There is a joke here about a worker who is being asked by an important communist official if he is happy with Yugoslavia's system of self-management. The worker says he could bare his true feelings only in strict privacy. After the official takes him aside, the worker whispers in his ear, "I really like it."
This is a quintessential Yugoslav joke. For although self-management has ushered in unprecedented prosperity since it replaced the country's previous Soviet-style economy, there are growing indications that President Tito's experiment in market socialism is at a crossroads.
Some senior Communist Party figures were saying publicly in recent days that the crucial juncture is near and the country will have to either revert to centralized policies or move toward greater democratization of its economic and political life.
After the Yugoslavs broke with Moscow in 1948, they sought to soften the constraints of one-party rule with a system that gives each person a role in running his or her enterprise. Self-management in fact conjures the picture of a New England town meeting going wild.
An integral part of it was the introduction of a market ruled by the laws of supply and demand in which Yugoslavs had to swim or sink on their own.
With workers managing their enterprises, hospitals, universities and virtually all aspects of life, the quality of life improved dramatically. But it also revealed that direct grassroots democracy appears irreconcilably at odds with one-party rule.
Before Tito applied the brakes and reaffirmed the Communist Party's preeminence again, the state, which theoretically should eventually wither away under communism, very nearly did in Yugoslavia.
Tito, in reinstating party controls throughout the complex system, did not go so far as to resore the Soviet-style policies under which the state owns and manages everything apart from a few personal possessions.
But in the twilight of his rule, Tito's restraint and world recession have created compelling reasons for a new, more rational approach to the country's economic and social life.
Yugoslavia today faces grave economic difficulties as a result of changes in terms of trade and the world's energy crisis. The country's unemployment rate for the past three years was in the perilous range of between 12 and 14 percent; its inflation is about 30 percent annually, and its balance of payments deficit is nearly $6.5 billion.
A country the size of Oregon with a population about 23 million, Yugoslavia is indebted to foreign countries and banks to the formidable total of $13 billion.
Moreover, its difficulties are compounded by the country's federal structure in which regional communist elites frequently cannot reconcile their varied interests in order to come up with a joint economic program. The 87-year-old Tito, until his recent illness, used to arbitrate between the regions and, if necessary, impose solutions on them. Tito's heirs may find this more difficult to do.
Against this background there are pressures here for fundamental reforms to reduce government involvement in economic affairs and to create a freer climate in general. Those favoring changes argue that the market can reconcile differences far more efficiently than administrative measures.
A senior communist theoretician, Dusan Bilandzic, said in a recent interview that "in the long run the present situation cannot survive and that because of existing economic problems either stronger administrative measures will have to be introduced or we will have to strengthen the laws of market economy."
"There is no third possibility," he said.
Bilandzic, who argues in favor of democratization, is a member of the Central Committee in Croatia. He argued in a published interview that the absence of free speech is a source of many economic and political difficulties.
On one hand, he said, Yugoslavs are "afraid to express different views" because they are accustomed to "self-censorship." Hence the absence of free debate on national issues, which he called "the most serious and most sensitive problem" for the country.
On the other hand, he continued, there are people in the communist hierarchy "who associate every free dialogue" with subversion or collapse.
Other senior party figures spoke in background briefings about egalitarian tendencies in the party that encourage "the spirit of parasitism" by depriving profitable firms and enterprising individuals of profits.
"There is nothing wrong with profits and nothing wrong with people getting richer if they work harder than others," one senior official said.
Bilandzic spoke about the Yugoslav system as one in which "losses are socialized while profits are nationalized" and suggested that this is at the root of inefficiency, the poor capital investment situation and other economic difficulties. Another ranking party official told journalists recently that future reforms should provide encouragement for private investors and entrepreneurs.
More dogmatic party figures favor greater party controls on the ground that "technocratic elites" would subvert the system and use self-management to gain political power.
They argue in effect that it is one thing to make industrial jobs more interesting and give workers more responsibility for what they do. It is quite another thing to see self-management and a market economy destroy the party's monopoly on power.
Although the battle lines are drawn, Tito's successful recovery from two recent operations has put off open combat for the time being.
Vladimir Bakaric, the last of Tito's old comrades, and younger figures who hold power are all pragamatic men committed to a modern Yugoslavia. In these circles, the country's continued liberalization is seen as both desirable and inevitable. One top figure also said last week that "no other way" is possible.
Tito's spectacular recovery, according to political observers here, is likely to put off the moment of decision, with the Yugoslav system continuing to adhere to the current Marxist mold, regardless of how much it has constrained natural development. Although Tito may never exercise absolute power over the country as he used to, no fundamental changes can be undertaken without his approval as long as he lives.
But some sources close to the party suggest that the old marshal may yet surprise everyone -- as he did so frequently during the past 40 years -- and support the current leaders who argue for a new program of liberalization.