Article by Kresimir Sajko
In the socialist countries of Eastern Europe, private companies were nationalized during the early postwar years. This transformation was in full accordance with the Marxist philosophy that the majority of the means of production and other assets of primary importance for the national economy must be owned by the entire people represented by the state, a principle that was expressly laid down in constitutions, civil codes, and other statutes of the mentioned states. Based on this principle and following the economic model of the USSR, the centrally planned economic system was put into effect. Enterprises were created and terminated by the governing state organs, and their assets remained part of the general stock of state socialist property. The main managing body was the establishing organ, from which the commercial enterprise received its plan tasks and to which it was responsible. Moreover, the enterprise was not allowed to conclude contracts not based upon any plan assignment; although its legal entity was acknowledged, it was regarded as a state organ. This system of uniform central planning was not of very long duration, however. It was suddenly shaken by the creation of the Yugoslav economic model in the early 1950s. Later, the process of reorganization of the national economy began in other countries and is still under way—particularly in Hungary and, to a lesser degree, Poland.
What were the reasons for the reorganization of the centrally planned economic system, and what goals have the economic reforms set out to achieve? In legal writing the separation of macro-economics from micro-economics, including the introduction of market relations and competition among enterprises, is very often stated as the main aim of such reforms. It is assumed that, as a result of these measures, the powerful increase in enterprises' independence—both in the economic and the organizational sphere—will bring many economic benefits not only to the employees of the enterprise, but also to the state in general. The enterprise's role is based on the assumption that the enterprise interests serve as connecting links between national and individual interests. Since the main indicator of enterprise activity is profit, the material interest of every employee in the success of the enterprise is increased. Thus, the new enterprise system, specifically the Yugoslav model, is based on the creation and enactment of the concepts of social ownership and workers' self-management.
The purpose of this Article is to analyze the present legal structure of enterprises, focusing especially on the new relations between the state and its enterprises. First, selected issues will be discussed according to Hungarian and Polish law. The Article will then address questions concerning the Yugoslav enterprise model. This division between the first two enterprise systems and the Yugoslav model is logical because there are substantial formal as well as conceptual differences between the two systems. Since the statutes regulating these matters in all the countries mentioned are very numerous and detailed, this relatively short Article can give only a survey of typical features of the state-enterprise relationship. Thus, some generalization is unavoidable.
About the Author
Kresimir Sajko. Professor of Law, Institutza Medunarodno Pravo Pravnog Fakutteta Zagrebu, Zagreb, Yugoslavia.
Citation
61 Tul. L. Rev. 1365 (1987)