The house that market socialism built: reform, consumption and inequality in Socialist Yugoslavia

Scholars have argued that Eastern European socialist regimes found themselves forced to compete with the capitalist consumerist model showcased in West Germany in order to maintain their legitimacy in the eyes of the population. Yugoslavia, however, did decide to prioritize consumer needs and scrap central planning in favor of a consumerdriven economy. How did these economic reforms fare? Focusing on the formulation of housing policy, its marketing, and its reception in the press, this study sheds light on the possibility of consumer-driven reforms in a socialist state. Although the economic policies and priorities pursued starting in 1957 yielded a general increase in personal consumption, these increases were not equitably shared in the area of housing, with unskilled and semiskilled workers being left in the cold. This fact was ideologically problematic for a regime whose legitimacy was founded on the promise of an egalitarian workers’ society. Rather than pulling back to more controlled economic conditions, policy-makers pushed forwards with even more radical liberalizing reforms, which they justified with the promise of greater equality through increased access to personal consumption. However, popular opinion disapproved of these reforms, because it perceived that they only benefited a privileged stratum of the population. In response, policy-makers did not retract the reforms, but merely buffered the margins of this consumer society – discarding the idea of luxury housing as politically unacceptable, and adopting a program of social housing for those shut out of the housing market.