in a state enterprise or collective farm. 2 4. Prevalence of money incentives as the stimulation form for all occupational and demographic groups regardless of their value orientations; inadequate relationship between work contributions and rewards; lack of publicity in apportioning bonuses. 5. Hiring and stimulation activity being entirely in the hands of managers, this often led to abuses. The positive results of this social policy included growth of wages, better work discipline, skill upgrading, reduction of heavy manual jobs, though the pace of the two latter processes has been less than satisfactory. In the further development of the SPSW the attention should be focused on new processes reflecting the current situation, new people's attitudes, their becoming citizens and not only workers.

New Strategies in the SPSW Under new economic conditions, traditional SPSW functions (e.g. promotion of good work attitudes, proper job behaviour etc.) should be not only modified but supplemented by other strategies: -

compensation strategy to mitigate social stresses arising in the course of economic modernization. It will provide social security for released workers who will be retrained and outplaced;

2

The 1988 Law "On Cooperation in the USSR" introduces some plurality into patterns of employment considered as socialist.

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stimulation strategy to create and use a social mechanism that is able to develop work commitment and work motivation in different groups of workers, which implies as much as possible consideration of the diversity of people's attitudes and interests; redesigning of jobs aimed at the abolishment of the socially ineffective ones as a result of technological progress; strategy securing social adaptation by offering a wide choice of work life styles.

In a situation where, along with traditional economic forms, new ones (such as cooperative, lease, farmers, stocksharing) are arising, they generate new problems as well as ways for their solution. And these new economic agents are entitled to have their representation in all governmental bodies. Beside that, in the implementation of the above strategies a certain continuity should be set up between social policies of different levels, i.e., national, regional and that pursued by various productive units over the targets, division of functions, resources etc. Let us consider now the particular strategies.

Compensation Strategy The new orientation in this SPSW strategy should anticipate, first, a large-scale workers' release from traditional production spheres due to technological change and switch-over to full self-accounting pattern; second, the need for social security for the above mentioned "difficultto-place" groups of workers. With regard to the former, the objective is to minimize for them social losses, at the same time satisfying the imperative demand of the economy for manpower restructuring. This objective can be attained by taking into account the preferences of different socio-demographic groups concerning their future placement (job retention at the cost of being compelled to work second and third shifts, voluntary early retirement; part-time employment with reduced working hours for women; jobs on auxiliary farms of industrial enterprises, as well as in cooperatives attached to state enterprises etc.).

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On the basis of our 1988 survey 3 we gained information about the degree of acceptability of possible changes in the working life: upgrading in one's trade was not opposed by 56.6 percent (and only 13 percent were definitely opposed); taking higher responsibility as well as job self-control in problem solution was not opposed by 62 percent; but occupational retraining was not opposed by as little as a third of the respondents, and only a small number agreed to change their work teams on the same enterprise (9 percent), to change enterprise (7 percent) and especially few people agreed to sustain nervous tensions (5 percent). In order to minimize social tensions, the compensation policy should be designed not in general terms but with reference to each specific situation. The social policy should be adjusted to different layers of the population able to work.

Stimulation Strategy The stimulation strategy aimed at higher performance motivation is hindered by the following workers' attitudes: -

-

by all means to maintain "social peace" and avoid conflicts in teams which is a barrier to reinforcement of the principle of reward according to contribution; orientation at artificial equalization manifested in negative or indifferent attitude towards better performers.

According to our data of 1988, the leading values were not those concerning material goods but rather those associated with team morale, friendly relations with work mates, as well as with pleasant working hours, guaranteed days-off which indicates a high significance attached to such values as family, good health state, human relations. A considerable barrier to the implementation of the stimulating strategy is the following fact revealed by sociological studies carried out in the 1970s: a shift of the overall direction of personal interests from the occupational to family, private and consumer sphere. 4 The evidence of the 3

4

Here and subsequently used are the data from a sample survey of the workers on some industrial plants of Novosibirsk carried out at the Department of Sociology, Institute of Economics & Industrial Engineering, Siberian Branch of the USSR Academy of Sciences. See V. A. Yadov. "Sotsialnyi tip lichnosti. - Kommunist, 1988, No. 10.

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increasing alienation from work acts, as was noted by V. A. Yadov, towards the weakening of financial incentives and moral drives. Financial incentives hardly can be a remedy for work alienation. Here to the foreground come the humanitarian goals of the social policy self-actualization of the individual as a creative personality. The ways for the attainment of this objective are accessibility to any type of education and opportunities to participate actively in different working and supervisory activities and truly influence the course of social-economic growth. In developing a social mechanism that could really motivate to work we should bear in mind that the true people's involvement in the economic sphere cannot be attained without the following conditions: -

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wide opportunities for social activity which on plant level imply participation in elections of managers and work collective councils and in final decision-making on a wide range of productive and social issues; participation-in-management which is not limited only to the technological sphere but includes organizational and, in particular, socio-economic spheres (determination of prospective objectives of production, participation in the preparation of the plant switch-over to the full self-accounting system, distribution of profits according to social and economic needs, work stimulation etc.).

All our respondents, subordinates and supervisors alike, were unanimous in acknowledging the need for better work performance. They diverged however on the evaluation of its particular forms. Most supervisors gave primacy to workers' participation in decisions relating to production matters (expansion of service zones, reduction of labour intensity etc.) and the least important is, according to them, workers' participation in the improvement of work conditions, introduction of pleasant working hours, hiring policy, awards, distribution of dwellings and other goods. This is in contrast to workers' aspirations and disagrees with their understanding of perestroika. The supervisors seem to be inclined to encourage workers only to do what they are told to. Quite a different hierarchy of aspirations has been revealed in the workers' answers. Yes, they agree to the importance of their participation in solving problems of production. Not less important however is, according to them, their participation in plant managerial decisions, in the planning and organization of production, control over the management's actions and self-government. The workers are striving for perestroika to be present in their daily life, in their initiatives. In this matter, therefore, they are more advanced-minded than their supervisors.

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People are now striving more than before to actualize themselves as citizens and personalities. In answering what meaning they attach to their everyday work activity, they reported, alongside with the satisfaction of economic needs, an opportunity "to be useful for the society", then "to actualize one's personality, use one's capabilities and skills in one's trade". At the same time, many workers defined their work as routine, tiring or unhealthy. Consistent with this, when explaining their motives for making innovative suggestions, most answers were: to make the work easier, to improve work conditions. One respondent in five said he made suggestions according to his inner desire, love for work activity as much, "to make the job assignment more attractive and stimulating", "I like doing this". Along with that, financial motives are also present (to enhance one's income). Obstacles to higher work involvement were especially notable in workers' motives for abstention from innovative activity: in the first place they reported lack of knowledge and experience which reflects the flaws of the vocational training and skill upgrading system. Next comes the motive: "I feel this is a sphere for managers and specialists" which points out to a certain gap between workers and specialists, their alienation. A no less frequent motive for this abstention was this one - "suggestions made by workers are as a rule neglected"; mentioned was also inadequacy of financial incentives for the innovative activity. Taking into account the workers' attitudes, it can be concluded that SPSW should pursue a proper balance between three kinds of work motivation: material, moral and creative. The system of work stimulation can be effective only if it is based on the real people's values. Such systems should be appraised not so much through comparison with the results achieved in the previous period as from the viewpoint of their consistency with the nature and potentialities of socialism.

The Strategy of Social Adjustment This strategy is aimed at providing conditions for plurality of work life styles within the socialist way of life, which is especially important in regard to groups of workers that deviate from the usual type (e.g. innovators). (We have mentioned earlier the social adjustment as a necessary feature of the compensation strategy in regard to laid off segments of the workforce).

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The implementation of this strategy was impeded by underdeveloped forms of employment and their being limited mostly to different forms of work organization in state plants (institutions) and on collective farms. In the survey carried out in 1988 by the Working Group of the International Problem Commission (the Academy of Sciences of the Socialist Countries) 5 under the direction of Professor Ch. Kiuranov the respondents were asked about their employment: "If you were to choose your employment, what would you prefer?" (What is the most profitable?) In industrial plants the following answers were given: self-employment in a state plant was preferred by 37.5 percent of the Soviet respondents and by 33.9 percent of the Bulgarian; the team form or in-plant business partnership in a state plant was preferred by 48.4 percent of the Soviet and 37.4 percent in the Bulgarian plants. Therefore, the employment in a state plant with different forms of organization was preferred by nearly 80 percent of the Soviet respondents and 71 percent of the Bulgarian respondents, while among the Polish respondents they were not more than 28 percent. Under the diverse forms existing in Poland, workers think it better to contribute to their own private firm or to a private firm with foreign capital. It seems that in Poland there exists a competition for better manpower among the economic units, and for a better job among the workers. Most valued are those jobs which make it possible to work under contract in a foreign country. The projective private enterprise was evaluated by the Bulgarian workers in this way: 30 percent wanted by all means to have a small private enterprise, and 22.4 percent wanted it on the following conditions (listed in descending significance): full economic independence, keeping social benefits as they are given in state enterprises, tax concessions, a small private enterprise attached to a large state enterprise. Under the existing system however, when though legally there are no barriers to self-employment and cooperative work but economic and other conditions are not developed, they were preferred by not more than 12 percent of the Soviet respondents and 15.6 percent of the Bulgarian respondents. In the Soviet publications one can often find references to current obstacles to the cooperative movement and "cautious" attitude towards them on the part of consumers. In sum, the renewed social policy in the sphere of work should incorporate attempts to find solutions to current economic and social problems, while retaining the strategy set up by the goal of socialism

5

The Bulgarian plants were surveyed by Prof. Ch. Kiuranov and T. Rakajiiska, the Polish by M. Yarosinska, the Soviet (in Novosibirsk) by Z.I. Kalugina and N.V. Chernina.

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unchanged - welfare for all society members and creation of conditions for all-round free personal growth. The renewal of the social policy and, in particular, of human management was also prompted by new requirements by work participants and from work participants by policymakers. These new requirements include: worker's aspiration to job self-control and the opportunity to use his own initiative; the society's demand for innovative performers who would develop and introduce technological change; social protection for people who will be compelled, under new conditions, to change their habitual work life style; worker's self-regulation instead of his/her being under severe supervision and control; implementation of participation-inmanagement and social justice not only in income distribution but extending it to the mechanism of work careers formation. The social policy can be successful to the degree that it, first, complies with people's moral values, assures democracy, free job choice, publicity, justice in distribution of goods and statuses, and, second, if it provides such job designs which would promote individual's actualization as a personality and not only as a worker. The most imperative task is to muster up as many perestroika adherents as possible due to differentiated flexible and just social policy.

The Role of Self-Management in Polish Enterprises Maria Jarosz and M a r e k Kozak

Introduction Employee self-management in Poland operates on the basis of a law enacted in September, 1981, but the applicability of the law was subsequently limited by other laws introduced during the period of martial law. At the end of the 1980s there were more than six thousand employee councils in existence, of which not more than 10-25 percent in various ways played an active role in co-managing state enterprises. The limitations on their activity were due to a variety of factors. Among these were: the poor economic conditions of state enterprises, direct and indirect limitations resulting from legal regulations (and non-cohesion of the laws), a decline in activity on the part of the society as a consequence of martial law, and, the deepening economic crisis. The consequences of this state of affairs have become apparent in the social awareness of the personnel. Research carried out between 1983-1989 demonstrates an unchanging attitude towards institutions of self-management. For this reason we have limited ourselves to the presentation of data from a survey carried out among state-enterprise employees at the end of 1986.

An Analysis of the Influence of Self-Management on Institutional Administration Almost half (49.2 percent) of the respondents were of the opinion that self-management has a significant influence on institutional administration. Close to 39 percent of those surveyed evaluated this influence as low. A relatively large group (21.4 percent) chose the reply "I don't know". This may reflect a lack of interest in self-management, or that respondents were poorly informed about self-management activity. It would" appear

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from the preliminary analysis of the variables that one's view of the influence of self-management on institutional administration is conditioned most strongly by the following variables: the institution's economic situation, one's position in the organizational hierarchy, membership in social-political organizations. In the group of respondents who described the economic situation of their parent firm as difficult there was a decided difference of opinion as to the influence of self-management on institutional administration. 39 percent of those surveyed regarded this influence as significant, whereas 38.7 percent said that the organ of self-management had no influence. Among those who described their institution's economic situation as good, the evaluation of the influence of self-management appeared in a different light. Here 58.3 percent of those surveyed indicated a significant influence of self-management in the administration of their enterprise. The number of those who held the opposing view was significantly smaller in this group - 21 percent. Let us examine the influence of the next variable - the position held in the institution's organizational structure. The distribution of variables is presented in Table 1. Table 1: The position held in the organizational structure and the evaluation of influence of the self-management bodies (in %) Evaluation of influence

Position held Rank and File

Foreman

Lower Level Manager

Middle Level Manager

Director

Yes

42.6

47.1

43.8

67.0

62.5

No

24.6

35.3

43.8

27.0

35.0

N o Opinion

32.8

17.6

12.5

6.0

2.5

N = 256

N = 51

N = 48

N = 100

N = 40

The group which held that self-management has an important influence on institutional administration were those of middle and higher-level management and the rank and file workers. On the other hand, among the lower-level management opinion was sharply polarized. Exactly one-half of the respondents from this group were of the opinion that self-management has a great influence on institutional management, and thé other half noted an absence of influence in this area. Among the foremen, the

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opinion that self-management had a significant influence on institutional administration held a slight advantage. The difference in favour of this opinion among foremen is not great - only 8.8 percent. One should draw the conclusion from this that the lower-level management and the foremen discern some influence of self-management on institutional administration less frequently than do other categories of workers. These two group of workers chose the response of "no opinion" more often than did the other respondents. The percentage of those answers among the rank and file was 32.8 percent, and among foremen 17.6 percent. By comparison, in the group of middle management the percentage of "no opinion" responses was 6 percent, and in the higher management only 2.5 percent. The high percentage of "no opinions" responses at the lowest levels of organizational structure is indicative of their lack of knowledge on the subject of the influence of self-management. We put forward some hypotheses explaining this situation when analyzing the relationship of the evaluation of the capacity of self-management to influence administration to the position of the respondent in the firm's organizational structure. Almost 30 percent of the respondents were of the opinion that self-management has no influence on institutional administration. We were interested in the reasons for such an opinion. The reason most often given for the low level of influence was that the self-management system was too subordinate to the administrative directors of the enterprise. The directors have too much say with regard to self-management (employee councils). The reason cited next often was the dependence of self-management institution on the policies of both the local and central authorities. The respondents also regarded the fact that the firm's administration often ignored self-management activity as another significant reason for the lack of influence on the part of self-management. This phenomenon was especially evident in such things as the management's tendency not to inform the self-management body on important matters in the enterprise or to consult with them after these matters had been resolved. Many responses pointed to a lack of qualifications among members of employee councils - in particular a lack of professional qualification, a low degree of awareness of the problems of the enterprise and the rights of self-management. Another important reason given for the lack of influence was that the self-management body would concern itself with matters which had very little importance of the enterprise. Other, secondary reasons given included a lack of credibility of employee councils' activists among the workers, as well as the subordination of self-management to political organizations. The question as to which groups of employees or which organizations exercise influence over the activities of self-management has an important place in the context of an examination of the influence of self-manage-

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ment on institutional administration. The respondents were asked to define the influence of different employee groups and social-political organizations on the activity of employee councils. The general distribution of responses is presented in Table 2. Table 2: Opinions on the influence of different groups on self-management bodies (in %) Evaluation of the extent of influence

Groups Workers

Technicians

Directors

Administrative Staff

PUWP

Trade Union

Very great or great

18.4

36.8

70.0

14.6

43.6

28.0

Moderate

31.0

28.2

13.0

33.0

20.2

22.6

Small or very small

41.4

15.0

5.6

36.6

15.4

29.2

Note: Without the categories of "Hard to Say" and "No Data"

The greatest influence on self-management activity, according to those surveyed, is exerted by the following groups: the directors, the Polish United Workers Party (PUWP) organization, and the technically trained personnel. This can be explained by the high position occupied by these organizations and groups in the institution's social structure, particularly the role they played in contacts with the outside world.

Rights of Employee Self-Management Over one-half of the respondents (56.4 percent) evaluated the rights of self-management as adequate. On the other hand, 23.6 percent regarded them as inadequate. A full 20 percent of the respondents did not take a position on this question, but rather chose the answer "hard to say". From an analysis of the results it appears that whether or not the rights of self-management are seen in these terms of "adequate - inadequate" is closely related to the position held by the respondent in the firm. An analysis of the data in Table 3 points to the following conclusions: the higher one's position in the firm structure, the more one thinks that the

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Table 3: Evaluation of the rights of self-management by different categories of employees (in %) Evaluation of rights (are they adequate?)

Position held Rank and File

Foreman

Lower Level Manager

Middle Level Manager

Directors

7.9

11.8

6.3

20.0

50.0

Probably So

37.1

45.1

50.0

55.0

32.5

Probably Not

16.4

19.6

29.2

12.0

2.5

Definitely Not

10.2

3.9

6.3

6.0

7.5

Hard to Say

29.3

19.6

8.3

7.0

7.5

N = 256

N = 51

Definitely So

N = 48

N = 100

N = 40

rights of self-management are adequate. In other words, the higher the position occupied in the organizational hierarchy, the more likely one is to express the opinion that the rights of self-management are adequate. If we regard the responses of "definitely so" and "probably so" as an expression of greater or lesser acceptance of self-management rights, then it appears that 45 percent of the respondents from among the rank and file accept the state of affairs. Among foremen and lower level a larger percentage indicated acceptance than among the rank and file, and comes to 59.6 percent for the foremen and 56.3 percent for lower-level management. In turn, the percentage from respondents among the middle-management is very high, 75 percent, whereas among the directors the percentage of those accepting the state of affairs is the highest - 82 percent. Which groups of employee are inclined to regard the rights of self-management as unsatisfactory? If we take the responses "definitely not" and "probably not" (taken together) as an expression of the opinion that the rights are not satisfactory, then this view is presented most often by lower-level management and by the rank and file, among whom 26.6 percent is inclined to such an opinion. Those respondents belonging to these two groups chose the response "hard to say" more often than did those from other categories of organizational position. The percentage of

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those from among rank and file choosing this response came to 29.3, and for the lower-level management it came to 19.6 percent. Two hypotheses can be put forward to explain this state of affairs. First - a very low level of interest in problems of self-management, something which can be attributed to a low level of education among the respondents. Secondly very little information among the workers about the rights of self-management, which could be related to a low level of activity on the part of self-management bodies in promoting their activities. Among the respondents from middle-management 18 percent thought that self-management rights should be extended, whereas only 10 percent of those surveyed from the higher management (directors) shared that opinion. Membership in a socio-political organization can exert an influence on the formation of opinions in different areas, as has been demonstrated by numerous surveys. Is this also the case with regard to convictions in the area of self-management rights? Those respondents who belong to a socio-political organization are more inclined to accept the current extent of these rights than those who do not belong to such an organization. Among P U W P members 30 percent regarded existing self-management rights as satisfactory, while among members of other organizations the number holding this opinion was significantly lower (10.8 percent). The lowest percentage of responses accepting the extent of these rights was found in the group of respondents who did not belong to any organization at all (5.3 percent). As can be seen in Table 4, membership in the P U W P exerts the strongest influence on whether or not one accepts the status quo in self-management rights, while membership in other organizations affects it to a lesser extent. How then is the opinion that self-management does not have sufficient rights in order for them to carry out the tasks assigned to them by their statute affected by membership in socio-political organizations? If we take the response of "definitely not" to denote acceptance of this view, then the degree of acceptance of this view is similar in three groups of respondents. Among P U W P members 10 percent accept this viewpoint, 9.6 percent among members of other organizations, while this view is expressed by 9.1 percent of those not belonging to any organization at all. Among those who belong to more than, one socio-political organization, however, including the PUWP, a different picture emerges. In this category of respondents only 2.1 percent regards self-management rights to be unsatisfactory. The data presented above tend to suggest that membership in a socio-political organization does not exert a large influence on opinions as to whether existing self-management rights should be changed. The results obtained here are significant because of the role played by the P U W P in the social system of the workplace. As a

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Table 4: Opinions on self-management rights and membership in organizations (in %) Opinions on rights (are they adequate?)

Organizational membership Belongs to P U W P or PUWP-controlled parties

Belongs to P U W P and to other organizations

Belongs to any other organisation only

Definitely So

30.0

30.9

10.8

5.3

Probably So

43.3

53.2

45.5

34.9

Probably Not

6.7

6.4

19.8

19.1

Definitely Not

10.0

2.1

9.6

9.1

Hard to Say

10.0

7.4

14.4

31.6

N = 167

N = 209

N = 30

N = 94

Does not belong to any organization

consequence it would seem worthwhile to examine more closely the way in which PUWP members - especially those who have some function in the party - view the question of the sphere of competency of self-management. The distribution of responses of three groups of respondents is included in the presentation: those who belong to the PUWP but do not have any function (rank and file), party officers and those who do not belong to the PUWP. An analysis of the responses leads to the conclusion that PUWP members - especially those who have some function in the party - tend to accept the range of self-management rights more readily than do the groups which have been studied here in this paper. The opposite is also true. Those who have some function in the PUWP, as well as party rank and file, tend to express the view less often than non-party-members that self-management rights are unsatisfactory. This thesis is illustrated by the following data: only 4.4 percent of party members altogether, and 3.2 percent of those who were officers, is of the opinion that self-management rights are unsatisfactory. On the other hand, of those who do not belong to the party 23.8 percent is inclined to perceive these rights as unsatisfactory. It is thus possible to say that, generally speaking, party members were in favour of maintaining the status quo, which in turn met with a negative

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Table 5: Evaluation of the self-management rights and membership in the communist Polish United Workers Party (in %) Evaluation of rights (are they adequate?)

Membership in the PUWP ^ V P Rank and File Officer Member

Definitely So

39.5

28.6

7.9

Probably So

51.6

50.9

39.7

Probably Not

6.5

6.6

19.3

Definitely Not

3.2

4.4

9.3

Hard to Say

3.2

9.5

23.8

N = 31

N = 91

Does Not Belong to the PUWP

N = 378

reaction on the part of non-party members. T h e division described here can have a great deal of meaning for the clearly visible (and for years frustrated) need for workers to exert more control in their work situations. T h e tendency for respondents to view the issue of self-management rights based on their subjective analysis of the enterprise's economic condition represents an important problem in the light of the function of self-management as an organ for co-managing the enterprise. Table 6: The evaluation of rights and perceived enterprise situation (in %) Evaluation of rights (are they adequate?)

Evaluation of the economic situation of the enterprise Difficult G^d

Definitely So

8.0

17.3

Probably So

40.6

45.4

Probably Not

20.3

13.3

Definitely Not

10.8

5.9

Hard to Say

20.3

18.1

N = 212

N = 271

If the economic situation of the enterprise is regarded by the respondents as good, then they are more likely to accept the view that the

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self-management rights are satisfactory. The opposite also holds true. Those who regard the economic situation of the enterprise as bad are more likely to say that the existing self-management rights are inadequate than are those who view the economic situation positively. In examining the influence of individual factors (such as: the position held at work, organizational membership) on one's view of self-management rights we discovered that the factor which most differentiated the outlooks of the respondents were their opinions about the influence exercised by self-management on institutional administration. This is shown in Table 7. Table 7: The evaluation of rights and of influence exercised by self-management bodies (in %) Evaluation of rights (are they adequate?)

Evaluation of influence YES, significant

NO

N o Opinion

Definitely So

21.9

3.8

2.8

Probably So

58.3

24.0

30.8

Probably N o t

9.3

30.1

13.1

Definitely N o t

1.6

20.5

5.6

Hard to Say

8.9

18.5

47.7

N = 146

N = 107

N = 247

It can be seen from the data presented here that those respondents who discerned a degree of influence by self-management on institutional administration were more likely to accept the rights than were those who saw no such influence. The percentage distribution in both groups of respondents was 80.2 percent and 27.8 respectively, in favour of accepting the current state of affairs. Those persons who did not perceive any influence by self-management on institutional administration were four times more likely to negate the thesis that the current extent of self-management rights was satisfactory than were those who felt that self-management played an important role in this administrative process.

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Actual and Postulated Decision-Making Powers on the Plant Level We should begin our analysis of the decision making-powers of self-management bodies and of the directors by saying that some of those surveyed do not have enough knowledge to enable them to distinguish between these two areas of influence. The distribution of responses attests to the fact that, in the opinion of those surveyed, the administration (directors) has either exclusive decision-making powers or makes decisions after consulting with the self-management institutions. This holds true for both operational decision-making and for strategic planning - in both cases the administration is seen as the dominant side (see Table 8). Is this state of affairs accepted by the respondents? The response to this question was not at all clear-cut. If we compare the information in tables 8 and 9, it appears that those surveyed were prepared to limit the administration's advantage in the sphere of decision-making. This does not mean, however, that they would be prepared to give all or most of the decisionmaking powers to the self-management institutions. It can be seen clearly here that neither the technocratic nor the self-management model of authority finds a great deal of support among those surveyed; most often they prefer a mixed model, one in which the administration has the decision-making powers, but only on condition that it consults with the self-management bodies. One notable exception, however, is found in the case of decisions concerning current production issues, where many respondents (38.8 percent) felt that the administration (directors) should have the sole right to decide. As can be seen, the majority of the respondents felt that there was an asymmetrical division of authority in their plants, with the directors in a definitely superior position. At the same time, however, the dominant group of respondents was prepared to maintain this state of affairs - with the reservation, however, that the role of self-management should be increased. This change would have the effect of making the division of authority somewhat more symmetrical.

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Expectations of Self-Management In a normative formulation of the issue o n e would look for the results of self-management in groups of people in two general areas: management Table 8: Opinions on the Actual Division of Decision-Making Powers (in %) Who decides on this: Annual plan of the firm

New A invest- change ments in the firm's activity

Setting Personwork nel guide- policy lines

Wage policy

Ongoing production issues

Firm's organizational structure

26.6

29.4

24.2

22.2

40.0

29.6

51.4

39.0

Manage48.0 ment upon consultation with S-M

46.4

44.4

46.6

42.6

50.0

31.6

39.4

S-M 10.0 upon consultation with management

8.0

5.6

8.0

4.0

6.8

3.8

4.2

Exclusively S-M

0.2

0.6

1.0

3.6

1.0

1.0

0.8

0.4

Hard to say

14.2

14.8

22.6

18.5

11.8

12.0

11.8

16.2

Lack of data

1.0

0.8

2.2

1.4

0.6

0.6

0.8.

0.8

Exclusively management

Note: S-M for self-management

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Table 9: Postulated Distribution of Decision-Making Powers in the Firm (in %) Who should decide on this: Annual plan of the firm

New A invest- change ments in the firm's activity

Setting Personwork nel guide- polidy lines

Wage policy

Ongoing pruduction issues

Firm's organizational structure

10.4

13.0

8.6

10.0

20.8

11.8

38.8

22.4

Manage61.2 ment upon consultation with S-M

59.0

57.8

47.6

50.4

58.0

39.6

52.8

S-M upon con sultation with management

21.0

19.8

19.0

25.8

16.6

17.2

12.6

12.4

Exclusively S-M

2.0

2.6

3.6

10.6

4.4

7.0

3.6

2.6

Hard to say

4.8

4.8

9.2

4.8

7.0

5.0

4.8

8.6

Lack of data

0.6

0.8

1.2

0.8

1.0

0.6

1.2

Exclusively management

Note: S-M for self-management

effectiveness and participation in the decision-making process. One often encounters in the literature on the subject the view that these two areas are bound together in such a way that the participation of the rank and file workers in the decision-making process allows their knowledge to be utilized, which in turn increases their motivation and consequently helps to increase productivity. Did people expect such changes as a result of existence of the self-management institutions?

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Table 10: Evaluation of changes in management effectiveness due to the self-management (in %) Management Effectiveness

Level Entire Economy

Enterprise

Increases

33.2

36.4

Decreases

12.6

10.0

N o Change

48.6

49.0

5.6

4.6

N o Data

N = 499

N = 499

In the opinion of close to one-half of the respondents the existence of self-management would not change the effectiveness neither on the enterprise level nor in the whole economy. On the other hand, approximately one-third of those surveyed expected an improvement of the effectiveness. The distribution of the responses demonstrates that effectiveness in both spheres is perceived in a similar fashion. A positive influence of self-management on effectiveness was expected primarily by persons having an elementary and basic technical education, persons whose father had the same education and who are over forty. Who then expected to see a decline in the role of self-management with regard to effectiveness? These were mainly people who before 1982 belonged to N S Z Z "Solidarnosc" (approximately 70 percent of this category of respondents). They had, in addition, a secondary or higher education, were non-PUWP-members, did not belong to any trade union created after 1982, and were not in any leadership position. Among the abovementioned categories of respondents no less than 40-50 per cent (depending on the scale - whole economy or enterprise) foresaw a decline in the influence of self-management. It should be emphasized that these are categories which are dominant in the economy, at least numerically.

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The Nature and Areas of Disagreements Conflict is a variable which due to its dynamic character is difficult to measure using sociological tools, especially in the semi-totalitarian society. Despite this difficulty an attempt was made to ascertain one of the dimensions of conflict, that of agreement (disagreement) in the actions of the most important elements of the social system in the workplace self-government institutions, the management, and the trade unions. In the opinion of half of the respondents (50.8 percent), the activities of the above-mentioned institutions are always in agreement. It thus appears that from the perspective of those surveyed the relations between decision-making centres and advisory bodies seemed to be in harmony, without any disagreements or tensions. For 40.8 percent of the respondents, however, these relations are not always in harmony (8.4 percent no opinion). The frequency with which this vision of harmony appears gives causes for reflection - particularly with regard to forms of interaction which are by nature more conflicting, as between worker organizations (unions) and management. The first hypothesis which comes to mind in connection with these data is that this vision of harmony is most often found in those plants where both trade unions and self-government institutions were inactive and possibly dominated by management. The issues which were most often in disagreement were: questions of pay (41.8 percent), personnel policies (8.8), social benefits (8.2), general production issues (7.1), spheres of authority (5.5), annual plan (4.4), work organization (3.3), and, discipline - 2.7 percent. (Percentages were calculated based on the number of responses, not the number of respondents. Those questions which did not get more than 2 percent were excluded). In this configuration, the issue that draws the most attention to itself is that of pay, especially when it directly concerns production. In the last few years the growth in the incidence of claims or demands has had its effect on the way in which the most important social institutions function in the workplace. Contrary to public opinion, we do not think that the fact that these claims often form a backdrop to conflict necessarily speaks poorly of self-management institutions for instance. It is rather an indication of the conflicts springing from unjust systems - conflicts which have been growing for years - or, rather, having to do with the issue of pay.

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Conclusions In the light of the analysis presented above, it would seem justified to characterize the condition of employee self-management in the late 1980s in the following way. The influence of self-management on institutional administration has reached a satisfactory level for about one-half of those surveyed. A little over one-half believed that self-management rights were adequate, so that the fundamental question would rather seem to be whether or not self-management is capable of taking advantage of those rights it already had. Any limitations on this ability were to be found not only in the self-management itself (lack of experience, passivity, etc.) but in large measure came from its relationship to other organizations and institutions, both within and outside of the enterprise. The majority of those surveyed indicated that the self-management organization was dominated in its activity by both the economic administration and by the communist party. An important problem is represented by the proposed changes in the role of self-management. An analysis of the specific functions which it has in the enterprise demonstrates that the employee considered it to play the role of adviser and consultant to the director. This state of affairs was not completely satisfactory to the employee, but this in no way indicates that people would prefer to see the positions reversed, and the director subordinated to the employee council. The projected model of the division of decision-making power would mean that the director's authority would be limited to a certain extent, and subjected to greater influence from workforce. This would involve in particular decisions of strategic nature (growth directions, new investments), as well as questions directly concerning the social system in the enterprise (personnel and wage policies). Self-management organizations were to make decisions for the workers on development strategy, but were to confine themselves in other areas to giving advice and expressing their opinions. Also worthy of note is that those surveyed also expected to see an increase in the importance of trade unions, seen in the mid-1980s without any significance in the work place. It is possible to state therefore that the workers are looking for changes which would socialize administration, for something which would serve to strengthen the self-management organizations and trade unions to act as representatives performing the task of watching over the administration. According to the significant part of those surveyed, the relationship among the unions, self-management and the directors usually was harmonious. It could represent a level of "attainment" in their current cooperation by the above institutions, as well as the domination of employee' representative institutions by the directors. This could also be a result of

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external threats, and uncertainty about the fate of firms (this situation could favour the restraint of conflict). A conclusive answer would require the examination of individual phenomena separately. In evaluating the future of employee self-management it must be remembered that the spread of employee councils is an outgrowth of the economic structure of ownership, which in turn depends on a model of the economy chosen by the political system. The present Polish government seems to be underestimating self-management institutions. One should bear in mind, however, that due to the very limited financial resources of the public denationalization and privatisation of the economy by selling shares will be a difficult and slow process (Jarosz, Jawlowski 1990). It should be also remembered that self-management institutions are perceived by many employees as one of a few elements of the previous economic system that should be respected and supported (Mujzel, 1990). Therefore we are of the opinion that if the new economic system were to reject the important role of self-management, society could suffer a substantial loss.

References Jarosz, Maria & Andrzej Jawlowski: Dilemmas of the Privatisation of the Enterprises and of the Participation. Warszawa, Institute of Economics, 1990. Mujzel, Jan: Polish Economic Reforms and the Dilemma of Privatisation. Warszawa, Institute of Economics, 1990.

III. New Forms of Management and Labour

Hungary's Changing Labour Relations System Lajos Héthy

For 1989/90 Eastern Europe has become the world's fastest moving target. After Hungary, Poland and the USSR, the rest of Eastern Europe is undergoing major political change: several Communist parties have lost their positions of power, pluralism, free elections and parliamentary democracy have been put on the agenda. The political change has opened up possibilities for economic reforms and extends a broad welcome to the once taboo ways of the Western market economies. In Hungary the state's withdrawal from the guidance of the economy is in progress, privatisation is looked upon as a prerequisite to reform, the inflow of foreign capital is encouraged, a stock exchange - the epitome of capitalist institutions has been created. Hungary (and the rest of Eastern Europe) badly need such changes: its national economies have been faced with acute problems of disorganization, of the wasting of human and material resources, of failing productivity, of structural rigidity and lack of competitiveness in the world market. In fact Eastern Europe's share in the world trade has kept shrinking during the past decade. The transformation in Hungary is heavily burdened however by the present economic crisis: the past 10 years yielded plodding GDP growth, mushrooming external dept and a budget deficit. It is in this context of political and economic reforms and challenges that the labour Relations System deserves discussion. What is the importance of the Labour Relations System in our days? -

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On the one hand, conflicts in the relationships of workers, employers and the State have kept accumulating because of a decline in real wages (minus 20 percent in the period 1978-88), rising inflation (20 percent in 1989 and previsibly even higher in 1990), an erosion of social benefits and menacing unemployment in particular because of the government's austerity policies. A well-functioning Labour Relations System may have a positive role in alleviating these tensions. On the other hand, a market economy and parliamentary democracy Hungary is going to need institutional guarantees for the settlement of

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conflicts and the maintenance of cooperation between workers employers and the State. It should be noted right away: the concept of the industrial or labour relations has been unknown to scientific thinking and ideology, or has been branded as a bourgeois market-economy category and therefore as unacceptable in Hungary (and in Eastern Europe), the term itself can be translated word by word in any language (into Hungarian as well), but it has no meaning as yet; still it will be learned soon as several other market economy concepts. In this context it is an obvious question: do we have a Labour Relations System (LRS) in Hungary and in Eastern Europe in our days? Is it something new that has to be created now and in the future (like the stock exchange) or something already existing but designated by differing terms? In other words: is it only the concept of the LRS that is missing from scientific and political thinking or is it the development of the institutions of the LRS that has been neglected? All things considered, Hungary (and Eastern Europe) has always had the partners of labour relations: trade unions, organizations that could be regarded as the employers' representatives and, needless to say, the State. Moreover, there have always existed institutions (at least most of them) that are the pillars of labour relations in the market economies, namely collective bargaining and agreements, workers' participation, procedures for the settlement of labour disputes and so forth. The only question is how much these organizations and institutions have actually, in substance and operation, matched the terms suggested by their names (to what extent e.g. have trade unions been independent, autonomous representative organizations of workers, to what extent has collective bargaining meant "free bargaining" or bargaining at all?). As historical experience shows, one must not be deceived by designations, for whereas they have remained unchanged, the model of labour relations has undergone radical changes in Hungary since 1945 to our days. Historically, one can speak about a sequence of four models of very differing nature: 1) In 1945-49 a market-economy model of labour relations was functioning in Hungary (and in most countries of Eastern Europe) under the conditions of a market economy and parliamentary democracy, the same model as in most of Europe. 2) From 1950 until the economic reform of 1968 the traditional Stalinist model of labour relations was dominant in Hungary (it has continued to exist until the recent political change in several countries of Eastern

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Europe, Bulgaria, Czechoslovakia, the German Democratic Republic or Rumania). Its features are well known: - the theoretical basis of this model is the assumption of the homogeneity of interests in the national economy and the whole society; it denies the existence of differing and conflicting interests (including those of the LR partners). - The party state is predominant in the regulation of the relationship between workers and employers; it relies in this respect almost exclusively on legislation and law enforcement, while no space is reserved for bargaining between the partners. - The functions of the State, employers and workers as well as of their representative organizations are not separated: the employer is a state bureaucrat responsible for the management of state property, the trade union is a "transmission belt" handing down the will of the party state to the workers. - Collective bargaining and agreements become instruments of plan fulfilment, formulating tasks for working collectives and of "mobilisation" to overfulfil the plans. (Collective agreement are of "supervisory" nature as labelled by comparative labour law). - Collective disputes of labour (particularly of interests) are regarded as non-existent and if they still occur (e.g. in sporadic strikes) they are looked upon and treated as "subversion" against the state. Statutory procedures for the settlement of collective labour disputes (of rights and interests) are missing. - Labour law is reduced to a means of disciplining the disobedient worker(s). The events of 1956 basically questioned the Stalinist model of labour relations as well - positive developments started as the establishment of workers councils - but the model was restored for one more decade by the subsequent political and ideological reversal. 3) The period 1968-1988 resulted, as a consequence of the economic reform of 1968, in a healthy but slow progress in labour relations: the classical Stalinist model was considerably liberalized. The main features of this process may be summed up as follows; - In its ideology the ruling Communist Party - the Hungarian Socialist Workers' Party - recognized the objective existence of differing and conflicting interests (although the party and the State themselves were still presented as an "enclave" with "no interest of their own", as an esoteric political force with exclusive prerogatives to represent all-social interests).

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- Along with their traditional function as a "transmission belt", the trade unions took on the role of representing workers' interests, but they remained dependent on (and under the close control of) the ruling Communist Party and retained their traditional bureaucratic organizational structure. - With the expansion of enterprise autonomy, the employers' function became easier to define; still the Chamber of Commerce (today: the Chamber of Economy), their representative organization, remained a state organ until the 1980s, regarding the representation of the employers' interests at best as a secondary function. - Collective bargaining and agreements got rid of functions alien to their nature (the promotion of production and plan fulfilment), but their contents remained limited by strict bureaucratic rules at the enterprise level (national level collective bargaining was substituted for by public discussions" of national economic plans). - At both national and enterprise levels there emerged new institutions opening up possibilities (at least in principle) for consultations between the LR partners of differing or adverse interests S Z O T '-Government meetings, shop stewards' bodies as union-based institutions of workers' participation set up in the enterprises in 1975-80, and new forms of enterprise self-management - Enterprise Councils - in 1984-86). However, the functioning of these institutions landed mostly in formalism due to the lack of general changes in the political system to support them. While labour law continued to ignore the existence of collective labour disputes, there emerged a specifically Hungarian institution (the trade union right of veto) which opened up some space for their institutional settlement, and labour court practice refrained from treating the sporadic strikes as criminal law cases. Developments in the period 1968-88 were marked, in the last analysis, by the start (and then the set-back) of the economic reform and by the absence of reform of the political system. The continuing dominance of the party state set obvious obstacles to a radical break with the Stalinist traditions in the regulation of employment relationship even if there occurred progressive changes in the institutional system of labour relations, especially if compared with other countries in Eastern Europe. 4) In 1988-90 changes have been accelerated in the Hungarian system of labour relations (in parallel with the disintegration of the party

1

Hungarian acronym for the National Council of the Trade Unions.

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state) - a process that points to a modern market economy model. The related developments are the following: - T h e state's withdrawal from the regulation directly related to the interests of employees and employers has been speeded up: among others on 1st January 1989 the traditional bureaucratic administrative wage determination by the state was eliminated and a new model of wage determination (the hitherto most liberal one in Eastern Europe) introduced: it opened up possibility for national level bargaining. - A redefinition of functions, a pluralisation and a restructuring of trade unions have been going on. - T h e traditional trade unions declared the representation of the workers' interests to be their exclusive function, renouncing that of a "transmission belt" (and the organisation of "socialist emulation of work" by the trade unions came to an end); the National Council of Trade Unions (SZOT) proclaimed its trade unions independence from the political parties (inclusive the Hungarian Socialist Workers Party and its successor the Hungarian Socialist Party). In early 1990 SZOT was reorganized into a National Confederation of Hungarian Trade Unions (MSZOSZ), its bureaucratic hierarchy pulled down and put under a closer control by its member organizations. (MSZOSZ had about 3,5 million members in summer 1990 - most traditional unions joined it with one notable exception, the large Chemical Workers trade union federation). Independent trade unions appeared on the scene with a stagnating membership of a couple of ten thousand, mostly white collar workers: they were united by the Democratic League of Independent Trade Unions. At the same time workers councils - and their national association - also emerged (with a status still in dispute). - T h e pluralisation of trade unions in Hungary (unlike in Poland) however has not led to the appearance of strong alternative organizations as yet. - A similar redefinition of functions, a pluralisation and a restructuring of the employers' representative organizations have also taken place. - T h e Chamber of Economy - uniting the still predominant big state-owned enterprises - reevaluated its tasks and functions and reorganized itself. The representative organizations of industrial, agricultural, consumer cooperatives (OKISZ, TOT, SZOVOSZ) and of small craftsmen and retail traders (KIOSZ, KISOSZ) partly collapsed and partly were reorganized. New organisations also appeared on the scene, first of all the militant National Association of Entrepreneurs (VOSZ), uniting mostly the small private entrepreneurs of the 1980s and others.

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Lajos Hethy - Initiatives were taken to establish a mechanism of real collective bargaining embracing the relationships between workers, employers and the State in wage determination at enterprise and national levels alike; a National Council of Coordination of Interests was set up and the scope for collective bargaining widened. (The NCCI is a tripartite body; it takes decisions about guaranteed minimum wages, it adopts recommendations concerning minimum and maximum wage increases by enterprises etc.). - Collective labour disputes (of rights and interests) were legalized; the Parliament adopted a Strike Act in March 1989, the second one in Eastern Europe (after the Polish Strike Act of 1982), a piece of legislation that was reasonably liberal as a response to the persistent pressure by both traditional and new independent trade unions.

(In 1989 we had a dozen of strike cases in Hungary, involving partly earlier privileged and disprivileged groups of labour; examples are: miners and teachers, or strike cases related to the restructuring of enterprises). What progress has been achieved so far, and what is yet to be done, in the development of the labour relations system in Hungary? The current situation can be called a "positive chaos", meaning that the traditional Stalinist model of labour relations is being pulled down (a process that started after 1968 and gathered speed in 1988-89), but no new model has yet evolved to replace it. What we have are only positive but in several aspects insufficient shifts, involving dangers and risks as well. - The State is still in the grip of traditional reflexes, reinforced by the economic crisis situation, tempting it to return to bureaucratic, administrative methods of regulation of the employment relationship (in, e.g. wage determination). - The separation of state, employer and trade union functions has speeded up; the new functions of the partners however are far from clarified. (Whom does the SZOT - and its successor - represent? The population? The workers, including those who are not trade union members or belong to alternative unions ? Whom does the Chamber of Economy represent? The large state-owned enterprises, their top managers or entrepreneurs in general? What is the definition of employer if the notion of "owner" is still blurred?). - The traditional organizations in L R often make efforts to retain their traditional monopolistic positions (e.g. S Z O T in 1988/89 concerning SZOT-Government meetings) and display a kind of reluctance, at times refusal, to cooperate with their new "rivals" and to share their rights with them (e.g. S Z O T - and its successor, M S Z O S Z - in its relationship with the independent trade unions, and the new workers' councils).

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At the same time, the pluralisation of the workers' representation involves the potential danger that the workers' positions would considerably weaken while the predominance of the state still exists. - The transformation, the renewal and the (occasionally) inevitable elimination of the bureaucratic hierarchies of the LR partners have been moving ahead at an unsatisfactory pace; the hierarchy (e.g. on the trade unions side in the branch trade union federations) lives on and often does not (cannot) adapt to the new situations. At present there are few signs of "organization from below upward", or control by membership that should replace "organization from top down", and in the absence of such change the organizations cannot function properly and have no credit. - There are no legal guarantees for the survival of some of the newly established institutions (e.g. National Council of Coordination of Interests), that may consequently be abolished by a Government's single stroke of the pen. - The renewal of the institutional system or the related initiatives have often been motivated, for lack of careful consideration, by short-term political interests and illusions related to the reform. (This is illustrated by the Hungarian government's unsuccessful attempts in 1989 to curtail trade union rights and to pass a strongly restrictive strike law). The Reasons for These Problems are Various. First, in the situation of political vacuum and the crisis of legitimacy that has arisen with the collapse of the party state, the traditional (and newly emerging) organizations of the labour relations system desperately fight for their survival and seek their legitimacy just as the institutions of the political system or the political parties do. This allows room, of course, for actions motivated by short-term partial interests. Second, while the model to be followed in the (re)construction of a modern LRS is that of the market economy countries, certain essential economic and political conditions, serving as a foundation of this model, are still (at least partly) missing and have just started to develop (such as the market, primarily the labour market and parliamentary democracy itself). On what crucial points does Hungary's LRS need strengthening and refining. At the enterprise level, we believe there is a need for the modernization of institutions (of e.g. collective bargaining and agreements, workers' participation) and for their adjustment to the new conditions (Joint Stock Company Act, the process of privatisation, the inflow of foreign capital. At the national level, the situation is far less favourable in respect to the coordination of interests between the State, workers and employers in the

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most important questions of economic and social policies. This is understandable since the monopolistic power centre of the party state gave the least say to any "outsider" precisely in these matters. At the "middle level" (sectors, branches of the economy, territorial units that are difficult to define) the institutions of bargaining are missing: as a result, national level bargaining (even if limited) is esoterically "floating" over the whole of the national economy without being interrelated with similar processes at the enterprise level. While the existence of collective conflicts (strikes) is legal, there exist no sufficient statutory procedures for their prevention and solution (such as conciliation, arbitration) and that is one reason why local conflicts of economic nature tend to develop into national tensions of political nature. If we start out from the need of managing the economic crisis situation and the related social and political tensions the Hungarian LRS calls for an institutional reinforcement, mainly at the national level, linked up with decision-making about economic and social policies. The most crucial issue of the near future is the new (freely elected) Government's and the Parliament's attitude towards the existing partners and institutions in labour relations. In principle the Government (in its general political behaviour and in legislation) may choose between two alternative courses of action: it can adopt a supportive attitude (by accepting the existing unions as legitimate representatives of the workers, by reinforcing the institutions of tripartite "concertation" namely the National Council of Coordination of Interests, by passing supportive legislation as to the trade unions rights, such as the Italian and Spanish Workers Statutes in 1970 and 1980) thus following the trend in Europe. On the other hand it can stand up against and try to limit the influence of trade unions, both at enterprise and national level decision-making, following the British example (mostly marginalized in our days in Europe). We think and hope that the first course of action will be preferred both by the Government and by the Parliament in Hungary. (completed in summer 1990)

A Small Factory Working on a Lease Basis in the USSR Natalia Chernina

The number of business units working on a fully lease basis is in the USSR not large: as of October 1, 1988, they were 109, 58 of which were in industry and employed 0.07 percent of the total labour. By the beginning of 1990 the number of factories fully transformed to leaseholds was 1332. The government is planning over 6 years to transform into leaseholds 20 percent of the factories. As they are scattered about the whole territory of the country, we have chosen to limit our survey to Siberian or, more precisely, ours is a case study. In August 1989 we surveyed a leasehold factory with 300 employees producing consumer goods. By the Soviet scales it is a small unit hereafter referred to as a small firm. What is the small business in the USSR like? Its main features are as follows: 1. In contrast to the West, the Soviet small firms are devoid of concessions from the State as no such policy is provided. 2. On the other hand, at the current stage of transition in the Soviet economy the small firms have some advantages over the state enterprises: they are free to produce what they deem the most profitable items and to set market prices and have thus higher earnings as well as a possibility to attract the most qualified and skilled manpower. A distinctive feature in today's transitional period is that albeit the most different business forms are permitted, they are frowned at by the State, and no financial, material or labour support is given to them. 3. Under the universal shortage of modern equipment and materials, the small firms are the last to get them through the state logistical system, and this pushes them out to the shadow economy. As the result, it is the small firms which establish market relations absent in the command economy. They create "bridges" among goods producers, are manoeuvrable and can easily find "holes" at the market. At the same time, in the situation of the economy of shortage, bribery is thriving. 4. Under the existing vocational training system (vocational technical schools are as a rule attached to large firms), the small firms are facing problems in getting skilled manpower to operate modern machinery. They also need highly qualified managing personnel for commercial and other outside business activities. There is a demand for highly

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Natalia Chemina enterprising and competent executives but such training is not open to small firms. The analysis of the work histories of the executives at our small firm has shown their great variety and unconventionality. The command economy management backgrounds were absent because the command economy cannot develop the skills needed today.

A distinctive feature of our firm is that it was formed on the basis of the former gold-digging cartel whose main features as a specifically Russian business form, were such as small size, team work, the dependence of individual earnings on the collective results, the participation of all members in the distribution of profits, democracy of hiring policy (new members are recruited at the consent of other members), all this has been retained. As a result of our survey, the following features of the employment in the small firm have been revealed: 1. A much higher tightness of labour motivated rather from inside than outside which enforces inadequate performers to quit. 2. In the above process the worker-manager relations are improving instead of deteriorating. Thus, talking of different forms of alienation, the experts have noted that in the small firm "the negative attitude of operative workers towards engineers and administrators" and, in particular, to those groups of engineers that are influential for the success of the firm, tends to decrease. 3. The working hours per week have increased but on a voluntary basis, in order to complete the planning tasks and meet the business obligations. The work loads are especially high among those who have secondary jobs at the cooperative attached to the small firm. 4. The value of innovative activity has greatly increased because: a) the small firm often has to adjust the equipment to quickly changing types of products or to "develop" the technology in the absence of specialized services etc.; b) the innovations are approved of by the team members because they improve their commercial results; c) the innovating activity can be effectively stimulated by rewarding it with part of profits or allotting extra wages (up to 100 percent) to innovators instead of resorting to the ineffective state system.

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The Small Firm and Local Authorities 1. The small firm finds itself under the pressure of local inspections: financial and ecological, sanitary etc. All this is perceived by small firm employees as fault-finding aroused by their high earnings which are two or three times as high as the national average. 2. The small firm employees are critical of the local authorities because: a) they do not help them in training skilled blue collar and managing manpower; b) they conceal information on how the money they pay to the local budget is used; c) no effective information service on the unemployed labour is available to them and no help in hiring the manpower needed by the small firm is made; workers are hired by trial and error attempts. We were interested to learn more about the kind of interaction between the small firm and the local economy, and can ascertain the following:

A. The Effect Made by the Small Firm on the Local Economy The small firm initiates by its example the diffusion on the town's scales of new business forms allowing the workers to increase their incomes; it demonstrates a non-conventional type of economic behaviour, i.e. the market behaviour.

B. The Effect on Labour In the small de-alienated firm, new social qualities of labour are being formed: concern about end economic results, desire to participate in management of production, including the product assortment and establishing commercial ties. The small firm employees develop, according to their increased incomes, new living standards: essentially changed consumption patterns, rise of new demand (construction of cottages, tourism), they tend to consume more expensive and higher quality goods. As a result, the workers are more involved in market relations as consumers.

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C. T h e Effect on the Local L a b o u r M a r k e t The employment in a small firm, first, contagiously raises the labour productivity of the other employed; second, it exercises from the bottom a pressure for higher incomes, which become an urgent need (as is known, according to the established system of distribution, in 1988 the percentage of earnings in manufacturing was in the USSR 36.6 percent and in the USA 68.1 percent); and, third, a high-paid manpower capable of high performance and exercising initiative appears on the labour market. And though at present the small firms, because of their paucity, cannot exercise a strong influence on the labour market, if they were more common, they would attract the best manpower and act toward segmentation of the labour market. Therefore, the attempt at a sociological study of a small firm has been useful since it has demonstrated the problems likely to arise when the state firms become part of the market economy. Some Soviet economists believe that the economic reform comprises three groups of events: 1) liberation from all acts and laws presenting the free movement of wages and prices, labour and capital; 2) measures on de-monopolization and decentralization in the public sector of the economy; 3) creation of motivation to economic growth. We think that in small firms these measures are beginning to be implemented and have already demonstrated their high effectiveness. Lease factories present yet a new type of business. They agree to face a moderate risk with regard to pioneer products though they do avoid the risk of having to reduce the employees' earnings because, under the looming pauperization of the working class, high earnings are the main motive for high performance on a lessee enterprise (reported by 67 percent of the respondents). Lessees as part of small business could better perform their specific functions, social and economic, in particular that of disseminating technological changes, if they had real support from the state in material, financial and manpower resources. The first steps in this direction were made in the beginning of 1990 - with the participation of- the Government, A "Joint Centre for Small Business Development" was set up in Moscow. The organizers see their chief goal as defining a strategy which would encourage the growth of small and medium business to counteract the existing monopolies. The Centre will encourage the Soviet small business to actively implement technological novelties and fearlessly compete with industrial giants by producing up-to-date goods arid filling up with them the consumer market.

Collective Forms of Work Organisation in Czechoslovak Economic Pratice Ludovit Cziria

In the last 40 years, various forms of collective organization of work were realized in the Czechoslovak economic practice. They were mostly applied collective forms of work with an emphasis on the operational division of labour and on cooperation inside work collectives, which usually shared common work tasks. These forms of work organization were used from the 1950s till the 1970s, mostly with workers in areas where collective work has had long-term traditions. It concerned mostly the mining industry, building and agriculture. Beside the field of manual activities, the collective forms of work organization were realized particularly in the 1970s also in creative work collectives which solved innovative or development tasks. The most widespread among them were the so called comprehensive rationalization brigades. These temporary organizational units can be compared to the establishment of quality circles in Japan, USA and in Western Europe. The greatest boom of implementation of the collective form of work organization in the Czechoslovak economic practice has been registered in the 1980s. In this period a brigade form of work organization and remuneration has begun to be applied (further referred to as brigade form). In this process the element that played an important role was the influence of the development of the brigade organization of work in the Soviet Union. This, beside the methodological point of view, also has a great political importance which stimulated the widespread realization of the brigade form in Czechoslovakia. After the initial period of experimental applications, during the first half of the eighties, a well defined stage can be distinguished, starting in 1985, characterized by the broad, purposeful, centrally regulated introduction of the brigade form into the economic practice. The application of this new collective form of work organisation was also the focus of attention by supreme political bodies. The Government of the CSSR published, in conjunction with the Central Trade-Union Council, the basic document guiding the practical implementation of the brigade form. (Zasady vlady CSSR) The brigade form embodies, in its essence, the principal aspects of the autonomous or semi-autonomous working groups.

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The objective of these activities, oriented towards increasing the meaningfulness and interest of work, improving work conditions and the overall quality of working life, eliminating factors of alienation from work, etc., was to achieve the renascence of man in the process of work. The set of organisational changes were implemented with the aim of doing away with the passive status of man at work, conceived only as one part of the production "mechanism", and of reinstating his role as a creator-producer. The main changes in the work organisation were focusing specially on: -

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enhancing the content and interest of work activities by means of job enrichment, etc. improving workers' qualifications and their occupational versatility, their ability to meet complex work obligations and the flexible adoption to changes in work tasks increasing the autonomy of primary work collectives, extending their competence and participation in management, together with some changes in organisational structures.

Characteristics of the Principles of Brigade Form The principles of the brigade form can be briefly described, on the basis of the basis document quoted above, as follows: The application of the brigade form aims at a more efficient utilization of the creative forces of work collectives on the basis of their active participation in the planning, organisation, and execution of work tasks, in the utilization of the advantages of the collective organisation of work, the strengthening of an active attitude towards work and the distribution of the payment according to the results of collective work and the individual contributions of members of their collective. Its principal goal is the improvement of production and work organisation with the direct participation of all members of the collective. The main objective is to achieve a more pronounced increase in labour productivity, improvements in the quality and effectiveness of production, and acceleration in the practical applications of scientific and technological achievements and in the social development of work collectives. The brigade form is becoming an important component of the internal management of the enterprise with specific tasks in terms of both quality, living work expenditures and material commitment to the results of collective work. It unites the members of the work collective in the joint and most effective fulfilment of production tasks, ensuring a better

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utilization of human, material and energy resources. When necessary, the implementation of the brigade form also entails changes in the internal organisation and management of the enterprise. The work collective, operating under the brigade form, is vested with the necessary rights and responsibilities, in the area of work organisation and division of labour within the collective in accepting tasks over and above the plan, in assessing the share of individual members and their remuneration, in complying with labour discipline and in enhancing an active attitude to work. The work collective introduces progressive elements into the organisation of work with the aim of enriching the content of work. It works usually on the principle of self-financing: it is materially committed to the achievement of the best possible economic results and its remuneration depends also on the results of the work of the collective as a whole. The brigade form is based on a high degree of autonomy in the internal organisation and management of the work collective. Work collectives become relatively independent production, economic and social units which are assigned tasks of both productive and non-productive nature through the plans. The plans specifically define the planning indices such as wage funds, labour productivity, production costs, etc. The implementation of the brigade form has a voluntary character and reflects the interest of the work collective to introduce more effective forms of work organisation. The management of the organisation sets specific goals for individual work collectives and creates adequate conditions for their activities. The brigade form is formally introduced on the basis of the decision of the organisation's director in agreement with the trade union body and the work collective concerned. Depending on the circumstances, members of these work collectives are production workers engaged in direct production work, auxiliary and indirect operations as well as non-manual workers in technical and administrative positions. The introduction of brigades should be preceded by a systematic introductory process covering technical, economic and sociological aspects and the preparation of personnel in conjunction with the participation of the technical, economic and production units of the organisation. The activities of brigades are governed by their leaders within the sphere of authority delegated to them by the director of the organisation. Depending on the specific circumstances, the leader of the collective is appointed from among the appropriate managerial staff (e.g. supervisor, workshop head, etc.) or from manual workers, capable of holding this position. He is appointed by the director of the organisation on the basis of the nomination made by the work collective and after discussion of the nomination with the trade union body.

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Meetings of the collective discuss and decide on essential questions for the operation of brigade collectives such as the creation of conditions for planned and unplanned tasks, membership of the collective, performance assessment and wage criteria. When justified (in larger collectives), a brigade council may be elected. In order to carry out successfully the tasks and to have adequate and necessary conditions, the collective and the management of the organisation conclude a "Socialist agreement". The agreement lays down, on the one hand, the obligations of both the collective and economic management, the conditions of material commitment for the collective and, on the other hand, the consequences for non-fulfilment of their respective obligations by either of the two sides. Under the terms of the general rules and conditions specified in socialist agreements, the responsibility for the implementation of the brigade form in a particular organisation is vested in its director together with the trade union body. Evaluation of the brigade performance constitutes an integral component of the economic activities of the organisation. In cases of non-compliance with the prescribed rules and conditions, remedial action must be taken immediately, or the decision about the implementation of the brigade form may eventually be revoked.

Implementation of the Brigade Form in Practice The implementation of the brigade form in Czechoslovak economic practice has been directed mainly towards production organisations in engineering, construction, agriculture, forest and water management, transportation, communications, and local production co-operatives. The implementation of the brigade form is considered as a long term dynamic process of systematic improvement and development of its individual components in harmony with changes in production, technological and socio-economic conditions. The total number of workers operating in the brigade form represents now some 21 percent of all production workers employed in the main branches of production. This score differs between individual branches and economic organisations (e.g. engineering 30 percent, construction, forest and water management about 29 percent, consumer cooperatives 24 percent, agriculture 18 percent, transportation and communications 10 percent, etc.). The developing of the brigade form has been rapidly growing, especially in the last years (see Table 1).

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Table 1 Year

Number of collectives

Number of workers

1982 1984 1985 1986 1987 1988

120 1.721 12.864 17.062 23.205 32.260

3.000 44.300 295.000 408.505 592.954 907.255

Source: Cziria, Liska and Munková, 1989: 13

The results obtained from the implementation of the brigade form in Czechoslovakia have been analyzed, in terms of both their quality and quantity, by a national survey in 1986-87 conducted by the Research Institute of Social Development and Labour, Bratislava, in cooperation with the Ministry of Labour and Social Affairs of the CSFR (Liska et al., 1988: 8-53). The investigation was conducted in two stages. The first stage (1986) included a questionnaire survey of more than 280 selected enterprises and about 4.200 work collectives with a total of more than 120.000 workers in brigades. This survey was designed to show the global characteristics of the implementation of the brigade form. The second stage of the investigation (1987) had a narrower focus analysing the effects of the brigade form. This survey covered 40 enterprises with almost 650 collectives and 29.000 workers. The indepth analysis covered 80 selected collectives with about 4.800 workers. The surveys showed that in most enterprises, the brigade form has been confined to a selected range of collectives. There is, however, also a large group of enterprises in which 10-25 percent of the production workers are operating within this form of work organisation, and where the principles of the brigade form gradually become an integral part of the internal enterprise management, improving its quality. There are even enterprises with 30 to 90 percent of the production workers involved in the brigade form of work organisation and basing their management practices on its principles. The results of the survey (1986) confirmed and validated the original assumption that the brigade form was, at the first stage, implemented mainly in the primary (main) production processes, representing approximately 85 percent of collectives of the sample. In auxiliary and service production processes (materials handling, stores management, maintenance and repairs, transportation, etc.), the brigade form was used in approximately 12 percent of the collectives in the sample. In other spheres

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or activities it was employed only to a limited extent. A positive aspect is that the brigade form is also expanding within the preparation production stages (product engineering, design, construction, etc.). In the work collectives operating the brigade form, in many cases the leaders are appointed from among production workers. The brigade leaders are technical and administrative staff in 50-60 percent cases. (At the early stage it was 30-40 percent only). About the type of workers engaged in the brigade form, the surveys showed that most of them were production (manual) workers (some 90 percent), and that technical and administrative staff represent approximately 10 percent. Collectives comprising both categories predominate (some 80 percent).

The Main Results The surveys conducted so far make it possible to get an impression of the effects of implementing the brigade form on the organisations, work collectives and their members. The survey (1987) has shown that about 75 percent of the organisations investigated consider the economic results achieved by theses collectives to be superior to those achieved by the organisation as a whole. In the area of economic effect the following indicators were the focus of attention: -

improvements in labour productivity reduction in material cost reduction in the proportion of overtime work increase in average wages.

Improvements in Labour Productivity Almost all the work collectives employing the brigade form are characterized by a more rapid growth in labour productivity. Almost half the work collectives surveyed reported an improvement in labour productivity of more than 5 percent. These collectives reported average annual increases in labour productivity (in the time series 1983-1986) of 2 to 3 percent. It has been generally accepted that work collectives record the greatest rate of productivity growth during the first year of implementation of brigade form. The survey (1987) conducted in eighty selected collectives did not, however, confirm this assumption (the mean productivity rate in the first

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year was 102,2 percent). In addition to the collectives which recorded an above-average labour productivity improvement (between 13 to 29 percent), 19 collectives showed even some drop in labour productivity during the first year of implementation.

Reduction in Material Costs After adopting the brigade form, most work collectives recorded better results in savings on material cost (raw materials, semi-finished products, fuel, energy). The savings are in the range 1 to 10 percent. For instance, in the 1983-1986 time series, annual savings on material costs was recorded, with an average of 2,7 percent.

Developments in the Extent of Overtime Work Most collectives working in the brigade form had a lower proportion of overtime work than the average for the whole enterprise. For instance, in the 1983-1986 time series, there has been a clear trend towards a declining proportion of overtime work, with an average of 4 to 5 percent.

Trends in Average Wages In the majority of collectives working under the brigade form, a higher than average growth of mean wages was observed. The average wage increases were concentrated into the range of 0,1 to 3 percent. The wage increase was justified by more rapid labour productivity growth. Beside these economic effects, changes in other aspects brought about by the implementation of the brigade form were examined. 1. In practically one half of the cases, the stability of work collectives has increased and the workers' turnover and unauthorised absences decreased. Among other factors, this has been due to the greater say that these collectives had in the recruitment of the workers. 2. Better than enterprise average results were also achieved in the utilization of machinery and equipment. This was due particularly to the following factors: the use of multi-machine attendance, increase in the rate of shift working, multi-skilling, extension of the zones of machine attendance and handing over machines between two shifts without stopping.

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3. In most collectives, better results were achieved in the quality of products and work than the average results for the enterprise as a whole. These results were achieved particularly through: the introduction of self-inspection, the introduction of the Saratov movement, increasing material incentives for quality, the use of a personal seal of quality and the organisation of competitions for quality. 4. Overall, increased autonomy of the work collectives is noticeable among collectives employing the brigade form, due particularly to the wider participation in the management and organisation of their work (see Table 2). A marked feature of these activities was also the participation of the collectives in the adoption of counter-plans (following an evaluation of the opportunities for mobilizing internal resources). This form of participation in management was employed by the collectives of approximately one third of the organisations. The workers' initiatives in their material aspect, are directed particularly to improve the following indicators: -

labour productivity improvement, material costs savings, total cost savings, improvement in net output indicators, profit and profitability of production funds, savings in living work, production quality improvement.

Production meetings are another important form of the workers' participation in management. In virtually all the collectives, they are held at least once a month, and if necessary, at shorter intervals. Production meetings also contributed to mobilize collective members towards making suggestions for the improvement of various aspects of the work of the collectives. These meetings are attended by the representatives of economic management and trade union organisation. 5. Positive changes have been observed in labour relations in all the collectives. This was shown especially in the handling of labour conflicts, in the reduction of the number of labour disputes and in the strengthening of informal labour relations. Increased attention is paid in these collectives to the social adoption of newly recruited workers and the acquisition of professional skills. The implementation of the brigade form also widens the scope for the creative improvement of

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Table 2: Evaluation of the Autonomy of Work Collectives applying the Brigade Form Application degree 0

1

1. Individual members of the work collective can determine themselves the working procedures and methods of work

2

3

X

3. The collective can decide on the membership of workers in the collective: — hiring/selection/of new members — dismissal of unwanted members

X X

4. The collective can decide on internal division of work and co-operation

X X

5. The collective can decide about the utilization (modification) of technological manufacturing processes X

X X X

7. The collective has the possibility to influence the designation of the leader 8. The collective decides on the formulation of the assignments and the conditions of their fulfilment: — type of working tasks — range of working tasks — total amount of remuneration according to work results — distribution of remuneration for respective workers — sanction for non-fulfilment of task

5

X

2. The work collective has the right to propose and elect their leader for the solution of brigade internal affairs

6. The collective can decide about: — place of work performance — performance of work in time sequence of operations, working time range — implementation of further profitable activities

4

X X X X X

Note: The Evaluation within a scale 0 to 5 is due to the expert estimation of the field research results in approx. 40 collectives (0 means almost no occurrence and 5 maximum occurrence)

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production management, work organisation, workers' remuneration and the improvement of working conditions. The development of the brigade form in every work collective and that of its basic criteria can be evaluated also by means of the scoring method (Czíria et al., 1989: 113-121). To do so, individual partial aspects of the evaluation of activity and work results of the collectives employing the brigade form have been grouped into eight homogeneous areas (see Fig. 1). The qualitative side (the degree of development) was evaluated by 1,2, 3 points. The adequate points are assigned on the basis of expert assessment of the specific situation. The results of the evaluation of the brigade form (following the above method), according to the sample (1987) represented by 80 collectives and approximately five thousand workers, are expressed in the graph (see Fig. 1).

Some Critical Remarks Despite the good results achieved by the implementation of the brigade form, in most cases one can recognize also several open questions and problems (Cziria/Liska, 1986: 4). One of them is the legal basis for fulfilment of the "socialist agreement" between the work collective implementing the brigade form and the enterprise management. It is necessary to solve the problem of the status of the work collective as a legal autonomous subject with adequate rights and responsibilities in the bargaining process with the enterprise management. This problem could be solved by a revision of the pertinent legislative documents as a part of the constitution of the new labour relations in the Czechoslovak economic practice. Another actual question is the implementation of elements of the internal cost accounting system at the level of primary work collectives. The problem is centred on the restructuring of the internal economic management of the enterprise, including also the issue of the indicators to be used in the assignment of work tasks which will efficiently stimulate work collectives towards economically fulfilling their tasks without raising demands on additional administrative work In certain types of production (e.g. apparatus manufacturing), this issue is strongly influenced by the technology of production. Consequently, there is also a tendency to organize larger work collectives in the brigade

Work Organisation in Czechoslovak E c o n o m i c Pratice 2.3 2.1 IB

197

2.2 2.0

1.9

1.8 1.6

1 -

1

2

3

4

5

6

7

8

Figure 1 1— 2— 3— 4— 5— 6— 7— 8— Note\

mode of management, use of khozraschot organisation of work remuneration participation in management and self-management growth of initiative social and professional growth innovation activities economic results On the assumption that the highest score — 3 points — denotes a 100 percent level of the given criterion, the degree of development is expressed by the average score for the given sample.

form at the level of the workshop and operations which constitute economic and/or cost centres. Statistically, the size of work collectives operating under the brigade form ranges from 3 or 4 to 300 and more workers (Munková, 1987: 18). At the present stage, the average size of these collectives is about 45 workers. For the effective management of these work collectives, it is more appropriate to set up smaller, more homogeneous work collectives. These provide better conditions for improving labour relations, for evaluating performance in relation to remuneration, for improving work organisation, for introducing progressive elements into job content, and for the flexible solution of operational tasks. A relatively important aspect of the brigade development is also the implementation of the progressive elements of work organisation, espe-

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daily the integration of work functions and activities, the enhancement of work content, the extension of performance and the organisationalmanagerial competence of the collectives, and increasing the commitment and participation of collective members in rationalization and innovation activities. According to the research, the most frequently occurring progressive element was that of substitution for a worker absent from work (92 percent of the 1987 sample). Less frequent were e.g. multi-machine operation (32 percent), job enlargement and enrichment (32 percent), job rotation (20 percent), etc. (Liska and others, 1988: 26). Such changes in the content and organisation of work call for systematic inspection of the production and technological processes, the structure of jobs and working conditions. Changes in the structure of jobs must also be supported with adequate changes in the vocational training of workers. Until recently, in the implementation of progressive elements of work organisation, the initiative of work collectives prevailed over the professional activities of the work rationalization specialist at the stage of introducing changes. A new element in the management of work collectives using the brigade form of organisation is also the status and are the duties of the leader of the collective. This was a problematic aspect especially at the beginning. When the brigade form started to develop, there was a tendency to appoint one of the manual workers to the post of collective leader who, as a rule, continued to carry out his specific production tasks. In the course of time this function came to be increasingly performed by non-manual workers because of the increasing demands placed on the collective leader's position. The transition to the brigade form also changes the operational tasks of supervisors, e.g. a production foreman is assigned new and more demanding tasks. The adequate solution to this problem calls for further development of the specialized training introduced in 1987 with the intention to contribute to raising the skill of a brigade leader to a higher level. This training was focussed on the acquisition of basic knowledge and skills in the areas of work organisation, management, economics, human relations, labour code and the design and practical implementation of the brigade form.

Conclusion The introduction of the brigade form into the Czechoslovak economic practice was, in spite of its failures and problems, relatively fast and extensive. The majority of managers and other workers evaluate the

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introduction of the brigade form positively. This process was beside positive results, influenced by the entire economic environment in which the enterprises existed. As a result, the brigade form was many times introduced under the pressure of realizing a "political task" or under the pressure of a reaction to some "modern direction". This was done usually without adequate professional preparation. In short time problems aroused in these enterprises which led consequently to the abolition of the brigade form. During the present transition of the Czechoslovak economy to a market economy, basically new conditions are created for the activity of enterprises. On new forms of work organization in enterprises, will decide neither political or ideological points of view nor formalistic approaches of the central system of management. The decisive factors will be the economic results of an enterprise and of work collectives. The enterprises will realize new forms of work organization everywhere where they will contribute effectively and evidently to the activity of an enterprise. For the future development of collective forms of work organization in the Czechoslovak economic practice, it will be therefore also important to propagate the positive sides of an implementation of the brigade form. That means giving appropriate information to managers and workers of enterprises regarding the essence, real contributions and possible hazards of an implementation of collective forms of work organization in practice. The important components of the modern management of enterprises are principles such as the growth of autonomy and responsibility of the primary work collectives, changes in the organizational structures and in the content of work, development of workers' participation and management of Czechoslovak enterprises; that will be the inevitable precondition of their ability to compete on the world markets. In this process, knowing the results of the implementation of the brigade form of the organization of work and remuneration can be useful.

Bibliography Cziria, Ludovit et al.: Co ma vediet' organizator prace (What should a work organizer know). Bratislava, Praca, 1989: 113-121. Cziria, Ludovit & Milan LiSKA: 'Problemy a trendy v rozvoji brigadnej formy. (Problems and trends in the development of the brigade form)', Hospodarske noviny, 38,1986: 4. Cziria, Li§ka, M. and Munkova, M.: Postup uplatgovania B F O P O v podmienkach prestavby narodneho hospodarstva. Expertiza §PEV

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904 802.62. (Procedure of omplimentation of the brigade form in condition of the restructuring of the economy), Bratislava, Vyskumny ústav sicialneho rozvoja a práce, 1989:13. Líska, Milan et al.: Uplatnovanie brigádnej formy organizácie práce a odmenovania v hospodárskej praxi CSSR. Vyskumné práce c. 11. (Implementation of the brigade form of work organisation and remuneration in the Czechoslovak economic practise). Research studies No. 11. Bratislava, Vyskumny ústav sociálneho rozvoja a práce, 1988: 8-53. Munkova, Marianna: 'Organizácia a riadenie kolektívov uplatnujúcich brigádnu formu organizácie práce a odmenovania', in Organizácia a riadenie pracovnych kolektívov uplatnujúcich brigádnu formu organizácie práce a odmenovania, I. cast'. (The organisation and management of collectives implementing the brigade form of work organisation and remuneration, in The Organisation and Management of Work Collectives Implementing the Brigade Form of Work Organisation and Remuneration, I. book). Bratislava, Dom Techniky CSVTS, 1987: 18. Zásady vlády CSSR a Ustredni rady odboru pro rozvoj brigádní formy organizace práce a odmenování. Prfloha k uznesení vlády CSSR c. 39, 1985. (The Guide-lines of the Czechoslovak Government and the Central Trade-Union Council for the Development of the Brigade Form of Work Organisation and Remuneration. Supplement to the Resolution of the CSSR Government, No. 39,1985).

Intraorganizational Determinants of Worker's Self-Management Activity Jolanta Kulpinska

Introduction The transformations occurring in Poland are very far-reaching. With regard to participation in the management of the economy alone we may describe them very briefly as decentralization, autonomy from the central organs, and administrative management obtained by enterprises, the introduction of market mechanisms, the depoliticization of management, changes in the structure of ownership and in that of economic entities. The successes scored in the realization of such transformations continue to be limited, which is, among other factors due to constraints imposed by the present economic recession, the heavy debt of the country, the resistance of bureaucracy, and finally social resistance because of the high costs paid by people. It became clear that the economic reform was not possible without political changes. After the elections of June 1989 it is also clear that economic changes are very difficult and painful. In the transformation of the system of power and economy, a special role falls to industrial relations. The logic of the reform in this respect is, to put it briefly, as follows: the decentralization of management and the decision-making freedom of state-owned enterprises, which are considered to be indispensable for reasons of efficiency, can be carried out in a way that ensures social control, namely through equipping workers with decision-making rights, which means through introducing workers' selfmanagement. It is workers' self-management which is to ensure effectiveness in an enterprise and control over its administration. At the same time, self-management seeks its independence from the political organization (being external to an enterprise) and strives to enhance the employees' motivation. Disputes around the institution of self-management in 1981 were rightly emphasizing the problem of the director's appointment, if the director were to be dependent upon the Ministry and a political recommendation,

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it would be difficult to speak of autonomy of enterprises and sovereignty of workers' self-management. A compromise solution was won in the Law of September 25, 1981: the director is dependent both on the self-management organ and on the Ministry. This second dependence - as well as the third one which is the communist party - proved to be most important in the martial law period, and it may be one of the major reasons of the inefficiency of self-management, which is rightly said to be only an advanced form of participation. 1 The introduction of self-management has not changed the economic mechanism by itself. It concerned only and ultimately problems of power at the plant level, as well as industrial relations especially since it introduced different institutions representing employees. Those institutions serve different, sometimes even opposing goals, i.e. regulation of the position and role of a worker, and participation in decision-making and control over the functioning of an enterprise. The first representation is by the trade union, the second is by self-management and its organ, the workers' council. The workers' council is active - in accordance with the law - within an enterprise; and its partner is the director of an enterprise or of a plant. Such an indirect form of participation does not influence change in the process of work in a decisive way, and particularly not the division of labour and the position of the worker in the structure of a plant (he continues to be an executor of tasks). Nevertheless, self-management creates change for collective codetermination and control of management. It could be an institution of "collective employer" as opposed to trade unions, which represent the employed, most often in a vindictive way. Workers' self-management, in accordance with the Law of 1981, is an institution regulating the system of power in state-owned enterprises. It was simultaneously treated as a way to "socialize" the state ownership. Consequently, it leads to a group ownership, in which the personnel, composed of producers, manages the 1

Employee self-management consists in this that the personnel constitutes the subject of power, and thus it decides about the organization and development of an enterprise, about working conditions and appointments to key management positions. Participation, on the other hand, consists in employees' participation in management and it may assume different forms and intensities. In the opinion of many researchers, the Law about Self-management of the Personnel of State-Owned Enterprises is inconsistent: equipping employees with various rights it simultaneously restricts their sovereignty, despite the name Self-management it speaks the right of personnel to codetermination, etc. See: among others H. Lewandowski & M. Sewerynski: Participation of employees in management of an enterprise in Poland, Lodz University 1985, typescript (in Polish); Sz. Jakubowicz: Battle for self-management 1980-1981. London, Aneks, 1988 (in Polish).

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process of work and has at its disposal means of production and results of work. One way of disposing of the results of work is the right of self-management to decide about the distribution of a plant's profits and also workers' participation in profit. In connection with the introduction of market mechanisms and of privatisation there has appeared the problem of individual shares or employees' shares connected with selfmanagement. It is a new element in the application of self-management and in its institutional form. New economical policies and changes in the economical and political order in 1989/90 (the so-called Balcerowicz Plan) give the first place to the market economy and the privatisation of the enterprises. The Law of July 1990 on privatisation has taken into consideration - under pressure from the "Self-management lobby" the possibility that the workers can hold shares (20 percent of the stock with preferences). At the same time the transformation of the ownership of the state-owned enterprises changes the role of self-management. One should ask: what could be the evolution of self-management in the future market economy in Poland? Would self-management activity be the accelerating or rather the slowing-down factor in the economic changes? Is it possible and necessary to transform the present self-management scheme into various forms of workers' participation, workers' stock-holding or participative management? The answers could be obtained from new- present and future-research. This article is concerning the earlier period - mainly the experience of the 1980's. The studies on self-management and workers' codetermination were always pointing at a considerable differentiation of effects, at a multitude of factors determining them, and the necessity of the simultaneous appearance of several favourable factors. However, these syndromes did not always (and everywhere) have a universal character, one could rather distinguish different types of self-management. In order to determine these types, syndromes and factors, a dual procedure could be applied: - first, to study numerous examples of self-management, representative of an industry or an industrial branch and determine interrelationships, tendencies and models through quantitative analyses; - secondly, to study purposefully chosen examples of self-management bodies, paying attention to the configuration of factors determining their functioning. These are, for the most part, qualitative analyses. A decisive element of such studies is the choice of enterprises. Unfortunately, typologies of self-management are rarely accompanied by knowledge about their quantitative dimensions.

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Being interested in the activity and the functioning of workers' self-management since 1956, I have more often adopted the second - the monographic method. 2 My research experience allows me to propose a particular list of factors favouring the development of self-management. (Kulpinska, 1982) They are exogenous or endogenous in relation to an enterprise and in relation to self-management. Among exogenous factors I include: the system of management, the Law about self-management, and macrosocial context of political and cultural character (self-management within the system of values and within the system of power). Discussions conducted in the 1980's and, thus, in the period of formation of the present workers' self-management and the first experience gained in this field bring to the fore only the problems of external determinants, i.e. interrelating the self-management order of an enterprise with the system of management of the economy and with the socio-political solutions. Perhaps the only endogenous factor, which is often spoken about, is the attitude of employees towards self-management. In the light of these studies, there emerges the following picture: -

-

-

2

constraints of political nature exert an influence on the active involvement of self-management activists and, at the same time, lead to politicisation of self-management to its treatment as a substitutional institution, through which political aspirations of workers are channelled; there have been delays and failures in the introduction of the economic reform in the 1980's; in connection with the impact of these and other factors it can be noticed that workers in particular enterprises do not evaluate highly their workers' councils, neither are they very interested in their activity, but simultaneously they highly appreciate the very idea of self-management and participation; the attitude of managing directors and of top management towards self-management is different. They collaborate with employee councils out of necessity, however they do not alter their management style under the influence of the self-management system but rather try to subordinate employee councils;

In particular: J. Osiatynski et al., 1985; P. Ruszkowski & M. Fedorowicz, 1988; 'Employee self-management in opinions' ...; 'Economy under reform, 1984; W. Morawski, 1986 ; J. Hausner & J. Indraszkiewicz, 1988; M. Jarosz, 1988; T. Zukowski, 1987;; Employee self-management at the threshold, 1898; M. Czarzasty et al., 1987.

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-

205

various studies indicate that 15-20 per cent of self-managements are active, which represent usually an "independent type" in relation to the administration or perhaps even a "conflict type", i.e. in which the differences and contradictions of the socio-economic interests in the functioning of an enterprise are perceived while the activity of the workers' council and self-management are treated as a set of rules and conditions of cooperation. (Jakuleowicz, 1989) Some of the active self-management organs have a participatory-cooperative character, i.e. they are included in the administrative system of power and consider their task to be representing the opinions of personnel and influencing decisions. A certain number of self-management organs according to some researchers most of them - play no significant role, they do not fulfil the statutory requirements and are dummies of self-management (even in a participatory sense). In the opinion of pessimists, this is due only to exogenous, macrosocial and political determinants.

If we accepted such a point of view we would not deal any further with the evaluation of these forms of self-management. All that would be left would be to explain " o n l y " how comes a minority obtains positive results despite really unfavourable contextual and formal determinants. I believe that these are factors of intraorganizational character. I include in them: -

-

-

"own law", i.e. statutes, regulations, agreements with sociopolitical organizations, fixing principles and ways of reconciling principles of self-management and codetermination both by the top management (administration) and by members of the employee council, functioning of self-management in accordance with principles of intraorganizational democracy as a platform for reconciliation of interests, interest in self-management displayed by the employees and their involvement in it, numerous group of activists, especially among rank and file employees, a co-operative management promoting a management style in conformity with the spirit and the letter of the self-management law.

It is impossible to mention examples of self-management fulfilling all these conditions, all the more so since almost each of them can vary in degree. On the other hand, it is possible to search for concrete solutions and concrete effects in each of the distinguished areas and investigate their impact on the success of the whole (i.e. self-management).

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I shall now proceed to the presentation of some intraorganizational factors that exert an influence on the success of the self-management institution, namely the determination of rules and procedures of activity, the role of self-management activists and the processes of formalization (bureaucratization). The basis for these considerations has been provided by findings of my own studies (see: reference 9), and especially monographs of chosen examples of self-management from 1985, as well as results yielded by studies conducted in many research centres (see: reference 4). The theoretical frame for the proposed description was found in the works on bureaucracy and/or democracy in the organizations such as enterprises, political parties and trade unions.

Prescriptions and Procedures of Activity The "Law about workers' self-management in Enterprises" of 25th September, 1981 was - as it is known - a cause of controversies and conflicts. Simultaneously, it was an act of compromise designating definite roles, tasks and modes of activity. It provides for the elaboration of statutes and regulations specifying these rules and adapting them to concrete situational conditions. Self-management organs already established before the adoption of the Law were starting their existence by drafting a temporary statute. The aspirations of employees and worker activists give the rules of their activity a legal form are an expression of the intensification of social conflict, and the lack of confidence in the protagonist, but also an expression of the desire to find an agreement and a field of cooperation. It is also for this reason that attention was devoted to the defining of rules of activity. The drafting of temporary statutes occupied the first employee councils in summer and autumn of 1981. Around model statutes and election rules there were also crystallized stances in the same degree as around controversial projects of Law.3 One of the first tasks of the self-management organs reinstated during and after the martial law period was to adjust statutes and electoral regulations to the binding Law. The first term of office of workers' councils was largely devoted to this issue. There were appointed commissions, workers were consulted and 3

W. Jermakowicz analyzed several dozens of temporary statutes elaborated in 1981. Their overwhelming majority were prepared in accordance with the draft Law about social enterprise prepared by the so-called "Network of the leading plant commissions of solidarity", workers' self-management. Hopes and disillusionments, Warsaw, MAW, 1983 (in Polish)

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advisers sought outside enterprises. Thè statutes known to me are usually very detailed, they repeat the paragraphs of the Law which are considered to be important for the activity of self-management. Especially procedures of interaction with the director (and the administration) and other organizations are defined in detail. The regulations concerning the election of employees' delegates and employee councils are also formulated in detail. Some enterprises have elaborated regulations concerning the activity of the council and other self-management organs. Is not that a too far-reaching formalization of activities, which by their very assumption are supposed to be of a spontaneous, "bottom-up" character, compatible, above all, with general democratic rules? The strengthening and legalization of rules seem to have had their source exactly in the lack of experience in the practice of democracy, as well as in long-standing distrust in appearances and ceremonial rituals, so characteristic of the councils in the 1970's. Detailed stipulation of the rights of self-management organs in the Law and the statutes often plays the role of a list of tasks not so much possible as rather desirable and even necessary. In this way, on the one hand the studies as well as control analyses performed by the Supreme Chamber of Control show that employee councils fulfil these tasks with regard to which they possess decision-making and exclusive rights, and on the other hand they are less active in the field of passing opinions on the activity of an enterprise and display few initiatives in relation to the administration. 4 The studies carried out by the Centre for Social Opinion Studies and M. Jarosz show that resolutions adopted by the councils often concern problems of marginal importance from the viewpoint of strategic plans of enterprises such as e.g. decorations, subsidies for organizations, rewards, etc. These are important problems for the management of people. Reserving these problems for decisions by employee councils demonstrates the intensification of social conflict in 1981 and it also reflects the intentions of the legislator in the field of solving labour relations through self-management. 4

Consultative rights of self-management organs are used, to a satisfactory degree, in relation to problems characterized as obligatory in the Law. A control revealed, however, that in 16 percent of the enterprises self-management organs did not utilize their possibilities of expressing opinions on problems concerning their enterprises. Not all employee councils were developing initiatives nor remarks on problems concerning enterprises either - this form of activity was not observed in 25 percent of the controlled organizational units. The realization of rights to control the entire activity of an enterprise, possessed by self-management organs, looks relatively worse, because such control was not undertaken in 36 percent of examined cases. "How self-management operates", Rzeczpospolita, No. 167,18th July 1986 (in Polish).

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The formalization of procedures of activity concerns, in particular, these issues, which on the basis of previous experience from 1970's were considered to be weak points in the democratic labour system and which were part of the problems requiring protection for many years. It is a solution counteracting oligarchization, the separation of the employee council from personnel, the take-over of competences by smaller (Presidium, Problem Commissions) and non-statutory bodies. The solution of these problems receives a great deal of attention in intraorganizational procedures. This, however, appears to be not effective enough. The studies reveal that the meetings of employees (of the employees' delegates) are not sufficiently active. This embodies a threat of separating from personnel, blocking information channels and the possibilities of employee control. It has also been shown by various studies that a particular rival of the general meetings of employees (on their delegates) is a body based on the cooptation of participants from among members of organizations and representatives of the administration. The functioning of such bodies sometimes has its roots in the initiative of drafting long-term projects of development of an enterprise, mainly by the Polish United Workers' Party. The existence of an extra-legal organ of an enterprise in the form of a "management collective" composed of the director, representatives of the Polish United Workers' Party, the Trade Union and the employee council is most strongly opposed to the Law and its derivative prescriptions. The law-maker's intention was that the Law should support the sovereignty and autonomy of self-management. The functioning of the above mentioned "collective" (recorded in almost all enterprises) however, corresponds to the tradition of the "autocratic-collegial" management style (according to W. Kiezun's term). In this way, a reference is made to a custom consolidated before 1980, which was convenient, anyway, from a practical point of view. In this way it was easier to solve the task of codetermination in decisions taken by representatives of basic institutions (organizations) in an enterprise and to practice "the leading role of the party". A characteristic feature of industrial relations in Poland is the large number of institutions and their formal rights. At the same time, other formal-legal regulations limit the possibilities of utilizing these institutions. That is due not so much to a lack of legislative elegance but it rather results from the socio-political context of societal character. Consequently, the rights and competences of self-management (or trade unions) are not fully utilized. Only part of the self-management "activists" estimate that their councils utilize their rights, while many others think that it is not possible in the existing conditions, and still others - perhaps the majority - are not well acquainted with the existing possibilities.

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Beside this, we are dealing with frequent "by-passing of law" or with informal, sometimes customary procedures of regulation. They often assume the character of factional bargaining when some group of workers of an enterprise or some branch groups exert pressure on the management of an enterprise or on the central authorities.

Self-Management "Activists" Among the most important intraorganizational conditions of the functioning of self-management is the selection of "activists", that is the appointment of willing and competent workers' leaders. Of course, they can be more easily found in larger enterprises, those employing qualified men in their middle age, or in modern industries such as engineering or chemical industries. Thus, the appearance of these leaders itself is not fully accidental or of strictly intraorganizational character. One should add an important situational factor which is that something must set the workers in motion, stimulate them to become active, bring leaders to reveal themselves. This "something" undoubtedly took place in 1980-1981, and consequently "activists" were not in short supply in the new workers' councils. The martial law and the suspension of self-management led to their withdrawal. In the councils reinstated in 1982 and 1983 new "activists" constituted the majority. The idea of self-management proved to be so strong and attractive that it was possible to coopt "activists" despite the withdrawal of some of them, the sporadic boycott of elections of new councils and the prevailing social apathy. It has been confirmed by the studies that workers tend to be little represented in the composition of employee councils and that key positions in them are held by lower- and middle-level managers. The situation looked similar with the Conferences of Workers' Self-management before 1980. After 1983, the necessity of introducing changes in the composition, statutes and activities of the employee council in order to bring in it persons closer to the top management, remaining more easily at disposal and both competent and willing to act. These could be exactly the middle-level managers, who were, anyway, quite engaged in problems of self-management and the economic reform. The studies also show that a high proportion of either communist party and or "official" trade union members can be found among "activists". That is a result of a mechanism similar to that in the case of managers, as well as of the fact that among all employees, members of the party were in 1982-1983 (when new self-management forms were being set up) more

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willing to get involved than those not belonging to the party - an involvement in line with the new contextual situation and with the new statute of self-management. Among active worker councils one must distinguish those in which "Solidarity" retained its influence also in the period of its delegalization. According to researchers who analyzed these "independent" self-management organs they were especially involved in the realization of economic reforms but they were also most vindictive. The Law of 1981 does not make any stipulations as regards socio-professional composition of self-management organs. However, in the practice of self-management organs, both in their first term of office i.e. starting from 1982-1983 and in the next one dealing with the existence of characteristic mechanisms of selection, which are most probably exerting an influence on mode and intensity of self-management activity. Selection of cooptation indicates more an inclination to cooperation than a desire to preserve statutory independence. In this way, initiative has been taken over by directors. The manner of selecting the council itself expresses most strongly a tendency to realize the participatory model of self-management. It should be added here that the possibility of setting up worker councils after the reinstating of self-management and its further activity reveal even more explicitly than public opinion polls the attachment of workers to the idea of self-management. The socio-professional composition of self-management organs hides definite chances and threats. They are: -

-

5

the inclusion into the structure of power of a cooperative-participatory character, the chances for further professional promotion of "activists" who proved their competence in self-management activities, the particular professionalization of "activists" corresponding to their professional competences, the presence of criteria of "closeness" with the administrative and political power in the opinion of "activists" and in the functioning of the worker council, the adoption of modes of activity characteristic of an administrative way of functioning, the separation from personnel, 5

I am using here a term very common in 1957 when workers' councils were accused of "separating themselves from employees". This should be understood as a complex process of severing information ties, lack of interest on the part of employees, weakened confidence, etc. As a result of it, self-management loses its representative and mobilizing function.

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the strengthening of the ambivalence of an activist's role, which consists in representing the interests of personnel (and its different segments) and, simultaneously, in representing the interest of an enterprise the way it is understood and realized by the management (which also includes "activists" of self-management).

I am presenting these mechanism as a threat for self-management, because they constitute a part of the mechanism of bureaucratizing and of losing of autonomy. As a result, this institution departs from its vision contained (at least partly) in the Law about Self-management and in the Directions of the Reform, as well as from the vision of major segments of employees. 6 The above mentioned mechanisms carry a smaller threat for self-management in its participatory model, however they may bring it down to lower levels of participation in decisions and control - below the chances provided by the Law, in direction of the consultative (and not authoritative) model.

Bureaucratic Threat to Self-Management The internal determinants of the functioning of self-management encompass factors promoting its success. In certain circumstances, however, these factors may become a source of bureaucratic threats. We oppose here bureaucratization with a desirable organizational democracy in accordance with the ideological conception of self-management, according to which the goal of self-management is to eliminate bureaucratic hierarchy and alienation in the work establishment, just as it is to counteract bureaucratic centralism on the macro-social scale. (See among others: Formalczyk, 1986; L. Gilejko (ed.), 1983; Iwanowska et al., 1986) In both dimensions, bureaucratization implies a loss of control over their own situation by participants in production and social processes. Bureaucratic organization consolidates the hierarchical power and subordination of executive relations, it leads to depersonalization of interhuman ties and gives rise to a feeling of anonymity and helplessness. On the other side within self-management, employees have a possibility of exerting 6

According to the studies of W. Morawski and others, workers in Warsaw are critical towards the functioning of self-management, because it does not fulfil their expectations with regard to autonomy and sovereignty. W. Morawski: 'Employee self-management: visions and reality', Studia Socjologiczne 1986, No. 3 (in Polih).

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their influence on decisions concerning them. Self-management, however, does not overcome bureaucracy, it succumbs to its fatal impact although it simultaneously creates and stimulates counteracting mechanisms. These mechanisms and threats can be listed in the light of earlier discussions and findings:7 1. Centralization and hierarchy of power in an enterprise constitute or are considered to be a binding and most effective way of organizing work, making decisions and controlling activities. This assumption is, simultaneously, constantly undermined when one discovers that a lower effectiveness is the result of little flexibility of longer hierarchical and communicational lines, and of excessive number of cells and managers. One is then tempted to turn to decentralization and transferring responsibility to producers themselves. As a rule, self-management is anti-hierarchical: in its activity, the two principles of organization, hierarchy and self-management, collide all the time. This is related to the management style adopted by directors and managerial cadres in their relations to subordinates. And although the interaction of selfmanagement and autocratic management style is possible it does not have a positive influence on the development of self-management. 8 2. Observance of the law. In the first part of this article I presented the role of the law and the local rules in the activity of self-management: I draw attention, first of all, to the positive functions of regulations. This concerned also the protection of intraorganizational democracy. However, one of the deficiencies of bureaucracy is known to be that the regulations can be so rigid that their observance hampers accomplishment of planned goals. Another threat is posed by ad hoc regulations, rules and guide-lines that stress only some of the tasks, which is sometimes contrary to the general intention of the law-maker. Activities which are of no interest for the employees, when they are imposed on the employee council, are sometimes counterproductive. It may happen then that this issue will be discussed in a superficial, nonauthentic and ceremonial way. Such ceremonial may give a symbolic 7

8

For more information on this subject see: J. Kulpinska: Bureaucratic threats to self-management and how to counteract them. Conference of TNOik in Lodz, 1982 (in Polih). In this context, it is worth mentioning another form of industrial democracy, and namely autonomous or partnership groups. I consider them to be a significant complementary form of workers' participation in management. So far these groups have been developing separately from employees' self-management. See: Z. Janowska; J. Kulpinska & H. Strzeminska: JNew Forms of Work Organization in Poland',in New Forms of Work Organization in Europe. New Brunswick & Oxford, Transaction Publishers,

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meaning to the discussion, but it really performs only informative functions. Of course, one should not forget the consequences of violating the self-management law, which are that it usually undermines the role and significance of the Law. 3. Cooptation of "activists" and oligarchization processes. The authenticity of self-management may be preserved if elected organs represent the aspirations and interests of personnel, and if elected people retain the confidence of the personnel. In this connection, the problem of the skills and managerial competences of self-management "activists" is often discussed. Obviously, some extent of knowledge about the problems of an enterprise is indispensable, however the main criteria of election have a moral and not a professional character. Another problem, which really occurs in democratic organizations, was formulated by R. Michels almost 80 years ago as the iron law of oligarchy. It consists in the consolidating of small groups of "activists", who are constantly reelected and who exert the strongest influence on the leadership of organizations. They became more and more experienced and better and better known to masses of members. Such a situation is reinforced by some indispensable competences in self-management acquired through exercising self-management activity but also in the course of professional training. It is against oligarchization that prescriptions about length of term of office and rotation of members are directed. I think that a decisive role is played by the maintenance of informative and social ties between the workers' council and its "activists" and personnel. 4. Procedures of activity. Various studies indicate that a dominant role in an enterprise is retained by the administration, which is not only due to the role of the managers but also to the taking over by the workers' council of administrative procedures of activity. This concerns the ability to conduct meetings and discussions, to formulate conclusions and resolutions, to "translate" the resolutions adopted by the workers' council into instructions to the top management, to prepare evaluations and opinions. A tendency to imitate administrative procedures is stronger when there is a conflict between the personnel and the management, when mutual confidence is missing and additional (and alternative) documentation is being compiled. 5. Information ties between the workers' council and the personnel. Informing personnel about the affairs of an enterprise belongs to the statutory duties of directors as well as of the workers' council. This is very important for the realization of self-management principles, and it calls for employing various ways of communicating information: papers, broadcasting centre, announcements and information meetings. The biggest problem in communicating information occurs when the

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personnel is not interested in it. This happens especially in conditions of social conflict. The passiveness of employees poses a major threat to self-management. Unfortunately, findings of the latest studies reveal an unsatisfactory flow of information towards the workers and their lack of interest in self-management activities. Counteracting the bureaucratization of self-management can take different forms and procedures. Undoubtedly, the willingness of employees and their influential groups to participate is most effective. The greater it is the more successes result from the functioning of a democratic environment in an industrial organization.

Conclusion Intraorganizational conditions for the functioning of worker self-management were discussed here under two aspects: favourable and unfavourable. The latter was approached globally under the heading of bureaucratization processes. That most probably does not exhaust the list of barriers. It should be supplemented by the problem of the attitude of management executives and of politicians towards the system of self-management. Strangely enough the latest projects of the economic reform in Poland either ignore or devote little attention to self-management and/or participation. On the other hand, one can observe the growing strength of the circle of supporters and "activists" who belong to the Polish Consensus of Worker Self-managements, the Association of Self-management "activists" or the Cooperative Research Institute. Positive conditions or circumstances include also the existence of the supra-enterprise representation, and the existence of the intellectual and political environment of self-management "activists" and supporters. 9 The functioning of self-management is difficult and possible only within some definite range. It is no wonder then that only some of the formally existing self-management organs score successes. It does not seem right that the Law about enterprises imposes an obligation to introduce self-management organs in all enterprises (as an organ of an enterprise). This regulation produces fictions. What level of success is needed to preserve the identity of self-management? What level of conflict and interaction in labour relations is needed to preserve the possibility that

9

Several representatives of the self-management movement were elected to the new Polish Parliament on June 4th and 18th, 19

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self-management functions? These are practical questions, which are and would be answered, first of all, by operating self-management organs.

Bibliography 'Economy under reform (1982-1983)', Studia Ekonomiczne, vol. 8, 1984 (in Polish). Employee self-management at the threshold of multi-sectorial economy. Conference Proceedings, Lodz, 1989 (in Polish). 'Employee self-management in opinions of employees of big industry, Biuletyn CBOS, No. 2 (in Polish). Formalczyk, A.: 'Models of management', Przeglad Socjologiczny, 1986, vol. 36 (in Polish). Gilejko, L. (ed.): Problems and perspectives of social self-management. Warsaw, IP PML, 1983 (in Polish). Hausner, J. & J. Indraskiewicz: Employee self-management. Warsaw, PWE, 1988 (in Polish). Iwanowska, I.; Federowicz, M. & T. Zuwkowski: Administrative order in management of the economy. Paper for the Conference "Man in system of economic management", Suprasl, 1986 (in Polish). Jakuleowicz, Sz. (ed.): "The independent" self-managements. Warszawa, 1989 (in Polish). Jarosz, Maria: Employee self-management in opinions of employees. Warsaw, 1988 (in Polish). Kulpinska, Jolanta: 'Participation of workers in management - determinants of success', Employee attitudes and behaviours, Folia Sociologica No. 4,1982 (in Polish). Morawski, Witold: Employee self-management: visions and reality, Studia Socjologiczne, 1986, No. 3 (in Polish). Osiatynski, J.; Pankow, W. & M. Federowicz: Self-management in Polish economy 1981-1985. Polish Sociological Society, mimeograph 1985 (in Polish). Ruszkowski, P. & M. Federowicz: Biuletyn CBOS, 1988, No. 3 (in Polish). Zuwkowski, T.: Trade unions and employee self-management in Polish industrial enterprises in the years 1944-1987. University of Warsaw, 1987 (in Polish). Zuwkowski, T.; Czarzasty, M.; Gilejko, L. & G. Nowacki: Workersreform-reality. ANS, 1987 (in Polish).

IV. The Change of Trade Union Structures

Business Democracy: Work Collective Councils and Trade Unions Vladimir Gerchikov

First Steps in Business Democracy The elections of people's deputies in March-April 1989 demonstrated that the perestroika of the political system of the USSR has already aroused to political activity fairly deep layers of the Soviet population, sharply raised their involvement and helped them to clarify their attitudes towards many social issues. Compared to this, the business management democratization process appears to lagging much behind: the business power relations in work collectives are changing very slowly, the main bulk of the workers are considerably more passive and the alienation of the so-called "ordinary" workers, i.e., operators or engineers, from the matters of their work collectives, remains deep. Even in the first years of the Soviet power, Vladimir I. Lenin saw as a guarantee of success in building socialism and societal growth, that each "understanding worker would feel he is not only a co-partner in business but a representative of his country, that he would feel his responsibility" (Lenin, 1962: 369-370). He said it in 1918 at the Second All-Union Congress of the Commissars of Labour when each "understanding worker" was actually a co-partner and participated in all decisions of some significance for business and for people's life. However, the formation and universal spread, in the subsequent decades of the administrative-command system of power in the society and in its business sphere have led to the fact that the overwhelming majority of the workers have been excluded from the actual management of the life of their collectives, from business, economics and social growth matters. Just for this reason, the idea expressed by Lenin in 1918, putting the emphasis on the need to return to lost forms of business democracy, was heard again almost seven decades later from Mihail Gorbachev at the XXVIIth Party Congress: "One cannot feel he is a full-right citizen if he is not that in the business he is with, be it a plant, a collective farm, a workshop etc." (Gorbachev, 1986: 40). The principles of business democracy and of participating functions in an industrial plant have been quite unambiguously formulated in Clause

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number 6 of the (Union) Law on the State Enterprise. That is, first, letting each "understanding" worker be informed of all that is undertaken or is planned to be undertaken on the enterprise (to begin with, the co-partner, the co-owner should have access to full and exact information on the situation); second, the participation of the work collective and its public organisations in the development of the important decisions and in the control of their realisation (the co-partner should make all major decisions himself: not only through his elective bodies, but directly); third, the elections of all line supervisors from team-leader and foreman to the general director (the co-owner ought to decide himself who is to manage his business). At the same time the principle of "one-man management" in operative activities is kept. The listing order of business self-management principles seems very important. It is necessary to emphasize that the democratisation of property is the main and indispensable condition for a transition from authoritarian to democratic management. The management represents relations referring to power and it's main features are determined by the ownership relations: an owner always has monopoly on the management connected with his property. The self-management principles determined by the Law on the State Enterprise reflect a conception of gradual transformation of economic mechanism and, in particular, the idea that a collective receives the right to use and to dispose of the property that still belongs to the State. But just in this point the contradiction was laid, providing in practice for the profanation of self-management within the production sphere. If property belongs to the State, to local authorities or to any public establishment, then a corresponding state or public unit has all the functions of an owner: it keeps people informed, makes main decisions and nominates managers. A team of workers in these conditions is only an organized totality of hired persons who may be permitted by the owner to participate in management. As long as the owner's and the team's interests and opinions coincide, an owner behaves quite democratically: he does not prevent the collective from managing (using and to disposing of) property, confirms the decisions of a team and takes care of it's activity. But if their interests come into collision (e.g. if the State demands from an enterprise to produce some necessary but unprofitable products, and a collective refuses), an owner simply finds different means to put hired workers in their place and reduces to nothing any self-management. Under the State property, self-management inexorably converts, at best into the democratization of management. If a collective becomes the owner (the total owner, if workers would buy an enterprise, or a partial one, if the State would lease them this enterprise

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or transfer to them the entire economic management), then it is not the democratization of management that is needed but real self-management. In that case a collective itself has to take care of the necessary information and the final decisions on all the main questions of it's activity. Therefore, a collective has to decide who will run the enterprise as an object of it's property. Some words concerning the elections of line managers. The fact is that the majority of directors, supervisors and different kinds of workers were against this procedure from the very beginning, and this attitude is only increasing. Under the State property, elections, precisely speaking, contradict with the principles of management: why should hired workers elect their managers? If I am an owner, only I am the one who makes decisions. Elections may be a natural form of supervisors' appointments only if a workers' team is the owner. But the transition from nomination to election could play the role of an accelerator of economic transformations in industry exactly because the supervisors' elections and the State property are principally incompatible. Elections could mainly give a manager the support of a collective and could create a high level of consent between a manager and hired workers who are subordinated to him. There is no essential difference between elections and a contract system: in both cases there is an agreement between an owner and a manager. But, if in a contract system only these two actors are involved in an agreement, the procedure announced by the Law on the State Enterprise permits three actors to participate in an agreement, the third one being represented by a collective of hired workers. It is necessary to change the present system of elections in order to help workers' teams not to be split but to be united, to be in consent concerning common goals, operation programmes and the choice of a manager. I want to emphasize the idea of common goals, i.e. those of a manager and hired workers, who should implement these goals and programmes. But if it is the case, then a manager and a collective have to elaborate these programmes together, to discuss them in details and to implement them jointly with total publicity and wide participation of the subordinates in management. Even the first steps towards business self-management have shown that this process will be long and difficult, that it is facing very serious problems. First of all the order of the implementation of the self-management principles has been violated in most of the industrial plants we have surveyed: the start was made not with making people fully informed but with the elections of supervisors and work collective councils (WCCs). The results, that is the secrecy and tokenism of the elections, haste, low

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participation from the bottom, low efficacy of the WCCs, and their estrangement from the collectives began to show. Second, under the still low economic autonomy of enterprises and the persisting administrative methods in the economy, the motivation to more democracy in business is very weak: managers do not show enthusiasm and do not want to share their administrative power nor the information which is behind this power. Ordinary workers and engineers are not very eager either to have access to this information and to active participation in the development of crucial decisions because they all hope that the "bad" chief will be replaced by a "good" one. Beside that, the very idea of democracy in business, in the eyes of many people, is not associated with business and economy but instead is limited only to work pays and to working and living conditions. Third, in the main point of business democracy, i.e., the development of its concrete forms securing mass participation in major decisions and in determining their life perspectives, no change has been observed. The general meeting (conference) of the work collective has been so far only formally a self-government body, no democratic procedures for mass bottom participation have been devised, democratic principles are concentrated only in work collective councils.

Activities of Work Collective Councils To date, WCCs have been established in nearly all enterprises throughout the country: in manufacturing, farming, science, services etc. In some industrial plants they have been functioning for already 2 years, which allows us to make some generalisations and look at their prospects. At present there are three types of WCC functioning: (1) The WCC is a consultation body attached to management; it informs the administration of the workers' opinions on all basic problems of their work life. (2) The WCC is a full-right representative of the work collective, which is a co-owner and a decision-maker in the business; the administration is responsible for the practical implementation of the decisions taken. (3) The WCC makes all decisions jointly with the administration, leaving to it only operative management. At present the first type is prevailing (80 percent of the surveyed enterprises and divisions), the second type is nearly absent (under 5

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percent), the third type is slightly more frequent (15 percent). This situation has been found unsatisfactory by most of the surveyed representatives of WCCs, executives and other workers. The most preferred is the third type (60-65 percent); as to the first and second, the attitudes of the WCC members and the administration are opposite: the WCC members prefer the second, while administration prefers the first. The councils are organized and are functioning according to the basic type. They listen to the administration on business matters, have a voice in the distribution of dwellings, places in children's institutions, other goods; they discuss the matters of working hours regulation and work discipline, socialist emulation and outside assignments (in farming, construction etc.). Among the main functions ascribed to them by the Law on the Enterprise, WCC's participation is insufficient in the field of wages and work organization (only consultation and not decision-making functions), of plan targets and accounts, of improvements in the power structure, of the election of supervisors and technological innovations and re-equipment. On the scope of functions to be in the competence of WCCs, the most combative position is held by workers, the most yielding one by trade unions, an intermediate one by the administration; as to the WCC's members, they are closer to workers. So far the councils have rarely entered conflict relations with administration but more often are united in their opposition to ministries and local authorities. This certainly helps to reduce the administrative management methods and to develop cost-accounting relations. The now existing work collective councils consist predominantly of the representatives of structural divisions with an excessive number of members of the administration in them. Only very few work collectives could manage to implement the principle of direct delegation, though it has been supported by the majority of the surveyed. As a consequence, auxiliary and "non-productive" divisions, young and retirement-age persons were very little if at all represented in the councils. We can observe a close correlation between WCC's participation and democratization of management with the development of cost-accounting relations within an enterprise. On plants with a higher level of costaccounting practice, WCCs are most active in making decisions on plan development, equipment and resources utilization and the plant's commercial activity.

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Work Collective Councils and Trade Union Committees The establishment of work collective councils actually implies the emergence of a new body in the management structure which has established itself over several decades. Unfortunately, to this moment the development of management democratization in work collectives and the transition from administrative-management to self-management paradigm (this corresponds to the revolution transformation, which has begun in the economic sphere of the USSR) in fact is manifested only by an enlargement of management organs in the enterprise. Naturally, under these changes, both the redistribution of functions among the various administrative and public bodies and conflicts between them become inevitable. The survey, which we have conducted in nearly 80 enterprises of Siberia, shows that WCCs members have least of all claims to Party Committees and that of the ones they have are caused by the fact that Party Committees are feebly occupied with growth of self-management and insufficiently support the activity and position of WCCs. The Party Committees of enterprises themselves are the most interested in the existence of work collective councils from all management bodies at the plant: for the direct question "Do WCCs in the current situation make sense at all?" only 25 per cent of the interviewed secretaries of Party Committees answered negatively. There is a considerably more strained situation between WCC and enterprise administration. Only 34 percent of the presidents of WCCs and 23 percent of the administration officials were satisfied with their interactions. Accordingly, almost a third of the administration representatives believe the work collective councils are not necessary because the existent bodies of management in the enterprise are quite sufficient. This situation is not explained by large conflicts between WCCs and administration: such conflicts were revealed only in 13,5 per cent of the surveyed enterprises. The reasons are deeper: -

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the not decreasing dependence of managers upon higher sectoral and regional management bodies, with still weak defence of them from WCC's side; the lack of development of economic mechanisms and the narrowness of real possibilities for independent and effective activity of managers in the economic-production sphere; the low qualification of WCC members in management, their poor knowledge of their functions and too often their claim to be the main controlling unit over the administration;

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the scepticism of many leaders concerning the basic efficiency of democratic management forms.

But the most conflicting situation has happened between WCCs and trade union (TU) committees of enterprises. Only 28 percent of the presidents of work collective councils were satisfied by their interactions with T U committees, only in a very few enterprises did WCCs and T U committees undertake joint actions against the administration. Accordingly, nearly 40 percent of the trade-union committees presidents consider the work collective councils in their enterprises as needless. In general the growth of self-management (self-government) gives birth to fairly serious problems and inconsistencies in the interrelationship of self-management bodies and T U committees. This was noticed by many authors of the volume "Trade Unions and Self-Management of Work Collectives" (Sofia, 1988). In our practice the same májor problems had appeared but modified by the exercise of the Law on the State Enterprise. First, since nearly all who are with an enterprise are members of the trade union (and according to the branch organizational principle of trade union that is in operation in the USSR, all workers of an enterprise are members of the same trade union), the TU committee and the WCC in an enterprise represent just the same people's totality as the general or trade union meeting (conference) does. As a consequence, when a conflict arises between WCC and T U committee, it is difficult to decide who must be the arbitrator. Second, as both T U committees and WCCs are formed mainly on the basis of the divisional structure of an enterprise, they have a very similar social composition. Third, many functions of the T U committee and of the WCC coincide. So if the former is a failure (which is often the case), the latter has to take on itself the former's functions, despite the fact that the T U committee members work on a paid and the WCC members on a voluntary basis. This coincidence of functions which seems inevitable in principle, causes their duplication, the so called "joint activity". In fact, the policy of an enterprise administration, for instance, in the sphere of payment and labour stimulation, has to conform with TU committee in accordance with the existing rules and work legislation. However, the Law on the State Enterprise attributes this problem to WCC's competence because the level and justice of payment is one of the main questions for all the workers. Policy in this area has the most considerable impact on the efficiency of the work collective activity. A similar situation exists concerning the problems of schedule and number of working shifts, the losses of working time, the distractions of people from their main job to an unusual one, labour discipline, etc.

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On the other hand, while the problems of labour conditions and protection, safety precautions and worker's health are to be solved by the trade union, T U committees are able to do nothing in this area except control functions. This happens due to the fact that WCCs have the prerogatives of using all the enterprise's funds, including the fund for industrial development which is the main base for the more serious improvements in labour conditions. The protection function of the trade unions has also greatly declined. WCCs have more legally supported possibilities to protect the collective's interests against administration's abuse. Because of that, TU leaders are more dependent on the administration. As to the protection of an individual worker against the collective, neither is effective because both represent rather the majority then the minority or the individual. The most effective protection could be obtained only from outside of an enterprise. In general, the problem of defending the minority interests is not studied neither in the Law on the State Enterprise nor in any other state and scientific recommendations. First of all, in order for any small group (collective' minority) to hope that it's interests would be taken in account in the decisions of WCC, it is necessary for their representatives to be in that council. And since the size of the council is limited, not all the large-scale groups in the collective may have their own representatives there. It makes, for instance, auxiliary divisions or services departments associate with each other during the elections to WCC. So, it is needed that the minorities transfer the responsibilities of defending their rights to some definite WCC members. Unfortunately, since such practice is absent nowadays, the minorities are not defended. But this is, probably, not the main trouble. It is worse, that the procedures for defending the interests of even rather large groups are also absent, if those groups do not represent the distinct majority of the collective, i.e. engineers corps, some professional groups, pensioners, the workers of the unproductive sphere of a plant. Making decisions by a simple majority (exactly this order exists in all tested enterprises) infringes upon the interests of those groups. In such situations the minority must have either a right of "veto" on unsatisfactory decisions of the council, making the WCC to examine the problems more accurately in searching some compromises, or the right to separate from this collective and to pursue its own policy. In an overwhelming number of situations no social group can separate from the plant's collective. Therefore to defend the minority's rights the WCC has to make decisions with not a simple but a highly-qualified majority (at the rate of 75 to 80 percent). More correctly, if 20-25 percent

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of the WCC members explicitly do not approve any decision, it must not be made but either turned back for revision or given for the collective discussion. It is evident that in the Law on the State Enterprise the question of a collective agreement is solved unsatisfactorily. Decade after decade, the T U committee, on behalf of the work collective, makes up a collective agreement with the administration. True, this was quite justified in the previous years under the conditions of previous economic mechanism, when a certain conception of public, but in fact of state property, was ruling. In those conditions, the administration of an enterprise was representing the government and exclusively administrative methods of management were used not only within an enterprise but also between it and the government. Therefore when the administration and the T U committee sign the collective agreement between them, it means that the collective and the government have established the collective-agreement relations. This ensures at least partial defence of the collective interests. Contrary to this, in the current situation where the administration is appointed by elections and where cost-accounting relations are developing within the enterprise, the previous practice of collective agreement making is no longer justified: since the elective administration represents the collective as much as the T U committee does, it is as if the collective makes an agreement with itself. Actually it is not an agreement, but a compulsory resolution to be adopted at the general meeting (conference) of the collective and to have the power of a Law for the given collective. However, the collective agreements are necessary too, but as an agreement between different collectives of a similar level (for instance, between collectives of two enterprises or two departments within one enterprise) or vertically subordinated (for example, between a team and a shop, a department and an enterprise, a plant's collective and the government in face, for instance, of a ministry representative).

From the Sectoral Unions to the Trade Unions L. Nikosh believes that the functions of WCC and T U committee can be separated on the basis of regarding a collective and a single worker as an owner, on the one hand, and as a hired labour force, on the other: "The council of factory mainly represents the interests of the work collective as the owner ... but the trade union's functions are to protect the interests of a hired labour force." (Nikosh, 1988: 12)

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In principle this cannot cause any doubt. A working collective as the owner and a full-right agent of the economic activities (according to the Legislation) is interested in an increase of it's activity's profit and efficiency, in the accumulation and utilization of it's funds, in having a real economic independence and, moreover, in the protection of its interests from the tyranny of the state machinery, such as ministries and local power organs, both the Soviet and the party. And the WCC must play and in some cases is playing the main role in that protection (according to the Legislation as well). At the same time each member of a state enterprise collective is a hired worker, for he signs a labour contract with this collective. In this sense all members of the collective are interested to have a job in accordance with their abilities, to get better labour conditions, to receive rather high wages and some other advantages, which are nowadays given to the workers by an enterprise, such as dwellings, kindergartens, permits in sanatoriums and health resorts, missing goods, some kind of leisure etc. The members of the work collective as hired workers must be defended not only from the state machinery tyranny but also from the infringement of their interests by the owner i.e. the work collective. This function must be provided by the trade union in principle. However, as it is well known and the press is chequered with innumerable examples, that the trade unions carry out this function very poorly. Moreover, it is rather obvious that the bad functioning and the unsatisfactory role of the WCCs is mainly a passive phenomena and its existence can be explained by several reasons, i.e. the resistance of the administrative-command system of managing (not only at the national level, but within a separate enterprise, too); the little experience of the existing Soviets; the deepest alienation from management of the bulk of workers formed by many decades passed; the lack of legislative support of the WCCs activities. As for the T U committees, their poor functioning as protectors, mentioned above, is nowadays caused by deep and principal reasons. It seems that the best way to deal with this situation would be to reorganize trade unions and to form them on an occupational instead of a branch basis. Indeed it is hardly justifiable when a truck driver in a radio plant is with the trade union of radio industry just like those in a textile factory are with the trade union of light industry. In consequence his interests as a driver are not protected in the enterprise - this occupation is not major on it. On the other hand, in case of locally organized occupational trade unions, there would be a real possibility to protect the interests of individual occupational groups and individuals from outside, while the competent representative of the work collective's interests and its defender against the administration will be only the work collective

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council. Such a reorganization would increase the importance of local TU committees since it will be their function to contact the work collectives and WCC on the issues common to different occupations. The ambiguity of the relation between WCC and T U committee can be seen in the fact that 20 percent of the respondents to our plainly put question " D o Work Collective Councils in the current situation make sense at all?" gave negative answers and half of them indicated the overlapping of the WCC's and T U committee's functions. Problems of this kind lead to WCC's estrangement from workers and to its transformation from a real self-government body into a next "apex" of the "managerial polygon" (administration proper, Party, TU, Young Communist League committees and WCC) which implies that some time later a new body (new "apex") will have to be formed, and a problem of functions' redistribution will arise a new unless real self-management structures are formed in work collectives.

Bibliography Gorbachev, Mihail: 'The Political Account of the Central Committee of SUCP to the XXVIIth Party Congress', in Proceedings of the XXVIIth Congress of Soviet Union Communist Party. Moscow, Politizdat, 1986: 3-97 (in Russian). Lenin, Vladimir I.: 'Speech at the Second Vserossijsky Congress of Labour Commissars, May 22, 1918', in Complete Works, vol. 36. Moscow, Politizdat, 1962: 365-370 (in Russian). Nikosh, Laslo: 'Self-Management and the Trade Unions: Theses', in D. Kirov (ed.), Trade Unions and Self-Management of Work Collectives. Sofia, Science-research Institution of Trade Unions Problems, 1988: 7-20 (in Russian).

Current Reform Trends in Yugoslavia A Challenge for Trade Unions A l e k s a n d r a Kanjuo-Mrcela

Most of the European societies commonly known to have a system of "real socialism" are undergoing deep and structural crises and dysfunctions. The recent developments indicated that only a few of them could eventually overcome these dysfunctions and avoid disruptions, by introducing various reforms. They are mostly oriented to radical economic and political changes. Some social scientists come to the conclusion that socialism as a social and economic practice as well as a system of ideological rhetorics and values is transforming to the extent of even loosing its identity. Phenomena which were incompatible with it up to yesterday, are now appearing both as practice and doctrines of nowadays socialism. The metamorphosis is general and almost universal (Marsenic, 1989). Yugoslavia is not an exception to that trend, although its crisis takes different forms, caused mainly by endogenous, internal factors. That crisis is currently manifested by extremely high rates of inflation, decrease of the standard of living, conflicts among nationalities, waves of strikes and dissatisfaction of workers. The economy manifests clear signs of decline, and the same is true of the overall social dynamics. There is no doubt that these problems require decisive changes and transformations in the social, political and economic spheres. They are actually taking place but, so far, mostly in reforming the economic life patterns and the institutional set up. In trying to attain the recovery of the economy the most important element is the strategy of introducing a free market economic framework. This requires specific steps that are now being carried out: basic forms of economic organization are changing, from ineffective, atomized, dispersed basic organization of associated labour to enterprises which are to prove their performance by competing on the common Yugoslav market. Enterprises are to be fully autonomous market units having a full responsibility and risk. They are losing their political and social functions. The roles of management and self-managerial bodies are separating; managers can no longer be political functionaries, but responsible and motivated professionals.

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Labour-related laws are changing. The pluralisation of ownership forms is taking place by the legalization of ownership pluralism and the stimulation of private, mixed and cooperative enterprises. It becomes increasingly clear that the concept of social ownership is obscure, thus causing many problems of responsibility, motivations, freedoms, etc. in its practical implementation. The crucial point is how could workers feel the social ownership as being their own, or, how is it possible to link them operatively to the "social ownership". The sociologist J. Zupanov considers that the market economy can only be a private economy. Every other form is some sort of state economy (planned or centrally planned; Zupanov, 1989). Economists like A. Dragicevic write that market economy does not necessarily need private competitive units, but that anyhow "social ownership" should be transformed into "group or workers'" ownership" (Dragicevic, 1989). All economic changes must be followed by simultaneous changes in the political life and system. The essential problem is the necessity of withdrawal of the Communist Party as a monopolistic factor of socialpolitical life, from the economic life and from decision-making. In spite of the long proclaimed separation of the Party and the state we are witnessing a situation in which the Party is still an important and often determining factor, not only in the political, but also in the economic sphere. Demands for providing constitutional conditions for the free association and organizing of those who are thinking differently are not only appearing in the public but are already implemented in many republics. Political pluralism and the right to politically associate must be regarded as a basic human right and political freedom. That is also connected with the introduction of free, multicandidate and direct elections. There are more and more unions, movements and associations, especially in the northern parts of the country, which obviously allow the articulation of different political aims, interests and parties. The basic postulations of the social system are being redefined. One of them is self-management, which is now in a process of separation from management and executive function. It is very clear that the long lasting domination of ideology over politics and of politics over all other social domains has to terminate. That practice led the entire society to a crisis which is hard to resolve. The sociologist Bernik, after describing socialist societies as "not yet modern" states that this means differentiation or a violent reduction of complexity manifested in low functional autonomies and self-regulation of social subsystems as whole (Bernik, 1989). Societies with such systemic features are seemingly integrated and stable, yet they are not capable to react to impulses and changes from environment nor to adjust themselves adequately.

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Especially problematic is the fact that crises and social dysfunctions appear when the people impatiently expect the rapid and fast resolving of problems and the improvement of the standard of living, where as the situation can be really changed only through a long lasting process of transformations. Trends which have lasted for decades cannot convert overnight. It seems that expectations from the legislative and normative innovations are rather unrealistic: they are undoubtedly leading to the promised overcoming of the crises but problems are not automatically resolved by implementing new laws. In such socio-political circumstances all segments of society become aware of the necessity of a "new way" of acting. There are radical changes in organization and economic structures. The Communist Party is undergoing reforms from inside and is trying to reform its role in the community, liberating the energy of all other subjects of the social life. The Socialist Alliance of the Working People is trying to redefine its role and status within the socio-political life. Among those who, aware of the crisis of the society, are intensively searching new and alternative models and functions is the Trade Union Federation of Yugoslavia. This organization, which by definition protects the interests of the working class, does not in practice perform its constitutionally defined role. Because of an ideologically obscured and confused social situation and of the balance of interest relations and forces of social groups, Trade Unions have clearly, lost a long time ago their working class image. Since, by the introduction of self-management, the working class normatively appropriated all social power and authority even formally, there was no more need for a special organization which was to defend the interests of the "ruling class". The situation was largely confused and ideologically posited: the desired was proclaimed as real and the real as only a sporadic deviation from the ideal. Today, however, workers rarely point out violation or offences of their self-management rights but they strictly ask for higher wages. Workers are forced to strike because of purely existential reasons. It seems that workers are less and less interested in ideals - they want bread, a roof over the head, any kind of standard of living and at least a little bit of perspective because they have had enough of empty phrases. Trade Unions find themselves in a contradictory position: on one side their role was to protect the interest and rights of workers; on the other side they became an integral part of the system. This "participation" in the administrative system caused that the Trade Unions suffered doubly. In spite of their insignificant influence in the system, they bear a part of responsibility for the position of the working class, as representatives of the workers' interests before management structures- According to the traditional conception, the Trade Unions were an organization of all employed people.. That position of the Trade Unions might be accepted in

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terms of the low social differentiation. In contrary cases, in conditions of sharp social differentiation, especially in terms of reproduction of elements of class-relations, an approach of that kind becomes counterproductive (Cimesa, 1989). Because all employed are in the same Trade Union organization, these with whom Trade Unions are expected to negotiate are its own members. The massive participation, which is achieved by the principle of admission of new members (automatically by employment, not by voluntary registration) does not manifest their real power. Instead of being a powerful and democratic movement, Trade Unions became a formally instituted organization which is active on marginal, unimportant problems. The work of Trade Unions has been studied by research institutions for years. 1990's survey shows to which extent workers/members of TU are satisfied by the actual Trade Union's role, position and performing of its actions. Respondents think that Trade Unions are too much connected with and dependent on Communist Party and state institutions and insufficiently directed at their basic concerns: the protection of worker's rights. Trade Unions need numerous, rapid and radical changes. The question of the basic form of organization is posed. Up to now the territorial-functional principle was predominant but it turned out to be not effective enough, because one cannot expect that so many social groups on one territory have the same interests. The organization on the principle of professional or branch interest integrations would probably be more efficient. The way of registration in Trade Union must be changed - it has to be exclusively on a voluntary basis. That relates to problems of the Trade Union's attractiveness and the plurality of Trade Union organizations. Párts of the existing Trade Unions and some new trade union organizations have already started independent fights for the membership. Trade Unions would be attractive for workers if they offer them services and protection of their real interests, particularly in the form of an easily understandable programme. In addition, Trade Unions are transforming themselves into organizations fully independent of the party, of any political party, and instead of being a political organization themselves - are becoming an interest and protective organization. Parallel with the market orientation of economy, Trade Unions will have to respect the rules of political marketing and to offer its clearly defined aims and duties to its potential membership. The basic enterprise organizations will have to increase their power because all trends of social reforms are oriented to works enforcing the role and position of management in enterprises. If Trade Unions want to be equal partners in the negotiations on labour conditions, they have to be powerful. It might be helpful, in that sense, if the Trade Union's activists are specially trained

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and paid professionals. As said already, if Trade Unions seriously want to perform their functions, they should achieve full autonomy and independence from all outside influences. First of all - independence from the Communist Party. Until now they have had a transmission role in relation to the Party, but they should strive to completely part their functioning. So far, this fact causes real problems for the Trade Unions reform, since party members are the most represented group in the composition of the Trade Unions councils (from 72 percent in local councils to 98 percent in the Federal council). Beside the internal factors of Trade Unions reforms (organizational changes, new programme, redefining social basis, autonomy), there are very important external factors and the most important of them are the following: the successful reform of Yugoslav economy; the democratization of political life and demonopolization of the position of the Communist Party; the realization of the "constitutional state" which guarantees the "rules of the game" to all social subjects. In case all these factors are implemented Trade Unions can really function in a normal and effective way. We hope that the rather pessimistic prospects described by the sociologist Zupanov will not become true. He considers that the country is still in a process of a social and economic crisis and that the situation could become even much worse. The latest records, however, together with the decisive government's measures for stopping the unfavourable economic trends, speak of clearly stabilizing and positive trends.

A Postscript Meanwhile, particularly in the course of the past few months (the summer/fall 1990), profound changes in the Yugoslav political and economic system and life took place and are still going on, followed by both reformative enthusiasm and conservative dissent and opposition. The result of these two contrasting trends are reflected in the high conflictualization of the social forces, particularly on the basis of inter-ethnical relations. There is no doubt that this state of affairs directly affects the position and the activities of the Trade Unions. The pluralisation and democratization of the political life were most clearly demonstrated by the first postwar free multi-party elections in the northern republics (Slovenia and Croatia). The Communist Parties in these republics suffered a defeat in these elections, in spite of their newly established reformative orientation (they are renamed parties for democratic reforms), although they still remain a comparatively strong and well supported partner. The Communist Party of Yugoslavia does not exist any

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more as a federal organization: since its last Congress in January 1990, the segments from Croatia and Slovenia withdrew. New parties and political associations emerged all around the country, in Slovenia and Croatia they already won the elections, while in other regions they are soon expected to be confirmed in the forthcoming general elections. The present political situation in Yugoslavia is characterized by evident inter-republican and inter-ethnic tensions as well as by bitter discussion on the future form of these relations, particularly regarding the status and the competences of the Union. While the North of the country demands sovereignty for each republic and a free agreement among themselves on matters of mutual interest (confederation), the South, centred in Serbia, manifests strong unitaristic demands (centralized federation) which are unacceptable for the rest of the republics. This political situation has, no doubt, a considerable impact on the economic life, since the newly introduced and largely supported market economy policies of the federal government have a massive grass root support but are efficiently countered by the conservative forces. In spite of the recently adopted liberal market oriented legislature, which is now stimulating the pluralisation of property forms and private initiative and entrepreneurship, conceptual and practical dilemmas and ambiguities still exist regarding the future economic system. The government policies now effectively assist the private and mixed sector's expansion, and try to find out solutions for the "property problem" of the public sector, the short term effects are not favourable since the unproductive public enterprises close down and the number of the unemployed is larger every day, threatening to become "the number one" problem of the country. The reforms, however, produce a number of positive and favourable effects. The inflation rate is being considerably reduced and the domestic currency made convertible, prices are going down, while exports increase. The national indebtedness has been largely reduced, parallel with an immense rise of the state foreign currency reserves. A technological renewal and a new cycle in the production dynamics of the economy is expected shortly. The private sector is giving rise to employment and market innovation of the economic activities. Trade unions, formally reformed, now try to retake a new breath and step in with these processes. Although pluralized, dispersed and under great pressure, if not even animosity, by the governing parties or newly elected governments, they try to effectively counter the negative consequences of the economic reforms for the position and standard of living of employees and workers. This is predominantly attempted through the system and practice of collective bargaining and agreements, as well as by

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influencing the social and employment policies of the governments, sometimes even by organizing general strikes. The real situation of the trade union movement in Yugoslavia of course differs from one republic to an other, but positive changes can be noticed everywhere. First of all, pluralisation and differentiation within Trade Unions are intensively taking place. The Union organizations in Slovenia and Croatia have already got a number of competitors, the traditional organizations, faced by the new initiatives as well as by the completely changed situation in society, are trying to reform themselves internally. At its last Congress in April 1990, the Slovene Trade Union changed its name (into Free Trade Unions of Slovenia) and accepted a new definition of the organization as well as a new programme directed mostly at the workers' protective function, having no ideological colour nor ties with the Communist Party. After the Congress, an action of revision of the membership on a voluntary basis was carried out. Efforts have been made to change the inefficient and costly internal organization. The prevailing territorial principle of organization was changed in favour of the branch principle of union constitution, even giving rise to a variety of professional, sector based, local and other unions. The former, party supervised trade union organization is now everywhere, although not always successfully, reformed and replaced by independent and autonomous unions, gathered in councils. Dissatisfaction with the former Trade Union's performance resulted in the creation of the new Unions - formed either by secession of some parts of the old organization (Journalist's Union; The Engine-drivers Union; The Union of Employees in Education and Science Activities; etc.) or by establishing entirely new organizations (Independence; Independent Worker's Trade Union; Independent Union of Slovenia; Independent Trade Union of the University of Ljubljana, etc.). All the new Unions based their programmes on the critique of the former Trade Union and its ineffective representation of workers. Programmes are mostly similar and based on non-ideological and non-political, purely claim-oriented objectives, aimed at a struggle for higher wages, better working conditions and better labour legislation. The Croatian Trade Union movement has been experiencing similar overturns lately, namely the reconstruction of the former Trade Union and new Trade Union initiatives. In the other republics some changes are visible, but the traditional Trade Unions use more or less similar methods as before, which has a negative impact on the new initiatives. The case óf Macedonia is interesting: parts of the "old" Trade Union are leaving the organization, as the leadership is working with the management of enterprises and not representing the workers in front of the management. There are some new

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Trade Union organizations in Macedonia (Trade Union of the Unemployed; Independent Trade Union of the EMO-Ohrid factory; etc.). Some parts of the Serbian Trade Unions are complaining about the situation of their members, which is in material terms deteriorating, but no visible signs of reformative claims have been brought up. All the above mentioned changes and tumultuous events in the last year crystallized the clear feature of what the Trade Unions have to deal with. The protective functions of the Trade Unions, as representatives of the employees, is no doubt the main objective, which the Trade Unions should certainly reach. The aims are clear, yet different unions choose different ways to reach them and that fact really makes the trade unions scenery in the country pluralized and diverse. One of the specific questions which Trade Unions have to deal with is the question of the collective agreements (a new phenomenon for the system of Yugoslav labour relations), by which the relations among the employers and the employees have to be arranged. Trade Unions are to be one of the bargaining partners - as representatives of the employees. The conditions for workers, achieved by way of contracts, and the benefits reached for the employees, will certainly and soon show the strength of the Trade Unions. It is understandable that high demands by workers, in the condition of a bad economic situation, would be hard to achieve, but that situation makes the responsibility of the Trade Unions towards the employees even greater and more serious, because the employees in a case of unrealistic demands/negotiations would surely pay the price. Altogether, the Yugoslav trade-unions movement is on its way to reform, reconstruct and revitalize in the condition of the democratization as well as of the transformation of the country's economic and political patterns.

References Bernik, Ivan: Socialisticna druzba kot obmoderna druzba, Druzbosiovne razprava 7, Slovensko sociolosko drustvo, Ljubljana, 1989. Cimesa, Miljenko: Modernizacija sindikata, NIRO Radnicke novine, Zagreb, 1989. Dragicevic, Adolf: Suton socijalizma "August Cesarec", Zagreb, 1989. Marsenic, Dragutin: Osipaju se prednosti socijalizma zasnovane na drustvenoj svojini, a pitanje da li su i postojale, Privredna Reforma i ekonomska (re)definicija socijalizma, Institut drustvenih nauka, Beograd, 1989.

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Zupanov, Josip: Samoupravni socializem: konec neke utopije, Socijalizem in demokracija, Univerza Edvarda Kardelja v Ljubljani, FSPN, Ljubljana, 1989.

On the Road to Autonomy: The Case of the Hungarian Unions Csaba Makó and Agnes Simonyi "There is no rule eliminating error, conflict, competition, wasting and risk in the living organism. Excessive disorder runs parallel in the living organism with no hope for the state of quiet". Edgar Morin: La Vie de la Vie. Paris, Seuil, 1982: 326

Introduction In the light of the measures designed to further develop the system of economic and political institutions and against a background of individual and collective reactions accompanying them, it is now imperative to determine the role played by the trade unions in this process and their prospect. The point at issue is not confined merely to the internal development of the Hungarian unions, since the existing system of the interest representation, impeding the endeavours of an extremely broad variety of strata and groups of employees, exerts an unfavourable influence today not only on the quality of the functioning of the system of political institutions but also upon that of the economy. Solidarity, the Polish union which was born in the summer of 1980 in the wake of the inconsistent functioning of political and economic institutions in that country, found itself faced with economic difficulties impossible to control. "Bad news about economy was arriving almost daily ... with lines lengthening and rations about to be cut, Solidarity's members were not willing to wait for an earthquake". (Norr, 1983) Prompted by the extremely difficult and unsurveyable economic conditions, the workers joining the newly established labour organization de facto brought about a structure of self-management. However, the effort to introduce self-management by the workers never proved to be a predominant endeavour in the span of the beginning and decline of the new alternative union movement. Workers were made to engage in company management issues out of ad hoc pragmatism, brought to life by the given situation. The fact that the standards of firm's autonomy were behind the growth of union independence was responsible for the development in structural terms. (Keenoy, 1983)

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Research Findings In the following, we shall make an attempt to present some of the organizational and regulatory mechanisms that can be adequately identified as hampering the Hungarian unions in playing their role of representing interests and guiding society efficiently. Experience, gained in the course of preparing for the measures taken recently with regard to the economic activity and the related methods of financial policy, contains a warning that a modification of the patterns of division of power, adopted in respect of the social partners in the Hungarian "political arena" (the trade unions, parties and the government), cannot be delayed any longer. We shall be discussing some types of "confusion" noticeable in the functioning of the unions, on the dart of the social partners listed in brackets. But it must be pointed out that similar anomalies are not absent from the activity carried on by the party/ies or the nation's economic leadership. The documents drawn up in preparation for the 25th Congress (1986) of the Hungarian unions, which analysed their activity with the contribution of the members delegates made references to a slight decline in organizational terms and to changes in the membership structure/composition. In thirteen out of 19 professional unions, membership figures had declined, while there was no change in two others. A document elaborated the following explanation for the above changes: "... freshly recruited employees account for the non-members, employees who have not been organised, quite often for a long while, or do not wish to join the union themselves. Persons changing jobs ever so often make up the other major group of non-union members. There are indications, however, that recently several employees left the unions for political reasons". It is necessary to emphasize that the above quoted views were expressed prior to measures taken in order to reduce budgetary expenses. Since then, the Hungarian unions have had to participate, for the first time during their functioning extending over three decades, in finding a solution to problems linked with the employees' interests, such as the regrouping of the workforce and dismissals emerging in the wake of the sales of plants and factories, cancellation of jobs etc. However, the related negotiations and the conflicts going hand in hand with them are no new thing making their first appearance in the relations between employees and employers. The essence of the change lies first and foremost in the conditions under which the negotiations are conducted, since, up to the mid-1980's the joint scope of the first and second economies assisted the employees in their efforts to put their individual interests into effect by creating by and large

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favourable circumstances on the labour market. It successfully counterbalanced the inadequacies in the functioning of the unions' official institutions destined to coordinate interests. Research on the value structure of the membership in the branches showed that "... it is a large and rigid structure ... tending to rely on its traditions; principally its officials, and not the individuals making up the membership, identify themselves with it". (Vanicsek, 1988) When presenting the picture obtained from the analysis of the value structure of the union members, mention must also be made of the image gathered from membership opinions concerning the interest representation and safeguarding function of the unions. Initiated by a Japanese "Denki Roren Trade Union" in 1985, preceding the 25th Congress of the Hungarian Unions, an international survey was made whose data on interest representation in the electric and electronic industries show the following. The majority of the Hungarian employees involved in the investigation were of the opinion that the interest representing role played by the unions was successful only in the field of social policy. In other areas, the company and plant level management represent their interests. The position taken by their immediate superior is decisive in terms of working conditions, wages, overtime, job security, the organisation and rationalisation of work and in the manpower transfer. Compared to the workshop or plant level management, the interest representing role of corporate management is manifested first of all in the introduction of new machines and equipment, manpower planning, modification of production programme, in the organization of training and the education of employees. The majority of the people interviewed maintained that no one represents the workers' interest in the decisions on overtime or internal subcontractings. (Nagy/Simonyi, 1987) All the above listed views are confirmed by other Hungarian sociological studies reporting about the state of Industrial Democracy. (Makó, 1986) On the basis of the foregoing, the question may well arise: what are the ideas to come up for consideration in the near future and be discussed with members in view of providing for a more efficient representation of the employees' interests than so far? With respect to the highly complex nature of the problems characterising the internal mechanism of the unions, we think the ones listed below must by all means be reconsidered: 1. The need for organization upwards from the bottom; 2. The justification of what is termed "controlled confrontation" as a mechanism used for conflict solving. 3. Providing for the representation of the interests of different social strata, standing for expressing the endeavours of groups of people

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pursuing the same profession and having the same type of employment relations. The favourable social impacts of the above listed governing principles and mechanism used for the settlement of conflicts can only be brought into play with maximum success if they are accepted mutually/collectively by the social partners. If any of them is used without the others, the effort to have a clear view of things, which is absolutely desirable in respect of relations between the social partners involved, will be made more difficult, because it will inevitably serve the endeavours focused on the maintenance of the status quo, in other words, reverting to the old scheme. The need for organization upwards from bottom is often emphasized today by certain representatives of the union leadership, as an essential governing principle for union building. For example, one of the principal speakers from the Central Council of the Trade Unions emphasized the point, in addressing the union activists meeting of late September 1987, that "... the method of determining things from below must replace dependence from above, and the process must run parallel with the strengthening of the democracy of the whole social system; this joint development is indeed possible and can, in fact, be an actual driving force in several respects; however, lagging behind and following developments from a distance will again be detrimental to the credibility of the union movement...". (Kosane-Kovács, 1987: 8)

The dangers of lagging behind were relatively easy to identify in the second half of the 1980's; from among the numerous symptoms, let me single out the example of the modernization of company management. It must be pointed out that the large number of high ideological and economic hopes, brought about by the reform of company management, failed to come true. At the same time the reform went hand in hand with non-planned consequences such as the opportunity of "getting around" the union branch at the company. The "deregulation" of the union is by and large attributable to the fact that the rules governing the coordination of the interests of the social partners involved were not elaborated collectively. As a matter of fact, the rules specifying relations between groups rallying people of the same trade and type of employment in the union and the roles "governing" relations between the leadership and the rank and file were not reconsidered. Today we can witness an increase in the number of members who reject, in highly varied forms of behaviour the union, or quit it, founding alternative unions or organisations, worker's councils, etc. The dissatisfaction of the union membership is reflected in the slowly growing strike activities in Hungary. (Table 1 illustrates the

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participation rates and aims of strikes between July 1st 1988 and July 1st of 1989.) Determining the course of development from high above is a practice causing unforeseeable damage which can only be compensated for or "remedied" in the "tissues" of society in the long run: it destroys individual and collective initiatives. It goes without saying that, in a dynamically developing society, which is endeavouring to be competitive, different ideas can be transplanted into practice not only by using different approaches but also by adopting a variety of methods. What is considered "the only and best method", as an instrument of management and guidance, is incapable of bringing about and making use of a relationship based upon "trust relations" between the leadership and the rank and file workers, because it does not need the support of "those being led". The economic development practice of the past decades, which was essentially based upon the method of job-creation, made it possible to avoid an escalation of conflicts leading to open confrontation, in the relations between the social partners involved. Thus it would be wrong to believe that the lack of courage on the part of the leaders or of those led by them and their cautious approaches resulted in attitudes designed to avoid open confrontations. Doubts as to the success of the use of only cooperative methods for tackling conflicts were raised by the social consequences of lasting unfavourable tendencies prevailing in Hungary's economy. On the basis of the experience gained over the past few years, it is increasingly obvious that cooperation in the relations between employees and employers, which is guided by the effort to avoid an escalation of conflicts, is capable of what is described as "selective interest representation" only. This means in practical terms that very definite interests motivated by the interests of groups, which are distinguished from one another on the basis of the profession or trade of their members or by other criteria, make their appearance in the form of union endeavours in the labour process or on the labour market. Clear-cut clarification of the actual sources of conflicts is further impeded by the fact that the methods of cooperative treatment of conflicts prevent not only the membership but also the corporate and union leadership from viewing things clearly, because the practice of handling problems in a cooperative fashion invariably conceals the actual importance of and role played by the different strata and groups (for instance, engineers, skilled and unskilled workers, administrative employees, researchers, etc.) or eliminates the line of distinction between them. As a matter of fact, in their absence it is impossible to recognise and reconcile or coordinate conflicting interests arising in the relations between the strata and groups and corporate leadership.

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The establishment of professional groups or sections within the union, on the initiative of the people involved, an effort which could possibly be assisted by the union centres, could pave the way for using what is termed controlled confrontation as a method adopted to tackle conflicts (Sabel, 1981). In the industrial sphere, for instance, it is a fundamental structural demand (to be met by the establishment of sections by trade or profession within the union) that essential changes be identified in the spectrum of the contribution made by groups belonging to different professions or trades and cooperating in a labour process to value production. The appearance of new technologies, the fact that production cooperation forms, which were discarded earlier, have recently become viable, and other factors have largely undermined the efficiency of "extensive" interest representation corresponding to the logics of mass production as "it can be operated favourably in bureaucratic terms". In matters of conflict with corporate management, the union can with high efficiency make use of classical weapons such as strikes if adequate consideration is given to them and in case it has profound knowledge of the interest and power relations within the factory or corporation promises. From this point of view the case of FIAT is extremely instructive. In an attempt to counterbalance the deterioration of conditions on the automobile market, the well-known Italian industrial giant reduced production by 30 percent in 1980 as part of its strategy (that included the sales of plants, withdrawal from steel production, diversification of automobile manufacturing, introduction of new products, e.g. microelectronics etc.). The implementation of the strategy boiled down to laying of 20 000 employees. The strike called by the union in protest against the dismissals proved to be ineffective. Those in charge of the production on the shop-floor, the administrative staff and the skilled workers took a position against the union. After the fall of the strike, the level of organized workers declined to 25 percent (Simonyi, 1987: 79-80). Obviously, the phenomenon is not confined merely to Italy. In the United States, for instance, the 1980's have seen fewer strikes than any period after the Second World War. (Kelso/Kelso, 1986:142) It is a welcome phenomenon that the representatives of the leadership of the Hungarian trade unions (Central Council of Hungarian Unions) support, for example, the initiatives taken by part of the membership to bring about an independent section of the different professional groups: but they are not so positive in relation to the newly formed independent trade unions. The appearance of an independent section of white collar employees, representing a certain trade, or other white collar sections in any or all of the 19 professional unions would indeed be an extremely important development. It would make it possible that, when the interests of a trade

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or minority group are relegated into the background, in a branch of any of the 19, this would not be experienced by the people concerned as a centralized anonymous decision made by the union bureaucracy but they could become aware of it as an open violation of their interest which were unsuccessfully represented. In this connection we consider it very important that it should be indicated that the establishment of the independent organizational forms of strata group-interest representation is merely the initial step. For the interest representation, the autonomy of a group will only be tolerated by another group if it is capable of legitimizing its activity and performance. (Hirschler, 1988: 6) In the opposite case, the organization of that particular group or stratum will not be able to achieve its interest targets in the long run or to put them into effect even if it has acquired its independent legal status. For, in the course of negotiations for the coordination of interests of sections belonging to the branches of the unions or its other organizations structured in a different fashion, the attitudes to and power relations of interests relating, not only to distribution but also to the input (performance), will be rendered transparent and visible to any of the parties involved. And without the input enjoying the support of legitimization, endeavours to enforce interests in distribution are bound to be weak and unsuccessful.

Conclusion The patterns of organisation outlined briefly in the foregoing apply to some dimensions of interest representation by the unions, an issue proving to be important in research into Industrial Relations. Together with the proposals elaborated in different workshops and the debate conducted by the membership, the press debate, launched in an attempt to renew union activity, is hoped to pave the way for finding the decisive factors now missing from the union movement. The point at issue is to accomplish tasks that cannot be delayed any longer. If any of the social partners involved fails to meet the challenge, it will stimulate the birth of such a political movement which can only name itself trade union from the position of pragmatic considerations.

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Table 1: Strikes in Hungary: 1st of July of 1988 & 1st of July of 1989 Date

Type of activity

Duration of strikes

Participation rate

Target

Mining/Pécs

20 hours

500 employees

Income

Printing Co.

1 % 6 hours

100 employees

Against dismissal of Director

Optic Co.

6 hours

250 employees

Against dismissal of Director and merging

Sept. 13:

Metal Industry

Strike alert only

Sept. 28:

University Szeged

1 day

Oct. 20:

Industry of retail sector

Strike alert only

For autonomy

Dec. 13:

Bus driver/ Pécs

Strike alert only

Overtime premium

Jan. 09:

SzabolcsSzatmar County

10 minutes

Several thousands

Against general price increase

Apr. 12 and 17:

Metal Industry

2 hours

160 employees

For autonomy

Apr. 21:

Mining Bauxit/ Tapolca

Strike alert only

May 03:

Cloth Industry

8 hours

1988: Aug. 23: 29: Aug. 2 6 -

Aug. 31:

Against dismissal of Director by Company Council Several hundreds of teachers & students

Better finance and real autonomy

1989

Against plant close 46 employees

Wage increase

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Table 1 : Continued Date

Type of activity

Duration of strikes

Participation rate

Target

May 10:

Education Primary school

2 hours

Several hundred teachers

For immediate wage increase (50%)

May 17:

Metal Industry

2 hours

160 employees

For autonomy

May 19:

Education/ Primary school

1 day

More than 100 teachers

Over time payment

June 01:

Education/ secondary Kaposvâr

1 day

58 teachers

50% wage increase

June 01:

Education/ secondary

2 hours

More than 100 teachers

Solidarity with teachers of Kaposvar

June 29:

Agriculture

2 hours

Several thousands (with machines)

Price increase 30%

Source: L. Héthy & V.l. Csuhaj, 1989: Annexe, 2 3 - 2 5 .

Bibliography Héthy, Lajos & V. Imre Csuhaj: Employee, Employer and the State. Budapest, Institute of Labour; Ministry of Labour, Background Paper Prepared for the National Industrial Relations Conference. Hirschler, Richard: 'Egy Kòzlemeny hattere (Background to a Statement)', Budapest, Heti Vilaggazdasag, January 23., 1988: 6. Keenoy, Tom: The Anti-Trade Unions. Southampton: University of Southampton, 1983, Manuscript. Kelso, Louis O. & Patricia O.: Democracy and Economic Power. Cambridge/Mass., Ballinger Publishing Company, 1986: 142. Kosane-Kovàcs, Magda: 'Miben vagyunk érdekeltek? (In What Are We Interested?)', Szakszervezeti Szemle (Union Review), October 1987.

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Makô, Csaba: Hungarian National Report: Survey of the Denki Roren International Research. Tokyo: Denki Roren Conference on "Workers Consciousness", 1986. Nagy, Katalin & Agnes Simonyi: 'Munkafeltételek és munkâsigények' (Working Conditions and Worker's Needs.) Târsadalomkutatâs (Social Research), 1987, No. 1. Norr, Henry: "Quite a Frog to Eat": Self-Management and. the Politics of Solidarity. Ph.D. Dissertation, Department of Sociology of Brandeis University & Russian Research Center, Harvard University, 1983. Sabel, F. Charles: 'The Internal Politics of Trade Unions', in S. Berger (éd.), Organizing Interest in Western Europe, Cambridge, Cambridge University Press, 1981: 44-209. Simonyi, Agnes: Nagyvallalatok alkalmazkodasa, rugalmas Kisvallalkozasok Olaszorszagban (Adoption of Large Firms and the Flexible Small Firms in Italy). Budapest, Ph.D. Dissertation, Hungarian Academy of Sciences, 1987. Vanicsek, Maria: A szakszervezeti alapszervezet cél, érdek-es ertékstrukturâja (Target, Value and Interest Structure of the Locals in the Hungarian Unions). Budapest, Ph.D. Dissertation, Hungarian Academy of Sciences, 1988.

Participation and Technological Alternatives in the German Democratic Republic: The Dilemma of Scientific Prediction and Co-Management by Trade Unions in the Past and Present Volkmar Kreißig and E r h a r d Schreiber

At the moment, there is a certain confusion in the discussion about trade unions in the G D R , their future and the concept of their activity. Mainly, the discussion focuses on the responsibility of the old trade union federation F D G B (German: Freier Deutscher Gewerkschaftsbund) for the catastrophic situation of the G D R which from the level of an industrialized European country will soon be degraded to the object of development aid and, later on, to the status of annexed junior partner of her omnipotent neighbour, the Federal Republic of Germany. It becomes more and more obvious that uncovered cases of corruption of certain higher trade union functionaries are an obstacle on the way towards renewed trade unions. One consequence of the lack of co-management by trade unions is that many union committees in factories and institutions were not re-elected or resigned after votes of no-confidence. Frequently, chairmen of factory committees that retained their position were not able to cope with the new challenges. Such new challenges include the consequences of the downfall of the centralist totalitarian system of planning, economic problems due to the opening of the Western border, and increasing unemployment resulting from extensive personnel cuttings in the civil service, industrial combine management, non-viable productions and research institutions. Additionally, unemployment is increased by the closing down of productions completely unacceptable from the view-point of ecology. Further challenges result from the fast development of a market economy integrated in the European Community and primarily in F R G economy, which is a precondition for the process of German unification. Up to the very end, the leaders of the S E D (Sozialistische Einheitspartei Deutschlands, former communist party of the G D R ) tried to avoid even partial introduction of market mechanisms and defended the planned economy system. Increasing lack of efficiency was either covered by revenue based upon the special relationship between both parts of Germany, such as transit fees, compulsory exchange, and sometimes illicit currency deals, or

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hidden by means of falsified statistics. The leap into a market economy, which was forced by the opening of the borders and the necessity of success in view of the mass exodus of hundreds of thousands of mostly young, qualified G D R citizens to the F R G , is enforced rather sporadically. Its consequences for East and West Germans, particularly employees and their unions, cannot be predicted easily. At the same time, the expectations of millions of citizens that stayed in the G D R , after having visited West Germany for the first time in their lives at the beginning of 1990, has also enormously increased in the face of a speedy process of German unity. The masses do not realize that a hasty combination of two completely different economic systems has its dangers, and that quick adaptation to the F R G ' s economy entangles certain problems. It is mainly the expectation of a fast improvement in the standards of living that will cause major problems, particularly in the area of installing a social network similar to that of West Germany in order to mitigate problems affecting low-income persons. Illusions that a fast introduction of a western market economy is equivalent to a fast introduction of a model consumer society are deeply entrenched in G D R society. This is clearly shown by opinion polls. The persons interviewed do not see that the restructuring of industry, education and science, and the political system that was necessitated by the scientific-technological revolution has been retarded by the dirigistic system for almost 20 years. This is the main reason why adapting to West German market economy and the future European market should prove difficult. At the moment, there is no comprehensive conception, agreed upon between trade unions of the G D R and F R G , about the adaptation to a market economy within the framework of German unity. In the G D R , the most important topics are a critical review of the past and the introduction of new structures of both industrial organizations and the federation F D G B . Another important question is the contents of a new law on trade unions and constitutional stipulations concerning trade unions, including a right to strike, free collective bargaining, a ban on lockouts, and extensive participation in all questions of enterprise management. A main objective is to contribute as many democratic elements in the process of German unification as possible. In view of these problems, discussions at the extraordinary Congress of the F D G B as well as in the election campaigns in certain industrial organizations were highly controversial. On the other hand, it took the West German unions sometime to come to a common viewpoint on the renewal of their partner unions in the G D R .

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Some Empirical Findings Investigations conducted in January 1990 have shown that most employees realize that strong independent trade unions are a requirement for the transition to a market economy as social as possible. Notwithstanding their disappointment with the former "protection of interests" (only 4.2 percent of all people interviewed expressed satisfaction with the work of trade unions in the past), 96.5 percent of interviewees opted for the continued existence of a factory trade union committee in the screw factory of Karl-Marx-Stadt 1 10.2 percent made certain reservations, for instance independence from both the government and political parties. These results are in agreement with the findings of the Trade Unions College at Bernau that 97 percent of all the people interviewed are in favour of a continued existence of trade unions and an increase of their role. This point of view is independent of whether the interviewees are members of trade unions themselves or not, whether they are in favour of works councils or not. In Karl-Marx-Stadt, only 2.6 percent of all samples were against trade unions. In many ways, the trade union grassroots reflect the confusion about the prospects and role of unions: certain factory committees disbanded on their own, even though they are the only legal representatives of workers according to the still valid G D R labour legislation; others had to resign after votes of no-confidence. Frequently, workers' representatives were unable to form new functioning and - most important - competent committees. Due to the lack of positive experience in terms of a genuine protection of the worker's interests (all former institutions are rejected in a wave of overflowing emotion), an orientation towards the West German model of trade unions and works councils takes place usually without sufficient knowledge of its role and functions, its possibilities and limits. However, first discussions with works councillors and grassroots functionaries of West German trade unions have made a part of G D R employees remember the extensive formal rights granted to the labour force in the G D R constitution and labour legislation. 72.2 percent of the population interviewed in Karl-Marx-Stadt opted for the election of works councils. Some of them understood works councils as permanent or temporary trade union structures whereas others took them for structures outside the trade unions. In many cases, the demand for works councils was a result of the almost 100 percent failure of the old trade union factory committees in the field 1

N o w renamed Chemnitz.

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of protection of social and participatory rights. Furthermore, the idea of councils is deeply rooted in the history of revolutionary processes in Germany. Newly formed social spaces are partially occupied by elected works councils. However, these are not simply a reaction to the failure of former trade union factory committees. Simultaneously, they are an expression of the desire of employees, which in accordance with GDR law feel themselves to be proprietors of their factories, to immediately realize their interests. This was why they voiced a frequently militant protest against the old and often opportunistic party unions in the factories, but were uncertain about their relations with the management and could easily be cheated due to lack of experience. The models agreed upon between the management and the works councils were frequently far below the standards of the West German industrial Relations Act and even of Weimar Republic legislation. In many cases, works councils were installed by the management itself: their function was to agree to all structural and technological changes and to give the workers a feeling of participation rather than participation itself. In other cases, a process of learning and the given situation in certain enterprises led to agreements between the management and the works council that in some cases reached far beyond the stipulations of the West German Industrial Relations Act. Such agreements showed that the employees were ready to defend not just their own material and legal interests but to take responsibility for efficient production.

The Legal Situation A legal basis for participation by workers that reaches far beyond the stipulations of the Industrial Relations Act of West Germany is contained in the GDR constitution and Labour Code. However, such rights belonged exclusively to trade unions and their committees. There is no legal basis for the activities of works councils outside the trade unions, as in some cases was shown in the result of legal action taken by the factory management against newly formed works councils. On the one hand, this has led to the demand for an Industrial Relations Act of the GDR. On the other hand, works councils defined themselves as immediate trade union structures assuming the rights and functions of the latter. Both cooperation and rivalry could be observed between works councils and trade union factory committees.

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The necessity of participation in the field of science and technology comes from the fact that the level of both in the G D R is fairly behind that of Western Europe. It remains to be seen to what extent the industrial combine directors, mainly former members of the SED Central Committee, will be able to make the transition to market economy socially acceptable to G D R employees. In the case of joint ventures, takeovers, and cooperation projects, higher quotas were frequently accepted notwithstanding lower pay and less favourable working conditions. This is normally presented as a requirement for survival by the management. The change of constitution allowing joint ventures, takeovers, and cooperation with western partners was passed by the People's Chamber without opposition. However, union rights guarantied by the old text were not adapted. In G D R history, the latter were never really enforced due to the incompetence of trade union functionaries. Objectively, this incompetence is a result of the developments in the former Soviet Occupation Zone and later on in the G D R . Typical trade-union approaches were discouraged as being non-socialist. A decisive turn in the history of the subordination of unions and works councils was the Bitterfeld conference of the F D G B on 25/26 November, 1948. The programme of trade union activities in the Soviet Occupation Zone that was adopted at that conference states: "The strong remnants of a non-political, narrow trade-union attitude repeatedly led to a practical underestimation of the intensified class struggle against the democratic economy by the class enemy. The narrow trade-union attitude continuing old bourgeois methods of work and evading close and continuous cooperation with trade union factory committees must be overcome. A new style of trade-union work must be implemented." (Ulbricht et al., 1966).

In the context of the communist concept of socialism dominated by a Stalinism of the Ulbricht type, "new style of work" meant the transfer of the rights and duties of works councils to the trade union factory committees which often were under strong communist influence already (Suckut, 1982). Co-management by trade unions was granted by the 1968 constitution, but was never implemented in spite of the fact that the high percentage of trade union members (80 to 90 percent as early as 1948) would have been highly favourable to such a development. Trade unions increasingly took a one-sided development as "organizers of socialist competition" and "schools of socialism". The task of trade unions in the view of the S E D leaders was mainly that of a "transmission belt". They were stripped of their main function, i.e. the protection of the workers' interests. In the forty years of G D R history, this led to an almost absolute uncritical subordination under the personal union of political leaders and. managers. Spontaneous grassroots initiatives and develop-

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ments aiming at participation were suppressed by means of enforcing party discipline on trade union functionaries and members. Trade union education courses became another version of the SED party education courses. Both reductions of wage rates that were imposed from above and unacceptable working conditions were accepted without protest. Factory committees remained loyal even in the face of decisions negatively affecting living and working conditions.

The Role of Social Sciences Because of this background, the scientific discussion on the social consequences of technological change, which had begun in the eighties and was highly relevant for trade unions' strategies in the G D R , disappeared from the unions' perception after the peaceful revolution. In 1990, the G D R trade unions do not even have a concept facing phenomena such as mass unemployment. This is why their strategies can by no means include objectives such as the development of alternative economic structures, or regional projects and technologies that would be acceptable both ecologically and socially and would provide new workplaces. Consequently, now that a considerable portion of the G D R population, trade union grassroots and functionaries face existential dangers for the first time, G D R science should look forward. In this context, the social and political science of the still existing G D R should propose concepts for the technological change which will come about in great dimensions in East Germany with the introduction of market economy. These would be progressive offers for the process of German and European unification. This should include alternative concepts for the forthcoming extensive closure of chemical plants, lignite mines and lignite processing plants, and lignite-fuelled power plants. In addition, solutions are needed for the closure of the Kernkraftwerk Nord nuclear power plant and other enterprises not in accordance with internationally accepted emission limits. At the moment, sporadic closures of plants are forced by the population without any alternative employment, something that may be accepted in some cases as an urgent requirement of environmental protection. However, newly proposed concepts of economic reform deal almost exclusively with monetary questions and matters of market and employment policy. They contain next to no well-founded ecological or technological alternatives, which cannot be proposed by citizens' pressure groups as well. Of course, an immediate ecological collapse can be evaded, but the introduction of market economy may easily lead to the indiscriminate implementa-

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tion of socially unacceptable technologies. This might be corrected only after the year 2000, involving new loads on the new course of social development including the risk of irreparable damage to environment and living conditions. Consequences might be as grave as a long-term impossibility of measures such as an anthropocentric design of industrial areas, decentralization, and the introduction of alternating jobs aiming at a better development of personality. In the same way, existing participatory movements that had come into being as spontaneous democratic initiatives might be in effect eliminated. By now, these have been mainly replaced by G e r m a n nationalist platitudes void of social prognosis, or were superseded by existential fears. Social science in the G D R has deficiencies in the field of progressive social alternatives and possible solutions. This is the result of censorship and self-censorship imposed from above, the apologetic function it fulfilled, constant polemics against the Western economic model, and most of all the economic policies of the S E D leaders which left no place for this kind of approaches. Notwithstanding the fact that the IXth Congress of the S E D had postulated the much-cited "unity of economic and social policy" in the sense of a "unity of scientific-technological, economic and social progress", the economic practice was far from this in the past. It was mainly productivist ideas that were in the centre of attention in all technical and technological developments. T h e social need of producers for creativity and development of their personality as well as real participation has been neglected for years. This involved a substantial loss of economic efficiency. Creativity was a danger to the dirigistic system and had thus to be discouraged (Symposium, 1988). However, a technology euphoria in the G D R was followed by doubts among sociologists as to whether the scientific and technological revolution could bring about socially undesirable results. Their investigations showed that the kind of technologies implemented, mostly following Western lines, was very often completely socially unacceptable. Possibilities for a socially progressive model of technology were looked for, including criteria for the progressive contents of work. Much research was d o n e in cooperation between industrial science and sociology. The consequences of technologies were estimated. To overcome the practice of "social repair" of the too negative effects of new technologies, the demand was sometimes m a d e to include social criteria as early as in the stage of development of new technologies (for instance, industrial scientists of the Technische Universität Karl-Marx-Stadt suggested to combine technological and social projects in an iterating process of adaptation). However, such proposals gained economic relevance at best only locally. The problem of creating new jobs was never given prominence.

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The officially postulated union participation particularly in the field of new technologies was very narrowly limited. Now, an industrial development in a socially unacceptable direction seems well possible, both in view of the lack of competence of union representatives and the effect of profit interests. The former practice to implement Western CIM projects and to sell them to the SED leaders as G D R developments on the event of party congresses never met with any contradiction by the unions. Protests of affected workers were never supported by F D G B functionaries; on the contrary, such measures formed the backbone of "socialist competition". It was an absolute exception that positions on certain directions of technology such as those proposed by the West German IG Metall were ever included in F D G B considerations (Bleicher, 1988). The union grassroots were never informed of such progressive proposals from West Germany. In the past, socially unacceptable conditions were at best taken note of by official G D R political and social sciences. Solutions were restricted to "social repair". Any options that would have involved the need for a reform of the centrally imposed models of enterprise management and macro economy were unthinkable, so that at best they could be put forward in unpublished form on scientific meeting. Proposals questioning the centralist system with a party central committee at the top were ignored or became the object of brutal repression (as in the case of R. Bahro). Proposals by social scientists, concerning special aspects of the technological development, which contained criticism within the framework of the possible were either ignored, declared confidential, or became the object of official criticism. Thus, a technological euphoria became possible which remained even typical of the G D R of the late eighties. G D R social scientists either supported this development, took to subordination, or flew to all kinds of "niches". Of course, the technological euphoria in the G D R should also be viewed in the context of the countries technological backwardness as compared with West Germany. The demands of the export industry and low competivity on the world market required mainly fast and uncritical implementation of obsolete or socially unacceptable technologies in fields such as nuclear power, microelectronics, robotic, and flexible automation. This approach was tantamount to the import of the viewpoint on technology typical of Western social scientists of the end of the sixtieth and seventies. The effect was that social science achieved little more than to name the problems. Western alternatives were perhaps studied, but neither understood nor applied to G D R conditions. Even today, it can easily be noticed in discussions with G D R social scientists

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that they think that a simple assessment of consequences of new technologies is the most up-to-date and desirable approach. The technological backwardness of the G D R was the result of both excessive consumption (as compared with productivity) in the Honecker era and reduced investment primarily in the field of new technologies. The problem was aggravated by the absence of real cooperation in the Comecon and by the arms race. On the other hand, the attempt to keep pace with developed countries which was made an official doctrine on the Xth Congress of the SED was enforced rather hastily and indiscriminately, thus preventing the consideration of alternative and socially acceptable technological models. Such was the result of the acute lack of money, and primarily hard currency, in most industrial combines and enterprises. Moreover, the available funds were distributed in a centralist and often somewhat incompetent way. The wrong priorities were selected, and the rest of the damage to be done was left to Western embargos. This is another explanation why G D R scientists did not try to question the official policy of how to overcome backwardness and reach the technological level of the West. Transition from a euphoric viewpoint on technology to a somewhat more discriminate one might prove dangerous if priorities of social acceptance are not indicated either. Deficiencies in the field of technology development could then not be overcome, social problems would just be mitigated. Discussions at several conferences (Magdeburg, Karl-MarxStadt) indicated some hazards of socially unacceptable technological developments. The main theoretical mistakes were the belief in an absolute job guarantee due to "socialist production relations" and the belief the system could be reformed. The giant structural and ecological deficiencies of G D R economy were hushed up so that they were not realized among social scientists. They are in some way the result of social unacceptability of technologies in terms of waste management, recycling, etc.. In the industry, the enterprise management and party committees ignored all kinds of criticism even of ordinary workers that was directed against the social unacceptability of projects. The 5th Congress of Sociologists made an attempt to revive social sciences in the G D R in February 1990. Two working parties ("Modernization as a sociological problem - international dialogue and controversy" and "Industrial democracy") attempted at least to topicalize the numerous problems. Highly controversial discussions sometimes revealing helplessness marked the scientific appearance of the congress. There were no genuine, scientifically founded solutions offered concerning topics such as future union participation, technological alternatives in

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the chemical industry, coal chemistry, fish processing industry, or textile industry. Sometimes, the introduction of unchanged West German models of trade unions and works councils was viewed as the only possible solution to overcome the enormous deficiency in alternatives. In the same way, the Industrial relations Act of the F R G was presented as the most desirable basis for union participation. Problems of technological development were given less prominence. This shows in an impressing way that the situation in the social sciences reflects the situation in the society as described above. The main contribution "Democracy and technological change" by the then ISA-Vice President Artur Meier (Humboldt University, Berlin) critically stated that technological change in the G D R was absorbed by structural conservatism which was not able to provide viable options for socially acceptable and efficient technologies. On the whole, the system-related enormous backwardness of social sciences in the G D R has become obvious. This was naturally reflected by social practice. Much more could be said about the dilemma of union participation in the past of East Germany and the failure of social sciences. However, it is much more important to talk about how the social sciences are going to solve the problems of the future.

Some Conclusions The following are the minimum requirements for efficient contributions particularly in the field of socially acceptable technologies and workers' participation: 1. Social science will have to make primarily practical contributions to guide the spontaneously formed huge potential for democracy, and to prevent it from wrong orientation by demagogues. This includes a determination of the relationship between trade unions and works council, in the sense of their respective functions. The lack of knowledge due to G D R history entangles the danger of a fast exhaustion of creative powers and grassroots activities. This becomes obvious by a certain orientation towards models of participation, the limitations of which have been known for long. 2. Social science must quickly separate itself from its primarily ideological function and start to do real research. It can be foreseen that this will be highly difficult to many colleagues who always concentrated upon

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the ideological function, excluding scientific thoughts departing from the framework of the system. 3. Social science has to overcome quickly its scientific backwardness and to prepare itself for its analytical and constructive functions. This requires to overcome system-related narrow-mindedness and to introduce a good deal of constructive discussion. Even a thorough analysis of literature, which was not easily available due to centralized information selection, is a very central problem. At the moment, this is highly relevant in practice in view of the continuing lack of Western literature. 4. This requires internationalization and the overthrow of the "old popes" from their thrones, to let younger scientists overcome the existing deficiencies with diligence and intelligence. Cooperation with scientists of a language other than German or Russian is a major requirement.

References Bleicher, Siegfried (ed.): Fabrik der Zukunft. Hamburg, VSA, 1988. Borsdorf, U. & H. O. Hemmer (eds.): Gewerkschaften - Wissenschaft Mitbestimmung. Köln, Bund Verlag, 1979. Briefs, Ulrich: 'Zukunft der Technik - Zukunft der Arbeit', in: Beiträge zur Bildungspolitik, Band 1, Neue Technologien, Arbeitsmarkt und Weiterbildung, ed. Fernuniversität - Gesamthochschule, Hagen, 1986: 61-82.

Diefenbacher, H. & H. G. Nutzinger: 'Mitbestimmung in Betrieb und Verwaltung', in Konzepte und Formen der Arbeitnehmerpartizipation. Band III, Texte und Materialien der Forschungsstätte der Evangelischen Studiengemeinschaft, Heidelberg, 1986. Ehinger, J. & W. Niopek: Erfahrung mit der Mitbestimmung in Kommunalen Unternehmen. Baden-Baden, Nomos, 1986. Gerum, E.; Steinmann, H. & W. Fees: Der mitbestimmte Aufsichtsrat. Stuttgart, C. E. Poeschel, 1988. Kostler, Roland: Das steckengebliebene Reformvorhaben Unternehmensmitbestimmung von 1922 bis zum Mitbestimmungsgesetz 1976. Köln, Bund Verlag, 1987. Mitbestimmung und Gewerkschaften 1945 bis 1949, Dokumente und Materialien. Frankfurt/M., Verlag Marxistische Blätter, 1972.

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Neue Techniken und betriebliche Mitbestimmung - Perspektiven für eine humane Arbeitswelt. Workshop by Hans-Böckler-Stiftung. Bremen, Milde Multiprint, 1988. Plander, Harro: Der Betriebsrat als Hüter des zwingenden Rechts. BadenBaden, Nomos, 1982. Pricke, W.; Peter, G. & W. Pöhler: Beteiligen, Mitgestalten, Mitbestimmen - Arbeitnehmer verändern ihre Arbeitsbedingungen, Köln, Bund Verlag, 1982. Suckut, Dieter: Die Betriebsräte in der sowjetisch besetzten Zone Deutschlands (1945-1948). Frankfurt/M., Haag und Herchen Verlag, 1982. 'Symposium: Das politische System der D D R und die weitere Entfaltung und Vervollkommnung der sozialistischen Demokratie unter den Bedingungen der umfassenden Intensivierung', Informationsbulletin Wissenschaftlicher Sozialismus 1.1.-1.3. 1988. Szell, György: Participation, Workers' control and Self-Management. London, SAGE, 1988.

V. Legal und Political Restructuring

Toward a Social Market in Communist Nations Severyn T. Bruyn

Socialist nations have been taking steps to privatize their state economies without clear corporate models, market alternatives, and social principles guiding decisions. The tendency has been to experiment with conventional capitalist business and private markets without careful planning. The quick changeover from a state-managed economy to a market economy has resulted in profiteering, inflation, golden parachutes for state bureaucrats, and dozens of other problems. We shall look at the problems and then address the alternatives. We begin by briefly referring to general problems reported by economists on experiments in open pricing, contracting with managers, leasing property, legalizing enterprise, privatizing state firms, and selling state firms to foreigners. We will then look at a theoretical framework which allows us to examine the problems of social governance and ownership in the new markets. We conclude with a set of guide-lines for alternatives in the practice of privatisation.

State Problems in Privatisation: Examples First, the state has experimented with open pricing policies. Economists argue that the Soviet Union and China have begun to initiate market pricing because administered prices have been too costly. There has been no relation between the cost of production and the price of the product and the government price system has led to shortages in some sectors, and oversupply of goods in other sectors, and many other problems. But changing to an open price system can lead to other problems. For example, economists have noted that releasing the price system to the open market in half-steps has had many disadvantages. Noteworthy is the case in China where government-administered prices for 236 out of 256 commodities were dropped, but a two-price system emerged for the remaining 20 commodities. But these remaining commodities could be bought from state enterprises at low official prices and then resold at high,

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unofficial market prices. New entrepreneurs of China took advantage it. In some cases they could then transform their legitimate private enterprises into a Joint venture with the state, giving the state agency part ownership, so that they could qualify for official access to low-priced materials. Consequently, new entrepreneurs made a lot of money buying these commodities cheap and then re-selling them at high prices. The type of capitalist profiteering, therefore, began with strong opposition against it from hard-liners in Chinese leadership. Second, the state has experimented with contracts. This is done by competitive bidding outside the state bureaucracy for people to manage a state enterprise. The contract manager agrees to accomplish a certain profitability in return for a fixed income and the opportunity to keep a fraction of the profits above the target. The problems with the contract managers are many. One problem reported by managers is that they have difficulty getting their share of the profits because their "excess earnings" become taxed under new laws applied retroactively. Then, they also complain about undue interference by the state with their management policies. Such problems are too complex to review here but they are due in part to a lack of clarity in contract accountability. Since management is still accountable to the state under this system, a contract must be specific about points of intervention because the state is still in a position of ultimate responsibility for what happens to the firm. But also reportedly, many contract managers lack the skill to perform the job well. This problem arises because they were chosen on the basis of nepotism or favouritism. There are no clear rules and procedures in many cases about the selection of managers on merit rather than upon kinship and political ties. Indeed, under these arrangements, some firms have been losing more money under contract managers than under state management. When there are no bankruptcy laws, the state then must again assume the final losses. Third, the state has experimented with leasing state property. The leased property still belongs to the government but an individual or a group under this plan manages it as a private firm, keeping the profits, and paying leasing fees to the state. Leasing began on a small scale with vehicles, worker cafeterias, retail shops, and light industry but in some cases is beginning to be extended to large enterprises. In China, there were some modest successes at first but over time, basic problems arose in the method. A basic issue again was in who assumes the final responsibility for state property and investments? If the state is accountable in the final sense, then a lessee has an incentive to save money by reducing maintenance costs of state property. Thus, there is very little managerial responsibility to maintain state equipment and buildings, and

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deterioration begins. Second, there is a need to invest in new equipment but who should pay for it? Who pays the costs and suffers the losses. Then, who reaps the rewards? The issue of final responsibility again arises and must be addressed in the process of privatisation. One area where leasing has been successful is in Chinese agriculture where the state owns the land but farmers have a 50-year lease, and can bequeath it to their children. The farmer exercises all the rights of private ownership. The result has been a large supply of all kinds of food everywhere. The rural populace has prospered and has begun to use its new capital to start light manufacturing. Fourth, the state has been legalizing private ownership of businesses. Initially restricted to small firms, such as restaurants, repair services, and retailing, private ownership is increasing in scale in all reforming socialist states. The Soviet Union has over 80,000 private businesses, and China has 14.5 million. One problem here is typical of all capitalist markets: who will regulate the injurious activities of these firms and monitor their tendency to grow large and control markets? Fifth, the state is privatizing state enterprises. Here corruption begins when Communist Party officials acquire ownership through self dealing. This involves state bureaucrats acquiring a privatized business, such as having the money or access to the purchase of major shares in it, thus making pecuniary and primary control over it. It is called positively "spontaneous privatisation" when their managerial skills for operating the business are deemed needed and negatively called "nomenklatura capitalism" when the officials have simply sought to advance their own interests. The nomenklatura are state officials who may assume authority and ownership in privatized companies because of their direction connections. It is a kind of "golden parachute" for state managers who may inherit the rewards of privatisation. The argument over this practice has political sides. It is said by East European leaders, to be a way of buying off party officials, enlisting them into the market economy, getting them to accept economic reform, giving them a stake in privatisation to reduce their opposition to the changes that would cost them their jobs, status, and perquisites. On the other hand, it is argued that these state managers are closest to the trade and know better than anyone else about bow to handle the business. Still, from another view, it begins the process of inequities and hierarchy that has been typical of capitalism. Later, we argue the alternatives to this practice. Sixth, the state is selling its enterprises to foreigners. Hungary, after selling half ownership of a state-owned lighting company, and majority ownership of a publishing company and a bank to western companies, is now negotiating the sale of 51 percent of a railway works to a British firm. The argument by Hungarian leaders is that outside expertise will stimulate

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new energy and capital as well as management training in trades and industries that lack these resources. 1 T h e problem is that such sales of significant public sectors to f o r e i g n owners erodes the system of public accountability. Foreign owners are not structurally accountable-to the host nation when their primary interest is in making a profit f o r themselves. T o o much f o r e i g n ownership in key market sectors means much m o r e f o r e i g n control o v e r the host government. This practice simply leads to m o r e political problems and government intervention. T h e problems of f o r e i g n ownership are historic and t o o complex to discuss here but alternatives to f o r e i g n control o v e r market have been d e v e l o p e d and will b e discussed later when w e have a conceptual f r a m e w o r k to evaluate cases. L e t us t h e r e f o r e examine a theoretical f r a m e w o r k as a basis f o r evaluating privatisation and the creation o f new markets f r o m state-managed systems.

The Purpose of Privatisation: A Theoretical Framework of Social Governance T h e purpose of privatisation of communist countries has b e e n t o i m p r o v e the p e r f o r m a n c e of the e c o n o m y . T h e assumption is that a return to the capitalist system and democratic f o r m s o f g o v e r n m e n t will increase the levels of profitability and productivity and thus i m p r o v e the e c o n o m i c well being of p e o p l e in the society. O u r argument is that a return to democratic g o v e r n m e n t is essential but a return to the conventional private market produces the same problems of injustice and dominance that caused the rise of communism in the first place. A t the very best, the privatisation process should return communist countries to the condition of the w e l f a r e state with considerable government regulation and charitable support f o r the poor. O u r argument is that the market system has been e v o l v i n g t o w a r d a social market in which new types of organization allow p e o p l e to b e c o m e m o r e accountable to themselves outside the control of the state. T h e argument is that the market can b e organized within the context of a civil society with equity and fairness to all. T h e aim of privatisation in the Marxist tradition, therefore, requires a new l o o k at the conceptual foundation and purposes o f d e v e l o p i n g a social market. 1

These methods are discussed by E.S. Savas in a paper on "The Rocky Road from Socialism", presented at the 2nd Annual Conference of Socioeconomics, 1990.

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We argue that the main purpose of privatisation is to integrate social and economic principles in creating new markets. The purpose of the government then is to create a system of markets that is both economically and socially-oriented, that is, both profitable and accountable to the people they affect. This means enhancing competition (avoiding destructive competition) through methods of cooperation. Put another way, it means organizing a system of economic exchange based on social governance. The purpose of privatisation is to create a socially self-governing system of economic exchange. Social governance refers to the way people manage markets together. It depicts the way people cooperate and compete in an exchange system. It subsumes three explanatory subconcepts: command governance, mutual governance and self governance. Command governance refers to management based on hierarchy with levels of authority, typical of business corporations. Mutual governance refers to co-equal management of an organization, typical of democratic federations, cooperatives, and participatory systems within corporations, such as autonomous work groups and labor-management committees. Self governance refers to the way people manage their own lives apart from outside controls at every level of market life - workshops, partnerships, corporations, and industries. It directs attention to the self-regulating capacity of individuals in a workplace but also to the way each social unit within an enterprise (e.g. worker councils and departments) and corporations as well as whole industries are self directing units apart from the state.2 In an analytical sense, all systems are socially governed because people are always oriented to one another with some measure of cooperation and competition. But we are interested especially in types of social systems of market governance which enhance the self-governing powers of people. The development of these systems depends on the integration of social and economic principles.

Socioeconomic Principles of Privatisation How can governments privatize their economies so that new markets do not exploit people and thus again require government regulation and control? Let us look at basic concepts that can guide public policies taken to create social markets. 2

For a more detailed discussion of these concepts, see: Severyn T. Bruyn, The Field of Social Investment ( N . Y . , Cambridge University Press, 1987): 44 ff.

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First, policies aimed at privatisation should seek to integrate social and economic concepts. The social concept refers to the way people organize and relate to one another in society. This is a very broad concept but for our purposes, we narrow it to questions about how new markets structure social contracts, accountability, and equity between people. (Later we shall be concerned about how the social factor is related to the quality of life.) The economic concept is also very broad but we emphasize the way markets ensure a higher level of productivity and profitability. Our argument is that to be fully successful in creating markets, privatisation must seek to integrate these social and economic concepts. The dimensions of economic concept (e.g. productivity and profitability) are well defined but it remains for us to define the social concept in relation to privatisation. Three dimensions of this broad social concept are important to understand as the basis for evaluating policies for privatisation. First, privatisation involves a social contract, that is, an agreement between people in economic exchange outside the state. A social contract is an understanding which people have about the nature of their exchange relationship. From an analytical perspective, a social contract always occurs in an economic exchange but it takes various shapes with different outcomes. A social contract can be formal, informal, written, verbal, hidden, open, conscious, unconscious, implicit, explicit, public, private, official, unofficial, legal, or illegal. These complex aspects of a social contract have yet to be fully studied in research but certain points can be made clear for privatisation policies. The focus of our argument is that the formal aspect of a contract should be legal and its other aspects (e.g. informal, verbal agreements) should be made fully disclosable to the public. For example, there should be no hidden subsidies from the government for private entrepreneurs and no special advantages given to government officials in the privatisation of state enterprises. Second, a contract can lead to dominance, exploitation, and profiteering, but we are interested in how it leads to social accountability. Privatisation should include a plan for accountability that is specified clearly in the market contract. Where organizations are involved, this means that social constitutions and bylaws are written to clarify the distribution of power and authority for members. It follows that organizational leaders can be recalled from office when they are not performing their duties according to the bylaws and where democratic decisions are made to give appropriate authority to organizational offices. It also means that offended parties should have recourse to adjudication procedures and appropriate compensation whenever the contract has been broken; people who are adversely affected by any newly system should have a formal

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opportunity to act back to complain and adjustments made for wrongs committed in the socioeconomic exchange arrangement. Furthermore, a contract in an open market system should be explicit in regard to the disclosure of information to the public. All information on pricing, profit-making, technology, budget-keeping, and negotiations between competing and cooperating parties, should be available to the public. This principle exists only by degree in conventional capitalist arrangements because competition has claimed corporate privilege on information but a public practice can be instituted effectively in a competitive system where this is defined as part of the general rules on the playing field. Cooperative systems of business in Sweden and Mondragon, Spain, have demonstrated their corporate capability of full disclosure and their own effectiveness as profitable market systems. Again, from an analytical view, any exchange system will have some measure of accountability in the broad sense of the term but we are interested in the kind that defines disclosure procedures and electoral and juridical systems where due process exists for people who become wronged by a contractual arrangement. The principle of social accountability should apply to each level of governance in social contract. This means that employees at the level of the workshop, the department, and the corporation as a whole must have an opportunity for recourse when their contract is broken. An internal tribunal must exist for employees and due process written into the charter or bylaws of the firm. At the level of the trade association, it means that patterns of adjudication must be arranged at these higher levels of organization. There is nothing new about this in capitalist markets but state policies do not take these evolved systems into account. Thousands of tribunals exist for enterprises in U.S. trade associations. Such systems need to be recognized and should be improved by policies of state privatisation. Such juridical arrangements are in embryonic form in capitalist markets. Finally, this same juridical pattern should exist for exchange at still higher levels between trade associations, that is, between federations within federations of firms in the market. The current practices of privatizing state enterprises and the legislation authorizing new private enterprises do not follow these guide-lines. These firms can be expected to become a new social problem in the market and repeat all the mistakes in the capitalist system. They should result in labour exploitation, runaway firms and mass layoffs, and subsequently result in a new trade union movement in former communist countries. They should lead again to government intervention to solve labor-management conflicts, a state labour department to provide labour mediation and monitor developments on behalf of the government, etc. Current policies

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of privatisation in the Soviet Union, Eastern Europe, and China, thus recreate the capitalist state. Third, privatisation should lead toward social equity in the exchange relationship. Social equity refers to an economic exchange situation which brings opposing parties toward a comparable position of power and access to vital. Specifically, privatized corporations should be internally organized so that employees are in a structure based on self-management and ownership. If this is not possible in certain cases, there should be an official planning process leading toward that end. At the higher organization of trade associations, it means that competitive corporations should also be equitably organized in terms of their capital and power. If not, there should be a government plan officially leading toward that end. Again, this has been a part government supervision in capitalist systems but privatisation can lead to new market systems that do not require government intervention. To implement this principle of equity, means that a government agency would temporarily monitor the development of privatized corporations in a way similar to the Anti-Trust Division of the U.S. Department of Justice, which limits monopolistic and oligopolistic developments. State-managed systems have no agencies like the U.S. Anti-Trust Division and thus privatisation leads toward this same end of government monitoring and control. This equity principle also means that competing buyer and seller associations (e.g. manufacturers vs. distributors vs. retailers) must not develop too great an inequity in market power in the value-added chain from producer to consumer. If we are seeking the basis for socially self-governing market systems, we must create a balance in the legislative, judicial, and administrative systems of market organization. It means that trade associations must develop methods for governing themselves. But it is important to remember that privatisation policies must integrate social and economic factors in the process of developing systems of self governance. This means that "accountability and equitability" are intricately related with "productivity and profitability" at each level of the market. Attention to social principles without attention to economic principles can lead to the collapse of cash flow or income for an organization. Attention to economic principles without attention to social principles can lead to a collapse of the private system because government controls would be again be required to protect the public. Fourth, social contracts should define the stakeholders in the new exchange system. Stakeholders are people who participate directly in an exchange, such as sellers and buyers, and also people who are indirectly affected by the market arrangement, such as creditors, communities and the public-at-large. (Creditors can be central to the governing mechanism

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of new firms but we are assuming that a business plan will remove them as quickly as possible from any direct association with the business.) By "sellers" is meant any enterprise offering goods or services for sale. This includes suppliers, producers, distributors, retailers (including labour, management, owners in each enterprise) and service professionals. By "buyers" is meant customers, consumers, clients and users who purchase the goods or services. The immediate stakeholders, therefore, are buyers and sellers and the more distant stakeholders are the members of the larger community who could be affected by their exchange relationship. In sum, there are both social and economic factors to consider in privatizing exchange relations which are critical to successful outcomes. The way in which productivity and efficiency is enhanced in privatizing markets is called economizing. The way in which social contracts are created with accountability and equity for stakeholders, is called socializing. The task of privatisation is to bring these two processes into a single policy-making process. Social governance concerns the way people manage their markets together. It is different from social ownership which means the way people control property. In modern society, people are no longer considered property and therefore are no longer controlled by other people except by their consent. People grant higher authorities to govern their lives in corporations because we do not know yet how to live together outside systems of command. The whole purpose of policies to advance social self-governance is to change the command system into mutual systems which promote self governance. But social ownership is still a problem to be solved since property is controlled. The problem is how can property be controlled through new systems of social governance?

Social Ownership: The Right to Control Property Capitalism is grounded in different forms of social ownership. From an analytical perspective of social control, all forms of business property are socially owned in a capitalist system. This includes the seemingly private property of people in proprietorships and the joint property of people in partnerships as well as the property of big corporations which are owned collectively by many stockholders. All business property is controlled by the government through its right to issue charters and remove them and the right to protect the security of the larger public. All private land is also subject to the right of public domain. Indeed, all property in modern society has this broad social character of ultimately being controlled

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through procedures legitimated in through the state, representing the social whole. All property is privatized and individualized, therefore, only because of a social agreement among people living together as a population aggregate. From this analytical perspective, therefore, we are examining only technical variations of social ownership in both capitalist and communist states. We begin with the assumption that the ultimate power to own and thus to control the use of property rests not with the state but with people in the context of society. The society assigns to the state its ultimate rights of property ownership. The ultimate authority over property use is society not the state. The legal rights to property in society are important to examine in privatisation because they are often vaguely defined - even in socialist states. For example, when a socialist state receives a return on the property that it owns, the definition of the control and use of that return is often a matter of custom or bargaining rather than based on a clear legal category. The administrative authority over state property (like buildings and factory equipment) exists at different levels of hierarchy and therefore releasing government assets into the private sector requires a careful look at the organizational level that should properly dispense of the property and receive proceeds from the private sale. Put another way, there is a hierarchy of authority at different levels of administrative budget-keeping for state funds between localities, regions, and provinces. There is also an arbitrary division of authority between what are called state funds and enterprise funds and the question becomes whether the proceeds for the sale of a state enterprise should go to workers, municipalities or higher levels of regional administration. (Conversely, to whom should the sale should be offered - the workers, the community, the public-at-large, foreigners?) Policies of privatisation therefore require a serious analysis. To whom does the government property properly belong when it is released for sale? D o factories belong to the workers or to the local community or to the public-at-large? Who should be offered the shares and who should reap the rewards? 3

3

For example, in Poland, assets of enterprises were in some cases formally divided into two funds: a state fund and an enterprise fund. That part of assets acquired through state grants was in principle to be distinguished from that part financed by workers out of their retained earnings. But when financial obligations were imposed on the first part of capital (i.e. paying a prescribed rate of return on the state portion), the division of capital was essentially done arbitrarily. The legal position of the two funds remained unclear. Some state administrators believed that even the enterprise portion was from a legal stand-point owned by the Polish state. Some enterprise workers, on the other

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According to our theoretical framework, the decision over property ownership should be made so that a higher level of economic well-being and capacity for self governance results to the organizational unit that receives the proceeds of a sale. But if our theory of self governance prevails, the proceeds would not go to the state or to the city government for extending its own operations. We are assuming that privatisation means higher levels of self-governance apart from government control. Yet some of the proceeds might go to the state for the purpose of empowering (capitalizing) self-governing economic organizations in poorer market sectors. The purpose of the state in this theory of privatisation, therefore, is to use capital for the broad advancement of selfgoverning systems in the market. Our question now is how this conceptual framework can be applied to cases in Eastern Europe and the Soviet Union?

Eastern Europe and the Soviet Union: Problem Cases The issue of property ownership in the Soviet Union is important because the capital assets of state enterprises are large. Here theorists have asked: if a state enterprise is privatized, should the new owners receive the property free because they are members of the society? Also, can the new owners pay the state for these assets out of borrowed capital? Could they pay out of future profits? If the state makes money from this privatisation, what should be done with it? In Yugoslavia, the concept of ownership is quite complex. For example, the capital assets in Yugoslavia have been defined legally as "social property" but a distinction is made between the right "to use" and the right "to sell" property. For example, factory property is given to workers to use but not to sell it. For decades this property has been thought to belong to the workers but in reality the law has been obscure on this matter. It has not belonged to anyone in particular; there has been no legal specification of who has ultimate control over the sale of corporate property. Legal decisions have had to be made arbitrarily by judges in Yugoslav courts and often the proceeds of a sale have gone to the municipality. Some Yugoslav theorists have supported the right of workers to use the business property but not to sell it because they believed the system would hand, would argue that even the enterprise funds belonged to them and so there was never a clear a clear definition of the distribution of ownership.

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self-destruct, that workers in richer firms would be tempted to sell their property and retire in luxury, thus, destroying the self-managed system. Therefore, this theory has never been tested in reality because the legal system prevented the sale from happening. The uncertain problem of property rights in state managed systems is illustrated by the contradictory policies within Poland and Hungary. Both countries offered a measure of ownership of firms to their workers and then later reversed their policy by reclaiming state authority over the firms' assets. Both countries moved in a matter of years from a centrally planned mode of control to a decentralized labour-managed mode and then back again toward full state ownership. This contradictory practice illustrates the need for greater clarity within a state managed system. For example, Hungarian decentralization began in 1985 when the state took steps toward labor-management but kept the right to nominate directors and influence policy among the large enterprises with official ownership. In 1985, state-managed enterprises accounted for 27 percent of all firms (mostly public utilities) while the remaining 73 percent were managed by workers' councils and also by workers' assemblies for enterprises under 500 workers. By the end of the decade, the government had begun strip workers of property rights, including their right to receive one portion of the return on capital in higher wages and their entrepreneurial role. The state changed the contract. Ironically, it became a fight between a socialist government and the workers who wanted to retain control. In 1988, the government passed the Economic Association Law which allowed worker councils in state enterprises to convert into jointstock companies. This led to a number of employee buyouts at very advantageous market terms to managers who had the money. While the decision to convert a firm into a joint-stock company was legislation from the viewpoint of our theory for integrating social and given to workers councils, there were two major problems with this legislation from the viewpoint of our theory for integrating social and economic factors. First, observers report that the privatisation took place at prices that were too low, failing to recognize the economic worth of the firm. The state's own investment in the enterprise was not re-couped in the process. There was no opportunity for the state to capitalize poorer sectors of the economy. There was no opportunity to empower people in other companies. Instead it increased the power of one established group of companies without regard to the need to create economic growth in lagging sectors. Second, this pattern of stock ownership enriched employees who could afford to buy the stock, and proportionally weakened workers who could not afford it. It increased the degree of inequity within the firm. At the same time, it gave richer managers an unfair power advantage within the

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firm. The voting pattern in joint-stock companies is based on the amount of stock people can purchase and does not respect each individual having one vote in company policy. This type of capitalist ownership therefore gave managers not only the power to get richer but to also to gain a special position of authority in the firm. Put another way, the joint-stock companies were founded on capital rather than on people in a system of mutual governance. The Transformation Law which passed in 1989 sought to correct the faults in this process by requiring that all privatisations be overseen by the Fund for State Property. The Fund was designed to limit any undervaluation of assets. The Fund can also initiate the privatisation of enterprises whose self- management rights were not extended in 1985, that is, that are still fully owned by the state. (For worker-managed enterprises, the Fund needs authorization of the Parliament to initiate privatisation.) The process of privatisation is by public auction but the rules are still being debated. In Poland, the 1982 legislative reform sought to meet the demands of Solidarity in the principle of the Three S: self-management, self-finance, and self-rule. Polish "worker councils" had existed in some form since 1956 but they were reinforced in this legislative reform so that they could elect directors. (About one hundred firms were considered of strategic importance, where the nomination was retained by the state.) But in 1989 under the new non-Communist government, privatisation in the conventional capitalist fashion - not by labour management and ownership became a preferred solution. This meant that the state had to reclaim all enterprise assets from the workers in order to sell them to private investors. The government has since sought to pass a Law on Transformation of State Enterprises to establish the Treasury as the sole owner in order to allow enterprises to reconstitute themselves as joint-stock companies under the auspices of the Treasury. This law was opposed by workers and debated in Parliament. The return of ownership rights to the government - while workers retained entrepreneurial rights - would have made capitalist privatisation impossible because outsiders would not invest in companies over which they had no control. (The powerlessness of outside investors is also increased by the absence of independent auditors in Poland.) According to the latest law-draft, the state Treasury would take over all enterprises that failed to pay a charge on fixed assets owned by the state. In this way, the government plans to reduce the power of workers' councils so their firms could be eventually sold to private investors. Meanwhile, joint-stock companies that are initiated by workers' councils and management can proceed toward sale.

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The direction of the Polish government is toward creating markets in the conventional capitalist tradition. It is seeking a to change the ownership of about 100 large enterprises in the first year and about 200 in later years, and so forth, out of a total of 7000 state enterprises. There is also an interest in developing a type of public corporation which may function in certain industries during the time in which the privatisation issues are settled. These policies of privatisation run contrary to the theory of social governance. In other words, the Hungarian and Polish governments have not developed any new vision of social accountability that reduces the tendencies of the market to create injustices and inequities, which ultimately lead to government controls. It has not considered the selfdestructive tendencies of a purely competitive market system. The markets they are designing are not planned to be socially self-governing. In Yugoslavia, the Law on Circulation and Management of Social Capital of December, 1989 seeks to solve the problem of ownership and sale of a firm's assets. It defines local state organs as owners who will receive proceeds from sales ad the decision to privatize is left to the workers' council. The state will receive money from the sales but there is no stipulation on how it will be used. There are still problems with the legislation. It may be legally possible for workers to sell their firm's assets to friends and managers at unrealistic prices since they are not the recipients of the proceeds. Attempts are under way currently to control prices at which assets are sold. The value of capital must not be less than its accounting value and local states that would receive privatisation proceeds can ask for an independent estimate of capital. Clearly, the issue of ownership is critical to the process of privatisation. What are the alternatives?

The New Stakeholders The sale of firms to workers in Eastern Europe has tended to be "management buyouts." For example, under the Rakowski government in Poland, state bureaucrats (the nomenklatura) who controlled the enterprises tried to preserve their power through buyouts at low prices - until a popular outcry against such actions curtailed it. The Mazowiecki government barred further steps, pending the passing of a new law. But what better alternatives are available? First, there is the option of selling the firms to workers on a one person, one vote basis. This requires special legislation which places the ownership

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of the assets fully in the hands of the workers as a collective unit and requires accountability systems. At best this involves a plan from workers on how such a system can be designed which includes electoral processes, a juridical system, methods of information disclosure, and corporate bylaws which clarify the socioeconomic purposes and organizational system of the firm as well as the basis for changing them. There are various ways by which this is accomplished in countries that legalize producer cooperatives. New systems are being devised today for doing this effectively in the United States under a special E S O P arrangement which permits workers full ownership rights while allowing each worker one vote. The method for doing this effectively, however, is a technical question to be discussed later. Second, the proceeds from the sale of a firm's assets may go in various directions. One direction is toward individual worker-owners. Many observers question the logic of this alternative because of the temptation of workers to sell a profitable firm in order to become privately enriched. In the best self-managed firms, there are other internal savings accounts for workers accumulated from profit-sharing and special pension plans for retirement that secures an income outside the job itself. This direction of selling off the firm to enrich its workers is not in the public interest. Another direction is m a n d a t e d . in the United States in which the proceeds from one nonprofit firm are given to another nonprofit firm. They cannot be returned to the state or to the employees. Self-managed firms could be considered like nonprofits so that a sale of one firm would then serve to advance the capital well being of other self managed firms. In other words, it advances the powers of self-governance in the enterprise system. A basic question then arises: what other firm should receive the proceeds? The answer could be in the collective decision of the workers who are selling their firm but I believe it is better accomplished in the collective decision of workers in the industry itself. This means that the proceeds from the sale should return to the trade federation. The federation of companies in the Industry (or the service field) of the firm being sold is thus enriched. The purpose of this option - requiring legislation - is to enhance the self-governing powers of the industry itself. The federation then may distribute the proceeds equitably among themselves, capitalize new R & D programs in the collective industry of all members, fund self-management training programs for all firms, etc. What if the whole industry is not viable or goes bankrupt? In this case, the next higher-up organization is the inter-trade federation. It is represented by a broader employers' organization which is organized to represent a larger sector. In a socialist country it is still state managed in the form of a government ministry of light industry or agriculture. In a

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capitalist country, it is a broad federation of federations like the Better Vision Institute which includes manufacturers, distributors, and service people in the optical products field or it is still broader in the National Association of Manufacturers or the Chamber of Commerce. The future task of state dismantlement in Eastern Europe should include the privatisation of these ministries into democratic federations of self- managed firms. This would mean that proceeds from the sale of a firm making shoes would go to its shoe federation and if that federation were for some reason not viable, it would go to the federation of firms in light industry. This is one more step ahead of where European nations are operating at the moment. But it clearly implies the dismantlement of state ministries into democratic federations in the private sector is a logical part of the future for these countries. The state always stands in the background as an observer of the process of privatisation to determine its effectiveness. It can always pass new legislation and give new directions for the sale of firms. The purpose of the state is to enhance the powers of social self-regulation in the economy. In Eastern European countries the aim is to privatize at least 50 percent of GDP. The overall principle guiding public policies is that self governance is advanced through mutual systems of governance based on economic principles. Broadly speaking, the purpose of the privatisation should be to develop systems of exchange which maximizes mutual governance for stakeholders while it maximizes profitability. The ideal is to create self-governing systems which are integrated with economic principles. Compromises must be made in the practice of integrating these goals and problems must be solved through experimentation. We are saying that the policies can lead toward compromises and at other times toward creative solutions in resolving the tensions between these social and economic principles. For example, the ideal of corporate policies is to promote programs which increase the level of self governance at the lowest level of administration while increasing productivity. For example, this means optimizing the self-governing powers of workers at each level of corporate hierarchy with each higher office, in turn, seeking to optimize the self governs powers of people in the ranks below it. This policy for advancing self-governance is advanced while at the same time advancing programs in productivity. In practice, for example, this could mean instituting new plans for participatory governance among employees while developing new technology that increases efficiency at work. As we shall see, studies suggest that an increase in self governance is accomplished through new systems of mutual governance. However, a corporation must find its own ways in which each governing level of

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employees (assembly line, clerical office, engineering department, etc.) participates effectively through linkages with higher levels of employees in the larger policy management of the firm. The ideal of higher management in trade associations is to optimize equitably the economic well-being (and the power) of each member enterprise in the larger context of society. The trade association must find ways in which each competing member-firm participates in the democratic governance of the association. According to our conceptual framework, each higher association acts to encourage self-management at the bottom of the hierarchy. For example, the trade association may sponsor self-management training programs for its firm-members which shows them how to increase the power of self-direction for employees in workshops and clerical offices. Thus, each higher level of governance directs its attention toward self-development at the lowest ranks of hierarchy in a market system. The ideal of self-governance operates as well in still larger trade federations. The task is to find ways in which competing member-associations can participate with each other in systems of mutual governance (democratic systems which advance self governance. This practice should at the same time, advance the economic well-being (e.g. sharing information on effective new technology) as well as advance the capacity for self governance of each member-association. Because these levels of mutual governance advance in social purpose at higher levels, this theory proposes that competing markets begin to operate jointly in the larger interest of the society. Examples will be given later on the meaning of these theoretical points about privatisation policies. But in sum, they are designed to maximize social and economic principles in the public interest. With this general framework in mind, privatisation involves a definition of the new property rights for people in an economic exchange. Privatisation involves new types of social ownership which determine the economic well-being and power of self governance of people.

Labour Legislation in a Socialist Country Bulgaria a Case Study1 Erik S u n d b e r g

To Understand That Which Cannot be Described I will begin this report with a description of an observation that apparently has little or nothing to do with working life. O n o n e occasion I entered a crowded bus in Sofia. O n a seat was a man, w h o had the physique, that w e Swedes think the wrestlers and bass-singers of Bulgaria usually have. Soon afterwards a w o m a n and her little boy entered the bus. T h e man signed to the boy that he could sit on his knee, which he gladly did. The mother got a seat after a few minutes, but the boy stayed with the man. N o t until it was time to get off the bus he separated from the strange man. I have not related this little observation to explain that they seem to have different relations between children and grown-ups than in Sweden. That is not the point of the story. Instead it has as its aim to be a

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Autumn 1988 I was awarded to study the operation of the new Labour Code of Bulgaria. The Swedish Institute financed the travel and the Bulgarian Ministry of Education was responsible for the costs in the country. The studies were organised in a way that I visited some enterprises and did interviews there. These enterprises were chosen by the Research Institute of the Bulgarian Trade Union. The interviews picked up similar questions because I wanted to get a total picture of all workplaces I visited. I want to give my thanks to those who made it possible for me to do the visit and to Krastyu Petkov at the research-institute. I am especially grateful to Galina Miltova who organised the visits and to Adelina Dotsinska who was my interpreter. This report was translated into English one Year later than the Swedish edition. Some English speaking persons told me they were interested in my experiences and therefore I translated it with the help from John Thirkell. Without his help it would never have been done. Tank You! I want to emphasize that the report is an "internal" report for the Swedish Institute. I have no ambitions to present a sociological or political essay about working life in Bulgaria.

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starting-point for reflections about things that are so obvious that it is not necessary to describe them. The man, the boy and the mother obviously had something within them that made it natural that they should act as they did. It was as valid for the grown-ups as for the child who quite naturally sat down on the knee of the man. But what really happened "within" these three persons? If I had asked them they could not answer otherwise than "we usually do so" or something like this. Their action was an expression of something that in fact cannot be expressed in exact statements. Outwardly this description deals with the relations between people in a bus. But the aim is to describe something much more fundamental in this connection, namely practical epistomology. Did I get any knowledge about the three persons? What then is knowledge? Are there different types of knowledge? How is one to know if one's knowledge is in accordance with reality? Is there "correct" knowledge and "false" knowledge? Or expressed concretely: Can I as a Swede understand at all what happened "within" the three persons on the bus? And did my knowledge or lack of knowledge influence my observations? My experiences in Bulgarian workplaces might have been of the same kind as my experiences on the bus. If I had asked about matters that I felt that I did not understand, the persons interviewed could not have been able to answer, because there are no words for matters that are so obvious that they do not need to be explained. Furthermore: I really did not know what I did not understand. When Galina and Adelina asked what was difficult to understand, I had no answer. I think this experience was the most fundamental during my visit in Bulgaria. It means that I am quite conscious that I am only capable of touching the surface when I am going to describe how the Bulgarian Labour Code operates in practice. The deepest streams under the surface I will never reach. Quite simply I do not understand them. Yet I will touch some conditions where I have an idea about the answer to my questions. It is probably essential to do so, because the description otherwise will "hang in the air". The matters difficult or impossible to explain have to do with the fact that Bulgaria is a socialist country. But the peculiar is that when you ask what is meant by that you will get almost the same answer as if you had asked the man, the boy and the woman in the bus. It is so obvious that it is not necessary to explain it. Everyone "knows" what is meant by "a socialist country". The central thought in socialism is - according to those I have had contact with - that the State first and foremost wants to help those who in earlier times were suppressed and powerless. The essential in the country

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is the development of the people, the working class, the proletariat, not the development of capital. This thought had as a consequence that capital had to be transferred to the society, the state. If that is done the development of the capital cannot destroy the development of the people. When capital has been transferred to the State the productive activity must be planned in quite another way compared with the free activity of the market. Therefore a substantial planning activity is needed. This "description" of ordinary people's conception of socialism in every day life is of course very superficial, but it gives opportunities to observe some of the misunderstandings we Swedes carry with us when we visit a socialist country. Before my visit I started from the thought that socialism essentially was the ownership of the means of production. My talks with Galina and Adelina gave me a more correct picture not of what socialism is "in reality" but how people usually understand the central meaning. Thus I am interested in ordinary people's conception of socialism, not a "correct" scientific definition. This generally accepted picture one must have in mind to be able to understand talks about conditions in workplaces. Otherwise the words will have different meanings for those who give information and those who receive it. The question whether the ownership of the State and centralisation really is useful for the people is in this connection of no interest. I only search for that which is so obvious to my informants, that it is not necessary to explain. Another essential matter one has to be aware of is the strong social control on the Bulgarian workplaces. The workers control and judge their comrades. Those who do not fulfil the tasks are reminded and have in the worst case to leave the job. I will return to this matter later in this report. The concrete consequences are quite unintelligible if one does not have knowledge of this social control. A third matter is the function and work of the party-cells, i.e. the local organisation of the Communist Party in the enterprises. In spite of many and long talks about this question and in spite of all willingness to answer, I probably still do not understand what was so obvious that it is not necessary to explain. But I still do not understand what was so difficult to understand. Yet, so far I have reached the position that this obvious matter is far more complex than I thought before I made my visit to Bulgaria. At last: for understanding anything at all of Bulgarian working life it is necessary to be aware of the changes that have happened in recent years. Earlier the authorities gave instructions on the goals that should be achieved during the following year. Now changes have occurred so that producing enterprises deal with other enterprises about products and

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prices. These new tendencies are usually called "the socialist marketeconomy". In this respect there is no difference between Bulgaria and capitalist countries, for instance Sweden. In principle the State authorities do not decide about the plans for production. Yet, the authorities often help the enterprises. The authorities have a lot of knowledge about the needs in different parts of the country. Therefore they can give advice on how to use the production capacity. In enterprises producing goods the change has had great consequences. Earlier they were paid for the goods they produced, i.e. the goods that the state had decided they should produce. Now they are paid for the goods they can sell. Still there are plans for production, but they are just the same as in any capitalist country. If a production unit - a whole enterprise or a department in an enterprise - can produce more than planned, they have either to let the resources remain unused or find new customers within or outside the country. Whether the above description corresponds to the real conditions or not is not of special interest in this paper. But it is essential to be aware that this description is a part of the world of conceptions in which my informants live. And this influences their way of answering my questions.

Labour Legislation in Bulgaria The following description of the Bulgarian labour legislation is written from a Swedish perspective. It means that I have stressed parts of the Bulgarian legislation, that I think are interesting, while other parts remain in the background or are not touched at all. It also means that I sometime make comparisons between Bulgaria and Sweden, with respect to both similarities and differences. Thus the paper has no ambition to give a total description of Bulgarian labour legislation. I must also emphasize that I only describe the content of the Labour Code. The concrete application at some Bulgarian enterprises will be reported later in this paper. Now and then I give some comments that I have heard during my visit in Bulgaria.

The Bulgarian Labour Code The Bulgarian Labour code was published as number 26 and 27, 1986 in Durzhaven vestnik, a series of laws in Bulgaria. It was translated a year

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later into English (Labour Code) and this publication is a basis for the paper. This Labour Code covers all conditions related to working life: relations between management and employees, employment and dismissal, principles for wages, the trade union, work environment, health care, working hours, cultural activities, education, cooperative enterprises also a complement to the state-owned and so on. The principles underlying the legislation are thus quite different from the Swedish ones. Here we have a lot of laws and moreover agreements between employers and employees.

Employers and Employees The concept of employer and employee does not exist in Bulgaria. It is not only that the terms do not exist, the law is structured in a way that such conceptions are eliminated. The law uses the concept "management" and "employed", but they are not considered as two opposite parties. The elimination of these concepts is performed by increasing the responsibility of the employees. As reported later in this paper, they appoint the manager. The enterprise belongs to the State/the people, but the employees are responsible for its activity through the trade union and various committees.

Working Collective The enterprises are organized so that the employees belong to collectives with responsibility for a certain part of the enterprise. The responsibility is very great compared with that of Swedish autonomous groups. There are two types of collectives: the primary work collective and the main work collective (in the text named primary collective and main collective). The main tasks of the collectives can be defined with the help of a quotation from Labour Code, art. 14: "The work collectives shall manage socialist property and shall use productively the machines, raw materials and other objects of socialist property." Thus, it is not a question of influencing these activities, but of managing them. Managing is formulated in the following way in art. 16: "The work collectives shall solve, on their own, all matters placed within their exclusive competence by this Code and by other legislation.

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Primary Collective The primary collective has some similarities with the so called autonomous groups in Sweden. The organizational form of this collective is of little interest in this paper, but some structures must be explained in order to make the following text intelligible. There are no rules in the Labour Code about the size of the primary collective, but they seem to consist of groups that make an organizational entity in a natural way. Usually they consist of at least ten persons and they are seldom more than fifty. Such primary collective exist in all types of enterprises: factories, civil service, farming, schools and so on. The collective discusses questions and makes decisions at general assembly meetings. All voting is open with majority-decision (if no other legislation gives other rules). A single member of the collective can ask for a secret ballot, but the majority decide if so will be done. (Some elections have to be carried out by secret ballot. More about this in the following text). At these meetings a work team council, which consists of 3 to 11 members, is elected for 2 years. Also the work team foreman is elected by the collective at the general assembly meeting. He/she is elected for 2 years and the meeting has the right to recall him from this position. The foreman is always elected by secret ballot. (Art. 85.3). The general assembly is convened by the foreman, the trade union or at the request of at least one quarter of the members. The primary collective has, according to art. 20, to: -

elect its own foreman and the work team council; decide rules for distributing the lump sum to common fund and wages; discuss and propose to the management which members should get education and training; discuss the reports of what the foreman and the council have done; discuss work discipline; take measures to safeguard socialist property.

Main Collective The main collective has no analogue in Sweden. It consists of all employees and is on certain occasions gathered for a general assembly. If the collective is too big, representatives from the primary collectives are instead elected. This general assembly elects the council and the manager of the enterprise. The general assembly has the duties which in Sweden are the

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responsibility of boards: they should not deal with questions of detail, but direct the interest to questions concerning the whole enterprise.

T h e Trade U n i o n The trade unions have other functions, compared with the trade unions in Sweden. They have not as a function to negotiate about wages, which is the main function of trade unions in Sweden and other capitalist countries. When the wages depend on the total work of the primary collective and when the distribution among the workers is decided by the meeting of the primary collective, there is no use for the trade union to concern itself about it. They have as duties: -

to ensure that the Labour Code is followed; to take measures for good working conditions; to improve the social conditions including those outside the workplace (i.e. housing, children care, holiday trips and so on).

The membership in the trade unions is voluntary, but at least 95 percent of the employees are member. Two thirds or four fifths of the members usually participate in the meetings. An indication that the conceptions of employer and employee are absent in Bulgaria is the fact that the manager has the right to be a member of the trade union and is almost always a member. In Bulgaria there is only one trade union organization in the country. (Compare with, for instance, France where there are three big ones). Within this organisation there are many suborganizations for different sectors of working life. The frames for these sectors are so wide that all employees in an enterprise always belong to the same trade union organisation. For instance all employees in a hospital belong to the same trade union organisation: cleaners, nurses, doctors, ambulance-drivers. The type of trade union organisation we find in England or France does not exist in Bulgaria. But there are rather great similarities to the Swedish system. The internal organisation is interesting for Swedes because it does not follow the same principles as we have. The basic structure is as follows. Every main collective is the base for a trade union organisation for the enterprise as a whole. Every primary collective is in the same way a base for a suborganization in this subcollective. Thus there are two parallel organisations. The collectives consist of 100 percent of all employees and according to the definition of them they cannot be less. The trade unions

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have a corresponding organisational structure, but they are voluntary and cover about 95-100 percent of the employed. The relationship between the collectives and the trade unions means that the trade unions have to ensure that the Labour Code is followed. In addition the trade unions have social and cultural tasks as mentioned earlier. As in Sweden, there are a lot of different types of cooperation in the trade union structure - for instance on the regional level - but they are of no interest in this paper.

Membership of the Party There is nothing written about membership of the Communist Party in the Labour Code. There are some similarities and differences in this respect between Bulgaria and Sweden. In Bulgaria only about 10 percent of the people belong to the party and members are individually chosen into the party. This means that it is considered as an honour to be a member. The question about the relations between the local party organisation in the enterprises and the producing activity in them will be reported on later in the paper.

The Results of the Interviews A report of this kind is of course problematic with respect to its trustworthiness,, because the data are more or less uncertain. This uncertainty arises at different levels. At the most superficial level it is a question of translation from Bulgarian into English and then to the report in Swedish. Yet, in practice the use of notes in Swedish gives rather good guarantees for avoiding of misunderstandings. At a somewhat deeper level one meets another type of uncertainty the same uncertainty one meets in all interview-situations: will and can the person who gives information say what he/she thinks? It does not necessarily mean that the person who gives information consciously withholds anything. I hardly think this is where the problems arises. Rather it is that, in a socialist country, they have a world of conceptions different from ours. Therefore the words mean different things, and the sphere of associations around words and expressions looks different. If one goes still deeper, one meets new problems. They can be formulated in the following way: does the respondent give a "correct" description of the conditions? My epistomological starting point is that it is

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hardly meaningful to discuss the "correctness" of various descriptions. It is more fruitful to talk about the plausibility connected to the perspective that the respondent uses. Is it reasonable that I got only the picture of the leaders (the managers, trade union leaders, local party leaders)? Of course it would have been of interest to know the workers' opinions. At least in Sweden the opinion of the workers and the managers differ a lot, and so it probably does in Bulgaria too. Yet, in the following description it is not possible to go deeper below the surface. I can only report on what the interviewed persons replied. To some degree I will interpret, but that is an exception. Thus it is the replies of the managers, the trade union leaders, and the party leaders I will report. The motives for this rather superficial reporting is that my questions lie on a superficial level. I asked about the practical implementation of the Labour Code. Beside the formal interviews, I have now and then co.me across opinions, that have been much more critical than the ones I met in the enterprises. These opinions I received when talking in trains, taxi-cabs, and at cafe-tables. Then one can hear opinions such as "all talking about perestroika and glasnost is just nonsense" or "the workers prefer better wages compared with the right to decide" or "whatever they say - the party decides anyway" or "in reality you don't understand anything about our life in Bulgaria". Well, these objections had little to do with the matters I investigated. But the whole atmosphere, that existed around the formal interviews, was quite different compared with informal talks in a café. There might be a source of lack of reliability. In practice the interviews were organized in the following way: 1. Before I came to Bulgaria I had read the Labour Code and translated it into English. I made a summary of the most essential points and sent it to the research institute, which hosted my visit. There my abstract was checked. Some misunderstandings were noted and corrected. 2. With this abstract as a starting point, I had already formulated some questions before the visit. 3. The interviews were conducted on the basis of these questions. 4. The interviews were recorded. The aim was not to have them written. This was impossible because the talks were a mixture of English and Bulgarian. During the talks we also made notes. 5. As soon as possible I made notes in Swedish. For these notes all three of us were responsible, i.e. we discussed in English what should be written. Only occasionally did we have to go back to the tapes to check what the interviewed persons had said.

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These notes in Swedish are the basis for the following report, which is structured according to the questions we put to the interviewed persons. Usually the questions were not formulated exactly in this manner. Instead the reported questions in reality were a set of minor questions. We visited the following enterprises: 1. a farming collective with about 500 employed and 11 primary collectives; 2. a textile factory with about 1200 employed and 7 primary collectives; 3. a refrigerator factory with 2100 employed and 124 primary collectives; 4. a district post-office with 350 employed and 16 primary collectives; 5. an elementary school with about 70 employed (teachers and other employed), and only one primary collective. I asked many times if these enterprises in general were representative of enterprises in Bulgaria. The answer was more or less a counterquestion: would I choose the very worst workplaces in Sweden if I were to show Swedish working life? At the same time the answer could be interpreted as if the workplaces on the whole were representative for Bulgarian working life.

The First Question: The Receiving of the Law Our ambition was to conduct the interviews in as similar a manner as possible at the same time to do them in a relaxed way. We therefore opened every interview with the following question: "The Labour Code can have three different aims, namely: -

to give instructions that the conditions shall be changed at a certain date; The codify what has already happened; to show a goal to strive for.

What was the aim at your workplace?" The purpose of this formulation was not to get an exact answer to the question, but to get a starting-point for discussions and a general idea of how the interviewed persons looked at the legislation. I appreciated it if they also answered somewhat outside the question, for getting a picture of the atmosphere in which the law was implemented.

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It is difficult to present a general characterisation of the answer, but I think that the first alternative seldom happened, i.e. that certain changes had to be done at a certain date. Some rules on elections and the like began to be used from that date, but as a whole they meant that the law successively came into operation both before the date of the law and after it. Yet, fundamentally most interesting was that the interviewed persons said that during a couple of years they had participated in the development of the Labour Code by discussing it. They had presented points of views, that had later been accepted. The first question had consciously a form that made it possible for the interviewed persons to express their opinions rather than answer on detailed questions. It must therefore be observed that the answers lie rather close to their own interests. I do not want to . say that they are unreliable, only that one must be aware of the fact that they can have been influenced by personal ambitions.

The Second Question: The Organizational Structure In fact the second question consisted of a set of questions about organizational conditions. This type of problems was not in the centre of my study in Bulgaria, but it is necessary to describe some structures in order to understand the rest of the text. In a traditional way of description, one can outline the form of an organization in the following way:

Figure 1

Galina Miltova commented that this picture hardly gave an adequate conception of the conditions. Instead it should be drawn in this way:

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Main collective

J-Primary collectives

Figure 2

With this figure she wanted to stress that the primary collective is not subordinated to the main collective. Instead they are parts of a bigger entity. In the following text I will - in spite of her objection - continue to use the first picture, because it is more useful for my purpose. As already mentioned, there are, in both the primary collective and the main collective, councils which have direct responsibility for the activity. Yet, the collective as a whole decides the principal questions at its general meeting. The most essential duties of the primary collective are: -

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Planning work. For instance, at the collective farm every day began with a discussion about the work of the day. Every week they discussed whether they had reached planned results. And every month they had talks with a long perspective about the conditions. Distribution of wages among the members of the collective. It is done so that the council and the foreman propose how to distribute the wages and the collective accepts it. Thus it is the collective that decides the distribution of wages from the total sum that the collective has earned. Appointment and dismissal of workers. An example: The collective dismissed a teacher, who was not considered to fulfil her tasks. In Sweden it would not even be possible to think of anything of this kind. First it would be psychologically impossible to dismiss a colleague. Secondly we have a law which makes it impossible to dismiss persons in this way. Election and dismissal of the foreman. He/she was elected for two years and could be dismissed during this period. Election of the council of the collective every second year. The foreman is a member of this council.

The general assembly of the main collective consists either of all employed in the enterprise or of representatives elected by the primary collectives. If so, it consisted of some hundred persons. In the school, which we visited, all employed participated in the general assembly. At all the other workplaces we studied, the general assembly consisted of representatives. The duties of the main collective are mainly:

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decisions about the principal production questions; supervision of the activities of the primary collectives; election and dismissal of the manager.

The organization of Bulgarian enterprises also includes two other components, i.e. the trade unions and the Communist Party. Both of them are parallel organizations to the primary collective. Within every primary collective there is a trade union organization, which is, in principle, voluntary but in practice consists of almost all employed. The communist organization consists of only a minority of the employees, 10 to 15 percent. Their work will be discussed in the following section. The relation between the collectives, the trade union and the communist party might be described with the next picture:

Figure 3

Thus, in every primary collective there is a trade union and a communist organisation of not more than a few persons. In the Labour Code one finds detailed descriptions of the trade union. But nothing is said about the communist organization and its relation to the enterprise and the trade union. Perhaps one can interpret the introduction of the Labour Code in the way that Bulgaria is a socialist country and therefore it is natural to have communist organizations in every workplace.

The Third Question: The Election of Leaders The election of the leaders and the council in the primary collective and the election of management of the enterprise has already been reported. In discussing the procedures, I tried to get details carefully described, because one little detail of the process can be a piece of a mirror, that gives a picture of greater principles.

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The election is carried out by secret ballot, and the votes are placed in a closed box. This procedure presupposes that there are many candidates, which was the case in the five workplaces we visited. The question of who nominated the candidates is, of course, a crucial point. Concerning foremen there seems to be many instances. Usually the council of the primary collective chose the candidate, the council to which the foreman belonged. However, individual workers and the trade union can choose candidates too. The election of the manager of the whole enterprise seems to be somewhat more complicated. This question was not at the centre of the investigation, but in principle it was done in a similar way, with the difference that the superior authority (i.e. the ministry of the industrial sector) has the right to nominate candidates. The candidates who were put forward in this way were "examined" by a group. In the end there remained a couple of persons. The general assembly could then elect one of them. Because secrecy of voting is an essential question, it might be reasonable to report how it was decided at the general meetings. Anyone has the right to propose secret ballots, but the majority decides if that will be the case. Yet, the election of foreman and managers will always be secret. Questions about voting and election are regulated in detail in the Labour Code. As far as I could understand the collectives eagerly followed these rules.

The Fourth Question: Wages In the production enterprises which we visited, the collectives decided every month about wages. Wages depend partly on the fund for the whole primary collective, partly on the quality and quantity of work done by every individual. In practice it is done so that the council of the primary collective is informed about the fund at the disposal of the whole collective. That sum depends on the amount of goods the enterprise can sell. For who produce services, for instance post-offices and schools the sum depended on the amount of goods produced. This change is usually called "the transition from the socialist planned economy to the socialist market economy". Because this change is very essential for the way of planning the job and estimating the wages, it must be reported in spite of its being outside the Labour Code.

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This lump sum is to be divided among the employed. The foreman and the council propose how many percent of maximum wages will be distributed to everyone of them. At one of the enterprises, we examined a protocol that had been presented to the collective. There were variations between 98 and 100 percent of the maximum possible. This proposal is accepted or rejected by the collective. It appears that the collective sometimes alters the proposals. At least it had recently happened in one of the factories we visited. The council and foreman proposed that one of the employees should get lower wages because she had not produced what they had expected. But the primary collective decided that she would get full wages.

The Fifth Question: The Trade Union The trade union has a very different role compared with trade unions in Sweden. Some of the main differences should be pointed out: The trade unions do not deal with wages. As mentioned above the primary collective has a lump sum at its disposal and it shall be divided among the employed. In this situation there is no reason for trade unions to be concerned with wages except for some principal questions. The tasks are instead of social kind. Trade unions can in different ways take care of the nursery facilities of the factory site, housing for the employees, shops in the factory site, cheap and good holiday trips and the like. Sometimes the trade unions themselves took measures at the enterprises we visited, sometimes they negotiated with authorities in order to have them take such measures. We could not find any rules for having things done. Sometimes, (at two of the enterprises) we found a tendency to take care of the members against the management when they wanted to increase the productivity at the expense of the employees. Information about this I found only casually in a couple of sentences, and it is difficult to interpret them. Yet I think the remarks show that there sometimes are conflicts of interest between management and employees. On that occasions the trade union took the side of the employees. Obviously it is profitable to be a member of the trade union, because the social measures are available only to the members. As an example which can be quoted, two persons at the school we visited were not members, with the result that they did not get any wages when they were ill. Therefore almost all employees were members. At some of the enterprises, which we visited, trade union membership was 100 percent.

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The participation in meetings also was very high compared with the conditions in Sweden. Sometimes there were internal trade union statutes saying that 50 percent (sometimes 75 percent) had to be present as a quorum for a meeting. Generally all who had the possibility to come did so, i.e. 80 or 90 percent of the members. The main reason for coming to the meeting was joy and value of participating. Participation could be a merit in working life. The active ones had greater possibilities to get advantages both in and outside the working situation. It could be regarded as meritorious to participate in the meetings.

The Sixth Question: The Communist Party in Workplaces Formally this question does not belong to my study, because the party is not mentioned at all in the Labour Code. But in reality the party probably has a great influence. Therefore there are reasons to discuss its role and method of operation. Generally, I must state that perhaps I did not understand the role of the party organisation. I have this impression in spite of many talks with my assistants. A description of the rules for electing a new member might indicate why it is so difficult for a Swede to understand the situation. When a person wants to be a member, he/she begins by writing an application to the local organisation of the party. This application is transmitted to the primary collective, which provides a report about the applicant's way of fulfilling his/her job, responsibility in relation to comrades, and whether the candidate sets a good example. This report is sent to the party organization, which has also in other ways gathered information about the applicant. The fundamentally interesting point is that non-party persons express their opinion on whether one of the comrades ought to get the status of being a member of the party. After a year or two the party decides whether the applicant will be a member. Thus the ambition is that the party will consist of members who set good examples and are an ideal for the employed. It has traditionally been considered that the communist party should be an elite among the people. I do not dare to express a definite opinion about the influence of the party within the enterprise. In spite of many attempts I have not got enough knowledge to formulate a statement. Yet it seems as if there has been a change in recent years. According to my informants, the party had earlier a controlling and governing function. Nowadays the party tries to

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help the inhabitants in the country (and the employees in the enterprise) to do a good job distinguished by responsibility and carefulness.

Conclusions The aim of the visit in Bulgaria was to get a picture of the operation of the Labour Code in practice. With some hesitation I think I can draw the following conclusions. There is always a general difficulty existing when one tries to enter a foreign world. This I called "matters that are so obvious that it is not necessary to explain them". In Bulgaria I met this situation in the bus with the man and the boy and of course in the workplaces. One precondition for describing the application of the Labour Code is to have at least a slight idea of "what is not necessary to explain" (see Stephen Toulmin: Foresight and Understanding). It is a plausible assumption that "what is not necessary to explain" is tied to the political tradition of the last 40 years in Bulgaria. But it is also plausible that it is knitted to the development of the last decade in many socialist countries. The reference to "perestroika" and "glasnost" in the Soviet Union, frequently recurring, shows the strong wind of changes sweeping over Bulgarian working life. The whole Labour Code is also a sign that they will change in the direction of increasing democracy, but not of the type of democracy one finds in capitalist countries. Yet, it is possible - or probable - that there are other conditions "which are not necessary to explain". The strong social pressure belongs, for instance, to this sphere. There are many matters an investigator ought to understand in order to be able to give a good picture of the conditions. But when one is aware of the difficulties and when the ambitions are not too high, one has the possibility of dealing with "that which is not necessary to explain". My task was to investigate some easily observable conditions such as structures of organization, elections, number of meetings and the like. Information beyond that I considered as by-products perhaps more essential than matters standing in the centre of my interest. If I limit myself to observable matters, I think I can make the following statements: -

The Labour Code and its application have as an aim to democratize working life. In the enterprises which we visited, I think the members of the primary collective really had influence. To meet once a day/week/month probably was more than pure rituals.

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Then participate in the election of the foreman might be done without real influence from the participants. (We have mainly the same situation in political elections and in elections of organizations). In spite of that, I think they had a substantial influence. How great it is and in what degree the Communist Party was able to influence the voting, I cannot judge. Implicitly the Labour Code accepts a strong social pressure on individual members of the collective and I think it was a reality. The collective decisions about wages, appointment and dismissal indicate that. It is difficult for a Swede to understand the ground of emotions and attitudes for that social pressure. The behaviour during our interviews indicates that the Labour Code was a line of aim, that they had the ambitions to follow. Most of our informants had the Code at hand and I could see it was full of notes and comments. As a summing up I dare to say that the Bulgarian Labour Code in reality was a line of aim for the leaders in the enterprises and authorities we visited. I dare also say that "ordinary employees" had influence on the workplace. Yet, how far this influence reached I do not know.

Some Comments one Year Later The report from my visit in Bulgaria was written late in autumn 1988. Now, one year later I have translated it into English with the help of John Thirkell, and during the meantime much has happened in Bulgaria. Most of the leaders in the country have been exchanged with other persons. Therefore I want to give some comments. My ambition was not to give a sociological analysis of the working conditions in the country. I only wanted to read carefully the Labour Code and ask the leaders of the enterprises, the trade unions and the party organisations how they implemented this law. I had no possibility to discuss the problem with ordinary workers, office-clerks, civil servants and the like. In spite of having no exact empirical facts I dare - now one year later to say that my impression was that the ideological frame seemed to be rather firm. It was difficult for an ordinary man/woman to express opinions that questioned the basic structure of the political system, but as long as one was within this frame one could say quite freely what one wanted, including strongly criticise the leaders of the enterprise.

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But during my visit I could see cracks in the surface now and then. My informants told me that the party organizations in the enterprises were no longer controlling the employees as they did before. They strongly emphasised that the working life was more and more democratic. There was a clear tendency toward democracy in the workplaces, they told me. Ordinary employees had a lot to decide. Whether I got a correct picture or not, I think - as my personal opinion - that the Labour code has had some influence on the development in Bulgaria. The intention might have been that the democracy in workplaces should have remained within the political frames, but instead it perhaps contributed to break it.

Industrial Democracy and Power Structuration in the Polish Economy Witold Morawski

Introduction Most of the discussions on the Polish economy in the eighties focused directly or indirectly on democracy, more precisely on the lack of it. Though the economic crisis directed attention towards economic reform, market equilibrium, supply shortages, inflation, the need to change the structure of the economy, etc., these problems were not discussed in isolation from questions of democracy. It was so in spite of the efforts of the political leadership, which for a long time preferred to restrict discussion and actions to economic reform and leave political reform untouched. It is equally important to stress that discussions on democracy problems were initially quite often reduced to industrial democracy issues. The explanation of it is simple. A clear tendency was visible at the outset of the eighties to treat the trade union "Solidarity" not only as a means to defend the immediate workers' interests, but also as a wider platform to change the political context in which industrial enterprises and the economy operate. "Solidarity" was not only a trade union but also a powerful social movement. In short, the institution of industrial democracy, the trade union "Solidarity", played the role of a substitute for political democracy institutions. Simultaneously "Solidarity" was treated as an embryo of the civil society in the workplace, that is an institution of self-defense and self-organization of employees' interests and citizens' interests, independent of the state. The need to build alternative structures to the existing state order became acute after the introduction of martial law, when the power centre began to carry out "the strategy of normalization", in which, for example, official trade unions had been created from above and "Solidarity" was being liquidated. Contrary to the previous experiences, a unique feature of the eighties is the fast emergence of counter-measures on the part of society to oppose the above strategy. Those counter-measures finally led to the collapse of the strategy.

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A recent tendency is to treat industrial democracy institutions as specialized ones: in the case of trade unions, to reduce their activities to the defense of the immediate employees' interests concerning wages and working conditions and in the case of employees' councils, to participate at production and economic decisions together with the enterprise management. This tendency is becoming stronger now that a political reform has been initiated after the "round table" talks in 1989. It means the removal of major political interests from the enterprise and the economy. Actually it means the realization of an economic reform of a new type, one in which market mechanisms and privatisation are central elements. The purpose of this article is to answer the question why the transformation of the main functions of industrial democracy institutions, from a substitute for political democracy to specialized institutions in the workplace, became possible and actually occurred. It is a question about power structuration, not only in the Polish economy, but in the whole system. The situation however is one of great flux, which urges caution in reaching conclusions.

Theoretical Background The question of democracy in the workplace has been discussed since the middle of the nineteenth century. As we see the problem nowadays, it can be looked at from various points of view, which on the whole constitute two different theoretical-ideological traditions of industrial democracy. One of them in the Weberian tradition, whose major thesis is that the victory of bureaucratic organization means the replacement of substantial by formal rationality, expressing itself in practice in the centralization of power in the hands of a bureaucratic or professional élite. This tendency is common to all contemporary civilizations. It also affects workers, who, not being the owners of the means of production, have no control over work processes, not to mention power in the industrial organization. This tendency cannot be checked by a socialist revolution. In Weber's opinion, socialism may even worsen things: even more than capitalism, it will augment the size and power of the bureaucracy. The pessimism of Weber was mitigated by allowing for the possibility of democratic control over these elites (Giddens, 1986). Robert Michels, a pupil of Weber, was even more pessimistic, however. His "iron law of oligarchy" states that "he who says organization - says oligarchy". The second tradition stems from K. Marx, who stated that, through a revolution, an equal share in power can be assured to all members of an

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industrial organization. Yet he had no illusions that this could be accomplished within the framework of the capitalist enterprise. He ridiculed various illusions of industrial democracy in capitalism that he encountered in his time. So far Weber's prognosis has turned out to be more correct than Marx's. The organization with a hierarchical system of power is the most widespread type of industrial organization both in capitalism and in socialism. In recent decades, however, there has been an increasing tendency to transform bureaucratic organizations in capitalist societies, in which, as in Western Europe, worker participation is becoming more and more prevalent. Neither Weber nor Marx anticipated this. With respect to socialism, on the other hand, it is still a long way to the realization of Marx's vision. In fact, we have to deal with the situation that Weber predicted. It is quite correct to call this system bureaucratic socialism. Yet one cannot be blind to various social forces (such as the workers of big enterprises), which are fighting to transform the present bureaucratic system into a consultative-cooperative or even democratic system.

Industrial Democracy as a Substitute for Political Democracy In the West the fight to protect workers' interests can be waged through the institutions of political democracy, first and foremost through democratic elections to parliament, through the influence of parliament on the government, through the influence of the government on business, and through the influence of trade unions on political parties. This indirect path has not always been satisfactory to the people employed in industry. They could not always rely on institutions of political democracy when their immediate interests were threatened. So at a certain moment they began to form trade unions, the institutionalization of which proceeded rapidly starting from the 1930s. Recently the idea of worker participation is becoming institutionalized, which further extends the influence of working teams on decision processes in the enterprise. One can say that the institutions of industrial democracy have complemented the institutions of political democracy in caring for immediate workers' interests. This complementation was a form of re-defining civil rights; in other words, it was based on more general principles of political democracy. In Poland something like the reverse took place. The institutions of industrial democracy led this process by acting as a substitute for institu-

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tions of political democracy. Since beforehand the worker-citizens had no other real possibilities of protecting their threatened workers' interests and no influence on the wider political process, they began to transform the enterprise and its institutions of industrial democracy into bodies with social and political goals, some of which they even partially achieved. This was a natural process because political institutions either were too rigid or did not exist in certain areas in which the worker-citizen was vitally interested. An example of this is the trade union "Solidarity", which at the beginning of the eighties rapidly transformed itself into a social movement that also had political ambitions. Is this substitution something desirable, though otherwise natural? In my opinion this is not theoretically desirable, though it may be a necessary phase in the passage to theoretically and practically better solutions. For many people, however, this was and still is something desirable (Morawski, 1986). They assume - to put it in a nutshell - that the enterprise and the economy are also political institutions. In other words, democracy in the society cannot be established without also establishing it in the enterprise. R.A. Dahl writes that if democracy is necessary in governing the state, it is also necessary in running the enterprise. (Dahl, 1984). This is a proposal of the far-reaching politisation of the enterprise, politisation from below: from the side of the workers. The assumption is that the enterprise will become a political institution not so much under the influence of certain circumstances, but because it ought to be such. When speaking of circumstances I have in mind two kinds of situations, those which cause politisation from below, as happened in 1980-1981, and those situations before 1980 and after December 13th, 1981, which caused politisation from above. Thus while I see some "justification" for politisation from below, I do not see any valid reasons to recognize the permanent politisation of the enterprise and institutions of industrial democracy as something desirable. For in my opinion the enterprise should strive to be as efficient as possible, leaving political goals to be achieved through other channels in the political system. This does not mean, however, that the enterprise should be stripped of the effective institutions of industrial democracy. On the contrary, they will be able to carry out their role better if certain important political issues are solved by political institutions, e.g., by the parliament. Paradoxically such a situation may allow for the expansion of direct democracy in the place of work, for some experiments hold out the hope of combining direct democracy and economic efficiency. But these solutions have not been applied on a wide scale in any country, with the exception of Yugoslavia. Yet it is debatable whether in that country the workers' council ensures full democracy and whether the enterprises are efficient (Rus, 1979). So the answer is negative.

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The political reforms under way in Poland may make the theory and practice of treating institutions of industrial democracy as a substitute for political democracy look outdated, but this is by no means a foregone conclusion. The defenders of the thesis of the necessity to continue this substitution can argue that the political reform in progress is only a reaction of the power system to the new waves of strikes that flared up industrial enterprises in 1988 and 1989 and not a manifestation of a deeper evolution of the system. In one way or another the course of events will not run along a straight line, but rather along two zigzag lines going in opposite directions. Since the time of the "round table", these lines have been changing their course. Will it become a common one? This is a question of theoretical and practical importance for the economic performance, the public feeling, and the political situation.

The Collapse of the Strategy of "Normalization" The strategy of normalization is usually based on a change in the leadership of the party and the state: the new leaders put forward a program of economic reform, carry out some postponed postulates in social policy, establish closer contacts, for a certain time, with the society or selected segments of it (e.g., with picked working teams of industrial enterprises), etc. The use of force is another method, but it has been used variably - usually at the beginning of events (still by the old team), but sometimes not until events have unfolded, as in 1981. With respect to industrial democracy, the authorities first consent to the initiatives of working teams to form workers' councils or trade unions and then subsequently withdraw this consent. This repertoire of actions has the aim of continuing control over the society, that is, of reproducing the existing power system. (Bielasiak, 1988) Among the unique features of the eighties in Poland, is the emergence of a clear tendency, on the part of the society, to oppose the above strategy of the leadership. This tendency has been given various names: restoring the subject character of the society, democratization, the civil society, realization of participatory aspirations, etc. Common to all of these terms is providing the society with various means for the self-protection of its group and individual interests. This would be a lower level. A higher one would be forms of self-organization for particular public goals, e.g., through the recognition of the opposition. W. Lamentowicz, who uses the concept of civil society to emphasize the independence of the new social structures from the state, notes the gradual nature of this process

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(Lamentowicz, 1989). I would add that the self-organization processes of the society are going in the direction of the formation of a nation-state, a situation in which the state emanates from a sovereign nation rather than being - to put it somewhat strongly - exclusively the state of the party. The collision of the strategy of normalization pursued by the authorities with the tendency of the society toward self-organization has resulted in contradictory events. The most spectacular of them were the establishment of the independent trade union "Solidarity", then its delegalization (after the imposition of martial law), followed by its re-legalization in 1989, allowing the opposition to take part in the elections to parliament. Questions are asked about the nature of these changes, the real reasons behind them, and whether they are irreversible. Overstated terms have often been used to describe the nature of these changes: on the one hand "revolution" or "self-limiting revolution" and on the other "make-believe reform", "cooptation to the system", etc. It is now generally agreed, however, that this process is "evolutionary", that it is a gradual transition to democracy from an autocratic system (some people would prefer to call it "totalitarian"). The reasons for these changes lie in the exhaustion of the old strategy of the authorities under pressure from the society and the working out by them of a new one consisting in actions that hitherto were unthinkable: free elections to the senate, recognition of the opposition as a constructive factor, etc. One might call this a collapse of the old strategy. Obviously one could argue that changes have also taken place "on the other side", that enable the leadership to treat the opposition differently, about which I say more below. Here I confine myself to noting those factors which have forced the authorities to recognize the old paradigm as defunct: -

first, the meagre effects of the economic reform. Though the economic system has changed in comparison with what it was before 1980, there are no signs yet that it has crossed the "critical threshold". The system is still more like the old one than some new one. Political reform became an initial condition of a real economic reform;

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second, the prolonged economic crisis, which is due not only to the meagre effects of the economic reform, but also to the crisis-generating nature of the economic structure, one that has not changed in the last ten years. So hopes of speeding up socioeconomic growth have been dashed;

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third, a renewed increase in social dissatisfaction on account of threats to the standard of living and disappointment with changes in the system, a public feeling that nurtured the underground forms of actions of "Solidarity";

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fourth, democratic tendencies in the USSR and some other socialist countries. This factor encouraged t h e m o r e venture-some members of the political leadership to search for bolder solutions.

It is on account of these factors that the old strategy of "normalization" does not bring normalization. The effort to destroy "Solidarity" failed, as did the plan to keep the official trade unions within the boundaries of the "transmission belt" model. Paradoxically one could argue that the failure to destroy "Solidarity" has turned out to be beneficial to the political leadership because it is thanks to "Solidarity" that a so-called constructive opposition has emerged. On the other hand the losses from the attempt to establish trade unions from above seem to be greater than the gains. The next section shows the collapse of the strategy of normalization, using the example of trade unions, and describes how they are becoming an independent structure, a part of which is called the civil society.

Trade Unions as Dependent and Independent Institutions There are two models of trade unions in the socialist system. In the first model, which can be called traditional, trade unions are restricted to the role of a "transmission belt" from the political authorities to the working teams, without any independent role in the defense of the long-range or immediate workers' interests. At best they are only an enlarged section of social welfare. In the second model, trade unions are independent and self-governed, an example of which became "Solidarity". Here the aspiration to be effective in the defense of the interests of the world of work may expand trade union activity to encompass the entire economic and political system, in effect turning trade unions into a social movement that is opposed to the power system in the name of the entire society. This movement emerged on a wave of social protest, especially the protest of the working teams of large industrial enterprises. As opposed to the situation in 1956, when the protest of working teams and the society resulted in the formation of workers' councils that had the aim of sharing in the management of industrial enterprises, this time the matter concerned the defense of the workers' interests in the widest sense, at least initially. In its ideological declarations "Solidarity" did not refer directly to socialism, though in fact - contrary to charges often made - it was not an antisocialist movement. It was rather a mixture of various ideological aspirations, which is not surprising considering the fact that it was a social

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movement and not a political party (Morawski, 1987). In this movement, the industrial enterprise and its independent trade unions reflected the problems of society at large even better than in 1956. Sometimes one even had the impression that these problems were more important to the working teams than their own problems. This time the use of industrial democracy as a substitute for political democracy, in order to achieve goals that elsewhere find outlets through normal political channels, took place under pressure from below, without any of the inspirations from above that were present in the workers' council movement in 1956. The putting into practice of the second model threatened the integrity of the existing power system, and so in order to prevent its breakup the authorities resorted to force by imposing martial law. In their justification for this drastic step they used two arguments: an "internal" one, namely, that forcing through the immediate workers' interests would threaten the long-range interests of the state and society, which would be thrown into chaos; and an "external" one, the danger of Soviet intervention. Obviously one can accept both arguments as partially valid, but more important was the threat to the power system as perceived by the political leadership. How they reacted to this situation can be illustrated by the example of the trade unions. Above all, the authorities wanted to abolish the independent trade union "Solidarity" and replace it with trade unions that would fit the first model. The leadership assumed that the new trade unions created from above would be dependent. Yet it must have been aware that since they would not be a counter-weight to the economic and political bureaucracy, they would be unable to prevent the surfacing of serious social tensions. The failure to ward off social tensions in the past, when trade unions according to the first model operated, showed that conflicts stemming from different interests cannot be eliminated, that they are something natural, and that the only sensible thing to do is to try to control them, which can be accomplished only through independent trade unions. For the industrial working teams the creation of new trade unions from above in the autumn of 1982 was a clear sign of their dependency, and so from the very beginning of the existence of these unions, the major problem has been the size of their membership, which for a long time remained small. Considering both the situation before 1980, when almost everybody belonged to the trade unions, and the situation in 1980-1981, when "Solidarity" (and other unions) also had a large-scale membership, this was something new. According to our studies, in April 1985 the percentage of union membership was 11.8, in December 1988 - 19.1. Behind these averages is the interesting fact that, as regards make-up, this new organization attracted chiefly the higher-up groups in the industrial enterprise: managers - 25.8 and 32.8 percent (for 1985 and 1988 respec-

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tively); white-collar workers - 14.4 and 20.2 percent; engineers and technicians - 9.9 and 13.0 percent; workers - 9.6 and 16.8 percent. More party than non-party members belonged to the new unions, and active supporters of the social and political system were overrepresented. For instance, on the whole the new members more rarely perceived differences of interests between the authorities and the society, between party and non party members, between superiors and subordinates, etc. The affiliations and attitudes of the average member of the new trade unions contrasted with the political attitudes of the rest of the working team. Being aware of these troubles of the new trade unions, the authorities did not object to a certain expansion of the formal-legal powers of these unions, assuming that this would increase their attractiveness and make their members more active. This had a rather limited effect, however. When asked to rank various factors that contribute to the success of trade unions, the crews mentioned expansion of formal-legal powers below support of the working team and political independence (see Table 1). Meanwhile the new trade unions continued to lack such support. The size of their membership increased, but slowly, and the working teams showed great indifference to their activity. The vast majority of those polled not only did not try to participate in the activity of this organization, which might be regarded as quite natural, but even did not expect the decisions of union organs to reflect their opinions (expressed by half of the respondents). The percentages of those satisfied with the activity of the unions were and are very low - 12.3 in 1985 and 8.9 in 1988. Half of the respondents believe that the new unions have scored no successes, and not many fewer even state that the interests of trade union organizers whether at the department level or higher - are different from or opposed to their own interests. This shows not so much indifference as outright hostility to this institution. One can easily surmise that such an attitude of working teams toward the trade unions affects the activity and role of the latter in the power system in the enterprise. In what does this activity consist and what is the position of the unions? Until 1980 power relations in the enterprise restricted the scope of activities of the trade unions. There was also much make-believe activity, with the unions being primarily a social welfare office for the working teams. For some union organizers this was a path to making a career. The position of the managing director was decisive in the enterprise. Right after him came the party organization, followed by the managerial staff, then the engineering and technical staff, and at the bottom of the hierarchy the trade unions and workers' council. Today the position of the managing director seems even stronger, but the position of the party has been weakened. The influence of the trade unions is still very slight (see Table 2), even though the head of the union organization

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belongs to the team that plays an important role in the decision making process in the enterprise. In addition to him and the managing director, the secretary of the party organization and the head of the workers' council are also members of this team. However, this body is not an effective channel for forcing through interests of more vital concern to the working team. So it is not surprising that, in the opinion of the respondents, the expectations of working teams are reflected better by the management of the enterprise or their immediate superiors than by the trade unions. This is not something exceptional, since we also find this in Western countries. In Poland, however, the institutions of industrial democracy do not play their role, which is not the case at best to such an extent, in the West. On the 12 matters about which we queried respondents, the percentages of positive responses for the trade unions range from 0.3 to 13.3 (respectively on the filling of positions and social welfare matters). Thus the successes of the trade unions at the enterprise level are not rated highly, though they are perceived. As regards the contribution of the unions to the needs of the economy and society, several additional factors determine how it is evaluated, first and foremost the progress of economic and political reforms. As long as the trade unions are perceived as co-operating with a political leadership that is failing to improve the economic and social situation of the country, the workers will continue to regard them with suspicion as an institution that has been created from above. From their creation until 1988 the official unions have been put at the bottom of lists of all the leading institutions of our political life (along with the party and the constabulary). They are also at the bottom of lists of those institutions that are regarded as concerned about the present and future interests of the country. This is hardly a flattering picture and is surely unjust to many a union organizer and union members in general, but I present it in order to show why the authorities were forced to abandon the transmission belt of trade unions. This is tantamount to a collapse of the traditional strategy of normalization and the necessity to allow trade union pluralism. In practice, this meant the relegalization of "Solidarity", a decision that the working teams regard as one of the most effective means for overcoming the crisis. Since the traditional way of re-establishing normality failed, the working teams do not believe that in acting in tandem with the political leadership the unions can be genuinely independent. That is why the slogans put forward in recent years by these unions telling of a relentless fight to better the working conditions and wages of workers, a fight which even weakened the government by forcing the resignation of the Messner cabinet, could not change these opinions. The demands of these unions have been called demagogic or populistic, and were all the more irritating

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to people because they often were in line with the need to check the declining standard of living of some segments of the society. At the same time these slogans seemed to pull the rug out from under the economic and political reform under way. The authorities decided to relegalize "Solidarity" not only under the pressure of new waves of strikes that flared up on account of the continuing crisis, but also because they believed that they would be able to control the fight of "Solidarity" on behalf of the workers' interests. In place of "licensed democracy" as part of the strategy of normalization, the authorities decided to gamble on "contractual democracy" as a new strategy negotiated between the political leadership and the opposition at the "round table". Based on the agreement reached there, the "controlled fight" of "Solidarity" could take the form that its leader, Lech Walesa, would oppose often justified wage demands of working teams in the name of the primary interests of the economy, state, and society. This means that "Solidarity" had worked out a more realistic programme than in 1980-1981, a large part of which was formulated in agreement with the authorities at the "round table". This programme might be carried out by excluding trade unions from processes of political democratization and political problems, from the enterprise and the economy. Even so the problems of working teams will not disappear from the agenda of "Solidarity" and the political leadership. These problems are becoming ever more acute, owing to the almost catastrophic economic situation. The hope is that this unprecedented challenge can be met by political institutions that have no parallel in real socialism: a legal opposition, democratic elections, control of the government by parliament, etc. Paradoxically the trade union "Solidarity" could score such an astonishing success only by giving up some of its traditional claims. Today, however, "Solidarity" is both a trade union and the embryo of a political party (The Citizens' Committee of "Solidarity"). On the other hand the official trade unions were doomed to defeat in spite of the fact that to a certain extent they tried to pattern themselves on the actions of "Solidarity" in 1980-1981, a tactic that was outdated by several years, which in the fast-moving events of Poland is an entire epoch. The collapse of the strategy of normalization is a victory not only of "Solidarity", but also of the reformatory wing of the political leadership. It is the beginning of a genuine coalition of proreformatory forces that is urgently needed to address economic problems, which are more complicated than political ones. Now we will look at the problem of workers' councils in the general context of these pressing economic problems.

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The Workers' Council and the Introduction of Market Mechanisms If "Solidarity" is in the process of splitting up into two trends - a political one with wider ambitions in this area and a trade union one that no longer supports excessive politisation of the enterprise and the economy - we might ask how this will affect the workers' council, an institution that by its nature focuses on production and other economic matters. This problem is all the more fascinating because economic reforms have the aim of speeding up the introduction of market mechanisms, which today is regarded as the best cure for the ailing socialist economy. The problem is, however, that as the experience of the United States and other countries shows, market mechanisms can turn out to be very inimical to workers' self-management. To be sure, some people argue that in the United States it is not so much the market that is hostile to workers' self-management as the spirit of capitalism (individualism and antiegalitarism). Others point out the possibility of a marriage of the market and democracy, citing the examples of Sweden, the land of the Basques, Israel, and the "market socialism" of Yugoslavia. Yet these examples hardly prove the economic superiority of solutions of this kind. Rather they suggest that such a marriage is undertaken not only for economic reasons. Such efforts have also been undertaken in Poland and had their sources in social protest. In Yugoslavia political factors were paramount: the desire to find an alternative system to the state-controlled model of the Soviet economy at the beginning of the fifties. In turn the Hungarian experiments, with the idea of joint management, seem to result chiefly from the pragmatic wish to deepen the economic reform. In the USSR not much has been done in this area in the practical sense, but several times already the question of industrial democracy has been recognized as important for ideological reasons. Thus an overall review of experiments in workers' self-management on a world-wide scale gives us no definite answer either way: for or against workers' self-management. This can only be decided by the specific configuration of economic, political, social and cultural factors in a given country. Let us look at the Polish case. The workers' council movement in 1956 (and later) was a spontaneous form of participation of working teams. On the one hand it was directed towards overcoming the deficiencies of the centralized system of planning and management and on the other, towards defending the workers' interests, which the bureaucratized trade unions, established according to the "transmission belt" model, were unable to do. The workers' council movement was headed by party activists who believed in the possibility of

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socialist renewal. From the very outset the party leadership was cool to more radical ideas of workers' self-management. For instance, Yugoslavian socialism was rejected both doctrinally and institutionally. The leadership soon recognized that the popular workers' councils were too serious rivals to other social and political institutions and in 1958 decided to turn them into one of the institutions of the "transmission belt" by incorporating them into the Confederation of Workers' Councils, in which party organizations would play the leading role. In addition to this, the workers' councils were put under the supervision of the trade unions. In a short time the activities of the workers' councils became ritualized, and thus neither the needs for participation nor the need to reform the economic system could be met. As time went on, the hope of the working teams and the activity of workers' council members faded. Though here and there the workers' councils (and CWCs) were able to correct partially the faulty decisions of the recentralizing system, they were unable to help either the working team or the plant in a real critical situation. At the end of the seventies the workers' councils were abolished. These processes were at first spontaneous and then more organized. The institutionalization of the workers' council movement was a form of "normalization", that is, a return to the old system through gradual ritualization without the use of force. It sufficed to incorporate the workers' councils into the unchanged institutional setting. Will this situation repeat itself today? As in the fifties, the workers' council movement in the eighties was inspired by the aspiration of working teams to have a share in management, but it was also a practical form of searching for new ways to reform the entire economy, with the emphasis on decentralization and social control of decisions. It was an institutionalization of the idea of creating intermediate bodies between the political leadership and the society, and so it was a carrying out of the same idea that motivated "Solidarity", except this time in management. In contrast to the bureaucratic reforms of the fifties, sixties, and seventies, the time had come for a workers' self-management reform. Nonetheless, with the imposition of martial law in 1981 and what followed it, it was evident that the authorities once again wanted to ritualize the movement and side-track it from its main goals. All of this notwithstanding, the movement has not died out, but is even picking up steam. Studies show that the number of workers' councils with an active role in decision making is increasing. New questions are appearing, however, not connected with the attitude of the authorities toward the workers' council movement, but with the reform processes themselves. For the new reform paradigm is geared not so much toward workers' self-management as toward introducing market mechanisms and privatisation. This may threaten the workers' self-man-

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agement movement. Such a fear is being expressed more and more often, though the decisions reached at the "round table" seem to rest on the assumption that social control can be reconciled with the market mechanism. The situation is complicated by threats to workers' self-management from the side of the authorities and from the side of the emerging market, though on both sides one can find both supporters and opponents of workers' self-management. Thus a description and analysis of this phenomenon must take account of cleavages in the leadership and the society and reject the one-sided picture of the leadership in opposition to the society. Certain elements of the power structure seem to be losing and others gaining importance. The position of the party-state bureaucracy seems to be losing ground. In the past it had its base in the monocentric power system (chiefly in the party and in control over the state-owned economy). Such a political leadership was not really interested in social control over its decisions, but today the power base has been extended to the opposition. The ideological stance of the leadership is not clear. Another element of the situation is the economic bureaucracy. With the success of the reform, this bureaucracy has the chance of being transformed into a group of professionals, of the type that in other countries is generally opposed to decision-sharing, but when incorporated into such a system (as in the land of the Basques), is able to find an outlet for its professional aspirations and to secure its vital interests. Finally, the interests of the lower-level members of the organization are even more diverse, allowing - abstractly speaking - fort different variants of the situation: 1) The working teams themselves want a reform that will institute genuine workers' self-management. This may mean the setting up of enterprises in which all of the important decisions are made by bodies elected by the working team or by those directly under its control. In such a case the management would be chosen directly by the workers' councils. 2) On the other hand if the working teams were not interested in social control over decision-making, there would be a choice between a continuation of bureaucratic management (based on decentralization, indirect centralization, or a controlled market) and a technocraticmarket model theoretically patterned on Western models. In fact, though, the latter would differ greatly from these models because enterprises would still be partially controlled by the state. 3) An intermediate possibility is one that assumes not so much workermanaged or technocratic models of the enterprise (and reform), but various patterns of workers participation, such as widely practiced in

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the West, namely, joint management of the enterprise in certain selected areas. The future will bring more and more examples of solutions in each of these three scenarios, for behind each of them stand particular social forces. This makes it almost a certainty that, theoretically at least, some sort of multisectorial economy will come into being. The above prognosis is too general, however, to be useful in trying to determine in which direction the structure of power in the Polish economy will shift in the near future, especially whether the workers' councils will succeed in transforming the state enterprise into a worker-managed one. Will the concentration of trade unions on non-political questions promote the politisation of the workers' councils or on the contrary, their self-limitation to joint management? What options will be supported by the engineering-technical and managerial executives that are coming to life in market conditions? It is more than likely that the market mechanism will bring about numerous configurations. Thus when we speak about participation, workers' self-management, and power in the economy we should separate people's needs and aspirations from the possibility of satisfying them. This problem looks different depending on which level of the social organization one looks at it from. From the level of society, surveys leave no doubt that the present power system is universally rejected. This is shown by the low percentages of respondents expressing confidence in the leading political institutions, criticism of inequalities of political influence, rejection of the practice of choosing people for managerial positions chiefly on the basis of political criteria (the nomenclature system), etc. Though there are numerous doubts as to the desired system, people seem to hold in common certain ideals on which a new system should be based. The respondents of our surveys most often mentioned freedom of speech and action. They ranked such an ideal society above a rich or even a just society. Further down the list they put a society of friendship and solidarity, personal security and social welfare. Thus it seems that people regard freedom as an initial condition for the realization of other ideals. The picture of the behaviours and attitudes of individuals contrasts greatly with the above image. For when we asked about the most important life matters, respondents put social participation, self-government, even political freedoms at the lower end of the list of things that people want to or struggle for in daily life. This concerns workers in particular, but the members of workers' councils and managers also attached greater importance to material questions, education and profession, family problems, having a circle of friends, etc. than to questions of

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participation or self-government. This does not mean that people do not have such aspirations and needs, but rather that they tend to be apathetic and passive only because in the past, outlets to participate actively in social life remained blocked. Thus the sources of apathy or frustration more than likely lie in the system than in individuals. In order to give a more precise answer to this question, we look at this problem at the level of the enterprise. To what degree does the situation there liberate people's activity? Let me report some empirical observations on this question. First, more than 40 percent of those surveyed stated that the workers' councils are able to take full advantage of the right of access to information, handing down opinions on the most important decisions in the enterprise, sharing in decisions, protesting, etc. (Table 3). However, the percentages of those who believe that the right to make decisions is observed in practice are lower: among workers, 23.7 percent, among managers, 40.6 percent. This means that the influence of the workers' council on the decisions and operations of the enterprise is perceived, but that this institution does not decide about the most important matters. The board of directors, middle-level managers, and even the engineeringtechnical staff have more influence than the workers' council. The position of the workers' council is much better in the eighties than in the seventies, however, and is constantly improving. Surveys of 353 enterprises, made by the Centre for the Study of Publish Opinion, estimate that workers' councils "with great influence" increased from 25.4 percent in 1985 to 43.9 percent in 1987.1 Our own studies show that the influence of the workers' council is especially evident in plans, economic-financial and production 1

I refer below to three studies made in the Department of Sociology of Work and Organizations of the Institute of Sociology of Warsaw University; the authors of the studies were Bogdan Cichomski and Witold Morawski: a) The study of April 1985 "Workers about their job, life, and society", which was part of an international a comparative study in which 10 countries participated; the co-ordinator was from Japan. The Polish part of the study was conducted in 8 large and small Warsaw enterprises of the electrical and electronics industry. The sample consisted of 1947 persons and covered workers, managers, administrative personnel, and the engineering-technical staff. b) The study on the turn of 1987 "Organizational practices in the industrial enterprise", which was conducted in the same 8 enterprises. It embraced two groups: managers at various levels - 554 persons, and members of workers' councils - 78 persons. c) The study "Work and society", which was done in December 1988 in 7 of the same 8 enterprises. It covered 1211 persons belonging to the following groups: managers, workers, administrative employees, and the engineeringtechnical staff.

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decisions, social welfare, distribution of profits (grants to various organizations, division of income into funds, individual awards, etc.). This influence is also felt in wages and bonuses, personnel policy, etc., though in these areas it is regarded as too small. Nonetheless, there is no doubt that management takes into consideration the opinion of the workers' council in making important decisions. Second, on the whole the working teams, the members of workers' councils, and even the managers are of the opinion that the powers of this body should be expanded (workers - 76.3 percent, managers - 66.4 percent), in spite of the fact that only every fourth manager and every fifth worker are satisfied with its present activity. The empirical facts confirm general confidence in this institution: 84.4 percent of the workers' council members and 73.5 percent of the managers believe that it represents the interests of most of the working teams. Third, workers often mention the passivity of the working teams and even of the members of the workers' council as a factor inhibiting the activity of this body. This factor is mentioned as often as the lack of independence of the enterprise, the negative attitudes of the managerial staff, the hostile actions of the political authorities, etc. Fourth, on the most important questions of the enterprise's operations, the members of the workers' council hardly differ from management, giving the impression that these two groups are almost interchangeable. Indeed, in both of them the percentage of PUWP membership is high (about half for members of workers' councils and one-third for their heads). Fifth, on the subject of the desirable types of ownership, the vast majority of respondents favours a multisectorial economy (Table 4). In such an economy there would be a large sector of worker-managed enterprises. Every third respondent holds this opinion, which has even more supporters among managers than among workers. Also, more or less every third respondent is in favour of a private economy. The others are divided into those who prefer centrally managed state enterprises and those who have no definite opinion. On the basis of the above facts, it is impossible to predict which of the three scenarios outlined above is more likely. One can only say with a certain amount of conviction that there is rather weak social support for the bureaucratic model, whose economic inefficiency is obvious to everybody. The other variants have support in the enterprise itself. Yet, even if we were able to determine the amount of this support, this would not be enough to forecast the direction of changes, because forces outside the enterprise and even outside the economy are even more important, namely, the society itself and the emerging system of power. Consequently, I only put forward some hypotheses.

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The first hypothesis. A s the political reforms proceed, the hitherto blocked aspirations for participation and self-government will strengthen actions in favour of social control in the part of working teams and members of workers' councils. This is highly likely. T h e prospect of a completely free market economy and privatisation of most of the national assets is still not acceptable to the society. Large groups of the society are in favour of price controls and against putting large enterprises and banks into private hands. Many people still expect the benefits of the so-called welfare state and for this reason prefer social control over state-owned property, all the more so as there are forces in the enterprise and outside of it working in this direction. T h e decisions made at the "round table" also followed this line. Perhaps this is the most realistic solution, though it is hard to say whether it is the most economically efficient one. In the face of the threat to the standard of living, on might expect that for a long time the working teams, trade unions, and workers' councils will want to exert direct control over the economy. The second hypothesis. T h e reform of state institutions, now under way, may satisfy the basic needs of citizens for political participation, and consequently the institutions of industrial democracy will no longer have to be a substitute for institutions of political democracy. Trade unions will then be able to return to the business of protecting the workers' interests. The position of the workers' councils in turn will depend on progress in introducing market mechanisms., the attitude of working teams, and the political stance of various social forces. In view of the strong support for a multisectorial economy, one may expect the mobilization of social forces in all possible directions, greater social control of the economy by setting up real worker-managed enterprises (which still do not exist in Poland), the privatisation of state-owned enterprises, and the establishment of enterprises jointly managed by the state and the workers, etc. Thus for a long time the situation will not be clear. The third hypothesis. T h e market reform will activate heretofore dormant forces, namely, managerial and engineering-technical staffs will want to gain as many possible benefits from the reform for themselves. Thus they will treat the institutions of industrial democracy as a necessary evil, while in fact working against wider social control over the enterprise and agreeing only to joint management. This model is prevalent in some Western countries, and in Poland has the greatest chances of becoming a reality in the long term. It ensures the realistic harmonization of democracy (in the form of participation), competency and efficiency.

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Table 1: Opinions of working teams in 1985 on ways of increasing the influence of trade unions (N-1472) Way suggested

Percentage of answers

1. Increase the participation of workers in management decisions

51.9

2. Increase the political independence of trade unions

46.7

3. Increase the powers of trade unions

40.3

4. Improve the training of trade union activists

17.4

5. Raise the qualifications of managers

14.6

6. Increase democracy in trade unions

14.0

7. Increase the membership of trade unions

8.7

8. Bring about an understanding between trade unions

6.6

Conclusion Though it is impossible to predict the direction of changes in the system of power in the Polish economy, it is very likely that the institutions of industrial democracy will play an important role in it, in view of the fact that state ownership makes widespread and rapid privatisation practically impossible. Moreover, the threat to the living standard of working teams will encourage them to retain control over the economy, which can be achieved directly in the enterprise and indirectly at the state level through elected officials. It is likely that both of these channels of control will be used, because of the traditional mistrust of the authorities on the part of workers and of the strong workers' councils and trade unions already existing in enterprises. Theses organs will want to make their presence felt in the economy. The state bureaucracy also is more in favour of gradual changes in the direction of greater social control over economic and political life than of a radical break with the past. On the other hand, large segments of the managerial and engineering-technical staffs may opt for more far-reaching changes, i.e., a completely free and not only a "controlled market" or even privatisation on a wide scale. Thus the question is whether a marriage of the market with democracy is possible. In Poland both a real market and democracy are necessary, but whether democracy coupled with the market is realistic in the long run is hardly

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Table 2: Opinions of managers and members of workers' councils in December 1988 on factors influencing the operations of the industrial enterprise Factors

Managers

N-554

Members of Workers' Councils N-78

1. Management

87.3

88.5

2. Co-operating enterprises (suppliers)

86.9

82.7

3. Middle-level managers

54.3

47.4

4. Engineering-technical staff

51.3

47.4

5. Functional ministries, e. g., finances

50.5

52.1

6. Customers, consumers

44.8

45.9

7. Founding organs (ministries and provincial governors)

41.2

60.3

8. Workers

39.3

39.7

9. The workers' council

37.2

28.6

10. Party organs on higher levels

29.9

35.6

11. The administration

27.7

24.7

12. The executive of the enterprise party organization

25.6

27.4

13. The union of enterprises

18.7

28.8

14. Municipal and regional authorities

9.2

8.6

15. Trade unions in the enterprise

9.2

10.5

16. Professional associations

5.7

8.0

guaranteed. This option currently has the strongest ideological support, but it is not so certain whether the forces behind this position are equally strong, especially in the long term. In the short term this is the most likely option.

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Table 3: Opinions of workers in December 1988 on the possibility of the worker's council exercising its rights (N-1211) Kind of right

Total

Mgrs.

Engtechn. staff

Admin.

Workers

1. The right of access to all information

45.4

69.4

37.9

39.9

43.7

2. The right to hand down opinions on the most important decisions

42.5

64.3

39.7

38.9

38.4

3. The right to protest

41.9

56.7

37.7

35.9

41.5

4. The right to take part in decisions

41.7

59.9

36.5

41.1

38.5

5. The right to disagree

40.4

56.6

37.1

36.5

37.8

6. The right to make decisions

28.3

44.5

23.1

30.2

25.0

Bibliography Bielasiak, Jack: 'Economic Reform Versus Political Normalization', in P. Marer & W. Siwinski (eds.), Creditworthiness and Reform in Poland. Western and Polish Perspectives, Indiana University Press, Bloomington, 1988. Dahl, R.A.: 'Democracy in the Workplace', Dissent, 31, No. 1 (Winter 1984). Giddens, Anthony: Sociology. Houndmills, Macmillan Education Ltd., 1986. Lamentowicz, Wojciech: 'Proces odrodzenia spoleczenstwa obywatelskiego (The Process of Rebirth of the Civil Society)', in Rola i funkcjonowania instytucji samorzadowych w systemie politycznym (The Role and Functioning of Institutions of Workers' Self-Management in the Political System), Folio 3, University of Warsaw, COMSNP & WWWP, Warsaw 1989. Morawski, Witold: 'Demokracja przemyslowa a polityka i gospodarka (Industrial Democracy, Politics and the Economy)', in W. Morawski (ed.), Gospodarka i spoleczenstwo. Wartosci i interesy zalog przemyslowych (Economy and Society. The Values and Interests of Industrial Crews). University of Warsaw, Institute of Sociology, Warsaw 1986.

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Table 4: Opinions in December 1988 on the desired types of ownership in Poland and in the enterprise in which the respondent himself would like to work (N-1211) Type of ownership

Total

Mgrs.

Engtechn. staff

Admin.

Workers

1. state-owned but centrally managed a) in Poland b) would like to work myself

18.9 3.9

22.1 6.1

23.2 4.2

25.6 3.5

13.3 3.1

2. state-owned but managed by the working teams a) in Poland b) would like to work myself

32.4 15.4

39.8 20.7

34.6 12.6

27.1 12.4

30.9 16.1

3. co-operative ownership a) in Poland b) would like to work myself

24.8 1.6

35.4 1.7

35.8 1.3

24.1 2.5

16.9 1.5

4. owned by the working teams a) in Poland b) would like to work myself

31.0 16.6

37.0 14.0

34.1 16.3

20.7 10.4

31.4 19.9

5. shareholder owned a) in Poland b) would like to work myself

25.4 8.0

35.9 15.6

37.8 11.7

22.2 7.0

17.8 4.2

6.8

11.6 no

11.4 data

6.4

3.4

7. private ownership a) in Poland b) would like to work myself

31.5 7.1

32.0 4.5

39.8 7.1

32.5 8.5

27.4 7.5

8. Polish-foreign ownership a) in Poland b) would like to work myself

35.1 18.5

33.7 18.4

38.2 15.1

34.0 20.9

34.6 19.2

9. Indifferent a) in Poland b) would like to work myself

9.7 19.2

12.2 16.6

12.2 22.6

9.9 22.4

7.8 17.6

6. municipal ownership a) in Poland b) would like to work myself

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Morawski, Witold: 'Self-Management and Economic Reform', in J. Koralewicz, I. Bialecki, & M. Watson (eds.), Crisis and Transition. Polish Society in the 1980s. Berg, Oxford 1987. Rus, Veljko: 'Limited Effects of Workers' Participation and Political Counter-Power', in Work and Power. The Liberation of Work and the Control of Political Power. London, Sage, 1979.

Transition to Free Market Economy and Romania in the Year 2000. A Manpower Prospective Approach Oscar Hoffman

Romania is going through a broad transition which has been triggered by the revolutionary movement of December 1989. To analyze its nature, content and consequences means to carry on long debates which draw many socio-political forces of the country. The lack of experience in this field, even on the international level, renders the practical development as well as the theoretical approach quite difficult: for the first time in history, an entire social system has collapsed and there is a concern about remaking some viable and efficient structures of societal existence as well as rebuilding a capitalist system in the context of a high economic growth in the world which induces a particular competitiveness. A transition has to be made in such a manner that it induces new mechanisms and development levers able to provide a system of factors critical for a programmatic promotion and a highly civilized level. One of these factors, probably the most important one, which will induce the Romanian society's growth, is the training of a manpower able to respond to the completely new requirements of the free market economy. From now on, the prospective training fo people becomes a cultural dimension of the transition and implies measures to be taken, over different periods of time, with regard to a series of explicitly and well formulated basic options concerning the reachable goals and desired purposes which will define our future. Unfortunately, the Romanian society of today is too much concerned with technical, economic and organizational matters and less interested in the basic issue of the transition to free market, which is to generate and train social actors able to carry out the planned measures. This study aims at outlining some of the major concerns pertinent to the prospective behaviours within the future socio-professional structures. We are taking into account some basic reasons, namely: 1) The socio-professional structure represents the way society allots a socially available time capital to fulfil humane requirements. It is therefore necessary to know the options society will make, over different periods of time, with regard to the means of fulfilling the needs of different groups of people, in order to provide manpower

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training. The main aspects of the theoretical analysis we have to make and of the political decisions we have to take within this transition period are the following: a) the assessment, selection and classification of different needs under the limited resources Romania possesses; b) the choice, under some social alternatives, of technological development directions and, as a consequence, of job and required staff planning; c) defining the possible rates of economic growth and setting up the percentages, assigned from the national income for different kinds of human agencies. 2) The change of the socio-professional structure must not be conceived as a consequence of technological, economic and social development only, but in the first place, as a major and operative factor of development inducement and orientation. Manpower prospective training is therefore, under modern circumstances, a basic factor in the policy of highly dynamic and societally efficient countries. Manpower prospective training implies a systemic overview of production, work and society. Hence we have set up a profession typology including: a) break-off professions which prepare and orient changes and also generate top technology (scientific and technological research and creation as well as education); b) modernization professions which take over the inventions originated on the previous level and provide for their societal spreading, i.e. the social renewal (production and top technology institutions). c) support professions concerning the users of new technologies (including also the training of non-professional users, i.e. those who use modern technology for private, domestic, public purposes); d) obsolete professions which represent those jobs being about to be limited or to be abandoned. 3) Taking into account the requirement of manpower prospective training, education becomes a fundamental factor of change. Transition must build its footing able to provide an efficient use of society change levers. Starting from these theoretical approaches, we can study the manpower prospective training in the short term (year 2000), as well as in the long term (year 2020).

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Manpower Present Aspects in Romania's Transition Process In Romania the main component of transition is the passage to a democratic society featuring a social capitalist structure and a modern and competitive free market economy, under the circumstances of a severe crisis: underdevelopment, the collapse of an old social mechanism of production, the lack of funds, of natural resources and of the technological conditions required by reorganization process. In the background of this crisis, the society has to provide for changes in the human interaction mechanisms at low and reasonable social costs. Here lie the decisive manpower challenges of urgent unpredicted factors which generate a change in human behaviours at all levels. The collapse of the former politically totalitarian system of economy management triggered a series of severe, socially pathological phenomena which induced a negatively marked feed-back mechanism-, the lack of products and the inefficiency of the production system induce a quick debasement of work relations and quality (robberies, absences, in observance of production and technological discipline as well as few and low-quality products) which, in turn brings about drawbacks, inefficiency, and so on. The appearance of a trade union movement based on claims for workers like work-hour reduction, wage increase, new economic profits) cannot be sufficiently connected to the direct and positive involvement of these new trade unions in fulfilling some present requirements to provide the enterprise with efficient measures to orient manpower towards new fields and appointments through a staff reprofessionalization able to make mobility more favourable to people. The present measures, connected with the work relations and quality in the transition background, consist of providing the change of production mechanisms to the free market economy on two complementary levels: on the one hand, social measures are to be taken (high work protection, healthy work conditions, democratic relations within the social production process, suitable moral behaviours within the working process, increase of people's satisfaction with work, improvement of payment system for obviating some of the unjust measures of the former régime); on the other hand, requalification and professional reconversion courses are to be organized. These courses will have immediate consequences upon manpower's flexibility, as well as upon the reduction of unemployment. Now and in the next months, many enterprises are to be re-shaped or even closed. This will induce professional change on a large scale; hundreds and hundreds and thousands of people who will not be able to

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get through the new appointment requirements. Therefore the unemployment rate could increase severely, (there are over 100.000 unemployed workers at this moment) as well as the manpower requirement. However, nobody knows yet these new requirements and there are no criteria of appointment planning. The professional structure of the present manpower is based on the former economy requirements, featuring a severe technological backwardness. Transition to new technological levels do not only mean a decision but it is also induced by the available funds as well as the cooperation of foreign capital. In this field we are meeting the second "sore point" of the transition: drawing foreign investors is by far more difficult than it has been assessed. Therefore the process of professional reorganization - as means and rates of change - is hardly predictable. As a consequence, the reconversion of specialists towards new fields has a reduced substantiation. Provisions could be therefore made about the new sources of social troubles to be generated in the near future. Reducing them to a minimum means to act in common and carry on a dialogue between the power on the one hand, and the trade unions, the parties and the scientific community mainly, on the other hand.

Medium and Long Term Concerns Prospecting the possible and desired evolution of professional structures in the medium and the long terms means raising other issues and generating new doubts. The table below shows the dynamics of various medium (year 2000) and long term (year 2020) age groups. The maximum work-age limit being 65 years old for men and the minimum one 16, it can be seen that a number of 39 age groups - those who will be between 26 and 65 years old and who start working after their 10-form high-school graduation - or a number of 32 age groups high-educated specialists between 23 and 65 years old - out of the 49 age groups of the year 2000 are already working. As for the year 2020, there are 19 and 12 age groups respectively. To summarize, those who will be the 2000's manpower are already employed in various institutions. It means that the future socio-professional structures will be mainly generated by professional mobility and reconversion. At the same time, an important part of the future highly educated specialists are attending school and university courses, those who are over 13 years old. In 2020 the professional reconversion share will be reduced by far - 19 for workers and 12 for intellectuals - but 17 are already under education training - between 6 and 23 years old.

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Table 1 year

1990

age

65 60 55 50 45 40 35 30 25 23 18 16 15 10 8 6 -

-

2000

2020

-

—

—

—

65 60 55 50 45 40 35 33 28 26 25 20 18 16 15 3 -

— — —

—

65 60 55 53 48 46 45 40 38 36 35 23 20 18

A first conclusion can be drawn: new professional training or new ways of practising already existing professions is the present day's task. The market economy implies various kinds of tasks we do not have qualified people for yet: management, highly competitive enterprises, managers and entrepreneurs, specialists in commercial advertising and product offer, jurists dealing with private property and product exchange, market relation economists, sociologists and psychologists trained for work relations, ecology-trained engineers. Secondly, a system of professions must be provided (scientific and technological research and creation, production and use of technological means) critical for bringing in top technologies which will support the modernization of our economy: computer technology, bio-technology, nuclear and laser technology, fine mechanics, etc. Thirdly, all professions must be prepared from the point of view of the new work behaviours required by the free market economy: the inventive enterprising mind, the courage to take risks and the ability to avoid them practically, conformity with everything that is new and to change, intuition, broad knowledge and high specialization, etc. It is therefore necessary to adapt the training purposes: a new way of specialization which

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would allow for and even stimulate the professional mobility with regard to the basic changes of economic and technological substructures. From now on we have to tackle and start solving our prospective problems, but here lie the very troubles. It is therefore important to make prospective studies and to take practical measures under the circumstances of a low-knowledge level, but a high uncertainty feeling. We know only partly our economic and technological potential, and we should have definite aims concerning the changes we wish to implement into the economic and technological system. We know little about the way and extent to which the psycho-personal and social risks and requirements of the free market economy are received and accepted. Therefore we should take radical and immediate measures to arrive at this kind of economy. We also have little knowledge about the desired and feasible configuration of the future economic and technological structures, but we must train the new professions and abilities required in our society in a serious way and in a broad perspective. We have to radically and urgently change the technological economy system, but there is a feeling of great uncertainty about the foreign capital share in the modernization of production and the remaking of technology. We have to store up and concentrate huge internal funds for new technology imports, but again there is much uncertainty felt about the ability of our economy to make these payments and about the external market prices, due to the oil impact. Under these circumstances the contribution of sociology could be of major importance.

Effects of Workers' Profit Sharing Revisited: Some Methodological and Substantive Reflections Jaroslav Vanek

In spring 1989 I have submitted to a symposium organised by the Czechoslovak Academy of Sciences my paper entitled Workers' Profit Participation, Unemployment and the Keynesian Equilibrium written and published some 23 years ago. I did so because the paper deals with a subject which recently gained prominence in the West and which may become significant in reforms now under consideration or in progress in the Eastern socialist countries. The 12 formal conclusions are reproduced below: the paper itself can-be read in the original document or in a subsequent printing the Advances in Economic Analysis. (Vanek, 1965 and 1987) The conclusions are that workers' profit participation: 1. will necessarily lead to a higher level of employment in the economy; 2. will necessarily lead to a higher gross national product; 3. will necessarily lead to lower prices; 4. will necessarily lead to an expansion of the volume of exports; 5. may or may not lead to a contraction of the volume of imports; 6. must lead to domestic import substitution; 7. will probably improve the balance of payments; 8. will necessarily reduce corporate profits after taxes and after labourshare disbursements; 9. will either improve or. worsen, ceteris paribus, the budgetary balance (both outcomes' being equally likely); 10. will necessarily increase the share of labour in the total GNP. 11. If the monetary authorities pursue a policy of price stability, then conclusions 1 and 2. above hold but the corresponding effects will be strengthened, exports will remain unchanged, the balance of payments on current account will deteriorate, and net corporate profits will not change; conclusions 9 and 10 above remain unchanged. 12. If only a part of the productive sector of the economy adheres to profit sharing the above conclusions obtain, the degree of the different effects varying with the relative size of the profit-sharing sector; the output of the latter will expand a good deal while the other (nonprofit-sharing) sector will contract.

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Not to repeat the old material, I focused in my actual presentation on what I feel is an important extension which evolved in my reflections over the past 23 years. A seed of these reflections is actually contained in the last sentence of the original paper: "... there is a strong presumption that profit participation in itself would improve the quality and efficiency of labor and make workers more concerned 'about the success of their enterprise."...

I am convinced that the essence which lies behind this statement is far more important than the entire main argument of the earlier article, not only in the general context of economic analysis but also and especially from the point of view of the ongoing reforms and attempts at restoration of the socialist economies. The rest of this paper is intended to substantiate this thesis. Indeed the incentive effects of profit sharing and even more so those of full economic democracy including profit [income] sharing by workers are enormous compared with effects of profit sharing on Keynesian macroeconomic equilibrium as discussed in my original paper. And in turn - it is significant to note - the Keynesian effects are far more important than the Paretoan or "marginalist" general equilibrium effects when measured in actual real terms or contexts. The three types of effects: 1. Incentive-cum-selfmanagement, 2. Keynesian, and 3. Second-best-Pareto-marginalist are like elephants, rabbits and fleas when it comes to orders of magnitude. And it is the third type, which I would like to suggest for the benefit of my hosts and scientific friends in the socialist countries, preoccupies most my scientific friends [and foes] in western countries. It is also the third type which I fear, like the Western advanced technology, the Eastern economists are in danger of adopting indiscriminately to the detriment of other types of scientific endeavour. Because a full and careful substantiation of my elephant-rabbit-flea thesis would necessitate an enormous volume, I will proceed with some practical illustrations in the context of the real world and a more careful theoretical analysis - where appropriate, leaving it to the reader, as in all endeavours of true dialogue and participation, to form his or her final opinion. We may begin with the fleas: but fleas in the context of one of the most significant portions of the world economy, the European Common Market. In a most 'tiichtig!' doctoral dissertation of one thousand pages, a student of mine, Arnold Kroner, a native of Stribro in Western Bohemia, 'dissected' the quantitative second-best effects of formation of the EEC. He used the 'well known index proposed for such a purpose by Professor Meade, and found that the gross gain, for E E C was of the order of 1/3 of a percent of aggregate G N P and the net effect, after discounting the losses

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by the rest of the world, less than 1/10 of a percent. The index of course, disregards that the losses may be on the parts of the poorest and the gains on the part of the rich, a consideration which may be more of the rabbit dimension than the aggregate result disregarding income distribution. The Keynesian rabbits are not only much larger than the fleas but also they are more sympathetic. Not only do they bear on entire percentages of GNP, once in history having even gone into two-digit figures in the Great depression, but the percentages concern fully employed versus unemployed people, and that is far graver a matter than everyone losing 1/3 of a percent via a Hicks-Slutsky income effect on indifference maps which [if we want to be honest with ourselves] do not even exist. The theoretical underpinings of the fleas and the rabbits seem to be quite obvious: positions near the contract curve, on a national box diagram, corresponding to, say, a 10 percent average price distortion [like the average pre-union tariff of the EEC] will contribute only very little to aggregate social welfare. Indeed, distortions can be larger in the case of monopoly but these normally do not affect the majority of firms or industries. The Keynesian' [rabbit] effects are self-evident, as indicated above, on statistical data from various situations of cyclical depressions, reaching to whole percentages of national product. The effects of profit sharing discussed in my original paper [see the 12 conclusions above] are essentially related to a marginal productivity-cum-price response, like the flea effects, but can be much larger precisely because the adjustment assumes the more realistic form of adjustment in employment. Let us now turn more thoroughly to the elephants or the, incentive effects. The key variable here can be denoted by the term effort. The first broad observation can be made that there are at least three major components of that effort [E], E-l: duration of work in hours per day, E-2: intensity of work, and E-3: quality of product. As everybody knows from observation or introspection, the possible realistic ranges for each of those may well be between 50 and 100 percent - i.e. compounded reaching into hundreds of percent. Empirical evidence on the elephants wherever these are correctly observed in an undistorted manner, confirms this: In Mondragon, Spain the best case of worker cooperatives in the west, profitability is double that of similar capitalist firms. Out of some hundred large coops started there in the past twenty years, only one failed; this compares to a mortality of new capitalist firms in the first two years reaching well over fifty percent. The 900 or so worker controlled ESOPs in the United States not only are for the most part resurrected bankrupt capitalist firms but they outcompete similar capitalist firms ... "in profitability, growth of productivity, of sales per employee and number of new

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jobs created"... (Logue, 1986) As proven in US courts [for reasons of tax liability] the plywood cooperatives in this country are 20 to 60 percent more productive than their capitalist peers; in addition they tend to produce products of higher quality. (Bernstein, 1974) A survey of all construction firms in France, both cooperative and capitalistic shows a nearly 100 percent higher productivity of capital (value added per unit of fixed assets), 5 per cent higher productivity of labor and about 20 per cent more efficient utilisation of intermediate inputs, i.e. energy, materials etc. for intermediate size cooperative firms. The results are equally impressive for small coops (up to 10 'workers) and somewhat less pronounced for large firms of 100 to 1000 workers. (Defourny, 1986) It must be noted that these results are based on averages taken over total populations of a large number of firms [not samples] and thus the orders of magnitude for individual firms can show even larger differences. The case of the incentives and related effects deserves some more careful theoretical exposition; not only for its own sake but also because such an exposition permits a simple comparison of three typical cases: 1. the capitalistic firm, 2. the socialist firm under central planning and 3. the self managed cooperative, or other democratic firm. The essentials are shown in Figure 1. The variable effort - E - with its three components as explained above is measured from 0-1, to the left, towards 0-2. From that last point we measure the income per worker, y, in the upward direction. The diagram reflects a "representative" or "average" worker in a typical firm of any size, and in any economic system. The curve CP is a conventional production or income possibility curve for the average worker. It starts at point C at a negative income because with zero effort some fixed costs per worker must be paid, and as effort increases, the net income per worker reaches positive values, with some diminishing returns as we move towards P; but that last characteristic is not essential for our analysis. It may be most convenient to look first at the typical situation of a worker in a capitalistic corporation, working under a union contract or at a wage determined by a competitive labor market. The assumed wage is represented by the point, y-1 in the diagram. At that wage the incomeeffort combinations open to the worker are represented by the contour y-1, A, E-cap, where the E-cap level of effort is enforced by the capitalist employer as the minimum acceptable effort, as stated in the collective contract or otherwise. Obviously, the worker will settle at point A where he maximises his welfare. We might have drawn an indifference map to show this, but we prefer not to do so because this is neither necessary for our argument, nor do any psychological or other studies confirm the existence of such maps. The distance AA' measures the excess profit per worker - additional to the fixed costs CO-1 - if such profits exist.

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We may now turn to the socialist centrally planned situation and. present it as Variations on the theme of the cement mixer of Liblice - which stood there, unused and unattended on a construction site during the whole week, of the conference, with no worker in sight. I realise that my referring to this might appear unkind to our hosts, but since our common objective is to assist improvement of economic conditions anywhere in the world, and since even Mr. Gorbachev tells us that the socialist workers of the Soviet Union have forgotten how to work, I take the liberty to make the point using the present analysis. Although the income level may be significantly less than in General Motors, the situation at hand can be described also with reference to point y-1 and the line leading to the right from it. The difference in the socialist country would seem to be the absence of enforcement of the minimum acceptable effort as in the case of point A for the capitalist corporation. On the limit, in an extreme situation where there were no enforcement of performance, the worker might settle at the point B where he/she-is indifferent between work and leisure. If indifference curves were used, one such curve would be horizontal at B. The extreme point B can thus be thought of as the theoretical definition of "work as play" or labor-ludus [paraphrasing the scola-ludus of Comenius of good memory]. The real point with reduced work incentive and little enforcement then will be somewhere between A and B. Because at B or some other point of "less-than capitalist work-morale" the wage y-1 is not produced by the firm, often subsidies must be given to the firm, which shift the "subjective" production locus of the firm from CP to a position such as 0-1,P" and this covers up, so to speak, the inherent inefficiency of the situation. On the national plane of course this adds up to average national wages, far lower, than the level y-1 indicated for a typical capitalist corporation. It would

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seem that this difference, hinging on the far stricter enforcement at point A, explains the apparent infatuation of socialist economists and politicians in recent years with capitalist work organisation. My contention, and the most significant practical thesis of this paper is that the third solution, based on true and fully implemented worker and firm democracy and self-management, can perform much better than either of the other two alternatives, and do so through spontaneous incentives and structural differences instead of through coercion, or profit maximisation. First of all, the characteristic worker, starting from the capitalistic solution at A will be able to move, all fixed costs being paid already, to a point of greater or lesser effort than E-cap, but certainly with a higher level of welfare, somewhere on the locus CP. This he can do through his right and exercise of self-management. Equally important, structural changes will occur, well documented from many studies of self-managing cooperatives, having to do with better utilisation of materials and energy [recall the result for the French construction coops] and far lower need for supervisory and other white-collar personnel. In one of the workers' enterprises [even in capitalist America which survived a capitalist bankruptcy, the ratio of blue collar to white collar workers changed from 3.5/1 to 9/1. One of the administrators of that workers' firm is quoted as saying "... you do not make money in offices..." (Logue, 1986) In terms of our diagram all this is translated by saying that the structural changes [as distinct from the incentive effects] shift the entire production locus from CP to CP' and this leads then to points such as P'/sm or P'Vsm. In my view it is such points in the realm of the elephants that, the former socialist countries should seek, rather than being concerned with fleas, trying to imitate the realm where fleas are preferred to elephants because the king fears much less to be stepped on by the former than by the latter. In addition, the former socialist countries can remain faithful in this way to true principles which cannot be other than economic democracy. These conclusions are based on strictly economic considerations of direct economic effects. If externalities and broad ecological effects are introduced the case for the analytical world of the elephants and its implicit policy recommendations is further strengthened and the world of the fleas becomes an "intersecting set" with the world of the ostrich who adopted the posture of après moi le déluge. While the explanation of these theses would take us well-beyond the scope of this paper, I have tried to substantiate them, also intended for my East-European friends and former countrymen, in another paper published in the Economic Analysis.

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Bibliography Bernstein, Paul: 'Run Your Own Business', Working Papers, Summer 1974: 24-34. Defourny, Jacques: 'Une analyse financière comparée des coopératives de travailleurs et des entreprises capitalistes in France', Annals of Public and Cooperative Economy, March 1986: 55-78. Logue, John: 'When Workers Take Stock', The Progressive, December ,1986: 28-32. Vanek, Jaroslav: 'Workers' Profit Participation, Unemployment, and the Keynesian Equilibrium', in Jones & Svejnar (eds.), Advances in the Economic Analysis of Participatory and Labor-Managed Firms, Vol. 2. Greenwich/Conn., JAI Press, 1987. Vanek, Jaroslav: 'Beware of the Yeast of the Pharisees', Economic Analysis and Workers' Self-management, 1990. Vanek, Jaroslav: 'Workers' Profit Participation, Unemployment, and the Keynesian Equilibrium', Weltwirtschaftliches Archiv, 1965 No. 2:206-214.

Perspectives of Self-Government and De-Alienation in Business in the USSR Natalia Chernina

It is a fact that self-government in business had been absent in the USSR since the abolition of NEP in the late 1920s. It had not reappeared until the 1980s when various business experiments, such as attempts at cost-benefit system and subcontracting ways of work organization (intra-business partnership) in brigades, teams etc., began to be carried out. Experience in self-government has been acquired by workers only in subcontracting teams, through their participation in different business matters and, first and foremost, in decisions on planned targets (activity I) as well as personnel policy in hiring and dismissing workers (activity II) and, certainly, in distribution, i.e., handling material and non-material incentives (activity III). The analysis of workers' self-ratings has shown the following. First, concerning activity I, no noticeable difference has been found between members and non-members of subcontracting units: "Yes, in decisions on planning targets my opinion is always taken into consideration" - this was the answer of 5 to 16 percent in both groups. It can be, therefore, concluded that no experience of collective business activity is acquired by most members of subcontracting collectives. Second, a slightly higher workers' participation can be noticed in activity II, although every one out of four workers said that it was "none of his business". And, finally, only in activity III a considerable part of the subcontracting members participate - 38 percent, and only 10 percent of them answered that it was "none of their business". So the general attitude of the workers is that their participation is more needed in the sphere of distribution and less in the sphere of production. Their demands for more powers to be given to brigades and workshops concern only the distribution of goods. A parallel to this can be found in the activity of our trade unions, which for a long time have been mostly concerned with distribution and avoided to interfere into the production sphere, leaving it to specialists and management. Today this situation begins to change However, in the survey we 1

In 1987, for example, the trade unions stopped the operation in 304 enterprises and in 5,000 workshops for violation of safety rules. See M. Beglai: 'Socio-economic rights: are the safeguards weakened?', Novoye Vremia, December, 1988.

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conducted in March 1989 in 59 business and other organizations of Novosibirsk, the specialists have indicated that trade unions do not support the workers in their conflicts with management on, for instant, the introduction of new organizational forms better suited to the interests of various categories of workers (39 percent of respondents) and on the improvement of working conditions or innovative suggestions (30 percent of respondents). According to the answers, this situation is typical of about a third of the surveyed collectives. In this survey the specialists served also as experts for their enterprises, and it is interesting to analyze according to their answers what groups help the self-government to grow and to what degree. We shall cite only the polar viewpoints. "Actively help" refers mostly to the Party committee and workers themselves (the answer of 36 to 41 percent of experts), much less help is received from trade unions and the least of all from managers and chief specialists (reported only by 17 to 19 percent of the experts). Just this latter group is noted for the opposite position - "resist the self-government practice" (29 percent of experts). The dominant trend among managers is to encourage only the follower virtues in workers, it is clearly seen in the answers of 385 managers of Novosibirsk plants (1988). Most managers give primacy to workers' participation in decisions relating to production matters (expansion of service zones, growth of productivity etc.) and the least important is, according to them, workers' participation in the improvement of working conditions, the introduction of pleasant working hours, hiring policy, awards, distribution of dwellings and other goods, it means that they exclude the need for workers' opinion exactly in those aspects of their working life where they would like to make their own choice of the alternative most fitting their ideas of social justice. Quite a different hierarchy of aspirations has been revealed in the workers' answers on the same industrial plants of Novosibirsk (1988). Yes, they agree to the importance of their participation in solving problems of production. Not less important, however, is, according to them, their participation in plant managerial decisions, in the planning and organization of production, in the control of the managers' actions and self-government. The workers are striving for perestroika to be present in their daily life, in their initiatives. In this matter, therefore, they are more advanced than their bosses. But it is till unknown whether this attitude reflects their value orientations and steadily determines their behaviours or else, whether it is an emotional response to the overall increase in democracy around them (by demonstrative occasional behaviour)? According to our data of 1988, the values concerning material goods were not preferred, but rather those relating to team morale, friendly relations with work mates, as well as to pleasant working hours, guar-

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antied days off, which indicates a high significance attached to such values as family, good health, human relations; on the third rank were values associated with high wages. Unfortunately, in the list of rated aspects of the daily working life, the last rank is occupied by the "chance to influence the decisions concerning the enterprise". We have undertaken an attempt to evaluate, through the expert method, the depth to which some of the stereotypes concerning the sphere of work have penetrated the workers' minds. The most common, both among workers and specialists, is the value of job security. It is quite natural that the spread of the opposite value "entrepreneurship" is very low among workers and specialists. In this respect, most common is the value of "freedom of speech and actions". The expert poll yields some ground for optimism: 64 percent of the experts believe that this value is spread actually among all or, at least, among half of the specialists, and with respect to the workers this opinion was expressed by 49 percent of the experts. These local data reflect overall shifts in the public mind. Thus, according to the data of the national poll of different categories of workers (1986), 79 percent of the surveyed on the average think that social justice in working relations implies that "each can earn as much as he is able to" 2. At the same time, equalization attitudes are far from being overcome. 63 percent of the experts in our small-size survey think that either all or half the workers are interpreting social justice as equal pays and only few of them see it as equal chances for work career. Equalization attitudes are not only a barrier to high performance motivation, which is especially painful under self-government conditions, but to the establishment of an innovative climate in the work setting too. Among the negative features reported by the workers are the negative attitudes towards better performers. The same was indicated by the experts who emphasized that innovators could not expect much support from their work fellow; rather, they can expect troubles because the innovative undermines the much valued job stability. In our opinion, however, it is the presence of innovators in a collective which can provide for a certain support for the increase of self-government. Therefore, while initially, at the brigade stage, self-government was marked by a rather limited workers' participation, today we associate its development with the elections and functioning of work collective councils, which are a form of representative democracy. On the surveyed plants (1988), only 13 percent of the workers are sure that the members of work collective councils are really informed about the state of affairs and, therefore, able to assume the responsibility of decision making; at the same time at least a quarter of the surveyed think that the workers in the 2

Sheregi F.: 'Barometer of perestroika', Moscow News, 1989, No. 11.

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council will, as always, support only the view of the specialists and managers. In general, the indifference to business problems is a sign of the workers' alienation. In the above mentioned survey, the specialists made tentative forecasts of workers' de-alienation for the coming 3 to 5 years (all surveyed plants are state-owned): 73 percent believe that passivity will decrease in production matters, but only 30 to 32 percent extend this decrease to estrangement from the collective and to the negative attitudes towards better performers. The rest of the specialists think that these signs of alienation will not only persist but even increase. In our opinion, alienation can be fought mostly through changes in the relations of ownership of the type, that are being achieved in non-conventional businesses - leaseholds, work on contracts etc. The present day policy of the USSR is towards the development of lease forms not only in agriculture but in other branches as well. There are some attempts to introduce lease relations in some small-size business units and to transform some "bottle-neck" workshops into subcontracting enterprises. According to the experts' appraisal, the motives for high performance in leasehold collectives can be clarified (in an order of decreasing significance) in this way: to earn much money; to have better work results; to improve the situation of the collective; to get a high esteem from the team mates; etc. It is also expected that in non-conventional business, people's attitudes and behaviour will change towards their better self-actualization, not only as performers (high competence, productivity etc.) but also as personalities (higher social involvement, creativity, initiative) and as business participants (higher work commitment, responsibility, frugality, better knowledge of labour legislation etc.). Now how much de-alienation has been achieved in leasehold collectives? Their managers first name more control in determining production plans, then control of resources and participation in management 3. Therefore, the lease form promotes such a function of self-government which Prof J. Kulpinska (Poland) refers to as "opposition to the central economic and political command". But another self-government function, which is "to protect the workers' interests" has been little realized: only 10 percent of the leasehold managers reported higher possibilities to improve workers' dwelling and other living conditions. At the same time, it is evident that the small-size lease firm with its economic independence and "flattened" pyramid of supervision can best fit the needs of a wide range of workers. Sometimes cooperatives are attached to such firms, and this combination permits to suit different 3

Rutgeiser V.M. & D. Azarkh: 'Leaseholds and costbenefit system in non-farming', Informational Bulletin of the National Centre of Public Opinion Studies, 1989/2.

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attitudes: toward more intensive work for higher earnings and toward income security, as well as toward higher self-actualization and creativity. Moreover, this combination of two forms of employment has two positive features: first, it guarantees, to a certain extent, social security (not provided for by cooperatives as far) and, second, it helps the members of cooperative boards to benefit from this experience by acquiring real knowledge in organising foreign economic relations. Therefore, the non-conventional patterns of employment, including cooperatives, provide for a plurality of worklife styles within socialism and for choice of job life. What they now most need is the removal of all limitations (legal aspects), openness and accessibility; the presence and availability of different resources (credits, production means, market, rent of equipment, transport and buildings); opportunities open to various demographic and social groups of population to choose the types of work life according to their individual preferences, interests and circumstances.

VI. Instead of a Conclusion

Dismantling the State and Creating Civil Society Severyn T. Bruyn

The people in Eastern Europe have been taking steps to privatize government enterprises and move back into a market economy that will create greater measures of freedom and productivity but the markets they are creating lead again toward the injustices they once rejected as socialists. These new steps show signs of leading toward a better society than they had in the former socialist state but the future also augurs again a need to solve the problems of inequity that once gave rise to the socialist revolutions. There are signs that some leaders in the Soviet Union and Eastern Europe know this train of events and want to create the kind of socialism about which Karl Marx never wrote but once dreamed was in the future of capitalism. They know their traditional markets will again produce such conditions as monopolies, oligopolies, inflation, recession, mass unemployment, environmental problems, job safety, and product safety, and are therefore seeking new avenues for privatizing the system. For these leaders, the welfare state is not the only choice for the future, the regulated market is not the only possibility for a better society on their horizon. A social vision is emerging among some leaders that had its beginnings in the philosophical tradition that led Marx to reject the state as the basis for controlling the economy.

The Origins of Civil Society The concept of society was formulated by philosophers from the seventeenth to the nineteenth century but it has a new significance today as its meaning continues to be debated. It helps to explain the policy directions for privatisation and the formation of new types of markets in both capitalist and communist countries. The basic question that these philosophers asked was: How is society possible? Much of the resulting argument focused on the primacy of the

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individual versus the moral community as the expression of human nature, the natural order of social life. Let us follow the history of this idea. Thomas Hobbes (1588-1679) sought to answer this question by depicting society as created by human agreement, in effect, society resulted from a social contract established by people in order to avoid chaos. He said that people were unable to assure their own survival because they lacked rules for living together. In the natural state of things, they confronted one another in conflict and desperate competition based on self-interest. Hobbes assumed, therefore, that a society was possible only when it was founded on a strong state. 1 John Locke (1632-1704) pursued this question further by interpreting society as a civil order interwoven with the state but not wholly identified with it. His theory of the contract was based on the existence of autonomous social structures, which required some measure of consent among people apart from government. Locke's concept was based on the assumption that individuals shared a measure of mutual recognition and obligation and assumed that the "natural order" extended beyond the combative state of individuals posed by Hobbes. People shared a moral sense that led them to understand the need for restraint, without which their security could not be certain. This Lockean state of human nature, then, began to look more like a social order that could exist relatively independent of the state. 2 Jean Jacques Rousseau (1712-1778) then conceptualized the individual closely woven into a moral community, arguing that the transition a pre-social state of nature to a civil society demanded a basic change in character. He proposed the existence of a general will which supplied the basis for moral reasoning, a will that would have to prevail in order for the social contract to be sustainable. Hobbes's "natural state" now became translated by Rousseau as an expression of the common good of the community. In effect, individuals found their natural state through a common bond and through a cultural life. Thus, Rousseau reconstructed 1

2

Hobbes idea is that the state originates in the need for self-preservation to escape the natural condition of war; life is "solitary, poor, nasty, brutish, and short" The state is a real individual replacing the many. See: The Citizen (N.Y., Appleton-Century-Crofts, 1949) and Leviathan (N.Y., Macmillan, 1947). John Locke, Two Treatises of Government, ed. Peter Laslett (London, 1967). Various scholars have noted that Lockean principles were in the background of the American constitution: See Louis Hartz, The Liberal Tradition in America: An Interpretation of American Political Thought since the Revolution (N.Y., Harcourt, Brace, 1955). Locke favoured freedom of thought and religion and believed that the sole business of government was to protect the lives, liberty, and property of people. If government does not do this, Locke said, people have a right to find other rulers who will look after their interests.

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the contract doctrine from a utilitarian, self-interest rationality to a condition of moral understanding, emphasizing the interdependency of human life and social motivation. But the argument between the primacy of the individual vs. the community would continue. 3 Georg Wilhelm Friedrich Hegel (1770-1831) identified civil society with the culture of the rising bourgeoisie, the capitalist class, and defined it as based on individual self-interest and utilitarian principles. He saw England as the prime example of a bourgeois nation with a new civil order emerging separate from the state. Like Hobbes, he saw this society potentially anarchistic. Economic individualism had destroyed social institutions and, therefore, the State was the only medium through which the conflicts and differences within society could be resolved. The government's administration of justice, he said, makes abstract right into law and introduces a conscious universal order into the contingent processes of society. Civil society was a set of rational institutions which could enculture the individual but could not by itself ensure the universal interests of people without the unity provided by the state. Thus, Hegel laid the intellectual basis for an argument that led to the socialist revolution. 4 Karl Marx (1818-1883) constructed his own view of civil society from it to be an expression of bourgeois culture based on individual self interest and competition but unlike Hegel, he refused to accept the state as the basis for the ultimate coherence and unity of people living together. He suggested that a return to civil society was the natural outcome of resolving class conflict through the establishment of common property. The state should wither away, in effect, dismantle itself, as civil society 3

4

Jean-Jacques Rousseau, The Social Contract, transl. by G.D.H. Cole (N.Y., Dutton, 1950) o.d. 1762.' Rousseau hated tyranny and loved freedom. What sort of institutions, he asked himself, would permit people to realize their natural goodness? His answer was that both education and politics needed to be reformed. In The Social Contract, he wrote that people have a duty to obey only legitimate powers, only the rightful rulers, whom citizens freely choose themselves. The right of a monarch, therefore, was given to him by the people, not by God. Hegel's concept of society thus included the corporation as well as the state. Civil society is based on the satisfaction of economic needs but its general welfare requires protection by both the police and the activities of the corporation. The police represent the interest of the whole against forces that are strong enough to disrupt the function of the civil process. The police are complemented by the corporation (like the guild) to bring unity to competing economic interests and to champion the organized interests of the larger society. Georg Wilhelm Friedrich Hegel, The Philosophy of Right, trans, by S.W. Dyde (London, George Bell, 1896).

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became restored by a social unity inherent in the natural order. It emerged by eliminating the roots of class conflict due to an organization of common property in society. People could now be wholly themselves as human beings living in society apart from state control. This social vision of eliminating the command state economy was lost in the aftermath of socialist revolutions but it is emerging again today selectively among leaders in the Soviet Union and Eastern Europe. It is a vision that is beginning to be discovered for its significance in shaping the future of both the east and the west. Today Dr. Vladimir O. Pechatnov, the First Secretary in the Embassy of the U.S.S.R. in Washington, D.C. speaks of intermediary institutions that buffer the individual from the state. He argues that: "Civil society is the most natural, organic form of social self-organization, and it would be ideally the only such form -- hence the famous notion of the withering away of the state ("absorption of state power by society")' as an ultimate ideal of socialism. In the twentieth century a disappearance of mediating institutions has left atomized individuals of a mass society helpless vis-a-vis the state ... For Karl Marx ... civil society was the main scene of world history."

He continues by saying that there are three features that stand out for the existence of civil society: 1. a developed infrastructure of horizontal institutions (associations and churches, trade unions, clubs, etc.), relationships independent from the state: 2. protection of civil society from the government and its influence by the supremacy of law, and constitutionally and legally guaranteed individual rights and freedoms; and by democratic control over the government itself; 3. the presence of a public mature enough to safeguard and fully exercise those rights. The special feature of United States' history, Pechatnov continues, is that civil society preceded big government and developed under very favourable conditions. In the early American colonies there was a high density of horizontal societal associations of a robust and muscular nature and a strong anti-elitist tradition in which freedom from government intervention was seen to be important. But the Russian situation was almost the opposite. A strongly autocratic central state preceded civil society and capitalism, thwarting social development. Because of the lack of any self-regulation by an active society, the predominant pattern of sociopolitical change was one of stagnation, followed by revolution, without any long-term progression in the development of civil society.

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But the essential meaning of Perestroika today, Pechatnov concludes, is the emancipation of civil society and of the individual from excessive interference and control by the state, as the only way of unleasing the creative energies of the people. The logic of the future society is a movement away from encompassing state ownership to more plural forms of ownership, a redistribution of powers among central, national, and local authorities. 5 Georgi Arbatov, deputy of the U.S.S.R. Supreme Soviet since 1974 and a member of the Presidium since 1988, makes a similar case for the development of civil society. He points out that both Marx and Engels held the opinion that both Marx and Engels held the opinion that one of the ends of the revolution would be the gradual withering away of "that political organization known as the state." This was supported by Lenin who argued that the people who have grown up in new, free social conditions will "gradually become accustomed to observing elementary rules elementary rules of communal life which have been known for centuries ... It was only Stalin who argued that it was imperative to strengthen the state "to deal the final blow to the remains of the dying classes and to organize a defense against the milieu of capitalism surrounding us, which is still far from destroyed and will not be destroyed soon." 6 The argument among some Soviet leaders for developing a new civil order, however, does not mean moving quickly into a stateless society. In the present stage of historical development, the withering away of the state does not mean the rapid transition from a state system to a system of societal self-governance but rather the transition from a hyper state (which today acts as a powerful braking mechanism on restructuring) toward a "half-state" (polugosudarstvo). What is involved here is the replacement of the control over society by the "apparatus" state, with society becoming prominent only through a process of government debureaucratization. It is therefore imperative to reiterate in these times that the concepts "state" and "society" are not identical, even though some socialist leaders have been inclined to perceive them as the same phenomenon. But most significantly, the concept of "civil society" is not only relevant to the remaking of communist countries but also of capitalist countries. Scholars have argued that this idea was at the heart of the constitutional founding of the United States, originating in the work of the social contractarians and elaborated in the thinking of Thomas Jefferson, John 5 6

V. O. Pechatnov, 'Civil Society in the United States and the Soviet Union,' in Kettering Review, Winter, 1990: 6-8. Georgi Arbatov & Eduard Batalov: 'The Evolution of the Soviet State,' Ibid: 15-16.

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Adams, and other colonial leaders. Thus, it continues to offer a direction toward America's own future. Alexis de Tocqueville asserted that the basis for American democracy be found in the civic association. It was through the active involvement in common concerns that the citizen could overcome a sense of alienation resulting from the burgeoning commerciality and resulting insecurities. The decentralized administration of associations mediated between the individual and the state, offering civic forums in which opinion could be publicly shaped outside the state. Associational life was a bulwark against the condition of conflicting groups which led people to accept the despot. These intermediate structures existed to check the tendencies of centralized governmental control over American society. But what new ideas are guiding the development of a civil society?

The Creation of a Social Market The basis for societal development rests first in recognizing that the market is grounded in society. The market system has been the foundation of all civil life, of government, religion, business, education, art, and science, having a basic role in the life of all civic associations. The continued evolution of civil society, therefore, depends upon cultivating connections between associations that serve society in the market system, independent of the state, finding the basis for a system of exchange that links all associations from business corporations to churches to universities and schools. It involves seeing how these associations connect in a socially-oriented market from local to national levels. The development of a socially-oriented market is becoming a key to the dismantlement of states and at the same time the cultivation of a society that is self-regulating. Some scholars argue that this development means fulfilling the dream of not only 19th century social philosophers such as Marx, Engels, and Proudhon but also that of 18th century writers like Adam Smith who argued that the economy should be self regulating in the context of society. A major task for a government in the 1990s, then, is to create a market that is socially self-regulating, operating in the public interest. A social market in the normative (ideal) sense is a relatively nonbureaucratic, publicly-oriented, decentralized, productive, profitable, community accountable, self-regulated, free, system of economic exchange that is grounded in processes of cooperation as well as competition within the private sector. A social market is an exchange system that integrates

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economic principles, such as profits and productivity, with social principles, such as accountability and public interest. This system of exchange is one which organizes itself in the interest of the society as well as in the interest of individuals and associations. A social market is thus one which articulates the common purposes of the civil society. In a civil society we assume that the size and power of a government can be reduced to the extent that associations become responsible and publicly accountable to their stakeholders (i.e. constitutiencies such as employees, customers, suppliers, creditors, and stockholders) and the larger society. Also, we assume that the government has a role in enabling and encouraging socially-accountable systems in private markets. The way in which this is done begins with a process of privatisation and profit-making becomes integrated with social responsibility and the public interest.

Privatisation in the Public Interest Privatisation refers to the removal of state agencies, departments, commissions, bureaus, and ministries from control by the government to their autonomous control and management in the private sector. This process is becoming well-known today in both communist and capitalist countries but in this new perspective there is a different twist. The argument is that privatisation can become effective only when a process of socialization takes place simultaneously to make it work in the public interest. Socialization refers to the re-organization of government agencies into the private sector as democratic organizations with publicly accountable systems. It means creating the conditions for social self-governance within the private sector. This begins to happen, for example, when government factories in socialist states become employee-owned and government utilities become customer-owned (or community-owned) in the private sector. The process has already begun in nations around the world. Privatisation provides an opportunity for governments to make capital and build a new civil order of markets but is not always recognized. For example, the Governor of Puerto Rico is selling the Island's governmentowned telephone company to private corporations in order to create two "perpetual funds" of $1 billion each, one for secondary education and the other to improve the island's government services.7 Though this action 7

David E. Pitt, 'Puerto Rico Sees Sale of a Utility for Social Need,' The New York Times, Wednesday, February 21,1990: 1.

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seems admirable, it does not transfer of power into a market that will become socially accountable and operate in the public interest. If the Governor of Puerto Rico were to sell the telephone company to local community development corporations or, perhaps on the other hand, to individual customers incorporated in an island-wide co-operative in the private market, this would be an example of a socialized transfer. Socialization takes place when the transfer of government agencies goes to constituencies, stake-holders, or publics in which the voting for control in the private sector on one person/one vote. Furthermore, if the governor were to use the capital resulting from the sale to organize public (nonstatist) corporations for improving schools, and created nonprofit corporations to create new jobs to eliminate the government's welfare system, it would be an action leading toward a new economic order, building toward that civil society dreamed about by Marx. This is what makes a difference in the everyday decisions of government leaders today, the creation of a new social order of markets. The Soviet Union's new "shareholding property" laws that allow for employees to own and lease properties in the nonstatist sector is an example of a limited step in this direction. New statutes in the USSR for cooperatives have encouraged over 200,000 co-ops to spring up in the small business sector in the last few years. At the same time 1000 or more lease firms have been converted from state firms; they are legal forms for private companies to develop that are different from the cooperative form because property is rented from the state. At the same time, these new firms are separated from state control, designed to allow one vote per worker and also to have local institutional partners, broadening their responsibility to the locality. On the other side of the world, the U.S. General Accounting Office had found little interest in spinning off federal agency programs to their employees but times are changing. A program known as "Fed Co-op" was developed in 1986 and announced in 1987. Under it, federal services that could be commercialized, such as government maintenance functions, information programs, or testing laboratories, would be transferred to new employee owned companies, which would then contract with the government while serving in the private sector. The Bush Administration has indicated interest in the idea. 8 To be part of this new social order of markets, privatized firms need to become profitable and accountable at the same time. If they do not become profitable, they cannot survive; they must make profits to stay 8

Copies of the G A O report, 'Status of the Federal Employee Director Corporate Ownership Opportunity Plan, (GGD-89-49) are available at no charge by calling G A O at 202-275-6241.

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afloat in an open market. On the other hand, profitable companies cannot become a monopoly or exploit their constituencies because they will simply become government regulated again. They must become both profitable and accountable to their stakeholders and the publics they affect in order to succeed on the market without government regulations. Successful steps toward a new order of self-regulating markets means the integration of economic ad social values. Creating such an integration marks a new age of the social market. The transfer of state enterprises in Eastern Europe into the private sector is taking place in different ways and at different paces. For example, state enterprises in Poland now have a large degree of formal autonomy even though they are not yet fully divested into the private sector. The state enterprise director is selected in open competition and generally the self-management council can select the director from among the candidates and the ministry only has a veto. (In several hundred larger, publicly-sensitive firms, the self-management council selects the 3 or 4 best candidates and the ministry makes the final choice.) At a general meeting, all workers approve a multi-year plan and evaluate the work of the director and the self-management council. The self-management council therefore has many functions of a board of directors in a U.S. company. In the Polish enterprise there is a group called the "board of directors" but it is only a management board, consisting of the directors of the various departments such as finance, personnel, marketing, etc. The reformed Polish enterprise thus has a significant measure of workercontrol but no worker ownership. The question is how the next step toward de-statification and accountability might take place successfully. Under the present arrangements where no worker-ownership exists, workers want to use their control to pay out not only net income but depreciation funds as bonuses and other worker welfare expenditures. There is no competitive incentive to invest capital for new technology or expansion. Therefore, the state finds it must intervene to control the use of enterprise funds but in this manner it defeats the autonomy it hoped would develop in the enterprise. This contradiction provides an incentive for making the next steps toward worker ownership in a socially accountable system of companies. The process leading to a new civil order in the economy is not easy because the state bureaucracy continues to perpetuate the old order. The Association of Self-Management Activists in Poland is taking steps toward worker-ownership but its purposes are not fully accepted by government officials. This Association is a new horizontal association of the workercontrolled self-management councils from a number of the larger state enterprises. It emerged after Solidarity's success in pressuring the government to create workers' councils in state enterprises. While at first the

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worker councils were state controlled, by the late eighties a number of the large councils had been taken over by genuine worker representatives. These councils then joined together to form the Association of Self-Management Activists. Such trade federations of worker-owned firms that become created in socialist countries are significant because they may determine how the market becomes organized in the public interest. These federations are parallel in function to trade associations in capitalist countries. Here we see a potential basis for creating a self-regulating economy in the broad sense. The commonly-agreed norms of trade associations serve as internal regulations controlling and guiding the competitive forces of member firms. Thus, this practice of social self-regulation has already begun in capitalist nations and becomes a basis for policymaking that could increase self regulation in the economy as a whole. For example, the American Standards Association in the U.S. is a confederation of trade associations that sets common norms for products in the interest of member firms. It sets standard sizes of everything from light bulbs to wood screws to shoes, so that the public will not become confused by different standards emanating from competitive practices. If competitors in the production of light bulbs did not have an agreed-upon size for placing these bulbs into electric sockets at home or in factories, the use of products in many markets would be a buzzing confusion. The associative action of this federation reduces the need for a government agency on product standardization. The public is not fully aware of the degree of cooperation that does take place like this among competitive firms in their own interest in ways that simultaneously meets the public interest. Many trade associations have developed codes of ethics for their own protection that also serve the civil order of markets. Journalists, newspaper firms, realtors, direct sellers, financial investors and securities dealers, bankers, lawyers, industrial manufacturers, retailers, and many more types of trades and professions have codes of conduct for members. These associations set up private tribunals to judge offenders and to issue appropriate penalties within the law. The codes serve as functional substitutes for government regulations. I believe that Eastern European nations will carry this practice still further within their trade federations because it allows competition within a framework of public rules. It provides a common playing field for competitors and reduces the need for state regulations. The significance of social federations of firms for sustaining selfregulatory markets can be illustrated in Sweden which has used them to avoid government regulatory agency like the Occupation, Safety, Health Administration (OSHA) in the United States. Sweden's employer and

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employee (union) associations have jointly set standards to monitor occupational safety and health. They have done so effectively outside government controls because they define and act privately upon the social norms which they create through joint agreements. A large government agency is not necessary when opposing parties within the market are able to agree upon common standards and mechanisms for acting jointly in the public interest and when there is a proper tribunal to treat offenders when those standards are broken. 9 The key to success in organizing public norms in the private sector is found through agreements between competing (or opposition) groups. Product manufacturers can treat problems between their own members (e.g. anti-rebate agreements) with norms and tribunal action for offenders but they cannot successfully set up norms on product safety for consumers when they are competing against one another. In this case, they must set up agreements with retailer and consumer associations whose members are injured by the products. For example, trade associations in the lumber industry (e.g. Southern Pine Lumber) have set up standards for the quality of wood which is sold to construction companies. The construction companies must depend upon measurable standards for the construction of their buildings. They have come to rely upon a system of marking which grades the lumber they buy. These standards were set by these competing associations in their own interest but it also happens to be in the public interest. It is an example of a self-regulatory (socially accountable) system within a market sector. The Soviet Union and Eastern European countries are headed for mistakes when they create traditional markets based on self interest and competition but some leaders are developing a new vision of the market serving society. They are following a path of social development within the market system that is creating a public order proposed by nineteenth century philosophers. In certain ways, both the East and the West are creating accountable systems of enterprise which operate in the public

9

Steven Kelman studied the Swedish case and concluded that industrial selfgovernance was promoted without the costly government rule-making interference that was observed in the United States. One reason was that business was able to reach agreement on health and safety standards itself through the influence of its peak organization, the Swedish Employers Federation. Steven Kelman: Regulating America. Regulating Sweden: A Comparative Study of Occupational Safety and Health Policy (Cambridge, Ma., MIT Press, 1981).

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interest, generating a new social order of markets. Marx might say that a civil society is evolving in the womb of the old. It simply needs more recognition by political leaders who are in position to advance this development.

On the Authors

Bolle de Bal, Marcel: Professor of Sociology and Psycho-sociology at the Free University of Brussels. In this capacity he is President of the Scientific Board of the Institute of Sociology, Director at the Centre of the Sociology of Work, and Head of the Social Psychology Department. He is also Honorary President of the Association Internationale des Sociologues de Langue Française and has published sixteen books in the field of industrial sociology and more than eighty articles. Bruyn, Severyn: Professor of Sociology at Boston College, Massachusetts, USA. Chemina, Natalia: research fellow at the Institute of Economics and Industrial Engineering, Siberian Branch of the USSR Academy of Sciences, and professor at the University of Novosibirsk. Cziria, Ludovit: Ph.D.; research manager at the Research Institute of Labour and Social Affairs, Bratislava/Slovakia; Visiting Lecturer in Management and Labour Relations at the School of Economics, Bratislava. Gershikov, Vladimir: research fellow at the Institute of Economics and Industrial Engineering, Siberian Branch of the USSR Academy of Sciences, Novosibirsk. Héthy, Lajos: graduate and Ph.D. in economy; Director of the Hungarian Institute for Labour Research; since 1990 deputy Secretary of State for Labour in the Hungarian Government. Hoffman, Oscar: born in 1930, graduate of the Faculty of Philosophy in Bucharest (1953), scientific director of the Institute of Sociology of the Romanian Academy of Sciences. Main publications: Operational conceptual systems in sociology (1977); Working Class in Romania under the Conditions of Scientific-Technological revolution (1984); The Ever

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Greater Impact of the Scientific and Technical Creation on the Socio-economic Activity (1987); The Profession and the Future (1990). Ishikawa, Akihiro: born in 1938, graduated from the University of Tokyo in 1961, M.A. (Univ. of Tokyo) in 1964; Ph.D. (Univ. of Tokyo) in 1987. Professor, Department of Sociology, Faculty of Letters, Chuo University. Main research fields: industrial sociology, especially socio-psychological empirical research on industrial relations, labour market and workers' participation. Jarosz, Maria: professor at the Institute of Economics of the University of Warsaw. Kanjuo-Mrcela, Aleksandra: born in 1962, graduated from the Faculty of Sociology, Political Sciences and Journalism at the University of Ljubljana/Yugoslavia. Presently employed with the Research Center for Management and Labour; post-graduate student in management, preparing a thesis on women managers; has published papers on trade unions and the position of women in society. Kiuranov, Chavdar: Professor at the Institute of Sociology of the Bulgarian Academy of Sciences, Sofia. Kreißig, Volkmar: research fellow and associate Professor at the Technical University Chemnitz, East-Germany. Makó, Csaba: degree in economics (Karl Marx University of Economics, Budapest), 1973 Ph.d. in Sociology; 1983 Great Doctors' title in Sociology, Budapest; 1985 Professor, Department of Sociology, Karl Marx University of Economics, Budapest; 1988-1990 Director, Institute of Sociology, Hungarian Academy of Sciences. Main research fields: industrial relations and organisations. Major publications: Labor Process in an Arena of Social Fighting, 1985; Innovation et Emploi á I'Est et á l'Ouest, 1990, Paris (with J. Koltay, P. Dubois, X. Richier). Kozak, Marek: research fellow at the Institute of Economics of the University of Warsaw. Kulpinska, Jolanta: graduate and Ph.D. in sociology; Professor and Director of the Institute of Sociology at the University of Lodz/Poland; President of the Polish Sociological Association.

On the Authors

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Morawski, Witold: MA Journalism, 1961, MA Sociology, 1963; Ph. d. Sociology, 1969, Habilitation Sociology, 1975, Professor 1984, Warsaw University, Poland. Appointments: Research assistant, Senior Research assistant, Central Institute for Labour Protection, Warsaw, 1962-65; Senior assistant, Department of Philosophy, 1965-70, Assistant professor, Institute of Sociology, 1971-76, Assistant professor, 1976-84, Professor of Sociology, since 1984, Institute of Sociology, Warsaw University. Publications: Industrial Conflict in America, 1970; Worker's Self-Management in Socialist Economy, 1973: The New Industrial Society: An Analysis and Critique of its Conceptions, 1975; Organisations - Sociology of Structures, Processes and Roles (editor), 1976. Peretiatkowicz, Anatol: graduate of the Faculty of Foreign Trade at the Main School of Economics and Statistics Warsaw, Doctor in economics at the Warsaw University in 1978, a senior lecturer at the Technical University Radom, Institute of Social Sciences; specialised in the problems of economic democracy since 1980; leading several research programs in the field of workers participation in Polish state and co-operative enterprises and coordinated the works of the Polish team within the Industrial Democracy in Europe international research project. Schreiber, Erhard: research fellow and asscoiate Professor at the Technical University Chemnitz, East-Germany. Simonyi, Agnes: sociologist; in the Research Institute of the Hungarian Trade Unions and later in the Labour Research Institute, she studied worker's behaviour, work organisation, participation in enterprise decisions and participated in several comparative international research projects. In 1986/87, as guest professor at Bari University/Italy. She studied the controversial innovative processes in the South Italian economy, at present deputy director of the Hungarian Academy in Rome/Italy. Sundberg, Erik: professor of sociology at the University of Sundvall, Sweden. Széll, Gyôrgy: born in Budapest/Hungary, professor of sociology at the University of Osnabriick/Germany since 1973; graduate of the University of Miinster/Germany (Diplom-Soziologe, 1965; Ph.D. 1967). President of Research Committee 10 "Participation & Self-Managament" of the International Sociological Association; founding president of the

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On the Authors

Thematic Group "Environment & Society" of the ISA, and member of the Executive Committee of the ISA. Tayeb, Monir: research fellow at the Heriot-Watt Business School, Department of Business Organisation, Edinburgh/United Kingdom. Vanek, Jaroslav: born in Czechoslovakia, since 1966 head of the Study Program in Labor Economics at the Cornell University, Ithaca/USA; one of the founders of labour-economics, honorary president of the International Association for Economics of Self-Management.

Name Index Adams, J., 347f Alexander, K.O., 116 Angelusz, R., 30 Arbatov, G., 347 Ascoli, U., 56 Bagnasco, A., 36, 41, 54 Bahro, R., 256 Baldamus, W„ 95 Baudrillard, J., 19 Becattini, G., 40 Behrend, H., 95 Bennis, W.G., 11 Berki, S., 34, 60, 62 Bernik, J., 231 Bernoux, Ph., 13 Bernstein, P. 331 Bielasiak, J., 303 Bleicher, S„ 253 Bogdân, J., 60 Boisot, M., 128, 132 Bolle De Bal, M„ 4, 93, 98ff, 104, 106 Bombera, Z., 115 Borkowska, St., 106 Bossânyi, K., 60 Braczyk, 33 Braudel, F., 16 Brejnev, L., 3 Brödner, P., 20 Brundtland, G.H., 15 Brus, W„ 115 Bruyn, S„ 4 Buitelaar, W.L., 43 Burawoy, M., 19, 60 Butera, F., 39f, 42, 44ff Cantanzaro, R., 56 C.E.C.A., 95ff

Channon, J„ 129 Chernina, N., 3 Child, J„ 128, 131f Chourko, A.S., 99f, 105f Collins, O., 95 Cooley, M., 12, 20 Csatäri, B„ 73 Csillag, I., 61 Cziria, L„ 2, 196 Dahl, R.A., 300 Dahrendorf, R., 17 Dallago, 53 Dalton, M„ 95 Deng Xiaoping, 130 Dickson, W.J., 95 Dohse, K., 43 Doktör, K., 117 Dore, R., 35, 72 Dorow, W„ 15 Dözsa, L., 60 Dragicevic, A., 231 Dubois, P., 29, 34 Duboniewicz, A., I l l Dutschke, R„ 16 Edström, A., 33 Ekstedt, E., 56 Egyed, G„ 73 Engels, F., 347 Enyedi, G„ 40 Etzioni, A., 42 Farkas, Z., 60 Fazekas, K., 34 Fedorowicz, Z., 115 Formalczyk, A., 211 Friedman, M.,14 Fua, G., 56

360

Galbraith, J.K., 12 Gershikov, V., 3 Giddens, A„ 300 Gilejko, L., 118,211 Gomulka, S. 111 Gorbachev, M„ 2, 53, 93, 99, 117, 219, 332 Gordon, L., 146 Granovetter, 30, 46, 48, 56 Gross, E., 42 Gustavson, B., 19 Gyenes, A.Jr., 39 Haraszti, M., 98 Hartmann, M., 21 Hegel, G.W.F., 345 Henning, R., 56 Hèthy, L., 2, 19, 39, 42, 60, 62, 67, 74 Hirschler, R., 245 Hobbes, Th„ 344f Hoffman, 0 . , 3 Hofstede, 14 Holtback, R„ 33 Hoof, J. van, 29 Honecker, E., 257 Horväth, L„ 60 ILO, 93f, 101 Ishikawa, A., 4 Iwanowska, I., 211 Jakuleowicz, Sz., 205 Jarkowski, A., 171 Jarosz, M„ 2, 171, 207 Jaruzelski, W., 117 Jaworski, T.B., 118 Jefferson, Th„ 347 Jürgen, U., 43 Kabaj, M., 106 Kalleberg, R„ 29 Kanjuo-Mrcela, A., 3

Name Index

Kasvio, A„ 2 9 , 3 1 , 3 4 , 42 Keenoy, T., 239 Kelso, L.O., 244 Kelso, P.O., 244 Kern, H., 13, 31 Kertesi, G., 42 Kiuranov, Ch., 2, 155 Kiezun, W., 4, 208 Köllö, 42 Kövari, G., 42 Kolakowski, L., 115 Kornai, J., 40, 67 Kosane-Kovâcz, M., 242 Kozak, M., 2 Kozdroj, A., 104 Krawczyk, R., 115 Kreißig, V., 3 Kresalek, 61 Kroner, A., 329 Kuc, B., 127, 132 Kujama, F., 24 Kulpinska, J., 2, 204, 338 Kuron, J., 115 Laaksonen, O., 129 Lamentowicz, W., 303f Lammers, C., 13, 18 Lado, M., 34 Laki, M., 34, 60, 62 Lenin, V.l., 113,219, 347 Léon, B., 99 Levcik, B., 100, 106 Liberman, E., 105f Likert, R., 13 Liska, M., 191, 196, 198 Littler, C.R., 129f Locke, J., 344f Lockett, M., 129f Logue, J., 331, 333 Lukâcs, J., 61 Lutz, B., 12, 17, 29, 95f

361

Name Index

Mako, Cs., 2, 34, 39, 42, 47, 60, 62, 67, 74,241 Malsch, T „ 13, 43 Manchin, R „ 41, 67 Marriott, R., 95, 99f Marsenic, D., 230 Marx, K., 12, 16, 20, 113, 148, 300f, 343, 345ff, 350, 354 Matthöfer, H „ 10 Maurice, M „ 29, 42, 52 Mayo, E „ 13, 95 Mazowiecki, T., 276 McGregor, D., 13 Meade, 329 Meier, A., 258 Messner, 308 Michels, R., 300 Mieszczankowski, M., 115 Miltova, G., 290f Morawski, W„ 2, 302 Morin, E „ 239 Mujzel, J., 171 Munkovä, M., 197 Nagy, K., 33, 60, 241 Nasilowski, M., 115 Nasimowa, A., 146 Neumann, L., 34, 61f, 66ff Nikosh, L „ 227 Norr, H., 239 Nyikos, L., 60 Odaka, K., 85 OECD, 133 OSHA, 352 Ouchi, W „ 13 Paciok, R., I l l Pechatnov, V.O., 346f Peretiatkowicz, A., 4, 111 Peters, Th.J., 13 Petkov, K „ 4, 21 Piore, M.J., 17, 20, 36, 40, 55

Polänyi, K., 40 Rakowski, 276 Ramondt, J., 131 Reagan, R., 15 Reynaud, J.D., 36, 47 Reyneri, E „ 29 Rimashevskaya, N., 93 Roethlisberger, F.S., 95 Rothschild-Whitt, J., 116 Roussenova, L., 106 Rousseau, J.-J., 344f Roy, D „ 95 Rozgonyi, T., 39 Rudolf, S., 111 Rus, V., 302 Säbel, Ch.F., 17, 20, 36, 40, 53, 55f, 244 Sainsaulieu, R., 14 Schevtsova, L., 115 Schreiber, E., 3 Schumann, M., 13, 31 Seitz, R „ 13 Serebrennikova, T., 93 Shimmin, S., 95 Simonyi, A „ 2, 32, 52, 55, 241 Slater, D „ 11 Smith, A., 348 Spitzchen, 33 Stalin, J., 347 Stark, D., 66 Suckut, D., 253 Sundberg, E., 2 Szeleny, I., 41, 67 Szell, G., l l f , 18 Sziräczki, 42 Tardos, R. 30 Tayeb, M „ 128, 131 Taylor, F.W., 95 Teller, G., 40 Thirkell, J., 4, 21, 297

362

Tinbergen, J., 1 Tittenbrun, J., 117 Tocqueville, A. de, 348 Tóth, F., 34 Toulmin, St., 296 Touraine, A., 50 Trigilia, C., 40, 56f Tscherkasov, E.N., 111 Turner, B., 21 Uhan, St., 106 Ulbricht, W„ 253

Name Index

Walesa, L., 309 Wallace, W.V., 127 Walton, R„ 34 Waterman, R.H., 13 Weber, M„ 300f Weldman, J., 40 Wesolowski, W„ 88 Whyte, W„ 95 Willener, A., 95f Wood, S„ 43 Wrublevskij, W.K., 113 Yadov, V.A., 153

Vanek,J„ 4, 118, 328 Vanicsek, M., 241 Volkov, M.I., 112 Voszka, E., 60

Zacchia, C., 56 Zaslavskaja, A., 115 Zhivkov, T., 117 Zupanov, J., 231, 234

Subject Index accountability, 270f, 349f administration, institutional, 156ff agriculture, 73f Albania, 1, 123 alienation, 15If, 188, 338, 348 Anti-Trust Division (USA), 270 association, 231, 348, 35If Association of Self-Management Activists (Poland), 35If atomization, 104 austerity policy, 173, 181 Austria, 1, 124 authoritarian modernization, 146 authority, 165, 170, 272 autonomy, 12, 22, 23, 34, 39f, 48ff, 60ff, 65, 69, 93, 116, 128ff, 189, 194, 201, 231, 239ff, 351 autonomy of the working group, 10, 17, 111, 187, 245 Balcerowicz Plan, 201 bargaining cf. collective bargaining Belgium/Belgian, 93, 96f, 102 black economy, 35 Bolshevism 16 bourgeois society, 16 break-down, 4 brigade, 2, 17, 61, 111, 140, 142, 187ff Britain/British, 128f, 182 Bulgaria/Bulgarian, 2, 123ff, 139ff, 154, 175, 280ff bureaucracy/bureaucratic, 93, 116, 180, 21 Iff, 244f, 264, 300f, 312, 317, 351 bureaucratic socialism, 301 Bureaucratism, 85 business democracy, 219ff business organization, 124ff

capital/capitalist, 3f, 90, 115, 173, 266, 269f, 330ff capitalism/capitalist system, 1, 15ff, 24, 105f, 116f, 123ff, 27If, 301, 310, 344, 347 central planning, 11 Iff, 119f, 128f, 231, 249f, 255, 332 centralization, 21, 128f, 212 Chamber of Commerce, 177 China, 123f, 128ff, 263ff, 270 CIM, 256 civil society, 266, 299, 305, 343ff class/class structure, 56, 91, 127, 232f class conflict, 346 co-management, 249ff co-determination, 24, 203, 205 Cold War, 1 collective action, 60 collective bargaining, 12, 67, 105, 174ff, 235, 237, 250 collective knowledge, 76 collective learning, 60ff collectivism/collective, 90, 139ff, 187ff, 284ff, 335 collectivist behaviour, 86 COMECON, 1 command economy/command system, 1, 123ff, 141f, 183, 267, 346 communism/ communist, 263ff communist party, 93, 124, 170, 173, 175, 202, 209f, 231ff, 265, 282, 287, 292, 295ff comparison between East and West, 86ff competition/competetiveness/competitive, 10, 49, 143, 243, 267, 270, 322, 324, 326, 348, 352f

364 competition of systems, 15 complexity, 41 compromise, 105f computer cf. new technologies conflict/conflicting 36, 76, 92, 169, 173f, 181, 24Iff conservatism, structural, 258 consultation/consultative, 9If, 222, 301 contract, 6Iff, 264 control, 1, 101, 117, 126f, 163, 266, 27Iff, 303, 312, 316f, 346f, 349, 351 controlled confrontation, 244 convergence, 2 cooperation/cooperative 34, 47, 49, 51, 56ff, 64, 69, 7Iff, 86, 9If, 97, 148, 174, 243f, 267, 301,348 co-operative(s), 1, 116, 146, 150, 277, 320, 330f, 339 cooptation, 213 corporate identity, 14 corruption, 249, 265 crediting, 4 crisis, 10, 49f, 9If, 156, 230, 232, 239, 263, 299, 304, 324 Croatia, 235f Cuba, 123 Cultural Revolution (China), 131 CWC, 311 Czechoslovakia/Czechoslovakian, 124, 126f, 175, 187ff de-alienation, 185, 335ff decentralization, 22, 41, 49, 55ff, 11 Iff, 128f, 186, 201,274 decision-making, 23, 60, 106, 118, 128ff, 153, 165ff, 171, 208, 222, 231, 245, 285, 288, 308, 31 If, 314, 316, 336 decline, 23 democracy/democratic, 23, 173f, 180, 258, 299ff, 317, 336, 348

Subject Index

democratic alternative, 4 democratic control, 346 democratic movement 17 democratization, 11, 22ff, 91, 115ff, 146ff, 218ff, 234f, 296ff, 303f depersonalization, 211 deregulation, 37, 93, 242 determinism, 21, 3 Iff development, 106, 112, 243, 353 development, sustainable, 15 director, 88, 159ff, 165, 171, 189, 201f dirigism cf. central planning dismantlement/dismantling the state, 281, 343ff dismissal, 291 dissatisfaction, 242f, 304 disobediance/disobediant, 175 division of labour, 19f, 33f, 42, 5 If, 64 dominance, 266 DSCEA, 14 Iff East Germany cf. G.D.R Eastern Europe, Iff, 15ff, 132ff, 173ff, 273, 35Iff ecology cf. environment economic democracy, 23f economic reform, 147ff, 175f, 20Iff, 230ff EEC, 11, 328f efficiency, 41, 105, 316 election(s), 2, 140f, 221, 231, 233, 25If, 285, 29Iff, 297, 301, 309 employee councils, 171, 204, 206ff, 209, 212, 300 employment 148, 154, 184f, 235, 339 environment, 14f, 22, 249, 254f enterprise, 13, 60ff equity, 266, 268, 270 ESOP, 280, 330f exploitation, 4, 104, 268

Subject Index FDGB, 249ff FIAT, 244 financial capital, 22 firm organization, 14Iff flexibility, 12f, 51, 93 Fordism/Fordian/Fordist, 10, 18, 34, 42 foreign owners, 265f France/French, 12, 18, 86, 97, 331 French Revolution, 22 F.R.G., 10, 86, 89, 98, 112, 125f, 249ff GDP, 173, 276 G.D.R., 3, 15, 113, 124ff, 175, 249ff Germany/German, 1,11, 97f glasnost, 296 GNP, 15, 18, 22, 112, 328ff government/govern, 48f, 88, 148, 182, 276f heterogeneity/heterogeneous, 41 ff, 48, 74f hierarchy, 116, 13 If, 157ff, 180, 212, 272, 301 Hong Kong, 86f human relations, 10, 30, 52, 65, 101, 198 humanism, 24 humanization of work, 10, 116 Hungary/Hungarian, 2, 33, 35, 40ff, 44, 86, 89, 98, 123f, 173ff, 239ff, 265f, 274 identity, 14, 85f, 88f ideology, 231 IG Metall (FRG), 18, 256 IIRA, 2 incentive(s), 93ff, 104f, 149, 15If, 329, 331,351 individualization, 104 industrial democracy, 118f, 241, 299ff

365

industrial relations, 2, 35,42, 50, 71, 85, 116, 119, 173ff, 201,208, 245 Industrial Relations Act (FRG), 252 inflation, 133, 173 informal relations, 42 information, 213f, 269, 314 initiative, 243 injustice, 266 innovation, 34, 4If, 46, 50f, 11 If, 115, 184, 235,327 Inside Contracting Groups (Hungary), 60ff integration, 22, 102f intensification, 104 interest/interest representation, 23, 35, 87f, 177f, 24If, 244f, 349 interest organization cf. trade union investement, 133f Israel, 310 Italy/Italian 24, 36, 53ff, 86, 89, 244 Japan/Japanese, 13f, 18f, 23, 35, 85ff, 112, 128, 187 job security, 17 job satisfaction, 19 Kädärism, 2 Keynesianism/Keynesian, 1 If, 329f KIOSZ, 178 KISOSZ, 178 Labour Code (Bulgaria), 139f, 283ff labour market, 186, 241 labour relations, Iff, 9ff, 173ff, 194f, 214f labour process, 43, 45f, 61f labour shares, 142f law/legislation 139f, 156, 175, 20Iff, 212f, 219ff, 232, 250f, 262ff, 275f, 283ff, 346, 350 Law about Workers' Self-management in Enterprises (Poland), 206ff

366 Law on Circulation and Management of Social Capital (Yugoslavia), 276 Law on the State Enterprise (Soviet Union), 219ff leader/leadership, 1, 3, 198, 209ff, 240, 242f, 303ff, 312, 353f lease base/leased property, 183ff, 264,339 local authorities, 185 localism, 53ff Lucas-Aerospace, 12 Macedonia, 236f management, 13, 46, 50f, 60f, 63, 85ff, 124f, 139ff, 159ff, 172ff, 189, 191, 199, 20If, 208, 221, 224, 241, 252, 264, 284, 312f, 316f, 336 manpower, 61, 64, 69, 75, 183f, 322ff market/market mechanism, 1, 16, 38ff, 58, 66f, 72, 105, 115, 159ff, 173f, 178, 180, 185, 230, 249ff, 263ff, 311, 313, 322ff, 343 market reform, 316 Martial Law,'87, 156, 304 Marxism/Marxist, 16, 266 Marxism-Leninism, 16,23, 113 mass production, 5If métayage, 54 microelectronics cf. new technologies mixed economy, 15, 39ff, 125, modernization, 30, 51, 71, 181, 242, 326f Mondragón, 269 motivation, 1 If, 41, 60, 93ff, 115, 118, 149f, 153, 186, 222, 337 MSZOSZ, 178f mutuality, 69 mutual governance, 267, 278

Subject Index NCCI, 179ff NEP, 335 New Economic Mechanism (Bulgaria), 139f new technologies, 11, 3Iff, 43, 49ff, 5If, 93, 119, 256f Nomenklatura, 16, 91, 265, 276 nomenclatura capitalism, 265 Normalization, 299, 303ff OECD, 133 OKISZ, 178 oligarchization, 213 oligarchy, 300 Organizational Design, 21 Organizational Symbolism, 21 ownership, If, 6, 11, 126f, 141f, 146, 171, 20If, 220f, 231, 265, 27Iff, 28If, 315ff, 320, 349ff Pareto eqilibrium, 329 participation, 1 Iff, 22, 29, 60, 94, lOOff, 111, 130f, 143f, 153, 155, 177, 181, 184f, 188, 201ff, 219, 22If, 233, 249ff, 295, 297, 316, 328ff, 336, partner/partnership, 111,, 18If, 245 payment, 93ff peaceful revolution, 254 Perestroika, 2ff, 4, 15, 24, 93, 99, 117, 149f, 152, 155, 219, 296, 336f, 347 personality, 147f planned economy cf. central planning pluralism/pluralistic, 146, 173 plurality, 148 pluralization, 178f, 231, 234ff, 347 Poland/Polish, 2, 4, 17, 86f, 89, 11 Iff, 123ff, 128f, 154, 156ff, 173, 178f, 20Iff, 274ff, 299ff, 351 political change, 201, 235f, 304, 316f, 323

Subject Index

political marketing, 233 political reform cf. law/legislation post-industrial society, 18f post-modernism, 18f Prague-spring, 2 prices, 124f, 144, 263ff, 328 private enterprise, 15, 154, 264 private property, 315 private sector, 235 privatization, 132ff, 171, 181, 202f, 263ff, 300, 311,317, 349ff production meetings, 194 productivity, 101, 186, 192f, 266, 330f, 343, 348f profit sharing, 328ff profitability, 266, 330, 349 proletarization of society, 16 propaganda, 3 property cf. ownership protective function/protective organization, 233, 236f, 251, 301 Puerto Rico, 349f PUWP, 159, 161f, 168, 208, 315 qualification, 10, 31f, 43, 65, 183f, 188, 322ff quality, 194 quality circles, 13, 18, 187 quality of working life, 9f, 18f, 151ff, 188 reciprocity, 41, 69 reform, 106, 230ff, 304, 316 regulation, 36ff, 97, 178, 209, 231 representation of employees cf. worker's representation responsability, 197, 262f revisionism/revisionist, 115 revolution, 85, 122, 302 right to decide, 286 Romania/Romanian, 3, 122ff, 174, 320ff

367 Saratov movement, 192 satisfaction, 89, lOlf, 152 Scandinavia/Scandinavian, 10, 24, 33, 127f SDI, 113 Second World War, 3f SED, 113, 247 self-actualization, 151, 336f self-government/self-governance, 265,, 277, 333ff self-management, 22f, 117f, 129, 138ff, 218ff, 229f, 308ff, 349 self-organization, 301 semi-autonomous working groups cf. autonomy of the working group shadow economy, 181 Slovenia, 233f small business/small enterprise/ small plant, 34, 49, 5If, 54ff, 181, 336f SPSW, 146ff social accountability, 266ff social adjustement, 152ff social agreement, 270 social change, 17ff, 29f, 36ff, 4 I f f , 48, 228ff, 320f social climate, 97 social compromise, 106 social contract, 266, 342 social control, 21f, 24, 310, 314 social differentiation, 230f social division, 22 social equity, 268 social governance, 264ff social justice, 111, 335 social market, 26Iff, 346ff social movement, 2, 49f, 300 social needs, 99 social policy, 146ff, 179, 253 social progress, 113 social reform, 106 social relations, 47

368 social sciences, 29ff, 47f, 252ff social security, 148f, 337 social structure, 93 socialisation, 24, 113, 347f socialism, 1, 15f, 92, 115, 122ff, 147, 152, 217f, 228, 279f, 299, 341 socialist/socialist system, 99, 105f, 11 Iff, 117, 119, 122ff, 331,327, socialist agreement, 188, 194 socialist industrialization, 90 socialist revolution, 341, 344 socio-political organization, 160 solidarity, 87f, 104f Solidarnosc/"Solidarity", 2, 115, 167, 208, 237, 273, 297, 300, 302ff, 349f sovereignity, 115 Soviet block, 16, Soviet-Union, 3, 15ff, 23, 93, 99, 101, 125, 128, 146ff, 153, 172, 181 ff, 185, 217ff, 26Iff, 268, 271, 294, 303, 308, 333ff, 345, 348, 351 Soviet System, 123 stakeholder, 268f, 274ff, 347ff Stalinism/Stalinist, 2, 23, 85, 173ff, 251 state, 1, 23, 38ff, 73, 124f, 173f, 177ff, 232, 261, 342, 344f state enterprise, 1, 15, 153, 217ff, 282, 318, 345 state intervention, 14, 38ff, 57f, 72f, 142f, 267f, 349 stimulation, 93ff, 148ff strike, 12, 103, 177, 179, 234, 240ff, 301, 307 Sweden, 86f, 89, 267, 282ff, 308, 350f SZOVOSZ, 176 SZOT, 176

Subject Index

Taylorism/Taylorian/Tayloristic, 10, 18, 34, 42, 95 taxation, 143 technical progress cf. technology technocracy/technocratic 139,31 Of technology/technological 1, 3, 2If, 98, 11 Iff, 252ff technology euphoria, 253 Third World, 22f Totalitarism/totalitarian, 85, 247, 302 TOT, 176 trade association, 267ff Trade Union, 12, 29, 36, 49, 59, 69f, 88ff, 103 ff, 116, 167f, 174ff, 186f, 200, 206f, 217ff, 222ff, 267, 284f, 290, 292f, 297f, 303ff tribunal, 267 two-tier society, 12 unemployment, 12, 17, 247, 252, 323 union cf. Trade Union United Kingdom, 11, 86, US(A), 10, 16, 23, 37, 185, 242, 267f, 275, 344ff, 348ff,

147, 233,

89, 99 99, 1184, 308, 328f,

VGMK, 60ff Volvo, 10, 18 VOSZ, 176 wages/wage determination/wage distribution, 13, 60, 63ff, 69, 104f, 123f, 132, 148, 172, 176f, 184, 191, 234, 252, , 284, 286, 289, 29If, 329f Warsaw Pact, 17 WCC, 217ff welfare state, 11, 19f, 93, 264, 341 West Germany cf. F.R.G. Western Europe, 1, 105, 185 woman's liberation, 14, 17

Subject Index

work collective, 185, 282ff work council(s), 139, 217ff, 249f, 283, 325f work identity, 85ff work organization, 185ff workers' collective, 138ff workers' control, 117 worker(s') council(s), 118, 129, 200, 202ff, 207f, 21 If, 249f,

369 272ff, 300, 303ff, 308ff, 335f, 349f worker's representation, 35, 177f, 220, 234, 239f, 249 working class, 91, 230, 280 Yugoslavia/Yugoslavian, 3, 17, 86, 89, 124f, 129f, 228ff, 27If, 274, 300, 308f

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