Poor Bosnia

Poor Bosnia. Unemployment has been over 44 percent for months and months. Independence (since 1992) has brought civil war; massive deaths related to war, invasion, ethnic violence (a hundred thousand is the death toll usually given); a “mixed” economy; big government, crony capitalism.

In February 2014, hundreds of thousands marched in protest at the level of hunger in a country that produces food for export.

The authorities say that the economy represents a transitional system from the old Yugoslavian communist state. But people in the streets are asking “Transition from what to what?” and “How long can a transition last?”

Gavrilo_Princip_croppedSo much for the aspirations of a group of young Bosnians (who actually called themselves Young Bosnians) in the summer of 1914. I am thinking, of course, of those kids who became involved as assassins in the scheme of some Serbian officials to use Bosnian “nationalism” to leverage the Austrians out of Bosnia.

Austria-Hungary came into possession of Bosnia after the Russo-Turkish war of the 1870s, but only as an occupier. The Austrians had good intentions: making available land to the desperate peasants, establishing a stable currency, creating orderly conditions which could make investing in the area attractive. But over the next thirty or forty years, Imperial politics, especially those having to do with Hungarian domestic politics, precluded many of the improvements. And in fact, much of the investment that occurred looked just like the colonial investment patterns of European overseas imperialism: corporate enterprises based on crony relationships with the government, railroad schemes for shaping “development” in political ways, the state’s tendency to use resources to favor cronies; pressure on local entrepreneurs with licensing laws and taxes. So the economy developed, but in ways that Occupy Wall Street protesters would have understood perfectly well.

The Young Bosnians (really just Gavrilo Princip and a few more Serbophile teenagers) saw Austria-Hungary as the engine of disrespect for average Bosnians that was apparent to most. Hence, when the Black Hand organization wanted to “train” these kids for a great strike against the Habsburg Empire, many of them trained hard, firing pistols into oak trees, crawling through bushes, etc. This kind of thing was increasingly in vogue, from Ireland to the Balkans during this time. Kids with some education, a system that was designed to institutionalize disrespect, thoughts of murder as sacrifice, some direction and financing from notables (normally bureaucrats) with agendas very different from merely local sacrifice.

The rest of the story is well known. The hundredth anniversary of Princip’s successful mission comes up later this month.

How bad was Austria-Hungary for Bosnia? Well, the bureaucratic “mixed economy” introduced by the Austro-Hungarian bureaucrats and crony capitalists probably helped conditions in some ways, but it also destroyed earlier habits of exchange within local economies by the usual means of economic intervention and disruption of the market. The Empire’s Tobacco Monopoly alone must have had a substantial impact among these hard-smoking folks.

What was Princip’s legacy? (Besides World War I, I mean.) Well, under Yugoslavia, twenty years of super-statist economic policies which sold the country’s mineral wealth for the good of the state, the unmitigated horrors of World War II, Tito and his band of “independent” communists, then, as seen above, “transition.”

Poor Bosnia.

One more note before closing: the top foreign investor in Bosnia today: Austria.

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