EKIP– Expert Club for Economics and Politics A Different Opinion
The emergence and spread of socialism, national socialism and fascism is not simply the result of an unfavorable combination of circumstances. These ideologies and their mutations in the conditions of various crises have the dangerous charm of convincing part of the masses of their rightness. In addition to being inhumane, they are also anti-market. When after September 1944 Bulgarian society rapidly embarked on the anti-market path, it seemed that this was the only chance for its modernization. However, a market alternative existed. To understand its essence, we must return to the period between the First and Second World Wars.
Bulgaria after World War I
For Bulgaria, the First World War (1914-1918) ended in a national catastrophe. The country was in the camp of the defeated, thousands of young Bulgarians lost their lives in the unsuccessful attempt to achieve national unification by military force. The primitive economy was already exhausted, burdened with reparation payments to the victors. Thousands of Bulgarians - refugees from regions that remained in neighboring countries - headed to Bulgaria. Responsibility for Bulgaria's entry into the war and for the subsequent catastrophe fell on political parties that, at least in their name, bore the characteristic of liberal. The interests and personal lust for power of their leaders compromised the liberal principles, which were never taken very seriously by them.
After World War I, ideas that contradicted the basic principles of a market economy gained popularity and practical application in Bulgarian society. The populist agricultural government of Alexander Stamboliyski (1920-1923) with the so-called agrarian reform encroached on private ownership of land and destroyed the few modern and market-oriented agricultural holdings. The next government, headed by Prof. Alexander Tsankov (1923-1926), repealed some of the agricultural reforms, but deepened state intervention in the economy. The Great Depression and authoritarian governments after 1934 continued these trends. Credit, foreign trade, electrification and other economic sectors came under almost complete state control.
In Bulgarian economic thought during the period, skepticism and criticism of the "shortcomings" attributed to the market economy were extremely popular. The state, with all its institutions, administrative and legislative bodies, was increasingly seen as a major player in the economy. Its regulatory role was strengthened and a large part of economists believed that it no longer simply supported, but in some cases completely or partially displaced, private initiative. It was considered to be above-class, unbound by the interests of the political elite and from this point of view able to overcome the shortcomings of capitalism. Already in the early 1920s, a similar opinion was expressed by Al. Tsankov.
Theoretical concepts are being developed that justify protectionism and criticize free trade. The first attempts to analyze and evaluate the possibilities for implementing planning in the economy appear. A considerable group of Bulgarian economists proposes ideas for implementing the introduction of planning in Bulgarian society without concentrating in detail on the theoretical question of the possibility of combining capitalism and planning. Others try to prove the thesis of compatibility between capitalism and planning. The specific proposals for the introduction of planning create an impression of pragmatism and engagement with the essential problems of the Bulgarian economy, without going into "abstract" and inappropriate theoretical debates for the specific historical moment. They illustrate the fact that planning is becoming increasingly popular among economists and among various representatives of the ruling elites in the country.
Market prospects
Against the backdrop of this powerful anti-market wave, several attempts by Bulgarian economists to propose a market alternative as a means of overcoming the backwardness and economic problems of the interwar period are striking.
In a series of publications, the long-time secretary of the Sofia Stock Exchange, Stoyan Bochev (1881-1968), draws attention to the possibilities of the joint-stock business to stimulate the country's economy. He knows that after the Liberation in Bulgaria there is a "deficit" of capital and capitalists. It is for this reason that he perceives and proposes the " joint-stock form of business entrepreneurship " as the most appropriate form of economic activity, especially when it has to be on a larger scale. Bochev traces the history and trends in the development of the joint-stock business in Bulgaria. He is aware of the shortcomings of the first joint-stock companies in the country - state hostility to the joint-stock business, vague balance sheets and annual accounts, management in which each shareholder strives to have voting rights disproportionate to the number of shares, etc.
However, Bochev points out that joint-stock companies have implemented projects that would not have been possible otherwise in the fields of credit, insurance, mining and industry. They have attracted foreign capital, which the Bulgarian economy desperately needs and have the potential to modernize it in the future. They are able to revive national savings by putting the available local capital into economic circulation and harnessing it in positive economic development. It is for this reason that the state should encourage them, primarily by easing the tax burden. The development and promotion of joint-stock companies is emerging as an alternative to direct state intervention in the economy.
Market-oriented alternatives to the Bulgarian economy are also seen by Prof. Y. Mollov, who deals mainly with the state of the agrarian sector, which was then the main one for Bulgaria. Bulgarian agriculture during the period between the two world wars was primitive, weakly tied to the market and with high hidden unemployment. This means that there is too much labor in it, which is not used effectively. However, it cannot find application in industry due to its weak development. The surplus labor cannot emigrate, due to the restrictions on the free movement of people during the period under consideration. In this situation, according to Y. Mollov, it is necessary for the agricultural economy to be transformed into a labor-intensive one, i.e. in the cultivation of " those crops and those types of domestic animals, in view of the requirements of the market, which best utilize and reward the funds invested in production ". Although in his publications Y. Mollov is not a consistent supporter of market ideas, he is convinced that the economic policy that can be successful in modernizing agriculture and increasing its income is the one in which the primary place is occupied by measures to strengthen private initiative. His recipe for Bulgarian economic development includes the market orientation of agriculture, based on the private initiative of agricultural producers.
Additional emphasis on such an option for modernizing Bulgarian agriculture is given by Professor Naum Dolinski. He is an emigrant from Bolshevik Russia and teaches at the Higher School of Commerce in Varna. Dolinski criticizes the agrarian reforms carried out by the Bulgarian Agricultural Workers' Union in the early 1920s as being justified by political motives. He is the Bulgarian economist who most clearly formulates the thesis that Bulgarian agriculture suffers not from capitalism, but from the lack of sufficient capitalism. It is the non-capitalist nature of agriculture that is among the main reasons for the crisis phenomena in agriculture. Like Y. Mollov, he develops the thesis that Bulgarian agriculture needs reforms through which it can transform from extensive to labor-intensive. According to N. Dolinski , the process of intensification and binding of agriculture takes place spontaneously and the rational economic policy of the state is to encourage and further develop it. As an example of agricultural reforms, Dolinski points to Denmark with its free cooperatives, oriented towards production for the market.
The unrealized alternative in the Bulgarian economy
After the September 9th coup in 1944, the Stalinist model of socialism was imposed in Bulgaria with the help of foreign military, political and economic power. The problems and shortcomings of the Bulgarian economy before 1944 presented those who ruled during the socialist regime as modernizers. The anti-market tendencies in Bulgaria's economic policy are not a surprise or a novelty. However, the economic policy of socialist industrialization pursued by the Bulgarian Communist Party is not the only possible way to overcome poverty and backwardness.
The ideas of the aforementioned Bulgarian economists from the period before 1944 show the alternative. Two elements can be distinguished in it. The first - labor-intensive, market-oriented agriculture and joint-stock companies to carry out larger-scale initiatives outside of agriculture. The second - an economic policy based not on opposition, but on cooperation and support of private initiative by the state. This alternative is not without its shortcomings, but it never gets a chance to show its advantages.
