Visit to Yugoslavia

...There is much interest in Yugoslavia as to how far the Poles can go in unwinding their economy without having an ideological conflict with the Russians on this point...

...I saw Tito today...

...I told her and invited her to have a drink with me...

...The 30 per cent of prices that are fixed include utilities and things like steel or fertilizers where there is a particular interest in the price...

...No workers' barracks this...

...the greater the service...

...Workers' Councils, a development of recent years, are also credited with a considerable improvement in the operation of the individual enterprise...

...ILeavk with the distinct impression that the "market socialism" of Yugoslavia is a going concern...

...Her line of work may not enjoy a particularly high priority...

...After the austerity of Poland I still find myself revelling in the luxury of life here—excellent food and wine, good service and people who seem to be enjoying themselves...

...The stores are filled with goods and, partly since there are more imports...

...The work is not demanding, and she attributed her good looks to the fact that she gets a lot of rest...

...Competent, self-assured and determined to raise the level of his science in Yugoslavia, he was a monument to the virtues of this enterprise...

...The individual (public) enterprise has the power to adjust its prices, and the problem of price relatives is self-solving—if the prices are too low, the firm can raise them and vice-versa...

...Someone has noted that they were the first such full-dress exposition by a bourgeois economist in a Communist country since the Russian Revolution...

...Clearly, also, it is better designed to incur the disfavor of the Soviets...

...She says she meets an interesting class of people of whom, on the whole, she finds the Germans best combine affectionate and gentlemanly manners with requisite intellect...

...In the course of conversation she had mentioned the unfortunate ubiquitousness of police surveillance in "these Communist countries," and this, along with the novelty of my surroundings, acted as a reinforcement to normal virtue...

...pean city...

...I am still impressed by the air of well-being and by the number of good-looking and well-groomed women...

...My last lecture today with an hour's discussion following...

...My third lecture today went about as usual...

...Yet one guesses that the Soviets still believe that ideology as distinct from such "objective circumstance" must be the controlling factor...

...It is immediately evident that this is a far less egalitarian society...

...And even the modern buildings, of which there are many in the parts of the city that were damaged, are softer and less severe than in Poland...

...Wouldn't economic independence at a lower level of consumption and investment be wiser in order to protect political independence...

...He thinks the Yugoslavs have succeeded in breaking through the crust of backwardness and in getting the industry that is necessary for sustained growth...

...I was taken to dinner in a delightful outdoor restaurant on a hill near Belgrade...

...This is in line with a pronouncement of Marshal Tito who has said that those who won Socialism should enjoy at least some of its fruits...

...A current Yugoslav identification of the difference between capitalism and Socialism: "Capitalism makes social mistakes, and Socialism makes capital mistakes...

...AT last an easy day, my first since I arrived from Poland...

...Wassily Leontief would have grown up in Russia...

...This is an important point...

...I told him that, since it was possible that we had even more economists than economic problems, something needed to be done to keep our profession employed...

...To the extent that capitalism is identified with free prices and the market, it represents a backsliding to capitalism and capitalist incentives...

...There have aheady been four or five "reforms...

...there was a good number of high officials, also a sizable delegation from the Embassy...

...They suggested that neo-Keynesian models were the most important macroeconomic guide and that the Leontief input-output analysis, given the aggregate system, was especially important as a planning model...

...He said he gathered that there were similar tendencies in the United States...

...The notion that satellite economic policy should follow the "social schematism" of the Russian development seems to me the most dangerous mistake the Soviets are making...

...The Yugoslavs solve this problem by leaving about 70 per cent of prices to the determination of the individual enterprise...

...The result, which I believe to be typical...

...The clue is in the price system...

...All in all, the Yugoslav system seems much more flexible and pragmatic than that of the Poles...

...One suggested that Leontief was more important for a Socialist than a capitalist economy and added an amusing observation: "You might hear in mind that if the Soviets had behaved wisely...

...The contrast with Warsaw could searrly be more striking...

...This means in turn that earnings can be used as the test of performance and also that earnings can be partly shared by management and workers as an incentive...

...Then at 10 a.m...

...But the Socialist inevitable happened—I was taken to an experiment station, a hybrid-corn-breeding station, an irrigation experimental farm and a State farm...

...Both are old Partisans and both had had a period of postwar service in Washington...

...These are wonderfully more agreeable than the stark social realism of Poland...

...At mid-morning we had schnapps and vermouth and at noon in Novi Sad a notable meal with more alcohol...

...The Poles recognize the problem and...

...Then we had wine and soda during the afternoon...

...Nothing in this part of the world strikes one with more force than the existence of pro-American Communists...

...I am glad they are over although I think, on the whole, they were fairly successful...

...Americans she somewhat unpredictably described as "much like Englishmen...

...The same might be true of the Yugoslavs...

...A motorcycle outrider moved us off the road and to a stop while he passed...

...His work would then have been done in its logical context...

...After dinner I strolled with my informant to her apartment but then discontinued my research with a small gift...

...And the higher the output and hence the higher the loss...

...My second lecture was uneventful with a good attendance...

...At dinner time there was a severe storm, and while making my way into the hotel restaurant I met a tall, handsome and (by the standards of this part of the world) very well-dressed woman in her late twenties...

...We had a long and informative talk punctuated by schnapps and coffee...

...But I did not encounter anyone who was disposed to think that Russian doctrine and experience should be considered the guide...

...Her apartment is also not very satisfactory—not sufficiently private—and this is difficult to remedy in so overcrowded a city...

...I arrived back in Belgrade very late for a party given by one of the cultural attaches at the Embassv...

...No concessions are made or contemplated on the issue of State ownership of the means of production, however...

...I am glad that there is nothing about the British economy which at the moment stirs my curiosity...

...The worst problems are the continuing imbalance in the external position—the large balance of payments deficit—and the tendency (as in Poland) for more gains to accrue to peasants than to workers...

...But isn't dependence on such foreign aid dangerous...

...At luncheon, which included two or three leading Yugoslav economists —Marxists, and one a leading Party theorist—we discussed the relevance of modern Western economic theory to the problems of economic planning...

...I suspect that I am too much of a hedonist to make a good modern Socialist...

...Should this be taken while the taking is good...

...It was not translated, but all attending were given a full text in Serbo-Croat...

...Not even Belgrade hotel prices are fixed, and as the result of the completion of the Metropole prices of hotel rooms are coming down...

...was that they had developed a deep interest in American politics and folkways...

...One forms his impressions of the well-being of a community from the number of automobiles on the streets, the number of well-dressed women on the sidewalks, the elegance of the shops and the number of fine houses or apartment buildings...

...Incidentally, the experiment stations seemed very good—far better equipped, more workmanlike and more self-confident than those I saw in Poland...

...But this lakes a year or two...

...I find this nourishing to my vanity...

...A number of high Government and Party people were on hand, and there is to be a general discussion following my final lecture tomorrow...

...It occurs to me that men in power, if thev are wise, will always travel at a moderate rate of speed and prefer-ably in modest cars...

...A firm that expands output at a loss—if it happens that its prices are low and its costs high—may be performing a useful service...

...The difference from Warsaw is also in the cafes, the chestnut trees along the streets and, above all, in the varied, pleasant buildings of what is at least a slightly older EuroWith this report, John Kenneth Galbraith concludes the series of articles on his recent trip to Europe...

...She seemed to be sheltering from the rain...

...Shouldn't every opportunity be seized to raise living standards as well as investment...

...There is a domestic difference between those who would decide economic issues more dogmatically and those who argue with great vigor and pride for flexible and pragmatic socialism...

...Adaptation to the higher living standard, the less self-sufficient character, the non-socialized agriculture and the cultural and economic mores of these countries would seem to be an imperative...

...I called by appointment on the Under-Secretary of the Planning Board...

...But only a small minority needs to be well off to suggest such opulence...

...Nothing can possiblv create a worse impression than big black limousines tearing through the countryside and forcing common people to jump for their lives...

...as I have noted...

...At twelve I gave my first lecture...

...I got up late, worked on my lectures, and later went for a stroll...

...They are committed to supplying consumer goods, including those that must be imported, in the present...

...By the time it is finished another reform will be needed...

...If the price relatives are not right, then the incentive structure is unreliable...

...they seem to be of far better quality...

...The Yugoslavs are not so Calvinist as the Poles...

...We are approaching the white cliffs of Dover...

...One of my hosts asked if we were unaccustomed to drinking in the United States One of my guides had been an exchange student in plant genetics at the University of Illinois...

...He thinks Yugoslav economists are going in too much for econometrics and formal and irrelevant theory...

...This led on to dinner...

...I consumed lightly, having regard to the hot weather and the danger of extreme drowsiness...

...By arrangement there was no discussion of this lecture, it being purely historical, although I was challenged in a friendly way for citing Joan Robinson on Marx's view of Say's Law...

...Preoccupation in Warsaw is far more with practical problems...

...Her greatest problem is the high cost of clothes, and she listed some prices which did sound rather stiff...

...The American Ambassador attended, although I am not sure he found the subject fascinating...

...We dined on an outdoor terrace at the Metropole, a vast, newly-completed hotel of most luxurious aspect...

...In Poland nearly all prices are fixed by the State...

...I lost the United States Ambassador but picked up the Canadian...

...A community with a higher but more nearly equal distribution of income can have fewer such amenities or luxuries and thus give the impression of less wealth and well-being...

...In the evening I went to a reception at the Ambassador's residence— small and pleasant—and then on to dinner with two high Yugoslav economic officials...

...There is more traffic and the people lack the drab, uniform appearance of Poland...

...It could also be that Marx is taken less seriously in Poland, so there is less concern with revision...

...Visitors regularly attribute to wealth what they should attribute to its distribution...

...I had hoped to wander through villages and old towns and take pictures, and I had made my wishes tolerably clear...

...The room was packed...

...His impressions of Poland appeared in our issues of February 23 and March 2. A fuller account of his trip has been published as a book, Journey to Poland and Yugoslavia, by Harvard University Press...

...We talked about time preferences in planning—how much should be sacrificed in the present for a higher living standard in the distant future...

...This morning I strolled around Belgrade looking for pictures and found a few interesting people and street scenes...

...It was a nice homelike party with well-groomed, slim and attractive young wives getting systematically stewed...

...The Yugoslavs, in their concern for inquiring what is to be retained from Marx and what is to be rejected, engage in a great deal more theoretical discussion than one encounters now in Warsaw...

...Both are strong Yugoslav nationalists but also more than half American in outlook and interests...

...He said the Yugoslav situation was less luxurious...

...The great current argument is over how much reliance should be placed on foreign aid and foreign assistance...

...She makes her living being agreeable to visitors, more especially those in the smaller and "more discreet" hotels...

...Of this there cannot be the slightest doubt...

...Indeed, this is the lesson of the Stalinist period...

...The Yugoslavs, incidentally, are completely set in their determination to pursue their own course...

...This afternoon I called by appointment on the editor of the leading economic journal and an important Party theoretician...

...She smiled and asked me how long I had been in Belgrade...

...She lives with her parents, both office workers, but has a small apartment for more relaxed moments...

...they are desperately striving to reform their price structure...

...He was proceeding at a high speed in a four-car convov when we met him...

...These are the only presentable culture...