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From Solidarity to Sellout
In the 1980s and 90s, renowned Polish economist Tadeusz Kowalik played a leading role in the Solidarity movement, struggling alongside workers for an alternative to "really-existing socialism" that was cooperative and controlled by the workers themselves. In the ensuing two decades, "really-existing" socialism has collapsed, capitalism has been restored, and Poland is now among the most unequal countries in the world. Kowalik asks, how could this happen in a country that once had the largest and most militant labor movement in Europe?
This book takes readers inside the debates within Solidarity, academic and intellectual circles, and the Communist Party over the future of Poland and competing visions of society. Kowalik argues that the failures of the Communist Party, combined with the power of the Catholic Church and interference from the United States, subverted efforts to build a cooperative and democratic economic order in the 1990s. Instead, Poland was subjected to a harsh return to the market, resulting in the wildly unequal distribution of the nation's productive property—often in the hands of former political rulers, who, along with foreign owners, constitute the new capitalist class. Kowalik aptly terms the transformation from command to market economy an epigone bourgeois revolution, and asks if a new social transformation is still possible in Poland.
This book takes readers inside the debates within Solidarity, academic and intellectual circles, and the Communist Party over the future of Poland and competing visions of society. Kowalik argues that the failures of the Communist Party, combined with the power of the Catholic Church and interference from the United States, subverted efforts to build a cooperative and democratic economic order in the 1990s. Instead, Poland was subjected to a harsh return to the market, resulting in the wildly unequal distribution of the nation's productive property—often in the hands of former political rulers, who, along with foreign owners, constitute the new capitalist class. Kowalik aptly terms the transformation from command to market economy an epigone bourgeois revolution, and asks if a new social transformation is still possible in Poland.
270 pages, Hardcover
First published July 1, 2012
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September 30, 2019
The book deals with the socio-economic changes in Poland beginning in 1989. The author is a Polish economist who assoicated with the Solidarity union in the 1980s. He favors social democratic policies, and is critical of the Polish government's policies establishing what he calls "nineteenth century capitalism."
Why I chose the book: It's my understanding that ruling groups (economic classes, theocracies, dictators, etc.) fight social change threatening their power base - and attempt violent repression if other means don't work. But during 1989 - 91, numerous Communist regimes in Central-Eastern Europe / USSR changed to harsh capitalism without violent efforts to maintain Communist Party rule. "There are exceptions to every rule," but changes without a fight were the rule in all the former Soviet republics, the Soviet-affiliated "East European" nations, AND unaffiliated Albania and post-Yugoslavian nations. I thought there must have been a decisive part of the Communist apparatus throughout the region which wanted to become capitalists themselves.
The book deals more with the Polish intelligentsia, and doesn't focus on the role of individual Communists and what new lives they built for themselves. The intelligentsia played a role in events. And the book suggests to me that parts of the Communist elite may have supported change in order to simply make money by corruption during the transition period, or hoping to make more as corporate executives than as state officials, or such - not necessarily becoming an entrepreneur. The book does have info indicating that some did go into business (or try to.) Maybe not exactly what I thought, but maybe similar. Also remember, Poland did the most extreme version of harsh capitalism of the post-Communist countries - resulting in a limping economy. International business took over in some areas (sometimes leaving factories closed to make Poland dependent on imports), and generally having an economy able to support few new businesses. I intend to read at least one more work focusing on another post-Communist nation.
Earlier in the book I didn't collect quotes & page numbers. Later I did. First, here are some of my notes:
Government enterprises sold off pieces of their facilities to private business at a loss for the government, and this was generally done by the boss of the government enterprise selling pieces to a friend. This, not the free market, was the source of the first wave of wealthy business-people in Poland.
In the last period of the Communist government, it seemed that the government was going along with the transition to private capitalism. For instance, a crucial meeting in the planning for the transition was held at the Ministry of Finance. What the author describes as the Communist government's last action was removing the lid on consumer prices.
Here are quotes with page numbers:
Page 290-291:
Page 294:
- - - - - - - - -
My thoughts:
In the mid-1980's Poland, there was a real growth in private businesses. These often began in government enterprises. A substantial majority were led by Communist functionaries or managers. Some may say that's because private business is more efficient than government enterprises. The book doesn't take on the question. Why would a private business spawned from a government enterprise, with the blessings of Communist officials, and run by a Communist apparatchik be more efficient? If "efficiency" means everybody gains, Poland wasn't more efficient. I worked at a government-run business in the US - which had a number legal constraints which didn't apply to its private competitors. Despite "having one arm tied behind its back," it did well enough that on at least 2 occasions the government raided its funds to help balance the state budget. Government businesses aren't inherently inefficient.
Kowalik seems to feel Communist nations' economic weaknesses largely result from the Communist system itself. Perhaps, it partly does. But how do you compare the USSR and US? Russia was less developed than the US before Communism. Both WWI and WWII were fought on Soviet soil (with millions of prime working-age citizens dying), but not on US soil. (Russia also had a civil war after WWI.) The USSR faced special trade restrictions with the West. It's not a simple comparison.
Regarding social democracy: In 1992, Sweden had a financial / banking crisis . Sweden's response was less servile to bankers than the US in 2008. It required stock in exchange for bailing out banks, but Sweden later sold off the stock, leaving the government without stockholder power to avoid future crises. Social democracies are capitalism with enlightened self-interest for the rich.
Regarding post-capitalism: Competition needn't be an advantage of capitalism. First, competition has disadvantages as well as advantages. Second, if post-capitalism would benefit from competition, the government could divide its production organization structure into three sections (designed to have somewhat different orientations) which could produce competing products where that was useful. There could be rules to follow for seeking improvement based on changing market shares. The three "companies" need not have patents, so they could learn from each other. Etc.
Why I chose the book: It's my understanding that ruling groups (economic classes, theocracies, dictators, etc.) fight social change threatening their power base - and attempt violent repression if other means don't work. But during 1989 - 91, numerous Communist regimes in Central-Eastern Europe / USSR changed to harsh capitalism without violent efforts to maintain Communist Party rule. "There are exceptions to every rule," but changes without a fight were the rule in all the former Soviet republics, the Soviet-affiliated "East European" nations, AND unaffiliated Albania and post-Yugoslavian nations. I thought there must have been a decisive part of the Communist apparatus throughout the region which wanted to become capitalists themselves.
The book deals more with the Polish intelligentsia, and doesn't focus on the role of individual Communists and what new lives they built for themselves. The intelligentsia played a role in events. And the book suggests to me that parts of the Communist elite may have supported change in order to simply make money by corruption during the transition period, or hoping to make more as corporate executives than as state officials, or such - not necessarily becoming an entrepreneur. The book does have info indicating that some did go into business (or try to.) Maybe not exactly what I thought, but maybe similar. Also remember, Poland did the most extreme version of harsh capitalism of the post-Communist countries - resulting in a limping economy. International business took over in some areas (sometimes leaving factories closed to make Poland dependent on imports), and generally having an economy able to support few new businesses. I intend to read at least one more work focusing on another post-Communist nation.
Earlier in the book I didn't collect quotes & page numbers. Later I did. First, here are some of my notes:
Government enterprises sold off pieces of their facilities to private business at a loss for the government, and this was generally done by the boss of the government enterprise selling pieces to a friend. This, not the free market, was the source of the first wave of wealthy business-people in Poland.
In the last period of the Communist government, it seemed that the government was going along with the transition to private capitalism. For instance, a crucial meeting in the planning for the transition was held at the Ministry of Finance. What the author describes as the Communist government's last action was removing the lid on consumer prices.
Here are quotes with page numbers:
Page 290-291:
Ironically, many agree that business had the most say during the last communist cabinet of Mieczysaw Rakowski. The most important offices were taken by two businessmen (non-intellectuals). Ireneusz Sekua became the deputy prime minister in charge of preparing the reform package and Mieczysaw Wilczek, an adamant advocate of radical and speedy privatization economy and the free market, became minister of industry.
Page 294:
Contrary to the declarations of the authorities (and to the Balcerowicz Plan), pledging withdrawal of the state from the economy and limitation of its influence, the state administration expanded quickly during the entire transformation period. In 1990, public administration employed 159,000 and six years later, 290,000 persons. The state administration (excluding local governments) grew even more, doubling in size. The most rapid growth occurred in the central administration (by a factor of more than two and a half). ...this social group in public administration...have taken advantage of the transformation rent, which is, of course, but a euphemism for corruption and clientelism.
"I have written about the transformation of a considerable portion of the old nomenklatura apparatus into businesspersons. Kuro recalls the beginnings of this self-enfranchisement of the power apparatus at the end of the 1980s and adds that in the general rush to get rich quick, bosses of state enterprises would set up deals with nomenklatura companies of acquaintance, bringing great losses to the enterprises, but immense gains for themselves."
- - - - - - - - -
My thoughts:
In the mid-1980's Poland, there was a real growth in private businesses. These often began in government enterprises. A substantial majority were led by Communist functionaries or managers. Some may say that's because private business is more efficient than government enterprises. The book doesn't take on the question. Why would a private business spawned from a government enterprise, with the blessings of Communist officials, and run by a Communist apparatchik be more efficient? If "efficiency" means everybody gains, Poland wasn't more efficient. I worked at a government-run business in the US - which had a number legal constraints which didn't apply to its private competitors. Despite "having one arm tied behind its back," it did well enough that on at least 2 occasions the government raided its funds to help balance the state budget. Government businesses aren't inherently inefficient.
Kowalik seems to feel Communist nations' economic weaknesses largely result from the Communist system itself. Perhaps, it partly does. But how do you compare the USSR and US? Russia was less developed than the US before Communism. Both WWI and WWII were fought on Soviet soil (with millions of prime working-age citizens dying), but not on US soil. (Russia also had a civil war after WWI.) The USSR faced special trade restrictions with the West. It's not a simple comparison.
Regarding social democracy: In 1992, Sweden had a financial / banking crisis . Sweden's response was less servile to bankers than the US in 2008. It required stock in exchange for bailing out banks, but Sweden later sold off the stock, leaving the government without stockholder power to avoid future crises. Social democracies are capitalism with enlightened self-interest for the rich.
Regarding post-capitalism: Competition needn't be an advantage of capitalism. First, competition has disadvantages as well as advantages. Second, if post-capitalism would benefit from competition, the government could divide its production organization structure into three sections (designed to have somewhat different orientations) which could produce competing products where that was useful. There could be rules to follow for seeking improvement based on changing market shares. The three "companies" need not have patents, so they could learn from each other. Etc.
August 30, 2019
When the USSR liberated the Polish masses enslaved under the heel of fascism, the first things its quisling collaborators did in constructing their satellite regime was build a "Polish road to socialism", and find ways to elevate the devastated economy, setting its people back to work. But, forty years hence, when the Democratic West liberated the Polish masses enslaved under the heel of Communism, the first thing its quisling collaborators did in setting up their satellite regime was deconstruct the economy, putting millions out of work and rejecting any Polish road at all. This picture look a bit upside down from what the paid-off Western critics used to rave over?
In his last book, the late Tadeusz Kowalik - a leading Polish economist and ex-Solidarity activist - shows how yet another regime, built in the "name of the working class," screwed over its constituency yet again. Yet how could a movement for a "self-governing workers' republic" end up as a bastion of Hayekian/Thatcherite extremism? A clue can be found in Peter Schweizer's "Victory," where it's shown how the Solidarity movement and its leaders became dependent on Reagan's CIA for survival under martial law, and were turned toward the ideological agenda of their benefactors. Unlike 1944, there was no military occupation; yet in 1989 the country's leaders showed less flexibility and sensitivity in ramming their agenda down the throats of a hungry, weary but hopeful nation.
Leszek Balcerowicz, Thaddeus Mazowiecki, Adam Michnik and Lech Walesa were not forced to take the extreme path to capitalism - they *chose* to do so for political advantage over the "reform Communists," a case of becoming more Catholic than the Pope in pimping for the IMF and Western investors. I find Kowalik's contention that these leaders were more naive than knave a bit of a stretch: they knew the radical "free market" agenda and its Friedmanite "individualism" were a cover for the corporate takeover of the Polish economy; but simply did not care as long as their intellectual selves could profit selling off the country and shearing its human sheep.
Other paths to capitalism were deliberately ignored in pursuit of a rigid ideological utopia. As a result Poland has returned to the 19th century, with the most unequal society and highest rate of unemployment in Europe outside Albania. While the elite jetset to Berlin and New York, the unemployed masses follow as a century ago, as Poland was transformed into the Mexico of the continent. And true to the 19th century, an ersatz military tradition has lent itself to mercenary pursuits, helping bring the same regime to Iraq - a rerun of 1944, with steel bayonets but without a trace of irony.
The book may be a bit deep for non-economists, but its message is clear. Unfortunately few in the West or in positions of power in Poland want to hear it. For a Western establishment still befogged by cold war triumphalism its truths are inconvenient. For a Polish one still mired in Yalta or Catholic fundamentalism, as lightning rods for the country's real problems, it can only be grateful that open borders prevented the destruction of its schemes - which took only four, not forty years, to meet a dead end.
In his last book, the late Tadeusz Kowalik - a leading Polish economist and ex-Solidarity activist - shows how yet another regime, built in the "name of the working class," screwed over its constituency yet again. Yet how could a movement for a "self-governing workers' republic" end up as a bastion of Hayekian/Thatcherite extremism? A clue can be found in Peter Schweizer's "Victory," where it's shown how the Solidarity movement and its leaders became dependent on Reagan's CIA for survival under martial law, and were turned toward the ideological agenda of their benefactors. Unlike 1944, there was no military occupation; yet in 1989 the country's leaders showed less flexibility and sensitivity in ramming their agenda down the throats of a hungry, weary but hopeful nation.
Leszek Balcerowicz, Thaddeus Mazowiecki, Adam Michnik and Lech Walesa were not forced to take the extreme path to capitalism - they *chose* to do so for political advantage over the "reform Communists," a case of becoming more Catholic than the Pope in pimping for the IMF and Western investors. I find Kowalik's contention that these leaders were more naive than knave a bit of a stretch: they knew the radical "free market" agenda and its Friedmanite "individualism" were a cover for the corporate takeover of the Polish economy; but simply did not care as long as their intellectual selves could profit selling off the country and shearing its human sheep.
Other paths to capitalism were deliberately ignored in pursuit of a rigid ideological utopia. As a result Poland has returned to the 19th century, with the most unequal society and highest rate of unemployment in Europe outside Albania. While the elite jetset to Berlin and New York, the unemployed masses follow as a century ago, as Poland was transformed into the Mexico of the continent. And true to the 19th century, an ersatz military tradition has lent itself to mercenary pursuits, helping bring the same regime to Iraq - a rerun of 1944, with steel bayonets but without a trace of irony.
The book may be a bit deep for non-economists, but its message is clear. Unfortunately few in the West or in positions of power in Poland want to hear it. For a Western establishment still befogged by cold war triumphalism its truths are inconvenient. For a Polish one still mired in Yalta or Catholic fundamentalism, as lightning rods for the country's real problems, it can only be grateful that open borders prevented the destruction of its schemes - which took only four, not forty years, to meet a dead end.
February 21, 2015
From Solidarity to Sellout is a Polish economist's detailed account of how his nation's transition from state socialism to a market economy was at best a missed opportunity and at worst (as the title suggests) a 'sellout'.
Beginning in 1980 Polish workers under the one party Communist rule of the Polish United Workers' Party organized into the Solidarity trade union to fight for better working conditions and greater civil liberties. After nearly ten years of strikes and civil disobedience, with the state fighting back viciously and even imposing martial law for nearly two years from late 1981 to early 1983, Solidarity was allowed to run candidates in partially open elections and form a coalition government with the ruling party.
A key actor in the worldwide collapse of Soviet-dominated Communism, Solidarity had the support of western governments and the Catholic Church and are viewed positively (somewhat ironically, considering their left/trade union roots) to this day by establishment opinion in the West. In Poland, however, Solidarity's initial popularity (during the 1980s Solidarity had more than ten million members in a nation with a total population of 30 million) became a casualty of its success. From Solidarity to Sellout is a detailed and frustrating account of how this came to pass.
The author, an economist and Solidarity activist in the early years gives the reader a blow-by-blow account of how a radical populist trade union ended up presiding over one of the most brutal transitions from Communism to Capitalism anywhere in the world. While Solidarity's initial foray into governance (the Round Table agreements with the United Workers Party leaders in 1989) reflected a principled commitment to transitioning gradually to an open economy and enshrining in law principles of social justice meant to ensure the development of a mixed economy of the social democratic variety or even a more radical 'third way' (some Solidarity activists at the time considered themselves Syndicalists), the actual history of the period following the agreements is one of the repeated betrayal of these goals in favor of corrupt wholesale privatization, austerity, and almost active promotion of sharp economic inequality. Nearly all of the commitments laid out in the Round Table agreements were simply left to wither on the vine while an extreme neoliberal Milton Friedman acolyte Leszek Balcerowicz was appointed Deputy Prime Minister in charge of economic affairs.
Solidarity didn't last long as a governing party as the failure of the transition to materially improve the lives of the majority of citizens became apparent. The people were told to endure lowered incomes, unemployment and the re-establishment of what the author calls 'nineteenth century' workplace relations until the inevitable economic growth created prosperity for all.
Kowalik argues convincingly that within neoliberal capitalism, even when growth is achieved, there is no mechanism to ensure the wide distribution of its fruits. Thus, to the present day while Poland has sustained GDP growth, it retains extremely high poverty levels and high levels of income and wealth inequality and has seen one of the highest rates of peace-time out-migration of any modern nation state.
The book contains a wealth of economic statistics and describes in detail the policies which determined how privatization was carried out and how these policies effected the common Polish citizen. It is not a narrative history and sometimes left me wishing for more in the way of anecdotal evidence of the effects of economic policy as well as the opinions of Solidarity activists and sympathizers about the course of events. Interesting digressions included an assessment of the Scandinavian social democratic economies as a more just alternative to the 'anglo-saxon' (Thatcher/Reaganite) economy and a philosophical foray into theories of social justice that can serve as guide-posts in any political-economic system. His explication of John Rawls' theory of justice was particularly interesting.
From Solidarity to Sellout is somewhat dry at times and assumes in its reader some knowledge of the historical events referred to in the text. It will certainly remain an important document of a nation's historic transition from one economic system to another as well as a cautionary tale for those who believe that there is simple and ideologically pure blueprint for creating the best possible society.
Beginning in 1980 Polish workers under the one party Communist rule of the Polish United Workers' Party organized into the Solidarity trade union to fight for better working conditions and greater civil liberties. After nearly ten years of strikes and civil disobedience, with the state fighting back viciously and even imposing martial law for nearly two years from late 1981 to early 1983, Solidarity was allowed to run candidates in partially open elections and form a coalition government with the ruling party.
A key actor in the worldwide collapse of Soviet-dominated Communism, Solidarity had the support of western governments and the Catholic Church and are viewed positively (somewhat ironically, considering their left/trade union roots) to this day by establishment opinion in the West. In Poland, however, Solidarity's initial popularity (during the 1980s Solidarity had more than ten million members in a nation with a total population of 30 million) became a casualty of its success. From Solidarity to Sellout is a detailed and frustrating account of how this came to pass.
The author, an economist and Solidarity activist in the early years gives the reader a blow-by-blow account of how a radical populist trade union ended up presiding over one of the most brutal transitions from Communism to Capitalism anywhere in the world. While Solidarity's initial foray into governance (the Round Table agreements with the United Workers Party leaders in 1989) reflected a principled commitment to transitioning gradually to an open economy and enshrining in law principles of social justice meant to ensure the development of a mixed economy of the social democratic variety or even a more radical 'third way' (some Solidarity activists at the time considered themselves Syndicalists), the actual history of the period following the agreements is one of the repeated betrayal of these goals in favor of corrupt wholesale privatization, austerity, and almost active promotion of sharp economic inequality. Nearly all of the commitments laid out in the Round Table agreements were simply left to wither on the vine while an extreme neoliberal Milton Friedman acolyte Leszek Balcerowicz was appointed Deputy Prime Minister in charge of economic affairs.
Solidarity didn't last long as a governing party as the failure of the transition to materially improve the lives of the majority of citizens became apparent. The people were told to endure lowered incomes, unemployment and the re-establishment of what the author calls 'nineteenth century' workplace relations until the inevitable economic growth created prosperity for all.
Kowalik argues convincingly that within neoliberal capitalism, even when growth is achieved, there is no mechanism to ensure the wide distribution of its fruits. Thus, to the present day while Poland has sustained GDP growth, it retains extremely high poverty levels and high levels of income and wealth inequality and has seen one of the highest rates of peace-time out-migration of any modern nation state.
The book contains a wealth of economic statistics and describes in detail the policies which determined how privatization was carried out and how these policies effected the common Polish citizen. It is not a narrative history and sometimes left me wishing for more in the way of anecdotal evidence of the effects of economic policy as well as the opinions of Solidarity activists and sympathizers about the course of events. Interesting digressions included an assessment of the Scandinavian social democratic economies as a more just alternative to the 'anglo-saxon' (Thatcher/Reaganite) economy and a philosophical foray into theories of social justice that can serve as guide-posts in any political-economic system. His explication of John Rawls' theory of justice was particularly interesting.
From Solidarity to Sellout is somewhat dry at times and assumes in its reader some knowledge of the historical events referred to in the text. It will certainly remain an important document of a nation's historic transition from one economic system to another as well as a cautionary tale for those who believe that there is simple and ideologically pure blueprint for creating the best possible society.
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