Abstract
The starting point of this review must be to acknowledge the intellectual and political stature of the author – the, respected prolific Polish economist Tadeusz Kowalik, who died in 2012. His lifetime spanned dramatic and panoramic changes in Polish history. He was born in 1926, eight years after the restoration of an independent Polish state; lived through the Great Depression; saw the imposition of communism and the Stalinisation of Poland in the post-Second World War settlement; and was an active participant in the so-called transformation process from 1990 onwards. Kowalik was associated with a group of renowned Polish economists such as Oskar Lange, Włodzimierz Brus, Edward Lipiński and Michal Kalecki, who were active in proposing economic reforms for the Polish system in the 1950s and 1960s, and whose theoretical work inspired current neo-Keynesian thinking. Kowalik was a persistent but engaged critic of the communist regime, and from the 1950s onwards, had argued in favour of an economy based on the self-management of workers, which had a long tradition in Poland.
As part of a general purge of oppositionist intellectuals in 1968, he was eventually expelled from the Communist Party, and from this point onwards became part of a growing opposition movement. For example, he was a member of the Workers Defence League (KOR) with Jacek Kuroń and Karol Modzelewski, authors of the pivotal ‘Open Letter to the Party’ in 1965, which criticised the bureaucratic class and argued in favour of workers’ democracy. In the huge upheavals of 1980-1, he supported the demands of the Gdańsk shipyard workers, and was an advisor to the Solidarity trade union and political party.
The key question posed by the book is evident from its title. Namely, how did a country that in 1980-1 had one of the, if not the largest workers’ movements in history, renowned for its widespread factory occupations in support of radical economic and political demands, go on to experience the imposition of the most ferocious ‘shock therapy’ underpinned by the most extreme form of neoliberalism only a decade later. Kowalik questions the outcomes of transformation, not by the yardstick of conventional economists (competitiveness), but in terms of the misery that was heaped on large sections of the population. He argues that an idealised myth of the market was adopted with the crude formula of ‘commercialise, privatise and deregulate’ in the shortest possible period, and at great cost to ordinary people.
According to Kowalik, the round table negotiations between representatives of the ruling Communist Party and the opposition (February to April 1989) were the critical juncture between two versions of capitalism. The first version was a co-operative social democratic model underpinned by the principle of workers’ self-management and full employment, akin to the Swedish model. The second version, which prevailed and underpinned ‘shock therapy’, was the Anglo-Saxon model of market-based capitalism, where the high human cost in terms of unemployment was deemed to be the medicine necessary for a sclerotic economy. Kowalik argues that the acceptance of the ‘leap to the market’ model was eased politically by the transformation of Solidarity in the previous decade from a 10-million strong democratic mass workers’ movement to a small, unaccountable committee where co-option was the order of the day.
Four chapters in the book are dedicated to the question of ownership and privatisation. Accounts of debates during the 1980s are discussed, and the inclusion of the deliberations of the Krakow Congress of Polish Economists of 1987 gives a flavour of the level of detail of the narrative. Further, debates about the political strategy of privatisation are situated in an extensive discussion on property rights theories. Strategies for ownership were a component of the round table negotiations, with the emergence of sharply divergent visions. One strand of thought, supported by Kowalik, advocated a pluralist structure with a central role accorded to self-management. However, the balance of forces was in favour of those who advocated a speedy route to a private economy, and comprehensive and quick privatisation. These protracted arguments led to thirteen versions of the legislation. Although there were concessions to employee ownership, the legislation dealt a body blow to co-operative aspirations when workers’ councils were dismantled as part of the privatisation process of firms.
A theme running through the narrative is that of foreign capital as one of the main beneficiaries of transformation, acquiring assets at a fraction of their value, and the elimination of domestic competition through hostile takeovers and asset stripping. Kowalik emphasizes the divisiveness and class nature of the privatisation process, and how it was reflected in the profound disillusionment of ordinary people as they saw a small minority reap the benefits of transformation.
Kowalik is critical of the lack of concern for and focus on the social justice aspects of transformation, and the impacts of neoliberalism on everyday lives. In the last section of the book, he raises the question, ‘What kind of capitalism is viable from a social point of view?’ In so doing he documents growing polarisation, inequality and poverty, and the way in which young people and women have been disproportionately affected. These concerns are encapsulated in the following quote from a teacher: ‘Society is divided into two groups: for some there are elegant cars, villas and ham; for others tramways, pre-fab housing and blood sausage (kaszana)’.
At the other end of the spectrum, Kowalik points to the development of an elite whose members have amassed huge fortunes through corruption and clientelism. This is not only the result of the kleptocracy of the old nomenklatura during the 1980s, but extends to the self-enfranchisement of a new power elite across the political spectrum throughout the whole period of systematic change.
The level of detail in the account and analysis is both a strength and weakness of the book. The extensive detail of conversations, vignettes of the major players and accounts of meetings are a strength in that the work provides a critical and unique historical account from the perspective of someone who was intimately involved with the main players. But this is also a weakness in terms of the book’s accessibility to those who lack such a thorough grounding in the broad economic and political events of the period. This book is not for the novice of Polish transformation, and particularly not for the non-Polish novice; but it is an important document for those in search of deeper insights into this fascinating and politically critical period.
The biggest political and economic challenge of the book is that of assessing Kowalik’s central argument that a different, more egalitarian and growth-oriented capitalism was a possible route from 1990 onwards. He argues that there was the option of a social democratic state, based on the Nordic model, which could have played a more positive role in instituting a more benign capitalism that served the interests of a wider group of people. While I am sympathetic to this analysis and aspiration, the implementation of this left-wing path from above by economists and policy makers, however well intentioned, was unlikely. The decapitation of Solidarity as a radical organisation during the 1980s, coupled with coercion from the Washington Consensus institutions and core capitalist powers with the cooperation of sections of the domestic ruling class, constrained the room for manoeuvre. Yet radical change is always possible. If there had been a mass and democratic workers movement in 1990, as there had been 1980-1, where radical demands were supported by organisation in the workplace, the possibility of change from below might have been on the agenda. Kowalik is rather pessimistic about workers’ organisations, yet he would be pleased to learn that there has been a modest revival in trade unions. He would also welcome the fact that his legacy is being continued by an emerging plural and critical intellectual left in Poland, and in particular would applaud those who put social justice at the centre of their analysis and policy recommendations.