The New-Old Rulers of Poland

Against the Current, No. 30, January/February 1991

Milka Tyszkiewicz

FROM THE PERSPECTIVE of Solidarnosc’s program of a self-managed Republic, published during our first congress in 1981, it is difficult to understand why, ten years later, Polish society has not rejected Finance Minister Leszek Balcerowicz’ International Monetary Fund (IMF)-backed austerity program of a crash transition to a market economy.

Why has the mass labor movement not been able to create any serious alternative political and economic proposal? It is obvious today, with the changes underway in Eastern Europe as a whole, that this can no longer be understood as a product of local conditions in Poland (Catholicism or the nationalist legend of a “Great Savior”).

It is not that there isn’t resistance: Polish workers and farmers, like many East and Central Europeans, are increasingly forced to defend benefits formerly taken for granted under the old Stalinist system against the encroachment of the market. Moreover, there is movement towards real self-management, which did not exist under Stalinism. Still, the Balcerowicz program dominates Olland today.

The changes taking place in Poland are being studied throughout East-Central Europe and the USSR as a potential model for a post-Stalinist society. Despite much ideological talk of a transition to capitalism and political liberalism on the U.S. pattern, which is supposed :hat an American freedom and prosperity to Poles, what we see in reality in quite different.

On an economic level, austerity programs are lowering Polish living standards in a way that is more like the conditions in the Third World than in the rich capitalist nations, while “privatization” is producing not liberal capitalism but the blatant appropriation of collective property by the former Stalinist nomenklatura, those we in Poland call “Them.”

On the political level, the supposedly democratic forces of Prime Minister Tadeusz Mazowiecki and the “Solidarnosc” government (who have been promoted in many western journals, during the Polish elections, as the champions of liberal values—ed.) are in fact opposing political pluralism. The threat is of an emerging corporatist system of undemocratic rule over an impoverished population in the style of Poland’s pre-war leader Marshal Josef Pilsudski.

The old Stalinist political system no longer exists in Central and Eastern Europe. That system involved a monopoly of social and economic power by the bureaucracy. This group exercised arbitrary control over the character of development in industry via ‘Communist’ Parties using a vulgarized version of Marxist language to gain ideological legitimacy for disciplining the working class in these countries. In fact so-called Marxism-Leninism and the Stalinist system was itself nothing but a political representation of bureaucracy. Having largely discredited Marxist language and socialist ideology, this system today is history.

Austerity in the Economy

Instead, more or less freely elected governments are introducing IMF adjustment programs, drastically lowering living standards and bringing in new methods of control over workers. According to the government, hyperinflation that followed the decontrolling of prices last fall (1989) has been stopped. But unemployment may reach 1.5 million; the average decline in production in general during the first six months of 1990 was 30%, whereas the first expectations of the government and IMF experts had been that the drop in production would not reach the level of 10-15%.

The collapse of production risks a “snowball effect,” as components and materials become unavailable. We will have to work many years till Poland achieves the level of production we had in 1988. The hope that free enterprise would save Polish society has not materialized. Neither, particularly, has free enterprise. Private production has risen 8.7% during the first six months of 1990, due to declining state production, but overall production in both sectors is falling.

In addition, extremely strong fiscal pressure against the nationalized enterprises failed to produce the expected wave of bankruptcies. The government has set an extraordinarily unrealistic goal, according to Balcerowicz, of privatizing 40% of the economy (where 99% of industry is state-owned) by the end of 1991.(1) In comparison, in Hungary, after years of pro-market reforms, 80-90% of industry remains nationalized, and the Hungarian government has published a probably overambitious plan of limiting state industry to 40-50% within the next three years, by 1994.(2)

Capitalism is not taking off in Poland in part because, like other Eastern European countries, the Polish economy is lacking capital. The level of foreign investment is very low and not yet significant on a national scale. The industrial plant is outdated and inefficient, the political situation is uncertain, and the workers have very high expectations.

Only small and medium business is ready to take the risk of investing in this situation. 41% of joint-yentures include German capital; 93% of capital came from Sweden, 7.7% from Austria, 7.3% from USA. The Polish private contribution is negligible. In 75% of existing joint-ventures the foreign capital is higher than 50%.(3)

This trend is unlikely to change in the near future. Balcerowicz can expect big investors mainly through different agreements done under the “umbrella” of the IMF or similar organizations. For example, there is the “Debt for Equity Swap” program proposing to turn debt into direct investments or shares in the national economy of the indebted country: Investors buy debt on the secondary market, then the central bank pays that quota back in its national currency and/or give the investors special privileges to buy national property.

This program has been already experienced by countries like Chile, Mexico, the Philippines, Ecuador, and Nigeria, where it has enriched the investors but not the countries.(4) IMF and World Bank loans as a source of capital in Poland, as in other poor countries, have proved of little value in reviving the economy. Poland is already $41 billion in debt to international lenders and Western banks. Although this debt was incurred by the old regime, and despite lip service to the new Polish “democracy,” there has been no move by the IMF or the Western creditors to reduce or forgive the debts.

In order to pay, the debt service Poland already increased its exports. In January-May 1990 its total quota with Western countries was 11.8% higher than the same period in 1989; in rubles over the same time the increase was 43%. Imports from the West declined 9.6%, from the East, 35.2%.(5) In short, Poland is on the road to a classic Third World style export-oriented economy, where domestic living standards are reduced to pay service on a debt that grows continually as production, burdened by the debt, declines.

“They” Get Rich

But it’s important to understand the irony of these policies. After ten years of struggling against bureaucracy, Polish workers find that the main social base of recent pro-market reforms is the same group of people who decided, supported or accepted the introduction of the martial law regime in 1981. Although the program is imposed by a so-called Solidarnosc government headed by many members of the former opposition, it is not the workers but the bureaucracy, the former nomenklatura, which is reaping the rewards.

For example, Mr. Wilczek—a former member of the Jaruzeiski government—is mentioned by the Polish press as the richest person in the country. He is able to act with his private wealth as well as bourgeoisie in the West do. In Gdansk, Zenon Jurema, general manager of the state retail monopoly became chief executive of a new private department store, which he is able to supply with concessions from the position he retained in the bureaucracy.(6)

Nor is this activity merely being conducted by individuals. The nomenklatura are acting as a group to grab control of property in a market-oriented economy. Some are involved in “nomenklatura-ventures,” as the Polish press calls companies that use the nomenklatura “net” between economic and state apparatus for not necessarily-legal financial operations to transfer resources from state to nomenklatura ownership.

In Wroclaw, Juventa, the bureaucratic apparatus of the former Stalinist youth organization, owns the best restaurant, bar, and night club. Research conducted for Barbara Piasecka-Johnson, the American millionaire who unsuccessfully attempted to buy the Gdansk shipyard where Solidarnosc started, indicates that around half of the property in Poland has been already “taken over” by forty-five small “ventures” linked to the bureaucracy.(7)

Making the best of a very bad thing. Danuta Staniszkis, a journalist from Tygodnik Solidarnosc and a supporter of Lech Walesa, has mentioned the possibility of using such a method of privatization in “speeding up” the Polish way to capitalism; she compared it to the reforms in Japan after World War II.

The Power of the State

Politically the situation is equally dubious. Strange things are happening to the Polish state apparatus: after recent reforms it has almost doubled itself. The new Poland is, if possible, almost twice as bureaucratic as the old. There are new Territorial “Self-Managements” as well as 256 new “Regional Offices” in the country. Each office means $200,000 a year paid from the state budget.(8)

Instead of decentralization, there is a real danger of new methods of subordinating social activities to expectations of the state. For example, the government recently decided to initiate a foundation to finance Polish culture. Contributors can take tax writeoffs, on the American model, through paying money into a special account, from which the foundation decides what museum or theater is worth financing.

The new bill does not accept direct transfers of money to the cultural institutions. Thus the state itself will retain control over cultural finances through deciding whom to fund rather than, as in the old method, direct censorship.(9)

During the Stalinist period it was very difficult to analyze the economy. The statistics produced by the government were unreliable and inaccurate. With the IMF in charge economic statistics will be more reliable, but now political statistics may be manipulated by the government.

Since the martial-law coup in December 1981, the Center for Research on Public Opinions (CBOS) was led by Colonel Professor Stanislaw Kwiatkowski, who resigned in August 1990 to become the chief of a Polish-Austrian joint-venture linked with Institute of Marketing in Vienna (another plum to the nomenklatura).

The Vice-Director of CBOS, Eugeniusz Smilowski, took over. Not surprisingly, the old rules which give all the power over CBOS to the hands of the chief have not been changed. The chief of CBOS can be disciplined only by the Prime Minister The Citizens’ Parliamentary Club (the former democratic opposition) proposed to subordinate the CBOS to the Parliament but Minister Ambroziak (also from the former democratic opposition) answered that both the form of ownership and a method of organization should be decided by the new chief of CBO.(10)

The Main Debate

These examples help explain why the main distinction in Polish economic debate does not lie between supporters of pro-capitalist reforms and defenders of the old regime. There are no defenders of the old regime. As far as political clarification is taking place along the lines of economic interest, problems of ownership still are secondary—industry is and will remain predominantly nationalized.

The two camps, rather, group themselves around their attitudes towards the idea of self-management from below, that is towards workers’ control overproduction. The government, the nomenklatura, and Lech Walesa’s allies in Solidarnosc are united in opposing economic democracy.

The old bureaucrats are happy with this. They get rich in the new, system, and one can keep the control over the means of production either through private ownership or through bureaucratic discipline. They agree with Danuta Zagrodzka, who writes: “Nobody is afraid to say today that the managerialist style [of the control over production] is more efficient than self-management.”(11)

Against this is grouped the working class, which, though politically unorganized, prefers self-management In September 1990 Professor Maria Jarosz published the results of her research on the working-class attitude towards different forms of ownership: 36.3 % of workers prefer nationalized industry; 35.3% chose group ownership of employees (workers share-holding) as a “less evil thing”; 13.2% prefers private ownership of means of production and that opinion is most popular among the managers or white-collar workers.(12)

This may be the result of a year and a half of implementing the IMF program in Poland: Prices rose 170% during the first six months. An average wage in September is around $100 and the decline in real wages during the last year and a half is around 70%. There are no shortages in the stores any more, but Poles have no money to buy everyday commodities.

In December 1989 there were 250,000 jobs waiting for workers; since January 1990, 100,000 workers a month have been losing their jobs. The government expects 1.3 million unemployed by December 1990, more than 10% of the work force.(13) Conditions of life are better than in Latin America, but the feeling of catastrophe is widespread among those who, for such a long time, were struggling for the right to keep destiny in their own hands.

At the roots of this situation is a collapse of the socialist ideal—the movement for a society geared to human needs, not to capital accumulation, which could be reached through different strategies of working class self-activity. According to traditional Marxism and Marxist-Leninist propaganda, the working class was supposed to “march to heaven” to overcome a commodity-based civilization. This did not happen in Stalinist Poland or elsewhere in Eastern and Central Europe.

Today the creative possibilities of the working class are questioned, both by old Stalinists and new capitalists who never believed in these possibilities, and by the former allies of the workers now in the government, who once did. To a certain extent they are questioned among the workers themselves.

Solidarity raised the workers against the bureaucracy, but together with the nomenklatura, workers overthrew the language of their own emancipation. So the labor movement in Poland must rediscover its identity and history once again, through a long process.

Nobody wants to go back to the Stalinist past, but the road to the Self-Managed Republic of Solidarnosc’s 1981 vision is difficult It is not impossible. In a future article I will describe the self-organization of Polish workers and their allies among the farmers and students that is occurring today.


  1. Gazeta Wyborcza, No. 210.
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  2. Trybuna, No. 183.
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  3. Gazeta Wyborcza, No. 217.
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  4. The World Bank Report, 1990.
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  5. The report of Centralny Urzad Planowania, June 1990. Western trade in US$, Eastern trade in USSR rubles.
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  6. New York Times, July 19, 1990.
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  7. Trybuna, No. 187.
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  8. Trybuna, No. 187.
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  9. Gazeta Wyborcza, No. 223.
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  10. Ibid.
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  11. D. Zagrodska, Lek przed prywatyzacja, Gazeta Wyborcza No. 223.
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  12. Gazeta Wyborcza, No. 223.
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  13. PcIityka, No. 38; Zycie Gospordacze 17 June 1990; Gazeta Bankowa 23-30 June 1990.
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January-February 1991, ATC 30