This article investigates the formation of a Hungarian socialist enterprise in the vehicle industry. After giving an overview of the legacy of World War II in a (nationalized) vehicle industry plant, it explores political, production, and wage conflicts on the basis of company and party archives and considers the kinds of resources which workers and engineers could use in their efforts to assert their interests. It also considers how these efforts limited the abilities of the central economic authorities to exert influence. It arrives at the conclusion that the main features of the early socialist enterprises, such as technology, the structure of the skilled workforce, the attitudes of this workforce, etc., were shaped by the industrial boost which had come with the war. Furthermore, the relationship between workers and firms was itself shaped by the shortage of consumer goods during and after the war, because the supply of consumer goods (above all, food) was considered the responsibility of the enterprises. These circumstances set narrow limits within which the central economic administration had to operate in is efforts to create so-called socialist enterprises. So, the early socialist enterprise seems to have had few genuinely socialist elements. It was shaped far more by the prevailing conditions in the postwar context, networks among engineers, and a sense of solidarity among skilled workers which had been inherited from the pre-socialist era.

Keywords: Socialism, Hungary, technocracy, labor history, enterprises.

In December 1951, tensions concerning wages (quite typical of the Rákosi era) in the Ikarus Bodywork and Vehicle Factory on the outskirts of Budapest led to a riot. Barely a week earlier, the trade union secretary of Ikarus had spoken about the tension surrounding bonuses at the meeting of the Hungarian Workers’ Party (MDP) in the sixteenth district.1 As Christmas approached, the conflict became increasingly acute. According to the rules, December 27 would have been the payday at Ikarus. However, chief accountant Jenő Medvei had promised at a trade union event on December 19 that wages due would be paid on December 23, i.e. before the holiday. He allegedly misled the company’s executives by saying he had obtained permission from the Ministry of Metallurgy and Machinery to pay these wages. When the payments were already in progress, Medvei called the ministry to get permission to make the payments before Christmas. The ministry, however, rejected his request and even ordered the suspension of the payments that were already underway. The Ikarus leaders then suspended the payments, and they spent some time on the phone helplessly entreating various representatives of the higher bodies to help until, eventually, Minister of Metallurgy and Machinery Mihály Zsofinyec firmly informed them that they were forbidden from deviating in any way, with the disbursement of payments, from the official schedule.2 At 4:30 that afternoon, the workers, who were eagerly waiting to be paid, were told on the loudspeaker that payments of wages would only be made on December 27. Later, the company management was harshly criticized for not having the courage to stand in front of their employees in person and explain the party’s decision and stance. Financial director Medvei, however, allegedly did approach the angry workers in person and informed them of the instructions he had been given by the party. The crowd of about 500 people, including party members, wanted to beat general manager Szőcs, who fled to the party office. Szőcs was later criticized for having led the angry crowd to the party office.3 The angry mob broke into the corporate MDP office, smashed the equipment, and threw the documents and décor on the ground, but Szőcs was able to escape. The events were brought to an end with the arrival of the state security forces. The crowd was dispersed, and some 100 people were detained.4 By exploring the processes which led to the conflict described above, the present study examines the peculiarities of the formation of a socialist company which, as one of the flagbearers of Hungarian industry, provided buses for the Soviet Union and other Comecon countries for decades and, in some periods, also was a major source of exports from Hungary to countries in the third world.5

The secondary literature on the economics of the state socialist era has always considered large enterprises as important actors, and it was, according to this literature, the relations between these enterprises and the governing superiors (relations which were plagued by communication failures), the often dysfunctional interactions among these enterprises, and the internal conflicts at these enterprises which were responsible for the chaos of the planned economy.6 At the same time, its inefficiency from an economic point of view notwithstanding, the socialist enterprise was an important institution of social integration in state socialism because it linked its workers and employees to itself and to the system through other organizations tied to the enterprise (trade unions, sports clubs, etc.) and through social benefits, in addition to wages, and thus provided them with a specific socialist way of life.7 The more recent literature also emphasizes, in comparison with earlier research, that companies functioned as autonomous institutional actors in state socialist societies, maintaining transnational networks of contacts, often across the Iron Curtain, and that the development of these networks over time did not necessarily follow the same pattern as the development of political relations between East and West, but rather had a distinctive dynamics of its own.8 At the same time, the literature has only rarely dealt with the period of the emergence of the socialist enterprise, the processes that created the familiar features of the socialist enterprise, and the actors who shaped them in the period of nationalization. The present study examines the groups and forces that shaped the image of the enterprise at the turn of the 1940s and 1950s, and it considers the extent to which nationalization and the establishment of the party-state system represented a departure from the earlier path.

The Legacy of the War

“The Uhri siblings showed us that there is an America in Hungary too. They began as entrepreneurs with only small workshops, and we immediately made them into major industrialists.” So said, allegedly, the Deputy Minister of Defense on October 17, 1943. He was referring (or at least so the source in which the statement is found contends) to the tremendous growth which the company founded by the Uhri siblings had enjoyed because of the orders placed by the state for the military.9 The enterprise launched by the Uhri family, which had begun as a low-level undertaking, had grown by 1938 to a middle-level company which, however, still had less than 100 employees. Over the course of the next year, however, as a consequence of the orders placed by the state, the company grew to several times this size, from the perspectives of both production and the number of employees. The company, which in the early 1940s employed a few thousand people, made cable drum carts and superstructures for a wide variety of military vehicles (artillery carts, veterinary and horse disinfection carts, and, later, command vehicles and radio carts) and also pontoons for the army. It was declared a military plant, and the army became the most important source of orders for its products. Furthermore, as a consequence of this change in the status of the company, the important skilled workers were exempted from military service.

They received government loans. In 1942, the state lent 3.7 million pengős to the Uhri siblings for investment in vehicle manufacturing. They had to build a modern factory in Mátyásföld in order to be able to engage in modern large-scale production.10 The creation of a dramatically larger factory site necessitated, of course, a number of other changes. A doctor’s office, a kitchen, and a cafeteria were set up, or in other words, the kinds of social facilities associated with a large enterprise. The company was run by three siblings. Imre Uhri Jr. served as commercial director because he had connections to politics and the Ministry of Defense. Zsigmond Uhri saw to the tasks of technical director and was in charge of production. Matild Uhri (the wife of László Kelecsényi) headed the material procurement department, which may well have been a major task at a time of war.11

In 1938, the Uhri siblings also began to work in airplane manufacture. First, they made a gliding machine on the basis of designs by the Technical University Sport Flying Association. The glider was essentially a matter of small-scale industrial production. The Miklós Horthy National Aviation Fund then placed orders for repairs to school machines made by Bücker Flugzeugbau, a German manufacturer.12 The move into the aircraft industry was made possible by the fact that the production processes for bodywork for road vehicles were technologically similar to the production processes involved in making aircraft bodies. Working with the same machines and tools and similar materials, the skilled workers were able to use the training and experience they already had to perform the necessary tasks. Thus, in addition to the role it played in vehicle production, the factory was also able to take on the repair of aircraft and the production of sports aircraft in small series.

The next step was to establish a relationship with the Bücker Flugzeugbau manufacturer, as the Uhri siblings’ factory was doing repairs to planes produced by Bücker. The other factories in Hungary which were suitable for aircraft production were engaged in production within the framework of a joint program with the Germans, and thus there were no factories which would have been able to address the need to produce planes for training for the Hungarian military. The Ministry of Defense purchased the license for the Bücker 131 and then handed it over to Uhri siblings’ company.13 The Ministry of Defense then ordered 210 training planes from the company, and it provided significant loans for the investments needed to meet the order.14 The Uhri company thus became a kind of government enterprise. Similar enterprises had developed in Germany and overseas as a consequence of government investment programs to combat the world economic crisis, and naturally they continued to grow as a result of production for the war.15

The emergence of a system of contracts for the manufacture of aircraft, which was in the interests of both the Hungarian Ministry of Defense and the German company, involved the mobilization of significant sums of money and thus would not have been possible without persistent lobbying and background work. One of the accusations against Imre Uhri, who in 1945 and later was stigmatized as someone who had been a right-wing friend to the Germans during the war, involved the contacts which he had maintained with extreme right-wing personalities and military leaders, primarily people in the air force and military who were responsible for equipment orders, several of whom were members of the Arrow Cross, a far-right party in Hungary which for a time was even banned by Horthy. Some of these individuals, for instance a retired Deputy Minister of Defense, ended up on the company’s board of directors.16

As the investments were being made, several reports were received by the Ministry of Defense regarding the loans which had been made to the Uhri siblings. According to these reports, the monies which had been provided had been used in part to cover expenses for luxuries. In the course of the subsequent investigations, the Ministry of Defense committee of inquiry found that the original loan agreement according to which the Hungarian Army Treasury had entered the investment had been reached without actually stipulating clear plans for the construction of buildings, the manner of implementation, or the provision of the necessary equipment, though the Ministry itself had called for such plans. Since the very first financial plans had been reached, the credit line which was allegedly needed “had grown like an avalanche to 5, 8, 11, 14.7, 20, and 25 million, and now there is talk of 30–32 million.”17 During the investment, the Uhri siblings charged a number of things to the credit line which were not, strictly speaking, eligible. A total of 1,670,189 pengős were spent on costs which, according to the committee, should not have been charged to the credit line.18 In 1944, however, the Ministry of Defense transferred another quick loan to the company so that construction would not stop, and they even made a proposal to the Council of Ministers to raise the credit line.

The construction of a factory under the leadership the Uhri siblings but financed entirely by the Ministry of Defense bears a close resemblance to the later investments made by the socialist state according to the planned economy with only soft constraints on budgeting. As a consequence of this investment, in 1943 and early 1944, a 11,685 square-meter factory hall was built in Mátyásföld which at the time was one of the largest and most modern factories in all of Hungary.19

In the summer of 1944, factory councils were formed at the company, as indeed was the case at all factories. These councils were established by law in the spirit of the corporate ideas of the far-right government which came to power with the German occupation after March 19, 1944.20 Later, from 1945 onwards, these bodies were referred to as “Arrow Cross factory councils.” However, the actual political views and inclinations of the members of the councils may well have been very mixed (though people who had open left-wing sympathies, of course, would not have been admitted), and there may have been cases in which the elections reflected little more than the popularity of a given candidate among those who were entitled to vote. The factory councils, which had to listen to questions concerning personnel, focused primarily on welfare matters. For instance, they oversaw the distribution among workers and officials of materials which had been taken from shops which had classified as “Jewish.” From the perspective of the provision of goods and wares during a time of war, this was a manner of complementing the company’s forms of social welfare which had been developed earlier.

In the upheaval of the last months of the war, the Uhri factory could hardly escape the fate of most modern enterprises. As the Soviet army drew ever nearer, the government resolved to have all installations of any possible value moved. Some of the workers hid both materials and machines in the cellars of the Mátyásföld factory, in all likelihood with Zsigmond Uhri’s knowledge. At the beginning of December 1944, as it was essentially impossible to transport the machines which had not yet been moved, the Arrow Cross authorities (by this time, the Arrow Cross was in power) ordered that the machines simply be destroyed on site. Some of the middle-level leaders at the company were able to hide some of the motors, and they contended that they were unable to dismantle important parts because they did not have the necessary manpower. The willingness of factory employees to try to protect some of the company machines, materials, and tools was not so much an expression or consequence of principled stance against Nazism on their part as it was an indication of their attachment to the factory itself. For them, the factory was something of value, and it was important that it remain able to function.

In 1945, as the war finally drew to a close, a new era began for a company which was deeply indebted to the state, which was equipped with both the most modern machinery and production facilities, and which had an experienced workforce which was in part bound to the factory and which expected both a livelihood and social benefits from it.

After 1945: The Growing Party-influence, Exculpation Proceedings, Economic Dependency

After the war, in the absence of orders from the military, it no longer made sense to produce aircraft. A new motor vehicle market was emerging for the company, however, first and foremost in the repair of damaged vehicles. As military operations came to an end, the Soviet Army placed large orders for vehicle repairs from the company, which was allowed to keep some of the repaired trucks as a form of payment. The company exchanged some of these trucks for food for its employees.21 The situation after the war created other business opportunities. The company made railway wagons for the Hungarian delivery of reparations to the Soviet Union and pontoons for use as temporary bridges.

Following the siege of Budapest, factory committees were formed which replaced the factory councils which had been in 1944. Former Arrow Cross members were removed from these committees, but there was still some continuity in council/committee membership, as views among the workers and the officials at the company concerning who was worthy of esteem or exerted influence did not necessarily change.22 István Cséfalvay, who became a leading figure at the company in 1945 as a member of the Hungarian Communist Party, had also been a member of the factory council which had been formed in 1944.23 Members of the factory committee which initially had been created at the company belonged, for the most part, to the Communist Party. They then came out in opposition to the continued presence of the Uhri family in the company leadership. At a factory committee meeting in April 1945, they proclaimed that, “it is no longer possible to work together [with the Uhri siblings]. At the time of German and Hungarian fascist rule, they served the army, forcing production to the extreme.”24 Imre and Zsigmond Uhri were reported to the political law enforcement division of the police station with jurisdiction. The factory committee alleged that the work done by the two directors was worthless to the company and their presence at the factory was harmful.25

Imre Uhri made no attempt to defend himself against the contentions that were being made about him by the factory committee. Given his strong right-wing leanings, he simply left the country. First, however, in the presence of a notary he authorized his two siblings, Zsigmond and Matild, to dispose over his possessions, including any divestments.

As a result of the report, Zsigmond Uhri was interned.26 At the plant, however, a conflict broke out between the groups leaning either towards the Communist Party or the Social Democratic Party. As a result, changes were made to the membership of the factory committee, and steps were taken by the new members, most of whom belonged to the Social Democratic Party, to release Zsigmond.27 In their submissions to the police, the Ministry of the Interior, and the Ministry of Justice, they referred only to Imre Uhri as a “friend of the Germans” or “fascist.” They claimed that Zsigmond’s experience was essential to the continued work of the factory, which allegedly had virtually ground to a halt after his internment.28 Zsigmond himself appealed against his internment. His appeal and the steps taken by the factory committee were successful in the end, and the Ministry of the Interior reversed the decision of the Mátyásföld captaincy and released him. In August 1945, Zsigmond Uhri rejoined the management of the factory.29

Parallel with the case involving Zsigmond’s internment, the case concerning whether the acts he had committed during the war were justified was also underway. Similar procedures were introduced in all companies and public service workplaces in 1945. The “justification” processes offer glimpses into what the “Arrow Cross” or other political stances actually meant for workers and how workers were attached to the factory. Most of the employees at the Uhri companies, concerning whom no potentially accusatory observations were made, were automatically certified as “justified” by the committee, meaning that they were no considered under suspicion of having committed questionable acts during the war. Only a comparatively small number of cases were heard at length or with the possible involvement of witnesses. A woman who had worked as an official at the factory admitted during the procedure (and she was, from this point of view, a remarkable exception) that she also had received materials from the stocks taken from people who had been classified as Jewish, which the company, as a military plant, had received. The questionnaire used in the process had one question concerning whether the person involved had received or “purchased any of these clearance-materials.” Almost no one answered yes to this question, though as workers at the factory, they had indeed received these kinds of materials as part of the social benefits provided by their employer. The member of the Factory Council who had been responsible for distributing the food allowances was only censured. One of the complaints made by the Factory Committee against him was that, before Christmas 1944, he had not distributed food supplies in full. Obviously, from the perspective of the workers, who were represented by the committee, this had been an “anti-labor” act. The fact that he had been a member of the Factory Council had not, in and of itself, been a matter of particular interest. In the case of another person who had been a member of the Factory Council involved in the distribution of foodstuffs, mere membership on the Council again was not the grounds on which accusations were brought. Rather, he was rebuked for having favored, in this position, members of the Arrow Cross Party.30 In other words, the notion of having received in some way materials which had once been owned by people classified as Jews seen quite as natural, since almost everyone at the factory did indeed benefit from what was essentially the theft of these materials because they were used by the factory in its efforts to provide forms of social welfare. In the case of everyday industrial goods and foodstuffs, the benefits which were provided by the enterprise were considered natural regardless of where they had come from.31 If someone had gotten his or her hands on some item of value which had once belonged to Jewish neighbors who had been deported, however, this was judged very differently. There is an example of one such case in the “justification” procedures which were held at the Uhri companies.

The “justification” of Zsigmond Uhri took place in this context of procedures after his release from internment.32 During the certification process, it was clearly to his advantage that, in the eyes of his workers, he was not a parasite or abusive boss. Many of the skilled laborers at the factory were on close terms with him, and they sought him out to discuss their troubles. Zsigmond’s efforts to make sure that the factory remained operational fostered a sense of community between him and workers who were tied long-term to the plant. This may explain the position of the company’s social democratic group of workers, who expressed their support for him.33

In the course of the “justification” procedures, the concept of worker identity seems not to have been defined according to the logic of party politics. For them, the work that they did in the factory was not simply a matter of putting food on the table. It was also an essential part of their identities. Anything that threatened operations at the plant threatened not only their livelihoods but also their social understandings of themselves. For this reason, they may very well have opposed the relocation of machinery at the plan abroad, and in 1945, they expected the people with the capital, i.e. the Uhri siblings, to ensure the necessary funds for the relaunch of the factory if they wanted to remain in their leadership positions. Zsigmond Uhri had to provide the working capital necessary to run the company. According to a subsequent audit report which was issued when the company was taken over by the state, Uhri Zsigmond invested a total of 370,000 pengős in the company in 1945.34 The workers were interested in who was promoting the operation of the factory, to which their livelihoods and identities were tied, while the question of whether a given individual had been an “Arrow Cross” (either a member of the party or just someone with extreme rightwing views) was not considered, on its own, a problem.

Thus, by the second half of 1945, in cooperation with Factory Committee, the majority of which belonged to the Social Democratic party, Zsigmond Uhri regained control of the company. The injection of capital helped solve the problems cause by war damages and the need for working capital. In the period of soaring inflation which followed, it was not difficult to finance the company. There were plenty of orders. The period of stabilization which began in early August 1946, however, put the company in a difficult position. Financial stabilization meant a dramatic drop in loan offers.35 Orders also fell, and it was impossible to get credit. This situation became a trap for the company in part simply because the management was unable to reduce the number of employees in parallel with the downturn in business. Government decrees had been issued starting in 1945 which made it impossible to reduce the workforce, which had swollen during the war, by banning layoffs. With the introduction of the forint in the autumn of 1946, a decree was issued allowing companies to reduce the number of employees, but the Factory Committee vehemently opposed it.36 In the aim of reducing the number of people who would be dismissed most of the members of the committee were not guided simply by social concerns which ran contrary to economic considerations.37 The factory communist party group regularly attacked the committee, most of the members of which, as noted above, were Social Democrats, so these Social Democratic members of the committee could not afford to seem if they were not vigorous in their efforts to defend the “interests of the workers.”38 Thus, the layoffs which were implemented following the introduction of the forint remained minimal, which put an extreme burden on the company, because in addition to wages, the company’s welfare department also provided a number of in-kind services for employees (for instance, firewood, boots, and food).39

Zsigmond Uhri made efforts to improve the situation by looking for new credit opportunities and new investors. However, there was simply no capital market in Hungary at the time. Had there been, the company probably would have been able to find adequate financing, must as it had been able to remain profitable at a time of inflation caused in part by an abundance of cash. According to the recollections of János Vörös, the company’s Social Democratic Party Secretary, for a time, the Social Democratic Party bank provided loans for the company.40 In the absence of a financial institution willing to provide serious loans, however, Zsigmond Uhri began looking for an investor who was also professionally interested in the automotive industry and would therefore be willing to cooperate with the company. Under the circumstances at the time, however, this kind of investor could only be a state-owned company, as at the beginning of 1947 there were no longer any serious companies in the vehicle industry that were still in private hands. Due to the lack of working capital and the political situation, it was quite clear that were it to partner with a state enterprise, the company would effectively fall under state control.

Two of the options merited particular consideration, the Heavy Industry Center (Nehézipari Központ, or NIK), which included the largest companies already under state management, and the Hungarian National Car Factory (Országos Gépkocsi Üzem Rt., or MOGÜRT), a vehicle industry and trade company. At the time, MOGÜRT was a communist company controlled by the Ministry of Transport, which was headed by prominent communist Ernő Gerő. In the NIK, which belonged to the Ministry of Industry (which was led by Social Democrats), the Social Democratic Party had slightly stronger positions. By engaging in negotiations in both directions (i.e. with both NIK and MOGÜRT), Zsigmond Uhri became embroiled in the struggle for economic and political influence between the two parties or, more precisely, between the networks which were organized around these parties, and in doing so, he also created conflicts among the workers at his factory.41

According to Vörös, there was pressure from above to hand over the leadership of the Factory Committee to the communists, but this had not yet taken place in 1947, as the Social Democratic Party group was more than twice as big as the Communist party group.42 There were sever conflicts about the future of the company between the various groups of workforces. According to some complaints, some “communist” workers have had even proclaimed that the Social Democrats would have to go “if we become MOGÜRTs.”43

In August 1947, NIK finally took over the company, simply because the company could no longer pay its employees weekly wages. At the time, Béla Zerkovitz, the son of the operetta and pop-song composer of the same name, who was a bodywork design engineer, was placed in Mátyásföld without a specific position, but practically as a factory manager. The legal situation was settled on September 30, 1947, when, in the presence of a notary, Zsigmond Uhri and his sister, Mrs. Matild Uhri László Kelecsényi, granted a call option for their company to a NIK owned Company.44

In the first half of 1948, the series of conflicts which had begun at the company in 1945 between the Communist Party and Social Democratic Party organizations (and the groups of workers who had sympathies with one of these two camps) came to an end, at least on the surface. The two parties were unified (which effectively meant that the Social Democratic Party was swallowed by the Communist Party), and in the course of this process, some of the people who had belonged to the Social Democratic organization simply were not made part of the new party. Others, János Vörös, for instance, who had served as the Social Democratic Party Secretary at the factory simply left the company. As part of the process, the Factory Committee, which had exerted remarkable power, also lost its role under the new management.45

Technocrats and Party Power

The company fell into the hands of the state, or rather the MDP, which had slowly become the only party. Every organized, independent group which or actor who could have had any influence in the life of the company (which in the meantime had been merged with a smaller company and given the name Ikarus) disappeared. Some informal groups remained, however, and the conflicts among them were very important from the perspective of the development of the company. The network of technocratic engineers constitutes one such informal group, while the other was the group of skilled laborers. Each of the two circles had its own practical space for maneuver, and they were in conflict with the party, or more precisely, with the individuals delegated by the party to prominent positions at the head of the company.

As Philip Scranton has noted, citing many examples from Hungary and Czechoslovakia, in the early stages of state socialism, in contrast to the politically appointed company managers who had little weight among employees, the technical management of the factories in many ways had effective local control of the company.46 In fact, technocrats were an indispensable component of the functioning of state socialism, operating according to their own logic, distinct from the political-ideological and power-driven mode of the party, as the history of Ikarus reveals.

In the age of modernity, technocrats seek to establish their positions and legitimize their roles in making investments and economic and technical decisions on the basis of some competence founded on scientific explanations and rational implementation (for example, the standardized knowledge of engineers or the expertise of economists).47 Technocrats are not political utopians, nor could they be considered social engineers in the sense in which Popper, for example, defined these concepts. Utopian thinking first envisions a distant ideal society and only then begins to look for the means to achieve this society (often including violence). Social engineers are captivated by visions of utopias, and they feel themselves called upon to transform society.48 Technocrats, in contrast, base the legitimacy of their own work and endeavors on “technique” itself, i.e. the precise, scientific knowledge of how to do something. Their point of departure is expert planning and implementation founded on the empirical sciences, not a distinct political goal. They work from the presumption that social and economic problems can be addressed with the use of rational procedures based on precise understandings of the sciences. Thus, though they do indeed follow visions which derive from the mentality of their professional surroundings, they are not laboring in the pursuit of political utopias.49

In the state socialist regime, following the nationalization of industry, with the essential liquidation of the market economy, there was more and more space for the emergence of the technocratic ethos. This ethos could also be easily linked in the discourses to the language of the party state. For instance, in connection with Ikarus, the following contention was made: “Yet today, the designer has been given such a vast space to make his wildest dreams come true, a space he never could have counted on in the capitalist economy. […] Nothing is impossible for the engineer if he has the suitable materials in his hands.”50 Technical skill was often linked with socialism in the rhetoric: “Under socialism—the progressive social order—the sciences play a particularly big role. We must concede that this is entirely natural if we keep in mind that the task of the sciences is construction, the search for the new, the systematic summary of natural and social laws, and the use of correct conclusions in everyday life, or in other words, to work in the service of progress and development.”51

After the nationalization of the large enterprise sector, technicians with formal training were able to do far more than link their technocratic manner of speaking (i.e. a kind of discourse that emphasized the need for rational, technical knowledge) with the language of socialist state politics at the time. The owners of the enterprises had disappeared, and the centralized management bureaucracy was unable to perform ownership functions as effectively as the earlier owners had. This gave technocrats considerably more room for maneuver on the level of individual companies. Furthermore, the emerging layer of technocrats was significantly more institutionalized than it had been in the earlier period had been.

One element which was central to the restructuring of the technocratic field in 1948 was the formation of the Alliance of Technical and Natural Science Associations (Műszaki és Természettudományi Egyesületek Szövetség, or METESZ), which gave engineers a shared forum and thus brought them together as a group. In the first presidency of METESZ, university professors, state secretaries, and high-ranking ministry officials met with CEOs of large companies and Ernő Gerő, the politician who was overseeing the entire area. METESZ was an association which included several member organizations. Following the wave of nationalizations, ten scientific associations dealing with branches of industry were formed in 1948 and 1949, and the mining and metallurgy associations which had existed for a long time also joined.

As a member organization of METESZ, the Mechanical Engineering Scientific Association (Gépipari Tudományos Egyesület, or GTE) was responsible for the automotive industry. The founding leaders of the Association included communist engineers, politicians or ministerial leaders, technical manager (Dezső Winkler), who had started his career as an engineer in large-scale industry before the war, a university professor and a member of the older generation, and other mechanical engineers, who had worked as leaders and designers of large enterprises.52 The composition of the leadership of the association made it possible for it to reach groups of technical experts who originally had kept their distance from the Communist Party, and it also enabled the association to create opportunities for these individuals, within the frameworks of the system, for participation in professional public life.

Alongside the association, there was also a surprisingly expansive vehicle research base in Hungary at the time. In addition to the groups at large companies who dealt with such issues, there was also the so-called National Automobile Experimental Station (Országos Autómobilkísérleti Állomás), which functioned under the direction of the Ministry of Transport and Postal Services. More important was the Vehicle Development Institute (Járműfejlesztési Intézet, JÁFI), which was created to further the centralization of technical design in the automotive industry. It was put under the leadership of Dezső Winkler (who remained in this position until 1968). Winkler owed his reputation in the automotive industry to the fact that he oversaw the development of one of the few truly successful Hungarian military innovations in World War II, the Botond all-terrain vehicle. The institution he ran became a kind of hub for engineers who had worked in vehicle development for military purposes during the war, and who worked here for the socialist vehicle industry. Their careers offer examples of the trajectories of the professional lives of technocrats, for whom the year 1945, which was pivotal in so many other respects, did not constitute a break.

Technicians working in research institutes and the corresponding departments of large companies also did not form a homogeneous group in all respects. There were generational differences, for instance. But these difference notwithstanding, together they began to form a technocratic community which was essential for state socialism. This is why this community had comparatively remarkable influence, not to mention room for maneuver, even if the individuals in this community were still vulnerable to the whims of the dictatorship. This layer of technocrats, with its associations and professional journals, was institutionalized in the first years of state socialism and created a sphere where individuals could assert themselves on the basis of the professional considerations, even given the pressures to confirm politically. The role of technocrats has been highlighted in many studies, which have called emphasis to their role in the development of some large companies,53 but it is important to note that in this case it was not just the individual technocrats who shaped the development of the party-state economy, but an institutionalized technocratic network.

At the Ikarus company, by relying on their professional competences, the technocrats could even get into conflicts with the party and some of its representatives. Their place in the larger field of technocrats constituted a source of strength and even authority for them. Drawing on this, they were able and willing to enter into lengthy conflicts with the party’s economic policy leaders over issues concerning the construction of buses. In order to understand this, it is worth pausing for a moment to consider the technical and historical turning point in bus production that took place in the 1940s.

After the Second World War, the production of buses all over the world essentially separated once and for all from the production of trucks. Buses with self-supporting bodywork were considered pioneering experiments within the industry. The body was no longer fitted to the chassis (which included all the main units and was capable of propulsion). Rather, the light-metal body itself was designed so that the chassis, the engine and powertrain, and the steering gear could then be built into it.54 This shift in the industry was in part a consequence of a change to the production of airplanes that had taken place during the war, because the self-supporting bus bodywork was based essentially on an adaptation of the construction methods used to make aircraft fuselages. During the war, the Ikarus factory was used for the production of airplanes, and the industrial knowhow gained in this process was then familiar to the engineers at the plant.

As part of their naive vision for cost-effectiveness, however, the politicians responsible for decisions concerning economic policy wanted the engines and the chassis for the buses to be made using the same main parts that were used for lorries (and other vehicles). Therefore, the designers at the factory worked on plans for the buses that they were expected to provide. Nevertheless, Cséfalvay and Zerkovitz did not give up on the idea of using self-supporting bodywork, and they continued to work on designs for these vehicles, while of course also continuing to develop designs as requested by the policymakers. It was not until 1955, with the production of the Ikarus 55 model, that a self-supporting bus was actually made by the plant, and that could be regarded as a success.

Zerkovitz and his engineers achieved this success by coming into conflict not only with ministerial superiors, but also with the organ of the party which had oversight in area and the director of the company. Furthermore, in 1952, the ÁVH (the State Protection Authority) launched an investigation against Zerkovitz on charges of sabotage.

At the meetings of the district party committee, the “technical intelligentsia” working at Ikarus and Béla Zerkovitz himself, who, as a non-party member, never attended the meetings, were regularly criticized behind their backs. Szőcs, the company’s director, who was the fourth person to hold this position since the company had been nationalized, complained at a meeting of the district party committee that Zerkovitz had “already accustomed the workers to working with him, so they believe what he tells them.”55 In its report to the Budapest Party Committee, the XVI. District Party Committee reproached Szőcs for failing to discipline Zerkovitz adequately. “It was also a failure on the part of the director to show opportunistic conduct in removing the hostile elements that had infiltrated the technical management,” according to the committee.56

In the debate over the report of the XVI. District Party Committee, Szőcs accused the technical management of the company of having been responsible for the 1951 Christmas riot at Ikarus.57 The critical remarks concerning Ikarus eventually reached Ernő Gerő, the leader of the MDP who was responsible for economic policy, who went so far as to speak publicly about the “mistakes” which allegedly had been made at the company: “At Ikarus, when designing the bus type 30, which is now so enthusiastically advertised by our papers and I think not without reason, the norms [meaning the expectations according to which an individual’s workers performance was assessed and thus wages were determined] were set for the first series, and they did not take into account that, later, the tools, equipment, and working methods had improved significantly. Of course, this meant a loosening of the standards.”58

The ÁVH also launched an investigation against the technical management of Ikarus under the suspicion sabotage. Their concerns with regard to state defense were focused primarily on Béla Zerkovitz, who had been under continuous observation since 1952. They believed he had been making mistakes that impeded completion of the plans issued by the regime. They also suspected him of hindering the labor competition movement59 and the switch from hourly wages to piece rates, which was one of the most important tools used by the regime in its strivings to improve production.60

However, Zerkovitz was not arrested or even removed from his position as chief engineer until 1957. Relying on his professional competence, he was able to make use of the spaces in which the specialists and technocrats operated. He was able to remain largely independent in technical matters within Ikarus and also had room for maneuver to convey his ideas. According to the recollections of Paul Michelberger, who was his successor at Ikarus, “he was a very good-natured man. Non-party, religious.”61 He seems to have been one of the poles in field of automotive technology in the first half of the 1950s.62 Relying on the institutionalized technocratic field, Zerkovitz was able to overcome the opposition of diveres representatives of the party-power and use his design ideas in series production. Naturally, he was not the only person to work on the designs. A team of engineers led by Cséfalvay worked on the detailed designs of the buses. But Zerkovitz, who (it is worth remembering) was not a member of the party, was the person who regularly published on the subject, represented the idea as the chief engineer at the company, and organized the work process. The engineer and experts did not simply perform tasks directly related to implementation, and with regards to investment decisions and directions of development, they were not limited to a subordinate preparatory function. Rather, by using the technical and scientific forums which were available to them, they also played important roles in initiatives which had consequences with regard to content. They also devoted some of their energies to securing orders, which meant that they assumed entrepreneurial functions, probably because, according to their assessment, they could not rely on the economic management bodies of the party state or the cumbersome foreign trade apparatus to look for a “market” for their technically innovative products.63

The political leadership had an urgent need of technocrats to be able to run the economy of the country. Indeed, with the disappearance of the owners, the technocrats in many ways took over some of the entrepreneurial functions, because these functions had fallen on them and not on the company leadership which represented the party.64 As a clear example of the success of the efforts of the technocrats, beginning in 1953, a separate experimental plant was in operation in Mátyásföld where work was done on the scientific development of new constructions. A design team was also set up at the time.65 With this, the two dominant directions in technocratic professionalism in the automotive industry, technical design and the industrial design, were given institutional form in Ikarus.66

It is not entirely clear just how cost-effective the operations of the technocracy in the socialist economy were or how they were tied to budgeting. During the war, given the exigencies faced by the government and military, investments already functioned according to “soft budgetary constraints.” As the factory reports which were submitted every year to the authorities, Ikarus had needed to take advantage, from year to year, of these “soft” constraints. After nationalization, a larger injection of capital was made to address the remaining debts from the earlier period and the lack of working capital, though even after this it remained necessary, year in, year out, to make up for losses of working capital, while the volume of production was growing rapidly.67

The budget problems, of course, were noticed by the party state leadership, which took steps to address them. In principle, the fight against the creation of excess scrap materials was intended to improve cost-effectiveness, as was the thriftier use of materials and the minimalization of waste in the production process, but the most important measures in this campaign were the effort to keep norms under continuous control, the transition to a system of pay based on performance, the organization of labor competitions. The use of these kinds of tools and the adoption of these approaches, however, necessarily led to conflicts with labor.

Skilled Workers and Party Power

After the nationalizations, it became increasingly clear that the companies were unable to provide the kinds of benefits which workers had managed to acquire in the earlier period. Several benefits in kind which had been considered more rights than benefits were left out of the collective contract, and the number of overtime hours and the amount of overtime pay were both dramatically reduced. The collective contract for 1949 year again had an ominous “echo” among workers, mainly due, for instance, to the obligation to report “obsolescence” of norms as a consequence of improvements in production technology.68 In 1948, the average annual wage among workers was 10,366 forints. By 1949, it had dropped to 7,921 forints.69 And this process did not stop here. As a result of the projected process of “standardization of norms” for the upcoming year (1950), average wages dropped by a nominal 35.5 percent at Ikarus. However, according to a report prepared for the Budapest Party Committee, wages were expected to increase, because workers would see that the norm could be exceeded.70 “Standardization of norms,” which really meant wage cuts, was met with an array of forms of resistance. Accusations concerning “manipulation” of norms were also raised in party disciplinary cases.71 The institution of standardized norms and competition among labor threatened the practical control of workers over work processes. Workers perceived these efforts to exert control as a limitation on and interference with their autonomy in relation to work processes and also as an irrational step from the point of view of production.72 This obviously affected primarily those workers who had been at the company before it was nationalized, especially skilled workers, who were accustomed to their work being important and valued and therefore were also accustomed to enjoying a degree of autonomy. They were also used to having some institutionalized room for maneuver through their trade unions or, after 1945, through the factory committee, but with nationalization, they had also lost this.73 As a result, there was “a certain degree of abstention from work among the workers.”74 The prevailing mood at the plant seemed to suggest the potential for violence, and as was noted, measures taken to ensure calm were not entirely effective: “The raising the factory fences, pulling out the wires, and the erection of watchtowers with floodlights and telephones also did not have a positive influence.”75

As a consequence of these changes, workers at Ikarus showed little enthusiasm for the party-state system. On the basis of the minutes of the XVI. District Party Committee meetings, the MDP seems to have had very little actual influence over the workers at the factory. There were frequent complaints about political indifference among the workers, and a recurring topic of discussion at the party committee meetings was that the party organ at the Ikarus factory was falling apart. Very few people actually attended the meetings, it had no real contact with the workers, and it did little substantive work. Most the workers who were selected at the Ikarus Factory to attend the party school or the various instructional programs never played roles of any prominence or importance.76 The “village tour group” which was organized at the company (these groups were sent to rural communities for propaganda purposes) had to be disbanded because of problems with discipline.77 In 1950, there was also a “shameful” occurrence on May 1, when no one was available to carry the Ikarus placard at the parade, so the placard was simply left in the factory.78

The workers’ demands, which for the most part they only made felt in a diffuse way (felt as something of a prevailing mood), in general were not considered feasible by the party authorities. Furthermore, in the wake of the many conflicts, some party functionaries seem to have thought of the workers as enemies of their party, and probably with good reason at times.79 After the disturbances in December 1951, for instance, when the new party secretary of Ikarus tried at the meeting of the district party committee to represent some demand made by the Ikarus workers, this proposal was rejected. The district secretary of the MDP offered the following argument in opposition to the workers’ demand: “If we fall into the barge of workers, then next week they might demand that we let them do the work for the week in five days.”80 The conflict described in the introduction to this essay may have been smoldering precisely because of these kinds of tensions, though other concrete factors contributed to its eventual outbreak.

According to a factory assessment dated October 3, 1952, only slightly more than half of the manual laborers were employed on a piece rate basis. The rest were paid hourly wages, though the goal was to have as many employees as possible on piece rates, as this was supposed to motivate them to work more efficiently.81 According to a domestic affairs report on Zerkovitz’s performance at the time, he would allow the work to fall behind during normal working hours. He would then need employees to work overtime, for which they were naturally paid more, thus incurring additional costs for the factory.82 The district party committee was also of the opinion that there was too much unjustifiable overtime pay at Ikarus.83 It is quite possible that Zerkovitz used this strategy to alleviate tensions at the factory concerning wages, which also at least in part explains why he enjoyed the support of the skilled workers, as Szőcs noted in his complaint to the XVI. District Party Committee.

The most important problem, however, was that only half of the manufacturing work carried out was done in accordance with an appropriate operations plan.84 According to a long report of chief engineer Antal Hirmann, who was Zerkovitz’s successor, the plant did indeed produce the models in the series, which were manufactured in relatively small numbers, “under the oversight of several of the superb engineers at the plant […] and a relatively large number (considering the number of vehicles manufactured) of first-class skilled workers,” without the technical documentation that would have been necessary for standardized production. The production of the buses rested on an industrial work culture in which the bodywork mechanics were the key figures. At the plant, they were referred to as “emperors of sheet metal,” able to produce any type of bodywork panel with a small amount of mechanized labor.85 Clearly, they were people who did not consider the technical documentation, which specified precise standards, terribly important.86 This skilled workers solved the various problems that arose in the course of the production (which were caused, for instance, by the varying quality of the materials provided by the suppliers) simply in oral consultation with the engineers and on the basis of their own experience in the profession. In other words, when it came to the production of buses, the plant relied to a large extent on the experience and knowledge of its engineers, and first and foremost its skilled laborers, who performed the tasks they were assigned without precise documentation.87

Thus, the engineers who were struggling with the challenges of designing self-supporting vehicle bodies were able to work well with skilled workers who, given their experience, were able to provide individual, even creative solutions to the tasks and who, as long as their financial interests were taken into account, were ready to produce the number of models ordered. Through the maintenance of a work culture that seemed natural for a significant proportion of the skilled workers, a community of shared interests was formed between the technical leadership at Ikarus and the core of the skilled workforce. This community of shared interests came into conflict with the representatives of the party, who were opposed by both the skilled workers and the technicians.88

Conclusion

The story of these tensions at Ikarus offers an example of the ways in which what was in principle a “socialist company” actually functioned according to earlier practices and expectations and had very few new elements in the early stages. In this period of the history of the company, its path had essentially been decided by the earlier events. Nationalization only made dependence on the state an undeniable fact, but this dependence had become a practical reality during the war. As the new owner, the party could do little to shape the company, the profile and work culture of which (which made skilled workers indispensable) had been formed in the first half of the 1940s. Instead of the state party, which in theory had ownership rights, the technocrats were in fact in charge of determining the development of the company. Though they were compelled to adapt to the party-state, the technocrats constituted an independent component of the regime which was of a fundamentally different nature from the ideological-political logic, and they were able to prevail in conflicts with the political power. However, the power of the party in the factories was limited not only by the presence of technocrats in the early socialist enterprise. When the party took measures to implement changes, it ended up threatening the identity of the workers (which was strongly linked to the factory and which had a solidarity which was rooted in wartime experiences) and provoked violent conflict in which the technocrats, who had their own conflicts with the party authorities, acted as allies of the workers.

Archival Sources

Állambiztonsági Szolgálatok Történeti Levéltára [Historical Archives of the Hungarian State Security] (ÁBTL) Budapest

3.19. V-141867. The investigation dossier on Dr Emil Hant and associates

Budapest Főváros Levéltára [Budapest City Archives] (BFL) Budapest

XVII.1625 Budapest justification committee

XXXV.95.a. The Budapest Party Committee of the Hungarian Workers’ Party

XXXV.157.a. (Budapest) XVI. Distric Party Committee of the Hungarian Workers’ Party

Fővárosi Szabó Ervin Könyvtár [Metropolitan Ervin Szabó Library] (FSZEK)

Budapest Gyűjtemény

BQ 0910/365 Jenei, Károly, and József Szekeres. “Az Ikarus Karosszéria és Járműgyár története” [The history of Ikarus Body and Vehicle Factory]. Manuscript, 1971.

Hadtörténelmi Levéltár [Military History Archives] (HL HM) Budapest

Ministry of Defense 1943 eln. 17/b 107819

Ministry of Defense 1944 eln. 17/b. 203893.

Ministry of Defense 1944 eln. 17/b. 209074

Magyar Nemzeti Levéltár Országos Levéltára [National Archives of Hungary] (MNL OL) Budapest

Z 517. Uhri Siblings’ Bodywork and Vehicle Factory, 1934–1950.

Z 1192. Uhri Siblings’ Bodywork and Vehicle Factory. Factory commitee, 1945–1948.

Oral History Archive 1956 Institute (OHA)

1001. interview with Sebestyén Endre Bakonyi

 

Vörös, János. “Az életutam” [My life]. Unpublished manuscript, last modified 2006,

https://mek.oszk.hu/06400/06462/06462.htm

Interview with Géza Tóth. May 20, 2019. (Author’s files.)

Közlekedéstudományi Szemle [Transportation Science Review], 1953, 1954.

Magyar Szárnyak [Hungarian Wings], 1941.

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In this article, I examine the fate during the decades of socialism in Hungary of the agricultural company Árpád-Agrár Ltd. of Szentes, which which has flourished up to the present day. Its predecessor, the Árpád Mezőgazdasági Termelőszövetkezet (Agricultural Producer Cooperative), was established in 1960, during the last wave of collectivization. Most members were gardeners who specialized in a Bulgarian type of horticulture.

One of the central questions in my inquiry is how individual gardeners’ best practices were preserved and further developed within the structure of a socialist cooperative. I also consider how the Árpád Cooperative used the economic reforms of 1968 to expand its market-share.
In my analysis of the successful transfer of knowledge and processes of adaptation, I devote particular attention to the human factor, taking into consideration both the changing relationship between the leadership and the membership of the cooperative and the formation of a class of managers who had had experiences in the West and had a more open-minded mentality. These factors offer a possible explanation as to why this agricultural community chose the organizational form of a cooperative at the time of the change of the political regime and was transformed into a public limited liability company only a decade later.

Keywords: Hungary, socialist cooperatives, horticulture, adaptation, bottom-up initiatives, agrarian lobby, market reforms, innovation

Árpád-Agrár Ltd. in Szentes is considered one of the national leaders in Hungary in the production of cocktail tomatoes and peppers as well as in the growing of seedlings. Vegetable cultivation is based on renewable energy and the utilization of thermal water and cutting-edge technology. For the purpose of protecting plants, the use of chemicals has been replaced with the use of organic materials.

Immediately after entering the company’s office in Szentes, one notices the certificates, awards, and diplomas from every decade of the enterprise’s existence decorating the walls. The earliest are from the 1960s, from the time of the Árpád Mezőgazdasági Termelőszövetkezet (Agricultural Producer Cooperative).1 The current company views the Cooperative as its predecessor both from the legal perspective and from the perspective of historical continuity. The commitment to this continuity is reflected in the way both the 50th and 60th anniversaries were celebrated.

In this paper, I focus on the socialist period of the company’s history. I begin with a discussion of how “socialist” the Árpád Cooperative really was. How did individual farmers dealing with intensive horticulture and production for the market fit into a socialist-type large-scale organization which at the time was essentially unknown in the world of Hungarian agriculture? I also consider how the Cooperative used the economic reforms of 1968 to expand its market. I make use in my analysis of the official documents of the Árpád Cooperative as well as the press and oral sources.2

Historical Background

The roots reach back to 1875, when Bulgarian gardeners moved to Hungary, or more specifically to the estate of the Count László Károlyi, where they founded a farm of roughly 15 hectares (ha).3 The Bulgarians made sure to settle alongside natural waterways. The major elements of the Bulgarian-type of gardening were the following: careful choice and arrangement of plants, protection against frost, use of hot-beds for seedlings, raised beds for growing, continuous irrigation, and soil treatment. Using these methods, the settlers and their descendants were able to get their vegetables to market before other producers, which led to significant profits.4

Most of the labor was handled manually. For periods of planting, hoeing, picking, and preparation for market, the Bulgarian gardeners hired seasonal laborers. More and more of these laborers learned these unique methods, and over time, vegetable growing in Szentes began to resemble Bulgarian horticulture more and more. Between the two World Wars, specialization became advanced. The production of green peppers and early cabbage varieties came to the fore, and the comparatively small gardens (1–1.5 ha) could produce significant incomes for various families. Before World War II, more than 700 families in Szentes produced vegetables for market distribution.5

In this region, the land reform of 1945 did not cause significant restructuring, as there were no large estates to divide.6 The situation of the local society remained much as it had been between the two World Wars. On the one hand, there was a group of small-plot, market-oriented gardeners, while on the other there was also the continued presence of a large group of landless agricultural laborers.

In the second half of 1948, the forced organization of cooperatives began, based on the Soviet model.7 In socialist agriculture, the place of individual farmers was taken by large-scale plants (sovkhozes, kolkhozes) which were based on collective production. As such, the planned economy, based on mandatory plan targets, was spread to agriculture. The compulsory delivery system and policy of price control ensured that the producer (the farmer) kept less and less of the profits made from the product. This was the antithesis of how the specialized gardeners of Szentes, who produced for the market, farmed. It is not surprising that they did not want to give up individual farming for a collective farming. The other significant section of local society, the landless agricultural laborers, took a different view. They saw the cooperatives as an employment opportunity and thus were the major social basis of the emerging world of socialist agriculture. The first cooperative in Szentes was founded in 1948, largely with the participation of prisoners of war returning from the Soviet Union, which is why it was named “Kalinin.”8

At the beginning of the process of forced collectivization, the leadership of the Hungarian Communist party9 was of the view that three to four years would be enough to force the Hungarian peasantry into socialist agriculture. Due to the resistance of the peasantry, neither the first (1949–53) nor the second (1955–56) collectivization campaigns reached the target goals.10 After the suppression of the 1956 revolution, in its efforts to consolidate its hold on power, the Kádár government abandoned compulsory deliveries and halted the second collectivization campaign. A large portion of the peasantry took advantage of the opportunity to leave the collective, and the number of cooperative members decreased from 343,000 to 119,000.11

While most of the peasantry was leaving the cooperatives at the turn of 1956–57, the gardeners of Szentes decided that they would form a genuine cooperative. On January 27, 1957, 68 gardeners in Szentes established a szakszövetkezet (a sort of cooperative).12 This form of cooperation was quite different from the Stalinist model that was being promoted.13 The new enterprise brought together its members mainly in the areas of sales and purchasing but allowed them to continue pursue their work in horticulture individually. The gardeners of Szentes quickly responded to the new situation, in which they were no longer obliged to make compulsory deliveries of their agricultural products. Thus, the market economy made a partial reappearance in one of the major branches of the Hungarian economy. The gardeners of Szentes hoped to profit directly from these widening market opportunities without having to rely on purchases by state bodies.

After three successful years, however, the members felt that the cooperative was enjoying less and less political support, especially after the third collectivization campaign was launched in early 1959. After lengthy debates, the best path forward seemed to be to transform the cooperative into an agricultural producer cooperative.14 The decision was made at the general meeting of January 27, 1960.15Although they could have joined another existing cooperative, as more than ten had been established in Szentes by this point, they decided to establish their own. This made it possible for them to choose their own leadership and keep control over several other essential issues. The investments of the post-1957 period were not lost, as they were transferred to the collective property of the new cooperative. 78 percent of the members of the earlier cooperative joined the Árpád Agricultural Cooperative.

What was behind the Socialist Facade?

When establishing the cooperative, one of the most important tasks was to prepare the charter laying out the ground rules, which were based on the Soviet kolkhoz legal form.16 For example, the members were obliged to manage their production tools and livestock in a collective form. Another mandatory element was collective labor in the form of brigades and smaller work groups. The cooperative members were given “work units” in exchange for their labor. The “work unit” served as a means of quantifying labor and the foundation of remuneration.17

During the first two collectivization campaigns in the 1950s the Hungarian cooperatives were given a model legal framework (charter) all the points of which were mandatory. On the eve of the third collectivization campaign, the Ministry of Agriculture published a model charter which functioned only as a guideline for basic rules, so it provided a degree of flexibility.18 For example, it recommended the Soviet “work unit” system as the most advanced form of remuneration, but this could be combined with alternative forms of payment. There was also some flexibility concerning household plots.19

The membership of the Árpád Cooperative in Szentes took advantage of this opportunity and enacted 14 modifications when writing its own charter.20 My interview subjects often repeated the words of the former cooperative president László Szabó: “When one can see he needs new clothes, it is best to go to the tailor and have some custom made rather than simply acquire one-size-fits-all, as whatever you get off the rack, it will either be too loose or too tight.”21 László Szabó himself was a successful and respected gardener, and he thus knew that this branch, which required exceptional attention and expertise, could not be transformed overnight into a completely foreign and unknown labor organization.

What did this mean in practice? The Árpád Cooperative organized mandatory labor brigades, but the members continued to work individually in their own gardens and conducted sales collectively. There was thus no labor supply issue for the cooperative, as members could bring in family members who were not members of the cooperative. The so-called family-farmed horticultural brigade was directed by a respected local gardener, Imre Kotymán. The form in which labor was organized was not the only thing which was adjusted to local farming traditions. Remuneration was also revised, integrating the logic of sharecropping, which created clear incentives.22

As part of the efforts to adjust to the main profile of horticulture, an unusual set of regulations was worked out for household plots. Members could choose to request a maximum of 0.5 ha of arable land per household plot. A fraction or complete area of this could be used for gardening, and in these cases, the household plot was calculated based not on area but instead on the number of hot-beds. It is also worth mentioning that the cooperative established a bare minimum number of labor units per household when measuring eligibility.23

In order for the cooperative to be able to adopt this outwardly socialist but inwardly (in terms of several of its elements) individual horticulture system, it had to have the approval of both the city and county party leadership. This was especially significant given that the cooperative president was not a member of the Communist party. The party secretary of Szentes, Sándor Labádi, had a key role. He was present at the cooperative’s general meetings and took a proactive part in the debates.24 With the knowledge he gleaned here, he was able to convince the higher authorities that these local initiatives were not concessions which would allow old-time peasant lifestyles to continue but rather were measures which would contribute to the transformation of the economy. Such local initiatives made continuity in labor-intensive vegetable production possible, and this served the interests of consumers in the cities.25

The reason this line of argument worked was that the same approach was being announced at the time at the national level of agricultural policy by the members of the agrarian lobby centered around Lajos Fehér (Ferenc Erdei, Imre Dimény, Ernő Csizmadia, etc.).26 They supported grassroots initiatives that improved the individual incentives of cooperative members and in turn ensured growth in production. Erdei’s research institute, the Research Institute of Agricultural Economics of the Hungarian Academy of Sciences (in Hungarian, Agrárgazdasági Kutató Intézet, or AKI), had been following and analyzing changes in the local practices of remuneration and work organization for years. Based on their studies, Fehér and his group convinced the political leadership to accept these local initiatives in spite of the fact that most of them deviated from the kolkhoz Model Charter. Thanks to the successful mediation between the party leadership and the peasantry, in the first half of the 1960s, more and more local initiatives were transferred from the category of “forbidden” to the category of “tolerated,” and this significantly widened the scope of action for cooperatives.27

In this atmosphere, after the initial difficulties of the transformation, the leaders of the Árpád Cooperative began to consider the idea of large-scale horticulture. Initially, this was tested only on a restricted area, because they had difficulty convincing twelve people to work on a trial basis for a year. However, the first year produced such impressive results that in the following year large-scale horticulture was implemented on a far bigger area. The expanding area provided ever more opportunities for the use of machinery. The seedling planting tractor and a modern irrigation system became cost-efficient when used on large territories.

As an effect of the improvements in production and higher earnings, large-scale horticulture became increasingly attractive over the course of the next several years. The 60-person brigade was formed into a well-integrated collective. The wisdom of the cooperative leadership is reflected in the fact that they did not try at the same time to eliminate the family-farmed horticultural brigade. In fact, they even offered support to expand it (more land, irrigation systems, etc.). This group also became more efficient and remained an independent labor organization unit within the cooperative. The two vegetable-producing units recorded their costs and production results separately (i.e. independently of each other), but they competed with each other in production and development. The minutes of the leadership meetings indicate a spirit of competition which motivated both units and led to increasingly impressive results.28 In 1964, the Árpád Cooperative began regularly to win prestigious national awards. These awards included prizes won at the National Agricultural Fair for products like peppers, kohlrabi, tomatoes, etc. as well as recognition given by the Ministry of Agriculture.29

The Period of Market Reforms

In the early years, when there was an actual disjuncture between legal norms and cooperative behavior, practices of “creative disobedience” played a key role. They led to visible results which made the Árpád Cooperative a unique phenomenon among Hungarian cooperatives.30 In the mid-1960s, the overwhelming majority of producer cooperatives struggled with start-up difficulties, shortages of equipment and labor, and unwillingness to work. The abovementioned grassroots initiatives facilitated the consolidation process of the cooperatives, but there were many villages and smaller communities where local leaders stuck with the Stalinist rules. In coping with the defiance of the provincial party-state, Lajos Fehér and his network tried to create a legal and administrative environment in which the authorization of local initiatives coming from below would be independent from the attitude of the local party-state apparatus. To this end, they initiated a comprehensive agricultural reform program. 31

As preparations for the general economic reforms progressed in Hungary and the contours of the New Economic Mechanism emerged, the arguments of the agrarian lobby received increasing attention and acceptance. The leadership of the Hungarian Socialist Workers’ Party sought a solution through a new system of economic management, one which combined planned and market economies. In an interview on precursors to the New Economic Mechanism, Economic Policy Secretary of the Central Committee Rezső Nyers indicated that the agricultural reform “had already addressed the questions of the economic mechanism from the agricultural perspective.”32 This is largely explained by the fact that, since the abolition of the compulsory delivery system in November 1956, a significant amount of experience with market incentives had been gathered. Among the many reform steps in agriculture, I will mention here only those that affected the functioning of cooperatives. The cancellation of machine-tractor stations in 1965, the write-off of debt, and an adjustment of the pricing system in 1966 all meant that the dismantling of the Stalinist system of socialist agriculture had begun.33

In the fall of 1967, Parliament accepted two laws which defined the economic and social relations of agricultural cooperatives for the next twenty years. 34 The new legislation incorporated the fruits of successful collaboration between the politicians and high-level administrators in the agrarian lobby and the agrarian economists. Law III on agricultural producer cooperatives aimed to resolve the duality which had arisen from the discrepancy between producer cooperative practice and the legal regulations in force. The abovementioned “tolerated” local practices, especially in the areas of remuneration, work organization, and household plot farming, were finally “legalized” in 1967.35

What did this significant shift mean for the life of the Árpád Cooperative in Szentes? Cooperative president László Szabó summarized this for the members as follows:

In the period of direct control, the state dictated the resources that the cooperatives would receive, specified how much they could produce and what they could produce, and stipulated who they could produce for and what price they could sell at. Whatever income remained was distributed to the members after public debts had been settled. Development was precisely dictated and had to be financed through credit, as the farms lacked their own funds at the time.

Indirect control caused an enormous change, given that within a regulatory framework, the collective’s leadership itself defined what it would produce, and at the time could choose for whom and for what price. Income covered costs, and members were given shares based not only on the proportion of their contributed labor: members could define their development from funds collected from their own income.36

For the cooperative, 1967 was truly the beginning of a new era. This was apparent in modifications made to its production system. Earlier, it had been forced to produce certain products in the name of “the expectations of the peoples’ economy” or “supply responsibility,” regardless of economic common-sense. Had these decisions been left to the cooperative membership or leadership, they would have been made differently. The Árpád Cooperative, which was based on horticulture, had become something of a “variety shop” by the 1960s. The expectation that all agricultural cooperatives produce meat and bread applied to them and to all other cooperatives.

In addition to horticulture, the other two main branches of the cooperative were cropping and husbandry. As of 1968, both could be rationalized in accordance with local conditions. A few plant types that were produced just for “the interest of the peoples’ economy” were phased out of the plant sector. And as pig breeding and shepherding were de-emphasized, the development of turkey and goose husbandry was brought to the fore.37 The guiding principles in the structuring of activities were profitability and increased efficiency. Taking advantages of opportunities in Law III of 1967, the Árpád Cooperative began expanding so-called supplementary activities falling outside its core agricultural activities (e.g., hiring out transportation and producing in-house animal compound feed). The most dynamically growing unit was the cooperative’s construction brigade. While earlier the execution of investments required waiting for state construction firms to schedule, from this point on, the farm provided its own construction crew.38 A 20-hectare greenhouse covered by polyethylene sheets was constructed between 1969 and 1971. In 1972 a 6.5-hectare glass greenhouse area was completed. (Today this is called the “old yard.”) The first modern turkey plant in the Árpád Cooperative was built between 1973 and 1976. In the last third of the 1970s, two large investment projects were carried out. One involved the construction of a 13.6-hectare glass greenhouse yard between 1977 and 1980 (the new yard), and the other was the creation of a new office center.39

Market reforms enabled the cooperative to manage the goods it produced, i.e., they gave the cooperative the opportunity to conduct sales. Corporate clients from this point on had a direct relationship with the cooperative, and the “tutelage” of local councils came to an end. Cooperatives could sell goods produced collectively or on household plots both to corporate purchasers and retailers, food industry companies, and foreign trade companies. This was called the multi-channel sales system. Furthermore, the cooperatives could open their own shops in which they could sell their goods.

In the new economic environment after 1967, the “creative disobedience” of the early years turned into a situation in which the cooperative was technically sticking to the new Cooperative Law but was pushing the regulations to their limits. Below, I will present examples which show why this was necessary.

The Human Factor

The Law III of 1967 created an entirely new situation for the cooperative membership by cancelling the “remainder-principle” income distribution system inherited from the Stalinist kolhoz. While earlier, the cooperatives had only been able to pay their members after they had met their obligations to the state, beginning in 1968, they could count payment for labor during the season as a production expense. Payment, as such, thus took priority over state budget receivables and the payout of material expenses. As a result, for the first time in their lives, cooperative members were paid a predetermined and guaranteed sum and, in proportion with the work performed, were regularly and continuously paid wages. The stabilization of incomes situation increased the attractiveness of the cooperative sector. While in the years of collectivization and even later migration from the agricultural sector was significant, by the late 1960s, the process had reversed and workers were beginning to return to agriculture.40

By the end of the decade, the increasing appeal of the Árpád Cooperative is shown in the fact the farm could hire people for a trial period. 41 After one or two years of employment, a decision was made on whether to offer a given employee membership. (The status of member had several advantages which were not available to employees.) The trial period thus served as a useful filter in the interests of creating a quality labor pool. For this reason, the fact that all cooperatives in the socialist period had employment duties throughout (meaning they were forced to employ all applicants) is worthy of attention.

In terms of the renewal of the labor pool, a new tendency emerged, whereby an increasing number of the children of cooperative members considered joining the cooperative. László Szabó proudly reported on this during one of the general meetings:

[T]he children of the cooperative members are knocking on the door. It is as if the ice has broken, as if they have tossed aside the old habit of the children of cooperative members becoming industrial workers only; they are coming and applying. We accept these young people as members, so that using the property their father gathered they may learn to farm. With the entry of young people, new needs will appear for culture, sports, kindergartens, but in the future we will spend on this from our income, which we earned together!42

 

Examining the social base of the cooperative, we see that scholarships were offered to those who continued their education in agricultural faculties on the condition that they work at the cooperative after graduating. Young married couples received support to build homes (interest-free loans), and later a separate financial fund was created for this purpose. This all helped ensure that experts with higher education would gladly settle in Szentes. In the 1970s, retiring members who had a past of individual gardening and experience were replaced by young people with degrees from universities and colleges.43

In the 1970s, several cooperatives in the country experienced changes in the post of president. Many of the “founding fathers” with peasant roots stepped away from the position of president at this time, as they felt they could not keep up with accelerating developments.44 László Szabó, who was born in 1910, was able to keep pace, and he surrounded himself with young experts. He was an outstanding team builder. This characteristic is reflected in the following anecdote: during his 25-year term (1960–1985), he was often asked what the secret to being a successful cooperative president was. His answer was, “the most important thing is to make sure that the branch managers do not provoke fights with one another!”

In the 1970s, with a well-trained pool of experts, the Árpád Cooperative entered a new period of growth. Their vegetable production took place in three different types of greenhouses:

• By the end of the decade, the area of its glass-covered greenhouses reached 27 hectares;

• An additional 48 hectares of greenhouses were covered with polyethylene sheets with their own heating systems; and

• 41 hectares without heating systems.45

At that point, the cooperative already had twelve thermal water wells. After the 1973 oil crisis, while energy costs soared, the value of local energy sources increased. These were used in several ways in local farming. Glass and foil greenhouses were heated using local energy sources, as was the turkey plant and, later, the grains drying facility.46

Cooperation in Research, Development, and Consulting

At the time of the New Economic Mechanism, the leadership of the Hungarian Socialist Workers’ Party recognized the necessity of opening to the West.47 Thanks to the agrarian lobby, large-scale agricultural farms played an intensive role in knowledge and technology transfers.48 Hungarian cooperatives adopted industrial-like closed production systems from capitalist countries. After livestock breeding and cropping systems had been transformed, in the mid-1970s, a large number of horticulture production systems also began to undergo change.49

In order to launch effective development within horticulture, three conditions had to be met. Experts familiar with the most up-to-date production procedures had to be available, people were needed who had production experience with new methods, and the sector had to be able to acquire necessary funds. The system organizer accepted responsibility for working out industrial-like technological solutions and continuously developing them. Furthermore, he was responsible for technically adapting the systems for adjoining member farms, in accordance with local conditions. Local expert consultation was also continuously provided. 50

One of the basic conditions for the dynamic development of horticulture production systems was cooperation among people involved in research, education, and consulting. Under the chairmanship of Professor László Koródi, the Department of Vegetable Production at the Horticultural University worked on plant breeding, the training of expert engineers, and the installment of a professional advisory system, which was an enormous boon to transitioning production systems. He worked particularly closely with the Árpád Cooperative.51

The technical development launched in the early 1970s caused deep-rooted changes in production, as the increased use of machinery and chemical materials led to the introduction of new breeds and new agro-procedures. After the end of World War II, the technology of greenhouse construction developed rapidly, especially in the cold countries of Western Europe. The Netherlands turned out to be the market leader. Although Hungarian cooperatives could import greenhouses mainly from East Germany, horticultural experts regularly took part in study tours in Netherlands.52

Cooperation in Sales

As noted above, according to the 1967 Law on cooperatives, the farms themselves chose how to sell their products. Furthermore, cooperatives selling vegetables and fruits were given a free hand in setting their sale prices. A reader today gets a sense of the significance of this by recalling that one of the most important characteristics of the planned economy was the system of centrally determined fixed prices. The New Economic Mechanism reformed this approach by introducing a three-pronged pricing system: prices set by the state were accompanied by prices that could fluctuate within a spectrum set by the authorities and also free market prices, which were determined solely by supply and demand.53

From January 1, 1968, fruit and vegetable prices were also included in the free price category. Numerous barriers to the actual emergence of market logic remained, however. One of the most important of these barriers was the fact that the storage and transport infrastructure remained in the hands of the Zöldért enterprises, which thus continued to purchase the dominant share of produce.54 Prices exercised a defining influence here too. Formally, Zöldért enterprises did not have a monopoly position, but they nevertheless dictated prices, and their profits depended on the price differential between consumer and producer prices, which could amount to a difference of two or three times. Thus, they could generate a significant income by doing nothing more than buying products and selling them to the enterprises with retail networks, such as Közért and Csemege. Their interest was in maintaining this price differential rather than in maximizing sales, and they were protected by their de facto monopoly. Such a system, in which their interests were separate from those of both producers and consumers, was especially harmful in the case of early season vegetables. At the end of the rather lengthy product chain, this system had negative consequences for both producer and consumer, albeit in different ways.

The conflict between the Árpád Cooperative in Szentes and the Zöldért company of Csongrád County would merit a separate paper. In an interview with me, Dr. Sándor Márton, the chief accountant of the cooperative, stated that as early as the 1960s he and other members of the cooperative leadership had advocated for the removal of this unnecessary and costly middleman. 55 As a result of the market reforms of 1968, the legal framework was established, and the leaders of the cooperative launched an effort to attain wholesaler rights. This required finding allies at the highest levels. Imre Dimény, Minister of Agriculture and Food, played a decisive role in this. 56

At the initiative of the Árpád Cooperative, the so-called Early Vegetable Production System was established in 1975. In addition to production, it dealt with several kinds of sales based on common interests. The Early Vegetable Production System of Szentes covered glass greenhouses, heated and unheated plastic foil greenhouses, and early outdoor/open-air production.

Initially, the initiative had two partners. Within five years, there were eight, and two years later, there were twenty. By this point, the Early Vegetable Production System covered three counties (Csongrád, Szolnok, and Bács-Kiskun). It is important to add that the system covered 20 farms and 3,500 household gardens and small-scale producers.57 The Árpád Cooperative played the role of gestor in the Early Vegetable Production System. It provided know-how and the production technology for certain varieties of sprouts to member farms. In order to be able to share the best technology, it established cooperation with the Horticultural University and the Consulting Service of the Vegetable Production Research Institute. The consultants of the Early Vegetable Production System offered assistance not only in the field of production technology adaptation, but also in compliance, with weekly visits to the member farms.58

The integration of production entailed cooperation among the members of the Early Vegetable Production System in the field of purchasing, given that in vegetable production, systems increasing volumes of seeds and consultancy had to be acquired, as did plant protection materials, machinery, and parts.

Regarding joint interests in sales, its essence lay in the fact that the member farms, unlike when dealing with Zöldért, did not calculate vegetables by the percentage of price gap but instead based on joint decisions defining the commercial costs per kilogram of product. They held that the greatest success in their first year was the sale of vegetables for 58 million forints at a cost of only 2.1 million Forint, which represented 3.6 percent of gross value: “those participating in the system had never conducted commerce this cost-efficiently.”59

By the mid-1980s, the Early Vegetable Production System had established contractual relationships with 46 companies and twelve private traders.60 Early Vegetable Production System trucks made weekly deliveries to Szombathely in the same manner as they did deliveries to the ÁFÉSZ chain of shops in Nyíregyháza. The outstanding quality of the vegetables is reflected in the fact that there were private commercial partners who were willing to travel as much as 330 km in their cars from Nagykanizsa to pick up produce.

It is also interesting to note how, in the communication networks of the time (when computers were not in use), it was possible to harmonize the production and sales processes of several primary products. Dr. Miklós Csikai, who directed the Early Vegetable Production System from 1983, summarized this in the following way in an interview:

The branch managers of the member farms met at least three to four times a year for a discussion, the goal of which was to develop the plan for the next year. These are then the circles of customers, which currently stand at several hundred small and large companies, economic units, and stores. In this way, the annual quantities of given products and given cooperatives develop, and the production system ensures them secure sales. Knowing this, the given cooperatives put together their final production plans, with attention paid to the household greenhouse producers with contracts. Everything counts: type, quality, quantity, and time of delivery handled by the production system, but in the meantime they are informed about demands.

The contracts lay all this out in precise detail. Based on them, work begins in the glass and plastic foil greenhouses. Later, throughout the year, they always know precisely how much produce to sell, in which week, and on which exact day.

Every Wednesday at 10:00am, the representatives of the member farms involved in common sales meet in my room and calculate the quantity of goods, with a daily breakdown, which are offered up for joint sale by the various cooperatives. This is very precise data, and that is necessary, as our sales division can only come to agreements with various buyers with this knowledge in hand.61

Before my reader forms a utopian notion of the functioning of the socialist vegetable market, let me note that the “state of war” with Zöldért lasted throughout the period. I offer a few examples of this conflictual relationship. The Early Vegetable Production System carried out significant exports. For example, they controlled 90 percent of all exported green peppers. Produce for export was transported in refrigerated wagons. They were stacked at the Zöldért side tracks by the System’s own workers, meaning the Zöldért employees never touched the produce. However, Zöldért charged a disproportionately high price per 100 kg. There were also constant conflicts in domestic commerce. A warehouse was rented from Zöldért for which the company charged ten times the normal rate. Ministerial mediation between the parties was in vain, and the conflict only began to subside at the end of the 1980s, when the Zöldért company of Csongrád county signed a cooperation agreement with the Early Vegetable Production System. The 1987 agreement laid out the following goal: “with an eye on common interests to create the conditions for fruit and vegetable production in the region, a unified distribution system, and at the same time a more efficient operation of the tools created for this purpose and in the hands of Zöldért.”62 Every word was justified and would have been appropriate earlier as well, but the agreement came too late. The agreement was quickly made redundant by the regime change. In the end, the Árpád farm bought Zöldért’s former facility.

After the Regime-Change

In Szentes, the year 1990 marked not only the change of regime but also a change in the post of president. Dr. János Lóczi, who had succeeded László Szabó in 1985, resigned from his post. The membership elected as president Dr. Miklós Csikai, the director of the Early Vegetable Production System. 63 His leader mentality and approach were of vital importance during the transition. As he explained in our interview, he spent most of 1992 sitting down with people to discuss the future of the cooperative. 64 Based on experience he had gained in the Netherlands, he was able to explain how cooperatives could have a legitimate role in the market economy. The players in horticulture could only reduce their vulnerability to powerful commercial chains and suppliers by working together. Although each member could have claimed property valued in the millions of Forints, in the end, only 27 of the 1,024 members indicated their intention to quit the collective.65 This number meant that an absolute majority of the members recognized that in the interests of the efficient use of accumulated property and employment for about a 1,000 people, they should remain together and continue to work together.

At the end of the 1990s, the Árpád farm underwent another organizational change. Given the agricultural policy climate of the time, those functioning as collectives had limited opportunities. In 1999, the Árpád cooperative, like many other cooperatives, decided that it would transform into a joint stock company.66 A mission statement from this time makes clear the importance of continuity in the value system:

Mission: Our tradition-respecting, capital-strong stock company, with its team of well-prepared experts, will satisfy and meet the expectations of consumers and their needs, serve its partners, stockholders, and employees with forward-thinking, market-sensitive planning, detailed quality work and outstanding products and services.

Vision: Árpád-Agrár Ltd. as a stock company which works in harmony with its environment, respects traditions, has widespread international business relations, and is known in Europe and across the country.

Producing branded products on an outstanding organic foundation, with up-to-date technology, at a world-class level, which meet the strictest food-security standards and consumer demands. From producing basic materials to the final product, with processes built on one another, and with the services we deliver to ensure the full satisfaction of customers and stable and high profits. Playing an integrating role in the region, the company provides a stable living for several thousand families. We serve as an example in our use of high-level horticultural technology which is environmentally friendly.

Responsible and risk-assessing management, highly trained employees, and the company’s retirees are all proud of the Árpád name, identify with its goals, and are satisfied individuals.67

Translated by Frank T. Zsigó

Archival Sources

Árpád-Agrár Zrt. Irattár [Archives of the Árpád-Agrár Ltd.] (ÁAI)

Szentes and its Region Fruit and Vegetable Production & Distribution Cooperative., 1957, 1959, 1960.

Árpád Agricultural Cooperative, 1960–1987.

Árpád Cooperative, 1992, 1999.

Árpád-Agrár Ltd., 2001.

Magyar Nemzeti Levéltár Országos Levéltára [National Archives of Hungary] (MNL OL) Budapest

M-KS-288. f. Documents of the Hungarian Socialist Workers’ Party, 1956–1989

Bibliography

Primary sources

Csongrád Megyei Hírlap [Csongrád County Newspaper], 1966, 1974, 1987.

Gazdasági Figyelő [Economic Observer], 1965, 1971.

Hajtatás, korai termesztés [Propagation, Early Cultivation], 1980.

Pártélet [Party Life], 1963.

Népszabadság [Free People], 1970, 1984.

 

Fóris, Imre ed. Mezőgazdasági termelőszövetkezeti törvény. Földjogi törvény [Law on collective farms: Law on land rights]. Budapest: Közgazdasági és Jogi Könyvkiadó, 1968.

Mezőgazdasági Statisztikai Zsebkönyv [Agricultural statistical pocketbook]. Budapest: KSH, 1971.

 

Interview with Miklós Csikai. March 12, 2019. (Author’s files.)

Interview with Imre Dimény. February 9, 2010. (Author’s files.)

Interview with Sándor Márton. August 23, 2019. (Author’s files.)

 

Secondary literature

Belényi, Gyula. “Az alföldi agrárvárosok mezőgazdasági népességének szerkezeti változásai az 1940-es években” [Structural changes of the agricultural population of the agricultural towns of the Great Plain in the 1940s]. Agrártörténeti Szemle 29, no. 1–2 (1987): 115–39.

Boross, Marietta. “Bolgár és bolgár rendszerű bolgár kertészetek Magyarországon 1870–1945” [Bulgarian and Bulgarian-type gardeners in Hungary, 1870–1945]. Ethnographia 84, no. 1–2 (1973): 29–52.

Bódi, Ferenc, and Ralitsa Savova. “A bolgárkertészek Magyarországon a 19. század végén és a 20. század első felében – környezeti és gazdaságantropológiai aspektusból” [Bulgarian-type gardeners in Hungary in the late nineteenth and first half of the twentieth century – from an environmental and economic anthropological point of view]. Magyar Tudomány 179, no. 3 (2018): 373–82.

Bóth, Ildikó ed. “A hagyomány kötelez!” A szentesi Árpád 60 éve, 1960–2020 [“Bound by Tradition!” 60 years of the Árpád Agricultural Company in Szentes, 1960–2020]. Budapest: Kossuth Kiadó, 2020.

Csikai, Miklós. “Kertészeti termelési rendszerek” [The horticultural production systems]. In A mezőgazdaság szolgálatában: Emlékkönyv Dimény Imre tiszteletére 90. születésnapja alkalmából [In the service of agriculture: Memorial book in honor of Imre Dimény on the occasion of his 90th birthday], edited by Judit Dimény, and Péter Szendrő, 105–16. Budapest–Gödöllő: SZIE, 2102.

Csikai, Miklós, Edit Takács, Pál Kruzslicz, László Kovács, and Zoltán Nagy, eds. Ötven év tükrében: Fotók – dokumentumok – adatok a Szentesi Árpád Agrár Zrt. 50 évéből [In the light of fifty years: Photos, documents, data from the 50 years of Szentesi Árpád Agrár Ltd.]. Szentes: Szentesi Árpád Agrár Zrt., 2010.

Davies, Robert William. The Soviet collective farm, 1929―1930. Cambridge, Mass.: Harvard University Press, 1980.

Erdei, Ferenc. “A Szentesi Árpád Tsz.” [The Árpád Producer Cooperative in Szentes]. Gazdálkodás, 11, no. 1 (1967): 41–43.

Ferber, Katalin, and Gábor Rejtő. Reform(év)fordulón [Reform anniversary]. Budapest: KJK, 1988.

Germuska, Pál. “Failed Eastern integration and a partly successful opening up to the West: the economic re-orientation of Hungary during the 1970s.” European Review of History: Revue européenne d’histoire 21, no. 2 (2014): 271–91.

Juhász, Pál. “Az agrárértelmiség szerepe és a mezőgazdasági szövetkezetek” [The role of the agricultural intelliegentsia and agricultural cooperatives]. Medvetánc 2–3, no. 4 (1982) and no. 1 (1983): 191–213.

Hann, Chris. Tázlár: a village in Hungary. Cambridge: Cambridge University Press, 1980.

Mód, László. “Bolgár kertészek Szentes környékén” [Bulgarian-type gardeners around Szentes]. In A bolgárkertészkedés hagyományai Szentesen és környékén [The traditions of the Bulgarian-type of gardening in and around Szentes], edited by Szabó János József, 27–35. Szentes: Móra Ferenc Múzeum, 2003.

Ö. Kovács, József. “The Forced Collectivization of Agriculture in Hungary, 1948–1961.” In The Collectivization of Agriculture in Communist Eastern Europe, edited by Constantin Iordachi, and Arnd Bauerkämper, 211–42. Budapest–New York: CEU Press, 2014.

Papp, István. Fehér Lajos. Egy népi kommunista politikus pályaképe [Lajos Fehér: A political biography of Lajos Fehér]. Budapest: Kronosz–ÁBTL, 2017.

Pető, Iván, and Sándor Szakács. A hazai gazdaság négy évtizedének története. 1945–1985 [The history of four decades of the domestic economy, 1945–1985]. Vol. 1. Budapest: KJK, 1985.

Schlett, András. Sziget a szárazföldön: A Bábolnai Állami Gazdaság története 1960 és 1990 között [An island on the continent: The history of the Bábolna State Farm between 1960 and 1990]. Budapest: Szent István Társulat, 2007.

Swain, Nigel. Collective Farms Which Work. Cambridge: Cambridge University Press, 1985.

Takács, Edit. “Adatok Szentes második világháború alatti gazdasági, társadalmi és politikai viszonyaihoz” [Data on the economic, social, and political conditions in Szentes during World War II]. In Tanulmányok Csongrád Megye Történetéből III [Studies on the history of Csongrád County], edited by József Farkas, 217–44. Szeged: Csongrád Megyei Levéltár, 1979.

Varga, Zsuzsanna. “Agricultural Economics and the Agrarian Lobby in Hungary under State Socialism.” East Central Europe 44, no. 2–3 (2017): 284–308.

Varga, Zsuzsanna. Az agrárlobbi tündöklése és bukása az államszocializmus időszakában [The rise and fall of the agrarian lobby under state socialism]. Budapest: Gondolat, 2013.

Varga, Zsuzsanna. The Hungarian Agricultural Miracle? Sovietization and Americanization in a Communist Country. Lanham: Lexington Books, 2021.

Varga, Zsuzsanna. “Three waves of collectivization in one country.” In Countryside and Communism in Eastern Europe: Perceptions, Attitudes, Propaganda, edited by Sorin Radu, and Cosmin Budeanca, 258–94. Berlin: LIT Verlag, 2016.

In this article, I examine foreign investment in the socialist enterprise in the former Yugoslavia based on the case study of Kolektor in the context of the liberalized communist social and economic order. Foreign investments were allowed in the form of joint ventures. I present these investments from the viewpoint of economic reforms, the concept of socialist enterprise, and the concept of economic development, which enabled foreign investments and shaped regulation and the structure of foreign investments in Yugoslavia. The history of the case of Kolektor began at a time when Slovenia still belonged to the former Yugoslavia, which was arguably a liberalized type of communist economic system. This was during the Cold War, when both Europe and the rest of the world were divided essentially along the lines of the communist east and the capitalist west. The Kolektor Company was established in 1963 as a state socialist enterprise for the manufacture of the rotary electrical switches known as commutators. From the outset, the company tried to establish international cooperation to acquire modern technology. In 1968, it reached an agreement with the West German Company Kautt & Bux, which at the time was the technological and market leader in the production of commutators. Kautt & Bux invested in Kolektor and became an owner of 49 percent of the company. The investment proved very profitable for both partners. The Slovenian side got access to modern technology and expertise, and the German side got additional production facilities, skilled workers, and low-cost production, which increased its competitiveness on international markets.

Keywords: Yugoslavia, Slovenia, communism, commutator economic reforms, socialist enterprise, joint ventures

Introduction

In this article, I examine foreign investments in Yugoslav companies during the communist period. Yugoslavia was among the first communist countries to allow foreign investments in the form of joint ventures in 1967. Later, it was followed by other communist countries. Yugoslavia attracted a larger volume of foreign investments than all other communist countries put together. It differed from the other Eastern Bloc countries because its economic and political system was decentralized, the state was better integrated into the global economy, its foreign economic relations were liberalized, and individual companies were responsible for their own success. This paved the way for foreign investments once they were allowed. The system of self-management was introduced with reforms in the early 1950s. It prospered thanks to a significant level of decentralized decision-making at the political and economic level. In the middle of the 1960s, it was decided that foreign investments in Yugoslav companies should be allowed, together with the integration into the international division of labor. The decision was strategic and pragmatic. In close cooperation with foreign partners, domestic companies would get access to modern technologies and management know-how, and they thus would be better able to penetrate Western markets. Also, foreign investments were cheaper than the importation of foreign capital through state borrowing. After that, the idea of attempting to attract foreign investment persisted in the Yugoslav territory until the dissolution of the state in 1991. Over the course of a period of twenty years, regulations would keep changing, becoming increasingly favorable to foreign investment, depending on the political circumstances.

The article is divided into six shorter sections. The first section summarizes the economic reforms and development periods during the existence of communist Yugoslavia. The second section analyses the distinctive characteristics of Yugoslav companies, which must be taken into consideration if one seeks to understand the positions of foreign investors. The third section traces the institutionalization of foreign investments. The fourth focuses on the regulation of foreign investments with emphasis on the essential aspects of regulation and changes over time. The fifth section examines the scope of foreign investments in view of the sectoral structure, regional distribution, and origins of foreign investors. A detailed case study of foreign investment follows in the sixth section, specifically the Western German Kautt & Bux company’s joint venture with Kolektor from Slovenia. The case study illustrates the pattern of investment in a Yugoslav company and of cohabitation between a foreign partner and a self-management company. This company’s experiences, however, were not typical of the practice of foreign investment into Yugoslav companies. Its long-term success makes it an exception, as most of the joint ventures were of a comparatively short duration and were of limited expansion and innovation. Kolektor, rather, offers a good example of what the Yugoslav authorities envisioned and hoped for when they decided to allow foreign investors to partner with domestic enterprises.

Economic Models

Economic development in Yugoslavia can be divided into four periods, each of which saw the emergence of a distinctive economic model. The first one lasted from 1947 to 1951. This period saw the rise of a centrally planned economy. In other words, it was the period in which administrative planning was implemented according to the Soviet example. The top priority was to develop heavy industry even if it meant neglecting other sectors, including sectors which had a direct impact on people’s living standards. In the second period, central administrative planning was abolished (1952–1965). The plan became a mere orientation concerning how the economy was supposed to develop. Furthermore, it became polycentric, as the individual republics attained the right to specify the priorities when it came to their economic development. In the context of the goals specified in such a manner, the companies would supposedly pursue their interests. Partial competition among companies was enabled. Companies were allowed to establish horizontal connections, i.e., communicate among themselves according to their business interests. Thus, hierarchic communication with the ministries in the framework of the centrally planned company activities was abolished. With reforms, decision-making was divided between the political and economic level. Companies became responsible for their own success, and their leaderships could make business decisions autonomously. The new economic model emphasized the development of the consumer goods industry and intensive rather than extensive development, i.e., productivity growth, business efficiency, and the liberalization of international trade. The third period (1965–1975) was called the period of “market socialism.” It saw the use of so-called indicative planning. Companies set their own business objectives in line with the national economic development plan. The focus of economic policy was on boosting consumer spending and income growth. The strengthening of the secondary and tertiary sectors, the integration of Yugoslavia into the international economic space, and the international division of labor were also emphasized. The intention was to strengthen the functioning of the market and the productivity and efficiency of the economy, to increase the level of general education, and to enhance the role of business research and development, either independently of or in connection with the academic sphere. The fourth and last period (1976–1991) was characterized by the consolidation of “workers’ self-management.” A turning point came when the society and the economy were reorganized according to the principles of the so-called “contractual economy,” which was supposed to strengthen the influence of workers (through self-management) in the management of economic entities. From the strategic point of view, the country changed its model and focused on the promotion of basic industries, energy, and raw materials. Attention was also paid to export growth, the reduction of the deficit in the balance of payments, efficient energy use, higher productivity, and closing the regional and economic gaps. The general decentralization of decision-making altered the nature of social planning. The planned goals became a synthesis of the planning by different actors, including companies, associations, and public authorities. Due to measures which were taken to further decentralization, which in turn diminished the power of the state authorities (especially the federal ones), the role of the renamed Communist Party became very important. With its cells in all of the social and economic units, the Communist Party, the League of Communists of Yugoslavia (LCY), became an informal integrating element of a fragmented society and economy.1

Yugoslav Companies

Foreign investments were also determined by the structure and concept of socialist enterprises in Yugoslavia, where there was a system of ownership that was unique in the Socialist Bloc. With the abandonment of the centrally planned economy and the introduction of “workers’ self-management,” the concept of state ownership and hierarchical management of socialist enterprises was abolished as well. In the context of the reforms, companies were becoming responsible for their own success. They were able to establish connections and engage in cooperative business endeavors according to their own interests and the demands of their activities. The transfer of responsibilities to companies took place in the context of the general decentralization of the state. At the same time, the transfer to lower units also meant a change in the ownership concept. The concept of state ownership was replaced by that of “social ownership.” According to this concept, the company was the property of society, i.e., of the entire population. Meanwhile, the workers were intended to run the company. The concept of social property was linked to the concept of “workers’ self-management.” This meant that company employees had the right to manage the company, determine its activities, production volumes, sales prices, marketing strategies, investments, and the use of profits.2

In Yugoslavia, a company could be set up by a municipality, a republic, the federation, another company, a bank, or even a group of citizens. New companies could also be created by merging or splitting up existing enterprises. The founder was obliged to provide the necessary capital. Companies were autonomous in determining their business policies. The power in the company hinged on the working community. With their employment in the company, all workers acquired the right to comanage the company. The working community would elect the highest management body in the company: the “workers’ council.” The workers’ council decided on all business strategies and implementation orientations. It also appointed the company’s management, board of directors, and the director. Board members were accountable to the workers’ council. The director was appointed by the workers’ council. The decision was formally based on the council’s public call for candidates, but the local party leadership initially made the choice. The period of tenure was four years, and there were no limitations on the number of terms. The director managed and administered the company on behalf of and by the authority of the workers’ council. In his work, he had to pursue the interests of the “working community,” to which he was ultimately accountable. The director had the right and obligation to participate in the workers’ council meetings, but he or she was not supposed to play a decisive role. The question of the realistic distribution of power, responsibility, and authority in Yugoslav companies was crucial for foreign investment decisions. Individual directors would successfully lead companies through the strength of their personalities and persuasive abilities. However, the real power of the workers’ councils also had to be taken into account.3

The notion of workers’ self-management was not merely a matter of abstract conceptual thinking or disingenuous rhetoric. It had to be taken seriously in case of every intention of foreign investment, and the investments had to be negotiated with the company itself or with its management. On the other hand, Yugoslav companies were obliged to secure the consent of the authorities and political bodies. Another important issue also arises in connection with the roles of political bodies: that of political intervention in companies. Foreign investors needed to consider this possibility as well. As the reforms weakened the influence of the central authorities in companies, the influence of the party authorities within the given republic and district survived. The LCY had cells in every social organization, including companies. The political line would thus control the company and supervise the decision-making mechanisms and company management. As party members, the directors had a twofold responsibility. On the one hand, they were accountable to the employees, i.e., to the “workers’ council,” but they were also accountable (as noted above) to the local party leadership.4 In practice, this meant that there were formal and informal levels of decision-making which were sometimes complementary and sometimes conflicting. Meanwhile, the LCY had a monopoly on personnel policy. Decentralization also implied a transfer of social power. Corporate self-responsibility also meant that the social power of company managements grew in strength. The control exerted through the local Communist Party authorities at the company and municipal level was intended precisely to regulate this power. This was necessary to ensure that companies would pursue the overall social objectives rather than just their own aims. However, in this manner, the companies’ “self-management” and self-responsibility for their own economic success was systemically denied. Company leaderships would struggle to balance their political and economic performances, with the former often taking precedence. This dilemma was identified at the time by domestic critics, who also questioned the concept of market socialism.5

The Decision to Accept and Encourage Foreign Investment

Yugoslavia was the first socialist country to allow foreign investment in its economy. Hungary, Poland, Romania, and Bulgaria followed later.6 Due to the nature of the system, the investments could only take the form of joint ventures. The 1960s were an important period in the economic history of Yugoslavia (and Slovenia). They bore witness to a significant attempt to change the economic and social landscape. Economic reforms were implemented to make the economy more efficient, increase business incomes, and make the economy more competitive in foreign markets. Naturally, everything was done within the framework of the communist ideology, which meant that change was desirable, but only to the point where it did not threaten the existing fundamental postulates of the communist political, social, and economic order. Thus, in the process of phasing out the centrally planned model, the state started to shift some of the responsibility for economic success to businesses and local communities. It only allowed the market to function, but only within limits set by the state, and it refused to give up the mechanisms with which it controlled the economy. The state also promoted the integration of companies into the international environment. In principle, it supported integration into the international trade flows and the international division of labor. The internal and external trade regimes were gradually liberalized, and some measures were even taken to attract foreign capital.7

Foreign investment was one of the major development issues in this process. At the time, after the country’s accession to the General Agreement on Trade and Tariffs (GATT), following the adoption of the Great Economic Reform (1965), the Yugoslav authorities wanted to integrate the country into the international division of labor. The 1965 reform was one of the most comprehensive and profound of the Yugoslav economic reforms. After these reforms were adopted, the concept of market socialism was consolidated. At the time, it was clear that integration into the international division of labor also meant opening up the country to foreign investment. For a short time, a view prevailed according to which it was socially cheaper to allow foreign capital to enter domestic companies than to build economic development solely on foreign loans.8 However, the price of capital was not the only factor. The expectation was that domestic companies would thereby gain swifter access to modern technologies and, by leaning on foreign partners, enter foreign markets.9 It was also expected that the “workers’ self-management” would become stronger, the general economy and individual enterprises would become more efficient and profitable, and the pace of industrialization would accelerate. Furthermore, the balance of payments was also supposed to improve, as foreign investment would boost exports of higher-value products and help the country address its capital shortage. The issue of unemployment was pressing. The decision was adopted in a context of very high levels of recognized unemployment and increasing economic emigration to Western European countries. It was hoped that foreign investments would allow the country to create jobs more quickly.10

Regulation of Foreign Investments

Foreign investment was regulated by specific legislation which was adopted in various stages. At the initial stage, acts which paved the way for joint ventures were adopted. In the subsequent stages, more detailed regulation of the relationships followed. The process started in 1967, when an act was adopted to tax the profits of foreign companies that invested in Yugoslav companies. A second act limited the foreign investor’s share. The domestic company had to hold the majority in the joint venture (at least 51 percent). Foreign investment was not allowed in banking, the insurance industry, domestic transport, trade, and public utility services. The domestic and foreign partner had to conclude a joint venture agreement, define the purpose of the agreement, and determine the mutual relations in terms of capital, management, cooperation, operations in domestic and foreign markets, and, of course, the division of profits.11 The domestic company had to obtain the informal consent of the republic’s authorities even to enter the initial negotiations. After the conclusion of the agreement, it had to be sent for approval and entry in a special register of such companies at the Federal Ministry of Economy in Belgrade. The foreign partner was guaranteed certain rights under the law: the right to retain ownership of its capital contribution and to sell it, the right to a proportionate share of the profits, the right to comanage the company, and the right to access all documentation. It was also very important that the foreign partner had the right to repatriate the majority of its share of the profits. In summary, foreign investors were allowed to manage the company and participate in it based on ownership (investment). Rights went hand in hand with duties. Thus, the foreign partner had to reinvest at least one fifth (20 percent) of the profits in the domestic company or invest them in a Yugoslav bank at the usual interest rate. The foreign partner also had to pay the required taxes: a profit tax of 35 percent, which was supposed to be a more favorable tax rate than in Western European countries, where most of the potential interest in investing in Yugoslav companies was expected to be found.12

The 1970s were a decade of contradictions. In 1971, although the requirement to reinvest part of profits was abolished, the foreign investor could repatriate only one-third of the income earned by exports after having paid the relevant taxes. The individual republics were allowed to set their own tax rates on foreign investments. In 1973, long-term investments and the joint and several liability of Yugoslav companies in joint ventures with foreign investors were regulated in more discouraging detail. In June 1976, conditions for foreign investments were tightened. Only foreign investment aimed at exports for foreign markets would be approved. Contracts needed to be more precise. The volume of exports and the currencies had to be specified for foreign investors to receive their profits. The rights of joint management bodies were also limited in the sense that they were not allowed to interfere with the “self-managing” structure of companies. The responsibility to determine business policy was transferred to work councils. This limited the foreign investor’s right to manage the company. These repeated changes limited growth in foreign investment.

The legislative changes of April 1978 were again more favorable to foreign investment, as special protections were granted to foreign investors. This time, the legislature put foreign investors on an equal footing with domestic companies in terms of the right to manage. The rights of the company’s joint management board were laid out in detail. In addition, foreign investment in banking was allowed, which was to be regulated by a special act. Foreign investment in the insurance industry, trade, and public utility services remained prohibited. A provision that allowed foreign investors to repatriate half of their export profits was important for them. The next step was taken in 1984, when ownership restrictions were lifted. Foreign investors could now also become majority owners. The last change dates to 1988, when a new foreign investment act completely freed up foreign investment. Prohibitions in the military industry, rail and air transport, telecommunications, the insurance industry, and media remained in place. The act put foreign investors on an equal footing with domestic companies in terms of tax reliefs and government incentives. The foreign investor acquired all management rights and the right to transfer all profits, and collective agreements would be concluded with the employees.13

Foreign Investments in Yugoslavia

The Yugoslav joint ventures policy attracted the attention of the international business, academic, and political public. The number of articles and expert analyses on the subject was considerable. This had an impact on the flow of capital into Yugoslavia. Yugoslavia succeeded in attracting investments from the most technologically and economically advanced countries. The data from 1980, compiled by the OECD, indicate that the volume of foreign investment was gradually increasing.14 Among the industrial sectors, metalworking, the chemical industry, and transport equipment manufacturing attracted the most investment. Despite the constantly changing regulatory measures concerning joint ventures, the political-ideological prejudices in the country, and the actual constraints of the political and economic system, the volume of foreign investment should be deemed only a limited success, since its total value remained a small share of capital in all sectors except metal production (see Table 1). The interest from foreign private Western companies was still considerable, especially those that had already established cooperation with Yugoslav companies. The Western companies’ motives for investing in Yugoslav companies varied and, above all, included the low price of labor and the tax advantages, which allowed for the acquisition of the Yugoslav market, sales through Yugoslav companies to other communist countries, and competitive exports to Western markets due to the low price of labor. As a rule, investments would be proposed by Yugoslav companies.15 The main motivation of foreign companies was, therefore, further growth, profitability, and export opportunities to third markets. Foreign companies that strived to understand the Yugoslav ideological-political reality were successful at investing. A survey of a sample of Western companies in Yugoslavia showed that investments in Yugoslav companies met their expectations. Foreign companies would follow several investment goals. The relatively lower return on investment was compensated for by the increase in exports to other communist countries and the conquest of the Yugoslav market.16

While foreign investors were evenly distributed, most came from countries that were also Yugoslavia’s largest foreign trade partners. The main players were companies from the contemporaneous European Economic Community. Unsurprisingly, Germany and Italy were in the first place (see Table 2). They were followed closely by companies from the United States of America, though only in terms of the number of contracts concluded. However, the United States was the top investor by far in terms of capital invested due to their heavy investment in the oil refining industry.

 

Table 2. Origin of foreign investors in Yugoslav enterprises, 1968–1980

Countries of origin	Number of contracts	Foreign capital invested (millions of dinars)	Share of total foreign capital
USA	30	3,368.0	32.8 %
UK	12	1,777.8	17.3 %
Switzerland	19	1,637.1	16.0 %
West Germany	52	1,123.0	11.0 %
Italy	31	937.6	9.1 %
France	11	290.0	2.8 %
Austria	7	254.1	2.5 %
Sweden	6	223.3	2.2 %
Luxembourg	4	126.0	1.2 %
Belgium	6	124.4	1.2 %
Netherlands	3	75.6	0.7 %
Others	17	402.2	3.2 %

 

Source: Artisien and Buckley, “Joint Ventures in Yugoslavia,” 115.

While foreign investments in Yugoslav companies were territorially dispersed throughout the country, they were also regionally concentrated. The idea of the Yugoslav economic development planning that foreign investment would contribute to the more rapid development of the underdeveloped republics was not realized. Most joint ventures were secured by companies from the developed regions of Slovenia, Croatia, and Serbia (see Table 3). As the legislation allowed it, a kind of “competition” emerged to attract joint ventures. The underdeveloped republics offered lower tax rates to attract a higher share of foreign investments. Montenegro, Vojvodina, and Kosovo set a tax rate of 10 percent. The Kosovo authorities offered an even more reduced rate of only 5 percent for investments in Kosovo’s underdeveloped municipalities. Serbia and Macedonia set tax rates of 15 percent and 14 percent, respectively. In Serbia, any foreign investor could benefit from a half tax rate if they invested in economically less developed areas. Slovenia and Bosnia and Herzegovina set their tax rates at 20 percent. Croatia taxed foreign investors more, at 35 percent. However, it also recognized reduced rates, for example, in the case of investments in tourism activities, the rate was only 5 percent for the first five years and 20 percent thereafter.17 However, through tax policy alone, the underdeveloped republics could not make up for the advantages of the developed republics, which offered a better educated and experienced workforce, better infrastructure, more efficient companies, and better integration into the international economic space.

 

Table 3. Regional distribution of foreign investments in Yugoslavia 1968–1980

Location	Number of joint ventures	In millions of dinars	Share
Serbia proper	41	2,589	30.9 %
Croatia	34	2,585	30.9 %
Bosnia-Hercegovina	29	1,186	14.2 %
Slovenia	43	1,026	12.4 %
Vojvodina	9	470	5.6 %
Macedonia	6	184	2.2 %
Kosovo	3	180	2.2 %
Montenegro	2	134	1.6 %

 

Source: Prinčič, “Tuja naložbe,” 116.

In the individual republics, special bodies were established to attract foreign investments. In Slovenia, these bodies were a part of the Chamber of Commerce and the state administration. The Chamber of Commerce established a Foreign Capital Investment Commission to provide legal and economic information to domestic and foreign companies and to assist them in making foreign investments. The same role was performed by the Work Group on Foreign Investments of the Ministry of Economic Cooperation with Foreign Countries of the Socialist Republic of Slovenia.18 At the international level, a special organization called the International Investment Corporation for Yugoslavia (IICY) was established to provide support for interested foreign companies. The project idea was developed in the Yugoslav banking circles to facilitate and purposely promote foreign investments in Yugoslav companies. In November 1968, a group of Yugoslav bankers, in cooperation with the International Finance Corporation of the World Bank Group (IFC), initiated consultations about the new institution. The response among Western bankers was sufficient for a decision to set up an institution aimed at providing assistance for private enterprises regarding their cooperation with Yugoslav companies. It would help them find business partners and raise the necessary capital in the form of loans or venture capital. The primary objective was to bring modern production techniques and management know-how to Yugoslavia. The IICY became operational in December 1969. It was based in London, Europe’s largest financial center, but registered in Luxembourg for tax reasons. The founding capital in the amount of 12 million US dollars was contributed by 12 Yugoslav and 39 foreign banks, with the assistance of the International Finance Corporation. The founding banks described the new institution as a “pioneering type of investment company, through which private business will invest in joint industrial, agricultural and tourism and other services ventures in Yugoslavia.” The largest shareholders included Yugoslav banks and banks from Austria, Germany, Switzerland, France, Italy, and the Netherlands, i.e., from the countries with which Yugoslavia had already developed economic cooperation. However, financial institutions from the USA, UK, Sweden, Japan, and Kuwait were among the shareholders as well. In the early years, the IICY played an important role in attracting foreign capital to Yugoslavia. By 1973, it had participated in 22 percent of the total investments and provided capital support for these investments. It also invested in its own name, partly in the form of loans and partly in the form of risk capital. Its representatives ensured that investments were balanced regionally and by sector. As the Yugoslav banks and their international activities expanded, the IICY’s importance gradually diminished, as had been expected would happen when it was founded.19

 

 

“We Worked in Socialism, but We Need to Act and Think as if We Were in Capitalism.”20 The Case of the Joint Venture between Kolektor and Kaut & Bux

The Kolektor Company was established in 1963 as a state socialist enterprise for the production of commutators. From the outset, they tried to establish international cooperation in order to acquire modern technology. In 1968, when for the first time the joint ventures were allowed, Kolektor made an agreement with the West German Company Kautt & Bux, which at the time was the technological and market leader in the production of commutators. Kautt & Bux invested in Kolektor and became the owner of 49 percent of the company. The investment proved very profitable, as both partners benefited. The Slovene side got access to modern technology and expertise, and the German side got additional production facilities, skilled workers, and low-cost production, which increased its competitiveness on international markets. The German side also got the exclusive right to handle marketing. Kolektor was only allowed to sell products under its own brand in the communist part of Europe. The investments in development and technology were always very high, and both partners were obliged to make them. As a foreign partner, Kautt & Bux had to invest at least 20 percent of its profit in order to be allowed to export the rest of its profits. Both partners also made a commitment to decide jointly on reinvesting the profits and on additional investment above the legally set limit of 20 percent. Kautt & Bux regularly reinvested the generated profits. The repatriation of profits represented a mere 2 percent of the profit per year.

The main threat to cooperation with foreign partners was the system of management of Slovenian and Yugoslav enterprises. It was based on the ideology of socialist self-management, according to which all decisions on business processes were to be entrusted to the “workers council.” In Kolektor, they had to deal with this obligation on a daily basis. The company tried to be flexible. On the one hand, they insisted on contractual provisions, but on the other, they strove for balance with the Yugoslav provisions on self-management. Fortunately, Kautt & Bux was equally pragmatic. Two parallel “mind” structures were thus pragmatically established in Kolektor. They differed completely in their origin, backgrounds, and purposes. The “communist” and “capitalist” structures and methods of management intertwined in the company’s operations. The latter structure eventually prevailed. Jožica Velikajne, a long-standing associate of the company, described the split personality of the company: “Half of the time, we lived in socialism and the other half in capitalism.” But a pragmatic solution was found which was respected by both sides and which enabled long-lasting cooperation. With the entering of German investors, Kolektor began to undergo a process of deep economic, social, and cultural changes. Kolektor was partly excluded from the local environment. Kolektor’s management structure was different. It was led by two codirectors, one from Germany and one from Slovenia. Decisions could be made only with the agreement of both sides. Kolektor as a company was faced with an urgent need to adapt to western, namely German business standards and habits, well also dealing with the characteristics of the local communist environment.

Kautt & Bux assured itself control over management of the company and thus protected its interests, but this indirectly brought it into a “systemically built-in” conflict with the self-management system. This is why it was also ready to give certain concessions to the Slovene factory. In one of the provisions, Kolektor received an assurance that Kautt & Bux would guarantee each year a minimum volume of sales of Kolektor commutators on foreign markets. This was a great achievement for the factory, as it made a much-desired expansion possible. They could thus use the revenues from exports to finance the modernization and expansion of production capacities and the import of special tools and indispensable semi-finished parts. Both partners also made a commitment to decide jointly on reinvesting the profits and on additional investment above the legally set limit of 20 percent.

In line with the existing legislation, the contract laid down that the company would be managed by a joint management committee with a full mandate to run the company. Yet the self-management organization of the company had to remain intact. But once again, Kautt & Bux got a concession here. At its request, a provision was added to the contract according to which “the supreme self-management body,” i.e., the “workers’ council,” had to respect all contractual provisions and all decisions taken by the joint management committee. In this manner, the German partner assured itself in advance of the protection of its interests.

Another part of the process of establishing cooperation between the two companies and entering into a joint venture was a financial check-up of the company, which took place in November 1968. The German partner was interested in the structure and method of Yugoslav bookkeeping and accounting, including its everyday practices and categories. It wanted to check the credibility of the financial statements of the Kolektor company. It sent to Kolektor a group of three accounting and tax experts. Their report confirmed the credibility of the financial statements. They even concluded that the bookkeeping and accounting at Kolektor was very good and precise in every detail. The auditors, however, noted certain terminological differences stemming from the Yugoslav system and accounting standards. They recommended standardizing the terms or specifying clearer definitions of individual terms so that their meanings would not be lost in translation. They were extremely satisfied with the financial control exerted by the authorized state services, in particular the audit service of the central bank. They even found a good feature in the management structure of Yugoslav enterprises. They believed that the controlling authority of workers’ councils was a good solution, as such internal control largely prevented the possibility of personal profiteering. They eventually reminded the accounting service of the obligation to send quarterly financial statements to Stuttgart. Thus, the accounting service was subject to additional control. But it was very important that the representatives of Kautt & Bux trusted the accounting service and did not question the credibility of its reports.

Kolektor was one of the first cases of an investment by a Western European partner in a self-managed socialist company in Slovenia and even in Yugoslavia. There were, understandably, many ideological suspicions and idle fears, which were also reflected within the company. Any close connection with a foreign partner was met with great mistrust and concealed opposition, as is evident from the minutes of the meetings of the workers’ council. At its session of July 9, 1968, the council had on the agenda the approval of the contract with Kautt & Bux. After the director read the contract and provided an extensive interpretation of individual provisions, all the hidden fears, distrust, objections, and reservations came to the surface. He was also assisted by the president of the municipality, whose presence at the meeting gave the agreement wider political support and the backing of the local political environment. It was the president who stressed several times that the contract was not the type of contract which allowed the exploitation of workers, and thus he rejected in advance the suspicions that could be felt from the tone of the speakers. The fear stemmed largely from the difference in the levels of wages in Germany and Slovenia and the reservations regarding the real prices of supplied raw materials and semi-finished goods. In modern terms, this meant that some of them saw in the envisioned partnership the danger of the effect of transfer pricing which Kautt & Bux could turn to its advantage in terms of its profit levels. The other reservations concerned technology. Some members were quite impatient and objected to the gradual nature of the transfer of production. According to the plans at the time, they were first to produce commutators which required only minor adjustments to production and only later to switch to the production of more demanding types. After a lengthy discussion, they nevertheless reached a decision that Kolektor should sign the contract.

According to the contract, the Kolektor would invest all its available assets, and the foreign partner would invest cash, machinery, tools, the necessary know-how, experience, and goodwill. The investment ratio between the partners was at the upper limit what was allowed: Kautt & Bux could only obtain a 49 percent equity stake. Although the German partners wanted a majority stake, they had to accept this as the only possible option. But they insisted on a provision stating that, were Yugoslavia to adopt new legislation concerning foreign investment, Kolektor would agree to each of the two parties holding a 50 percent stake. The foreign partner also required additional assurances of the safety of its investment. They therefore negotiated the right to cosign any contract. Each contract had to be cosigned by a representative of Kautt & Bux’s management. The term “codirector” was used in the contract. When responding to the ideological accusations regarding this delicate issue of a “codirector,” Kolektor successfully explained to the authorities that the term itself was merely a “terminological concession.” They explicitly assured that it would not have any consequences for the management of the company, as all other management structures typical of a socially self-managed company would remain in place. These explanations notwithstanding, this provision constituted a significant change in the structures and methods of company management and business.

Both partners were pragmatic enough that the cooperative undertaking proved very successful. In the period beginning with the conclusion of the contract and ending in the early 1980s, production and exports grew at an average annual rate of 12 percent. By the mid-1970s, the volume of production surged around eightfold, and around half of all commutators produced were sold to foreign markets through Kautt & Bux. The share of production for the foreign partner was slowly rising, and Kautt & Bux constantly exceeded the purchase value of commutators set out in the contract. Kolektor became a supplier to numerous European companies, including Philips, Bosch, AEG, Siemens, Vorwerk, and Perles. Moreover, thanks to the new technology, the door to the Yugoslav market was also opened wide. Kolektor had an 85 percent market share of the domestic market.

Kolektor increased its production, technology, and market share rapidly. It also constantly invested in research and development, and it enjoyed successes with a few patents which enabled it to lower production costs substantially. Kolektor also improved the educational qualifications of its employees. At the end of 1980, Kolektor has already surpassed Kautt & Bux by volume of production and overall operation, market share, and profitability. Kolektor went from being a recipient of knowledge to an innovator, a company which generated its own knowledge and started to base its further growth on this knowledge.

Then, in 1988, the first agreement, which had been signed 20 years earlier, came to an end. After initial disagreement, a new contract was finally signed which was very similar to the first agreement from 1968. But there was one important difference. Kolektor would be allowed to sell in markets where its German partner did not have its own company for the production or sale of commutators or its own sales agents. Thus, a small window opened for Kolektor for independent marketing with its own brand.

The 1990s were the challenging years for Kolektor and Kautt & Bux. The transition period in Slovenia and the business troubles faced by Kautt & Bux created a new context. During the post-1989 transition, it was finally possible to transform the Kautt & Bux share in Kolektor into a pure capital investment. Kautt & Bux achieved a majority share, 51 percent, with the lease of the production line to Kolektor. It was stipulated that Kautt & Bux’s majority share should be reduced after Kolektor had paid off the production line. Kolektor did that in two years, so the share of Kautt & Bux decreased to 50.01 percent. Kautt & Bux at that time still held the exclusive sales and marketing rights for Kolektor’s products on Western markets. Kautt & Bux regularly used its majority share in Kolektor as collateral in different credit transactions. In the new contract, there was a provision which later became crucial. Kautt & Bux agreed that for any kind of decision, a three-quarters majority of shareholders was required. This was a concession given to Kolektor in order to protect the interests of the Slovenian side.

In the beginning of 1990s, Kautt & Bux was overburdened with debts, lagging behind Kolektor technologically, and losing its competitiveness, and its market share was in decline. In fact, its business performance was completely dependent on the profitability of Kolektor. Kautt & Bux was at the verge of insolvency. Due to the marketing rights which Kautt & Bux held, which meant that it had direct contacts with customers, Kolektor had an interest in helping Kautt & Bux ease its solvency problems. However, in 1994, the efforts to keep Kautt & Bux afloat proved futile. In fear for its future, Kolektor cancelled the agreement with Kautt & Bux, since Kautt & Bux was not in position to ensure the selling channels anymore. Within the customer’s network, Kolektor was already recognized as reliable, innovative, and excellent producer of commutators. Although Kolektor faced initial troubles, it successfully managed to establish direct ties with its customers and build partnerships with them.

Simultaneously with the decline of Kautt & Bux, another process was going on, specifically, the privatization of Kolektor, or to be more precise, the privatization of Kolektor’s 49.99 percent share, which was in state/social ownership. By the time of Kautt & Bux’s bankruptcy, privatization based on the concept of broad employee co-ownership had started. After a very complicated procedure, two newly stablished companies (FI and FMR), owned by 800 employees with a deciding role in management, privatized the Slovenian part of Kolektor.

After Kautt & Bux declared bankruptcy, there was an offer to the Slovenian side to take over the Kautt & Bux share in Kolektor. At the time, however, the Slovenian side simply did not have enough founds for such a takeover. Finally, Kautt & Bux was taken over by Kirkwood Industries, an American commutator manufacturer, in February 1994. In addition to Kautt & Bux’s total assets, Kirkwood also took over slightly more than a 50 percent share in Kolektor. Kirkwood entered the takeover procedure of Kautt & Bux, and Kolektor unprepared. Kirkwood’s management expected to gain total control of the company. However, they were soon faced with reality. They found out about the contractual provision concerning the need for the assent of a three-quarters majority of shareholders for the adoption and enforcement of decisions. The bankruptcy administrator in Germany had obviously withheld this important information from Kirkwood.

In the 1990s, when Kirkwood acquired a share in Kolektor, Kolektor became even stronger and more independent. By using modern technology, it substantially increased its production capacity. The volume of production surged by 47 percent in the second half of the 1990s, from 66 million to 107 million commutators. In the same period, the volume of sales was up by 40 percent. The company started to establish commercial branches and production facilities in different countries (Germany, USA, Brazil, Mexico, South Korea, China, and Bosnia). In the end, Kolektor even bought Kautt & Bux.

From the perspective of the day-to-day realities, the story was not so smooth. The Kirkwood era at Kolektor was marked by huge misunderstandings concerning the future of both companies, since they were also competitors on the most important markets. The Kautt & Bux and Kolektor management were on close and friendly terms. They trusted each other and were partners. In Kolektor’s relations with Kirkwood, there was no sign of that spirit. From the outset, Kirkwood tried to subordinate Kolektor and degrade it into being a plain production plant, without any other function. This was completely unacceptable for the Slovenian side. Kirkwood attempted to acquire additional shares in Kolektor, but it failed, and it also underestimated the mutual loyalty in the local environment. After this failure, Kirkwood lost interest in Kolektor and in the European market. They offered Kolektor’s owner the option to buy out Kirkwood’s share. Slovenian owners agreed. They finished the procedure in 2002. At the same time, Kolektor also purchased the German company Kautt & Bux from Kirkwood and thus completely dominated the European market.21

Conclusion

Yugoslavia was the first communist country to allow foreign investments in the form of joint ventures as early as the second half of the 1960s. The decision was made as part of the broad reform efforts of 1965. This was a period when the reformist wing of the LCY was dominant. The decision to allow foreign investments was part of the effort to modernize technology and management in the Yugoslav economy. The aim was to further Yugoslav integration into the global economy and the international division of labor and also to enable its competitive entry into the Western markets. Allegedly, the advantages for foreign enterprises of investing in Yugoslavia were the relatively lower investment costs due to cheaper labor and favorable tax rates, satisfactory infrastructure, proximity to the Western markets, a relatively extensive domestic market, and the possibility of exports to third markets, especially the Eastern Bloc countries. This was a pragmatic approach to making the domestic economy more efficient. However, the representatives of the reformist wing, even before they were removed from their positions at the beginning of the 1970s, had to take into account the political realities and the prevailing ideological orthodoxy. Therefore, the regulation of foreign investment was a compromise between pragmatism and the ideological constraints of the communist regime. For foreign investors, the security of their investments, shares and management of joint ventures, and repatriation of profits were vital considerations. There were no ideological prejudices regarding the security of investments. This interest was recognized by the authorities, but there were greater concerns about the co-management of companies and the repatriation of profits. As of the mid-1970s, ideological restraints were tentatively weakening, and the regulation of foreign investments was gradually removing the constraints imposed by the self-management political and economic system. In the late 1980s, Yugoslavia fully liberalized foreign investment. However, at that time, the country’s profound economic and political crisis drastically undermined the efforts to encourage foreign investments in the Yugoslav economy through liberalized regulation.

By 1980, Yugoslavia had managed to attract 200 joint ventures, which meant an average of around 15 foreign investments per year. These investments were rarely extensive, which attests to the caution of foreign investors when it came to joint ventures. 200 foreign investments were not much considering the size of the national economy, but they were a lot for a country with a communist system and regulatory restrictions. Research has shown that foreign investors had no problems with the Yugoslav self-managed corporate structure as long as the local or republic party leadership did not interfere. Investors received half of the management rights, even if they had a smaller share of the capital. Thus, both sides needed to seek consensus to make business decisions. A sort of an informal pattern emerged where the Yugoslav side had more say in setting the employee wages, determining the pricing policy on the domestic market, and focusing on integration into the local environment and relations with the local supplier network. Meanwhile, the foreign partner had a decisive say regarding the technology, the product range, the organization and quality of production, marketing, and sales on the Western markets. Together, they made decisions on recruitment, employee training, and marketing on the domestic market and in other communist countries. The experiences of foreign companies were mostly positive. The self-management of the Yugoslav companies was also not an obstacle. The qualities of the leading operational personnel of both partners were more crucial. The concerns of many investors regarding subordination to the workers’ council as the supreme governing body of Yugoslav companies were unfounded. As a survey among foreign investors revealed, the workers’ councils in joint ventures were more of an advisory body, while the decisions were made by the joint management board.22

The volume of foreign investments shows that the expectations of the Communist Party’s reform wing were justified and that foreign investment could be an important driving force for swifter economic development and the state’s integration into the international economic space.23 However, the restrictions put in place by the communist regime were severe. The ideological-political, social, and economic dilemmas related to foreign investments are evident from the case study presented here. The example of the Kolektor company shows that pragmatism was also needed by foreign investors and domestic companies in their daily business practices. The case of Kolektor also shows that foreign investment in a self-managed enterprise could be very successful when long-term objectives were given emphasis and there was minimal political interference, as was often the case in Slovenia.

As we have already pointed out, Kolektor was not a typical example, but the question remains as to how much of its long-term success was made possible by the investments made by its West German partner. The success of a company cannot simply be attributed to one or two factors. The answer lies in several arguments and their mutual interaction in a historical time and space. Each company is a specific, unique story. It takes place in a specific social context in combination with several favorable circumstances.

The presence of the foreign partner was no doubt a very important factor in Kolektor’s success. It put Kolektor in a specific position and prevented any foreign interference. As for internal relations, here the foreign investor had an important controlling function. Dependence on the foreign markets guaranteed by Kautt & Bux and the ensuing steady incomes were advantages that could not be ignored. The need to adhere to the Western economic standards through Kautt & Bux also had a positive impact on the performance standard of the employees and the leading managers. The foreign partner assured a high level of investment. First, the high investment stemmed from the entry of the foreign partner and the requirements of the Yugoslav legislation, but later, they became a necessity guaranteeing technological progress and growth in the market share. Both sides were aware of this. The level of investments in development (knowledge), technology, and production were constantly high. Kolektor’s success was founded on massive cost-competitive production in the constantly expanding electric motors market.

Another important element was the stability of management and teamwork. In the period between 1968 and 1994, there were only two Slovenian directors and one German director. This contributed to the necessary predictability of the management and its approach to the business. Long-term goals had priority over short-term goals. This was respected by the foreign partner. Kolektor was a company which from the outset had a clear strategic orientation and clearly defined, realistic, and measurable goals. The loyalty of employees to the company should also be mentioned. The level of employees’ identification with the company was high for a long time. The company tried to understand the employees and their families and help them meet their needs. This has been a constant feature of the company’s policy of social responsibility, regardless of which decade of Kolektor’s development we are looking at. Social responsibility was a key feature in the concept of Yugoslav enterprise, as other cases clearly show.24

Unlike most of the others joint ventures in Yugoslavia, the collaborative undertaking between Kolektor and Kautt & Bux was successful due to pragmatism of the partners, both the foreign and the domestic, and the pragmatism of local authorities, which was very important. Local party and administrative authorities respected the new reality at Kolektor, which was established after the entry of a foreign partner. Primarily, they were interested in economic performance, since Kolektor became an important employer and contributor to the development of the local community.

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Table 1. Foreign investments by economic sector, 1968–1980

Sector	Number of contracts	Total investments (millions of dinars)	Share of capital
Food, Drinks, and Tobacco	17	2,577	5.5 %
Chemicals and Allied Industries	27	5,843	12.5 %
Industries in Which Metals Were Used	17	2,269	4.8 %
Production of Metals	12	22,218	47.8 %
Wood and Paper Industry	8	3,094	6.7 %
Transport Equipment	17	5,860	12.6 %
Electrical Engineering	14	1,395	2.9 %
Rubber Industry	8	2,178	4.7 %
Other Industries and Activities	44	1,137	2.5 %

 

Source: Artisien and Buckley, “Joint Ventures in Yugoslavia,” 116.

The study examines Soviet fashion houses as fashion corporations with an extensive structure and a certain autonomy which served as centers for the development and representation of Soviet fashion. These state institutions were created in the capitals and large cities of the Soviet republics. The Moscow All-Union Fashion House acted as a methodological center for fashion houses of all Soviet republics. The Ukrainian SSR was one of the important centers of fashion development in the Soviet Union, and it included six general orientation and five specialized fashion houses, as well as the Ukrainian Institute of Assortment of Light Industry Products and Clothing Culture. Based on a wide range of archival sources and interviews with fashion house workers, the article reveals the structure and operation of Ukrainian fashion houses in the period between 1940 and 1991 and also examine their cooperative endeavors with garment enterprises and research institutions. The technology of clothing production by designers, the processes of approval to which these technologies were subjected by art councils, and the organization of exhibitions in the USSR and abroad are also considered.

Keywords: Soviet fashion, fashion house, light industry, Soviet Union, Soviet Ukraine, fashion corporation, art council.

As the nineteenth-century Russian playwriter Anton Chekhov wrote in his comedy The Wood Demon, “In a human being everything should be beautiful: the face, the clothes, the soul, the thoughts.” Although Chekhov was not referring to the USSR and its fashion industry, his now famous saying served as a slogan for the so-called “new Soviet person.” The “new Soviet person,” a hard-working, selfless member of Soviet socialist society, was cast as the embodiment of the harmony of individual and societal interests. This person was supposed to express this harmony through his or her every act and accoutrement, including clothing, to which particular attention was devoted in the second half of the twentieth century.

Soviet fashion is a complex phenomenon which combines cultural, social, aesthetic, and ideological aspects. Clothing is arguably also one of the most important symbolic languages of a given society, and the production of clothing is a way to control the appearance and visual vocabulary of the population, as well as a way to interfere in everyday life through a regulated market for fashion products.

Today, Soviet fashion is being made the subject of study by representatives of various disciplines, including art criticism, culturology, philosophy, and sociology. Rather recently, it also began to be actively studied by historians. Among the studies on the history of Soviet Ukrainian fashion, it is worth noting the works of Ukrainian culturologists Zenovia Tkanko and Maria Kostel’na.1 In her book Fashion in Ukraine of the Twentieth Сentury, Tkanko points out the most distinctive features of the styles and trends that influenced the development of Ukrainian fashion.2 Kostel’na focuses in her research on the ethnic direction in the work of Ukrainian fashion houses designers who were active in the middle of the twentieth century or the beginning of the twenty-first century.3 She attempts to reconstruct the stages of development of Ukrainian fashion houses, focusing on the evolution of the ethno-paradigms of the Kyiv, Lviv, Odesa, Kharkiv, and Donetsk schools of fashion design.4 She also covers the creative path and the development of ethnic trends of Ukrainian designers such as Marta Tokar, Lidia Avdeeva, Hertz Mepen, and others. While both Tkanko and Kostel’na consider mainly the cultural aspects of the development of fashion trends, including the period of Soviet Ukraine, they also examine the distinctive elements of fashion development in Ukraine and Soviet light industry in general.

The works of the Russian historian Sergey Zhuravlev and the Finnish sociologist Jukka Gronow are significant for the study of the history of Soviet fashion.5 Zhuravlev and Gronow consider the history of fashion industry development in the USSR and analyze changes in the attitudes of the authorities and society towards fashion.6 Their works deal with various aspects of Soviet fashion, including the creation of the design system in Soviet Russia, discussions about fashion in the Soviet public discourse, individual tailoring and designing clothing based on the example of the State Department Store (GUM), and so on. Their detailed examination of the Tallinn House of Fashion Design, which is based on interviews and archival materials, is of particular value to the scholarship on the broader subject.7

Historians Larissa Zakharova and Natalia Lebina are also actively studying the fashion world of Soviet Russia, and Djurdja Bartlett and Judd Stitziel are studying socialist fashion as a phenomenon. Historian Larissa Zakharova has examined the trips taken by Soviet fashion designers to France and attempts to cooperate with the Parisian fashion house Christian Dior, and they have called attention to the significant French influence on fashion trends in the Soviet Union.8

Natalia Lebina’s works are dedicated primarily to the study of Soviet everyday life and the image of Soviet people, including aspects of their appearance, clothing, and behavior.9 In the monograph Man and woman: body, fashion, culture. The USSR – Thaw, in which Lebina scrutinizes the relationship between a man and a woman from various perspectives, she also examines fashion as well.10 Lebina alo considers the activity of the All-Union Fashion House and the Leningrad House of Fashion Design, which is particularly important for this study.

In Fashioning Socialism: Clothing, Politics, and Consumer Culture in East Germany, German researcher Judd Stitziel thoroughly examines the emergence and development of the socialist fashion industry and analyzes discussions about the aesthetics of clothing, drawing on the example of East Germany.11 Stitziel reveals the economic and political conditions under which the fashion industry in Germany operated.

FashionEast: The Spectre that Haunted Socialism by British researcher Djurdja Bartlett is dedicated to the phenomenon of socialist fashion. Bartlett considers the institutionalization of fashion and the formation of the “official socialist costume” as an ideological construct.12 She also touches on the roles of the Council for Mutual Economic Assistance (СМЕА), within the framework of which the USSR also cooperated with the socialist countries in the formation of socialist fashion, where corporate ethics and culture were also visible. In addition to considering clothing design in the USSR, Bartlett also devotes considerable attention to Eastern European countries such as Hungary, Czechoslovakia, Poland, the GDR, and Yugoslavia.

Thus, the research topic on which I focus in this inquiry is relevant and interdisciplinary and has broad potential for further research, though it has not yet gained the recognition it merits among professional historians. My inquiry is the first in the field to consider Ukrainian fashion houses as Soviet corporations responsible for representing fashion in Soviet Ukraine and abroad. Questions about fashion houses, the features of their internal structures, and the hierarchies within which they functioned remain poorly studied.

This paper is based on a wide range of sources, including archival documents, interviews, and periodicals. In particular, I have done considerable work in archives in Ukraine and Russia. The materials include documents from the Ministry of Light Industry, fashion houses, garment and shoe factories, tailor shops (atel’ye mod), department stores, and other institutions that were directly involved in the development and production of fashion goods. Especially valuable are the materials which were produced by the fashion houses, including documents on their organization and functioning, their trips abroad, exhibitions, and cooperative endeavors both within the republic and abroad.

However, after the collapse of the Soviet Union, most of the materials on Ukrainian fashion houses disappeared, and they are not found in the state archives. For the time being, only two archival funds have been identified, namely for the Kyiv and Lviv Houses of Fashion Design. But they are incomplete and do not cover the entire period under study. In contrast, the All-Union Fashion House fund is available in a more extensive format at the Russian State Archive of Economics. Since the All-Union Fashion House was a methodological center for all the Soviet republics, its materials also contain aspects pertaining to corporate cooperation with Ukrainian fashion houses. Additional sources include private archives of fashion houses workers, which contain sketches, photos, documents, etc.

Interview materials are an important part of this paper. Since the interviews were done with fashion houses workers, the features and specifics of work in the fashion houses were shared firsthand by the interviewees. This made it possible to consider the subject from different perspectives, including the perspective of a clothing maker (konstruktor odezhdy), a fashion designer (khudozhnik-modelyer), a fabric artist (khudozhnik po tkanyam), a clothing demonstrator (demonstrator odezhdy), a chief art director (glavnyy khudozhestvennyy rukovoditel), the director of a fashion house, and the head of the raw materials rationing department.

These historical records are valuable sources, since very few “witnesses” were still alive and available for questioning. However, it should also be taken into account that the interviews were done several decades after the fashion houses closed, so respondents may tend to forget or miss some facts. Moreover, the current political situation and public opinion affect how the past is remembered and evaluated today. In some cases, there was a feeling that the people who were being interviewed were still afraid of State Security Committee (KGB) surveillance. For example, respondents refused to speak on tape about the illegal activities of fashion houses or some real statistical information. Against this background, an attempt was made to reach as many fashion houses workers and members of their professions as possible in order to collate the data and determine their relevance.

Regarding periodicals, the emphasis was on Ukrainian magazines, in particular the socio-political journal Radianska zhinka (Soviet Woman) and the fashion magazine Krasa i moda (Beauty and Fashion). They were two of the most popular and widely distributed magazines in Soviet Ukraine. In these magazines, reports were published on the latest achievements of the light industry in Ukraine and the functioning of fashion houses, and they also contained writings on the image of a modern fashionable person and certain fashion dogmas. The materials of the socio-political magazine Rabotnitsa (Worker) and the fashion magazine Zhurnal mod (Fashion Magazine) were also used, since they were the most popular such publications in the Soviet Union and contain valuable information on the general Soviet context.

The Soviet Fashion Concept

From the second half of the twentieth century onwards, there were lively discussions in periodicals about the place of fashion in Soviet society, discussions which involved specialists from various fields.13 As a result of these discussions, fashion was recognized as one of the components of the ideological education of the “Soviet person.” The concept of “Soviet” fashion began to be broadcast in every possible way, but primarily through periodicals. Based on periodicals and special literature about fashion by Soviet fashion experts, the characteristic features of “Soviet” fashion were simplicity, modesty, convenience, relevance, sense of proportion, and good taste. Any slight deviation from the norm in clothing met with a negative assessment.

Emphasis was also placed on the availability of goods: “Dressing nicely does not mean wearing expensive things. Clothing should be inexpensive and elegant at the same time. After all, we create samples for workers.”14 The fabric also did not have to be expensive, even when it was used to make samples which were used in international exhibitions: “Use of cheap colorful fabrics is very important for sewing because it makes clothes accessible to the general public.”15

Fashion was supposed to reflect the success of Soviet industry. At the same time, the concept of Soviet taste was being formed in the official discourse. It was believed that “the cultivation of taste is one of the important forms of struggle for the formation of Soviet socialist culture, for the cultural growth of all Soviet people.”16 Taste was considered “inseparable from the general culture of a human,” and it was regarded as playing an important role in the regulation of consumer behavior and was therefore brought in line with Soviet values.17

The question of how to learn good taste was discussed in the pages of newspapers and magazines: “Taste is what we need today. Excess is bad.”18 Periodicals received letters asking for help in understanding what “tastefully dressed” meant.19 Sometimes, Soviet fashion designers or art historians personally answered these questions in the pages of magazines. In particular, the fashion designer of Kyiv Fashion House Natalia Kalashnikova advised readers to improve their knowledge of culture, visit museums and galleries, and read fiction to cultivate their tastes. “While visiting museums,” she advised, “one should pay attention to the color scheme of paintings and their composition, and one should look closely at the plastic expressiveness of sculptures. Clothing also ‘sculpts’ a person’s figure. It is necessary to read more fiction and to be interested in all branches of the arts, especially applied art. This will nurture an artistic sense, and then you can accurately identify everything that is marked by good taste, whether it is a painting, a sculpture, or a dress.”20

Many publications with characteristic headlines were devoted to the cultivation of taste and the art of dressing in the 1960s–1980s. I am thinking of titles such as “Taste and Fashion,” “Needs, Tastes, Fashion,” etc.21 Importance was attached not only to clothing, but also to manners, behavior, correct posture, and the ability to maintain a conversation. In one of the responses printed in the socio-political journal Radianska zhinka (Soviet Woman) to a reader’s letter, the author contended that “Tastefully selected clothes and shoes may look ridiculous if a person does not maintain his posture.”22

Advice on how to look beautiful was also given to men: “Dear men, look for it, try it out. The concept of ‘fashion,’ although feminine, applies equally to you.”23 Referring to the “commandment” to men from the famous French couturier Pierre Cardin, one of the publications emphasized that “a tie which is too bright and expressive and immediately catches the eye is a man’s sin number one.”24 The same was true of bright socks. Tips about fashion trends in men’s clothing often were made by professional Soviet men’s fashion designers.25

Considerable attention was also devoted to children’s clothes, because it was believed that one had to make an effort to begin cultivating good taste when a child was still in the cradle: “Have you noticed how a child reaches for a bright toy, a colorful scarf? Specialists, artists, and educators believe that this is the first manifestation of the aesthetic perception of the world. What about children’s clothes? They play perhaps the most important role in the complex process of crystallization of good taste.”26 The fact that Ukrainian SSR had a separate fashion house, the Dnipropetrovsk House of Fashion Design, which specialized only in children’s clothing, offers clear testimony to the importance given to the concept of fashion in children’s garb.

One of the most important features of Soviet fashion was the appeal to folk traditions: “Although new equipment and new materials suggest and sometimes dictate new forms of clothing, we should not forget about the importance of nationality. The history of the traditional national costume has left us brilliant examples of the organic unity of the texture of the fabric and ornaments, decorations, a rich synthesis of delicate taste and culture of color. If you follow these patterns, study them thoroughly, our suit in modern processing will be safe from inconsistency, deliberateness, disharmony.”27

Soviet fashion designers collaborated with folk artists, studied national art, visited specialized museums and galleries, were inspired by natural materials, and created their collections on the basis of these influences. Folk clothing was based on the use of ancient ornaments, embroidery, lace, and sewing.28 The originality and uniqueness of the clothing was seen in the appeals of folk motifs and the ways in which they were combined with newer fashion trends.

Another trend involved the use of motifs from narratives concerning the heroic past of the country, which included the sewing of women’s coats with materials from military overcoats, hats in the form of helmets, budyonovka created according to the sketches of artist Victor Vasnetsov, etc.29 It should be noted that the folk theme was relevant throughout the entire period under study. In the pages of women’s magazines, in addition to a large number of publications concerning national traditions in clothing, quite often there were samples of folk clothing or national ornaments.30

The periodicals also systematically covered competitions for the best drawings of fabrics, clothing samples, knitwear, and hats using Ukrainian folk motifs. For example, in 1965, 72 enterprises in the textile industry and six republic fashion houses participated in such competitions. This shows a fairly high interest and involvement in similar events.31

Another feature of Soviet fashion was the creation of clothing ensembles. The ensemble signified a combination of things which were in harmony with one another in color, shape, and decoration. The ensemble was complemented with shoes, a hat, a bag, a scarf, and gloves. It was important to arrange the outfit according to the purpose (were they to be worn in the theater, during a visit to an exhibition, for a casual walk, etc.). The correct creation of an ensemble of clothes was also covered in the section of fashion tips for readers. Taisiya Rovna, a fashion consultant in the Kyiv Fashion House, offered the following suggestions in response to her own rhetorical question: “What makes up the ensemble? A coat and a dress, a coat and a suit, a coat and a blouse with a sundress or skirt, a suit and a blouse, a suit and a vest and a blouse, a jacket and a dress, a half-coat and trousers with a blouse, trousers, a blouse and a vest should be in harmony.”32 The development of the ensemble depended not only on the tailoring of the clothes, but also on the proposals made by textile artists, shoemakers, fur masters, and headdress masters.

Soviet Fashion Corporations

In the Soviet Union, a network of state institutions was created which was aimed at development of the fashion industry and its promotion and engaged in clothing production and the formation of the Soviet fashion concept (this network included fashion houses and research and oversight organizations).

Fashion houses were gradually created in all the Soviet republics with a methodological center in Moscow. They were divided into general orientation (houses of fashion design) and specialized (houses which focused on shoes, knitwear, leather goods, workwear, etc.). The first fashion house was opened in Moscow in 1934. With the outbreak of World War II, it was closed, only resuming its activity in 1944. The gradual restoration of clothing and shoe factories throughout the Soviet Union also began in the postwar period. In 1949, the Moscow Fashion House was reorganized into the All-Union Fashion House, and it gradually became a kind of fashion institute with a large number of services and divisions which dealt with the main theoretical, practical, and methodological aspects of fashion.33

In the period between 1944 and 1948, fashion houses were established in Kyiv, Leningrad, Minsk, and Riga. These institutions were merged into a single system, headed by the All-Union Fashion House in Moscow. At the beginning of 1949, twelve republican and regional fashion houses had been organized.34 By the second half of the 1950s, there were 16 of them. In 1977, there were 38 fashion houses in the Soviet Union, 18 of which were in the RSFSR and seven of which were in the Ukrainian SSR.35 There was by one house of fashion design in each of the other Soviet republics.36 Thus, given the total number of fashion houses in Soviet Russia and Ukraine, it can be argued that these two republics were the centers of fashion development and promotion in the USSR. It is also worth considering that these republics had large territories and extensive light industry in general.

In addition to large designing institutions such as fashion houses, there were research organizations that were also entrusted with the responsibilities of providing scientific and methodological guidance and coordinating the work of other fashion designing structures. These organizations included the All-Union Research Institute of the Garment Industry, the Special Art and Design Bureau, and the All-Union Institute for the Assortment of Light Industry Products and Clothing Culture.

The All-Union Research Institute of the Garment Industry was the main scientific institution in the Soviet Union. It dealt with virtually all issues concerning scientific and technological support for light industry. In particular, its functions included the improvement of technologies for design and tailoring, analysis of materials for manufacture, the study of the performance properties of clothing, rationing, making clothing production more efficient.37

The Special Art and Design Bureau (SHKB) was established in 1962. Its main tasks included the development of projects for mechanical engineering products and goods for cultural and household purposes, the generalization and promotion of best practices in the field of artistic design of industrial products, the preparation of proposals for phasing out products which were obsolete and unsatisfactory in terms of artistic design, and staging for the production of new types of goods which met modern expectations.38

It was this organization that developed a method which made it possible to create various samples, such as items of clothing, according to one basic form and a single constructive basis. According to the Bureau management, the constant renewal of collections through the use of new or different fabrics, décors, and the imaginative redesign of samples without the introduction of any fundamentally new cuts would allow the industry to rebuild easily and provide a wide variety of garments in stores.39 Articles in periodicals were often dedicated to the study of the experiences of the Bureau’s clothing department.40

The All-Union Institute for the Assortment of Light Industry Products and Clothing Culture (VIALegprom) was launched in the second half of the 1960s. The Institute studied the range of goods produced by light industry enterprises. It selected the best samples and made recommendations for their introduction, monitored the timely introduction of a new range of fabrics and light industry products into mass production, and promoted the development of fashion in clothes and the artistic design of fabrics, shoes, and other light industry products.41

The Ukrainian Institute of Assortment of Light Industry Products and Clothing Culture (UIALegprom) was founded in 1977. It was entrusted with the task of coordinating the work of and providing methodological guidance for the creative team, which dealt with the creation of a new fashion range. The institute’s responsibilities included studying the demands of buyers for light industry products, organizing advertising, and promoting products through television, radio, and print media, organizing art and technical councils, developing, in cooperation with research institutes and fashion design organizations, proposals for introducing a new range of fabrics and other materials clothing and footwear manufacture.42 It should be noted that the Institute of Assortment of Light Industry Products and Clothing Culture operated only on the territory of the Ukrainian SSR and the RSFSR.

The fashion corporations described above interacted with each other, forming a single mechanism aimed at the development of the Soviet fashion industry. The approach to the design and creation of clothing was meticulous and thought-out to the smallest detail. At the same time, there was a high corporate culture at the all-union, republican, and local levels. Methodological meetings, contests and fashion shows, creative business trips, and employee exchanges were regularly held at the all-union and republican levels. For example, the All-Union Fashion House designer Vyacheslav Zaitsev often visited fashion houses in Soviet Ukraine, where he gave lectures and shared his experience in fashion design.43

To unite the team at the local level, joint creative trips were organized to cultural and historical places, as well as “skits” (kapustniki).44 Designers were given creative days and had opportunities to go on creative business trips both within the country and abroad. There were cases when one specialist had the opportunity to work in three Ukrainian fashion houses (Lviv, Kharkiv, Kyiv).45 The cohesion of the team is also indicated by the fact that when the new building of the Kyiv House of Fashion Design was being built, all employees tried to be involved in the process. At the same time, Svetlana Titova, the director of the fashion house, donated her precious jewelry, throwing it under the foundation of the new building of the fashion house as it was being laid. (Fig. 1.) All of the above served to build a sense of unity among the various colleagues and coworkers, and this made it possible to establish horizontal connections within the fashion house and between fashion houses both within the republic and at the all-union level.

Figure 1. Svetlana Titova (on the right), the director of the Kyiv House of Fashion Design, throws her precious jewelry under the foundation of the new building of the fashion house as it is being laid, 1973. (Private collection of the Kyiv Fashion House designer Lydia Avdeeva, with Lydia Avdeeva’s permission)

Ukrainian Fashion Houses: Structure, Operation, and Cooperation

Opening

The Ukrainian SSR was one of the main centers of fashion development in the Soviet Union. There were six fashion houses located in the largest cities in Soviet Ukraine. The first house of fashion design, which was created in 1944, was in Kyiv.46 Ten years later, the Lviv fashion house opened.47 During the period of its existence, the Lviv fashion house was reorganized several times. In 1962, it was transformed into the Design and Engineering Institute of Light Industry. Shoe and knitwear laboratories were opened at the institute, as was an artistic and experimental laboratory for creating sketches for fabrics, embroidery, lace, and various haberdashery and a laboratory for weaving and printing fabrics. In 1968, it was made back into a fashion house.48 In the period beginning in 1958 and stretching to the end of the 1960’s, Odesa, Donetsk, Kharkiv, and Dnipropetrovsk established their own fashion houses.49 Much like during the Khrushchev period, the 1960s, 1970s, and 1980s saw the opening of specialized fashion houses in the Ukrainian SSR as well.

Fashion houses with general orientation were entrusted with the task of designing and developing clothes for industrial production and making samples which would be used abroad as examples of the fashion work being done in the Soviet Union. It was also responsible for publishing in fashion magazines, holding fashion shows, and educating Soviet society by implementing the “correct,” ideologically consistent canons of Soviet fashion.

The specialized fashion houses, including the Republican House of Footwear Samples, the Republican House of Leather and Haberdashery Goods, the Republican House of Knitwear Samples “Khreshchatyk,” the Republican House of Workwear Samples, the Republican House of Model Household Items, served as supporting fashion organizations.50 In practical terms, there was a need for them, because the main principle of creating fashion collections was the stylistic combination of all elements, or in other words, the creation of an ensemble (clothing, shoes, hats, leather goods).

Each Ukrainian general fashion house specialized in a unique range of products. For example, the Odesa House of Fashion Design worked on the creation of leisure clothes, Kharkiv fashion house focused on light women’s dresses, Dnipropetrovsk on children and clothing for teenagers, and Donetsk on creating women’s outerwear.51 The Kyiv and Lviv fashion houses developed an entire product range and were the leading modeling centers of Soviet Ukraine.52 It should be noted that such specialization by region was a feature of Ukrainian fashion houses.

According to Nadezhda Nikiforuk, the director of the Lviv House of Fashion Design, the Lviv institution was considered the leader in the field of clothing design in Soviet Ukraine.53 In particular, this was influenced by its relative proximity to Poland, from where it was possible to be the first to get “information from all over the world,” as well as the generations of old Lviv masters who had significant experience in clothing design.54 However, according to official documents, the Lviv fashion house was considered the second in the republic by capacity after the one in the capital.55 It should also be emphasized that all fashion houses were directly subordinate to the Ministry of Light Industry of the Ukrainian SSR. The fact that two fashion houses were under the same leadership at once is a characteristic element of the Ukrainian fashion industry.

Constant competition between the Kyiv and Lviv fashion houses contributed to their transformation into fashion corporations which had a certain degree of autonomy and also exerted an influence on the development of fashion and fashion trends in Soviet Ukraine. This fact is also confirmed by the number of employees and their extensive structure. From the perspective of the total number of workers in fashion houses in 1962, the largest number of workers was in Lviv (370 people) and Kyiv (298 people) and the smallest was in Dnipropetrovsk (100 people).56 This indicates the importance of these fashion houses.

Structure and Operation

The structure of fashion houses was quite extensive and consisted of many departments and workshops.57 Based on the example of the Lviv Fashion House, these included the departments of planning and production, supply and sales, implementation, culture and propaganda, design outerwear, light dresses, rationing of raw materials and the development of technical documentation, and experimental and methodological workshops.58

Separately, a department of so-called “exposition hall” (demonstratsionnyy zal) workers was created, where models were employed to wear garments and show them to the public). In 1968, 16 people were officially employed in this department, including two laboratory assistants and 14 models.59 This fact indicates the relevance of this profession and its perception as a necessary position in fashion houses. In the employment record, the position was listed as a “clothing demonstrator.”60 It should be emphasized that it was quite difficult to get this position, because alongside a given applicant’s appearance (including his or her measurements), his or her education, knowledge of languages, and reputation were also taken into consideration, as was the question of whether he or she belonged to the Communist Party. These various considerations were regarded as important because so-called clothing demonstrators often traveled abroad to show fashion collections, and they were expected to represent the country appropriately.61

Fashion shows were held both inside and outside the buildings of fashion houses. There were two halls in the houses of fashion design, the exhibition hall and the exposition hall. The exhibition hall was open daily, except on weekends, and it was accessible to the general public. Collections of fashionable clothes by seasons were shown in the exposition hall. These kinds of fashion shows were held for the Soviet population once a week.62 Each fashion show was accompanied by comments from an art critic.63 The art critic provided details for each item of clothing, indicating its style, fabric, the age for which it was sewn, where it could be worn, and what other garments and accessories it should be worn with.64 A striking example is a shot from the film The Diamond Hand (Brilliantovaya ruka), directed by Leonid Gaidai, in which the art critic describes each item of clothing at a fashion show for the Soviet public. Such detailed information was needed in order to ensure that a woman who attended a particular show would understand which items would be most suitable for her and what things she might be able to sew at home on her own.65 (Fig. 2–4.)

 

 

 

Figure 4. Fashion show at the October Palace of Culture in Kyiv, 1962

TsDKFFA od. obliku 2–109980)

 

Visiting fashion shows were held in factories and plants, at universities, and at other public places. Soviet art critics and fashion designers often held lectures to familiarize the population with the latest trends and promote Soviet style and fashion. Based on archival materials, these visiting fashion shows were popular and in demand among Soviet citizens.66

The department of Culture and Clothing Propaganda was in charge of organizing fashion shows and thematic lectures which influenced the formation of perceptions concerning fashion among Soviet citizens. The department consisted of art critics and fashion consultants who systematically prepared the necessary materials for the print media, radio, and television.67 It also contained the most recent foreign literature on fashion and fashion magazines, which were translated, carefully reviewed, and scrutinized by the fashion consultants.68 The staff also included a photographer who regularly shot fashion shows and work processes and took pictures of items of clothing for periodicals published in the republic, primarily fashion magazines. The Lviv house of fashion design had its own photo laboratory, which was headed by Tanas Nikiforuk.69

Fashion magazines and booklets in which new fashion trends were popularized among the Soviet population were mainly published in the capital by the Kyiv House of Fashion Design. Certain attempts to organize the publication of the Zhurnal mod (Fashion Magazine) were made by the Lviv House of Fashion Design.70 In 1959, the fashion house published two editorials of the fashion magazine, but due to the decision according to which fashion magazines could only be published by the fashion houses which were regarded as important on the level of the entire republic, pub of the magazine ceased.71 This suggests the dominance of the fashion house in the capital. However, the Kyiv Fashion House did not publish a fashion magazine with circulation as wide as, for example, the Tallinn Siluett. Basically, the magazines published by the Kyiv Fashion House were small booklets. The most popular Ukrainian fashion magazine was Krasa i moda (Beauty and Fashion), published by the publishing house Reklama (Advertising), which was also in Soviet Ukraine. Most of the items of clothing featured in the magazine were designed by the fashion houses in the capital and made in the Kyiv clothing factories. This once again underlines the dominance of the fashion houses in Kyiv. Other fashion houses were able to make patterns and illustrations of the new clothing models that were sold to the public. Also, there was a practice of using periodicals to inform the Soviet citizenry about the purchase of clothing patterns in a particular house of fashion design.72

The Role of the Designer and the Creation of Fashion Collections

Fashion designers played an important role in the formation of collections and fashion trends in general. Since the task was to create their own Soviet fashion (without blindly copying Western trends), designers had to create original and distinctive items. Artists developed motifs and patterns drawing on folk art, in particular, and actively designed folk themes. For example, Lviv fashion house artists went to the villages in the Carpathian Mountains, where they collected materials and studied embroidery, fabrics, and jewelry and created a folk costume based on what they had found. They were assisted by employees of the Lviv Museum of Ukrainian Art, the Museum of Ethnography and Arts and Crafts, and art critics from the House of Folk Art. They organized classes on various types of Ukrainian arts and crafts, such as embroidery, weaving, knitting, and needlecraft.73

In addition, Lviv artists drew sketches for fabrics and independently produced fabrics on hand machines, which made these fabrics unique.74 They also engaged in cooperative endeavors with masters of folk art from Kosovo.75 In 1959, the Lviv fashion house established its own weaving workshop, where hand-made looms were used to produce fabrics in the Ukrainian folk style, both decorative and for tailoring.76 The garments and fabric created in this experimental textile laboratory were presented at prestigious international exhibitions (in cities such as Marseille, Tokyo, and Leipzig).77

Fashion designers who had higher special education and proved to be capable artists in the creation of new items of clothing for mass production or as samples of presentation were given a creative day once a week.78 On this day, they did not come to work. Rather, they were able to visit art museums or galleries, work outside or in the library, and spend time outdoors or in the mountains.79 In short, they did everything that might inspire them to create a new collection of clothes. Once in six months, they had to report on their creative work. Those who did not report on time were deprived of the right to use their creative days for the next six months.80 To increase their skills and further the improvement of the designs for sample items of clothing and developed sketches, fashion designers were also provided with studio days.81 Advanced training courses were held in which participants studied the composition of a drawing,82 for instance, and there were creative business trips, after which reports were submitted.83

To maintain fair competition among designers, contests were often held for the best samples of new garments. There was a book of reviews at the exhibitions in which visitors could write their impressions of a certain item, often noting the creator of the garment in question.84 Competitions for the best item of clothing were also held among light industry workers at both the all-union Soviet level and within the republic.

In the process of preparing the collection, fashion designers worked very closely with clothing makers and clothing demonstrators. Fashion collections were developed according to certain regulations. The director of the fashion house and the chief art director were responsible for the final results.85 Collections were divided into industrial and exhibition formats. Industrial collections served as a guide for garment enterprises and were aimed at introducing the items in the collection into mass production within the country. Exhibition collections were also regarded as a forward-looking undertaking (perspektivnaya kollektsiya). Samples of exhibition clothing were included in seasonal collections for display to the public and for international fashion shows and exhibitions.

Particular importance was attached to the exhibition collections, because the garments made by Ukrainian fashion houses represented not only the republic, but the whole country. The best fashion designers were selected for the production of such collections. For example, in the Kyiv House of Fashion Design, two leading fashion designers were always engaged in making sketches for exhibition collections, namely Lydia Avdeeva and Hertz Mepen.86 The sketches made by the designers were approved by the art council. After the sketches were approved, the designer and constructor in the team began to create items of clothing. During this time, clothing demonstrators constantly came to try on the clothes which were being made by the designers involved in the process. Each piece of clothing existed in only one version and was sewn for a specific clothing demonstrator. When the collection was completed, a mini-show of clothes was held with the participation of demonstrators, where the art council approved the final products. The best items were selected for inclusion in the final collection, and things with certain defects were eliminated.87

The Art Council of the Ministry of Light Industry of the USSR was responsible for all areas of light industry. Art councils for various branches of light industry were singled out separately from it. In 1967, there were 17 such art councils in various fields.88 For example, there were art councils on silk fabrics, hats, garments, knitwear and hosiery, footwear, textile haberdashery, etc. Usually, the council consisted of 25 to 40 people. It included a chairman, a deputy chairman, the executive secretary, and members of the art council.89 The members of the art council were representatives of the Ministry of Trade of the USSR, the State Planning Committee, the Planning and Production Department of the Ministry of Light Industry of the Ukrainian SSR, research institutes, the Republican House of Assortment, sewing and specialized fashion houses, and large sewing enterprises.90

In the fashion houses, art councils for garments, divided into big and small, were held. Big councils met approximately once a month and included economists, representatives of trade, the Ukrainian Research Institute of Light Industry, the State Planning Committee, chief art directors, fashion designers, and clothing makers.91 Small councils met as needed and included representatives of a one of the fashion houses, specifically the director, the chief art director, the chief clothing maker, and fashion designers. They discussed and resolved whatever issues needed to be addressed. There were also councils at sewing enterprises.

It should be pointed out that new items of clothing were not released without the approval of the art council. Furthermore, samples of clothing images of which had been published in periodicals had to be pre-reviewed and approved by the art council before being published. (Fig. 5–6.) These facts show the significant influence of art councils on the development of fashion in the country, and they also offer a grasp of the bureaucracy of the processes.

Foreign Fashion Exhibitions

The Lviv and Kyiv Houses of Fashion Design actively participated in foreign exhibitions and fashion shows and successfully represented the Soviet Union on the international level. For example, they were involved in creating a collection of clothing for fashion shows in countries such as Canada, France, the USA, Belgium, and Argentina.92 There were cases when Ukraine and Ukrainian fashion were singled out separately, for instance at the World Exhibition in Montreal (Canada) in 1967.93 The Soviet Union was represented by four fashion houses (Kyiv, All-Union, Leningrad, and Riga) and three socialist republics (Ukrainian, Russian, and Latvian). For the collection of fashion clothing of the Ukrainian SSR, 160 ensembles of women’s and men’s clothing were made. The collection was based on the use of folk clothing motifs from various regions and districts of Ukraine. Over the course of a month and a half, the Kiev Fashion House held 80 fashion shows, and a film was made about Ukraine and Ukrainian fashion.94

One finds evidence of great interest in the Ukrainian collection in the 383 instances of positive feedback in the guestbook from different countries, including the USA, Canada, England, France, Switzerland, and Argentina. There were also many articles in the foreign press, for example, in the newspapers Montreal Star, La Presse, and Ottawa Citizen.95 In particular, attention was focused on the modernness of Ukrainian fashion. According to an article in the Montreal Star entitled “Kiev fashions ‘play’ to a crowded Expo house,” “the colors might have been considered conservative by Western tastes, but most of the designs were up to any Paris or New York standards.”96 In an article entitled “La mode de Kiev: plus americaine que cosaque,” correspondent Michele Boulva pointed out that “the typical Russian or Cossack fashion, which is so popular to meet, has almost disappeared. According to the fashion show in the Russian pavilion, the American and European influence is felt in most of the items presented.”97 Thus, on the international level, Ukrainian fashion was identified by its use of folk traditions combined with modern forms and silhouettes.

Cooperation

When creating collections, fashion houses collaborated with other Ukrainian light industry enterprises. These enterprises included specialized fashion houses (footwear, knitwear) and related light industry enterprises. Such enterprises provided fabrics for creating fashion clothes, as well as additions to clothing ensembles (shoes, accessories).98 In general, Ukrainian designers preferred to work with domestic fabrics and materials, so each fashion house collaborated with certain textile and related enterprises when creating their collections.99 In particular, this was due to the orientation to the domestic market and well-developed Ukrainian light industry.

There was another option for cooperation which involved the development of technical documents and the implementation of fashion houses’ designs into the mass production of clothing.100 The technical documentation consisted of patterns and sewing technology for a certain product.101 Annually, more than 70 percent of the entire industrial collection (technical documentation) was made in fashion houses in the republic.102

It should be emphasized that such documentation was not free of charge, but agreements were concluded and a fixed fee was set for the development of a certain product. Thus, this was one of the ways in which fashion houses earned compensation. It is noteworthy that Ukrainian fashion houses were not limited in their cooperative endeavors to sewing enterprises from their regions.103 For example, as of 1970, the Odesa House of Fashion Design had provided technical documentation for 54 garment enterprises throughout the Ukrainian SSR.104 In contrast, the system of regional consolidation for the provision of technical documentation was relevant for fashion houses in the Russian SSR.105

Furthermore, Ukrainian fashion houses were able to conclude contracts with sewing enterprises both throughout the territory of the Ukrainian SSR and in other republics of the Soviet Union, as well as with socialist countries.106 However, this mainly applied to the Kyiv and Lviv fashion houses. Quite often, fashion designers and clothing makers and engineers from the production department visited sewing enterprises to provide practical assistance in the manufacture of certain items of clothing.107

It should be noted that the vast majority of garment and knitting enterprises in the Ukrainian SSR had their own experimental shops, laboratories, and sections which were also engaged in the development and creation of new items and styles of clothing.108 For instance, the state audit of 1962 showed that the Vorovsky Sewing Association in Odessa had its own experimental workshop where 52 people were employed, including 13 designers and clothing makers. At this time, Kharkiv had experimental sewing laboratories in 14 out of 15 sewing enterprises, where 53 fashion designers and clothing makers were employed.109 The situation was similar in Dnipropetrovsk, Donetsk, Kyiv, Lviv, and other Ukrainian cities.

In addition, some factories were able to cooperate directly (legally or illegally) with foreign enterprises. According to archival materials, the Lviv garment factory Mayak tried to cooperate with the United States in 1963 (Maidenform, Phoenix Сlothes firms).110 Based on oral history materials, the Tinyakov Kharkiv garment factory sewed clothes for France, and the Lviv shoe company Progress sold shoes for the GDR in the 1980s.111 As Kharkiv resident Mikhail Stanchev recalls, “[o]nce I went to Lille in France. We were in a sewing shop, where we were encouraged to buy a suit according to French fashion. However, I then heard someone say, ‘Do not rush to buy, it is all made in Kharkiv on Tinyakovka.’”112

Though garment factories generally used the materials produced by the fashion houses, clothing samples could often differ from the originals. This was particularly influenced by the availability of the necessary fabric, accessories, and equipment and the production capacity at a given factory, as well as the amount of time allocated for the manufacture of a certain item of clothing.113 It should be noted that there was a disparity in the development of heavy and light industries in the Soviet Union. Hence, light industry suffered from insufficient capacity and technical backwardness of the technological base. In addition, not all garment factories were able to sew clothing prototypes in the version prescribed in the technical documentation due to a lack of necessary materials.

As a result, a given sample was adapted to the production conditions at the factory and to the available fabrics and accessories. In addition, there was a stronger focus on quantitative indicators than on qualitative ones in the planned Soviet economy. (Fig. 7.) The caricature on this topic from the Ukrainian satirical magazine Perets’ (Pepper) is telling. (Fig. 8.) In this depiction, an item of clothing introduced in a fashion house and the same item of clothing in a garment factory differ greatly.114

It should also be noted that the consumption of raw materials and fabrics at light industry enterprises was subjected to control. In particular, there was a Laboratory for Rationing Raw Materials and Fabrics with authority within the republic located on the territory of the Kyiv House of Fashion Design. It was entrusted with the task of analyzing the consumption of materials in garment factories. Laboratory specialists (an engineer and a fabric distributor) visited textile factories and checked the consumption of fabric for garments produced by enterprises. If the amount of fabric consumed exceeded the norm, the specialists offered their own cutting system, which was more economical. Thus, the overall savings that the factory could achieve were revealed.115 In turn, the factory was obliged to comply with the laboratory’s recommendations.

Conclusion

Fashion in the USSR underwent a gradual transformation from something which was perceived as negative by the Soviet authorities to something which was perceived as positive and having a role in the evolution of a socialist society, though this process was admittedly complex. Soviet fashion was opposed to Western “bourgeois” fashion and had a clear ideological tone. Through the development and creation of “socialist” fashions, the Soviet authorities sought to show the advantages of the USSR over the capitalist countries not only in heavy but also in light industry.

As of the second half of the 1940s, the active development of light industry in the Soviet Union and the Ukrainian SSR in particular was a characteristic feature. Several state institutions were created for the development of the fashion industry and its promotion in Soviet society (fashion houses, research and control organizations). Fashion houses were given a crucial role. They were the main fashion corporations responsible for Soviet fashion’s image both within the country and abroad. Methodological meetings, fashion shows and contests, creative business trips, and employee exchanges were regularly held at the all-union, republic, and local levels.

The Ukrainian SSR developed an extensive system of clothing design, which included the Ukrainian Institute of Light Industry and Clothing Culture and six general orientation and five specialized fashion houses. This fact indicates that the Ukrainian SSR was one of the main centers of clothing design in the Soviet Union. Along with the development of technical documentation and new clothing samples for introduction into mass production, the fashion houses produced exhibition samples that were part of the seasonal collections for public display within the Soviet Union and at international fashion shows and clothing exhibitions.

Art councils played a crucial role in shaping the fashion trends and developing Soviet fashion in general. They included representatives of the Ministry of Trade, the Ministry of Light Industry, the State Planning Committee, research institutions, fashion houses, and big garment factories. All clothing samples had to be checked given approval by the art council before they were released and before images of them were published in magazines. This indicates the significant influence of the art councils on the development of fashion in the country, as well as the bureaucratization of the process and strict censorship of this direction.

Fashion houses served as clothing design centers and at the same time acted as fashion promoters for the Soviet citizenry. They regularly presented new fashion designs and developed permanent collections of new items of clothing, which were displayed in their exhibition halls. They also organized group trips to factories, plants, and institutes, where they showed their new fashion collections and made reports on how to dress tastefully.

Archival Sources

Derzhavnyi arkhiv Lvivskoi oblasti /Gosudarstvennyy arkhiv Lvovskoy oblasti [State Archive of Lviv Region] (DALO)

Perepiska direkcii firmy “Mayak” s inostrannymi firmami za 1963 god [Correspondence of the Mayak management with foreign firms in 1963], f. R–2002 “Lvivska shvatska firma ‘Maiak’” [Lviv sewing firm Mayak], op. 1, d. 55, l. 1–6, Lviv, Ukraine

Prikazy i direktivnyye ukazaniya Ministerstva legkoy promyshlennosti za 1967 god [Orders and directives of the Ministry of Light Industry for 1967], f. R–2002 “Lvivska shvatska firma ‘Maiak’” [Lviv sewing firm Mayak], op. 1, d. 352, l. 1–141, Lviv, Ukraine

Derzhavnyi arkhiv mista Kyieva / Gosudarstvennyy arkhiv goroda Kiyeva [State Archive of Kyiv] (DAK)

Kniga otzyvov i predlozheniy za 1951 god [Book of reviews and suggestions for 1951], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 25, l. 1–18, Kyiv, Ukraine

Materialy (akty, otchety) po okazaniyu pomoshchi shveynym fabrikam Ukrainy za 1954 god [Materials (acts, reports) to provide assistance to Ukrainian garment factories for 1954], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 62, l. 1–192, Kyiv, Ukraine

Materialy okazaniya pomoshchi shveynym fabrikam i otchety po komandirovkam za 1957 god [Garment factories assistance materials and business trips reports for 1957], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 113, l. 1–27, Kyiv, Ukraine

Otchety o tvorcheskoy komandirovke po obmenu opytom v gorod Moskvu i Leningrad, 1960 god [Reports on a creative trip to exchange experience to Moscow and Leningrad in 1960], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 161, l. 1–12, Kyiv, Ukraine

Otchety o tvorcheskoy komandirovke po obmenu opytom v Vengerskuyu Narodnuyu Respubliku i gorod Rigu, 1959 god [Reports on a creative trip to exchange experience to the Hungarian People’s Republic and Riga in 1959], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 142, l. 1–24, Kyiv, Ukraine

Perepiska s Glavnym Upravleniyem shveynoy promyshlennosti po voprosam proizvodstvennoy deyatelnosti Doma modeley (19 fevralya – 15 dekabrya 1955 goda) [Correspondence with the Main Directorate of the Garment Industry on the production activities of the Kyiv Fashion House (February 19–December 15, 1955)], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 68, l. 1–90, Kyiv, Ukraine

Spravka o rabote Doma modeley za 1955 god [Information about the Kyiv Fashion House activity for 1955], f. R–1219 “Kyivskyi budynok modelei Ministerstva lehkoi promyslovosti Ukrainskoi RSR” [Kyiv House of Fashion Design of the Light Industry Ministry of the Ukrainian SSR], op. 1, d. 69, l. 1–81, Kyiv, Ukraine

Lvivskyi miskyi mediaarkhiv Tsentru miskoi istorii Tsentralno-Skhidnoi Yevropy / Lvovskiy gorodskoy mediaarkhiv Tsentra gorodskoy istorii Tsentralno-Vostochnoy Evropy [Lviv Media Archive of the Center for Urban History of East Central Europe] (LMA)

Nikiforuk, Nadezhda, director of Lviv Fashion House, interview by the Lviv Center for Urban History, Lviv, 2015, transcript, LMA, Lviv, Ukraine

Zalesskaya, E. Istoriya Lvovskogo Doma modeley odezhdy [History of the Lviv House of Fashion Design], 1980, Lviv, Ukraine

Rossiyskiy gosudarstvennyy arkhiv ekonomiki [Russian State Archive of Economy] (RGAE)

Doklady, dokladnyye zapiski, spravki i pisma, napravlennyye v TsK KPSS po razvitiyu otrasley legkoy promyshlennosti (6 yanvarya – 11 sentyabrya 1965 goda) [Reports, memoranda, information, and letters sent to the Central Committee of the CPSU on the development of light industry sectors (January 6–September 11, 1965)], f. 198 “Gosudarstvennyy komitet po legkoy promyshlennosti pri Gosplane SSSR” [State Committee for Light Industry under the USSR State Planning Committee], op. 1, d. 85, l. 1–44, Moskva, Russian Federation

Tsentralnyi derzhavnyi arkhiv hromadskykh obiednan Ukrainy / Tsentralnyy gosudarstvennyy arkhiv obshchestvennykh obyedineniy Ukrainy [Central State Archive of Public Organizations of Ukraine] (TsDAGO)

Pisma redaktsiy zhurnalov i izdatelstv o rabote respublikanskikh zhurnalov [Letters from the editors of magazines and publishers about the work of republican magazines], f. 1 “Tsentralnyi komitet Komunistychnoi partii Ukrainy” [Central Committee of the Communist Party of Ukraine], op. 70, d. 2385, l. 1–128, Kyiv, Ukraine

Tsentralnyi derzhavnyi kinofotofonoarkhiv Ukrainy imeni H. S. Pshenychnoho / Tsentralnyy gosudarstvennyy kinofotofonoarkhiv Ukrainy imeni G. S. Pshenichnogo [Pshenichny Central State Film and Photo Archive of Ukraine] (TsDKFFA)

od. obliku 0–207692, Soveshchaniye chlenov khudozhestvenno-tekhnicheskogo soveta Kiyevskoy shveynoy fabriki “Oktyabr” [Meeting of the members of the Art and Technical council of the Kyiv garment factory “Zhovten”], 1983 god, Kyiv, Ukraine

od. obliku 2–75686, Udarnitsy kommunisticheskogo truda Odesskogo shveynogo obyedineniya imeni V. Vorovskogo, vypolnyayushchiye normu na 130–150% v tsekhe [The leaders of the Communist labor of the V. Vorovsky Odessa Sewing Association, who exceeded the norm by 130-150% in the sewing workshop], 1962 god, Odesa, Ukraine

od. obliku 2–91364, Vystavochnyy zal Kiyevskogo doma modeley odezhdy [Exhibition hall of the Kyiv House of Fashion Design], 1964 god, Kyiv, Ukraine

od. obliku 2–98033, Demonstratsiya modeley odezhdy v Kiyevskom dome modeley [Fashion show at the Kyiv House of Fashion Designg, 1965 god, Kyiv, Ukraine

od. obliku 2–109980, Demonstratsiya modeley odezhdy v Oktyabrskom dvortse kultury v Kiyeve [Demonstration of clothing samples at the October Palace of Culture in Kyiv], 1962 god, Kyiv, Ukraine

od. obliku 2–111619, Gruppa khudozhnikov-modelyerov Kiyevskogo doma modeley obsuzhdayet novyye obraztsy odezhdy [A group of fashion designers of the Kyiv House of Fashion Design discusses new clothing samples], 1967 god, Kyiv, Ukraine

Tsentralnyi derzhavnyi arkhiv vyshchykh orhaniv vlady ta upravlinnia Ukrainy / Tsentralnyy gosudarstvennyy arkhiv vysshikh organov vlasti i upravleniya Ukrainy [Central State Archives of Supreme Bodies of Power and Government of Ukraine] (TsDAVO)

Perepiska s Gosplanom USSR i drugimi respublikanskimi organizatsiyami po voprosam legkoy promyshlennosti, 19 iyulya – 15 dekabrya 1962 [Correspondence with the State Planning Committee of the Ukrainian SSR and other republican organizations on the issues of Light industry, July 19 - December 15, 1962], f. R–2 “Rada Ministriv Ukrainskoi RSR. Vykonavcha vlada” [Council of Ministers of the Ukrainian SSR. Executive], op. 10, d. 959, l. 1–171, Kyiv, Ukraine

Spravka o demonstratsii modeley odezhdy v Sovetskom pavilone na Vsemirnoy vystavke v gorode Monreale (Kanada) Kiyevskogo Doma modeley USSR v period s 25 iyulya po 5 sentyabrya 1967 goda [Information about the demonstration of clothes by the Kiev House of Fashion Design in the Soviet pavilion at the World Exhibition in Montreal (Canada) from July 25 to September 5, 1967], f.572 “Ministerstvo lehkoi promyslovosti Ukrainskoi RSR” [Ministry of Light Industry of the Ukrainian SSR], op. 4, d. 332, l. 1–78, Kyiv, Ukraine

Ukrainian Fashion History Digital Archive [Tsyfrovyi arkhiv istorii mody Ukrainy / Czifrovoj arkhiv istorii mody Ukrainy] (UFHDA)

Avdeeva, Lidia, Soviet fashion designer, interview by Olha Korniienko, Kyiv, 2017, 2020, transcript

Mateyko, Katerina, Soviet clothing maker, interview by Olha Korniienko, Lviv, 2018, transcript

Nesmiyan, Vladimir, Soviet chief art director, interview by Olha Korniienko, Kyiv, 2017, transcript

Nikiforuk, Nadezhda, director of Lviv Fashion House, interview by Olha Korniienko, Lviv, 2018, transcript

Stanchev, Mikhail, interview by Olha Korniienko, Kharkiv, 2014, transcript

Tokar, Marta, Soviet fabric artist, interview by Olha Korniienko, Lviv, 2018, transcript

Uvarkina, Galina, head of the Republican Laboratory for the Standardization of Raw Materials and Fabrics, interview by Olha Korniienko, Kyiv, 2017, transcript

Yasinskaya, Elena, Soviet model, interview by Olha Korniienko, Kyiv, 2018, transcript

Viddil trudovoho arkhivu Lutskoi raionnoi rady / Otdel trudovogo arkhiva Lutskogo rayonnogo soveta [Labor Archive Department of the Lutsk District Council] (LAD)

Prikazy po domu modeley za 1968 god [Orders for Lviv House of Fashion Design for 1968], f. 56 “Lvivskyi budynok modelei odiahu ‘Halmoda’” [Lviv House of Fashion Design “Galmoda”], op. 1, d. 1, l. 1–204, Lutsk, Ukraine.

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Secondary literature

Bartlett, Djurdja. FashionEast: The Spectre that Haunted Socialism. Cambridge: Massachusetts Institute of Technology Press, 2010.

Bezvershuk, Zhanna. Potrebnosti, vkusy, moda [Needs, tastes, fashion]. Kiev, 1987.

Golybina, Antonina. Vkus i moda [Taste and fashion]. Moscow: Znaniye, 1974.

Gronow, Jukka, and Sergey Zhuravlev. Fashion Meets Socialism: Fashion Industry in the Soviet Union after the Second World War. Helsinki, 2016.

Gronow, Jukka, and Sergey Zhuravlev. Moda po planu: istoriya mody i modelirovaniya odezhdy v SSSR, 1917–1991 [Fashion according to plan: The history of fashion and clothing designing in the Soviet Union, 1917–1991]. Moscow: IRI RAN, 2013.

Kostel’na, Maria. “Diialnist ukrainskykh budynkiv modelei odiahu v 60–80-kh rr. 20 st.: kontseptsii rozvytku modnykh tendentsii” [Activity of Ukrainian fashion houses in the 1960s–1980s: Concepts of of fashion trends development]. Visnyk Lvivskoi natsionalnoi akademii mystetstv, no. 24 (2013): 37–48.

Kostel’na, Maria. “Tvorchist dyzaineriv ukrainskykh budynkiv modelei seredyny XX – pochatku XXI st.: etnichnyi napriam” [Creativity of designers of Ukrainian fashion houses of the mid-20th–early 21st centuries: Ethnic Direction]. PhD diss., Kyiv National University of Culture and Arts, 2016.

Lebina, Natalia. Muzhchina i zhenshchina: telo, moda, kultura. SSSR – ottepel [Man and woman: Body, fashion, culture. USSR – Thaw]. Moscow: Novoye literaturnoye obozreniye, 2014.

Lebina, Natalia. Povsednevnaya zhizn sovetskogo goroda: normy i anomalii. 1920–1930-e gody [Everyday life of a Soviet city: Norms and anomalies. 1920s–1930s]. Sankt-Peterburg: Zhurnal “Neva” – Izdatelsko-torgovyy dom “Letniy Sad,” 1999.

Parmon, Fedor. Kompozitsiya kostyuma [Costume composition]. Moscow: Legprombytizdat. 1985.

Stitziel, Judd. Fashioning Socialism: Clothing, Politics, and Consumer Culture in East Germany. Oxford: Berg, 2005.

Tkanko, Zenovia. Moda v Ukraini 20 stolittia [Fashion in Ukraine in the 20th century]. Lviv: Vydavnytstvo “ARTOS,” 2015.

Tokar, Marta. Akvarel. Khudozhnii tekstyl [Watercolor: Art textiles]. Lviv, 2010.

Zakharova, Larissa. “Kazhdoi sovetskoi zhenshchine – plat’e ot Diora! Frantsuzskoe vliyanie v sovetskoi mode 1950–1960-kh godov.” [A Dior dress for every Soviet woman! French influence in Soviet fashion in the 1950s–1960s). In Sotsial’naya istoriya. Ezhegodnik 2004, 339–70. Moscow: Rosspen, 2005.

Figure 2. Exhibition hall of the Kyiv House of Fashion Design, 1964

(TsDKFFA od. obliku 2–91364)

Figure 3. Fashion show at the Kyiv House of Fashion Design, 1965

(TsDKFFA od. obliku 2–98033)

 

Figure 5. Meeting of the members of the Art and Technical council
of the Kyiv garment factory Zhovten’, 1983

(TsDKFFA od. obliku 0–207692)

 

Figure 6. Fashion designers discuss a new collection
at the Kyiv House of Fashion Design, 1967

(TsDKFFA od. obliku 2–111619)

 

Figure 7. Focus on the number of items of clothing produced.
The leaders of the Communist labor of the Vorovsky Odessa Sewing Association,
who exceeded the norm in terms of the number of items of clothing, 1962

(TsDKFFA od. obliku 2–75686)

 

Figure 8. A caricature from the satirical magazine Perets’ (cover) showing the contrast between an item of clothing as presented by a fashion house and the same item of clothing in use after production in a garment factory, 1965